Exhibit 10.3
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks ("*****"), and the omitted text has
been filed separately with the Securities and Exchange Commission.
AMENDED AND RESTATED
AFFILIATION AND LICENSE AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF PROGRAMMING
PLAYBOY TV, TWO ADULT MOVIE CHANNELS AND PLAYBOY TV EN ESPANOL
DIRECTV, INC.
and
PLAYBOY ENTERTAINMENT GROUP, INC. and
SPICE HOT ENTERTAINMENT, INC.
AMENDED AND RESTATED
AFFILIATION AND LICENSE AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF PROGRAMMING
AMENDED AND RESTATED AGREEMENT made as of August 1, 2007 (the "Effective
Date"), by and between PLAYBOY ENTERTAINMENT GROUP, INC., and SPICE HOT
ENTERTAINMENT, INC., each of which is a Delaware corporation having an office
located at Xxxxx Xxxxxx Xxxxx., Xxx Xxxxxxx, Xxxxxxxxxx 00000 (collectively
referred to herein as "Programmer"), and DIRECTV, INC., a California
corporation, having an office located at 0000 Xxxx Xxxxxxxx Xxx., Xx Xxxxxxx,
Xxxxxxxxxx 00000 ("Affiliate").
WITNESSETH:
WHEREAS, Affiliate and Programmer entered into a written agreement
entitled Amended and Restated Affiliation and License Agreement for DTH
Satellite Exhibition of Programming dated September 16, 2006 (the "Current
Playboy Agreement"), whereby Programmer granted Affiliate the right to
distribute various television networks owned and operated by Programmer that
feature adult films, related programming and interstitial material (individually
the "Service," or collectively the "Services", as defined in Section 1(b) below)
via the DTH Distribution System (as defined in Section 1(a)(ii) below) in the
United States (the "Territory") as restricted herein;
WHEREAS, the parties desire to amend various terms of the Agreement and
herein restate the Agreement in its entirety; and
WHEREAS, this Agreement supersedes all prior understandings and agreements
relating to the subject matter herein, including without limitation, the Current
Playboy Agreement and any amendments or extensions thereto;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
ADEQUACY OF WHICH ARE HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED AS FOLLOWS:
1. Grant of Rights.
(a) Distribution; Certain Definitions.
(i) Programmer hereby grants to Affiliate, and Affiliate hereby
accepts, the non-exclusive right to distribute the Service in the Territory via
the DTH Distribution System (as defined below) to DIRECTV Subscribers during the
Term (as defined in Section 6(a) below), as follows: (i) with respect to the
Playboy TV Service (as
EXECUTION VERSION 2
defined in Section 1(b) below), distribution shall include residential
subscribers, hotels, motels, private offices, multiple dwelling facilities and
oil rigs (provided, however, that Affiliate shall not have the right to
distribute the Service in any common areas to which the public has free access)
on a subscription (a la carte or package) basis (the "Subscription Offerings")
and on a pay-per-view, pay-per-block and pay-per-night basis (collectively, the
"PPV Offerings"), in blocks of at least sixty (60) minutes each (or such period
as the parties shall agree) for up to twenty four (24) hours; provided, however,
that any partial exhibition of the Service which consists only of motion
pictures must be no shorter than sixty (60) minutes (any block of time, a "PPV
Program"); and (ii) with respect to each of Movie Channel 1, Movie Channel 2 and
Playboy TV en Espanol Services (as each is defined in Section 1(b) below),
distribution may include Subscription Offerings and PPV Offerings to residential
subscribers, hotels, motels, private offices, multiple dwelling facilities and
oil rigs (provided, however, that Affiliate shall not have the right to
distribute the Service in any common areas to which the public has free access).
Affiliate shall determine in its sole discretion whether to sell Subscription
Offerings on an a la carte or package basis. Affiliate shall have the
non-exclusive right to use the name of or logo for "Playboy TV," "Club Jenna,"
"Spice:Xcess," and "Playboy TV en Espanol" as such names or logos may be
changed, altered and amended by Programmer, or the names, titles or logos of the
Service or any of its programs, or the names, voices, photographs, music,
likenesses or biographies of any individual participant or performer in, or
contributor to, any program or any variations thereof, all of which are being
licensed exclusively for use in connection with the distribution, promotion,
marketing and sale of the Service as provided herein. Any further use shall
require Affiliate's notification to Programmer and Programmer's written
approval, not to be unreasonably withheld.
(ii) The term "DTH Distribution System" shall mean the distribution
system for video and other programming services whereby the programming
satellite signal or feed is received from Programmer's delivery source by a
DIRECTV turnaround earth-station facility which compresses and processes the
signal or feed and then uplinks it to a DTH communications satellite (a "DTH
Satellite") for transmission to DIRECTV Subscribers. DTH Distribution System
shall also include any other method of distribution that Affiliate currently
and/or subsequently uses to deliver the Service feed(s) to DIRECTV Subscribers
as part of Affiliate's provision of television services consisting of
multi-channel linear programming (which may be combined with other services),
including, without limitation, MMDS and territorial-based transmission
infrastructures such as Internet protocol (excluding distribution via the
Internet or the World Wide Web; provided that if at any time Programmer offers
the right to distribute the Service via the Internet or World Wide Web to any
other distributor of the Service, Programmer will offer the same rights on the
same terms and conditions to distribute the Service on the Internet or the World
Wide Web to Affiliate)), fiber optic, twisted pairs and coaxial cable, provided
that in connection with such delivery methods, Affiliate complies with the
following: (i) the end users to whom Affiliate distributes the Service are
DIRECTV Subscribers; (ii) the branding and packaging that is received by such
DIRECTV Subscribers is substantially the same as the branding and packaging
received by DIRECTV Subscribers that receive the Service via Affiliate's direct
to home satellites. During the Term (as defined in Section 6(a)), the Service
(as defined below)
EXECUTION VERSION 3
shall be distributed via a DTH Satellite at the orbital location which transmits
to the greatest number of DIRECTV Subscribers. "DIRECTV Subscribers" shall mean
those customers (both residential and non-residential) authorized by Affiliate
to receive a DIRECTV branded DTH service via the DTH Distribution System to a
customer's Set-Top Box (as defined below), provided that nothing herein shall
prohibit the transfer of Service programming by a DIRECTV Subscriber from such
Subscriber's Set-Top Box to a portable viewing device. "Service Subscribers"
shall mean DIRECTV Subscribers authorized by Affiliate to receive the
Subscription Offerings and/or PPV Offerings. "Internet" shall mean the
electronic communications network that connects computer networks and
organizational computer facilities around the world. "World Wide Web" means the
hypertext transfer protocol-based, distributed information system that
facilitates sharing information and content via the Internet. A "Set-Top Box"
means a device that connects to, or is integrated as part of, a television or
other video output display device ("Display Device") and also connects to the
source of Affiliate's audio/visual signal, the content of which then is
displayed on the Display Device.
(iii) *****
(iv) Affiliate shall have the right, but not the obligation,
exercisable in its absolute sole discretion, to distribute the programming
service commonly known as "Playboy en Espanol" upon delivery to Programmer of
not less than thirty (30) days prior written notice thereof. References
throughout this Agreement to Playboy en Espanol shall be applicable only upon
Affiliate's launch, if any, of Playboy en Espanol via the DTH Distribution
System.
