Exhibit 10.3
Portions of
this Exhibit have been omitted pursuant to a request for
confidential treatment
filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks ("*****"), and the omitted text has
been filed separately with the Securities and Exchange
Commission.
AMENDED AND RESTATED
AFFILIATION AND LICENSE AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF PROGRAMMING
PLAYBOY TV, TWO ADULT MOVIE CHANNELS AND PLAYBOY TV EN ESPANOL
DIRECTV, INC.
and
PLAYBOY ENTERTAINMENT GROUP, INC. and
SPICE HOT ENTERTAINMENT, INC.
<PAGE>
AMENDED AND RESTATED
AFFILIATION AND LICENSE AGREEMENT
FOR DTH SATELLITE EXHIBITION
OF PROGRAMMING
AMENDED
AND RESTATED AGREEMENT
made as of August 1, 2007 (the "Effective
Date"), by and
between PLAYBOY ENTERTAINMENT GROUP, INC., and SPICE HOT
ENTERTAINMENT, INC.,
each of which is a Delaware corporation having an office
located at Media Center Drive., Los Angeles, California 90065 (collectively
referred to
herein as "Programmer"), and DIRECTV, INC., a California
corporation, having an
office located at 2230
East Imperial Hwy., El
Segundo,
California 90245 ("Affiliate").
WITNESSETH:
WHEREAS,
Affiliate and Programmer entered into a written agreement
entitled Amended
and Restated Affiliation and License Agreement for DTH
Satellite Exhibition
of Programming dated September 16, 2006 (the "Current
Playboy
Agreement"),
whereby Programmer
granted Affiliate the right to
distribute various
television
networks owned and
operated by Programmer
that
feature adult films, related programming and interstitial material
(individually
the "Service," or collectively the "Services", as defined in
Section 1(b) below)
via the DTH
Distribution System
(as defined in Section
1(a)(ii) below) in the
United States (the "Territory") as restricted herein;
WHEREAS,
the parties
desire to amend
various terms of the
Agreement and
herein restate the Agreement in its entirety; and
WHEREAS,
this Agreement supersedes all prior understandings and
agreements
relating to the subject matter herein, including without
limitation, the Current
Playboy Agreement and any amendments or extensions thereto;
NOW,
THEREFORE,
FOR GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND
ADEQUACY OF WHICH ARE HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED AS
FOLLOWS:
1. Grant
of Rights.
(a) Distribution; Certain Definitions.
(i) Programmer
hereby grants to Affiliate, and Affiliate hereby
accepts, the
non-exclusive right to distribute the Service in the Territory
via
the DTH Distribution System (as defined below) to DIRECTV
Subscribers during the
Term (as defined in Section 6(a) below), as follows: (i) with respect to the
Playboy TV Service (as
EXECUTION VERSION
2
<PAGE>
defined in
Section 1(b) below), distribution shall include residential
subscribers, hotels,
motels, private offices, multiple dwelling facilities
and
oil rigs (provided,
however, that Affiliate shall not have the right to
distribute the Service
in any common areas to which the public has free access)
on a subscription (a la carte or package) basis (the "Subscription Offerings")
and on a pay-per-view,
pay-per-block and pay-per-night basis (collectively, the
"PPV Offerings"), in
blocks of at least sixty (60) minutes each (or such period
as the parties shall agree) for up to twenty four (24) hours;
provided, however,
that any partial
exhibition
of the Service which consists only of motion
pictures must be no
shorter than sixty
(60) minutes (any block of time, a "PPV
Program"); and (ii) with respect to each of Movie Channel 1, Movie
Channel 2 and
Playboy TV en Espanol
Services (as each is
defined in Section 1(b) below),
distribution may include Subscription Offerings and PPV Offerings
to residential
subscribers, hotels,
motels, private offices, multiple dwelling facilities
and
oil rigs (provided,
however, that Affiliate shall not have the right to
distribute the Service in any common areas to which the public has
free access).
