UNIVISION COMMUNICATIONS INC

Transcription

1 UNIVISION COMMUNICATIONS INC FORM 10-K (Annual Report) Filed 03/27/08 for the Period Ending 12/31/07 Address 1999 AVENUE OF THE STARS STE 3050 LOS ANGLES, CA Telephone CIK SIC Code Television Broadcasting Stations Industry Broadcasting & Cable TV Sector Technology Fiscal Year 12/31 Copyright 2008, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

2 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2007 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: UNIVISION COMMUNICATIONS INC. Incorporated in Delaware I.R.S. Employer Identification Number: Third Avenue, 12 th Floor New York, NY Tel: (212) Securities registered pursuant to Section 12 (b) of the Act: None Securities registered pursuant to Section 12 (g) of the Act: None to Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. NO Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. NO YES YES Note Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections. 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 NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES NO There is no public market for the registrant s common stock. There were 1,000 shares, $0.01 par value, common stock issued and outstanding as of February 15, None DOCUMENTS INCORPORATED BY REFERENCE

3 Table of Contents TABLE OF CONTENTS PART I Item 1. Business 1 Item 1A. Risk Factors 14 Item 1B. Unresolved Staff Comments 23 Item 2. Properties 23 Item 3. Legal Proceedings 24 Item 4. Submission of Matters to a Vote of Security Holders 25 PART II Item 5. Market for Registrant s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Selected Financial Data 27 Item 7. Management s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8. Financial Statements and Supplementary Data 45 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 45 Item 9A. Controls and Procedures 46 Item 9B. Other Information 47 PART III Item 10. Directors, Executive Officers and Corporate Governance 48 Item 11. Executive Compensation 53 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 70 Item 13. Certain Relationships and Related Transactions, and Director Independence 74 Item 14. Principal Accounting Fees and Services 75 PART IV Item 15. Exhibits, Financial Statement Schedules 77 i

4 Table of Contents FORWARD-LOOKING STATEMENTS Certain statements contained within this report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of In some cases you can identify forward-looking statements by terms such as anticipate, plan, may, intend, will, expect, believe or the negative of these terms, and similar expressions intended to identify forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Also, 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 federal securities laws, we do not intend to update you concerning any future revisions to any forward-looking statements to reflect events or circumstances occurring after the date of this report. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include: failure to service our debt; cancellation, reductions or postponements of advertising; possible strikes or other union job actions; failure of our new or existing businesses to produce projected revenues or cash flows; our reliance on Televisa for a significant amount of our network programming and our pending litigation with Televisa; failure to obtain the benefits expected from cross-promotion of media; regional downturns in economic conditions in those areas where our stations are located; changes in the rules and regulations of the Federal Communications Commission ( FCC ); a decrease in the supply or quality of programming; an increase in the cost of programming; an increase in the preference among Hispanics for English-language programming; the need for any unanticipated expenses; competitive pressures from other broadcasters and other entertainment and news media; potential impact of new technologies; unanticipated interruption in our broadcasting for any reason, including acts of terrorism; write downs of the carrying value of assets due to impairment; uncertainty surrounding consummation of the sale of our music recording and publishing businesses; inability to repay or refinance our bank second-lien asset sale bridge loan if the sale of our music business is not consummated, or delayed and if we are unable to sell our other non-core assets for as much as we estimated or at all; and a failure to achieve profitability, growth or anticipated cash flows from acquisitions. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, those described in Risk Factors contained in this report. ii

5 Table of Contents ITEM 1. PART I Univision Communications Inc., together with its subsidiaries, is the leading Spanish-language media company in the United States and has continuing operations in three business segments: television, radio and Internet. As a result of the decision to divest certain non-core assets, the Company s music division, which includes the Univision Records, Fonovisa Records and La Calle labels and Disa Records, S.A. de C.V. ( Disa ), is treated as a discontinued operation for all periods presented. See Notes to Consolidated Financial Statements 2. Recent Developments. For a description of the financial information about each segment, see Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations and Notes to Consolidated Financial Statements 16. Business Segments. The Company was incorporated in Delaware in April 1992 as Perenchio Communications, Inc. and changed its name to Univision Communications Inc. in June Its principal executive offices are located at 605 Third Avenue, 12 th Floor, New York, New York 10158, telephone number (212) The terms Company, we, us and our refer collectively to Univision Communications Inc. and the subsidiaries through which our various businesses are conducted, unless the context otherwise requires. The Merger Bu siness Television: The Company s principal business segment is television, which consists primarily of the Univision and TeleFutura national broadcast networks, the owned and/or operated television stations and the Galavisión cable television network. For the year ended December 31, 2007, the television segment accounted for approximately 77% of the Company s net revenues. See Television Broadcasting. Radio: Univision Radio is the largest Spanish-language radio broadcasting company in the United States. For the year ended December 31, 2007, the radio segment accounted for approximately 21% of the Company s net revenues. See Univision Radio. Internet: Univision Online, Inc. operates the Company s Internet portal, Univision.com, which provides Spanish-language content directed at Hispanics in the U.S., Mexico and Latin America. For the year ended December 31, 2007, the Internet segment accounted for approximately 2% of the Company s net revenues. See Internet. On March 29, 2007, Broadcasting Media Partners, Inc. ( Broadcasting Media, formerly known as Umbrella Holdings, LLC), completed its acquisition of the Company pursuant to the terms of the agreement and plan of merger dated as of June 26, 2006 (the Merger Agreement ), by and among the Company, Broadcasting Media and Umbrella Acquisition, Inc. ( Umbrella Acquisition ), a subsidiary of Broadcasting Media. Umbrella Acquisition and Broadcasting Media were formed by an investor group that includes affiliates of Madison Dearborn Partners, LLC, Providence Equity Partners Inc., Saban Capital Group Inc., Texas Pacific Group and Thomas H. Lee Partners, L.P. (collectively the Sponsors ). To consummate the acquisition, Umbrella Acquisition was merged (the Merger ) with and into the Company and the Company was the surviving corporation. Pursuant to the Merger Agreement, each share of the Company s common stock issued and outstanding immediately prior to the effective time of the Merger was canceled and automatically converted into the right to receive $36.25 in cash, without interest. As a result of the Merger, a new basis of accounting was established at March 29, In effect, Broadcasting Media s basis in the Company s assets and liabilities has been pushed down to the Company s financial statements as of March 31, The acquisition was accounted for using the purchase method of accounting as though the Merger closed on March 31, 2007 for convenience purposes to align the Merger transaction date to the accounting close date, considering the insignificant impact to the statement of operations. See Notes to Consolidated Financial Statements 2. Recent Developments. 1

6 Table of Contents The Company s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed pursuant to Sections 13 and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on the Company s website at The materials the Company files with the Securities and Exchange Commission ( SEC ) at the SEC s Public Reference Room at 100 F Street, NE, Washington, DC and information on the operation of the Public Reference Room can be obtained by calling the SEC at SEC The SEC maintains an Internet site ( that contains reports, proxy and information statements, and other information regarding issuers that file electronically. Recent Developments Discontinued Operation Prior to the completion of the Merger on March 29, 2007, the Sponsors decided to sell the Company s music recording and publishing businesses. As a result, the music division results of operations, assets and liabilities are reported as a discontinued operation for all periods presented in the accompanying consolidated financial statements. On February 27, 2008, the Company entered into a purchase agreement with UMG Recordings, Inc. ( Universal ), an entity controlled by Universal Music Group, for the sale of its music recording and publishing businesses. The total consideration due to the Company under the purchase agreement is $153.0 million (including approximately $13.0 million for working capital), payable in cash as follows: (i) approximately $113.0 million upon the closing, (ii) $11.5 million upon the first anniversary of the closing, (iii) $12.5 million upon the second anniversary of the closing, (iv) $6.0 million upon the third anniversary of the closing, and (v) $10.0 million upon the fourth anniversary of the closing, subject to purchase price adjustments. Univision is expected to incur fees and certain obligations of approximately $10.0 million in connection with the transaction. Under the purchase agreement, the Company has committed to provide both preemptible and non-preemptible advertising support through broadcast commercials that will be aired on its Univision and Telefutura Networks, and its owned and operated television stations, for the Universal Music Group and its Latin artists over the five year period following the closing. The total consideration includes amounts payable to the Company for such advertising support. The Company is required to indemnify Universal from and against losses it may incur arising out of breaches by the Company of representations, warranties and covenants set forth in the purchase agreement, subject to certain limitations as set forth in the purchase agreement. Between the date of the purchase agreement and the closing, the Company has to operate the music business in all material respects, in the ordinary course consistent with past practice and may not take certain actions, as specified in the purchase agreement, without Universal s prior consent. Consummation of the transaction is conditioned upon, among other things, the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the Mexican Federal Competition Law, and there must not have been a Material Adverse Effect (as defined in the purchase agreement) since September 30, The Company expects the transaction to close in the second quarter of The Company intends to use approximately $113.0 million in gross proceeds from the sale of its music recording and publishing businesses together with the proceeds from the sale of certain non-core television and radio stations, investments and real estate, and may potentially use borrowings under its bank senior secured revolving credit facility (which cannot exceed $250.0 million), to pay down its $500.0 million bank second-lien asset sale bridge loan due March 29,

7 Table of Contents Television Broadcasting The Company s principal business segment is television broadcasting, which consists primarily of the Univision, TeleFutura and Galavisión television networks, the Univision Television Group ( UTG ) owned-and-operated broadcast television stations (collectively, the UTG O&Os ) and the TeleFutura Television Group ( TTG ) owned-and-operated broadcast television stations (collectively, the TTG O&Os ). At December 31, 2007, the UTG O&Os include a station in Washington, D.C. and the TTG O&Os include five stations in Boston, Massachusetts; Albuquerque, New Mexico; Orlando, Florida; Denver, Colorado; and Tampa, Florida that are owned but not operated by the Company. The Company programs its three networks so that Univision Network, TeleFutura Network and Galavisión generally do not run the same type of program simultaneously. Univision Network and Univision Television Group and Affiliates Univision Network. Univision Network is the leading Spanish-language television network in the U.S., reaching approximately 99% of all U.S. Hispanic Households (defined as those with a head of household who is of Hispanic descent or origin, regardless of the language spoken in the household). From its operations center in Miami, Univision Network provides its broadcast and cable affiliates with 24 hours per day of Spanish-language programming with a prime time schedule of substantially all first-run programming ( i.e., no re-runs) throughout the year. The operations center also provides production facilities for Univision Network s news and entertainment programming. Univision Television Group and Affiliates. At December 31, 2007, UTG O&Os had 20 full-power and 10 low-power stations. Nineteen of the full-power UTG O&Os broadcast Univision Network s programming, and most produce local news and other programming of local importance, cover special events and may acquire programs from other suppliers. One full-power UTG O&O in Bakersfield, California is a CW affiliate. Eleven of the 20 full-power UTG O&Os are located in the top 15 Nielson Designated Market Areas ( DMA ) in terms of number of Hispanic households. The Company also owns and operates two television stations in Puerto Rico. In addition to the UTG O&Os, as of December 31, 2007, Univision Network had 20 full-power and 47 low-power television station affiliates ( Univision Affiliated Stations ) and approximately 1,681 cable affiliates. Univision Network produces and acquires programs, makes those programs available to its affiliates, including the UTG O&Os, and sells network advertising. Affiliation Agreements. Each of Univision Network s affiliates has the right to preempt ( i.e., to decline to broadcast at all or at the time scheduled by Univision Network), without prior Univision Network permission, any and all Univision Network programming that it deems unsatisfactory, unsuitable or contrary to the public interest or to substitute programming it believes is of greater local or national importance. Univision Network may direct an affiliate to reschedule substituted programming. Each affiliation agreement (including the master affiliation agreement Univision Network has with Entravision for certain Entravision stations) grants the Univision Network s affiliate the right to broadcast over the air the entire program schedule. The affiliation agreements generally provide that a percentage of all advertising time be retained by Univision Network for advertising and the remaining amount is allocated to the affiliate for local and national spot advertising. This allocation may be modified at Univision Network s discretion. The Univision Network retains 100% of network advertising revenues. The Univision Affiliated Stations retain 100% of all local and national revenues. The Company acts as the exclusive national sales representative 3

8 Table of Contents for the sale of all national advertising on Univision Affiliated Stations. For this service, the Company receives commission income equal to 15% of the Univision Affiliated Stations net national revenues. Univision Network from time to time may enter into affiliation agreements with additional stations in new designated market areas based upon its perception of the market for Spanish-language television. Cable Affiliates. Univision Network has historically used cable affiliates to reach communities that could not support a broadcast affiliate because of the relatively small number of Hispanic Households. Cable affiliation agreements may cover an individual system operator or a multiple system operator. Cable affiliation agreements are all non-exclusive, thereby giving Univision Network the right to license all forms of distribution in cable markets. Cable affiliates generally receive Univision Network s programming for a fee based on the number of subscribers. TeleFutura Network and TeleFutura Television Group and Affiliates TeleFutura Network. In January 2002, the Company launched a 24-hour general-interest Spanish-language broadcast network, TeleFutura, to meet the diverse preferences of the multi-faceted U.S. Hispanic community. TeleFutura Network s signal covers approximately 88% of all Hispanic Households through TTG O&Os, three full-power and 31 low-power station affiliates ( TeleFutura Affiliated Stations ). TeleFutura Network counter-programs traditional Spanish-language lineups and is designed to draw additional viewers to Spanish-language television by offering primetime Hollywood movies dubbed in Spanish, original Spanish-language movies, primetime game shows and sports. TeleFutura Television Group and Affiliates. The TTG O&Os consist of 18 full-power and 13 low-power Spanish-language television stations. Thirteen of the 18 full-power TTG O&Os are located in the top 15 designated market areas in terms of number of Hispanic Households. In addition, TeleFutura Network has entered into affiliation agreements with broadcast television stations, and cable and satellite television distributors to provide TeleFutura Network and station programming on terms similar to those of the affiliation agreements between Univision Network and its affiliates. The TeleFutura Network retains 100% of network advertising revenues. The TeleFutura Affiliated Stations retain 100% of all local and national revenues. The Company acts as the exclusive national sales representative for the sale of all national advertising on TeleFutura Affiliated Stations. For this service, the Company receives commission income equal to 15% of the TeleFutura Affiliated Stations net national revenues. Cable Affiliates. TeleFutura Network uses cable affiliates in a similar manner as Univision Network. See Univision Network and Univision Television Group and Affiliates Cable Affiliates. Galavision The Company also owns Galavisión, the leading U.S. Spanish-language general entertainment basic cable television network, which is available in 137 DMAs. Galavisión s schedule averages over 50 hours of live news, sports, variety and entertainment programming each week. According to Nielsen Hispanic Television Index, Galavisión reaches approximately 51.7 million U.S. cable households and 8.0 million or 82% of Hispanic Cable Plus households, which include satellite providers. The network has achieved record viewership levels since its new programming launch in May Univision Radio Univision Radio, headquartered in Dallas, Texas, owns and operates 69 radio stations in 16 of the top 25 U.S. Hispanic markets and owns and operates five radio stations in Puerto Rico. Univision Radio s stations cover approximately 70% of the U.S. Hispanic radio listeners and have 11 million listeners weekly. 4

9 Table of Contents Univision Radio has historically acquired under-performing radio stations with good signal coverage of the target population and converted the existing station format to a Hispanic-targeted format. In addition, Univision Radio has acquired radio stations whose radio signals might eventually be upgraded or improved. Univision Radio programs more than 60 individual or simulcast radio stations. Most music formats are primarily variations of regional Mexican, tropical, reggaeton, tejano and contemporary music styles. The regional Mexican format consists of various types of music played in different regions of Mexico; the Latin adult format is a relatively new format that is a compilation of the best hits of regional Mexican music from the 70 s, 80 s and 90 s; the tropical format consists primarily of salsa, merengue and cumbia music; the reggaetón format consists of the current and prevalent form of Latin urban and pop music; the tejano format consists of music originated in or indigenous to Texas, but based on Mexican themes; and the contemporary format consists of popular romantic and pop music forms. Hispanics who may use the English language along with Spanish, or perhaps favor English music over Spanish music, are also reached by five of Univision Radio s stations in three markets, which are programmed in the classic rock, hip hop and rhythmic/contemporary hit formats. Radio revenues are derived primarily from sales of local, national, and network advertising. Account executives at the Company s various radio stations are responsible for generating sales through local advertisers within the stations respective markets. Sales with national advertisers are generated through Katz Hispanic Media (a subsidiary of Clear Channel Communications, Inc.), the Company s national representation firm, and through coordination with national sales managers at the Company s radio stations. The Company also sells national advertising through its radio network, which allows an advertiser to place a single buy that targets multiple stations across the Company s various market areas. The Company has special events that range from entertainment concerts to community service events targeted to Hispanics, which are another source of revenues for the Company. Internet Univision Online, Inc. operates the Company s Internet portal, Univision.com, which is primarily directed at Hispanics in the United States and is intended to appeal to a broad consumer interest, including entertainment, sports, news, personal finance and shopping. In 2001, its first full-year of operations, Univision.com became the #1 Spanish-language website for U.S. Hispanics and has retained its leadership position ever since, according to Nielsen Media Research, Forrester Research, Inc., a market research company that advises about technology s impact on business and consumers and Simmons Market Research Bureau, Inc., a custom market research company. The use of the Internet by U.S. Hispanics is climbing rapidly, as unique visits to Univision.com grew approximately five times the 2002 total of approximately 81 million to approximately 400 million in Music Recording and Publishing Univision Music Group, launched in 2001, consists of the businesses under its wholly-owned subsidiary, Univision Music, Inc. The primary business under Univision Music, Inc. is Univision Music LLC, which owns and operates the Univision Records, Fonovisa Records and La Calle Records labels, Univision Music Group Mexico and Univision Music Publishing. Univision Music, Inc. also owns Disa, a Monterrey, Mexico-based record label and music publisher. Univision Music LLC s membership units are owned 90% by the Company and 10% by Diara, Inc., which is wholly-owned by José Behar, President and Chief Executive Officer of Univision Music Group. Univision Music Group is headquartered in Los Angeles, California. Univision Records, Fonovisa Records, Disa Records and La Calle Records have approximately 125 recording artists on their combined rosters. Univision Music Group is the leader in record sales of Latin music in the U.S. and Puerto Rico accounting for approximately 43% of the Latin music sold in the U.S. in Within the U.S. Latin music market, the Univision Music Group accounted for approximately 70% of the regional 5

10 Table of Contents Mexican genre. Universal Music Group Distribution, a division of Universal Music Group, provides sales, distribution and manufacturing services to the Univision Music Group. Prior to the completion of the Merger on March 29, 2007, the Sponsors decided to sell the Company s music recording and publishing businesses. As a result, the music division results of operations, assets and liabilities are reported as a discontinued operation for all periods presented in the consolidated financial statements of this Annual Report on Form 10-K. The Company has entered into a definitive agreement to sell its music business which it expects to close in the second quarter of The closing is subject to regulatory approvals and certain closing conditions including the absence of a material adverse effect (as defined in the definitive agreement) on our music business since September 30, See Notes to Consolidated Financial Statements 2. Recent Developments. The Hispanic Audience in the United States Management believes that Spanish-language media, in general, and the Company, in particular, have benefited and will continue to benefit from a number of factors, including projected Hispanic population growth, increasing Hispanic buying power and greater advertiser spending on Spanish-language media. Unless otherwise noted, the data provided below, pertaining to the Hispanic population in the U.S., was derived from Global Insights, Inc Hispanic Market Monitor, a syndicated service. Hispanic Population Growth and Concentration. The Hispanic population of the U.S. increased by 58% between 1990 and 2000 to 35.3 million according to the 2000 U.S. Census. This rate of growth was more than four times that of the total U.S. population and approximately seven times that of the U.S. non-hispanic population. While Hispanics accounted for 12.5% of the U.S. population in 2000, the U.S. Census Bureau projects that the Hispanic percentage will grow to approximately 20% of the total U.S. population by the year 2020, confirming a fundamental shift in the ethnic makeup of the country. According to the 2000 U.S. Census, Hispanics accounted for 27% of the population of New York City and 46.5% of Los Angeles, the two cities with the largest total populations and largest Hispanic populations. Approximately 50% of all Hispanics are located in the eight largest U.S. Hispanic markets, and the Company owns two or more television stations and three or more radio stations in each of these markets. According to U.S. Census estimates published July 1, 2006, there are approximately 44.3 million Hispanics living in the United States, which account for approximately 14.8% of the U.S. population. Greater Hispanic Buying Power. The Hispanic population is projected to represent $964 billion in estimated disposable income in 2008 (9.0% of the total U.S. disposable income), an increase of 92% since Hispanics are expected to account for more than $1.1 trillion of U.S. disposable income (9.5% of the U.S. total) by 2010, outpacing the expected growth in total U.S. disposable income. In addition to the anticipated growth of the Hispanic population, the Hispanic audience has several other characteristics that the Company believes make it attractive to advertisers. The Company believes the larger size and younger age of Hispanic Households leads Hispanics to spend more per household on many categories of goods. Hispanics are expected to continue to account for a disproportionate share of growth in spending nationwide in many important consumer categories as the Hispanic population and its disposable income continue to grow. These factors make Hispanics an attractive target audience for many major U.S. advertisers. Ratings Until December 26, 2005, Univision Network solely subscribed to Nielsen Media Research s National Hispanic Television Index ( NHTI ), which measures only Hispanic audiences. As of December 26, 2005, Univision Network ratings also became available on Nielsen s national ratings service, Nielsen Television Index ( NTI ), which provides television ratings for all of the major U.S. networks. NTI is based on the National People Meter sample which is comprised of approximately 14,000 households and is subscribed to by broadcast 6

11 Table of Contents networks, cable networks, syndicators, advertisers and advertising agencies nationwide. The Univision Network maintained its subscription to NHTI until September Effective August 27, 2007, the National People Meter sample became the sole sample for both English-language media and Spanish-language media. From this sample, Nielsen continues to measure Hispanic viewing, calling the new service NTI-H (Nielsen Television Index Hispanic). Television. During the last five years, Univision Network has consistently ranked first in prime time television among all Hispanic year olds and has consistently had between 95% and 100% of the 20 most widely watched programs among all Hispanic Households based on the November NTI-H. Among Hispanics, the Spanish-language television share of prime time viewing continues to increase. Currently in the season, 51% of all Hispanic year olds watching television in prime time are watching Spanish language programs. This compares with 47% in the season. The following table shows that the Univision Broadcast Networks prime time audience ratings during the last five years are considerably higher than the other networks among the age segment most targeted by advertisers: Average 7:00 PM-11:00 PM Prime Time Ratings Among Hispanic Adults Aged 18 to P18-49 Average Audience% Spanish-language television prime time is from 7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday through Saturday. English-language television prime time is from 8 p.m. to 11 p.m., Eastern and Pacific Standard Times, Monday through Saturday and 7 p.m. to 11 p.m., Eastern and Pacific Standard Times, Sunday. Note: The CW network was launched on September 18, 2006, and is a combination of the WB and UPN networks. Effective January 29, 2007, PAX became ION; however, Nielsen continued to report ION as PAX through April 1, 2007, officially making the change on April 2, In addition, according to the November 2007 Nielsen Station Index: 2004 P18-49 Average Audience% P18-49 Average Audience% 2006 P18-49 Average Audience% 2007 P18-49 Average Audience% Univision (UNI) TeleFutura (TF) Telemundo ABC CBS NBC FOX WB UPN PAX/ION AZTECA AMERICA CW MNT 0.3 SHARE CALCULATIONS: Total Ratings UNI+TF Ratings Univision Combined Networks Share 49.3 % 48.7 % 53.5 % 50.5 % 54.5 % Source: Nielsen Hispanic Television Index/Nielsen Television Index-Hispanic all 14 full-power UTG O&Os for which such data are available ranked first among Spanish-language television stations in total day in their respective DMAs, based on total audience rank of adults 18 to 49 years of age;

12 Table of Contents three of the 14 full-power UTG O&Os for which such data are available ranked as the top station in total day in their respective DMAs, English- or Spanish-language, based on total audience rank of adults 18 to 49 years of age; all 15 of the full-power Univision Affiliated Stations for which such data are available ranked first among Spanish-language television stations in total day in their respective DMAs, based on total audience rank of adults 18 to 49 years of age; No audience data are available for five UTG O&O full-power stations and five Univision Affiliated Stations. Radio. Radio ratings are measured by Arbitron, a marketing and research firm serving primarily the radio industry and specializing in audience ratings-measurement for marketing to advertisers. Arbitron measures radio station listening by market, in various day-parts and demographics, with data collected from areas throughout a given market. Ratings trends are released monthly and ratings books are issued each season. In 2007, Arbitron began implementing a new electronic measurement system called Portable People Meter (PPM), which will replace the diary-based method that has been used historically. This methodology is available in one Univision Radio market, Houston, and audience trend data is now available on a weekly basis and a ratings book is released on a monthly basis. Arbitron plans to roll out the PPM measurement system in all Top 50 markets with New York, Los Angeles, Chicago, San Francisco and Dallas, scheduled to roll out between September through December of Univision Radio, according to the Summer 2007 Arbitron ratings book, operates the leading Spanish-language radio station in the adult age group, as measured by Average Quarter Hour ( AQH ) audience rating, in 11 of the 12 top U.S. Hispanic radio markets as measured by Arbitron. During this same period, the Company operated the number one station format in six markets and 30 station formats ranked among the top-ten radio stations in AQH audience, regardless of language or format, in their respective markets. Program License Agreements Through its program license agreements (the PLAs ) with Grupo Televisa S.A. and its affiliates ( Televisa ) and affiliates of Corporacion Venezolana del Television, C.A. (VENEVISION) ( Venevision ), the Company has the exclusive right until December 2017 to air in the U.S. all Spanish-language programming produced by or for them (with limited exceptions). The PLAs provide the Company s television and cable networks with access to programming to fill up to 100% of their daily schedules. Televisa and Venevision programming represented approximately 36% and 23% in 2007 and 42% and 19% in 2006, respectively, of Univision Network s non-repeat broadcast hours. Televisa and Venevision programming represented approximately 15% and 5% in 2007 and 19% and 6% in 2006, respectively, of TeleFutura Network s non-repeat broadcast hours. See Item 3. Legal Proceedings for a description of the litigation with respect to our PLA with Televisa. The PLAs allow the Company long-term access to Televisa and Venevision programs and the ability to terminate unsuccessful programs and replace them with other Televisa and Venevision programs without paying for the episodes that are not broadcast. This program availability and flexibility permits the Company to adjust programming on all its networks to best meet the tastes of its viewers. Televisa and Venevision programs available to the Company are defined under the PLAs as all programs produced by or for each of them in the Spanish-language or with Spanish subtitles other than programs for which they do not own U.S. broadcast rights or as to which third parties have a right to a portion of the revenues from U.S. broadcasts ( Co-produced Programs ). Televisa, Venevision and their affiliates have also agreed to use their best efforts to coordinate with the Company to permit the Company to acquire U.S. Spanish-language rights to certain Co-produced Programs and to special events produced by others, sporting events, political conventions, election coverage, parades, pageants and variety shows. 8

13 Table of Contents In addition, Televisa and Venevision must use good faith efforts not to structure arrangements or agreements with respect to programs in a manner intended to cause such programs not to be available to the Company as Programs pursuant to the Program License Agreement. In consideration for access to the programming of Televisa and Venevision, the Company pays royalties to Televisa and Venevision. Under the PLAs, Televisa and Venevision also have the right to use, without charge and subject to limitations, advertising time that we do not either sell to advertisers or use for our own purposes. The PLAs also provide that the Company will annually swap with each of Televisa and Venevision $10 million of non-preemptable advertising time. The Company accounts for this arrangement as a net barter transaction, with no effect on revenues, expenses or net income on an annual basis. Each of Televisa and Venevision may also purchase for its own use nonpreemptable time at the lowest spot rate for the applicable time period. Televisa received approximately 97,000, 129,000 and 93,000 of preemptable and non-preemptable 30-second commercial advertisements in 2007, 2006 and 2005, respectively. Venevision received approximately 36,000, 55,000 and 84,000 of preemptable and non-preemptable 30-second commercial advertisements in 2007, 2006 and 2005, respectively. The Company has program license agreements for Puerto Rico where its rights are exclusive in a manner similar to the overall PLAs pursuant to which we are required to pay royalties to Televisa and Venevision. The obligations of Televisa and Venevision s respective affiliates have been guaranteed by, in the case of Televisa, Grupo Televisa S.A. and, in the case of Venevision, Corporacion Venezolana de Television, C.A. (VENEVISION). Pursuant to their respective guarantees, Televisa has agreed to produce each year for the Company s use at least 8,531 hours of programs, which will be of the quality of programs produced by Televisa during the calendar year 2000, and Venevision has agreed to use commercially reasonable efforts to produce or acquire programs for the Company s use at least to the same extent of quality and quantity as in calendar years 1989, 1990 and Advertising During the last three years, no single customer has accounted for more than 10% of the Company s net revenues. The Company s television and radio advertising revenues are derived from network advertising, national spot advertising and local advertising, and come from diverse industries, with advertising for food and beverages, personal care products, automobiles, other household goods and telephone services representing the majority of network advertising revenues. National spot advertising represents time sold to national and regional advertisers based outside a station s DMA and is the means by which most new national and regional advertisers begin marketing to Hispanics. National spot advertising primarily comes from new advertisers wishing to test a market and from regional retailers and manufacturers without national distribution. To a lesser degree, national spot advertising comes from advertisers wanting to enhance network advertising in a given market. Local advertising revenues are generated from both local merchants and service providers and regional and national businesses and advertising agencies located in a particular DMA. Currently, most of the Company s television stations do not receive their proportionate share of advertising revenues commensurate with their audience share. Approximately 40% of the Company s radio stations currently receive their proportionate share of advertising revenues commensurate with their audience share. The Company strives to close the gap between audience and revenue share by persuading advertisers of the benefits they may achieve by utilizing or increasing their utilization of Spanish-language television and radio advertising. The Company focuses much of its sales efforts on demonstrating to advertisers its ability to reach the Hispanic audience. 9

14 Table of Contents Marketing Television. Our television network and station marketing account executives are divided into three groups: network sales, national spot sales and local sales. The account executives responsible for network sales target and negotiate with accounts that advertise nationally. The national spot sales force represents each broadcast affiliate for all sales placed from outside its DMAs. The local sales force represents the owned-and-operated stations for all sales placed from within its DMA. In addition, our television network and station marketing sales departments utilize research, including both ratings and demographic information, to negotiate sales contracts as well as target major national advertisers that are not purchasing advertising time or who are underpurchasing advertising time on Spanish-language television. Galavisión sells advertising time and also utilizes a cable affiliate relations sales group that is responsible for generating cable subscriber fee revenues for the Company. Radio. Our radio network and station marketing account executives are divided into three groups: network sales, national spot sales and local sales. The account executives responsible for network and national sales target and negotiate with accounts that advertise nationally. Univision Radio Corporate Sales represents the Company s radio stations for sales placed from outside its DMAs. The local sales force represents the owned-and-operated stations for all sales placed from within its DMA. In addition, Univision Radio owned and operated stations sales departments utilize research, including both ratings and demographic information, to negotiate sales contracts as well as target major local, regional, and national advertisers that are not purchasing advertising time or that are under-purchasing advertising time on Spanish-language and Hispanic-targeted radio stations. The owned and operated stations also derive sales from the sponsorship and organization of various special events. Internet. Univision Online, Inc. generates advertising revenues primarily from large national advertisers in the United States and is represented by a separate sales force. Univision Online, Inc. recognizes primarily banner and sponsorship advertisement revenues. Music. Univision Music Group generates revenues from its music recording and publishing businesses. Universal Music Group Distribution, a division of Universal Music Group, provides sales, distribution and manufacturing services to the Univision Music Group. Competition Our business is highly competitive. Competition for advertising revenues is based on the size of the market that the particular medium can reach, the cost of such advertising and the effectiveness of such medium. The Company s television business competes for viewers and revenues with other Spanish-language and English-language television stations and networks, including the seven English-language broadcast television networks as well as approximately 84 measured cable networks. Many of these competitors are owned by companies much larger and having financial strength greater than the Company. Certain of the English-language networks and others have begun producing Spanish-language programming and simulcasting certain programming in English and Spanish. Several cable broadcasters have recently commenced or announced their intention to commence Spanish-language services as well. The Company s radio business competes for audiences and advertising revenues with other radio stations of all formats. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced such as (1) satellitedelivered digital audio radio service, which has resulted in the introduction of new subscriber based satellite radio services with numerous niche formats; and (2) audio programming by cable systems, direct broadcast satellite systems, Internet content providers, personal communications services and other digital audio broadcast formats. 10

15 Table of Contents Many of our competitors have more television and radio stations, greater resources (financial or otherwise) and broader relationships with advertisers than we do. Furthermore, because our English-language competitors are perceived to reach a broader audience than we do, they have been able to attract more advertisers and command higher advertising rates than we have. The Company also competes for audience and revenues with independent television and radio stations, other media, suppliers of cable television programs, direct broadcast systems, newspapers, magazines and other forms of entertainment and advertising. The Company s television affiliates located near the Mexican border also compete for viewers with television stations operated in Mexico, many of which are affiliated with a Televisa network and are owned by Televisa. The Company s share of overall television and radio audience has increased over the past five years. The Company attributes this to the growth of the U.S. Hispanic population, the quality of our programming and the quality and experience of our management. Telemundo, a subsidiary of NBC, a division of General Electric, is the Company s largest television competitor that broadcasts Spanish-language television programming. In most of the Company s DMAs, the Company s affiliates compete for advertising dollars directly with a station owned by or affiliated with Telemundo, as well as with other Spanish-language and English-language stations. Clear Channel (the largest radio operator in the United States), CBS Radio, Spanish Broadcasting System, Entravision Communications, Liberman Broadcasting and Border Media Partners are the Company s largest radio competitors that broadcast Spanish-language radio programming in several of the Company s DMAs. Additionally, the Company faces competition from English-language stations that offer programming targeting Hispanic audiences. Clear Channel has established a Hispanic radio division and has begun converting stations to Hispanic targeted formats, in English or Spanish, seeking niche formats within the current music available in Spanish or appealing to Hispanics. Radio One converted a station to Spanish and Spanish Broadcasting System has entered into a strategic alliance with Viacom to allow it to promote its radio stations on Viacom outdoor properties. ABC Radio networks and Spanish Broadcasting Systems have joined forces to syndicate three popular Hispanic morning shows nationally and in markets where the Company competes. The rules and policies of the Federal Communications Commission ( FCC ) encourage increased competition among different electronic communications media. As a result of rapidly developing technology, the Company may experience increased competition from other free or pay systems by which information and entertainment are delivered to consumers, such as direct broadcast satellite and video dial tone services. Satellite-delivered audio, including XM Satellite Radio and Sirius Satellite Radio, provides a medium for the delivery by satellite or supplemental terrestrial means of multiple new audio programming formats to local and/or national audiences. Univision Music Group s major Spanish-language competitors are Sony/BMG Norte, Universal Latino, WEA Latina and EMI Latin. The Group also competes against English-language music companies. Univision Online competes for advertising revenues with numerous direct competitors, including Web-based portals, such as Yahoo! En Español, Terra and AOL Latino, individual Web sites providing content, commerce, community and similar features and other media companies, such as those with newspaper or magazine publications, radio stations and broadcast stations or networks. Employees As of December 31, 2007, the Company employed approximately 4,282 full-time employees. Approximately 7.4% of these employees are located in Chicago, Los Angeles, San Francisco, New York and Puerto Rico, and are represented by unions. Approximately 2% of full-time employees are subject to collective bargaining agreements that expire in one year. The Company has collective bargaining agreements covering the union employees with varying expiration dates through Management believes that its relations with its non-union and union employees, as well as with the union representatives, are generally good. 11

16 Table of Contents Federal Regulation The ownership, operation and sale of television and radio broadcast stations are subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the Communications Act ). The Communications Act and FCC regulations establish an extensive system of regulation to which the Company s stations are subject. The FCC may impose substantial penalties for violation of its regulations, including fines, license revocations, denial of license renewal or renewal of a station s license for less than the normal term. Licenses and Applications. Each television and radio station that we own must be licensed by the FCC. Licenses are granted for periods of up to eight years and we must obtain renewal of licenses as they expire in order to continue operating the stations. We must also obtain FCC approval prior to the acquisition or disposition of a station, the construction of a new station or modification of the technical facilities of an existing station. Interested parties may petition to deny such applications and the FCC may decline to renew or approve the requested authorization in certain circumstances. Although we have generally received such renewals and approvals in the past, there can be no assurance that we will continue to do so in the future. Programming and Operation. The Communications Act requires broadcasters to serve the public interest through programming that is responsive to local community problems, needs and interests. Our stations must also adhere to various content regulations that govern, among other things, political and commercial advertising, sponsorship identification, contests and lotteries, television programming and advertising addressed to children, payola and obscene and indecent broadcasts. Ownership Restrictions. FCC rules permit us to own up to two television stations with overlapping contours where the stations are in different DMAs, where certain specified signal contours do not overlap, where a specified number of separately-owned full-power broadcast stations will remain after the combination is created or where certain waiver criteria are met. Rules also limit the number of radio stations that we may own in any single market (defined by Arbitron or by certain signal strength contours). The FCC s cross-ownership rule permits a party to own both television and radio stations in the same local market in certain cases, depending primarily on the number of independent media voices in that market. The national audience cap prohibits us from owning stations that, in the aggregate, reach more than a specified percentage of the national audience. The FCC currently is considering whether to relax certain ownership restrictions; we cannot predict the outcome of that proceeding. Alien Ownership. The Communications Act generally prohibits foreign parties from having more than a 20% interest in a licensee entity or more than a 25% interest in the parent entity of a licensee. The Company believes that, as presently organized, it complies with the FCC s foreign ownership restrictions. Network Regulation. FCC rules affect the network-affiliate relationship. Among other things, these rules require that network affiliation agreements (i) prohibit networks from requiring affiliates to clear time previously scheduled for other use, (ii) permit affiliates to preempt network programs that they believe are unsuitable for their audience and (iii) permit affiliates to substitute programs that they believe are of greater local or national importance for network programs. The Company believes that its network affiliation agreements conform with those rules, as presently interpreted. Cable and Satellite Carriage. FCC rules require that television stations make an election every third year to exercise either must-carry or retransmission consent rights in connection with local cable carriage. Stations which fail to make a cable carriage election are assumed to have elected must-carry. Stations electing must-carry may require carriage on certain channels on cable systems within their market. Mustcarry rights are not absolute, however, and are dependent on a number of factors, which may or may not be present in a particular case. Cable systems are prohibited from carrying the signals of a station electing retransmission consent until an agreement is negotiated with that station. 12

17 Table of Contents The FCC recently adopted rules designed to ensure that cable subscribers, including those with analog TV sets, can continue to view broadcast television after the transition to digital television occurs on February 17, By statute, cable operators must make local broadcasters primary video and program-related material viewable by all of their subscribers. Cable operators may choose to comply with the viewability requirement by either: (1) carrying the digital signal in analog format, or (2) carrying the signal only in digital format, provided that all subscribers have the necessary equipment to view the broadcast content. Waivers for low capacity cable systems are contemplated by the FCC. Direct Broadcast Satellite ( DBS ) systems provide television programming on a subscription basis to consumers that have purchased and installed a satellite signal receiving dish and associated decoder equipment. Under the Satellite Home Improvement Act, satellite carriers are permitted to retransmit a local television station s signal into its local market with the consent of the local television station. If a satellite carrier elects to carry one local station in a market, the satellite carrier must carry the signals of all local television stations that also request carriage. All television stations operated by the Company at the time of election made timely elections for DBS carriage and the Company intends to seek DBS carriage for each of its eligible stations. A number of entities have commenced operation, or announced plans to commence operation of Internet protocol video systems, using digital subscriber line ( DSL ), fiber optic to the home ( FTTH ) and other distribution technologies. The issue of whether those services are subject to the existing cable television regulations, including must-carry obligations, has not been resolved. There are proposals in Congress and at the FCC to resolve this issue. We cannot predict whether regulations will be adopted, or, if adopted, what form they might take. Pending such resolution, such systems may not retransmit the signals of our television stations without our consent. DTV. FCC rules require full-power analog television stations, such as ours, to transition from currently-provided analog service to digital ( DTV ) service. A multi-step channel election and repacking process is underway pursuant to which DTV stations are being assigned to their ultimate channel for digital transmissions. The FCC has made channel assignments, but a number of parties have sought modifications to those assignments. We are unable to predict at this time when the channel assignment process will be completed. Federal law requires TV stations to complete the digital transition (operating exclusively in the digital mode and surrendering any additional channels) by February 17, Other Matters. The FCC has numerous other regulations and policies that affect its licensees, including rules requiring close-captioning to assist television viewing by the physically handicapped and the equal employment opportunities ( EEO ) rule requiring broadcast licensees to provide equal opportunity in employment to all qualified job applicants and prohibiting discrimination against any person by broadcast stations based on race, color, religion, national origin or gender. The EEO rule also requires each station to widely disseminate information concerning its full-time job vacancies with limited exceptions, provide notice of each full-time job vacancy to recruitment organizations that have requested such notice and engage in a certain number of longer-term recruitment initiatives. Licensees are also required to collect, submit to the FCC and/or maintain for public inspection extensive documentation regarding a number of aspects of their station operations. A recent decision of the FCC contemplates expansion of the material that must be compiled and made available for public inspection, and provides for much of that material to be made available on each station s public website. On November 20, 2007, the FCC issued a Public Notice seeking public comment on proposed changes to conditions which were imposed at the time the FCC consented to the acquisition of the Company by certain investors. The conditions required two investors to take specific steps to come into compliance with the FCC s newspaper/broadcast cross-ownership rule, the radio/television cross-ownership limitations, and/or the local radio ownership rules by divesting certain media interests. Both investors subsequently sought clarification that they could comply with the multiple ownership rules by means other than divestiture. The public comment 13

18 Table of Contents period expired December 4, We cannot predict whether the FCC will permit the Company s investors to implement their alternative compliance approach. The foregoing does not purport to be a complete summary of all of the provisions of the Communications Act, or of the regulations and policies of the FCC thereunder. Proposals for additional or revised regulations and requirements are pending before, and are considered by, Congress and federal regulatory agencies from time to time. We generally cannot predict whether new legislation, court action or regulations or a change in the extent of application or enforcement of current laws and regulations, would have an adverse impact on our operations. ITEM 1A. Risk Factors You should carefully consider the following discussion of risks and the other information included in this report in evaluating the Company and our business. The risks described below are not the only ones facing the Company. Additional risks that we are not presently aware of or that we currently believe are immaterial may also impair our business operations. We receive from Televisa a significant amount of our network programming and we are engaged in litigation with Televisa. We receive substantial amounts of programming for our three networks from Televisa pursuant to our PLA with Televisa, and a separate letter agreement of the same date (referred to as the Soccer Agreement ) granting us rights to rebroadcast Televisa s feeds of certain Mexican League soccer games. The programming we receive under the PLA accounts for a majority of our prime time programming and a substantial portion of the overall programming on all three networks. We currently pay a license fee to Televisa for programming, which is subject to certain upward adjustments. In June 2005, Televisa began litigation against us. Televisa s current claims include breach for our alleged failure to pay Televisa royalties attributable to revenues from certain programs and from our use of unsold time to promote assets, the Company s alleged unauthorized editing of certain Televisa programs and related copyright infringement claims, a claimed breach of the Soccer Agreement, a claim that we did not cooperate with various Televisa audit rights and efforts and a claim that we have not been properly carrying out a provision of the PLA that gives Televisa the secondary right to use our unsold advertising inventory. Televisa currently asserts that we were in material breach of the PLA and the Soccer Agreement, thereby giving Televisa the right to suspend or terminate those agreements. To date, mediation has failed. Televisa is seeking a declaration that we are in material breach of the PLA, that Televisa has the right to suspend or terminate its performance under the PLA and that Televisa may, without liability to Univision, transmit or permit others to transmit any television programming into the United States from Mexico over or by means of the Internet. We intend to continue to defend the litigation and pursue our counterclaims vigorously and plan to take all action necessary to ensure Televisa s continued performance under the PLA until its expiration in If we were held to be in material breach and unable to effect a timely cure, Televisa could elect to terminate the PLA and the Soccer Agreement, and we could be required to pay monetary damages, which could have a material adverse effect on our business and our results of operations. The programming we receive from Televisa has been very popular and it has helped us to achieve high ratings and grow our audience share. If Televisa were to stop providing us programming for any reason, it could be difficult to develop or acquire replacement programming of comparable quality whether on similar terms or at all, and our failure to do so could have a material adverse effect on the popularity of our network and TV stations, which in turn would have a material adverse effect on our results of operations. The trial is scheduled to commence April 29, For a description of the litigation process, see Item 3. Legal Proceedings. Cancellations, reductions or postponements of advertising could reduce our revenues. We have in the past derived, and we expect to continue to derive, a significant amount of our revenues from advertisers. Other than some television network advertising that is presold on an annual basis, we generally have not obtained, and we do not expect to obtain, long-term commitments from advertisers. Therefore, advertisers 14

19 Table of Contents generally may cancel, reduce or postpone orders without penalty. Cancellations, reductions or postponements in purchases of advertising could, and often do, occur as a result of a strike; a general economic downturn; an economic downturn in one or more industries that have historically invested more in advertising; an economic downturn in one or more major markets such as New York, Los Angeles or Miami-Fort Lauderdale; changes in population, demographics, audience preferences and other factors beyond our control; or a failure to agree on contractual terms with advertisers. In addition, major incidents of terrorism, war, natural disasters or similar events may require us to program without any advertising. Any material cancellations, reductions, or postponements of advertising for any of the foregoing reasons could adversely affect our revenues and results of operations. We could be adversely affected by strikes or other union job actions. We are directly or indirectly dependent upon highly specialized union members who are essential to the production of motion pictures and television programs. A strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television programs could delay or halt our ongoing production activities. Such a halt or delay, depending on the length of time, could cause a delay or interruption in our release of new motion pictures and television programs, which could have a material adverse effect on our business, results of operations and financial condition. On October 31, 2007, the television business collective bargaining agreement with the Writers Guild of America (East and West) (the WGA ) covering freelance writers expired. On November 5, 2007, the WGA began an industry-wide strike which ended on February 12, The full impact of the WGA strike has not been determined. In addition, the Screen Actors Guild s ( SAG ) major contracts with the Alliance of Motion Picture and Television Producers will expire in June 2008 and there is no assurance that the SAG will not begin an industry-wide strike once their contracts expire. If a strike were to occur in the future and continue for an extended period of time, it may have a material adverse effect on our business, results of operations and financial condition. Lack of audience acceptance of our content could decrease our ratings and, therefore, our revenues. Television and radio content production and distribution are inherently risky businesses because the revenues derived from the production and distribution of a television or radio program, and from the licensing of rights to the intellectual property associated with the program, depend primarily upon their acceptance by the public. The commercial success of a television or radio program also depends upon the quality and acceptance of other competing programs released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general or specific geographic economic conditions and other tangible and intangible factors, many of which are outside our control. Other television and radio stations may change their formats or programming, a new station may adopt a format to compete directly with one or more of our stations, or stations might engage in aggressive promotional campaigns. Certain of the Englishlanguage networks and others have begun producing Spanish-language programming and simulcasting certain programming in English and Spanish. A decrease in our audience acceptance because of these factors can lead to lower ratings. Rating points are the primary factors that are weighed when determining the advertising rates that we receive. Poor ratings can lead to a reduction in pricing and advertising spending. As a result of the unpredictability of program performance and of competition, our stations audience ratings, market shares and advertising revenues may decline. Our music business is dependent on identifying, signing and retaining artists with long-term, potential, whose debut albums are well received on release, whose subsequent albums are anticipated by consumers and whose music will continue to generate sales as part of our catalog for years to come. Our financial results may be adversely affected by the absence of superstar artist releases during a particular period. 15

20 Table of Contents We acquire programming (including sports programming) and make long-term creative talent commitments in advance of a season and in some cases make multi-year commitments even though we cannot predict the ratings they will generate. Similarly in our music business, we make long-term commitments with artists well before an album is produced. A shortfall, now or in the future, in the expected popularity of such programming or music could lead to lower revenue and may prohibit us from recouping these upfront costs through corresponding revenues which could lead to decreased profitability. In addition, we must still pay the same program license fees pursuant to the PLA even if the programming supplied under the PLA is no longer popular or is not utilized to the same extent as the programming that was previously utilized. We may replace unpopular programming before we recapture any significant portion of the costs incurred in connection with the programming or before we have fully amortized the costs. Because our programming and music businesses are dependent on popular acceptance, which we cannot predict at the time we incur related costs, our results of operations and cash flows have fluctuated, and may continue to fluctuate, significantly from period to period. Operating results from our programming businesses fluctuate primarily with the acceptance of such programming by the public, which is difficult to predict. Our net music sales and profitability, like those of other companies in the music business, are largely affected by the number and quality of albums that we release, our release schedule, and, more importantly, the consumer demand for these releases. We also make advance payments to recording artists and songwriters, which impact our operating cash flows. The timing of album releases and advance payments is largely based on business and other considerations and is made without regard to the timing of the release of our financial results. We report results of operations quarterly and our results of operations and cash flows in any reporting period may be materially affected by the lack of popularity of programming and the timing of releases and advance payments, which may result in significant fluctuations from period to period. Because the U.S. Hispanic population is concentrated geographically, our results of operations are sensitive to the economic conditions in particular markets and negative events in those markets could reduce our revenues. Approximately 33% of all U.S. Hispanics live in the Los Angeles, New York and Miami-Fort Lauderdale markets and the top ten U.S. Hispanic markets collectively account for approximately 55% of the U.S. Hispanic population. Our revenues are, therefore, concentrated in these key markets. As a result, an economic downturn, increased competition, or another significant negative event in these markets could reduce our revenues and results of operations more dramatically than other companies that do not depend as much on these markets. Piracy of our programming and other content, including digital and Internet piracy, home copying and Internet downloading, may decrease sales. Piracy of programming, particularly industrial pirated music, is prevalent in many parts of the world and is made easier by technological advances allowing conversion of programming and other content into digital formats, which facilitates the creation, transmission and sharing of high quality unauthorized copies of our content. In addition, the decreasing cost of electronic and computer equipment and related technology such as CD burners and the conversion of music into digital formats have made it easier for consumers to create unauthorized copies of our music recordings in the form of, for example, CDs and MP3 files. A substantial portion of our music revenue comes from the sale of audio products that are potentially subject to unauthorized copying and widespread dissemination on the Internet without an economic return to us. The proliferation of unauthorized copies and piracy of these products has an adverse effect on our businesses and profitability because unauthorized copies and piracy contribute to the decrease in the volume of legitimate sales and put pressure on the price of legitimate products. They have had, and may continue to have, an adverse effect on our business. 16

21 Table of Contents The recorded music industry has been declining and may continue to decline, which may adversely affect our music segment prospects and our results of operations. Illegal downloading of music from the Internet, CD piracy, industrial piracy, economic recession, bankruptcies of record wholesalers and retailers and growing competition for consumer discretionary spending and retail shelf space are all contributing to a declining recorded music industry. Additionally, the period of growth in recorded music sales driven by the introduction and penetration of the CD format has ended, and consumers are purchasing music on a song-by-song basis rather than purchasing an entire album, thereby generating lower sales. The industry may continue to decline and we cannot predict the timing or the extent of any improvement in the industry. A declining recorded music industry is likely to lead to reduced levels of revenue and operating income generated by our recorded music business. Additionally, a declining recorded music industry is also likely to have a negative impact on our music publishing business, which generates a portion of its revenues from mechanical royalties, primarily from the sale of music in CD and other recorded music formats. If we do not successfully respond to rapid changes in technology, services and standards, we may not remain competitive. Technology in the video, telecommunications, radio, music and data services used in the entertainment and Internet industries is changing rapidly. Advances in technologies or alternative methods of product delivery or storage or certain changes in consumer behavior driven by these or other technologies and methods of delivery and storage could have a negative effect on our businesses. Examples of such advances in technologies include video-on-demand, satellite radio, video games, MP3 players and other personal video and audio systems (e.g., ipods), wireless devices, text messaging and downloading from the Internet. For example, devices that allow users to view or listen to television or radio programs on a time-delayed basis and technologies which enable users to fast-forward or skip advertisements, such as DVRs (e.g., TiVo) and portable digital devices, may cause changes in consumer behavior that could affect the attractiveness of our offerings to advertisers, and could, therefore, adversely affect our revenues. In addition, further increases in the use of portable digital devices which allow users to view or listen to content of their own choosing, in their own time, while avoiding traditional commercial advertisements, could adversely affect our radio and television broadcasting advertising revenues. Other cable providers and direct-to-home satellite operators are developing new video compression techniques that allow them to transmit more channels on their existing equipment to highly targeted audiences, reducing the cost of creating channels and potentially leading to the division of the television marketplace into more specialized niche audiences. More television options increase competition for viewers and competitors targeting programming to narrowly defined audiences may gain an advantage over us for television advertising and subscription revenues. Such a competitive environment may increase the demand for programming thereby making it more expensive to acquire new programming or renew current programming. The ability to anticipate and adapt to changes in technology on a timely basis and exploit new sources of revenue from these changes will affect our ability to continue to grow and increase our revenue. Changes in U.S. communications laws or other regulations may have an adverse effect on our business. The television, radio music and Internet industries in the U.S. are highly regulated by U.S. federal laws and regulations issued and administered by various federal agencies, including the FCC. The television and radio broadcasting industry is subject to extensive regulation by the FCC under the Communications Act of 1934, as amended. For example, we are required to obtain licenses from the FCC to operate our radio and television stations with maximum terms of eight years. We cannot assure you that the FCC will approve our future renewal applications or that the renewals will be for full terms or will not include conditions or qualifications. The non-renewal, or renewal with substantial conditions or modifications, of one or more of our licenses could have a material adverse effect on our revenues. The U.S. Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation 17

22 Table of Contents of each of our business segments and ownership of our radio and television properties. For example, from time to time, proposals have been advanced in the U.S. Congress and at the FCC to shorten license terms to less than eight years, to mandate the origination of certain levels and types of local programming, or to require radio and television broadcast stations to provide advertising time to political candidates for free. In addition, some policymakers maintain that cable operators should be required to offer a la carte programming to subscribers on a network by network basis or family friendly programming tiers. Unbundling packages of program services may increase both competition for carriage on distribution platforms and marketing expenses, which could adversely affect our cable networks results of operations. Our failure to reach agreement with cable operators on acceptable retransmission consent terms, or new laws or regulations that eliminate or limit the scope of must-carry or retransmission consent rights, could significantly reduce our ability to obtain cable carriage and therefore revenues. The Communications Act prohibits cable operators from retransmitting commercial television and low power television signals without first obtaining the broadcaster s consent. This permission is commonly referred to as retransmission consent and may involve some compensation from the cable company to the broadcaster for the use of the signal. Alternatively, a local commercial television broadcast station may require a cable operator that serves the same market as the broadcaster to carry its signal. A demand for carriage is commonly referred to as must-carry. If the broadcast station asserts its must-carry rights, the broadcaster cannot demand compensation from the cable operator. We have elected retransmission consent with respect to some cable systems in markets where we own television stations, and must carry with respect to other cable systems. In cases where we have elected retransmission consent, we must reach agreement with local cable operators over the terms on which our stations will be carried, including compensation from the cable operator. These agreements are typically renegotiated every three to five years. We have not yet reached agreement with all cable systems with respect to which we have currently elected retransmission consent. By October 1, 2008, we must make a new election of either must-carry or retransmission consent for each system in markets in which we operate television stations for the three-year period commencing January 1, We cannot predict whether we will be able to reach agreement on acceptable terms with the operators of all cable systems with respect to which we elected retransmission consent. If we are unable to reach such agreement with a cable operator, we may choose to require that operator to cease carriage of our stations. If we are unable to execute retransmission consent agreements with respect to cable operators serving a material number of subscribers, it could reduce viewership and result in a diminution of revenues. To the extent that our full-power television stations rely on must-carry rights to obtain cable carriage on specific cable systems, new laws or regulations that eliminate or limit the scope of these cable carriage rights could significantly reduce our ability to obtain cable carriage. We cannot assure that must carry rights will continue, especially as they relate to the carriage of digital television. New laws or regulations that eliminate or limit the scope of these cable carriage rights could significantly reduce our ability to obtain cable carriage, which would reduce our ability to distribute our programming and consequently our ability to generate revenues from advertising. In addition, a number of entities have commenced operation, or announced plans to commence operation of Internet protocol video systems, or IPTV, using digital subscriber line, fiber optic to the home and other distribution technologies. The issue of whether those services are subject to the existing cable television regulations, including must carry or retransmission consent obligations, has not been resolved. If IPTV systems gain a significant share of the video distribution marketplace, and new laws and regulations fail to provide adequate must carry and/or retransmission consent rights, our ability to distribute our programming to the maximum number of potential viewers will be limited and consequently our revenue potential will be limited. 18

23 Table of Contents Vigorous enforcement or enhancement of FCC indecency and other program content rules against the broadcast and cable industries could have an adverse effect on our businesses and results of operations. FCC rules prohibit the broadcast of obscene material at any time and indecent or profane material on television or radio broadcast stations between the hours of 6 a.m. and 10 p.m. The FCC has stepped up its enforcement activities as they apply to indecency, and has indicated that it would consider initiating license revocation proceedings for serious indecency violations. In the past two years, the FCC has found indecent content in a number of cases, and has issued fines to the offending licensees. The maximum permitted fines per station are $325,000 per incident and $3,000,000 for a continuing violation. Fines have been assessed on a station-by-station basis, so that the broadcast of network programming containing allegedly indecent or profane material has resulted in fines levied against each station affiliated with that network which aired the programming containing such material. Appeals challenging the FCC s underlying indecency standards are pending in the federal courts, and the FCC has placed a hold on resolving indecency complaints pending resolution of those appeals. The determination of whether content is indecent is inherently subjective and, as such, it can be difficult to predict whether particular content could violate indecency standards, particularly where programming is live and spontaneous. Violation of the indecency rules could lead to sanctions that may adversely affect our businesses and results of operations. We have a significant amount of goodwill and other intangible assets and we may never realize the full value of our intangible assets. Goodwill and intangible assets totaled approximately $14.4 billion at December 31, After the Merger, our goodwill increased significantly. At least annually, we test our goodwill and non-amortizable intangible assets for impairment. Impairment may result from, among other things, deterioration in our performance, adverse market conditions, adverse changes in applicable laws and regulations, including changes that restrict the activities of or affect the products or services sold by our businesses and a variety of other factors. The amount of any quantified impairment must be expensed immediately as a charge to operations. Depending on future circumstances, we may never realize the full value of our intangible assets. Any future determination of impairment of a significant portion of our goodwill and other intangibles would have an adverse effect on our financial condition and results of operations. Our substantial indebtedness could adversely affect our operations. As a result of the Merger, we have a significant amount of indebtedness. As of December 31, 2007, we have outstanding total indebtedness of approximately $10 billion, including capital lease obligations and the aggregate of $2.3 billion of senior notes. In addition, as of December 31, 2007, we have available $750 million (without giving effect to the existing letters of credit) of additional borrowing capacity under our senior revolving credit facility. Our substantial level of indebtedness and other financial obligations increase the possibility that we may be unable to generate cash sufficient to pay, when due, the principal of, interest on, or other amounts due, in respect of our indebtedness, including the senior notes. Our substantial debt could also have other significant consequences. For example, it could: increase our vulnerability to general adverse economic, competitive and industry conditions; limit our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes on satisfactory terms or at all; require us to dedicate a substantial portion of our cash flow from operations to the payment of our indebtedness, thereby reducing the funds available to us for operations and any future business opportunities; expose us to the risk of increased interest rates as certain of our borrowings, including borrowings under our Senior Secured Credit Facilities (as defined below), will be at variable rates of interest; 19

24 Table of Contents restrict us from making strategic acquisitions or cause us to make non-strategic divestitures; limit our planning flexibility for, or ability to react to, changes in our business and the industries in which we operate; limit our ability to adjust to changing market conditions; and place us at a competitive disadvantage with competitors who may have less indebtedness and other obligations or greater access to financing. If we fail to make any required payment under our bank senior secured revolving credit facility, bank senior secured term loan facility, bank second-lien asset sale bridge loan and bank senior secured draw term loan facility (collectively, the Senior Secured Credit Facilities ) or to comply with any of the financial and operating covenants included in the Senior Secured Credit Facilities, we will be in default. Lenders under such facilities could then vote to accelerate the maturity of the indebtedness and foreclose upon our and our subsidiaries assets securing such indebtedness. Other creditors might then accelerate other indebtedness. If any of our creditors accelerate the maturity of their indebtedness, we may not have sufficient assets to satisfy our obligations under the Senior Secured Credit Facilities or our other indebtedness. Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage. We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although one of the indentures governing the senior notes and our Senior Secured Credit Facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. For example, we have up to $750 million (without giving effect to the existing letters of credit) of borrowings available under our senior secured revolving credit facility. In addition, we may, at our option, subject to certain conditions, increase the senior credit facilities in an amount not to exceed $750 million. Moreover, none of our indentures imposes any limitation on our incurrence of liabilities that are not considered Indebtedness under the indenture, nor do they impose any limitation on liabilities incurred by subsidiaries, if any, that might be designated as unrestricted subsidiaries. If we incur additional debt above current indebtedness levels, the risks associated with our substantial leverage would increase. Our ability to generate the significant amount of cash needed to service our debt and financial obligations and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control. Our ability to make payments on and refinance our debt, including the senior notes, amounts borrowed under our Senior Secured Credit Facilities and other financial obligations, and to fund our operations will depend on our ability to generate substantial operating cash flow. Our cash flow generation will depend on our future performance, which will be subject to prevailing economic conditions and to financial, business and other factors, many of which are beyond our control. Our business may not generate sufficient cash flow from operations and future borrowings may not be available to us under our Senior Secured Credit Facilities or otherwise in amounts sufficient to enable us to service our indebtedness, including the senior notes and borrowings under our Senior Secured Credit Facilities or to fund our other liquidity needs. If we cannot service our debt, we will have to take actions such as reducing or delaying capital investments, selling assets, restructuring or refinancing our debt or seeking additional equity capital. Any of these remedies may not, if necessary, be effected on commercially reasonable terms, or at all. In addition, the indenture governing the senior notes and the credit agreement for our Senior Secured Credit Facilities may restrict us from adopting any of these alternatives. Because of these and other factors beyond our control, we may be unable to pay the principal, premium, if any, interest or other amounts on our indebtedness. 20

25 Table of Contents The consummation of our sale of our music recording and publishing businesses is subject to risks and uncertainties, including the satisfaction of specified closing conditions by both parties. On February 27, 2008, we entered into a definitive agreement to sell our music recording and publishing businesses. The transaction is subject to certain closing conditions, including the receipt of certain regulatory approvals and the absence of a material adverse effect (as defined in the definitive agreement) on our music recording and publishing businesses since September 30, We expect the transaction to close in the second quarter of In the event that the sale of our music recording and publishing businesses is not consummated, our financial results and operations of those businesses may be adversely affected by the continuing diversion of management resources and uncertainty regarding the outcome of the process of selling the business. For example, if the sale is not consummated, the uncertainty of whether we will continue to own these businesses in the future could lead us to lose or fail to attract music artists, advertising revenue or business partners. Although we intend to take steps to address these risks, there can be no assurance that the sale will be consummated, or that any losses or distractions resulting from such failure to consummate the transaction, will not adversely affect the operations or financial results of these businesses. If we are unable to complete the sale of our music recording and publishing businesses and sell our other non-core assets, we may be unable to refinance our bank second-lien asset sale bridge loan. In addition to the proposed sale of our music recording and publishing businesses, we intend to sell certain non-core assets, including certain non-core television and radio stations, investments and excess real estate. We expect to close the music transaction in the second quarter of We intend to use approximately $113 million in gross proceeds from that sale together with the proceeds from the sale of the other non-core assets, and to the extent necessary, borrowings under our bank senior secured revolving credit facility (which cannot exceed $250.0 million), to pay down our $500.0 million bank second-lien asset sale bridge loan due March 29, The sale of our music recording and publishing businesses is subject to certain closing conditions, including the receipt of regulatory approvals and the absence of a material adverse effect (as defined in the definitive agreement) on our music recording and publishing businesses since September 30, We have not entered into any agreements to sell any of the other non-core assets. If the music sale is not consummated, the closing of the transaction is delayed and if we are unable to sell the other non-core businesses for as much as we estimated or at all, our ability to repay or refinance our bank second-lien asset sale bridge loan will be adversely affected. Restrictive covenants in the Senior Secured Credit Facilities and the indentures may restrict our ability to pursue our business strategies. Our Senior Secured Credit Facilities and the indentures governing our senior notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests. These agreements governing our indebtedness include covenants restricting, among other things, our ability to: incur or guarantee additional debt or issue certain preferred stock; pay dividends or make distributions on our capital stock or redeem, repurchase or retire our capital stock or subordinated and certain other debt; make certain investments; create liens on our or our subsidiary guarantors assets to secure debt; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries that are not guarantors of the senior notes; make capital expenditures; enter into transactions with affiliates; 21

26 Table of Contents merge or consolidate with another person or sell or otherwise dispose of all or substantially all of our assets; sell assets, including capital stock of our subsidiaries; alter the business that we conduct; and designate our subsidiaries as unrestricted subsidiaries. The Senior Secured Credit Facilities and the senior notes contain various covenants and restrictions and a breach of any covenant or restriction could result in a default under those agreements. If any such default occurs, the lenders of the Senior Secured Credit Facilities or the holders of the senior notes may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. In addition, a default under the indentures governing the senior notes would cause a default under the Senior Secured Credit Facilities, and the acceleration of debt under the Senior Secured Credit Facilities or the failure to pay that debt when due would cause a default under the indentures governing the senior notes (assuming certain amounts of that debt were outstanding at that time). The lenders under the Senior Secured Credit Facilities also have the right upon an event of default thereunder to terminate any commitments they have to provide further borrowings. Further, following an event of default under the Senior Secured Credit Facilities, the lenders under these facilities will have the right to proceed against the collateral. Beginning June 30, 2008, we will be subject to certain customary financial covenants under our bank credit agreement, and there can be no assurance that we will be in compliance at such date. If we are unable to implement and upgrade effectively our accounting and operations support systems we will be unable to provide outstanding customer service, we may lose customers and our ability to monitor our businesses may be impaired. On July 1, 2007, we implemented the Oracle system throughout the entire company and also implemented a shared services organization to centralize certain accounting functions, streamline processes, improve consistency in internal controls and enhance analytical capabilities. The Company was required to modify its existing internal controls related to the accounting processes that were affected by the implementation of the Oracle system. Our accounting and operations support systems are crucial to our ability to manage our business, control and monitor costs, provide customer service, and achieve operating efficiencies. Our accounting records, sales and other core operating and financial data are generated by these systems and the accuracy of this data depends on the quality of manual and automated entry and system integration. Our business depends on the performance of our senior executives. Our business depends on the efforts, abilities and expertise of our senior executives. These individuals are important to our success because they have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel and identifying business opportunities. The loss of one or more of these key individuals could impair our business and development until qualified replacements are found. We cannot assure you that these individuals could quickly be replaced with persons of equal experience and capabilities. Although we have employment agreements with certain of these individuals, we could not prevent them from terminating their employment with us. We are controlled by the Sponsors, whose interests may not be aligned with ours or yours. We are controlled by the Sponsors, and therefore they have the power to control our affairs and policies, including entering into mergers, sales of substantially all of our assets and other extraordinary transactions as well as decisions to issue shares, declare dividends, pay advisory fees and make other decisions, and they may have an interest in our doing so. The interests of the Sponsors could conflict with your interests in material 22

27 Table of Contents respects. Furthermore, the Sponsors are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us, as well as businesses that represent major customers of our businesses. The Sponsors may also pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as the Sponsors continue to own a significant amount of our outstanding capital stock, they will continue to be able to strongly influence or effectively control our decisions. ITEM 1B. None. Unresolved Staff Comments ITEM 2. At December 31, 2007, the principal buildings owned or leased by the Company and used primarily by the television and radio segments are described below: Location (1) Properties Principal Properties of the Company The Company is party to a lease for a three-story building with approximately 92,500 square feet for the relocation of its owned and/or operated television and radio stations and studio facilities in Puerto Rico. The building is being constructed and is owned by the landlord, with occupancy of the premises expected during the second half of The term of the lease is 50 years. The sum of the lease payments will be approximately $74 million over 50 years. The Miami owned facilities primarily house Univision Network and TeleFutura Network administration, operations (including uplink facilities), sales, production and news. In addition, Galavisión operations occupy space in Univision Network s facilities. The Company s Miami television stations, WLTV and WAMI, occupy leased facilities. The Company broadcasts its programs to the Company s affiliates on three separate satellites from four transponders. In addition, the Company uses a fifth transponder for news feeds. The Company owns or leases remote antenna space and microwave transmitter space near each of its owned-and-operated stations. Also, the Company leases space in public warehouses and storage facilities, as needed, near some of its owned-and-operated stations. The Company believes that its principal properties, whether owned or leased, are suitable and adequate for the purposes for which they are used and are suitably maintained for such purposes. Except for the inability to renew any leases of property on which antenna towers stand or under which the Company leases transponders, the inability to renew any lease would not have a material adverse effect on the Company s financial condition or results of operations since the Company believes alternative space on reasonable terms is available in each city. 23 Aggregate Size of Property in Square Feet (Approximate) Owned or Leased Lease Expiration Date Miami, FL 310,108 Owned Miami, FL 68,595 Leased 06/30/15 (2) Los Angeles, CA 166,366 Owned Houston, TX 107,489 Owned New York, NY 92,017 Leased 06/30/15 (1) The Miami, Los Angeles and New York locations are used primarily by the television and Internet businesses. The Houston location, which was purchased in 2004, is used by the television and radio businesses. (2) Option to renew available.

28 Table of Contents ITEM 3. Legal Proceedings Televisa PLA Litigation Televisa and the Company are parties to the PLA, which provides the Company s three television networks with a majority of prime time programming and a substantial portion of their overall programming. The Company currently pays a license fee to Televisa for programming, subject to certain upward adjustments. On June 16, 2005, Televisa filed an amended complaint in the United States District Court for the Central District of California alleging breach by the Company of the PLA, including breach for its alleged failure to pay Televisa royalties attributable to revenues from certain programs and from our use of unsold time to promote assets, the Company s alleged unauthorized editing of certain Televisa programs and related copyright infringement claims, a claimed breach of the Soccer Agreement (a soccer rights side-letter to the PLA), a claim that we did not cooperate with various Televisa audit rights and efforts and a claim that the Company has not been properly carrying out a provision of the PLA that gives Televisa the secondary right to use the Company s unsold advertising inventory. Televisa sought monetary relief in an amount not less than $1.5 million for breach, declaratory relief against the Company s ability to recover amounts of approximately $5.0 million previously paid in royalties to Televisa, and an injunction against the Company s alteration of Televisa programming without Televisa s consent. In June 2005, the Company made a payment under protest to Televisa of $1.5 million. On August 15, 2005, the Company filed an answer to the amended complaint denying Televisa s claims and also filed counterclaims alleging various breaches of contract and covenants by Televisa. The Company seeks monetary damages and injunctive relief. On September 20, 2005, Televisa filed a motion to dismiss certain of the Company s counterclaims. On November 17, 2005, the District Court denied that motion in its entirety. Thereafter, Televisa changed counsel and on January 31, 2006, after several extensions of time granted by the Company, Televisa filed its answer to the Company s counterclaims. Televisa in its answer alleged that its claims rose to the level of a material breach of the PLA and delivered a purported notice of material breach on February 16, On March 2, 2006, the Company responded to Televisa s purported notice of material breaches. In the Company s response, the Company asserted that the notice was procedurally defective and that Televisa s breach claims were not, in any event, well-founded. The Company does not believe that it is in breach of its agreements with Televisa and certainly not in material breach. For the nine months ended December 31, 2007, three months ended March 31, 2007, twelve months ended December 31, 2006 and 2005, the Company recognized charges in the statement of operations related to the Televisa payments under protest and other license fee overcharges of approximately $2.5 million, $2.2 million, $9.4 million and $9.6 million, respectively. The Company seeks recovery of these amounts via a counterclaim. On March 31, 2006, the Company and Televisa stipulated to the filing of Televisa s Second Amended and Supplemental Complaint in the lawsuit. The new complaint raises the same allegations of material breach contained in Televisa s January 31, 2006 answer to the Company s counterclaims and in its February 16, 2006 notice of purported material breaches. Among other claims, the new complaint seeks a declaration that the Company is in material breach of the PLA and that Televisa has the right to suspend or terminate its performance under the PLA. On May 5, 2006, the Company filed its Answer to the Second Amended Complaint, denying Televisa s principal substantive allegations, denying liability, and asserting various affirmative defenses. On May 12, 2006, the Court reset the discovery cut-off date in the case for December 29, 2006, and the trial date for June 19, On May 22, 2006, the Company filed its First Amended Counterclaims, which added a claim for declaratory relief that the Company was not in material breach of the PLA or the Soccer Agreement and that it had received inadequate notice of any alleged breaches. Televisa sent a letter on June 2, 2006, notifying the Company that the 90-day cure period had expired for certain breaches alleged in Televisa s February 16, 2006, notice of purported material breaches under the PLA and the Soccer Agreement. In that June 2, 2006 letter, Televisa contended that because the Company had purportedly failed to cure these and other breaches, some of which Televisa asserted were not susceptible of being cured, Televisa therefore had the right to terminate the PLA, the Soccer 24

29 Table of Contents Agreement, and a related Guaranty given by Grupo Televisa to the Company. Televisa indicated, however, that it was not at that time exercising its purported termination rights and that it was seeking a declaration of its right to terminate in the litigation between the companies. On July 19, 2006, Televisa filed a complaint in Los Angeles Superior Court seeking a judicial declaration that on and after December 19, 2006, it may, without liability to Univision, transmit or permit others to transmit any programming that is licensed to the Company under the PLA into the United States from Mexico over or by means of the Internet. The Company was served with the new complaint on July 21, The Company filed a motion to dismiss or stay this action on August 21, In response to the motion, Televisa stipulated to stay the Superior Court action, and the Court entered the stay on January 11, On August 18, 2006, the Company filed a motion for leave to file its Second Amended Counterclaims, which include a newly-added claim for a judicial declaration that on and after December 19, 2006, Televisa may not transmit or permit others to transmit any programming that is licensed to the Company under the PLA into the United States over or by means of the Internet. Televisa opposed the motion. On October 5, 2006, the Court granted Univision s motion for leave to file its Second Amended Counterclaims. On September 21, 2006, Televisa sent the Company an additional notice of purported breaches under the PLA. The new notice alleged breaches relating to the Company s sale of advertising time in connection with certain types of programs. The notice also purported to supplement Televisa s previous breach claims with respect to the Company s editing of Televisa programming. On November 15, 2006, Televisa filed a motion seeking a separate trial of the Company s Internet counterclaim. The Company opposed Televisa s motion, and, on December 6, 2006, the Court denied the motion. Pursuant to a stipulation and order dated November 3, 2006, the Court appointed a Special Master to oversee discovery matters in the federal case and to make recommendations on certain procedural issues. On December 15, 2006, the Special Master recommended that the Court extend the discovery completion date to June 29, 2007, and continue the trial date to October The Court accepted the Special Master s recommended dates for discovery completion and trial by order dated January 18, Pursuant to a motion brought by the Company, the Special Master on June 8, 2007, recommended a further extension of the discovery cutoff to August 27, 2007, and of the trial date to January 15, The federal court accepted the Special Master s recommended dates for discovery completion and trial by order dated June 19, Pursuant to a stipulation of the parties and a recommendation by the Special Master, the Court on August 29, 2007, further continued the trial date to February 12, 2008, and adjusted other pretrial deadlines. On October 16, 2007, acting upon another stipulation of the parties and recommendation by the Special Master, the Court once again continued the trial date and related deadlines. The trial is now scheduled to begin on April 29, On October 1, 2007, the Company filed a motion for partial summary judgment on one of Televisa s claims and one of the Company s counterclaims seeking a ruling that the breaches of the PLA alleged by Televisa, even if found to be true, do not constitute material breaches that would allow Televisa to terminate the PLA. After briefing by both sides and argument before the Court, on December 17, 2007, the Court issued an order denying the Company s summary judgment motion, finding that disputed issues as to certain facts would need to be resolved by a jury. The Company continues to defend the litigation and pursue its counterclaims vigorously and it plans to take all action necessary to ensure Televisa s continued performance under the PLA until its expiration in ITEM 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of shareholders during the fourth quarter of the fiscal year covered by this report. 25

30 Table of Contents ITEM 5. (a) PART II There were 1,000 shares, $0.01 par value, common stock issued and outstanding as of February 15, There is no public market for the Company s common stock. (b) Market for Registrant s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information All of the Company s shares of common stock issued and outstanding as of February 15, 2008 are held by Broadcast Media Partners Holdings, Inc. (c) Holders Cash Dividends The Company has never declared or paid dividends on any class of its common stock. The Company s Senior Secured Credit Facilities restricts the payment of cash dividends on common stock. The Company does not anticipate paying any cash dividends on its common stock in the foreseeable future. Future dividend policy will depend on the Company s earnings, capital requirements, financial condition and other factors considered relevant by the Board of Directors. (d) (e) Securities Authorized for Issuance Under Equity Compensation Plans Not applicable. Issuer Purchases of Equity Securities There have been no repurchases of our equity securities during the fourth quarter of the past fiscal year. 26

31 Table of Contents ITEM 6. Selected Financial Data Presented below is the selected historical financial data of Univision Communications Inc. FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA (In thousands, except share and per-share data) Successor Nine Months Ended December, 31 Three Months Ended March 31, Year Ended December 31, Predecessor Year Ended December 31, Year Ended December 31, Year Ended December 31, (a) 2005 (a) 2004 (a) 2003 (b) Statement of Operations Data Net revenues $ 1,635,579 $ 437,266 $ 2,025,587 $ 1,746,087 $ 1,608,375 $ 1,197,817 Direct operating expenses (excluding depreciation and amortization) 524, , , , , ,244 Selling, general and administrative expenses (excluding depreciation and amortization ) 450, , , , , ,521 Merger related expenses 5, ,181 13,308 Cost reduction plan 30,256 (c) Voluntary contribution per FCC consent decree 24,000 (d) Depreciation and amortization 120,066 20,122 82,871 80,346 85,938 74,926 Operating income (loss) 534,931 (55,671) 671, , , ,126 Interest expense, net 584,429 17,857 89,234 84,882 65,982 69,116 Loss on extinguishment of debt 1, ,122 Amortization of deferred financing costs 34, ,553 3,309 3,429 3,593 Equity (income) loss in unconsolidated subsidiaries and other (2,922) (1,141) (4,352) (4,626) 1,517 4,007 Gain on sale of Enntravision stock (1,454) Gain on change of Entravision ownership interest (1,611) Nontemporary decline in fair value of cost method investments 2,925 5,200 (e) 81,877 (e) (Loss) income from continuing operations before income taxes (84,226) (74,526) 580, , , ,899 (Benefit) provision for income taxes (23,756) (5,943) 231, , , ,520 (Loss) income from continuing operations (60,470) (68,583) 348, , , ,379 (Loss) income from discontinued operations, net of income tax (187,403) (f) 1, ,528 2,330 (6,952) Net (loss) income $ (247,873) $ (67,020) $ 349,174 $ 187,179 $ 255,883 $ 155,427 Balance Sheet Data (at the end of period) Current assets $ 820,581 $ 872,052 $ 663,891 $ 633,600 $ 638,489 $ 520,566 Total assets 16,457,938 16,921,542 8,166,394 8,128,336 8,227,126 7,642,917 Current liabilities 686, , , , , ,633 Long-term debt, including capital leases 9,765,540 9,817, , ,299 1,227,680 1,368,346 Stockholders equity 3,627,941 3,957,000 5,561,499 5,090,900 5,387,704 5,102,977 Other Data Net cash provided by operating activities $ 158,823 $ 121,040 $ 441,172 $ 409,722 $ 424,977 $ 329,777 Net cash used in investing activities (45,894) (16,314) (155,988) (320,081) (231,114) (197,360) Net cash (used in) provided by financing activities (207,088) 112,100 (281,062) (180,109) (80,672) (91,391) (a) Includes the Company s variable interest entities from March 31, See Notes to Consolidated Financial Statements 7. Investments. (b) The Company acquired Hispanic Broadcasting Corporation on September 22, (c) The Company reported a cost reduction plan charge in the fourth quarter of See Notes to Consolidated Financial Statements 8. Accounts Payable and Accrued Liabilities. (d) The Company made a voluntary contribution per an FCC consent decree. See Notes to Consolidated Financial Statements 2. Recent Developments. (e) Charge related to the Company s investments in Entravision and St. Louis/Denver LLC. See Notes to Consolidated Financial Statements 7. Investments. The Company reported no tax benefit related to these charges related to its investments. See Notes to Consolidated Financial Statements 15. Income Taxes. (f) Includes an impairment charge of $190.6 million before the effect of income taxes and $180.3 million net of income taxes. See Notes to Consolidated Financial Statements 2. Recent Developments.