(v) Affiliate shall be permitted to authorize satellite master
antenna television system ("SMATV") operators (including telephone companies and
similar service providers) that serve multiple dwelling unit buildings or
complexes, commercial or business establishments with multiple television
viewing sites or master planned communities and the like to distribute the
Service in the Territory via such SMATV systems directly to end users within
such buildings or establishments for DTH reception only, provided, however,
that: (i) such SMATV operator shall not have the right to distribute the Service
in any common areas to which the public has free access and (ii) Affiliate shall
be responsible for each such SMATV operator's compliance with all the terms and
conditions of this Agreement including but not limited to, the service charge
due for each individual purchase of the Service, whether on a PPV Offering or
Subscription Offering basis.
(b) The Service. The "Service" shall, individually and collectively,
mean and consist of the national feed (or, if Programmer uses multiple feeds for
the Service for the purpose of serving multiple time zones, such other of such
multiple feeds designated by Affiliate) of the three programming services
described in clauses (i) through (iii) below, and Playboy TV en Espanol and the
VOD Service at such time, if any, that Affiliate elects to launch Playboy TV en
Espanol and/or the VOD Service. Each Service, except the VOD Service, shall be
presented on a 24-hour per day, 7 days a week schedule, as described below and
in the "Descriptions and Limitations of the Service," attached hereto as Exhibit
A. The
EXECUTION VERSION 4
Service shall be delivered to Affiliate in its entirety, meaning that the
programming (including, without limitation, all other information related
thereto (e.g., data)) on the Service as received by any Service Subscriber at a
given point in time shall be the same as the programming received by all other
subscribers to the Service at such point in time (excluding insertions by
individual video service providers to permit the customization of a feed with
respect to promoting such video service provider not to exceed four minutes per
hour; provided that the insertions do not change the content of a Program, and
only preempt interstitial programming). In the event that Programmer grants
individual service providers the right to insert customized insertions as
provided hereinabove, Programmer shall notify Affiliate and Affiliate shall be
granted the same such rights.
(i) Playboy TV. The programming service commonly known as "Playboy
TV" ("Playboy TV") shall consist of entertainment programming for adult
audiences as more fully described in the "Description and Limitation of the
Services" Section attached hereto as Exhibit A. Affiliate shall refer to Playboy
TV as "Playboy TV," or other name mutually agreed to by the parties, and may
list Playboy TV on the program guide as "PBTV." Affiliate shall include a
marketing description of Playboy TV in Affiliate's programming guide that is
viewed by Subscribers that is mutually agreed upon by the parties.
(ii) Movie Channel 1. The service known as "Movie Channel 1" ("Movie
Channel 1") shall consist of entertainment programming for adult audiences as
more fully described in the "Description and Limitation of the Services" Section
attached hereto as Exhibit A. Affiliate shall refer to Movie Channel 1 as "Club
Jenna," or other name approved by Affiliate, and may list Movie Channel 1 on the
program guide as "JENNA" or as otherwise agreed to by the Parties. Affiliate
shall include a marketing description of Movie Channel 1 in the programming
guide that is viewed by Subscribers that is mutually agreed upon by the parties.
Notwithstanding the foregoing, upon thirty (30) days prior written notice by
Affiliate to Programmer, Affiliate shall have the right to permanently replace
the programming currently distributed on Movie Channel 1 (i.e., "Club Jenna")
with the Programmer controlled service currently known as "Fresh!".
(iii) Movie Channel 2. The service known as "Movie Channel 2"
("Movie Channel 2") shall consist of entertainment programming for adult
audiences as more fully described in the "Description and Limitation of the
Services" Section attached hereto as Exhibit A. Affiliate shall refer to Movie
Channel 2 as "Spice:Xcess", and may list Movie Channel 2 on the program guide as
"XCSS" or as otherwise agreed to by the Parties. Affiliate shall include a
marketing description of Movie Channel 2 in the programming guide that is viewed
by Subscribers that is mutually agreed upon by the parties. Movie Channel 1 and
Movie Channel 2 may be referred to collectively as the "Movie Channels".
(iv) [This section intentionally left blank.]
(v) [This section intentionally left blank.]
EXECUTION VERSION 5
(vi) Playboy TV en Espanol. Playboy TV en Espanol shall consist of
native and dubbed Spanish-language entertainment programming for adult audiences
as more fully described in the "Description and Limitation of the Services"
Section attached hereto as Exhibit A. Affiliate shall refer to the Service as
"Playboy en Espanol," or other name mutually agreed to by the parties, and may
list the channel on the program guide as "PBE" Affiliate shall include a
marketing description of Playboy TV en Espanol in the programming guide that is
mutually agreed upon by the parties.
(vii) VOD Service. The collection of VOD Packages (as defined
herein) offered to distributors of the Service for use in the distributors'
Video-On-Demand service, wherein each Package is offered in its entirety to a
subscriber's premises by means of the DTH Distribution System for use in an
"On-Demand" environment where the subscriber can start and stop video
programming at any time and the content is delivered to subscribers as part of
the same service that the subscriber receives his or her linear television
service (specifically excluding delivery via the Internet/World Wide Web.) A VOD
Package is defined as those bundles of adult programs consisting of adult
content offered to multi-channel video distributors of television in the
Territory (for example any cable operator, satellite television provider, or
other facilities-based provider such as Verizon, Xxxx South or AT&T, in
connection with such other provider's multi-channel video distribution business,
but not such other provider's cellular phone, World Wide Web, Internet or
wireless businesses (an "MCVP")) for distribution on a VOD basis to subscribers
with specific distribution requirements including requirements with respect to
the user interface. Notwithstanding the terms of this paragraph, upon
Affiliate's election and written request, Programmer agrees to provide
customized VOD Packages for use by Affiliate in its VOD service offered to
Subscribers to the extent that use of Programmer's VOD Packages as set forth
above is commercially unreasonable given the technology deployed by Affiliate
for so long as Affiliate's use of Programmer's VOD Packages remains commercially
unreasonable.
(viii) [This section intentionally left blank.]
(ix) Programmer represents and warrants that (A) it reviews all
programming contained in the Service for compliance with the restrictions and
limitations set forth in Exhibit A, and (B) the Service shall reflect adult
content subject to the restrictions and limitations set forth in Exhibit A, and
shall not contain or depict any acts otherwise prohibited by Exhibit A.
(x) All right, title and interest in and to the entire contents of
the Service, including, but not limited to, films and recordings thereof, title
or titles, names, trademarks, concepts, stories, plots, incidents, ideas,
formulas, formats, general content and any other literary, musical, artistic, or
other creative material included therein shall, as between Programmer and
Affiliate, remain vested in Programmer.
(xi) Each of the Playboy TV, Movie Channel 1, Movie Channel 2 and
Playboy TV en Espanol (if applicable) shall be offered on a simultaneous basis
and
EXECUTION VERSION 6
distributed by Affiliate to its Subscribers a minimum of 24 hours per day, seven
days per week, on a separate and distinct channel.
(xii) At any time during the Term and in any portion of the
Territory, Affiliate shall be permitted to offer other "branded" or "unbranded"
adult programming competitive to the Service, it being acknowledged and agreed
by the parties that Affiliate's offering of such other adult programming shall
not constitute a breach of this Agreement.
(xiii) Programmer shall not propose or impose upon Affiliate, nor
shall Affiliate be obligated to pay, any surcharge or other cost (other than the
License Fees provided for in Section 2 hereof) for receipt and distribution of
the Service.