Affiliate shall determine in its sole discretion whether to sell Subscription
Offerings on
an a la carte or package basis. Affiliate shall have the
non-exclusive right to
use the name of or logo for "Playboy TV," "Club Jenna,"
"Spice:Xcess," and
"Playboy TV en Espanol" as such names or logos may be
changed, altered and amended by Programmer, or the names, titles or
logos of the
Service or any of its
programs, or the names, voices, photographs, music,
likenesses or
biographies of any
individual
participant
or performer in,
or
contributor to, any
program or any variations thereof, all of which are being
licensed exclusively
for use in connection
with the distribution,
promotion,
marketing and sale of
the Service as
provided herein. Any further use shall
require Affiliate's
notification
to Programmer and Programmer's written
approval, not to be unreasonably withheld.
(ii) The term "DTH Distribution System" shall mean the
distribution
system for
video and other programming services whereby the programming
satellite signal or
feed is received from
Programmer's
delivery source by a
DIRECTV turnaround
earth-station
facility which
compresses and
processes the
signal or feed and then uplinks it to a DTH communications satellite (a "DTH
Satellite") for transmission to DIRECTV Subscribers. DTH Distribution System
shall also include any other method of distribution that Affiliate currently
and/or subsequently
uses to deliver the Service feed(s) to DIRECTV Subscribers
as part of Affiliate's provision of television services consisting of
multi-channel linear
programming
(which may be combined
with other services),
including,
without limitation,
MMDS
and territorial-based
transmission
infrastructures such
as Internet protocol (excluding distribution via the
Internet or the World Wide Web; provided that if at any time
Programmer offers
the right to
distribute the Service
via the Internet or
World Wide Web to any
other distributor of
the Service,
Programmer will offer the same rights on the
same terms and conditions to distribute the Service on the Internet
or the World
Wide Web to Affiliate)), fiber optic, twisted pairs and
coaxial cable, provided
that in connection
with such delivery methods, Affiliate complies with the
following: (i) the end
users to whom
Affiliate distributes
the Service are
DIRECTV Subscribers;
(ii) the branding and
packaging that is
received by such
DIRECTV Subscribers
is substantially the same as the branding and
packaging
received by DIRECTV
Subscribers that receive the Service via Affiliate's direct
to home satellites.
During the Term (as
defined in Section 6(a)), the Service
(as defined below)
EXECUTION VERSION
3
<PAGE>
shall be distributed via a DTH Satellite at the orbital location
which transmits
to the greatest number of DIRECTV Subscribers. "DIRECTV Subscribers" shall
mean
those customers (both residential and non-residential) authorized by Affiliate
to receive a DIRECTV
branded DTH service via the DTH Distribution System to a
customer's Set-Top Box
(as defined below),
provided that nothing
herein shall
prohibit the transfer of Service programming by a DIRECTV
Subscriber from
such
Subscriber's Set-Top
Box to a portable
viewing device.
"Service
Subscribers"
shall mean
DIRECTV Subscribers authorized by Affiliate to receive the
Subscription
Offerings and/or
PPV Offerings. "Internet" shall mean the
electronic
communications
network that
connects computer networks and
organizational
computer facilities around the world. "World Wide Web" means
the
hypertext
transfer
protocol-based,
distributed
information system
that
facilitates sharing
information and
content via the Internet. A "Set-Top Box"
means a device that
connects to, or is
integrated as part of,
a television or
other video output
display device
("Display Device") and
also connects to the
source of Affiliate's audio/visual signal, the content of which then is
displayed on the Display Device.
(iii) *****
(iv) Affiliate
shall have the right, but not the obligation,
exercisable in its
absolute sole
discretion,
to distribute
the programming
service commonly
known as "Playboy en
Espanol" upon delivery
to Programmer of
not less than
thirty (30) days prior written notice thereof. References
throughout this
Agreement to Playboy
en Espanol shall be applicable only upon
Affiliate's launch,
if any, of Playboy en Espanol via the DTH Distribution
System.
