Affiliation Agreement for DTH Satellite Exhibition of Cable Network Programming - DirecTV Inc. and Colorado Satellite Broadcasting Inc.
EXECUTION VERSION
AMENDED AND RESTATED AFFILIATION AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF CABLE NETWORK PROGRAMMING
DIRECTV, INC.
and
COLORADO SATELLITE BROADCASTING, INC.
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
AMENDED AND RESTATED AFFILIATION AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF CABLE NETWORK PROGRAMMING
AGREEMENT, made as of this 24th day of September, 2007, by and between
COLORADO SATELLITE BROADCASTING, INC., a Colorado corporation ("Programmer"),
and DIRECTV, INC., a California corporation ("DIRECTV").
WHEREAS:
A. DIRECTV and Programmer entered into a written agreement
entitled Affiliation Agreement for DTH Satellite Exhibition of Cable Network
Programming dated March 31, 2006 (the "Agreement") whereby Programmer granted
DIRECTV the right to distribute adult programming television networks owned and
operated by Programmer (individually the "Service," or collectively the
"Services", as defined in Section 1.2.1 below) via the DTH Distribution System
(as defined in Section 1.1.2 below) in the United States, its territories and
possessions, including Puerto Rico (the "Territory") as restricted herein; and
B. The parties desire to amend various terms of the Agreement
and herein restate the Agreement in its entirety.
NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. Grant of Rights.
1.1 Distribution; Certain Definitions.
1.1.1 Programmer hereby grants to DIRECTV the
non-exclusive right to distribute the Services in the Territory via the DTH
Distribution System to DIRECTV Subscribers (as defined in Section 1.1.2 below)
during the Term (as defined in Section 6.1 below) hereof. DIRECTV shall have the
right to use the names, titles or logos of the Services 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, subject to the warranties and restrictions set forth in this
Agreement.
1.1.2 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 (as defined in Section 1.3.3 below) 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 DIRECTV currently and/or subsequently uses to deliver the
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
Services feed to DIRECTV Subscribers, including, without limitation, MMDS and
terrestrial-based transmission infrastructures such as Internet protocol, fiber
optic, twisted pairs and coaxial cable, provided that in connection with such
delivery methods, DIRECTV complies with the following: (i) the end users to whom
DIRECTV distributes the Services 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
Services via DIRECTV's direct to home satellites. "DIRECTV Subscribers" shall
mean those customers (both residential and non-residential) authorized by
DIRECTV to receive DTH service via the DTH Distribution System, excluding any
customer who to DIRECTV's knowledge: (A) charges an admission fee, cover charge,
minimum or the like; or (B) distributes all or any part of the Services to
viewers who are not located in the same residence, dwelling unit, store,
hospital room, hotel room or suite, motel room or suite, office or other
singular facility occupied, owned, leased or otherwise controlled by the
customer entitled to receive the Services.
1.1.3 If Programmer grants or has granted to any
other distributor that distributes a Service in the Territory the right to
receive and distribute such Service(s) and/or any Segments (as defined in
Section 1.2.1 below) of Service programming (as any such Segments appear on the
Service(s)) or Programmer or an Affiliated Company (as defined in Section 8.1
below) distributes the Service(s) (or any portion thereof) itself via a "New
Distribution Method" (as defined below), then Programmer will promptly notify
DIRECTV thereof and make available to DIRECTV the right to receive and
distribute such programming to DIRECTV Subscribers via such New Distribution
Method under the same terms and conditions such rights were made available such
other distributor directly in exchange for such rights, provided that if DIRECTV
cannot reasonably satisfy such terms and conditions, Programmer shall offer
DIRECTV comparable terms and conditions. "New Distribution Method" shall mean,
with respect to any other distributor of a Service in the Territory, any
distribution method, device, distribution technology or format (for example,
distribution to hand-held devices, streamlining to a web site); provided that,
in all events, the current distribution methods of cable television, telco
(e.g., via Internet protocol or traditional fiber lines), direct to home
satellite, SMATV and multipoint distribution service (all as currently utilized
in the multichannel video distribution business) shall not be considered a New
Distribution Method.
1.2 The Services.
1.2.1 The "Services" shall mean and consist of the
national feed (or, if Programmer uses multiple feeds for the Services, such
other of such multiple feeds designated by DIRECTV) of the following 24-hour per
day, 7-day per week programming services: (i) the programming service commonly
known as "TEN*Clips", which shall consist of thematically organized [***] scenes
which are sourced from various movies (each [***] minute segment shall contain
up to [***] individual [***] scenes and shall in no instance show less than
[***] scenes (collectively a "Segment")); (ii) the programming service commonly
2
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
known as "Juicy", which shall consist of Segments of thematically organized
[***] scenes; and (iii) the programming service commonly known as "Real", which
shall consist of a minimum of [***] unique programs per [***] and [***] unique
programs per [***], including [***] channel premiers per [***] and [***] channel
premiers per [***]. No program shall repeat for a minimum of [***] after its
initial [***] run on Real or for a minimum of [***] after any subsequent [***]
run. Furthermore, no program on Real shall repeat more than [***] during any
given [***]. All programs on Real will employ a reality aspect or feel in which
[***] scenes simulate [***] situations. TEN*Clips and Juicy each shall contain a
minimum of [***] unique Segments per [***] ([***] unique Segments comprised of
[***] unique [***] scenes per [***]). While [***] of Segments will be created
during the Term, all Segments shall be [***] in that no Segment is ever [***]
with the [***] scenes in the [***]. No Segment will ever [***] after its initial
[***] run and no [***] scene will [***] for [***] after its initial [***] run or
for a minimum of [***] after any subsequent [***] run. Furthermore, no Segment
shall [***] more than [***] during any given [***]. Segments shall be no less
than [***] in duration. The daily start time for Real is [***] and the daily
start time for TEN*Clips and Juicy is [***]; provided that Programmer shall make
commercially reasonable efforts to accommodate any request by DIRECTV to modify
such start times. Notwithstanding the foregoing or the content limitations set
forth herein, in the event that, during the Term, DIRECTV authorizes the
exhibition via the DTH Distribution System of adult programming which contains
or depicts acts set forth only in the [***] of Schedule I to Exhibit A ("[***]
Programming"), then Programmer shall replace TEN*Clips with the programming
service commonly known as "Xtsy", which shall consist of a mix of quality [***]
adult feature programs (including [***],and [***]). Xtsy shall feature a minimum
of [***] unique programs per [***] and [***] unique programs per [***]. Among
the aforementioned unique programs, Xtsy shall feature [***] channel premiers
per [***] and [***] channel premiers per [***] and which may contain [***]
Programming. The start time for Xtsy is [***]. No program shall [***] for a
minimum of [***] after its initial [***] run on Xtsy or for a minimum of [***]
after any subsequent [***] run. Furthermore, no program on Xtsy shall [***] more
than [***] during any given [***]. The Services shall be comprised of [***]
adult programming depicting [***] and [***] situations and [***] among
consenting adults. [***] programming shall not be exhibited on more than one
Service during any [***] during the Term. Subject to the foregoing, the Services
shall at all times be [***] to (or [***] than) the degree of explicitness of
programming currently featured on competing adult services such as the services
currently known as [***] and [***] (subject to the description and limitations
in Exhibit A, as illustrated by the programming schedules in Exhibit C).
