printer-friendly

Sample Business Contracts

Contract for a Combined Compressed Uplink and Eurobird Space Segment Service - British Telecommunications plc and Playboy TV UK Ltd.

Sponsored Links

                       (1) BRITISH TELECOMMUNICATIONS plc

                            (2) PLAYBOY TV UK LIMITED

--------------------------------------------------------------------------------

                       CONTRACT FOR A COMBINED COMPRESSED
                    UPLINK AND EUROBIRD SPACE SEGMENT SERVICE

--------------------------------------------------------------------------------


Playboy Eurobird contract channel 2        Page 1 of 23
<PAGE>

CONTENTS

1.   Definitions and Interpretation
2.   Provision of the Service
3.   The Charge for the Service
4.   Unavailability of the Service
5.   Credits
6.   Suspension by BT
7.   Termination by the Customer
8.   Termination by BT
9.   Effect of Termination
10.  Use and Assignment
11.  Force Majeure
12.  Limitation of Liability
13.  Indemnity
14.  Notices
15.  Confidentiality
16.  Variations and Amendment
17.  No Partnership
18.  Severability
19.  Waiver
20.  Entire Agreement
21.  Proper Law and Jurisdiction
22.  Remote Adaptation
23.  Third Party Rights

SCHEDULES

Schedule 1: The Service
Schedule 2: Charges and Other Financial Matters
Schedule 3: Fault Reporting Procedures


Playboy Eurobird contract channel 2        Page 2 of 23
<PAGE>

THIS CONTRACT is made this 12th day of May 2003
BETWEEN

(1)   BRITISH TELECOMMUNICATIONS public limited company whose registered office
      is at BT Centre, 81 Newgate Street, London, EC1A 7AJ, registered in
      England No 1800000 ("BT")

AND

(2)   PLAYBOY TV UK LIMITED whose registered office is at Aquis House, Station
      Road, Hayes, Middlesex, UB3 4DX registered in England No. 2412178 ("the
      Customer").

INTRODUCTION

A.    The Customer is in the business of transmitting television and audio
      services and requires facilities to enable it to transmit the said
      services by means of satellite to various receive points; and

B.    BT has agreed to provide the service as described in this Contract to the
      Customer on the terms and conditions of this Contract.

IT IS AGREED AS FOLLOWS:

1.    Definitions and Interpretation

1.1   In this Contract, unless otherwise specifically provided or required by
      the context, the following expressions will have the following meanings:

       Broadcast Service                  the material comprising video,
                                          audio, data, multimedia, interactive
                                          services and teletext as provided by
                                          the Customer and delivered to the
                                          International Gateway by the Customer
                                          Signals;

       Charge                             the charges as set out in Schedule 2;

       Compressed Channel                 means a data stream derived from the
                                          compression and multiplex system
                                          described in Schedule 1 - Part B;

       Contract                           the Clauses of this Contract together
                                          with the attached Schedules;

       Customer Signals                   the electronic signals generated by
                                          (or on behalf of) the Customer to
                                          deliver the Broadcast Service to BT as
                                          described in Schedule 1;

       Due Date                           (a) for the first month, the
                                          Operational Service Date; and


Playboy Eurobird contract channel 2        Page 3 of 23
<PAGE>

                                          (b) for each succeeding month during
                                          the Contract, the first day of the
                                          month;

       Earth Segment Facilities           the facilities described in Schedule
                                          1;

       Expiry Date                        the date set out in Schedule 2 when
                                          the Contract expires;

       Force Majeure                      is defined in Clause 11;

       International Gateway              the BT Tower in London;

       Operational Service Date or OSD    the date set out in Schedule 2 on
                                          which the Service starts;

       Satellite                          the satellite referred to in Schedule
                                          1;

       Service                            means the compression and multiplexing
                                          of the Broadcast Service and its
                                          onward transmission via an uplink
                                          earth terminal to the Space Segment
                                          provided by BT and all as further
                                          detailed in Schedule 1;

       Space Segment                      the capacity in the Satellite as
                                          described in Schedule 1;

       Space Segment Operator             the entity named in Schedule 1 or such
                                          other entity or successor to which its
                                          rights and obligations to provide
                                          capacity in the Satellite and/or to
                                          operate the Satellite may in future be
                                          transferred or devolved;

       Termination Date                   the date that termination is
                                          effective;

       Termination Payment                the payment for early termination set
                                          out in Clause 9;

       Transmission Period                the hours of transmission as defined
                                          in Schedule 2;

       Unavailability                     is defined in Clause 4;

       Year                               any 12 months starting on the OSD or
                                          any anniversary of the OSD.

