Exhibit 10.7d
CONFIDENTIAL
-------------------------
PLAYBOY TV - LATIN AMERICA
AMENDED AND RESTATED PROGRAM SUPPLY AND TRADEMARK LICENSE
AGREEMENT
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Between
PLAYBOY ENTERTAINMENT GROUP, INC.
as Licensor
and
PLAYBOY TV - LATIN AMERICA, LLC
as Company
November 10, 2006
Table of Contents
Page
1. DEFINITIONS..............................................................1
2. GRANT OF PROGRAM LICENSE.................................................8
2.1. Grant..............................................................8
2.2. Approved Uses of Licensed Programming.............................11
2.3. Company Produced Programming......................................13
2.4. Licensor Option to Purchase.......................................13
2.5. Licensor Ownership................................................14
2.6. Use Rights........................................................15
2.7. Services Provided by Licensor.....................................15
3. TRADEMARK LICENSE AND QUALITY CONTROL...................................15
3.1. Grant of Exclusive License........................................15
3.2. All Other Rights Retained by Licensor.............................17
3.3. Restriction on Sub-Licensing......................................17
3.4. Duration of License...............................................17
3.5. Company's Right of First Negotiation..............................17
3.6. Restriction on Scope of Services..................................18
3.7. Restrictions on Modifications of Trademarks.......................18
3.8. License of Additional Trademarks..................................18
3.9. Quality Control...................................................19
3.10. Title and Protection of the Licensor Trademarks; Use of the
Licensor Trademarks.............................................20
3.11. Form..............................................................21
3.12. Maintenance of Distinctive Quality of Licensor Trademarks.........21
3.13. Advertising and Publicity.........................................21
3.14. Ownership of the Licensor Trademarks..............................22
3.15. Infringements.....................................................22
4. LICENSE TERM AND MEDIA HOLDBACKS........................................23
4.1. License Term......................................................23
4.2. No Home Video Rights..............................................23
4.3. Other Home Video Rights...........................................23
5. CENSORSHIP; WITHDRAWAL OF PROGRAMS......................................24
5.1. Censorship........................................................24
5.2. Withdrawal of Programs............................................24
5.3. Advertising.......................................................24
6. DELIVERY AND RETURN.....................................................25
6.1. Access and Delivery Items.........................................25
(i)
6.2. Title to Delivery Materials.......................................25
7. PROGRAM AND TRADEMARK LICENSE FEES; OTHER FEES..........................25
7.1. Due and Payable...................................................26
7.2. Wire Transfers....................................................26
7.3. Late Payment......................................................26
7.4. Restricted Funds..................................................27
7.5. Currency..........................................................27
7.6. Maintenance of Records and Audit Rights...........................27
7.7. Distribution Fee..................................................28
7.8. Licensor Distribution In Belize...................................29
8. INDEMNITIES.............................................................29
8.1. Representations and Warranties....................................29
8.2. Indemnification...................................................30
8.3. Musical Compositions..............................................31
8.4. Procedure.........................................................31
9. TERMINATION.............................................................31
9.1. Expiration of Term................................................31
9.2. Renewal...........................................................31
9.3. Early Termination on Breach.......................................32
9.4. Inadvertent Breach................................................32
9.5. Cross Default.....................................................32
9.6. Dissolution of Company............................................32
10. EFFECTS OF TERMINATION..................................................33
10.1. Survival of Obligations...........................................33
10.2. Termination of Rights.............................................33
10.3. Further Assurances................................................33
11. EQUITABLE RELIEF........................................................33
12. DISPUTE RESOLUTION......................................................33
12.1. IP-Validity Dispute...............................................33
12.2. Dispute, Notice and Response......................................34
12.3. Arbitration.......................................................34
12.4. Number of Arbitrators.............................................34
12.5. Hearing...........................................................35
12.6. Jurisdiction......................................................35
12.7. Enforceability....................................................35
13. MISCELLANEOUS...........................................................35
13.1. Force Majeure.....................................................35
(ii)
13.2. Binding Effect; No Assignment....................................36
13.3. Invalidity.......................................................36
13.4. Waivers, Remedies Cumulative, Amendments, etc....................36
13.5. Notices..........................................................36
13.6. Governing Law....................................................38
13.7. Entire Agreement.................................................38
13.8. Rules of Construction............................................38
13.9. Counterparts.....................................................38
13.10. Relationship Between the Parties.................................38
13.11. Time Is of the Essence...........................................38
SCHEDULES
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Schedule 2 1(a) Existing Library
Schedule 2 1(b) 2001 PTVLA New Programming Schedule
Schedule 3 1 Licensor Trademarks
Schedule 6 1 Delivery Materials
(iii)
THIS AMENDED AND RESTATED PROGRAM SUPPLY AND TRADEMARK LICENSE AGREEMENT
(this "Agreement") is entered into on November 10, 2006, between Playboy
Entertainment Group, Inc., a Delaware corporation ("PEGI"), and Playboy TV-Latin
America, LLC, a California limited liability company (including its
subsidiaries, collectively the "Company").
RECITALS
WHEREAS, the Company is the owner and operator of the Company Service (as
defined below);
WHEREAS, Licensor (as defined below) is the owner of certain rights in and
to certain television programs, movies and other content as described herein;
WHEREAS, the Company licenses from Licensor on the terms and conditions
set forth in this Agreement certain television programs, movies and other
content for use on the Company Service and the Licensor Trademarks (as defined
below).
WHEREAS, the parties entered into that certain Program Supply and
Trademark License Agreement as of December 31, 2002 and effective as of April 1,
2002 as amended by that First Amendment to Program Supply and Trademark License
Agreement for Playboy-TV-Latin America, LLC as of June 17, 2004 and effective as
of January 1, 2004 (as so amended, the "Original Agreement").
WHEREAS, the parties desire to amend the Original Agreement in order to,
among other things, (i) extend the term of the Original Agreement for an
additional ten (10) years and (ii) provide a license to the Company including
its subsidiaries, the Playboy Lifestyle Companies (as defined below) for the use
of Licensor Trademarks and Licensed Programming in connection with the Playboy
Lifestyle Business (as defined below), each as more fully set forth in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt, adequacy
and legal sufficiency of which are hereby acknowledged, the parties hereby amend
and restate the Original Agreement in its entirety as follows:
1. DEFINITIONS.
In this Agreement (including the Recitals hereto) the following terms will
have the following meanings unless otherwise stated:
"AAA" has the meaning set forth in Section 12.3.
"Acquired Movie" means a program acquired by Licensor (or any of its
Affiliates) from a third party that is at least 60 minutes in length and
represents an edited or unedited version of an adult film (i.e., a film which
contains actual sex acts).
"Adult-Oriented" means, with respect to a Channel or program, that such
Channel or program features content that is comparable to or more explicit than
the content that is exhibited
on the Channels in the Territory as of the date of this Agreement; it being
understood that content that would be rated no more restrictively than "R" by
the Motion Picture Association of America as such rating standards are currently
in effect is not "Adult-Oriented" content.
"Affiliate" means any Person, directly or indirectly through one or more
intermediaries, controlling, controlled by, or under common control with the
specified Person. For purposes of the foregoing, "control" (and "controlled" and
"controlling," respectively), as used in the immediately preceding sentence,
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the specified Person (whether by the
holding of shares or other equity interests, the possession of voting or
contract rights or otherwise). Notwithstanding the foregoing, the Company will
not be deemed an Affiliate of Licensor.
"After Tax Basis" means a basis such that any payment (the "Original
Payment") received or deemed to have been received by a Person (the "Recipient")
will be supplemented by a further payment to the Recipient so that the sum of
the two payments will equal the Original Payment, after taking into account (x)
all taxes that would result from the receipt or accrual of such payments, if
legally required, and (y) any reduction in taxes that would result from the
deduction of the expense indemnified against, if legally permissible. In the
event that the expense indemnified against is used to reduce taxes by way of
amortization or depreciation, payments made on an After Tax Basis will be
refunded in each taxable year of the recipient in which such expense is
deductible in an amount equal to the sum of (i) the tax savings attributable to
such deduction plus (ii) any reduction in taxes that would result from the
deduction of any amounts described in clause (i) as increased hereby. All
payments hereunder will be calculated on the assumptions that the recipient was
subject to tax at the highest marginal rates of tax applicable to such class of
taxpayer and that it could benefit from the deduction of any expense at such
rate of tax. In the event that a taxing authority will treat any indemnification
payment as not includible in gross income or disallow any deduction taken into
account hereunder, the indemnification will be recomputed and further payments
or refunds made.
"Agreement" has the meaning set forth in the introductory paragraph.
"Alta Loma Program" has the meaning set forth in Section 2.1(g).
"Amended Distribution Agreement" means the Amended and Restated
Distribution Agreement, dated the date hereof, between PEGI and the Company.
"Basic Cable" has the meaning currently or hereafter commonly understood
in the television industry, but will also include for all purposes of this
Agreement any broadcast or other transmission (whether by satellite or
otherwise) to television sets or other television devices, now or hereafter
known, of a program service (other than any free television terrestrial
broadcast station) (a) that is included as part of a package of program services
for which members of the public pay a periodic fee for the right to receive such
package of program services, and (b) for which program service a separate fee is
not generally charged for the right to receive the particular service in
question.
"Blocked Funds" has the meaning set forth in Section 7.4.
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"Branded" means a television service or Program where Licensor's or any
Licensor Affiliate's name or trademarks currently existing or hereafter created
by Licensor or its Affiliates are used in connection, or closely associated,
with such television service or Program, or any related advertising.
"Branded Channels" means the PTVLA Channels, the Playboy Lifestyle Channel
and the Spice Channels.
"Branded Company Originated Marks" has the meaning set forth in Section
3.7.
"Branded Format Programming" has the meaning set forth in Section 2.1(f).
"Caribbean Basin" means the following territories: Anguilla, Antigua and
Barbuda, Aruba, Barbados, Bermuda, the British Virgin Islands, the Cayman
Islands, Cuba, Dominica, Dominican Republic, Grenada, Haiti, Jamaica,
Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines,
Trinidad and Tobago, and the Turks and Caicos Islands.
"Channel" has the meaning set forth in the Company Operating Agreement.
"Company" has the meaning set forth in the introductory paragraph.
"Company Format Programming" has the meaning set forth in Section 2.3(c).
"Company Guaranteed Minimum License Fee" has the meaning set forth in
Section 7.
"Company Indemnified Parties" has the meaning set forth in Section 8.2(a).
"Company Operating Agreement" means the Third Amended and Restated
Operating Agreement, dated the date hereof, between PEGI and Lifford relating to
the formation and governance of the Company, as amended from time to time.
"Company Produced Programming" has the meaning set forth in Section
2.3(a).
"Company Produced Programming Budget" has the meaning set forth in Section
6.2.1 of the Company Operating Agreement.
"Company Service" means Playboy TV-Latin America, the television service
which includes the PTVLA Channels, the Spice Channels, the Venus Channel, the
Playboy Lifestyle Programming Services, the G-Channel and any other television
program or channel operated by the Company or any of its subsidiaries from time
to time in accordance with this Agreement and the Company Operating Agreement
and any other permitted activity contemplated herein or therein.
"CPI" means the Consumer Price Index for all Urban Consumers as released
by the Bureau of Labor Statistics, U.S. Department of Labor. If the Bureau of
Labor Statistics, U.S. Department of Labor (i) substantially revises the
methodology (in contrast to benchmark adjustments or other corrections of
previously published data), (ii) discontinues publication of any of the data
referred to above or (iii) temporarily discontinues publication of any of the
data
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referred to above, the parties shall select a substitute for the revised or
discontinued data, in order to provide substitute data to lead to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated had it not
been revised or discontinued.
"Customer Service and Shipping Department" means Licensor's department,
formerly known as the traffic department, that processes all requests made to
Licensor and its Affiliates for duplication and shipment of Delivery Materials
and marketing materials.
"Delivery Materials" means the materials set forth on Schedule 6.1.
"DirectTV Latin America, LLC" means the satellite DTH pay TV service, and
its successors and assignees.
"Dispute" has the meaning set forth in Section 12.2.
"Existing Library" means any program or movie to which Licensor (or its
Affiliates) owns or has obtained the rights to in the Media in the Territory as
of March 31, 2002 each of which is set forth on Schedule 2.1(a) hereto.
"Fiscal Year" has the meaning set forth in the Company Operating
Agreement.
"Force Majeure" has the meaning set forth in Section 13.1.
"Format Rights" has the meaning set forth in Section 2.1(f).
"G-Channel" has the meaning set forth in the Company Operating Agreement.
"Home Video Rights" has the meaning set forth in Section 4.2.
"Hot Brands" means those trademarks listed under "Hot Trademark" on
Schedule 3.1 attached hereto.
"IP - Validity Dispute" has the meaning set forth in Section 12.1.
"License Fees" has the meaning set forth in Section 7.
"Licensed Programming" means collectively, the Existing Library, the New
Programs, the Acquired Movies, Playboy Branded Format Programming, the Alta Loma
Programs (subject to Section 2.1(g)), Wallpaper and any other Programs which may
be made available to the Company hereunder.
