Pay Television License Agreement

Pay Television License Agreement

AMENDED & RESTATED

AMENDMENT TO PAY TELEVISION LICENSE AGREEMENT

This Amended & RestatedAmendment to Pay Television License Agreement (this “Amended & Restated Amendment”) is entered into as of February 9, 2009 (the “Amended & RestatedAmendment Date”)between STARZ ENTERTAINMENT, LLC,formerly known as STARZ ENCORE MEDIA GROUP, LLC, located at 8900 Liberty Circle, Englewood, Colorado 80112-7057 (“STE”), and SONY PICTURESENTERTAINMENT INC., located at 10202 West Washington Boulevard, Culver City, California 90232(“Licensor”).

RECITALS

WHEREAS, Licensor and STE are parties to that Pay Television License Agreement, dated January 26, 2000, as amended (“Original Agreement”);

WHEREAS, Licensor has assigned the Original Agreement to Sony Corporation of America (“SCA”), and SCA has re-assigned the Original Agreement to Licensor;

WHEREAS, Licensor and STE haveentered into that Amendment to Pay Television License Agreement (“Amendment”), as of December 26, 2008 (the “Amendment Date”), which, effective as of the Amendment Date, amends the terms of the Original Agreement and terminates that Letter Agreement with respect to Starz Ticket & VONGO, dated as of September 1, 2006 (“VONGO Letter Agreement”); and

WHEREAS, Licensor and STE desire to amend and restate the Amendmentin its entirety.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is acknowledged by the signing and delivery hereof, the parties agree to amend and restate the Amendmentas of the Amended & Restated Amendment Date,as follows:

  1. Definitions.

(a)“Additional Element” with respect to a motion picture means any of the following:

(i)50% or more of the total P&A Expenses for such motion picture was incurred by, or the payment of which is otherwise the responsibility of,any SPE Group Member(s), either directly or via third party financiers or investors.

(ii)Such motion picture arises out of a script, screenplay or underlying property that was developed by any SPE Group Member.

(iii)Such motion picture was produced under the control, direction or supervision of any SPE Group Member.

(iv)An SPE Group Member(s) was responsible for, or guaranteed a sum equal to, at least 25% or more of the Negative Costs for such motion picture.

(v)Such motion picture is based in whole or in part on an underlying property owned or controlled by any SPE Group Member.

(vi)At the time of Initial Theatrical Release, substantially all of the U.S. Home Video and Television rights to such motion picture were owned or controlled by any SPE Group Member.

(b)“Adult Program” shall mean any motion picture that has either been rated (i)NC-17 or successor rating (or if unrated would likely have received a rating of NC-17 if it had been submitted to the MPAA for rating), other than a title released by any Major Studio, or a title otherwise deemed not to be an Adult Program by Licensor in its sole discretion or (ii) X (or is unrated and would have likely received an X if it had been submitted to the MPAA for rating).

(c)“‘A’ Film” means any Qualifying Film that is so designated by Licensor and satisfies at least one Additional Element and at least one Minimum Requirement, is Theatrically Released By an SPE Group Member, and is released on no less than 800 screens at its widest point of theatrical release; provided, however, that the foregoing 800 screen requirement shall not apply to any SPC Film designated as an “A” Film by Licensor pursuant to Section 4(a)(i)(B), or to up to 3 Qualifying Films per Year designated by Licensor; provided, however, that each of such 3 Qualifying Films shall have either (i) P&A greater than $20 million or (ii) a theatrical release on no less than 550 screens at its widest point of theatrical release in the Territory. Notwithstanding the foregoing, any Qualifying Film that satisfies only the Additional Element set forth under 1(a)(vi) (and no other Additional Elements) and which is produced by any Major Studio, Lionsgate or The Weinstein Company, or any company which owns at least 50% of the capital stock or similar equity interests of a majorHome Videodistribution entity (i.e.,entity is the sole distributor of such company’s Home Video product (including Physical Medium product)in the Territory, has direct accounts with major retailers (e.g. Wal-mart), has revenue share relationships with rentailers, conducts full sales and marketing for products being distributed, and has an annual home video revenue for the Territory of at least $250 million), shall not be an “A” Film, but shall be a Sony Rent-A-System Film, and shall be subject to the limitations on such films as set forth in Section 4.

(d)“Availability Date” shall mean the first day of each Picture’s First License Period, as set forth in Section 3(a)(i)below.