(v) Affiliate
shall be permitted to authorize satellite master
antenna television system ("SMATV") operators (including telephone
companies and
similar service
providers)
that serve
multiple dwelling unit buildings or
complexes, commercial
or business establishments with multiple television
viewing sites or
master planned
communities
and the like to
distribute
the
Service in the
Territory via such
SMATV systems
directly to end users
within
such buildings or
establishments for DTH
reception only,
provided, however,
that: (i) such SMATV operator shall not have the right to
distribute the Service
in any common areas to which the public has free access and (ii)
Affiliate shall
be responsible for each such SMATV operator's compliance with all the terms
and
conditions of this
Agreement including
but not limited to, the service charge
due for each
individual purchase of
the Service, whether
on a PPV Offering or
Subscription Offering basis.
(b) The Service. The
"Service" shall,
individually and
collectively,
mean and consist of the national feed (or, if Programmer uses
multiple feeds for
the Service for the purpose of serving multiple time zones, such other of such
multiple feeds
designated
by Affiliate) of the three programming services
described in clauses (i) through (iii) below, and Playboy TV en Espanol and
the
VOD Service at such time, if any, that Affiliate elects to launch Playboy TV en
Espanol and/or the VOD Service. Each Service, except the VOD Service,
shall be
presented on a 24-hour per day, 7 days a week schedule,
as described
below and
in the "Descriptions and Limitations of the Service," attached
hereto as Exhibit
A. The
EXECUTION VERSION
4
<PAGE>
Service shall be
delivered to Affiliate in its entirety, meaning that the
programming
(including, without
limitation,
all other information related
thereto (e.g., data))
on the Service as received by any Service Subscriber at a
given point in time shall be the same as the programming received by all other
subscribers to the
Service at such point in time (excluding insertions by
individual video
service providers to
permit the
customization of a feed with
respect to promoting such video service provider not to exceed four
minutes per
hour; provided that
the insertions do not change the content of a Program, and
only preempt
interstitial
programming). In the
event that Programmer
grants
individual service
providers the right to insert customized insertions as
provided hereinabove,
Programmer shall
notify Affiliate and Affiliate shall be
granted the same such rights.
(i) Playboy TV. The programming service commonly known as "Playboy
TV" ("Playboy
TV") shall consist of entertainment programming for adult
audiences as more fully described in the "Description and Limitation of the
Services" Section attached hereto as Exhibit A. Affiliate shall
refer to Playboy
TV as "Playboy TV," or
other name mutually
agreed to by the
parties, and may
list Playboy TV on the
program guide as "PBTV." Affiliate shall include a
marketing description
of Playboy TV in
Affiliate's
programming guide that
is
viewed by Subscribers that is mutually agreed upon by the
parties.
(ii) Movie Channel 1. The service known as "Movie Channel 1"
("Movie
Channel 1") shall consist of entertainment programming for adult audiences as
more fully described in the "Description and Limitation of the
Services" Section
attached hereto as
Exhibit A. Affiliate shall refer to Movie Channel 1 as "Club
Jenna," or other name approved by Affiliate, and may list Movie
Channel 1 on the
program guide as
"JENNA" or as otherwise agreed to by the Parties. Affiliate
shall include a
marketing description
of Movie Channel 1 in the programming
guide that is viewed by Subscribers that is mutually agreed upon by
the parties.
Notwithstanding the
foregoing,
upon thirty (30) days
prior written notice
by
Affiliate to Programmer, Affiliate shall have the right to
permanently
replace
the programming
currently distributed
on Movie Channel 1 (i.e., "Club Jenna")
with the Programmer controlled service currently known as
"Fresh!".