"Licensor" means PEGI and any of its Affiliates that hold any of the
rights licensed hereunder or which may provide services hereunder, or such
successor or assignee as may be permitted herein.
"Licensor Additional Marks" has the meaning set forth in Section 3.8.
"Licensor Indemnified Parties" has the meaning set forth in Section
8.2(b).
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"Licensor Trademarks" means the trademarks and the registrations or
pending registrations therefor, as listed under such heading in Schedule 3.1
hereto, owned by Licensor or to which Licensor has all necessary rights to grant
the license as set forth herein, and the Licensor Additional Marks.
"Lifestyle Oriented" means, with respect to content, Programs or
advertising supported Channels, such content, Program, or advertising supported
Channel, that is primarily focused on themes associated with the attitudes and
values of a group of persons or social classification, including without
limitation, habits of consumption, dress, recreation and way of living; it being
understood that Lifestyle Oriented content does not include "Adult-Oriented"
content.
"Lifford" means Lifford International Co. Ltd., an International Business
Company incorporated under the laws of the British Virgin Islands, a party to
the Company Operating Agreement and a member of the Company.
"Localized Licensed Programming" has the meaning set forth in Section
2.2(e).
"Losses" has the meaning set forth in Section 8.2(a).
"Management Committee" has the meaning set forth in the Company Operating
Agreement.
"Media" means all forms of linear and nonlinear television exhibition,
transmission and distribution whether now existing or developed in the future
and whether on a subscription, pay-per-view, video-on-demand or free basis,
including but not limited to the following: (i) conventional VHF or UHF
television broadcast, (ii) Basic Cable and pay cable, (iii) "over the air pay"
subscription television (STV), (iv) direct broadcasting by satellite (DBS), (v)
master antenna television systems (MATV), (vi) multipoint distribution services
(MDS), (vii) multichannel multipoint distribution services (MMDS), (viii)
satellite master antenna television systems (SMATV), (ix) microwave transmission
and (x) IP television encrypted to a set top box. Solely with respect to the
Playboy Lifestyle Business (other than the Playboy Lifestyle Channel), Media
shall include the Playboy Lifestyle Media as defined below. Notwithstanding the
foregoing, except as provided herein, in the Program Supply Agreement or any
Related Documents, Media shall exclude Streaming.
"Member" has the meaning set forth in the Company Operating Agreement.
"Net Revenue" shall have the meaning set forth in Section 7.
"New Programs" means television programs or movies that are similar in
content, style, mix and budget to the Existing Library, that are not included in
the Existing Library which are acquired or produced by Licensor after March 31,
2002. Compilations of Programs previously provided to the Company shall be
considered New Programs if such compilations are prepared in a manner consistent
with Licensor's activities in 2001 and the number of such compilations provided
hereunder shall be consistent with the number produced in 2001. In the event
Licensor obtains the rights in the Media in the Territory to a television
program or movie for which Licensor previously had other rights in such program
or movie, such program or movie shall not be considered a New Program hereunder
without the prior consent of the Company.
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"Newco" means a soon to be formed Argentine limited liability company and
wholly owned subsidiary of Playboy Lifestyle Holding.
"Notice" has the meaning set forth in Section 12.2.
"Original Payment" has the meaning set forth in this Section 1.
"Original Agreement" has the meaning set forth in the recitals.
"PEGI" has the meaning set forth in the introductory paragraph.
"Permitted Sublicensee" has the meaning set forth in Section 3.3.
"Person" means an individual, general partnership, limited partnership,
limited liability company, corporation, trust, estate, real estate investment
trust, association or any other entity.
"Playboy Brands" means those trademarks listed under the heading "Playboy
Marks" on Schedule 3.1 attached hereto.
"Playboy Competition" has the meaning set forth in Section 3.9(b).
"Playboy Lifestyle Business" has the meaning set forth in the Company
Operating Agreement.
"Playboy Lifestyle Channel" means the television program service
containing Playboy Lifestyle Programming Services to be launched by the Playboy
Lifestyle Companies in the Territory and which may be named "Playboy Lifestyle
Channel" or any other name including names using Licensor Trademarks permitted
hereunder and approved by the Management Committee.
"Playboy Lifestyle Channel USA" means an advertising supported, 24 hours a
day, 7 days a week linear television programming service (which may also be
distributed nonexclusively on a pay per view or video on demand basis offered as
a premium on demand or subscription on demand solely to subscribers of the 24
hours a day, 7 days a week linear television programming service) containing
Playboy Lifestyle Programming Services in the US Lifestyle Territory, to be
launched by the Playboy Lifestyle Companies subject to Section 3.1(a) which may
be named "Playboy Lifestyle Channel" or any other name including names using
Licensor Trademarks permitted hereunder and approved by the Management
Committee. For clarity, the Playboy Lifestyle Channel USA shall not include
delivery via wireless devices, internet or mobile television or any other means
of non linear television transmission now in existence or hereafter created.
"Playboy Lifestyle Companies" means collectively Playboy Lifestyle Holding
and Newco.
"Playboy Lifestyle Holding" means Playboy Lifestyle Holding, LLC, a wholly
owned subsidiary of the Company that is a Delaware limited liability company.
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"Playboy Lifestyle Media" has the meaning set forth in the Company
Operating Agreement.
"Playboy Lifestyle Net Revenue" has the meaning set forth in Section 7.
"Playboy Lifestyle Net Revenue Fee" has the meaning set forth in Section
7.
"Playboy Lifestyle Programming Service" has the meaning set forth in the
Company Operating Agreement.
"Playboy TV en Espanol" means those Spanish language networks operated by
PEGI and its Affiliates based on the Playboy Brands, excluding the Playboy
Lifestyle Programming Service.
"Playboy TV" means those television networks operated by PEGI and its
Affiliates based on the Playboy Brands, excluding the Playboy Lifestyle
Programming Service.
"Portuguese Africa Distribution Territory" means, with respect to
distribution in any and all Media, (a) the Republic of Angola; (b) Republic of
Mozambique; (c) the Democratic Republic of Sao Tome and Principe; (d) Cap Verde;
(e) Guinea-Bissau; and (f) the territories, possessions and commonwealths of
each of the foregoing, if any.
"Program" or "Programming" has the meaning set forth in the Company
Operating Agreement.
"Proposed Activity" has the meaning set forth in Section 3.5.
"PTVLA Channels" means those Branded Channels, other than the Playboy
Lifestyle Programming Service, included as part of the Company Service that are
based on Playboy TV.
"PTVLA Portugal Feed" means the PTVLA Channel as originally telecast by
the Company in Portugal.
"Recipient" has the meaning set forth in this Section 1.
"Remediable Breach" has the meaning set forth in Section 9.3(b).
"Response" has the meaning set forth in Section 12.2.
"Rules" has the meaning set forth in Section 12.3.
"Spice Brands" means those trademarks listed under the heading "Spice
Marks" on Schedule 3.1 attached hereto.
"Spice Channels" means those Branded Channels included as part of the
Company Service that are based on the Spice Network.
"Spice-Hot Feed" has the meaning set forth in Section 2.1(i).
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"Spice Network" means collectively, Spice Digital Networks, Club Jenna,
Spice:xcess, fresh! and shorteez, and successor networks, if any, as PEGI may
include from time-to-time, as programmed by PEGI.
"Streaming" means the delivery of audio and/or visual programming whether
in real time or by program download (including, but not limited to, RealVideo,
any format that operates on the Windows Media Player or any other streaming or
direct download audio and/or visual software) through the data delivery protocol
known as TCP/Internet Protocol or any successor or replacement protocol to any
recipient for purposes of viewing.
"Sublicense" has the meaning set forth in Section 2.2(d).
"TCP" has the meaning set forth in Section 3.1(a).
"Term" has the meaning set forth in Section 9.1.
"Termination Date" has the meaning set forth in Section 10.2.
"Territory" shall have the meaning set forth in the Company Operating
Agreement.
"Trade Materials" means trade presentations, business cards, invoices,
stationery and other similar printed matter reflecting names under which the
Company conducts business.
"Unbranded" means a television service, Program or a block of Programs
where Licensor's or any Licensor Affiliate's name or trademarks are not used in
connection or closely associated with such television service, Program or block
of Programs or any related advertising other than in customary production, logo
credits or end sequences of such Program, for use solely in the credit block in
advertising for such Program, where applicable. Unbranded Programs include
Branded Programs which have been edited to remove all Licensor Trademarks
pursuant to Section 2.4(c).
"Unbranded Channels" means any channel which may be operated by the
Company where Licensor or any Licensor Affiliate's name or trademarks are not
used in close connection or closely associated with such channel.
"US Lifestyle Territory" has the meaning set forth in the Company
Operating Agreement.
"Venus Channel" means the television program service known as "Venus" and
any other television program service, channel or network operated by Venus TV,
Inc. and Contribution S.A.
"Wallpaper" has the meaning set forth in Section 2.1(d).
2. GRANT OF PROGRAM LICENSE.
2.1. Grant. Upon and subject to the terms and conditions set forth
in this Agreement and to Licensor's retained rights pursuant to Section 2.5,
Licensor hereby grants to the Company and the Company hereby accepts an
exclusive license during the Term (or until
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Licensor loses its rights in or to any Licensed Programming) to distribute,
exhibit and display the Licensed Programming on the Company Service subject to
the terms herein. Notwithstanding anything to the contrary in this Agreement,
without the express written permission of Licensor, the Company shall not be
entitled to use the Licensed Programming in connection with the Playboy
Lifestyle Business except for Licensed Programming that is suitable for the
Playboy Lifestyle Channel containing Lifestyle Oriented content subject to
Licensor's ability to grant such rights.
(a) Existing Library. Licensor represents and warrants that
the Existing Library consists of all Programs for which Licensor (and/or its
Affiliates) owns rights in the Media in the Territory as of March 31, 2002,
including (but not limited to) Playboy, Spice and Hot Branded Programs and adult
films licensed by Licensor and its Affiliates and any other programming or
content, including Wallpaper, and the Acquired Movies as set forth on Schedule
2.1(a) attached hereto.
(b) New Programs. Each Fiscal Year Licensor and/or its
Affiliates will produce or acquire the rights in the Media in the Territory to
New Programs. The parties acknowledge that the content, style, mix and budget of
the 180 program hours of New Programs provided to the Company pursuant to
Section 2.1(e) shall meet the category mix specifications detailed in Schedule
2.1(b) (Programming Delivery Based on 2001 Categories).
(c) Acquired Movies. Whenever Licensor and/or its Affiliates
acquire the rights to an Acquired Movie for exploitation in the United States,
it will also acquire the rights for such Acquired Movie in the Media in the
Territory, unless such rights are unavailable or are not available on
commercially reasonable terms. If the rights to such Acquired Movie are not
available in the Media for the Territory, or are available in only a portion of
the Territory, on commercially reasonable terms, Licensor will so notify the
Company, and the Company will determine whether it wishes to acquire the rights
in the Territory for such Acquired Movie. If the Company wishes to acquire such
rights, Licensor will acquire such rights for the Company on terms to be agreed
to by the Company. The Company shall reimburse Licensor for any material
incremental costs associated with such acquisition.
(d) "Wall-to-Wall" Material. Licensor will provide the Company
with copies of, or access to, all bumpers, promos, interstitials and other raw
materials produced by Licensor and/or its Affiliates for use in its television
business (collectively, the "Wallpaper"). The Company may exhibit Wallpaper in
the form provided or may modify, edit or utilize them to create appropriate
Wallpaper for the Company Service, subject to the terms and conditions of the
trademark license set forth in Section 3 and all applicable laws and regulations
within the Territory.
(e) Program Hour Requirement. Licensor shall make available
hereunder: (i) at least one hundred eighty (180) program hours of Adult Oriented
New Programs for the Company Service; and (ii) in addition to any Acquired
Movies included in New Programs set forth on Schedule 2.1(b), two hundred twelve
(212) Adult Oriented Acquired Movies for the Company Service; provided, however,
that the Company acknowledges that Licensor shall not be required to provide the
Company with any more than one hundred eighty (180) program hours of New
Programs, and, in addition to any Acquired Movies included in New Programs, two
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hundred twelve (212) Acquired Movies, for each Fiscal Year during the Term. The
parties acknowledge that if differently rated versions of the same Program or
movie are provided to the Company hereunder, such different versions shall be
counted as one movie or Program. Notwithstanding the foregoing, the Company
acknowledges and agrees that, unless the Term is extended pursuant to Section
9.2 herein for the year 2022, Licensor shall provide the Company a pro rated
amount of program hours for three calendar months of such year equal to forty
five (45) program hours of New Programs and, in addition to any Acquired Movies
included in New Programs, fifty three (53) Acquired Movies.