Notwithstanding the foregoing, upon [***] written notice to Programmer, DIRECTV
shall have the sole option at any time during the Term to replace any one of the
Services with any other programming service of the same edit standard (i.e.,
[***], or, as the case may be, [***]) distributed by Programmer in the Territory
and to distribute such other service under the terms hereof. Programmer
represents and warrants that the Services shall reflect adult content limited to
the [***] version, as described in Exhibit A and Schedule I thereto, and, except
as may be permitted in strict accordance herewith, shall not contain or depict
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
any acts set forth in the [***] of Schedule I to Exhibit A, or otherwise
prohibited by Exhibit A. The Services shall not contain any paid programming,
including, without limitation, infomercials, home shopping programming,
fundraising or religious programming. Notwithstanding the foregoing, Programmer
shall have the right to include Programmer's brand or trademark identification
on the Services and to include promotional tags or spots solely for purposes of
promoting upcoming programs on the Services (no more than [***] in each [***]
segment of programming content); provided that in no case shall such tags or
spots promote any programming service other than the Services. The Services
shall be delivered to DIRECTV in their entirety, meaning that the programming on
the Services, as received by any Service Subscriber at a given point in time,
shall be the same as the programming that is received by all other subscribers
to the Services at such point in time. If Programmer or an Affiliated Company
(as defined in Section 8.1 hereof) distributes itself or provides (or offers)
any other programming rights, including, without limitation, DVR push down, high
definition, video-on-demand, interactive or gaming rights (including, without
limitation, data and informational enhancements to the programming contained in
or delivered along with the Services) to any other distributor of the Services
in the Territory, then Programmer shall promptly offer to DIRECTV such rights
upon terms and conditions that are no less favorable to DIRECTV than those
provided to the Other Distributor; provided, however, that if such terms and
conditions are not relevant to DIRECTV or DIRECTV is not reasonably capable of
complying with such terms and conditions taking into consideration DIRECTV's
business, including, without limitation, DIRECTV's technology and DIRECTV's
national platform, then the parties shall negotiate comparable obligations,
terms and conditions in good faith. The terms hereunder that cannot be reduced
to an economic value shall be no less favorable to DIRECTV than such terms that
are provided to Other Distributors.
1.2.2 All rights and title in and to the entire
contents of the Services, 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 DIRECTV, remain vested in Programmer.
1.2.3 DIRECTV is authorized to distribute the
Services using satellite master antenna television system (or similar system)
("SMATV") operators (including telephone companies and similar service
providers) that serve multiple dwelling locations, master planned communities,
multiple dwelling unit ("MDU") buildings or complexes or commercial or business
establishments with multiple television viewing sites via such SMATV systems
directly to end users within such buildings or establishments, subject to
Section 1.1.2 above.
1.2.4 Programmer shall not propose or impose upon
DIRECTV, nor shall DIRECTV 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 Services.
1.3 Other Distribution Obligations. In addition, the
parties agree as follows:
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
1.3.1 Subject to Programmer's obligations hereunder
and DIRECTV's rights under Section 17, DIRECTV shall distribute the Services on
a PPV basis 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 (collectively, the
"Alterations") excepting: (i) DIRECTV's electronic guides (including without
limitation, any mosaic or similar guides), (ii) news bulletins and other public
announcements as may be required by emergencies or applicable law; and (iii) a
DIRECTV Subscriber's use of equipment, programming or other data supplied by
DIRECTV or any third party to make Alterations to the Signal as viewed on a
monitor/television screen. Programmer acknowledges that the DTH Distribution
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 and/or other
modification of the Services. Programmer shall fully encrypt the satellite
signals of the Services utilizing encryption technology commonly used in the
satellite distribution industry.
1.3.2 Subject to the terms and conditions of this
Agreement, the terms and conditions upon which DIRECTV distributes the Services
to DIRECTV Subscribers, including, without limitation, Service packaging and
retail prices charged, shall be determined by DIRECTV in its sole discretion.
DIRECTV shall offer the Services to DIRECTV Subscribers [***] or [***] and/or in
a [***] (as defined in Section 3 of Exhibit B) on a [***] (each, a "PPV
Offering"), in blocks of at least [***] each (or such other period as the
parties shall agree), but not to exceed [***] each unless Programmer consents in
writing, which consent shall not be unreasonably withheld (any such block of
time, a "PPV Program").
1.3.3 Programmer shall, at its sole expense, deliver
the feeds of the Services from a U.S. domestic communications satellite in the
Territory commonly used for transmission of television programming (or, at
Programmer's option and expense, a fiber optic or other facility reasonably
acceptable to DIRECTV) (the "Delivery Source") to either or both (as designated
by DIRECTV) of DIRECTV's uplink and broadcast facilities currently located in
Castle Rock, Colorado and Los Angeles, California (collectively, the "Broadcast
Centers"). In connection with the foregoing, Programmer shall, at its sole cost
and expense, provide DIRECTV with [***] receivers and decoders for the Services
for each of the Broadcast Centers. Programmer shall have in place appropriate
back-up procedures and process, or shall reserve back-up fiber links between
Programmer's broadcast center and its satellite uplink center (VYVX), such that
in the event of a failure of the first satellite or fiber link, delivery of the
Services to DIRECTV shall be only minimally interrupted. The format of the
backup feeds shall be the same format as the primary feeds of the Services. As
of the Effective Date (defined in Section 6.1), the feeds of the Services shall
be delivered from [***], transponder [***]. The delivery of all feeds hereunder
shall be pursuant to the technical specifications set forth at Exhibit "C"
hereto.
5
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
1.3.4 Programmer and DIRECTV shall use their
respective commercially reasonable efforts to maintain for the Services a high
quality of signal transmission in accordance with their respective technical
standards and procedures. Programmer agrees to include closed-captioning and/or
video description of the audio portion of the Services as delivered by
Programmer to DIRECTV in a manner sufficient to allow DIRECTV to comply with any
applicable closed-captioning and/or video description obligations as may be
imposed upon DIRECTV or Programmer the rules and regulations of the Federal
Communications Commission ("FCC") or other governmental body during the Term, as
modified from time to time, and Programmer shall provide DIRECTV certificates of
compliance in connection therewith with the above obligations on a [***] basis
during the Term. Other than as required pursuant to the immediately preceding
sentence, DIRECTV shall have no liability in connection with Programmer's
failure to prepare, insert or include closed-captioning and/or video description
in the Services as required by this Section 1.3.4. Accordingly Programmer shall
indemnify, defend and hold harmless DIRECTV, as provided in Section 8 hereof,
against and from any and all losses, liabilities, claims, costs (including
without limitation, any costs of preparing and including closed-captioning
and/or video description in the Services), damages and expenses, including
without limitation, fines, forfeitures, attorneys' fees, disbursements and court
or administrative costs, arising out of third party claims (including, without
limitation, the action of any Governmental Authority, as such term is defined in
Section 5.2.10 below) as a result of Programmer's breach of this Section 1.3.4.
1.4 Program Guide. During the Term, Programmer, at
its sole cost and expense, shall provide the daily programming schedule for the
Services to Tribune Media Service (or such other service designated by DIRECTV)
in order that DIRECTV may access the program schedule for purposes on the
on-screen program guide.