(iii) Movie
Channel 2. The service known as "Movie Channel 2"
("Movie Channel
2") shall consist of entertainment programming for adult
audiences as more fully described in the "Description and Limitation of the
Services" Section
attached hereto as
Exhibit A. Affiliate shall refer to Movie
Channel 2 as "Spice:Xcess", and may list Movie Channel 2 on the
program guide as
"XCSS" or as otherwise
agreed to by the
Parties. Affiliate shall include a
marketing description of Movie Channel 2 in the programming guide
that is viewed
by Subscribers that is mutually agreed upon by the parties.
Movie Channel 1
and
Movie Channel 2 may be referred to collectively as the "Movie
Channels".
(iv) [This section intentionally left blank.]
(v) [This section intentionally left blank.]
EXECUTION VERSION
5
<PAGE>
(vi) Playboy TV en Espanol. Playboy TV en Espanol shall consist of
native and dubbed Spanish-language entertainment programming for
adult audiences
as more fully
described in the
"Description and
Limitation
of the Services"
Section attached
hereto as Exhibit A.
Affiliate shall refer
to the Service as
"Playboy en Espanol," or other name mutually agreed to by the parties,
and may
list the channel
on the program guide as "PBE" Affiliate shall include a
marketing description
of Playboy TV en Espanol in the programming guide that is
mutually agreed upon by the parties.
(vii) VOD Service.
The collection of VOD Packages (as defined
herein) offered to
distributors
of the Service
for use in the
distributors'
Video-On-Demand
service, wherein
each Package is
offered in its entirety to a
subscriber's premises
by means of the DTH
Distribution
System for use in an
"On-Demand"
environment
where the subscriber can start and stop video
programming at any
time and the content is delivered to subscribers as part of
the same service
that the subscriber receives his or her linear television
service (specifically excluding delivery via the Internet/World
Wide Web.) A VOD
Package is defined
as those bundles of adult programs consisting of adult
content offered
to multi-channel video distributors of television in the
Territory (for example any cable operator, satellite television provider, or
other facilities-based
provider such as Verizon, Bell South or AT&T, in
connection with such other provider's multi-channel video
distribution business,
but not such other
provider's
cellular phone, World Wide Web, Internet or
wireless businesses
(an "MCVP")) for distribution on a VOD basis to subscribers
with specific distribution requirements including requirements with
respect to
the user interface. Notwithstanding the terms of this paragraph, upon
Affiliate's
election and
written request, Programmer agrees to provide
customized VOD
Packages for use by Affiliate in its VOD service offered to
Subscribers to the
extent that use of
Programmer's VOD
Packages as set
forth
above is commercially
unreasonable given the
technology deployed by
Affiliate
for so long as Affiliate's use of Programmer's VOD Packages remains
commercially
unreasonable.
(viii) [This section intentionally left blank.]
(ix) Programmer
represents
and warrants that (A) it reviews all
programming contained
in the Service for compliance with the restrictions and
limitations set forth
in Exhibit A, and (B) the Service shall reflect adult
content subject to the
restrictions and limitations set forth in Exhibit A, and
shall not contain or depict any acts otherwise prohibited by
Exhibit A.
(x) All right, title
and interest in and to the entire contents of
the Service,
including, but not limited to, films and recordings thereof,
title
or titles, names,
trademarks,
concepts, stories, plots, incidents, ideas,
formulas, formats, general content and any other literary, musical,
artistic, or
other creative
material included therein shall, as between Programmer and
Affiliate, remain vested in Programmer.
(xi) Each of the Playboy TV, Movie Channel 1, Movie Channel 2 and
Playboy TV en Espanol (if applicable) shall be offered on a simultaneous
basis
and
EXECUTION VERSION
6
<PAGE>
distributed by Affiliate to its Subscribers a minimum of 24 hours
per day, seven
days per week, on a separate and distinct channel.