(f) Format Rights. Licensor hereby grants the Company the
exclusive right, to create, produce, develop, commercialize, and distribute
Programs, in the Spanish and/or Portuguese languages, in the Territory for use
in the Media, which Programs are based upon any titles, formats (including,
without limitation, the "Night Calls" format), concepts or other elements
developed, owned or controlled by Licensor or its Affiliates, whether now
existing or hereinafter acquired or created (collectively, the "Format Rights")
subject to Licensor's prior written approval of any such production, which shall
not be unreasonably withheld or delayed. Each Program or other production based
on the Format Rights created by, or, on behalf of, the Company ("Branded Format
Programming") shall be owned by Licensor in accordance with Section 2.5 and
subject to Section 2.2 herein, provided, however, Licensor shall pay the Company
for any use of any Branded Format Programming pursuant to the terms of the
Amended Distribution Agreement and Sections 2.4(b) and 2.6 herein.
(g) Alta Loma Programs. The parties acknowledge that Licensor
and/or its Affiliates produce additional programs which: (i) are intended for
adults and do not contain nudity; and (ii) do not carry any of the Licensor
Trademarks set forth on Schedule 3.1 other than: (x) in customary production,
presentation and logo credits in the title or end sequences of such program, or
(y) for use solely in the credit block in advertising for such program. These
programs are intended for "first run" on domestic television networks or
channels other than Playboy TV or the Spice Network. Licensor produces and sells
such programming under the Alta Loma banner. This programming may consist, from
time to time, of movies, series, and/or specials. (Any such non-nude program,
whether produced by Licensor or one of its Affiliates, and whether carrying the
"Alta Loma" or any other brand, will be referred to as an "Alta Loma Program").
(h) Option to Acquire Rights. Licensor will offer the Company
rights to any Alta Loma Program for a fee equal to twenty percent (20%) of the
production budget for such program. If the Company chooses to pay such fee,
Licensor shall make such Alta Loma Program available to the Company on the same
terms as, and such program shall be considered, a Licensed Program hereunder,
provided, however, that such program will not be counted as a part of the
program hour requirement as described in Section 2.1(e). If the Company does not
choose to obtain a license for a given Alta Loma Program: (i) the Company will
have the right to act as Licensor's exclusive sales agent for that program
throughout the Territory and will receive a twenty percent (20%) distribution
fee on such sales, plus reimbursement of reasonable costs; provided, however,
that in the event an Alta Loma Program is produced pursuant to an agreement
which gives a third-party co-producer or commissioning network the right to
distribute such program in a region or regions of the Territory (or otherwise
restricts Licensor's right to grant the Company the right to act as sales agent
for such program), Licensor will pay to
10
the Company twenty percent (20%) of the total revenue which Licensor (or its
Affiliates) receives from the exploitation of such program in the Media in such
region(s) of the Territory; and (ii) Licensor shall have the right to produce or
co-produce not more than 15 hours per year of Alta Loma Programs. The Company
acknowledges that the following criteria shall not count towards the 15 hours
per year of Alta Loma Programs: (a) repeat showings of the same program; and (b)
Alta Loma Programs for which the Company has agreed to pay twenty percent (20%)
of the production budget. The Company shall use commercially reasonable efforts
to distribute Alta Loma Programs in the Territory in regards to any Alta Loma
Program for which it has sales and distribution rights.
(i) Spice-Hot Feed. Licensor shall provide the Company with
one feed to Club Jenna, fresh!, Spice:xcess and shorteez (the "Spice-Hot Feed").
The costs associated with the Company's exploitation of the Spice-Hot Feed will
be borne by the Company; provided, however, that Licensor shall be responsible
for the uplink and other Spice-Hot Feed signal availability-related costs.
2.2. Approved Uses of Licensed Programming. The Company may exploit
the Licensed Programming as follows:
(a) Licensed Programming Use. Branded Programming shall only
be displayed or transmitted on the PTVLA Channels, the Playboy Lifestyle Channel
or on the Spice Channels in accordance with the respective Branding as
appropriate as set forth on Schedule 3.1 attached hereto unless any such
Branding is previously removed by the Company such that such Programming would
be characterized as Unbranded hereunder pursuant to Section 2.4(c). In no event
shall the Company display or transmit Branded Programming on the Venus Channel
or any other Unbranded Channel without Licensor's prior written consent.
(b) Spillover. Licensor and the Company acknowledge and agree
that the accidental or de minimis "spillover" into the Territory of
transmissions to Licensor customers outside of the Territory will not be a
breach of the grant of rights hereunder and that the accidental or de minimis
"spillover" outside of the Territory of transmissions to Company customers
inside the Territory will not be a breach of the grant of rights hereunder.
(c) Puerto Rico. Notwithstanding any territorial or other
restrictions contained in this Agreement, the parties hereto acknowledge that
the distribution of the Company Service in Puerto Rico in the Spanish language
via DirectTV Latin America shall not be deemed to violate any such territorial
restrictions.
(d) Sublicensing. The Company shall have the right to license
the Licensed Programming and Branded Format Programming to third parties for
exhibition and use in the Media in the Territory (each a "Sublicense") subject
to the following terms: (i) the Company may grant a Sublicense for any Unbranded
Licensed Programming at its sole discretion, and (ii) may grant a Sublicense for
any Branded Programming and/or Branded Format Programming subject to Licensor's
prior written approval which shall not be unreasonably withheld or delayed,
provided, however, that, in any event, any such Licensed Programming must first
be exhibited on the Company Service (i.e., "downstream windows").
11
(e) Sales Agents. The Company may, in its sole discretion and
solely in accordance with this Section, utilize sales agents to handle permitted
sub-licensing of Licensed Programming to third parties on an arms-length basis
based on prevailing market rates (whether or not such third party is an
Affiliate of the Company). Unless the Company receives Licensor's prior written
consent to use a different procedure: (i) a sales agent may not enter into any
outright sales or sales of unlimited runs; (ii) all agreements negotiated on the
Company's behalf by any sales agent will be subject to the Company's prior
approval, and all contracts will be entered into by the Company directly with
the purchaser, which must be an end-user (e.g., a broadcaster, direct-to-home or
Private Network operator); (iii) any sales agent will be compensated on a
commissions-only basis; and (iv) and any sales agency agreement must be
terminable at will by the Company on not more than six (6) months written
notice.
(f) Editing. Subject to and consistent with the terms of
Section 3 (Trademark License and Quality Control) and Section 5 (Censorship;
Withdrawal of Programs), the Company may, at its sole cost and expense, edit,
dub or subtitle in Spanish and/or Portuguese, or otherwise alter Licensed
Programming as necessary to comply with local language or custom or local
broadcasting requirements ("Localized Licensed Programming"). Such altered
Licensed Programming, including, without limitation, the rights to any edited,
dubbed or subtitled tracks related thereto, shall be owned exclusively by
Licensor subject to the terms of Section 2.5 herein, provided, however, Licensor
shall pay the Company for any use of any such altered Licensed Programming
pursuant to the terms of the Amended Distribution Agreement and Sections 2.4(b)
and 2.6 herein.
(g) Exclusive Supplier. Except for Company Produced
Programming and Company Format Programming, Licensor will be the exclusive
supplier of Programs on the PTVLA Channels and Spice Channels regardless of
whether such Programs are produced and owned by Licensor, or whether Licensor
acquires such Programs for the Company.
(h) Streaming.
(i) During the Term, Licensor shall not, and shall
direct Playboy.com not to, distribute in the Territory via Streaming to
television any scheduled-based programming in blocks of six or more hours.
(ii) Except as otherwise provided by the Company
Operating Agreement, in the event that the Company believes that it is necessary
to the business of the Company to engage in any activity that constitutes
Streaming, it shall contact PEGI in writing seeking permission. Except as
otherwise required by the Company Operating Agreement, PEGI shall consider such
request in good faith on a case by case basis, taking into account, among other
things, (a) whether such activity competes with PEGI or Playboy.com; and (b)
whether such activity is consistent with the activities of the Company. Except
as otherwise required by the Company Operating Agreement, PEGI shall be under no
obligation to approve a Streaming request that does not, in PEGI's reasonable
discretion satisfy the foregoing criteria.
12
2.3. Company Produced Programming.
(a) Development. Each year during the Term, the Company shall
produce Programs for exhibition on the Company Service and for sublicensing
("Company Produced Programming"). All such Company Produced Programming shall be
subject to domestic and international law. All Company Produced Programming
which is Branded shall be subject to the prior written approval of Licensor,
which shall not be unreasonably withheld or delayed, and shall be produced
consistent with Licensor's standards (including, but not limited to, the content
restrictions set forth herein) and subject to domestic and international law
including, without limitation, the Child Protection Restoration and Penalties
Enhancement Act of 1990. The inclusion of any Company Produced Programming on
the Company Service shall be in addition to and in no way diminish the
one-hundred-eighty (180) program hours of New Programs and two-hundred-twelve
(212) Acquired Movies required to be provided by Licensor pursuant to Section
2.1(e).
(b) Minimum Company Produced Programming Budget. Subject to
Section 9.2 herein, the Company shall annually spend the Company Produced
Programming Budget in accordance with the provisions of Article 6 of the Company
Operating Agreement.
(c) Company Format Programming. The Company shall be the sole
and exclusive owner of any and all Programs or other materials created by, or on
behalf of, the Company that are exclusively based on titles, formats, or
concepts wholly original to the Company but which are not based on titles,
formats, concepts or other elements exclusively owned or controlled by Licensor
under applicable law ("Company Format Programming"). Any Branded Company Format
Programming, Branded Localized Licensed Programming and Branded Company Format
Programming shall be subject to the content restrictions set forth herein and
domestic and international law including, without limitation, the Child
Protection Restoration and Penalties Enhancement Act of 1990. The Company
acknowledges that the use of Company Format Programming is subject to the
non-compete provisions set forth in Article 14 of the Company Operating
Agreement.
(d) Scheduling of the Company Service. In reasonable
consultation with Licensor, the Company shall determine, the timing, order,
placement and other scheduling-related details of all Programs to be transmitted
on the PTVLA Channels throughout the Territory.
2.4. Licensor Option to Purchase.
(a) Cost. At the expiration or earlier termination of this
Agreement, for any reason, Licensor may, at its option, purchase from the
Company the entire right, title and interest in and to all of the Branded
Company Produced Programming, any Branded Company Format Programming, or the
rights to any edited, dubbed or subtitled tracks created by the Company pursuant
to Section 2.2(e) for an amount equal to twenty five percent (25%) of the
aggregate cost of production of such Branded Company Produced Programming or any
Branded Company Format Programming. If Licensor chooses to purchase any or all
Branded Company Produced Programming or Branded Company Format Programming
pursuant to this Section 2.4(a), the Company shall promptly provide Licensor
with written documentation
13
evidencing the aggregate cost of such production. Whenever possible during the
Term, for Branded Company Produced Programming and Branded Company Format
Programming, the Company shall use commercially reasonable efforts to acquire
all rights, licenses and clearances in perpetuity; provided, however, the
Company shall not be responsible for future guild or union residual or similar
obligations.
(b) Branded Format Programming and Localized Licensed
Programs. In respect to any Branded Format Programming or any Localized Licensed
Programming, at the expiration or earlier termination of the Agreement, for any
reason, Licensor may, at its option, pay to the Company a fee equal to
twenty-five percent (25%) of the aggregate cost of production of such Branded
Format Programming or Localized Licensed Programming in consideration for any
future use of such Branded Format Programming or Localized Licensed Programming
by Licensor.
(c) Branding Removal. If Licensor chooses not to purchase any
or all Branded Company Produced Programming, Branded Company Format Programming,
Branded Format Programming or Localized Licensed Programming, the Company must
remove all Licensor Trademarks and any look-and-feel contained therein which is
reasonably associated with Licensor and/or the Licensor Trademarks prior to any
further use or disposition of such Branded Programming not purchased by
Licensor. The Company acknowledges and agrees that if any such Branded
Programming is used or disposed of contrary to the provisions of this Section,
such use shall constitute a breach of this Agreement and, in addition to any
other remedies that may be available to Licensor, such Branded Programming
shall, at no cost to Licensor, immediately and automatically become the sole and
exclusive property of Licensor.
2.5. Licensor Ownership.
(a) Goodwill. Subject to Section 2.4, Licensor acknowledges
and agrees that the Company is and will be the sole and exclusive owner of all
right, title, and interest throughout the world, including without limitation
all intellectual property and other proprietary rights in and to Company
Produced Programming; provided, however, that, any and all goodwill associated
with the Licensor Trademarks included as part of any Branded Company Produced
Programming shall inure to the sole benefit of Licensor.
(b) Work For Hire. Subject to Section 2.4, any Branded Format
Programming or any Localized Licensed Programming produced by the Company shall
be a work made for hire specially ordered or commissioned by Licensor within the
meaning of the United States Copyright Act, made for the sole benefit of
Licensor and Licensor shall be the sole and exclusive owner thereof. In the
event that any right, title or interest, except for any right, title or interest
granted to the Company hereunder to any Branded Format Programming or Localized
Branded Programming, or part thereof, may not, by operation of law, vest in
Licensor, then the Company hereby conveys, transfers and assigns to Licensor all
right, title and interest, except for any right, title or interest granted to
the Company hereunder throughout the world and without further consideration, in
and to such Branded Format Programming or Localized Branded Programming
retroactive to the date of creation. The assignment of the Branded Format
Programming or Localized Branded Programming under this Section includes all
rights of paternity, integrity, attribution and withdrawal and any other rights
known as, or substantially
14
similar to, "moral rights." To the extent such moral rights may not be assigned
under applicable law and to the extent such assignment is not allowed by the
laws in the various countries moral rights exist, the Company hereby waives such
moral rights and consents to any action that would violate such moral rights in
the absence of such consent.