32 Table of Contents ITEM 7. Executive Summary Management s Discussion and Analysis of Financial Condition and Results of Operations Information presented for the year ended December 31, 2007 represents the sum of the amounts for the three months ended March 31, 2007 and the nine months ended December 31, See Notes to Consolidated Financial Statements 3. Significant Accounting Policies. Univision Communications Inc., together with its wholly-owned subsidiaries (the Company, we, us and our ), has continuing operations in three business segments: Television : The Company s principal business segment is television, which consists primarily of the Univision and TeleFutura national broadcast networks, the owned and/or operated television stations and the Galavisión cable television network. For the year ended December 31, 2007, the television segment accounted for approximately 77% of the Company s net revenues. Radio : Univision Radio is the largest Spanish-language radio broadcasting company in the United States. For the year ended December 31, 2007, the radio segment accounted for approximately 21% of the Company s net revenues. Internet: Univision Online, Inc. operates the Company s Internet portal, Univision.com, which provides Spanish-language content directed at Hispanics in the U.S., Mexico and Latin America. For the year ended December 31, 2007, the Internet segment accounted for approximately 2% of the Company s net revenues. On March 29, 2007, Broadcasting Media Partners, Inc. ( Broadcasting Media, formerly known as Umbrella Holdings, LLC), completed its acquisition of the Company pursuant to the terms of the agreement and plan of merger dated as of June 26, 2006 (the Merger Agreement ), by and among the Company, Broadcasting Media and Umbrella Acquisition, Inc. ( Umbrella Acquisition ), a subsidiary of Broadcasting Media. Umbrella Acquisition and Broadcasting Media were formed by an investor group that includes affiliates of Madison Dearborn Partners, LLC, Providence Equity Partners Inc., Saban Capital Group Inc., Texas Pacific Group, and Thomas H. Lee Partners, L.P. (collectively the Sponsors ). To consummate the acquisition, Umbrella Acquisition was merged (the Merger ) with and into the Company and the Company was the surviving corporation. Pursuant to the Merger Agreement, each share of the Company s common stock issued and outstanding immediately prior to the effective time of the Merger was canceled and automatically converted into the right to receive $36.25 in cash, without interest. As a result of the Merger, a new basis of accounting was established at March 29, In effect, Broadcasting Media s basis in the Company s assets and liabilities has been pushed down to the Company s financial statements as of March 31, The acquisition was accounted for using the purchase method of accounting as though the Merger closed on March 31, 2007 for convenience purposes to align the Merger transaction date to the accounting close date considering the insignificant impact to the statement of operations. The Company intends to divest certain non-core assets, including its music recording and publishing businesses and certain non-core television and radio stations, investments and excess real estate. The Company has entered into a definitive agreement to sell its music business which it expects to close in the second quarter of The closing is subject to regulatory approvals and certain closing conditions including the absence of a material adverse effect (as defined in the definitive agreement) on our music business since September 30, See Notes to Consolidated Financial Statements 2. Recent Developments. The music business assets and liabilities are classified as held for sale in the consolidated balance sheet and the results of operations are classified as discontinued operations in the consolidated statement of operations. See Notes to Consolidated Financial Statements 2. Recent Developments. 28

33 Table of Contents Description of Net Revenues Television net revenues are generated from the sale of network, national and local spot advertising time, subscriber fees and sales commissions on national advertising aired on Univision affiliate television stations less agency commissions, music license fees and station compensation paid to affiliates. Radio net revenues are derived from the sale of local, national, and network spot advertising time less agency commissions. The Internet business derives its net revenues primarily from online advertising. Description of Direct Operating Expenses Direct operating expenses consist primarily of programming, license fees, news and technical costs. License fees related to our program license agreements (the PLA ) with Grupo Televisa S.A. and its affiliates ( Televisa ) and affiliates of Corporación Venezolana del Television, C.A. (VENEVISION) ( Venevision ) account for approximately 17% and 16% of our total direct operating and selling, general and administrative expenses, excluding Merger related expenses for the years ended December 31, 2007 and 2006, respectively. Description of Selling, General and Administrative Expenses Selling, general and administrative expenses include selling, research, promotions, Televisa litigations costs, management fee and other general and administrative expenses. Factors Affecting Our Results Televisa Program License Agreement Litigation Televisa and the Company are parties to the PLA, which provides our three television networks with a majority of its prime time programming and a substantial portion of its overall programming. The Company currently pays a license fee to Televisa for programming, subject to certain upward adjustments. In June 2005, Televisa filed an amended complaint in the United States District Court for the Central District of California alleging breach by us of our PLA with Televisa. Televisa s current claims include breach for our alleged failure to pay Televisa royalties attributable to revenues from certain programs and from our use of unsold time to promote assets, the Company s alleged unauthorized editing of certain Televisa programs and related copyright infringement claims, a claimed breach of a soccer rights side-letter to the PLA (the Soccer Agreement ), a claim that we did not cooperate with various Televisa audit rights and efforts and a claim that we have not been properly carrying out a provision of the PLA that gives Televisa the secondary right to use our unsold advertising inventory. Televisa sought monetary relief in an amount not less than $1.5 million for breach, declaratory relief against the Company s ability to recover amounts of approximately $5.0 million previously paid in royalties to Televisa, and an injunction against our alteration of Televisa programming without Televisa s consent. For the nine months ended December 31, 2007, three months ended March 31, 2007 and years ended December 31, 2006 and 2005, the Company recognized charges in the statement of operations related to the Televisa payments under protest and other license fee overcharges of approximately $2.5, $2.2, $9.4 and $9.6 million, respectively. Televisa is also seeking a declaration that the Company is in material breach of the PLA and the Soccer Agreement and that Televisa has the right to suspend or terminate its performance under such agreements. We do not believe we are in breach of our agreements with Televisa and certainly not in material breach. The Company has filed an answer and also filed counterclaims alleging various breaches of contract and covenants by Televisa. The Company seeks monetary damages and injunctive relief. Televisa also seeks a declaration that it may transmit or permit others to transmit any television programming into the United States from Mexico over or by means of the Internet. Pursuant to a stipulation and order dated November 3, 2006, the federal court appointed a Special Master to oversee discovery matters in the federal case and to make recommendations on certain procedural issues. On December 15, 2006, the Special Master recommended that the federal court extend the discovery completion date to June 29, 2007, and continue the trial date to October The federal court accepted the Special Master s recommended dates for discovery completion and trial by order dated January 18,

34 Table of Contents Pursuant to a motion brought by the Company, the Special Master on June 8, 2007, recommended a further extension of the discovery cutoff to August 27, 2007, and of the trial date to January 15, The federal court accepted the Special Master s recommended dates for discovery completion and trial by order dated June 19, Pursuant to a stipulation of the parties and a recommendation by the Special Master, the Court on August 29, 2007, further continued the trial date to February 12, 2008, and adjusted other pretrial deadlines. On October 16, 2007, acting upon another stipulation of the parties and recommendation by the Special Master, the Court once again continued the trial date and related deadlines. The trial is now scheduled to begin on April 29, On October 1, 2007, the Company filed a motion for partial summary judgment on one of Televisa s claims and one of the Company s counterclaims. The motion seeks a ruling that the breaches of the PLA alleged by Televisa, even if found to be true, do not constitute material breaches that would allow Televisa to terminate the PLA. After briefing by both sides and argument before the Court, on December 17, 2007, the Court issued an order denying the Company s summary judgment motion, finding that disputed issues as to certain facts would need to be resolved by a jury. The Company continues to defend the litigation and pursue its counterclaims vigorously and it plans to take all action necessary to ensure Televisa s continued performance under the PLA until its expiration in Merger Related Expenses The Company accounted for its Merger-related payments, incurred in connection with the Merger, primarily as either deferred financing costs recorded as an asset in the balance sheet or merger related expenses, which were expensed in the statement of operations. Deferred financing costs consist of all payments made by the Company in connection with obtaining its new debt, primarily ratings fees, legal fees, audit fees and all costs related to the offering circular and the road show. All other costs were expensed in the statement of operations by the Company as merger related expenses such as the success and opinion fees, change in control severance payments, the solvency opinion fee, legal fees, audit fees, appraisal fees and tax fees. Certain post-merger payments relate to involuntary termination benefits and relocation costs, which were capitalized under EITF 95-3, Recognition of Liabilities in Connection with a Purchase Business Combination. Other costs such as indirect expenses related to the Merger were expensed in the statement of operations. Broadcasting Media s Merger-related direct expenditures were capitalized and accounted for under the guideline of SFAS No. 141, Business Combinations, and were allocated to tangible or intangible assets, deferred financing costs or goodwill. Voluntary Contribution per FCC Consent Decree On March 27, 2007, the FCC and Univision entered into a Consent Decree to resolve pending license renewal proceedings where petitioners alleged that certain Univision stations failed to comply with the children s programming requirements set forth in the Children s Television Act of 1990 and Section of the Commission s rules. The FCC agreed to terminate the proceedings and grant the stations renewal applications and the Company agreed to make a $24 million voluntary contribution to the United States Treasury. The contribution was accrued as of March 31, 2007 and was paid in April World Cup Games In 2006, the Company s television segment aired the 2006 World Cup games, which generated revenues and expenses that did not exist in During the year ended December 31, 2006, the 2006 Fédération Internationale de Football Association ( FIFA ) World Cup directly contributed an estimated $113.6 million of incremental net revenue and an estimated $5.3 million of incremental operating income before depreciation and amortization. 30

35 Table of Contents Management Fee Agreement On March 29, 2007, the Company entered into a management agreement with Broadcasting Media and the Sponsors under which certain affiliates of the Sponsors provide the Company with management, consulting and advisory services for a quarterly aggregate service fee of 2% of operating income before depreciation and amortization, subject to certain adjustments, as well as reimbursement of out-of-pocket expenses. The management fee for the nine months ended December 31, 2007 was $14.4 million and the out-of-pocket expenses were $1.2 million, both of which are included in selling, general and administrative expenses on the statement of operations. Critical Accounting Policies Certain of the Company s accounting policies require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on the Company s historical experience, terms of existing contracts, the Company s evaluation of trends in the industry, information provided by the Company s customers and suppliers and information available from other outside sources, as appropriate. However, they are subject to an inherent degree of uncertainty. As a result, actual results in these areas may differ significantly from the Company s estimates. The Company believes the following critical accounting policies affect the more significant judgments and estimates used in the preparation of its financial statements and changes in these judgments and estimates may impact future results of operations and financial condition. Program Costs for Television Broadcast Program costs pursuant to the PLAs are expensed monthly by the Company as a license fee, which is based principally on a percentage of the Company s television combined net time sales, as defined in the PLA. The Company has expensed its payments made under protest to Televisa, discussed previously in Item 3. Legal Proceedings. Depending on the outcome of the litigation, the Company may recover some or all of these payments. Also, the Company may be required to pay additional license fees on certain programming that is currently being excluded from the license fee calculation. All other costs incurred in connection with the production of or purchase of rights to programs that are ready and available to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequent to one year are considered non-current. Program costs are charged to operating expense as the programs are broadcast. In the case of multi-year sports contracts, program costs are charged to operating expense based on the flow-of-income method over the term of the contract. Management estimates the amount of revenue expected to be realized when programs are aired, as well as the revenue associated with multi-year sports contracts in applying the flow-of-income method. If the revenue realized associated with the programming is less than estimated, the Company s future operating margins will be lower and previously capitalized program costs may be written off. Revenue Recognition Net revenues are comprised of gross revenues from the Company s television and radio broadcast, cable and Internet businesses, including subscriber fees, sales commissions on national advertising aired on Univision affiliated television stations, less agency commissions, music license fees paid by television and compensation costs paid to affiliated television stations. The Company s television and radio gross revenues are recognized when advertising spots are aired and performance guaranties, if any, are achieved. The Internet business recognizes primarily banner and sponsorship advertisement revenues. Banner and sponsorship revenues are recognized ratably over their contract period or as impressions are delivered. Impressions are defined as the number of times that an advertisement appears in pages viewed by users of the Company s online properties. 31

36 Table of Contents The music business, which is accounted for as a discontinued operation, recognizes revenues from the sale of recorded music upon delivery of products to third parties based on terms F.O.B. destination, less an allowance for returns, cooperative advertising and discounts. Accounting for Intangibles and Long-Lived Assets For purposes of performing the impairment test of goodwill, we established the following reporting units: television, radio, music and Internet. The Company compares the fair value of the reporting unit to its carrying amount on an annual basis to determine if there is potential goodwill impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value. The Company also compares the fair value of indefinite-lived intangible assets to their carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized. In accordance with SFAS No. 144, Accounting for Impairment of Disposal of Long-Lived Assets, long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Program License Agreement Televisa and Venevision have PLAs with us that provide our three television networks with a substantial amount of programming. The Company currently pays an aggregate license fee of approximately 15% of television net revenues to Televisa and Venevision collectively for their programming, subject to certain upward adjustments. The Company believes that the PLAs and all other agreements with Televisa and Venevision, which were related party transactions prior to the Merger, have been negotiated as arms-length transactions. If the license fee ultimately paid is more than the amount estimated by management, additional license fee expense will be recognized. Share-Based Compensation On January 1, 2006, the Company adopted SFAS No. 123R, Share-Based Payment, which requires compensation expense relating to share-based payments to be recognized in earnings using a fair-value measurement method. The Company has elected to use the straight-line attribution method of recognizing compensation expense over the vesting period. The fair value of each new stock option award will be estimated on the date of grant using the Black-Scholes-Merton option-pricing model, which is the same model that was used by the Company prior to the adoption of SFAS No. 123R. The Company elected the modified prospective method and therefore, prior periods were not restated. Under the modified prospective method, this statement was applied to new awards granted after the time of adoption, as well as to the unvested portion of previously granted equity-based awards for which the requisite service had not been rendered as of January 1, See Notes to Consolidated Financial Statements 3. Significant Accounting Policies. Recent Accounting Pronouncements For recent accounting pronouncements see Notes to Consolidated Financial Statements 3. Significant Accounting Policies. 32

37 Table of Contents Results of Operations Overview In the following table, the Company s combined results for the year ended December 31, 2007 represent the sum of the amounts for the three months ended March 31, 2007 and the nine months ended December 31, This combination does not comply with U.S. generally accepted accounting principles ( GAAP ) or with the Securities and Exchange Commission rules for pro forma presentation, but is presented because we believe it enables a meaningful comparison of our results for the year ended December 31, 2007 compared to year ended December 31, In thousands 33 Successor Nine Months Ended December 31, 2007 Predecessor Three Months Ended March 31, 2007 Combined Results of Successor and Predecessor Year Ended December 31, 2007 Predecessor Year Ended December 31, Net revenues $ 1,635,579 $ 437,266 $ 2,072,845 $ 2,025,587 Direct operating expenses (excluding depreciation and amortization) 524, , , ,924 Selling, general and administrative expenses (excluding depreciation and amortization) 450, , , ,003 Merger related expenses 5, , ,131 13,308 Voluntary contribution per FCC consent decree 24,000 24,000 Depreciation and amortization 120,066 20, ,188 82,871 Operating expenses 1,100, ,937 1,593,585 1,354,106 Operating income (loss) 534,931 (55,671) 479, ,481 Other expenses (income): Interest expense, net 584,429 17, ,286 89,234 Loss on extinguishment of debt 1,630 1,630 Amortization of deferred financing costs 34, ,234 2,553 Equity income in unconsolidated subsidiaries and other (2,922) (1,141) (4,063) (4,352) Nontemporary decline in fair value of cost and equity method investments 2,925 2,925 5,200 Gain on sale of Entravision stock (1,454) (Loss) income from continuing operations before income taxes (84,226) (74,526) (158,752) 580,300 (Benefit) provision for income taxes (23,756) (5,943) (29,699) 231,304 (Loss) income from continuing operations (60,470) (68,583) (129,053) 348,996 (Loss) income from discontinued operation, net of income tax (187,403) 1,563 (185,840) 178 Net (loss) income $ (247,873) $ (67,020) $ (314,893) $ 349,

38 Table of Contents Year Ended December 31, 2007 Compared to Year Ended December 31, 2006 In comparing our results of operations for the year ended December 31, 2007 ( 2007 ) with those ended December 31, 2006 ( 2006 ), the following should be noted: In 2007, the Company recorded an impairment charge related to its music business in the amount of $190.6 million before the effect of income taxes and $180.3 million net of income taxes. The decline in the value of our music business is due primarily to political, technological and economic factors impacting the music industry in general. In 2006, the Company s television segment aired the 2006 World Cup games, which generated revenues and expenses that did not exist in During the year ended December 31, 2006, the 2006 Fédération Internationale de Football Association ( FIFA ) World Cup directly contributed an estimated $113.6 million of incremental net revenue and an estimated $5.3 million of incremental operating income before depreciation and amortization. In 2007 and 2006, the Company incurred Merger related expenses of $150.1 and $13.3 million, respectively. The costs are primarily related to legal, banking, change in control severance payments and consulting fees incurred in connection with the Merger. In the first quarter of 2007, the Company expensed a voluntary contribution per an FCC consent decree of approximately $24.0 million to resolve pending license renewal applications. In 2007 and 2006, the Company recorded selling, general and administrative expenses of $20.1 and $9.4 million, respectively, for Televisa litigation costs regarding its PLA and direct operating expenses of $4.7 and $9.4 million, respectively, for payments made under protest and other license fee overcharges to Televisa. In 2007, the Company recorded management fee expense of $14.4 million payable to affiliates of the Sponsors and $1.2 million of out-of-pocket expenses, which are included in selling, general and administrative expenses. See Notes to Consolidated Financial Statements 4. Related Party Transactions. The Company s selling, general and administrative expenses include share-based compensation costs of $8.2 and $11.1 million for the year ended December 31, 2007 and 2006, respectively. The Company s direct operating expenses include share-based compensation costs of $0.6 million and $1.5 million for the year ended December 31, 2007 and 2006, respectively. The Company also recorded an impairment charge in the fourth quarter of 2006 of $5.2 million in connection with its Denver and St. Louis LLC investment. The Company did not record a tax benefit related to these transactions in See Notes to Consolidated Financial Statements 7. Investments. In 2007, the Company recorded $6.7 million of finance transformation expenses, primarily related to the implementation of the Oracle system. At December 31, 2007, the Company recorded a nontemporary decline in the fair value of investments of $2.9 million, which consisted of $1.6 million related to our investment in Entravision and $1.3 million related to our investment in Equity Media Holdings Corporation. See Notes to Consolidated Financial Statements 7. Investments. In 2007, the Company recorded an asset impairment charge of $1.2 million related to a loan receivable, which was recorded in selling, general and administrative expenses. Net revenues. Net revenues were $2,072.8 million in 2007 compared to $2,025.6 million in 2006, an increase of $47.2 million or 2.3%. In 2006, the 2006 FIFA World Cup contributed an estimated $113.6 million of incremental net revenues. The Company s television segment revenues were $1,596.6 million in 2007 compared to $1,492.1 million in 2006, excluding the 2006 FIFA World Cup estimated incremental net revenues, an increase of $104.5 million or 7.0%. The growth was primarily attributable to the Company s television networks, resulting from increased viewership. The owned-and-operated stations also had increased revenues attributable primarily to the New York, Chicago, San Antonio, Dallas and Los Angeles markets, while most of the remaining 34

39 Table of Contents markets were essentially flat. The Company s radio segment had revenues of $429.9 million in 2007 compared to $381.5 million in 2006, an increase of $48.4 million or 12.7%. The growth was attributable primarily to the stations in the Los Angeles, Miami, Houston, Dallas, and Chicago and increased network revenues. The Company s Internet segment had revenues of $46.3 million in 2007 compared to $38.3 million in 2006, an increase of $8.0 million or 20.7%, primarily related to an increase in advertisers. Expenses. Direct operating expenses decreased to $684.6 million in 2007 from $719.9 million in 2006, a decrease of $35.3 million or 4.9%. The Company s television segment direct operating expenses were $584.2 million in 2007 compared to $633.4 million in 2006, a decrease of $49.2 million or 7.8%. The decrease is due to the elimination of 2006 World Cup costs of $108.3 million, and a decrease in payments made under protest and other license fee overcharges to Televisa of $4.7 million; offset by increased license fee expense of $18.7 million paid under our PLA and $45.1 million primarily related to increased programming costs. The Company s radio segment had direct operating expenses of $85.1 million in 2007 compared to $72.7 million in 2006, an increase of $12.4 million or 17.1%. The increase is due to increased programming costs of $11.4 million and technical costs of $1.0 million. The Company s Internet segment had direct operating expenses of $15.3 million in 2007 compared to $13.8 million in 2006, an increase of $1.5 million or 11.2%. The increase is due primarily to increased technical and programming costs. As a percentage of net revenues, the Company s direct operating expenses decreased to 33.0% in 2007 from 35.5% in Selling, general and administrative expenses increased to $594.6 million in 2007 from $538.0 million in 2006, an increase of $56.6 million or 10.5%. The Company s television segment selling, general and administrative expenses were $404.1 million in 2007 compared to $358.1 million in 2006, an increase of $46.0 million or 12.8%. The increase is due primarily to increased Televisa litigation costs of $10.8 million, a management fee payable to affiliates of the Sponsors of $14.4 million, finance transformation costs of $6.7 million and increased research and promotion costs of $5.4 million. The Company s radio segment had selling, general and administrative expenses of $174.1 million in 2007 compared to $164.9 million in 2006, an increase of $9.2 million or 5.6%. The increase is due to increased selling costs of $11.1 million offset by various savings of $1.9 million. The Company s Internet segment had selling, general and administrative expenses of $16.4 million in 2007 compared to $15.0 million in 2006, an increase of $1.4 million or 9.3%. The increase is due primarily to an increase in selling costs of $1.1 million. As a percentage of net revenues, the Company s selling, general and administrative expenses increased to 28.7% in 2007 from 26.6% in Merger related expenses. In 2007 and 2006, the Company incurred Merger related expenses of $150.1 and $13.3 million, respectively, of which $144.4 and $13.1 million relates to the television segment and $5.7 million and $0.2 million relates to the radio segment, respectively. The costs are primarily related to legal, banking, change in control severance payments and consulting fees incurred in connection with the Merger. See Notes to Consolidated Financial Statements 2. Recent Developments. Voluntary contribution per FCC consent decree. In 2007, the Company expensed a voluntary contribution per an FCC consent decree of approximately $24.0 million to resolve pending license renewal applications. Depreciation and amortization. Depreciation and amortization increased to $140.2 million in 2007 from $82.9 million in 2006, an increase of $57.3 million or 69.2% The Company s depreciation expense decreased to $78.9 million in 2007 from $80.1 million in 2006, a decrease of $1.2 million primarily related to decreased capital expenditures and an increase in the depreciable lives of certain tangible assets as a result of the Merger. The Company had amortization of intangible assets of $61.3 million and $2.8 million in 2007 and 2006, respectively, an increase of $58.5 million. The allocation of the purchase price related to the Merger affected both tangible and amortizable intangible assets. See Notes to Consolidated Financial Statements 6. Goodwill and Other Intangible Assets. Depreciation and amortization expense for the television segment increased by $55.4 million to $123.8 million in 2007 from $68.4 million in 2006 due to an increase in amortization expense from the purchase accounting adjustments. Depreciation and amortization expense for the radio segment decreased by $2.0 million to $10.3 million in 2007 from $12.3 million in 2006 primarily due to an increase in the 35

40 Table of Contents depreciable lives of certain intangible assets as a result of the Merger. Depreciation and amortization expense for the Internet segment was $6.1 million in 2007 and $2.1 million in 2006 due to an increase in amortization expense from the purchase accounting adjustments. Operating income. As a result of the above factors, operating income decreased to $479.3 million in 2007 from $671.5 million in 2006, a decrease of $192.2 million or 28.6%. The Company s television segment had operating income of $316.1 million in 2007 and $532.6 million in 2006, a decrease of $216.5 million or 40.7%. The Company s radio segment had operating income of $154.8 million in 2007 compared to $131.5 million in 2006, an increase of $23.3 million or 17.7%. The Company s Internet segment had operating income of $8.4 million in 2007 compared to $7.3 million in 2006, an increase of $1.1 million or 14.4%. The Company s operating income as a percentage of net revenue was 23.1% and 33.1% in 2007 and 2006, respectively. Interest expense, net. Interest expense increased to $602.3 million in 2007 from $89.2 million in 2006, an increase of $513.1 million. The increase is due primarily to an increase in borrowings in connection with the Merger. Future interest expense is expected to be much greater as a result of the new debt incurred in connection with the Merger. See Notes to Consolidated Financial Statements 9. Debt. Equity income in unconsolidated subsidiaries and other. Equity income in unconsolidated subsidiaries and other decreased to $4.1 million in 2007 from $4.4 million in 2006, a decrease of $0.3 million, due to a decrease of $0.8 million primarily related to stock dividend income offset by an increase in income of $0.5 million related to the Company s equity method investments. Nontemporary decline in fair value of investment. At December 31, 2007, the Company recorded a nontemporary decline in the fair value of investments of $2.9 million, of this amount, $1.6 million was related to our investment in Entravision and $1.3 million was related to our investment in Equity Media Holdings Corporation. See Notes to Consolidated Financial Statements 7. Investments. Gain on sale of Entravision stock. On March 2, 2006, the Company and Entravision Communications Corporation completed the repurchase by Entravision of 7 million shares of Entravision Class U common stock held by the Company, for an aggregate sale price of $51.1 million, or $7.30 per share. The Company recognized a gain on the repurchase transaction of approximately $1.3 million in the first quarter of In the third quarter of 2006, the Company sold 0.2 million additional shares of Entravision Class U Common Stock and recognized a gain of $0.2 million. No shares of Entravision were sold in Provision (benefit) for income taxes. In 2007, the Company reported an income tax benefit of $29.7 million, representing the net of $24.0 million of a current tax benefit and $5.7 million of a deferred tax benefit. In 2006, the Company reported an income tax provision of $231.3 million, representing $167.6 million of current tax expense and $63.7 million of deferred tax expense. The Company s effective tax benefit rate of 18.7% in 2007 is different from the effective tax rate of 39.9% in 2006 due primarily to the pre-tax loss and non-deductibility of certain Merger related expenses recorded in (Loss) income from discontinued operation, net of income tax. The Company reported a net loss from discontinued operations in 2007 of $185.8 million compared to net income of $0.2 million in 2006 related to its music business. The net loss in 2007 includes an impairment charge related to the music business in the amount of $190.6 million before the effect of income taxes and $180.3 million net of income taxes. See Notes to Consolidated Financial Statements 2. Recent Developments. Net (loss) income. As a result of the above factors, the Company reported a net loss of $314.9 million in 2007 compared to net income of $349.2 million in Adjusted operating income before depreciation and amortization ( OIBDA ). OIBDA increased to $863.2 in 2007 from $800.6 in 2006, an increase of $62.6 million or 7.8%. The increase is based on the net revenue and operating expense explanations above, along with the matters noted in the overview. As a percentage of net revenues, the Company s OIDBA increased to 41.6% in 2007 from 39.5% in

41 Table of Contents The Company uses the key indicator of OIBDA to evaluate the Company s operating performance, for planning and forecasting future business operations, and reporting to the banks. This indicator is presented on an adjusted basis consistent with the definition in our Bank Credit Agreement to exclude certain expenses. OIBDA is not, and should not be used as, an indicator of or alternative to operating income or net (loss) income as reflected in the consolidated financial statements. It is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Since the definition of OIBDA may vary among companies and industries it should not be used as a measure of performance among companies. See Notes to Consolidated Financial Statements 16. Business Segments for a reconciliation of OIBDA to operating income. Year Ended December 31, 2006 Compared to Year Ended December 31, 2005 Overview In comparing our results of operations for the years ended December 31, 2006 and 2005, the following should be noted For the year ended December 31, 2006, the Company incurred Merger related expenses of $13.3 million. The costs are primarily related to legal, banking and consulting incurred in connection with the Merger. For the year ended December 31, 2006, the Company recorded selling, general and administrative expenses of $9.4 million for Televisa litigation costs regarding its PLA and direct operating expenses of $9.4 million for payments made under protest and other license fee overcharges to Televisa. For the year ended December 31, 2005, the Company recorded selling, general and administrative expenses of $1.2 million for Televisa litigation costs regarding its PLA and direct operating expenses of $9.6 million for payments made under protest and other license fee overcharges to Televisa. On January 1, 2006, the Company adopted SFAS No. 123R. SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options and restricted stock, to be recognized in the financial statements based on their fair values. Prior to the adoption of SFAS No. 123R, the Company accounted for employee share-based compensation using the intrinsic-value method prescribed in APB No. 25. The Company s direct operating expenses include share-based compensation costs of $1.5 million for the year ended December 31, The Company s selling, general and administrative expenses include share-based compensation costs of $11.1 million for the year ended December 31, See Notes to Consolidated Financial Statements 13. Performance Award and Incentive Plans. During the second and third quarters of 2006, the Company s television segment aired the 2006 World Cup games, which generated revenues and expenses that did not exist in During the year ended December 31, 2006, the 2006 FIFA World Cup directly contributed an estimated $113.6 million of incremental net revenue and an estimated $5.3 million of incremental operating income before depreciation and amortization. On March 2, 2006, the Company and Entravision completed the repurchase by Entravision of 7 million shares of Entravision Class U common stock held by the Company, for an aggregate sale price of $51.1 million, or $7.30 per share. The Company recognized a gain on the repurchase transaction of approximately $1.2 million. On November 2, 2005, the Company announced a cost reduction plan that reduced its workforce and abandoned certain less profitable programming in an effort to achieve sustainable improvement in financial performance. The plan included reducing approximately 5.6% of the workforce by eliminating job redundancies and inefficiencies. The Company incurred a pre-tax charge of approximately $30.3 million in the fourth quarter of 2005 consisting of employee terminations of $17.8 million and abandonment of programming costs and other costs of $12.5 million. See Notes to Consolidated Financial Statements 8. Accounts Payable and Accrued Liabilities. 37

42 Table of Contents The Company recorded a charge for a nontemporary decline in the fair value of its Entravision investment of $73.1 million in The Company also recorded an impairment charge in the fourth quarter of 2005 and 2006 of $8.8 and $5.2 million, respectively, in connection with its Denver and St. Louis LLC investment. The Company did not record a tax benefit related to these transactions in 2005 or See Notes to Consolidated Financial Statements 7. Investments. In 2006, the Company recorded an asset impairment charge of $1.6 million related to a loan receivable, which was recorded to selling, general and administrative expenses. Net revenues. Net revenues were $2,025.6 million in 2006 compared to $1,746.1 million in 2005, an increase of $279.5 million or 16%. The Company s television segment net revenues were $1,605.7 million in 2006 compared to $1,360.7 million in 2005, an increase of $245.0 million or 18%. The growth was attributable to strong viewership and higher rates for advertising spots across the Company s three television networks, an increase in advertising revenues due to the 2006 World Cup games and an increase in subscriber fees including a favorable adjustment of $5.9 million related to programming services provided to a cable operator, not previously recognized. The owned-and-operated stations also had increased net revenues, which benefited from the 2006 World Cup games, primarily in the Los Angeles, Phoenix, Miami, Houston and Chicago markets. The Company s radio segment had net revenues of $381.5 million in 2006 compared to $359.1 million in 2005, an increase of $22.4 million or 6.2%. The growth was attributable primarily to the new radio stations in San Francisco/San Jose acquired from Entravision, the new radio station acquired in Fresno, and increased revenues at the stations in the Los Angeles, Miami, Chicago, Phoenix and San Antonio markets. The Company s Internet segment had net revenues of $38.3 million in 2006 compared to $26.3 million in 2005, an increase of $12.0 million or 45.8%, primarily related to an increase in advertisers and increased spending from existing advertisers. Expenses. Direct operating expenses increased to $719.9 million in 2006 from $614.5 million in 2005, an increase of $105.4 million or 17.1%. The Company s television segment direct operating expenses were $633.4 million in 2006 compared to $536.2 million in 2005, an increase of $97.2 million or 18.1%. The increase is due primarily to 2006 World Cup costs of $108.3 million and increased license fee expense of $20.3 million paid under our PLAs, offset by a decrease in other operating costs of $31.4 million. The decrease in other operating costs was due to the benefits resulting from the Company s cost reduction plan implemented in the fourth quarter of 2005 which eliminated job redundancies and inefficiencies and abandonment of certain less profitable programming, and a reimbursement of $4.5 million for production costs that Televisa overbilled the Company related to the show 100 Mejicanos Dijeron ($4.1 million of which relates to costs paid by us prior to 2006). The Company s radio segment had direct operating expenses of $72.7 million in 2006 compared to $65.8 million in 2005, an increase of $6.9 million or 10.5%. The increase is due to increased programming costs of $6.6 million, primarily related to talent, and technical costs of $0.4 million. The Company s Internet segment had direct operating expenses of $13.8 million in 2006 compared to $12.6 million in 2005, an increase of $1.2 million or 9.2%. The Company s direct operating expenses include share-based compensation costs of $1.5 million. As a percentage of net revenues, the Company s direct operating expenses increased from 35.2% in 2005 to 35.5% in Selling, general and administrative expenses increased to $538.0 million in 2006 from $499.7 million in 2005, an increase of $38.3 million or 7.7%. The increase in selling, general and administrative expenses includes share-based compensation costs of $11.1 million and Televisa litigation costs of $8.1 million. The Company s television segment selling, general and administrative expenses were $358.1 million in 2006 compared to $335.2 million in 2005, an increase of $22.9 million, or 6.8%. The increase is due primarily to Televisa litigation costs of $8.1 million, increased general and administrative compensation costs of $8.9 million, share-based compensation costs in general and administrative expenses of $5.3 million, offset in part by a decrease in certain insurance costs of $3.9 million. The Company s radio segment had selling, general and administrative expenses of $164.9 million in 2006 compared to $152.0 million in 2005, an increase of $12.9 million or 8.5%. The increase is due primarily to an asset impairment charge of $1.6 million, share-based compensation costs in general and administrative expenses of $2.3 million, increased promotion costs of $1.8 million, increased selling costs of $2.7 million and an increase in bad debt expense of $1.8 million. The Company s Internet segment had 38

43 Table of Contents selling, general and administrative expenses of $15.0 million in 2006 compared to $12.5 million in 2005, an increase of $2.5 million or 20.5%. As a percentage of net revenues, the Company s selling, general and administrative expenses decreased from 28.6% in 2005 to 26.6% in Merger related expenses. In 2006, the Company incurred Merger related expenses of $13.3 million of which $13.1 million relates to the television segment and $0.2 million relates to the radio segment. The costs are primarily related to legal, banking, change in control severance payments and consulting fees incurred in connection with the Merger. Cost reduction plan. The cost reduction plan included reducing approximately 5.6% of the workforce by eliminating job redundancies and inefficiencies. The Company incurred a pre-tax charge of approximately $30.3 million in the fourth quarter of 2005 consisting of employee terminations of $17.8 million and abandonment of programming and other costs of $12.5 million. Depreciation and amortization. Depreciation and amortization increased to $82.9 million in 2006 from $80.3 million in 2005, a decrease of $2.6 million or 3.1%. The Company s depreciation expense increased to $80.1 million in 2006 from $77.5 million in 2005, an increase of $2.6 million primarily related to capital expenditures. The Company had amortization of intangible assets of $2.8 million in 2006 and 2005, respectively. Depreciation and amortization expense for the television segment increased by $1.5 million to $68.4 million in 2006 from $66.9 million in 2005 due to depreciation expense related to capital expenditures. Depreciation and amortization expense for the radio segment increased by $0.7 million to $12.3 million in 2006 from $11.6 million in Depreciation and amortization expense for the Internet segment increased by $0.3 million to $2.1 million in 2006 from $1.8 million in Operating income. As a result of the above factors, operating income increased to $671.5 million in 2006 from $521.2 million in 2005, an increase of $150.3 million or 28.8%. The Company s television segment had operating income of $532.6 million in 2006 and $392.4 million in 2005, an increase of $140.2 million or 35.7%. The Company s radio segment had operating income of $131.5 million in 2006 compared to $129.6 million in 2005, an increase of $1.9 million or 1.5%. The Company s Internet segment had operating income of $7.3 million in 2006 compared to an operating loss of $0.8 million in 2005, an improvement of $8.1 million. The Company s operating income as a percentage of net revenue was 33.1% and 29.8% in 2006 and 2005, respectively. Interest expense, net. Interest expense, net increased to $89.2 million in 2006 from $84.9 million in 2005, an increase of $4.3 million or 5.1%. The increase is due to higher interest rates and borrowings from the revolving credit facility to fund the 2005 stock repurchase plan and the acquisitions of WLII in 2005 and Disa in See Liquidity and Capital Resources Debt Instruments. Equity income in unconsolidated subsidiaries and other. Equity income in unconsolidated subsidiaries decreased by $0.2 million to $4.4 million in 2006 from $4.6 million in 2005, due primarily to the elimination of 2005 noncontrolling interest income from a variable interest entity of $1.8 million offset by higher income related to the Company s equity method investments of $1.6 million. Nontemporary decline in fair value of investment. In 2006, the Company recorded a charge for a nontemporary decline in the fair value of its investment in St. Louis/Denver LLC of $5.2 million. In 2005, the Company recorded a charge for a nontemporary decline in the fair value of its investments in Entravision of $73.1 million and St. Louis/Denver LLC of $8.8 million. See Notes to Consolidated Financial Statements 7. Investments. Gain on sales of entravision stock. On March 2, 2006, the Company and Entravision Communications Corporation completed the repurchase by Entravision of 7 million shares of Entravision Class U common stock held by the Company, for an aggregate sale price of $51.1 million, or $7.30 per share. The Company recognized 39

44 Table of Contents a gain on the repurchase transaction of approximately $1.3 million in the first quarter of In the third quarter of 2006, the Company sold 0.2 million additional shares of Entravision Class U common stock and recognized a gain of $0.2 million. Provision for income taxes. In 2006, the Company reported an income tax provision of $231.3 million, representing $167.6 million of current tax expense and $63.7 million of deferred tax expense. In 2005, the Company reported an income tax provision of $173.1 million, representing $114.1 million of current tax expense and $59.0 million of deferred tax expense. The effective tax rate was 39.9% in 2006 and 48.7% in The Company s effective tax rate of 39.9% for 2006 is lower than the 48.7% for 2005 due primarily to a charge in 2005 for a nontemporary decline in the fair value of the Entravision investment, for which no tax benefit was recorded. Also, in 2006 a tax benefit of $5.7 million was recorded due to the resolution of various federal and state income tax audits. Income from discontinued operation, net of income tax. The Company reported net income from discontinued operations of $0.2 million in 2006 and $4.5 million in 2005 related to its music business. See Notes to Consolidated Financial Statements 2. Recent Developments. Net income. As a result of the above factors, the Company reported net income in 2006 of $349.2 million compared to net income of $187.2 million in 2005, an increase of $162.0 or 86.5%. As a percentage of net revenues, the Company s net income increased from 10.7% in 2005 to 17.2% in Adjusted operating income before depreciation and amortization ( OIBDA ). OIBDA increased to $800.6 million in 2006 from $642.6 million in 2005, an increase of $158.0 million or 24.6%. The increase is based on the net revenue and operating expense explanations above along with the matters noted in the overview. As a percentage of net revenues, the Company s OIDBA increased to 39.5% in 2006 from 36.8% in For a description of the reasons the Company uses the key indicator of OIBDA to evaluate the Company s operating performance for planning and forecasting future business operations and reporting to banks, and for a reconciliation of OIBDA to operating income, see Notes to Consolidated Financial Statements 16. Business Segments. Liquidity and Capital Resources The information for the year ended December 31, 2007 represents the sum of the three months ended March 31, 2007 and the nine months ended December 31, This combination does not comply with U.S. generally accepted accounting principles ( GAAP ) or with the Securities and Exchange Commission rules for pro forma presentation, but is presented because we believe it enables a meaningful presentation of our results for the year ended December 31, Cash Flows The Company s primary source of cash flow is its television and radio operations. Funds for debt service will be provided by funds from operations. Capital expenditures historically have been, and we expect will continue to be, provided by funds from operations and by borrowings. Cash and cash equivalents were $226.2 million at December 31, 2007 and $103.5 million at December 31, The increase of $122.7 million was attributable to net cash provided from operating activities of $279.9 million, issuance of long-term debt of $9.280 billion, capital contributions of $3.972 billion, proceeds from sale of the Company s Equity Broadcasting investment of $19.6 million and other sources of funds of $5.6 million offset by acquisition costs of $ billion, deferred financing costs of $292.0 million, net bank repayments of $464.9 million, Merger related payments of $60.8 million and capital expenditures of $69.7 million. The Company intends to divest certain non-core assets, including its music recording and publishing businesses and certain non-core television and radio stations, investments and excess real estate. The Company has entered into a definitive agreement to sell its music business which it expects to close in the second quarter of 40

45 Table of Contents The closing is subject to regulatory approvals and certain closing conditions including the absence of a material adverse effect (as defined in the definitive agreement) on our music business since September 30, See Notes to Consolidated Financial Statements 2. Recent Development s. Capital Expenditures Capital expenditures totaled $69.7 million for the year ended December 31, The Company s capital expenditures exclude the capitalized lease obligations of the Company. For the year 2008, the Company plans on spending a total of approximately $100.0 million, which is expected to consist of $18.0 million for television station facilities primarily in Fresno and Puerto Rico; $24.0 million for Univision and TeleFutura Network upgrades and facilities expansion; $17.0 million related to television station transmitter projects; $11.0 million primarily for radio station facility upgrades; and approximately $30.0 million primarily for normal capital improvements. Debt Instruments The Company has a 7-year, $750.0 million bank senior secured revolving credit facility. Interest will accrue at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the Company s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is expected to be the three-month LIBOR rate. There was no balance outstanding on this facility as of December 31, The bank senior secured term loan facility is a 7.5 year facility totaling $7 billion and accrues interest at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the borrower s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is the three month LIBOR rate. The applicable interest rate as of December 31, 2007 was 7.21%. Interest is paid on January 31, April 30, July 31 and October 31. In April and August 2007, the Company entered into $5 and $2 billion three- and two-year, respectively, interest rate swaps on its variable rate bank debt. Under the interest rate swap contracts, the Company agreed to receive a floating rate payment for a fixed rate payment. These interest rate swaps are accounted for as cash flow hedges that are highly effective. As of December 31, 2007, the Company had a swap liability totaling $165.8 million, which is included in other long-term liabilities on the balance sheet. The bank second-lien asset sale bridge is a 2 year loan totaling $500 million and accrues interest at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the Company s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is the three-month LIBOR rate. The applicable interest rate as of December 31, 2007 was 7.35%. Interest is paid on a monthly basis. See Notes to Consolidated Financial Statements 2. Recent Developments, for a discussion on the pay down of the bank second-lien asset sale bridge loan. See Item 1A. Risk Factors If we are unable to complete the sale of our music recording and publishing businesses and sell our other non-core assets, we may be unable to refinance our bank second-lien asset sale bridge loan. The Company has a 7.5 year, $450 million bank senior secured draw term loan facility, which is available for a limited time to repay or prepay the Company s senior notes that existed prior to the Merger and remain outstanding. On October 15, 2007, the Company paid down its senior notes due 2007 and had $200 million outstanding under this facility as of December 31, The applicable rate is the three-month LIBOR rate plus an applicable margin. The applicable interest rate as of December 31, 2007 was 7.1%. Interest is paid on a monthly basis. The 9.75% senior notes are 8 year notes due 2015, totaling $1.5 billion and accrue interest at a fixed rate. The initial interest payment on these notes was paid in cash on September 15, For any interest period 41

46 Table of Contents thereafter through March 15, 2012, we may elect to pay interest on the notes entirely by cash, by increasing the principal amount of the notes or by issuing new notes ( PIK interest ) for the entire amount of the interest payment or by paying interest on half of the principal amount of the notes in cash and half in PIK interest. After March 15, 2012, all interest on the notes will be payable entirely in cash. PIK interest will be paid at the maturity of the senior notes. The notes bear interest at 9.75% and PIK interest will accrue at 10.50%. These senior notes pay interest on March 15 th and September 15 th each year, beginning September 15, As of December 31, 2007 the Company has not elected the PIK option on these notes. The Company s 7.85% senior notes due 2011 bear interest at 7.85% per annum. These senior notes pay interest on January 15 th and July 15 th of each year. The Company has $250 million of senior notes due in 2008, which bear interest at the rate of 3.875% per annum. The interest is payable on the senior notes in cash on April 15 th and October 15 th of each year. When the Company issued the senior notes due 2007 and 2008, it entered into fixed-to-floating interest rate swaps that resulted in fair value hedges that were perfectly effective up until the date of the Merger. The interest rate swaps totaling $450 million on our 2007 and 2008 senior notes qualified for the shortcut method under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Following the merger, the Company no longer qualified for the shortcut method since the senior notes were required to be recorded at market value at March 29, 2007 under SFAS No. 141, Business Combinations. The Company was required to perform the hedge effectiveness analysis using the long-haul method and reassess hedge effectiveness at the time of the acquisition. Based on this analysis, the Company concluded to cease applying hedge accounting. During the nine months ended December 31, 2007, the Company recognized income of $5.5 million to earnings related to the ineffectiveness. The $5.5 million is reported in interest expense in the Company s statement of operations. At December 31, 2007, the Company had a swap asset of $0.4 million reported in prepaid expenses and other assets on the balance sheet, related to the interest rate swaps on the 2008 senior notes. Voluntary prepayments of principal amounts outstanding under the bank senior secured revolving credit facility, bank senior secured term loan facility, bank second-lien asset sale bridge loan and bank senior secured draw term loan (collectively the Senior Secured Credit Facilities ) will be permitted, except for the bank second-lien asset sale bridge loan, at any time; however, if a prepayment of principal is made with respect to a Eurodollar loan on a date other than the last day of the applicable interest period, the lenders will require compensation for any funding losses and expenses incurred as a result of the prepayment. Voluntary prepayments of principal amounts outstanding under the secondlien asset sale bridge loan will not be permitted at any time, except to the extent the payment is made with the proceeds of any sale of equity interests by, or any equity contribution to, us or any issuance by us of permitted senior subordinated notes and/or senior unsecured notes on terms to be agreed upon. The Senior Secured Credit Facilities and the senior notes contain various covenants and a breach of any covenant could result in a default under those agreements. If any such default occurs, the lenders of the Senior Secured Credit Facilities or the holders of the senior notes may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. In addition, a default under the indenture governing the senior notes would cause a default under the Senior Secured Credit Facilities, and the acceleration of debt under the Senior Secured Credit Facilities or the failure to pay that debt when due would cause a default under the indentures governing the senior notes (assuming certain amounts of that debt were outstanding at the time). The lenders under our Senior Secured Credit Facilities also have the right upon an event of default thereunder to terminate any commitments they have to provide further borrowings. Further, following an event of default under our Senior Secured Credit Facilities, the lenders will have the right to proceed against the collateral. The Company is in compliance with its bank credit agreement as of December 31, Beginning June 30, 2008, the Company will be subject to certain customary financial covenants under its bank credit agreement, which the Company expects to be in compliance with at such date. 42

47 Table of Contents Additionally, the Senior Secured Credit Facilities contain certain restrictive covenants which, among other things, limit the incurrence of investments, payment of dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, prepayments of other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements. The subsidiary guarantors under the Company s bank senior secured term loan facility and senior notes are all of the Company s domestic subsidiaries other than certain immaterial subsidiaries. The guarantees are full and unconditional and joint and several and any subsidiaries of the Company other than the subsidiary guarantors are minor. Univision Communications, Inc. is not a guarantor and has no independent assets or operations. The bank senior secured term loan facility and senior notes are secured by, among other things (a) a first priority security interest in substantially all of the assets of the Company, Broadcast Holdings and the Company s material domestic subsidiaries, as defined, including without limitation, all receivables, contracts, contract rights, equipment, intellectual property, inventory, and other tangible and intangible assets, subject to certain customary exceptions; (b) a pledge of (i) all of the Company s present and future capital stock and the present and future capital stock of each of the Company s and each subsidiary guarantor s direct domestic subsidiaries and (ii) 65% of the voting stock of each of our and each guarantor s material direct foreign subsidiaries, subject to certain exception including to avoid certain reporting obligations; and (c) all proceeds and products of the property and assets described above. The bank second-lien asset sale bridge loan is secured by a second priority security interest in all of the assets of the Company, Broadcast Holdings and the Company s material domestic subsidiaries, as defined, securing the other secured credit facilities. The Company s senior notes due 2008 and 2011 that were outstanding prior to the Merger and remain outstanding, as a result of the Merger are secured on an equal and ratable basis with the Senior Secured Credit Facilities. The Company and its subsidiaries, affiliates or significant shareholders may from time to time, in their sole discretion, purchase, repay, redeem or retire any of the Company s outstanding debt or equity securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise. Acquisitions The Company continues to explore acquisition opportunities to complement and capitalize on its existing business and management. The purchase price for any future acquisitions may be paid with (a) cash derived from operating cash flow, (b) proceeds available under bank facilities, (c) proceeds from future debt offerings, or (d) any combination thereof. Contractual Obligations and Other Pending Transactions Puerto Rico Lease The Company is party to a lease for a three-story building with approximately 92,500 square feet for the relocation of its owned and/or operated television and radio stations and studio facilities in Puerto Rico. The building is to be constructed and owned by the landlord, with occupancy of the premises expected during the second half of The term of the lease is 50 years. The sum of the lease payments will be approximately $74 million over 50 years. World Cup Rights On November 2, 2005, the Company acquired the Spanish-language broadcast rights in the U.S. to the 2010 and 2014 FIFA World Cup soccer games and other FIFA events. A series of payments totaling $325.0 million are due over the term of the agreement. Payments totaling $15.5 million were made in In addition to these payments, and consistent with past coverage of the World Cup games, the Company will be responsible for all costs associated with advertising, promotion and broadcast of the World Cup games, as well as the 43

48 Table of Contents production of certain television programming related to the World Cup games. Each scheduled payment under the contract is supported by a letter of credit. The funds for these payments are expected to come from cash from operations and/or borrowings from the Senior Secured Credit Facilities. Entravision Investment As part of the consent decree pursuant to which the United States Department of Justice approved our acquisition of Hispanic Broadcasting Corporation, we are required currently to own not more than 15% of Entravision stock on a fully converted basis which includes full exercise of employee options and conversion of all convertible securities, and to sell enough of our Entravision stock so that our ownership of Entravision, on a fully converted basis, does not exceed 10% by March 26, As of December 31, 2007, the Company owned 17,152,729 shares of Entravision Class U common stock. As part of its stock repurchase plan, Entravision repurchased and retired 6.3 million shares of its common stock in the fourth quarter of 2007, which increased the Company s ownership interest in Entravision on a fully converted basis to 16.0% as of December 31, 2007 from 14.8% as of September 30, On February 4, 2008, the Company sold 1.5 million shares of its Entravision Class U common stock to Entravision for $10.4 million and reduced its ownership interest in Entravision on a fully converted basis to 14.7%. See Notes To Consolidated Financial Statements 7. Investments. Based on our current level of operations, planned capital expenditures, expected future acquisitions and major contractual obligations, the Company believes that its cash flow from operations, together with available cash and available borrowings under the bank revolving credit facility will provide sufficient liquidity to fund our current obligations, projected working capital requirements and capital expenditures for a period that includes at least the next year. Below is a summary of the Company s major contractual payment obligations as of December 31, 2007: Major Contractual Obligations As of December 31, 2007 Payments Due By Period Thereafter TOTAL (In thousands) Bank senior secured term loan facility $ $ $ $ $ $ 7,000,000 $ 7,000,000 Bank senior secured term loan facility interest (a) 498, , , , , ,995 3,325,117 Bank second-lien asset sale bridge loan 500, ,000 Bank second-lien asset sale bridge loan interest (a) 37,250 6,208 43,458 Bank senior secured draw term loan 200, ,000 Senior secured draw term loan interest (a) 18,900 32,400 32,096 31,286 30,659 52, ,275 Senior notes 250, ,000 1,500,000 2,250,000 Senior notes interest-fixed (b) 185, , , , , ,625 1,253,875 Senior notes interest-variable (a) 12,065 12,065 Programming (c) 65,087 62,392 97,565 25,871 25, , ,735 Operating leases 36,283 34,074 31,793 30,131 28, , ,169 Capital leases 8,277 8,277 8,277 8,277 8,277 91, ,915 Research services 26,616 21,393 21,038 22,352 3,763 95,162 Music License Fees 15,357 11,612 26,969 Other 3,330 2,733 2,558 1, ,261 14,590 $ 1,157,475 $ 1,363,399 $ 878,116 $ 1,293,001 $ 721,814 $ 10,345,525 $ 15,759,330 (a) Interest expense is based on the LIBOR rate plus cost margins applicable to each loan at December 31, (b) Interest expense does not assume that the Company will exercise the PIK option available under its $1.5 billion senior note. (c) Amounts exclude the license fees that will be paid in accordance with the PLA, which is based primarily on 15% of Combined Net Time Sales. Amounts include broadcast rights costs for the 2010 and 2014 World Cup and other FIFA events. 44

49 Table of Contents Off-Balance Sheet Arrangements We do not have any off-balance sheet transactions, arrangements or obligations (including contingent obligations) that would have a material effect on our financial results. ITEM 7A. The Company s primary interest rate exposure results from changes in the short-term interest rates applicable to the Company s LIBOR loans. The Company s overall interest rate exposure is on $250.0 million of its 2008 senior notes, $200 million bank senior secured draw term loan and $500 million of second-lien asset sale bridge loan at December 31, A change of 10% in interest rates would have an impact of approximately $6 million on pre-tax earnings and pre-tax cash flows over a one-year period. On October 15, 2007, the Company paid down its senior notes due 2007 and now has $200 million outstanding under its bank senior secured draw term loan facility, which will bear interest based on the three-month LIBOR rate plus an applicable margin. The Company has an immaterial foreign exchange exposure in Mexico. On October 15, 2003, the Company issued four- and five-year senior notes due 2007 and 2008 in an aggregate principal amount of $450.0 million. On October 15, 2007, the Company paid down its senior notes due 2007 with borrowing under its senior secured draw term loan facility. The Company s 3.875% senior notes have a face value of $250.0 million. The senior notes pay interest on April 15th and October 15th of each year. The interest rate swaps totaling $450 million on our 2007 and 2008 senior notes qualified for the shortcut method under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and were accounted for as perfectly effective fair value hedges. Following the merger, the Company no longer qualified for the shortcut method since the senior notes were required to be recorded at market value at March 29, 2007 under SFAS No. 141, Business Combinations. The Company was required to perform the hedge effectiveness analysis using the long-haul method and reassess hedge effectiveness at the time of the acquisition. Based on this analysis, the Company concluded to cease applying hedge accounting. During the nine months ended December 31, 2007, the Company recognized income of $5.5 million to earnings, related to the ineffectiveness. The $5.5 million is reported in interest expense in the Company s statement of operations. At December 31, 2007, the Company had a swap asset of $0.4 million reported in prepaid expenses and other assets on the balance sheet, related to the interest rate swaps on the 2008 senior notes. In April 2007, the Company entered into a $5 billion three-year interest rate swap on its variable rate bank debt. In August 2007, the Company also entered into a $2 billion two-year interest rate swap on its variable rate bank debt. Under the interest rate swap contracts, the Company agreed to receive a floating rate payment for a fixed rate payment. These interest rate swaps are accounted for as cash flow hedges that are highly effective. As of December 31, 2007, the Company had a swap liability totaling $165.8 million, which is included in other longterm liabilities on the balance sheet, related to these interest rate swaps. ITEM 8. ITEM 9. See pages F-1 through F- 47 Not applicable. Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 45

50 Table of Contents Item 9A. Controls and Procedures Conclusion Regarding the Effectiveness of Disclosure Control and Procedures Disclosure controls and procedures are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods specified in Securities and Exchange Commission rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. As of December 31, 2007, the end of the period covered by this report, the Company carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective. The Company reviews its disclosure controls and procedures, on an ongoing basis, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that they evolve with the Company s business. In addition, no change in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Securities Exchange Act of 1934) occurred during the fourth quarter of 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. On July 1, 2007, the Company implemented an Oracle Enterprise Resource Planning system throughout the entire company, except for music, and also implemented a shared services organization to centralize certain accounting functions, streamline processes, improve consistency in internal controls and enhance analytical capabilities. The Company was required to modify its existing internal controls related to the accounting processes that were affected by the implementation of the Oracle system. The implementation of the Oracle system did not materially affect, and is not reasonably likely to affect, our internal controls over financial reporting. 46

51 Table of Contents Management s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. As of the end of our 2007 fiscal year, management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations for the Treadway Commission. Based on our evaluation under that framework, management concluded our internal control over financial reporting as of December 31, 2007 was effective. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company s assets that could have a material effect on our financial statements. The financial statements have been audited by our independent registered public accounting firm, Ernst & Young LLP, to the extent required by auditing standards of the Public Company Accounting Oversight Board (United States) and, accordingly, they have expressed their professional opinion on the financial statements in their report included herein. The attestation report issued by Ernst & Young LLP on our internal control over financial reporting is also included herein. Because of their inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Therefore, even those systems, controls and procedures determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation. Item 9B. Other Information None. 47

52 Table of Contents PART III ITEM 10. Directors, Executive Officers and Corporate Governance Executive Officers The executive officers of the Company serve at the discretion of its Board of Directors subject to certain employment agreements. Messrs. Uva, Hobson, Kranwinkle, Rodriguez and Lori have employment agreements with the Company. The executive officers of the Company as of December 31, 2007 were as follows: Name Age Position Joseph Uva 51 Chief Executive Officer Andrew W. Hobson 46 Senior Executive Vice President, Chief Strategic Officer, and Chief Financial Officer C. Douglas Kranwinkle 67 Executive Vice President and General Counsel Ray Rodriguez 56 President and Chief Operating Officer Peter H. Lori 42 Senior Vice President and Chief Accounting Officer Mr. Uva has been Chief Executive Officer of the Company since April From January 2002 through March 2007, he was President and Chief Executive Officer of OMD Worldwide, a media buying and planning agency. From June 1996 until December 2001, Mr. Uva was President of Entertainment Sales for Turner Broadcasting Sales, Inc. where he oversaw and directed advertising sales for Turner Entertainment. Mr. Hobson has been Senior Executive Vice President and Chief Strategic Officer since July In June 2005, Mr. Hobson was named to the additional position of Chief Financial Officer. Mr. Hobson was Executive Vice President of the Company from January 2001 through July From 1994 to 2000, Mr. Hobson was an Executive Vice President of Univision Network. Mr. Hobson served as a Principal at Chartwell Partners LLC from 1990 to Mr. Kranwinkle has been Executive Vice President and General Counsel of the Company since September From January 1989 until September 2000, Mr. Kranwinkle was a partner of O Melveny & Myers LLP, a law firm. While at O Melveny & Myers LLP, Mr. Kranwinkle was the managing partner of its New York office from December 1993 until June 1997 and the firm s managing partner from April 1996 until September Mr. Rodriguez has been President and Chief Operating Officer of the Company since February He was President of the Univision Network from December 1992 through February 2005 and President of TeleFutura Network and of the Galavisión Network from August 2001 through February Mr. Lori has been Senior Vice President and Chief Accounting Officer since April From June 2002 through March 2005, Mr. Lori was a partner of KPMG LLP. Directors On March 29, 2007, Broadcasting Media Partners, Inc. ( Broadcasting Media formerly known as Umbrella Holdings, LLC), completed its acquisition of the Company pursuant to the terms of that certain agreement and plan of merger, dated as of June 26, 2006, by and among the Company, Broadcasting Media and Umbrella Acquisition, Inc. ( Umbrella Acquisition ), an indirect subsidiary of Broadcasting Media. Umbrella Acquisition and Broadcasting Media were formed by an investor group that includes affiliates of Madison Dearborn Partners, Providence Equity Partners, Saban Capital Group, Texas Pacific Group, and Thomas H. Lee Partners (the 48

53 Table of Contents Sponsors ). As a result of the merger, all of the Company s issued and outstanding securities is held by Broadcast Media Partners Holdings, Inc. ( Broadcast Holdings ), all of the issued and outstanding common stock of Broadcast Holdings is owned by Broadcasting Media, and all of the issued and outstanding preferred stock of Broadcast Holdings is held by the funds affiliated with the Sponsors, co-investors and certain members of management. These stockholders, Broadcasting Media, Broadcast Holdings and Umbrella Acquisition entered into stockholders agreements, dated as of March 29, 2007, pursuant to which the Company became a party by operation of law in connection with the closing of the merger. Pursuant to the stockholders agreements and other governing documents, the funds affiliated with each Sponsor have the right to nominate a designated number of directors to the Company s Board of Directors subject to continuing to hold certain threshold equity amounts. All of the directors, except Mr. Cisneros and Ms. Estefan are not independent because of their affiliation with the Sponsors which each hold more than a 5% equity interest in Univision s parent companies, Broadcasting Media and Broadcast Holdings. Zaid F. Alsikafi Director since April 2007 Mr. Alsikafi, age 32, is Vice President of Madison Dearborn Partners, LLC. From 2001 to 2003, Mr. Alsikafi attended Harvard Business School. Prior to joining MDP, Mr. Alsikafi was with Goldman, Sachs & Co. in the financial institutions group and with MDP as an associate for two years. Mr. Alsikafi is currently a director of Forest Products Holding, LLC (d.b.a. Boise Cascade), UPC Wind Partners LLC and US Power Generating Company. Mr. Alsikafi received a B.S. from The Wharton School of the University of Pennsylvania and an M.B.A. from Harvard Business School. David Bonderman Director since April 2007 Mr. Bonderman, age 65, is a Founding Partner of Texas Pacific Group. TPG invests primarily in restructurings, recapitalizations and buyouts in the United States, Canada, Europe and Asia. Prior to forming TPG in 1992, Mr. Bonderman was Chief Operating Officer of the Robert M. Bass Group, Inc. (now doing business as Keystone, Inc.) in Fort Worth, Texas. Prior to joining Robert M. Bass Group in 1983, Mr. Bonderman was a partner in the law firm of Arnold & Porter in Washington, D.C., where he specialized in corporate, securities, bankruptcy and antitrust litigation. From 1969 to 1970, Mr. Bonderman was a Fellow in Foreign and Comparative Law in conjunction with Harvard University and from 1968 to 1969, he was Special Assistant to the U.S. Attorney General in the Civil Rights Division. From 1967 to 1968, Mr. Bonderman was Assistant Professor at Tulane University School of Law in New Orleans. Mr. Bonderman is currently a director of the following public companies: Burger King Holdings, Inc.; Co Star Group, Inc., Gemalto N.V.; and Ryanair Holdings, plc, of which he is Chairman. He also serves on the boards of the Wilderness Society, the Grand Canyon Trust, the World Wildlife Fund, the University of Washington Foundation and the American Himalayan Foundation. Mr. Bonderman received a B.A. from the University of Washington, and a J.D from Harvard Law School. Adam Chesnoff Director since March 2007 Mr. Chesnoff, age 43, is the President and Chief Operating Officer of Saban Capital Group, Inc. Prior to becoming Chief Operating Officer of Saban Capital Group in 2002, Mr. Chesnoff spent five years at Fox Family Worldwide, where he oversaw business development across all global divisions, including television channels, programming, production, international distribution and merchandising. From 1994 to 1995, Mr. Chesnoff worked in the Business Affairs and Corporate Development groups at Sony Pictures Entertainment and Columbia Pictures, where he focused on strategic planning, financial analysis, deal structuring and new business development in Motion Picture and Television divisions. Mr. Chesnoff is currently a director of Bezeq, the Israel 49

54 Table of Contents Telecommunications Company, German Media Partners, Far East Innovative Investments BV, and Saban Capital Group, Inc. Mr. Chesnoff previously served as a director of ProSiebenSat.1 Media AG. Mr. Chesnoff received a B.A. in Economics and Management from Tel Aviv University s Recanati School of Business Administration, and an M.B.A. from UCLA s Anderson School of Business. Henry G. Cisneros Director since June 2007 Mr. Cisneros, age 60, is the founder and Chairman of CityView America, a joint venture to build affordable homes in metropolitan areas. From 2000 to 2005, he was founder and Chairman of American CityVista, a joint venture with KB Home. From January 1997 to August 2000, he was President, Chief Operating Officer and a director of Univision. From 1993 to 1997, he served as Secretary of Housing and Urban Development under President Clinton. He also served as Mayor of the City of San Antonio, Texas, from 1981 to Mr. Cisneros previously served as a director of KB Home, Countrywide Financial Corporation and Live Nation. He is currently also a director of CityView America, New America Alliance and the San Antonio Hispanic Chamber of Commerce. He is also a member of the board of trustees of The Enterprise Foundation and an honorary life director of the National Civic League. Mr. Cisneros received a B.A. and an M.A. in Urban and Regional Planning from Texas A&M University, an M.P.A. from the John F. Kennedy School of Government at Harvard University and a Doctor in Public Administration from George Washington University. Michael P. Cole Director since April 2007 Mr. Cole, age 35, is a Managing Director of Madison Dearborn Partners, LLC. Prior to joining MDP, Mr. Cole was with Bear, Stearns & Co. Inc. in the investment banking division. Mr. Cole concentrates on investments in the communications industry and is currently a director of MetroPCS Communications, Inc., Sorenson Communications Inc., The Topps Company, Inc., Chicago Entrepreneurial Center within the Chicagoland Chamber of Commerce, and The Lyric Opera of Chicago. Mr. Cole received an A.B from Harvard College. Kelvin L. Davis Director since April 2007 Mr. Davis, age 44, is a Senior Partner of Texas Pacific Group and Head of the North American Buyouts Group, incorporating investments in all non-technology industry sectors. Prior to joining TPG in 2000, Mr. Davis was President and Chief Operating Officer of Colony Capital, Inc., a private international real estate-related investment firm in Los Angeles. Prior to the formation of Colony, Mr. Davis was a principal of RMB Realty, Inc., the real estate investment vehicle of Robert M. Bass Group, Inc. Prior to his affiliation with RMB Realty, Inc., he worked at Goldman, Sachs & Co. in New York City and with Trammell Crow Company in Dallas and Los Angeles. Mr. Davis is the Chairman of the board of Kraton Polymers LLC, and is currently a director of Metro-Goldwyn-Mayer, Inc., Altivity Packaging LLC, Aleris International Inc. and Harrah s Entertainment Inc. He is also a director of Los Angeles Team Mentoring, Inc. (a charitable mentoring organization), the Los Angeles Philharmonic Association and is on the Board of Overseers of the Huntington Library, Art Collections and Botanical Gardens. Mr. Davis received a B.A. (Economics) from Stanford University and an M.B.A. from Harvard University. Albert J. Dobron Director since April 2007 Mr. Dobron, age 39, is a Managing Director of Providence Equity Partners Inc. Prior to joining Providence in 1999, Mr. Dobron worked for Morgan Stanley in mergers and acquisitions. Previously, he held positions with the K.A.D. Companies, a private equity investment group, working primarily in an operating role with one of the firm s portfolio companies. Mr. Dobron is currently a director of Affinity Direct, LLC, Bustos Media, LLC, Hulu, LLC, Newport Television, NexTag, Inc., and Trumper Communications III, LLC and was, during the 50

55 Table of Contents period of Providence s investment, a director of ProSiebenSat.1 Media AG and BlueStone Television. Mr. Dobron is also actively involved with Yankees Entertainment and Sports Network Inc. Mr. Dobron received a B.S. from the University of New Hampshire and an M.B.A. from Harvard Business School. Gloria Estefan Director since June 2007 Ms. Estefan, age 50, is a world-renowned entertainer, business woman and philanthropist. Ms. Estefan is a five-time Grammy awardwinning singer-songwriter, who began her career as lead vocalist for the then exclusively Spanish-language band, Miami Sound Machine in In 2003, Ms. Estefan was inducted into the Florida Women s Hall of Fame. In 2004, the City of Hope presented her with the Spirit of Life Award in recognition of her contributions to the Hispanic community and in support of its charitable endeavors, and Miami honored her with the Mayor s Lifetime Achievement Award. Ms. Estefan is a director of various closely-held corporations beneficially owned by Ms. Estefan and her husband, including Estefan Enterprises, Inc., Estefan Film and Television Productions, Inc. and Estefan Music Publishing, Inc. Ms. Estefan received a degree in communications and psychology (with a minor in French) from the University of Miami and an honorary Doctoral degree in Music from the University of Miami. Mark J. Masiello Director since March 2007 Mr. Masiello, age 50, is a Managing Director of Providence Equity Partners, Inc. Prior to the founding of Providence in 1990, Mr. Masiello was an Associate with Narragansett Capital, which he joined in He was directly involved in Narragansett Capital s investments in cable television, broadcast television, radio broadcasting and publishing. Mr. Masiello received a B.A. from Brown University. Jonathan M. Nelson Director since April 2007 Mr. Nelson, age 51, is the Chief Executive Officer and founder of Providence Equity Partners, Inc. Prior to founding Providence in 1990, Mr. Nelson was a Managing Director of Narragansett Capital Inc., which he joined in Mr. Nelson is currently a director of Bresnan Broadband Holdings, LLC, Hulu, LLC, Metro Goldwyn Mayer, Warner Music Group and Yankees Entertainment and Sports Network, Inc. He is also a member of the Sony Corporation Advisory Board. Mr. Nelson has also served as a director of the following public companies: AT&T Canada, Inc., Brooks Fiber Properties, Inc. (now Verizon), Eircom plc, Voice Stream Wireless Corp. (now Deutsche Telekom A.G.), Wellman Inc. and Western Wireless Corporation (now Alltel Corp.), as well as numerous privately-held companies affiliated with Providence Equity Partners Inc. and Narragansett Capital Inc. Mr. Nelson is a trustee of Brown University. Mr. Nelson received a B.A. from Brown University and an M.B.A. from Harvard Business School. James N. Perry, Jr. Director since March 2007 Mr. Perry, age 47, is a Managing Director of Madison Dearborn Partners LLC. From January 1993 to January 1999, Mr. Perry was a Vice President of MDP. Prior to co-founding MDP, Mr. Perry was with First Chicago Venture Capital for eight years. Previously, he was with The First National Bank of Chicago. Mr. Perry is currently a director of Asurion Corporation, Cbeyond Communications, Inc, MetroPCS Communications, Inc., Sorenson Communications, Inc., The Topps Company, Inc. and Catholic Relief Services. Mr. Perry received a B.A. from the University of Pennsylvania and an M.B.A. from the University of Chicago. Karl Peterson Director since April 2007 Mr. Peterson, age 37, is a partner of Texas Pacific Group. Since joining TPG in 2004, Mr. Peterson has led TPG s investment activities on travel, leisure, media and entertainment. Prior to 2004, he was president and 51

56 Table of Contents Chief Executive Officer of Hotwire Inc. Before his work at Hotwire.com in 2000, Mr. Peterson was a principal of TPG based in San Francisco. Prior to joining TPG, Mr. Peterson was an investment banker in the Mergers & Acquisitions Department and the Leveraged Buyout Group of Goldman, Sachs & Co. from 1992 to Mr. Peterson is currently a director of Sabre Holdings and Harrah s Entertainment, Inc. as well as a director of JustGive.org, a charitable contribution Web site. He received a BBA in Finance and Business Administration from the University of Notre Dame. Haim Saban Director since April 2007 Mr. Saban, age 64, has served as Chairman and Chief Executive Officer of Saban Capital Group, Inc. since Mr. Saban is currently a director of German Media Partners, Television Francaise 1, and DirecTV, and other affiliates of the Saban Capital Group. Mr. Saban serves on the Compensation Committee of DirecTV. Mr. Saban previously served as Chairman of the Supervisory Board of ProSiebenSat.1 Media AG, and as Chairman and Chief Executive Officer of Fox Family Worldwide from 1997 to Mr. Saban is a member of the board of trustees of the Brookings Institution. Joseph Uva Director since June 2007 Mr. Uva, age 51, has been Chief Executive Officer of the Company since April From January 2002 through March 2007, he was President and Chief Executive Officer of OMD Worldwide, a media buying and planning agency. From June 1996 until December 2001, Mr. Uva was President of Entertainment Sales for Turner Broadcasting Sales, Inc. where he oversaw and directed advertising sales for Turner Entertainment. Board Committees We have an Audit Committee and a Compensation Committee. Univision is not required to have, and does not have, a majority of independent directors or a Nominating Committee. Audit Committee Univision s Audit Committee currently has four members: Messrs. Alsikafi, Chesnoff, Dobron and Peterson. Mr. Peterson is the Chair of the Audit Committee. The Audit Committee monitors the integrity of Univision s financial statements, as well as Univision s compliance with legal and regulatory requirements, engages the independent auditors, reviews with the independent auditors the plans and results of the audit engagement, reviews the independence of the independent auditors and pre-approves and considers the range of all audit and non-audit services. The Board has determined that all of the members of the Audit Committee qualify as an audit committee financial expert under SEC regulations. Messrs. Alsikafi, Chesnoff, Dobron and Peterson are not independent because of their affiliation with Madison Dearborn Partners, Saban Capital Group, Providence Equity Partners, and Texas Pacific Group, respectively, which each hold more than a 5% equity interest in Univision s parent companies, Broadcasting Media and Broadcast Holdings. Compensation Committee Univision s Compensation Committee currently has five members: Messrs. Chesnoff, Cole, Davis, Masiello and Uva. Mr. Davis is the Chair of the Compensation Committee. The Compensation Committee makes recommendations to the Board concerning compensation of our Named Officers (defined in Item 11. Executive Compensation. 52

57 Table of Contents Directors Compensation See the information presented under Director Compensation under Item 11 below. Code of Ethics The Company has a Code of Conduct, Ethical Standards and Business Practices, which applies to all employees, officers and directors of the Company, as well as a separate Code of Ethics for Senior Financial Officers, which applies to the Chairman and Chief Executive Officer, the Vice Chairman, the Chief Financial Officer, the Chief Accounting Officer and any person who performs a similar function. Both the Code of Conduct, Ethical Standards and Business Practices and the Code of Ethics for Senior Financial Officers can be found on the Company s website at and, the Company will disclose on its website when there have been amendments to such codes. Waivers of the Code of Conduct, Ethical Standards and Business Practices for Named Officers and directors and waivers of the Code of Ethics for Senior Financial Officers will also be posted on the Company s website. ITEM 11. Executive Compensation. Compensation Discussion & Analysis This section contains a discussion of the material elements of compensation awarded to, earned by or paid to the principal executive and principal financial officers of Univision, and the other three most highly compensated executive officers of Univision, as well as two former executive officers of Univision. These individuals are collectively referred to as the Named Officers in this Annual Report on Form 10-K. Our current executive compensation programs are determined and approved by our Compensation Committee. None of the Named Officers are members of our Compensation Committee or otherwise had any role in determining the compensation of other Named Officers, although the Compensation Committee does consider the recommendations of Mr. Uva in setting compensation levels for our other executive officers. The Compensation Committee did not retain outside compensation consultants for 2007 or formally review or consider external compensation data in setting the compensation levels of the Named Officers. Executive Compensation Program Objectives and Overview Univision s current executive compensation programs are intended to achieve three fundamental objectives: (1) attract and retain qualified executives; (2) motivate performance to achieve specific strategic and operating objectives of Univision; and (3) align executives interests with the long-term interests of Univision s stockholders. As described in more detail below, the material elements of our current executive compensation program for Named Officers include a base salary, an annual bonus opportunity, perquisites, long-term equity incentive opportunities, retirement benefits and severance protection for certain actual or constructive terminations of the Named Officers employment. 53

58 Table of Contents We believe that each element of our executive compensation program helps us to achieve one or more of our compensation objectives. The table below lists each material element of our executive compensation program and the compensation objective or objectives that it is designed to achieve. As illustrated by the table above, base salaries, perquisites and personal benefits, retirement benefits and severance and other termination benefits are all primarily intended to attract and retain qualified executives. These are the elements of our current executive compensation program where the value of the benefit in any given year is not dependent on performance (although base salary amounts and benefits determined by reference to base salary will increase from year to year depending on performance, among other things). We believe that in order to attract and retain top-caliber executives, we need to provide executives with predictable benefit amounts that reward the executive s continued service. Some of the elements, such as base salaries and perquisites and personal benefits, are generally paid out on a short-term or current basis. The other elements are generally paid out on a longer-term basis, such as upon retirement or other termination of employment. We believe that this mix of longer-term and short-term elements allows us to achieve our dual goals of attracting and retaining executives (with the longer-term benefits geared toward retention and the short-term awards focused on recruitment). Our annual bonus opportunity is primarily intended to motivate Named Officers performance to achieve specific strategies and operating objectives, although we also believe it helps us attract and retain executives. Our equity-based compensation is primarily intended to align Named Officers long-term interests with the long-term interests of Broadcasting Media and its stakeholders, although we also believe they help motivate performance and help us attract and retain executives. These are the elements of our current executive compensation program that are designed to reward performance, and therefore the value of these benefits is dependent on performance. Each Named Officer s annual bonus opportunity is paid out on an annual short-term basis and is designed to reward performance for that period. Equity-based compensation is generally paid out or earned on a longer-term basis and is designed to reward performance over several years. Current Executive Compensation Program Elements Base Salaries Compensation Element On March 29, 2007, Messrs. Uva, Hobson, Kranwinkle and Rodriguez entered into employment agreements with our parent, Broadcasting Media that provide minimum base salary levels for each of these executives. These 54 Compensation Objectives Attempted to be Achieved Base Salary Attract and retain qualified executives Bonus Compensation Motivate performance to achieve specific strategies and operating objectives Attract and retain qualified executives Perquisites and Personal Benefits Attract and retain qualified executives Equity-Based Compensation Align Named Officers long-term interests with stockholders long-term interests Motivate performance to achieve specific strategies and operating objectives Attract and retain qualified executives Retirement Benefits (e.g., 401(k)) Attract and retain qualified executives Severance and Other Benefits Upon Termination of Employment Attract and retain qualified executives Motivate performance to achieve specific strategies and operating objectives