1.2   Words in the singular include the plural and vice versa. Clause headings
      are for the purpose of guidance only and will not affect the construction
      or interpretation of this Contract.

2.    Provision of the Service

2.1   BT will provide the Service to the Customer from the Operational Service
      Date to the Expiry Date on the terms and conditions set out in this
      Contract.

2.2   The Customer will deliver the Customer Signals to BT at the International
      Gateway.


Playboy Eurobird contract channel 2        Page 4 of 23
<PAGE>

2.3   The Customer must ensure that the Customer Signals comply with Schedule 1,
      part E -Specifications and Limitations of Customer Signals, so that they
      do not cause any damage, loss or interference to the Earth Segment or
      Space Segment Facilities, or to other services.

2.4   The Customer is responsible for the content of the Broadcast Service, even
      if the Customer is not the creator of the material comprised in such
      content.

2.5   The Customer is responsible for obtaining all necessary consents from
      relevant authorities in, and must observe the applicable laws of, any
      country where the Broadcast Service is transmitted and/or received.

2.6   When using the Service the Customer must not use, or permit any other
      person to use, the Service contrary to any applicable legislation, codes,
      mandatory rules or regulations either in the UK or any other country as
      applicable and, in particular, must comply, in the UK with any applicable
      obligations under the Broadcasting Act 1990 and the Independent Television
      Commission Codes of Practice (including any successor legislation or
      codes).

2.7   Use of the Service in contravention of Clauses 2.5 or 2.6 is a breach of
      Contract by the Customer. If in BT's reasonable opinion BT is potentially
      exposed, to civil or criminal liability, or is likely to be exposed to an
      action taken by any competent regulatory authority, BT may on giving
      notice to the Customer of the breach suspend the Service under Clause 6.

2.8   BT reserves the right to interrupt the Service for necessary maintenance,
      adjustments or repair. BT will, except in case of emergency, give
      reasonable prior written notice to the Customer of such interruption. BT
      shall ensure and procure that any such interruption shall be kept to a
      minimum and shall advise the Customer of the expected duration of such
      interruption.

3.    The Charge for the Service

3.1   The Customer agrees to pay the Charge for the Service from the OSD until
      the Expiry Date.

3.2   The Customer will pay the Charge in equal monthly instalments except for
      the first and last months, which will be calculated on a pro-rata time
      basis by BT.

3.3   BT will invoice the Customer not less than 30 days before the Due Date. BT
      must receive payment of the monthly instalment in full (together with
      payment of VAT or other taxes as appropriate) by the Due Date. BT may
      charge interest upon the sum outstanding from the Due Date and suspend
      Service or Terminate in accordance with the relevant provisions of this
      Contract. Such interest will be at a rate of four (4) per cent per annum
      above the base-lending rate from time-to-time of HSBC Bank compounded on a
      monthly basis and will accrue on a daily basis.


Playboy Eurobird contract channel 2        Page 5 of 23
<PAGE>

3.4   The Charge and any other sums payable are exclusive of United Kingdom
      Value Added Tax (VAT), fees, surcharges and any other taxes. Invoices
      payable under this Contract are subject to the addition of VAT, fees,
      surcharges and any other taxes where appropriate.

3.5   The Customer will pay the Charge and any other sums payable under the
      Contract without set off, counter claim or other deductions by the method
      as set out in Schedule 2.

4.    Unavailability of the Service

4.1   The parties agree to comply with the Fault Reporting Procedures as
      attached at Schedule 3. The Service will be regarded as Unavailable during
      the term of the Contract in the following circumstances:

      4.1.1 total loss of the Service;

      4.1.2 degradation of the Service below the parameters set out in Schedule
            1;

      4.1.3 routine testing or maintenance.

      and "Unavailable" and "Unavailability" will be construed accordingly.

4.2   For the avoidance of doubt, the Service shall not be regarded as
      Unavailable during any periods where the Customer Signals are unavailable
      or degraded.