(c) All Other Rights Retained by Licensor; Covenant not to
Challenge. All rights not expressly granted to the Company hereunder are
reserved by Licensor for its own use and benefit. Without limiting the
generality of the foregoing, the Company shall not challenge the validity of
Licensor's ownership of the Licensed Programming or any intellectual property
registration or application for registration thereof or contest the fact that
the Company's rights under this Agreement are solely those of the Company, which
rights shall terminate in accordance with the provisions of Section 9.
2.6. Use Rights. Licensor shall have the exclusive rights to Branded
Company Produced Programming, Branded Format Programming and Branded Company
Format Programming as set forth in the Amended Distribution Agreement. In the
event that Licensor desires to use Branded Company Produced Programming, Branded
Format Programming or Branded Company Format Programming other than on Playboy
TV en Espanol, the parties shall negotiate in good faith reasonable financial
terms for such distribution on a case-by-case basis. In the event that Licensor
desires to use Branded Company Produced Programming, Branded Format Programming
and Branded Company Format Programming produced for the Playboy Lifestyle
Business in the US Lifestyle Territory and all applicable non-competition
provisions set forth in Section 14.3 of the Company Operating Agreement have
expired, the parties shall negotiate in good faith reasonable financial terms
for such distribution on a case-by-case basis.
2.7. Services Provided by Licensor. In addition to any License Fees
payable to Licensor pursuant to Section 7, the Company will be entitled to
purchase from Licensor specific services, which request Licensor shall not
unreasonably refuse, which Licensor routinely performs for itself (such as
creative services, the creation of on-air promos, Customer Service and Shipping
Department services as described in Section 6.1 hereof, and residual accounting)
at Licensor's actual direct cost, without mark-up, but including all related
staffing costs.
3. TRADEMARK LICENSE AND QUALITY CONTROL.
3.1. Grant of Exclusive License.
(a) Company Rights. Upon and subject to the terms and
conditions set forth in this Agreement, Licensor hereby grants to the Company,
and the Company hereby accepts, an exclusive license to use the Licensor
Trademarks in the Territory in connection with: (i) the broadcast, transmission
and distribution of the Company Service and the applicable Programs as part of
the Company Service; (ii) the Company's sublicensing rights provided herein;
(iii) the promotion and marketing of the Company Service in any and all media,
now known or hereafter devised, and the applicable Programs as part of the
Company Service, including through the use of Trade Materials, provided,
however, that the Company shall not conduct any such promotion or marketing via
Transmission Control Protocol ("TCP"), TCP/Internet Protocol, or similar or
successor network or protocol, unless such promotion or marketing takes place on
an Internet site that is controlled by Licensor or its Affiliates or that has
15
been approved in writing (and not withdrawn) by Licensor; and (iv) the Playboy
Lifestyle Business. Notwithstanding the foregoing, the Company shall not have
any right to use any of the Licensor Trademarks on or in connection with any
Program that is not Licensed Programming except for Programs acquired from third
parties for the Playboy Lifestyle Programming Services (provided that the use of
such Licensor Trademarks in connection with such acquired Programs are subject
to the written consent of PEGI, not to be unreasonably withheld or delayed) or
as the name of the channel on which such Program is broadcast or as approved by
Licensor in connection with any Company Produced Programming. Further, the
Company shall not have the right to use the Licensor Trademarks on or in
connection with any product, goods or services except the Company Service, the
Programs and the Playboy Lifestyle Business (provided that the use of such
Licensor Trademarks in connection with such product, goods or services are
subject to the written consent of PEGI, not to be unreasonably withheld or
delayed). Upon and subject to the terms and conditions set forth in this
Agreement, Licensor hereby grants to the Company, and the Company hereby
accepts, a limited, non-exclusive license to use the Licensor Trademarks in the
Portuguese Africa Distribution Territory in connection with: (i) the broadcast,
transmission and distribution of the PTVLA Portugal Feed, (ii) the Company's
sublicensing rights provided herein; and (iii) the promotion and marketing of
the PTVLA Portugal Feed, including through the use of Trade Materials, provided,
however, that the Company shall not conduct any such promotion or marketing via
TCP, TCP/Internet Protocol, or similar or successor network or protocol, unless
such promotion or marketing takes place on an Internet site that is controlled
by Licensor or its Affiliates or that has been approved in writing (and not
withdrawn) by Licensor.
In the event the Playboy Lifestyle Channel USA is launched in the US Lifestyle
Territory in accordance with the terms of the Company Operating Agreement, upon
and subject to the terms and conditions set forth in this Agreement and the
Company Operating Agreement, Licensor hereby grants to the Company, and the
Company hereby accepts, a non exclusive license to use the Licensor Trademarks
in the US Lifestyle Territory in connection with: (i) the broadcast,
transmission and distribution of the Playboy Lifestyle Channel USA; (ii) the
Company's sublicensing rights in connection with the Playboy Lifestyle
Programming Services; and (iii) the promotion and marketing of the Playboy
Lifestyle Programming Services, including through the use of Trade Materials,
provided, however, that the Company shall not conduct any such promotion or
marketing via TCP, TCP/Internet Protocol, or similar or successor network or
protocol, unless such promotion or marketing takes place on an Internet site
that is controlled by Licensor or its Affiliates or that has been approved in
writing (and not withdrawn) by Licensor.
(b) Prohibited Licensor Activity Relating to Media in the
Territory. During the Term, Licensor shall not itself use or authorize any other
person to use the Licensor Trademarks or any confusingly similar designation
within the Territory in connection with Media in the Territory other than
Internet promotion and marketing for the Company Service; provided, however,
that the following shall not constitute a breach of this sub-paragraph 3.1(b):
(i) use of the Licensor Trademarks or any confusingly similar designation in
customary production, presentation and logo credits in advertising for and the
title or end credits sequences of programs licensed to others in the Territory
as permitted hereunder, and (ii) use of the Licensor Trademarks or any
confusingly similar designation in connection with any Media, or any programs or
other items of any description included in any Media, which is not intended for
general reception in the Territory but is received in the Territory due to
unintentional spillover,
16
so long as that Media was transmitted in a manner not intended for general
reception in the Territory.
(c) Portuguese Africa Distribution Territory. Upon and subject
to the terms and conditions set forth in this Agreement, the Company shall have
the right to transmit, exhibit, broadcast, telecast, exploit, edit (solely in
accordance with Section 2.2(e)), distribute, advertise, promote, publicize, and
make available to system operators the PTVLA Portugal Feed for exploitation in
the Portuguese Africa Distribution Territory during the Term. For clarification
purposes only, the rights granted under this paragraph (c) are granted on a
non-exclusive basis.
3.2. All Other Rights Retained by Licensor. All rights not expressly
granted to the Company hereunder or expressly restricted hereunder are reserved
to Licensor for its own use and benefit. Without limiting the generality of the
foregoing, nothing in this Agreement shall prevent Licensor from doing any or
all of the following: (a) subject to the restrictions set forth herein, using or
granting one or more others the right or license to use the Licensor Trademarks
outside of the Media in any area of the world including the Territory; (b) using
or granting one or more others the right or license to use the Licensor
Trademarks on or in connection with Media in any area of the world other than
the Territory; (c) using or granting one or more others the right or license to
use the Licensor Trademarks on or in connection with any service (other than a
service in the Media and the activities described in Section 2.2 and Section
2.1(g) (Alta Loma) of this Agreement) or goods in any or all areas of the world
including the Territory; and (d) retaining and exercising the exclusive rights
hereby reserved to Licensor to design, manufacture, advertise, promote, sell and
distribute and license the design, manufacture, advertising, promotion, sale and
distribution of any and all products and services in any or all areas of the
world including the Territory other than Media in the Territory.
3.3. Restriction on Sub-Licensing. Licensor acknowledges that for
the Company to conduct its business the Company will need to procure licenses of
the Licensor Trademarks for use by systems operators and other distributors of
the Programming for the purposes of distributing, marketing or advertising such
Branded Channels or Branded Programming in the Territory (each, a "Permitted
Sublicensee"). Licensor agrees that it will enter into trademark sublicense
agreements with the Company and Permitted Sublicensees pursuant to the permitted
grant of any Sublicense of Licensed Programming hereunder. The term of such
sublicense agreements will be consistent with Licensor's customary practices for
licenses of similar scope and will provide Licensor with rights of approval and
control reasonably satisfactory to Licensor; provided that the license fee or
other payment terms will be in the discretion of the Company. The Company will
not otherwise sub-license any of the Trademarks without the prior written
consent of Licensor.
3.4. Duration of License. The trademark license granted pursuant to
this Section 3 shall continue in force until any termination of this Agreement
in accordance with the provisions of Section 9.
3.5. Company's Right of First Negotiation. If Licensor (or any of
its Affiliates) proposes to enter into a new license of the Trademarks in any
region of the Territory for any use in broadcast media other than the Media and
other than with respect to any edition of
17
the "Playboy" Magazine or an option or renewal of license granted prior to the
commencement of the Agreement and which could reasonably be expected to compete
with the Company Service or the Playboy Lifestyle Business (a "Proposed
Activity"), it will grant the Company a first opportunity to negotiate for such
a license. The parties will negotiate in good faith the terms of any such
license, except that if Licensor (or its Affiliate) determines in good faith
either that the Company cannot provide the required level of service with
respect to the Proposed Activity or produce for Licensor (or its Affiliate) the
revenues expected from such Proposed Activity, Licensor (or its Affiliate) may
license the Trademarks for such Proposed Activity to a third party.
3.6. Restriction on Scope of Services. During the Term, the Company
shall not be involved in providing any television program service or channel
using the Licensor Trademarks which is intended for general reception, whether
by use of decoder devices or otherwise, outside the Territory; provided,
however, that, a television program service or channel using the Licensor
Trademarks that is received outside the Territory due to unintentional spillover
shall not constitute a breach of this Agreement so long as it was not
transmitted in a manner intended for general reception outside the Territory.
3.7. Restrictions on Modifications of Trademarks. The Company shall
not use, cause or authorize to be used any word, device, design, slogan or
symbol confusingly similar to any or all of the Licensor Trademarks other than a
Licensor Trademark. Without limiting the generality of the foregoing, during the
Term, any or all of the following shall not be used by the Company on or in
connection with the Company Service or the Programs without, in each case,
Licensor's express prior written consent: (i) permutations of any or all of the
Licensor Trademarks; (ii) secondary or combination marks including or derived
from any of the Licensor Trademarks; (iii) new words, devices, designs, slogans
or symbols derived from any of the Licensor Trademarks.
Notwithstanding the foregoing, Licensor shall not withhold consent for any mark
that would otherwise violate this Section (collectively "Branded Company
Originated Marks") unless it reasonably determines that such Branded Company
Originated Mark or the Company's intended use thereof would be detrimental to
the Licensor Trademarks or Licensor. Upon termination of this Agreement, the
Company shall immediately cease all use of any Branded Company Originated Marks
and Licensor and the Company shall negotiate in good faith terms for the sale of
such Branded Company Originated Marks to Licensor.
3.8. License of Additional Trademarks. Licensor hereby agrees to
include as Licensor Trademarks licensed hereunder with respect to the applicable
Company Service and the Playboy Lifestyle Business (i) any trademarks or
permutations, secondary, combination or derivative marks owned by Licensor and
its Affiliates and used in connection with the broadcast, transmission,
advertising or promotion of the Licensed Programming in the United States and
worldwide outside the Territory provided that the same are, in Licensor's
reasonable determination, at such time applicable to the Company Service, as the
case may be, and are available for use by the Company pursuant hereto and are
available for registration by Licensor in the Territory, and (ii) any other mark
to which Licensor consents to include pursuant hereto (all of such marks the
"Licensor Additional Marks"). The Company may not attempt to register or
otherwise gain any other rights than as set forth herein in and to Licensor
Additional Marks. If, in Licensor's reasonable discretion, based on the
Company's use in the Territory of such
18
Licensor Additional Marks, Licensor elects to register any such Licensor
Additional Marks in the Territory, the Company shall reimburse Licensor for the
costs of such registration and the maintenance thereof during the Term, if the
Company elects to continue such use. The Company will at Licensor's written
request, and at Licensor's cost, register and maintain any Branded Company
Originated Mark that Licensor approves pursuant hereto, if the Company elects to
continue such use.
3.9. Quality Control. All Programs and other material transmitted by
the Company shall comply with the specifications set forth in this Section 3.9.
Licensor acknowledges that the Venus Channel and any Unbranded Channel or
Program is not subject to this Section 3.9.