1.5 VBI. Programmer acknowledges that digitizing and
compressing of the signals of the Services (the "Signal") will result in changes
to the Signal. As a consequence, the DTH Distribution System does not currently
retransmit any data or information contained in the VBI of the Signals except
line 21, fields 1 and 2, and only carries a single mono secondary audio program
provided that such secondary audio is programmed twenty-four (24) hours per
day/seven (7) days per week ("SAP"). Accordingly, in no event shall DIRECTV be
obligated to transmit more than the primary video and a single stereo pair of
primary audio programs to be associated with the Signal, a single mono SAP
associated with the Signal, and line 21, fields 1 and 2 of the VBI. Programmer
reserves and retains all rights in and to all signal distribution capacity
contained within the bandwidth of the Signal, including without limitation, the
VBI and audio subcarriers from its transmission point to the point of reception
by DIRECTV. DIRECTV retains and reserves any and all rights in and to, and may
use in its sole discretion, all distribution capacity contained within the
bandwidth of the Signals, including, without limitation, the VBI and audio
subcarriers, from the point of reception by DIRECTV to the DIRECTV Subscribers
in the Territory. Programmer shall not have any rights to use any part of a
DIRECTV Subscriber's return path for any reason whatsoever.
6
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
1.6 Change of Satellite. In the event Programmer
either (i) changes the satellite to which the Services are transmitted to a
satellite or other transmission medium not susceptible to viewing or utilization
by DIRECTV'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 DIRECTV, (ii) changes the technology used by
Programmer to encrypt the Services to a technology not compatible with DIRECTV's
then-existing descrambling equipment, or (iii) compresses, digitizes or
otherwise modifies the signal of the Services in such a manner that it cannot be
received or utilized by DIRECTV, then DIRECTV shall have the right to
discontinue carriage of the Services, immediately; provided that this right of
discontinuance and deletion shall not apply to DIRECTV if Programmer agrees to
promptly reimburse DIRECTV for (I) the cost to acquire and install equipment
necessary for DIRECTV to receive the signal of the Services from such new
satellite or other transmission medium, and/or (II) the cost to acquire and
install equipment necessary for DIRECTV to descramble and/or utilize the signal
of the Services; Programmer agrees to [***] provide DIRECTV with at least [***])
prior written notice of a satellite or technology change as set forth in
subsections (i) through (iii) above.
1.7 On-Screen Logos. It is understood and agreed that
DIRECTV may superimpose a logo or "bug" in a corner of the screen identifying
DIRECTV over the programming of the Services; provided however that DIRECTV's
bug shall appear only intermittently during any portion of the Services, and
provided further that DIRECTV shall not delete the Service's own promotion bug
or its on-screen graphics.
2. Reports and Payments.
2.1 Reports; Payments; Audit Rights. Within [***]
after the end of each [***] during the Term, DIRECTV shall furnish Programmer
(i) a statement containing a report of (A) the total number of [***] as of the
last day of the relevant [***]; (B) the number of [***] (defined as the number
of [***] for the Services authorized by DIRECTV for reception by DIRECTV
Subscribers, net of any [***] and/or [***] subject to a [***] (as defined in
Paragraph 2 of Exhibit "B")) for the relevant [***]; and (C) the total amount of
[***] (as defined in Exhibit B, attached hereto, and made a part hereof) for the
relevant [***] and (ii) payment of the License Fees for the relevant [***],
calculated pursuant to Section 2.2 and Exhibit B. Programmer shall accord
confidential treatment to any information contained in the aforementioned
statement in accordance with Section 15. At Programmer's request, DIRECTV shall
permit Programmer's independent representatives to review, during the Term (no
more than [***]) and [***] after the end of the Term and on a one-time basis,
such DIRECTV Subscriber records as required for the sole purpose of verifying
such statements at reasonable times, upon reasonable advance written notice and
during normal business hours at DIRECTV's offices. Any third party auditors
7
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
retained by Programmer shall be a certified public accountant and/or firm
specializing in media audits that has no conflict with DIRECTV (subject to
DIRECTV's reasonable approval). Such review shall be at Programmer's sole cost
and expense, unless such review reveals an underpayment of more than [***] of
License Fees due, in which case, DIRECTV shall reimburse Programmer the
reasonable cost of such audit and shall promptly make payment of any fees due
and owing, provided (I) DIRECTV does not have a bona fide dispute with the audit
findings; and (II) such audit costs shall not exceed such underpayment. Such
review shall be conducted during reasonable business hours and in such manner as
not to interfere with DIRECTV's normal business activities and shall not
continue for more than [***]. Programmer shall not have the right to examine or
inquire into any matters or items which are embraced by or contained in any such
statement after the expiration of [***] from and after the date of mailing of
such statement, and such statement shall be final and conclusive upon Programmer
upon the expiration of such [***] period notwithstanding that the matters or
items embraced by or contained therein may later be contained or referred to in
a cumulative statement pertaining to more than one accounting period. Such
cumulative statement shall not be subject to audit by Programmer to the extent
the material contained therein was first reflected on a statement submitted more
than [***] prior to the date of mailing of such cumulative statement. Programmer
shall be forever barred from maintaining or instituting any action or proceeding
based upon, or in anyway relating to, any matters that are embraced by or
reflected on any statement rendered hereunder, or the accuracy of any item
appearing therein, unless written objection thereto shall have been delivered by
Programmer to DIRECTV within [***] after the date of mailing of the statement on
which such transaction or items was first reflected and unless such action or
proceeding is commenced within [***] after delivery of such written objection.
Programmer may not commence a new audit until all prior audits have been closed
(i.e., after such closure is confirmed in writing by Programmer) and the results
have been presented to DIRECTV. If Programmer shall audit DIRECTV's books and
records, then Programmer shall, within [***] of the conclusion of such audit
(i.e., after the auditors conclude the audit at DIRECTV's offices), inform
DIRECTV in writing of any claim resulting therefrom (including a true copy of
any third party audit), and, except for the claims set forth in such notice, all
statements rendered by DIRECTV with respect to the period covered by such audit
shall be conclusive and binding on the parties and not subject to further audit.
The information derived from and the process of such review shall be subject to
the confidentiality provisions of Section 15, and any third party auditor shall
be required to acknowledge in writing its agreement to such confidentiality
provisions.
2.2 License Fees. As full and complete compensation
for DIRECTV's right to distribute the Services, DIRECTV shall pay to Programmer,
on a [***] basis, for each Service Subscriber receiving the Services from
DIRECTV for such [***], a "License Fee" determined pursuant to Programmer's rate
card for the Services set forth in Exhibit B hereto.
2.3 Late or Non-Payments. Any amounts that are not
subject to a bona fide dispute by DIRECTV and not paid by DIRECTV after (i) the
date payment is due pursuant to the first sentence of Section 2.1 and (ii)
[***]after DIRECTV's receipt of written notice from Programmer of such failure
by DIRECTV, shall accrue interest at the rate of [***] per [***] or the maximum
allowed by law, whichever shall be the lesser, from the date such amounts were
due until they are paid.