59 Table of Contents base salary levels are reviewed annually by our Compensation Committee and may be increased (but not decreased) from the level then in effect. Mr. Lori has an employment agreement with Univision Management Company, one of our subsidiaries. The base salary that was paid to each Named Officer in 2007 is the amount reported for such officer in Column (c) of the Summary Compensation Table below. Annual Bonuses Under his employment agreement, Mr. Uva is eligible to receive an annual bonus based on our achievement of performance goals established by the Compensation Committee for the applicable fiscal year. His annual target bonus each year is 150% of his base salary for that year. For 2007, the Compensation Committee evaluated the Company s overall performance during the nine-month period Mr. Uva served as chief executive officer and determined that it would be appropriate to award Mr. Uva a bonus at substantially above the target level. For more information on Mr. Uva s 2007 bonus, please see Description of Employment Agreements Base Salary, Bonuses and Benefits below. In the case of Messrs. Hobson and Rodriguez, their respective employment agreements provide that the executive is eligible to receive an annual bonus based on our earnings before interest, taxes, depreciation and amortization (subject to certain adjustments) for the applicable fiscal year as compared to preestablished performance targets for that year. In each case, the executive s target bonus is 100% of his base salary for the applicable fiscal year, with a maximum bonus of 200% of his base salary for that year. In the case of Messrs. Kranwinkle and Lori, our Compensation Committee has discretion to determine the executive s bonus level each fiscal year based on its evaluation of the performance of the Company and the executive for that year. In setting Mr. Kranwinkle s bonus for 2007, the Compensation Committee considered the recommendations of Mr. Uva and took into account Mr. Kranwinkle s contributions with respect to the Televisa litigation and the handling of certain matters related to changes in senior personnel. In setting Mr. Lori s bonus for 2007, the Compensation Committee considered the recommendations of Mr. Hobson in its evaluation of Mr. Lori s individual performance during the year. The bonuses for 2007 for the Named Officers are reported in column (d) or column (g), as applicable, of the Summary Compensation Table below. Perquisites In addition to base salaries and annual bonus opportunities, Univision provides the Named Officers with certain perquisites and personal benefits, including automobile-related expenses. We believe that perquisites and personal benefits are often a tax-advantaged way to provide the Named Officers with additional annual compensation that supplements their base salaries and bonus opportunities. When determining each Named Officer s base salary, we take the value of each Named Officer s perquisites and personal benefits into consideration. The perquisites and personal benefits paid to each Named Officer in 2007 are reported in Column (i) of the Summary Compensation Table below, and are further described in the footnotes to the Summary Compensation Table. Equity-Based Compensation Univision s policy is that the Named Officers long-term compensation should be directly linked to the creation of value for stockholders. Accordingly, the Compensation Committee may, from time to time, approve the grant of equity-based awards to our Named Officers and our other executives. The Compensation Committee believes that equity-based awards play an important role in creating incentives for our executives to maximize Company performance and aligning the interests of our executives with those of our owners. Because Univision is a wholly owned subsidiary of Broadcasting Media, the Compensation Committee considers it appropriate that these awards cover equity securities of Broadcasting Media and Broadcast Holdings. These awards consist of either outright grants of stock or stock units that are payable in the future in shares of stock and are generally 55

60 Table of Contents subject to time-based or performance-based vesting requirements. Time-based awards function as a retention incentive, while performancebased awards encourage executives to maximize Company performance and create value for our equity owners. Pursuant to their employment agreements, Messrs. Uva, Hobson, Kranwinkle and Rodriguez were each granted equity awards during The material terms of these award grants are reported in the Grants of Plan-Based Awards Table below and the accompanying narrative. Retirement Benefits and Deferred Compensation Opportunities Deferred compensation is a tax-advantaged means of providing the Named Officers with additional compensation that supplements their base salaries and bonus opportunities. Mr. Rodriguez began participating in our Univision Key Senior Management Deferred Compensation Plan in 1992; however, he has not received any credits under the terms of the plan since No other Named Officer participated in the Univision Key Senior Management Deferred Compensation Plan. Please see the Non-Qualified Deferred Compensation table and related narrative section Non-Qualified Deferred Compensation Plans below for a description of Univision s deferred compensation plans and the benefits thereunder. Severance and Other Benefits Upon Termination of Employment We believe that severance protections can play a valuable role in attracting and retaining key executive officers. Accordingly, we provide such protections for certain of our Named Officers under their respective employment agreements. The Compensation Committee evaluates the level of severance benefits to provide an executive on a case-by-case basis, and in general, we consider these severance protections an important part of an executive s compensation. As described in more detail under Potential Payments Upon Termination or Change in Control below, under their employment agreements, Messrs. Uva, Hobson and Rodriguez would be entitled to severance benefits in the event of a termination of employment by Univision without cause, a termination by the executive for good reason, or in the event the employment agreement is not renewed by Univision on the expiration of the term of the agreement. We have determined that it is appropriate to provide these executives with severance benefits in the event of a termination of the executive s employment under these circumstances in light of their positions within Univision and as part of their overall compensation package. Please see the Potential Payments Upon Termination or Change in Control section below for a description of the potential payments that may be made to the Named Officers in connection with a termination of their employment and/or a change in control. As noted in the footnotes to the Summary Compensation Table below, certain Named Officers also received payments in connection with the Merger in consideration for the termination of their participation in the Company s Change in Control Retention Bonus Plan and/or Change in Control Severance Plan. 56

61 Table of Contents Compensation Committee s Report on Executive Compensation (1) Univision s Compensation Committee has certain duties and powers as described in its charter. The Compensation Committee is currently composed of the non-employee directors named at the end of this report. The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Item 11. Based upon this review and our discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Annual Report on Form 10-K. Compensation Committee of the Board of Directors Kelvin Davis (Chair) Adam Chesnoff Michael Cole Mark Masiello Joseph Uva (1) SEC filings sometimes incorporate information by reference. This means the Company is referring you to information that has previously been filed with the SEC, and that this information should be considered as part of the filing you are reading. Unless the Company specifically states otherwise, this Compensation Committee Report shall not be deemed to be incorporated by reference and shall not constitute soliciting material or otherwise be considered filed under the Securities Act or the Securities Exchange Act. Compensation Committee s Interlocks and Insider Participation The Compensation Committee members whose names appear above comprised the committee members as of December 31, Prior to March 29, 2007, Alan F. Horn and Harold Gaba served as members of the Compensation Committee. Other than Mr. Uva, our Chief Executive Officer, no Director who served as a member of the Compensation Committee at any time during 2007 is or has been a Named Officer of the Company. Messrs. Chesnoff, Cole, Davis and Masiello are affiliated with each of Saban Capital Group, Madison Dearborn Partners, Texas Pacific Group and Providence Equity Partners, respectively, and funds affiliated with these Sponsors have a management agreement with the Company and Broadcasting Media. The Company also does business with other companies in an amount exceeding $120,000 in which Texas Pacific Group and Madison Dearborn Partners each own a more than 10% equity interest. See Item 13, Certain Relationships and Related Transactions, and Director Independence. Other than Messrs. Chesnoff, Cole, Davis and Masiello, no Director who served as a member of the Compensation Committee at any time during 2007 had any relationships requiring disclosure by the Company under the SEC s rules requiring disclosure of certain relationships and related-party transactions. None of the Company s Named Officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the Named Officers of which served as a director or member of the Compensation Committee during the fiscal year ended December 31,

62 Table of Contents Summary Compensation Table Fiscal 2007 The following table presents information regarding compensation of each of our Named Officers for services rendered during fiscal Fiscal Stock Option Non-Equity Incentive Plan Year Salary ($) Bonus ($)(1) Awards ($)(2) Awards ($)(2) Compensation ($) ($) ($)(4)(5)(6) Total ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) ,500 1,300,000 1,494,490 1,350,000 5,006,990 Name and Principal Position Joseph Uva (3) Chief Executive Officer Andrew W. Hobson Senior Executive Vice President, Chief Financial Officer and Chief Strategic Officer Ray Rodriguez President and Chief Operating Officer C. Douglas Kranwinkle Executive Vice President and General Counsel Peter H. Lori Senior Vice President and Chief Accounting Officer A. Jerrold Perenchio (8) Former Chairman of the Board and Chief Executive Officer Robert V. Cahill (9) Former Vice Chairman and Corporate Secretary , ,000 1,575, ,100,000 1,853,800 1,000, ,000 1,100, ,000 1,297, , , , , None None 2006 None None , ,000 1,390, ,881, ,208 7,542, ,860 2,212, , ,850 46,559 None None 2,212, ,465 1,214, ,810 1,214, , , , ,971 95,759 None None 910, , ,000 1,100,000 None None Change in Pension Value and Nonqualified Deferred Compensation Earnings All Other Compensation 9,151,665 29,924 4,310 (7) 10,199,786 1,398 52,325 None None 7,600,713 45,618 1,729,901 3,600 None None 8,068,155 5,280 19,117,231 3,012,742 21,160,632 3,617,193 12,641,887 2,460,963 2,923, ,918 None None 11,397,813 2,563,325 (1) The methodology for determining each Named Officer s bonus for 2007 is described in the Compensation Discussion and Analysis above. (2) The amounts reported in columns (e) and (f) of the table above reflect the aggregate dollar amounts recognized for stock awards and option awards, respectively, for financial statement reporting purposes with respect to fiscal 2007 (disregarding any estimate of forfeitures related to service-based vesting conditions). No stock awards or option awards granted to Named Officers were forfeited during fiscal For a discussion of the assumptions and methodologies used to value the awards reported in Column (e) and Column (f), please see the discussion of stock awards and option awards contained in Note 13 (Performance Award and Incentive Plans) to the Company s Consolidated Financial Statements, included in this Annual Report on Form 10-K. For information about the stock awards and option awards granted to the Named Officers for fiscal 2007, please see the discussion under Grants of Plan- Based Awards below. (3) Mr. Uva was appointed the Company s Chief Executive Officer effective April 2, (4) The amounts reported in column (i) of the table above include matching contributions by the Company under the 401(k) Plan for 2007 in the amount of $6,750 for each of Messrs. Hobson, Kranwinkle, Rodriguez and Lori. These amounts also include the Company s payment of annual life insurance premiums for Messrs. Hobson, Kranwinkle and Rodriguez under the Company s executive life insurance program. For 2007, the Company paid annual term life insurance premiums of $19,311 for Mr. Kranwinkle and $27,379 for Mr. Rodriguez and annual variable life insurance premiums for Mr. Hobson in the amount of $9,730. The amounts in this column also include the Company s payment of annual premiums for long-term disability insurance coverage in the following amounts: $6,134 for Mr. Hobson, $10,227 for Mr. Kranwinkle, and $5,508 for Mr. Rodriguez. (5) The amounts reported in this column for 2007 also include auto related expenses paid by the Company in the amounts of $1,335 for Mr. Cahill, $7,785 for Mr. Kranwinkle, $8,235 for Mr. Hobson and $7,200 for Mr. Rodriguez; a housing allowance paid by the Company to Mr. Kranwinkle in the amount of $58,064, and annual club dues paid by the Company for Mr. Rodriguez in the amount of $8,830. (6) The amounts reported in this column for 2007 also include payments made to certain Named Officers in connection with the change in control of Univision. These payments were made in consideration for the termination of the executive s participation in the Company s Change in Control Retention Bonus Plan and/or Change in Control Severance Plan in the amounts of $9,120,816 for Mr. Hobson, $7,498,576 for Mr. Kranwinkle, $10,144,119 for Mr. Rodriguez, $7,916,817 for Mr. Cahill and $1,723,151 for Mr. Lori.

63 Table of Contents (7) This amount represents deferred compensation interest income earned by Mr. Rodriguez under the Univision Key Senior Management Deferred Compensation Plan for 2007 that is above market rates as determined under the SEC s proxy rules. Refer to Footnote (1) of the Nonqualified Deferred Compensation table that appears later in this Item 11. (8) Mr. Perenchio resigned as the Company s Chief Executive Officer effective March 29, Prior to his resignation, Mr. Perenchio had not been compensated for his services as an employee of Univision since (9) Mr. Cahill resigned as the Company s Vice Chairman and Corporate Secretary effective March 29, The amount reported in the All Other Compensation column includes consulting fees paid to Mr. Cahill for 2007 in the amount of $150,003. The terms of Mr. Cahill s consulting arrangement with the Company are described below. Compensation of Named Officers The Summary Compensation Table should be read in connection with the tables and narrative descriptions that follow. The Grants of Plan-Based Awards table, and the description of the material terms of the restricted stock awards and restricted stock units granted in 2007 that follows it, provides information regarding the long-term equity incentives awarded to Named Officers in 2007 that are reported in the Summary Compensation Table. The Outstanding Equity Awards at Fiscal Year End and Option Exercises and Stock Vested tables provide further information on the Named Officers potential realizable value and actual value realized with respect to their equity awards. The Non-Qualified Deferred Compensation table and related description of the material terms of our non-qualified deferred compensation plans provides context to the deferred compensation earnings listed in the table above, and also provides a more complete picture of the potential future payments due to one of our Named Officers. The discussion of the potential payments due upon a termination of employment or change in control is intended to further explain the potential future payments that are, or may become, payable to our Named Officers. Description of Employment Agreements Base Salary, Bonuses and Benefits On March 29, 2007, Broadcasting Media Partners, Inc., the Company s parent ( Broadcasting Media ), entered into employment agreements with each of Messrs. Uva, Hobson, Rodriguez and Kranwinkle. These employment agreements, including the salary, bonus and perquisites terms of each agreement, are briefly described below. Provisions of these agreements relating to outstanding equity incentive awards and post-termination of employment benefits are discussed below under the applicable sections of this Form 10-K. Joseph Uva. Mr. Uva s employment agreement provides for a four-year term, with automatic one-year extensions unless either party provides six months notice that the term will not be extended. Mr. Uva s annual base salary under the agreement is $1,150,000, subject to annual review by the Board of Directors which has discretion to increase (but not decrease) the base salary level then in effect. Mr. Uva is entitled to an annual bonus opportunity based on performance goals established by the Board of Directors. For 2007, Mr. Uva s target bonus was $1,425,000, and the agreement provides that his bonus for 2007 would not be less than $850,000. After 2007, Mr. Uva s target bonus will be 150% of his annual base salary. In addition, as described in the footnotes to the Summary Compensation Table above, the agreement provides for Mr. Uva to receive certain cash payments to cover his tax obligations incurred in connection with certain equity awards granted under the agreement. The agreement also provides for Mr. Uva to participate in Broadcasting Media s usual benefit programs for senior executives and to receive certain perquisites as described in the footnotes to the Summary Compensation Table above. In the event that Broadcasting Media were to relocate its executive offices from New York to the Los Angeles or Miami metropolitan areas, the agreement provides for Mr. Uva to receive relocation benefits. Andrew Hobson. Mr. Hobson s employment agreement provides for a five-year term, with automatic one-year extensions unless either party provides six months notice that the term will not be extended. Mr. Hobson s initial annual base salary under the agreement is $935,000 and will automatically be increased by 59

64 Table of Contents five percent each year. Mr. Hobson is entitled to an annual bonus opportunity based on Broadcasting Media s earnings for the applicable fiscal year as described in the Compensation Discussion and Analysis above. Mr. Hobson s target bonus is 100% of his annual base salary, with a maximum bonus of 200% of his annual base salary. In addition, as described in the footnotes to the Summary Compensation Table above, the agreement provides for Mr. Hobson to receive certain cash payments in connection with the acquisition of the Company by Broadcasting Media. The agreement also provides for Mr. Hobson to participate in Broadcasting Media s usual benefit programs for senior executives and to receive certain perquisites as described in the footnotes to the Summary Compensation Table above. In connection with Mr. Hobson s relocation to the New York City metropolitan area at Broadcasting Media s request, the agreement provides that Broadcasting Media will purchase Mr. Hobson s home in Los Angeles, California at a price equal to cost (not to exceed $9.6 million) and to reimburse Mr. Hobson s reasonable relocation costs (including taxes incurred in connection with any such reimbursement). Ray Rodriguez. Mr. Rodriguez s employment agreement provides for a five-year term, with automatic one-year extensions unless either party provides six months notice that the term will not be extended. Mr. Rodriguez s initial annual base salary under the agreement is $1,100,000 and will automatically be increased by five percent each year. Mr. Rodriguez is entitled to an annual bonus opportunity based on Broadcasting Media s earnings for the applicable fiscal year as described in the Compensation Discussion and Analysis above. Mr. Rodriguez s target bonus is 100% of his annual base salary, with a maximum bonus of 200% of his annual base salary. In addition, as described in the footnotes to the Summary Compensation Table above, the agreement provides for Mr. Rodriguez to receive certain cash payments in connection with the acquisition of the Company by Broadcasting Media. The agreement also provides for Mr. Rodriguez to participate in Broadcasting Media s usual benefit programs for senior executives and to receive certain perquisites as described in the footnotes to the Summary Compensation Table above. C. Douglas Kranwinkle. Mr. Kranwinkle s employment agreement provides for a two-year term, with the expectation that Mr. Kranwinkle would provide services on a full-time basis through July 1, 2007 and transition to a less than full-time basis thereafter. The agreement provides for Mr. Kranwinkle to receive a monthly base salary of $64,200 for full-time services and for that rate to be proportionately adjusted for any month in which he provides less than full-time services. Mr. Kranwinkle is also eligible to receive an annual bonus in an amount to be determined by the Board of Directors in its sole discretion. In addition, as described in the footnotes to the Summary Compensation Table above, the agreement provides for Mr. Kranwinkle to receive certain cash payments in connection with the acquisition of the Company by Broadcasting Media (including certain payments in consideration his covenant not to compete with Broadcasting Media for five years after the effective date of the agreement). The agreement also provides for Mr. Kranwinkle to participate in Broadcasting Media s usual benefit programs for senior executives and to receive certain perquisites as described in the footnotes to the Summary Compensation Table above. Peter Lori. In 2005, Mr. Lori entered into an employment agreement with Univision Management Company, one of our subsidiaries. The term of the agreement has been extended through December 31, 2009 and provides for Mr. Lori to receive an annual base salary of $400,000 for 2006 and 2007 and $500,000 for 2008 and The agreement also provides for Mr. Lori to receive a discretionary annual bonus and to participate in the benefit programs provided generally to employees of Univision Management Company. Robert Cahill. Effective March 28, 2007, the Company entered into a consulting agreement with Mr. Cahill to provide substantive advice in all areas of community and government relations. The agreement provides for Mr. Cahill to provide such services commencing April 1, 2007 and continuing through the close of business on March 31, The agreement provides for Mr. Cahill to receive a fee of $200,000 for his services, which is payable in periodic installments no less frequently than monthly. 60

65 Table of Contents Grants of Plan-Based Awards Fiscal 2007 The following table presents information regarding the equity incentive awards granted to the Named Officers for fiscal Each of these awards was granted under Broadcasting Media s 2007 Equity Incentive Plan (the 2007 Plan ). Unless otherwise noted, references in the table to stock or securities are to Class A Common Stock of Broadcasting Media. Estimated Future Payouts Under Non-Equity Incentive Plan Awards 61 Maximum ($) Estimated Future Payouts Under Equity Incentive Plan Awards Name Grant Date hold ($) Target ($) hold (#) (#) mum (#) (#) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Joseph Uva N/A 1,425,000 04/02/07 (2) 33, ,753 04/02/07 (3) 9, ,400 04/02/07 (4) 3,670 3,670,000 Andrew W. Hobson N/A 935,000 1,870,000 03/29/07 (5) 19, ,655 03/29/07 (3) 5, ,400 03/29/07 (4) 2,202 2,202,000 Ray Rodriguez N/A 1,100,000 2,200,000 03/29/07 (5) 23, ,580 03/29/07 (3) 6, ,100 03/29/07 (4) 2,642 2,642,000 C. Douglas Kranwinkle 03/29/07 (6) 18, ,021 Peter Lori 12/15/07 (6) 8,001 16, ,028 A. Jerrold Perenchio Robert V. Cahill Thres- Target Maxi- All Other Stock Awards: Number of Shares of Stock or Units All Other Option Awards: Number of Securities Underlying Options (#) Exercise or Base Price of Option Awards ($/Sh) Grant Date Fair Value of Stock and Option Awards ($) (1) Thres- (1) The amounts reported in this column reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of the Company s financial statements. For a discussion of the assumptions and methodologies used to value the awards reported in this column, please see footnote (2) to the Summary Compensation Table. (2) Restricted Stock Award covering shares of class A-1 voting common stock of Broadcasting Media. (3) Restricted Stock Unit Awards covering shares of cumulative preferred stock of Broadcast Holdings. (4) Restricted Stock Unit Awards covering shares of class L-1 voting common stock of Broadcasting Media. (5) Restricted Stock Unit Award covering shares of class A-1 voting common stock of Broadcasting Media. (6) Stock option covering shares of class A-1 voting common stock of Broadcasting Media.

66 Table of Contents Description of Plan-Based Awards The material terms of each of the non-equity incentive plan awards reported in the Grants of Plan-Based Awards Table are described in the Compensation Discussion and Analysis above. Each of the equity-based awards reported in the Grants of Plan-Based Awards Table was granted under, and is subject to, the terms of the 2007 Plan. The 2007 Plan is administered by the Board of Directors of Broadcasting Media. The board has authority to interpret the plan provisions and make all required determinations under the plan. This authority includes making required proportionate adjustments to outstanding awards upon the occurrence of certain corporate events such as reorganizations, mergers and stock splits, and making provision to ensure that any tax withholding obligations incurred in respect of awards are satisfied. Awards granted under the plan are generally only transferable to a beneficiary of a Named Officer upon his death. Under the terms of the 2007 Plan, if there is a change in control of Broadcasting Media, the Broadcasting Media board may provide for the acceleration of vesting of outstanding awards granted under the plan (including awards granted to the Named Executive Officers) and the assumption or cancellation of such awards upon the occurrence of the transaction. Pursuant to the 2007 Plan, Broadcasting Media may grant awards of restricted stock, restricted stock units, stock appreciation rights, dividend equivalent rights, options, and other stock-based awards. The types of stock that may be issued under these awards pursuant to the 2007 Plan are class A-1 voting and class A-2 non-voting common shares of Broadcasting Media, class L-1 voting and class L-2 non-voting common shares of Broadcasting Media, and 8.64% cumulative preferred stock of Broadcast Media Partners Holdings, Inc. Restricted Stock On April 2, 2007, Mr. Uva received a grant of 33,028 shares of restricted stock. The restricted shares are scheduled to vest in three installments over a period of two-and-one-half years. This grant will become fully vested upon a change in control event or a termination of Mr. Uva s employment by Broadcasting Media without cause, by Mr. Uva for good reason or due to Mr. Uva s death or disability. If Mr. Uva s employment terminates for any other reason, any unvested shares are forfeited. Prior to the time the shares become vested, Mr. Uva generally does not have the right to dispose of the restricted shares, but does have the right to vote and receive dividends (if any) paid by Broadcasting Media in respect to the restricted shares. The restricted shares, whether vested or unvested, are subject upon certain transactions to tag-along rights in favor of Mr. Uva and drag-along rights in favor of Broadcasting Media. If Mr. Uva s employment terminates for any reason other than a termination by Broadcast Media for cause, Broadcast Media has a right to repurchase any vested shares at their then fair market value. If Mr. Uva s employment is terminated by Broadcasting Media without cause or if Mr. Uva terminates employment for good reason prior to the second anniversary of the grant date, he has a right to require Broadcasting Media to repurchase the shares at their then fair market value. Restricted Stock Units Awards of restricted stock units granted to the Named Officers during 2007 are scheduled to vest in three installments over a period of two and one-half years following the grant date, provided that the executive continues to be employed with Broadcasting Media through the vesting date. Restricted stock units are settled upon vesting in shares of the class of stock underlying the units. All unvested restricted stock units will accelerate and vest upon a termination of the Named Officer s employment by Broadcasting Media without cause, by the executive for good reason, or due to the executive s death or disability. Except as provided above, the restricted stock units are cancelled without payment upon a termination of the Named Officer s service, and the executive forfeits any rights with respect to the restricted stock units. Prior to the time the units become vested, the Named Officer generally does not have the right to dispose of the restricted stock units, but does have the right to receive dividend equivalents (if any) paid by Broadcasting 62

67 Table of Contents Media in respect of the shares underlying the restricted stock units (these dividend equivalents will accumulate and be paid when and if the restricted stock units ultimately vest). If a Named Officer s employment terminates for any reason, Broadcasting Media has a right to repurchase any shares issued in settlement of the restricted stock units at their then fair market value. Additionally, the shares issued in settlement of the restricted stock units are subject upon certain transactions to tag-along rights in favor of the Named Officer and drag-along rights in favor of Broadcast Media. Upon a termination of his employment by Broadcasting Media without cause or by Mr. Uva for good reason prior to the second anniversary of the grant date, Mr. Uva has a right to require Broadcasting Media to repurchase any shares issued in settlement of his restricted stock units at their then fair market value. The repurchase rights described above would generally terminate upon a public offering of the securities of Broadcasting Media. Stock Options Options granted to Named Officers during 2007 have a per-share exercise price equal to the per-share fair market value of the underlying securities on the grant date. The option granted to Mr. Kranwinkle is subject to a two-year vesting schedule, with 50% of the option vesting on each of the first two anniversaries of the grant date. The option granted to Mr. Lori is scheduled to vest in annual installments on each of the first five anniversaries of the vesting commencement date of April 1, 2007, with one-third of the option also being subject to additional vesting requirements based on the internal rates of return for the Sponsors and co-investors on their investments in Broadcasting Media. In each case, the executive generally must continue to be employed with us through the applicable vesting date. However, each of these options may automatically become fully or partially vested if the Named Officer s employment is terminated by Broadcasting Media without cause or due to the Named Officer s death or disability (or, in the case of Mr. Lori, a termination by the executive for good reason). Once vested, each option will generally remain exercisable until its normal expiration date. Each of the options granted to our Named Officers in 2007 has a term of ten years. However, vested options may terminate earlier in connection with a change in control transaction or a termination of the Named Officer s employment. Subject to any accelerated vesting that may apply in the circumstances, the unvested portion of the option will immediately terminate upon a termination of the Named Officer s employment. The Named Officer will generally have 90 days to exercise the vested portion of the option following a termination of employment. This period is extended to twelve months if the termination is a result of the Named Officer s death or disability. If the Named Officer is terminated by us for cause (or, in the case of Mr. Lori, if he voluntarily resigns other than for good reason prior to April 1, 2010), the option (whether or not vested) will immediately terminate. The options granted to Named Officers during 2007 do not include any dividend rights. 63

68 Table of Contents Outstanding Equity Awards At Fiscal 2007 Year-End The following table presents information regarding the outstanding equity awards held by each of the Named Officers as of December 31, 2007, including the vesting dates for the portions of these awards that had not vested as of that date. Number of Securities Underlying Unexercised Options (#) Exercisable Option Awards Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise 64 Option Expiration Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) (1) Stock Awards Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) Price Name ($) Date (a) (b) (c) (e) (f) (g) (h) (i) (j) Joseph Uva 33,028 (2) 396,997 9,224 (2) 940,848 3,670 (2) 3,802,120 Andrew W. Hobson 19,817 (3) 238,200 5,534 (3) 564,468 2,202 (3) 2,281,272 Ray Rodriguez 23,780 (3) 285,836 6,641 (3) 677,382 2,642 (3) 2,737,112 C. Douglas Kranwinkle 18,003 (4) /29/17 Peter Lori 24,004 (5) /15/17 A. Jerrold Perenchio Robert V. Cahill (1) The dollar amounts shown in these columns are determined by multiplying the number of unvested shares or units subject to the award by the fair market value of the underlying securities on December 31, (2) The unvested portions of these awards are scheduled to vest in three installments on April 2, 2008, April 2, 2009 and October 2, (3) The unvested portions of these awards are scheduled to vest in three installments on March 29, 2008, March 29, 2009 and September 29, (4) The unvested portion of this award is scheduled to vest in two installments on March 29, 2008 and March 29, (5) The unvested portion of this award is scheduled to vest in five installments on April 1, 2008, April 1, 2009, April 1, 2010, April 1, 2011 and April 1, A portion of this award is also subject to performance-based vesting requirements as described above.

69 Table of Contents Option Exercises and Stock Vested Fiscal 2007 The following table presents information regarding the exercise of stock options by the Named Officers during fiscal 2007, and on the vesting during fiscal 2007 of other stock awards previously granted to the Named Officers. Option Awards Number of Shares Acquired on Value Realized Stock Awards Number of Shares Acquired on Value Realized Name Exercise (#) on Exercise ($) (1) Vesting (#) on Vesting ($) (1) (a) (b) (c) (d) (e) Joseph Uva Andrew W. Hobson 808,300 3,128, ,300 6,245,875 Ray Rodriguez 818,300 2,435, ,300 6,970,875 C. Douglas Kranwinkle 370, ,500 66,700 2,417,875 Peter Lori 33, ,780 8, ,609 A. Jerrold Perenchio Robert V. Cahill 680,000 2,189,300 66,700 2,417,875 (1) The dollar amounts shown in column (c) above for option awards are determined by multiplying (i) the number of shares of our common stock to which the exercise of the option related, by (ii) the difference between the per-share closing price of our common stock on the date of exercise and the exercise price of the options. The dollar amounts shown in column (e) above for stock awards are determined by multiplying the number of shares or units, as applicable, that vested by the per-share closing price of our common stock on the vesting date. Nonqualified Deferred Compensation Plans The Univision Key Senior Management Deferred Compensation Plan was initiated in 1990 to provide selected key executives of the Company with incentives linked to the increase in the Company s market value. Participants in the plan would receive credits to their deferred accounts annually based upon the percentage increase in the Company s cash flow for 1990 and each calendar year thereafter, over the cash flow for the prior year. Awards would vest annually, and earn interest at the rate of 6% per year. In the event of termination of employment due to death, disability or retirement at or after age 65, a participant in the plan would receive payment of his deferred amount. Upon termination of employment for any other reason, a participant would receive an amount equal to his or her vested portion of his or her account. The following table presents information regarding the amount of nonqualified deferred compensation earned by Named Officers under the Univision Key Senior Management Deferred Compensation Plan. Name Nonqualified Deferred Compensation Fiscal 2007 Executive Contributions in Last FY ($) 65 Registrant Contributions in Last FY ($) Aggregate Earnings in Last FY ($) Aggregate Withdrawals/ Distributions ($) Aggregate Balance at Last FYE ($) (a) (b) (c) (d) (e) (f) Joseph Uva Andrew W. Hobson Ray Rodriguez(1) 80,815 1,427,733 C. Douglas Kranwinkle Peter Lori A. Jerrold Perenchio Robert V. Cahill (1) Only the portion of earnings on deferred compensation that is considered to be at above-market rates under the SEC s proxy rules, $4,310, is included as compensation for Mr. Rodriguez in the Summary Compensation Table above.

70 Table of Contents Potential Payments Upon Termination Or Change In Control The following section describes the benefits that may become payable to the Named Officers in connection with a termination of their employment with the Company and/or a change in control of Broadcasting Media pursuant to the terms of their respective employment agreements. In addition to the benefits described below, outstanding equity-based awards held by our Named Officers may also be subject to accelerated vesting in connection with a change in control of Broadcasting Media and/or certain terminations of their employment as described under Grants of Plan-Based Awards above. In the event that the stock of Broadcasting Media were to be publicly traded and the benefits payable to Messrs. Uva, Hobson or Rodriguez in connection with a change in control would be subject to the excise tax imposed under Section 280G of the U.S. Internal Revenue Code of 1986, Broadcasting Media would make an additional payment to the executive so that the net amount of such payment (after taxes) the executive receives is sufficient to pay the excise tax due. Mr. Uva also has a right to require Broadcasting Media to repurchase, at their then fair market value, certain shares he previously purchased from Broadcasting Media upon a termination of employment by Broadcasting Media without cause or by Mr. Uva for good reason prior to the second anniversary of the date the shares were acquired. Joseph Uva. In the event Mr. Uva s employment is terminated during the employment term either by the Company without cause or by Mr. Uva for good reason (as those terms are defined in the employment agreement), or if the term of Mr. Uva s employment agreement is not renewed by the Company, Mr. Uva will be entitled to severance pay equal to (i) if the termination occurs within the first two years of the term of the agreement, one times his base salary, or (ii) if the termination occurs more than two years after the effective date of the agreement, two times the sum of his base salary and his annual bonus for the year preceding the year in which the termination occurs. Mr. Uva will also generally be entitled to a prorated bonus for the year in which the termination occurs and continued medical and term life insurance coverage for Mr. Uva and his family members by the Company for two years after the termination. In addition, in the event Mr. Uva s employment is terminated during the employment term due to his death or disability (as defined in the employment agreement), he (or his estate) would generally be entitled to a prorated bonus for the year in which the termination occurs and continued medical and term life insurance coverage for Mr. Uva and his family members by the Company for two years after the termination. Finally, if Broadcasting Media were to relocate outside of the New York metropolitan area, and Mr. Uva s employment were thereafter terminated by the Company without cause or by Mr. Uva for good reason, the Company will relocate him and his family back to the New York metropolitan area and provide a tax gross-up to Mr. Uva for these relocation benefits. Andrew Hobson. In the event Mr. Hobson s employment is terminated during the employment term either by the Company without cause or by Mr. Hobson for good reason (as those terms are defined in the employment agreement), or if the term of Mr. Hobson s employment agreement is not renewed by the Company (prior to his attaining age 65), Mr. Hobson will be entitled to severance pay equal to two times the sum of his base salary and his annual bonus for the year preceding the year in which the termination occurs. For this purpose, Mr. Hobson s annual bonus will be deemed to be $1,870,000 if the termination occurs during Mr. Hobson will also generally be entitled to a prorated bonus for the year in which the termination occurs (calculated based on the severance amount determined as described above and prorated based on the period of his employment with the Company during the year). Mr. Hobson will also generally be entitled to continued medical and term life insurance coverage for Mr. Hobson and his family members by the Company for two years after the termination. Finally, Mr. Hobson would be entitled to certain reasonable and customary benefits in connection with relocating his family from New York to Southern California following any such termination. Ray Rodriguez. In the event Mr. Rodriguez s employment is terminated during the employment term either by the Company without cause or by Mr. Rodriguez for good reason (as those terms are defined in the employment agreement), or if the term of Mr. Rodriguez s employment agreement is not renewed by the Company (prior to his attaining age 65), Mr. Rodriguez will be entitled to severance pay equal to two times the 66

71 Table of Contents sum of his base salary and his annual bonus for the year preceding the year in which the termination occurs. For this purpose, Mr. Rodriguez s annual bonus will be deemed to be $2,200,000 if the termination occurs during Mr. Rodriguez will also generally be entitled to a prorated bonus for the year in which the termination occurs (calculated based on the severance amount determined as described above and prorated based on the period of his employment with the Company during the year). Mr. Rodriguez will also generally be entitled to continued medical and term life insurance coverage for Mr. Rodriguez and his family members by the Company for two years after the termination. C. Douglas Kranwinkle. In the event Mr. Kranwinkle s employment terminates during the employment term due to his disability, or if his employment agreement terminates on the second anniversary of its effective date, Mr. Kranwinkle will generally be entitled to continued medical insurance coverage for Mr. Kranwinkle and his family members by the Company for one year after the termination. Quantification of Severance and Change in Control Benefits As prescribed by the SEC s disclosure rules, in calculating the amount of any potential payments to the Named Officers under the arrangements described above, we have assumed that the applicable triggering event (i.e., termination of employment and/or change in control of the Company) occurred on December 31, Name and Principal Position 67 Change in Control: Value of Accelerated Equity Compensation (2) ($) Cash Severance Payment ($) Severance Benefits (1) Continued Health and Life Insurance Benefits ($) Value of Accelerated Equity Compensation (2) (3) ($) Joseph Uva 5,139,965 4,800,000 21,000 5,139,965 Andrew W. Hobson 3,083,940 3,740,000 40,460 3,083,940 Ray Rodriguez 3,700,330 4,400,000 75,758 3,700,330 C. Douglas Kranwinkle (4) Peter Lori 800,000 (1) As noted above, these benefits would generally be payable upon a termination of the Named Officer s employment by the Company without cause or by the executive for good reason. The executive would be entitled to the full amount of his bonus for fiscal 2007 if he were employed by us through December 31, 2007, so the pro-rata bonus provision in his employment agreement described above would not apply. As described above, Mr. Rodriguez would also be entitled to certain reasonable and customary relocation benefits in the circumstances. The Company does not believe it can reasonably estimate its costs to provide these benefits. (2) For restricted stock and restricted stock unit awards, this value is calculated by multiplying the fair market value of the underlying securities as of December 31, 2007 by the number of shares or units subject to the accelerated portion of the award. As discussed above, acceleration of outstanding restricted stock unit awards is permitted, but not required, upon a change in control under the 2007 Plan. (3) As described under Grants of Plan-Based Awards above, the executive may also be entitled to accelerated vesting of equity awards upon a termination of employment due to his death or disability. (4) As noted above, Mr. Kranwinkle would be entitled to continued medical coverage for one year after a termination due to his disability. The Company estimates that if Mr. Kranwinkle s employment had terminated under these circumstances on December 31, 2007, its cost to provide this benefit would have been $10,080.

72 Table of Contents Director Compensation Fiscal 2007 The following table presents information regarding the compensation paid during fiscal 2007 to members of our Board of Directors who are not also our employees (referred to herein as Non-Employee Directors ). The compensation paid to Mr. Uva, who is also employed by us, and A. Jerrold Perenchio, our former Chief Executive Officer, are presented above in the Summary Compensation Table and the related explanatory tables. Mr. Uva is generally not entitled to receive additional compensation for his service as a director. Name Fees Earned or Paid in Cash($) Current Directors Stock Awards ($)(1) (2) 68 Option Awards ($)(1) (2) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (a) (b) (c) (d) (e) (f) (g) (h) Zaid F. Alsikafi David Bonderman Adam Chesnoff Henry G. Cisneros 75, ,892 Michael P. Cole Kelvin L. Davis Albert J. Dobron Gloria Estefan 75, ,892 Mark J. Masiello Jonathan M. Nelson James N. Perry, Jr. Karl Peterson Haim Saban All Other Compensation ($) Total ($)

73 Table of Contents Former Directors Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) (2)(3) 69 Option Awards ($)(1) (2)(3) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (a) (b) (c) (d) (e) (f) (g) (h) Anthony Cassara Gustavo Cisneros Harold Gaba Alan F. Horn Michael O. Johnson A. Jerrold Perenchio John G. Perenchio Alejandro Rivera McHenry T. Tichenor, Jr. David Trujillo Ricardo Maldonado Yanez (1) The amounts reported in Columns (c) and (d) of the table above reflect the aggregate dollar amounts recognized for stock awards and option awards, respectively, for financial statement reporting purposes with respect to fiscal 2007 (disregarding any estimate of forfeitures related to service-based vesting conditions). No stock awards or option awards granted to Non-Employee Directors were forfeited during fiscal For a discussion of the assumptions and methodologies used to calculate the amounts referred to above, please see the discussion of stock awards and option awards contained in Note 13 (Performance Award and Incentive Plans) to our Consolidated Financial Statements, included as part of our Annual Report for fiscal 2007 filed on Form 10-K and incorporated herein by reference. (2) Mr. Cisneros and Ms. Estefan were each granted options to purchase 2,441 shares of Broadcasting Media class A-1 voting common stock during 2007 at an exercise price equal to the fair market value of the underlying shares on the date of grant. Other than these two option grants, none of the current or former Non-Employee Directors held any outstanding options or other equity-based awards as of December 31, 2007, except for the equity interest in BMPI Services LLC ( BMPI ), an affiliate of Broadcasting Media, held by Mr. Saban described below. No charge was recognized by the Company on its 2007 financial statements in connection with this grant. All Other Compensation ($) Total ($)

74 Table of Contents Non-Employee Director Compensation Mr. Cisneros and Ms. Estefan each received a $75,000 cash retainer and a stock option grant in 2007 in consideration for their services as members of the Board. None of our other Non-Employee Directors received compensation for their services as directors during 2007, although we do reimburse our Non-Employee Directors for expenses incurred in connection with their Board service (including, in certain cases, reimbursement for use of a private plane in connection with such services). Consulting Agreement. Broadcasting Media has entered into a consulting agreement with SCG Investments IIB LLC ( SCG ) for the performance of certain consulting services by Haim Saban, the Chairman of our Board of Directors, to Broadcasting Media. Mr. Saban may be assisted by employees of Saban Capital Group. The agreement does not have a specified term and can be terminated by either party for any reason on thirty days notice. In consideration for Mr. Saban s consulting services, the parent of SCG has been granted an equity and profits interest in BMPI Services LLC ( BMPI ), which is managed by Broadcasting Media. The profits interest represents the right to receive a percentage of any gains realized by the sponsors and co-investors on their investments in Broadcasting Media, subject to both time-based and performance-based vesting requirements. In addition, SCG is entitled to reimbursement for reasonable expenses incurred by SCG in connection with Mr. Saban s services for Broadcasting Media, including his direct operating costs for use of a private plane in connection with his performance of such services, not to exceed $720,000 in any calendar year. SCG is entitled to certain indemnification protections under the agreement. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Beneficial Ownership Table As a result of the Merger, all of the Company s issued and outstanding securities is held by Broadcast Media Partners Holdings, Inc. ( Broadcast Holdings ), all of the issued and outstanding common stock of Broadcast Holdings is owned by Broadcasting Media Partners, Inc. ( Broadcasting Media ), and all of the issued and outstanding preferred stock of Broadcast Holdings is held by the Sponsors, co-investors and certain members of management. The following table presents information regarding beneficial ownership of the common stock of Broadcasting Media and the preferred stock of Broadcast Holdings as of February 15, 2008 by (1) each person who we know beneficially owns 5% or more of the outstanding shares of any class of Broadcasting Media s or Broadcast Holdings securities, (2) each director and the Named Officers, and (3) all current directors and executive officers as a group. Except as indicated in the footnotes to the table, each person named in the table has sole voting and investment power with respect to all shares of securities shown as beneficially owned by them, subject to community property laws where applicable. The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person s ownership percentage, but not for purposes of computing any other person s percentage. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as otherwise indicated in the footnotes below, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock, and has not pledged any such shares as security. 70

75 Table of Contents Name of Beneficial Owner (a) Number of Shares Beneficially Owned (b) Percent of Classes (c) Class A- 1 Common Class A- 2 Common Class L- 1 Common Class L- 2 Common Preferred Class A Common Class L Common Preferred Stock Stock Stock Stock Stock Stock Stock Stock Madison Dearborn Funds (1) 4,127,497 1,432, , ,204 1,552, % 21.2 % 21.2 % Providence Equity Funds (2) 3,931,209 1,629, , ,015 1,552, SCG Investments II, LLC (3) 2,077, , , Texas Pacific Funds (4) 5,510, , ,291 58,737 1,686, Thomas H. Lee Funds (5) 5,560, ,814 1,552, Zaid Alsikafi (1) David Bonderman (4) Robert V. Cahill (former Vice Chairman and Corporate Secretary) Adam Chesnoff (3) Henry G. Cisneros Michael P. Cole (1) Kelvin L. Davis (4) Albert J. Dobron (2) Gloria Estefan Andrew W. Hobson (6) 260,848 3,980 10,003 * * * C. Douglas Kranwinkle (7) 9,002 * Peter Lori (8) 3,201 * Mark J. Masiello (2) Jonathan M. Nelson (2) A. Jerrold Perenchio (former Chairman of the Board and Chief Executive Officer) James N. Perry, Jr. (1) Karl Peterson (4) Ray Rodriguez (9) 218,362 2,593 6,516 * * * Haim Saban (3) Joseph Uva (10) 246,362 1,835 4,612 * * * All current directors and executive officers as a group (18 persons) 737,775 8,408 21, * * (a) Unless otherwise indicated, the address of each executive officer and director is c/o 605 Third Avenue, 12 th Floor, New York, NY (b) The Class A-1 and Class L-1 Common Stock of Broadcasting Media and the preferred stock of Broadcast Holdings carry voting rights. Although the Class A-2 and Class L-2 Common Stock of Broadcasting Media do not carry voting rights, they can be converted at any time into the corresponding number of Class A-1 and Class L-1 Common Stock of Broadcasting Media, respectively. (c) Based on 26,944,993 Class A shares (including both Class A-1 and Class A-2) of Broadcasting Media, 2,920,207 Class L shares (including both Class L-1 and Class L-2) of Broadcasting Media and 7,339,987 shares of preferred stock of Broadcast Holdings outstanding as of February 15, * Represents less than one percent. (1) Includes the following: (i) 1,458,613 Class A-1 shares and 162,068 Class L-1 shares of Broadcasting Media and 407,361 shares of preferred stock of Broadcast Holdings held by Madison Dearborn Capital Partners IV, L.P., and 45,442 Class A-1 shares and 5,047 Class L-1 shares of Broadcasting Media and 12,685 shares of preferred stock of Broadcast Holdings held by Madison Dearborn Capital Partners IV, L.P., through its interest in BMPI Services LLC ( BMPI ), the named owner of these shares, (ii) 303,090 Class A-1 shares and 33,676 Class L-1 shares of Broadcasting Media and 84,647 shares of preferred stock of Broadcast Holdings held by MDCPIV Intermediate (Umbrella) L.P., and 9,438 Class A-1 shares and 1,049 Class L-1 shares of Broadcasting Media and 2,636 shares of preferred stock of Broadcast Holdings held by MDCPIV Intermediate (Umbrella), L.P., through its interest in BMPI, the named owner of these shares, (iii) 1,622,236 Class A-1 shares and 180,248 Class L-1 shares of Broadcasting Media and 453,057 shares of preferred stock of Broadcast Holdings held by Madison Dearborn Capital Partners, V-A, L.P., and 50,517 Class A-1 shares and 5,613 Class L-1 shares of Broadcasting Media and 14,108 shares of preferred stock of Broadcast Holdings held by Madison Dearborn Capital Partners, V-A, L.P., through its interest in BMPI, the named owner of these shares, (iv) 618,908 Class A-1 shares and 68,768 Class L-1 shares of Broadcasting Media and 172,848 shares of preferred stock of Broadcast Holdings held by MDCPV Intermediate (Umbrella), L.P., and 19,273 Class A-1 shares and 2,141 Class L-1 shares of Broadcasting Media and 5,383 shares of preferred stock of Broadcast Holdings held by MDCPV Intermediate (Umbrella), L.P., through its interest in BMPI, the named owner of these shares, (v) 839,033 Class A-2 shares and 93,226 Class L-2 shares of Broadcasting Media and 234,325 shares of preferred stock of Broadcast Holdings held by MDCP Foreign Co-Investors (Umbrella), L.P., and 26,128 Class A-2 shares and 2,903 Class L-2 shares of Broadcasting Media and 7,297 shares of preferred stock of Broadcast Holdings held by MDCP Foreign Co-Investors (Umbrella), L.P., through its interest in BMPI, the named owner of these shares, and (vi) 550,533 Class A-2 shares and 61,170 Class L-2 shares of Broadcasting Media and 153,753 shares of preferred stock of Broadcast Holdings held by MDCP US Co-Investors (Umbrella), L.P., and 17,144 Class A-2 shares and 1,905 Class 71

76 Table of Contents L-2 shares of Broadcasting Media and 4,788 shares of preferred stock of Broadcast Holdings held by MDCP US Co-Investors (Umbrella), L.P., through its interest in BMPI, the named owner of these shares, All the entities in this footnote are referred to as the Madison Dearborn Funds. Madison Dearborn Partners IV, L.P. is the general partner of the entities in paragraphs (i) and (ii) above and Madison Dearborn Partners V-A&C, L.P. is the general partner of the entities in paragraphs (iii) to (vi) above. Madison Dearborn Partners, LLC is the general partner of Madison Dearborn Partners IV, L.P. and Madison Dearborn Partners V-A&C, L.P. Messrs. John A. Canning, Jr., Paul J. Finnegan and Samuel M. Mencoff, as principal officers of Madison Dearborn Partners, LLC, may be deemed to possess indirect beneficial ownership of the securities owned by the Madison Dearborn Funds, but disclaim such beneficial ownership, except to the extent of their respective pecuniary interest therein. Messrs. Alsikafi, Cole and Perry, directors of the Company are affiliated with the Madison Dearborn Funds and disclaim any beneficial ownership of any shares beneficially owned by the Madison Dearborn Funds except to the extent of their respective pecuniary interest. The address of the entities listed in this footnote is c/o Madison Dearborn Partners, Three First National Plaza, Suite 3800, Chicago, Illinois, (2) Includes the following: (i) 1,510,977 Class A-1 shares and 167,886 Class L-1 shares of Broadcasting Media and 421,985 shares of preferred stock of Broadcast Holdings held by Providence Equity Partners V (Umbrella US) L.P., and 47,052 Class A-1 shares and 5,228 Class L-1 shares of Broadcasting Media and 13,141 shares of preferred stock of Broadcast Holdings held by Providence Equity Partners V (Umbrella US), L.P., through its interest in BMPI, the named owner of these shares, (ii) 731,191 Class A-1 shares and 81,243 Class L-1 shares of Broadcasting Media and 204,207 shares of preferred stock of Broadcast Holdings held by Providence Investors V (Univision) L.P., and 22,770 Class A-1 shares and 2,530 Class L-1 shares of Broadcasting Media and 6,359 shares of preferred stock of Broadcast Holdings held by Providence Investors V (Univision), L.P., through its interest in BMPI, the named owner of these shares, (iii) 866,723 Class A-1 shares and 96,302 Class L-1 shares of Broadcasting Media and 242,058 shares of preferred stock of Broadcast Holdings held by Providence Equity Partners VI (Umbrella US) L.P., and 26,990 Class A-1 shares and 2,999 Class L-1 shares of Broadcasting Media and 7,538 shares of preferred stock of Broadcast Holdings held by Providence Equity Partners VI (Umbrella US), L.P., through its interest in BMPI, the named owner of these shares, (iv) 703,596 Class A-1 shares and 78,178 Class L- 1 shares of Broadcasting Media and 196,500 shares of preferred stock of Broadcast Holdings held by Providence Investors VI (Univision) L.P., and 21,910 Class A-1 shares and 2,434 Class L-1 shares of Broadcasting Media and 6,119 shares of preferred stock of Broadcast Holdings held by Providence Investors VI (Univision), L.P., through its interest in BMPI, the named owner of these shares, (v) 209,003 Class A-2 shares and 23,223 Class L-2 shares of Broadcasting Media and 58,370 shares of preferred stock of Broadcast Holdings held by Providence Co-Investors (Univision US) L.P., and 6,508 Class A-2 shares and 723 Class L-2 shares of Broadcasting Media and 1,818 shares of preferred stock of Broadcast Holdings held by Providence Co-Investors (Univision US), L.P., through its interest in BMPI, the named owner of these shares, and (vi) 1,370,926 Class A-2 shares and 152,326 Class L-2 shares of Broadcasting Media and 382,871 shares of preferred stock of Broadcasting Holdings held by Providence Co-Investors (Univision) L.P., and 42,691 Class A-2 shares and 4,743 Class L-2 shares of Broadcasting Media and 11,923 shares of preferred stock of Broadcast Holdings held by Providence Co-Investors (Univision), L.P., through its interest in BMPI, the named owner of these shares, All the entities in this footnote are referred to as the Providence Equity Funds. Providence Equity Partners V L.L.C. is the general partner of Providence Equity GP V L.P. which is the general partner of Providence Equity Partners V (Umbrella US) L.P. Providence Umbrella GP L.L.C. ( PEP Umbrella GP ) is the general partner of the entities in paragraphs (ii), (v) and (vi) above. Providence Equity Partners VI L.L.C. is the general partner of Providence Equity GP VI L.P. which is the general partner of Providence Equity Partners VI (Umbrella US) L.P. Providence VI Umbrella GP L.L.C. is the general partner of Providence Investors VI (Univision) L.P. PEP Umbrella GP may be deemed to share beneficial ownership of the shares owned by Providence Investors V (Univision) L.P., Providence Co-Investors (Univision US) L.P. and Providence Co-Investors (Univision) L.P. PEP Umbrella GP disclaims this beneficial ownership. Messrs. Glenn M. Creamer, Jonathan M. Nelson and Paul J. Salem are members of each of the limited liability companies referenced above and may be deemed to possess indirect beneficial ownership of the securities owned by the Providence Equity Funds, but disclaims such beneficial ownership, except to the extent of their respective pecuniary interest therein. Messrs. Dobron and Masiello, directors of the Company are affiliated with the Providence Equity Funds and disclaim any beneficial ownership of any shares beneficially owned by the Providence Equity Funds except to the extent of their respective pecuniary interest. The address of the entities listed in this footnote is c/o Providence Equity Partners, Inc., 50 Kennedy Plaza, 11 th Floor, Providence, Rhode Island (3) Includes 2,014,511 Class A-1 shares and 223,835 Class L-1 shares of Broadcasting Media and 562,611 shares of preferred stock of Broadcast Holdings held by SCG Investments II, LLC, and 62,733 Class A-1 shares and 6,970 Class L-1 shares of Broadcasting Media and 17,520 shares of preferred stock of Broadcast Holdings held by SCG Investments II, LLC through its interest in BMPI, the named owner of these shares. Haim Saban, a director of the Company, indirectly controls SCG Investments II LLC and may be deemed to possess indirect beneficial ownership of the securities owned by SCG Investments II LLC, but disclaims such beneficial ownership, except to the extent of his pecuniary interest therein. Mr. Chesnoff, a director of the Company, and Chip Morgan are managers of SCG Investment II, and may be deemed to possess indirect beneficial ownership of the securities owned by SCG Investments II, LLC, but disclaim any beneficial ownership of any shares beneficially owned by SCG Investments II, LLC except to the extent of their respective pecuniary interest. The address of SCG Investments II, LLC is c/o Saban Capital Group, Santa Monica Boulevard, Los Angeles, California (4) Includes the following: (i) 1,248,795 Class A-1 shares and 138,755 Class L-1 shares of Broadcasting Media and 348,762 shares of preferred stock of Broadcast Holdings held by TPG Umbrella IV, L.P., and 38,888 Class A-1 shares and 4,321 Class L-1 shares of Broadcasting Media and 10,861 shares of preferred stock of Broadcast Holdings held by TPG Umbrella IV, L.P., through its interest in BMPI, the named owner of these shares, (ii) 673,064 Class A-1 shares and 74,785 Class L-1 shares of Broadcasting Media and 187,972 shares of preferred stock of Broadcast Holdings held by TPG Umbrella International IV, L.P., and 20,959 Class A-1 shares and 2,329 Class L-1 shares of Broadcasting Media and 5,854 shares of preferred stock of Broadcast Holdings held by TPG Umbrella International 72

77 Table of Contents IV, L.P., through its interest in BMPI, the named owner of these shares, (iii) 1,954,797 Class A-1 shares and 217,199 Class L-1 shares of Broadcasting Media and 545,934 shares of preferred stock of Broadcast Holdings held by TPG Media V-AIV1, L.P., and 60,873 Class A-1 shares and 6,764 Class L-1 shares of Broadcasting Media and 17,001 shares of preferred stock of Broadcast Holdings held by TPG Media V-AIV1, L.P., through its interest in BMPI, the named owner of these shares, (iv) 1,467,543 Class A-1 shares and 163,060 Class L-1 shares of Broadcasting Media and 409,855 shares of preferred stock of Broadcast Holdings held by TPG Media V-AIV2, L.P., and 45,700 Class A-1 shares and 5,078 Class L-1 shares of Broadcasting Media and 12,763 shares of preferred stock of Broadcast Holdings held by TPG Media V-AIV2, L.P., through its interest in BMPI, the named owner of these shares, (v) 108,746 Class A-2 shares and 12,083 Class L-2 shares of Broadcasting Media and 30,370 shares of preferred stock of Broadcast Holdings held by TPG Umbrella Co- Investment, L.P., and 3,386 Class A-2 shares and 376 Class L-2 shares of Broadcasting Media and 946 shares of preferred stock of Broadcast Holdings held by TPG Umbrella Co- Investment, L.P., through its interest in BMPI, the named owner of these shares, and (vi) 403,920 Class A-2 shares and 44,880 Class L-2 shares of Broadcasting Media and 112,806 shares of preferred stock of Broadcast Holdings held by TPG Umbrella International Co-Investment, L.P. and 12,578 Class A-2 shares and 1,398 Class L-2 shares of Broadcasting Media and 3,513 shares of preferred stock of Broadcast Holdings held by TPG Umbrella International Co-Investment, L.P., through its interest in BMPI, the named owner of these shares, All the entities in this footnote are referred to as the Texas Pacific Funds. TPG Advisors IV, Inc. is the general partner of the entities in paragraphs (i) and (ii) above and TPG Advisors V, Inc. is the general partner of the entities in paragraphs (iii) to (vi) above. Messrs. David Bonderman, a director of the Company and James Coulter as sole shareholders of both TPG Advisors IV, Inc. and TPG Advisors V, Inc., may be deemed to possess indirect beneficial ownership of the securities owned by the Texas Pacific Funds, but disclaim such beneficial ownership, except to the extent of their respective pecuniary interest therein. Messrs. Davis and Peterson, directors of the Company are affiliated with the Texas Pacific Funds and disclaim any beneficial ownership of any shares beneficially owned by the Texas Pacific Funds except to the extent of their respective pecuniary interest. The address of the entities listed in this footnote is c/o Texas Pacific Group, 301 Commerce Street, Suite 3300, Fort Worth, Texas (5) Includes the following: (i) 1,624,074 Class A-2 shares and 180,453 Class L-2 shares of Broadcasting Media and 453,571 shares of preferred stock of Broadcast Holdings held by Thomas H. Lee Equity Fund VI, L.P., and 50,574 Class A-2 shares and 5,619 Class L-2 shares of Broadcasting Media and 14,124 shares of preferred stock of Broadcast Holdings held by Thomas H. Lee Equity Fund VI, L.P., through its interest in BMPI, the named owner of these shares, (ii) 1,258,714 Class A-2 shares and 139,857 Class L-2 shares of Broadcasting Media and 351,533 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Investors (Univision), L.P., and 39,197 Class A-2 shares and 4,355 Class L-2 shares of Broadcasting Media and 10,947 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Investors (Univision), L.P., through its interest in BMPI, the named owner of these shares, (iii) 574,048 Class A-2 shares and 63,783 Class L-2 shares of Broadcasting Media and 160,320 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Intermediate Investors (Univision US), L.P., and 17,876 Class A-2 shares and 1,986 Class L-2 shares of Broadcasting Media and 4,992 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Intermediate Investors (Univision US), L.P., through its interest in BMPI, the named owner of these shares, (iv) 1,918,854 Class A-2 shares and 213,206 Class L-2 shares of Broadcasting Media and 535,896 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Intermediate Investors (Univision), L.P., and 59,754 Class A-2 shares and 6,639 Class L-2 shares of Broadcasting Media and 16,688 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Intermediate Investors (Univision), through its interest in BMPI, the named owner of these shares, and (v) 16,724 Class A-2 shares and 1,858 Class L-2 shares of Broadcasting Media and 4,671 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Investors (GS), LLC, and 521 Class A-2 shares and 58 Class L-2 shares of Broadcasting Media and 145 shares of preferred stock of Broadcast Holdings held by THL Equity Fund VI Investors (GS), LLC, through its interest in BMPI, the named owner of these shares. All the entities in this footnote are referred to as the Thomas H. Lee Funds. Thomas H. Lee Advisors, LLC is the general partner of Thomas H. Lee Partners, L.P. which is the sole member of THL Equity Advisors VI, LLC the general partners of the entities in paragraphs (i) to (iv) above. THL Equity Advisors VI, LLC is the manager of THL Equity Fund VI Investors (GS), LLC. The address of the entities listed in this footnote is c/o Thomas H. Lee Partners, L.P., 100 Federal Street, 35 th Floor, Boston, Massachusetts (6) Includes the following: (i) 27,888 shares and 225,033 restricted stock for Class A-1 shares of Broadcasting Media and 7,927 shares underlying restricted stock units, or RSUs, vesting within 60 days of February 15, 2008 for Class A-1 shares of Broadcasting Media; (ii) 3,099 shares and 881 shares underlying RSUs vesting within 60 days of February 15, 2008 for Class L-1 shares of Broadcasting Media; and (iii) 7,789 shares and 2,214 shares underlying RSUs vesting within 60 days of February 15, 2008 for preferred stock of Broadcast Holdings. (7) Consists of shares underlying options exercisable within 60 days of February 15, (8) Consists of shares underlying options exercisable within 60 days of February 15, (9) Includes the following: (i) 13,821 shares and 195,029 restricted stock for Class A-1 shares of Broadcasting Media and 9,512 shares underlying RSUs vesting within 60 days of February 15, 2008 for Class A-1 shares of Broadcasting Media; (ii) 1,536 shares and 1,057 shares underlying RSUs vesting within 60 days of February 15, 2008 for Class L-1 shares of Broadcasting Media; and (iii) 3,860 shares and 2,656 shares underlying RSUs vesting within 60 days of February 15, 2008 for preferred stock of Broadcast Holdings. (10) Includes the following: (i) 3,303 shares and 243,059 restricted stock for Class A-1 shares of Broadcasting Media; (ii) 367 shares and 1,468 shares underlying RSUs vesting within 60 days of February 15, 2008 for Class L-1 shares of Broadcasting Media; and (iii) 922 shares and 3,690 shares underlying RSUs vesting within 60 days of February 15, 2008 for preferred stock of Broadcast Holdings. 210,031 Class A-1 shares are pledged as security pursuant to a stock pledge agreement dated June 19, 2007 between Mr. Uva and Broadcasting Media. 73

78 Table of Contents ITEM 13. Review of Related Transactions Univision s written Code of Conduct (adopted in 2003) guides the Board of Directors in its actions and deliberations with respect to related party transactions. Under the Code, conflicts of interest, including any involving the directors or any Named Officers, are prohibited except under any guidelines approved by the Board of Directors or the Audit Committee. Activities or positions approved in advance by the Audit Committee will not be deemed a conflict of interest under the Code of Conduct. Only the Board of Directors, or the Audit Committee, may waive a provision of the Code of Conduct for a director or a Named Officer, and only then in compliance with all applicable laws and rules and regulations. The following is a brief summary of any transactions since January 1, 2007 in which we and (1) each person who we know beneficially owns 5% or more of the outstanding shares of any class of Broadcasting Media s or Broadcast Holdings securities, (2) each director during the fiscal year ended December 31, 2007 and Named Officer and (3) immediate family members of anyone described in (1) or (2) above. The information set forth below does not purport to be and is not a complete summary of all such agreements and arrangements. Related Transactions Certain Relationships and Related Transactions, and Director Independence. Sponsor Management Agreement On March 29, 2007, the Company entered into a management agreement with Broadcasting Media and the Sponsors under which certain affiliates of the Sponsors provide the Company with management, consulting and advisory services for a quarterly aggregate service fee of 2% of operating income before depreciation and amortization, subject to certain adjustments, as well as reimbursement of out-of-pocket expenses. The management fee for year ended December 31, 2007 was $14.4 million and the out-of-pocket expenses were $1.2 million, which are included in selling, general and administrative expenses on the statement of operations. Transactions with other related Sponsor-affiliated companies The Sponsors are private investment firms that have investments in companies that may do business with Univision. No individual Sponsor has a controlling ownership interest in Univision. However, the Sponsors may have a controlling ownership interest or an ownership interest with significant influence with a company that does business with Univision. During the year ended December 31, 2007, the Company made payments in excess of $120,000 to each of the Nielsen Company and Warner Music Group, for an aggregate of $34.9 million. Thomas H. Lee Partners, one of the Sponsors has a more than 10% equity interest in each of these companies. In addition, the Company received revenues in excess of $120,000 from (i) each of the Warner Music Group, Nielsen Company and the Dunkin Brands, for an aggregate of $0.9 million (Thomas H. Lee has a more than 10% equity interest in each of these companies); (ii) each of Burger King Corporation and Direct General Corporation, for an aggregate of $12.4 million (Texas Pacific Group, one of the Sponsors has a more than 10% equity interest in each of these companies); and MetroPCS Communication for a total of $3.9 million (Madison Dearborn Partners, one of the Sponsors has a more than 10% equity interest in MetroPCS). Loan to Joseph Uva On June 19, 2007, Broadcasting Media, Univision s parent and Joseph Uva, the Chief Executive Officer of Broadcasting Media and Univision, entered into a promissory note and stock pledge agreement pursuant to which Broadcasting Media made to Mr. Uva a full recourse loan in an amount equal to $1,985,774, to enable Mr. Uva to purchase 210,031 shares of restricted Class A-1 common shares of Broadcasting Media. Mr. Uva s payment obligation under the promissory note is secured by the restricted Class A-1 common shares of Broadcasting Media, and Broadcasting Media has a first priority security interest in such shares. The promissory note bears interest at an annual rate of 4.59%. Onethird of Mr. Uva s annual bonus, starting with the annual bonus for Broadcasting Media s fiscal year commencing January 1, 2008, will be applied to repayment of the promissory note, provided that the promissory note shall not remain outstanding following June 19, At December 31, 2007, the $1,985,774 promissory note remains outstanding. For the year ended December 31, 2007, Mr. Uva has not paid any of the principal or interest on the promissory note. 74

79 Table of Contents Loan to Andrew W. Hobson On August 27, 2007, Broadcasting Media made a non-interest bearing loan in the principal amount of $3,000,000 to Andrew W. Hobson, Senior Executive Vice President, Chief Strategic Officer and Chief Financial Officer of Univision, in connection with Mr. Hobson s relocation to Univision s offices in New York. The loan is evidenced by a promissory note dated August 27, 2007, which was paid by Mr. Hobson on August 31, The promissory note was payable on the earlier of (i) the date of the completion of the sale of Mr. Hobson s primary residence in California or (ii) the date on which Mr. Hobson s employment with Broadcasting Media has been terminated for any reason. The promissory note also provided that at any time while all or a portion of the principal amount remained outstanding, the price at which Mr. Hobson had the right to request that Broadcasting Media purchase his primary residence in California pursuant to Section 3.8 of the Employment and Non-competition Agreement, dated March 29, 2007, between Mr. Hobson and Broadcasting Media, would have been reduced by such unpaid principal amount. Transactions with Gloria Estefan related entities The Company does business with entities related to Gloria Estefan, one of our directors. For the year ended December 31, 2007, Univision paid an aggregate of $0.8 million, primarily for production services provided by companies beneficially owned by Ms. Estefan and her husband. Reimbursement Arrangements at Cost with No Mark-Up Chartwell Services, Inc. and Chartwell Partners LLC (collectively Chartwell ) are affiliates of Mr. Perenchio. Mr. Perenchio is our former Chief Executive Officer who resigned effective March 29, All arrangements between the Company and Chartwell were at cost and Chartwell realized no profit from any of the reimbursements. Pursuant to an agreement between the Company and Chartwell, services were provided until March During the year ended December 31, 2007 cash reimbursements to Chartwell totaled $202,446. ITEM 14. Principal Accounting Fees and Services Appointment of Ernst & Young LLP The Audit Committee appointed Ernst & Young LLP as our independent auditors for Auditors Fees In connection with the audit of the 2007 financial statements, the Company entered into an engagement agreement with Ernst & Young LLP which set forth the terms by which Ernst & Young LLP will perform audit services for the Company. That agreement is subject to alternative dispute resolution procedures and an exclusion of punitive damages. The aggregate fees that our independent auditors billed for professional services rendered in 2006 and 2007 were: Audit Fees : Ernst & Young LLP s fees for audit services totaled approximately $2,086,000 in 2006 and approximately $2,127,000 in Audit-Related Fees : Ernst & Young LLP s fees for audit-related services totaled approximately $158,000 in 2006 and $104,000 in Audit-related services principally included accounting consultations and review of various SEC filings. Tax Fees : Ernst & Young LLP s fees for tax consulting services totaled approximately $18,000 in 2006 and $83,000 in All Other Fees : Univision did not pay any other fees to Ernst & Young LLP in either 2006 or

80 Table of Contents The Audit Committee pre-approves annually of certain specific services in the defined categories of audit services, audit-related services, and tax services up to specified annual budget amounts, and sets requirements for specific case-by-case pre-approval of discrete projects, such as those which may have a material effect on our operations or services, over certain amounts. Pre-approval may be given as part of the Audit Committee s approval of the scope of the engagement of our independent auditors or on an individual basis. The pre-approval of services may be delegated to one or more of the Audit Committee s members, but the decision must be presented to the full Audit Committee at its next scheduled meeting. All non-audit services provided in 2007 were pre-approved by our Audit Committee. Our Audit Committee determined that Ernst & Young LLP s provision of services for all non-audit fees in 2007 is compatible with maintaining its independence. 76

81 Table of Contents PART IV Item 15. (a) See Index to Exhibits after signature pages to this report. (b) Exhibits, Financial Statement Schedules Exhibits Financial Statement Schedules Schedule II Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities Exchange Act of 1934 are not required under the related instructions or are inapplicable and therefore have been omitted. 77

82 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 on March 27, Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates so indicated. Each person whose signature appears below appoints each of Andrew W. Hobson, C. Douglas Kranwinkle and Peter H. Lori, severally and not jointly, to be his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any amendments to the Company s Annual Report on Form 10-K for the fiscal year ended December 31, 2007; granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, shall lawfully do or cause to be done by virtue hereof. 78 UNIVISION COMMUNICATIONS INC. By: / S / P ETER H. L ORI Peter H. Lori Senior Vice President and Chief Accounting Officer / S / J OSEPH U VA Chief Executive Officer March 27, 2008 Joseph Uva / S / A NDREW W. H OBSON Senior Executive Vice President and Chief Andrew W. Hobson Financial Officer / S / P ETER H. L ORI Senior Vice President and Chief Accounting Peter H. Lori Officer March 27, 2008 March 27, 2008 / S / Z AID F. A LSIKAFI Director March 27, 2008 Zaid F. Alsikafi /s/ D AVID B ONDERMAN Director March 27, 2008 David Bonderman /s/ A DAM C HESNOFF Director March 27, 2008 Adam Chesnoff /s/ H ENRY C ISNEROS Director March 27, 2008 Henry Cisneros / S / M ICHAEL P. C OLE Director March 27, 2008 Michael P. Cole /s/ K ELVIN L. D AVIS Director March 27, 2008 Kelvin L. Davis /s/ A LBERT J. D OBRON Director March 27, 2008 Albert J. Dobron

83 Table of Contents / S / G LORIA E STEFAN Director March 27, 2008 Gloria Estefan /s/ M ARK J. M ASIELLO Director March 27, 2008 Mark J. Masiello /s/ J ONATHAN M. N ELSON Director March 27, 2008 Jonathan M. Nelson /s/ J AMES N. P ERRY, J R. Director March 27, 2008 James N. Perry, Jr. /s/ K ARL P ETERSON Director March 27, 2008 Karl Peterson / S / H AIM S ABAN Director March 27, 2008 Haim Saban 79

84 Table of Contents Exhibit Number PART IV INDEX TO EXHIBITS 80 Description 2.1 Agreement and Plan of Merger, dated June 26, 2006, by and among Umbrella Holdings, LLC., Umbrella Acquisition, Inc., and Univision Communications Inc. (4) 3.1 Certificate of Merger, dated March 28, (5) 3.2 Amended and Restated Certificate of Incorporation of the Company. (5) 3.3 Amended and Restated Bylaws of the Company. (5) 4.1 Form of specimen stock certificate. (5) 4.2 Indenture dated as of July 18, 2001, between Univision Communications Inc. and The Bank of New York as Trustee. (1) 4.3 Form of Supplemental Indenture to be delivered by additional guarantors, among Univision Communications Inc., the Guaranteeing Subsidiaries to be named therein and The Bank of New York as Trustee. (1) 4.4 Officer s Certificate dated July 18, 2001 relating to the Company s 7.85% Notes due (2) 4.5 Form of Officer s Certificate for the Company s 2008 Senior Notes. (3) 4.6 Form of Supplemental Indenture for the Company s Senior Notes Due (3) 4.7 Form of 3.875% Senior Notes Due (3) 4.8 Form of Guarantee to Senior Notes Due (3) 4.9 Indenture dated as of March 29, 2007 between Umbrella Acquisition and Wells Fargo Bank, National Association, as trustee. (5) 4.10 First Supplemental Indenture, dated as March 29, 2007 among the Company, the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as trustee. (5) 10.1 Credit Agreement dated March 29, 2007, among Umbrella Acquisition and Univision of Puerto Rico, Inc., as borrowers, the lenders from time to time party thereto, and Deutsche Bank AG New York Branch as administrative agent and collateral agent. (5) 10.2 Form of First-Lien Guarantee and Collateral Agreement (included in Exhibit 10.1). (5) 10.3 Form of Second-Lien Guarantee and Collateral Agreement (included in Exhibit 10.1). (5) 10.4 Form of First-Lien Trademark Security Agreement (included in Exhibit 10.1). (5) 10.5 Form of Second-Lien Trademark Security Agreement (included in Exhibit 10.1). (5) 10.6 Form of First-Lien Copyright Security Agreement (included in Exhibit 10.1). (5) 10.7 Form of Second-Lien Copyright Security Agreement (included in Exhibit 10.1). (5) 10.8 Principal Investors Agreement, dated March 29, 2007, by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and certain Principal Investor signatories thereto. (5) 10.9 Stockholders Agreement dated as of March 29, 2007 by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and certain Stockholder signatories thereto. (5) Participation, Registration Rights, and Coordination Agreement, dated March 29, 2007, by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc., and certain Stockholder signatories thereto. (5) First Amendment to Principal Investors Agreement ( PIA ), Participation, Registration Rights and Coordination Agreement and Stockholders Agreement, dated January 29, 2008, by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc., and each person executing the PIA as a principal investor.

85 Table of Contents Exhibit Number 81 Description First Amendment to Participation, Registration Rights and Coordination Agreement and Stockholders Agreement, dated January 29, 2008, by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc., and certain persons who will be stockholders of Broadcasting Media Partners, Inc Management Agreement, dated March 29, 2007, by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Madison Dearborn Partners IV, L.P., Madison Dearborn Partners V-B, L.P., Providence Equity Partners V Inc., Providence Equity Partners L.L.C., KSF Corp., THL Managers VI, LLC and TPG Capital, L.P. (5) Employment Agreement dated March 29, 2007 between Broadcasting Media Partners, Inc. and Joseph Uva. (5) Employment Agreement dated March 29, 2007 between Broadcasting Media Partners, Inc. and Ray Rodriguez. (5) Employment Agreement dated March 29, 2007 between Broadcasting Media Partners, Inc. and Andrew Hobson. (5) Employment Agreement dated March 29, 2007 between Broadcasting Media Partners, Inc. and Douglas Kranwinkle. (5) Form of Indemnification Agreement for Outside Directors. (5) Broadcasting Media Partners, Inc Equity Incentive Plan. (5) Form of Restricted Stock Award Agreement. (5) Form of Restricted Stock Unit Award Agreement. (5) Form of Notice of Restricted Stock Award for Andrew W. Hobson, Ray Rodriguez and Joseph Uva. (5) Notice of Restricted Stock Awards for Joseph Uva. (6) Form of Notice of Restricted Stock Unit Award for Andrew W. Hobson, Ray Rodriguez and Joseph Uva. (5) Promissory Note and Stock Pledge Agreement dated June 19, 2007 between Joseph Uva and Broadcasting Media Partners, Inc. (6) Services Agreement, dated as of January 29, 2008 and effective as of March 29, 2007, by and between Broadcasting Media Partners, Inc., SCG Investments IIB LLC and BMPI Services LLC Employment Agreement dated January 1, 2005 between Univision Management Company and Peter H. Lori Amendment to Employment Agreement effective as of December 2, 2006 between Univision Management Company and Peter H. Lori Option Award Agreement and Notice of Stock Option Grant for Douglas Kranwinkle Option Award Agreement and Notice of Stock Option Grant for Peter H. Lori * Purchase Agreement, dated as of February 27, 2008, between Univision Communications Inc., a Delaware corporation and UMG Recordings, Inc., a Delaware corporation Subsidiaries of the Company Certification of CEO pursuant to Section 302 of Sarbanes-Oxley Act of Certification of CFO pursuant to Section 302 of Sarbanes-Oxley Act of Certification of CEO and CFO pursuant to Section 906 of Sarbanes-Oxley Act of (1) Previously filed as an exhibit to Univision Communications Inc. s Registration Statement on Form S-4 (File No ). (2) Previously filed as an exhibit to Univision Communications Inc. s Registration Statement on Form S-3 filed on September 30, 2003 (File No ). (3) Previously filed as an exhibit to Univision Communications Inc. s Report on Form 8-K filed October 15, (4) Previously filed as an exhibit to Univision Communications Inc. s Report on Form 8-K filed June 28, (5) Previously filed as an exhibit to Univision Communications Inc. s Quarterly Report on Form 10-Q for the period ended March 31, (6) Previously filed as an exhibit to Univision Communications Inc. s report on Form 8-K, filed June 25, * Confidential treatment has been requested for portions of this exhibit. Portions of this document have been omitted and submitted separately to the Securities and Exchange Commission.