5.    Credits

5.1   BT will allow a credit to the Customer for any period of Unavailability as
      defined in Clause 4 above except where such Unavailability is due to one
      or more of the following:

      5.1.1 Any act or omission of, or a request by, the Customer, its
            employees, agents or contractors including but not limited to
            failure to deliver the Customer Signals (including the Broadcast
            Service) for whatever reason; or

      5.1.2 The Service is degraded due to sun outage or adverse weather
            conditions.

5.2   Periods of Unavailability will be measured in minutes from the time such
      Unavailability is reported to BT by the Customer or such other time if
      earlier when the Unavailability becomes known to BT until the time the
      Service is restored to the parameters specified in Schedule 1.

5.3   Credits will be calculated by taking the total amount of minutes as
      measured in Clause 5.2 above and multiplying them by the pro rata minute
      rate as defined in Schedule 2.

5.4   BT will issue a credit note for the amount as calculated in Clause 5.3
      above and such credit will be applied to the applicable invoice and will
      reduce the outstanding balance on the Customer's account at the date of
      such issue.


Playboy Eurobird contract channel 2        Page 6 of 23
<PAGE>

5.5   Credits are in full and final settlement of any claim arising for any
      period of Unavailability.

6.    Suspension by BT

6.1   BT may (without prejudice to any other right or remedy) suspend the
      Service:

      6.1.1 on giving the Customer seven (7) days written notice if BT does not
            receive the payment of the Charge in full within 30 days of the Due
            Date together with any interest due;

      6.1.2 immediately by written notice if the Customer commits a substantial
            breach of this Contract; or

      6.1.3 immediately by written notice if any of the events which are grounds
            for suspension under Clause 2.7 occur.

      Suspension will continue until the grounds for suspension are removed to
      BT's reasonable satisfaction or BT terminates the Contract pursuant to the
      terms herein.

6.2   The Customer remains liable to pay the Charges during any period of
      suspension and, for the avoidance of doubt, no credits are payable by BT
      to the Customer for any such period of suspension.

7.    Termination by the Customer

7.1   The Customer may terminate this Contract before the Expiry Date for
      Unavailability (save for where such Unavailability is due to the reasons
      given in Clause 5.1.1, 5.1.2 or an event of Force Majeure) immediately by
      written notice to BT:

      7.1.1 subject to Clause 7.1.2 below, where such Unavailability has
            continued for a single continuous period of 15 days or sooner when
            it is agreed by both parties that such Unavailability will continue
            for longer than 15 days from the day it started;

      7.1.2 where such Unavailability is due to a failure of the Space Segment,
            the Customer may terminate this Contract only where such failure has
            continued for a single continuous period of 30 days.

7.2   The Customer may terminate this Contract before the Expiry Date by written
      notice to BT if BT commits a substantial breach of this Contract (other
      than matters provided for in clause 7.1) and;

      7.2.1 if the breach of Contract is capable of remedy, BT fails to remedy
            the breach within 30 days of written notice to do so; or

      7.2.2 if it is not possible to remedy the breach.


Playboy Eurobird contract channel 2        Page 7 of 23
<PAGE>

7.3   The Customer may terminate this Contract before the Expiry Date by written
      notice to BT if BT is the subject of a bankruptcy order or becomes
      insolvent or makes any arrangement or composition with or assignment for
      the benefit of its creditors or goes into liquidation, either voluntary
      (otherwise than for reconstruction or amalgamation) or compulsory, or if a
      receiver or administrator is appointed over its assets.

7.4   Upon the first anniversary of the OSD the Customer shall be entitled to
      terminate the Contract without becoming liable for the Termination payment
      by giving BT three (3) months prior written notice in the event that the
      Customer withdraws the Broadcast Service from the UK Direct to Home
      subscription market.

8.    Termination by BT

8.1   BT may immediately terminate this Contract by written notice to the
      Customer, giving the Customer as much notice as is reasonably practicable,
      if BT receives written notification that the Space Segment Facilities have
      become permanently unavailable. Upon such termination BT will advise
      Customer of the availability, if any, of suitable alternative Space
      Segment Facilities and will use reasonable endeavours to arrange for the
      provision of suitable alternative Space Segment Facilities on terms to be
      agreed negotiating in good faith. In the event of termination in
      accordance with this Clause 8.1 BT shall repay any Charges paid in advance
      by the Customer.