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
2.4 Most Favored Nation.
2.4.1 Programmer agrees that if, at any time during
the Term (or any portion thereof), Programmer distributes or Programmer allows
(including, without limitation, by way of agreements that Programmer previously
entered into) or offers to allow any other distributor to distribute a Service
(or any Segment contained in a Service) in the Territory or in any portion
thereof by any technology whatsoever at a net effective rate per Service
subscriber that is lower than the net effective rate per "Service Subscriber"
(defined as a DIRECTV Subscriber authorized by Affiliate to receive the
Services) charged to DIRECTV hereunder ("Favored Fees"), then Programmer shall
promptly notify DIRECTV in writing of such Favored Fees and DIRECTV shall be
immediately entitled to incorporate into this Agreement the Favored Fees
effective as of the first day on which Programmer first allows or makes the
offer to allow such other distributor to distribute the Service(s) in exchange
for the Favored Fees (and for so long as such Favored Fees are available to such
other distributor). Nothing in the preceding sentence shall require DIRECTV to
incorporate the Favored Fees into this Agreement. Notwithstanding anything to
the contrary herein, if the Favored Fees contain such obligations, terms and
conditions that are not relevant to DIRECTV or DIRECTV is not reasonably capable
of complying with such terms and conditions taking into consideration DIRECTV's
business, including, without limitation, DIRECTV's technology and DIRECTV's
national platform, then Programmer shall provide DIRECTV with comparable
obligations, terms and conditions. In determining net effective rates, all
direct and indirect economic outlays in connection with or related to carriage
of the Service(s) shall be considered, whether embodied in an agreement relating
to the Service(s) or otherwise (e.g., side letters or commitments such as
advertising purchases), including, without limitation, discounts, credits,
commissions, rebates, revenue sharing, channel position fees, advertising
purchases, launch or marketing support, or other adjustments of any kind, or
other goods or services offered by such other distributor. In determining net
effective rates, actual numbers of Service Subscribers shall be used. In no
event shall DIRECTV be required to incorporate the following as a condition to
incorporating the Favored Fees: (i) the other distributor's term hereunder
(however, DIRECTV may, in its sole discretion, elect to have the same Term as
provided to the other distributor); (ii) less favorable penetration, packaging
or subscriber benchmark requirements; (iii) launch of additional services,
programs or networks; (iv) a requirement that is designed or intended to, or
that operates to, frustrate or interfere with, or otherwise have the effect of
discriminating against DIRECTV or frustrating or circumventing the application
of this Section 2.4 and DIRECTV's ability to receive any Favored Fees; or (v) a
condition that is not specifically conditioned and directly related and
indivisible from any Favored Fees.
2.4.2 At DIRECTV's election, Programmer shall (i)
permit DIRECTV's independent representatives to review, during the Term (no more
than [***]) and for[***], such Programmer records as required for the sole
purpose of verifying Programmer's compliance with the terms of Section 2.4, at
reasonable times, upon reasonable advance written notice and during normal
business hours at Programmer's offices, or (ii) provide to DIRECTV an annual
statement, certified by Programmer's chief financial officer, certifying
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
compliance with the provisions of Section 2.4. Such review shall be at DIRECTV's
sole cost and expense, unless such review reveals an overpayment by DIRECTV of
more than [***], in which case, Programmer shall promptly reimburse DIRECTV for
the reasonable cost of such audit and shall promptly make payment of any monies
due and owing, provided (A) Programmer does not have a bona fide dispute with
the audit findings; and (B) such audit costs shall not exceed such overpayment.
The information derived from and the process of such review shall be subject to
the confidentiality provisions of Section 15, and any third party auditor shall
be required to acknowledge in writing its agreement to such confidentiality
provisions.
3. Advertising.
Subject to Section 1.2.1 above, Programmer hereby represents and
warrants that the Services shall not contain any advertising, direct sales or
infomercials during the Term; provided, however, that Programmer shall have the
right to include [***] on the Services [***] in [***]of programming; and
provided further that [***]of programming on the Services shall include [***]
separate [***]that may be covered by DIRECTV via the [***] (including, without
limitation, [***] for any or all [***] services distributed by DIRECTV) (such
available [***] defined as "Avails"). Subject to the foregoing, under no
circumstances may such [***] promote any form of [***], including but not
limited to: [***]. The Avails provided by Programmer to DIRECTV shall be no less
favorable (in terms of the [***] of the Avails and so forth) than those provided
to any other distributor of the Services. Programmer shall properly [***] all
Avails to enable DIRECTV to [***].
4. Marketing and Promotion.
In addition to other rights granted herein, Programmer hereby grants to
DIRECTV, during the Term and in the Territory only, the following rights, but
not the obligation, to be exercised by DIRECTV in its sole discretion with
respect to its marketing of the Services: (i) the right to use any and all
marketing materials reasonably requested from Programmer by DIRECTV (which
materials shall be provided at [***] to DIRECTV) for the purpose of marketing
the Services; (ii) the right to manufacture and produce its own marketing
materials, subject to the prior approval of Programmer, such approval not to be
unreasonably withheld or delayed; and (iii) the right to use the names, voices,
music, recordings, images, and likenesses of any and all performers in and other
persons related to the Services, and the right to use Programmer's name and logo
to market the Services without the [***] of [***] or of any [***] whatsoever.
Programmer shall promote DIRECTV's carriage of the Services [***] as it promotes
10
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
the carriage of the Services by any other [***] (including, without limitation,
the [***] and [***]); provided, however, that Programmer shall provide DIRECTV
with prior written notification of any [***] of DIRECTV's [***] of the Services
by Programmer, and any such [***] shall be subject to DIRECTV's prior approval.
Notwithstanding the foregoing, DIRECTV may cease marketing and promoting the
Services if DIRECTV, in its absolute sole determination, reasonably believes
that marketing or promoting the Services may be politically harmful to DIRECTV
or its Affiliated Companies or adversely affect the corporate image that DIRECTV
or its Affiliated Companies desires to maintain at such time. In the event that
DIRECTV, in its sole discretion, elects to undertake a [***] on behalf of the
Services, DIRECTV shall furnish a [***] and [***] to Programmer, and Programmer
and DIRECTV shall work in good faith to jointly implement such plan.
5. Representations, Warranties and Covenants.
5.1 By DIRECTV. DIRECTV warrants, represents and covenants to
Programmer that it:
5.1.1 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 (as may be
amended and any successor, replacement or similar Law or statute) and any and
all regulations issued pursuant thereto (as used herein, "Law" shall mean any
FCC and any other governmental (whether international, federal, state, municipal
or otherwise) statute, law, rule, regulation, ordinance, code, directive or
order, including without limitation, any court order);
5.1.2 has the power and authority to enter into this
Agreement and to fully perform its obligations hereunder;
5.1.3 shall distribute the Services in the Territory
in accordance with and subject to the terms and conditions set forth in this
Agreement;
5.1.4 shall, except as otherwise set forth herein,
(A) arrange and pay for reception of the Services (excluding any authorization
fees) from the U.S. domestic communications satellite from time-to-time
designated by Programmer to DIRECTV with DIRECTV's approval of such designation;
and (B) acquire and maintain, at DIRECTV's sole expense, any equipment,
including, without limitation, backup or reserve descramblers, which may be
necessary to decode and unscramble the signal(s) for the Services;
5.1.5 shall not, without Programmer's consent,
knowingly authorize or cause or knowingly permit any portion of the Services to
be recorded, duplicated, cablecast, exhibited or otherwise used (except on a
videocassette recorder or other home or personal recording device for private,
noncommercial use) for any purpose other than for distribution by DIRECTV at the
time the same is made available;
5.1.6 shall not, without Programmer's prior written
approval, use the names, titles or logos of the Services 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 DIRECTV
11
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
Subscribers or potential DIRECTV Subscribers of the availability and scheduling
of the Services or as a channel identifier. The restrictions set forth in this
Section 5.1.6 shall apply only to the extent they are applied by Programmer
uniformly with respect to all of its distributors of the Services, and shall not
apply if DIRECTV has received a valid authorization from a third party for any
of the uses described in this Section 5.1.6;
5.1.7 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; and
5.1.8 the obligations created by this Agreement, in
so far as they purport to be binding on DIRECTV, constitute legal, valid and
binding obligations of DIRECTV enforceable in accordance with their terms.