86 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For the Nine Months Ended December 31, 2007, the Three Months Ended March 31, 2007 and the Years Ended December and 2005 (In thousands) SCHEDULE II Balance at Additions Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at end of Period Allowance for doubtful accounts: Successor For the Nine Months Ended December 31, 2007 $ 16,263 $ 2,780 $ $ 4,097 (1) $ 14,946 Predecessor For the Three Months Ended March 31, 2007 $ 14,193 $ 2,578 $ $ 508 (1) $ 16,263 For the Year Ended December 31, 2006 $ 12,538 $ 6,175 $ $ 4,520 (1) $ 14,193 For the Year Ended December 31, 2005 $ 16,649 $ 414 $ $ 4,525 (1) $ 12,538 (1) Write-offs. Balance at Additions Beginning of Period Charged to Costs and Expenses Utilization Adjustments Balance at end of Period Deferred tax asset valuation allowance: Successor For the Nine Months Ended December 31, 2007 $ 31,869 $ 2,976 $ (7,654) $ (13,527) (a) $ 13,664 Predecessor For the Three Months Ended March 31, 2007 $ 31,869 $ $ $ $ 31,869 For the Year Ended December 31, 2006 $ 32,014 $ 2,043 $ (2,188) $ $ 31,869 For the Year Ended December 31, 2005 $ $ 32,014 (b) $ $ $ 32,014 (a) (b) Revaluation of Entravision investment related to the Merger. Write-down of Entravision and St. Louis/Denver LLC investments. 82

87 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets at December 31, 2007 and 2006 F-4 Consolidated Statements of Operations for the Nine Months Ended December 31, 2007, the Three Months Ended March 31, 2007 and the Years Ended December 31, 2006 and 2005 F-5 Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2005, 2006, the Three Months Ended March 31, 2007 and the Nine Months Ended December 31, 2007 F-6 Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2007, the Three Months Ended March 31, 2007 and the Years Ended December 31, 2006 and 2005 F-7 Notes to Consolidated Financial Statements F-8 F-1

88 Table of Contents Board of Directors and Stockholders of Univision Communications Inc. FINANCIAL STATEMENT OPINION REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have audited the accompanying consolidated balance sheets of Univision Communications Inc. and subsidiaries as of December 31, 2007 (Successor) and 2006 (Predecessor), and the related consolidated statements of operations, stockholders equity, and cash flows for the nine months ended December 31, 2007 (Successor); three months ended March 31, 2007, and the years ended December 31, 2006 and 2005 (Predecessor). Our audits also included the financial statement schedule listed in the Index at Item 15(b). These financial statements and schedule are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Univision Communications Inc. and subsidiaries at December 31, 2007 (Successor) and 2006 (Predecessor), and the consolidated results of their operations and their cash flows for the nine months ended December 31, 2007 (Successor); three months ended March 31, 2007, and the years ended December 31, 2006 and 2005 (Predecessor), in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein. As discussed in Note 3 to the consolidated financial statements, effective January 1, 2007, Univision Communications Inc. adopted Financial Accounting Standards Board Interpretation ( FASB ) No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 ; and effective January 1, 2006, adopted Financial Accounting Standards Board Statement No. 123R, Share-Based Payment. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Univision Communications Inc. s internal control over financial reporting as of December 31, 2007 (Successor), based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2008 expressed an unqualified opinion thereon. New York, New York March 5, 2008 F-2 /s/ Ernst & Young LLP

89 Table of Contents Board of Directors and Stockholders of Univision Communications Inc. OPINION ON INTERNAL CONTROLS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have audited Univision Communications Inc. s internal control over financial reporting as of December 31, 2007 (Successor), based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Univision Communications Inc. s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Univision Communications Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007 (Successor), based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Univision Communications Inc. and subsidiaries as of December 31, 2007 (Successor) and 2006 (Predecessor), and the related consolidated statements of operations, stockholders equity, and cash flows for the nine months ended December 31, 2007 (Successor); three months ended March 31, 2007, and the years ended December 31, 2006 and 2005 (Predecessor), and our report dated March 5, 2008 expressed an unqualified opinion thereon. New York, New York March 5, 2008 F-3 /s/ Ernst & Young LLP

90 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) Successor December 31, Predecessor December 31, ASSETS Current assets: Cash and cash equivalents $ 226,189 $ 103,522 Accounts receivable, less allowance for doubtful accounts of $14,946 in 2007 and $14,193 in , ,625 Program rights 24,051 27,342 Deferred tax assets 22,032 20,088 Prepaid expenses and other 28,310 36,016 Current assets held for sale 48,537 50,298 Total current assets 820, ,891 Property and equipment, net 673, ,354 Intangible assets, net 7,106,094 4,298,239 Goodwill 7,277,249 2,002,799 Deferred financing costs, less accumulated amortization of $34,725 in 2007 and $13,870 in ,175 5,494 Program rights 14,451 17,449 Investments 225, ,617 Other assets 58,340 19,096 Non-current assets held for sale 24, ,455 Total assets $ 16,457,938 $ 8,166,394 LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: Accounts payable and accrued liabilities $ 178,075 $ 156,578 Income taxes payable 6,824 8,159 Accrued interest 150,163 22,435 Accrued license fees 23,734 17,874 Program rights obligations 13,897 15,658 Current portion of long-term debt and capital lease obligations 250, ,262 Current liabilities held for sale 63,258 60,742 Total current liabilities 686, ,708 Long-term debt 9,721, ,169 Capital lease obligations 43,113 47,420 Program rights obligations 12,126 13,876 Deferred tax liabilities 2,138,755 1,078,866 Other long-term liabilities 226,793 53,494 Non-current liabilities held for sale 1,009 5,362 Total liabilities 12,829,997 2,604,895 Commitments and contingencies (see notes 10 and 11) Stockholders equity: Preferred stock, $0.01 par value; no shares authorized in 2007; 10,000,000 shares authorized in 2006; no shares issued or outstanding in 2007 and 2006 Common stock, $0.01 par value; 100,000 shares authorized in 2007 and 1,040,000,000 shares authorized in 2006; 1,000 shares issued and outstanding in 2007 and 309,943,277 shares issued and 309,533,633 shares outstanding in ,099 Additional paid-in-capital 3,975,463 4,268,867 (Accumulated deficit) retained earnings (247,873) 1,305,674 Accumulated other comprehensive loss (99,649) (1,657) Treasury stock, at cost, 409,644 shares in 2006 (14,484) Total stockholders equity 3,627,941 5,561,499 Total liabilities and stockholders equity $ 16,457,938 $ 8,166,394 See Notes to Consolidated Financial Statements F-4

91 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Nine Months Ended December 31, 2007, the Three Months Ended March 31, 2007 and the Years Ended December 31, 2006 and 2005 (In thousands) See Notes to Consolidated Financial Statements F-5 Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, Net revenues $ 1,635,579 $ 437,266 $ 2,025,587 $ 1,746,087 Direct operating expenses (excluding depreciation and amortization) 524, , , ,609 Selling, general and administrative expenses (excluding depreciation and amortization) 450, , , ,686 Merger related expenses 5, ,181 13,308 Cost reduction plan 30,256 Voluntary contribution per FCC consent decree 24,000 Depreciation and amortization 120,066 20,122 82,871 80,346 Operating income (loss) 534,931 (55,671) 671, ,190 Other expense (income): Interest expense, net 584,429 17,857 89,234 84,882 Loss on extinguishment of debt 1,630 Amortization of deferred financing costs 34, ,553 3,309 Equity income in unconsolidated subsidiaries and other (2,922) (1,141) (4,352) (4,626) Nontemporary decline in fair value of investments 2,925 5,200 81,877 Gain on sales of Entravision stock (1,454) (Loss) income from continuing operations before income taxes (84,226) (74,526) 580, ,748 (Benefit) provision for income taxes (23,756) (5,943) 231, ,097 (Loss) income from continuing operations (60,470) (68,583) 348, ,651 (Loss) income from discontinued operation, net of income taxes (187,403) 1, ,528 Net (loss) income $ (247,873) $ (67,020) $ 349,174 $ 187,

92 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY For the Years Ended December 31, 2005, 2006, the Three Months Ended March 31, 2007 and the Nine Months Ended December 31, 2007 (In thousands) Common Additional Paid-in- Capital See Notes to Consolidated Financial Statements F-6 Deferred Compensation Retained Earnings (Accumulated Accumulated Other Comprehensive Treasury Stock Deficit) Income (loss) Stock Total Predecessor Balance, January 1, 2005 $ 3,243 $ 4,640,554 $ (1,847) $ 769,321 $ (1,374) $ (22,193) $ 5,387,704 Components of comprehensive income: Net income 187, ,179 Currency translation adjustment gain Total comprehensive income 187,348 Treasury stock acquired (499,994) (499,994) Treasury stock retired (201) (521,986) 522,187 Amortization of deferred compensation Share-based compensation costs Exercise of stock options including related tax benefits 7 14,854 14,861 Balance December 31, ,049 4,133,889 (1,333) 956,500 (1,205) 5,090,900 Components of comprehensive income: Net income 349, ,174 Currency translation adjustment loss (452) (452) Total comprehensive income 348,722 Treasury stock acquired (14,484) (14,484) Reclassification of deferred compensation (1,333) 1,333 Share-based compensation costs 12,678 12,678 Exercise of stock options, including related tax benefits , ,683 Balance, December 31, ,099 4,268,867 1,305,674 (1,657) (14,484) 5,561,499 Components of comprehensive loss: Net loss (67,020) (67,020) Currency translation adjustment loss (145) (145) Total comprehensive loss (67,165) Treasury stock acquired (2,638) (2,638) Adoption of FIN 48 1,124 1,124 Share-based compensation costs 53,571 53,571 Exercise of stock options, including income tax related benefit 8 62,906 62,914 Balance, March 31, 2007 $ 3,107 $ 4,386,468 $ $ 1,238,654 $ (1,802) $ (17,122) $ 5,609,305 Successor Balance, March 31, 2007 $ $ $ $ $ $ $ Sponsor equity 3,957,000 3,957,000 Components of comprehensive loss: Net loss (247,873) (247,873) Unrealized loss on hedging activities, net of income taxes of $66.3 million (99,460) (99,460) Currency translation adjustment loss (189) (189) Total comprehensive loss (347,522) Capital contribution by management 14,593 14,593 Share-based compensation 3,870 3,870 Balance December 31, 2007 $ $ 3,975,463 $ $ (247,873) $ (99,649) $ $ 3,627,941

93 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended December 31, 2007, the Three Months Ended March 31, 2007 and the Years Ended December 31, 2006 and 2005 (In thousands) See Notes to Consolidated Financial Statements F-7 Successor Nine Months Ended December 31, Three Months Ended March 31, 2007 Predecessor Year Ended December 31, Year Ended December 31, Cash flows from operating activities: Net (loss) income $ (247,873) $ (67,020) $ 349,174 $ 187,179 (Loss) income from discontinued operation (187,403) 1, ,528 (Loss) income from continuing operations (60,470) (68,583) 348, ,651 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 59,417 19,480 80,127 77,521 Amortization of intangible assets and deferred financing costs 95,374 1,151 5,297 6,135 Deferred income taxes (26,147) 20,478 63,405 57,068 Noncontrolling interest of variable interest entities (1,855) Nontemporary decline in fair value of investments 2,925 5,200 81,877 Gain on sales of Entravision stock (1,454) Share-based compensation 3,870 36,475 12, Cash distribution from equity investments 3,837 2,140 (5,537) Other non-cash items (158) 910 (2,274) (3,262) Changes in assets and liabilities: Accounts receivable, net (107,463) 62,627 (36,758) (59,886) Program rights 483 4,716 11,048 15,475 Income taxes receivable 3,194 Deferred tax assets (6,571) Prepaid expenses and other (9,948) (23,386) 29,732 (6,994) Accounts payable and accrued liabilities (19,651) 91,478 (36,966) 29,649 Income taxes 92,571 (29,986) 13,677 1,746 Income tax benefit from share-based awards 4,236 Accrued interest 133,943 (6,215) (3,204) 2,529 Accrued license fees 1,577 1,520 (2,674) 6,925 Program rights obligations (2,309) (1,203) (7,223) (12,447) Other, net (4,039) 8,515 (3,470) (1,487) Net cash provided by operating activities from continuing operations 163, , , ,858 Net cash (used in) provided by operating activities from discontinued operation (4,989) 3,063 (33,623) 34,864 Net cash provided by operating activities 158, , , ,722 Cash flows from investing activities: Acquisitions, net of acquired cash (13,998) (120,051) (220,940) Proceeds from sales of Entravision stock 52,718 Proceeds from sale of investment 19,589 Capital expenditures (54,099) (15,572) (80,245) (102,213) Other, net 2,722 (304) 909 5,309 Net cash used in investing activities from continuing operations (45,786) (15,876) (146,669) (317,844) Net cash used in investing activities from discontinued operation (108) (438) (9,319) (2,237) Net cash used in investing activities (45,894) (16,314) (155,988) (320,081) Cash flows from financing activities: Proceeds from issuance of long-term debt 9,200,000 80, , ,000 Capital contributions 3,971,593 Acquisition costs (12,546,747) Repayment of long-term debt (243,745) (221,167) (938,845) (182,740) Purchases of treasury shares (2,638) (14,484) (499,994) Proceeds from stock options exercised 16,773 91,577 10,625 Income tax benefit from share-based awards 3,818 32,106 Deferred financing costs (291,900) (136) (1,416) Merger related (payments) and receipts (296,289) 235,450 Net cash (used in) provided by financing activities from continuing operations (207,088) 112,100 (281,062) (180,109) Net cash (used in) provided by financing activities from discontinued operation Net cash (used in) provided by financing activities (207,088) 112,100 (281,062) (180,109) Net (decrease) increase in cash (94,159) 216,826 4,122 (90,468) Cash and cash equivalents, beginning of period 320, ,522 99, ,868 Cash and cash equivalents, end of period $ 226,189 $ 320,348 $ 103,522 $ 99,400 Supplemental disclosure of cash flow information: Interest paid $ 482,786 $ 22,320 $ 79,372 $ 71,452 Income taxes paid $ 5,055 $ 731 $ 120,650 $ 117,041

94 Table of Contents 1. Organization of the Company UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Univision Communications Inc., together with its subsidiaries (the Company or Univision ), is the leading Spanish-language media company in the United States and has continuing operations in three business segments: television, radio and Internet. The Company s television operations include the Univision and TeleFutura networks, the Company s owned and operated television stations and Galavisión, the Company s cable television network. Univision Radio, Inc. ( Univision Radio ) operates the Company s radio business, which includes its owned and operated radio stations and radio network. Univision Online, Inc. ( Univision Online ) operates the Company s Internet portal, Univision.com. The Company s music division, which includes the Univision Records, Fonovisa Records and La Calle labels and Disa, is treated as a discontinued operation for all periods presented. See Note 2. Recent Developments. 2. Recent Developments The Merger On March 29, 2007, Broadcasting Media Partners, Inc. ( Broadcasting Media, formerly known as Umbrella Holdings, LLC), completed its acquisition of the Company pursuant to the terms of the agreement and plan of merger dated as of June 26, 2006 (the Merger Agreement ), by and among the Company, Broadcasting Media and Umbrella Acquisition, Inc. ( Umbrella Acquisition ), a subsidiary of Broadcasting Media. Umbrella Acquisition and Broadcasting Media were formed by an investor group that includes affiliates of Madison Dearborn Partners, LLC, Providence Equity Partners Inc., Saban Capital Group Inc., Texas Pacific Group, and Thomas H. Lee Partners, L.P. (collectively the Sponsors ). To consummate the acquisition, Umbrella Acquisition was merged (the Merger ) with and into the Company and the Company was the surviving corporation. Pursuant to the Merger Agreement, each share of the Company s common stock issued and outstanding immediately prior to the effective time of the Merger was canceled and automatically converted into the right to receive $36.25 in cash, without interest. As a result of the Merger, a new basis of accounting was established at March 29, Broadcasting Media s basis in the Company s assets and liabilities has been pushed down to the Company s financial statements as of March 31, The consolidated financial statements and notes identify the financial position, results of operations and cash flows using the new basis of accounting as successor in such statements, with a black line separating that information from the financial position, the results of operations and cash flows using the basis of accounting used prior to the merger transaction and identified as predecessor in such statements. The acquisition was accounted for using the purchase method of accounting as though the Merger closed on March 31, 2007 for convenience purposes to align the Merger transaction date to the accounting close date, considering the insignificant impact to the statement of operations. The statement of operations for the nine months ended December 31, 2007, includes depreciation and amortization of the purchase accounting adjustments and interest on the new debt related to the Merger for the period March 29, 2007 through March 31, As a result of the Merger, the common stock, par value $0.01 per share, of Umbrella Acquisition that was issued and outstanding immediately prior to the Merger converted into and became one thousand fully paid shares of common stock, par value $0.01 per share, of the Company and constitutes the only outstanding shares of capital stock of the Company. These issued and outstanding shares of the Company are held by Broadcast F-8

95 Table of Contents 2. Recent Developments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Media Partners Holdings, Inc. ( Broadcast Holdings ). The issued and outstanding common stock of Broadcast Holdings is owned by Broadcasting Media. The issued and outstanding preferred stock of Broadcast Holdings is owned by the Sponsors, co-investors and certain members of management. The total acquisition cost of the Company is calculated as follows: Amounts paid to holders of stock, warrants and options: Common stock $ 11,246,893 Warrants owned by Televisa and Venevision 993,806 Stock options 130,181 Restricted stock 25,699 12,396,579 Direct acquisition costs 150,168 12,546,747 Debt assumed 941,958 Acquisition cost $ 13,488,705 The following is a condensed balance sheet disclosing the amounts assigned to each major asset and liability caption of the Company at the acquisition date: The Company has allocated the purchase price to broadcast licenses, trade names, multiple subscriber operator contracts and relationships, affiliate agreements and relationships, advertiser relationships, land and buildings and liabilities based upon a valuation of the fair value of assets and liabilities prepared by an independent appraisal firm. The Company s music division is held for sale. During the fourth quarter of 2007, the Company adjusted the carrying value of the music business based upon the independent valuation. The Company uses the direct value method to value intangible assets other than goodwill acquired in business combinations. The Company expects to make certain changes to the purchase price allocation during the three months ended March 31, 2008, but does not expect these changes to be material. F-9 March 31, 2007 ASSETS Current assets $ 916,284 Property and equipment 680,913 Intangible assets 7,152,717 Goodwill 7,277,249 Deferred financing costs 291,235 Other non-current assets 519,811 Total assets $ 16,838,209 LIABILITIES AND STOCKHOLDER S EQUITY Current liabilities $ 719,069 Long-term debt 9,771,365 Deferred tax liabilities 2,252,095 Other long-term liabilities 124,087 Total liabilities 12,866,616 Stockholder s equity 3,971,593 Total liabilities and stockholder s equity $ 16,838,209

96 Table of Contents 2. Recent Developments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) In accordance with EITF 95-3 Recognition of Liabilities in Connection with a Purchase Business Combination, the Company booked an estimated liability of $13.2 million, with the offset to goodwill, as part of the application of purchase accounting for the involuntary termination and relocation of certain key employees in connection with the Merger. At December 31, 2007, the accrued liability remaining was $2.9 million. Merger Related Expenses As a result of the Merger, the Company incurred the following Merger related expenses: Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December Share-based compensation expense $ $ 46,400 (a) $ Change in control payments to employees 2,439 41,857 2,236 Advisory success fee 32,786 Legal fees 1,260 16,097 4,052 Other non-compensation expenses 1,932 4,314 7,020 Other compensation expenses 319 2,727 Total Merger related expenses $ 5,950 $ 144,181 $ 13,308 31, 2006 (a) As a result of the Merger, the Company accelerated approximately $31.9 million of share-based compensation and expensed change in control share-based compensation of $14.5 million. Consulting Agreement with Chairman of the Board of Directors On January 29, 2008, Broadcasting Media entered into a consulting agreement with an entity controlled by the Chairman of the Board of Directors, pursuant to which such entity is entitled to a carried interest of up to 3% of gains realized by the Sponsors and co-investors on their investments in Broadcasting Media subject to certain vesting and performance criteria. Consulting expense will be determined based on the valuation of the investments over the vesting period subject to the performance criteria. Voluntary Contribution Per FCC Consent Decree On March 27, 2007, the Federal Communications Commission ( FCC ) and Univision entered into a Consent Decree to resolve pending license renewal proceedings where petitioners alleged that certain Univision stations failed to comply with the children s programming requirements set forth in the Children s Television Act of 1990 and Section of the Commission s rules. The FCC agreed to terminate the proceedings and grant the stations renewal applications, and the Company agreed to make a $24 million voluntary contribution to the United States Treasury. The contribution was paid in April Discontinued Operation Prior to the completion of the Merger on March 29, 2007, the Sponsors decided to sell the Company s music recording and publishing businesses. As a result, the music division results of operations, assets and liabilities are reported as a discontinued operation for all periods presented in the accompanying consolidated financial statements. F-10

97 Table of Contents 2. Recent Developments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) On February 27, 2008, the Company entered into a purchase agreement with UMG Recordings, Inc. ( Universal ), an entity controlled by Universal Music Group, for the sale of its music recording and publishing businesses. The total consideration due to the Company under the purchase agreement is $153.0 million (including approximately $13.0 million for working capital), payable in cash as follows: (i) approximately $113.0 million upon the closing, (ii) $11.5 million upon the first anniversary of the closing, (iii) $12.5 million upon the second anniversary of the closing, (iv) $6.0 million upon the third anniversary of the closing, and (v) $10.0 million upon the fourth anniversary of the closing, subject to purchase price adjustments. Univision is expected to incur fees and certain obligations of approximately $10.0 million in connection with the transaction. Under the purchase agreement, the Company has committed to provide both preemptible and non-preemptible advertising support through broadcast commercials that will be aired on its Univision and Telefutura Networks, and its owned and operated television stations, for the Universal Music Group and its Latin artists over the five year period following the closing. The total consideration includes amounts payable to the Company for such advertising support. The Company is required to indemnify Universal from and against losses it may incur arising out of breaches by the Company of representations, warranties and covenants set forth in the purchase agreement, subject to certain limitations as set forth in the purchase agreement. Between the date of the purchase agreement and the closing, the Company has to operate the music business in all material respects, in the ordinary course consistent with past practice and may not take certain actions, as specified in the purchase agreement, without Universal s prior consent. Consummation of the transaction is conditioned upon, among other things, the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the Mexican Federal Competition Law, and there must not have been a Material Adverse Effect (as defined in the purchase agreement) since September 30, The Company expects the transaction to close in the second quarter of The Company intends to use approximately $113.0 million in gross proceeds from the sale of its music recording and publishing businesses together with the proceeds from the sale of certain non-core television and radio stations, investments and real estate, and may potentially use borrowings under its bank senior secured revolving credit facility (which cannot exceed $250.0 million), to pay down its $500.0 million bank second-lien asset sale bridge loan due March 29, Upon the completion of the expected sale of the music business, the transaction may generate a material deferred tax asset relating to the excess tax basis the Company has in the music entities. As of December 31, 2007, the Company has not recognized the deferred tax asset since it is not apparent that the difference will reverse in the foreseeable future. Furthermore, if the deferred tax asset is recognized, no tax benefit would be recorded by the Company since the realization of this deferred tax asset will not be more likely than not. F-11

98 Table of Contents 2. Recent Developments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Results of the discontinued operation are as follows: Successor Nine Months Ended December 31, Three Months Ended March 31, Predecessor Year Ended December 31, Year Ended December 31, Net revenues $ 81,782 $ 41,331 $ 141,064 $ 206,444 (Loss) income from discontinued operation before income taxes (201,378) 2,607 (4,890) 13,434 (Benefit) provision for income taxes (13,975) 1,044 (5,068) 8,906 (Loss) income from discontinued operation, net of income taxes $ (187,403) $ 1,563 $ 178 $ 4, (a) (a) Includes an impairment charge of $190.6 million before the effect of income taxes and $180.3 million net of income taxes recorded in the fourth quarter based on an independent valuation of the music business. The financial positions of the discontinued operation are as follows: Successor December 31, Predecessor December 31, Cash and cash equivalents $ 13,067 $ 4,932 Current assets held for sale: Accounts receivable, net $ 23,457 $ 27,435 Deferred tax asset 5,256 5,256 Prepaid and other current assets 19,824 17,607 $ 48,537 $ 50,298 Non-current assets held for sale: Property and equipment $ 2,606 $ 3,483 Intangible assets 6,988 39,171 Goodwill 305,281 Deferred tax asset 4,061 Other assets 10,703 9,520 $ 24,358 $ 357,455 Current liabilities held for sale: Accounts payable and accrued liabilities $ 63,258 $ 60,101 Other current liabilities 641 $ 63,258 $ 60,742 Non-current liabilities held for sale $ 1,009 $ 5,362 F

99 Table of Contents 3. Significant Accounting Policies Principles of Consolidation UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) The consolidated financial statements include the accounts and operations of the Company and its majority owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The operating results of acquired companies are included in the consolidated statement of operations of the Company from the date of acquisition. For investments in which the Company owns 20% to 50% of the voting shares and has significant influence over the operating and financial policies, the equity method of accounting is used. Accordingly, the Company s share of the earnings and losses of these companies are included in the equity income in unconsolidated subsidiaries in the accompanying consolidated statements of operations of the Company. For investments in which the Company owns less than 20% or owns non-voting shares and does not have significant influence over operating and financial policies of the investees, the cost method of accounting is used. Under the cost method of accounting, the Company does not record its share in the earnings and losses of the companies in which it has an investment. Reclassifications Certain reclassifications have been made to prior financial statements to conform to the current presentation. The most significant reclassification is the presentation of the music segment as a discontinued operation in the statement of operations and the assets and liabilities held for sale in the balance sheet. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents Cash equivalents consist of all highly liquid investments with a maturity of 90 days or less from the date of purchase. Revenue Recognition Net revenues comprise gross revenues from the Company s television and radio broadcast, cable, and Internet businesses, including subscriber fees, sales commissions on national advertising aired on Univision affiliated television stations less agency commissions, music license fees paid by television and compensation costs paid to an affiliated television station. The amounts deducted from gross revenues, principally representing agency commissions, aggregate to $280.2, $74.4, $345.8 and $302.5 million for the nine months ended December 31, 2007, three months ended March 31, 2007 and the years ended 2006 and 2005, respectively. The Company s television and radio gross revenues are recognized when advertising spots are aired and performance guaranties, if any, are achieved. The Internet business recognizes primarily banner and sponsorship advertisement revenues. Banner revenues are recognized as impressions are delivered and sponsorship revenues are recognized ratably over their contract period. Impressions are defined as the number of times that F-13

100 Table of Contents 3. Significant Accounting Policies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) an advertisement appears in pages viewed by users of the Company s online properties. All revenues are recognized only when collection of the resulting receivable is reasonably assured. The music business recognizes revenues from the sale of recorded music upon delivery of products to third parties based on terms F.O.B. destination, less an allowance for returns, cooperative advertising and discounts. Fair Value of Financial Instruments The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, cost method investments, accounts payable, accrued liabilities and debt approximate their fair value. The estimated fair value of financial instruments has been determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of risk include primarily cash and cash equivalents, trade receivables and financial instruments used in hedging activities. The Company invests cash with high-quality-credit institutions, which limits the amount of credit exposure with any one financial institution. The Company sells its products and services to a large number of diverse customers in a number of different industries, thus spreading the trade credit risk. No one customer represented more than 10% of net revenues of the Company in 2007, 2006 or The Company extends credit based on an evaluation of the customers financial condition, generally without requiring collateral. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses. The counterparties to the agreements relating to the Company s financial instruments consist of major, international institutions. The Company does not believe that there is significant risk of nonperformance by these counterparties as the Company monitors the credit ratings of such counterparties and limits the financial exposure with any one institution. Investment Valuation The Company monitors the value of its investments for indicators of impairment, including changes in market conditions and/or the operating results of its underlying investments that may result in the inability to recover the carrying value of the investment. The Company will record an impairment charge if and when it believes any investment has experienced a decline that is other than temporary. Accounting for Goodwill Intangible and Long-Lived Assets Goodwill and other intangible assets with indefinite lives, such as broadcast licenses, are not amortized and are tested for impairment annually or more frequently if circumstances indicate a possible impairment exists. The television and radio broadcast licenses have an indefinite life because the Company expects to renew them and renewals are routinely granted with little cost, provided that the licensee has complied with the applicable rules and regulations of the FCC. Over the last five years, all the television and radio licenses that have been up for renewal have been renewed and there has been no compelling challenge to the license renewal. The technology used in broadcasting is not expected to be replaced by another technology in the foreseeable future. Therefore, the television and radio broadcast licenses and the related cash flows are expected to continue indefinitely. The licenses will not be amortized until their useful life is deemed to no longer be indefinite. F-14

101 Table of Contents 3. Significant Accounting Policies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Goodwill is allocated to various reporting units. For purposes of performing the impairment test of goodwill, the Company established the following reporting units: television, radio, music and Internet. The Company compares the fair value of the reporting unit to its carrying amount on an annual basis to determine if there is potential goodwill impairment. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its carrying value. The Company also compares the fair value of indefinite-lived intangible assets to their carrying amount. If the carrying amount of an indefinitelived intangible asset exceeds its fair value, an impairment loss is recognized. Fair value for broadcast licenses, other indefinite-lived intangible assets and goodwill are determined primarily based on discounted cash flows, market multiples or appraised values, as appropriate. The Company has evaluated its licenses, other indefinite-lived intangible assets and goodwill, as of October 1, 2007 and has concluded that it does not have an impairment loss related to these assets, other than $190.6 million, before the effect of income taxes, and $180.3 million, net of income taxes, related to the Company s music business, which reduced goodwill, tradenames and amortizable intangibles. The decline in the value of our music business is due primarily to political, technological and economic factors impacting the music industry in general. See Note 2. Recent Developments. In the future, the Company may incur additional impairment charges under SFAS No. 142, Goodwill and Other Intangible Assets if market values decline and the Company does not achieve expected cash flow growth rates. The Company uses the direct value method to value intangible assets other than goodwill acquired in business combinations and for purposes of impairment testing. The Company has various intangible assets that are being amortized on a straight line basis. The advertiser related intangible assets are being amortized through 2026, the multiple system operator contracts and relationships and broadcast affiliate agreements and relationships are being amortized through 2027 and 2031, respectively, and other amortizable intangible assets are being amortized through In accordance with Statement of Financial Accounting Standards ( SFAS ) No. 144, Accounting for Impairment of Disposal of Long- Lived Assets ( SFAS No. 144 ), long-lived assets, such as property and equipment and intangible assets subject to amortization, are reviewed for impairment at the lowest level of identifiable cash flows whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Trade Accounts Receivable Trade accounts receivable are recorded at the invoice amount and do not bear interest. The allowance for doubtful accounts is the Company s estimate of the amount of credit losses in the Company s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts monthly. Past due balances are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and potential for recovery is considered remote. The Company does not have any off-balance-sheet exposure related to its customers. F-15

102 Table of Contents 3. Significant Accounting Policies (Continued) Share-Based Compensation UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) On January 1, 2006, the Company adopted SFAS No. 123R, Share-Based Payment, which requires compensation expense relating to share-based payments to be recognized in earnings using a fair-value measurement method. The Company has elected to use the straight-line attribution method of recognizing compensation expense over the vesting period. The fair value of each new stock option award will be estimated on the date of grant using the Black-Scholes-Merton option-pricing model, which is the same model that was used by the Company prior to the adoption of SFAS No. 123R. The Company elected the modified prospective method and therefore, prior periods were not restated. Under the modified prospective method, this statement was applied to new awards granted after the time of adoption, as well as to the unvested portion of previously granted equity-based awards for which the requisite service had not been rendered as of January 1, Following the Merger, Broadcasting Media Partners, Inc. granted 1,152,570 restricted and preferred stock awards to certain executive officers for services to be provided to the Company. The compensation expense related to the awards is being accounted for by the Company. These awards have both time and performance based features and various vesting periods ranging from 2.5 to 7 years. The fair value of these awards is based on an appraisal prepared for the Company by an independent appraisal firm. The fair values are based on the same per share value and are in the same proportion as the classes of Company securities that were purchased by Umbrella Acquisition as of the closing date of the Merger. The Company granted 1,207,100 stock options and 818,400 restricted stock awards on January 13, 2006 under the 2004 Performance Award Plan (the Plan ) and also granted 933,025 restricted stock awards on December 29, 2006 under the Plan. As a result of the Merger, the Company accelerated the share-based compensation related to these awards. Share-based compensation expense reduced the Company s results of operations as follows: Successor Nine Months Ended December 31, Three Months Ended March 31, Predecessor Year Ended December 31, (a) Income from continuing operations before income taxes $ 3,870 $ 51,280 (a) $ 12,573 Net income $ 2,322 $ 30,768 $ 7,544 As a result of the Merger, the Company accelerated approximately $31.9 million of share-based compensation and expensed change in control share-based compensation of $14.5 million For the year ended December 31, 2006, share-based compensation is net of an adjustment for forfeitures (before tax) of $46. Prior to January 1, 2006, the Company accounted for share-based employee compensation under the provisions of APB No. 25 and related interpretations and the disclosures required by SFAS No Under the intrinsic value method, no compensation expense was recognized for stock options, as the exercise price of employee stock options equaled the market value of the Company s stock on the date of grant. The following pro-forma net income and earnings per share information has been determined as if the Company had accounted F-16

103 Table of Contents 3. Significant Accounting Policies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) for its share-based compensation awards issued using the fair value method. Prior to January 1, 2006, the Company used the accelerated attribution method, which recognizes a greater amount of compensation expense in the earlier vesting years. In 2005, the Compensation Committee of the Board of Directors of the Company approved the acceleration of vesting of substantially all unvested stock options outstanding whose exercise price was above the then current market price. This vesting acceleration increased pro forma share-based employee compensation, before tax, by approximately $59 million. Predecessor Year Ended December 31, 2005 Net income as reported $ 187,179 Share-based compensation expense, net of tax actual 3,201 Share-based employee compensation, net of tax pro forma (71,116) Net income pro forma $ 119,264 The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the following weighted-average assumptions used for stock options granted in 2006 and 2005, respectively: dividend yield of 0%, volatility of 29.29% and 45.59%, risk-free interest rate of 4.31% and 4.08% and expected life of approximately six years. The Black-Scholes-Merton option-pricing model was developed for use in estimating the value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility and expected life. In years prior to 2006, historical volatility was used to estimate the expected volatility of the share price, whereas in 2006 and 2007 implied volatility was used. Management believes the implied volatility factor reflects the market s expectations of future volatility. Market prices of traded options and shares were analyzed around the time of the 2006 stock option grant along with the analysis of other factors to estimate the implied volatility of the stock options granted in Restricted stock units vested 25% on each of the first, second, third and fourth anniversaries of the award date. The fair value of all restricted stock units was based on the market value of the Company s stock on the date of grant. On May 23, 2006, the Company, under its change in control retention bonus plan, issued 400,000 restricted stock units to certain executive officers, which vested upon the change in control. The value of the 400,000 restricted stock units were expensed upon consummation of the Merger. Consolidation of Variable Interest Entities The Company follows Financial Accounting Standards Board ( FASB ) Interpretation No. 46, Consolidation of Variable Interest Entities, ( FIN 46 ) in the determination of whether it should consolidate in its financial statements the assets, liabilities and operating results of another entity. A variable interest entity ( VIE ) is consolidated if the company is the primary beneficiary of that entity. An entity is a VIE if, among other things, it has equity investors that do not absorb the expected losses or receive the expected returns of the entity. The primary beneficiary is subject to a majority of the risk of loss from the VIE s activities or is entitled to receive a majority of the VIE s residual returns, or both. See Note 7. Investments for a discussion of the Company s VIEs. F-17

104 Table of Contents 3. Significant Accounting Policies (Continued) Derivative Instruments and Hedging Activities UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, all derivatives are recorded in the balance sheet at fair value and changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. The Company utilizes interest rate swaps to manage its exposure to fluctuating interest rates. The Company does not use derivative financial instruments for trading or speculative purposes. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods that the hedged item affects earnings. Any deferred gains or losses associated with derivative instruments, which on infrequent occasions may be terminated prior to maturity, are recognized in income in the period in which the underlying hedged transaction is recognized. In the event a designated hedged item is sold, extinguished or matures prior to the termination of the related derivative instrument, such instrument would be closed and the resulting gain or loss would be recognized in income. See Note 9. Debt. Property and Equipment and Related Depreciation Property and equipment, including capital leases, are carried at historical cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. The Company removes the cost and accumulated depreciation of its property and equipment upon the retirement or sale of such assets. The resulting gain or loss, if any, is recognized upon the disposition. Land improvements are depreciated up to 15 years, buildings and improvements are depreciated up to 40 years, broadcast equipment over 5 to 20 years and furniture, computer and other equipment over 3 to 7 years. Leasehold improvements and transponder equipment, which are capitalized, are amortized over the shorter of their useful life or the remaining life of the lease. Repairs and maintenance costs are expensed by the Company. Deferred Financing Costs Deferred financing costs are amortized over the life of the related debt using the straight-line method, which is not materially different than the effective interest method. Program Rights for Television Broadcast Costs incurred in connection with the production of or purchase of rights to programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast beyond a one year period are considered non-current. Program costs are charged to operating expense as the programs are broadcast. The rights fees related to the 2010/2014 World Cups and other interim FIFA events are amortized using the flow of income method. Income Taxes The Company accounts for income taxes under the liability method pursuant to SFAS No. 109, Accounting for Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. F-18

105 Table of Contents 3. Significant Accounting Policies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) The Company adopted the provisions of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes ( FIN 48 ), an interpretation of FASB Statement No. 109 ( SFAS 109 ) on January 1, The interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The impact of adopting FIN 48 was not significant. Recent Accounting Pronouncements In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ( SFAS No. 157 ). SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure requirements for fair value measurements. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. SFAS No. 157 does not expand the use of fair value measurements in any new circumstances. Companies will need to apply the recognition and disclosure provisions of SFAS No. 157 for financial assets and financial liabilities and for nonfinancial assets and nonfinancial liabilities that are remeasured at least annually effective January 1, The effective date in SFAS No. 157 is delayed for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Excluded from the scope of SFAS No. 157 are certain leasing transactions accounted for under SFAS No. 13, Accounting for Leases. The Company is currently evaluating the impact of SFAS No. 157 on its financial position and results of operations. SFAS No. 141R, Business Combinations ( SFAS No. 141R ), was issued in December SFAS No. 141R requires that upon initially obtaining control, an acquirer will recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100% of its target. Additionally, contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration and transaction costs will be expensed as incurred. SFAS No. 141R also modifies the recognition for preacquisition contingencies, such as environmental or legal issues and restructuring plans. SFAS No. 141R amends SFAS No. 109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. SFAS No. 141R is effective for fiscal years beginning after December 15, Adoption is prospective and early adoption is not permitted. The Company will adopt SFAS No. 141R on January 1, The impact of SFAS No. 141R on accounting for business combinations is dependent upon acquisitions that close subsequent to December 31, SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115 ( SFAS No. 159 ), was issued in February SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. SFAS No. 159 does not eliminate disclosure F-19

106 Table of Contents 3. Significant Accounting Policies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157 and SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective as of the beginning of an entity s first fiscal year that begins after November 15, The Company adopted SFAS No. 159 on January 1, 2008 and does not anticipate adoption to materially impact its financial position or results of operations. SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51 ( SFAS No. 160 ), was issued in December SFAS No. 160 clarifies the classification of noncontrolling interests in consolidated statements of financial position and the accounting for and reporting of transactions between the reporting entity and holders of such noncontrolling interests. Under SFAS No. 160 noncontrolling interests are considered equity and should be reported as an element of consolidated equity, net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between the controlling and noncontrolling interests, and increases and decreases in the noncontrolling ownership interest amount will be accounted for as equity transactions. SFAS No. 160 is effective for the first annual reporting period beginning on or after December 15, 2008, and earlier application is prohibited. SFAS No. 160 is required to be adopted prospectively, except to reclassify noncontrolling interests to equity, separate from the parent s shareholders equity, in the consolidated statement of financial position and recasting consolidated net income (loss) to include net income (loss) attributable to both the controlling and noncontrolling interests, both of which are required to be adopted retrospectively. The Company will adopt SFAS No. 160 on January 1, 2009 and does not anticipate adoption to materially impact its financial position or results of operations. 4. Related Party Transactions Management Fee Agreement On March 29, 2007, the Company entered into a management agreement with Broadcasting Media and the Sponsors under which certain affiliates of the Sponsors provide the Company with management, consulting and advisory services for a quarterly aggregate service fee of 2% of operating income before depreciation and amortization, subject to certain adjustments, as well as reimbursement of out-of-pocket expenses. The management fee for the nine months ended December 31, 2007 was $14.4 million and the out-of-pocket expenses were $1.2 million, which are included in selling, general and administrative expenses on the statement of operations. Sponsor Related Transactions The Sponsors are private investment firms that have investments in companies that do business with Univision. No individual Sponsor has a controlling ownership interest in Univision. However, the Sponsors have controlling ownership interests or ownership interests with significant influence with companies that do business with Univision. In the opinion of management, all business conducted by Univision with companies that the Sponsors have an ownership in are arms length transactions entered into in the ordinary course of business. During the nine months ended December 31, 2007 and the three months ended March 31, 2007, the Company made payments totaling $26.8 and $8.1 million, respectively, to the Nielsen Company and Warner Music Group, LLC, which are related to one or more of the Sponsors. In addition, during the nine months ended F-20

107 Table of Contents 4. Related Party Transactions (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) December 31, 2007 and the three months ended March 31, 2007, the Company recorded revenues totaling $14.1 and $3.1 million, respectively, from the following companies in which one or more of the sponsors own an interest: Burger King Corporation, MetroPCS Communications, Inc., Direct General Corporation, Dunkin Brands, Warner Music Group and the Nielsen Company. The payments made to and revenues recorded from the companies listed above are immaterial to the results of operations and cash flows of the Company. Loan to Joseph Uva On June 19, 2007, Broadcasting Media, Univision s parent and Joseph Uva, the Chief Executive Officer of Broadcasting Media and Univision, entered into a promissory note and stock pledge agreement pursuant to which Broadcasting Media made to Mr. Uva a full recourse loan in an amount equal to $2.0 million to enable Mr. Uva to purchase 210,031 shares of restricted Class A-1 common shares of Broadcasting Media. Mr. Uva s payment obligation under the promissory note is secured by the restricted Class A-1 common shares of Broadcasting Media, and Broadcasting Media has a first priority security interest in such shares. The promissory note bears interest at an annual rate of 4.59%. Onethird of Mr. Uva s annual bonus, starting with the annual bonus for Broadcasting Media s fiscal year commencing January 1, 2008, will be applied to repayment of the promissory note, provided that the promissory note shall not remain outstanding following June 19, At December 31, 2007, the $2.0 million promissory note remains outstanding. For the year ended December 31, 2007, Mr. Uva has not paid any of the principal or interest on the promissory note. Loan to Andrew W. Hobson On August 27, 2007, Broadcasting Media made a non-interest bearing loan in the principal amount of $3.0 million to Andrew W. Hobson, Senior Executive Vice President, Chief Strategic Officer and Chief Financial Officer of Univision, in connection with Mr. Hobson s relocation to Univision s offices in New York. The loan is evidenced by a promissory note dated August 27, 2007, which was paid by Mr. Hobson on August 31, The promissory note was payable on the earlier of (i) the date of the completion of the sale of Mr. Hobson s primary residence in California or (ii) the date on which Mr. Hobson s employment with Broadcasting Media has been terminated for any reason. The promissory note also provided that at any time while all or a portion of the principal amount remained outstanding, the price at which Mr. Hobson had the right to request that Broadcasting Media purchase his primary residence in California pursuant to Section 3.8 of the Employment and Non-competition Agreement, dated March 29, 2007, between Mr. Hobson and Broadcasting Media, would have been reduced by such unpaid principal amount. F-21

108 Table of Contents 5. Property and Equipment UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Property and equipment consists of the following as of December 31, 2007 and 2006: Depreciation expense on property and equipment was $59.4, $19.5, $80.1 and $77.5 million for the nine months ended December 31, 2007, three months ended March 31, 2007 and the years ended 2006 and 2005, respectively. Accumulated depreciation related to capital leases for the transponder equipment for 2007 and 2006 is $2.9 and $24.2 million, respectively. 6. Intangible Assets and Goodwill The following is an analysis of the Company s intangible assets currently being amortized, intangible assets not being amortized, estimated amortization expense for the years 2008 through 2012 and goodwill by segment: F-22 Successor Predecessor Land and improvements $ 167,027 $ 89,803 Building and improvements 242, ,239 Broadcast equipment 192, ,347 Furniture, computer and other equipment 104, ,503 Capital leases transponder equipment 27,110 52, ,235 1,035,285 Accumulated depreciation (59,323) (444,931) $ 673,912 $ 590,354 Gross Carrying Amount Successor As of December 31, 2007 Accumulated Amortization Net Carrying Amount Intangible Assets Being Amortized Multiple system operator contracts and relationships and broadcast affiliate agreements $ 981,700 $ 32,613 $ 949,087 Advertiser related intangibles, primarily advertiser contracts 105,300 27,603 77,697 Other amortizable intangibles 1, Total $ 1,088,046 $ 60,643 1,027,403 Intangible Assets Not Being Amortized Broadcast licenses 5,467,466 Trademarks 610,089 Other intangible assets 1,136 Total 6,078,691 Total intangible assets, net $ 7,106,094

109 Table of Contents 6. Intangible Assets and Goodwill (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Estimated amortization expense for the five years subsequent to December 31, 2007 is as follows: The Company incurred amortization expense of $60.6 million, $0.6 million, $2.7 million and $2.8 million for the nine months ended December 31, 2007, three months ended March 31, 2007 and the years ended 2006 and 2005, respectively. The remaining weighted average amortization period for the amortizable intangibles is approximately 21 years. Goodwill is as follows: Gross Carrying Amount Predecessor As of December 31, 2006 Accumulated Amortization Net Carrying Amount Intangible Assets Being Amortized Nielsen contract $ 20,700 $ 14,533 $ 6,167 Broadcast agreement 9,892 3,143 6,749 Advertiser related intangibles, primarily advertiser contracts 5,059 5, Other amortizable intangibles 3,657 2,185 1,472 Total $ 39,308 $ 24,874 14,434 Intangible Assets Not Being Amortized Broadcast licenses 4,281,289 Other intangible assets 2,516 Total 4,283,805 Total intangible assets, net $ 4,298,239 Year Amount 2008 $ 50, $ 50, $ 50, $ 50, $ 50,062 Predecessor Segments Television Radio Internet Total Goodwill at December 31, 2006 (a) $ 449,843 $ 1,552,956 $ $ 2,002,799 (a) There were no changes in goodwill from January 1, 2007 to March 31, Successor Segments Television Radio Internet Total Goodwill at December 31, 2007 (b) $ 6,039,979 $ 1,129,325 $ 107,945 $ 7,277,249 (b) There were no changes in goodwill from April 1, 2007 through December 31, 2007 other than the transactions related to the Merger. F-23

110 Table of Contents 7. Investments UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Investments consist of the following as of December 31,: Successor Predecessor Entravision Communications Corporation $ 153,963 $ 122,128 St. Louis/Denver LLC 44,608 47,108 Equity Media Holdings Corporation in 2007 and Equity Broadcasting Corporation in ,554 38,669 TuTV LLC 2,476 2,552 Other investments 1,177 1,160 $ 225,778 $ 211,617 Investments As a result of the Merger on March 29, 2007, the Company increased the value of its Entravision investment by $33.4 million from $122.1 million to $155.5 million, which was the fair value of the Company s investment in Entravsion on the date of the Merger based on the closing stock price on that date of $9.07. Entravision s stock price on December 31, 2007 was $7.83. The Company has determined that it is not appropriate to record an other than temporary charge for the decline in the value of its investment in Entravision at December 31, 2007 since, as of December 31, 2007, the Entravision stock price has been trading below the Company s cost basis of $9.07 for only two months. Any gain or loss on future transactions involving Entravision stock will be measured by comparing the cost basis of $9.07 per share to the fair value of the Entravision stock at the transaction date. The Company monitors the Entravision stock price, its operating results, the performance and outlook for the media sector in general and other information available to determine if the value of its investment becomes other than temporarily impaired in subsequent reporting periods. The future sale of the stock will have no impact on the Company s existing television station affiliation agreements with Entravision. As part of the consent decree pursuant to which the United States Department of Justice approved the Company s acquisition of Hispanic Broadcasting Corporation ( HBC ), the Company is currently required to own not more than 15% of Entravision stock on a fully converted basis, which includes full exercise of employee options and conversion of all convertible securities, and to sell enough of the Company s Entravision stock so that its ownership of Entravision, on a fully converted basis, does not exceed 10% by March 26, As of December 31, 2007, the Company owned 17,152,729 shares of Entravision Class U common stock. As part of its stock repurchase plan, Entravision repurchased and retired 6.3 million shares of its common stock in the fourth quarter of 2007, which increased the Company s ownership interest in Entravision on a fully converted basis to 16.0% as of December 31, 2007 from 14.8% as of September 30, On February 4, 2008, the Company sold 1.5 million shares of its Entravision Class U common stock to Entravision for $10.4 million and reduced its ownership interest in Entravision on a fully converted basis to 14.7%. The Company now owns 15,652,729 shares of Entravision Class U common stock. The Company accounts for its investment in Entravision as a cost method investment. At December 31, 2007, the Company expected to sell 1.3 million shares to reduce its ownership interest in Entravision below 15% and wrote down the 1.3 million shares to the year-end Entravision closing share price of $7.83 and recorded an other than temporary charge of $1.6 million since the Company did not expect to recover F-24

111 Table of Contents 7. Investments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) its stock cost basis of $9.07 prior to the sale of these shares. The 1.3 million shares were sold as part of the February 4, 2008 transaction noted above. At December 31, 2007, the Company s cost basis in its Entravision investment was $154.0 million and its fair value was $134.3 million, which resulted in an unrealized loss of $19.7 million. In 2005, the Company recorded a charge for an other than temporary decline in the fair value of its Entravision investment of $73.1 million. The Company did not record a tax benefit related to the charge. The Company recorded a deferred tax asset of $28.5 million related to its capital loss that was offset by a valuation allowance for the same amount since, based on the weight of available evidence, it is more likely than not that the deferred tax asset recorded will not be realized. On January 1, 2006, the Company acquired radio stations KBRG(FM) and KLOK(AM) serving the San Francisco/San Jose, California market from Entravision for approximately $90 million. The Company paid for the acquisition with shares of Entravision common stock held by the Company. On March 2, 2006, the Company and Entravision completed the repurchase by Entravision of 7 million shares of Entravision Class U common stock held by the Company, for an aggregate sale price of $51.1 million, or $7.30 per share. This share repurchase transaction, coupled with the Company s purchase of Entravision s radio stations serving the San Francisco/San Jose market for approximately 12.6 million shares of Entravision Class U common stock, reduced the Company s non-voting ownership interest on a fully converted basis in Entravision to approximately 14.9%. The Company recognized a gain on the repurchase transaction of approximately $1.2 million. Due to Entravision option terminations during the quarter ended June 30, 2006, the Company s non-voting ownership interest on a fully converted basis in Entravision increased to approximately 15.06% at June 30, On July 10, 2006, the Company sold 200,000 shares of its Entravision Class U common stock for an aggregate sale price of $1.6 million, which reduced the Company s non-voting ownership interest on a fully converted basis in Entravision to approximately 14.9%, and recognized a gain of $0.2 million. On November 7, 2002, the Company, through its wholly-owned subsidiary TeleFutura, entered into a limited liability company agreement with Roberts Brothers Broadcasting, LLC ( Roberts ), called St. Louis/Denver LLC (the LLC ). In 2002, TeleFutura contributed $26 million and in 2003 contributed its minority interests in the St. Louis and Denver stations of approximately $34 million and Roberts contributed its majority interests in the St. Louis and Denver stations to the LLC. The Company owns 45% of the joint venture. The Company accounts for its investment in St. Louis/Denver LLC as an equity method investment. In addition, TeleFutura and Roberts have each entered into time brokerage agreements ( TBA ) to program the Denver and St. Louis stations, respectively. The TeleFutura TBA became effective on February 23, In 2005 and 2006, the Company determined that the fair value of its investment in the LLC was less than the book carrying value and recorded impairment charges of $8.8 and $5.2 million, respectively. In June 2001, the Company purchased for $26 million an approximate 20% non-voting preferred stock equity interest in Equity Broadcasting Corporation ( EBC ), which has 23 full power/network television stations, 38 Class A television stations and applications and 57 low-power television stations. In addition, in September 2001, the Company purchased shares of Equity Broadcasting s Class A common stock for approximately $2.5 million. F-25

112 Table of Contents 7. Investments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) On April 10, 2006, Coconut Palm Acquisition Corp. ( CPAC ) announced that it had entered into an Agreement and Plan of Merger with EBC. At December 31, 2006, the Company had an investment in EBC of approximately $38.7 million. On March 30, 2007, EBC merged with and into CPAC, with CPAC remaining as the surviving corporation. Following closing of the merger, CPAC changed its name to Equity Media Holdings Corporation. As a result of the merger, the Company received cash of $19.6 million, preferred stock of $10.5 million, common stock of $5.3 million and two television station FCC licenses serving the Salt Lake City market valued at approximately $8.5 million. The Company received $43.9 million in total consideration for its investment in EBC on the date of the merger. The Company accounts for its common stock investment in EBC as available-for-sale securities under the guidelines of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. At December 31, 2007, the Company recorded a $1.3 million other than temporary decline in the fair value of its $5.3 million common stock investment in Equity Media Holdings Corporation based on the Equity Media Holdings share price on that date, reducing the investment to $4.0 million. In April 2003, the Company entered into a limited liability company agreement with Televisa Pay-TV Venture, Inc. to form a 50/50 joint venture called TuTV LLC. The Company accounts for its investment in TuTV LLC as an equity method investment. Variable Interest Entities Since March 31, 2004, the Company was also required to consolidate the assets, liabilities, and operating results of the Puerto Rico TV stations, WLII/WSUR, Inc., a Delaware corporation ( WLII ), which were wholly-owned by Raycom Media, Inc. ( Raycom ). On June 30, 2005, the Company acquired Raycom s ownership interest in WLII in Puerto Rico for approximately $190 million, excluding acquisition costs. 8. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the following as of December 31, 2007 and 2006: Successor Predecessor Trade accounts payable and accruals $ 99,736 $ 81,992 Accrued compensation 65,241 49,429 Accrued insurance 4,242 12,196 Deferred revenue 8,856 12,961 $ 178,075 $ 156,578 Cost Reduction Plan On November 2, 2005, the Company announced a cost reduction plan that reduced its workforce and abandoned certain less profitable programming in an effort to achieve sustainable improvement in financial performance. The plan included reducing approximately 5.6% of the workforce by eliminating job redundancies and inefficiencies. The Company incurred a before-tax charge of approximately $30.3 million in the fourth F-26

113 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 8. Accounts Payable and Accrued Liabilities (Continued) quarter of The plan was substantially completed during the fourth quarter of The unpaid portion of the cost reduction plan as of December 31, 2007 is as follows: 9. Debt The cost reduction charge was $30.0, $0.1 and $0.2 million for the television, radio and Internet segments, respectively. Long-term debt consists of the following as of December 31, 2007 and 2006: The Company has a 7-year, $750.0 million bank senior secured revolving credit facility. Interest will accrue at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the Company s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is expected to be the three-month LIBOR rate. There was no balance outstanding on this facility as of December 31, The bank senior secured term loan facility is a 7.5 year facility totaling $7 billion and accrues interest at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the borrower s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the F-27 Employee Terminations Abandonment of Programming Liability as of December 31, 2005 $ 9,783 $ 1,453 $ 73 $ 11,309 Cash paid in , ,968 Liability as of December 31, ,170 1,171 3,341 Cash paid in ,138 1,138 Liability as of December 31, 2007 $ 1,032 $ 1,171 $ $ 2,203 Costs Successor Other Costs Predecessor December 31, December 31, Bank senior secured revolving credit facility $ $ 180,000 Bank senior secured term loan facility 7,000,000 Bank second-lien asset sale bridge loan 500,000 Bank senior secured draw term loan 200,000 Senior notes 9.75% / 10.50% due ,500,000 Senior notes 7.85% due , ,439 Senior notes 3.875% due , ,730 Senior notes 3.5% due ,541 9,966,981 1,119,710 Less current portion (245,554) (197,541) Long-term debt $ 9,721,427 $ 922,169 Total

114 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 9. Debt (Continued) federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is the three month LIBOR rate. The applicable interest rate as of December 31, 2007 was 7.21%. Interest is paid on January 31, April 30, July 31 and October 31. In April and August 2007, the Company entered into $5 and $2 billion three- and two-year, respectively, interest rate swaps on its variable rate bank debt. Under the interest rate swap contracts, the Company agreed to receive a floating rate payment for a fixed rate payment. These interest rate swaps are accounted for as cash flow hedges that are highly effective. As of December 31, 2007, the Company had a swap liability totaling $165.8 million, which is included in other long-term liabilities on the balance sheet. The bank second-lien asset sale bridge loan is a 2 year loan totaling $500 million and accrues interest at a floating rate, which can be either a Eurodollar rate plus an applicable margin or, at the Company s option, an alternative base rate (defined as the higher of (x) the Deutsche Bank AG New York Branch prime rate and (y) the federal funds effective rate, plus one half percent (0.50%) per annum) plus an applicable margin. The Eurodollar rate is the three-month LIBOR rate. The applicable interest rate as of December 31, 2007 was 7.35%. Interest is paid on a monthly basis. See Notes to Consolidated Financial Statements 2. Recent Developments, for a discussion on the pay down of the bank second-lien asset sale bridge loan. The Company has a 7.5 year, $450 million bank senior secured draw term loan facility, which is available for a limited time to repay or prepay the Company s senior notes that existed prior to the Merger and remain outstanding. On October 15, 2007, the Company paid down its senior notes due 2007 and had $200 million outstanding under this facility as of December 31, The applicable rate is the three-month LIBOR rate plus an applicable margin. The applicable interest rate as of December 31, 2007 was 7.1%. Interest is paid on a monthly basis. The 9.75% senior notes are 8 year notes due 2015, totaling $1.5 billion and accrue interest at a fixed rate. The initial interest payment on these notes was paid in cash on September 15, For any interest period thereafter through March 15, 2012, the Company may elect to pay interest on the notes entirely by cash, by increasing the principal amount of the notes or by issuing new notes ( PIK interest ) for the entire amount of the interest payment or by paying interest on half of the principal amount of the notes in cash and half in PIK interest. After March 15, 2012, all interest on the notes will be payable entirely in cash. PIK interest will be paid at the maturity of the senior notes. The notes bear interest at 9.75% and PIK interest will accrue at 10.50%. These senior notes pay interest on March 15 th and September 15 th each year. As of December 31, 2007, the Company has not elected the PIK option on these notes. The Company s 7.85% senior notes due 2011 bear interest at 7.85% per annum. These senior notes pay interest on January 15 th and July 15 th of each year. The Company has $250 million of senior notes due in 2008, which bear interest at the rate of 3.875% per annum. The interest is payable on the senior notes in cash on April 15 th and October 15 th of each year. When the Company issued the senior notes due 2007 and 2008, it entered into fixed-to-floating interest rate swaps that resulted in fair value hedges that were perfectly effective up until the date of the Merger. The interest rate swaps totaling $450 million on our 2007 and 2008 senior notes qualified for the shortcut method under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Following the merger, the Company no longer qualified for the shortcut method since the senior notes were required to be recorded at F-28

115 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 9. Debt (Continued) market value at March 29, 2007 under SFAS No. 141, Business Combinations. The Company was required to perform the hedge effectiveness analysis using the long-haul method and reassess hedge effectiveness at the time of the acquisition. Based on this analysis, the Company concluded to cease applying hedge accounting. During the nine months ended December 31, 2007, the Company recognized income of $5.5 million to earnings related to the ineffectiveness. The $5.5 million is reported in interest expense in the Company s statement of operations. At December 31, 2007, the Company had a swap asset of $0.4 million reported in prepaid expenses and other assets on the balance sheet, related to the interest rate swaps on the 2008 senior notes. Voluntary prepayments of principal amounts outstanding under the bank senior secured revolving credit facility, bank senior secured term loan facility, bank second-lien asset sale bridge loan and bank senior secured draw term loan (collectively the Senior Secured Credit Facilities ) will be permitted, except for the bank second-lien asset sale bridge loan, at any time; however, if a prepayment of principal is made with respect to a Eurodollar loan on a date other than the last day of the applicable interest period, the lenders will require compensation for any funding losses and expenses incurred as a result of the prepayment. Voluntary prepayments of principal amounts outstanding under the secondlien asset sale bridge loan will not be permitted at any time, except to the extent the payment is made with the proceeds of any sale of equity interests by, or any equity contribution to, us or any issuance by us of permitted senior subordinated notes and/or senior unsecured notes on terms to be agreed upon. The Senior Secured Credit Facilities and the senior notes contain various covenants and a breach of any covenant could result in a default under those agreements. If any such default occurs, the lenders of the Senior Secured Credit Facilities or the holders of the senior notes may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. In addition, a default under the indenture governing the senior notes would cause a default under the Senior Secured Credit Facilities, and the acceleration of debt under the Senior Secured Credit Facilities or the failure to pay that debt when due would cause a default under the indentures governing the senior notes (assuming certain amounts of that debt were outstanding at the time). The lenders under the Company s Senior Secured Credit Facilities also have the right upon an event of default thereunder to terminate any commitments they have to provide further borrowings. Further, following an event of default under the Company s Senior Secured Credit Facilities, the lenders will have the right to proceed against the collateral. The Company is in compliance with its bank credit agreement as of December 31, Beginning June 30, 2008, the Company will be subject to certain customary financial covenants under its bank credit agreement, which the Company expects to be in compliance with at such date. Additionally, the Senior Secured Credit Facilities contain certain restrictive covenants which, among other things, limit the incurrence of investments, payment of dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, prepayments of other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements. The subsidiary guarantors under the Company s bank senior secured term loan facility and senior notes are all of the Company s domestic subsidiaries other than certain immaterial subsidiaries. The guarantees are full and unconditional and joint and several and any subsidiaries of the Company other than the subsidiary guarantors are minor. Univision Communications Inc. is not a guarantor and has no independent assets or operations. The bank senior secured term loan facility and senior notes are secured by, among other things (a) a first priority security interest in substantially all of the assets of the Company, Broadcast Holdings and the Company s material F-29

116 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 9. Debt (Continued) domestic subsidiaries, as defined, including without limitation, all receivables, contracts, contract rights, equipment, intellectual property, inventory, and other tangible and intangible assets, subject to certain customary exceptions; (b) a pledge of (i) all of the Company s present and future capital stock and the present and future capital stock of each of the Company s and each subsidiary guarantor s direct domestic subsidiaries and (ii) 65% of the voting stock of each of our and each guarantor s material direct foreign subsidiaries, subject to certain exception including to avoid certain reporting obligations; and (c) all proceeds and products of the property and assets described above. The bank second-lien asset sale bridge loan is secured by a second priority security interest in all of the assets of the Company, Broadcast Holdings and the Company s material domestic subsidiaries, as defined, securing the other secured credit facilities. The Company s senior notes due 2008 and 2011 that were outstanding prior to the Merger and remain outstanding, as a result of the Merger are secured on an equal and ratable basis with the Senior Secured Credit Facilities. Maturities of long-term debt for the five years subsequent to December 31, 2007 are as follows: Year Amount 2009 $ 500, ,427 Thereafter 8,700,000 Total $ 9,721, Commitments The Company has long-term operating leases expiring on various dates for office, studio, automobile and tower rentals. The Company s operating leases, which are primarily related to buildings and tower properties, have various renewal terms and escalation clauses. The Company also has long-term capital lease obligations for its transponders that are used to transmit and receive its network signals. In 2004, the Company entered into a new transponder capital lease of $23.4 million. The following is a schedule by year of future minimum rental payments under noncancelable operating and capital leases as of December 31, 2007: Year F-30 Operating Leases 2008 $ 36,283 $ 7, ,074 7, ,793 7, ,131 7, ,537 7,420 Thereafter 114,351 22,638 Total minimum lease payments $ 275,169 61,337 Interest (12,955) Total present value of minimum lease payments 48,382 Current portion (5,269) Capital lease obligation, less current portion $ 43,113 Capital Leases

117 Table of Contents 10. Commitments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Rent expense totaled $32.9, $10.4, $44.1 and $42.6 million for the nine months ended December 31, 2007, three months ended March 31, 2007 and the years ended 2006 and 2005, respectively. The Company is party to a lease for a three-story building with approximately 92,500 square feet for the relocation of its owned and/or operated television and radio stations and studio facilities in Puerto Rico. The building is to be constructed and owned by the landlord, with occupancy of the premises expected during the second half of The term of the lease is 50 years. The sum of the lease payments will be approximately $74 million over 50 years. In 2003, the Company entered into a transponder lease agreement for TeleFutura Network that was capitalized in May 2004 for approximately $17 million. Also, in 2003, the Company entered into a transponder lease agreement for Univision Network that was capitalized in the first quarter 2006 for approximately $17 million. According to the Emerging Issues Task Force published Issue 01-8 Determining Whether an Arrangement Contains a Lease, if the Company negotiates a new transponder lease agreement, the Company will not capitalize, or incur depreciation expense, for its transponder lease agreements and will expense the cost as a service fee. EITF 01-8 became effective for agreements entered into after May The Company does not expect to negotiate new transponder lease agreements until two existing transponder lease agreements expire in December When and if the Company decides to transmit a high definition signal, it will be required to negotiate new transponder leases. In June 2005, the Company entered into a new seven-year contract with Nielsen Media Research ( Nielsen ), to provide local market television programming ratings services for the Univision Television Group and the TeleFutura Television Group at a total cost of approximately $132 million. The aggregate payment remaining under the agreement, at December 31, 2007, is approximately $85.5 million, which will be paid through February In February 2002, the Company entered into a five-year contract with Nielsen for TeleFutura owned and operated stations, which had remaining payments of approximately $0.3 million payable through January 31, In the first quarter of 2006, Univision Network and TeleFutura Network became available on Nielsen s national ratings service, Nielsen Television Index (NTI), which provides television ratings for all of the major U.S. networks. The total cost associated with these subscriptions is approximately $5 million, with payments that ended in August In January 2001, Univision Network entered into a program license agreement with Coral International Television Corp. (the exclusive distributing agent for Radio Caracas Television) to acquire approximately 780 hours of new novellas per year through January In 2007, the aggregate payment under the contract was adjusted to approximately $68.4 million, with an aggregate payment remaining under the contract of approximately $33.8 million at December 31, In June 2001, Univision Network entered into a program license agreement with RCN to acquire approximately 300 hours of new novellas per year through June All of the aggregate payments under the contract of approximately $28.9 million has been paid as of March Telefutura Network has several program license agreements for various movies. The agreements commenced in January 2002 and expire on various dates through March The remaining payments under the agreements are approximately $12.4, $8.2 and $3.9 million for the years 2008, 2009 and the period January 2010 through March 2016, respectively. F-31

118 Table of Contents 10. Commitments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) In the third quarter of 2006, the Company entered into a new four-year contract with Arbitron to provide ratings services for our Radio business. At December 31, 2007, the Company had commitments with Arbitron of approximately $9.6 million. The Company has various music license agreements for its television and radio businesses. These contracts grant the Company a license to broadcast musical compositions. The remaining payments under these contracts are approximately $15.4 and $11.6 million in 2008 and On November 2, 2005, the Company acquired the Spanish-language broadcast rights in the U.S. to the 2010 and 2014 Fédération Internationale de Football Association ( FIFA ) World Cup soccer games and other 2007 through 2014 FIFA events. A series of payments totaling $325 million is due over the term of the agreement, with approximately $302 million remaining as of December 31, In addition to these payments, and consistent with past coverage of the World Cup games, the Company will be responsible for all costs associated with advertising, promotion and broadcast of the World Cup games, as well as the production of certain television programming related to the World Cup games. 11. Contingencies Televisa Program License Agreement ( PLA ) Litigation Televisa and the Company are parties to the PLA, which provides the Company s three television networks with a majority of prime time programming and a substantial portion of their overall programming. The Company currently pays a license fee to Televisa for programming, subject to certain upward adjustments. On June 16, 2005, Televisa filed an amended complaint in the United States District Court for the Central District of California alleging breach by the Company of the PLA, including breach for its alleged failure to pay Televisa royalties attributable to revenues from certain programs and from the Company s use of unsold time to promote assets, the Company s alleged unauthorized editing of certain Televisa programs and related copyright infringement claims, a claimed breach of the Soccer Agreement (a soccer rights side-letter to the PLA), a claim that the Company did not cooperate with various Televisa audit rights and efforts and a claim that the Company has not been properly carrying out a provision of the PLA that gives Televisa the secondary right to use the Company s unsold advertising inventory. Televisa sought monetary relief in an amount not less than $1.5 million for breach, declaratory relief against the Company s ability to recover amounts of approximately $5.0 million previously paid in royalties to Televisa, and an injunction against the Company s alteration of Televisa programming without Televisa s consent. In June 2005, the Company made a payment under protest to Televisa of $1.5 million. On August 15, 2005, the Company filed an answer to the amended complaint denying Televisa s claims and also filed counterclaims alleging various breaches of contract and covenants by Televisa. The Company seeks monetary damages and injunctive relief. On September 20, 2005, Televisa filed a motion to dismiss certain of the Company s counterclaims. On November 17, 2005, the District Court denied that motion in its entirety. Thereafter, Televisa changed counsel and on January 31, 2006, after several extensions of time granted by the Company, Televisa filed its answer to the Company s counterclaims. Televisa in its answer alleged that its claims rose to the level of a material breach of the PLA and delivered a purported notice of material breach on February 16, On March 2, 2006, the Company responded to Televisa s purported notice of material breaches. In the Company s response, the Company asserted that the notice was procedurally defective and that Televisa s breach claims were not, in any event, well-founded. The Company does not believe that it is in breach of its agreements with Televisa and certainly not in material breach. F-32

119 Table of Contents 11. Contingencies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) The Company has recognized charges in the statement of operations related to the Televisa payments under protest and other license fee overcharges for the nine months ended December 31, 2007, three months ended March 31, 2007 and twelve months ended December 31, 2006 and 2005 of approximately $2.5 million, $2.2 million, $9.4 million and $9.6 million, respectively. The Company seeks recovery of these amounts via a counterclaim. On March 31, 2006, the Company and Televisa stipulated to the filing of Televisa s Second Amended and Supplemental Complaint in the lawsuit. The new complaint raises the same allegations of material breach contained in Televisa s January 31, 2006 answer to the Company s counterclaims and in its February 16, 2006 notice of purported material breaches. Among other claims, the new complaint seeks a declaration that the Company is in material breach of the PLA and that Televisa has the right to suspend or terminate its performance under the PLA. On May 5, 2006, the Company filed its Answer to the Second Amended and Supplemental Complaint, denying Televisa s principal substantive allegations, denying liability, and asserting various affirmative defenses. On May 12, 2006, the Court reset the discovery cut-off date in the case for December 29, 2006, and the trial date for June 19, On May 22, 2006, the Company filed its First Amended Counterclaims, which added a claim for declaratory relief that the Company was not in material breach of the PLA or the Soccer Agreement and that it had received inadequate notice of any alleged breaches. Televisa sent a letter on June 2, 2006, notifying the Company that the 90- day cure period had expired for certain breaches alleged in Televisa s February 16, 2006 notice of purported material breaches under the PLA and the Soccer Agreement. In that June 2, 2006 letter, Televisa contended that because the Company had purportedly failed to cure these and other breaches, some of which Televisa asserted were not susceptible of being cured, Televisa therefore had the right to terminate the PLA, the Soccer Agreement, and a related guaranty given by Grupo Televisa to the Company. Televisa indicated, however, that it was not at that time exercising its purported termination rights and that it was seeking a declaration of its right to terminate, in the litigation between the companies. On July 19, 2006, Televisa filed a complaint in Los Angeles Superior Court seeking a judicial declaration that on and after December 19, 2006, it may, without liability to Univision, transmit or permit others to transmit any programming that is licensed to the Company under the PLA into the United States from Mexico over or by means of the Internet. The Company was served with the complaint on July 21, The Company filed a motion to dismiss or stay this action on August 21, In response to the motion, Televisa stipulated to stay the Superior Court action, and the Court entered the stay on January 11, On August 18, 2006, the Company filed a motion for leave to file its Second Amended Counterclaims, which include a newly-added claim for a judicial declaration that on and after December 19, 2006, Televisa may not transmit or permit others to transmit any programming that is licensed to the Company under the PLA into the United States over or by means of the Internet. Televisa opposed the motion. On October 5, 2006, the Court granted Univision s motion for leave to file its Second Amended Counterclaims. On September 21, 2006, Televisa sent the Company an additional notice of purported breaches under the PLA. The new notice alleged breaches relating to the Company s sale of advertising time in connection with certain types of programs. The notice also purported to supplement Televisa s previous breach claims with respect to the Company s editing of Televisa programming. On November 15, 2006, Televisa filed a motion seeking a separate trial of the Company s Internet counterclaim. The Company opposed Televisa s motion and on December 6, 2006, the Court denied the motion. F-33

120 Table of Contents 11. Contingencies (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Pursuant to a stipulation and order dated November 3, 2006, the Court appointed a Special Master to oversee discovery matters in the federal case and to make recommendations on certain procedural issues. On December 15, 2006, the Special Master recommended that the Court extend the discovery completion date to June 29, 2007, and continue the trial date to October The Court accepted the Special Master s recommended dates for discovery completion and trial by order dated January 18, Pursuant to a motion brought by the Company, the Special Master on June 8, 2007, recommended a further extension of the discovery cutoff to August 27, 2007, and of the trial date to January 15, The Court accepted the Special Master s recommended dates for discovery completion and trial by order dated June 19, Pursuant to a stipulation of the parties and a recommendation by the Special Master, the Court on August 29, 2007, further continued the trial date to February 12, 2008, and adjusted other pretrial deadlines. On October 16, 2007, acting upon another stipulation of the parties and recommendation by the Special Master, the Court once again continued the trial date and related deadlines. The trial is now scheduled to begin on April 29, On October 1, 2007, the Company filed a motion for partial summary judgment on one of Televisa s claims and one of the Company s counterclaims seeking a ruling that the breaches of the PLA alleged by Televisa, even if found to be true, do not constitute material breaches that would allow Televisa to terminate the PLA. After briefing by both sides and argument before the Court, on December 17, 2007, the Court issued an order denying the Company s summary judgment motion, finding that disputed issues as to certain facts would need to be resolved by a jury. The Company continues to defend the litigation and pursue its counterclaims vigorously and it plans to take all action necessary to ensure Televisa s continued performance under the PLA until its expiration in Other Contingencies The Company maintains insurance coverage for various risks, where deemed appropriate by management, at rates and terms that management considers reasonable. The Company has deductibles for various risks, including those associated with windstorm and earthquake damage. The Company self-insures its employee medical benefits and its media errors and omissions exposures. In management s opinion, the potential exposure in future periods, if uninsured losses were to be incurred, should not be material to the consolidated financial position or results of operations. The Company is subject to various lawsuits and other claims in the normal course of business. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with law or regulations in jurisdictions in which the Company operates. The Company establishes reserves for specific liabilities in connection with regulatory and legal actions that we deem to be probable and estimable. No material amounts have been accrued in our financial statements with respect to any matters. In other instances, we are not able to make a reasonable estimate of any liability because of the uncertainties related to the outcome and/or the amount or range of loss. We do not expect that the ultimate resolution of pending regulatory and legal matters in future periods will have a material effect on our financial condition or result of operations. F-34

121 Table of Contents 12. Common Stock, Preferred Stock and Warrants UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) As of December 31, 2007, as a result of the Merger, all of the Company s issued and outstanding capital stock is held by Broadcast Holdings and all of the issued and outstanding capital stock of Broadcast Holdings is owned by Broadcasting Media, and all of the issued and outstanding preferred stock of Broadcast Holdings is held by the Sponsor, co-investors and certain members of management. Broadcast Holdings owns 1,000 shares of common stock, par value $0.01 per share, of the Company, which constitutes the only outstanding shares of capital stock of the Company. As of December 31, 2006, the Company s common stock consisted of Class A, Class P, Class T and Class V shares. The Class A shares were listed on the New York Stock Exchange and were primarily held by non-affiliates. The Class P, T and V shares were held by affiliates and were not traded. All classes of common stock had substantially the same rights, with the exception of Class P shares, which generally had ten votes per share on all matters on which shareholders were entitled to vote and Class T and V, which each had the right to elect one member of the Company s board of directors. At December 31, 2006, there were 250,112,253 shares of Class A Common Stock issued and 249,702,609 outstanding, 35,283,284 shares of Class P Common Stock issued and outstanding, 13,593,034 shares of Class T Common Stock issued and outstanding and 10,954,706 of Class V Common Stock issued and outstanding. The Company s Class A Common Stock outstanding increased during 2006 by 13,112,666 shares from 236,589,943 to 249,702,609 due to an increase of 4,960,746 resulting from exercise of options, an increase of 1,679,106 due to the conversion of Class P shares to Class A shares, an increase of 6,882,458 due to the conversion of Class V shares to Class A shares and a decrease of 409,644 representing treasury shares resulting from the exercise of options. The Company had 10,000,000 shares of preferred stock, $.01 par value, authorized at December 31, At December 31, 2006, Televisa and Venevision owned a total of 9,102,000 and 30,237,700 warrants, respectively. These warrants included 27,439,700 warrants issued in 1992 that were exercisable for Class T and Class V Common Stock at an exercise price of $ per share. The Company accounted for the warrants issued to Televisa and Venevision within stockholders equity, except for the 100,000 warrants issued in connection with the Fonovisa acquisition that have been accounted for as part of its purchase price. In October 2006, Venevision assigned 4,153,155 of its Class V warrants, which converted to Class A warrants, to a third party. Upon the date of the Merger, the warrants were exercised and are no longer outstanding. 13. Performance Award and Incentive Plans Broadcasting Media has a 2007 Equity Incentive Plan (the 2007 Plan ), which reserves shares of Class A Common Stock, Class L Common Stock and shares of Preferred Stock of Broadcasting Media and Broadcast Holdings, a wholly-owned subsidiary of Broadcasting Media, for issuance to Company officers, directors, key employees and other eligible persons. The 2007 Plan is administered by the Board of Directors or, at its election, by one or more committees consisting of one or more members who have been appointed by the Board of Directors. The Plan Committee shall have such authority and be responsible for such functions as may be delegated to it by the Board of Directors, and any reference to the Board of Directors in the 2007 Plan shall be construed as a reference to the Plan Committee with respect to functions delegated to it. If no Plan Committee is appointed, the entire Board of Directors shall administer the 2007 Plan. The 2007 Plan was adopted as of March 29, 2007, to attract, retain and motivate officers and employees of, consultants to, and nonemployee directors providing services to, the Company, to provide additional incentives F-35