8.2   BT may (without prejudice to any other right or remedy) terminate this
      Contract by giving 30 days written notice to the Customer if BT does not
      receive payment of the Charges in full on the Due Date and any interest
      thereon.

8.3   BT may terminate this Contract before the Expiry Date by written notice to
      the Customer if the Customer commits a substantial breach of this Contract
      (other than matters provided for in Clause 8.2) and:

      8.3.1 if the breach of Contract is capable of remedy, the Customer fails
            to remedy the breach within 30 days after receipt of written notice
            to do so; or

      8.3.2 if it is not possible to remedy the breach.

8.4   BT may terminate this Contract before the Expiry Date by written notice to
      the Customer if the Customer is the subject of a bankruptcy order or
      becomes insolvent or makes any arrangement or composition with or
      assignment for the benefit of its creditors or goes into liquidation,
      either voluntary (otherwise than for reconstruction or amalgamation) or
      compulsory, or if a receiver or administrator is appointed over its
      assets.

9.    Effect of Termination

9.1   It or expiry of this Contract will be without prejudice to the rights and
      liabilities of either BT or the Customer, which may accrue on or up to the
      Termination Date.


Playboy Eurobird contract channel 2        Page 8 of 23
<PAGE>

9.2   Where BT terminates this Contract under Clause 8 (other than under Clause
      8.1) or where the Customer purports to terminate before the Expiry Date
      (other than under Clause 7), the Customer must pay the Termination
      Payment.

9.3   The Termination Payment is calculated by taking the amounts payable under
      this Contract up to the Expiry Date not received by BT on or before the
      Termination Date less the aggregate of all credits due to the Customer
      under Clause 5 prior to the Termination Date which have not been credited
      to the Customer on or before the Termination Date and discounting these
      amounts payable from the original Due Dates back to the Termination Date.
      The discount rate used will be the 3-month Euro Interbank offered rate
      quoted by Barclays Bank plc, London, at 11 am on the last business day of
      the preceding month.

9.4   The Customer must pay the Termination Payment to BT within 30 days of the
      date of BT's VAT invoice.

9.5   BT may charge interest calculated in accordance with Clause 3.3 if the
      Termination Payment is not paid within 30 days of the date of BT's
      invoice.

9.6   If, after payment by the Customer of the Termination Payment, BT, by using
      its reasonable endeavours, shall secure another customer or customers for
      the same capacity as that used for the Services for any part of the period
      between the Termination Date and the Expiry Date, BT will pay to the
      Customer a sum equivalent to the sum it obtains from the new customer(s)
      less all of BT's reasonable costs and expenses incurred in the period from
      the Termination Date to the Expiry Date. For the avoidance of doubt, BT
      shall not be obliged to secure such new customer(s) for the same capacity
      as that used in the Service, unless BT has first contracted with customers
      for all other available capacity within BT's Eurobird service available at
      or after the Termination Date.

9.7   Where the Customer terminates this Contract under Clause 7 BT shall refund
      to the Customer all advance payments made by the Customer in respect of
      any period after the Termination Date.

10.   Use and Assignment

10.1  The Customer may assign any rights or benefits under the Contract only
      with the prior written consent of BT (such consent not to be unreasonably
      delayed or withheld).

10.2  The Customer may permit a third party to use all or part of the Service
      only with the prior written consent of BT. Such consent is not to be
      unreasonably withheld or delayed. Prior to permitting such third party
      use, the Customer must notify BT of the proposed party's name and the
      proposed extent of their use of the Service. The Customer remains
      responsible for all its obligations under this Contract including use of
      the Service and payment of the Charges. BT may make reasonable additional
      requirements of the Customer or the third party as a condition of its
      consent for such third party use. Notification to BT or BT's consent does
      not imply any approval by BT of the third party or its proposed usage.


Playboy Eurobird contract channel 2        Page 9 of 23
<PAGE>

10.3  BT may assign this Contract to a Company within the BT Group of Companies.
      "Company within the BT Group of Companies" means BT or one of the
      subsidiaries of BT as defined by Section 736 of the Companies Act 1985.

11.   Force Majeure

11.1  If either BT or the Customer is unable to perform any obligation under
      this Contract because of a matter beyond its reasonable control, including
      but not limited to lightning, flood, exceptionally severe weather, fire,
      explosion, war, civil disorder, industrial disputes (whether or not
      involving their employees), satellite or launch failure or acts of local
      or central Government or other competent authorities it will have no
      liability to the other party.