5.2 By Programmer. Programmer warrants, represents and
covenants to DIRECTV that:
5.2.1 to its best knowledge after diligent review and
receipt of advice of counsel with respect hereto, it is in compliance with and
will throughout the Term continue to comply with all Laws applicable to, or with
respect to, the Services and the provision of the Services to DIRECTV, and
Programmer's rights and obligations under this Agreement with respect to the
Services and Programmer's obligations hereunder, including without limitation,
FCC rules and regulations governing the Services, 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;
5.2.2 it has the power and authority to enter into
this Agreement and to fully perform its obligations hereunder and once executed
this Agreement shall constitute a valid and binding agreement of Programmer
enforceable in accordance with its terms;
5.2.3 the general quality and quantity of programming
on the Services shall not materially change from that existing as of the date of
this Agreement, and the genre of programming shall not materially change from
that described in Section 1.2.1 and existing on the date of this Agreement;
5.2.4 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;
12
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
5.2.5 it has secured and shall maintain in full force
during the Term hereof all rights necessary for DIRECTV to use and enjoy its
rights in connection with its distribution of the Services and all programming
provided as part thereof, as a whole or in parts, as PPV Offerings in the
Territory, including, without limitation, obtaining or all necessary trademarks,
copyrights, licenses and any and all other proprietary intellectual property and
other use rights necessary in connection with, and for DIRECTV's distribution
of, the Services (including without limitation, the right to use the names,
titles or logos of the Services or any of its programs, the promotional
materials supplied or approved by Programmer, 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;
5.2.6 it shall not, without DIRECTVs prior written
approval, use the name or logo for "DIRECTV" or any other works owned or
controlled by DIRECTV (and its related companies);
5.2.7 as of the date hereof, the programming on the
Services consists of and during the Term hereof such programming shall consist
of, that programming described in Section 1.2.1;
5.2.8 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
DIRECTV's rights to distribute the Services in the Territory;
5.2.9 the obligations created by this Agreement, in
so far as they purport to be binding on Programmer constitute legal, valid and
binding obligations of Programmer enforceable in accordance with their terms;
5.2.10 it has not (and none of its principals or
Affiliated Companies have) been convicted for the criminal violation of, and/or
has not been found by the FCC or other federal, state or local governmental
authority with appropriate jurisdiction (collectively, the "Governmental
Authority") to have violated, any federal, state or local law or regulation as
applicable concerning illegal, indecent or obscene material or the transmission
thereof (the "Obscenity Laws"), and Programmer is not currently aware of any
pending investigation (including, without limitation, a grand jury
investigation) involving the Services (or any content included in the Services)
or any pending proceeding against Programmer (or any of its principals or
Affiliated Companies) for the violation of any Obscenity Laws;
5.2.11 it will notify DIRECTV as soon as possible,
but in no event later than the close of business on the same Business Day upon
which Programmer receives notice of, or becomes aware of, any pending
investigation by any Governmental Authority, or any pending criminal proceeding
13
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
against Programmer (or any of its principals or Affiliated Companies), which
investigation or proceeding concerns distribution of the Services or programming
in the Services, including without limitation, investigations and/or proceedings
concerning potential violations of Obscenity Laws. For purposes of this Section
5(2)(11), Programmer shall be deemed to be aware of any such investigation or
proceeding if any of the directors, officers, outside attorneys or employees of
managerial status of Programmer or an Affiliated Company has received any
communication about or otherwise becomes aware of any such investigation or
proceeding;
5.2.12 the Services, and all programming provided as
part thereof, Programmer provides DIRECTV hereunder (A) is not intended to be
obscene and, to the best of Programmer's knowledge after diligent review, would
not be found to be obscene in any jurisdiction in the Territory, and (B)
complies with and, at all times that this Agreement is in effect, shall comply
with the description and associated restrictions set forth in the definition of
"Service" and "Services" in Section 1.2.1, Exhibit A and Schedule I thereto,
including, without limitation, Programmer represents and warrants that the
Services shall reflect adult content limited to the [***] type, as described in
Schedule I, and, except as may be expressly permitted in accordance herewith,
shall under no circumstances contain or depict any acts set forth in the [***]
thereof;
5.2.13 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 a "record custodian"
as required under Section 2257, and will keep DIRECTV 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
DIRECTV in connection with any inspections or government inquiries initiated
pursuant to Section 2257. DIRECTV 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 DIRECTV; and
14
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
5.2.14 as of date hereof, it is in compliance with
the most favored nations provision set forth in Section 2.4 hereof.
6. Term; Termination.
6.1 Term; Extension. The term of this Agreement shall be for
the period commencing on October 15, 2007 (the "Effective Date") and continuing
through October 14, 2009 (the "Term"). [***]
6.2 Termination for Breach, Bankruptcy; Discontinuance of
Business. In addition to any other rights or remedies, in equity or at law, this
Agreement may be terminated by either party (the "Affected Party"), in its
discretion, at any time after any of the following occurrences, except as
provided in this Agreement, with respect to the other party (the "Other Party"):
6.2.1 the 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);
6.2.2 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
6.2.3 if DIRECTV discontinues operation of the DTH
Distribution System, or Programmer discontinues operation and distribution of
the Services. Neither party shall have any further liability to the other, other
than as set forth in Section 6.6 below, for the discontinuance of the DTH
Distribution System or the Services, as the case may be; provided that such
discontinuance is not in connection with, and does not arise from, DIRECTV's or
Programmer's breach of this Agreement.
6.3 Termination of Agreement by DIRECTV. In addition to any
other rights or remedies, in equity or at law, DIRECTV may terminate this
Agreement upon thirty (30) days' prior written notice to Programmer:
6.3.1 if at any time the general quality and quantity
of programming on the Services materially changes from that existing as of the
date of this Agreement, or the genre of programming materially changes from that
described in Section 1.2.1 and existing on the date of this Agreement, as
determined by DIRECTV in its sole discretion; [***];
15
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
6.3.2 in the event of a Programmer Transfer (as
defined below) other than (A) with DIRECTV's prior written consent to the
assignment of this Agreement to a new entity, which consent shall not be
unreasonably withheld, (B) as the result of a merger into or sale or transfer
directly or indirectly to a wholly-owned subsidiary, (C) or a transfer of a
percentage of the assets or stock ownership of Programmer or the Services where
Programmer retains ownership of at least fifty percent (50%) of the assets or
stock thereof. "Programmer Transfer" shall mean a change in the ownership of
Programmer (or the parent of Programmer) or any transfer, conveyance, exclusive
license, transfer or disposition of all or substantially all of the assets or
business of Programmer (or the parent of Programmer), whether by operation of
law or otherwise, the result of which is that a new entity, person or group of
persons, directly or indirectly, has the ability (A) to elect or control the
votes of the majority of the board of directors or other governing body of
Programmer (or the parent of Programmer), (B) to control more than 50% of the
voting interests of Programmer (or the parent of Programmer), or (C) to direct
or cause the direction of the general management and policies of Programmer (or
the parent of Programmer).