(c) Other Distribution Rights and Obligations. In addition, the parties
agree as follows:
(i) Subject to Programmer's obligations hereunder and Affiliate's
rights under Section 17, Affiliate shall distribute the Service as transmitted
by Programmer, in its entirety, in the order and at the time transmitted by
Programmer without any intentional and willful editing, delays, alterations,
interruptions, deletions or additions ("Alterations"), excepting: (A)
Affiliate's commercial or other announcements, only if permitted under Section 3
hereof, (B) Affiliate's electronic guides (including without limitation, any
mosaic or similar guides), (C) news bulletins and other public announcements as
may be required by emergencies or applicable law; and (D) the use of digital
video recorders at the DIRECTV Subscriber's premises for playback either on a
television display or a mobile device ("DVRs"), videocassette recorders
("VCRs"), or other similar devices by DIRECTV Subscribers. Programmer
acknowledges that the DTH System requires and applies digital compression and
encryption processes prior to transmission and decryption and decompression
processes upon reception and agrees that such processing does not constitute an
Alteration of the Service. Programmer shall fully encrypt the satellite signal
of the Service utilizing encryption technology commonly used in the satellite
distribution industry. Affiliate shall at all times provide Affiliate with two
operational receivers and decoders per Service as necessary to receive and
decode the Service.
(ii) Subject to the terms and conditions of this Agreement, the
terms and conditions upon which Affiliate distributes the Service to Service
Subscribers, including, without limitation, the packaging of the Service and
retail price charged, shall be determined by Affiliate in its sole discretion.
Affiliate shall use reasonable efforts to provide Programmer with sixty (60)
days' prior written notice of any retail price change.
(iii) Subject to the limitations contained in Section 17 below, and
Exhibit B, as applicable, with respect to the PPV Offerings, Affiliate may offer
a multiple channel offering, such that for a single payment a purchasing
Subscriber is permitted to view Movie Channel 1 and Movie Channel 2 and/or
Playboy TV together with other adult
EXECUTION VERSION 7
channels as determined by Affiliate (as restricted by Section 17 herein) (the
"Cascade"), all for one fee (the "Cascade Fee").
Notwithstanding Affiliate's current intention, Affiliate shall not
be obligated to offer the Service using the purchasing mechanism set forth in
this Section 1(c)(iii).
(iv) Programmer shall make the Service available via satellite
signal from a domestic communications satellite commonly used for the delivery
of television programming which must be viewable with existing equipment from
Affiliate's broadcast center in Los Angeles, California (the "Broadcast
Center"). As of the Effective Date, the feeds of the Service are or will be
available on Intelsat Americas 13 ("Programmer's U.S. Satellite"). Programmer
may, from time to time, in its sole discretion, change the satellite being used
for delivery of the Service to Affiliate; provided, however, that any satellite
used by Programmer to transmit the Service shall be a domestic communications
satellite commonly used for the delivery of television programming which must be
viewable with existing equipment from the Broadcast Center without Affiliate
incurring additional costs or requiring Affiliate to enter into any third-party
arrangements (e.g., HITS) for receipt of the signals. In the event Programmer
either (i) changes Programmer's U.S. Satellite to a satellite or other
transmission medium not susceptible to viewing or utilization by Affiliate's
then-existing earth station equipment without affecting the receipt of the
signals of any other programming or other services then received (or committed
to be received) by such Affiliate, (ii) changes the technology used by
Programmer to encrypt the Service to a technology not compatible with
Affiliate's then-existing descrambling equipment, or (iii) compresses, digitizes
or otherwise modifies the signal of the Service in such a manner that it cannot
be received or utilized by Affiliate, then Affiliate shall have the right to
discontinue carriage of the Service, immediately; provided that this right of
discontinuance and deletion shall not apply to Affiliate if Programmer agrees
to: (I) provide Affiliate with the necessary additional equipment required to
receive the Service from the new satellite; and (II) promptly reimburse
Affiliate for the actual out of pocket cost to acquire and install equipment
necessary for Affiliate to descramble, receive and/or utilize the signal of the
Service from such new satellite or other transmission medium, and/or the actual
out of pocket cost to acquire and install equipment necessary for Affiliate to
descramble, receive and/or utilize the signal of the Service. Programmer agrees
to use commercially reasonable efforts to provide Affiliate with at least one
hundred twenty (120) days' prior written notice of any satellite or technology
change. Programmer, or its designee, shall maintain appropriate back-up
satellite protection arrangements in accordance with customary industry
standards. Programmer and Affiliate shall use their respective commercially
reasonable efforts to maintain for the Service a high quality of signal
transmission in accordance with their respective technical standards and
procedures.
(v) *****
(d) Rights with Respect to Channel Capacity. Affiliate shall have the
right, in its sole discretion and for Affiliate's sole benefit as between
Programmer
EXECUTION VERSION 8
and Affiliate, to utilize the channel capacity used to transmit the Service
during any hours which (i) the Service, or any significant portion thereof, is
not being transmitted to Affiliate for any reason; or (ii) the transmission of
the Service, or any significant portion thereof, has been suspended or
terminated by Affiliate pursuant to Section 17. Programmer acknowledges that it
has no ownership rights in, or right to use, any channel or any amount of
capacity on any DTH Satellite.
2. Compensation; Most Favored Nation; Programming Account.
(a) Compensation. As full and complete compensation for Affiliate's
right to distribute the Service, Affiliate shall pay to Programmer the
applicable percentage of Gross Receipts (as defined below) for each month, as
such percentage is calculated as set forth on Exhibit B.
(i) "Gross Receipts" are defined as the sum of all monies billed to
Subscribers by Affiliate during any month (not including amounts owed by
Affiliate due to taxes other than income or franchise taxes) for receiving any
part of the Service; provided, however, that Gross Receipts shall in no event
include (i) any charge specifically made for access to programming other than
for the Service or any general access charge, hardware licensing charge or other
charge made on a "blanket" basis (which shall mean that such charge will relate
to access to all program services available from Affiliate by means of the DTH
Distribution System); or (ii) any charges made for ordering the Service via
telephone as a PPV Offering, which charges are additional to the charges for
ordering the Service without using the telephone. Affiliate shall have the right
to offer Movie Channel 1, Movie Channel 2 and/or Playboy TV as part of the
Cascade, as set forth above, *****. Other than as set forth above, Affiliate
shall notify Programmer prior to packaging the Subscription Offerings with any
other programming services. *****
(ii) To the extent that a Subscriber prepays any portion of monies
solely in connection with Affiliate's distribution of the Service, then the
amount prepaid shall be included in Gross Receipts for the month in which such
payment was received; provided that, Affiliate's billing system has the
capability to account for such prepayments. Affiliate shall deduct the amount of
any Credit Transaction (as defined below in Section 2(a)(ii)), as such amount is
reasonably determined by Affiliate, from the Gross Receipts of the month in
which such Credit Transaction occurs.
(iii) "Credit Transaction" shall mean any refund (or other payment
or credit) to a DIRECTV Subscriber in connection with (A) prepayments for the
Service, (B) Programmer's inability to transmit the Service to Affiliate for
distribution via the DTH Distribution System for any reason other than
Affiliate's non-performance of an obligation hereunder, (C) a Force Majeure
Event or (D) credits (excluding Discounted Previews of the Service not
authorized by Programmer) allowed by Affiliate in its commercially reasonable
EXECUTION VERSION 9
judgment consistent with Affiliate's policies and procedures applied
consistently to Programmer and Affiliate's other sources of programming
services.
(iv) Affiliate shall be responsible for the accounting for all Gross
Receipts and shall account to Programmer with regard to the Gross Receipts for
the Service on a monthly basis, *****. Affiliate shall provide a separate
accounting for the Playboy TV, Movie Channel 1, Movie Channel 2 and Playboy TV
en Espanol (if applicable) Services. Each such accounting shall include:
(A) the aggregate Gross Receipts for such month;
(B) the origin (categorized separately by residential subscribers
(which includes multiple dwelling facilities, private offices
and oil rigs) and hotels/motels, if any) of all Gross Receipts
for Subscription Offerings for such month;
(C) the number of residential DIRECTV Subscribers as of
approximately the fifteenth calendar day of such calendar
month;
(D) the applicable Programmer Share from Exhibit B;
(E) the dollar amount of Programmer's share of Gross Receipts for
such month;
(F) the number of Service Subscribers as of approximately the 15th
day of such calendar month; and
(G) for each PPV Offering, the number of Service Subscribers
purchasing such PPV Offering on each calendar day of such
month; and
(H) Hotel/Motel License Fee (as defined below in Section 2(c)).
