AMENDED AND RESTATED AFFILIATION AND LICENSE AGREEMENT FOR DTH SATELLITE EXHIBITION OF PROGRAMMING

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.

AMEN DED 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 Imp erial 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)             Programm er 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 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 Español 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 Español” 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)

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 Español” upon delivery to Programmer of not less than thirty (30) days prior written notice thereof.  References throughout this Agreement to Playboy en Español shall be applicable only upon Affiliate’s launch, if any, of Playboy en Español 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 Español and the VOD Service at such time, if any, that Affiliate elects to launch Playboy TV en Español 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

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 ”.

(vi)         Playboy TV en Español.  Playboy TV en Español 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 Español,” 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 Español 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 c ompliance 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 Español (if applicable) shall be offered on a simultaneous basis

and 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

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)            The parties hereby acknowledge and understand that the overall terms and conditions of this Agreement, including without limitation, *****, are expressly conditioned upon Affiliate’s distribution of each of the ***** to all residential DIRECTV Subscribers, excluding DIRECTV Subscribers restricted from receiving the

applicable Services as set forth in ***** and/or those Subscribers who have elected not to have the option of purchasing adult programming and/or have been excluded from the purchase of transactional programming.

(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 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.

of the foregoing has an a la carte retail price of *****.   The retail price for the entire package is ***** .  Programmer’s allocable share of the revenues from such package would be *****.

(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 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, not later than ***** after the last day of the month in which the Gross Receipts are accrued by Affiliate.  Affiliate shall provide a separate accounting for the Playboy TV, Movie Channel 1, Movie Channel 2 and Playboy TV en Español (if applicable) Services.  Each such accounting shall include:

(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 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; provided, however, if such review discloses an underpayment greater than ***** of the actual amount due (which amount is not subject to a bona fide dispute by Affiliate), Affiliate shall reimburse Programmer for its reasonable out-of-pocket costs and expenses incurred to discover such underpayment.  The information derived from and the process of such review shall be subject to the confidentiality provisions of Section 15.   Notwithstanding anything herein to the contrary, any audit conducted pursuant to this Section 2(a)(v) shall be conducted by a reputable, industry recognized third party auditor or another firm approved in advance by Affiliate, which shall have first entered into a confidentiality agreement with Affiliate.

(b)         License Fee .  As full and complete compensation for the rights granted Affiliate hereunder, Affiliate shall pay to Programmer, on a monthly basis, the “ License Fees ,” calculated pursuant to Programmer’s Cable Rate Card in Exhibit B, subject to reduction and offset for any credits, discounts, and reimbursements set forth in Exhibit B, annexed hereto, and a *****.   As used in this Section 2 and elsewhere in this Agreement (including Exhibit “B”) when referring to the payment of License Fees or the provision of subscriber reports by Affiliate to Programmer, unless expressly modified by “calendar,” the term “month” shall refer to Affiliate’s accounting month, which is the approximately thirty

(30) day period commencing on approximately the middle of each month and ending on approximately the middle of the next succeedin g month.  Affiliate acknowledges that it is being extended the License Fees herein in exchange for offering ***** to all residential DIRECTV Subscribers , excluding DIRECTV Subscribers restricted from receiving the applicable Services as set forth in ***** and/or those Subscribers who have elected not to have the option of purchasing adult programming and/or have been excluded from the purchase of transactional programming .

(c)         Hotel/Motel License Fee .  The parties understand and agree that the terms of this Section 2(c), and not Section 2(a), shall govern the case of monies received from the distribution of the Service to hotels or motels.  In no event shall Affiliate pay any fees or other charges on any Gross Receipts pursuant to both this Section 2(c) and any other section of this Agreement.  Affiliate shall pay to Programmer a license fee (the “ Hotel/Motel License Fee ”) simultaneously with the accounting rendered to Programmer as set forth in Section 2(a)(iv).  The Hotel/Motel License Fee shall be equal to the license fee set forth on Exhibit D attached to this Agreement.

(d)         Late or Non-Payments .  Any amounts not paid hereunder by the date payment is due, and which are not paid within ten Business Days after receipt of a notice from the obligee thereof stating that such amounts have not been paid and are overdue, shall, at Programmer’s option, accrue interest at the rate of ***** or at the highest lawful rate, whichever shall be the lesser, from the date notice was given that such amounts were overdue until they are paid.  “Business Day” shall mean a day that is not a Saturday, Sunday or day on which banks are generally closed for business in the State of California.

*****

(iii)          Intentionally Omitted .