(a) Program Restrictions. Although the Programs transmitted by
the Company Service will depict nudity and will allow strong or explicit
language, the Company is prohibited from transmitting and covenants that it will
not knowingly permit, on the Branded Channels, the transmission or exhibition of
scenes, Wallpaper, or other material depicting any of the following: (i) the
glorification of violence or gratuitous violence; (ii) rape, nonconsensual
intercourse or other nonconsensual sexual activity; (iii) bondage, incest,
sadism or masochism, bestiality, extreme sexual explicitness or the graphic
close-up of genitals; or (iv) child pornography, including, without limitation,
instances where an actor is the legal age for consent but is portrayed as under
the legal age for consent. In that regard, no actor will appear nude or engage
in sexual conduct in any Program who is not at least the age of majority (e.g.,
eighteen (18) years of age in the United States) consistent with the laws and
regulations of each jurisdiction within the Territory where such Program is
transmitted. Notwithstanding the foregoing, (i) the standards applied by
Licensor from time to time for Playboy TV in the United States shall be the
controlling standards and any material transmitted on Playboy TV or the Spice
Networks shall be deemed acceptable by Licensor for transmission on the Branded
Channels and (ii) any materials provided, or approved by Licensor under this
Agreement shall be deemed acceptable for transmission on the Branded Channels.
(b) Advertising and Home Shopping Restrictions. All
advertising transmitted on the Branded Channels, exhibited through Wallpaper,
and all direct marketing activities conducted on the Branded Channels shall
comply with the specifications set forth in this Section 3.9(b) and all
applicable laws and regulations in the Territory. The Company shall not transmit
advertising or direct marketing programs or exhibit Wallpaper or other materials
which advertise or promote any of the following: (i) firearms (or advertisements
from any gun lobby organization) and other weapons, explosives or fireworks;
(ii) massage parlors, sex clubs, sexually explicit audio-visual products (e.g.,
X-rated or similar "hard core" videos), sex toys, materials depicting graphic
sexual conduct or depicting any matter subject to the restrictions set forth in
Section 3.9(a) above; (iii) classified advertising, including, but not limited
to, psychics or similar persons or services; (iv) religious organizations and
cults; or (v) magazines which compete with any edition of the "Playboy" magazine
or any other publication, product or service published, produced, financed,
branded, identified with or distributed by any Person who is engaged in the
publication or distribution of any magazine which, in Licensor's discretion,
competes with any edition of the "Playboy" magazine (whether in the print,
television or Internet industry, or any other medium of delivery now known or
hereinafter created) ("Playboy Competition"). Further, the Company shall not
advertise or promote the Branded Channels or
19
otherwise use the Licensor Trademarks in any media in connection with any of the
foregoing. Notwithstanding the foregoing, and Wallpaper, advertising or direct
marketing programs provided by Licensor under this Agreement or otherwise
expressly approved in writing by Licensor shall be deemed acceptable by Licensor
for distribution and display on the Branded Channels.
(c) Inspection Rights. Except for any items or Programs
prepared or provided by Licensor, the Company shall submit to Licensor for its
inspection representative samples of all items and materials with respect to
which a Licensor Trademark is utilized pursuant hereto (including, without
limitation, any Programs, all advertising, and all promotional and marketing
materials) for Licensor's prior written approval at least ten (10) days prior to
their intended distribution. If Licensor does not reply to any such submission
within ten (10) days, such submission will be deemed rejected.
3.10. Title and Protection of the Licensor Trademarks; Use of the
Licensor Trademarks. The Company hereby acknowledges that except for the license
expressly granted in this Agreement, the Company has not acquired and will not
acquire any rights, title or interest in the Licensor Trademarks by reason of
this Agreement and further acknowledges each of the following: the great value
of the goodwill associated with the Licensor Trademarks; the worldwide
recognition thereof; that the proprietary rights therein (including, without
limitation, all rights that Licensor may have by virtue of international
agreements that protect famous marks and common law rights) and the goodwill
associated therewith are solely owned by and belong to Licensor; that the
Licensor Trademarks and other related words, devices, designs and symbols are
inherently distinctive or have secondary meaning firmly associated in the mind
of the general public with Licensor, the respective subsidiaries and Affiliates
and their activities; and that all additional goodwill associated with the
Licensor Trademarks created through the use of such Licensor Trademarks by the
Company shall inure to the sole benefit of Licensor. The Company agrees not to
use the Licensor Trademarks in any manner which, directly or indirectly, would
dilute, demean, ridicule or otherwise tarnish the image of the Licensor
Trademarks or Licensor, or any of its Affiliates. During and after the Term, the
Company shall not:
(a) attack or question the validity of, or assist any
individual or entity in attacking or questioning, the title or any rights of or
claims by any or all of Licensor, its subsidiaries and Affiliates and their
respective licensees and sublicensees in and to the Licensor Trademarks or any
other trademark, copyright or such other intellectual or intangible property
associated or connected with Licensor, its respective Affiliates, their
publications, published material and activities;
(b) directly or indirectly seek for itself or assist any third
party to use or acquire any rights, proprietary or otherwise, in any patent,
trademark, copyright or such other intellectual or intangible property
associated or connected with Licensor, its Affiliates, their publications,
published material or activities, without, in each case, the prior express
written consent of Licensor;
(c) in any way seek to avoid the Company's duties or
obligations under this Agreement because of the assertion or allegation by any
individual or entity that any
20
or all of the Licensor Trademarks are invalid or by reason of any contest
concerning the rights of or claimed by Licensor; or
(d) file or prosecute one or more trademark applications in
connection with the Company's use or intended use of the Licensor Trademarks or
any mark or designation of any kind that is confusingly similar to or dilutive
of the Licensor Trademarks, unless expressly requested to do so in writing by
Licensor.
3.11. Form. The Company shall use the Licensor Trademarks in the
form stipulated by Licensor and shall include such trademark and copyright
notices as Licensor may request in connection with the protection of Licensor's
ownership of the Licensor Trademarks. The Company shall also observe all
directions given by Licensor as to colors and size of the representations of the
Licensor Trademarks and their manner and disposition in connection with the
Programs.
3.12. Maintenance of Distinctive Quality of Licensor Trademarks. The
use of the Licensor Trademarks by the Company shall at all times be in keeping
with and seek to maintain their distinctiveness and reputation as determined by
Licensor.
3.13. Advertising and Publicity. The Company hereby acknowledges
that, as between the Company and Licensor, the Licensor Trademarks are the sole
and exclusive property of Licensor. The Company, and any sublicensee of the
Licensed Programming and solely in connection with the sublicensed Licensed
Programming, shall have the right to develop and distribute in the Territory,
and with respect to the PTVLA Portugal Feed, in the Portuguese Africa
Distribution Territory, advertising, publicity and promotional materials
relating to the Company Service and the Programs, including advertising
telecasts of the Programs or any person appearing therein (unless Licensor has
specifically notified the Company to the contrary); provided, however, that any
such advertising, publicity and promotional materials (other than material
obtained directly from Licensor) shall comply with applicable law and the
following restrictions:
(a) all such materials shall comply with the restrictions set
forth in this Section 3 and be subject to Licensor's approval rights pursuant
thereto;
(b) all such materials shall clearly identify the Licensor
Trademarks with a legible credit line with the wording "Playboy" (or the `Rabbit
Head Design,' etc.) is the mark of and used with the permission of Playboy or
its Affiliates, as the case may be, or such other words as Licensor may
designate from time to time;
(c) in no event may any advertising, publicity or promotional
material using the names of Licensor, the name of a Branded Program or the name
of any person appearing in a Branded Program be used to constitute an
endorsement, express or implied, of any party, sponsor, product or service; and
(d) in no event without Licensor's prior approval, in each
instance, may any advertising, publicity or promotional material be in any
language other than Spanish, Portuguese or English.
21
Other than as expressly set forth in this Agreement, the Company shall make no
use of the Licensor Trademarks or any confusingly similar designation without
the prior express written consent of Licensor in each instance. The Company
shall also make no use whatsoever of any other trademark, trade name or service
mark that is the property of Licensor or any of its Affiliates without the prior
express written consent of Licensor in each instance. The Company similarly
agrees that it will not authorize or purport to authorize any third party to
make any such use and, if Licensor's consent thereto is obtained in accordance
with this Section 3, it will expressly provide in any applicable third-party
agreements that such third parties will only be entitled to use such names and
marks on material supplied to them by the Company in accordance with the
Company's rights hereunder.
3.14. Ownership of the Licensor Trademarks.
(a) Prosecution and Maintenance of Licensor Trademarks.
Licensor shall pay all renewal fees and take such other actions as are
commercially reasonable to prosecute the applications for and maintain the
registrations of the Licensor Trademarks in the Territory during the Term.
(b) Cooperation of Company. The Company will on request give
to Licensor or its authorized representative any information as to its use of
the Licensor Trademarks which Licensor may require and will render during the
Term any assistance reasonably required by Licensor in registering and
maintaining the registrations of the Licensor Trademarks.
(c) Covenant of Company. The Company will not make any
representation or do any act to the effect that it has any right, title or
interest in or to the ownership or use of any of the Licensor Trademarks except
under the terms of this Agreement.
(d) Cooperation of Parties to Register Licensor Trademarks.
Each party shall at its own expense, if required by the other, do all such acts
and execute all such documents as may be necessary to confirm the license
granted hereunder in respect of any of the Licensor Trademarks and to record the
Company as a registered user of the registered Licensor Trademarks on the
trademarks register in the Territory. The Company hereby agrees that any such
entry with respect to any Company Service on any trademark register may be
cancelled by Licensor on termination of this Agreement with respect to such
Company Service, for whatever reason, and that it will assist Licensor insofar
as may be necessary to achieve such cancellation including by executing any
necessary documents.
3.15. Infringements.
(a) Notice. Each party shall as soon as it becomes aware
thereof give the other written notice of (i) any use or proposed use by any
other person, firm or company of a trade name, trademark or trade dress or mode
of promotion or advertising which amounts or might amount either to infringement
in the Territory of Licensor's rights in connection with the Licensor Trademarks
or to passing off in the Territory, and (ii) any allegation or claim by any
other person, firm or company that any of the Licensor Trademarks are invalid
within the Territory or that use of any of the Licensor Trademarks infringes any
rights of another party or
22
that any of the Licensor Trademarks are otherwise attacked or open to attack
within the Territory.
(b) Control of Proceedings. Licensor shall have the sole right
to control and conduct all proceedings relating to any claim or suit arising out
of or relating to any of the matters described in this Section 3 and to decide
what action (if any) to take in respect thereof. The Company expressly covenants
no discussions by the Company whatsoever with any and all claimants and
litigants, no compromise or settlement by the Company of any claim or suit and
no negotiations by the Company with respect to any compromise or settlement
shall be had, made or entered into without the prior written approval of
Licensor.
(c) Procedures and Costs. Licensor shall bear the cost of all
proceedings pursuant to this Section 3 and shall be entitled to retain any
damages recovered pursuant to such proceeding. At Licensor's cost, the Company
shall provide any assistance reasonably requested by Licensor, and the Company
shall agree to being joined as a party in any such proceeding at the request of
Licensor. The parties may mutually agree to jointly conduct and control any such
proceeding, in which case the costs and proceeds thereof shall be borne equally
by the parties.
(d) Equitable Relief. The Company acknowledges that the
Company's failure to cease using the Licensor Trademarks upon the expiration or
termination of this Agreement, will result in irreparable harm to Licensor for
which there is no adequate remedy at law. Accordingly, in such event, Licensor
shall be entitled to preliminary or temporary equitable relief in any Federal or
State court of competent jurisdiction located in the State of California without
regard to the provisions of Section 12, without the necessity of posting bond
unless otherwise required by applicable law by way of any or all of the
temporary and permanent injunctions and such other relief as any court of
competent jurisdiction may deem just and proper.
(e) Use of the Term "Licensor". As used in this Section 3, in
each instance, "Licensor" shall mean Licensor or its licensees, as the case may
be.
4. LICENSE TERM AND MEDIA HOLDBACKS.
4.1. License Term. In each instance, the term of the Company's
rights in and to any Licensed Programming shall begin upon the availability of
such Licensed Programming to the Company, and shall end on the sooner to occur
of: (i) the term of Licensor's rights in and to such Licensed Programming; or
(ii) the duration of the Term.
4.2. No Home Video Rights. The Company shall not have the right to
distribute any Licensed Programming for non-public exhibition in a private
residence by means of discs, cassettes or electronic analog or digital storage
devices now existing or invented in the future ("Home Video Rights"). Home Video
Rights shall not include any decoding, recording or storage devices (whether now
existing or hereinafter devised) which allow viewers to view, record or store
programs broadcast via the Media.
4.3. Other Home Video Rights. The Company acknowledges that, in
certain cases, Licensor may be offered the rights in the Media in the Territory
as part of Licensor's
23
acquisition of Home Video Rights. Licensor shall obtain these Media rights, in
its discretion, provided that, in the event the fees for such Media rights are
unreasonable, Licensor shall consult with the Company and obtain the Media
rights for the Company at the Company's own cost. Nothing herein shall effect
Licensor's rights to acquire separately the Home Video Rights.