(v) Programmer and Affiliate shall accord confidential treatment to
any information contained in the aforementioned statement in accordance with
Section 15. At Programmer's request and at reasonable times, upon reasonable
advance written notice and during normal business hours at Affiliate's offices,
Affiliate shall permit Programmer's representatives to review, one time per each
year of the Term and one time during the year immediately after the termination
or expiration of this Agreement, those books and records maintained according to
Affiliate's standard accounting practices which are generally in accordance with
GAAP required to verify License Fees and reports made hereunder. Programmer
shall audit each calendar year of the Term, if at all, within one (1) year
following the end of such calendar year, with such review limited to those
records for those months of
EXECUTION VERSION 10
the prior calendar year which have not been previously reviewed and those past
months of the current calendar year for which records are available. Programmer
shall report promptly (but no later than 30 days following completion) to
Affiliate the results of such audit, including any deficiency in payment of
License Fees that Programmer believes were revealed by such audit, and shall
make any claim against Affiliate with respect to the results of such audit
within one (1) year after reporting such results to Affiliate. From and after
Programmer's audit of a particular period of the Term, such period shall be
deemed closed by the parties and, except as may be demonstrated by such audit,
Affiliate shall have no further liability in respect of License Fees for such
period. Programmer may not commence a new audit until all prior audits have been
closed and the results have been presented to Affiliate. Any such review shall
be at Programmer's sole cost and expense; *****. The information derived from
and the process of such review shall be subject to the confidentiality
provisions of Section 15. Notwithstanding anything herein to the contrary, any
audit conducted pursuant to this Section 2(a)(v) shall be conducted by a
reputable, industry recognized third party auditor or another firm approved in
advance by Affiliate, which shall have first entered into a confidentiality
agreement with Affiliate.
(b) License Fee. As full and complete compensation for the rights
granted Affiliate hereunder, Affiliate shall pay to Programmer, on a monthly
basis, the "License Fees," calculated pursuant to Programmer's Cable Rate Card
in Exhibit B, subject to reduction and offset for any credits, discounts, and
reimbursements set forth in Exhibit B, annexed hereto, *****. As used in this
Section 2 and elsewhere in this Agreement (including Exhibit "B") when referring
to the payment of License Fees or the provision of subscriber reports by
Affiliate to Programmer, unless expressly modified by "calendar," the term
"month" shall refer to Affiliate's accounting month, which is the approximately
thirty (30) day period commencing on approximately the middle of each month and
ending on approximately the middle of the next succeeding month. *****.
(c) Hotel/Motel License Fee. The parties understand and agree that the
terms of this Section 2(c), and not Section 2(a), shall govern the case of
monies received from the distribution of the Service to hotels or motels. In no
event shall Affiliate pay any fees or other charges on any Gross Receipts
pursuant to both this Section 2(c) and any other section of this Agreement.
Affiliate shall pay to Programmer a license fee (the "Hotel/Motel License Fee")
simultaneously with the accounting rendered to Programmer as set forth in
Section 2(a)(iv). The Hotel/Motel License Fee shall be equal to the license fee
set forth on Exhibit D attached to this Agreement.
(d) *****
(e) *****
*****
3. Commercial Announcements and Other Advertising.
EXECUTION VERSION 11
(a) Commercial Announcements. Programmer hereby represents and warrants
that it does not make available to any Other Distributor of any Service
commercial announcements of any nature in the schedule of such Service(s). If at
any time during the Term, Programmer provides to any Other Distributor the right
to make commercial announcements within any Service, then Programmer shall offer
such right to Affiliate on terms and conditions no less favorable than those
offered to such Other Distributor of the Service(s). In any event, the rights
with respect to commercial or promotional announcements provided by Programmer
to Affiliate shall be no less favorable, in terms of the nature, use,
scheduling, availability, length of the announcements and so forth (including,
without limitation, the right to cover Programmer's commercial or promotional
announcements), than those provided to any Other Distributor.
(b) Advertising. If Programmer offers any Other Distributor the
opportunity to advertise, or includes any Other Distributor in any
advertisement(s), whether or not in connection with the Service, in any
publication, recording, service, visual work or audiovisual work, whether or not
Programmer controls it, then Programmer shall provide Affiliate with the
opportunity to elect to be included in such advertisement, if such advertisement
is in connection with advertising the Service, or an opportunity to elect to be
included in a similar advertisement, if such advertisement is not in connection
with advertising the Service, on at least as favorable terms as such Other
Distributor. Programmer shall not include Affiliate, or advertise Affiliate, by
any means without Affiliate's prior written consent, which may be given or
withheld by Affiliate in its sole discretion.
4. Marketing and Promotion of the Service.
(a) Affiliate shall market and promote the Service in a similar manner
as Affiliate markets and promotes other similar premium programming services;
provided, however, that Affiliate may market and promote any other such premium
programming service differently and/or more frequently, if such service provider
provides Affiliate with material consideration or compensation therefore. In
connection therewith, Programmer shall provide Affiliate, upon Affiliate's
request, with promotional and marketing advice. *****. Affiliate shall publicize
the schedule of the Service in the Territory in a manner similar to that which
it employs, and based on the same factors, it considers, in publicizing the
schedule of other similar premium programming services distributed via the DTH
Distribution System, including, without limitation, the publication of the
Service programming schedule in the television listings and program guides which
Affiliate, as applicable, distributes.
(b) Subject to Sections 6 and 17, Affiliate shall not at any time
during the Term (i) cease marketing or promoting the Service or (ii) withdraw
distribution of the Service in any area of the Territory after the introduction
thereof in such area; provided that, Affiliate may cease marketing and promoting
the Service if Affiliate, in its absolute sole determination, reasonably
believes that marketing or promoting the Service may be politically harmful to
Affiliate or its Affiliated Companies or adversely affect the corporate image
that Affiliate or its Affiliated Companies desires to maintain at such time,
provided however, that should Affiliate cease marketing and/or promoting the
Service for the
EXECUTION VERSION 12
aforementioned reason, Affiliate may not market and/or promote any other adult
services comparable to the Service provided by Programmer hereunder for so long
as Affiliate ceases marketing and/or promoting the Service.
(c) *****
(d) [This section intentionally left blank.]
(e) *****
(f) Program Guide. During the Term, Programmer shall provide the daily
programming schedule for the Service to Tribune Media Service (or such other
service designated by Affiliate) in order that Affiliate may access the program
schedule for purposes of the on-screen program guide.