*****

(vi)         Programmer hereby grants to Affiliate, and Affiliate hereby accepts from Programmer, the non-exclusive right to distribute the VOD Services that Programmer makes available for distribution on a Video On Demand basis (whereby a consumer selects the viewing of a program on an unscheduled real time basis (as opposed to selection of a viewing time by such consumer from a pre-determined schedule of viewing times) (“ VOD ”)) at such time that Affiliate has the capability to distribute programming services via VOD to DIRECTV Subscribers.   *****

(f)         Titanium Subscribers .  Notwithstanding any other provisions of this Agreement, Affiliate may offer the Service as part of Affiliate’s planned premium programming package offering subscribers the right to receive all or substantially all of Affiliate’s programming (including premium and pay-per-view programming) *****, which package is tentatively branded as the “Titanium Package” (the subscribers to which package shall be referred to as “Titanium Subscribers”), and Affiliate shall ***** for the distribution of such package so long as the total number of Titanium Subscribers does not exceed *****.

In the event that Affiliate obtains more than ***** Titanium Subscribers, Affiliate and Programmer ***** to be paid to Programmer by Affiliate for those subscribers in excess of *****.   Affiliate will provide Titanium Subscribers with the opportunity to opt out of receiving the Service at any time.

(g)         Programming Account/Marketing Fund .

(i)          The parties hereby acknowledge that pursuant to all predecessor agreements (including, without limitation, the Current Playboy Agreement), and notwithstanding any previous accounting of the amounts in question, all amounts set aside by Affiliate for marketing and promotion of channels provided to Affiliate by Programmer are ***** (the “ Programming Account ”) and that the following shall constitute full satisfaction of the parties’ respective obligations with respect to such Programming Account: Affiliate may spend the Programming Account funds on any marketing campaigns or initiatives related to the Services or Programmer *****; provided, however, that the parties agree that if any Programming Account funds are not utilized by the end of the Term, then such amounts will be paid to Programmer.

(ii)         Commencing as of ***** and continuing throughout the Term of this Agreement, Programmer shall contribute ***** to a specific special purpose marketing support account (the “ Marketing Account ”); provided that Programmer shall contribute ***** to the Marketing Account for the period from the Effective Date through ***** .  Affiliate may spend up to ***** of the Marketing Account funds on any marketing campaigns or initiatives related to the Services or Programmer as determined *****.   Affiliate agrees that all other funds in this account ***** will be used on campaigns designed to drive DIRECTV Subscribers to Playboy TV or the Movie Channels as mutually agreed to by the Parties.  In addition, Programmer agrees to *****.

(iii)         Affiliate shall provide a quarterly accounting of amounts spent pursuant to the above Sections 2(g)(i) and (ii).

3.           Commercial Announcements and Other Advertising .

(a)             Commercial Announcements .  Programmer hereby represents and warrants that it does not make available to any Other Distributor of any Service commercial announcements of any nature in the schedule of such Service(s).  If at any time during the Term, Programmer provides to any Other Distributor the right to make commercial announcements within any Service, then Programmer shall offer such right to Affiliate on terms and conditions no less favorable than those offered to such Other Distributor of the Service(s).  In any event, the rights with respect to commercial or promotional announcements provided by Programmer to Affiliate shall be no less favorable, in terms of the nature, use, scheduling, availability, length of the announcements and so forth (including, without limitation, the right to cover Programmer’s commercial or promotional announcements), than those provided to any Other Distributor.

(b)         Advertising .  If Programmer offers any Other Distributor the opportunity to advertise, or includes any Other Distributor in any advertisement(s), whether or not in connection with the Service, in any publication, recording, service, visual work or audiovisual work, whether or not Programmer controls it, then Programmer shall provide Affiliate with the opportunity to elect to be included in such advertisement, if such advertisement is in connection with advertising the Service, or an opportunity to elect to be included in a similar advertisement, if such advertisement is not in connection with advertising the Service, on at least as favorable terms as such Other Distributor.  Programmer shall not include Affiliate, or advertise Affiliate, by any means without Affiliate’s prior written consent, which may be given or withheld by Affiliate in its sole discretion.

(a)     Affiliate shall market and promote the Service in a similar manner as Affiliate markets and promotes other similar premium programming services; provided, however, that Affiliate may market and promote any other such premium programming service differently and/or more frequently, if such service provider provides Affiliate with material consideration or compensation therefore.  In connection therewith, Programmer shall provide Affiliate, upon Affiliate’s request,