11.2  The affected party must promptly give written notice to the other party on
      commencement and on cessation of the Force Majeure event.

11.3  BT will pay a credit to the Customer calculated in accordance with Clause
      5 for any period of Unavailability that is caused by an event of Force
      Majeure.

11.4  If the Force Majeure event continues for a period of 60 days or more or
      when it is agreed by both parties that such an event will continue for
      longer than 60 days from the day it started either party shall have the
      right to terminate this Contract without liability (save for the accrued
      rights and obligations of the parties) upon giving seven (7) days written
      notice to the other party.

12.   Limitation of Liability

12.1  For the avoidance of doubt, BT has no obligation duty or liability in
      contract, tort, for breach of statutory duty or otherwise beyond that of a
      duty to exercise reasonable skill and care.

12.2  BT accepts liability under this Contract only to the extent stated in this
      Clause 12, Clause 9.7 and Clause 5.

12.3  BT does not exclude or restrict liability for death or personal injury
      resulting from its own negligence.

12.4  Neither party is liable to the other in contract, tort (including
      negligence or breach of statutory duty) or otherwise for loss (whether
      direct or indirect) of profits, business or anticipated savings, or for
      any indirect or consequential loss or damage whatsoever;

12.5  In any event BT's liability in contract, tort (including negligence or
      breach of statutory duty) or otherwise arising by reason of or in
      connection with this Contract or howsoever otherwise is limited to *****
      for any one incident or series of related incidents and to ***** for all
      incidents in any period of 12 months.

12.6  Each provision of this Clause 12 is to be construed as a separate
      limitation applying and surviving even if for any reason one or other of
      the said provisions is held inapplicable or


Playboy Eurobird contract channel 2        Page 10 of 23
<PAGE>

      unreasonable in any circumstances and shall remain in force
      notwithstanding termination of this Contract.

13.   Indemnity

13.1  The Customer must indemnify BT against any actions, proceedings, claims or
      demands for loss or damages including death or personal injury in any way
      connected with this Contract brought or threatened against BT by a third
      party except to the extent that BT is liable to the Customer under this
      Contract.

13.2  Without prejudice to the generality of Clause 13.1 the Customer shall
      indemnify BT in the event of:

      13.2.1  actual or alleged libel, slander, invasion of privacy or
              infringement of copyright;

      13.2.2  actual or alleged infringement of intellectual property rights
              arising from use of the Service with facilities or services,
              apparatus or systems not provided by BT for use with the Service;

      13.2.3  use of the Service contrary to the provisions of this Contract;

      13.2.4  claims relating to the quality or contents of the Broadcast
              Service; or

      13.2.5  claims relating to any actual or alleged failure, however caused,
              to meet an obligation to any person to transmit the Broadcast
              Service; or

      13.2.6  any actions, proceedings, claims or demands connected with the
              Service which are brought or threatened against BT due to BT
              acting in accordance with the instructions of the Customer.

13.3  BT will promptly notify the Customer in writing of any claim to which the
      indemnity in this Clause l3 relates and will:

      13.3.1  make no admission without the Customer's consent;

      13.3.2  allow the Customer to conduct any proceedings or settle any claims
              in each case at the expense of the Customer and must do so at BT's
              written request; and

      13.3.3  give to the Customer at the cost and expense of the Customer
              reasonable assistance in connection with such proceedings.

14.   Notices

14.1  Notices given under this Contract will be in writing and will be sent to
      the address of the Customer or BT specified in Schedule 2.

14.2  All notices will be delivered by hand or sent by telex, facsimile or in
      the United Kingdom, by registered post or by recorded delivery and outside
      of the United Kingdom by registered airmail letter. All notices will be
      deemed to have been received when delivered


Playboy Eurobird contract channel 2        Page 11 of 23
<PAGE>

      by hand or on the date on which they would be received in the normal
      course of posting (if posted) when the proper answerback code or
      confirmation is received by the sender if sent by telex or facsimile.

15.   Confidentiality

15.1  BT and the Customer will keep in confidence any information of a
      confidential nature obtained under this Contract and will not divulge it
      to any person (other than their employees who need to know the information
      and subject to their employer making them fully aware of and causing them
      to comply with the provisions of this Clause) without the consent of the
      other party.