(e)“‘B’ Film” means any Qualifying Film that is so designated by Licensor and satisfies at least one Additional Element and at least one Minimum Requirement and is Theatrically Released By an SPE Group Member. In addition, “B” Films shall expressly include Third Party Rent-A-System Films (even though such films do not satisfy any Additional Element and are not Theatrically Released By an SPE Group Member),and Sony Rent-A-System Films (even though such films do not satisfy any Additional Element).

(f)“Digital Cinema” shall mean the exhibition in a theaterintended primarily for the exhibition of motion pictures of an intangible, digital or electronic format embodying a motion picture.

(g)“DSL” means the technology that provides digital transmissionover twisted pair copper wire telephone lines which may in some cases be delivered from a central hub known as a digital subscriber line access multiplier (DSLAM). For the avoidance of doubt, DSL is not Fiber.

(h)“DSL A La Carte Package SLP” means the greater of (a) the Open Internet A La Carte SLP then in effect plus the monthly DSL Base Tier SLP or (b) $10.98 with respect to the period beginning January 1, 2009 and ending on December 31, 2012or $12.98 with respect tothe period beginning January 1, 2013 and ending onthe last day of the last License Period hereunder.

(i)“DSL Base Tier” shall mean with respect to DSL the least expensive package of Internet access, but in no event less than the DSL Base Tier SLP, that offersa speed that would permit streaming video image quality consistent with the then-current feature film Internet VOD standards.

(j)“DSL Base Tier SLP” shall mean $4.99 per month.

(k)“DSL Bundle” shall mean a bundled offering by a telephone company of an STE Service together with DSL service and any other products or services commonly bundled with DSL services as of the date of the offering to the consumer (e.g., anti-spyware), provided that such other products or services are the same as or comparable to those commonly bundled with DSL services as of the Amendment Date.

(l)“DSL Bundle SLP” shall mean $33.00 per month; provided, however, that such price may be adjusted as provided in Section 2(c)(iii)(C).

(m)“DSL Bundle Amount SLP” shall mean the greater of (a) an amount greater than the Open Internet A La Carte SLP then in effect plus the monthly price for the DSL Base Tier and (b) the DSL Bundle SLP.

(n)“DVD functionality” with respect to any Picture means the capability of a customer to perform any or all of the following functions with respect to the viewing of such Picture: stop, start, pause, play, rewind, fast forward and (provided that Licensor shall have final approval over chapter break points) chaptering, but not recording.

(o)“Entry-Level Video Package” shall mean a subscription package of video programming (containing only video programming and not containing any Adult Program) for a price equal to at least$4.99 per month.

(p)“Exhibition Day” shall mean with respect to each Picture and each channel of the STEPay Television Services a period of twenty-four (24) consecutive hours during which such Picture may be exhibited up to three (3)times, provided, that only one exhibition per Exhibition Day may commence between the hours of 7:00 p.m. and 11:00 p.m. and in no event shall two exhibitions in an Exhibition Day be scheduled on a back-to-back basis. Exhibitions on separate channels of the STEPay Television Services shall count as separate Exhibition Days. The following shall not be counted as incremental Exhibition Days:

(i)Exhibition of a Picture on different time zone feeds of the same channel of an STE Pay Television Service, and, provided the following are Mirror Services of each other, exhibition of a Picture in different formats (e.g., digital and analog, English and Spanish, standard and high-definition) on the STE Pay Television Service. “Mirror Service” shall meanchannels on a Pay Television Service with substantially identical programming schedules (e.g., HBO Latino).

(ii)Exhibition of a Picture on MOVIEplex, so long as MOVIEplex continues to be programmed and operated in substantially the same manner as it is as of the Amendment Date (i.e., a channel devoted to repeating the programming schedule of various channels on the STE Pay Television Services);or

(iii)Viewings on a Subscription-On-Demand basis.

(q)“Feature-Length” means a running time of not less than 75 minutes, inclusive of credits.

(r)“Fiber” means delivery of Internet service via passive optical network (PON) over fiber to the premises (FTTP)(as it is commonly understood as of the Amendment Date) or fiber to the node (FTTN) (as it is commonly understood as of the Amendment Date);provided, however that FTTN requires the node to be within 2,000 to 3,000 feet of the home on average.