5. CENSORSHIP; WITHDRAWAL OF PROGRAMS.
5.1. Censorship. The Company is willing to accept and pay for the
Existing Library and New Programs regardless of censorship regulations or the
potential for same throughout the Territory or in any individual country or
political subdivision within the Territory. The Company will elect, consistent
with applicable law, either to: (i) edit out the Programming as supplied by
Licensor, provided that the storyline of such edited Programming may not be
altered, (ii) blackout the region(s) where the censorship problem occurs, or
(iii) not use such Programming, provided, that any such effected New Programs
nonetheless shall count towards the requirements set forth in Section 2.1(e).
All costs of editing and/or blackout will be borne by the Company; provided,
that the Company will make good faith efforts to obtain waivers of such
restrictions or will permit Licensor to make such efforts on behalf of the
Company. Without limiting the Company's rights under Section 2.2(e), the Company
will only make such cuts or deletions as are necessary to conform to applicable
censorship regulations.
5.2. Withdrawal of Programs.
(a) Notwithstanding any other term of this Agreement to the
contrary, Licensor may, in its sole but reasonable discretion, withdraw any
Program if Licensor determines that the transmission thereof would or might
reasonably be expected to (i) infringe upon the rights of others; (ii) violate
the law, court order, government regulation or other ruling of any governmental
agency; or (iii) subject Licensor to any liability, other than due to a breach
by Licensor of its covenants and representations in this Agreement.
(b) If Licensor elects to withdraw any Program as set forth in
paragraph 5.2(a) above before any telecast, the Company will have the right, in
its sole discretion, to require Licensor to deliver another program of
comparable quality (which program will constitute a Program hereunder). If
Licensor elects to withdraw any Program, any transportation, dubbing and
assembly costs incurred and paid by the Company with respect to the withdrawn
Program will be refunded by Licensor promptly upon the Company's presentation of
reasonable evidence of such expenditures.
(c) If a withdrawn Program has been delivered, the Company
will, at Licensor's request, either promptly erase such Program or return it to
Licensor at Licensor's expense.
5.3. Advertising.
(a) In all advertising and publicity relating to any Branded
Program or any transmission thereof, the Company will comply with the
advertising and billing credit requirements furnished by Licensor. The Company
will not make or permit to be made, in any advertising, publicity or otherwise,
any statements which (i) constitute or may be understood to be an endorsement of
any sponsor, product, article or service by Licensor or any of its Affiliates
24
or by any person or entity that appears in or otherwise renders any services or
provides any materials for use in any Branded Program or (ii) indicate or may be
understood to indicate the Licensor, any of its Affiliates, or any person that
appears in or otherwise renders any services or provides any materials for use
in any Program is connected or associated with any sponsor, product, article or
service.
(b) The Company will not advertise or promote, in any manner,
any Program withdrawn by Licensor.
(c) The Company will not authorize or permit any excerpt or
clip from any Branded Program to be used for promotional purposes to be in
excess of one (1) minute in length.
(d) The Company will not advertise or promote any Branded
Program earlier than sixty (60) days prior to the first day of the month in
which the Branded Program will first air.
6. DELIVERY AND RETURN.
6.1. Access and Delivery Items. The Company will have full and
immediate access to all Delivery Materials set forth on Schedule 6.1, and other
tangible manifestations of the rights licensed hereunder, solely as requested by
the Company from Licensor's Customer Service and Shipping Department, or other
designee as Licensor may from time-to-time designate. Licensor shall provide the
Company, at no extra cost to the Company, with one original copy of each of the
Delivery Materials and shall provide the same for all Programs, Acquired Movies,
Wallpaper or any other content required to be made available to the Company
hereunder from time-to-time during the Term.
6.2. Title to Delivery Materials. It is expressly agreed that title
in and to any Delivery Material provided to the Company hereunder will remain in
Licensor at all times and that title, including copyrights therein, will vest in
Licensor upon the creation thereof, subject only to the possession and control
thereof by the Company from the date of delivery through the end of the related
license period solely for the purposes of exercising its rights hereunder. The
Company will execute, acknowledge and deliver to Licensor any instruments of
transfer, conveyance or assignment in or to any such Delivery Materials
necessary or desirable to evidence or effectuate Licensor's ownership thereof
and in the event that the Company fails or refuses to execute, acknowledge or
deliver any such instrument or documents then Licensor will be deemed to be, and
the Company hereby nominates, constitutes and appoints Licensor, its true and
lawful attorney-in-fact irrevocably to execute and deliver all such instruments
in the Company's name or otherwise, it being acknowledged that such power is a
power coupled with an interest. The Company will not have the right to use any
Delivery Materials except in the exercise of the rights granted to the Company
hereunder and in accordance with all limitations on said rights as are contained
in this Agreement.
7. PROGRAM AND TRADEMARK LICENSE FEES; OTHER FEES. The Company will pay to
Licensor each Fiscal Year license fees (the "License Fees") equal to a sum
computed as (A) the greater of: (i) seventeen and one-half percent (17.5%) of
the aggregate Net
25
Revenue of the Company; or (ii) the Company Guaranteed Minimum License Fee (as
described below), plus (B) six percent (6%) of the aggregate Playboy Lifestyle
Net Revenue (as described below)(the "Playboy Lifestyle Net Revenue Fee"). For
purposes hereof, "Company Guaranteed Minimum License Fee" means: (x) for the
year 2002, three million seven hundred thousand dollars ($3,700,000), of which
the pro rated amount for nine calendar months of such year equals two million
seven hundred and seventy-five thousand dollars ($2,775,000); (y) for the year
2003, four million dollars ($4,000,000); and (z) for each subsequent twelve (12)
month period, the Company Guaranteed Minimum License Fee shall be adjusted each
year by any change in the CPI. As used herein, the term "Net Revenue" means
gross revenues earned and actually collected, less any applicable withholding
taxes, excluding: (I) the PTVLA Channel Distribution Fee (as defined in the
Amended Distribution Agreement); (II) amounts paid to the Company by Playboy.com
pursuant to Section 5.1 of the First Amended and Restated Web Site Revenue Share
Agreement dated the date hereof among the Company, Playboy.com, Inc., and
Claxson Interactive Group Inc.; (III) any revenues from (A) advertising; (B)
from the sublicense of any Unbranded Company Format Programming and Unbranded
Company Produced Programming; and (C) revenues from the exploitation by the
Company of any Alta Loma Program rights acquired by the Company as Licensed
Programming pursuant to Section 2.1(g)(1), to the extent that such revenues can
be separately identified; (IV) any revenues received by the Company pursuant to
that certain Wireless Distribution Agreement dated September 1, 2005 between the
Company and Playboy.com, Inc., as amended; (V) any Playboy Lifestyle Net
Revenues; (VI) the PTVLA Portugal Feed Net Revenues; (VII) amounts paid to the
Company from Licensor pursuant to Section 7.8 and (VIII) amount paid to the
Company from Licensor pursuant to the Iberia Arrangements as set forth in
Section 3.6 of the Company Operating Agreement. As used herein, the term
"Playboy Lifestyle Net Revenue" means the gross annual revenues earned and
actually collected for the Playboy Lifestyle Business, less any applicable
withholding taxes. Notwithstanding the foregoing, in the event this Agreement is
terminated or expires, any License Fees owed to Licensor hereunder shall be
adjusted on a pro rata basis based on the date of such termination or expiration
during such Fiscal Year.
7.1. Due and Payable. The License Fees shall be due and payable to
Licensor as follows: (i) the Company Guaranteed Minimum License Fee shall be
paid in equal monthly installments within thirty (30) days after the end of the
respective month; (ii) any overages based on Net Revenue above the Company
Guaranteed Minimum License Fee and the Playboy Lifestyle Net Revenue Fee shall
be calculated at the end of each fiscal quarter and paid within thirty (30) days
thereafter. Any necessary adjustments thereto shall be made within thirty (30)
days after the Company receives audited financial statements.
7.2. Wire Transfers. Payments of License Fees will be made by wire
transfer of immediately available funds, net of any withholding required by
applicable law. Licensor will from time to time designate one or more accounts
into which such payments will be made and may designate one or more Affiliates
to receive such payments.
7.3. Late Payment. Any payment not made when due will bear interest
from the date due to and including the date payment in full is made at a rate
equal to the reference rate of the Bank of America for U.S. domestic customers
as in effect on the date payment was due.
26
7.4. Restricted Funds. Monies actually received by the Company
outside the U.S. in U.S. dollars or in a currency freely convertible to U.S.
dollars and freely remittable to the U.S. shall be deemed to have been received
by the Company as of the end of the applicable accounting period during which
such monies were received, and, as applicable, converted into U.S. dollars at
the actual exchange rate applicable to the Company. Monies actually received by
the Company outside the U.S. in any currency and not freely remittable to the
Company in the U.S. in U.S. dollars shall be considered "Blocked Funds", and
shall not be included in Net Revenues. However, upon the Company's receipt of
written notice from Licensor that the Licensor desires a settlement of its share
of a particular item of Blocked Funds, the Company shall deposit the Licensor's
share of such Blocked Funds (i.e., the License Fees) in a bank account in the
applicable country, in the Licensor's name, subject to all applicable laws and
regulations. Such deposit shall fully satisfy the Company's obligations to
Licensor with respect to such Blocked Funds and Licensor's share thereof, and
any taxes, expenses or other charges incurred in connection with the making of
such deposit shall be deducted from Licensor's share of such Blocked Funds, or
otherwise charged to or paid by Licensor in advance, if required to make such
deposit.
7.5. Currency. The License Fees shall be paid quarterly in U.S.
Dollars. To the extent the calculation of the License Fees are based on revenues
received in other currencies, such revenues shall be calculated using the
exchange rate published in the Wall Street Journal or, with respect to Mexico,
Brazil, Argentina and Venezuela, as quoted by the Central Bank of such country,
as of the last day of the month during which the payment is due. Where License
Fees' payments are due by the Company in a country where, pursuant to the
reasonable advice of legal counsel, it is unlawful to make License Fees'
payments in that country in accordance with this Agreement, notice thereof in
writing will be given by the Company to Licensor and said License Fees' payments
shall be deposited in whatever currency is allowable, for the benefit or credit
of Licensor, by wire transfer into an accredited bank in that country as shall
be acceptable to Licensor.
7.6. Maintenance of Records and Audit Rights.
(a) The Company shall keep accurate books of account and
records covering all transactions relating to or arising out of this Agreement.
The Company shall permit Licensor and its nominees, employees, accountants,
agents and representatives to (i) have full access to and inspect such books and
records during normal business hours upon reasonable notice, and (ii) to conduct
an examination of and to copy all such books and records. The Company shall
maintain in good order and condition all such books and records for a period of
either: (i) five years after the expiration of the Term or the earlier
termination of this Agreement, or in the event of a dispute between the parties
hereto, until such dispute is resolved, whichever date is later; or (ii) such
period of time required under applicable laws and regulations, whichever period
is longer. Receipt or acceptance by Licensor of any sums paid by the Company
hereunder shall not preclude Licensor from questioning the correctness thereof
at any time.
(b) If an inspection or examination referred to in paragraph
(a) above discloses, or Licensor or the Company otherwise discover, an
underpayment of License Fees, the amount of such underpayment shall be paid by
the Company to Licensor not later than thirty (30)
27
days after determination thereof plus interest from the date the payment should
have been made to and including the date of payment in full at a rate equal to
the reference rate of the Bank of America for U.S. domestic customers as in
effect on the date payment should have been made. If such underpayment of
License Fees by the Company is in excess of ten percent (10%) of the aggregate
License Fees earned during any quarterly period under inspection, the Company
shall, in addition to paying Licensor the amount of such underpayment, reimburse
Licensor for all reasonable costs and expenses of conducting such inspection or
examination.
(c) If an inspection or examination referred to in paragraph
(a) above discloses, or Licensor or the Company otherwise discovers, an
overpayment of License Fees, the amount of such overpayment shall be credited
against future payments of License Fees, unless the period for which the
overpayment was made is the final period covered by this Agreement, in which
case the amount of the overpayment shall be paid by Licensor to the Company
within thirty (30) days after determination thereof.
(d) The Company shall provide Licensor with year-end audited
financial statements within: (i) forty-five (45) days of the end of calendar
year 2006; and (ii) thirty (30) days of the end of each calendar year during the
Term thereafter.
7.7. Distribution Fee.
(a) The Company shall collect and receive all revenues derived
from systems operators or any other authorized person on account of the
Company's exploitation of the PTVLA Portugal Feed in the Portuguese Africa
Distribution Territory. In consideration for granting exploitation rights
hereunder outside the Company's Territory, the Company will pay to PEGI a
distribution fee equal to fifty percent (50%) of the Net Revenues received by
the Company from the exploitation of the PTVLA Portugal Feed in the Portuguese
Africa Distribution Territory, based on the simultaneous retransmission feed or
a broadcast directed to the Portuguese Africa Distribution Territory (the "PTVLA
Portugal Feed Distribution Fee"). For purposes of distribution fees under this
Paragraph, the term "PTVLA Portugal Feed Net Revenue" means gross revenues
earned and actually collected from systems operators or any other authorized
person on account of the Company's exploitation of the PTVLA Portugal Feed in
the Portuguese Africa Distribution Territory, less any applicable withholding
taxes herein. It is understood that the PTVLA Portugal Net Feed Revenue shall be
excluded from the Net Revenues as defined in Section 7 hereinabove.