15.2  Clause 15.1 will not apply to:

      15.2.1  information in the public domain otherwise than in breach of this
              Contract;

      15.2.2  information in the possession of the receiving party prior to its
              disclosure to them under the terms of this Contract;

      15.2.3  information obtained from a third party who is free to divulge it;

      15.2.4  information which is independently developed by the receiving
              party without any breach of confidentiality under this Contract or
              otherwise; or

      15.2.5  the disclosure of information as required by a court of law or
              other competent authority.

16.   Variations and Amendments

16.1  No variation, amendment or change to this Contract will be effective
      unless contained in a document agreed by the parties and signed by their
      authorised representatives.

16.2  If the Customer wishes BT to modify the Service it must notify BT in
      writing. If the proposed modification is acceptable to BT the parties will
      negotiate the applicable terms and conditions in good faith.

17.   No Partnership

      Nothing in this Contract will give rise to any partnership between BT and
      the Customer.

18.   Severability

      Any part of this Contract, which is determined illegal or invalid, will
      not affect the legality or validity of the remainder.

19.   Waiver

      Any waiver by either party of a breach by the other party of any provision
      of this Contract shall be limited to the particular breach and shall not
      operate in any way in


Playboy Eurobird contract channel 2        Page 12 of 23
<PAGE>

      respect of any future breach, and no delay on the part of a party to act
      upon a breach shall be deemed to be a waiver of that breach.

20.   Entire Agreement

      This Contract governs the provision of the Service to the Customer to the
      exclusion of all other written or verbal representations, statements,
      understandings, negotiations, proposals or agreements.

21.   Proper Law and jurisdiction

      This Contract shall be governed and construed in accordance with the laws
      of England and Wales and the parties agree to submit to the exclusive
      jurisdiction of the English Courts.

22.   Remote Adaptation

      The creation supply and insertion of Conditional Access and EPG data
      associated with the Broadcast Service ("Remote Adaptation") is the
      responsibility of the Customer. To enable Remote Adaptation for the
      Broadcast Service the Customer must enter into separate contracts with
      other parties, currently British Sky Broadcasting Limited registration
      number 02906991 ("BSkyB") and Sky Subscriber Services Limited registration
      number 02340150 ("SSSL") for such provision. The Customer acknowledges
      that BT has no liability to the Customer, BSkyB or SSSL under this
      Contract for Remote Adaptation. Where damage or loss is caused to the
      Broadcast Service by Remote Adaptation the Customer's obligations to BT
      under this Contract are not affected.

23.   Contracts (Rights of Third Parties) Act 1999

      The Parties to this Agreement do not intend that any term of this
      Agreement should be enforceable, by virtue of the Contracts (Rights of
      Third Parties) Act 1999, by any person who is not a Party to this
      Agreement.


Playboy Eurobird contract channel 2        Page 13 of 23
<PAGE>

AS WITNESS these agreements the duly authorised representatives of the parties
have signed this Contract on the day and year stated on page 2 above.

Signed for and on behalf of the Customer


/s/ A. D. Wren
-----------------------------------------------------
Signature

A. D. Wren, Company Secretary
-----------------------------------------------------
Name & Title


Signed for and on behalf of BT

/s/ Peter Nicholls
-----------------------------------------------------
Signature


--------------------------------------------------------------------------------
Peter Nicholls
Product Director


Playboy Eurobird contract channel 2        Page 14 of 23
<PAGE>

                                   SCHEDULE 1

                                   THE SERVICE

The Service comprises the following:

PART A : SPACE SEGMENT

Space Segment Operator                  Eutelsat (or such other entity or
                                        successor to which its rights and
                                        obligations to provide capacity in the
                                        Satellite and to operate the Satellite
                                        may in future be transferred or
                                        devolved).

Satellite                               Eurobird (or as may be replaced from
                                        time to time by the Space Segment
                                        Operator).

Satellite Location                      28.5(degree)E

Minimum Transponder EIRP over the       53dBW, over Zone 1.
Transmit Service Area                   51dBW, over Zone 2 (see note below).

Space Segment pre-emption Status        Non-preemptible

Note: The Transmit Service Area is defined by two zones -- Zone 1 and Zone 2,
each of which are defined by a list of towns/countries towards which the minimum
EIRP of the saturated transponder shall be provided for a single carrier at
transponder centre frequency. The lists of towns/countries for Zone 1 and Zone 2
are attached at Annex 2.