6.4 Termination of Services by DIRECTV. [***] DIRECTV shall
have the right, in its sole discretion, to discontinue carriage of such
Service(s) in accordance with the following: if Programmer receives written
notice from DIRECTV [***]. If Programmer has not [***] within thirty (30) days
of receiving [***] Notice, DIRECTV shall thereafter have the right to
discontinue carriage of the applicable Service(s) upon thirty (30) days' written
notice to Programmer.
6.5 Offsets. Without limiting any other remedies available to
it under this Agreement, by law or at equity and, notwithstanding anything to
the contrary herein, DIRECTV shall have the right [***] to withhold and reserve
from any monies whatsoever payable to Programmer or its designee hereunder, sums
reasonably sufficient to secure DIRECTV from and against Programmer's material
breach of any of its obligations under this Agreement [***].
6.6 Force Majeure. Notwithstanding any other provision in this
Agreement, neither Programmer nor DIRECTV shall have any liability to the other
or any other person or entity with respect to any failure of Programmer or
DIRECTV, as the case may be, to transmit or distribute the Services or perform
its obligations hereunder if such failure is due to any failure or degradation
in performance of the Delivery Source or the DTH Satellite(s) or transponders on
such satellites (as applicable) or of the DTH Distribution System (in which
case, DIRECTV shall be excused from its distribution obligations under this
Agreement), or of any scrambling/descrambling equipment or any other equipment
owned or maintained by others (including, without limitation, DIRECTV's
automated billing and authorization system), any failure at the origination and
uplinking center used by Programmer or DIRECTV, any labor dispute, fire, flood,
riot, legal enactment, government regulation, Act of God, or any cause beyond
the reasonable control of Programmer or DIRECTV, as the case may be (a "Force
Majeure"), and such non-performance shall be excused for the period of time such
16
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
failure(s) causes such non-performance; provided, however, that if DIRECTV
determines in its sole discretion that it is commercially or technically
unfeasible to cure a Force Majeure with respect to the DTH Distribution System
or DTH Satellite 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 Services 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 DIRECTV to reduce the number of programming
services available for allocation among all of the DTH Satellites, with such
reduction including, without limitation, curtailment or termination of the
distribution of the Services by DIRECTV, at DIRECTV's sole discretion.
Accordingly, Programmer further acknowledges and agrees that the provisions set
forth in the first sentence of this Section 6.6 shall apply and shall exculpate
DIRECTV and excuse the performance of DIRECTV hereunder in the event of a
failure or degradation of any of the DTH Satellites or the transponders on any
such satellites, regardless of whether the satellite to which the Services are
uplinked at the time of such failure or degradation is itself the subject of
such failure or degradation.
6.7 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.
7. Separate Entities. No officer, employee, agent, servant or
independent contractor of either party hereto or their respective subsidiaries
or DIRECTVs 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 DIRECTV, 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; Insurance.
8.1 By Programmer. Programmer shall indemnify, defend and hold
harmless each of DIRECTV, its Affiliated Companies (as defined below), DIRECTV's
contractors, subcontractors and authorized distributors and the directors,
officers, employees and agents of DIRECTV, such Affiliated Companies and such
contractors, subcontractors and distributors (collectively, the "DIRECTV
Indemnitees") from, against and with respect to any and all claims, damages,
liabilities, costs and expenses (including reasonable attorneys' and expert's
fees) incurred in connection with any third party claim (including, without
limitation, a claim by any Governmental Authority) against any of the DIRECTV
Indemnitees arising out of (i) Programmer's breach or alleged breach of any
provision of this Agreement, (ii) any content contained in the Services, (iii)
the distribution or cablecast of any programming of the Services which violates
17
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
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 Services, and/or (v) any other materials, including advertising
or promotional copy, supplied or permitted by Programmer. In addition,
Programmer shall pay and hold the DIRECTV Indemnitees harmless from any federal,
state, or local taxes or fees which are based upon revenues derived by, or the
operations of, Programmer. 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.
8.2 By DIRECTV. DIRECTV shall indemnify and hold harmless each
of Programmer, its Affiliated Companies, Programmer's contractors,
subcontractors and authorized distributors, each supplier to Programmer of any
portion of the Services hereunder and each participant therein and the
directors, officers, employees and agents of Programmer, such Affiliated
Companies, such contractors, subcontractors and distributors and such suppliers
and participants therein (collectively, the "Programmer Indemnitees") from,
against and with respect to any and all claims, damages, liabilities, costs and
expenses (including reasonable attorneys' and experts' fees) incurred in
connection with any third party claim (including, without limitation, a claim by
any Governmental Authority) against the Programmer Indemnitees arising out of
(i) DIRECTV's breach or alleged breach of any provision of this Agreement, (ii)
the distribution by DIRECTV of the Services (except with respect to claims
relating to the content of the Services for which Programmer is solely
responsible pursuant to Section 8.1(ii) and Section 8.1(iii)), (iii) DIRECTV's
advertising and marketing of the Services (except with respect to such
advertising and marketing materials or content supplied or approved by
Programmer), and (iv) any other materials, including advertising or promotional
copy, supplied by DIRECTV. In addition, DIRECTV shall pay and hold Programmer
harmless from any federal, state, or local taxes or fees, including any fees
payable to local franchising authorities, which are based upon revenues derived
by, or the operations of, DIRECTV.
8.3 Survival. Termination of this Agreement shall not affect
the continuing obligations of each of the parties hereto as indemnitors
hereunder. The party wishing to assert its rights set forth in this Section 8
shall promptly notify the other of any claim or legal proceeding with respect to
which such party is asserting such right. Upon the written request of an
indemnitee, the indemnitor will (1) assume the sole control of the defense and
settlement of any claim, demand or action against such indemnitee and/or (2)
allow the indemnitee to participate in the defense thereof, such participation
to be at the expense of the indemnitee. Settlement by the indemnitee without the
indemnitor's prior written consent shall release the indemnitor from the
indemnity as to the claim, demand or action so settled.
8.4 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT:
18
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
8.4.1 IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, OCCASIONED BY
ANY FAILURE TO PERFORM OR THE BREACH OF ANY OBLIGATION UNDER THIS AGREEMENT FOR
ANY CAUSE WHATSOEVER, WHETHER BASED ON NEGLIGENCE.
8.4.2 IN NO EVENT SHALL ANY PROJECTIONS, FORECASTS,
ESTIMATIONS OF SALES AND/OR MARKET SHARE OR EXPECTED PROFITS, OR OTHER
ESTIMATIONS OR PROJECTIONS BY PROGRAMMER OR DIRECTV OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES, REGARDING OR RELATED TO PROGRAMMER'S
OR DIRECTV'S DTH BUSINESS BE BINDING AS COMMITMENTS OR, IN ANY WAY, PROMISES BY
PROGRAMMER OR DIRECTV.