5. Representations. Warranties and Covenants.
(a) By Affiliate. Affiliate warrants, represents and covenants to
Programmer that:
(i) to its best knowledge after diligent review and receipt of
advice of legal counsel with experience in such matters, it is in compliance
with and will comply with all material "Laws" (as defined below) with respect to
its rights and obligations under this Agreement, including without limitation,
all relevant provisions of the Cable Television Consumer Protection and
Competition Act of 1992 which are applicable to Affiliate, the Communications
Act of 1934, the Communications Decency Act of 1996 (as any or all may be
amended and any successor, replacement or similar Laws or statutes), and any and
all regulations issued pursuant to any of the foregoing. As used in this
Agreement, "Laws" mean and include relevant federal, state, municipal or local
statutes, laws, rules, regulations, ordinances, codes, directives and orders,
including administrative rules or policies and court orders;
(ii) it has the power and authority to enter into this Agreement and
to fully perform its obligations hereunder;
(iii) it shall distribute the Service in the Territory in accordance
with and subject to the terms and conditions set forth in this Agreement;
(iv) it shall not, without Programmer's prior written approval, use
the name of or logo for "Playboy TV," "Spice Wild," "The Hot Network," "The Hot
Zone," "Fresh!," "Club Jenna', "Spice:Xcess" or "Playboy TV en Espanol," or the
names, titles or logos of the Service (or any successors thereto) or any of its
programs, or the names, voices, photographs, likenesses or biographies of any
individual participant or performer in, or contributor to, any program or any
variations thereof, for any purpose other than in material intended to advise
Service Subscribers or potential Service Subscribers of the availability and
EXECUTION VERSION 13
scheduling of the Service or as a channel identifier. Affiliate shall not
publish or disseminate any material that violates restrictions imposed by
Programmer or Programmer's suppliers and disclosed upon reasonable advance
written notice to Affiliate by Programmer. The restrictions set forth in this
Section 5(a) (iv) shall apply only to the extent they are applied by Programmer
uniformly with respect to all of its distributors of the Service, and shall not
apply if Affiliate has received a valid written authorization from a third party
for any of the uses described in this Section 5(a)(iv);
(v) it has obtained, and shall maintain in full force during the
Term hereof, such federal, state and local authorizations as are material and
necessary to operate the business it is conducting in connection with its rights
and obligations under this Agreement;
(vi) it has no knowledge of any misrepresentation, breach of
warranty or covenant made by Programmer hereunder;
(vii) the individual executing this Agreement on its behalf has the
authority to do so.
(b) By Programmer. Programmer warrants, represents and covenants to
Affiliate that:
(i) to its best knowledge after diligent review and receipt of
advice of legal counsel with experience in such matters, it is in compliance
with and will throughout the Term continue to comply with all material Laws
applicable to, or with respect to, the Service and the provision of the Service
to Affiliate, and Programmer's rights and obligations under this Agreement with
respect to the Service and Programmer's obligations hereunder, including without
limitation, FCC rules and regulations governing the Service, if any, all
relevant provisions of the Cable Television Consumer Protection and Competition
Act of 1992, and the Communications Act of 1934, the effective portions of the
Communications Decency Act of 1996 (as any or all may be amended and any
successor, replacement or similar Laws) and any regulations promulgated under
any applicable law or any of the foregoing;
(ii) it has the power and authority to enter into this Agreement and
to fully perform its obligations hereunder;
(iii) it shall provide the Service for the Territory, at its sole
cost and expense (together with any necessary equipment, including without
limitation, backup or reserve equipment), in accordance with and subject to the
terms and conditions set forth in this Agreement, *****.
(iv) it shall promptly provide Affiliate with any and all
promotional materials of the Service which it generally provides to any other
distributor of the Service, at Programmer's sole cost and expense; and if
Affiliate shall request additional such materials,
EXECUTION VERSION 14
then Programmer shall promptly provide such materials to Affiliate and Affiliate
shall reimburse Programmer for the reasonable actual costs thereof;
(v) it has obtained, and shall maintain in full force during the
Term hereof, such federal, state and local authorizations as are necessary to
comply with Laws or which are material and necessary to operate the business it
is conducting in connection with its rights and obligations under this
Agreement;
(vi) it has obtained or will obtain at its sole expense all rights
necessary for Affiliate to use and enjoy its rights in connection with its
distribution of the Service, including, without limitation, obtaining all
necessary trademarks, copyrights, licenses and any and all other proprietary,
intellectual, property and other use rights necessary in connection with, or for
Affiliate's distribution of the Service, and at all times during the Term
"PLAYBOY TV," "SPICE WILD," "THE HOT NETWORK," "FRESH!," "CLUB JENNA",
"SPICE:XCESS" or "PLAYBOY TV EN ESPANOL" or the names, titles or logos of the
Service (or any successors thereto) or any of their programs, or the names,
voices, photographs, music, likenesses or biographies of any individual
participant or performer in, or contributor to, any program or any variations
thereof) and to perform its obligations hereunder and grant the rights granted
pursuant to Section 1;
(vii) there are no (and it covenants that it shall not enter into
directly or indirectly, allow or otherwise permit any) affiliation, distribution
or any other agreements, whether written or oral, granting to distributors
and/or any other third party, person or entity any form or type of exclusive or
other rights that would limit or restrict in any way Affiliate's rights to
distribute the Service in the Territory;
(viii) it shall not, without Affiliate's prior written approval, use
the name of or logo for "DIRECTV," or any variations thereof, for any purpose,
without Affiliate's prior written consent;
(ix) there is no actual and, to Programmer's knowledge, there is no
pending investigation (including, without limitation, a grand jury
investigation) involving the Service (or any content included in the Service) or
any pending proceeding against Programmer (or any of its principals or
Affiliated Companies) for the violation of any federal, state or local law or
regulation, as applicable, concerning illegal, indecent or obscene material or
the transmission thereof (the "Obscenity Laws");
(x) it will notify Affiliate as soon as reasonably practical, but in
no event more than two Business Days, after receiving notification of, or
becoming aware of, any pending investigation by any governmental authority, or
any pending criminal proceeding against Programmer (or any of its principals or
Affiliated Companies (as defined in Section 8(a)), which investigation or
proceeding concerns distribution of the Service or programming in the Service,
including without limitation, investigations any/or proceedings concerning
potential violations of Obscenity Laws. For purposes of this Section 5(b)(x),
Programmer shall be deemed to be aware of any such investigation or proceeding
if any of the directors,
EXECUTION VERSION 15
officers, agents, representatives or employees of managerial functions of
Programmer or an Affiliated Company has received any communication about or
otherwise becomes aware of any such investigation or proceeding;
(xi) to the best of Programmer's knowledge after diligent review and
advice of counsel with experience in such matters, the programming Service and
all programming provided as part thereof that Programmer provides Affiliate
hereunder complies with Obscenity Laws and is not violative of Obscenity Laws in
any jurisdiction in the Territory;
(xii) it solely and exclusively possesses, and will at all times
during the Term so possess, any and all rights necessary to grant Affiliate the
right to distribute the Service and all programming provided as part thereof, as
a whole or in parts, as Subscription Offering(s) and PPV Offering(s), as the
case may be, in the Territory (it being understood and agreed that Programmer
has granted and may grant similar rights to other third parties);
(xiii) nothing contained in the Service or in any other material
supplied by Programmer to Affiliate violates, infringes, or conflicts with any
rights of any person or entity (including, without limitation, copyright,
trademark, music performance and all other proprietary and/or intellectual
rights);
(xiv) there are no outstanding (or, to the best of Programmer's
knowledge, threatened) judgments or pending claims, liens, charges,
restrictions, or encumbrances on or related to the Service or any programming
provided as part thereof that may materially interfere with the rights of
Affiliate under this Agreement;
(xv) Programmer is the sole entity that has entered into and shall
enter into agreements and obligations with other distributors with respect to
the Service and to any and all programming provided as part of the Service;
(xvi) except to the extent expressly permitted hereunder, during the
Term, the Service shall not include any direct sales, advertising or
infomercials;
(xvii) the individual executing this Agreement on its behalf has the
authority to do so;
(xviii) to its best knowledge after diligent review and receipt of
advice of legal counsel with experience in such matters, it is in compliance
with and will throughout the Term continue to comply with 18 USC 2257 or 28 CFR
75 or any successor legislation or code. Programmer has prepared, maintained and
executed, and at all times during the Term and for a period of seven (7) years
thereafter shall, prepare, maintain and execute any documents or records, and
provide Affiliate with copies of any documents or records which are required by
Title 18, U.S.C. ss. 2257, as amended, and/or the associated regulations found
at 28 C.F.R. 75.1 et. seq., as amended, and/or any successor statute or
regulation ("Section 2257"). Programmer warrants and represents that it is in
possession of such documents and records, and maintains them in accordance with
Section 2257. Programmer agrees to appoint
EXECUTION VERSION 16
a "record custodian" as required under Section 2257, and will keep Affiliate
apprised of the physical address where all required records are compiled and
maintained pursuant to Section 2257, along with the name of the records
custodian. Programmer will display a conspicuous disclosure statement on all
depictions of `actual sexually explicit conduct' contained in the Services as
required by Section 2257, which statement identifies the records custodian for
the content and describes the physical location where the records relating to
the content may be inspected as required under applicable law. If required by
law, Programmer will be identified as a "primary producer" in any and all
disclosure statements associated with the Services pursuant to Section 2257.