(b) The PTVLA Portugal Feed Distribution Fee will be computed
by the Company as of the last day of each calendar month, and will be paid to
PEGI on a quarterly basis as of each March 31, June 30, September 30, and
December 31, within 30 days after the end of each such respective quarter. The
Company shall furnish PEGI with a statement showing the calculation of such
PTVLA Channel Distribution Fee and setting forth all applicable Company-related
taxes withheld, if any.
(c) Payments of the PTVLA Channel Distribution Fee will be
made by wire transfer of immediately available funds, net of any withholding
required by applicable law. PEGI will from time to time designate one or more
accounts into which such payments will be made and may designate one or more
Affiliates to receive such payments.
28
(d) Any payment not made when due will bear interest from the
date due to and including the date payment in fill is made at a rate equal to
the reference rate of the Bank of the America for domestic customers as in
effect on the date payment was due.
(e) Subject to Section 7.4 the PTVLA Portugal Feed
Distribution Fees shall be paid in U.S. dollars. To the extent the calculation
is based on revenues received in other currencies, such revenues shall be
calculated using the exchange rate published in the Wall Street Journal as of
the business day immediately preceding the date on which the payment initially
is due.
(f) Distribution Cost. The cost associated with the
exploitation of the PTVLA Portugal Feed will be borne by the Company including
all related costs set forth in the Company Operating Agreement or in this
Agreement (including, but not limited to, uplink an other delivery-related
costs).
7.8. Licensor Distribution In Belize. Notwithstanding any
territorial, exclusivity or other restrictions contained in this Agreement, upon
notice from Licensor and consent from the Company, such consent not to be
unreasonably withheld or delayed, Licensor may sub-license and distribute
Programs in the English language from the Licensed Programming to television
system operators in the country of Belize. In the event Licensor sub-licenses
and distributes such Programs to third parties in the country of Belize,
Licensor shall pay the Company a distribution fee equal to fifty percent (50%)
of the total revenues which Licensor receives from the exploitation of such
Programs in the Media in such region of the Territory, less any applicable
withholding taxes. It is understood that the distribution fee received by the
Company pursuant to this Section 7.8 shall be excluded from Net Revenues as
defined in Section 7.
8. INDEMNITIES.
8.1. Representations and Warranties.
(a) By Licensor. Licensor represents and warrants that, except
as set forth in the Schedules hereto: (i) it is duly authorized to enter into
the transactions contemplated by this Agreement; (ii) this Agreement is a valid
and binding obligation of Licensor, enforceable against it in accordance with
its terms; (iii) the performance of Licensor's obligations hereunder does not
violate any agreement, law, rule, or regulation binding on Licensor or
Licensor's charter documents; (iv) it has, and will continue to have during the
Term, all rights in and to the Existing Library, New Programs, Wallpaper and any
other content provided hereunder necessary to fulfill its obligations hereunder
(except that with respect to the Existing Library, no such representation is
made as to any program not listed on Schedule 6.1); (v) the Existing Library,
New Programs, Wallpaper and any other content provided hereunder are not subject
to licenses which conflict with the rights granted herein, and the use thereof
by the Company as contemplated herein will not infringe upon the copyright,
literary or dramatic right or right of privacy of any third party or constitute
a libel or slander of any third party; and (vi) Licensor has disclosed all
information having a material adverse effect on the rights granted hereunder,
and that all such information is true and correct to the best of Licensor's
knowledge and belief.
29
(b) By the Company. The Company represents and warrants that:
(i) it is duly authorized to enter into the transactions contemplated by this
Agreement; (ii) this Agreement is a valid and binding obligation of the Company,
enforceable against it in accordance with its terms; (iii) the performance of
the Company obligations hereunder does not violate any agreement, law, rule, or
regulation binding on the Company or the Company charter documents; (iv) it will
not use the Licensed Programming expect as authorized by this Agreement; (v) it
has, and will continue to have during the Term, all rights in and to the Company
Produced Programming and Company Format Programming and any other content
provided hereunder necessary to fulfill its obligations hereunder; (vi) the
Company Produced Programming and Company Format Programming and any other
content provided hereunder are not subject to licenses which conflict with the
rights granted herein, and the use thereof by Licensor as contemplated herein
will not infringe upon the copyright, literary or dramatic right or right of
privacy of any third party or constitute a libel or slander of any third party;
and (vii) the Company has disclosed all information having a material adverse
effect on the rights granted hereunder, and that all such information is true
and correct to the best of the Company's knowledge and belief.
8.2. Indemnification.
(a) By Licensor. Licensor will indemnify and hold harmless the
Company and its members, managers, directors, officers, shareholders, employees,
agents, representatives and Affiliates (collectively, the "Company Indemnified
Parties"), on an After Tax Basis, from and against all claims, losses, damages
(including loss of profits and consequential damages awarded to unrelated third
parties, if any, but excluding loss of profits and consequential damages
otherwise suffered by the Company Indemnified Parties), expenses, judgments,
costs and liabilities (including reasonable attorneys' fees and costs)
(collectively, "Losses") incurred by the Company Indemnified Parties arising
from Licensor's breach of any obligation, representation or warranty contained
in this Agreement or by reason of any claim, resulting in liability to the
claimant or a settlement approved in writing by Licensor, which may be made
alleging that any of the Licensed Programming or other materials furnished by
Licensor for public exhibition as authorized hereunder infringe upon the
copyright, literary or dramatic right or right of privacy of any claimant or
constitutes a libel or slander of such person, except with respect to any
material added by the Company (including as permitted hereunder) and except with
respect to music which is specifically covered by Section 8.3 below. Licensor
shall not be required to provide indemnification for any Losses solely and
directly caused by the action or inaction of any Company Indemnified Party.
(b) By Company. The Company will indemnify and hold harmless
Licensor and its directors, officers, shareholders, employees, agents,
representatives and Affiliates (collectively, the "Licensor Indemnified
Parties"), on an After Tax Basis, from and against all Losses incurred by the
Licensor Indemnified Parties arising from (i) the breach or alleged breach of
any provision of this Agreement by the Company; or (ii) any claim, resulting in
liability to the claimant or a settlement approved in writing by the Company,
which may be made alleging that any of the Company Produced Programming, Branded
Format Programming, Company Format Programming or other materials furnished by
the Company as authorized hereunder infringe upon the copyright, literary or
dramatic right or right of privacy of any claimant or constitutes a libel or
slander of such person, except with respect to any material
30
added by Licensor, but excluding any Losses for which the Company must indemnify
Licensor pursuant to Section 8.2(a) above and excluding claims arising out of
Licensor's failure to secure clearances and/or make payments as provided in
paragraph 2.4(a) above except for those clearances that are the responsibility
of the Company subject to Section 2.4(a) above. Without limiting the foregoing,
the Company shall specifically so indemnify Licensor and such other parties from
and against all Losses made or assessed against Licensor arising from the
transmission of any material that should have been edited for censorship or
other than as contained in the Delivery Materials as delivered by Licensor, or
from the temporary or permanent loss of any such material. The Company shall not
be required to provide indemnification for any Losses solely and directly caused
by the action or inaction of any Licensor Indemnified Party.
8.3. Musical Compositions. Licensor warrants and represents that to
the best of its knowledge, information and belief, the performing rights in all
musical compositions contained in the Licensed Programming are: (i) controlled
by a performing rights society having jurisdiction, (ii) controlled by Licensor,
or (iii) in the public domain. Licensor does not represent or warrant that the
Company may exercise the performing rights to said musical compositions without
the payment of a performing rights royalty. The Company will be solely
responsible for the payment of such royalty and will hold Licensor free and
harmless therefrom.
8.4. Procedure. If a claim by a third party is made against an
indemnified party, the indemnified party will promptly notify the indemnifying
party of such claim. Failure to so notify the indemnifying party will not
relieve the indemnifying party of any liability which the indemnifying party
might have, except to the extent that such failure materially prejudices the
indemnifying party's legal rights. The indemnifying party will have the
obligation after receipt of such notice to undertake, conduct and control such
claim through counsel of its own choosing and its expense. If, within thirty
(30) days of such notice, the indemnifying party has not undertaken, conducted
nor controlled such claim through counsel, the indemnified party shall have the
right to undertake, conduct and control such claim through counsel of its own
choosing and at the expense of the indemnifying party, provided, that any such
expenses shall be reasonable, actual, verifiable, out-of-pocket expenses.
9. TERMINATION.
9.1. Expiration of Term. The term of this Agreement shall continue
from the original effective date of April 1, 2002 and terminate on March 31,
2022, unless sooner terminated pursuant to the other provisions of this Section
(the "Term").
9.2. Renewal. No later than October 1, 2019, PEGI shall notify the
Company in writing if it intends to renew or extend this Agreement. If PEGI so
elects, PEGI and the Company shall negotiate in good faith for a period of six
(6) months on the terms of such renewal or extension. If PEGI elects not to
renew or extend this Agreement, the parties hereto agree and acknowledge that
Section 2.2(g) (Exclusive Supplier) of this Agreement and Sections 6.2.1, 6.2.2
and 6.2.3 of the Company Operating Agreement shall terminate on January 1, 2020.
31
9.3. Early Termination on Breach. Either party may without prejudice
to its other remedies terminate this Agreement immediately by notice in writing
to the other on or after the occurrence of any of the following:
(a) the commission of one or more material breaches of this
Agreement by the other party which are not capable of remedy; provided, however,
that in case of a breach by the Company, such breach is not caused by Licensor
as a Member of the Company; or
(b) the commission of a material breach of this Agreement by
the other party which is capable of remedy (a "Remediable Breach") which shall
not have been remedied within a period of thirty (30) days after the party in
breach has been given notice in writing specifying that Remediable Breach and
requiring it to be remedied; provided, however, that such thirty (30) day period
shall be extended for such additional period, not to exceed one-hundred-twenty
(120) days, as shall be reasonably necessary if that Remediable Breach is
incapable of remedy within that thirty (30) day period and during that
additional period the party in breach shall diligently endeavor to remedy that
Remediable Breach, but only if such extension would not reasonably be expected
to have a material adverse effect on the party giving notice of such breach.
However, in respect of the breach of any obligation to make payment hereunder,
the cure period shall not be extended as provided in the foregoing proviso.
Notwithstanding the foregoing, Licensor may not terminate this Agreement in case
of a breach by the Company if such breach is caused by Licensor as a Member of
the Company; or
(c) the bankruptcy or insolvency of, a general assignment for
the benefit of creditors or similar event by, or the appointment of a trustee,
receiver or similar person for the other party;
(d) the other party being prevented by an event of Force
Majeure from performing its obligations or the party exercising such right of
termination being prevented by an event of Force Majeure from exercising its
rights under this Agreement for a period of one-hundred-twenty (120) consecutive
calendar days; and provided, further, that in case of a breach by the Company,
such breach is not caused by Licensor as a Member of the Company.
9.4. Inadvertent Breach. The parties agree that any inadvertent
breach relating to Licensor's obligations with respect to any individual Program
shall constitute a Remediable Breach and shall not constitute grounds for
termination hereof if Licensor provides comparable substitute Programming for
the applicable Program.
9.5. Cross Default. The uncured material breach of the Company
Operating Agreement by either party or their Affiliates shall cause this
Agreement to terminate, unless such breach was caused by the party seeking
termination hereunder.
9.6. Dissolution of Company. The dissolution of the Company shall
cause this Agreement to terminate.
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10. EFFECTS OF TERMINATION.
10.1. Survival of Obligations. The termination of this Agreement for
whatever reason shall not effect Articles 8, 10, 12 and 13, and Sections 2.3(c),
2.4(c), 2.5, 3.10, 6.2 and 7.6 of this Agreement.
10.2. Termination of Rights. Upon the date on which any termination
of this Agreement for whatever reason takes effect (the "Termination Date") all
rights of the Company hereunder (other than any rights that the Company may have
arising from the conduct of, or performance hereof by, Licensor) will
immediately terminate and automatically revert to Licensor and the Company will
cease to make any use of the Licensed Programs and other materials provided by
Licensor hereunder, and shall promptly destroy or return the same to Licensor,
in each case as directed by Licensor. Further, the Company shall immediately
amend its charter documents so that its name no longer includes any reference to
any trademark of Licensor or any confusingly similar designation or mark, if
such a reference is included its name.
10.3. Further Assurances. Upon termination of this Agreement, the
parties will perform all other acts which may be necessary or useful to render
effective the termination of the Company's interests in the Licensed Programs,
Licensor Trademarks and other materials furnished by Licensor hereunder and the
Company will execute any assignment, conveyance, acknowledgment or other
document that Licensor may reasonably request relinquishing such interests.