122 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 13. Performance Award and Incentive Plans (Continued) to employees, consultants and directors and to promote the success of the Company s business. Under the provisions of the 2007 Plan, as amended, the maximum number of shares that may be issued pursuant to awards made under the plan is (i) 1,657,742 shares of Class A Stock, (ii) 9,000 shares of Class L Stock and (iii) 22,000 shares of Preferred Stock, and such additional securities in such amounts and such classes as the Board of Directors or Plan Committee may approve. As of December 31, 2007, 535,085 shares of Class A Stock, 486 shares of Class L Stock and 601 shares of Preferred Stock remain available for awards under the share authorization of the 2007 Plan. The price of the options granted pursuant to the 2007 Plan may not be less than 100% of the fair market value of the shares on the date of grant (110% in the case of an incentive stock option granted to any person owning more than 10% of the Company s total combined voting power). Award grants may be in the form of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, dividend equivalent rights or other stock-based awards. No award will be exercisable after ten years from the date granted. Except in the case of a nonqualified stock option granted to a consultant, officer of the Company, or any member of the Board of Directors, each nonqualified stock option shall become exercisable and vested with respect to at least 20% of the total number of shares subject to such nonqualified stock option each year, beginning no later than one year after the date of grant. Following the Merger, Broadcasting Media granted 706,718 Class A Stock restricted stock and restricted stock unit awards, 8,514 Class L Stock restricted stock unit awards and 21,399 preferred stock restricted stock unit awards to certain executive officers under the 2007 Plan. The executive officers purchased 630,093 restricted stock awards of the 706,718 Class A restricted stock and restricted stock unit awards at fair value and therefore there is no share-based compensation related to the purchased awards. The total fair value of the awards granted to the executive officers, excluding the restricted stock awards they purchased, is approximately $11.6 million and the Company amortized approximately $3.5 million for the nine months ended December 31, Total compensation cost related to non-vested awards not yet recognized at December 31, 2007 is approximately $8.1 million and the weighted average period over which it is expected to be recognized is approximately 1.75 years. Share-based compensation cost will be charged to income (loss) on a straight-line basis over the requisite service period, which is generally the vesting period. As of December 31, 2007, Broadcasting Media granted 415,939 stock option awards for Class A Stock under the 2007 Plan. The total fair value of the awards granted is approximately $2.8 million and the Company amortized approximately $0.4 million for the nine months ended December 31, Total compensation cost related to non-vested awards not yet recognized at December 31, 2007 is approximately $2.4 million and the weighted average period over which it is expected to be recognized is approximately 4.5 years. Share-based compensation cost will be charged to income (loss) on a straight-line basis over the requisite service period, which is generally the vesting period. At the effective date of the Merger, all unvested restricted stock units that were granted by the Company prior to the Merger automatically ceased to exist and each holder of an unvested restricted stock unit ceased to have any rights with respect thereto. In accordance with the Merger Agreement, Broadcasting Media is required to create an equity incentive plan with comparable value in the aggregate promptly after the Merger. As of December 31, 2007, no share-based instruments were granted related to this obligation. Prior to the Merger, the Company had 1996 and 2004 Performance Award Plans. The 1996 and 2004 Performance Award Plans reserved shares of Class A Common Stock for issuance to Company officers, key F-36

123 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 13. Performance Award and Incentive Plans (Continued) employees and other eligible persons as determined by the Board of Directors or Plan Committee (as appointed by the Board). The 1996 and 2004 Performance Award Plans were terminated upon the Merger on March 29, The price of the options granted pursuant to the 1996 and 2004 Plans could not be less than 100% of the fair market value of the shares on the date of grant (110% in the case of an incentive stock option granted to any person owning more than 10% of the Company s total combined voting power). No award was exercisable after ten years from the date granted. Unless approved by the Plan Committee, no award vested at a rate greater than 25% per year, other than in the case of awards granted in lieu of cash bonuses, which were able to vest at the rate of 50% per year. On September 14, 2005, the Compensation Committee of the Board of Directors of the Company approved the acceleration of vesting of substantially all unvested stock options outstanding whose exercise price was above the then current market price. The Compensation Committee s decision to accelerate the vesting of the affected stock options was based upon the issuance of SFAS No. 123R, which requires the Company to treat unvested stock options as compensation expense effective January 1, Because the Company accounted for stock based compensation using the intrinsic value method prescribed in APB No. 25, and because these options were priced above current market on that date, the acceleration of vesting of these options did not result in a charge in the Company s financial statements. The acceleration of the vesting increased pro forma share-based compensation expense under the provisions of SFAS No. 123 by approximately $59 million before income tax. In connection with the acquisition of HBC on September 22, 2003, the Company assumed outstanding stock options previously issued under the HBC Long-Term Incentive Plan. The assumed stock option and their respective grant price were converted in accordance with the acquisition agreement. No new awards were granted under this plan upon and following the acquisition of HBC. The maximum term of each assumed option was ten years from the original grant date, subject to earlier termination in connection with the recipient s termination of employment with or service to the Company. The assumed options vested in accordance with the HBC Long-Term Incentive Plan and the acquisition agreement. The HBC Long-Term Incentive Plan was terminated upon the Merger on March 29, On January 1, 2006, the Company adopted SFAS No. 123R, which requires compensation expense relating to share-based payments to be recognized in net income using a fair-value measurement method. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period, which is generally the vesting period. The Company elected the modified prospective method and therefore, prior periods were not restated. Under the modified prospective method, this statement was applied to new awards granted after the time of adoption, as well as to the unvested portion of previously granted equity-based awards for which the requisite service had not been rendered as of January 1, F-37

124 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 13. Performance Award and Incentive Plans (Continued) A summary of stock options and restricted stock outstanding as of December 31, 2007, and the changes during the year then ended is presented below: The weighted-average grant-date fair value of options granted during the nine months ended December 31, 2007 and the years ended December 31, 2006 and 2005, was $7.00, $12.01 and $13.22, respectively, per share. The Company s stock options vest between two to five years. F-38 Stock Options Weighted Average Exercise Price Predecessor Balance at December 31, ,453,652 $ Granted Exercised 21,570,295 $ Forfeited, canceled, or expired 3,883,357 $ Outstanding at March 31,2007 Exercisable at March 31, 2007 Weighted Average remaining Contractual Term (years) Aggregate Successor Granted 415,939 $ Exercised Forfeited, canceled, or expired Outstanding at December 31, ,939 $ $ Exercisable at December 31, 2007 Intrinsic Value

125 Table of Contents UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) 13. Performance Award and Incentive Plans (Continued) Cash received from the exercise of stock options in the three months ended March 31, 2007 and the years ended December 31, 2006 and 2005 was $16.8, $91.6 and $10.6 million, respectively. The actual tax benefit realized for tax deductions from stock options exercised during the three months ended March 31, 2007 and the years ended December 31, 2006 and 2005 was $3.8, $32.1 and $4.2 million, respectively. The total intrinsic value of stock options exercised during the three months ended March 31, 2007 and the years ended December 31, 2006 and 2005 was $134.9, $80.4 and $11.0 million, respectively. The weighted-average grant-date fair value of restricted stock units granted during the nine months ended December 31, 2007 and the year ended December 31, 2006 was $26.31 and $33.63 per share, respectively. The Company did not grant restricted stock unit awards prior to The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option-pricing model with the below weighted-average assumptions used for grants in 2007, 2006 and The Black-Scholes-Merton option-pricing model was developed for use in estimating the value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the stock price volatility and expected life. 14. Employee Benefits The Company has a 401(k) retirement savings plan (the 401(k) Plan ) covering all eligible employees who have completed one year of service. The 401(k) Plan allows the employees to defer a portion of their annual compensation and the Company may match a portion of the employees contributions. For all years presented, F-39 Restricted Stock and Restricted Stock Unit Awards Weighted Average Grant Predecessor Balance at December 31, ,729,775 $ Granted Converted 908,860 $ Forfeited, canceled, or expired 820,915 $ Outstanding at March 31, 2007 Successor Granted 736,631 $ Converted Forfeited, canceled, or expired Outstanding at December 31, ,631 $ Successor Predecessor Volatility % % % Dividends 0.00 % 0.00 % 0.00 % Expected Term Risk-free interest rate 4.07 % 4.31 % 4.08 % Price

126 Table of Contents 14. Employee Benefits (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) the Company matches 100% of the first 3% of eligible employee compensation that was contributed to the plan. For the nine months ended December 31, 2007, three months ended March 31, 2007 and the years ended December 31, 2006 and 2005, the Company made matching cash contributions to the 401(k) Plan totaling $4.4, $1.7, $6.5 and $6.0 million, respectively. 15. Income Taxes The Company files a consolidated federal income tax return. The income tax provision for the nine months ended December 31, 2007, the three months ended March 31, 2007 and the years ended December 31, 2006 and 2005 comprised the following charges and (benefits): F-40 Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, Current: Federal $ $ (23,530) $ 149,418 $ 100,956 State 1,494 (2,891) 17,753 13,158 Foreign Deferred: Federal (25,160) 18,237 56,701 53,171 State (4,060) 2,241 7,001 5,926 Foreign 3,073 (8) (146) Total $ (23,756) $ (5,943) $ 231,304 $ 173,

127 Table of Contents 15. Income Taxes (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) The Company s deferred tax assets and liabilities as of December 31, 2007 and 2006 are as follows: The Company has a deferred tax asset of $21.7 million relating to the nontemporary decline in the value of its investments in Entravision, Equity Media Holdings Corporation and the St. Louis/Denver joint venture. This asset is offset by a valuation allowance of $11.9 million because, based on the weight of all available evidence, it is more likely than not that this portion of the deferred tax asset recorded will not be recognized. If recognized, approximately $10.7 million will be allocated to reduce goodwill. The Company has a deferred tax asset relating to the net operating losses generated by its Puerto Rican subsidiary, which is subject to income tax in Puerto Rico. This asset is offset by a valuation allowance of $1.8 million because, based on the weight of all available evidence, it is more likely than not that this portion of the deferred tax asset recorded will not be recognized. F-41 Successor Predecessor Current deferred tax assets: Accrued severance and litigation $ 2,973 $ 3,118 Accrued vacation 4,929 4,701 Allowances 8,934 7,156 Accrued facility-related costs 937 1,288 Accrued insurance 4,663 5,008 Total current deferred tax assets 22,436 21,271 Current deferred tax liabilities: Other liabilities 404 1,183 Total current deferred tax liabilities 404 1,183 Net current deferred tax assets 22,032 20,088 Long-term deferred tax assets: Equity loss in unconsolidated subsidiaries 17,835 9,898 Deferred compensation 8,172 6,627 Foreign and state loss carryforwards 13,135 6,124 Federal loss carryforwards 51,059 Nontemporary decline in investments 21,715 34,057 Interest rate swap OCI 66,307 Other assets, net 7,896 1,131 Long-term deferred tax assets 186,119 57,837 Less: valuation allowance (13,664) (31,869) Total net long-term deferred tax assets 172,455 25,968 Long-term deferred tax liabilities: Property and equipment, net 87,482 39,397 Intangible assets, net 2,223,728 1,065,437 Total long-term deferred tax liabilities 2,311,210 1,104,834 Net long-term deferred tax liabilities $ 2,138,755 $ 1,078,866

128 Table of Contents 15. Income Taxes (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) As of December 31, 2007, the Company had a tax net operating loss of approximately $156 million, which expires in the year 2027 if not used. As a result of various acquisitions, the Company recorded goodwill representing the consideration given in excess of the fair value of net assets acquired. No deferred tax liability is established for goodwill that is not deductible for tax purposes. The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, As a result of the implementation of Interpretation 48, the Company did not recognize any increase in the liability for unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Predecessor Balance at January 1, 2007 $ 9,400 Addition based on activities through March 31, ,410 Balance at March 31, 2007 $ 12,810 Successor Addition based on activities from April 1, 2007 through December 31, 2007 $ 20,886 Additions for tax positions of prior years 740 Reduction for tax positions of prior years Reduction for settlements (4,554) Lapse in statute of limitations (1,715) Balance at December 31, 2007 $ 28,167 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $3 million in the aggregate. The Company recognizes interest and penalties, if any, related to uncertain income tax positions in income tax expense. As of December 31, 2007, the Company has approximately $1 million of accrued interest related to uncertain tax positions. As a result of the March 29, 2007 acquisition, Univision Communications Inc. became an indirect subsidiary of Broadcasting Media Partners, Inc., therefore, the new consolidated group is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through Substantially all material state income tax matters have been concluded for years through F-42

129 Table of Contents 15. Income Taxes (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) For the nine months ended December, 31, 2007, the three months ended March 31, 2007 and the years ended December 31, 2006 and 2005, a reconciliation of the federal statutory tax rate to the Company s effective tax rate is as follows: Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, Federal statutory tax rate (35.0)% (35.0)% 35.0 % 35.0 % State and local income taxes, net of federal tax benefit (1.8) (0.9) Wages and benefits Credits and state refunds 0.4 (0.1) (1.2) Valuation allowance Merger related expenses 22.5 Puerto Rico rate differential 0.2 Other Total effective tax (benefit) rate (28.2)% (8.0)% 39.9 % 48.7 % Business Segments The Company s principal business segment is television, which includes the operations of the Company s Univision Network, TeleFutura Network, Galavisión and owned-and-operated stations. The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by management in deciding how to allocate resources and in assessing performance. The Company s corporate expenses are included in its television segment. The Company uses the key indicator of adjusted operating income before depreciation and amortization ( OIBDA ) to evaluate the Company s operating performance, for planning and forecasting future business operations, and reporting to the banks. This indicator is presented on an adjusted basis consistent with the definition in the Company s Bank Credit Agreement to exclude certain expenses. F-43

130 Table of Contents 16. Business Segments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Presented below is segment information pertaining to the Company s television, radio and Internet businesses: F-44 Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, Net revenue: Television $ 1,255,693 $ 340,944 $ 1,605,720 $ 1,360,694 Radio 343,058 86, , ,107 Internet 36,828 9,435 38,320 26,286 Consolidated 1,635, ,266 2,025,587 1,746,087 Direct operating expenses (excluding depreciation and amortization): Television 448, , , ,209 Radio 64,260 20,839 72,702 65,772 Internet 11,575 3,761 13,791 12,628 Consolidated 524, , , ,609 Selling, general and administrative expenses (excluding depreciation and amortization): Television 305,675 98, , ,215 Radio 133,275 40, , ,985 Internet 11,632 4,811 15,049 12,486 Consolidated 450, , , ,686 Cost reduction plan: Television 29,993 Radio 73 Internet 190 Consolidated 30,256 Merger related expenses: Television 5, ,521 13,156 Radio 5, Internet Consolidated 5, ,181 13,308 Voluntary contribution per FCC consent decree: Television 24,000 Radio Internet Consolidated 24,000 Depreciation and amortization: Television 107,137 16,705 68,435 66,927 Radio 7,388 2,870 12,292 11,649 Internet 5, ,144 1,770 Consolidated 120,066 20,122 82,871 80,346 Operating income (loss): Television 388,716 (72,658) 532, ,350 Radio 138,135 16, , ,628 Internet 8, ,336 (788) Consolidated $ 534,931 $ (55,671) $ 671,481 $ 521,

131 Table of Contents 16. Business Segments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) F-45 Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, OIBDA: Television $ 555,424 $ 119,345 $ 641,752 $ 500,068 Radio 147,450 26, , ,344 Internet 13,621 1,010 9,786 1,178 Consolidated $ 716,495 $ 146,656 $ 800,571 $ 642,590 Capital expenditures: Television $ 44,589 $ 12,324 $ 66,133 $ 85,505 Radio 7,666 3,090 12,458 14,700 Internet 1, ,654 2,008 Consolidated $ 54,099 $ 15,572 $ 80,245 $ 102,213 Successor December 31, 2007 December 31, 2006 Predecessor 2005 December 31, 2005 Total Assets: Television $ 11,892,925 $ 3,322,396 $ 3,441,338 Radio 4,295,527 4,412,597 4,299,197 Internet 183,524 18,715 10,950 Discontinued operation 85, , ,851 Consolidated $ 16,457,938 $ 8,166,394 $ 8,128,336

132 Table of Contents 16. Business Segments (Continued) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) OIBDA is not, and should not be used as, an indicator of or alternative to operating income or net (loss) income as reflected in the consolidated financial statements. It is not a measure of financial performance under U.S. generally accepted accounting principles ( GAAP ) and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Since the definition of OIBDA may vary among companies and industries it should not be used as a measure of performance among companies. The Company is providing on a consolidated basis a reconciliation of adjusted operating income before depreciation and amortization to operating income, which is the most directly comparable GAAP financial measure, for the periods presented in the segmental disclosure: F-46 Successor Nine Months Ended December 31, 2007 Three Months Ended March 31, 2007 Predecessor Year Ended December 31, 2006 Year Ended December 31, Adjusted operating income before depreciation and amortization $ 716,495 $ 146,656 $ 800,571 $ 642,590 Depreciation and amortization 120,066 20,122 82,871 80,346 Share-based compensation expense 3,870 4,880 12,574 Televisa litigation costs and payments under protest and other license fee overcharges 18,222 6,577 18,719 10,798 Merger related expenses 5, ,181 13,308 Voluntary contribution per FCC consent decree 24,000 Cost reduction plan 30,256 Finance transformation expense 4,130 2,567 Restructuring costs 7,767 Business optimization expense 4,778 Asset impairment charge 1,200 1,618 Sponsor expense 1,215 Management fee 14,366 Operating income (loss) $ 534,931 $ (55,671) $ 671,481 $ 521,

133 Table of Contents 17. Quarterly Financial Information (unaudited) UNIVISION COMMUNICATIONS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) December 31, 2007 (Dollars in thousands, except share and per-share data, unless otherwise indicated) Predecessor 1st Quarter 2nd Quarter 3rd Quarter Successor 4th Quarter Nine Months Ended December 31, 2007 Net revenues $ 437,266 $ 562,208 $ 529,055 $ 544,316 $ 1,635,579 Loss from continuing operations $ (68,583) $ (16,407) $ (25,291) $ (18,772) $ (60,470) Income (loss) from discontinued operations, net of income tax $ 1,563 $ (3,144) $ (1,551) $ (182,708) (a) $ (187,403) Net loss $ (67,020) $ (19,551) $ (26,842) $ (201,480) $ (247,873) 1st Quarter 2nd Quarter Predecessor 3rd Quarter 4th Quarter 2006 Net revenues $ 402,621 $ 603,661 $ 506,556 $ 512,749 $ 2,025,587 Income from continuing operations $ 52,334 $ 109,701 $ 89,224 $ 97,737 $ 348,996 Income (loss) from discontinued operations, net of income tax $ 1,569 $ (2,281) $ (1,085) $ 1,975 $ 178 Net income $ 53,903 $ 107,420 $ 88,139 $ 99,712 $ 349, Total Year (a) Includes an impairment charge related to Music in the amount of $190.6 million before the effect of income taxes and $180.3 million net of income taxes. F-47

134 Exhibit FIRST AMENDMENT TO PRINCIPAL INVESTORS AGREEMENT, PARTICIPATION, REGISTRATION RIGHTS AND COORDINATION AGREEMENT AND STOCKHOLDERS AGREEMENT This First Amendment (the Amendment ), dated as of January 29, 2008, to the following agreements: (i) the PRINCIPAL INVESTORS AGREEMENT (the PIA ), dated as of March 29, 2007, by and among Broadcasting Media Partners, Inc. (the Company ), Broadcast Media Partners Holdings, Inc., ( Midco ), Univision Communications Inc., as successor in interest to Umbrella Acquisition, Inc. ( Univision ); and each Person executing the PIA as a Principal Investor (collectively with their Permitted Transferees and so long as they are members of a Principal Investor Group, the Principal Investors ); (ii) the PARTICIPATION, REGISTRATION RIGHTS AND COORDINATION AGREEMENT (the RRA ), dated as of March 29, 2007, by and among the Company, Midco, Univision and certain Persons who will be stockholders of the Company; and (iii) the STOCKHOLDERS AGREEMENT (the SHA and together with the PIA and the RRA, the Agreements ), dated as of March 29, 2007, by and among the Company, Midco, Univision and certain stockholders of the Company is made by and among the Company, Midco, Univision and the Principal Investors (collectively, the Parties ). WHEREAS, the Principal Investors have entered into a Services Agreement, dated as of January 29, 2008 and effective as of March 27, 2007, with SCG Investments IIB LLC (the Services Agreement ) to employ its services on the terms set forth therein; WHEREAS, in connection with the Services Agreement, the Principal Investors agreed to modify certain terms in the Agreements; WHEREAS, the Parties, pursuant to their authority under Section 7.2 of the PIA, Section 7.2 of the RRA and Section 8.2 of the SHA, desire to effect an amendment to the Agreements to reflect changes resulting from the Services Agreement; and WHEREAS, capitalized terms used but not defined herein shall have the meanings given thereto in the Agreements. NOW, THEREFORE, in consideration of the foregoing premises, the parties hereto hereby agree as follows: 1. Amendments to the Agreements. (a) Part (iii) of the definitions of Strategic Investor Transaction in each of the PIA, RRA and SHA is hereby amended to read as follows: (iii) if agreements related to such transaction are entered into with a Strategic Investor on or prior to January 25, 2009, the SCG Investors not being obligated to Sell Shares resulting, after giving effect to such Strategic Investor Transaction, in the SCG Investors, in the aggregate, holding Shares valued at an initial cost of less than $250,000,000);

135 (b) The last sentence of Section 2.1.1(iv) of the PIA is hereby amended and restated in its entirety to read as follows: For the avoidance of doubt, permitting the SCG Investors to retain Shares after giving effect to a transaction involving a Strategic Investor ( provided that an agreement with respect to such transaction is entered into on or prior to January 25, 2009) that have an initial cost of at least $250,000,000 shall not be deemed as Discrimination against the rights of a Principal Investor or a Principal Investor Group. (c) Section 2.1.1(iv) of the PIA is hereby amended to add the following sentences to the end of the revised paragraph: For the further avoidance of doubt, a Strategic Investor Transaction requires the approval of the Majority Principal Investors, without regard to whether or not a Principal Investor has a conflict of interest with respect to such a transaction. The preceding two sentences hereof may not be amended without the consent of the SCG Investors. (d) Section 8.3 of the SHA is hereby amended to add the following to the end of the first sentence: ; provided that any Shares held by BMPI Services LLC shall not be taken into consideration when calculating Individual Sell Down Percentages. 2. Confirmation of the Agreement. Except as herein expressly amended, the Agreements are ratified and confirmed in all respects and shall remain in full force and effect in accordance with their terms. Each reference in the Amendment to the PIA, the RRA, the SHA or the Agreements shall mean such Agreement as amended by this Amendment, and as hereinafter amended or restated. 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State without giving effect to the choice of law principles of such state that would require or permit the application of the laws of another jurisdiction. 4. Counterparts. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 2

136 IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment (or caused this Amendment to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first written above. THE COMPANY: BROADCASTING MEDIA PARTNERS, INC. By: * Name: Title: MIDCO: BROADCAST MEDIA PARTNERS HOLDINGS, INC. By: * Name: Title: UNIVISION: UNIVISION COMMUNICATIONS INC. By: * Name: Title: * The signature appearing immediately below shall serve as a signature at each place indicated with an * on this page: /s/ C. DOUGLAS KRANWINKLE Name: C. Douglas Kranwinkle Title: Executive Vice President, Law [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

137 MDP INVESTORS MADISON DEARBORN CAPITAL PARTNERS IV, L.P. By: Madison Dearborn Partners IV, L.P., its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director MDCPIV INTERMEDIATE (UMBRELLA), L.P. By: Madison Dearborn Partners IV, L.P. its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director MADISON DEARBORN CAPITAL PARTNERS V- A, L.P. By: Madison Dearborn Partners V-A&C, L.P., its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

138 MDCPV INTERMEDIATE (UMBRELLA), L.P. By: Madison Dearborn Partners V-A&C, L.P., its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director MDCP FOREIGN CO-INVESTORS (UMBRELLA), L.P. By: Madison Dearborn Partners V-A&C, L.P., its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director MDCP US CO-INVESTORS (UMBRELLA), L.P. By: Madison Dearborn Partners V-A&C, L.P., its General Partner By: Madison Dearborn Partners, LLC, its General Partner By: * Name: James N. Perry, Jr. Its: Managing Director * The signature appearing immediately below shall serve as a signature at each place indicated with an * under the heading of MDP INVESTORS: /s/ JAMES N. PERRY, JR. Name: James N. Perry, Jr. Title: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

139 PEP INVESTORS PROVIDENCE INVESTORS V (UNIVISION) L.P. By: Providence Umbrella GP L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director PROVIDENCE EQUITY PARTNERS V (UMBRELLA US) L.P. By: Providence Equity GP V L.P., its General Partner By: Providence Equity Partners V L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director PROVIDENCE INVESTORS VI (UNIVISION) L.P. By: Providence VI Umbrella GP L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director PROVIDENCE EQUITY PARTNERS VI (UMBRELLA US) L.P. By: Providence Equity GP VI L.P., its General Partner By: Providence Equity Partners VI L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

140 PROVIDENCE CO-INVESTORS (UNIVISION) L.P. By: Providence Umbrella GP L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director PROVIDENCE CO-INVESTORS (UNIVISION US) L.P. By: Providence Umbrella GP L.L.C., its General Partner By: * Name: Mark Masiello Its: Managing Director * The signature appearing immediately below shall serve as a signature at each place indicated with an * under the heading of PEP INVESTORS: /s/ MARK MASIELLO Name: Mark Masiello Title: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

141 SCG INVESTMENTS II, LLC, a Delaware LLC By: /s/ ADAM CHESNOFF Name: Adam Chesnoff Title: Manager [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

142 TPG INVESTORS TPG UMBRELLA IV, L.P. By: TPG Advisors IV, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President TPG UMBRELLA V, L.P. By: TPG Advisors V, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President TPG UMBRELLA INTERNATIONAL IV, L.P. By: TPG Advisors IV, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

143 TPG UMBRELLA INTERNATIONAL V, L.P. By: TPG Advisors V, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President TPG UMBRELLA CO-INVESTMENT, L.P. By: TPG Advisors V, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President TPG UMBRELLA INTERNATIONAL CO-INVESTMENT, L.P. By: TPG Advisors V, Inc., its General Partner By: * Name: Clive D. Bode Title: Vice President * The signature appearing immediately below shall serve as a signature at each place indicated with an * under the heading of TPG INVESTORS: By: /s/ CLIVE D. BODE Name: Clive D. Bode Title: Vice President [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

144 THL INVESTORS THOMAS H. LEE EQUITY FUND VI, L.P. By: THL Equity Advisors VI, LLC, its General Partner By: Thomas H. Lee Partners, L.P., its Sole Member By: Thomas H. Lee Advisors, LLC, its General Partner By: * Name: Scott Sperling Its: Managing Director THL EQUITY FUND VI INVESTORS (UNIVISION), L.P. By: THL Equity Advisors VI, LLC, its General Partner By: Thomas H. Lee Partners, L.P., its Sole Member By: Thomas H. Lee Advisors, LLC, its General Partner By: * Name: Scott Sperling Its: Managing Director THL EQUITY FUND VI INTERMEDIATE INVESTORS (UNIVISION), L.P. By: THL Equity Advisors VI, LLC, its general partner By: Thomas H. Lee Partners, L.P., its sole member By: Thomas H. Lee Advisors, LLC, its general partner By: * Name: Scott Sperling Its: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

145 THL EQUITY FUND VI INTERMEDIATE INVESTORS (UNIVISION US), L.P. By: THL Equity Advisors VI, LLC, its General Partner By: Thomas H. Lee Partners, L.P., its Sole Member By: Thomas H. Lee Advisors, LLC, its General Partner By: * Name: Scott Sperling Its: Managing Director THL EQUITY FUND VI INVESTORS (GS), LLC By: THL Equity Advisors VI, LLC, its Manager By: * Name: Scott Sperling Its: Managing Director * The signature appearing immediately below shall serve as a signature at each place indicated with an * under the heading of THL INVESTORS: By: /s/ SCOTT SPERLING Name: Scott Sperling Its: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO PRINCIPAL INVESTORS AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

146 Exhibit FIRST AMENDMENT TO PARTICIPATION, REGISTRATION RIGHTS AND COORDINATION AGREEMENT AND STOCKHOLDERS AGREEMENT This First Amendment (the Amendment ), dated as of January 29, 2008, to the following agreements: (i) the PARTICIPATION, REGISTRATION RIGHTS AND COORDINATION AGREEMENT (the RRA ), dated as of March 29, 2007, by and among Broadcasting Media Partners, Inc. (the Company ), Broadcast Media Partners Holdings, Inc., ( Midco ), Univision Communications Inc., as successor in interest to Umbrella Acquisition, Inc. ( Univision ) and certain Persons who will be stockholders of the Company; and (ii) the STOCKHOLDERS AGREEMENT (the SHA and together with the RRA, the Agreements ), dated as of March 29, 2007, by and among the Company, Midco, Univision and certain stockholders of the Company is made by and among the Company, Midco, Univision, the Principal Investors and the Bank Investors (collectively, the Parties ). WHEREAS, the Principal Investors have entered into a Services Agreement, dated as of January 29, 2008 and effective as of March 27, 2007, with SCG Investments IIB LLC (the Services Agreement ) to employ its services on the terms set forth therein; WHEREAS, in connection with the Services Agreement, the Principal Investor and the Bank Investors agreed to modify certain terms in the Agreements; WHEREAS, the Parties, pursuant to their authority under Section 7.2 of the RRA and Section 8.2 of the SHA, desire to effect an amendment to the Agreements to reflect changes resulting from the Services Agreement; and WHEREAS, capitalized terms used but not defined herein shall have the meanings given thereto in the Agreements. NOW, THEREFORE, in consideration of the foregoing premises, the parties hereto hereby agree as follows: 1. Amendments to the Agreements. (a) Part (iii) of the definitions of Strategic Investor Transaction in each of the RRA and SHA is hereby amended to read as follows: (iii) if agreements related to such transaction are entered into with a Strategic Investor on or prior to January 25, 2009, the SCG Investors not being obligated to Sell Shares resulting, after giving effect to such Strategic Investor Transaction, in the SCG Investors, in the aggregate, holding Shares valued at an initial cost of less than $250,000,000);

147 (b) Section 8.3 of the SHA is hereby amended to add the following to the end of the first sentence: ; provided that any Shares held by BMPI Services LLC shall not be taken into consideration when calculating Individual Sell Down Percentages. 2. Confirmation of the Agreement. Except as herein expressly amended, the Agreements are ratified and confirmed in all respects and shall remain in full force and effect in accordance with their terms. Each reference in the Amendment to the RRA, the SHA or the Agreements shall mean such Agreement as amended by this Amendment, and as hereinafter amended or restated. 3. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State without giving effect to the choice of law principles of such state that would require or permit the application of the laws of another jurisdiction. 4. Counterparts. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 2

148 IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment (or caused this Amendment to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first written above. THE COMPANY: BROADCASTING MEDIA PARTNERS, INC. By: * Name: Title: MIDCO: BROADCAST MEDIA PARTNERS HOLDINGS, INC. By: * Name: Title: UNIVISION: UNIVISION COMMUNICATIONS INC. By: * Name: Title: * The signature appearing immediately below shall serve as a signature at each place indicated with an * on this page: /s/ C. DOUGLAS KRANWINKLE Name: C. Douglas Kranwinkle Title: Executive Vice President - Law [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

149 BANK INVESTORS : BACI INVESTORS INTERMEDIATE (UNIVISION), L.P. By: /s/ ROBERT H. SHERIDAN III Name: Robert H. Sheridan III Title: Authorized Signatory [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

150 CREDIT SUISSE INVESTORS INTERMEDIATE (UNIVISION), L.P. By: GSS Holdings (Univision-CS), Inc. Its: General Partner By: /s/ JILL A. GORDON Name: Jill A. Gordon Title: Vice President [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

151 DB INVESTORS INTERMEDIATE (UNIVISION), L.P. By: DB (Univision), LLC Its: General Partner By: GSS Holdings (Univision), Inc. Its: Sole Member By: /s/ JILL A. GORDON Name: Jill A. Gordon Title: Vice President [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

152 LB INVESTORS INTERMEDIATE (UNIVISION), L.P. By: /s/ ALEX KIRK Name: Alex Kirk Title: Authorized Signatory [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

153 RBS INVESTORS INTERMEDIATE (UNIVISION), L.P. By: RBS (Univision), LLC Its: General Partner By: GSS Holdings (Univision-RBS), Inc. Its: Sole Member By: /s/ JILL A. GORDON Name: Jill A. Gordon Title: Vice President [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

154 WCP UNIVISION, L.P. By: /s/ WALKER SIMMONS Name: Walker Simmons Title: Managing Director [SIGNATURE PAGE TO AMENDMENT 1 TO REGISTRATION RIGHTS AGREEMENT AND STOCKHOLDERS AGREEMENT]

155 Exhibit SERVICES AGREEMENT This SERVICES AGREEMENT, dated as of January 29, 2008 and effective as of March 29, 2007, by and between Broadcasting Media Partners, Inc. (the Company ), SCG Investments IIB LLC (the Consulting Firm ) and BMPI Services LLC ( BMPI LLC ). WHEREAS, the Consulting Firm is a member of BMPI LLC and has been providing services and has agreed to continue providing services to the Company; WHEREAS, the Company, BMPI LLC and the Consulting Firm desire to formally memorialize the Company s engagement of the Consulting Firm and to enter into this Service Agreement (this Agreement ) embodying the terms of such retainer and the Company desires to retain the Consulting Firm and the Consulting Firm desires to be retained by the Company and, in exchange for the Profits Interest (as defined in Section 3(a) below), to continue providing services to the Company subject to the terms and conditions hereinafter described. NOW THEREFORE, in consideration of the terms and mutual undertakings set forth herein, the parties agree as follows: 1. Retention of the Consulting Firm. The Company hereby retains the Consulting Firm to provide the consulting services described in Appendix A attached hereto (the Services ), and the Consulting Firm hereby agrees to provide such Services, in each case, on the terms and subject to the conditions as set forth in this Agreement. 2. Services; Executive Committee. (a) Services. During the Term (as defined in Section 4), the Consulting Firm shall perform the Services for the Company in a manner consistent with Appendix A. The Services shall be performed personally by Haim Saban ( Saban ) as set forth in Appendix A, and the Consulting Firm shall devote other sufficient personnel resources to assist Saban in the performance of such Services as may be necessary and appropriate in accordance with Appendix A. (b) Executive Committee. The Company shall establish an executive committee (an Executive Committee ) in a manner consistent with the terms and conditions set forth in Appendix A. 3. Profits Interests; Out-of-Pocket Expenses. (a) Profits Interests. During the Term, for the Services rendered by the Consulting Firm hereunder, SCG Investments II LLC has received a profits interest (the Profits Interest ) in BMPI LLC in accordance with the Limited Liability Company Agreement of BMPI Services LLC, dated as of January 29, 2008 (as may be amended from time to time, the LLC Agreement ). 1

156 (b) Out-of-Pocket Expenses. Univision Communications Inc shall reimburse (or cause to be reimbursed) the Consulting Firm for all reasonable, documented out-of-pocket expenses incurred by the Consulting Firm directly in connection with the performance of the Services (the Out-of-Pocket Expenses ), including Saban s direct operating costs for use of a private plane directly in connection with his performance of the Services for the Company (which such private plane usage is estimated to be hours per year and such private plane expenses is estimated to be $4, per hour with respect to use of the plane owned by Saban affiliate company, or if such plane is unavailable, then equal to the direct out-of-pocket cost to charter another plane, provided that if such expenses may exceed $720,000 in any calendar year, the Consulting Firm shall promptly notify the Executive Committee). 4. Term. The period during which the Consulting Firm shall perform the Services for the Company pursuant to this Agreement (the Term ) shall be an indefinite period, subject to the right of either party to terminate the Term and the Services for any reason or no reason on thirty (30) days prior written notice to the other party. Any termination by the Company shall require the approval of 3 of 4 voting members of the Executive Committee (other than Saban) as described in Appendix A. (a) Termination for Cause. The Company may terminate the Term and the Services for Cause. The term Cause shall mean: (i) the indictment of the Consulting Firm or Saban for a felony involving moral turpitude; (ii) the Consulting Firm s failure to comply in a material respect with a written directive or duly adopted resolution of the Executive Committee; or (iii) the willful, material breach by the Consulting Firm or any of its employees, officers, directors, including Saban, of the Consulting Firm s obligations under this Agreement, including without limitation the obligation for Saban to be personally involved in providing the Services in accordance with Section 2(a) hereof, or the LLC Agreement; provided, that prior to any termination pursuant to (ii) and (iii), the Consulting Firm shall be entitled to thirty (30) days prior written notice of any proposed termination for Cause (and such notice shall describe specific facts and circumstances) and shall have the opportunity to cure, to the extent curable, such circumstances within thirty (30) days following such notice. No action taken by the Consulting Firm or Saban shall constitute Cause if the Consulting Firm or Saban, as the case may be, acted reasonably and in the good faith belief that its or his actions, as the case may be, were in the best interests of the Company and its subsidiaries, and neither the Consulting Firm or Saban had any pecuniary interest in such circumstances other than its or his interests in the Company, provided that any action taken in contravention of a specific direction from the Executive Committee or Board of Directors shall not be deemed to be an action taken reasonably and in good faith. (b) Without Cause; Death; Disability. The Company may also terminate the Term and the Services without Cause or on the account of Saban s death or Disability. Disability shall mean a physical or mental incapacity or disability which renders Saban unable to perform the Services for a period of 180 days in any twelve-month period. The failure of Saban to be designated as the Chairman of the Board of Directors (or similar successor body) of the Company (or its successors) shall be deemed, at the election of Saban and after providing the Company 60 days to use its reasonable efforts to have Saban designated as the Chairman of the Board, a termination without Cause by the Company of this Services Agreement (unless the Company seeks such termination as a termination for Cause as provided in this Agreement) 2

157 (c) Resignation. The Consulting Firm may terminate the Term for any reason upon thirty days advance written notice to the Company. Haim Saban may resign as Chairman which resignation shall have no effect on the provision of the Services contemplated hereunder or the Term hereunder or the LLC Agreement unless this Agreement is also terminated. (e) Automatic Termination. The Term shall terminate automatically in the event that none of the Principal Investors (as defined in the LLC Agreement) other than the Consulting Firm or SCG (as defined in the LLC Agreement) hold any Company Securities. (f) Rights Upon Termination. Upon any termination of the Term and the Services, the Company shall reimburse (or cause to be reimbursed) the Consulting Firm for all Out-of-Pocket Expenses (accrued prior to the date of termination and not yet paid) and the Consulting Firm s rights and obligations with respect to the Profits Interests shall be governed by the LLC Agreement. Except as set forth in the LLC Agreement, the Company shall have no further obligations in the nature of termination payments or otherwise. 5. No Benefits. Neither Saban nor any other personnel of the Consulting Firm shall participate in any of the Company s employee compensation or benefit plans, policies or arrangements. 6. Confidential Information; Noncompetition. (a) The Consulting Firm shall not, and shall cause its personnel, including Saban, not to, during the Term or at any time thereafter, directly or indirectly, disclose, reveal, divulge or communicate to any person other than authorized officers, directors and employees of the Company and the Principal Investors (including officers, directors, employees, partners and members of the Principal Investors and any entity that controls a Principal Investor) and advisors of the Company and Principal Investors in connection with providing the Services, or use or otherwise exploit for its own benefit or for the benefit of anyone other than the Company, any Confidential Information (as defined below); provided, that the Consulting Firm may disclose any such information (i) as has become generally available to the public, (ii) to its employees and professional advisers who need to know such information and agree to keep it confidential, (iii) to the extent required in order to comply with reporting obligations to its limited partners or members, in each case, who have agreed to keep such information confidential, (iv) to the extent necessary in order to comply with any law, order, regulation or ruling applicable to the Consulting Firm, (v) to enforce the provisions hereof or to the extent required in the proper performance of the Services hereunder, and (vi) as may be required in response to any summons or subpoena or in connection with any litigation, it being agreed that, unless such information has become generally available to the public, if such information is being requested pursuant to a summons or subpoena or a discovery request in connection with a litigation, (x) the Consulting Firm shall give the Company notice of such request and shall cooperate with the Company at the Company s request so that the Company may, in its discretion, seek a protective order or other appropriate remedy, if available, and (y) in the event that such protective order is not obtained (or sought by the Company after notice), the Consulting Firm (a) shall furnish only that portion of the information which, in accordance with the advice of counsel, is legally required to be furnished and (b) will exercise its reasonable efforts to obtain assurances that confidential treatment will be accorded such information. 3

158 Confidential Information means any information with respect to the Company or any of its subsidiaries and controlled affiliates, including methods of operation, customer lists, products, prices, fees, costs, technology, formulas, inventions, trade secrets, know-how, software, marketing methods, plans, personnel, suppliers, competitors, markets or other specialized information or proprietary matters. (b) Noncompetition. During the Term and (i) the one-year period following the date the Term ends and (ii) if the Term has not previously ended, then the one-year period following a Change of Control (as defined in the LLC Agreement on the date hereof), the Consulting Firm shall not, and shall cause Saban and any Affiliate of the Consulting Firm or Saban not to, perform services for or otherwise invest in or become a member of the board of directors (or similar body) of any business or entity (x) where either (i) more than 50% of the revenues of such business or entity are derived from the Hispanic market in the U.S., or (ii) $250 million of revenues of such business or entity are derived from the Hispanic market in the U.S.; (y) (i) that broadcasts 75% or more of its content in the U.S. in Spanish language; or (ii) of which 75% or more of its audience are Hispanics in the U.S.; and (z) which competes or would reasonably be expected to compete with a Company Business Activity. Notwithstanding the foregoing, (i) SCG cannot provide services for / invest in/ become a board member of ABC, NBC, CBS, Fox, CW, Clear Channel and (ii) Haim Saban shall be permitted to serve as a member of the Board of Directors of DirecTv. A Company Business Activity means any business segment of the Company or any of its subsidiaries that has generated at least $100 million in revenue in the prior fiscal year or is reasonably expected to generate $100 million or more in revenue during the current fiscal year or any internet-based media business in which the Company has expended material resources. Affiliate means with respect to any person or entity any other person or entity which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified person or entity. In the event that a business or entity which was not subject to this clause on the date of any investment by Consulting Firm or Saban or any of their Affiliates, become a business or entity that would be prohibited by this clause ( Restricted Investment ), then the Consulting Firm shall, and shall cause Saban and any Affiliate of the Consulting Firm or Saban to, go nonattributable with respect to that Restricted Investment (as such is defined under the rules and regulations of the Federal Communication Commission) and the Consulting Firm shall, upon reasonable request, provide annual certifications that it is in compliance with the nonattributable status. (c) Corporate Opportunity. During the Term and the one-year period following the date the Term ends, the Consulting Firm shall, and shall cause Saban to, inform the Company in writing of any Hispanic Business Opportunity (as defined below) that is not otherwise prohibited by the noncompetition clause (b) above before the Consulting Firm or Saban consummate any investment or other strategic partnership with respect thereto ( Opportunity Notice ). Within ten business days after the date of such Opportunity Notice, the 4

159 Company shall inform the Consulting Firm in writing whether the Company intends to further evaluate a making of an investment or enter into other strategic partnership with respect to such Hispanic Business Opportunity. Thereafter, if none of the Company or its subsidiaries have either executed definitive agreements with respect to or consummated a transaction with respect to such Hispanic Business Opportunity within three months after the date of the Opportunity Notice, the Consulting Firm and Saban shall be free to pursue any action with respect to such Hispanic Business Opportunity subject at all times to clause (b) above and the provisions of this Services Agreement. Hispanic Business Opportunity means a business (at the time of evaluation) that generates at least 50% of its revenues from the Hispanic market in the U.S. or is projected or reasonably expected to generate at least 50% of its revenues from the Hispanic market in the U.S in the current fiscal year or the next five succeeding years. (d) Notwithstanding anything herein to the contrary, the Consulting Firm or Saban may hold passive investments in any enterprise the shares of which are publicly traded if such investment constitutes less than five percent (5%) of the equity of such enterprise. Nothing herein is intended to prohibit the Consulting Firm, Saban or their affiliates from evaluating or discussing an opportunity the consummation of which would otherwise be prohibited by Sections 6(b) and (c). (e) The parties recognize that the Company will have no adequate remedy at law for breach by the Consulting Firm or any of its personnel (including Saban) of the covenants provided in this Section 6 and 7 and, in the event of any such breach, the Company and the Consulting Firm hereby agree that the Company shall be entitled to injunctive relief providing for specific performance, mandamus or other appropriate remedy to enforce performance of such covenant, without the requirement to post bond. 7. Nondisclosure of this Agreement. The Consulting Firm agrees not to, and shall cause its personnel (including Saban) not to, disclose the terms or conditions of this Agreement to any third party, without the prior written consent of the Company, except to the extent required by law or with their respective professional advisers for the purpose of discussing the subject matter hereof or to enforce the provisions hereof or to the extent required in the proper performance of the Services hereunder. 8. Representations. Each party hereto represents and warrants to the other party hereto that (a) the execution, delivery and performance by such party of this Agreement has been duly authorized by all necessary action on its part and does not and will not contravene or conflict with any provisions of any agreement or other instrument to which it is a party or by which it is bound or any applicable law, judgment, order, writ, injunction, decree, rule or regulation of any court, governmental authority, administrative agency or arbitrator, (b) this Agreement is the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms and (c) there is no pending or threatened action or proceeding affecting such party before or by any court, governmental authority, administrative agency or arbitrator, which if adversely determined, would prevent such party from performing its obligations hereunder. 9. Independent Contractor. The Consulting Firm and the Company agree that the Consulting Firm and its personnel (including Saban) shall be independent contractors of the 5

160 Company for all purposes with regard to their performance of the Services pursuant to this Agreement, including, without limitation, for U.S. federal (including social security and unemployment), state, local and non-u.s. income and employment tax purposes and for purposes of any social charges under applicable non-u.s. law. If the Company is required to withhold U.S. federal, state, local or non-u.s. taxes with respect to any amounts payable hereunder, such taxes shall be withheld out of such amounts. The parties agree that this Agreement does not increase or expand the scope of the duties (including fiduciary duties) or responsibilities of Saban (or any person assisting Saban in the performance of the Services) as a director of the Company. 10. Notices. Any notices, requests, demands and other communications provided for by this Agreement between the parties hereto shall be in writing and deemed received (a) on the day delivered in person, by facsimile (fax) transmission after receipt of confirmation or by as provided below (in each case, with hard copy to be delivered by registered or certified mail or courier service), (b) on the next business day if sent by overnight delivery service, or (c) five days after being mailed, postage prepaid, certified or registered with return receipt requested at the address stated below or to such changed address as the addressee may have given by similar notice hereunder: To the Company : Broadcasting Media Partners, Inc Center Drive Los Angeles, CA Attention: Executive Committee of the Board of Directors with a copy (which shall not constitute notice) to: Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY Attention: Robert J. Raymond Facsimile: (212) with a copy (which shall not constitute notice) to: Weil, Gotshal & Manges LLP 50 Kennedy Plaza Providence, RI Attention: David Duffell Facsimile: (401) To BMPI LLC : c/o Broadcasting Media Partners, Inc Center Drive Los Angeles, CA Attention: Executive Committee of the Board of Directors 6

161 with a copy (which shall not constitute notice) to: Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, NY Attention: Robert J. Raymond Facsimile: (212) with a copy (which shall not constitute notice) to: Weil, Gotshal & Manges LLP 50 Kennedy Plaza Providence, RI Attention: David Duffell Facsimile: (401) To the Consulting Firm : SCG Investments IIB LLC Santa Monica Blvd, Suite 2600 Los Angeles, CA Attention: Adam Chesnoff (with copy by to [email protected]) copy to: Niveen Tadros (with copy by to [email protected]) 11. Amendment; No Waiver. No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing by the Company and the Consulting Firm. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No waiver of any provision of this Agreement shall be implied from any course of dealing between or among the parties hereto or from any failure by any party hereto to assert its rights hereunder on any occasion or series of occasions. 12. Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York. 13. Assignment. This Agreement shall not be assignable by the Consulting Firm or the Company or its affiliates. Any assignment in violation of this Section 13 shall be null, void and without effect. 14. Entire Agreement; Severability. This Agreement contains the entire agreement between the parties with respect to the retention by the Company of the Consulting Firm and supersedes any and all prior understandings, agreements or correspondence between the parties with respect to the subject matter hereof. In the event that any provision or portion of this Agreement shall be determined to be invalid, illegal or unenforceable for any reason, the remaining provisions and portions of this Agreement shall be unaffected thereby and shall 7

162 remain in full force and effect to the fullest extent permitted by law. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant shall be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. 15. Construction of Agreement. The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision. Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party. 16. Indemnity. To the fullest extent permitted by applicable law, the Company shall indemnify and hold harmless the Consulting Firm and Saban and each officer, director, shareholder, partner, member, employee, representative, agent and/or Affiliate of the Consulting Firm (collectively, the Covered Persons and each a Covered Person ) from and against any and all liabilities, obligations, losses, damages, fines, taxes and interest and penalties thereon (other than taxes based on fees or other compensation received by the Covered Persons from the Company or BMPI LLC), claims, demands, actions, suits, proceedings (whether civil, criminal, administrative, investigative or otherwise), costs, expenses and disbursements (including reasonable and documented legal and accounting fees and expenses, costs of investigation and sums paid in settlement) of any kind or nature whatsoever (collectively, Claims and Expenses ) that may be imposed on, incurred by or asserted at any time against any Covered Person in any way relating to or arising out of this Agreement or in connection with the business or affairs of the Company or the activities of the Covered Persons on behalf of the Company or BMPI LLC; provided, that the Consulting Firm shall not be entitled to indemnification hereunder against Claims and Expenses that are finally determined by a court of competent jurisdiction to have resulted from the Covered Person(s) Disabling Conduct (as such term is defined below). Disabling Conduct means an act or omission by a Covered Person (a) that is a criminal act and that the Covered Person had no reasonable cause to believe was lawful; (b) that constitutes fraud, bad faith or willful misconduct; or (c) that is contrary to the direction provided by the Company or BMPI (either directly or indirectly through its respective board of directors or managers or CEO) or that is otherwise not done in the good faith performance of the Covered Person s duties and responsibilities for the Company or BMPI. 8

163 IN WITNESS WHEREOF, the Company and the Consulting Firm have caused this Agreement to be signed by their respective duly authorized representatives as of the day and year first above written. 9 Broadcasting Media Partners, Inc. / S / C. D OUGLAS K RANWINKLE By: C. Douglas Kranwinkle Title: Vice President BMPI Services LLC / S / C. D OUGLAS K RANWINKLE By: C. Douglas Kranwinkle Title: Vice President Univision Communications Inc. with respect to reimbursement of expenses pursuant to Section 3(b) / S / C. D OUGLAS K RANWINKLE By: C. Douglas Kranwinkle Title: Executive Vice President-Law SCG Investments IIB, LLC / S / A DAM C HESNOFF By: Adam Chesnoff Title: Manager

164 Executive Committee of the Board of Directors. Appendix A The Board of Directors of the Company shall establish an Executive Committee as provided in Section of the Principal Investor Agreement by and among Broadcasting Media Partners, Inc., Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and the Principal Investors, dated as of March 29, 2007 (the PIA ), which shall be comprised of one representative from each of the Principal Investors, including any Non Voting Principal Investors (as each term is defined in the PIA) (including Haim Saban as the representative of SCG) and the Company s CEO as a non-voting member. It is expected that Management will interact regularly with the Executive Committee and the Board of Directors in the ordinary course. Each Principal Investor shall also designate an alternate member to the Executive Committee. The Executive Committee shall have such duties and functions as may be delegated to it by the Board of Directors, but such duties are expected to include working in close coordination with Saban and the CEO. A majority vote of the members of the Executive Committee is required to approve any matter brought to the Committee by a Principal Investor, except as to matters involving Saban (e.g. the definition of his duties, responsibilities, reporting relationships and activities on behalf of the Company, including whether to continue to pursue any activity, and any guidelines, parameters or limits within which he is expected to perform services) which shall require approval by 3 of 4 voting members of the Executive Committee other than Saban. The Executive Committee will have regularly scheduled meetings via conference call, which initially are expected to be every other Tuesday at 1 pm PST, and will otherwise meet as needed. Notice of meetings (other than the regularly scheduled meeting in the preceding sentence) and information relevant thereto shall be sent to the Committee members and the alternate members. Saban s Duties and Responsibilities. Saban shall evaluate, develop and initiate various strategic initiatives for the benefit of the Company in cooperation with the CEO. Each of Saban and the members of the Executive Committee/Board shall reasonably and timely inform the other of all material activities. Saban cannot legally bind the Company without the approval of the Board of Directors and/or Executive Committee. Saban is not expected to have responsibility for managing the day-to-day business affairs of the Company, except in such manner as otherwise agreed by the Executive Committee, Saban and the CEO. As provided in the CEO s proposed terms of employment, [Saban] is not entitled to have direct authority as to any employees (other than [the CEO]) and thus any requests made directly to such employees are subject to [the CEO s] authority to manage the day-to-day activities of his direct reports and other employees. The Company shall ensure that Saban shall have reasonable access to information and resources of the Company. Any reports or other information provided to Saban shall also be provided to and shared with the Board of Directors or the Executive Committee (including alternate members) if requested by the Executive Committee or Board of Directors or any member thereof.

165 It is acknowledged by the Board of Directors and the Executive Committee that Saban may be assisted, as he determines, by employees of Saban Capital Group, but the only employee of Saban Capital Group to whom the CEO shall report to is Saban himself, who will be the primary contact for Saban Capital Group with the CEO. 11

166 Exhibit EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is entered into as of January 1, 2005, by and between Univision Management Co., a Delaware corporation ( Company ), and Peter H. Lori ( Employee ). RECITALS WHEREAS, Company desires to employ Employee and Employee desires to accept such employment on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual covenants contained herein, Employee and Company agree as follows: 1. Definitions/Interpretation. The terms and conditions of Sections 1-11 (the Express Terms and Conditions ), together with the Standard Terms and Conditions attached hereto and incorporated herein by reference, are collectively referred to as the Agreement. All capitalized terms in the Agreement shall have the meaning set forth in the Express Terms and Conditions, except as otherwise specifically defined in the Standard Terms and Conditions. In the event of a conflict, the Express Terms and Conditions shall prevail over the Standard Terms and Conditions. All references to Section are Sections of the Standard Terms and Conditions unless expressly stated otherwise. 2. Employment/Term. On the terms and subject to the conditions set forth in this Agreement and Employee s satisfactory completion of Company s background check, Company hereby employs Employee and Employee hereby accepts such employment for the period commencing on April 1, 2005, and ending on December 31, 2007 (the Term ). 3. Base Salary. Company will pay to Employee a base salary (the Base Salary ) at the annualized rate of Three Hundred Fifty Thousand Dollars ($350,000) during the Term. Such Base Salary will be earned weekly, in arrears, and be payable no less frequently than monthly, in accordance with Company s customary practices. 4. Duties. Employee will perform the duties and responsibilities and render services in the capacity of Senior Vice President, Controller and Chief 1

167 Accounting Officer for Univision Communications Inc., or in any other capacity as Company may from time to time prescribe. Employee will observe and comply with all rules, regulations, policies, orders and directions, whether oral or written, as Company may prescribe from time to time ( Company s Policies ). 5. Bonuses. Company may or may not, in its sole and absolute discretion, award Employee a bonus. 6. Stock Options. Employee shall be entitled to a one-time, nonstatutory stock option to purchase Fifty Thousand (50,000) shares of Univision Communications Inc. s ( Corporation ) Class A Common Stock, at a strike price equal to the closing price per share on the commencement date of the Term, subject to the terms, conditions and approval process of the Corporation s 1996 Performance Award Plan and Employee signing the standard stock option agreement of Univision Communications Inc. 7. Signing Bonus. Company shall pay to Employee a one-time signing bonus in the amount of One Hundred Eighty Thousand Dollars ($180,000) following commencement of the Term. 8. Benefits. Company will provide to Employee all insurance and other benefits that Company provides to employees of Company generally (the Benefits ); subject, however, to Employee s eligibility to participate in such Benefits under Company s Policies. 9. Vacation. Employee will be entitled to fifteen (15) business days paid vacation for each calendar year to be earned and accrued in accordance with Company s Policies. 10. Business Expenses. Company will reimburse Employee for all reasonable and necessary business expenditures made by Employee in accordance with Company s Policies. 11. Place of Employment. Employee s principal place of employment will be Teaneck, New Jersey, or at such other place as may be mutually determined by Company and Employee. Notwithstanding the foregoing, Employee will engage in temporary travel as Company may reasonably request or as may be required to carry out Employee s duties and responsibilities hereunder. 2

168 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. UNIVISION MANAGEMENT CO. By: /s/ Jeffrey T. Hinson Jeffrey T. Hinson Chief Financial Officer /s/ Peter H. Lori Peter H. Lori 3

169 STANDARD TERMS AND CONDITIONS 1. Exclusivity of Services. (a) Full Time. Employee will render services solely and exclusively for Company and devote Employee s full business time, energy and ability to Company and faithfully and diligently promote the business affairs and interests of Company. (b) Prohibited Activities. Without the prior express written consent of Company, which consent may be withheld or rescinded at any time in the sole discretion of Company, Employee will not, directly or indirectly, either individually or as an employee, agent, partner, joint venturer shareholder, consultant, officer, director or in any other capacity: (i) render services to any other person or entity, except to a charitable organization for no consideration and then only to the extent it does not interfere with the business interests of Company and the performance by Employee of Employee s obligations under this Agreement; or (ii) participate, engage in or have any financial or other interest in any business which is competitive in any manner whatsoever with any business in which Company or any of its affiliates is now or may hereafter become engaged. The foregoing prohibition does not include ownership by Employee of less than five percent (5%) of the outstanding shares of any publicly-traded entity, provided that Employee does not otherwise participate in such entity as a director, officer, employee or in any other capacity. (c) No Commitments. Employee represents and warrants to Company that Employee has no outstanding commitments inconsistent with any of the terms of this Agreement or the services to be rendered by Employee hereunder. 2. Termination. (a) Events. This Agreement and Employee s employment by Company will terminate on the earlier of (i) the expiration of the Term, or (ii) the first to occur of any of the following: 4

170 (1) Disability. (i) Failure to Render Service. In the event Employee fails for a period of one hundred twenty (120) business days, either consecutively or in the aggregate during any twelve- (12-) month period, as a result of illness, incapacity, Disability, injury, or by reason of any statute, law, ordinance, regulation, order, judgment or decree, to render the services contemplated by this Agreement, Company, by written notice to Employee, may terminate Employee s employment. (ii) Disability Defined. Disability shall for purposes of this Agreement mean a physical or mental condition which substantially limits a major life activity and which renders Employee unable to perform the essential functions of Employee s position, even with such reasonable accommodation by Company that does not impose an undue hardship on Company. Company reserves the right, in good faith, to make the determination of Disability under this Agreement based on information supplied by Employee s medical personnel, as well as information from medical personnel selected by Company or its insurers. (2) Death. Employee s employment shall automatically terminate upon the death of Employee. (3) For Cause. Company may terminate Employee s employment at any time, without notice, for Cause. For purposes of this Agreement the term Cause includes, but is not limited to: habitual neglect of the duties which Employee is required to perform; willful misconduct; gross negligence; theft, fraud or other illegal conduct; refusal or unwillingness to perform duties; failure of Employee to perform all duties and obligations of Employee in a manner which is satisfactory to Company; sexual or other unlawful harassment; conduct which reflects adversely upon the Company, any affiliate of Company, or any officer, director or Board of any of them, including, without limitation, making disparaging remarks; arrest for or conviction of a crime involving moral turpitude; insubordination; any willful act that is likely to or does in fact have the effect of injuring the reputation, business or a business relationship of the Company, any affiliate of Company, or any officer, director or Board of any of them; violation of any fiduciary duty; violation of any duty of loyalty; or breach of any term of this Agreement. Termination of Employee s employment under this Section 2(a)(3) will not limit Company s rights and remedies against Employee under this Agreement, at law or in equity. 5

171 (4) Without Cause. Company, in its absolute discretion, may terminate Employee s employment at any time without Cause and with or without notice. (b) Effect. Effective as of the date of the termination of Employee s employment pursuant to this Section 2, Employee s right to receive Base Salary, Benefits, expense reimbursement and other amounts (such as bonuses) will cease, provided that Company will pay to Employee such amounts, if any, which Employee has earned but are unpaid. Notwithstanding the foregoing, and subject to Employee s compliance with the conditions of Section 2(c) and 4 and execution of full release and settlement of all claims in connection with Employee s employment, in the event Employee s employment is terminated pursuant to Section 2(a)(4) Company will pay Employee Base Salary for the unexpired Term remaining after the date of such termination. Such payments will be in lieu of all other rights of Employee under this Agreement, at law or in equity, except as provided in the first sentence of this Section 2(b). (c) Post Termination Conditions. Upon termination of Employee s employment, Employee will cooperate with and provide reasonable assistance Company regarding any litigation, contract negotiation or other matter in which the benefit of Employee s knowledge or expertise may be requested by Company, including, without limitation, assisting Company, at Company s request, in the preparation of litigation (including testifying). 3. Renewal. (a) Notice. Unless this Agreement has been terminated pursuant to Section 2, no later than ninety (90) days prior to the expiration of the Term Company will give Employee written notice advising Employee whether or not Company will seek to negotiate an extension of the Term ( Extension Notice ). (b) Effect. If Company gives Employee an Extension Notice, informing Employee that Company will not seek to renew or extend the term of the Agreement or if Company fails to give an Extension Notice then, upon expiration of the Term (unless Employee is sooner terminated in accordance with the provisions of Section 2), Employee s employment will terminate and Employee s right to receive Base Salary, Benefits, expense reimbursement and other amounts will cease. Upon such expiration of the Term, (i) Company will pay to Employee all Base Salary, Benefits, expense reimbursement and other amounts, if any, earned by Employee but unpaid as of the date of such expiration and (ii) Company will continue to pay Employee s then-current Base Salary at an annualized rate (A) for a period of ninety (90) days if no Extension Notice was 6

172 given to Employee, or (B) if the Extension Notice is given by Company less than ninety (90) days prior to the expiration of the Term, for a period of ninety (90) days minus the number of days from the date the Extension Notice was given to Employee until the expiration date of the Term. In any event, Company s election not to renew or extend Employee s employment will not relieve Employee of any continuing obligations under the Agreement. If Company gives Employee an Extension Notice informing Employee that Company will seek to renew or extend the Term and if Company and Employee fail to agree on the terms and conditions of an extended term prior to the expiration of the Term then, upon the expiration of the Term, (unless Employee is sooner terminated in accordance with the provisions of Section 2), Employee s employment will terminate and Employee s right to receive Base Salary, Benefits, expense reimbursement and other amounts will cease. Upon such expiration of the Term (i) Company will pay to Employee all Base Salary, Benefits, expense reimbursement and other amounts, if any, earned by Employee but unpaid as of the date of such expiration and (ii) if the Extension Notice is given less than ninety (90) days prior to the expiration of the Term, Company will continue to pay Employee s then-current Base Salary at an annualized rate for a period of ninety (90) days minus the number of days from the date the Extension Notice was given to Employee until the expiration date of the Term. (c) Company s Discretion. The election to seek an extension of the Term will be at the sole and absolute discretion of Company. No renewal or extension of this Agreement will result in any subsequent renewal or extension of this Agreement unless such subsequent renewal or extension is by written agreement between Company and Employee. (d) Exclusivity. During the Term and, if Company has given Employee an Extension Notice prior to the expiration of the Term, for a period of ninety (90) days thereafter, Employee shall not directly or indirectly enter into any discussions or negotiations with anyone other than Company for the performance of services by Employee after the expiration of the Term. Employee will negotiate in good faith exclusively with Company if Company elects to seek an extension or renewal of Employee s Employment Agreement prior to the expiration of the Term. 7

173 4. Confidentiality/Trade Secrets/Unfair Competition; Competitive Activities; Proprietary Rights. (a) Confidentiality/Trade Secrets/Unfair Competition. (1) Defined. In the performance of Employee s duties, Employee may have access to, receive and be entrusted with trade secrets and other confidential information regarding marketing, sales, financial, management, administrative, production and distribution information, customer lists, plans, processes and specifications presently owned, or at any time in the future developed by Company or its affiliates or its or their agents or consultants, actually or potentially used in the operation of Company s business, or obtained form third parties under an agreement of confidentiality, and that is not otherwise part of the public domain (collectively the Confidential Material ). (2) Prohibitions. Employee acknowledges and agrees that all Confidential Material is considered secret and is made available to Employee in strictest confidence. Except in the performance of Employee s duties or as may be required by applicable law, Employee shall not, directly or indirectly for any reason whatsoever, disclose, duplicate or use any such Confidential Material, unless such Confidential Material ceases (through no fault of Employee) to be confidential because it has become part of the public domain. All records, files, drawings, documents, equipment and other tangible items, and all copies thereof, wherever located, relating in any way to the Confidential Material or otherwise to Company s business, which Employee prepares, uses or encounters, shall be and remain Company s sole and exclusive property and shall be included in the Confidential Material. (3) Delivery. Upon termination of this Agreement by any means, or whenever requested by Company, Employee shall promptly deliver to Company any and all of the Confidential Material, and all copies thereof, not previously delivered to Company, that may be or at any previous time has been in Employee s possession or under Employee s control. Employee hereby acknowledges that the sale or unauthorized use, duplication or disclosure of any Confidential Material by any means whatsoever and any time before, during or after employment with Company shall constitute a material breach of this Agreement and unfair competition; and Employee agrees not to engage in unfair competition either during the time employed by Company or at any time thereafter in perpetuity. (b) Competitive Activities. termination of (1) Solicitation. Employee covenants and agrees that during the Term and for a period of six (6) months after the 8

174 Employee s employment under this Agreement, Employee shall not directly or indirectly influence or attempt to influence or solicit present or future customers, employees, performers or independent contractors of Company or any of its affiliates to restrict, reduce, sever or otherwise alter their relationship with Company or such affiliates. (2) Cooling-Off. Employee further covenants and agrees that if Employee s employment is terminated prior to the expiration of the Term pursuant to Section 2(a)(4) (without Cause) or any breach or other early termination of the Agreement by Employee, during the remainder of the unexpired Term (the Cooling-Off Period ), Employee will not directly or indirectly engage in the Business (as defined at the end of this Section 4(b)(2)) in the United States and Puerto Rico and any other country in which the Company or any of its affiliates engages in such Business (whether alone, as a partner, joint venturer, officer, director, employee, consultant or investor of any other entity), including but not limited to any activity that is competitive with or adverse to such business that involves (x) representing, as talent agent or otherwise, any performer or celebrity, (y) the production of advertising, news or programming of any kind or the distribution or transmission of any such advertising, news or programming wherever produced, or (z) the advertising, marketing, telemarketing or sale of any product, institution or service. Employee also covenants and agrees that during the Cooling-Off Period Employee will not (other than in the performance of Employee s duties under this Agreement) join or participate with any person who is, or hereafter at any time is engaged by Company or any of its affiliates as an officer, performer or independent contractor in the conduct of any business, corporation, partnership, firm or enterprise competing with the business of the Company or any of its affiliates. For purposes of this subsection, Business means any and all forms of media, communication and entertainment, including, without limitation, television, radio, the internet (including e-services and e- commerce), music, movies, theater, print and visual/audio entertainment via all methods of delivery whether now known or hereafter developed or conceived. (c) Proprietary Rights. (1) Works Made For Hire. Employee acknowledges and agrees that Employee is Company s employee for hire. In this regard, Company, and not Employee, is the sole and exclusive owner of the rights to the fruit, proceeds and work product of Employee, including, but not limited to, scripts, artwork, software programs, lay-outs, story boards, slogans, designs, flow-charts, etc., created, written, developed, furnished, produced, disclosed or acquired by Employee, alone or in collaboration with others, during Employee s employment by Company or within the one (1) year period thereafter (qualified by the last sentence of subparagraph (2) below) (collectively the Work Product ). 9

175 The Work Product constitutes work made for hire as such term is defined in Section 101 of the U.S. Copyright Act of 1976 (17 U.S.C. 101), as amended, such that all copyrights in such work product, in any and all media and through all forms of communication or transmission, whether presently known or hereafter developed, are the exclusive property of Company. If, for any reason, the Work Product does not qualify as work made for hire, Employee is deemed to have hereby irrevocably sold, assigned and transferred to Company all such copyrights. (2) Deemed Creations. Any patent, trademark, copyright or other property relating to Company s actual or contemplated business or activities, that is discovered, created, etc. by Employee, alone or in collaboration with others, within one (1) year after the termination of Employee s employment by Company for any reason, shall be deemed to be within the provisions of this Section 4(c), unless Employee can prove that the same was conceived and made after such termination. 5. Conflicts of Interest. Employee represents and warrants that Employee is familiar with the provisions of Sections 317 and 507 of the Communications Act of 1934, as amended, recognizes Employee s responsibilities and personal liabilities thereunder, and will fully comply with those provisions during the Term. Specifically, Employee will not, without the prior knowledge and written consent of Company in each instance: (a) engage in any business or economic activity that would create a conflict of interest in the selection of broadcast matter; (b) accept any favors, loans, entertainment or anything of value from persons seeking the airing of any matter in return therefor; or (c) promote over the air any activity or matter in which Employee or any affiliate of Employee has a direct or indirect financial interest. Employee will provide Company with such information and execute such certifications as Company may from time to time reasonably require to enable Company to discharge its obligations under the above-referenced statutory provisions. 6. Miscellaneous. (a) Succession. This Agreement shall inure to the benefit of and shall be binding upon Company, its successors and assigns. The obligations and duties of Employee hereunder are personal and not assignable. Company will have the right to assign its rights and obligations to any successor or affiliate of Company. 10

176 (b) Notices. Any notice provided for in this Agreement shall be in writing and sent: If to Company to: With copies to: C. Douglas Kranwinkle, General Counsel Univision Communications Inc Avenue of the Stars, Suite 3050 Los Angeles, California Fax: (310) Phyllis Verdugo, Deputy General Counsel Univision Communications Inc Center Drive Los Angeles, California Fax: (310) or at such other address as Company may from time to time in writing designate; and, if to Employee, at such address as Employee may from time to time in writing designate (or Employee s business address of record in the absence of such designation). All notices will be deemed to have been given immediately if communicated by telecopy or facsimile transmission, and two (2) business days after they have been deposited, in the United States mail, certified, return receipt requested, postage paid and properly addressed to the designated address of the party to receive the notice (or on the date the return receipt is signed, if later than two (2) business days). (c) Entire Agreement. This instrument constitutes and contains the entire agreement and final understanding concerning Employee s employment and the other subject matters addressed herein between the parties. It is intended by the parties as a complete and exclusive statement of the terms of their agreement, and supersedes and replaces all prior negotiations and all agreements, proposed or otherwise, whether written or oral, concerning the subject matters hereof. Any representation, warranty, covenant or agreement not specifically included in this Agreement will not be binding upon or enforceable against either party. This is a fully-integrated agreement. No amendment or modification of the terms of this Agreement will be valid unless made in writing and signed by Employee and Company. (d) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder will be deemed a waiver thereof or of any 11

177 other right, nor will any single or partial exercise preclude any further or other exercise of such or any other right. (e) Choice of Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to contracts made and to be performed in such State and without regard to conflicts of law doctrines, except to the extent that federal law preempts certain matters. (f) Severability. If this Agreement for any reason is or becomes unenforceable in any material respect by any party, it shall thereupon terminate and become unenforceable by the other party as well. In all other respects, if any provision of this Agreement is held invalid or unenforceable, the remainder of shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. In the event that any portion of the second paragraph of Section 1 or any portion of Section 4 of these Standard Terms and Conditions is more restrictive than permitted by applicable law, such provisions shall be deemed and construed as limited to the extent, but only to the minimum extent, necessary to permit their enforcement under such law. In particular, the parties acknowledge that the duration and geographic scope of such provisions may be so limited to permit the greatest possible enforcement thereof. (g) Withholding. All compensation payable hereunder shall be subject to applicable taxes, withholding, premium charges, co-payment of benefits, self-insured retentions and other normal deductions. (h) Remedies. Each of the parties to this Agreement will be entitled to enforce its rights under this Agreement to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights at law or in equity existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for certain breaches of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement. Such injunctive relief shall be available without the posting of any bond or other security. In this connection, the parties agree that the services to be rendered by Employee under this Agreement are of a special, unique and extraordinary nature, which gives them a peculiar value and that a breach by Employee will cause Company great and irreparable injury and harm. 12

178 (i) Survival. The provisions of Sections 2(b)(c), 3(d), 4(a)(b)(c), and 6(d)(e)(f)(h)(i) will survive the expiration or earlier termination of this Agreement. 13

179 Exhibit Amendment No. 2 (the Amendment ) To Employment Agreement (the Employment Agreement ) between Peter Lori ( Employee ) and Univision Management Co. ( Company ) Employee and Company agree to amend the Employment Agreement as follows: 1. Term. The Term of the Employment Agreement is extended through December 31, 2009, unless earlier terminated in accordance with the provisions of the Employment Agreement. 2. Base Salary. The annual Base Salary rate will be Five Hundred Thousand Dollars ($500,000) for the period of the Term from January 1, 2008 through December 31, Effective Date of Amendment. Upon execution by Employee and Company, this Amendment will become effective as of December 2, Other. Except as provided in this Amendment, all other terms and conditions in the Employment Agreement will remain in full force and effect, and the Employment Agreement, as amended hereby, is ratified and confirmed. UNIVISION MANAGEMENT COMPANY By: Andrew Hobson Senior Executive Vice President, Chief Strategic Officer and CFO Peter Lori

180 Exhibit SECTION 1. GRANT OF OPTION (a) (b) (c) SECTION 2. RIGHT TO EXERCISE (a) (b) (c) Broadcasting Media Partners, Inc Equity Incentive Plan Option Award Agreement Reference Number: Option. On the terms and conditions set forth in this Agreement and the Notice of Stock Option Grant referencing this Agreement (the Notice ), Broadcasting Media Partners, Inc. (the Company ) hereby grants to the Participant an option under the terms set forth in the Notice (the Option ) pursuant to and in accordance with the terms of the Broadcasting Media Partners, Inc Equity Incentive Plan ( Plan ). Each Notice, together with this referenced Agreement, shall be a separate award governed by the terms of this Agreement and the Plan. This Agreement shall apply both to this Option and to the Shares acquired upon the exercise of this Option. Adjustment of Award. The number of Shares subject to this Option is subject to adjustment following the occurrence of certain events affecting the Company, as provided in Section 10 of the Plan. Equity Incentive Plan and Defined Terms. This Option is granted under and subject to the terms of the Plan. Capitalized terms are defined in Section 10 of this Agreement and in the Plan. General. Subject to the conditions set forth in this Agreement, all or part of this Option may be exercised by the Participant (or in the case of the Participant s death or Permanent Disability, the Participant s representative) prior to its expiration to the extent the Option is vested. In no event shall Participant exercise this Option for a fraction of a Share. Vesting. Subject to the conditions set forth in this Agreement, this Option shall vest at the time or times set forth in the Notice. Expiration. This Option shall expire on the earliest to occur of the following: (i) the tenth (10th) anniversary of the date of grant; (ii) one (1) year following termination of the Participant s Service due to death or Permanent Disability; (iii) the fourth (4th) anniversary of the date of grant in the case of termination of the Participant s Service by the Company without Cause or termination of the Participant s Service due to expiration of the Employment Period (as defined in the Employment and Non- Competition Agreement by and between the Participant and the Company, dated as of March 29, 2007 (the Employment Agreement )) on the second anniversary of the Effective Date (as defined in the Employment Agreement); (iv) ninety (90) days following termination of the Participant s Service by the Participant prior to the second anniversary of the Effective Date; and (v) immediately on the date the Participant s Service terminates for Cause. The Participant (or in

181 SECTION 3. EXERCISE PROCEDURES (a) (b) (c) (d) the case of the Participant s death or Permanent Disability, the Participant s representative) may exercise all or part of this Option at any time before its expiration under the preceding sentence, but only to the extent that this Option has vested on or before the date the Participant s Service terminates. When the Participant s Service terminates, this Option shall expire immediately with respect to the number of Shares for which this Option is not yet vested. Notice of Exercise. The Participant (or, if applicable the Participant s representative) may exercise this Option by giving written notice to the Company specifying the election to exercise this Option, the number of Shares for which it is being exercised and the form of payment. Exhibit A is an example of a Notice of Exercise. The Notice of Exercise shall be signed by the person exercising this Option. In the event that this Option is being exercised by the Participant s representative, the notice shall be accompanied by proof (satisfactory to the Committee) of the representative s right to exercise this Option. The Participant or the Participant s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under SECTION 4 hereof for the amount equal to the Exercise Price (as set forth in the notice) multiplied by the number of Shares with respect to which the Option is being exercised (the Purchase Price ). Issuance of Shares. After receiving a proper notice of exercise and subject to the terms of the Plan, the Notice and this Agreement, the Company shall cause to be issued a certificate or certificates for the Shares as to which this Option has been exercised, registered in the name of the person exercising this Option; provided that prior to the delivery of the Shares, the Participant enters a joinder to the Stockholders Agreement, or such other similar agreement in a form and substance reasonably satisfactory to the Company. Withholding Requirements. The Company may withhold any tax (or other governmental obligation) as a result of the exercise of this Option, as a condition to the exercise of this Option, and the Participant shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements and the Company and the Participant agree that the Participant may direct the Company to withhold from the number of Shares otherwise deliverable pursuant to the exercise of this Option a number of such Shares having a Fair Market Value on the date of exercise equal to such withholding liability. Legend. The Company shall cause to be issued a certificate or certificates for the Shares purchased pursuant to the exercise of this Option registered in the name of the Participant. Unless otherwise determined by the Company, such certificate shall bear the following legend: THE VOTING OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, AND THE SALE, ENCUMBRANCE OR OTHER DISPOSITION THEREOF, ARE SUBJECT TO THE PROVISIONS OF AN OPTION AWARD AGREEMENT AND NOTICE OF STOCK OPTION GRANT. SUCH AGREEMENT AND NOTICE INCLUDE RESTRICTIONS AND LIMITATIONS ON THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE. 2

182 SECTION 4. PAYMENT FOR SHARES (a) (b) SECTION 5. TRANSFER OR ASSIGNMENT OF OPTION. This Option and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) other than by will or the laws of descent and distribution and shall not be subject to sale under execution, attachment, levy or similar process. SECTION 6. SHAREHOLDER RIGHTS. (a) (b) (c) Cash or Check. All or part of the Purchase Price may be paid in cash or personal check. Alternative Methods of Payment. All or any part of the Purchase Price and any applicable withholding requirements may be paid by one or more of the following methods: i. Surrender of Shares. By surrendering of Shares then owned by the Participant; provided that such Shares have been owned for at least six (6) months or such action would not cause the Company or any Subsidiary to recognize a compensation expense (or additional compensation expense) with respect to the applicable Option for financial reporting purposes, unless the Committee consents thereto. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date of the applicable exercise of this Option. ii. SECTION 7. SECURITIES LAW ISSUES. (a) Net Exercise. By reducing the number of Shares otherwise deliverable pursuant to the Option by the number of such Shares having a Fair Market Value on the date of exercise equal to the Exercise Price (and if applicable, such required withholding). Stockholders Agreement. As a condition to the issuance of any Shares purchased upon exercise of this Option hereunder, the Participant shall enter into and execute a joinder to the Stockholders Agreement or such other similar agreement in a form and substance reasonably satisfactory to the Company. Rights as Shareholder. Until such time as the Shares acquired upon exercise of this Option are repurchased by the Company in accordance with the terms of this Agreement, the Participant (or any successor in interest) shall have all the rights of a shareholder (including dividend and liquidation rights) with respect to such Shares. Voting Rights. The Participant hereby appoints each Principal Investor as its proxy to vote the Shares acquired upon exercise of this Option, whether at a meeting or by written consent, which appointment and proxy shall be in accordance with and subject to the provisions of Section 2 of the Stockholders Agreement (whether or not the Participant is required by the Company to execute a joinder to the Stockholders Agreement). The proxy granted hereby is irrevocable and coupled with an interest sufficient in law to support an irrevocable power. Notwithstanding the above, this SECTION 6(c) shall cease to apply as to any such Shares upon the termination of the Stockholders Agreement as to such Shares. Securities Not Registered. The Shares acquired upon exercise of this Option have not been registered under the Securities Act. Any Shares acquired upon exercise of this Option are 3