Programmer further agrees to cooperate with Affiliate in connection with any
inspections or government inquiries initiated pursuant to Section 2257.
Affiliate shall have the right to inspect such documents and records at any time
during regular business hours at Programmer's location for maintaining the
records with five (5) business days' prior written notice from Affiliate.
6. Term; Effective Date; Termination.
(a) Term; Effective Date. Subject to certain rights of termination set
forth in this Agreement, the term of the Agreement shall be for the period
commencing on the Effective Date and continuing through October 14, 2009 (the
"Term").
(b) Termination for Breach or Bankruptcy. This Agreement may be
terminated by either party (the "Affected Party"), in its discretion, at any
time after any of the following occurrences with respect to the other party (the
"Other Party"):
(i) the breach of any representation, warranty or covenant of the
Other Party or failure by the Other Party, its successors or assigns to perform
any material obligation hereunder which is not cured within thirty (30) days
after receipt of written notice thereof from the Affected Party or as to which
reasonable steps to cure have not been commenced within such period (or are not
thereafter diligently pursued and completed within an additional thirty (30)
days); or
(ii) the filing of a petition in bankruptcy or for reorganization by
or against the Other Party under any bankruptcy act; the assignment by the Other
Party for the benefit of its creditors, or the appointment of a receiver,
trustee, liquidator or custodian for all or a substantial part of the Other
Party's property, and the order of appointment is not vacated within thirty (30)
days; or the assignment or encumbrance by the Other Party of this Agreement
contrary to the terms hereof; or
(c) Termination by Affiliate. Affiliate may terminate this Agreement:
(i) subject to Section 1(b)(viii), immediately upon prior written
notice, if the Service, or any programming provided as part thereof (including,
without limitation, advertising, if any), fails to comply in any material way
with Exhibit A hereto and the definition of "Service" in Section 1(b) hereof, as
reasonably determined by Affiliate, if
EXECUTION VERSION 17
Programmer is unable to cure such material failure within fifteen (15) days upon
notice (specifying such failure) thereof ;
(ii) if Affiliate discontinues operation of the DTH System,
immediately upon such discontinuance;
(iii) according to the provisions of Section 6(d) or Section 17
hereof;
(iv) immediately following written notice to Programmer of
Programmer's failure to comply with any material Laws, if Programmer is unable
to cure or eliminate the failure to comply with such material Laws in any
material respect within fifteen (15) days upon notice (specifying such failure)
thereof; or
(v) *****
(d) Force Majeure. Notwithstanding any other provision in this
Agreement, neither Programmer nor Affiliate shall have any liability to the
other or any other person or entity with respect to any failure of Programmer or
Affiliate, as the case may be, to transmit or distribute the Service or perform
its obligations hereunder if such failure is due to any failure or degradation
in performance of Programmer's U.S. Satellite or Affiliate's DTH Satellite(s) or
transponders on any such satellites (as applicable) or of the DTH System (in
which case, Affiliate shall be excused from its distribution obligations under
this Agreement), or of any failure of scrambling/descrambling equipment or any
other equipment owned or maintained by others (including, without limitation,
Affiliate's automated billing and authorization systems), any failure at the
origination and uplinking center used by Programmer or Affiliate, any labor
dispute, fire, flood, riot, legal enactment, government regulation, Act of God,
or any cause beyond the reasonable control of Programmer or Affiliate, as the
case may be (a "Force Majeure"), ***** provided, however, that if Affiliate
determines in its sole discretion that it is commercially or technically
unfeasible to cure a Force Majeure with respect to the DTH System or one or more
DTH Satellites and so notifies Programmer, then either party may terminate this
Agreement effective upon written notice to the other party. The parties
acknowledge and agree that although the Service may at any given time be
uplinked to only one of several DTH Satellites, failure or degradation in any of
such DTH Satellites may require Affiliate to reduce the number of programming
services (in particular the number of PPV and/or adult services) available for
allocation among all of the DTH Satellites, with such reduction including,
without limitation, curtailment or termination of the distribution of the
Service by Affiliate, at Affiliate's sole discretion. Accordingly, Programmer
further acknowledges and agrees that the provisions set forth in the first
sentence of this Section 6(d) shall apply and shall exculpate Affiliate and
excuse the performance of Affiliate hereunder in the event of such a failure or
degradation of any of the DTH Satellites or the transponders on any such
satellite, regardless of whether the satellite to which the Service is uplinked
at the time of such failure or degradation is itself the subject of such failure
or degradation. In the event Affiliate determines in its sole discretion that it
is unable to cure, or it is commercially impracticable to cure, such Force
Majeure during the
EXECUTION VERSION 18
remaining Term of this Agreement, then Affiliate may terminate this Agreement
immediately upon notice to Programmer.
(e) Survival. Termination of this Agreement pursuant to this Section 6
shall not relieve either party of any of its liabilities or obligations under
this Agreement, including without limitation those set forth below in Section 8,
which shall have accrued on or prior to the date of such termination.
(f) *****
(g) Rights to Limit Distribution. Programmer shall have the rights to
limit distribution of Movie Channel 1 and Movie Channel 2 as set forth in
Exhibit B hereof.
7. Separate Entities. No officer, employee, agent, servant or independent
contractor of either party hereto or their respective subsidiaries or affiliates
shall at any time be deemed to be an employee, servant or agent of the other
party for any purpose whatsoever, and the parties shall use commercially
reasonable efforts to prevent any such misrepresentation. Nothing in this
Agreement shall be deemed to create any joint-venture, partnership or
principal-agent relationship between Programmer and Affiliate, and neither shall
hold itself out in its advertising or in any other manner which would indicate
any such relationship with the other.
8. Indemnification; Limitation of Liability.
(a) By Programmer. Programmer shall indemnify, defend and hold harmless
each of Affiliate, its Affiliated Companies (as defined below) and the
directors, officers, employees, and agents of Affiliate and its Affiliated
Companies (collectively, the "Affiliate Indemnitees") from, against and with
respect to any and all claims, criminal and civil liabilities, costs and
expenses (including reasonable attorneys' and experts' fees) ("Claims") incurred
to third parties (including without limitation, any Governmental Authorities) in
connection with any claim against any of the Affiliate Indemnitees arising out
of (i) Programmer's breach of its representations, warranties and covenants set
forth in this Agreement, (ii) the Service or material or programming supplied by
Programmer pursuant to this Agreement, (iii) the distribution or cablecast of
any programming of the Service which violates or requires payment for use or
performance of any copyright, right of privacy or literary, music performance or
dramatic right, (iv) Programmer's advertising and marketing of the Service, (v)
any acts or omissions by audio text suppliers (including, without limitation,
the content of any of the audio text service) and all employees and contractors
thereof, (vi) any other materials, including advertising or promotional copy,
supplied or permitted by Programmer, and/or (vii) any claim for payment by a
third party as a result of Affiliate's distribution of the Service. As used in
this Agreement, "Affiliated Company(ies)" shall mean, with respect to any person
or entity, any other person or entity directly or indirectly controlling,
controlled by or under common control (i.e., the power to direct affairs by
reason of ownership of voting stock, by contract or otherwise) with such person
or entity and any member, director, officer or employee of such person or
entity.