Without limiting the foregoing, the Company hereby consents to any application
which Licensor may make to limit or terminate the Company's status as a
registered user of the Licensor Trademarks and irrevocably agrees not to
contest, oppose or dispute such application.
11. EQUITABLE RELIEF.
Each of Licensor and the Company acknowledges that any material breach of
this Agreement by such party, including, by way of example, the Company's
failure to cease using any Programming supplied hereunder upon the expiration or
termination of this Agreement, will result in irreparable harm to the other
party for which there is no adequate remedy at law. Accordingly, in such event,
Licensor or the Company, as the case may be, will be entitled to preliminary or
temporary equitable relief in any Federal or State court of competent
jurisdiction located in Los Angeles County, California and, except in the case
of an IP-Validity Dispute, pending a final determination in accordance with
Section 12, without the necessity of posting bond unless otherwise required by
applicable law by way of any or all of the temporary and permanent injunctions
and such other relief as any court of competent jurisdiction may deem just and
proper.
12. DISPUTE RESOLUTION.
12.1. IP-Validity Dispute. Notwithstanding the foregoing and the
provisions of this Section 12, the parties hereto agree in the event any
third-party brings a dispute concerning: (i) the validity, ownership, or control
of the Licensor Trademarks or the Licensor Additional Marks, Branded Company
Originated Marks or the copyrights or other intellectual property rights to any
Licensed Programming or any Branded Programming (an "IP-Validity Dispute"); the
parties, (a) shall seek to have such dispute litigated in a court of law and
brought in the state
33
or federal courts in Los Angeles, California and (b) shall irrevocably submit to
the exclusive jurisdiction of such courts, (x) shall waive any objection to
choice of venue in any such action or proceeding in such courts, (y) shall waive
any objection that any such court is an inconvenient forum or does not have
jurisdiction over any party hereto, and (z) shall waive any right they may have
to request a jury trial.
12.2. Dispute, Notice and Response. If any dispute or difference of
any kind whatsoever shall arise between the parties in connection with, arising
out of or relating to this Agreement (including any schedule or exhibit hereto),
or the breach, termination or validity thereof (a "Dispute"), the parties shall
attempt to settle such Dispute in the first instance by mutual discussions.
Within ten (10) business days of the receipt by a party of a notice of the
existence of a Dispute ("Notice"), the receiving party shall submit a written
response to the other party ("Response"). Both the Notice and the Response shall
include (i) a statement of each party's position with regard to the Dispute and
a summary of arguments supporting that position; and (ii) the name and title of
the senior executive who will represent that party in attempting to resolve the
Dispute pursuant to this Section 12.2. Within five (5) business days of receipt
of the Response, the designated executives shall meet and attempt to resolve the
Dispute. All negotiations pursuant to this clause shall be confidential and
shall be treated as compromise and settlement negotiations, and no oral or
documentary representations made by the parties during such negotiations shall
be admissible for any purpose in any subsequent proceedings. If any Dispute is
not resolved for any reason within twenty (20) days of receipt of the Response
(or within such longer period as to which the parties have agreed in writing),
then, on the request of any party the Dispute shall be submitted to arbitration
in accordance with Sections 12.2-12.5 herein.
12.3. Arbitration. Any Dispute not timely resolved in accordance
with Section 12.2 shall be finally and exclusively settled by arbitration in
accordance with the International Arbitration Rules of the American Arbitration
Association ("AAA") then in effect (the "Rules"), except as modified herein. The
arbitration shall be held in Los Angeles, California. The arbitration
proceedings shall be conducted, and the award shall be rendered, in the English
language.
12.4. Number of Arbitrators. If the Dispute (including claims and
counterclaims) is for less than $5 million, there shall be one arbitrator. The
parties shall have fifteen (15) days from the receipt by the respondent of the
demand for arbitration to agree on an arbitrator. If the parties fail to timely
agree, on the request of any party such arbitrator shall be appointed by the AAA
in accordance with the Rules and the procedures set forth herein. If the Dispute
(including claims and counterclaims) is for more than $5 million, there shall be
three neutral and impartial arbitrators of whom the claimant and the respondent
shall each appoint one, within fifteen (15) days of the receipt by respondent of
a copy of the demand for arbitration. The two arbitrators so appointed shall
select a third arbitrator to serve as presiding arbitrator, such selection to be
made within twenty (20) days of the selection of the second arbitrator. If any
arbitrator is not appointed within the time limits set forth herein, such
arbitrator(s) shall be appointed by the AAA in accordance with the Rules and the
procedures set forth herein. There shall be no restriction on the nationality of
any arbitrator. Any arbitrator appointed by the AAA shall be either a retired
judge with experience in international commercial cases or a practicing attorney
with at least 15 years experience with large commercial cases and experience as
an
34
international arbitrator. The AAA shall send simultaneously to each party an
identical list of at least nine arbitrator candidates, and each party shall be
permitted to strike two names from the list, rank the remaining arbitrators in
order of preference and return the list to the AAA within ten (10) days of the
transmittal date. If a party does not return the list within the time specified,
all persons named therein shall be considered acceptable. From among the persons
who remain on both lists and in accordance with the designated order of mutual
preference, the AAA shall invite the acceptance of an arbitrator to serve. There
shall be no restrictions on the nationality of any arbitrator.
12.5. Hearing. The hearing on the merits shall be held as
expeditiously as possible, if practicable no later than four months after the
appointment of a single arbitrator or five months after the appointment of the
third arbitrator, as applicable. The hearing shall, if practicable, last no
longer than ten days, which shall be consecutive, if possible. The award, which
shall be in writing and shall briefly and concisely state the findings of fact
and conclusions of law on which it is based, shall be rendered, if practicable,
within twenty (20) days of the close of the hearing. In rendering an award, the
arbitrator(s) shall be required to follow the law of the State of New York. The
arbitrator(s) are not empowered to award damages in excess of compensatory
damages and each party hereby irrevocably waives any right to recover such
damages with respect to any dispute resolved by arbitration. The arbitrator(s)
shall have the authority to award the costs of the arbitration (including
attorneys' fees and expenses) to the prevailing party. The award shall be final
and binding upon the parties and shall be the sole and exclusive remedy between
the parties regarding any claims, counterclaims, issues or accounting presented
to the arbitral tribunal. Judgment upon any award may be entered in any court
having jurisdiction thereof. Any costs or fees (including attorney's fees and
expenses) incident to enforcing the award shall be charged against the party
resisting such enforcement.
12.6. Jurisdiction. By agreeing to arbitration, the parties do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration
proceedings and the enforcement of any award. Without prejudice to such
provisional remedies as may be available under the jurisdiction of a national
court, the arbitral tribunal shall have full authority to grant provisional
remedies or modify or vacate any temporary or preliminary relief issued by a
court, and to award damages for the failure of any party to respect the arbitral
tribunal's orders to that effect.
12.7. Enforceability. The parties shall take all actions necessary
for awards and other judgments resulting from the provisions set forth above to
be recognized and enforceable in the respective jurisdictions of organization of
the parties and, to the extent necessary, in other jurisdictions in the
Territory.
13. MISCELLANEOUS.
13.1. Force Majeure. Subject to the right to terminate set forth in
Section 9.3, neither party will be liable to the other for any failure or delay
in delivery of Delivery Materials, or the inability to telecast any of the
Programs, due to accident involving breakdown of any satellite or of
transmission facilities or equipment, labor disputes, acts of God, failure of
carriers, failure or delay of laboratories, of or any other cause beyond the
control of such party (each, an event of "Force Majeure") and such performances
will be excused to the extent that it is
35
prevented by reason of any of the foregoing conditions. Notwithstanding the
foregoing, an event of Force Majeure will not include censorship restrictions or
any restriction by any jurisdiction on a party's right to transfer funds.
13.2. Binding Effect; No Assignment. The provisions of this
Agreement shall be binding on and ensure to the benefit of the successors of
each party hereto; provided, however, that no party may not assign, transfer,
pledge, hypothecate, charge or otherwise dispose of or subcontract any of its
rights or obligations hereunder without the prior written consent of the other
party. Notwithstanding the foregoing; (i) either party may assign its rights and
obligations hereunder to an Affiliate of such party, but the original party will
remain responsible and liable for such Affiliate's compliance with all of such
original party's obligations hereunder, and, in the case of an assignment by
Licensor, such Affiliate must be the owner of the Licensor Trademarks; and (ii)
in the event Lifford (or an Affiliate of Lifford which is then a member of the
Company) elects to dissolve the Company due to a breach by PEGI (or an Affiliate
of PEGI which is then a member of the Company) of the Company Operating
Agreement, Lifford (or such Affiliate) may cause the Company's rights hereunder
to be assigned to Lifford (or to an Affiliate of Lifford), provided that the
Company's rights under the this Agreement are assigned to the same assignee.
Nothing in this Agreement, expressed or implied, is intended to confer on any
Person other than the parties hereto or their respective permitted successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Agreement.
13.3. Invalidity. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdictions.
13.4. Waivers, Remedies Cumulative, Amendments, etc.
(a) No failure or delay by either party hereto in exercising
any right, power or privilege under this Agreement will operate as a waiver
thereof nor will any single or partial exercise by either party hereto of any
right, power or privilege preclude any further exercise thereof or the exercise
of any other right, power or privilege.
(b) Except as otherwise provided in this Agreement, the rights
and remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
(c) No provision of this Agreement may be amended, modified,
waived, discharged or terminated, other than by the express written agreement of
the parties hereto nor may any breach of any provision of this Agreement be
waived or discharged except with the express written consent of the party not in
breach.
13.5. Notices.
(a) All notices, requests, demands and other communications
required to be given under this Agreement will conclusively be deemed to have
been duly given: (i) when hand delivered, (ii) the next business day if sent by
a generally recognized overnight courier service that provides written
acknowledgment by the addressee of receipt, or (iii) when received
36
(with appropriate answerback), if sent by facsimile transmission or other
generally accepted means of electronic transmission addressed as follows:
If to Licensor to: Playboy Entertainment Group, Inc.
Attention: President
2706 Media Center Drive
Los Angeles, CA 90065
United States of America
Fax Number: (323) 276-4500
with a copy to: Playboy Enterprises, Inc.
Attention: General Counsel
680 North Lake Shore Drive
Chicago, IL 60611
United States of America
Fax Number: (312) 266-2042
with a copy to: Business and Legal Affairs
2706 Media Center Drive
Los Angeles, CA 90065
United States of America
Fax Number: (323) 276-4502
If to the Company: Playboy TV - Latin America, LLC
c/o Claxson Interactive Group Inc.
Attention: Chairman and Chief Executive
Officer
1550 Biscayne Boulevard
Ground Floor
Miami, FL 33132
Fax Number: (305) 894-3606
with a copy to: Claxson Interactive Group Inc.
Attention: General Counsel
1550 Biscayne Boulevard
Ground Floor
Miami, FL 33132
Fax Number: (305) 894-4803
with a copy to: Paul Berkowitz, Esq.
Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Fax Number: (305) 961-5685
or to such other address, or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.
37
(b) All notices will be deemed given when received at the
address(es) as provided in paragraph (a) above.
13.6. Governing Law. ALL QUESTIONS WITH RESPECT TO THIS AGREEMENT
AND THE RIGHTS AND LIABILITIES OF THE PARTIES WILL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, IRRESPECTIVE OF THE CHOICE OF LAWS PROVISIONS OF NEW YORK
OR OF ANY OTHER JURISDICTION. The parties each hereby consent to the personal
jurisdiction and venue in the state and federal courts sitting in the State of
California.
13.7. Entire Agreement. This Agreement, together with its
attachments, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject matter hereof.
13.8. Rules of Construction.
(a) Headings. The section headings in this Agreement are
inserted only as a matter of convenience, and in no way define, limit, or extend
or interpret the scope of this Agreement or of any particular section.
(b) Tense and Case. Throughout this Agreement, as the context
may require, references to any word used in one tense or case will include all
other appropriate tenses or cases.
(c) Agreement Negotiated. The parties hereto are sophisticated
and have been represented by lawyers throughout the negotiation and execution of
this Agreement who have carefully negotiated the provisions hereof.
13.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
13.10. Relationship Between the Parties. This Agreement will not be
construed to place the parties in the relationship of partners or joint
venturers. The Company shall have no power to obligate or bind any or all of
Licensor and its subsidiaries or Affiliates in any manner whatsoever except as
expressly set forth in the Company Operating Agreement.
13.11. Time Is of the Essence. Time will be of the essence with
respect to each and every obligation of the Company and Licensor hereunder.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
LICENSOR:
PLAYBOY ENTERTAINMENT GROUP, INC.
By: /s/ F. Reid Nathan
------------------
Name:F. Reid Nathan
Title: VPBusiness & Legal Affairs
COMPANY:
PLAYBOY TV-LATIN AMERICA, LLC
By: /s/ Alejandro Iglesias
----------------------
Name: Alejandro Iglesias
Title:General Manager
39
Schedule 2.1(a)
Existing Library
40
Schedule 2.1(b)
2001 PTVLA New Programming Schedule
41
Schedule 3.1
Licensor Trademarks
42
Schedule 6.1
Delivery Materials
43