183 (b) (c) (d) being issued to the Participant in reliance upon either (i) the exemption from such registration provided by Rule 701 promulgated under the Securities Act for stock issuances under compensatory benefit plans such as the Plan or (ii) the exemption for grants made to executive officers of the Company (or one of its Affiliates or Subsidiaries) under Section 4(2) and Regulation D of the Securities Act. Participant Representations. The Participant hereby confirms that he or she has been informed that the Shares acquired upon exercise of this Option are restricted securities under the Securities Act which may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. Accordingly, the Participant hereby represents and acknowledges as follows: i. The Shares are being acquired for investment, and not with a view to sale or distribution thereof; ii. iii. The Participant is prepared to hold the Shares for an indefinite period and is aware that Rule 144 promulgated under the Securities Act (which exempts certain resales of securities) is not presently available to exempt the resale of the Shares from the registration requirements of the Securities Act; and The Participant is an accredited investor within the meaning of Rule 501(e) of Regulation D of the Securities Act by virtue of the Participant s position with the Company, income, assets or otherwise. Registration. The Company may, but shall not be obligated, to register or qualify the Shares under the Securities Act or any other applicable law, except, solely with respect to Participants who are signatories to or have executed a joinder with respect to the Registration Rights Agreement, as required under the Registration Rights Agreement. Market Stand-Off. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company s Initial Public Offering, the Participant hereby agrees, at the request of the Company or the managing underwriters, to be bound by and/or to execute and deliver, a lock-up agreement with the underwriter(s) of such public offering restricting such Participant s right to (a) Transfer, directly or indirectly, any Shares acquired under this Agreement or any securities convertible into or exercisable or exchangeable for such Shares or (b) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of Shares acquired under this Agreement, in each case to the extent that such restrictions are agreed to by the Majority Principal Investors (as defined in the Stockholders Agreement) (or a majority of the shares of Class A Stock if there are no Principal Investors remaining) with the underwriter(s) of such public offering (the Principal Lock-Up Agreement ); provided, however, that the Participant shall not be required by this SECTION 7(d) to be bound by a lock-up agreement covering a period of greater than 90 days (180 days in the case of the Initial Public Offering) following the effectiveness of the related registration statement. Notwithstanding the foregoing, such lock-up agreement shall not apply to: (a) Transfers to Permitted Transferees of the Participant permitted in accordance with the terms of this Agreement, (b) conversions of Shares into other classes of Shares or securities without change of Participant and (c) during the period preceding the execution of the underwriting agreement, Transfers to a charitable organization, described by Section 501(c)(3) of the Code, permitted in accordance with the terms of the Stockholders Agreement. 4

184 (e) (f) Additional Restrictions. The Shares are subject to such additional restrictions as are set forth in the Stockholders Agreement and any employment or consulting agreement between the Participant and the Company or any Subsidiary or Affiliate, as well as such other restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions), that in the reasonable good faith judgment of the Company, are necessary or desirable in order to comply with the Securities Act or the securities laws of any state or any other law. Participant Undertaking. The Participant agrees to take whatever additional actions and execute whatever additional documents that the Company may, acting reasonably and in good faith, deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Participant or the Shares pursuant to the provisions of this Agreement or to comply with applicable laws. SECTION 8. TRANSFER OF SHARES (a) (b) (c) (d) General Rule. Other than as set forth herein, the Shares acquired upon exercise of this Option may not be transferred to any person other than to the Company or to a Permitted Transferee in accordance with the terms of the Stockholders Agreement (whether or not the Participant has executed a joinder to the Stockholders Agreement) or any other applicable agreement entered into by the Company and the Participant. Notwithstanding the above, this SECTION 8(a) shall cease to apply as to any Shares acquired upon exercise of this Option upon an Initial Public Offering, subject to the Stockholders Agreement or any other applicable agreement entered into by the Company and the Participant, or if the Stockholders Agreement otherwise ceases to apply to the Shares. Transferee Obligations. If the Shares acquired upon exercise of this Option are transferred to a Permitted Transferee, such Permitted Transferee must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Agreement to the same extent such Shares would be so subject if retained by the Participant. Drag-Along Rights. The Shares acquired upon exercise of this Option shall be subject to the Drag-Along Rights as set forth in Sections 4.2 and 4.3 of the Stockholders Agreement (whether or not the Participant is a signatory thereof), the provisions of such Sections 4.2 and 4.3 of the Stockholders Agreement to apply mutatis mutandis to this Agreement. The Participant shall be deemed to have appointed each member of the Principal Investors, with full power of substitution, as the Participant s true and lawful representative and attorney-in-fact, in such Participant s name, place and stead, to execute and deliver any and all agreements that the Company reasonably believes are consistent with the purposes of Sections 4.2 and 4.3 of the Stockholders Agreement. The foregoing power of attorney is coupled with an interest sufficient in law to support an irrevocable power and shall continue in full force and effect notwithstanding the subsequent death, incapacity, bankruptcy or dissolution of any Participant. Tag-Along Rights. The Shares acquired upon exercise of this Option shall be deemed Tag-Eligible Shares under Section 4.1 of the Stockholders Agreement, the Participant shall be a Tag-Along Holder, and the Shares shall be subject to the Tag-Along Rights as, and to the extent, set forth in Section 4.1 of the Stockholders Agreement (whether or not the Participant is a signatory thereof), the provisions of such Section 4.1 of the Stockholders Agreement to apply mutatis mutandis to this Agreement. 5

185 (e) Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any of the Shares acquired upon exercise of this Option or into which such Shares thereby become convertible shall immediately be subject to this SECTION 8. SECTION 9. CALL RIGHT (a) (b) (c) (d) Call Right. If the Participant s Service with the Company ceases for any reason, the Company shall have the right (but not an obligation) to call any Shares acquired upon exercise of this Option. Exercise Notice. In the event the Company wishes to exercise its Call Right, the Company shall notify the Participant (or any Permitted Transferee to whom the Shares have been transferred) by written notice that the Company has elected to exercise such right, and the number of Shares with respect to which the right is being exercised. Execution of Call. The closing (the Call Closing ) of any purchase and sale pursuant to the Call Right shall take place at the principal office of the Company as soon as reasonably practicable and in no event later than thirty (30) days after the date of the Company s exercise notice described in SECTION 9(b) or at such other time and location as the parties to such purchase may mutually determine. Purchase Price. If the Company exercises the Call Right, the Participant shall sell, and shall cause any Permitted Transferee to whom Shares acquired pursuant to exercise of this Option have been transferred to sell (and such Permitted Transferee shall sell), to the Company all of the Shares subject to the Call Right and the Company shall purchase each such Share for its Fair Market Value on the date of the closing. The Company shall make commercially reasonable efforts, as determined by the Board of Directors in good faith, to pay all or any portion of the repurchase price in cash. However, if the Company cannot make all or any portion of the payment in cash due to restrictions pursuant to its debt documents, it shall issue a promissory note with a principal amount equal to the amount of the repurchase price which was not paid in cash (e.g., the full amount or a portion thereof, as applicable), on which interest will accrue on the principal thereof at a rate equal to the prime rate and the principal, together with the interest thereon, will become due and payable, to the extent commercially reasonable (as determined by the Board of Directors), in three equal annual installments, payable on the first, second and third anniversaries of the date of issuance thereof. If, within the six (6) month period following the Call Closing, an Initial Public Offering or event giving rise to Drag-Along Rights set forth in Section 4.2 or Section 4.3 of the Stockholders Agreement occurs, and the per-share offering price or purchase price, as applicable, in such transaction is higher than the per-share price paid by the Company at the Call Closing, the Participant shall receive from the Company an additional payment with respect to each Share purchased by the Company from the Participant at the Call Closing equal to the difference between such higher per-share price and the per-share price paid by the Company at the Call Closing. 6

186 (e) (f) (g) Lapse of Rights. The Call Right shall lapse upon an Initial Public Offering. Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any of the Shares subject to the Call Right or into which such Shares thereby become convertible shall immediately be subject to this SECTION 9. Termination of Rights as Shareholder. If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 9, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. SECTION 10. MISCELLANEOUS PROVISIONS (a) (b) (c) (d) (e) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary or Affiliate employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. Notification. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, or a nationally recognized overnight express mail service with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Participant at the address that he or she most recently provided to the Company. Entire Agreement. This Agreement, the Notice, the Plan, the Stockholders Agreement (or such other stockholders agreement entered into between the Company and the Participant) and the Employment Agreement constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant s assigns and the legal representatives, heirs and legatees of the Participant s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be join herein and be bound by the terms hereof. 7

187 (f) Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State. SECTION 11. DEFINITIONS. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) Agreement shall mean this Option Award Agreement. Call Right shall mean the Call Right described in SECTION 9 of this Agreement. Company shall have the meaning described in SECTION 1(a) of this Agreement. Company Securities shall mean collectively the Class A Stock, Class L Stock and Preferred Stock, or such other class or kind of shares or other securities resulting from an event described in Section 10 of the Plan. Initial Public Offering shall mean (i) initial public offering as defined in the Stockholders Agreement and (ii) Company Securities otherwise becoming traded on a national securities exchange. Notice shall have the meaning described in SECTION 1(a) of this Agreement. Participant shall mean the person named in the Notice. Permanent Disability shall mean permanent disability as defined in any employment or other agreement between the Company and the Participant governing the provision of Service by the Participant to the Company and its Affiliates, and shall be interpreted in accordance with the procedures set forth therein, or in the absence of such an agreement, Permanent Disability shall mean the Participant s absence from the full-time performance of the Participant s duties with the Company for 180 consecutive calendar days as a result of incapacity due to mental or physical illness, which is determined to be total and permanent by the Board of Directors, in its sole discretion. Permitted Transferee shall mean permitted transferee as defined in the Stockholders Agreement. Plan shall have the meaning described in SECTION 1(a) of this Agreement. Principal Investors shall mean the principal investors as defined in the Stockholders Agreement. Qualified Public Offering shall mean a qualified public offering as defined in the Stockholders Agreement. (m) Registration Rights Agreement shall mean the Participation, Registration Rights and Coordination Agreement by and among the Company, Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and Certain Persons who will be stockholders of the Company, dated as of March 29, 2007, as amended from time to time. 8

188 (n) (o) (p) Share shall mean a share of Class A-1 Common Stock of the Company, par value of $.001 per Share, or any security which is exchanged therefor, in any case as may be adjusted in accordance with Section 10 of the Plan (if applicable). Stockholders Agreement shall mean the Stockholders Agreement by and among the Company Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and Certain Stockholders of Broadcasting Media Partners, Inc., dated as of March 29, 2007, as amended from time to time. Transfer shall mean transfer as defined in the Stockholders Agreement. 9

189 EXHIBIT A Broadcasting Media Partners, Inc. [Address] Attn: Corporate Secretary To the Corporate Secretary: I hereby exercise my stock option granted under the Broadcasting Media Partners, Inc Equity Incentive Plan (the Plan ) and notify you of my desire to purchase the shares that have been offered pursuant to the Plan and related Option Agreement as described below. I shall pay for the shares by [ ] in the amount described below in full payment for such shares plus all amounts required to be withheld by Broadcasting Media Partners, Inc. (the Company ) under state, Federal or local law as a result of such exercise or shall provide such documentation as is satisfactory to the Company demonstrating that I am exempt from any withholding requirement. This notice of exercise is delivered this day of (month) (year). No. Shares to be Acquired Type of Option Exercise Price Total Nonstatutory Estimated Withholding Amount Paid Very truly yours, Signature of Participant Participant s Name and Mailing Address Participant s Social Security Number 10

190 Participant: BROADCASTING MEDIA PARTNERS, INC E QUITY I NCENTIVE P LAN N OTICE OF S TOCK O PTION G RANT C. Douglas Kranwinkle # of Shares Subject to Option : 18,003 shares of Class A-1 common stock, par value $0.001 per share of Broadcasting Media Partners, Inc. (the Company ) Type of Option : Exercise Price Per Share : $ Nonqualified Stock Option Date of Grant : March 29, 2007 Date Exercisable : This option may be exercised to the extent vested. Vesting Schedule of Restricted Shares : This Option shall vest with respect to 50% of the total number of Shares subject to this Option on each of the first and second anniversaries of the Date of Grant, provided the Participant s employment with the Company has not terminated pursuant to Section 5 of the Employment and Non-Competition Agreement, dated as of March 29, 2007, by and between the Participant and the Company (the Employment Agreement ) prior to such date. Vesting Accelerator : This Option shall become 100% vested on the date of Participant s death or Permanent Disability or upon the termination of Participant s employment by the Company without Cause. [REMAINDER OF PAGE INTENTIONALLY BLANK] 11

191 By signing your name below, you accept this option and acknowledge and agree that this option is granted under and governed by the terms and conditions of Broadcasting Media Partners, Inc Equity Incentive Plan and the Stock Option Agreement reference number , both of which are hereby made a part of this document. PARTICIPANT: PARTNERS, INC. BROADCASTING MEDIA By: Peter H. Lori Title: Assistant Secretary 12

192 Exhibit SECTION 1. GRANT OF OPTION (a) (b) (c) SECTION 2. RIGHT TO EXERCISE (a) (b) (c) Broadcasting Media Partners, Inc. Amended and Restated 2007 Equity Incentive Plan Option Award Agreement Reference Number: 2008-AG Option. On the terms and conditions set forth in this Agreement and the Notice of Stock Option Grant referencing this Agreement (the Notice ), Broadcasting Media Partners, Inc. (the Company ) hereby grants to the Participant an option under the terms set forth in the Notice (the Option ) pursuant to and in accordance with the terms of the Broadcasting Media Partners, Inc. Amended and Restated 2007 Equity Incentive Plan (the Plan ). Each Notice, together with this referenced Agreement, shall be a separate award governed by the terms of this Agreement and the Plan. This Agreement shall apply both to this Option and to the Shares acquired upon the exercise of this Option. Adjustment of Award. The number of Shares subject to this Option is subject to adjustment following the occurrence of certain events affecting the Company, as provided in Section 10 of the Plan. Equity Incentive Plan and Defined Terms. This Option is granted under and subject to the terms of the Plan. Capitalized terms are defined in the Notice and in the Plan to the extent not defined in this Agreement. General. Subject to the conditions set forth in this Agreement, all or part of this Option may be exercised by the Participant (or in the case of the Participant s death or Permanent Disability, the Participant s representative) prior to its expiration to the extent the Option is vested. The Company shall also have the right not to deliver Shares upon the exercise of this Option if, after the exercise of this Option, the Participant s Service is terminated for Cause or the Participant resigns after an inquiry as to whether Cause exists has been initiated and Cause existed as of the date of such resignation. In no event shall Participant exercise this Option for a fraction of a Share. Vesting. Subject to the conditions set forth in this Agreement, this Option shall vest at the time or times set forth in the Notice. Expiration. This Option shall expire on the earliest to occur of the following: (i) the tenth (10th) anniversary of the date of grant; (ii) ninety (90) days following termination of Participation s Service for any reason other than death, Permanent Disability, Cause or, voluntary resignation without Good Reason prior to the third (3rd) anniversary of the Vesting Commencement Date (as defined in the Notice); (iii) one (1) year following termination of Participant s Service due to death or Permanent Disability; and (iv) immediately on the date Participant s Service terminates for Cause or as a result of voluntary resignation without Good Reason prior to the third (3rd) anniversary of the Vesting Commencement Date. The Participant (or in the case of the Participant s death or Permanent Disability, the Participant s

193 (d) representative) may exercise all or part of this Option at any time before its expiration under the preceding sentence, but only to the extent that this Option has vested on or before the date the Participant s Service terminates. When the Participant s Service terminates, this Option shall expire immediately with respect to the number of Shares for which this Option is not yet vested. Exercisable for Restricted Stock : This Option may be exercised at any time for Restricted Stock that has the same service-based and performance-based vesting requirements as this Option and such other restrictions as determined by the Committee and as set forth in a Restricted Stock Award Agreement to be provided by the Company. As a condition to exercising this Option for Restricted Stock, the participant shall execute a Restricted Stock Award Agreement. SECTION 3. EXERCISE PROCEDURES (a) (b) (c) (d) Notice of Exercise. The Participant (or, if applicable the Participant s representative) may exercise this Option by giving written notice to the Company specifying the election to exercise this Option, the number of Shares for which it is being exercised and the form of payment. Exhibit A is an example of a Notice of Exercise. The Notice of Exercise shall be signed by the person exercising this Option. In the event that this Option is being exercised by the Participant s representative, the notice shall be accompanied by proof (satisfactory to the Committee) of the representative s right to exercise this Option. The Participant or the Participant s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under SECTION 4 hereof for an amount equal to the Exercise Price (as set forth in the notice) multiplied by the number of Shares with respect to which the Option is being exercised (the Purchase Price ). Issuance of Shares. After receiving a proper notice of exercise and subject to the terms of the Plan, the Notice and this Agreement, the Company shall cause to be issued a certificate or certificates for the Shares as to which this Option has been exercised, registered in the name of the person exercising this Option; provided that prior to the delivery of the Shares, the Participant enters a joinder to the Stockholders Agreement, or such other agreement in a form and substance satisfactory to the Company. Withholding Requirements. The Company may withhold any tax (or other governmental obligation) as a result of the exercise of this Option, as a condition to the exercise of this Option, and the Participant shall make arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements. The Participant shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased pursuant to the exercise of this Option. Legend. The Company shall cause to be issued a certificate or certificates for the Shares purchased pursuant to the exercise of this Option registered in the name of the Participant. Unless otherwise determined by the Company, such certificate shall bear the following legend: THE VOTING OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, AND THE SALE, ENCUMBRANCE OR OTHER DISPOSITION THEREOF, ARE SUBJECT TO THE PROVISIONS OF THIS STOCK OPTION AGREEMENT. SUCH AGREEMENT INCLUDES RESTRICTIONS AND LIMITATIONS ON THE TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE. 2

194 SECTION 4. PAYMENT FOR SHARES (a) (b) Cash or Check. All or part of the Purchase Price may be paid in cash or personal check. Should the Committee exercise its discretion to permit the Participant to exercise this Option in whole or in part in accordance with this Subsection (b) above, it shall have no obligation to permit such alternative exercise with respect to the remainder of this Option or with respect to any other Option to purchase Shares held by the Participant. SECTION 5. TRANSFER OR ASSIGNMENT OF OPTION. This Option and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) other than by will or the laws of descent and distribution and shall not be subject to sale under execution, attachment, levy or similar process. SECTION 6. SHAREHOLDER RIGHTS. (a) (b) (c) Alternative Methods of Payment. At the sole discretion of the Committee, all or any part of the Purchase Price and any applicable withholding requirements may be paid by one or more of the following methods: i. Surrender of Shares. By surrendering of Shares then owned by the Participant; provided that such Shares have been owned for at least six (6) months or such action would not cause the Company or any Subsidiary to recognize a compensation expense (or additional compensation expense) with respect to the applicable Option for financial reporting purposes, unless the Committee consents thereto. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date of the applicable exercise of this Option. ii. Net Exercise. By reducing the number of Shares otherwise deliverable pursuant to the Option by the number of such Shares having a Fair Market Value on the date of exercise equal to the Exercise Price (and if applicable, such required withholding). Stockholders Agreement. As a condition to the issuance of any Shares purchased upon exercise of this Option hereunder, the Participant shall enter into and execute a joinder to the Stockholders Agreement or such other agreement in a form and substance satisfactory to the Company. Rights as Shareholder. Until such time as the Shares acquired upon exercise of this Option are repurchased by the Company in accordance with the terms of this Agreement, the Participant (or any successor in interest) shall have all the rights of a shareholder (including dividend and liquidation rights) with respect to such Shares. Voting Rights. The Participant hereby appoints each Principal Investor as its proxy to vote the Shares acquired upon exercise of this Option, whether at a meeting or by written consent in accordance with the provisions of Section 2 of the Stockholders Agreement (whether or 3

195 SECTION 7. SECURITIES LAW ISSUES. (a) (b) (c) (d) not the Participant is required by the Company to execute a joinder to the Stockholders Agreement). The proxy granted hereby is irrevocable and coupled with an interest sufficient in law to support an irrevocable power. Notwithstanding the above, this paragraph 6(c) shall cease to apply as to any such Shares upon the termination of the Stockholders Agreement as to such Shares. Securities Not Registered. The Shares acquired upon exercise of this Option have not been registered under the Securities Act. Any Shares acquired upon exercise of this Option are being issued to the Participant in reliance upon either (i) the exemption from such registration provided by Rule 701 promulgated under the Securities Act for stock issuances under compensatory benefit plans such as the Plan or (ii) the exemption for grants made to executive officers of the Company (or one of its Affiliates or Subsidiaries) under Section 4(2) and Regulation D of the Securities Act. Participant Representations. The Participant hereby confirms that he or she has been informed that the Shares acquired upon exercise of this Option are restricted securities under the Securities Act which may not be resold or transferred unless they are first registered under the Securities Act or unless an exemption from such registration is available. Accordingly, the Participant hereby represents and acknowledges as follows: i. The Shares are being acquired for investment, and not with a view to sale or distribution thereof; ii. iii. The Participant is prepared to hold the Shares for an indefinite period and is aware that Rule 144 promulgated under the Securities Act (which exempts certain resales of securities) is not presently available to exempt the resale of the Shares from the registration requirements of the Securities Act; and The Participant is an accredited investor within the meaning of Rule 501(e) of Regulation D of the Securities Act by virtue of the Participant s position with the Company, income, assets or otherwise. Registration. The Company may, but shall not be obligated, to register or qualify the Shares under the Securities Act or any other applicable law, except, solely with respect to Participants who are signatories to or have executed a joinder with respect to the Registration Rights Agreement, as required under the Registration Rights Agreement. Market Stand-Off. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company s Initial Public Offering, the Participant hereby agrees, at the request of the Company or the managing underwriters, to be bound by and/or to execute and deliver, a lock-up agreement with the underwriter(s) of such public offering restricting such Participant s right to (a) Transfer, directly or indirectly, any Shares acquired under this Agreement or any securities convertible into or exercisable or exchangeable for such Shares or (b) enter into any swap or other arrangement that transfers to another any of the economic consequences of ownership of Shares acquired under this Agreement, in each case to the extent that such restrictions are agreed to by the Majority Principal Investors (as defined in the Stockholders Agreement) (or a majority of the shares of Class A Stock if there are no Principal Investors remaining) with the underwriter(s) of such public offering (the Principal 4

196 (e) (f) Lock-Up Agreement ); provided, however, that the Participant shall not be required by this SECTION 7(d) to be bound by a lockup agreement covering a period of greater than 90 days (180 days in the case of the Initial Public Offering) following the effectiveness of the related registration statement. Notwithstanding the foregoing, such lock-up agreement shall not apply to: (a) Transfers to Permitted Transferees of the Participant permitted in accordance with the terms of this Agreement, (b) conversions of Shares into other classes of Shares or securities without change of Participant and (c) during the period preceding the execution of the underwriting agreement, Transfers to a charitable organization, described by Section 501(c)(3) of the Code, permitted in accordance with the terms of the Stockholders Agreement. Additional Restrictions. The Shares are subject to such additional restrictions as are set forth in the Stockholders Agreement and any employment or consulting agreement between the Participant and the Company or any Subsidiary or Affiliate, as well as such other restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions), that in the judgment of the Company, are necessary or desirable in order to achieve compliance with the Securities Act or the securities laws of any state or any other law. Participant Undertaking. The Participant agrees to take whatever additional actions and execute whatever additional documents that the Company may deem necessary or advisable to carry out or effect one or more of the obligations or restrictions imposed on either the Participant or the Shares pursuant to the provisions of this Agreement or to comply with applicable laws. SECTION 8. TRANSFER OF SHARES (a) (b) (c) General Rule. Other than as set forth herein, the Shares acquired upon exercise of this Option may not be transferred to any person other than to the Company or to a Permitted Transferee in accordance with the terms of the Stockholders Agreement (whether or not the Participant has executed a joinder to the Stockholders Agreement) or any other applicable agreement entered into by the Company and the Participant; provided that notwithstanding the Stockholders Agreement, the Company may restrict transfers to a Permitted Transferee if, in its sole and absolute discretion, the Company determines it desirable in order to limit the number of holders of record of shares of stock of the Company, so as to prevent the Company from becoming a reporting company under the Securities and Exchange Act of Notwithstanding the above, this SECTION 8(a) shall cease to apply as to any Shares acquired upon exercise of this Option upon an Initial Public Offering, subject to the Stockholders Agreement or any other applicable agreement entered into by the Company and the Participant. Transferee Obligations. If the Shares acquired upon exercise of this Option are transferred to a Permitted Transferee, such Permitted Transferee must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Agreement to the same extent such Shares would be so subject if retained by the Participant. Drag-Along Rights. The Shares acquired upon exercise of this Option shall be subject to the Drag-Along Rights as set forth in Sections 4.2 and 4.3 of the Stockholders Agreement (whether or not the Participant is a signatory thereof), the provisions of such Sections 4.2 and 4.3 of the Stockholders Agreement to apply mutatis mutandis to this Agreement. The 5

197 (d) (e) Participant shall be deemed to have appointed each member of the Principal Investors, with full power of substitution, as the Participant s true and lawful representative and attorney-in-fact, in such Participant s name, place and stead, to execute and deliver any and all agreements that the members of the Principal Investors reasonably believe are consistent with the purposes of Sections 4.2 and 4.3 of the Stockholders Agreement. The foregoing power of attorney is coupled with an interest sufficient in law to support an irrevocable power and shall continue in full force and effect notwithstanding the subsequent death, incapacity, bankruptcy or dissolution of any Participant. Tag-Along Rights. The Shares shall be subject to the Tag-Along Rights as, and to the extent, set forth in Section 4.1 of the Stockholders Agreement (whether or not the Participant is a signatory thereof), the provisions of such Section 4.1 of the Stockholders Agreement to apply mutatis mutandis to this Agreement. Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any of the Shares acquired upon exercise of this Option or into which such Shares thereby become convertible shall immediately be subject to this SECTION 8. SECTION 9. CALL RIGHT (a) (b) (c) (d) Call Right. If the Participant s Service with the Company ceases for any reason, the Company shall have the right (but not an obligation) to call any Shares acquired upon exercise of this Option. Exercise Notice. In the event the Company wishes to exercise its Call Right, the Company shall notify the Participant (or any Permitted Transferee to whom the Shares have been transferred) by written notice that the Company has elected to exercise such right, and the number of Shares with respect to which the right is being exercised. Execution of Call. The closing of any purchase and sale pursuant to the Call Right shall take place at the principal office of the Company as soon as reasonably practicable and in no event later than thirty (30) days after the date of the Company s exercise notice described in SECTION 9(b) or at such other time and location as the parties to such purchase may mutually determine. Purchase Price. If the Company exercises the Call Right, the Participant shall sell, and shall cause any Permitted Transferee to whom Shares acquired pursuant to exercise of this Option have been transferred to sell (and such Permitted Transferee shall sell), to the Company all of the Shares subject to the Call Right and the Company shall purchase each such Share for its Fair Market Value on the date of the closing or, (i) in the event of a termination of the Participant s employment by the Company for Cause, (ii) by the Participant s resignation after an inquiry by the Company as to the existence of Cause has been initiated and Cause existed as of the date of such resignation, or (iii) in the event the Participant s service terminates by Participant s voluntary resignation without Good Reason prior to the third (3rd) anniversary of the Vesting Commencement Date, the lesser of the amount paid by the Participant or such Fair Market Value. The Company shall make commercially reasonable 6

198 (e) (f) (g) efforts, as determined by the Board of Directors in good faith, to pay all or any portion of the repurchase price in cash. However, if the Company cannot make all or any portion of the payment in cash it shall issue a promissory note with a principal amount equal to the amount of the repurchase price which was not paid in cash (e.g., the full amount or a portion thereof, as applicable), on which interest will accrue on the principal thereof at a rate equal to the prime rate and the principal, together with the interest thereon, will become due and payable, to the extent commercially reasonable (as determined by the Board of Directors), in three equal annual installments, payable on the first, second and third anniversaries of the date of issuance thereof. Lapse of Rights. The Call Right shall lapse upon an Initial Public Offering (except the Company s rights to purchase Shares as provided in the Notice upon the Participant s termination for Cause or resignation that is treated similarly to a termination for Cause (as described in Sections 2 (a) and 9 (d) hereof) shall not lapse upon an Initial Public Offering). Additional Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such transaction distributed with respect to any of the Shares subject to the Call Right or into which such Shares thereby become convertible shall immediately be subject to this SECTION 9. Termination of Rights as Shareholder. If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 9, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. SECTION 10. MISCELLANEOUS PROVISIONS (a) (b) (c) No Retention Rights. Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary or Affiliate employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. Notification. Any notice required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, or a nationally recognized overnight express mail service with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Participant at the address that he or she most recently provided to the Company. Entire Agreement. This Agreement, the Notice, the Plan, the Stockholders Agreement (or such other stockholders agreement entered into between the Company and the Participant) 7

199 (d) (e) (f) and any employment or consulting agreement between the Participant and the Company constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant s assigns and the legal representatives, heirs and legatees of the Participant s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be join herein and be bound by the terms hereof. Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State. SECTION 11. DEFINITIONS. (a) (b) (c) (d) (e) (f) (g) Agreement shall mean this Option Award Agreement. Call Right shall mean the Call Right described in SECTION 9 of this Agreement. Company shall have the meaning described in SECTION 1(a) of this Agreement. Company Securities shall mean collectively the Class A Stock, Class L Stock and Preferred Stock, or such other class or kind of shares or other securities resulting from an event described in Section 10 of the Plan. Good Reason shall mean either (i) a material reduction in base salary or (ii) a relocation of the Participant s primary office at least fifty (50) miles farther from both the Participant s then primary office location and the Participant s then primary residence, provided the Participant gives notice to the Company of a Good Reason event within thirty (30) days of the occurrence event, the Company does not cure such event within thirty (30) days of receipt of such notice and the Participant terminates employment within ten (10) days thereafter. Initial Public Offering shall mean (i) initial public offering as defined in the Stockholders Agreement and (ii) Company Securities otherwise becoming traded on a national securities exchange. Internal Rate of Return shall mean with respect to the Principal Investors as of any date on which such return is to be determined, the annual percentage rate, which when utilized to calculate the present value of the dividends or cash distributions in respect of Company Securities received by the Principal Investors (excluding compensation for services) ( i.e., cash inflows) shall cause such present value to equal the present value of the Investment made by the Principal Investors, including any subsequent Investment ( i.e., cash outflows). In order for the Principal Investors to receive a positive Internal Rate of Return, the Principal Investors must receive an aggregate amount equal to (a) the aggregate Investment plus (b) a return thereon. The Internal Rate of Return with respect to the Principal Investors, at any date on which such return is to be determined, shall be computed with annual compounding and by the Board of Directors in its good faith discretion. 8

200 (h) (i) (j) (k) (l) Investment shall mean, with respect to any person, the total amount invested by such person, as of March 29, 2007 and thereafter, to acquire the Company Securities. Notice shall have the meaning described in SECTION 1(a) of this Agreement. Participant shall mean the person named in the Notice. Permanent Disability shall mean permanent disability as defined in any employment or other agreement between the Company and the Participant governing the provision of Service by the Participant to the Company and its Affiliates, and shall be interpreted in accordance with the procedures set forth therein, or in the absence of such an agreement, Permanent Disability shall mean the Participant s absence from the full-time performance of the Participant s duties with the Company for 180 consecutive calendar days as a result of incapacity due to mental or physical illness, which is determined to be total and permanent by the Board of Directors, in its sole discretion. Permitted Transferee shall mean permitted transferee as defined in the Stockholders Agreement. (m) Plan shall have the meaning described in Section 1(a) of this Agreement. (n) (o) (p) (q) (r) (s) Principal Investors shall mean the principal investors as defined in the Stockholders Agreement. Qualified Public Offering shall mean a qualified public offering as defined in the Stockholders Agreement. Registration Rights Agreement shall mean the Participation, Registration Rights and Coordination Agreement by and among the Company, Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and Certain Persons who will be stockholders of the Company, dated as of March 29, 2007, as amended from time to time. Share shall mean a share of Class A-1 Common Stock of the Company, par value of $.001 per Share, or any security which is exchanged therefor, in any case as may be adjusted in accordance with Section 10 of the Plan (if applicable). Stockholders Agreement shall mean the Stockholders Agreement by and among the Company Broadcast Media Partners Holdings, Inc., Umbrella Acquisition, Inc. and Certain Stockholders of Broadcasting Media Partners, Inc., dated as of March 29, 2007, as amended from time to time. Transfer shall mean transfer as defined in the Stockholders Agreement. 9

201 Broadcasting Media Partners, Inc. [Address] Attn: Corporate Secretary To the Corporate Secretary: I hereby exercise my stock option granted under the Broadcasting Media Partners, Inc. Amended and Restated 2007 Equity Incentive Plan (the Plan ) and notify you of my desire to purchase the shares that have been offered pursuant to the Plan and related Option Agreement as described below. I shall pay for the shares by delivery of a check payable to Broadcasting Media Partners, Inc. (the Company ) in the amount described below in full payment for such shares plus all amounts required to be withheld by the Company under state, Federal or local law as a result of such exercise or shall provide such documentation as is satisfactory to the Company demonstrating that I am exempt from any withholding requirement. This notice of exercise is delivered this day of (month) (year). No. Shares to be Acquired Type of Option Exercise Price Total Nonstatutory Estimated Withholding Amount Paid Very truly yours, Signature of Participant Participant s Name and Mailing Address Participant s Social Security Number

202 Participant: Peter Lori BROADCASTING MEDIA PARTNERS, INC. A MENDED A ND R ESTATED 2007 E QUITY I NCENTIVE P LAN N OTICE OF S TOCK O PTION G RANT # of Shares Subject to Option : 24,004 shares of Class A-1 common stock, par value $0.001 per share ( Shares ) of Broadcasting Media Partners, Inc. (the Company ), which shall be allocated into two tranches: 16,003 Tranche 1 shares ( Tranche 1 Shares ) and 8,001 Tranche 2 shares ( Tranche 2 Shares ) Type of Option : Exercise Price Per Share : $13.52 Nonqualified Stock Option Grant Date : December 19, 2007 Vesting Commencement Date : April 1, 2007 Date Exercisable : Vesting Schedule : Additional Vesting Terms : This Option may be exercised to the extent vested or immediately for restricted stock as provided in Section 2(d) of the Option Award Agreement. The Shares subject to this Option shall vest as follows: Tranche 1 Shares. One-fifth (20%) of the Tranche 1 Shares shall vest on each of the first five anniversaries of Vesting Commencement Date noted above (each such date a Vesting Date ); provided Participant s Service has not terminated prior to the applicable Vesting Date and the vesting of any Shares has not been accelerated as provided below. Tranche 2 Shares. Tranche 2 Shares shall be subject to the same service-based vesting requirement as Tranche 1 Shares and shall also be subject to performance-based vesting requirements as described below. Tranche 2 Shares shall vest (if at all) only if the Principal Investors have received, in the aggregate, cash proceeds and other cash distributions in respect of Company Securities (i) equal to two (2) times their Investment, and (ii) after April 2, 2012, of at least a 15% Internal Rate of Return to the Principal Investors. All of the service-based vesting requirements with respect to the Tranche 1 Shares and Tranche 2 Shares shall be deemed to be satisfied upon the Participant s termination of employment with Univision Communications Inc. and its subsidiaries and affiliates ( Univision ) without Cause (other than by reason of the Participant s death or Permanent Disability) or resignation for Good Reason, in each case within two (2) years after a Change of Control; provided that the performance-based vesting requirements with respect to Tranche 2 Shares shall have been satisfied prior to such termination.

203 Definitions: In the event the Participant s employment with the Company is involuntarily terminated without Cause within 30 days preceding a Change of Control at the initiative of any purchaser or similar person involved in such Change of Control, or any employee, director, agent or representative thereof, the performance-based vesting requirements applicable to the Tranche 2 Shares shall be determined on the date of such Change of Control as if the Participant was employed with Univision on such date. Upon the Participant s termination of employment with Univision by reason of his death or Permanent Disability, the Participant shall be deemed to have satisfied any service-based vesting requirement as to a pro rata portion (based on the number of calendar days during the year through such date of termination divided by 365) of the tranche of the Shares subject to this Option that are next eligible to satisfy the service-based vesting requirement; provided that any performance-based vesting requirements with respect to Tranche 2 Shares shall need to have been satisfied at or prior to such termination to result in any vesting of such Tranche 2 Shares. In the event the Participant s employment with the Company is terminated for Cause, this Option shall be not be exercisable and the Company shall have the right to purchase any Shares acquired pursuant to the exercise of this Option at the lesser of the Participant s cost or the Fair Market Value of such Shares. If Participant resigns after an inquiry by Company as to the existence of Cause has been initiated and Cause existed as of the date of such resignation, this Option shall not be exercisable and the Company shall have same right to purchase any Shares acquired pursuant to the exercise of this Option as if the Participant s employment had been terminated for Cause. Capitalized terms are defined in the Agreement and in the Plan to the extent not defined in this Notice. This Option is granted under and governed by the terms and conditions of Broadcasting Media Partners, Inc. Amended and Restated 2007 Equity Incentive Plan (the Plan ) and the Amended and Restated Stock Option Agreement reference number 2008-AG (the Agreement ), both of which are hereby made a part of this document (the Notice ). BROADCASTING MEDIA PARTNERS, INC. By: /s/ Andrew Hobson Name: Andrew Hobson Title: Chief Financial Officer

204 Exhibit Execution Version CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH *****. AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. PURCHASE AGREEMENT Dated as of February 27, 2008 between UNIVISION COMMUNICATIONS INC. and UMG RECORDINGS, INC.

205 TABLE OF CONTENTS ARTICLE I PURCHASE AND SALE SECTION Securities; Advertising Package; Non-Competition Agreement 1 SECTION Purchase Price 1 SECTION Adjustment to Purchase Price 1 ARTICLE II DOCUMENTATION AND CLOSING SECTION The Closing 4 SECTION Purchaser Closing Conditions 7 SECTION Seller Closing Conditions 8 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER SECTION Organization 8 SECTION Authority; Enforceability 9 SECTION Non-Contravention 9 SECTION Governmental Consents 10 SECTION Capitalization of the Companies 10 SECTION Subsidiaries 11 SECTION Financial Statements 11 SECTION Absence of Certain Changes 13 SECTION No Undisclosed Material Liabilities 14 SECTION Contracts 14 SECTION Recorded Music Business and Music Publishing Business. 17 SECTION Compliance with Laws and Court Orders 19 SECTION Litigation 19 SECTION Title 20 SECTION Sufficiency of the Securities 20 SECTION Intellectual Property Rights. 21 SECTION Licenses and Permits 27 SECTION Tax Matters 27 SECTION Employee Plans 29 i Page

206 Page SECTION Environmental Compliance 30 SECTION Brokers 31 SECTION Real Property 31 SECTION Insurance 31 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER SECTION Organization 32 SECTION Authority; Enforceability 32 SECTION Non-Contravention 32 SECTION Governmental Consents 33 SECTION Purchase for Investment 33 SECTION Availability of Funds 33 SECTION Brokers 33 ARTICLE V EMPLOYEE MATTERS SECTION General 33 SECTION Compensation and Benefits 34 SECTION Local Modifications 35 SECTION Employer Substitution and Related Matters 35 SECTION ***** 36 ARTICLE VI COVENANTS SECTION Conduct of Business Prior to the Closing 36 SECTION Access to Information; Reports 41 SECTION Regulatory and Other Authorizations; Notices and Consents 42 SECTION Notice of Developments 45 SECTION Insurance; Risk of Loss 45 SECTION Books and Records 46 SECTION Further Action; Transition Services 47 SECTION Confidentiality 48 SECTION Intercompany Receivables and Payables 49 SECTION Publicity 49 SECTION Acquisition Proposals 50 ii

207 Page SECTION ***** 50 SECTION ***** 50 SECTION Certain Intercompany Agreements 51 ARTICLE VII TAX MATTERS SECTION Preparation and Filing of Returns; Payment of Taxes 51 SECTION Refunds, Credits and Tax Benefits 52 SECTION Cooperation 53 SECTION Transfer Taxes 53 SECTION FIRPTA Certificate 53 SECTION Tax Sharing Agreements 53 SECTION Purchase Price Adjustments and Allocation 53 SECTION Section 338(g) Elections 54 SECTION Tax Attributes 54 SECTION Intercompany Receivables and Payables 54 ARTICLE VIII TERMINATION SECTION Termination 54 SECTION Effect of Termination 56 ARTICLE IX INDEMNITIES SECTION Survival of Representations and Warranties 56 SECTION Indemnification 56 SECTION Limits on Indemnification 60 SECTION Tax Indemnification. 62 SECTION Computation of Indemnifiable Losses 64 SECTION Indemnification as Exclusive Remedy 64 ARTICLE X OTHER MATTERS SECTION Notices 64 SECTION Amendments; No Waivers 65 SECTION Governing Law 66 SECTION Jurisdiction; No Third Party Beneficiaries; Expenses of Litigation 66 iii

208 Page SECTION Severability 66 SECTION Counterparts 66 SECTION Assignment 67 SECTION Entire Agreement 67 SECTION Captions 67 SECTION Specific Performance 67 SECTION Expenses 67 SECTION Interpretation 67 APPENDIX A Definitions APPENDIX B Key Artists APPENDIX C Key Songwriters APPENDIX D Selected Artists SCHEDULE 1.01 Schedule of Securities and List of Companies EXHIBIT A Balance Sheet EXHIBIT B Advertising Package EXHIBIT C Non-Competition Agreement EXHIBIT D-1 Trademark License Agreement EXHIBIT D-2 Co-Existence Agreement EXHIBIT E Material Terms of Transition Services Agreement EXHIBIT F ***** iv

209 PURCHASE AGREEMENT, dated as of February 27, 2008 (this Agreement ), between UNIVISION COMMUNICATIONS INC., a Delaware corporation ( Seller ) and UMG Recordings, Inc., a Delaware corporation ( Purchaser ). WHEREAS, Seller owns the UCI Recorded Music Business and the UCI Music Publishing Business that are conducted, among other names, under the Univision Music Group name (collectively, the UCI Businesses ) and certain other related assets; WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Seller wishes to sell to Purchaser, and Purchaser wishes to purchase, directly or indirectly, the UCI Businesses and certain other related assets; and WHEREAS, certain capitalized terms used in this Agreement are defined in Appendix A. NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I Purchase and Sale SECTION Securities; Advertising Package; Non-Competition Agreement. Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell to Purchaser, and Purchaser shall purchase (i) all the securities listed on Schedule 1.01 (the Securities ); (ii) the Advertising Package; and (iii) the Non-Competition Agreement. The entities listed on Schedule 1.01 are referred to in this Agreement individually as a Company and collectively as the Companies. SECTION Purchase Price. The aggregate purchase price for the Securities, the Advertising Package and the Non-Competition Agreement shall be One Hundred Forty Million Dollars ($140,000,000) (the Purchase Price ) and shall be payable as follows: (i) One Hundred Million Dollars ($100,000,000) (the Closing Payment ) shall be payable on the Closing Date; (ii) Eleven Million Five Hundred Thousand Dollars ($11,500,000) shall be payable on the first anniversary of the Closing Date; (iii) Twelve Million Five Hundred Thousand Dollars ($12,500,000) shall be payable on the second anniversary of the Closing Date; (iv) Six Million Dollars ($6,000,000) shall be payable on the third anniversary of the Closing Date; and (v) Ten Million Dollars ($10,000,000) shall be payable on the fourth anniversary of the Closing Date; provided, however, that if the applicable payment date for any of the foregoing payments is not a Business Day, then such payment date shall be extended to the immediately following Business Day. In addition, the Receivable Amount shall be payable on the Closing Date. SECTION Adjustment to Purchase Price. (a) Inter-Company Liability. In the event that the Inter-Company Liability on the day prior to the Closing Date exceeds the Target Inter-Company Liability, the Purchase Price shall be increased by such excess amount. In the event that

210 the Inter-Company Liability on the day prior to the Closing Date is less than the Target Inter-Company Liability, the Purchase Price shall be reduced by the amount by which the Target Inter-Company Liability exceeds the Inter-Company Liability on the day prior to the Closing Date. (b) Determination of Inter-Company Liability. For purposes of this Agreement, increases in the Inter-Company Liability between the Balance Sheet Date and the day prior to the Closing Date may only occur as a result of (i) actual cash outlays made to third parties or liabilities to third parties incurred (in each case in accordance with this Agreement) in accordance with GAAP, by Seller for and on behalf of the Acquired Companies, during the period (and pro rated only for the period) from the Balance Sheet Date to the day prior to the Closing Date, relating to (w) payroll and related benefits for UCI Employees under the UCI Employee Plans, (x) salaries and benefits of Seller s Mexico employees who are employed by Vision Latina, S.A. de C.V. ( Vision Latina ) and perform services exclusively for the Acquired Companies, and (y) audit, legal and other professional service fees directly related to the operations of the Acquired Companies (subject to the following sentence), and (ii) cash advances (which shall be made without interest) made to the Acquired Companies to permit the Acquired Companies to operate in the ordinary course of business and in accordance with the terms of this Agreement. Notwithstanding anything to the contrary, in no event shall there be any increase of the Inter-Company Liability (whether pursuant to clause (i) or (ii) of the foregoing sentence), or any payment by the Acquired Companies, on and after the Balance Sheet Date relating to (x) amounts (including costs and expenses) related to the Auction or otherwise related to entering into, negotiating or performing under this Agreement or any ancillary agreement, including, without limitation, ***** or (y) amounts (including costs and expenses) relating to Actions described in Section 9.02(a) (v) or Section 9.02(a)(vi). Decreases in the Inter-Company Liability may only occur as a result of cash transferred from the Acquired Companies to Seller during the period from the Balance Sheet Date to the day prior to the Closing Date, provided, however, that there shall be no such cash transfers if immediately following giving effect to such cash transfers the Acquired Companies would have less than $6,396,629 of cash and provided, further, however, that any such cash transfers may only be made on the last Business Day of a month during the period from the date hereof to the day prior to the Closing. For the avoidance of doubt, any determination of the amount of Inter-Company Liability on the day prior to the Closing Date for purposes of this Section 1.03 shall be made by reference to the amount of Inter-Company Liability outstanding on such date and shall be made immediately prior to the application of Section The parties further agree that there shall be no changes in the Inter-Company Liability between the day prior to the Closing Date and the Closing. (c) Preliminary Statement. Within ten (10) Business Days after the Closing Date, Seller shall prepare and deliver to Purchaser a statement (the Preliminary Statement ) containing in reasonable detail its determination of the Inter-Company Liability as of the day prior to the Closing Date, determined in accordance with Section 1.03(b). Purchaser shall give Seller reasonable access to the books, records and other materials of Acquired Companies to the extent related to Seller s preparation of the Preliminary Statement. 2

211 (d) Final Adjustment. Within thirty (30) days after Purchaser receives the Preliminary Statement from Seller, Purchaser shall have the right, but not the obligation, to cause to be prepared and delivered to Seller a statement (the Final Statement ) containing Purchaser s determination of the Inter-Company Liability as of the day prior to the Closing Date in accordance with this Section The Final Statement shall also include a calculation of the corresponding adjustment to the Purchase Price required by the final determination of the Inter-Company Liability as of the day prior to the Closing Date (the Final Reconciliation Payment ), as well as a determination of whether the Final Reconciliation Payment is owed by Purchaser to Seller or vice versa pursuant to Section 1.03(a). If Purchaser fails to deliver such Final Statement within such thirty (30) day period, then the Preliminary Statement shall be deemed to be the Final Statement. Seller shall give Purchaser reasonable access to the books, records and other materials of Seller and its Affiliates (other than the Acquired Companies) to the extent related to Purchaser s review of the Preliminary Statement or Purchaser s preparation of the Final Statement. The Final Statement and the corresponding calculations of the Final Reconciliation Payment and the party owing the same shall be final and binding upon the parties to this Agreement unless Seller gives written notice of disagreement therewith (a Dispute Notice ) to Purchaser within thirty (30) days after receipt of the Final Statement, specifying the specific line items in dispute and a reasonably detailed explanation of the nature and extent of such disagreement. If Purchaser and Seller mutually agree upon the Final Statement, as may be modified by a Dispute Notice, and the corresponding calculations of the Final Reconciliation Payment and the party owing the same within thirty (30) days after Purchaser s receipt of any Dispute Notice, that agreement shall be final and binding upon the parties for the purposes of this Agreement. If Purchaser and Seller are unable to resolve any matters raised in a Dispute Notice within such period, the specific items in dispute shall be referred for final determination to the Los Angeles office of PricewaterhouseCoopers, or if they are for any reason unable or unwilling to accept such engagement, then to a mutually-agreeable, nationally-recognized accounting firm that is not the principal accounting firm regularly engaged by Purchaser or Seller (the Accounting Firm ) whose scope of review shall be limited to whether the disputed items were prepared in a manner consistent with this Section 1.03 and whether there were errors of fact or mathematical errors in the Final Statement, and the resolution of that disagreement and the calculations by the Accounting Firm of the Final Reconciliation Payment and the party owing the same shall be final and binding upon the parties for purposes of this Agreement. The fees and disbursements of the Accounting Firm shall be paid by Purchaser and Seller as the Accounting Firm shall determine based upon its assessment of the relative merits of the positions taken by each in any disagreement presented to it and, if the Accounting Firm does not make such a determination, Seller shall pay 50% and Purchaser shall pay 50%. The Final Reconciliation Payment shall be payable, without interest, by wire transfer of immediately available funds to a bank account designated in writing by the receiving party at least two (2) Business Days prior to the due date thereof and shall be paid within five (5) Business Days after the determination of the amount due. 3

212 ARTICLE II Documentation and Closing SECTION The Closing. The Closing shall occur at the offices of Loeb & Loeb LLP, Santa Monica Boulevard, Los Angeles, California at 10:00 a.m. (pst) on the fifth Business Day following the satisfaction or waiver of the conditions contained in Sections 2.02 and 2.03, other than those conditions that by their nature can be satisfied only on the Closing Date. The date on which the Closing occurs shall be called the Closing Date. At the Closing: (a) Purchaser shall: (i) pay or cause to be paid to Seller or its designees, in immediately available funds by wire transfer to one or more bank accounts designated in writing by Seller at least two Business Days prior to the Closing Date, cash in U.S. dollars in an amount equal to (x) the Closing Payment and (y) the Receivable Amount; (ii) deliver to Seller a receipt for the Securities; (iii) deliver to Seller a certificate of the Secretary or an Assistant Secretary of Purchaser, dated as of the Closing Date and certifying on behalf of Purchaser: (A) that attached thereto is a true, correct and complete copy of the certificate of incorporation and by-laws (or comparable constitutive documents) of Purchaser as in effect on the date of such certification; (B) that attached thereto is a true, correct and complete copy of all resolutions adopted by the board of directors or comparable governing body (and any committees thereof) of Purchaser authorizing, to the extent applicable, the execution, delivery and performance of this Agreement and the purchase of the Securities, and that all such resolutions are still in full force and effect; and (C) the incumbency and specimen signature of all officers of Purchaser executing this Agreement or the certificates representing the Securities, and any certificate or instrument furnished pursuant hereto or thereto, and a certification by another officer of Purchaser as to the incumbency and signature of the officer signing the certificate referred to in this clause (iii); (iv) deliver to Seller certificates of the Secretary of State (or other applicable office) in the jurisdiction in which Purchaser is organized, dated as of the Closing Date (or as close thereto as reasonably practicable), certifying as to the good standing (to the extent such concept is recognized in such jurisdiction) and non-delinquent status of Purchaser and the certificate of incorporation (or comparable constitutive document) of Purchaser; and form reasonably (v) deliver to Seller the certificate required to be delivered pursuant to Section 2.03(a). (b) Seller shall deliver to Purchaser: (i) in respect of the Companies, certificates evidencing the Securities registered in the name of Purchaser or its nominee, in 4

213 satisfactory to Purchaser, with all required stock transfer Tax stamps affixed and free and clear of all Encumbrances other than Permitted Encumbrances and Encumbrances arising as a result of any action taken by Purchaser or any of its Affiliates (other than the Acquired Companies); (ii) a receipt for the Closing Payment and the Receivable Amount; (iii) a certificate of the Secretary or an Assistant Secretary of Seller, dated as of the Closing Date and certifying on behalf of Seller: (A) that attached thereto is a true, correct and complete copy of the certificate of incorporation and by-laws of Seller as in effect on the date of such certification; (B) that attached thereto is a true, correct and complete copy of all resolutions adopted by the board of directors (and any committees thereof) of Seller authorizing, to the extent applicable, the execution, delivery and performance of this Agreement and the sale and delivery of the Securities, and that all such resolutions are still in full force and effect; and (C) the incumbency and specimen signature of all officers of Seller executing this Agreement or the certificates representing the Securities, and any certificate or instrument furnished pursuant hereto or thereto, and a certification by another officer of Seller as to the incumbency and signature of the officer signing the certificate referred to in this clause (iii); (iv) certificates of the Secretaries of State (or other applicable office) in each jurisdiction in which Seller and each Acquired Company is organized, dated as of the Closing Date (or as close thereto as reasonably practicable), certifying as to the good standing (to the extent such concept is recognized in such jurisdiction) and non-delinquent status of such entities and the certificate of incorporation (or comparable constitutive document) of such entities; (v) corporate minute books and stock register/transfer ledgers (or equivalents) of each of the Acquired Companies, including the original certificates representing the capital stock or other ownership interest in each Acquired Company (to the extent certificated); (vi) the certificate required to be delivered pursuant to Section 2.02(a); (vii) a list, by physical location and certified by an executive officer of Seller, of (A) ***** of each artist identified on Section 2.01(b)(vii)(A) of the Seller Disclosure Letter and (b) ***** of each artist listed on Section 2.01(b)(vii)(B) of the Seller Disclosure Letter, it being agreed that all ***** described in the foregoing clause (a) and (b) shall be in the possession and control of the Acquired Companies as of the Closing; (viii) Seller s and/or its Affiliates (as applicable) duly executed counterpart to the Advertising Package, substantially in the form attached hereto as Exhibit B; 5

214 (ix) Seller s duly executed counterpart to that certain Non-Competition Agreement, substantially in the form attached hereto as Exhibit C (the Non-Competition Agreement ); (x) Seller s duly executed counterpart to that certain Trademark License Agreement, substantially in the form attached hereto as Exhibit D-1 and Seller s duly executed counterpart to that certain Co-Existence Agreement, substantially in the form attached hereto as Exhibit D-2; (xi) assignments to the applicable Acquired Companies or other assignee, as determined by Purchaser, and all applicable corrections of title to reflect the ownership by the applicable Acquired Companies or such other assignee, and recordations, as set forth on Section 2.01(b)(xiii) of the Seller Disclosure Letter, of the same with the appropriate Persons, of UCI Owned Intellectual Property Rights and UCI Licensed Intellectual Property Rights that are currently in the name or DBA of Seller or its Affiliates (other than the Acquired Companies) and are not held of record in the name of any Acquired Company (including domain names and registrations and applications for registration of Intellectual Property Rights), including, without limitation, any such Intellectual Property Rights identified by Purchaser in writing to Seller prior to the Closing and the Intellectual Property Rights set forth on Section 2.01(b)(xiii) of the Seller Disclosure Letter, but not including (a) the marks and domain names licensed to Purchaser and its Affiliates pursuant to the Trademark License Agreement or (b) the Intellectual Property Rights in which no Acquired Company shall have any interest from and after the Closing Date, all of which such Intellectual Property Rights are specified as Non-Deliverables on Section 2.02(b)(xi) of the Seller Disclosure Letter,; it being agreed that fully and duly executed (and, if applicable, notarized) original documents that evidence such assignments and corrections of title which are properly prepared and properly filed with all applicable governmental and other agencies or Persons prior to the Closing Date shall satisfy the condition set forth in this clause (xi), provided, further that the costs and expenses of effecting all such assignments, corrections of title and filings (including, without limitation, obtaining from all applicable agencies and entities proof of the proper recordation, where available, of all such assignments, corrections of title and filings and delivering same to Purchaser), whether such costs and expenses arise before or after the Closing, shall be borne by Seller and not any Acquired Company or Purchaser; (xii) duly signed resignations, effective immediately after the Closing, of all directors of any Acquired Company who are employees of, or who otherwise perform services for, Seller or any of its Affiliates (other than the Acquired Companies); (xiii) assignments to the applicable Acquired Companies (or other assignee as determined by Purchaser) in a form reasonably satisfactory to Purchaser of the Contracts and Rights listed on Section 2.01(b)(xiii) of the Seller Disclosure Letter and any other Contracts and Rights that relate to the UCI Businesses but are not owned directly or indirectly by any Acquired Company, including, without limitation, any such Contracts and Rights identified by Purchaser in writing to Seller prior to the Closing; 6

215 (xiv) lien releases in a form reasonably satisfactory to Purchaser with respect to the liens identified on Section 3.14 of the Seller Disclosure Letter; (xv) evidence in a form reasonably satisfactory to Purchaser of the termination or amendment, without any liability to Purchaser or any Acquired Company, of the Contracts listed on Section 3.10(c)(i) of the Seller Disclosure Letter and identified thereon as subject to termination or amendment, as the case may be, as of the dates and in the manner set forth on such Section of the Seller Disclosure Letter; (xvi) fully executed originals of each of the *****; and (xvii) fully executed mutual noninterference letter in connection with ancillary documents. SECTION Purchaser Closing Conditions. The obligation of Purchaser to consummate the Closing is subject to the satisfaction or waiver by Purchaser of the following further conditions: (a) the representations and warranties of Seller contained in this Agreement (i) that are qualified as to materiality or Material Adverse Effect shall be true and accurate in all respects and (ii) that are not so qualified shall be true and accurate in all material respects, at and as of the Closing Date, with the same force and effect as if made as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date). The covenants and agreements contained in this Agreement to be complied with by Seller or the Acquired Companies at or before the Closing shall have been complied with in all material respects. Purchaser shall have received a certificate from Seller signed by an executive officer thereof with respect to the matters described in this Section 2.02(a); (b) any waiting period (and any extension thereof) under (i) the HSR Act or (ii) the Mexican Federal Competition Law applicable to the purchase of the Securities contemplated hereby shall have expired or shall have been terminated; (c) no Action shall be pending by any Governmental Authority against Purchaser or Seller seeking to restrain the Transactions; (d) there shall not be pending any Law or Governmental Order directing that the Transactions not be consummated or which has the effect of rendering it unlawful to consummate such Transactions; (e) since the Balance Sheet Date, there shall not have occurred a Material Adverse Effect; and (f) Purchaser shall have received duly executed copies or originals, as applicable, of the closing deliveries set forth in Section 2.01 (b), and such documents shall be in full force and effect. 7

216 SECTION Seller Closing Conditions. The obligation of Seller to consummate the Closing is subject to the satisfaction or waiver by Seller of the following further conditions: (a) the representations and warranties of Purchaser contained in this Agreement (i) that are qualified as to materiality or material adverse effect shall be true and accurate in all respects and (ii) that are not so qualified shall be true and accurate in all material respects, at and as of the Closing Date with the same force and effect as if made at and as of the Closing Date (other than such representations and warranties as are made as of another date, which shall be true and correct as of such date). The covenants and agreements contained in this Agreement to be complied with by Purchaser at or before the Closing shall have been complied with in all material respects. Seller shall have received a certificate from Purchaser signed by an executive officer thereof with respect to the matters described in this Section 2.03(a); (b) any waiting period (and any extension thereof) under (i) the HSR Act or (ii) the Mexican Federal Competition Law applicable to the purchase of the Securities contemplated hereby shall have expired or shall have been terminated; (c) no Action shall be pending by any Governmental Authority against Purchaser or Seller seeking to restrain the Transactions; (d) there shall not be pending any Law or Governmental Order directing that the Transactions not be consummated or which has the effect of rendering it unlawful to consummate such Transactions; and (e) Seller shall have received duly executed copies of the closing deliveries set forth in Section 2.01(a), and such documents shall be in full force and effect. ARTICLE III Representations and Warranties of Seller Seller represents and warrants to Purchaser that, except as specifically set forth in the applicable section (or other section(s) to the extent it is reasonably apparent on its face that such other section(s) apply to the applicable section) of that certain letter, dated as of the date of this Agreement from Seller to Purchaser (the Seller Disclosure Letter ), that corresponds to the sections below: SECTION Organization. Seller is duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Each of the Acquired Companies is duly organized, validly existing and in good standing under the laws of its jurisdiction of its organization, which jurisdiction is set forth in the Seller Disclosure Letter, and has the requisite power to own its properties and to carry on its business as it is now being conducted. Each of the Acquired Companies is duly qualified to do business in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification necessary (and Section 3.01 of the Seller Disclosure Letter lists each such jurisdiction with respect to each Acquired 8

217 Company), except where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect. Complete and correct copies of the certificate of incorporation and by-laws (or comparable constitutive documents) of Seller and each of the Acquired Companies have been made available to Purchaser. SECTION Authority; Enforceability. Seller and each of its Subsidiaries (including the Acquired Companies) has the corporate power and authority to execute and deliver this Agreement and all other Seller Documents to which Seller or such Subsidiary is, or is specified to be, a party and perform its obligations hereunder and thereunder. The execution and delivery by Seller and each of its Subsidiaries of this Agreement and all other Seller Documents to which Seller or such Subsidiary is, or is specified to be, a party and the performance by Seller and such Subsidiary of their obligations hereunder and thereunder have been duly authorized by all necessary corporate action on the part of Seller and each of its Subsidiaries. This Agreement and all other Seller Documents have been (or will have been, as of the Closing) duly executed and delivered by Seller and, as applicable, its Subsidiaries and, assuming the due authorization, execution and delivery of this Agreement by Purchaser, each constitutes (or will constitute, as of the Closing) a legal, valid and binding agreement of Seller and, as applicable, its Subsidiaries, enforceable against Seller and, as applicable, its Subsidiaries in accordance with its terms. SECTION Non-Contravention. The execution, delivery and performance by Seller and each of its Subsidiaries of this Agreement and the Seller Documents to which Seller or such Subsidiary is, or is specified to be, a party do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws (or comparable constitutive documents) of Seller or such Subsidiary, as applicable, or any resolution which may have been adopted by the board of directors (or comparable governing body) of Seller or such Subsidiary, (b) conflict with or violate any Law or Governmental Order applicable to the Seller, the UCI Businesses, any Acquired Company or any of their assets or properties or (c) other than with respect to government consents as are described in Section 3.04(a), conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would conflict with or become a breach or default) under, require any consent or the giving of notice under, or give to others any right to exercise any remedy under, or any rights of termination, amendment or acceleration of, or result in the creation of any Encumbrance on the UCI Businesses or any of the assets or properties of any Acquired Company pursuant to, any Contract to which Seller or any Acquired Company is a party or by which any of their respective properties or assets is bound or affected, except with respect to clause (c) for any such conflict, violation, breach, default, consent, right of termination, amendment or acceleration or Encumbrance as would not have, in each case, individually or in the aggregate, a Material Adverse Effect. SECTION Governmental Consents. (a) The execution, delivery and performance by Seller and each of its Subsidiaries of this Agreement and the Seller Documents to which Seller or such Subsidiary is, or is specified to be, a party do not and will not require any consent, approval, authorization or other Governmental Order of, action by, filing with or notification to any Governmental Authority, except for (i) the 9

218 filing of a notification and report form under the HSR Act, (ii) the filing of a notification form under the Mexican Federal Competition Law, (iii) all filings required to be made, and all consents, approvals and authorizations required to be obtained, prior to the Closing Date by either party with or from any Governmental Authority responsible for enforcement of antitrust Law (including the DOJ and the MFCC) in order to consummate the Transactions, all of which such filings, consents, approvals and authorizations are set forth on Section 3.04(a) of the Seller Disclosure Letter, (iv) those that may be required as a result of the nature of the business or ownership of Purchaser and (v) those the failure of which to obtain or make would not, individually or in the aggregate, have a Material Adverse Effect. (b) Neither the UCI Businesses nor the Acquired Companies have any sales of Music Assets during their most recent fiscal year in any jurisdiction other than the United States or Mexico, excluding any and all sales of Music Assets made by Purchaser and/or any of its Affiliates. SECTION Capitalization of the Companies. (a) The Seller Disclosure Letter sets forth, for each of the Companies, (i) the entire authorized securities of each such Company, and (ii) the number of issued and outstanding securities of each such Company. All of such issued and outstanding securities have been duly authorized, validly issued, are fully paid and nonassessable, have not been issued in violation of any preemptive or similar rights, the Securities Act or other applicable Law, and are owned of record and beneficially by Seller as set forth in the Seller Disclosure Letter, free and clear of any Encumbrances (other than Permitted Encumbrances). There are no other outstanding shares, limited liability company interests, options, warrants, calls, rights or commitments or any other agreements of any character to which a Company or any of its Subsidiaries is a party or by which a Company or any of its Subsidiaries is bound obligating a Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of, or other equity or voting interests in, or securities convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, a Company or any of its Subsidiaries or obligating a Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right or contract. There are no outstanding stock appreciation, phantom stock, profit participation or similar rights for which any Acquired Company has or will have any Liability. (b) The transfer and delivery of the Securities by the Seller to Purchaser as contemplated by this Agreement shall transfer good and valid title to the Securities (and all equity interests in each Subsidiary of the Companies) to Purchaser, free and clear of all Encumbrances, except Permitted Encumbrances and Encumbrances arising as a result of any action taken by Purchaser or any of its Affiliates (other than the Acquired Companies). SECTION Subsidiaries. Set forth in Section 3.06(a) of the Seller Disclosure Letter is the number of authorized, issued and outstanding shares of capital stock, ordinary shares, partnership interests, membership interests or other ownership interests of each Subsidiary of the Companies and the record holder(s) thereof. Except 10

219 for the Companies and their Subsidiaries, there is no Person in which any Company directly or indirectly owns any material equity or other ownership interest. All the outstanding shares of capital stock, ordinary shares, partnership interests, membership interests or other ownership interests, as applicable, of each Subsidiary listed in the Seller Disclosure Letter are duly authorized, validly issued, fully paid and nonassessable, have not been issued in violation of any preemptive or similar rights, and are owned of record by one of the Companies or its Subsidiaries free and clear of any Encumbrances. There are no other outstanding shares of capital stock, partnership interests, membership interests, other ownership interests, options, warrants, calls, rights or commitments or any other agreements of any character relating to dividend or other distribution rights or to the sale, allotment, issuance or voting of, or the granting of rights to acquire, any shares of the capital stock, share capital, partnership interests, membership interests or other ownership interests, as applicable, of any such Subsidiary, or any securities or other instruments convertible into, exchangeable for or evidencing the right to purchase any shares of capital stock, share capital, partnership interests, membership interests or other ownership interests, as applicable, of any such Subsidiary. Except for the Other Activities, none of Seller or any of its Affiliates (other than the Acquired Companies) are engaged in the Recorded Music Business or the Music Publishing Business. None of Seller or any of its Affiliates (other than the Acquired Companies) own or control any assets, properties or rights used in the UCI Businesses other than the Non-Music Assets. None of the results of the Other Activities or the Non-Music Assets is included in any of the Financial Statements. SECTION Financial Statements. (a) The unaudited financial statements consisting of the balance sheet of Disa LLC, a Delaware limited liability company ( Disa LLC ), as of the Balance Sheet Date, and the related unaudited statements of income for Disa LLC for the nine months ended as of the Balance Sheet Date, included in the Seller Disclosure Letter, fairly present in conformity with generally accepted accounting principles in the United States ( GAAP ), applied on a consistent basis, the consolidated financial position of Disa LLC as of the date thereof and its results of operations for the period then ended, subject to normal year-end adjustments in the case of any unaudited interim financial statements, which will not be material. Disa Holdco LLC, a Delaware limited liability company ( Disa Holdco ) is and has always been a holding company that has no business operations and that owns no assets or properties, and has no liabilities, other than to the extent of its ownership of 50% of the total equity of Disa LLC. (b) The audited financial statements consisting of the balance sheets of Disa LLC as of December 31, 2005 and as of December 31, 2006, and the related audited statements of income and other statements included within such audited financials for Disa LLC for the fiscal years then ended, included in the Seller Disclosure Letter, fairly present in conformity with GAAP, applied on a consistent basis, the financial position of Disa LLC on a consolidated basis as of the dates thereof and its results of operations for the periods then ended. (c) The unaudited financial statements consisting of the balance sheet of Univision Music LLC, a Delaware limited liability company ( Univision Music 11

220 LLC ), as of the Balance Sheet Date, and the related unaudited statements of income for Univision Music LLC for the nine months ended as of the Balance Sheet Date, included in the Seller Disclosure Letter, fairly present in conformity with GAAP, applied on a consistent basis, the financial position of Univision Music LLC as of the date thereof and its results of operations for the period then ended, subject to normal yearend adjustments in the case of any unaudited interim financial statements, which will not be material. (d) The unaudited financial statements consisting of the balance sheets of Univision Music LLC as of December 31, 2005 and as of December 31, 2006, and the related unaudited statements of income for Univision Music LLC for the fiscal years then ended, included in the Seller Disclosure Letter, fairly present in conformity with GAAP, applied on a consistent basis, the financial position of Univision Music LLC as of the date thereof and its results of operations for the period then ended. (e) The unaudited financial statements consisting of the balance sheet of the Acquired Companies on a consolidated basis as of the Balance Sheet Date (the Balance Sheet ), and the related unaudited statements of income for the Acquired Companies on a consolidated basis for the nine months ended as of the Balance Sheet Date, included in the Seller Disclosure Letter, fairly present in conformity with GAAP, applied on a consistent basis, the financial position of the Acquired Companies as of the date thereof and their results of operations for the period then ended, subject to normal year-end adjustments in the case of any unaudited interim financial statements, which will not be material. (f) The unaudited financial statements consisting of the balance sheet of the Acquired Companies on a consolidated basis as of December 31, 2005 and December 31, 2006, and the related unaudited statements of income for the Acquired Companies on a consolidated basis for the years then ended, included in the Seller Disclosure Letter, fairly present in conformity with GAAP, applied on a consistent basis, the financial position of the Acquired Companies as of the dates thereof and its results of operations for the periods then ended, subject to normal year-end adjustments in the case of any unaudited interim financial statements which will not be material. (g) The unaudited management report for the Acquired Companies on a consolidated basis for the fiscal month and year ended December 31, 2007, included in the Seller Disclosure Letter, fairly presents the financial position of the Acquired Companies on a consolidated basis as of the date thereof and their results of operations for the period then ended and has been prepared using principles and policies consistent with the audited, consolidated financial statements of the Acquired Companies, except that such unaudited management report does not include disclosures required under GAAP. (h) The information set forth on the financial statements referenced in clauses (a)-(g) above (the Financial Statements ) and the books and records of the Acquired Companies are true, correct and complete in all material respects. Each transaction is, in all material respects, properly and accurately recorded on the books and records of the Acquired Companies. The Acquired Companies maintain a system of 12

221 internal accounting controls that is adequate to provide assurance that (i) transactions are executed with management s authorization; (ii) transactions are recorded as is necessary to permit the preparation of the Acquired Companies financial statements and maintain accountability for the assets and properties of the Acquired Companies; and (iii) liabilities are properly recorded when incurred. Upon delivery of the books and Files and Records contemplated under Section 6.06(c), all of the books and Files and Records of the Acquired Companies will be in the possession and exclusive and direct control of the Acquired Companies. The books and Files and Records of the Acquired Companies have been maintained in the ordinary course of business and in good order, and they are adequate for the operations of the UCI Businesses. The financial performance of the UCI Businesses is summarized in the consolidated financial statements of the Acquired Companies included in the Seller Disclosure Letter. (i) Section 3.07(i) of the Seller Disclosure Schedule sets forth a true, correct and complete copy of the Acquired Companies artist study as of the year ended December 31, 2006 and as of the nine-month period ended as of the Balance Sheet Date, which accurately presents the respective royalty account positions of the Key Artists and Key Songwriters. (j) Since the Balance Sheet Date, there have been no distributions of cash or other property from any of the Acquired Companies to Seller or any of its other Affiliates except in compliance with Section 1.03(b). Each of the line items described on the Balance Sheet as Cash and Accounts Receivable are true and correct in all respects as of the Balance Sheet Date. SECTION Absence of Certain Changes. Since June 30, 2007, except as otherwise contemplated or permitted by this Agreement, the UCI Businesses have been conducted in the ordinary course of business consistent with past practice, and there has not been a Material Adverse Effect. Since June 30, 2007, to Seller s knowledge, the Acquired Companies have used their reasonable efforts to maintain relations with artists, songwriters, customers, licensors, vendors, employees and others having business dealings with any of the Acquired Companies, and to keep in full force and effect, without amendment, all material Rights relating to the UCI Businesses. Since June 30, 2007, each Acquired Company has paid its obligations as they came due (except for obligations being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established on the Balance Sheet) except where the failure to have paid such obligations would not, individually or in the aggregate, have a Material Adverse Effect, and Seller has no knowledge of any failure by any Acquired Company to pay any such obligations (regardless of whether such failure would or would not, individually or in the aggregate, have a Material Adverse Effect). Without limitation of any of Seller s other representations and warranties set forth in this Agreement, since the Balance Sheet Date, the Acquired Companies have established and maintained the unknown publisher liabilities in their financial statements consistent with past practice. SECTION No Undisclosed Material Liabilities. None of the Acquired Companies has (a) any Liability that would be required to be disclosed in a balance sheet for such Acquired Company prepared in accordance with GAAP or in the 13

222 notes thereto, or (b) to Seller s knowledge, any other Liabilities, in each case, other than Liabilities (i) reflected in the Balance Sheet or (ii) incurred after the Balance Sheet Date in the ordinary course of the UCI Businesses. SECTION Contracts. The Seller Disclosure Letter lists each of the following categories of Contracts (collectively, the Material Contracts ), and true, correct and complete copies of all Material Contracts to which any of the Acquired Companies is a party or by which any Acquired Company is bound or otherwise relating to the UCI Businesses have been made available by Seller to Purchaser: (a) Contract (i) containing a covenant limiting the freedom of any Acquired Company (or Purchaser or its Affiliates after the Closing) to engage in any line of business in any geographic area or to compete with any Person or (ii) containing any change in control or similar provision that could result in a Liability or other Loss of $100,000 or more as a result of the consummation of the Transactions; (b) UCI Employment Agreement that has (i) annual guaranteed cash compensation and other benefits (or severance) in excess of $100,000 and is not terminable by the relevant Acquired Company by notice of not more than 90 days for a cost of less than $100,000; or (ii) any severance Liabilities; (c) Contract with (i) Seller or any Affiliate of Seller (other than any Acquired Company) or (ii) any current or former officer, director or employee of Seller (or any Affiliate of Seller) or any Acquired Company (other than UCI Employment Agreements covered by clause (b) above); (d) Contract under which (i) any Person (other than any Acquired Company) has directly or indirectly guaranteed Liabilities of any Acquired Company or (ii) any Acquired Company has directly or indirectly guaranteed Liabilities of any Person (other than any Acquired Company) (in each case, which guarantee obligation exceeds $100,000 individually or $500,000 in the aggregate); (e) Contract that contains an obligation on the part of any Acquired Company to utilize Manufacturing services or Distribution services, other than a Contract that is terminable without penalty or other Liability on no more than 90 days notice by the relevant Acquired Company; (f) Contract creating an Encumbrance upon any assets that are material, individually or in the aggregate, to the UCI Businesses, taken as a whole, or upon any capital stock or other ownership interests in any Acquired Company; (g) power of attorney or similar instrument (other than immaterial ones made in the ordinary course of business); (h) Contract (other than this Agreement) for the sale of any of the assets of the UCI Businesses (including any capital stock or other ownership interest in any Acquired Company) after the date hereof (other than sales of Phonorecords in the ordinary course of the UCI Businesses consistent with past practice); 14

223 (i) Contract providing for indemnification by the relevant Acquired Company of any Person with respect to Liabilities relating to any current or former business of the relevant Acquired Company or any predecessor Person; (j) Contract relating to all (or a material Contract relating to any part) of the UCI Owned Intellectual Property Rights or the UCI Licensed Intellectual Property Rights (including any license or other agreement under which the relevant Acquired Company is licensee or licensor of any Intellectual Property Rights), other than Artist Contracts, Production/Label Contracts and Music Publishing Contracts; (k) Contract under which any Acquired Company has borrowed any money from, or issued any note, bond, debenture or other evidence of indebtedness to, any Person or any other note, bond, debenture or other evidence of indebtedness of any Acquired Company ( Debt Arrangements ) (it being understood and agreed that, as of the Closing Date, none of the Acquired Companies shall be party to or otherwise bound by any Debt Arrangements except for Inter-Company Liabilities to the extent permitted under Section 1.03(b)); (l) Contract under which any relevant Acquired Company has, directly or indirectly, made or may be required to make any advance, loan, extension of credit or capital contribution to, or other investment in, any Person (other than extensions of trade credit in the ordinary course of the UCI Businesses consistent with past practices and set forth on the Balance Sheet), in any such case which such advance, loan, extension of credit, capital contribution or other investment, individually, is in excess of $100,000, other than Artist Contracts, Production/Label Contracts and Music Publishing Contracts; (m) collective bargaining agreement, workers council agreement or other labor union agreement covering UCI Employees; (n) Contract requiring expenditures in excess of $100,000, other than (i) Artist Contracts, Production/Label Contracts and Music Publishing Contracts and (ii) Contracts that are cancellable or terminable with no more than 30 days notice by any Acquired Company without penalty; (o) real property leases and subleases to which any Acquired Company is party (whether as tenant, sublandlord or subtenant or otherwise); (p) policies of insurance whereby an Acquired Company is the policy holder; (q) joint venture or similar arrangements; (r) Contract with any Subagent; (s) Contracts with collection or publishing or music rights societies; 15