EXECUTION VERSION 19
(b) By Affiliate. Affiliate shall indemnify, defend and hold harmless
each of Programmer, Programmer's Affiliated Companies and the directors,
officers, employees and agents of Programmer and Programmer's Affiliated
Companies (collectively, the "Programmer Indemnitees") from, against and with
respect to any and all claims, liabilities, costs and expenses (including
reasonable attorneys' and experts' fees) incurred to third parties arising out
of (i) Affiliate's breach of its representations, warranties and covenants set
forth in this Agreement, (ii) Affiliate's distribution of the Service by means
of the DTH Distribution System (except with respect to claims relating to the
content of the Service, including advertising or promotional copy supplied or
permitted by Programmer), (iii) Affiliate's advertising and marketing of the
Service and the DTH System, and (iii) any other materials used by Affiliate,
including advertising or promotional copy, not supplied or permitted by
Programmer.
(c) Procedure for Indemnification Claims. The respective
indemnification obligations of each of the parties pursuant to Sections 8(a) and
8(b), above, shall be conditioned upon strict compliance with the following
procedures for indemnification claims based upon or arising out of any claim,
action or proceeding by any person not a party to this Agreement. If at any time
a claim shall be made, or an action or proceeding shall be commenced, against a
party to this Agreement (the "Aggrieved Party") which could result in liability
of the other party (the "Indemnifying Party") under its indemnification
obligations under this Agreement, the Aggrieved Party shall give to the
Indemnifying Party notice of that claim, action or proceeding within five (5)
Business Days following receipt of service of any claim, action or proceeding by
the Party (except that failure to give that notice shall not excuse the
Indemnifying Party except to the extent that it is materially prejudiced by that
failure). The notice shall state the basis for the claim, action or proceeding
and the amounts claimed, (to the extent that amount is determined at the time
when the notice is given) and shall permit the Indemnifying Party to assume the
defense of any such claim, action or proceeding (including any action or
proceeding resulting from any such claim) with counsel which is reasonably
acceptable to the Aggrieved Party. Failure by the Indemnifying Party to notify
the Aggrieved Party of its election to defend the claim, action or proceeding
within a reasonable time, but in no event more than fifteen (15) days after the
notice shall have been given to the Indemnifying Party, shall be deemed a waiver
by the Indemnifying Party of its right to defend the claim, action or
proceeding; provided, however, that the Indemnifying Party shall not be deemed
to have waived the right to contest and defend against any claim of the
Aggrieved Party for indemnification under this Agreement based upon or arising
out of that claim, action or proceeding.
(i) *****
*****
9. Notices. Except as set forth below, all notices hereunder shall be in
writing and delivered by hand or sent by certified mail, return receipt
requested, fax, an overnight delivery service to the receiving party at its
address set forth above or as otherwise designated by written notice. Notice to
Programmer shall be provided as follows:
EXECUTION VERSION 20
If by mail, facsimile Playboy Entertainment Group, Inc.
or overnight or 2706 Media Center Drive.
personal delivery: Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Senior Vice President,
Business and Legal Affairs
Fax: (000) 000-0000
Playboy Entertainment Group, Inc.
0000 Xxxxx Xxxxxx Xxxxx.
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President,
Sales and Affiliate Relations
Fax: (000) 000-0000
With a courtesy copy to: Playboy Enterprises, Inc.
000 X. Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
Notice to Affiliate shall be provided as follows:
If by mail DIRECTV, Inc.
or facsimile: X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President, Programming
Fax: (000) 000-0000
cc: General Counsel
Fax: (000) 000-0000
cc: Legal & Business Affairs
Fax: (000) 000-0000
If by overnight or DIRECTV, Inc.
personal delivery: 0000 Xxxx Xxxxxxxx Xxxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President, Programming
cc: General Counsel
cc: Legal & Business Affairs
Notice given by mail shall be considered to have been given five (5) days
after the date of mailing, postage prepaid certified or registered mail. Notice
given by facsimile machine shall be considered to have been given on the date
receipt thereof is electronically acknowledged. Notice given by an overnight
delivery service shall be considered to have been given on the next business
day.
EXECUTION VERSION 21
10. Waiver. The failure of any party to insist upon strict performance of
any provision of this Agreement shall not be construed as a waiver of any
subsequent breach of the same or similar nature. Subject to Section 8(d) above,
all rights and remedies reserved to either party shall be cumulative and shall
not be in limitation of any other right or remedy which such party may have at
law or in equity.
11. Binding Agreement; Assignment. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns, except that it
may not be assigned by transfer, by operation of law or otherwise, without the
prior written consent of the non-transferring party, which shall not be
unreasonably withheld; provided, however, that (i) Affiliate may assign its
rights and obligations under this Agreement, in whole or in part (including
without limitation, Affiliate's right to distribute the Service) (A) to a
successor entity to Affiliate's DTH business; (B) to a third party as part of
preparing to go or going public; or (C) to a third party, provided Affiliate
remains primarily liable for the performance of such third party's obligations
hereunder and (ii) Programmer may assign its rights and obligations under this
Agreement, in whole or in part, (A) to a successor entity to Programmer's
business; provided, however, that such assignment shall be subject to the
limitations relating to Change in Control set forth in Section 6(c)(v) hereof);
or (B) to a third party as part of preparing to go or going public, so long as
the controlling stockholder(s) of Programmer and substantially all of the
members of management of the Programmer remain the same following the initial
public offering and for the duration of the Term.
12. Laws of California; Consent to California Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
California applicable to contracts made and fully performed therein, except to
the extent that the parties' respective rights and obligations are subject to
mandatory local, State and Federal laws or regulations. All actions relating to
this Agreement shall be brought, and the parties hereto consent to exclusive
jurisdiction (in personam and in rem) and venue for all actions relating to this
Agreement, in the courts located in Los Angeles County, California; provided,
however, that any judgments or court orders obtained may be enforced in any
other jurisdiction. Programmer represents that CT Corporation System is its
authorized agent for service of process in Los Angeles, California.
13. Entire Agreement and Section Headings. This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements, or understandings
relating to the subject matter hereof (whether written, oral or implied),
including, without limitation, the Current Playboy Agreement and any amendments
thereto. This Agreement shall not be modified other than in a writing, signed by
each of the parties hereto. The section headings hereof are for the convenience
of the parties only and shall not be given any legal effect or otherwise affect
the interpretation of this Agreement.
14. Severability. The parties agree that each provision of this Agreement
shall be construed as separable and divisible from every other provision and
that the enforceability of
EXECUTION VERSION 22
any one provision shall not limit the enforceability, in whole or in part, of
any other provision hereof. In the event that a court of competent jurisdiction
determines that a restriction contained in this Agreement shall be unenforceable
because of the extent of time or geography, such restriction shall be deemed
amended to conform to such extent of time and/or geography as such court shall
deem reasonable.