(xii) At any
time during the Term and in any portion of the
Territory, Affiliate
shall be permitted to offer other "branded" or "unbranded"
adult programming
competitive to the Service, it being acknowledged and
agreed
by the parties that Affiliate's offering of such other adult
programming shall
not constitute a breach of this Agreement.
(xiii) Programmer
shall not propose or
impose upon Affiliate,
nor
shall Affiliate be obligated to pay, any surcharge or other cost
(other than the
License Fees provided for in Section 2 hereof) for receipt and
distribution
of
the Service.
(c) Other Distribution Rights and Obligations. In addition, the
parties
agree as follows:
(i) Subject to
Programmer's
obligations hereunder
and Affiliate's
rights under Section 17, Affiliate shall distribute the Service as
transmitted
by Programmer,
in its entirety,
in the order and at
the time transmitted
by
Programmer without any
intentional and willful editing, delays, alterations,
interruptions,
deletions or
additions
("Alterations"),
excepting:
(A)
Affiliate's commercial or other announcements, only if permitted
under Section 3
hereof, (B)
Affiliate's electronic
guides (including without limitation, any
mosaic or similar guides), (C) news bulletins and other
public announcements as
may be required by
emergencies or
applicable
law; and (D) the use
of digital
video recorders at the
DIRECTV Subscriber's
premises for playback
either on a
television display
or a mobile device ("DVRs"), videocassette recorders
("VCRs"), or
other similar devices by DIRECTV Subscribers. Programmer
acknowledges that the
DTH System requires and applies digital compression and
encryption processes
prior to transmission and decryption and decompression
processes upon reception and agrees that such processing does not constitute
an
Alteration of the Service. Programmer shall fully encrypt the satellite
signal
of the Service utilizing encryption technology commonly used in the satellite
distribution industry.
Affiliate shall at all
times provide Affiliate with two
operational receivers
and decoders per Service as necessary to receive and
decode the Service.
(ii) Subject to the
terms and conditions
of this Agreement, the
terms and conditions
upon which Affiliate
distributes
the Service to
Service
Subscribers,
including, without
limitation,
the packaging of the
Service and
retail price charged,
shall be determined by Affiliate in its sole discretion.
Affiliate shall use
reasonable efforts to
provide Programmer
with sixty (60)
days' prior written notice of any retail price change.
(iii) Subject to the limitations contained in Section 17 below,
and
Exhibit B, as applicable, with respect to the PPV Offerings,
Affiliate may offer
a multiple
channel offering, such that for a single payment a purchasing
Subscriber is
permitted to view Movie Channel 1 and Movie Channel 2 and/or
Playboy TV together
with other adult
EXECUTION VERSION
7
<PAGE>
channels as determined
by Affiliate (as
restricted by Section
17 herein) (the
"Cascade"), all for one fee (the "Cascade Fee").
Notwithstanding
Affiliate's current intention, Affiliate shall not
be obligated to offer the Service using the purchasing mechanism set forth in
this Section 1(c)(iii).