A downlink coverage map showing the expected EIRP contours of the Transmit
Service Area is attached at Annex 1, The coverage map is provided for the
Customer's general information and does not represent the actual Satellite
performance requirements.

The coverage map is only an estimate of such performance requirements and BT
shall not be liable for any damage or loss sustained by the Customer as a result
of the Customer's reliance on this coverage map. The coverage map does not show
the effect of satellite beam pointing errors.


Playboy Eurobird contract channel 2        Page 15 of 23
<PAGE>

PART B : EARTH SEGMENT

The Earth Segment Facilities comprises the following:

(i)   A Tandberg compression, multiplex and adaptation system. The multiplex
      system shall aggregate compressed channels including the Customer's
      Compressed Channel into a single multiplex stream.

(ii)  a main and standby DVB/ASI compliant terrestrial link is used to transmit
      the multiplex stream from the International Gateway to the BT uplink earth
      terminal.

(iii) the multiplex stream is uplinked to the Space Segment Facilities via
      transmit capacity in a Space Segment Operator approved uplink earth
      terminal with shared redundancy facilities operating on a 1 for N basis
      (where N does not exceed 8). The redundant transmit chain shall
      automatically switch into service and be configured to restore a failed
      transmit chain.

PART C : RADIO FREQUENCY PARAMETERS

The following radio frequency (RF) parameters apply :

Modulation Type   :           QPSK
Forward Error Correction   :  2/3 rate
Transmitted Symbol rate    :  27.5 Msym/s
Compressed Channel rate    :  3.5Mbit/s which includes capacity for video, audio
                              channel(s), data channels (if any), teletext, Reed
                              Solomon coding, EPG, CA and service information
                              data
Number of Audio Channels   :  Up to four mono or two stereo audios using MPEG1
                              layer 2 compression
Audio Channel Data Rate    :  100kb/s
Teletext                   :  n/a
Original Network ID        :  02 (Hex)
Network ID                 :  02 (Hex)
Transport Stream ID        :  [To be advised on commencement of service ]
Service ID                 :  [To be advised on commencement of service ]
Downlink Frequency         :  In the range 11450.00MHz to 11700.00MHz
Downlink Polarisation      :  H or V

D.    DEGRADATION OF SERVICE / BIT ERROR RATE

Degradation of the Service is deemed to have occurred when the bit error rate is
greater than [1 in 10(3) when monitored under clear sky conditions by means of a
TVRO with a nominal G/T of 14dB/K and an L-band satellite receiver at BT London
Teleport.

E.    SPECIFICATIONS AND LIMITATIONS OF CUSTOMER SIGNALS

The Customer Signals must comply with the following Specifications:


Playboy Eurobird contract channel 2        Page 16 of 23
<PAGE>

A.

1.    VIDEO SIGNALS

      Serial Digital Component Video 625 lines, 50 fields at 270Mbit/s
      conforming to ITU BT-R601 and ITU BT-R656.

2.    AUDIO SIGNALS

      Embedded in Video Signal (as above) conforming to SMPTE 272M.

3.    SIGNALS CONTAINED IN THE FIELD BLANKING INTERVAL

      World Standards Format.

or

B.

A NON ENCRYPTED DVB COMPLIANT ASI TRANSPORT STREAM (REFERENCE ETR 211 AND
ASSOCIATED IMPLEMENTATION GUIDELINES) WHICH MAY CONSIST OF AUDIO, VIDEO AND
ASSOCIATED DATA.


Playboy Eurobird contract channel 2        Page 17 of 23
<PAGE>

                                                                         ANNEX 1

                Downlink Coverage of EuroBird 1 steerable beam 1

The Customer should not rely on the information contained in this coverage map.
BT shall not be liable for any damage or loss sustained by the Customer as a
result of the Customer's reliance on this coverage map.