8.5. Insurance. Without limiting Programmer's representations,
warranties and indemnification obligations under this Agreement, Programmer
shall secure, at its sole cost and expense, the insurance policy (the
"Insurance" and/or the "Policy" set forth in this paragraph. Programmer shall
obtain a media/professional liability insurance policy covering Programmer's
distribution of the Services during the Term (including the distribution by
DIRECTV authorized under this Agreement) and for one (1) year thereafter in the
minimum amount of [***] dollars ([***]) per claim and [***] dollars ([***]) in
the aggregate, with a deductible of not greater than [***] dollars ([***]). The
Policy shall be in form and substance reasonably acceptable to DIRECTV, and
shall name DIRECTV (and those "Affiliates" (defined below) identified by
DIRECTV) as insureds thereon. The Insurance shall contain an endorsement that
negates the "other insurance" claims in the Policy, and shall contain a
statement that the insurance being provided therein is primary. For purposes of
this Agreement, "Affiliate" shall mean any corporation or other person or entity
controlling, or controlled by, or under common control with a party or third
person, as the case may be. Programmer shall provide DIRECTV and those
Affiliates identified by DIRECTV with a certificate evidencing the Insurance
required by this paragraph on or before the Services Commencement Date.
Programmer shall ensure that DIRECTV is notified in writing thirty (30) days in
advance of any actual or proposed change to such insurance, and no such change
(and no such Insurance, nor DIRECTV's failure to disapprove of or object to the
lack thereof) shall diminish Programmer's obligations under this Agreement.
9. Notices. Except as set forth below, all notices hereunder shall be
in writing and delivered by hand or sent by certified mail, postage prepaid and
return receipt requested, fax, or by 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:
Colorado Satellite Broadcasting, Inc.
7007 Winchester Circle, Suite 200
Boulder, CO 80301
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Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
Attention: Ken Boenish, President
Fax: (303) 527-2872
cc: General Counsel
Fax: (303) 527-2872
Notice to DIRECTV shall be provided as follows:
DIRECTV, Inc.
2230 East Imperial Highway
El Segundo, California 90245
Attention: Senior Vice President, Programming
Fax: (310) 964-5416
cc: Executive Vice President and General Counsel
Fax: (310) 964-4991
Notice given by hand shall be considered to have been given on the date
delivered or, if delivery is refused, as of the date presented. Notice given by
mail shall be considered to have been given five (5) days after the date of
mailing, postage prepaid certified (return receipt requested). 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.
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 8.4 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. Subject to DIRECTV's rights under
Section 6.3.2, 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 DIRECTV may assign its rights and obligations under this
Agreement, in whole or in part (including without limitation, DIRECTV's right to
distribute the Services) (i) to an Affiliated Company or to a successor entity
to DIRECTV's DTH business; (ii) to a third party as part of preparing to go or
going public or as part of a merger, consolidation or sale of all substantially
all of the assets of DIRECTV or (iii) to a third party, provided DIRECTV remains
primarily liable for the performance of such third party's obligations
hereunder.
12. Laws of California. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and to be fully performed therein by residents of the State of
California, except to the extent that the parties' respective rights and
obligations are subject to mandatory local, State and Federal laws or
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Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
regulations. The parties hereby agree that the jurisdiction of, or the venue of,
any action brought by either party shall be in a state or federal district court
sitting in the Los Angeles, California and both parties hereby agree to waive
any right to contest such jurisdiction and venue.
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. 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 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.
15.1 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
(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) by mutual
agreement; (B) to the extent necessary to comply with the law (including SEC
reporting requirements) 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 auditors and its attorneys, and such parent company,
auditors and attorneys agree to be bound by the provisions of this Section 15;
(D) in order to enforce any of its rights pursuant to this Agreement; or (E) in
the case of DIRECTV, to the NRTC, potential investors, insurers, financing
entities or any entity engaged in DIRECTV's DBS business; provided, 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 with respect to this Agreement or
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Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
the transactions contemplated hereby without the prior written consent of the
other party. Breach of this last sentence shall be deemed a material breach of
this Agreement.
15.2 Notwithstanding Section 15.1, Programmer specifically
acknowledges and agrees that any lists of DIRECTV's customers or users, and all
information related to such customers and users, is confidential and proprietary
information of DIRECTV and cannot be disclosed by Programmer or used by
Programmer for any purpose or use whatsoever, other than for its review at
DIRECTV's offices as part of Programmer's audit rights hereunder to determine if
Programmer has been paid the License Fees due to it by DIRECTV. Also
notwithstanding Section 15.1, 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 DIRECTV's customers
or users or engage in any direct mailing or telephone solicitation which
DIRECTV's customers or users do not previously and expressly approve (whether
orally or in writing) or previously and expressly request (whether orally or in
writing), or which DIRECTV does not previously and expressly approve in writing
in DIRECTV's sole discretion.
16. Inadequacy of Money Damages. Programmer and DIRECTV hereby
acknowledge and agree that DIRECTV's distribution and marketing of the Services
pursuant to the terms and conditions contained herein are of the essence of this
Agreement. DIRECTV further acknowledges and agrees that such carriage and
marketing requirements, subject to Force Majeure and other conditions of this
Agreement, are special and unique, and that Programmer may not be adequately
compensated by the payment of money damages in the event that DIRECTV failed to
comply with any of such requirements. Programmer acknowledges and agrees that
the grant of rights to DIRECTV hereunder are special and unique, and that
DIRECTV may not be adequately compensated by the payment of money damages in the
event that Programmer failed to comply with any of its obligations under this
Agreement, including without limitation, providing access to any Service
programming to DIRECTV, as required hereunder.
17. Cessation of Program Distribution. If DIRECTV in good faith
reasonably believes that DIRECTV's provision of any of the programming on the
Services either violates any Law or could be found by a court or administrative
agency to violate any Law (a "Law Violation" or "Potential Law Violation") or
reasonably believes in good faith at any time that any of the programming on the
Services is adversely affecting the corporate image that DIRECTV desires to
maintain at such time (an "Image Problem") then, notwithstanding anything to the
contrary in this Agreement, (i) immediately following written notice to
Programmer in the case of a Law Violation or Potential Law Violation, or (ii) no
sooner than [***] following written notice to Programmer in the case of an Image
Problem (if DIRECTV elects to terminate this Agreement as provided in this
Section 17): DIRECTV may terminate this Agreement, or DIRECTV may cease
distributing the offending programming or the Services (in any portion of the
22
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
Territory, or the entire Territory, as DIRECTV shall determine in its sole
discretion based on the genesis of the Law Violation; Potential Law Violation or
Image Problem) until DIRECTV determines in DIRECTV'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 DIRECTV then desires to maintain or
DIRECTV reasonably determines that a Law Violation or Potential Law Violation
will not again occur. Consistent with the foregoing, and without limiting
DIRECTV's rights hereunder, the parties understand and acknowledge that in the
event that a Service contains [***] Programming (and only as such is permitted
in strict accordance with the terms hereof), [***].
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.
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
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 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/ Toby Berlin
-----------------------------------------------
Name: Toby Berlin
Title: Vice President, Programming Acquisitions
Date: 9/27/2007
COLORADO SATELLITE BROADCASTING, INC.
By: /s/ Ken Boenish
-----------------------------------------------
Name: Ken Boenish
Title: President
Date: 9/28/2007
24
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
EXHIBIT A
DESCRIPTION OF THE SERVICE
The programming content of the Services shall comply strictly with the
provisions of this Exhibit A and the attached Schedule 1. In addition to the
definition set forth in Section 1.2.1 of the Agreement, the Services shall
adhere to the industry's strictest set of standards and practices (the
"Industry's Standards and Practices") for adult programming, which will not be
circumvented, and shall comply with the following standards and practices (the
"Standards and Practices") (which shall control if they conflict with the
Industry's Standards and Practices) (any act or portrayal which is prohibited
below or which the Industry's Standards and Practices prohibit to be presented
in audiovisual material shall be deemed a "Prohibited Act").