(iv) Programmer
shall make the
Service available via satellite
signal from a domestic
communications
satellite commonly used for the delivery
of television
programming which must
be viewable with existing equipment from
Affiliate's broadcast
center in Los Angeles, California (the "Broadcast
Center"). As of the
Effective Date, the feeds of the Service are or will be
available on Intelsat Americas 13 ("Programmer's U.S. Satellite"). Programmer
may, from time to time, in its sole discretion, change the satellite being
used
for delivery of the Service to Affiliate; provided, however, that any
satellite
used by Programmer to
transmit the Service
shall be a domestic
communications
satellite commonly used for the delivery of television programming
which must be
viewable with existing
equipment from the Broadcast Center without Affiliate
incurring additional
costs or requiring Affiliate to enter into any third-party
arrangements (e.g.,
HITS) for receipt of
the signals. In the
event Programmer
either (i)
changes Programmer's U.S. Satellite to a satellite or other
transmission medium
not susceptible
to viewing or
utilization by
Affiliate's
then-existing earth
station equipment without affecting the receipt of the
signals of any other
programming or other
services then received (or committed
to be received)
by such Affiliate, (ii) changes the technology used by
Programmer to
encrypt the Service to a technology not compatible with
Affiliate's then-existing descrambling equipment, or (iii)
compresses, digitizes
or otherwise modifies
the signal of the Service in such a manner that it cannot
be received or utilized by Affiliate, then Affiliate shall have the right to
discontinue carriage
of the Service,
immediately; provided
that this right of
discontinuance and
deletion shall not
apply to Affiliate if Programmer agrees
to: (I) provide Affiliate with the necessary additional equipment required to
receive the
Service from the new satellite; and (II) promptly reimburse
Affiliate for the
actual out of pocket cost to acquire and install equipment
necessary for Affiliate to descramble, receive and/or utilize the signal
of the
Service from such new satellite or other transmission medium,
and/or the actual
out of pocket cost to acquire and install equipment necessary for Affiliate to
descramble, receive
and/or utilize the signal of the Service. Programmer agrees
to use commercially
reasonable efforts to
provide Affiliate with
at least one
hundred twenty (120)
days' prior written
notice of any satellite or technology
change.
Programmer, or
its designee, shall maintain appropriate back-up
satellite
protection
arrangements in
accordance
with customary industry
standards. Programmer
and Affiliate
shall use their
respective
commercially
reasonable efforts
to maintain for the Service a high quality of signal
transmission in
accordance
with their respective technical standards and
procedures.
(v) *****
(d) Rights with Respect to Channel Capacity. Affiliate shall have the
right, in its sole
discretion
and for Affiliate's sole benefit as between
Programmer
EXECUTION VERSION
8
<PAGE>
and Affiliate,
to utilize the channel
capacity used to transmit the Service
during any hours which (i) the Service, or any significant portion thereof, is
not being transmitted
to Affiliate for any reason; or (ii) the transmission of
the Service,
or any significant portion thereof, has been suspended or
terminated by Affiliate pursuant to Section 17. Programmer
acknowledges that
it
has no ownership
rights in, or right to use, any channel or any amount of
capacity on any DTH Satellite.
2.
Compensation; Most Favored Nation; Programming Account.
(a) Compensation.
As full and complete
compensation
for Affiliate's
right to distribute the Service, Affiliate shall pay to Programmer the
applicable percentage
of Gross Receipts (as defined below) for each month,
as
such percentage is calculated as set forth on Exhibit B.
(i) "Gross Receipts"
are defined as the sum of all monies billed to
Subscribers by
Affiliate during any month (not including amounts owed by
Affiliate due to taxes
other than income or franchise taxes) for receiving any
part of the Service;
provided, however,
that Gross Receipts
shall in no event
include (i) any charge
specifically made for
access to programming
other than
for the Service or any general access charge, hardware licensing
charge or other
charge made on a "blanket" basis (which shall mean that such
charge will relate
to access to all program services available from Affiliate by means
of the DTH
Distribution System);
or (ii) any charges
made for ordering the Service via
telephone as a PPV
Offering, which
charges are
additional to the
charges for
ordering the Service without using the telephone. Affiliate shall
have the right
to offer Movie
Channel 1, Movie Channel 2 and/or Playboy TV as part of the
Cascade, as set forth
above, *****.
Other than as set
forth above,
Affiliate
shall notify
Programmer prior to packaging the Subscription Offerings with any
other programming services. *****
(ii) To the extent that a Subscriber prepays any portion of monies
solely in connection
with Affiliate's
distribution
of the Service,
then the
amount prepaid shall
be included in Gross
Receipts for the month in which such
payment was
received; provided that, Affiliate's billing system has the
capability to account for such prepayments. Affiliate shall deduct
the amount of
any Credit Transaction (as defined below in Section 2(a)(ii)), as
such amount is
reasonably determined
by Affiliate, from the Gross Receipts of the month in
which such Credit Transaction occurs.