224 (t) Contracts (other than Artist Contracts and Production/Label Contracts) under which any Acquired Company is required to provide television or radio advertising support; (u) Artist Contracts, Production/Label Contracts and Music Publishing Contracts under which any Acquired Company has, directly or indirectly, made or may be required to make any loan (other than artist advances), extension of credit or capital contribution to, or other investment in, any Person, which such loan, extension of credit, capital contribution or other investment, individually, is in excess of $100,000; or (v) Contract, other than as set forth above and other than Artist Contracts, that is material to the UCI Businesses, taken as a whole, including without limitation Production/Label Contracts and Music Publishing Contracts. Each Contract to which any Acquired Company is a party or to which it is otherwise bound (collectively, including without limitation the Material Contracts and Acquisition Documents, the Company Contracts ) constitutes in all material respects a legal, valid and binding agreement, enforceable against the other parties thereto in accordance with its terms (except as enforceability may be limited by bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors rights generally and limitations on the remedy of specific performance). Each Acquired Company has performed in all material respects the terms, covenants and conditions on its part contained in all Company Contracts (including without limitation all Artist Contracts, Production/Label Contracts and Music Publishing Contracts) which are required to be performed on or prior to the Closing Date. No Acquired Company is in default under, or in violation or breach of, in each case in any material respect, any of the Company Contracts. No Acquired Company has received (or given) any written notice that it (or any other party thereto) is in material default under or in material violation or breach of any Company Contract, or that any party thereto intends to or has claimed a right to cancel, rescind or claim a breach of or default under any provision thereof. Without limitation of the foregoing, all royalties, advances, obligations and contractual benefits due to any third party pursuant to such Contracts have been paid to all third parties due the same, including, without limitation, all recording artists, producers, musicians, songwriters, composers, music publishers, income participants and other Persons to which any Acquired Company is required to pay royalties pursuant to Artist Contracts, Production/Label Contracts, Music Publishing Contracts, mechanical licenses or other Contracts. SECTION Recorded Music Business and Music Publishing Business. (a) The Seller Disclosure Letter lists (i) each Artist Contract or Production/Label Contract (A) as to which the term of such Contract is in effect as of the date hereof and which relates to the acquisition of rights in any Acquired Company Masters delivered by a Key Artist or license of rights in any Acquired Company Masters from a third party to an Acquired Company, or (B) as to which the term of such Contract is in effect (or has terminated or otherwise expired) as of the date hereof and which 16

225 relates to the acquisition or license of rights in any Acquired Company Masters of any of the Selected Artists; (ii) the Contracts pursuant to which any rights are granted (other than to an Acquired Company) with respect to (AA) all or substantially all of the Acquired Company Masters of the UCI Recorded Music Business as a whole, or all or substantially all of the Acquired Company Masters of any record label of the UCI Recorded Music Business, or (BB) all or substantially all of the Acquired Company Compositions of the UCI Music Publishing Business as a whole, or all or substantially all of the Acquired Company Compositions of a music publishing division of the UCI Music Publishing Business; (iii) the Contracts pursuant to which any exclusive rights are granted by an Acquired Company to a third party (other than an Acquired Company) with respect to any of the Selected Compositions; (iv) the Key Composition Agreements; and (v) each Recording and album embodying Owned Acquired Company Masters that is part of or related to the UCI Businesses that is subject to the Contract identified on Section 3.11(a)(v) of the Seller Disclosure Schedule and with respect to each such Recording and/or album, the territory to which such Recording and/or album is subject under such Contract; and true, correct and complete copies of all such Contracts identified in the foregoing clauses (i), (ii), (iii) and (iv) have been made available by Seller to Purchaser. Section 3.11(a)(KeyComp) of the Seller Disclosure Letter also sets forth a true, correct and complete list of each of the Key Compositions, and Section 3.11(a)(SelectComp) of the Seller Disclosure Letter sets forth a true, correct and complete list of each of the Selected Compositions. The total Net Publisher s Share of Income that the Acquired Companies were entitled to retain with respect to the Acquired Company Compositions pursuant to the Music Publishing Contracts during the fiscal year ended December 31, 2005 was *****, during the fiscal year ended December 31, 2006 was *****, and for the nine months ended as of the Balance Sheet Date was *****. (b) Section 3.11(b) of the Seller Disclosure Letter lists the Recordings that, to the Seller s knowledge, sold more than One Hundred Thousand (100,000) units for each of the fiscal years ended December 31, 2005 and December 31, 2006, net of returns or credits. (c) The total recoupable advances and non-recoupable payments collectively paid to third parties by the Acquired Companies during each of the UCI Businesses fiscal years ended December 31, 2004, December 31, 2005, and December 31, 2006 did not exceed ***** in any such fiscal year, and none of the Acquired Companies, individually or collectively, have committed to make total recoupable advances and non-recoupable payments in excess of ***** for either of the fiscal years ended December 31, 2007 or December 31, Section 3.11(c) of the Seller Disclosure Letter sets forth a true and complete list of each unrecouped advance balance in connection with advances paid by an Acquired Company (or any other Person in connection with the UCI Businesses) to any artist, songwriter, music publisher or other Person who would otherwise be entitled to royalties that remains unrecouped as of the Balance Sheet Date. (d) (i) The following music publishing entities are affiliated publisher members of the American Society of Composers, Authors and Publishers ( ASCAP ): (A) Edimonsa Corporation, a Texas corporation, (B) Univision Songs Inc., a Delaware corporation, and (C) Fonomusic, Inc., a California corporation d/b/a Fonomax Music Publishing. 17

226 (ii) The following music publishing entities are affiliated publisher members of Broadcast Music, Inc. ( BMI ): (A) Disa Latin Publishing LLC, a Delaware limited liability company, (B) Fonohits Music Publishing, Inc., a California corporation, and (C) Songs of Univision Inc., a Delaware corporation. (iii) Univision Melodies, Inc., a Delaware corporation, is an affiliated publisher member of SESAC ( SESAC ). (iv) The following music publishing entities are affiliated publisher members of Sociedad de Autores y Compositores de México ( SACM ): (A) Univision Music Publishing Mexico S.A. de C.V., a Mexican corporation, (formerly known as America Musical S.A. de C.V.), and (B) Edimonsa EM, S. de R.L. de C.V., a Mexican limited liability company (which is the successor in interest to the rights of Edimonsa Editora Monterrey, S.A.). (v) The music publishing entity Fonomusic, Inc., a California corporation, is not currently an affiliated publisher member of a performing rights society or other music rights society under the name Fonomusic, Inc. by itself, but such entity is a legal entity in good standing that owns and administers and is entitled to own and administer Rights in Acquired Company Compositions (and, for the avoidance of doubt, as indicated in Section 3.11(d)(i)(C) above, Fonomusic, Inc., a California corporation, d/b/a Fonomax Music Publishing, is a music publishing entity that is an affiliated publisher member of ASCAP, and such entity owns and administers and is entitled to own and administer Rights in certain Acquired Company Compositions). (vi) The entities listed in the foregoing provisions of this Section 3.11(d) constitute all of the entities engaged in the Music Publishing Business that are owned, in whole or in part, directly or indirectly, by Seller. To Seller s knowledge, each such membership is in good standing. To Seller s knowledge, none of the Acquired Companies or Subsidiaries is a party to any ASCAP, BMI, SESAC or SACM grievance procedure. (e) None of the Music Assets constitute Approval Assets or First-Refusal Assets, and there are no Restrictions on any of the Acquired Companies, other than such Approval Assets, First Refusal Assets and Restrictions that would not have, individually or in the aggregate, a Material Adverse Effect. (f) All royalties and other payments or credits due or to become due to recording artists, producers, songwriters, composers and/or any other Person with respect to any of the Music Assets as the result of any income received by or on behalf of or credited to Seller or its Affiliates (including any Acquired Company) have been timely paid or credited to the Persons entitled to receive those royalties and/or other payments or credits, and if any such royalties and/or other payments or credits are not yet payable or creditable as of the Closing Date, such royalties and other payments and credits are 18

227 properly reflected as a liability on the Balance Sheet for which adequate reserves have been established except as would not have, individually or in the aggregate, a Material Adverse Effect. (g) None of the Acquired Companies has received any advance (whether pursuant to a Company Contract or otherwise) that remains unrecouped as of the Balance Sheet Date, and neither Seller nor any of its other Affiliates has received any such advance in connection with the UCI Businesses. (h) The value of all payments and other benefits made or due by the Acquired Companies (or otherwise in connection with the UCI Businesses) in connection with the Independent Promotion Agreements listed on Section 3.10(j) of the Seller Disclosure Letter and all other similar Contracts does not exceed, in the aggregate (i) ***** for the period from the Balance Sheet Date through December 31, 2007 and (ii) ***** in any month since January 1, 2008 up to and including the month in which the Closing occurs. SECTION Compliance with Laws and Court Orders. The UCI Businesses have been and are being conducted in compliance in all material respects with all applicable Laws. Neither Seller nor any of its Subsidiaries (including the Acquired Companies) nor any of their employees or their respective agents or representatives (to the extent such agents and representatives have been directed or their actions authorized by the Acquired Companies) have taken any action (or failed to take any action) that, with or without notice or lapse of time, constitutes or will constitute or will result in a violation of any Law that would have a Material Adverse Effect, or that gives or will give rise to any obligation on the part of the Purchaser or any Acquired Company to undertake or bear any cost or remedial action of any sort that would have a Material Adverse Effect. All material UCI Permits that are required for each of the Acquired Companies to operate the UCI Businesses have been issued to the Acquired Companies, and such UCI Permits are in full force and effect, except where the failure to have, or the suspension or cancellation of, any of the UCI Permits would not have individually or in the aggregate, a Material Adverse Effect, and no proceeding is pending or, to Seller s knowledge, threatened to revoke or limit any thereof. There are no Governmental Orders applicable to the Acquired Companies or the UCI Businesses. SECTION Litigation. There is no Action pending against, or, to the knowledge of Seller, threatened against any Acquired Company, or otherwise relating to the business, operations, employees or agents of any Acquired Company, before any court, arbitrator or other body or before or by any Governmental Authority that could be material to the business or operations of any Acquired Company or with respect to which any insurance provider has not acknowledged coverage. Neither Seller nor any of its Affiliates has asserted or threatened to assert any Action against any Acquired Company in connection with any of the Contracts listed on Section 3.10(c) of the Seller Disclosure Letter, nor has Seller or any of its Affiliates assigned or otherwise transferred their respective rights to any such Actions in connection with any such Contracts. 19

228 SECTION Title. (a) The Acquired Companies have, free and clear of all Encumbrances, good and valid fee simple title to, or in the case of leased property and assets have valid leasehold interests in, all property and assets (whether real, personal, tangible or intangible, including without limitation the Music Assets) owned, leased, used or held for use by the Acquired Companies or otherwise used in the UCI Businesses, other than the Non-Music Assets and those properties or assets: (i) as are no longer used or useful in the ordinary course of business of the UCI Businesses, (ii) as have been disposed of in the ordinary course of business or (iii) for which the absence of such title or leasehold interest would not have, individually or in the aggregate, a Material Adverse Effect. Without limitation of the foregoing, each Music Asset owned or used, as of the date hereof and immediately prior to the Closing, by any Acquired Company or otherwise related to the UCI Businesses will be owned or available for use by Purchaser and the Acquired Companies on identical terms and conditions from and after the Closing as were available to the Acquired Companies prior to the Closing. All the fixed assets used or held for use in the UCI Businesses are in all material respects in good condition and working order (reasonable wear and tear excepted) and suitable for the operation of the UCI Businesses. (b) As of the Closing Date, the Acquired Companies shall have in their possession or control (x) ***** of each artist identified on Section 2.01(b)(vii)(A) of the Seller Disclosure Letter and (y) ***** of each artist listed on Section 2.01(b)(vii)(B) of the Seller Disclosure Letter. The parties agree that the lists of ***** referenced in the foregoing two sentences do not constitute a complete list of all ***** that are owned by the Acquired Companies (and will be owned by the Purchaser following the Closing) and, accordingly, are not intended to, and shall not, limit in any way Seller s representations, warranties and covenants (or Purchaser s remedies) under this Agreement. SECTION Sufficiency of the Securities and Assets. The Securities conveyed to Purchaser under this Agreement constitute all of the equity interests directly or indirectly owned and held by Seller in the Acquired Companies, and such conveyance shall convey to Purchaser the Rights to all of the assets, properties and businesses, of every kind and description, wherever located, real, personal or mixed, tangible or intangible, owned, leased, licensed used or held by the Acquired Companies or otherwise used in the UCI Businesses (including, without limitation, all of the equity interests in each of the Acquired Companies and the Music Assets) other than the Non-Music Assets. The Securities, together with such Rights, constitute all of the assets, properties, businesses and Rights (i) that are related to, used or held for use in connection with the UCI Businesses and (ii) that are required for the continued conduct of the UCI Businesses in a commercially reasonable manner and as currently conducted. Other than the UCI Businesses (the Rights to which Seller shall fully convey to Purchaser pursuant to this Agreement) and the Other Activities, neither Seller nor any of its Affiliates (other than the Acquired Companies) are engaged in the Recorded Music Business or the Music Publishing Business or otherwise own or control any Rights related to, used or held for use in the UCI Businesses. As of immediately prior to the Closing, Seller has (or has caused) all assets and properties other than the Non-Music Assets relating to or held for use in the conduct of the UCI Businesses that are owned or controlled by Seller or any of 20

229 its Affiliates (other than the Acquired Companies) to be irrevocably assigned, transferred and delivered to the Acquired Companies. Other than this Agreement, there are no existing agreements, options, commitments or Rights with, of or to any Person to acquire any Rights in or to the UCI Businesses. No Acquired Company has ever engaged, directly or indirectly, in any business other than the Recorded Music Business or the Music Publishing Business at any time during which Seller has owned, directly or indirectly, any interest in such Acquired Company, and, to Seller s knowledge, no Acquired Company has ever engaged, directly or indirectly, in any business other than the Recorded Music Business or the Music Publishing Business at any other time. SECTION Intellectual Property Rights. (a) Neither the conduct of the UCI Businesses nor any of the Music Assets infringe upon, misappropriate or otherwise violate Rights of any other Person, except for any such infringement, misappropriation or other violation that would not have, individually or in the aggregate, a Material Adverse Effect. None of the Acquired Companies has received, in the past two (2) years, any written charge, complaint, action, demand or notice alleging any infringement, misappropriation or other violation by an Acquired Company or otherwise relating to the UCI Businesses (including any claim that an Acquired Company must license or refrain from using any UCI Owned Intellectual Property Rights or UCI Licensed Intellectual Property Rights of any other Person) that has not been settled or otherwise fully resolved, except for any such infringement, misappropriation or other violation that would not have, individually or in the aggregate, a Material Adverse Effect. No other Person has infringed, misappropriated or otherwise violated any UCI Owned Intellectual Property Rights, UCI Licensed Intellectual Property Rights or other Intellectual Property Rights related to the UCI Businesses, except for any such infringement, misappropriation or other violation that would not have, individually or in the aggregate, a Material Adverse Effect. (b) Except as would not have, individually or in the aggregate, a Material Adverse Effect, the UCI Licensed Intellectual Property Rights and the UCI Owned Intellectual Property Rights together constitute all the Intellectual Property Rights necessary, used or held for use solely in the conduct of the UCI Businesses. The consummation of the Transactions shall not alter, impair or extinguish any UCI Owned Intellectual Property Rights or UCI Licensed Intellectual Property Rights, other than such alterations, impairments or extinguishments that would not have, individually or in the aggregate, a Material Adverse Effect. Section 3.16(b)(i) of the Seller Disclosure Letter sets forth a list of all registered (including registration applications) and material unregistered trademarks and service marks used or held for use in the conduct of the UCI Businesses, including the registration/application number, the class(es) registered/applied for, all jurisdictions in which each such mark is registered/applied for, and the owner of record of such registration, application or mark. Section 3.16(b)(ii) of the Seller Disclosure Letter sets forth a list of all Internet domain names used or held for use in the conduct of the UCI Businesses and the registered owner of each of such Internet domain names. As of the Closing Date, the Acquired Companies are the registered owners of, or have properly filed with applicable governmental and other agencies or Persons to become the registered owners of, all registrations and applications listed on Section 3.16(b)(i) and Section 3.16(b)(ii) of the Seller Disclosure Letter. 21

230 (c) The Acquired Companies own valid claims to the Copyrights in all of the Owned Acquired Company Masters and Owned Acquired Company Compositions, and, with respect to the Selected Artists and the Selected Compositions, such claims to Copyrights are for the full term of the worldwide Copyrights and all renewals, extensions, reversions and restorations thereof, (other than where an author (or a statutory successor to an author, including, without limitation, those successors (each, a Successor ) set forth in Section 3.04(a)(i)(C) of the U.S. Copyright Act of 1976, as amended (the Act )) obtains a reversion of the rights of the Acquired Companies in or to such renewals, extensions, reversions or restorations pursuant to Sections 203 or 304(c) or (d) of the Act or similar foreign law or where future legislation or case law results in a reversion to an author (or a Successor) of the rights of the Acquired Companies with respect to such renewals, extensions, reversions or restorations), and the Acquired Companies have obtained valid and effective written licenses, under Copyright and otherwise, to administer and exploit the Licensed Acquired Company Masters and Administered Acquired Company Compositions, except where the failure to own any such claim or license would not have a Material Adverse Effect. There has been no act or omission by Seller, any of Seller s Affiliates and/or any of the Acquired Companies that would, destroy or impair Copyright protection of any of the Music Assets, which destruction or impairment would have, individually or in the aggregate, a Material Adverse Effect. (d) (i) Administered Acquired Company Compositions. Subject to the provisions set forth in Section 3.16(d)(iv) of this Agreement, Schedule 3.16(d)(i) of the Seller Disclosure Letter contains, in all material respects, a true and complete list of all Administered Acquired Company Compositions as of the date of this Agreement, including with respect to each Administered Acquired Company Composition: (A) the title (and the song code contained in the applicable Acquired Company s royalty system to identify such Administered Acquired Company Composition); (B) the name(s) of those songwriters whose interests in the applicable composition are administered, in whole or in part, by an Acquired Company; (C) the Acquired Company publisher name(s) (it being acknowledged that the legal name of the Acquired Company publisher(s) will not be required to be provided by Seller on the date hereof, but shall be provided by Seller not later than the date five (5) Business Days prior to the Closing Date); (D) the name(s) of the publisher(s) whose interests in the applicable composition are administered, in whole or in part, by an Acquired Company (individually and collectively, with respect to the applicable composition, the Administered Publisher(s) ); 22

231 (E) the name(s), if any, of any other publisher(s) whose interests in the applicable composition are not owned and/or administered by an Acquired Company (individually and collectively, with respect to the applicable composition, Other Publisher(s) ); (F) the percentage of the Copyright administered by the Acquired Companies; (G) the percentage of the mechanical and synchronization income received by an Acquired Company with respect to such Administered Acquired Company Composition that is retainable by the Acquired Companies; and (H) the percentage of the mechanical and synchronization income received by an Acquired Company with respect to such Administered Acquired Company Composition that is required to be allocated by an Acquired Company to the royalty account of the Administered Publisher(s); (I) an indication of whether such Administered Acquired Company Composition has previously been, to the knowledge of Seller, publicly exploited prior to the date of this Agreement (for purposes of Schedule 3.16(d)(i) of the Seller Disclosure Letter, published shall indicate an Administered Acquired Company Composition that, to the knowledge of Seller, has previously been publicly exploited prior to the date of this Agreement, and unpublished shall indicate an Administered Acquired Company Composition that, to the knowledge of Seller, has not previously been publicly exploited prior to the date of this Agreement); provided that, for purposes of this Section 3.16(d)(i)(I) and without limiting the foregoing, Seller is deemed to have knowledge that an Administered Acquired Company Composition has been previously publicly exploited if an Acquired Company has received any income with respect to that Administered Acquired Company Composition. (ii) Owned Acquired Company Compositions. Subject to the provisions set forth in Section 3.16(d)(iv) of this Agreement, Section 3.16 (d)(ii) of the Seller Disclosure Letter contains, in all material respects, a true and complete list of all Owned Acquired Company Compositions as of the date of this Agreement, including with respect to each Owned Acquired Company Composition: (A) the title (and the song code contained in the applicable Acquired Company s royalty system to identify such Owned Acquired Company Composition); (B) the name(s) of those songwriters whose interests in the applicable composition are owned and controlled, in whole or in part, by an Acquired Company; (C) the Acquired Company publisher name(s) (it being acknowledged that the legal name of the Acquired Company publisher(s) will not be required to be provided by Seller on the date hereof but shall be provided by Seller not later than the date five (5) Business Days prior to the Closing Date); 23

232 (D) the name(s), if any, of any Other Publishers; (E) the percentage of the Copyright owned by the Acquired Companies; (F) the percentage of the Copyright administered by the Acquired Companies; (G) the percentage of the mechanical and synchronization license income received by an Acquired Company with respect to such Owned Acquired Company Composition that is required to be allocated to the royalty account of the songwriter(s), music publisher(s), and/or other third party(ies) whose interests in the Owned Acquired Company Composition are owned and controlled, in whole or in part, by the Acquired Company and with respect to whom an Acquired Company is required to render any accountings with respect to such Owned Acquired Company Composition (such songwriter(s), music publisher(s), and/or other third party(ies), individually and collectively, with respect to the applicable composition, the Payees ) (with the balance of such mechanical and synchronization license income retainable by an Acquired Company for the Acquired Company s own account); (H) an indication of whether such Owned Acquired Company Composition has previously been, to the knowledge of Seller, publicly exploited prior to the date of this Agreement (for purposes of Schedule 3.16(d)(ii) of the Seller Disclosure Letter, published shall indicate an Owned Acquired Company Composition that, to the knowledge of Seller, has previously been publicly exploited prior to the date of this Agreement, and unpublished shall indicate an Owned Acquired Company Composition that, to the knowledge of the Seller, has not previously been publicly exploited prior to the date of this Agreement); provided that, for purposes of this Section 3.16(d) (ii)(h) and without limiting the foregoing, Seller is deemed to have knowledge that an Owned Acquired Company Composition has been previously publicly exploited if an Acquired Company has received any income with respect to that Owned Acquired Company Composition. (iii) Public Performance Income. Schedule 3.16(d)(iii) of the Seller Disclosure Letter contains, in all material respects, a true and complete list of all Administered Acquired Company Compositions and Owned Acquired Company Compositions as of the date of this Agreement, including with respect to each Administered Acquired Company Composition and Owned Acquired Company Composition: (A) the title (and the song code contained in the applicable Acquired Company s royalty system to identify such Administered Acquired Company Composition or Owned Acquired Company Composition); 24

233 (B) the Acquired Company publisher name(s) (it being acknowledged that the legal name of the Acquired Company publisher(s) will not be required to be provided by Seller on the date of this Agreement but shall be provided by Seller as soon as reasonably practicable after the date of this Agreement but in no event later than the date ten (10) Business Days prior to the Closing Date); (C) the Payees, if any; (D) the percentage of the so-called publisher s share of public performance income received by an Acquired Company with respect to such Administered Acquired Company Composition or Owned Acquired Company Composition that is retainable by the Acquired Companies with respect to such Administered Acquired Company Composition or Owned Acquired Company Composition that has actually generated performance income prior to the date of this Agreement (it being acknowledged that solely with respect to Administered Acquired Company Compositions or Owned Acquired Company Compositions administered or owned by Edimonsa Corporation, a Texas corporation, Disa Latin Publishing LLC, a Delaware limited liability company, Fonomusic, Inc., a California corporation d/b/a Fonomax Music Publishing, Univision Music Publishing Mexico S.A. de C.V., a Mexican corporation, or Edimonsa EM, S. de R.L. de C.V., a Mexican limited liability company (collectively the Specified Music Publishing Entities ), the information specified in this Section 3.16(d)(iii)(D) will not be required to be provided by Seller on the date of this Agreement but shall be provided by Seller as soon as reasonably practicable after the date of this Agreement but in no event later than the date ten (10) Business Days prior to the Closing Date); and (E) the percentage of the so-called publisher s share of public performance income received by an Acquired Company with respect to such Administered Acquired Company Composition or Owned Acquired Company Composition that is required to be allocated by an Acquired Company to the royalty account of the applicable Payee(s) with respect to such Administered Acquired Company Composition or Owned Acquired Company Composition that has actually generated performance income prior to the date of this Agreement (it being acknowledged that solely with respect to Administered Acquired Company Compositions or Owned Acquired Company Compositions administered by one of the Specified Music Publishing Entities, the information specified in this Section 3.16(d)(iii)(E) will not be required to be provided by Seller on the date of this Agreement but shall be provided by Seller as soon as reasonably practicable after the date of this Agreement but in no event later than the date ten (10) Business Days prior to the Closing Date). (iv) Notwithstanding anything to the contrary contained in the foregoing provisions of Sections 3.16(d)(i) and 3.16(d)(ii) of this Agreement: (A) solely with respect to the information set forth in Schedules 3.16(d)(i) and 3.16(d)(ii) regarding synchronization license income, in no event shall the failure of Seller to provide at any time (through the Closing Date or otherwise) true, complete and accurate information with respect to the matters 25

234 identified in Sections 3.16(d)(i)(H) and Sections 3.16(d)(ii)(G) of this Agreement solely with respect to an Acquired Company Composition with respect to which no Acquired Company has received any synchronization license income at any time prior to the date of this Agreement be (or be deemed to be) a breach hereof; provided that if Seller provides any of the information referenced in this Section 3.16(d)(iv)(A), such information shall not be intentionally false or misleading; and (B) in no event shall the failure of Seller to provide, at any time (through the Closing Date or otherwise), true, complete and accurate information with respect to the matters identified in Sections 3.16(d)(i)(E) and 3.16(d)(ii)(D) of this Agreement be (or be deemed to be) a breach hereof; provided that if Seller provides any of the information referenced in this Section 3.16(d)(iv)(B), such information shall not be intentionally false or misleading. (e) All necessary mechanical and synchronization licenses for the recording of the Musical Compositions performed on Acquired Company Masters have been obtained from the Copyright owners or from those authorized to grant such licenses on behalf of the Copyright owners (except with respect to any statutory licenses), and all monies payable under such licenses or otherwise by reason of such recording have been timely paid to the Persons entitled to receive such payments, except where the failure to obtain such licenses or pay such monies would not have, individually or in the aggregate, a Material Adverse Effect. (f) Section 3.16(f) of the Seller Disclosure Letter sets forth: (a) with respect to each of the labels of the UCI Businesses, a true, correct and complete list of the royalty accounting systems that are owned or licensed by the Acquired Companies (with an indication of whether owned or licensed) and that are currently used and/or were previously used by such label with respect to royalty processing, accounting and payment matters (with an indication of when each system was and/or is being used by such labels and the types of royalty processing, accounting and payment matters handled by the applicable system); and (b) with respect to each of the music publishing divisions of the UCI Businesses, a true, correct and complete list of the royalty accounting and Copyright systems that are owned or licensed by the Acquired Companies (with an indication of whether owned or licensed) and that are currently used and/or were previously used by such music publishing division with respect to royalty processing, accounting and payment matters and Copyright management and/or licensing matters (with an indication of when each system was and/or is being used by such music publishing divisions and the types of royalty processing, accounting and payment matters and Copyright management and/or licensing matters handled by the applicable system). (g) Without limitation of Section 3.07(h), all documents necessary to determine and characterize the exact nature and scope of all material Rights of the Acquired Companies for each Acquired Company Composition that has been publicly exploited at any time prior to the Closing Date (including without limitation all information with respect to the matters identified in Sections 3.16(d)(i), 3.16(d)(ii) and 3.16(d) (iii) have been maintained in a reasonably organized manner and are in the possession and control of the Acquired Companies (and will be available to Purchaser as of the Closing). 26

235 (h) Section 3.16(h) of the Seller Disclosure Letter sets forth a true, correct and complete list of every Musical Composition as of January 31, 2008 subject to a so-called Promo Contract in one of the two forms attached thereto ( Form Promo Contract ) with any of the Acquired Companies whereby an Acquired Company has obtained the exclusive right to locate and secure potential licensed uses of such Musical Composition(s), including without limitation cover recording uses and/or synchronization uses in motion pictures, television programs, commercial spots and other media, and Section 3.16(h) includes for each such Musical Composition the title, songwriter(s), and Contract date. All of such Contracts are substantially similar to one of the two form Promo Contracts. SECTION Licenses and Permits. Each license, franchise, permit, certificate, approval or other similar authorization from any Governmental Authority affecting, or relating in any way to, the UCI Businesses (collectively, the UCI Permits ), (i) is valid and in full force and effect and (ii) neither Seller nor any of its Subsidiaries (including the Acquired Companies), as the case may be, is in default, and no cancellation or suspension of any of the UCI Permits is pending, or, to the knowledge of the Seller, threatened other than those permits whose failure to obtain would not have, individually or in the aggregate, a Material Adverse Effect. SECTION Tax Matters. (a) Except as would not have, individually or in the aggregate, a Material Adverse Effect: (i) all Tax Returns required to be filed by, or with respect to the income, assets, properties, activities or operations of, the Acquired Companies, taking into account any extensions, have been timely filed, and such Tax Returns are complete and accurate in all respects; (ii) all Taxes due and payable by, or with respect to the income, assets, properties, activities or operations of, the Acquired Companies (whether or not shown on any Tax Return) have (A) been timely paid or (B) are being contested in good faith pursuant to appropriate proceedings which are being diligently pursued, and for which an adequate reserve has been established in accordance with GAAP as set forth in the Seller Disclosure Letter and on the face of the balance sheets (rather than in any notes thereto) of the applicable Acquired Companies; and (iii) all Taxes not yet due and payable by, or with respect to the income, assets, properties, activities or operations of, the Acquired Companies (A) did not, as of the Balance Sheet Date, exceed the reserve for Tax liabilities (rather than any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Balance Sheet (rather than in any notes thereto) and (B) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with the past custom and practice in filing Tax Returns relating to such Taxes. 27

236 (b) No deficiency for any Taxes payable by, or relating to the income, assets, properties, activities or operations of, the Acquired Companies has been asserted or assessed by any Taxing Authority in writing pursuant to any examination, investigation, audit, suit, proceeding, claim or otherwise (or, to the knowledge of Seller, has been threatened or proposed). (c) None of the Acquired Companies has entered into, or is subject to, any agreements or waivers extending the statutory period of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course). (d) Section 3.18(d) of the Seller Disclosure Letter contains a complete and accurate list of all audits of Tax Returns of the Acquired Companies for the past five years, including a reasonably detailed description of the status, nature and, if completed, outcome of each audit. (e) No Acquired Company is party to any ruling requests, private letter rulings, closing agreements, settlement agreements, advance pricing arrangements, revenue agent reports, or other agreements with any Governmental Authority relating to Taxes for any periods for which the statute of limitations has not yet expired. (f) No domestic or foreign jurisdiction in which an Acquired Company currently does not file Tax Returns (whether separately or as part of a reporting group) has asserted in writing that such Acquired Company is required to file Tax Returns. (g) No Encumbrance for Taxes exists with respect to any of the assets of the Acquired Companies other than Permitted Encumbrances. (h) No Acquired Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for a Post-Closing Tax Period as a result of (i) any installment sale or open transaction disposition made on or prior to the Closing Date, (ii) any change in method of accounting for a taxable period ending on or prior to the Closing Date, (iii) the completed contract method of accounting, (iv) any prepaid amount received on or prior to the Closing Date, (v) any closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; or (vi) any intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law). (i) (A) none of the Acquired Companies has been a member of an affiliated group filing a consolidated federal income Tax Return (or any similar group defined under a similar provision of state, local or foreign Law), other than a group the common parent of which was Seller, for any taxable period for which the applicable statute of limitations has not yet expired; 28

237 (B) none of the Acquired Companies is a party to or bound by any tax sharing agreement, tax indemnity obligation or similar agreement, arrangement or practice with respect to Taxes; and (C) no power of attorney is currently in effect with respect to any Tax of any of the Acquired Companies. (j) Each of the Acquired Companies has, at all times since its formation, had the entity classification(s) set forth in Section 3.18(j) of the Seller Disclosure Letter for U.S. federal income tax purposes. (k) None of the Acquired Companies has participated in any listed transaction (within the meaning of Treasury Regulations Section (b)). (l) No material property of the Acquired Companies is tax exempt use property within the meaning of Section 168(h) of the Code. (m) None of the Acquired Companies has constituted either a distributing corporation or a controlled corporation in a distribution of stock intended to qualify for nontaxable treatment under Section 355 of the Code (i) at any time during the five-year period ending immediately prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) in conjunction with the sale of Securities contemplated by this Agreement. (n) As of the Closing Date, no amount paid or payable under this Agreement, any agreement referred to herein, or any existing obligation of the Acquired Companies (whether in cash, in property, or in the form of benefits) by or on behalf of the Acquired Companies or Purchaser in connection with the transactions contemplated by this Agreement (either solely as a result thereof or as a result of such transactions in conjunction with any other event), whether before, on, or after the Closing Date, will be an excess parachute payment within the meaning of Section 280G of the Code. SECTION Employee Plans. (a) Each UCI Employee Plan has been operated and administered in compliance with, and is currently in compliance with, its terms and with the requirements prescribed by applicable Law, except for such failures to so comply as would not have, individually or in the aggregate, a Material Adverse Effect. (b) Section 3.19(b) of the Seller Disclosure Letter sets forth a list of each UCI Employee Plan with respect to which Purchaser is required, following the Closing, to assume any Liabilities pursuant to Section 5.01 or 9.02(b)(iii), and Seller has made available to Purchaser all documentation related to the UCI Employee Plans. 29

238 (c) All contributions to, and payments from, each UCI Employee Plan required to be made under the UCI Employee Plans have been timely made or will be timely made by the Closing Date. Seller has, or has caused to be, fully paid all bonuses due to UCI Employees with respect to the fiscal year ended December 31, 2007 (which did not exceed ***** in the aggregate) in such amounts and to such employees as set forth on Section 3.19(c) of the Seller Disclosure Letter. All reports, returns and similar documents, if any, with respect to all UCI Employee Plans required to be filed with any Governmental Authority or distributed to any participant in such UCI Employee Plan have been duly and timely filed or distributed or will be filed or distributed by the Closing Date. (d) There are no pending investigations by any Governmental Authority involving any UCI Employee Plan, and there are no material pending claims or Actions against any UCI Employee Plan asserting any rights or claims to benefits under such UCI Employee Plan. The consummation of the transactions contemplated by this Agreement will not create or otherwise result in any material Liability with respect to any UCI Employee Plan. (e) Other than as listed on Section 3.10(m) of the Seller Disclosure Letter, no labor union or similar contract is applicable to any Acquired Company or the UCI Businesses, and, to Seller s knowledge, there is no activity, proceeding or movement to organize any UCI Employees. There are no strikes, slowdowns, work stoppages, lockouts or boycotts relating to any Acquired Company or the UCI Businesses, and Seller has no knowledge of any pending or threatened strikes, slowdowns, work stoppages, lockouts and boycotts. The Acquired Companies are not subject to any multi-employer or similar plans, and there are no pensions relating to any UCI Employee. The consummation of the Transactions will not result in or cause Liabilities under any of the UCI Employee Plans. SECTION Environmental Compliance. (a) Except as to matters that would not have, individually or in the aggregate, a Material Adverse Effect: (i) the Acquired Companies have all Environmental Permits required for their respective operations as currently conducted and the Acquired Companies are in compliance with the terms of such Environmental Permits and with all such applicable Environmental Laws; (ii) no Environmental Law imposes any obligation upon any Acquired Company, arising out of, or as a condition to, any transaction contemplated by this Agreement, including any requirement to modify or transfer any Environmental Permit, any requirement to file any notice or other submission with a Governmental Authority, the placement of any notice, restriction or covenant, or the modification of any provision of notice under any agreement, consent order, or consent decree; (iii) there are no Liabilities of, or in any way relating to, any Acquired Company, of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, arising under or relating to any Environmental Law, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in any such Liability; and (iv) no Hazardous Substance has been generated, stored, treated, discharged, disposed of, dumped, injected, pumped, deposited, spilled, leaked, emitted, or released at, on or under any real property leased, owned, or operated in connection with the UCI Businesses. 30

239 (b) No written notice of violation or Liability, request for information, order, demand, citation or summons has been received, no complaint from any Person has been filed, no penalty has been assessed and no investigation, action, claim, suit or proceeding is pending or, to the knowledge of Seller, threatened with respect to any matters relating to the UCI Businesses, including any currently or previously leased or owned property, and arising under any Environmental Law, and to Seller s knowledge there is no basis for any of the foregoing. (c) Seller has made available to Purchaser for review true, correct and complete copies of all reports of material environmental, health and safety investigations, studies, audits, assessments, reviews and other analyses conducted in relation to any operations, facilities, or properties of the Acquired Companies that are in Seller s or any Acquired Company s possession or control. SECTION Brokers. No broker, finder investment banker or other Person is entitled to any brokerage, finders or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Seller or any of its Affiliates in any of the Acquired Companies. Seller is solely responsible for the fees and expenses to be paid to the Persons indicated in the Seller Disclosure Letter as being entitled thereto. SECTION Real Property. No Acquired Company holds or has ever held fee title interest in any real property. SECTION Insurance. Neither Seller nor any of its Affiliates (including the Acquired Companies) has received (i) any written notice regarding the actual or possible cancellation or invalidation of any of the policies of insurance pertaining to the UCI Businesses or regarding any actual or possible adjustment in the amount of the premiums payable with respect to any of said policies; (ii) any written notice regarding any actual or possible refusal of coverage under, or any actual or possible rejection of any claim under, any of such policies (including with respect to any matter that is disclosed in the Seller Disclosure Letter in connection with Section 3.13); (iii) any written indication that the issuer of any of such policies may be unwilling or unable to perform any of its obligations thereunder. All current and historical self-insured programs relating to the UCI Businesses have been disclosed to Purchaser along with applicable claims history including internal reserves. All policies relating to the UCI Businesses are in full force and effect and have been issued by an insurance carrier that, to Seller s knowledge is solvent, financially sound and reputable. All of the information contained in the applications submitted in connection with said policies was (at the times said applications were submitted) accurate and complete in all material respects. ARTICLE IV Representations and Warranties of Purchaser Purchaser represents and warrants to Seller that, except as specifically set forth in the applicable section (or other section(s) to the extent it is reasonably apparent 31

240 on its face that such other section(s) apply to the applicable section) of that certain letter, dated as of the date of this Agreement, from Purchaser to Seller (the Purchaser Disclosure Letter ), that corresponds to the sections below: Delaware. SECTION Organization. Purchaser is duly formed, validly existing and in good standing under the laws of the State of SECTION Authority; Enforceability. Purchaser and each of its Affiliates have the corporate power and authority to execute and deliver this Agreement to which Purchaser or such Affiliate is, or is specified to be, a party and to perform its obligations hereunder and thereunder. The execution and delivery by Purchaser and each of its Affiliates of this Agreement to which Purchaser or such Affiliate is, or is specified to be, a party and the performance by Purchaser and such Affiliate of their obligations hereunder and thereunder have been duly authorized by all necessary corporate action on the part of Purchaser and such Affiliate. This Agreement has been duly executed and delivered by Purchaser and, assuming the due authorization, execution and delivery of this Agreement by Seller, constitutes a legal, valid and binding agreement of Purchaser, enforceable against it in accordance with its terms. SECTION Non-Contravention. The execution, delivery and performance by Purchaser and each of its Affiliates of this Agreement and all other Purchaser Documents to which Purchaser or such Affiliate is, or is specified to be, a party do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws or any resolution which may have been adopted by the board of directors (or comparable governing body) of Purchaser or such Affiliate, (b) conflict with or violate any Law or Governmental Order applicable to Purchaser or such Affiliate any of its assets or properties or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent or the giving of notice under, or give to others any right to exercise any remedy under, or any rights of termination, amendment or acceleration of, or result in the creation of any Encumbrance on any of the assets or properties of Purchaser or such Affiliate pursuant to, any Contract to which Purchaser or such Affiliate is a party or by which any of its assets or properties is bound or affected, except for any such conflict, violation, consent, right of termination, amendment or acceleration or Encumbrance as would not reasonably be expected to have a material adverse effect on the ability of Purchaser to consummate the Transactions. SECTION Governmental Consents. The execution, delivery and performance by Purchaser and each of its Affiliates of this Agreement and all other Purchaser Documents to which Purchaser or such Affiliate is, or is specified to be, a party do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any Governmental Authority, except for (a) the filing of a notification and report form under the HSR Act, (b) the filing of a notification form under the Mexican Federal Competition Law, (c) assuming the accuracy and completeness of Section 3.04(b), all filings required to be made, and all consents, approvals and authorizations required to be obtained, prior to the Closing Date by either party with or from any Governmental Authority responsible for enforcement of antitrust 32

241 Law (including the DOJ and the MFCC) in order to consummate the Transactions, all of which such filings, consents, approvals and authorizations are set forth in the Purchaser Disclosure Letter, (d) filings that may be required under the Exchange Act, (e) those that may be required as a result of the nature of the business or ownership of Seller, and (f) those that are immaterial to the ability of Purchaser to consummate the Transactions. SECTION Purchase for Investment. Purchaser acknowledges that the Securities have not been registered under the Securities Act or under any state securities laws. Purchaser (i) is acquiring the Securities solely for investment with no present intention to distribute any of the Securities to any Person and (ii) will not sell or otherwise dispose of any of the Securities, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws. SECTION Availability of Funds. Purchaser currently has available all the funds sufficient to enable it to purchase the Securities in accordance with the terms of this Agreement and to pay all related fees and expenses. Purchaser s ability to consummate the Transactions is not contingent upon its ability to obtain financing. SECTION Brokers. No broker, finder or investment banker is entitled to any brokerage, finder s or other fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Purchaser. ARTICLE V Employee Matters SECTION General. (a) Without limitation of Seller s representations and warranties or Purchaser s rights to indemnity under Article IX, Purchaser shall, or shall cause the Acquired Companies to, effective as of the Closing Date retain, assume or otherwise be responsible for all employee or employment-related Liabilities solely under the UCI Employee Plans detailed on Section 3.19(b) of the Seller s Disclosure Letter, but only to the extent relating to UCI Employees (and not employees of Seller or its other Affiliates), regardless of whether such Liabilities relate to events or circumstances existing or occurring on, preceding or following the Closing Date. (b) All UCI Transferred Employees will continue to participate in the UCI Employee Plans listed on Section 3.19(b) of the Seller Disclosure Letter until such time as the Purchaser can transition them onto the Purchaser s benefit programs, it being agreed that after such transition onto Purchaser s (or its Affiliates ) payroll and plans, such employees shall be treated as terminees under such UCI Employee Plans, and, following such transition, Seller shall maintain (or cause to be maintained) all such UCI Employee Plans to the extent required by Law. SECTION Compensation and Benefits. (a) For a period of six months following the Closing Date, Purchaser shall, or shall cause the Acquired Companies to, ensure that (i) each Transferred Employee receives base salary which is no 33

242 less favorable than the base salary provided to such Transferred Employee by Seller and its Subsidiaries (including the Acquired Companies), in the applicable periods immediately preceding the Closing Date, (ii) subject to a transition period whereby Transferred Employees may remain as participants in the UCI Employee Plans listed on Section 3.19(b) of the Seller Disclosure Letter, the Transferred Employees will become eligible to participate in Purchaser s employee benefit programs subject to the same terms and conditions as Purchaser s recently-hired existing employees (with recognition provided for eligible years of service at Seller), and (iii) ***** (b) To the extent required by applicable Mexican Law, Purchaser shall, or shall cause the Acquired Companies to, ensure that each Transferred Employee employed by a Mexican Subsidiary shall receive the same base salary and other compensation, bonus and incentive opportunities provided to such employee by such Mexican Subsidiary as of immediately prior to the Closing Date (all of which benefits are set forth in Section 5.02(a) and 5.02(b) of the Seller Disclosure Letter). Without limitation of Section 1.03(b)(i)(x), *****, Seller shall, or shall cause Vision Latina to, ensure that each Vision Latina Employee receives the same base salary and other compensation, bonus and incentive opportunities provided to such employee as of immediately prior to their the Closing Date (all of which benefits are set forth in the Seller Disclosure Letter), which base salary and other compensation, bonus and incentive opportunities shall be reimbursed in full by Purchaser to Vision Latina within fifteen (15) days following the end of each month or, if later, five (5) Business Days after Purchaser receives the applicable statement for such amounts from Seller. (c) Purchaser shall, or shall cause the Acquired Companies to, recognize all eligible service of the Transferred Employees with Seller and its Subsidiaries (including the Acquired Companies) for all purposes of the employee benefit plans they are permitted to participate in following the Closing Date, to the extent that the analogous UCI Employee Plan recognized such service and subject to the terms and conditions of such plans. With respect to any such plan, but subject to the terms and conditions of such plans, Purchaser shall, or shall cause the Acquired Companies to, (i) waive all limitations as to preexisting conditions, exclusions, and waiting periods, except to the extent that the analogous UCI Employee Plan recognized or applied such conditions, exclusions, and waiting periods and (ii) provide each Transferred Employee (and any covered spouse or dependant) with credit for any co-payments and deductibles paid in connection with the analogous UCI Employee Plan prior to the Closing Date but during the current plan year in satisfying any applicable deductible or out-of-pocket requirements for the current plan year under any plan in which such employee is eligible to participate. Notwithstanding the foregoing, nothing herein shall require Purchaser or any Acquired Company to provide any duplication of benefits to any Transferred Employee. (d) Purchaser shall, or shall cause the Acquired Companies to, honor all unused vacation and other time-off earned or accrued by the Transferred Employees prior to the Closing Date and set forth on the Balance Sheet in accordance with the policies of Seller and its Subsidiaries (including the Acquired Companies) in effect immediately prior to the Closing Date (all of which such policies are set forth in the Seller Disclosure Letter). 34

243 (e) Nothing herein shall be deemed in any way to (i) change the at will or other status as of the date hereof of any UCI Employee, or (ii) oblige or commit Purchaser or its Affiliates (including the Acquired Companies) on or after the Closing Date to maintain the employment of any UCI Employee. SECTION Local Modifications. Notwithstanding anything to the contrary in this Article V, Purchaser and Seller shall cooperate in good faith to the extent that applicable Law requires modifications to the provisions contained in this Article V and hereby agree to implement any such modification in a manner that is, to the extent practicable, consistent with the general provisions of this Article V. SECTION Employer Substitution and Related Matters. Seller represents to Purchaser that (i) the UCI Employees listed on Section 5.04 of the Seller Disclosure Letter (the Vision Latina Employees ) are employed as of the date hereof by Vision Latina, an Affiliate of Seller that is not an Acquired Company, (ii) none of the Vision Latina Employees provides or has ever provided services (while employed by Vision Latina or, to Seller s knowledge, while employed by Seller or any of its other Affiliates) other than for the UCI Businesses (except for services that are immaterial in the aggregate); and (iii) severance payments due to Vision Latina Employees are based on such employees respective seniority, salary and benefits while employed by Vision Latina in connection with the UCI Businesses. Seller agrees to cooperate with, and cause its Affiliates to cooperate with, Purchaser and its Affiliates in order to transition, no later than 6 months following the Closing Date, some or all (as determined in Purchaser s sole discretion) of the Vision Latina Employees from Vision Latina to another entity (selected by Purchaser in its sole discretion) in a manner that is orderly and non-disruptive to the UCI Businesses. Purchaser may elect to effect such transition pursuant to an employer substitution process or a voluntary termination and rehire process or any other process that it deems appropriate or desirable. Purchaser shall be responsible for all costs related to effecting such transition ***** After the Closing and ***** Vision Latina Employees shall continue to be employees of Vision Latina, but shall provide services solely for and on behalf of the UCI Businesses, at the direction of Purchaser. After all Vision Latina Employees are transitioned ***** that certain Services Agreement, dated April 16, 2002, by and between Vision Latina and Fonovisa, S.A. de C.V. listed on Section 3.10(c)(i) of the Seller Disclosure Letter shall automatically terminate ***** with no liability to Purchaser or any Acquired Company. Purchaser shall indemnify and hold Vision Latina harmless pursuant to Section 9.2 from any cost and expense incurred by virtue of any labor claim brought by a Vision Latina Employee, resulting from Purchaser s direction of such Vision Latina Employee and the services being provided by Vision Latina hereunder pursuant to such direction, until the Vision Latina Employees are effectively transferred or terminated regardless of the above-mentioned 6-month period. SECTION ***** 35

244 ARTICLE VI Covenants SECTION Conduct of Business Prior to the Closing. Except as contemplated by this Agreement and except as set forth in Section 6.01 of the Seller Disclosure Letter, prior to the Closing, Seller shall and shall cause its Affiliates (including the Acquired Companies) to (i) cause the UCI Businesses to be conducted in all material respects in the ordinary course of the UCI Businesses and consistent with past practice and (ii) use its and their reasonable efforts to keep intact the UCI Businesses (including all Rights related thereto), keep available the services of the employees related to the UCI Businesses and preserve and continue relationships with customers and others with whom the Acquired Companies deal or otherwise related to the UCI Businesses (including, without limitation, artists and songwriters). Notwithstanding the foregoing, except as expressly contemplated by this Agreement and except as set forth in Section 6.01 of the Seller Disclosure Letter, Seller shall not (and shall cause its Affiliates, including the Acquired Companies, not to) do any of the following, to the extent affecting or otherwise relating to the UCI Businesses or any Acquired Company, without the prior written consent of Purchaser: (a) amend, waive any material provision of, or otherwise modify the certificate of incorporation or by-laws (or comparable constitutive documents) of any of the Acquired Companies; (b) terminate, waive any material provision of or Rights under (including granting or permitting (except to the extent automatic or compulsory under the terms of a Company Contract existing prior to the date hereof or where an author (or a statutory successor to an author, including, without limitation, a Successor) obtains a reversion of the rights of the Acquired Companies in or to such renewals, extensions, reversions or restorations pursuant to Sections 203 or 304(c) or (d) of the Act or similar foreign law or where future legislation or case law results in a reversion to an author (or a Successor) of the rights of the Acquired Companies with respect to such renewals, extensions, reversions or restorations)), amend or otherwise modify in any material respect any Contract (i) listed in (or that should have been listed in) the Seller Disclosure Letter or (ii) with respect to which Purchaser grants its consent pursuant to this Section 6.01; (c) make any material change in the insurance coverage pertaining to the Acquired Companies; (d) enter into, amend or otherwise modify any Contract (or amend or otherwise modify any existing Company Contract such that it becomes) of the type described in Section 3.10; (e) adopt, amend or otherwise modify any UCI Employee Plan to the extent covering or affecting any UCI Employees or enter into, amend or otherwise modify any collective bargaining agreement with any labor union or similar organization to the extent that it applies to, covers, or affects any UCI Employee, except, in each case, as required by Law; 36

245 (f) grant to any active UCI Employee any increase in cash compensation or other benefits, except for base salary pursuant to regularly scheduled annual increases in the ordinary course of the UCI Businesses consistent with past practice, ***** or as is required under (i) existing UCI Employment Agreements that are disclosed in the Seller Disclosure Letter, (ii) any renewal of a UCI Employment Agreement that is disclosed in the Seller Disclosure Letter in the ordinary course of the UCI Businesses or (iii) any UCI Employee Plan; (g) ***** (h) ***** (i) ***** (j) sell, transfer or lease any of its assets to, or enter into any Contract with, Seller or any of its Affiliates (other than the Acquired Companies) or otherwise pay or incur any management or service charges to Seller or its Affiliates (other than the Acquired Companies), except as expressly permitted under Section 1.03(b); (k) enter into any lease, sublease, license or other occupancy Contract of real property, as lessor or lessee, except any renewals of existing leases in the ordinary course of the UCI Businesses consistent with past practice; (l) (i) make any change in any method of accounting (for both financial reporting and tax purposes) or accounting practice or policy other than those required by GAAP, (ii) make or change any Tax election, (iii) file any amended Tax Return, (iv) enter into any closing agreement with a Taxing Authority, (v) settle or compromise any Liability for Taxes, (vi) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Acquired Companies or (vii) take any other action relating to the filing of any Tax Return or the payment of any Tax, if such action would result in (A) any material increase in the Liability for Taxes of Purchaser or its Affiliates (including the Acquired Companies) or (B) any material increase in payments made to Seller pursuant to this Agreement in respect of any Post-Closing Tax Period; (m) (1) issue, sell, transfer, pledge or encumber any shares of capital stock, share capital, partnership interests, membership interests or other ownership interests, as applicable, in any of the Acquired Companies, or any option, warrant or right relating thereto or any securities convertible into or exchangeable for any shares of capital stock, share capital, partnership interests, membership interests or other ownership interests, as applicable, in any of the Acquired Companies; (2) split, combine or reclassify the capital stock or other ownership interest or otherwise change the capitalization or effect any corporate restructuring of any Acquired Company; 37

246 (n) (1) acquire by merging or consolidating with, or by purchasing substantially all of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or other entity or division thereof; (2) enter into any joint venture or similar agreement or (3) acquire any assets that are material, individually or in the aggregate, to any Acquired Company or the UCI Businesses, other than, in the case of this clause (3), acquisitions of Rights in Recordings or Musical Compositions in the ordinary course of business and in accordance with this Agreement; (o) enter into any Contract containing an obligation on the part of any Acquired Company to utilize Distribution services or otherwise granting any Person any exclusive license to any Acquired Company s Rights; (p) sell, lease, license or otherwise dispose of any of its assets (other than sales in the ordinary course of the UCI Businesses consistent with past practice of inventory or obsolete equipment no longer used or useful in the conduct of the UCI Businesses); (q) delay or postpone the payment of accounts payable and other obligations beyond their respective payment deadline or accelerate the collection of accounts receivable (or other revenues under any Contract), or accept payment at a discount, in each case other than in the ordinary course of the UCI Businesses consistent with past practice; (r) commit to any capital expenditure in excess of $75,000 individually or $250,000 in the aggregate; (s) enter into any Contract other than Artist Contracts requiring (or amend any existing Company Contract other than Artist Contracts such that it requires) expenditures, individually or in the aggregate, in excess of $100,000; (t) enter into any Artist Contract (i) requiring expenditures, individually or in the aggregate, in excess of ***** or (ii) providing for a basic album royalty on top line sales in the United States during any contract period of (x) ***** or greater of the applicable suggested retail list price (or suggested retail list price equivalent) or (y) ***** or greater of the applicable price paid to the dealer (or amend any existing Artist Contract such that it would contain either of the provisions described in the foregoing clauses (i) and (ii)); (u) enter into any Artist Contract, Production/Label Contract or Music Publishing Contract (other than Contracts pursuant to which the Acquired Companies obtain their rights to Licensed Acquired Company Masters and/or Administered Acquired Company Compositions) that (or amend any such existing Contract so that it): (i) contains a reversion of Copyright prior to the end of the life of such Copyrights throughout the world and all renewals, extensions, reversions and restorations thereof (other than where an author or statutory successor to an author, including a Successor) obtains a reversion of the rights of the Acquired Companies in or to such renewals, 38

247 extensions, reversions or restorations pursuant to Sections 203 or 304(c) or (d) of the Act or similar foreign law or where future legislation or case law results in a reversion to an author (or a Successor) of the rights of the Acquired Companies with respect to such renewals, extensions, reversions or restorations), (ii) constitutes Approval Assets or First Refusal Assets or (iii) contains Restrictions; (v) make any profit payment, distribution or dividend of cash or other property to Seller or any of its Affiliates (other than the Acquired Companies) except as expressly permitted under Section 1.03(b); (w) permit or suffer any Acquired Company (or any assets or properties of any Acquired Company) to become subject to any Encumbrance other than Permitted Encumbrances and the Encumbrances listed on Section 3.14 of the Seller Disclosure Letter (all of which such Encumbrances shall be released prior to Closing pursuant to Section 2.01(b)(xiv)); (x) fail to request, or fail to provide, television advertising support to the UCI Businesses in the ordinary course of business consistent with past practice, but in any event at a level of television advertising support at least commensurate with the level of support described in Exhibit B attached hereto (such that the UCI Businesses would be deemed to be the recipient of such support for this purpose, rather than Purchaser), it being agreed that all television advertising support shall be provided at no cost to Purchaser or its Affiliates (including the Acquired Companies); (y) fail to request, or fail to provide, radio advertising support to the UCI Businesses on the owned and operated radio stations of Seller and its Affiliates in the ordinary course of business consistent with past practice, it being agreed that all radio advertising support shall be provided at no cost to Purchaser or its Affiliates (including the Acquired Companies); (z) commence, settle or compromise any Action relating to the Acquired Companies or the UCI Businesses that could reasonably be expected to result in loss, damage, cost or expense, individually or in the aggregate, in excess of $100,000 or that could otherwise limit the operations of the UCI Businesses (or any of the Rights related thereto); (aa) fail to offer in good faith promptly after the date hereof to enter into new Contracts for employment with the employees listed on Section 6.01(aa) of the Seller Disclosure Letter on terms substantially similar to the terms set forth on such Section of the Seller Disclosure Letter; (bb) fail to take any of the actions identified on Section 6.01(bb) of the Seller Disclosure Letter; or (cc) authorize, permit, or commit to do or agree to take, whether in writing or otherwise, any of the foregoing actions. 39

248 SECTION Access to Information; Reports. (a) From the date hereof until the Closing, Seller shall, insofar as permitted by Law, cause the Acquired Companies to afford the employees, agents and representatives of Purchaser access, during normal business hours, to the offices, properties, facilities, books and records of the UCI Businesses, as Purchaser deems necessary, desirable or advisable, and to those UCI Employees and the accountants, advisors, customers, distributors, artists, songwriters and suppliers to whom Purchaser reasonably requests access. All information obtained by Purchaser and its employees, agents and representatives pursuant to this Section 6.02 shall be kept confidential in accordance with the Confidentiality Agreement. (b) In order to facilitate the resolution of any claims made by or against or incurred by Seller (but not including claims against Purchaser or its Affiliates) prior to the Closing, for a period of four years after the Closing (or, with respect to any books and records necessary for the preparation and filing of any Tax Returns or the defense of any Tax audit, claim or assessment, until Seller agrees and so notifies Purchaser in writing that such retention is no longer necessary), the Acquired Companies shall, and Purchaser shall cause the Acquired Companies to (i) retain the books and records of the Acquired Companies relating to periods prior to the Closing and (ii) upon reasonable notice, afford the employees, agents and representatives of Seller reasonable access (including the right to make photocopies, at Seller s expense), during normal business hours, to such books and records. Seller shall reimburse Purchaser promptly upon demand for all out-ofpocket expenses incurred by Purchaser in connection therewith. Nothing herein shall require Purchaser or its Affiliates after the Closing (including the Acquired Companies) to disclose any information that would be reasonably likely to result in a waiver of attorney-client privilege, disclosure of trade secrets or violation of any Contract. (c) In order to facilitate the resolution of any claims made by or against or incurred by Purchaser or any Acquired Company after the Closing or for any other reasonable purpose, for a period of four years after the Closing (or, with respect to any books and records necessary for the preparation and filing of any Tax Returns or the defense of any Tax audit, claim or assessment, until Purchaser agrees and so notifies Seller in writing that such retention is no longer necessary), Seller shall (i) retain the books and records of Seller which relate to the Acquired Companies for periods prior to the Closing and which shall not otherwise have been delivered to Purchaser or any Acquired Company and (ii) upon reasonable notice, afford the employees, agents and representatives of Purchaser and the Acquired Companies reasonable access (including the right to make photocopies, at the expense of Purchaser), during normal business hours, to such books and records. Purchaser shall reimburse Seller promptly upon demand for all out-of-pocket expenses incurred by Seller in connection therewith. (d) From the date hereof until the Closing Date, Seller shall deliver to Purchaser within 15 days after the end of each calendar month, the following reports: (i) monthly management reports; (ii) monthly recaps of artist signings and dropped artists; (iii) mobile sales reports, to be provided when delivered to Seller and/or its Affiliates (including, if prepared for Seller and/or its Affiliates, a list of the top 20 sellers by carrier 40

249 including Mastertone and OTA downloads); (iv) monthly release schedules (reflecting upcoming releases); and (v) monthly reports of the amount of television advertising of the UCI Businesses which aired on the television networks or owned and operated television stations of Seller or its Affiliates during the prior month. SECTION Regulatory and Other Authorizations; Notices and Consents. (a) Each of Seller and Purchaser shall: (i) use its commercially reasonable efforts to obtain all authorizations, consents, orders and approvals of all Governmental Authorities that may be or become necessary for its execution and delivery of, and the performance of its obligations pursuant to, this Agreement and shall cooperate fully with the other party in promptly seeking to obtain all such authorizations, consents, orders and approvals, including those necessary to cause the conditions in Sections 2.02(b) and 2.03(b) to be satisfied; (ii) no later than 20 days after the date hereof, file with the United States Federal Trade Commission (the FTC ) and the United States Department of Justice (the DOJ ) the notification and report form required for the Transactions under the HSR Act and shall, as promptly as practicable, file any supplemental information requested in connection therewith pursuant to the HSR Act. Any such notification and report form shall comply with the HSR Act. Each of Seller and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary under the HSR Act. Seller and Purchaser shall keep each other fully apprised of the status of any communications with, and any inquiries or requests for additional information from, the FTC and the DOJ (to the extent permitted by the FTC and DOJ) and shall comply promptly with any such inquiry or request and shall promptly provide any supplemental information requested in connection with the filings made hereunder pursuant to the HSR Act. Any such supplemental information shall comply with the HSR Act; (iii) no later than 30 days after the date hereof, make an appropriate filing to the European Commission, if necessary (including, if applicable, a Form CO), and/or any other Governmental Authority responsible for the enforcement of antitrust Law with respect to the Transactions and shall, as promptly as practicable, file any supplemental information requested in connection therewith (including pursuant to Council Regulation (EEC) 139/2004 on the Control of Concentrations Between Undertakings, OJ [2004] L24/1 and the regulations and decisions of the Commission of the European Communities or other organs of the European Union implementing such regulation (the EU Merger Regulation )). Any such filing shall comply with the relevant antitrust Law (including, if applicable, the EU Merger Regulation). Each of Seller and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is necessary under the relevant antitrust Law (including, if applicable, the EU Merger Regulation). Seller and Purchaser shall keep each other fully apprised of the status of any communications with, and any inquiries or requests for additional 41

250 information from, the relevant Governmental Authorities (including, if applicable, the European Commission) and shall comply promptly with any such inquiry or request and shall promptly provide any supplemental information requested in connection with the filings made hereunder pursuant to the relevant antitrust Law (including, if applicable, the EU Merger Regulation). Any such supplemental information shall comply with the relevant antitrust Law (including, if applicable, the EU Merger Regulation); (iv) no later than 30 days after the date hereof, file with the Mexican Federal Competition Commission (the MFCC ) under the Federal Law of Economic Competition of México (as amended) (the Mexican Federal Competition Law ), the notification form required for the Transactions under the Mexican Federal Competition Law and shall, as promptly as practicable, file any supplemental information requested in connection therewith pursuant to the Mexican Federal Competition Law or as formally requested by the MFCC. Any such notification form shall comply with the Mexican Federal Competition Law. Each of Seller and Purchaser shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary under the Mexican Federal Competition Law. Seller and Purchaser shall keep each other fully apprised of the status of any communications with, and any inquiries or requests for additional information from, the MFCC and shall comply promptly with any such inquiry or request and shall promptly provide any supplemental information requested in connection with the filings made hereunder pursuant to the Mexican Federal Competition Law. Any such supplemental information shall comply with the Mexican Federal Competition Law. In addition, Seller and Purchaser shall abstain from closing the Transactions until (i) a favorable resolution is issued by the MFCC in response to the notification form filed in accordance with this Section 6.03, if so ordered by the MFCC not to close the Transactions within 10 Business Days following the submission by Seller and Purchaser of the required notification form or (ii) 35 Business Days following the submission by Seller and Purchaser of the required notification form have elapsed and the MFCC has not challenged the transaction; and (v) use its commercially reasonable efforts to contest any Action by a Governmental Authority seeking to restrain or enjoin the Transactions and to avoid the imposition of such restraint or injunction, and if any such Governmental Order has been granted or issued, use its commercially reasonable efforts to have such Governmental Order vacated or lifted. (b) For purposes of Section 6.03(a), commercially reasonable efforts shall not require (i) Seller to agree to divest, merge, consolidate, separate, liquidate, dissolve or otherwise modify or agree to any conduct-based relief (each, an Adverse Disposition ) in a manner adverse to Seller or that adversely affects any business of Seller (other than the UCI Businesses) or any part thereof, or (ii) require Purchaser to agree to any Adverse Disposition in a manner adverse to Purchaser or that adversely affects any business of Purchaser or its Affiliates. (c) Notwithstanding anything to the contrary herein, (i) Seller shall not (and Purchaser shall not be required to) take any action which constitutes an Adverse 42

251 Disposition or agree to any Adverse Disposition with respect to any portion of the UCI Businesses to the extent that such Adverse Disposition could or could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, business, assets or results of operations of the UCI Businesses (a Material Adverse Disposition ), and (ii) Seller and Purchaser shall work together in good faith, to the extent permitted by Law and the applicable Governmental Authority, to jointly determine whether to agree to, contest or negotiate any position or claim (including any demand for any Adverse Disposition) in connection with antitrust or competition matters. Notwithstanding the foregoing, Purchaser shall control any contest, negotiations and/or decisions with respect to any demand for an Adverse Disposition, including, without limitation, the terms, conditions and structure of any Adverse Disposition and all related communications with any applicable Governmental Authority; provided that Purchaser shall act in good faith and without the intent solely and willfully to frustrate the purposes of this Agreement; provided, further that Purchaser shall keep Seller apprised on a reasonably current basis of all material communications with applicable Governmental Authorities and permit Seller to participate therein (in all cases to the extent permitted by the applicable Governmental Authorities). For purposes of clarity, all proceeds from any Adverse Disposition taken by any party hereunder shall be solely for the account of Purchaser without any right of set off or other claim by Seller. (d) Seller shall or shall cause the Acquired Companies to give such notices to third parties (other than Governmental Authorities) and use their reasonable efforts to obtain such third party consents as are necessary in connection with the Transactions. Purchaser shall cooperate and use its reasonable efforts to assist Seller in giving such notices and obtaining such consents. Notwithstanding anything in the foregoing to the contrary, neither party shall be required to pay or commit to pay any amount to (or incur any obligation in favor of) any Person from whom any such consent may be required. SECTION Notice of Developments. Prior to the Closing, each party shall, promptly after obtaining knowledge of the occurrence (or non-occurrence) of any event, circumstance or fact arising subsequent to the date of this Agreement which could reasonably be expected to result in the inaccuracy or breach of any representation or warranty or covenant of such party in this Agreement, give notice thereof to the other party and shall use its reasonable best efforts to prevent or to remedy promptly such breach; provided, however, that the delivery of, or failure to deliver, any notice pursuant to this Section 6.04 or otherwise, shall not limit or otherwise affect the remedies available hereunder and shall not be or be deemed to be a cure for any such breach. SECTION Insurance; Risk of Loss. (a) Seller shall keep, or cause to be kept, all insurance policies, or suitable replacements therefor, to the extent relating to the UCI Businesses, in full force and effect through the close of business on the Closing Date. As of the close of business on the Closing Date, Seller shall terminate or cause its Affiliates to terminate all coverage relating to the UCI Businesses under the general corporate policies of insurance of Seller for the benefit of all of its Subsidiaries; provided, however, that (i) no such termination of any policy in force as of the Closing Date shall be effected so as to prevent the Acquired Companies from recovering under 43

252 such policies for losses from events occurring prior to the Closing Date, it being understood that the Acquired Companies shall be responsible for any deductible payable under the terms of the applicable policy in connection with any such claims except to the extent that Seller is required to provide indemnification for such losses pursuant to Article IX; and (ii) no such termination of any claims made policy in force as of the Closing Date shall be effected so as to prevent the Acquired Companies from recovering under such policies for losses from events occurring prior to the Closing Date and for which Purchaser has given Seller written notice of such loss during the policy period and/or the extended reporting period. Purchaser shall become solely responsible for all insurance coverage and related risk of loss with respect to the Acquired Companies based on events occurring on or after the close of business on the Closing Date. Seller shall notify each applicable insurance company for any claims made prior to the Closing Date and, with respect to clause (ii) above, for any claims made during the policy period and/or the extended reporting period. After the Closing Date, Purchaser shall promptly (in all cases within forty five (45) Business Days of receipt of any notice) notify Seller of any claims arising from events that occurred prior to the Closing Date that may be covered by Seller s insurance policies. Purchaser shall cooperate as fully as practicable with Seller and its insurers in the investigation and defense of any such claim. Seller will cooperate, at the sole expense of Purchaser (unless Seller is responsible for the applicable claim pursuant to Article IX), with Purchaser in submitting and pursuing claims promptly and in accordance with the terms of such policies, use commercially reasonable efforts to obtain recoveries for the Acquired Companies with respect to claims pursuant to such insurance policies and remit to the Acquired Companies any recovery obtained by it pursuant to such claims for which Seller is not otherwise responsible pursuant to Article IX. (b) To the extent that, after the Closing Date, the Acquired Companies or Seller requires any information regarding claim data, payroll or other information in order to make filings with insurance carriers, Seller shall promptly supply such information to the Acquired Companies, or Purchaser shall or shall cause the Acquired Companies promptly to supply such information to Seller, in each case except to the extent such requests are in connection with claims between Purchaser and Seller or non-third party indemnification claims pursuant to Article IX. SECTION Books and Records. (a) Purchaser and Seller shall cooperate with each other, and shall cause their officers, employees, agents, auditors and representatives to cooperate with each other, for a period of 180 days after the Closing to ensure the orderly transition of the UCI Businesses from Seller to Purchaser and to minimize any disruption to the respective businesses of Seller and Purchaser that might result from the Transactions. After the Closing, upon reasonable notice, Purchaser and Seller shall furnish or cause to be furnished to each other and their authorized employees, counsel, auditors and representatives access, during normal business hours, to such information and assistance relating to the UCI Businesses as is reasonably necessary for financial reporting and accounting matters, the preparation and filing of any Tax Returns or the defense of any Tax audit, claim or assessment. Each party shall reimburse the other for reasonable out-of-pocket costs and expenses incurred in assisting the other pursuant to the immediately preceding sentence of this Section 6.06(a). Neither party 44

253 shall be required by this Section 6.06(a) to take any action that would unreasonably interfere with the conduct of its business or unreasonably disrupt its normal operations or result in any actual breach of the Law or give rise to any other actual compliance concern. (b) After the Closing, upon Seller s delivery of reasonable notice, Purchaser shall furnish or cause to be furnished to Seller, and each of its authorized employees on a need to know basis, counsel and representatives, such access (including the right to make photocopies, at the expense of Seller), during normal business hours, to all books and records and employees of the Acquired Companies reasonably required by Seller to defend any third party claim relating to the Acquired Companies for which Seller may be required to indemnify Purchaser under Article IX. Nothing herein shall require Purchaser or its Affiliates (including the Acquired Companies after the Closing) to disclose any information that would reasonably likely result in a waiver of attorney-client privilege, disclosure of trade secrets or violation of any Contract. (c) As soon as reasonably practical after the Closing Date (but within five Business Days thereafter), Seller shall deliver or cause to be delivered to Purchaser all agreements, documents, books, Files and Records, including Files and Records stored on computer discs or tapes or any other storage medium (collectively, Company Materials ) in the possession or control of Seller or its Affiliates relating to the UCI Businesses; provided, however, that: (i) Purchaser recognizes that certain Company Materials may relate primarily to Seller or to Subsidiaries or divisions of Seller other than the Acquired Companies and that Seller may retain such Company Materials and shall provide true, complete and correct copies of the relevant portions thereof to Purchaser, including all Company Materials relating to UCI Employees, provided, that to the extent such Company Materials relate to any Acquired Company or the UCI Businesses, Seller shall cause such portions to be kept confidential in accordance with Section 6.08(c); (ii) Without limitation of Section 6.08(a), Seller may retain all Company Materials prepared in connection with the process undertaken by Seller and its Affiliates with respect to the potential disposition of the UCI Businesses (the Auction ); and (iii) Seller may retain any Tax Returns and Purchaser shall be provided with copies of such Tax Returns only to the extent that they relate to separate Tax Returns or separate Liability for Taxes of any of the Acquired Companies or Purchaser. SECTION Further Action; Transition Services. (a) Each of the parties shall use its reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and execute and deliver such documents and other papers, as may be required to consummate the Transactions. Without limitation of the foregoing, (i) promptly upon Purchaser s request, Seller shall execute a letter addressed to royalty recipients, grantors, 45

254 licensors, licensees and all other Persons advising them that effective as of the Closing Date, Purchaser or its Affiliates (including the Acquired Companies) own all Rights to the UCI Businesses and all assets, properties and businesses therein other than the Non-Music Assets, which Seller shall have (or caused to have been) transferred to the Acquired Companies, and that Purchaser or its Affiliates (including the Acquired Companies) are entitled to receive all receipts, income, and revenues derived therefrom, without regard to when earned, and requesting that thereafter, until further notice from Purchaser or Purchaser s Affiliates, they render all required statements and reports and make payments of all sums thereafter otherwise due in respect thereof and provide copies of all notices, claims or other correspondence, directly to Purchaser or its Affiliates; (ii) the parties acknowledge that it is their intent that all Rights to the UCI Businesses and all assets, properties and businesses therein (other than the Non-Music Assets) which are owned or controlled by Seller or its Affiliates (other than the Acquired Companies) were duly contributed and transferred to the Acquired Companies prior to the Closing, and, without limiting Seller s representations and warranties herein or Purchaser s Rights and remedies hereunder, if and to the extent that following the Closing it is determined that a Seller or any of its Affiliates owns, controls or otherwise holds any such assets, properties or businesses, Seller shall, at its sole cost and expense, promptly take all actions that Purchaser reasonably deems necessary or desirable to convey, transfer and deliver, free and clear of any Encumbrance other than Permitted Encumbrances, all Rights therein to Purchaser, including the delivery of all related Files and Records; (iii) Seller shall prepare and file with all applicable Persons, as soon as reasonably practicable after the date hereof, all assignments and corrections of title referenced in Section 2.01(b)(xi) (which shall first be submitted to Purchaser for its approval, which shall not be unreasonably withheld or delayed), and Seller shall thereafter forward to Purchaser all original notices of recordation of assignment and corrections of title and any other correspondence from such Persons relating to such assignments or corrections; and (iv) Seller shall prepare and file with all applicable Persons, as soon as reasonably practicable after the date hereof, all backup applications for trademark registrations for goods and services to be specified by Purchaser in each of the classes and for each of the trademarks identified on Section 3.16(a) of the Seller Disclosure Letter (which such applications for registration shall first be submitted to Purchaser for its approval, not to be unreasonably withheld or delayed), and Seller shall thereafter forward to Purchaser all original notices and any other correspondence from such Persons relating to such applications or the registrations resulting therefrom and consult with Purchaser with respect to any action with respect to any of such applications. (b) The parties hereto desire to effect an orderly transition and integration of the UCI Businesses into Purchaser s businesses and operations. To that end, without limitation of Section 6.07(a), from and after the Closing, Seller shall provide or cause to be provided the transition services described on Exhibit E hereto; it being agreed, that the costs for all such transition services shall be as set out in Exhibit E; it being further agreed, that any cooperation or transition services that Seller is required to provide pursuant to other provisions of this Agreement shall be provided without cost to Purchaser or its Affiliates. 46

255 SECTION Confidentiality. (a) Purchaser acknowledges that the information provided or to be provided to it in connection with the Transactions is subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, but without limitation of Section 6.08(b), the Confidentiality Agreement shall terminate with respect to information relating solely to the UCI Businesses; provided, however, that Purchaser acknowledges that any and all information provided to Purchaser by Seller or Seller s representatives concerning Seller (but not to the extent concerning the UCI Businesses or the Acquired Companies) shall remain subject to the terms and conditions of the Confidentiality Agreement after the Closing Date. As of the Closing Date, Seller shall assign, or if assignment is prohibited, shall designate Purchaser as the intended third party beneficiary under, each of the confidentiality agreements entered into by Seller and any prospective bidder in connection with the Auction to the extent such confidentiality agreements relate to the UCI Businesses or the Acquired Companies. (b) Notwithstanding anything to the contrary set forth in this Agreement or the Confidentiality Agreement, any party to this Agreement (and any employee, representative or other agent of such party) may disclose to any and all Persons, without limitation of any kind, the Tax treatment and Tax structure of the Transactions and all materials of any kind (including opinions or other Tax analyses) that are provided to it relating to such Tax treatment and Tax structure to the extent required by the Internal Revenue Code of 1986, as amended (the Code ) Section 6011 and the regulations thereunder in order to avoid the Transactions being treated as a Confidential Transaction as defined by such regulations, except that (i) this provision shall not permit disclosure until the earliest of (A) the date of the public announcement of discussions relating to the Transactions, (B) the date of the public announcement of the Transactions or (C) the date of the execution of an agreement (with or without conditions) to enter into the Transactions and (ii) this provision shall not permit disclosure to the extent that nondisclosure is necessary in order to comply with applicable securities laws. Nothing in this Agreement shall in any way limit any party s ability to consult any Tax advisor (including a Tax advisor independent from all other entities involved in the transaction) regarding the Tax treatment or Tax structure of the transaction or to respond to or otherwise comply with any request from any Taxing Authority (including Tax audits). (c) On and after the Closing Date, Seller agrees to keep, and to cause its Affiliates and Representatives to keep, strictly confidential all information relating to the business, operations, finances, budgets, contracts, ideas, promotions, plans, Intellectual Property Rights, trade secrets, consumers, suppliers, distributors, employees and other confidential and proprietary information relating to the Acquired Companies or the UCI Businesses ( Confidential Information ) and not to disclose or use any such information without Purchaser s prior written consent, other than as expressly contemplated in this Agreement or to the extent required by Law. Confidential Information shall not include any information that (i) is publicly available through no breach of this Agreement, (ii) is independently developed or acquired by Seller or its Affiliates without use of Confidential Information; or (iii) rightfully obtained from a third party that is not under any obligation to keep such information confidential. 47