                                 [MAP OMITTED]


Playboy Eurobird contract channel 2        Page 18 of 23
<PAGE>

                                                                         ANNEX 2

                               Table 1 to Annex 2

                             Transmit Service Areas
                          Zone 1 (53 dBW EIRP transmit)

        ----------------------------------------------------------------

                                   Whole of UK

                                Whole of Germany

                                Whole of Benelux

                              Whole of Switzerland

                                  Lyon (France)

                                  Milan (Italy)

                             Prague (Czech Republic)

                              Copenhagen (Denmark)

        ----------------------------------------------------------------


Playboy Eurobird contract channel 2        Page 19 of 23
<PAGE>

                               Table 2 to Annex 2

                             Transmit Service Areas
                          Zone 2 (51 dBW EIRP transmit)

         --------------------------------------------------------------

                                Whole of Ireland

                                 Whole of France

                                Whole of Austria

                                Whole of Slovenia

                                Whole of Croatia

                           Whole of Bosnia Herzegovina

                                Whole of Hungary

                                Whole of Slovakia

                             Whole of Czech Republic

                                Whole of Iceland

                                 Bilbao (Spain)

                                Sardinia (Italy)

                                  Rome (Italy)

                                Belgrad (Serbia)

                                 Warsaw (Poland)

                                 Oland (Sweden)

                                  Oslo (Norway)

         --------------------------------------------------------------


Playboy Eurobird contract channel 2        Page 20 of 23
<PAGE>

                                   SCHEDULE 2

                       CHARGES AND OTHER FINANCIAL MATTERS

Service OSD                           14th July 2003

Service Expiry Date                   13th July 2006

                                      At Customers sole discretion, and on the
                                      provision by Customer to BT of at least
                                      six months written notice in advance of
                                      the Expiry Date first above written, this
                                      Contract may be extended, on the terms
                                      and conditions set forth herein, for a
                                      period of three years such that the
                                      Expiry Date shall be 13th July 2009.

Transmission Period                   between the hours 20:00 and 05:30 UK
                                      local time daily.

Charge                                Subject always to the abatements set
                                      forth below ***** for each 12 months from
                                      the OSD or anniversary of the OSD.

                                      There shall be no charge for the period
                                      from 14th July 2003 to 13th September
                                      2003.

                                      Test capacity shall be available free of
                                      charge from 1st July 2003 to the OSD.

                                      In the event that BT makes the facilities
                                      for the service available to another
                                      customer during any of those hours when
                                      the Service is not provided to the
                                      Customer then BT shall further abate the
                                      charge to ***** for the first twelve
                                      months for which payment is made.

Credits (Pro Rata Minute Rate)        *****

Payment Method and Bank Account       Citibank N.A.
                                      366 Strand
                                      London
                                      WC2R 1HB
                                      United Kingdom

                                      Account Number    8060479
                                      Swift             CITIGB 2L

Address for Notices to BT             Senior Business Manager
                                      British Telecommunications plc
                                      Broadcast Services
                                      PP523S, South Block
                                      London Telecom Tower
                                      60 Cleveland Street
                                      London WIT 4JZ


Playboy Eurobird contract channel 2       Page 21 of 23
<PAGE>

                                      Tel: +44 20 7432 5277
                                      Fax: +44 20 7432 5297

Address for Notices to the Customer   The Company Secretary
                                      Playboy TV UK Limited
                                      Aquis House
                                      Station Road
                                      Hayes
                                      Middlesex
                                      UB3 4DX

                                      Tel: +44 (0) 20 8581 7000
                                      Fax: +44 (0) 20 8581 4090

Customer Reference Number             [To be advised on commencement of service]


Playboy Eurobird contract channel 2        Page 22 of 23
<PAGE>

                                   SCHEDULE 3

                           FAULT REPORTING PROCEDURES

The Customer will promptly report any fault to the BT Tower Customer Service
Centre on the following numbers (available 24 hours a day/7 days per week):

Telephone:   0800 671 847             (from the UK)

             +44 (0) 207 432 5548     (from outside the UK)

Fax:         +44 (0) 207 580 1815

(These numbers should also be used for other operational issues).

BT will log the fault and give the Customer a reference number.

Please Note: if BT has identified a fault with the Service it will log the fault
and also issue a reference number.

The parties agree that the time recorded in the Fault Reporting Log following a
fault report from either BT or the Customer is used for timing any
Unavailability of the Service.

The Customer Contact Points (for Operational/Fault Reporting purposes) are as
follows:

John Lally
Head of Technical Services
Telephone: 020 8581 7004
Fax: 020 8581 7022
09:00 - 18:00


Playboy Eurobird contract channel 2        Page 23 of 23