(iii) "Credit
Transaction" shall
mean any refund (or other payment
or credit) to a DIRECTV Subscriber in connection
with (A) prepayments for the
Service, (B)
Programmer's
inability to transmit
the Service to Affiliate for
distribution via
the DTH Distribution System for any reason other than
Affiliate's
non-performance of an
obligation
hereunder,
(C) a Force
Majeure
Event or (D) credits (excluding Discounted Previews of the Service not
authorized by Programmer) allowed by Affiliate in its
commercially
reasonable
EXECUTION VERSION
9
<PAGE>
judgment
consistent with
Affiliate's
policies
and procedures applied
consistently to
Programmer
and Affiliate's other sources of programming
services.
(iv) Affiliate shall be responsible for the accounting for all
Gross
Receipts and shall account to Programmer with regard to the Gross
Receipts for
the Service
on a monthly
basis, *****. Affiliate shall provide a separate
accounting for the
Playboy TV, Movie
Channel 1, Movie Channel 2 and Playboy TV
en Espanol (if applicable) Services. Each such accounting shall
include:
(A) the
aggregate Gross Receipts for such month;
(B) the origin
(categorized
separately by residential subscribers
(which includes multiple dwelling facilities, private offices
and oil rigs) and hotels/motels, if any) of all Gross Receipts
for Subscription Offerings for such month;
(C) the
number of residential DIRECTV Subscribers as of
approximately the
fifteenth calendar day of such calendar
month;
(D) the
applicable Programmer Share from Exhibit B;
(E) the dollar
amount of Programmer's
share of Gross Receipts for
such month;
(F) the number
of Service Subscribers as of approximately the 15th
day of such calendar month; and
(G) for each PPV
Offering, the number of Service Subscribers
purchasing such PPV
Offering on each calendar day of such
month; and
(H) Hotel/Motel
License Fee (as defined below in Section 2(c)).
(v) Programmer and Affiliate shall accord confidential treatment to
any information
contained in the
aforementioned
statement in
accordance with
Section 15. At
Programmer's request
and at reasonable
times, upon
reasonable
advance written notice and during normal business hours at
Affiliate's
offices,
Affiliate shall permit Programmer's representatives to review, one
time per each
year of the Term and one time during the year immediately
after the
termination
or expiration of this Agreement, those books and records maintained
according to
Affiliate's standard accounting practices which are generally in
accordance with
GAAP required to
verify License
Fees and reports made
hereunder.
Programmer
shall audit
each calendar year of the Term, if at all, within one (1) year
following the end of
such calendar
year, with such review limited to those
records for
those months of
EXECUTION VERSION
10
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the prior calendar year which have not been previously reviewed and those past
months of the current calendar year for which records are
available.
Programmer
shall report
promptly (but no later than 30 days following completion) to
Affiliate the results
of such audit,
including any
deficiency
in payment of
License Fees that
Programmer believes
were revealed by such
audit, and shall
make any claim against
Affiliate with respect to the results of such audit
within one (1) year after reporting such results to Affiliate.
From and after
Programmer's audit of
a particular
period of the Term,
such period
shall be
deemed closed by the parties and, except as may be demonstrated by such audit,
Affiliate shall have
no further liability
in respect of License
Fees for such
period. Programmer may not commence a new audit until all prior
audits have been
closed and the results have been presented to Affiliate.
Any such review
shall
be at Programmer's
sole cost and expense;
*****. The information
derived from
and the process of such review shall be subject to the confidentiality
provisions of Section 15. Notwithstanding anything herein to the contrary,
any
audit conducted
pursuant to this Section 2(a)(v) shall be conducted by a
reputable, industry
recognized third party
auditor or another firm approved in
advance by Affiliate,
which shall have first
entered into a confidentiali