The Services shall offer tasteful [***] adult programming (feature films and
interstitials) substantially the same in content, quality and production values
as appears on the Services on the date hereof. It is understood and acknowledged
by Programmer that the Services may contain acts of the type listed on Schedule
I to this Exhibit A under the heading [***] Subject to the restrictions set
forth herein, the Services' programming shall consist primarily of [***]
activity between consenting adults, including [***] activity.
None of the programming or promotional materials of the Services shall condone
or present [***] in any form, nor contain any activity which equates [***] with
[***]. Additionally, under no circumstances shall any programming on the
Services contain any scenes of [***].
[***] and [***] situations may be presented on the Services as a matter of
course; however, except as expressly authorized hereunder, there shall be no
depiction of any [***] acts in the [***] of Schedule I hereof except such acts
as are also included in the [***].
The Services may include [***]; however, the Services shall not include
descriptive dialogue that is [***].
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Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
SCHEDULE I TO EXHIBIT A
PROGRAMMING STANDARDS
[Programming Standards Rating Schedule Omitted.]
[***]
26
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
EXHIBIT B
PROGRAMMER'S RATE CARD
1. DIRECTV shall pay a "License Fee" for the Services equal to a
percentage of [***] generated from pay-per-view purchases of the
Services as follows:
[Method for calculating License Fee redacted.]
[***]
For purposes of the above calculation, total [***] for each
respective Service for each contract [***] shall include (i) all
[***] in connection with any stand alone PPV Offering of such
Service, (ii) all [***] (as defined below) in connection with the
inclusion of such Service within a [***] and (iii) [***] of any
[***] (as defined below). [***] per Service shall be equal to
[***], where [***], [***] = the total number of all [***] offered
in the [***] and [***] of the [***]. [***] shall mean all [***]
received in connection with the Master Pay-Per-View License
Agreement entered into as of December 21, 1998 between DIRECTV and
MRG Entertainment (as the term [***] is defined in such Master
Pay-Per-View License Agreement).
[***]
For carriage of the Services within a [***], DIRECTV shall pay
Programmer an amount determined in accordance with Paragraph 4
below.
Notwithstanding the foregoing, DIRECTV shall have the right to
include the Services within its [***] programming package
currently branded as the [***], and DIRECTV shall not be obligated
to pay any License Fee to Programmer for the distribution of such
package [***]. In the event that DIRECTV obtains [***]to the
[***], DIRECTV and Programmer will negotiate in good faith a
reasonable monthly license fee to be paid [***].
2. For purposes of this Agreement, [***] are defined as (A) the [***]
actually [***] by DIRECTV from Subscribers for the right to
receive and view the Services, after deduction of (B) (i) [***] or
other similar fees or charges (other than [***]) relating to the
distribution of such Services hereunder, (ii) [***] (as defined
below), (iii) any [***] made for [***] programming other than such
Services or any general [***], or other [***] made to DIRECTV
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<PAGE>
Subscribers on a [***] basis, and (iv) [***] in the amount of
[***] of [***]. Upon [***] written request, but in no event more
than [***] during any contract [***], [***] shall provide [***]
applied in the [***] in a form and in such detail as may be [***].
For purposes of this Agreement, a [***] shall mean DIRECTV's [***]
or [***] to any Subscriber all or any portion of a [***] by a
Subscriber in connection with the Services as a direct result of a
[***] (e.g., without limitation, in cases where the Services are
[***] by the DIRECTV Subscriber).
3. To the extent that a Subscriber [***] any portion of [***] owed
solely in connection with DIRECTV's distribution of the Services
as a PPV Offering, then the [***] shall be included in the [***]
for the [***] in which such [***] was received.
4. DIRECTV may, in its sole discretion, elect to offer a packaged
[***] offering (or offerings) of adult services in the [***],
[***], [***] and/or [***] Programming Standards (the [***]). In
each month that DIRECTV offers a [***] including the Services
together with another [***] service (or services), DIRECTV shall
determine the corresponding License Fee payable to Programmer per
each Service by use of the following formula:
[***]
where
[***] All [***] to the Programmer in connection with the [***]
[***] the [***]
[***] the [***] of all programming services offered in the
[***]
[***] [***] of the [***]
[***]
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
EXHIBIT C
PROGRAMMING SCHEDULE
(see attached)
[Programming Schedule by Title and Time Omitted]
[***]
29
<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
EXHIBIT D
DELIVERY SPECIFICATIONS
1. A fully integrated broadcast quality NTSC program feed (in 4:3 aspect
ratio) must be delivered to the DIRECTV Broadcast Center. All feeds
must be delivered via satellite or fiber optic transmission. All costs
associated with delivery to the broadcast center to be borne solely by
Provider.
2. Should Programmer elect to deliver via satellite, Programmer must use
an encrypted C or Ku-band feed delivered via a geostationary satellite
typically used for television program delivery and located in the US
domestic arc (defined here to be 70 degrees WL to 139 degrees WL).
3. Should Programmer elect fiber optic delivery to the DIRECTV broadcast
centers, Programmer must use dedicated facilities providing [***]
end-end connectivity. Programmer to be named customer of record with
all associated telecom service providers thereby assuming all
operational, troubleshooting and preventative maintenance
responsibilities associated with supporting the program feed. DIRECTV
may, upon [***], require Programmer (at Programmer's sole expense) to
re-terminate a fiber optic feed to an alternate DIRECTV broadcast
center or an alternate location within a DIRECTV broadcast center.
4. Programmer must supply [***] sets of such receivers, decoders, codecs,
delay units and all other equipment as required to produce both a main
and a back-up program feed to the DIRECTV Broadcast Center ([***] sets
total). All required equipment must arrive at least [***] prior to
start of testing ([***] prior to start of service).
5. The technical quality of all supplied signals must be within applicable
RS-250 and SMPTE specifications and must be consistently maintained
throughout the testing and on-going operations periods. Video noise
must not be apparent when viewed on a broadcast quality television
monitor. Audio must be delivered distortion free with at least [***] of
headroom. All audio channels must be phase aligned and in lip sync with
the video as measured at the output of provider's supplied equipment.
6. Prior to start of testing, Programmer must furnish to DIRECTV complete
service specific technical details for the proposed transmission path
between Programmer and DIRECTV's broadcast centers. Such information to
include all transmission service providers, satellites and coordinates,
transponders, encryption methods, fiber circuit numbers, DTMF tone
formats, 24x7 telephone contacts and such other information as needed
to completely detail the path sufficient to facilitate immediate outage
recovery in the event of a loss of continuity.
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<PAGE>
Portions of this Exhibit have been redacted pursuant to a request for
confidential treatment under Rule 24b-2 of the General Rules and Regulations
under the Securities Exchange Act. Omitted information, marked "[***]" in this
exhibit, has been filed with the Securities and Exchange Commission together
with such request for confidential treatment.
7. Programmer to support a complete end-to-end thread test between the
program origination point and DIRECTV's broadcast centers using the
actual transmission path, configuration and equipment to be used in
on-going operations. Start of testing to begin at least [***] prior to
the start of Service. Tests must be encrypted. Programmer to schedule
and fully support such additional tests and all other work as required
to ensure a successful DIRECTV start of Service.
31