15. Confidentiality.
(a) Generally. The parties agree that they and their employees have
maintained and will maintain, in confidence, the terms and provisions of this
Agreement, as well as all data, summaries, reports, proprietary information,
trade secrets and information of all kinds, whether oral or written, acquired or
devised or developed in any manner from the other party's personnel or files or
any proprietary or subscriber information provided by one party to the other
party (the "Confidential Information"), and that they have not and will not
reveal the same to any persons not employed by the other party except: (i) (A)
at the written direction of such party; (B) to the extent necessary to comply
with the law or the valid order of a court of competent jurisdiction, in which
event the disclosing party shall so notify the other party as promptly as
practicable (and, if possible, prior to making any disclosure) and shall seek
confidential treatment of such information, or in connection with any
arbitration proceeding; (C) as part of its normal reporting or review procedure
to its parent company, its financial advisors, auditors and its attorneys, and
such parent company, financial advisors, auditors and attorneys agree to be
bound by the provisions of this Section 15; (D) to independent contractors hired
by either party in the ordinary course of business, bona fide potential
investors, insurers and financing entities; provided, however, that such persons
described above agree to be bound by the provisions of this Section 15; or (E)
in order to enforce any of its rights pursuant to this Agreement; however, that
such person described above agrees to be bound by the provisions of this Section
15; or (ii)(A) at the time of disclosure to the recipient the Confidential
Information is in the public domain; or (B) after disclosure to the recipient
the Confidential Information becomes part of the public domain by written
publication through no fault of the recipient. During the Term, neither party
shall issue an independent press release, or discuss with a member of the press,
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party.
(b) Programmer's Further Obligations. Notwithstanding Section 15(a),
Programmer specifically acknowledges and agrees that any lists of Affiliate's
customers or users, and all information related to such customers and users, is
confidential and proprietary information of Affiliate and cannot be disclosed by
Programmer or used by Programmer for any purpose or use whatsoever, other than
for its review at Affiliate's offices as part of Programmer's audit rights
hereunder to determine if Programmer has been paid the License Fees due to it by
Affiliate. Also notwithstanding Section 15(a), Programmer further acknowledges
and agrees that under no circumstances will it in any way: disclose information
(whether personally identifiable or not) to any third party regarding
Affiliate's customers or users or engage in any direct mailing or telephone
solicitation which Affiliate's customers or users do not previously and
expressly approve (whether orally or in writing) or previously
EXECUTION VERSION 23
and expressly request (whether orally or in writing), or which Affiliate does
not previously and expressly approve in writing in Affiliate's sole discretion.
16. Injunctive Relief. Notwithstanding anything in this Agreement to the
contrary, Programmer and Affiliate each shall have the right to obtain
injunctive relief, if necessary, in order to prevent the other party from
willfully breaching its obligations under this Agreement.
17. Cessation of Program Distribution. If Affiliate in good faith
reasonably believes that Affiliate's provision of any of the programming on the
Service either violates any material Law or could be found by a court or
administrative agency to violate any material Law (a "Law Violation" or
"Potential Law Violation") or reasonably believes in good faith at any time that
any of the programming on the Service is adversely affecting the corporate image
that Affiliate desires to maintain at such time (an "Image Problem") then,
notwithstanding anything to the contrary in this Agreement, (a) immediately
following written notice to Programmer in the case of a Law Violation or
Potential Law Violation, or (b) no sooner than thirty (30) days following
written notice to Programmer in the case of an Image Problem and only after
consultation with Programmer and providing Programmer the opportunity to propose
a plan to resolve the Image Problem (if Affiliate elects to terminate this
Agreement as provided in this Section 17); Affiliate may terminate this
Agreement, or Affiliate may cease distributing the offending programming or the
Service (in any portion of the Territory, or the entire Territory, as Affiliate
shall determine in its sole discretion based on the genesis of the Law
Violation; Potential Law Violation or Image Problem) until Affiliate determines
in Affiliate's sole discretion that there will be no Image Problem because the
Service programming at that subsequent time is consistent with the corporate
image that Affiliate then desires to maintain or Affiliate reasonably determines
that a Law Violation or Potential Law Violation will not again occur. If
Affiliate, pursuant to this Section 17 and due to an Image Problem, desires to
cease distributing the Service, Affiliate shall provide Programmer with notice
thereof setting forth in reasonable detail the nature of Affiliate's concerns
and provide Programmer with the opportunity to propose changes in the Service to
address Affiliate's concerns.
18. Survival of Representations and Warranties. All representations and
warranties contained herein or made by the parties, and each of them, in
connection herewith shall survive any independent investigation made by either
party.
19. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all such counterparts together
shall constitute but one and the same instrument. The parties also agree that
this Agreement shall be binding upon the faxing by each party of a signed
signature page thereof to the other party. If such a
EXECUTION VERSION 24
faxing occurs, the parties agree that they will each also immediately post, by
Federal Express, a fully executed original counterpart of the Agreement to the
other party.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
DIRECTV, INC.
By: /s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx
Vice President, Programming Acquisitions
PLAYBOY ENTERTAINMENT GROUP, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx/
----------------------------------------
SPICE HOT ENTERTAINMENT, INC.
By: /s/ Xxxxxxxx Xxxxxxxxxx/
----------------------------------------
EXECUTION VERSION 25
EXHIBIT A
DESCRIPTIONS AND LIMITATIONS OF THE SERVICE
From and after the Effective Date and at all times during the Term, the Service
(including Playboy TV En Espanol, if applicable) shall be provided by Programmer
to Affiliate on a full-time turnaround basis (i.e., 24 hours per day, seven days
a week)
The programming content of the Service shall comply with the following
limitations and restrictions:
(i) With respect to the services making up the Service, the programming
contained therein shall (subject to specific channel descriptions set forth in
this Agreement):
*****
(ii) All programming services may:
(A) Include nudity and sexual situations as a matter of course; however,
there shall be no depiction of any sexual acts prohibited by this Exhibit A.
(B) Include explicit and graphic language; *****.
(iii) The Movie Channels shall comply with the following:
(A) Movies on the Movie Channels shall be scheduled to start every 90
minutes, and on a staggered basis, with attention given to creating appealing
double feature, three-hour blocks.
(B) The movies broadcast on the Movie Channels shall generally range from
70 to 85 minutes in length.
(C) *****
(iii) Subject to specific channel descriptions set forth in this Agreement,
Programmer may determine the content of its programming services in its sole
discretion, including the substitution or withdrawal of scheduled programs, and
of commercial, promotional or other announcements, consistent with the terms and
conditions of this Agreement.
(v) Programming Service Specific Restrictions.
(A) Playboy TV. *****
(B) Movie Channel 1. *****
(C) Movie Channel 2. *****
EXECUTION VERSION 26
(D) Playboy TV en Espanol Service. *****
(E) *****
EXECUTION VERSION 27
*****
EXECUTION VERSION 28
EXHIBIT B
PROGRAMMER'S CABLE RATE CARD FOR NON-HOTEL/MOTEL DISTRIBUTION
***** *****
***** ***** *****
***** ***** *****
***** ***** *****
*****
EXECUTION VERSION 29
EXHIBIT C
MONTHLY PROGRAM SCHEDULES FOR THE SERVICE
(see attached)
EXECUTION VERSION 30
EXHIBIT D
PROGRAMMER'S RATE CARD FOR HOTEL/MOTEL DISTRIBUTION
***** *****
***** ***** *****
***** ***** *****
***** ***** *****
EXECUTION VERSION 31
EXHIBIT E
PROGRAMMERS RATE CARD FOR PLAYBOY TV EN ESPANOL (IF APPLICABLE)
***** ***** *****
***** ***** *****
EXECUTION VERSION 32