256 SECTION Intercompany Receivables and Payables. Seller shall ensure that all receivables and payables of the Acquired Companies from or to, as applicable, Seller and its Subsidiaries (other than the Acquired Companies), including any Inter-Company Liabilities, are discharged in full effective at the close of business on the day prior to the Closing and that no such Liabilities exist as of the Closing. SECTION Publicity. From the date hereof to the Closing Date (i) neither party hereto shall directly or indirectly make any public announcement in respect of the consummation of the Transactions without the prior written consent of the other party and (ii) the parties hereto agree to keep confidential the terms and conditions of this Agreement and the Transactions, in each case except to the extent required by Law. On and after the Closing Date, (x) Seller shall not make or authorize any statements to the media regarding the subject matter of this Agreement or the Transactions without Purchaser s prior written consent or pursuant to a press release agreed upon by Purchaser in writing, and Seller shall maintain as strictly confidential the provisions of this Agreement and the Transactions, except to the extent required by Law, and (y) each party shall keep confidential the terms and conditions of this Agreement and Transactions, except to the extent required by Law and except as each party may require for its respective internal financial, accounting and business purposes. Notwithstanding the foregoing, to the extent that Purchaser or Seller is required by Law to make any disclosure that would otherwise require the prior written consent of the other party, then Purchaser or Seller, as the case may be, shall promptly notify the other party of the existence, terms and circumstances of such request, consult with the other party on the advisability of taking legally available steps to resist or narrow such request, and assist the other party (at the other party s expense) in seeking a protective or other appropriate remedy. SECTION Acquisition Proposals. Seller shall not, and shall cause each Acquired Company and each of Seller s and such Acquired Company s respective directors, officers, employees, agents, consultants, advisors, or other representatives, including legal counsel, accountants and financial advisors ( Representatives ) not to, directly or indirectly, solicit, initiate, encourage, or otherwise facilitate, any inquiries or the making of any proposals or offers from, discuss or negotiate with, provide any information or data to, or consider the merits of any inquiries, proposals or offers from any third party (other than Purchaser) relating to any transaction involving the sale of the UCI Businesses (in whole or in part) or any merger, consolidation, business combination, or similar transaction involving any of the Acquired Companies, or enter into any agreement, memorandum, letter of intent or similar oral or written understanding with respect to the foregoing. Seller shall, and shall cause each Acquired Company and each of Seller s and such Acquired Company s respective Representatives to, immediately, upon the execution of this Agreement, cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. Seller shall, and shall cause each of the Acquired Companies to, promptly notify Purchaser if any such inquiries, proposals or offers that are received by or any such information that is requested from or any such negotiations or discussions are sought to be initiated or continued with or about the Acquired Companies or the UCI Businesses, and shall promptly upon execution of this Agreement request each Person 48

257 that may have received any confidential information relating to the UCI Businesses or that has heretofore executed a confidentiality agreement in connection with its consideration of acquiring the Acquired Companies and the UCI Businesses to promptly return or destroy (and certify such destruction for and on behalf of the Acquired Companies) all confidential information heretofore furnished to such Person by or on behalf of the Acquired Companies or the UCI Businesses in accordance with the terms of such confidentiality agreement (if applicable). SECTION ***** From the date hereof through the Closing Date, Seller shall and shall cause its Affiliates (including the Acquired Companies but excluding Seller s shareholders), at no cost to any Acquired Company or Purchaser, to use its and their respective best efforts to locate and obtain possession and control of ***** described in Sections 2.01(b)(vii)(A) and 2.01(b)(vii)(B) and to use its and their reasonable efforts to locate and obtain possession and control of all other ***** related to the UCI Businesses. After the Closing Date, Seller shall and shall cause its Affiliates (other than its shareholders), at no cost to Purchaser or its Affiliates, to use its or their respective reasonable efforts to cooperate with Purchaser and its Affiliates (including the Acquired Companies) to locate and obtain on behalf of the Acquired Companies possession and control of all ***** related to the UCI Businesses. SECTION ***** Without limitation of Section 1.03(b), Seller shall comply with all of its obligations (and shall, through the Closing Date, cause the Acquired Companies to comply with all of their respective obligations) under the ***** SECTION Certain Intercompany Agreements. Seller shall and shall cause the Acquired Companies to amend, as of the date hereof, without any liability to the Acquired Companies or Purchaser, the Contracts listed on Section 3.10(c)(i) of the Seller Disclosure Letter in the manner set forth on such Section of the Seller Disclosure Letter. Additionally, Seller agrees not to assert, not to cause to be asserted and not to assist any Person in asserting any claim for indemnity or damages or other remedies of any sort under any of the Contracts listed on Section 3.10(c)(i) of the Seller Disclosure Letter. ARTICLE VII Tax Matters SECTION Preparation and Filing of Returns; Payment of Taxes. (a) Seller shall timely prepare and file, or cause to be prepared and filed, on a basis consistent with past practice, all income Tax Returns with respect to the Acquired Companies for (i) any taxable period that ends on or before the Closing Date or (ii) any Straddle Period, to the extent such Tax Returns are required to be filed by Seller or any of its Affiliates (other than the Acquired Companies). Subject to any available indemnification pursuant to Section 9.04(b), Seller shall timely pay or cause to be paid any Taxes shown on such Tax Returns as owing, except to the extent there is a reserve for such Tax liability that was specifically established and identified on the face of the balance sheet of an Acquired Company (rather than in any notes thereto) on the Closing Date. Without limiting the foregoing, for all taxable periods ending on or before the 49

258 Closing Date, Seller shall (i) cause Univision Music Inc. and its U.S. Subsidiaries to join in Seller s consolidated federal income Tax Return and, in jurisdictions requiring separate reporting from Seller, to file separate company state and local income Tax Returns, (ii) include the income of Univision Music Inc. and its U.S. Subsidiaries (including any deferred items triggered into income by Treasury Regulations Section and any excess loss account taken into income under Treasury Regulations Section ) on Seller s consolidated federal income Tax Returns and (iii) timely pay any federal income Taxes attributable to such income. (b) Except as provided in Section 7.01(a), following the Closing, Purchaser shall timely prepare, or cause to be prepared, on a basis consistent with past practice, all Tax Returns with respect to the Acquired Companies for any (i) taxable period that ends on or before the Closing Date or (ii) Straddle Period. Purchaser shall present drafts of such Tax Returns to Seller for review at least thirty (30) days (or ten (10) days in the case of such Tax Returns that are required to be filed more frequently than annually) before the date on which such Tax Returns are required to be filed (taking into account all extensions). Seller shall notify the Buyer of any reasonable proposed revisions to such draft Tax Returns (or the absence thereof) in writing within fifteen (15) days (or three (3) days in the case of such Tax Returns that are required to be filed more frequently than annually) after receipt of such draft Tax Returns from the Buyer; provided, that Seller s failure to respond in writing within such time period shall conclusively be deemed as consent for Purchaser to file, or cause to be filed, such Tax Returns without any further revisions. Seller and Purchaser shall agree to attempt to resolve in good faith any dispute concerning the reporting of any item on any such Tax Return. Promptly upon receiving the written or deemed consent of Seller, Purchaser shall file, or cause to be filed, such Tax Returns. Subject to any available indemnification pursuant to Section 9.04(a), Purchaser shall timely pay or cause to be paid any Taxes shown on such Tax Returns as owing. SECTION Refunds, Credits and Tax Benefits. (a) Purchaser shall pay or cause to be paid to Seller any refunds of Taxes actually received by Purchaser or any Affiliate of Purchaser after the Closing that are attributable to Taxes with respect to any Pre-Closing Tax Period that were (i) paid by any of the Acquired Companies prior to Closing, (ii) paid by Seller or any Affiliate thereof (other than an Acquired Company) (including any such Taxes paid pursuant to Section 9.04(a)), except for Taxes for which Purchaser or any of its Affiliates indemnified Seller pursuant to Section 9.04(b), or (iii) specifically established and identified as a reserve for the Tax liability to which such refund relates on the face of the balance sheet of an Acquired Company (rather than in any notes thereto) on the Closing Date; provided, however, that no such payments shall be made pursuant to this Section 7.02(a) to the extent such refund was listed as an asset on the face of the balance sheet of any Acquired Company (rather than in any notes thereto) on the Closing Date. If, in lieu of receiving any such refund, Purchaser or any of its Affiliates reduces a Tax liability with respect to a Post-Closing Tax Period or increases a Tax Attribute that can be carried forward to a Post-Closing Tax Period, Purchaser shall pay or cause to be paid to Seller the amount of such reduction in Tax liability or the amount of any benefit resulting from 50

259 such increase in a Tax Attribute, as the case may be, when such reduction is actually realized or such increased Tax Attribute is actually utilized. Notwithstanding the above, payments pursuant to this Section 7.02(a) shall only be made to the extent that any such refund, reduction in Tax liability or increase in Tax Attributes exceeds any actual increase in the liability of the Acquired Companies (or of Purchaser or any of its Affiliates required to take items of the Acquired Companies into account in computing its Tax liability) for Taxes for any Post-Closing Tax Period as a result of the Tax position underlying such refund, reduction or increase in Tax Attributes. Any payment pursuant to this Section 7.02(a) shall be made within ten (10) days after such refund is received, such reduction in Tax liability is actually realized or such increased Tax Attributes are actually utilized. (b) Seller shall pay or cause to be paid to Purchaser any refunds of Taxes received, reductions in Tax liability or the amount of any benefit resulting from an increase in a Tax Attribute, in each case resulting from a carryback of a post-acquisition Tax Attribute of any of the Acquired Companies into Seller s consolidated, affiliated, combined, unitary or similar Tax Returns, within ten (10) days after such refund is received, such reduction in Tax liability is actually realized or such increased Tax Attribute is actually realized, by Seller s consolidated, affiliated, combined, unitary or similar group. At Purchaser s request, Seller will cooperate with the Acquired Companies in obtaining such refund, reduction or increase, including through the filing of amended Tax Returns or refund claims. Notwithstanding the above, payments pursuant to this Section 7.02(b) shall only be made to the extent that any such refund, reduction in Tax liability or increase in Tax Attributes exceeds any actual increase in the liability of Seller or any of its Affiliates (other than the Acquired Companies) for Taxes for any Post-Closing Tax Period as a result of the Tax position underlying such refund, reduction or increase in Tax Attributes. Purchaser agrees to indemnify Seller for any Taxes resulting from the disallowance of such post-acquisition Tax Attribute on audit or otherwise. Purchaser shall cause the Acquired Companies to elect, where permitted by any Laws, to carry forward any post-acquisition Tax Attribute that would, absent such election, be carried back into Seller s consolidated, affiliated, combined, unitary or similar Tax Returns. SECTION Cooperation. Seller, the Acquired Companies and Purchaser shall reasonably cooperate, and shall cause their respective Affiliates, officers, employees, agents, auditors and other representatives to reasonably cooperate in (a) preparing and filing all Tax Returns for Straddle Periods and tax periods ending on or before the Closing Date, and (b) resolving all disputes, audits and other matters relating to Taxes with respect to such taxable periods. Such cooperation shall include maintaining and making available to each other all books and records and all relevant correspondence with Taxing Authorities and promptly informing each other of the receipt of any notice of any Tax audit or other Tax proceeding in respect of which the other party or any of its Affiliates may have a Liability. SECTION Transfer Taxes. All transfer, documentary, sales, use, stamp, registration and applicable real estate transfer and stock transfer Taxes ( Transfer Taxes ) incurred in connection with this Agreement and the Transactions shall be borne equally by Seller and Purchaser. 51

260 SECTION FIRPTA Certificate. Seller shall deliver to Purchaser at the Closing a certificate or certificates certifying that the Transactions are exempt from withholding under Section 1445 of the Code. SECTION Tax Sharing Agreements. Seller shall cause the provisions of any Tax sharing agreement between Seller or any of its Affiliates, on the one hand, and any of the Acquired Companies on the other hand, to be terminated on or before the Closing Date. After the Closing Date, no party shall have any rights or obligations under any such Tax sharing agreements (whether with respect to a Pre-Closing Tax Period or a Post-Closing Tax Period). SECTION Purchase Price Adjustments and Allocation. (a) Seller and Purchaser agree to treat any amounts payable pursuant to Section 7.02, Section 7.04 or Article IX as an adjustment to the Purchase Price for Tax purposes, unless a final determination by a Taxing Authority causes any such payment not to be treated as an adjustment to the Purchase Price for U.S. Federal income Tax purposes. (b) If an adjustment is made to the Purchase Price pursuant to Section 7.07(a), Seller and Purchaser agree, for all Tax purposes, to allocate the adjustment among the Acquired Companies based upon the item or items to which such adjustment is principally attributable. Neither Seller nor Purchaser (nor any of their respective Affiliates) shall file any Tax Return, or take a position with a Taxing Authority, that is inconsistent with this Section 7.07 or that treats the Transactions in a manner inconsistent with the terms of this Agreement, unless otherwise required to do so by applicable Law. SECTION Section 338(h)(10) Elections. At the request of Purchaser, Seller shall make, or shall cause to be made, a timely, effective and irrevocable election under Section 338(h)(10) of the Code and under any comparable statutes in any other jurisdiction with respect to any Acquired Companies that the Purchaser requests (other than Univision Music Group Mexico, S.A. de C.V., Univision Music Publishing Mexico, and Fonovisa Inc. and each of its domestic Subsidiaries), and shall file such election(s) in accordance with applicable regulations. Seller agrees to cooperate fully with respect to the making of any such election(s). SECTION Tax Attributes. Seller and its Affiliates (other than the Acquired Companies) shall not elect to retain any net operating loss carryovers, capital loss carryovers or other Tax Attributes of the Acquired Companies. SECTION Intercompany Receivables and Payables. Notwithstanding anything to the contrary in this Agreement, Seller shall have sole responsibility for any Tax Liabilities associated with the elimination of any receivables and payables of the Acquired Companies from or to, as applicable, Seller or any of its Affiliates (other than the Acquired Companies), including any Inter-Company Liabilities, on or prior to the Closing Date. In addition, Seller shall pay or cause to be paid to 52

261 Purchaser within ten (10) Business Days after the Closing Date an amount equal to the product of (i) the amount of federal income Tax basis in any net assets of the Purchaser or its Affiliates (including the Acquired Companies) that was reduced as a result of the elimination of any receivables and payables of the Acquired Companies from or to, as applicable, Seller or any of its Affiliates (other than the Acquired Companies), including any Inter-Company Liabilities, on or prior to the Closing Date, and (ii) twenty percent (20%); provided, however, that no such payment shall be made with respect to the elimination of $13,000,000 of receivables of Disa LLC from Univision Music Inc. and Disa Holdco relating to the distribution of such amount by Disa LLC in December SECTION Termination. ARTICLE VIII Termination (a) This Agreement may be terminated at any time prior to the Closing: (i) by the mutual written consent of Seller and Purchaser; (ii) by either Seller or Purchaser, upon written notice to the other, if the Closing shall not have occurred by 90 days of the date of this Agreement (the Outside Date ); provided, however, that (A) the right to terminate this Agreement under this Section 8.01(a)(ii) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the principal cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date and (B) either Seller or Purchaser shall have the right to extend the Outside Date by up to an additional 90 days by notice in writing to the other party delivered on or prior to the original Outside Date; (iii) by either Seller or Purchaser, upon written notice to the other, in the event that any Governmental Authority shall have issued a judgment or taken any Action restraining, enjoining or otherwise prohibiting the Transactions and such judgment or Action shall have become final and non-appealable; provided, however, that the right to terminate this Agreement under this Section 8.01(a)(iii) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the principal cause of, or shall have resulted in, the occurrence of such judgment or Action; (iv) subject to clause (v) below, by either Seller or Purchaser, upon written notice to the other, if the other party has committed a material breach of this Agreement and, if such breach is curable, has failed to cure such breach within ten (10) days of receipt of written notice; (v) by Purchaser, upon written notice to Seller, in the event that any one or more inaccuracies of any of the representations or warranties contained in the ultimate paragraph of Section 3.10, disregarding in all instances any materiality or Material Adverse Effect qualifiers, could reasonably be expected to result in liabilities, 53

262 losses, damages, claims, costs, expenses, interest, awards, judgments, penalties (including reasonable attorneys fees and expenses) to Purchaser or any Acquired Company in excess of $10,000,000, it being agreed that if Purchaser elects not to exercise its rights to terminate this Agreement as set forth herein and the Closing occurs, Purchaser shall have the right to indemnity for any Losses relating to such breaches pursuant to Article IX; (vi) by Purchaser upon written notice to Seller if (a) there occurs a Material Adverse Effect or (b) Seller takes, permits to be taken or agrees to any Adverse Disposition (x) without Purchaser s prior written consent or (y) that could otherwise result in a Material Adverse Disposition (it being agreed that the actions described in the foregoing clause (b) shall be deemed to be material breaches by Seller of this Agreement); or (vii) by Seller, upon written notice to Purchaser, which notice must be received by Purchaser no later than 5 days after the end of the 20 day period referenced in clause (b) below, if both of the following conditions are met: (a) Seller promptly delivers to Purchaser a notice of a breach by Seller of any of its representations or warranties in this Agreement that occurs after the date hereof alleging that such notice satisfies the conditions of this Section 8.01(a)(vii) (an 8.01(a)(vii) Breach Notice ), and the Losses to which Purchaser would be entitled pursuant to Article IX (if the Closing were to occur) resulting from or otherwise associated with such breaches first disclosed in such 8.01(a)(vii) Breach Notice, together with the Losses to which Purchaser would be entitled pursuant to Article IX (if the Closing were to occur) resulting from or otherwise associated with breaches of representations and warranties in this Agreement that occurred after the date hereof and were the subject of prior notices provided under (and in compliance with) Section 6.04, are in excess of Fifteen Million Dollars ($15,000,000) in the aggregate and (b) Purchaser does not waive in writing, within 20 days after receiving such 8.01(a)(vii) Breach Notice, Purchaser s indemnification rights under Article IX with respect to Losses related thereto. (b) In the event of termination pursuant to Section 8.01(a): (i) Purchaser and Seller shall return to each other all documents and other material received from the other, or any of their respective Representatives (or the Acquired Companies, in the case of Purchaser) relating to the Transactions, whether so obtained before or after the execution hereof; and (ii) all confidential information received by any party hereto shall be treated in accordance with the Confidentiality Agreement, which shall remain in full force and effect notwithstanding the termination of this Agreement. SECTION Effect of Termination. In the event of termination of this Agreement as provided in Section 8.01, this Agreement shall forthwith become void and there shall be no Liability on the part of either party except that (a) the last sentence of Section 6.02(a), Section 6.10, Section 8.01, this Section 8.02, and Article X shall survive any such termination; and (b) nothing herein shall be deemed to release any party from any Liability if such termination results from (i) the willful or negligent failure of 54

263 such party to fulfill a condition hereunder to the performance of the other party s obligations, (ii) the material failure of such party to perform (or any other material breach of) a covenant or agreement in this Agreement, or (iii) the material breach by such party of any representation or warranty contained herein. ARTICLE IX Indemnities SECTION Survival of Representations and Warranties. The representations and warranties contained in this Agreement shall survive the Closing and expire fifteen (15) months thereafter; provided, however, that (i) the representations and warranties contained in Section 3.01 (Organization), Section 3.02 (Authority; Enforceability), 3.05 (Capitalization of the Companies), Section 3.06 (Subsidiaries), Section 3.14 (Title), and Section 3.21 (Brokers) shall survive indefinitely and (ii) the representations and warranties contained in Section 3.18 (Tax Matters), Section 3.16(a) (Infringements) and Section 3.20 (Environmental, Health and Safety Compliance) shall survive until and expire ninety (90) days after the expiration of the applicable statute of limitations (as such statute of limitations period may be extended from time to time). If written notice of a claim has been given in accordance with Section 9.02(d) or Section 9.04(e) prior to the expiration of the applicable representations and warranties, then the relevant representations and warranties shall survive as to such claim, until such claim has been finally resolved. SECTION Indemnification. (a) After the Closing, Purchaser and its Affiliates, and each of their respective officers, directors, employees, agents, successors and assigns (the Purchaser Indemnified Parties ) shall be indemnified and held harmless by Seller for any and all liabilities, losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including reasonable attorneys fees and expenses and the costs of enforcing the terms of this Agreement) actually suffered or incurred by them (hereinafter a Loss ), arising out of, relating to, or resulting from: (i) subject to Section 9.03, the inaccuracy or breach of any representation or warranty made by Seller in this Agreement as if such representation or warranty were made on and as of the Closing Date and without giving effect to any materiality or Material Adverse Effect qualifier or any supplement to the Seller Disclosure Letter; (ii) the inaccuracy or breach of any representation or warranty made by Seller in Section 3.04(b) as if such representation or warranty were made on and as of the Closing Date and without giving effect to any materiality or Material Adverse Effect qualifier or any supplement to the Seller Disclosure Letter; (iii) the inaccuracy or breach of any representation or warranty made by Seller in Section 3.07(j) without giving effect to any materiality or Material Adverse Effect qualifier or any supplement to the Seller Disclosure Letter; 55

264 (iv) the breach of any covenant or agreement by Seller contained in this Agreement; (v) any and all Actions related to the Acquired Companies or the UCI Businesses arising out of, incurred in or otherwise relating to periods on and prior to the Closing Date (including, without limitation, all Actions referenced in the Seller Disclosure Letter); (vi) payola and similar Actions, including, without limitation, assertions that Seller or any of its Subsidiaries (including the Acquired Companies) or the UCI Businesses (or any of their respective employees, agents or representatives) have at any time prior to the Closing Date given or agreed to give any gift or similar benefit to any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder the UCI Businesses or assist in connection with any actual or proposed transaction (whether such gift or benefit was received, or to be received, prior to or after the Closing Date); (vii) any and all Losses relating to the property, land or improvements located at 2137 E. 37th Street, Vernon, CA; (viii) any Acquired Company s failure (at any time before or after the Closing) to comply with its obligations under any Company Contract to deliver to artists and other Persons the Original Multi-Tracks or other original materials required thereunder that Seller was unable to deliver possession or control of to Purchaser prior to or on the Closing Date; (ix) any and all Actions related to any of the agreements set forth on Section 3.10(c)(i) of the Seller Disclosure Letter, whether related to any period prior to or after the Closing Date and whether related to such agreement prior to or after termination or amendment pursuant to Section 6.14; or (x) ***** (b) After the Closing, Seller and its Affiliates, and each of their respective officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless by Purchaser for any and all Losses arising out of, relating to, or resulting from: (i) subject to Section 9.03, the inaccuracy or breach of any representation or warranty made by Purchaser in this Agreement as if such representation or warranty were made on and as of the Closing Date and without giving effect to any materiality qualifier or any supplement to the Purchaser Disclosure Letter; (ii) the breach of any covenant or agreement by Purchaser contained in this Agreement; or (iii) subject to Section 9.03, all Liabilities assumed by Purchaser pursuant to Section 5.01(a) and all Losses arising from Seller s agreement to 56

265 cause Vision Latina to maintain the employment of the Vision Latina Employees pursuant to the terms and conditions of Section 5.04, except to the extent resulting from Seller s gross negligence, willful misconduct or breach of Section 5.02(b) or Section (c) Each party hereto shall be entitled to rely upon, and shall be deemed to have relied upon, all representations, warranties and covenants of each party set forth in this Agreement that have been or are made in favor of such party, and each party s obligation to indemnify the other will not be affected in any manner, notwithstanding (i) the making of this Agreement, (ii) any investigation or examination conducted with respect to, or any knowledge acquired (or capable of being acquired) about the accuracy or inaccuracy of or compliance with, any representation, warranty, covenant, agreement, undertaking or obligation made by or on behalf of the parties hereto, (iii) the waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant, agreement, undertaking or obligation or (iv) the Closing hereunder. (d) Any party seeking indemnification under this Section 9.02 (an Indemnified Party ) shall give the party from whom indemnification is being sought (an Indemnifying Party ) notice of any matter which such Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement, within 60 days of such determination, stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Section 9.02 except to the extent (and only to the extent) the Indemnifying Party is actually and materially prejudiced by such failure. The obligations and Liabilities of an Indemnifying Party under this Section 9.02 with respect to Losses arising from claims of any third party which are subject to the indemnification provided for in this Section 9.02 ( Third Party Claims ) shall be governed by and contingent upon the following additional terms and conditions: if an Indemnified Party shall receive written notice of any Third Party Claim, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim within 30 days of the receipt by the Indemnified Party of such notice; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Section 9.02 except to the extent (and only to the extent) the Indemnifying Party is actually and materially prejudiced by such failure. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice (which counsel must be reasonably acceptable to the Indemnified Party) if it gives notice of its intention to do so to the Indemnified Party within 20 Business Days (or sooner, if the nature of the Third Party Claim so requires) of the receipt of such notice from the Indemnified Party; provided, however, that, if (i) the Indemnified Party shall have been advised by counsel that there are one or more legal or equitable defenses or theories available to it that are different from or in addition to those available to the Indemnifying Party, or, in the reasonable opinion of the 57

266 Indemnified Party, counsel for the Indemnifying Party could not adequately represent the interests of the Indemnified Party because its interests could be in conflict with those of the Indemnifying Party, (ii) such action or Third Party Claim involves, or is reasonably likely to have a material effect on, any matter beyond the scope of the indemnification obligation of the Indemnifying Party or (iii) the Indemnifying Party shall not have assumed the defense of the Third Party Claim in a timely fashion, then the Indemnified Party shall be entitled to retain its own counsel, at the expense of the Indemnifying Party; provided that in any case the Indemnifying Party shall not be obligated to pay the expenses of more than one separate counsel for all Indemnified Parties, taken together unless in the opinion of counsel for any Indemnified Party such joint or collective representation would be inappropriate due to a conflict of interest. For purposes of clarity, the parties agree that the Indemnified Party shall be entitled to control any action whose outcome could materially adversely effect the Indemnified Party s rights to indemnification from the Indemnifying Party hereunder. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party all witnesses, pertinent records, materials and information in the Indemnified Party s possession or under the Indemnified Party s control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, all such witnesses, records, materials and information in the Indemnifying Party s possession or under the Indemnifying Party s control relating thereto as is reasonably required by the Indemnified Party. Without limitation of the foregoing, (i) the parties hereby expressly agree to cooperate in good faith with respect to the resolution of all claims involving artists and songwriters potentially subject to indemnification pursuant to the terms of this Agreement, and (ii) it is the parties intent that all such claims shall be addressed and resolved in good faith so as to not unduly damage the relationship of Purchaser or its Affiliates (including the Acquired Companies) with artists and songwriters. If the Indemnifying Party assumes control of the Third Party Claim, the Indemnifying Party shall keep the Indemnified Party informed regarding all material developments and shall permit the Indemnified Party to meaningfully participate in all decisions potentially affecting the rights of the Indemnified Party. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, (i) settle or compromise any Third Party Claim or consent to the entry of any judgment which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a written release from all Liability in respect of such Third Party Claim or (ii) settle or compromise any Third Party Claim in any manner that may adversely affect the Indemnified Party (other than as a result of money damages or other monetary payments that are fully paid by the Indemnifying Party). No Third Party Claim which is being defended in good faith by the Indemnifying Party in accordance with the terms of this Agreement shall be settled by the Indemnified Party without the prior written consent of the Indemnifying Party. (e) Sections 9.02(a)(i) and 9.02(b)(i) shall not apply with respect to any Losses arising out of, relating to or arising from (and no indemnification hereunder shall be available with respect to) any inaccuracy or breach of any representation and warranty that has expired as provided in Section

267 (f) The respective indemnification obligations of the parties with respect to all Tax matters shall be governed by Section 9.04, and this Section 9.02 shall not be applicable to any such matters. SECTION Limits on Indemnification. (a) No amount shall be payable by Seller pursuant to Section 9.02(a)(i) unless the aggregate amount of Losses indemnifiable under Section 9.02(a)(i) exceeds Two Million Dollars ($2,000,000) (and then only to the extent of such excess), provided, however, that the limitations set forth in this Section 9.03(a) shall not apply to any Losses indemnifiable under Section 3.01 (Organization), Section 3.02 (Authority; Enforceability), 3.05 (Capitalization of the Companies), Section 3.06 (Subsidiaries), Section 3.21 (Brokers), or Section 3.18 (Tax Matters), all of which such Losses shall be indemnifiable dollar for dollar from dollar one. (b) No amount shall be payable by Seller pursuant to Section 9.02(a)(i) for any individual item or series of related items where the amount of Losses relating thereto is less than $100,000, provided, however, that such items shall be aggregated for purposes of determining whether the aggregate amount of Losses set forth in Section 9.03(a) have been met. For illustration purposes only, if Purchaser incurs 21 separate Losses, each of which is for an amount equal to $99,000, Purchaser shall be entitled to seek recovery from Seller for $79,000 plus any additional Losses that Purchaser incurs thereafter. (c) The provisions of Section 9.05 shall not apply for purposes of determining the limits on indemnification pursuant to this Section (d) Notwithstanding anything to the contrary contained in this Agreement, the maximum amount of aggregate indemnifiable Losses which may be recovered from Seller pursuant to Section 9.02(a)(i) shall be an amount equal to Thirteen Million Five Hundred Thousand Dollars ($13,500,000); provided however, that with respect to indemnifiable Losses which may be recovered from Seller pursuant to Section 9.02(a)(i) arising out of, relating to, or resulting from the inaccuracy or breach of any representation or warranty made by Seller in Section 3.01 (Organization), Section 3.02 (Authority; Enforceability), 3.05 (Capitalization of the Companies), Section 3.06 (Subsidiaries), Section 3.14 (Title) or Section 3.21 (Brokers), the foregoing limitation shall be an amount equal to One Hundred Million Dollars ($100,000,000), provided, further however, that none of the foregoing limitations shall apply to indemnifiable Losses which may be recovered from Seller pursuant to Section 9.02(a)(i) arising out of, relating to, or resulting from the inaccuracy or breach of any representation or warranty made by Seller in Section 3.18 (Tax Matters). (e) No amount shall be payable by Purchaser pursuant to Section 9.02(b)(i) or Section 9.02(b)(iii) until the aggregate amount of Losses indemnifiable under Section 9.02(b)(i) or Section 9.02(b)(iii) exceeds Two Million Dollars ($2,000,000) 59

268 (and then only to the extent of such excess), provided, however, that the limitations set forth in this Section 9.03(e) shall not apply to any Losses indemnifiable under Section 4.01 (Organization), Section 4.02 (Authority; Enforceability), Section 4.06 (Availability of Funds) or Section 4.07 (Brokers). (f) No amount shall be payable by Purchaser pursuant to Section 9.02(b)(i) or 9.02(b)(iii) for any individual item or series of related items where the amount of Losses relating thereto is less than $100,000; provided however, that such items shall be aggregated for purposes of determining whether the aggregate amount of Losses set forth in Section 9.03(e) have been met. (g) Notwithstanding anything to the contrary contained in this Agreement, the maximum amount of aggregate indemnifiable Losses which may be recovered from Purchaser pursuant to Section 9.02(b)(i) and 9.03(b)(iii) shall be an amount equal to Thirteen Million Five Hundred Thousand Dollars ($13,500,000); provided however, that with respect to indemnifiable Losses which may be recovered from Purchaser pursuant to Section 9.02(b)(i) arising out of, relating to, or resulting from the inaccuracy or breach of any representation or warranty made by Purchaser in Section 4.01 (Organization), Section 4.02 (Authority; Enforceability), Section 4.06 (Availability of Funds) or Section 4.07 (Brokers), the foregoing limitation shall be an amount equal to One Hundred Million Dollars ($100,000,000). SECTION Tax Indemnification. (a) Following the Closing, Seller shall indemnify Purchaser and its Affiliates (including the Acquired Companies) and hold them harmless from: (i) all Liability for Taxes of the Acquired Companies for any Pre-Closing Tax Period (including, for avoidance of doubt, any withholding Taxes resulting from the issuance of an equity interest in any of the Acquired Companies); (ii) all Liability (as a result of Treasury Regulations Section (a) or otherwise, whether arising before, at or after the Closing) for Taxes of any Person that is or was a member of any affiliated, consolidated, combined or unitary group of which any of the Acquired Companies is or was a member during any Pre-Closing Tax Period; (iii) any breach by Seller or any of its Affiliates (except for breaches by the Acquired Companies after the Closing) of (A) any representation or warranty set forth in Section 3.18 (as if such representation or warranty were made on and as of the Closing Date without giving effect to any materiality or Material Adverse Effect qualifier or any supplement to the Seller Disclosure Letter) or in any certificate delivered pursuant to Section 7.06 or (B) any covenant or agreement contained in Article VII; and (iv) all Liability for reasonable legal fees and any reasonable costs and expenses attributable to any item in clauses (i) through (iii). Notwithstanding the foregoing, Seller shall not have any indemnification obligation for (i) any Liability for Taxes attributable solely to a breach by Purchaser or any of its Affiliates (except for breaches by the Acquired Companies on or prior to the Closing) of any covenant or agreement contained in Article VII; (ii) any Liability for Taxes on any subpart F income attributable to the Acquired Companies for the Pre-Closing Tax Period 60

269 as calculated under Section 951 of the Code to the extent such income exceeds the subpart F income attributable to the Acquired Companies for the Pre-Closing Tax Period as calculated on a closing of the books basis; (iii) any Liability for Taxes with respect to which the Acquired Companies specifically established and identified a reserve relating to such Liability on the face of the balance sheets of the applicable Acquired Companies (rather than in any notes thereto) as of the Closing Date; or (iv) any Liability for Taxes attributable solely to any action taken on or after the Closing Date by Purchaser or any of its Affiliates (except for actions of the Acquired Companies on or prior to the Closing) or any transferee thereof (other than any such action expressly required or contemplated by this Agreement). (b) Following the Closing, Purchaser shall, and shall cause each of the Acquired Companies to, indemnify Seller and its Affiliates and hold them harmless from: (i) all Liability for Taxes of the Acquired Companies for any Post-Closing Tax Period; (ii) all Liability for Taxes, calculated based on a forty percent (40%) aggregate Tax rate, on any subpart F income attributable to the Acquired Companies for the Pre-Closing Tax Period as calculated under Section 951 of the Code to the extent such income exceeds the subpart F income attributable to the Acquired Companies for the Pre-Closing Tax Period as calculated on a closing of the books basis; (iii) any breach by Purchaser or any of its Affiliates (except for breaches by the Acquired Companies on or prior to Closing) of any covenant or agreement contained in Article VII; and (iv) all Liability for reasonable legal fees and any reasonable costs and expenses attributable to any item in clauses (i) through (iii). Notwithstanding the foregoing, Purchaser and the Acquired Companies shall not have any indemnification obligation for (i) any Liability for Taxes attributable solely to a breach by Seller or any of its Affiliates (except for breaches by the Acquired Companies after the Closing) of any covenant or agreement contained in Article VII; or (ii) any Liability for Taxes attributable solely to any action taken on or prior to the Closing Date by Seller or any of its Affiliates or any transferee thereof (other than any such action expressly required or contemplated by this Agreement). (c) Any indemnity payment to be made hereunder shall be paid within ten (10) days after the Indemnified Party makes written demand upon the Indemnifying Party, but in the case of indemnity payments required for the Indemnified Party to satisfy its payment obligations pursuant to Section 7.01, no earlier than five (5) Business Days prior to the date on which the relevant Taxes (including any estimated Tax payments) are required to be paid to the relevant Taxing Authority. (d) For purposes of this Agreement (including, without limitation, Section 7.02), in the case of any Straddle Period, (i) real, personal and intangible property Taxes ( Property Taxes ) shall be apportioned between the Pre-Closing Tax Period and the Post-Closing Tax Period on a daily pro-rata basis and (ii) all Taxes other than Property Taxes shall be apportioned between the Pre-Closing Tax Period and the Post- Closing Tax Period on a closing of the books basis. (e) Within thirty (30) days after a party is notified by a Taxing Authority of the existence of a Tax issue that may give rise to an indemnification claim under this Section 9.04 (a Tax Controversy ) by it against the other party, the Indemnified Party shall notify the Indemnifying Party of the Tax issue, and thereafter shall promptly forward to the Indemnifying Party copies of notices and communications 61

270 with a Taxing Authority relating to such Tax Controversy (provided, however, that the failure to provide such initial notice to the Indemnifying Party or to forward copies of such notices and communications from a Taxing Authority shall not release the Indemnifying Party from any of its obligations under this Section 9.04, except to the extent the Indemnifying Party is materially prejudiced by such failure). Except as provided in this Section 9.04(e), the Indemnifying Party may elect to control any audit inquiry, information request, audit proceeding, suit, contest or any other action (a Tax Proceeding ) with respect to a Tax Controversy for which it would be required to indemnify the other party if it acknowledges in writing that it has sole Liability for any Taxes that might arise therefrom or in connection therewith and will not materially increase the unindemnified Liabilities for Taxes of the Indemnified Party; provided, however, that the Indemnifying Party shall (i) keep the other party reasonably informed about such Tax Proceedings, (ii) provide the Indemnified Party with copies of all documents delivered to or received by the Indemnifying Party in connection with such Tax Proceedings promptly following delivery to or receipt from a Taxing Authority, (iii) consult in good faith with the Indemnified Party regarding all matters relating to the conduct of such Tax Proceedings, and (iv) use reasonable best efforts to provide the Indemnified Party with an opportunity to attend as an observer settlement discussions and other conferences and meetings relating thereto. The Indemnifying Party shall not settle any Tax Proceeding with respect to a Tax Controversy on a basis that would materially adversely affect the Indemnified Party without obtaining the Indemnified Party s written consent, which consent shall not be unreasonably withheld. The Indemnified Party shall not settle any Tax Controversy without obtaining the Indemnifying Party s written consent, which shall not be unreasonably withheld. Any out-of-pocket expenses incurred by the Indemnified Party in handling, settling or contesting a Tax Controversy that the Indemnifying Party has elected to control under this Section 9.04 shall be borne by the Indemnified Party. Seller and Purchaser shall jointly control, and shall each have the right to participate in all activities and strategic decisions with respect to, any Tax Proceedings for which each party would be required to indemnify the other party with respect to one or more Tax issues. Seller may assume control of any such Tax Proceeding for any Straddle Period in the manner set forth above if it acknowledges in writing that it has sole Liability for any Taxes that might arise pursuant to such proceeding. Whether or not Purchaser or Seller chooses to control or participate in any Tax Proceeding, all of the parties hereto shall cooperate in the defense or prosecution thereof. SECTION Computation of Indemnifiable Losses. Any amount payable pursuant to this Article IX shall be decreased to the extent of any insurance proceeds actually received (after deduction of related costs and expenses) by the recipient of such amount in respect of an indemnifiable Loss and shall be (i) increased to take account of any net Tax cost incurred by the Indemnified Party arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (ii) reduced to take account of any net Tax benefit realized by the Indemnified Party arising from the incurrence or payment of any such Loss, in each case, when and as such Tax cost or benefit is actually realized. For purposes of this Section 9.05, Taxes shall be determined without regard to any available Tax Attributes ( e.g., net operating losses) of the Indemnified Party. 62

271 SECTION Indemnification as Exclusive Remedy. The indemnification provided in this Article IX, subject to the limitations set forth herein, shall be the exclusive post-closing monetary remedy available to any party for any breach of any representation, warranty or covenant by the other party contained herein (other than claims for or in the nature of fraud or willful misconduct); provided, however, that this exclusive remedy for damages does not preclude a party from bringing an action for specific performance or other equitable remedy to require a party to perform its obligation under this Agreement. ARTICLE X Other Matters SECTION Notices. Any notice or other communication hereunder must be given in writing and (a) delivered in person, (b) transmitted by facsimile or electronic mail, provided, that any notice so given is also mailed as provided in clause (c), or (c) mailed by certified or registered mail, postage prepaid, receipt requested as follows: if to Seller, to: Univision Communications Inc Center Drive Los Angeles, California Fax : (310) Attn: General Counsel with a copy to: Loeb & Loeb LLP Santa Monica Boulevard Los Angeles, California Fax: (310) Attn: John T. Frankenheimer, Esq. if to Purchaser, to: UMG Recordings, Inc Colorado Avenue Santa Monica, California Attention: Executive Vice President, Business and Legal Affairs with a copy to: Munger, Tolles & Olson LLP 355 South Grand Avenue; 35th Floor Los Angeles, California Attention: Mary Ann Todd Maria Seferian 63

272 or to such other address or to such other person as either party shall have last designated by such notice to the other party. Each such notice or other communication shall be effective (i) if given by telecommunication, facsimile or electronic mail, when transmitted to the applicable number so specified in (or pursuant to) this Section and receipt confirmation is received or, if transmitted after 5:00 p.m. local time on a Business Day in the jurisdiction to which such notice is sent or at any time on a day that is not a Business Day in the jurisdiction to which such notice is sent, then on the immediately following Business Day, (ii) if given by mail, on the first Business Day in the jurisdiction to which such notice is sent following the date three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, on the Business Day when actually received at such address or, if not received on a Business Day, on the Business Day immediately following such actual receipt. SECTION Amendments; No Waivers. (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. (b) No failure or delay by any party in exercising any Right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other Right, power or privilege. The Rights and remedies herein provided shall be cumulative and not exclusive of any Rights or remedies provided by Law. SECTION Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof; provided, however, that the laws of the respective jurisdictions of incorporation of each of the parties hereto shall govern the relative rights, obligations, powers, duties and other internal affairs of such party and its board of directors. SECTION Jurisdiction; No Third Party Beneficiaries; Expenses of Litigation. (a) Each party hereby consents to the exclusive jurisdiction of any California state or United States Federal court sitting in the City of Los Angeles, State of California with respect to disputes arising out of this Agreement. (b) Except for rights of Indemnified Parties pursuant to Article IX hereof, (i) there are not any intended third party beneficiaries of any provision of this Agreement and (ii) nothing herein shall be deemed to confer upon any Person other than the parties hereto any legal or equitable right, benefit or remedy under or by reason of this Agreement. (c) Upon final and non-appealable judgment by a court of competent jurisdiction with respect to any disputes arising out of this Agreement, the party against which judgment has been entered shall reimburse the prevailing party for all reasonable fees and expenses incurred in connection with the defense or prosecution, as the case may be, of such dispute. 64

273 SECTION Severability. If any term, provision, covenant, restriction or other condition of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, illegal or incapable of being enforced by any rule or Law, or public policy, all other terms, provisions, covenants, restrictions and conditions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to either party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the Transactions are consummated to the extent possible. SECTION Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. SECTION Assignment. Neither this Agreement nor any of the Rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of Law or otherwise by either party without the prior written consent of the other party and any such purported assignment without such consent shall be void provided, however that Purchaser may assign this Agreement in whole or in part to any of its Affiliates or to any Person in connection with a sale of all or substantially all of Purchaser s or its Affiliates business, stock or assets. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. SECTION Entire Agreement. This Agreement, including (i) the Appendix, Schedule and Exhibits hereto, and (ii) the Seller Disclosure Letter, together with the Confidentiality Agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement. All Appendices, Schedules and Exhibits hereto are hereby incorporated herein, and all such Appendices, Schedules and Exhibits shall be deemed to be included in all referenced to this Agreement. SECTION Captions. The captions herein are included for convenience of reference only and shall be ignored as in the construction or interpretation hereof. SECTION Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof. 65

274 SECTION Expenses. Regardless of whether the Transactions are consummated, the Seller and Purchaser shall each bear their own respective costs and expenses incident to the preparation, negotiation, execution, delivery and performance of the Transactions, including without limitation the fees and expenses of counsel, accountants and other experts and advisors, provided that Seller and Purchaser shall equally share the cost of all filing fees and similar costs related to securing antitrust clearance. SECTION Interpretation. Unless the context otherwise requires (i) all pronouns and all variations thereof will be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require, (ii) words in the singular include the plural, and words in the plural include the singular, (iii) herein, hereof and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, subsection, or other subdivision, (iv) including or includes, when following any general provision, sentence, clause, statement, term or matter, will be deemed to be followed by, but not limited to, and, but is not limited to, respectively, (vi) an accounting term not otherwise defined herein has the meaning assigned to it in accordance with GAAP, and (vii) all references to dollars or $ shall mean United States Dollars. [Remainder of this page intentionally left blank; signature page follows] 66

275 IN WITNESS WHEREOF, Seller and Purchaser have duly executed this Purchase Agreement, all as of the date first written above. UNIVISION COMMUNICATIONS INC. By: /s/ C. Douglas Kranwinkle Name: C. Douglas Kranwinkle Title: Executive Vice President - Law UMG RECORDINGS, INC. By: /s/ Zach Horowitz Name: Zach Horowitz Title: President

276 APPENDIX A Definitions Acquired Companies means the Companies and all Subsidiaries of the Companies (including their respective predecessors). Acquired Company Compositions means all Musical Compositions and musical works, or portions thereof, including cues, domestic or foreign, that are owned, controlled and/or administered, in whole or in part, by an Acquired Company, or in which an Acquired Company owns any interest (including an income participation interest), or which relate to, are utilized in or form a part of the UCI Businesses other than the Non-Music Assets. Acquired Company Masters means all Recordings, together with the performances and other relevant contributions embodied therein, that are owned, licensed or otherwise acquired by an Acquired Company, or which relate to, are utilized in or form a part of the UCI Businesses other than the Non-Music Assets. Acquired Company Phonorecords means all Phonorecords derived from Acquired Company Masters in which the Copyright with respect to the compilation of sound recordings or other works embodied therein is held by or licensed to an Acquired Company, or which relate to, are utilized in or form a part of the UCI Businesses other than the Non-Music Assets. Acquisition Documents means all contracts, agreements, assignments and other instruments pursuant to which an Acquired Company acquired any Intellectual Property Rights, or which relate to or otherwise affect the UCI Businesses (including, without limitation, all recording artist agreements, master purchase agreements, master license agreements, pressing and distribution agreements, exclusive songwriter agreements, single song agreements, co-publishing agreements, administration and subpublishing agreements). Action means any domestic or international, civil or criminal claim, action, suit, arbitration, inquiry, proceeding, audit, contest, investigation or other action by or before any Person (including any Governmental Authority). Administered Acquired Company Compositions means all Acquired Company Compositions other than the Owned Acquired Company Compositions. Advertising Package means the advertising in television, which Seller shall make available, or cause to be made available, to Purchaser on all of the terms and conditions set forth in Exhibit B attached hereto. Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, following the Closing, none of Seller and its Subsidiaries, on the one hand, and Purchaser and its Affiliates (including the Acquired Companies), on the other hand, shall be deemed to be Affiliates of each other.

277 Approval Asset means any Music Asset that is subject to any so-called key man clause, any provision that requires approval of a third party prior to the assignment of the Contract governing that Music Asset or any similar contractual provision restricting the transfer of such Music Asset. Artist Contract means a Contract with an artist or other Person pursuant to which such artist or other Person is required to provide its (or such furnisher is required to provide the artist s) exclusive services to the counterparty for the making or delivery of master Recordings, or pursuant to which Recordings featuring the performances of an artist are licensed to the counterparty for Distribution. Balance Sheet Date means September 30, ***** ***** Business Day shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Los Angeles, California are authorized or required by Law to close. Cause means (i) conviction of a felony, (ii) willful misconduct; or (iii) the willful and continued failure to substantially perform the applicable employee s duties. Closing means the closing of the purchase and sale of the Securities. Confidentiality Agreement means that certain letter agreement dated July 16, 2007 between Seller and UMG Recordings, Inc. Contract means any contract, arrangement, lease, license, indenture, agreement, commitment and any other legally binding arrangement, whether oral or written. control (including, with correlative meanings, the terms controlling, controlled by and under common control with ) means, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting interests, by Contract or otherwise. Copyright means any and all common law copyright and registered copyright Rights, neighboring rights, related rights and similar Rights arising under the Law of any nation, state or jurisdiction or pursuant to any treaty or convention (including without limitation the Act, and any phonogram producer s neighboring rights and related rights under the laws of Mexico), and, together with any and all applications, registrations, certificates, renewals, reversions, extensions, goodwill, benefits, privileges, causes of action and remedies (including without limitation the right to sue and take action for any past, current or future infringement, misappropriation or violation and the 2

278 right to settle and retain proceeds from any such action) for any of the foregoing and all derivative works, or restorations, now or hereafter provided by any Law, regardless of the medium of fixation or means of expression (including websites and webpages) and all Rights therein throughout the world and universe. Distribution means distributing to brick and mortar or online stores that distribute recorded music or music videos in physical form to consumers (or to persons who sell to such stores), including warehousing, freight and pick, pack and ship arrangements, and/or distributing of recorded music or music videos to consumers in electronic or digital formats, and possibly marketing and sales services in connection therewith. Encumbrance means any security interest, pledge, mortgage, lien, charge, option to purchase or lease or otherwise acquire any interest, conditional sales agreement, claim, restriction, covenant, easement, right of way, or other encumbrance of any kind, other than any obligation to accept returns of inventory in the ordinary course of business. Notwithstanding the foregoing, the term Encumbrance shall exclude any (i) customary rights granted to subpublishers or licensees with respect to Musical Compositions or the customary rights of copublishers of, or royalty participants in, Musical Compositions, and (ii) the customary rights granted to distributors or licensees with respect to Recordings or the customary rights or royalty participants in Recordings. Environmental Law means any applicable federal, state, local or foreign Law (including common Law), treaty, regulation, rule, judgment, order, decree, injunction, permit or governmental restriction, or any agreement with any Governmental Authority, relating to the environment, natural resources, human health and safety (including occupational safety and health), or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials. Environmental Permits means all permits, licenses, franchises, certificates, approvals and other similar authorizations of Governmental Authorities required by Environmental Laws and relating to the UCI Businesses or any Acquired Company. Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Files and Records means all books, records, files and papers (whether in audio files, hard copy or electronic format) relating to the Music Assets or the UCI Businesses, including, without limitation, all: (i) documents necessary for the day to-day administration of the UCI Businesses (such as, without limitation, Acquisition Documents, Copyright certificates, rate cards, computer programs, files, and other accounting records (regardless of medium of storage) related to receipts and royalty activities); (ii) telephone numbers and customer and supplier lists; (iii) catalogs and advertising literature; (iv) photographic materials and packaging materials (including inserts); (v) financial records, historical performance records, accounting records and the 3

279 royalty system of the UCI Businesses; (vi) designs, formulas, patterns, specifications, drawings and blueprints; (vii) microfilm and microfiche; (viii) licenses and other exploitation agreements, lead sheets, cue sheets, musical scores, artwork, paper and arrangements; and (ix) registrations with performing rights societies. First-Refusal Assets means Music Assets that an Acquired Company is required to offer to sell, negotiate the sale or other transfer of, or otherwise grant any rights in, to and/or with third parties, before title in such Music Assets may be transferred to a third party. Governmental Authority means any governmental authority, quasi-governmental authority, instrumentality, court, government or self-regulatory organization, commission, tribunal or organization or any regulatory, administrative or other agency, whether domestic, foreign or supranational or any political or other subdivision, department or branch of any of the foregoing. Governmental Order means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. Hazardous Substances means any substance, pollutant, contaminant, waste, material or chemical (whether solid, liquid or gaseous) that is classified, defined, listed, or identified pursuant to any Environmental Law, including without limitation, any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including petroleum, its derivatives, by-products and other hydrocarbons, asbestos, radon, polychlorinated biphenyls, or mold, fungi or other microbial or microbiological contaminants. HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. Intellectual Property Rights means (i) inventions, whether or not patentable, whether or not reduced to practice, and whether or not yet made the subject of a pending patent application or applications, (ii) national and multinational statutory invention registrations, patents and patent applications (including all reissues, divisions, continuation, continuation-in-part, extensions and reexaminations), all improvements to the inventions disclosed in each such registration, patent or application, registered or applied for in the United States and all other nations throughout the world, and all Rights therein provided by bilateral or international treaties or conventions, (iii) trademarks, service marks, trade dress, logos, domain names, trade names and corporate names, whether or not registered, including all common Law Rights and all variations, derivations and combinations thereof, and registrations and applications for registration thereof in any product category, including all marks registered or applied for in the United States and all other nations throughout the world, and all Rights therein provided by bilateral or international treaties or conventions and all goodwill associated therewith, (iv) Copyrights, (v) computer software, including source code, object code, firmware, 4

280 operating systems and specifications, data, databases, files, and documentation and other materials related thereto, (vi) trade secrets and confidential, technical and business information (including inventions, whether patentable or unpatentable and whether or not reduced to practice), (vii) whether or not confidential, technology, (including know-how), manufacturing and production processes and techniques, research and development information, formulae, formulations, recipes, drawings, specifications, designs, plans, proposals, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (viii) copies and tangible embodiments of all of the foregoing, in whatever form or medium, (ix) all Rights to obtain and Rights to apply for patents, and to register trademarks and Copyrights, (x) all other intellectual property; and (xi) all Rights to sue or recover and retain damages and costs and attorneys fees for past, present and future infringement or misappropriation of any of the foregoing. Inter-Company Liability means the sum of all amounts reflected in the line items listed as Intercompany Accounts in the section captioned Liabilities on the Balance Sheet, or (to the extent permitted by Section 1.03) on the Preliminary Statement or the Final Statement, as the case may be. Key Artist means an artist professionally known as one of the artists listed on Appendix B hereto. Key Songwriters means any Person listed on Appendix C hereto. Key Composition means any of the top twenty-five (25) Acquired Company Compositions based on the total Net Publisher s Share of Income that the Acquired Companies were entitled to retain with respect to the Acquired Company Compositions pursuant to the Music Publishing Contracts in each of 2004, 2005, 2006 and the six (6) months ended June 30, Key Composition Agreements means (a) any Contract relating to the acquisition of rights in any Key Composition or (b) any of the top ten (10) Contracts pursuant to which an Acquired Company obtained administration rights to one or more Administered Acquired Company Compositions, based on the total Net Publisher s Share of Income that the Acquired Companies were entitled to retain pursuant to such Contracts related to the administration of any Administered Acquired Company Composition in each of 2004, 2005, 2006 and the six (6) months ended June 30, knowledge means with respect to Seller or Purchaser, as the case may be, a particular fact or other matter of which (a) with respect to Seller, Jose Behar, Phyllis B. Verdugo, Dave Palacio, Mark Berger, Nestor Rodriguez, Joe Rakauskas and/or Peter H. Lori, and (b) with respect to Purchaser, Zach Horowitz and Charles Ciongoli, in each case, is actually aware after reasonable inquiry or investigation. Law means any Federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, or other requirement of a Governmental Authority. 5

281 Liabilities means any and all indebtedness and other liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured. Licensed Acquired Company Masters means all Acquired Company Masters other than the Owned Acquired Company Masters. Manufacturing means packaging, pressing or otherwise manufacturing compact discs and DVDs and other forms of recorded music or music videos and printing cover material, inserts, point-of-purchase materials and artwork related thereto. Material Adverse Effect means any change, effect, event, occurrence or state of facts that has had or would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, assets or results of operations of the UCI Businesses or which materially impairs the ability of Seller or Purchaser to consummate the Transactions other than any change, effect, event, occurrence or state of facts relating to or arising from (i) the economy in general, (ii) this Agreement or the Transactions or the public announcement thereof, (iii) the music industry in general, and not specifically relating to the UCI Businesses which does not disproportionately effect the UCI Businesses; or (iv) the timing of new product releases or the commercial success of such releases (provided that the Acquired Companies are not in breach under Article VI). Mexican Subsidiary means, collectively, (i) Amanecer Servicios Profesionales, S. de R.L., de C.V., (ii) Edimonsa EM, S. de R.L. de C.V., (iii) D Disa Latin Music, S. de R.L de C.V., (iv) Univision Music Publishing-México, S.A. de C.V. and (v) Univision MUSIC Group-México, S.A. de C.V. Musical Composition means a musical composition or medley consisting of words and/or music, or any dramatic material and bridging passages, whether in form of instrumental and/or vocal music, prose or otherwise, irrespective of length. Music Assets means all of the Acquired Companies Right in and to all of the assets, properties and rights owned, leased, licensed or administered by any Acquired Company, or otherwise used or held for use in the UCI Businesses, of every type and description, real, personal and mixed, tangible and intangible, wherever located and whether or not reflected on the books and Files and Records of any Acquired Company, including, without limitation: (i) all of the Intellectual Property Rights used in the UCI Businesses, the Acquired Company Masters, the Acquired Company Phonorecords, and the Acquired Company Compositions, and all Rights of the Acquired Companies therein; (ii) all Acquisition Documents, and any other Company Contract, and all Rights, licenses, privileges and benefits of the Acquired Companies thereunder; (iii) all Files and Records; and (iv) all other assets (whether owned, leased or licensed, real, personal or mixed, or tangible or intangible) of Seller, the Seller Affiliates, or the Acquired Companies which are utilized in, held for use in or are otherwise related to the UCI Businesses, including without limitation, all accounts receivable, credits, prepaid expenses, deferred charges and advance payments, record inventory, unrecouped advances, unfilled sales orders; etc.). 6

282 Music Publishing Business means the business of acquiring, creating, advertising, marketing, promoting, administering, licensing, and/or otherwise exploiting (by whatever means, whether now known or hereafter developed) Musical Compositions, including, without limitation, by means of entering into agreements with composers, songwriters, lyricists, production companies or owners of Rights in Musical Compositions for the acquisition, creation, advertising, marketing, promotion, administration or other exploitation of Musical Compositions and exercising Rights under such agreements. Notwithstanding the foregoing, the Music Publishing Business shall not include the Recorded Music Business. Music Publishing Contract means a Contract with any Person who owns or controls rights in Musical Composition(s) pursuant to which a Copyright interest and/or administration rights in existing or future Musical Compositions are transferred by such Person to an Acquired Company or Acquired Companies (or a predecessor-in-interest to an Acquired Company or Acquired Companies). Net Publisher s Share of Income with respect to any specified time period (a Particular Period ), shall mean all gross fees, payments and royalty revenues actually received by the Acquired Companies during such Particular Period that are derived solely as the result of the exploitation of any of the Acquired Company Compositions (collectively, Gross Revenues ), less any amounts of any nature directly relating to such Gross Revenues that are actually paid or are or will be payable by the Acquired Companies (or that are or will be credited or are or will be required to be credited by the Acquired Companies against advances previously paid by the Acquired Companies or their predecessors-in-interest) to any songwriters, music publishers and any other Persons, including, without limitation, co-publishers, administrators and subpublishers of the Acquired Company Compositions, and any other royalty or income participants. Furthermore, for purposes of calculating Net Publisher s Share of Income there shall not have been any acceleration by Seller or any Acquired Company of the collection of any Gross Revenues to a time earlier than the time at which such payment otherwise would have been made. Furthermore, the following items shall not be included in the calculation of Net Publisher s Share of Income: (a) income not specifically attributable to the exploitation of the Acquired Company Compositions (including, but not limited to, interest accrued or accruing on deposits); (b) material advances and any other material prepayments; (c) amounts utilized to recoup advances paid by an Acquired Company or its predecessors-ininterest to third parties; (d) material non-recurring monies (such as, but not limited to, receipt of special distributions relating to revenues attributable to prior or future periods which distributions have not been received in the past and are unlikely to be received in the future or special uses of the Acquired Company Compositions which are unlikely to recur); (e) other extraordinary income which materially affects the Net Publisher s Share of Income in a Particular Period; or (f) material audit recoveries related to income which should have been received prior to or after the applicable Particular Period. Notwithstanding the foregoing, for purposes of calculating the Net Publisher s Share of Income as used in the last sentence of Section 7

283 3.11(a) of this Agreement, the Gross Revenues for a Particular Period may also include so called black box income and fees, if any, that were actually received in the ordinary course of business by an Acquired Company during that Particular Period as the result of the Acquired Company s ownership and/or administration of the Acquired Company Compositions. For purposes of this definition of Net Publisher s Share of Income, references to material or materially shall mean material or materially in the context of the Net Publisher s Share of Income for the Particular Period involved. Additionally, for purposes of this definition of Net Publisher s Share of Income, it is agreed by the parties that the Acquired Companies recognition of forward income resulting from the Acquired Companies change in method of recording intercompany publishing revenue, which was effective September 2005 and which shall have been made in accordance with GAAP on a consistent basis, in connection with which the Acquired Companies liquidated all intercompany reserves, approximately totaling ***** equally over 5 quarters from September 2005 to December 2006, shall be included within the calculation of Net Publisher s Share of Income and shall not be considered an acceleration of Gross Revenues to a time earlier than the time at which such payment otherwise would have otherwise been made. Non-Music Assets means assets to the extent derived from and relating primarily to the Other Activities. Original Multi-Tracks means, with respect to any Recording, the original recording medium in which the individual tracks of sound related to such Recording are recorded that can then be used for playback for purposes of mix-down to create a stereo or surround-sound flat master and a certain number of stems, which may be in the form of multi-track tape, analogue formats (including, without limitation, two inch (2 ) multi-track tape) and/or digital formats (including, without limitation, digital files or hard drive formats embodying such digital files (e.g. Pro-Tools, Digital Performer, Logic Studio, etc.). For purposes of this Agreement, all references to possession and control of any Original Multi-Tracks shall mean the possession and control of the Acquired Companies, which prior to the Closing Date shall mean the offices of the Acquired Companies located in Woodland Hills, California, and, on and after the Closing Date shall mean such offices or any other location determined by the Purchaser. Other Activities means the activities listed on Schedule Other Activities of the Seller Disclosure Letter, in each case solely to the extent that Seller and its Affiliates (other than the Acquired Companies) conduct such activities as of the date hereof. Owned Acquired Company Compositions means all Acquired Company Compositions (i) owned, in whole or in part, by any Acquired Company, or in which an Acquired Company owns any interest (including an income participation interest) or (ii) owned, in whole or in part, by Seller or its Affiliates (other than an Acquired Company) or in which Seller or such Affiliates own any interest (including an income participation interest) (it being agreed that nothing herein shall be deemed to limit Seller s obligations to assign all such Acquired Company Compositions to an Acquired Company pursuant to the terms and conditions of this Agreement). 8

284 Owned Acquired Company Masters means all Acquired Company Masters (i) owned, in whole or in part, by an Acquired Company or (ii) owned, in whole or in part, by Seller or its Affiliates (other than an Acquired Company) (it being agreed that nothing herein shall be deemed to limit Seller s obligations to assign all such Acquired Company Masters to an Acquired Company pursuant to the terms and conditions of this Agreement). Permitted Encumbrances means (a) Encumbrances as are set forth in Section 3.14 of the Seller Disclosure Letter, which shall be released pursuant to Section 2.01(b)(xiv), (b) liens for Taxes, assessments and governmental charges or levies not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established on the Balance Sheet, as set forth in the Seller Disclosure Letter, or have been established in accordance with GAAP subsequent to the Balance Sheet Date, (c) pledges or deposits to secure obligations under workers compensation Laws or similar legislation or to secure public or statutory obligations, (d) landlords, mechanics, carriers, workmen s, repairmen s or other like Encumbrances arising or incurred in the ordinary course of the UCI Businesses not yet due and payable or being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established on the Balance Sheet, as set forth in the Seller Disclosure Letter, or have been established in accordance with GAAP subsequent to the Balance Sheet Date, and (e) zoning and building restrictions, easements or claims of easements, covenants, rights-of-way and other similar restrictions whether shown or not shown by public records, boundary line disputes, overlaps, encroachments and any matters of record which would be disclosed by an accurate survey or a personal inspection of the property and that individually or in the aggregate are immaterial to the UCI Businesses. Person means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. Phonorecords means all forms of reproduction, now known or hereafter devised, manufactured and/or distributed primarily for personal use, home use, school use, juke box use or use in means of transportation, including sound-alone recordings, audiovisual recordings, interactive media (e.g., CD-ROM and DVD-ROM) and electronic transmissions. Post-Closing Tax Period means any taxable period beginning after the Closing Date and, in the case of a Straddle Period, the portion of such taxable period beginning after the Closing Date. Pre-Closing Tax Period means any taxable period ending on (and including) or before the Closing Date and, in the case of a Straddle Period, the portion of such taxable period ending on (and including) the Closing Date. 9

285 Production/Label Contract means a Contract with a production entity pursuant to which the production entity agrees to offer all of its or a certain number of its artists exclusively to the counterparty. Purchaser Document means this Agreement and all other agreements, instruments and certificates to be executed and delivered by Purchaser or any of its Affiliates (but not including any Acquired Company) in connection with this Agreement. Receivable Amount means $13,103, and represents full settlement of 50% of the cash balance (i.e., 50% of $6,396,629) and 50% of the amount (i.e., 50% of $19,810,000) owed by Purchaser to Seller (and its Affiliates including the Acquired Companies) related to the Phonorecord distribution activities performed by Purchaser on behalf of Seller (and its Affiliates including the Acquired Companies) in the United States as of the Balance Sheet Date, which, if the Closing occurs, shall have been prior to the Closing Date. Recorded Music Business means the business of (a) acquiring, recording, producing, releasing, distributing, advertising, marketing, promoting, licensing, selling or otherwise exploiting (by whatever means, whether now known or hereafter developed) of sound recordings, recording artist services, and audiovisual recordings in any media (now or hereafter known), the acquisition, administration and other exploitation of any and all other ancillary Rights with respect to the recorded music business (including merchandising, tour and tour support activities and film Rights) and (b) any and all other businesses or fields directly related to or arising out of any of the foregoing. Notwithstanding the foregoing, the Recorded Music Business shall not include the Music Publishing Business. Recording means any recording of sound, whether or not coupled with a visual image, by any method and on any substance or material, whether now or hereafter known, which is used or useful in the recording, production and/or manufacture of Phonorecords or for any other exploitation of sound, including, without limitation, all so-called out-takes and unfinished recordings). Restrictions means any Contracts, Rights, judgments, orders or awards of any nature limiting or restricting the rights of an Acquired Company to publish, license, administer or otherwise exploit any of the Acquired Company Masters, Acquired Company Phonorecords, Acquired Company Compositions or any other Music Asset or to exercise any of the Rights therein. Restrictions include, without limitation, (i) any agreement which grants to any Person the right to claim a reversion in any Music Asset upon the transfer thereof to a third party, upon the consummation of the Transactions or otherwise; (ii) reversions that may occur through operation of law; (iii) the right of any Person to participate in the income derived from the exploitation of any Acquired Company Master or any Acquired Company Composition; and (iv) any agreement that would reduce the right of Buyer to collect all income derived from the use or exploitation of any of the Music Assets. 10

286 Rights means any rights, title, interest or benefit of whatever kind or nature. Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. Selected Artists means an artist professionally known as one of the artists listed on Appendix D hereto. Selected Compositions means the top twenty-five (25) Owned Acquired Company Compositions during each of the fiscal year ended December 31, 2006 and the six month period ended June 30, 2007 based on the total Acquired Company Net Publisher s Share of Income that the Acquired Companies were entitled to retain pursuant to the Music Publishing Contracts with respect to the Owned Acquired Company Compositions for each of the fiscal year ended December 31, 2006 and the six-month period ended June 30, Seller Document means this Agreement and all other agreements, instruments and certificates to be executed and delivered by Seller or any of its Subsidiaries or any Acquired Company in connection with this Agreement. Straddle Period means any taxable period that begins on or before, and ends after, the Closing Date. Subagent means any Person that administers and acts as an agent or subpublisher for the exploitation of one or more of the Acquired Company Compositions and/or the Acquired Company Masters (and the collection of income derived therefrom) on a general basis, and grants exclusive and/or non-exclusive rights in such Acquired Company Compositions and/or Acquired Company Masters to users or other Subagents in a particular country or group of countries. subpart F income has the meaning ascribed to such term in Section 952 of the Code. Subsidiary means, with respect to a Person, (i) any entity of which securities or other ownership interests having ordinary voting power to elect or designate a majority of the board of directors or other Persons performing similar functions are at the time owned, directly or indirectly, by such Person and (ii) any entity in which such Person beneficially owns directly or indirectly 50% or more of the class of equity interests. Target Inter-Company Liability means the amount of the Inter-Company Liability as set forth on the Balance Sheet. Tax means any tax, governmental fee or other like assessment or charge of any kind whatsoever (including, but not limited to, withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority (a Taxing Authority ) responsible for the 11

287 imposition of any such tax (domestic or foreign), including by reason of membership in an affiliated, consolidated, combined, unitary or similar Tax group or by contract, indemnity or otherwise, whether disputed or not. Tax Attribute means any net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable deduction or any other credit or tax attribute that could be carried forward or back to reduce Taxes (including, without limitation, deductions and credits related to alternative minimum Taxes) and losses or deductions deferred by the Code or other applicable law (including, without limitation, pursuant to Section 163(e)(3) or Section 163(j) of the Code). Tax Return means any return, filing, report, questionnaire, information statement or other document required to be filed, including any amendments that may be filed, for any taxable period with any Taxing Authority. Transactions means the transactions contemplated by this Agreement, the Seller Documents and the Purchaser Documents. ***** UCI Employee means (i) any current or former employee of any Acquired Company or (ii) any employee of Vision Latina who is primarily employed with respect to the UCI Businesses. UCI Employee Plans means any employee benefit plan, as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), and each severance, plan, arrangement or policy and each other plan or arrangement providing for compensation, bonuses, profit-sharing, stock option or other stock related Rights or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers compensation, supplemental unemployment benefits, or post-employment or retirement benefits which is maintained, administered or contributed to by Seller or any of its Subsidiaries (including the Acquired Companies) or Affiliates, and covers any UCI Employees, but shall exclude UCI Employment Agreements. UCI Employee Plans shall not include U.S. Social Security or Medicare. UCI Employment Agreement means any individual agreement or arrangement, including any amendments thereto, between an Acquired Company, on the one hand, and a UCI Employee, on the other hand, other than any agreement, arrangement or other document under any stock option or other equity plan of Seller or its Subsidiaries. UCI Licensed Intellectual Property Rights means (i) all Intellectual Property Rights relating to the UCI Businesses that are owned by a party other than an Acquired Company and licensed or sublicensed by an Acquired Company or with respect to the UCI Businesses, and (ii) all UCI Owned Intellectual Property Rights licensed by an Acquired Company (or by Seller or its other Affiliates to the extent relating to UCI Owned Intellectual Property Rights described in clause (ii) of the definition of UCI Owned Intellectual Property Rights ) to any party other than an Acquired Company. 12

288 UCI Music Publishing Business means the Music Publishing Business conducted by the Acquired Companies (including, without limitation, the entire Music Publishing Business conducted under the Univision Music Group name). UCI Owned Intellectual Property Rights means all Intellectual Property Rights relating to the UCI Businesses that are (i) owned, held or possessed or registered by an Acquired Company (other than Intellectual Property Rights described in clause (i) of the definition of UCI Licensed Intellectual Property Rights ) or (ii) owned, held or possessed or registered by or in the name of Seller or its Affiliates (other than an Acquired Company) and related to the UCI Businesses (it being agreed that nothing herein shall be deemed to limit Seller s obligations to assign all such Intellectual Property Rights to an Acquired Company pursuant to the terms and conditions of this Agreement) but not including (x) the marks and domain names licensed to Purchaser and its Affiliates pursuant to the Trademark License Agreement or (y) the Intellectual Property Rights specified as Non-Deliverables on Section 2.02(b)(xi) of the Seller Disclosure Letter. UCI Recorded Music Business means the Recorded Music Business conducted by the Acquired Companies (including, without limitation, the entire Recorded Music Business conducted under the Univision Music Group name). 13

289 Definitions APPENDIX A Term Section 8.01(a)(vii) Breach Notice 8.01(a)(vii) Accounting Firm 1.03(d) Act 3.16(c) Adverse Disposition 6.03(b) Administered Publisher(s) 3.16(d)(D) ASCAP 3.11(d)(i) Agreement Recitals Auction 6.06(c)(ii) Balance Sheet 3.07(e) BMI 3.11(d)(ii) Closing Date 2.01 Closing Payment 1.02 Code 6.08(b) Companies 1.01 Company 1.01 Company Contract 3.10 Company Materials 6.06(c) Confidential Information 6.08(c) Debt Arrangements 3.10(k) Disa Holdco 3.07(a) Disa LLC 3.07(a) Dispute Notice 1.03(d) DOJ 6.03(a)(ii) ERISA Appendix A, Definition of UCI Employee Plans EU Merger Regulation 6.03(a)(iii) Final Reconciliation Payment 1.03(d) Final Statement 1.03(d) Financial Statements 3.07(h) Financing 4.06 Form Promo Contract 3.16(h) FTC 6.03(a)(ii) GAAP 3.07(a) Indemnified Party 9.02(d)

290 Indemnifying Party 9.02(d) Loss 9.02(a) Material Adverse Disposition 6.03(c) Material Contracts 3.10 Mexican Federal Competition Commission 6.03(a)(iv) MFCC 6.03(a)(iv) Non-Competition Agreement 2.01(b)(ix) Other Publisher(s) 3.16(d)(E) Payees 3.16(d)(G) Outside Date 8.01(a)(ii) Preliminary Statement 1.03(c) Property Taxes 9.04(d) Purchase Price 1.02 Purchaser Recitals Purchaser Disclosure Letter ARTICLE IV Purchaser Indemnified Parties 9.02(a) Representatives 6.11 SACM 3.11(d)(iv) Securities 1.01 Seller Recitals Seller Disclosure Letter ARTICLE III SESAC 3.11(d)(iii) Successor 3.16(c) Tax Controversy 9.04(e) Tax Proceeding 9.04(e) Taxing Authority Appendix A, Definition of Tax Third Party Claims 9.02(d) Transfer Taxes 7.04 UCI Businesses Recitals UCI Permits 3.17 Univision Music LLC 3.07(c) Vision Latina 1.03(b) Vision Latina Employees 5.04

291 Exhibit 21.1 Subsidiaries of the Company as of December 31, 2007 Jurisdiction of Incorporation or Name of Entity Disa Holdco LLC Disa LLC Edimonsa Corporation Disa Latin Publishing LLC D Disa Latin Music, S. DE R.L. Edimonsa EM, S. DE R.L. Amanecer Servicios Profesionales, S. DE R.L. Fonohits Music Publishing, Inc. Fonomusic, Inc. Fonovisa, Inc. Galavision, Inc. HBCi, LLC HPN Numbers, Inc. KAKW License Partnership, L.P. KCYT-FM License Corp. KDTV License Partnership, G.P. KECS-FM License Corp. KESS-AM License Corp. KESS-TV License Corp. KFTV License Partnership, G.P. KHCK-FM License Corp. KICI-AM License Corp. KICI-FM License Corp. KLSQ-AM License Corp. KLVE-FM License Corp. KMEX License Partnership, G.P. KMRT-AM License Corp. KTNQ-AM License Corp. KTVW License Partnership, G.P. KUVI License Partnership, G.P. KUVN License Partnership, L.P. KUVS License Partnership, G.P. KWEX License Partnership, L.P. KXLN License Partnership, L.P. License Corp. No. 1 License Corp. No. 2 Mi Casa Publications, Inc. Servicio de Informacion Programativa, Inc. Notivision, S.A. de C.V. PTI Holdings, Inc. Rawhide Radio, LLC Songs of Univision, Inc. Spanish Coast-to-Coast Ltd. St. Louis/Denver LLC Station Works, LLC Organization Delaware Delaware Texas Delaware Mexico Mexico Mexico California California California Delaware Delaware Delaware California Delaware California Delaware Delaware Delaware California Delaware Delaware Delaware Delaware Delaware California Delaware Delaware California California California California California California Florida Florida California Delaware Mexico Delaware Texas Delaware Delaware Delaware Delaware

292 Jurisdiction of Incorporation or Name of Entity Sunshine Acquisition Corp. T C Television, Inc. El Trato Inc. Wurzburg, Inc. Univision Home Entertainment Inc. Telefutura Albuquerque LLC Telefutura Bakersfield LLC Telefutura Boston LLC Telefutura Chicago LLC Telefutura D.C. LLC Telefutura Dallas LLC Telefutura Fresno LLC Telefutura Houston LLC Telefutura Los Angeles LLC Telefutura Miami LLC Telefutura Network Inc. Telefutura of San Francisco, Inc. Telefutura Orlando, Inc. Telefutura Partnership of Douglas Telefutura Partnership of Flagstaff Telefutura Partnership of Floresville Telefutura Partnership of Phoenix Telefutura Partnership of San Antonio Telefutura Partnership of Tucson Telefutura Sacramento LLC Telefutura San Francisco LLC Telefutura Southwest LLC Telefutura Tampa LLC Telefutura Television Group, Inc. The Univision Network Limited Partnership Tichenor License Corporation TMS License California, Inc. TuTV LLC Univision Atlanta LLC Univision Cleveland LLC Univision Investments, Inc. Univision Management Co. Univision Melodies, Inc. Univision Music Group Mexico S.A. de C.V. Univision Music LLC Univision Music Publishing Mexico S.A. de C.V. Univision Music, Inc. Univision New York LLC Univision of Atlanta Inc. Univision of New Jersey Inc. Univision of Puerto Rico Inc. Univision Puerto Rico Station Acquisition Company Organization California Texas Delaware Delaware Illinois Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Texas Delaware Delaware Delaware Delaware Delaware Delaware Delaware Mexico Delaware Mexico Delaware Delaware Delaware Delaware Nevada Delaware

293 Name of Entity Univision Puerto Rico Station Operating Company Univision Puerto Rico Station Production Company Univision Network Puerto Rico Production LLC Univision of Raleigh, Inc. Univision Online, Inc. Univision Philadelphia LLC Univision Radio Broadcasting Puerto Rico, L.P. Univision Radio Broadcasting Texas, L.P. Univision Radio Florida, LLC Univision Radio GP, Inc. Univision Radio Fresno, Inc. Univision Radio Houston License Corporation Univision Radio Illinois, Inc. Univision Radio Investments, Inc. Univision Radio License Corporation Univision Radio Los Angeles, Inc. Univision Radio Management Company, Inc. Univision Radio New Mexico, Inc. Univision Radio New York, Inc. Univision Radio Phoenix, Inc. Univision Radio Puerto Rico, Inc. Univision Radio Sacramento, Inc. Univision Radio San Francisco, Inc. Univision Radio Corporate Sales, Inc. Univision Radio San Diego, Inc. Univision Radio Tower Company, Inc. Univision Radio, Inc. Univision Radio Las Vegas, Inc. Univision Songs, Inc. Univision Television Group, Inc. Univision Texas Stations LLC Univision-EV Holdings, LLC UNLP Mexico, S.A. de C.V. UVN Texas L.P. Vision Latina, S.A. de C.V. WADO Radio, Inc. WADO-AM License Corp. WGBO License Partnership G.P. WLTV License Partnership, G.P. WLXX-AM License Corp. WPAT-AM License Corp. WQBA-AM License Corp. WQBA-FM License Corp. WUVC License Partnership, G.P. WXTV License Partnership, G.P. Jurisdiction of Incorporation or Organization Delaware Delaware Delaware North Carolina Delaware Delaware Delaware Texas Delaware Delaware Delaware Delaware Delaware Delaware Delaware California Delaware Delaware Delaware Delaware Puerto Rico Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Mexico Delaware Mexico Texas Delaware California California Delaware Delaware Delaware Delaware North Carolina California

294 Exhibit 31.1 I, Joseph Uva, certify that: CERTIFICATION 1. I have reviewed this annual report on Form 10-K of Univision Communications Inc.; 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) 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 (d) 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 function): (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: March 27, 2008 /s/ J OSEPH U VA Joseph Uva Chief Executive Officer

295 Exhibit 31.2 I, Andrew W. Hobson, certify that: CERTIFICATION 1. I have reviewed this annual report on Form 10-K of Univision Communications Inc.; 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) 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 (d) 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 function): (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: March 27, 2008 /s/ A NDREW W. H OBSON Andrew W. Hobson Chief Financial Officer

296 Exhibit 32.1 WRITTEN STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350 The undersigned officers of Univision Communications Inc. (the Company ), pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, to their knowledge: (i) The annual report on Form 10-K for the year ended December 31, 2007 of the Company, as filed with the Securities and Exchange Commission (the Report ), fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 27, 2008 /s/ J OSEPH U VA Joseph Uva Chief Executive Officer Dated: March 27, 2008 /s/ A NDREW W. H OBSON Andrew W. Hobson Chief Financial Officer