(s)“Film Rentals” shall mean all sums billed and received by, owing to or credited to the account of the theatrical distributor from its exploitation of the Picture in the Territory as tabulated periodically on the theatrical distributor’s regular domestic film rental report during the period commencing on such Picture’s Initial Theatrical Release and continuing until the first anniversary of such Picture’s Initial Theatrical Release (the “Film Rentals Measurement Period”); provided, that with respect to any amounts billed for which Licensor accepts a settlement of less than full payment, the settlement amounts actually accepted by Licensor, rather than the amounts originally billed, shall constitute “Film Rentals” for purposes of this provision. Film Rentals shall include all monies due from the exploitation of the Picture via direct projection means, regardless of whether such direct projection involves physical print materials or Digital Cinema(but specifically excluding Home Theater, Home Video and Television); provided, that, with respect to all exhibitions on a “four wall” basis, all box office admission amounts received by the theatrical distributor shall be included in “Film Rentals” and all costs of operating such theater which are paid for or assumed by the theatrical distributor in connection with its taking over of such theater for such “four wall” engagement shall be deducted from “Film Rentals” and any transaction with a Licensor Affiliate shallbe on an arms-length basis. Film Rentals shall not include any monies (A) owed to, retained by or paid to a theatrical exhibitor, other than monies otherwise payable to the theatrical distributor but rightfully retained by such exhibitor for co-op advertising incurred and actually spent on behalf of such theatrical distributor; (B) received for Television broadcast, including but not limited to, Home Theater, Pay-Per-View, Video-On-Demand, free Television, Pay Television or subscription Television, Sell ThroughElectronic Video or Internet transmission; (C) attributable to any sales, admission or similar taxes or governmental fees deriving from or otherwise imposed upon Licensor’s use of the Picture or its positive prints thereof; (D) received from Non-Theatrical Exhibition; (E) received from Licensor’s exploitation of subsidiary rights from the Picture, such as (without being exhaustive) merchandising, music, music publishing, publishing, soundtrack and recording rights and (F) earned and retained from Licensor’s exploitation of the Picture after the Film Rentals Measurement Period.

(t)“General Theatrical Release” of a Picture shall mean the first day on which the Picture has been released cumulatively on 100 or more screens within the Territory. Test and marketing previews and so-called “sneak” previews, free and/or charitable screenings, private, limited screenings and releases made on no more screens and for no longer than required in order to comply with Academy Award qualification rules shall not be taken into account in determining whether a General Theatrical Release has occurred, regardless of whether an admission fee is charged.

(u)“Home Theater” shall mean the transmission of a single motion picture transmitted by Television by either VOD or PPV, which PPV or VOD transmission occurs (i) from as early as 4 weeks prior to the Initial Theatrical Release for such motion picture until as late as the conclusion of the 4th week after Initial Theatrical Release for such motion picture for a retail price equal to at least 300% of the Average Theatrical Admissions (as defined below), or (ii) duringa 60-day period that begins at any time between the day after the conclusion of the 4th week after Initial Theatrical Release for such motion picture and the Initial Home Video Release of such motion picturefor a retail price equal to at least 200% of the Average Theatrical Admissions. For purposes hereof, "Average Theatrical Admissions" means the average non-discounted retail price of theatrical admissions during the first week of theatrical exhibition of first-run motion pictures in New York City, Los Angeles, Providence, RI, Atlanta, Dallas, Detroit, Denver, Greensboro, NC, Fresno, CA and Spokane, WA(as measured as of January 15 of the Year in which occurs the earlier of such motion picture’s Initial Theatrical Release or such picture’s Initial Pay-Per-View Release or Initial Video-On-Demand Release).

(v)“Home Video” shall mean the exploitation of a motion picture embodied in a Physical Medium that is rented or sold for the sole purpose of private viewing where no admission fee is charged with respect to such viewing. In addition, for the purposes of this Amended & Restated Amendment,Home Video shall expressly includeSell-Through Electronic Video, Manufacture-On-Demand, and In-Store Digital Download.

(w)“Initial Home Video Release” of a Picture shall mean the first day of its initial Home Video release to the general public within the Territory, but specifically excluding (i) any releases of a Home Video product embodying a Picture and bundled with or embedded in a hardware product only to the extent such products are bundled with hardware branded with a Licensor Affiliate brand and such hardware has a retail price of at least $100 per unit and (ii) Limited Home Video Releases; provided, however, that if any such release of a Picture is made greater than 30 days prior to the applicable Initial Home Video Release of such Picture, then the date of such release shall count as the Initial Home Video Release with respect to such Picture notwithstanding the above exceptions.

(x)“Initial Pay-Per-View Release” of a Picture shall mean the first day of its initial residential Pay-Per-View release to the general public within the Territory.

(y)“Initial Theatrical Release” of a Picture shall mean the first dayof its initial theatrical release anywhere within the Territory, but specifically excluding film festivals, test and marketing previews, so-called “sneak” previews, free and/or charitable screenings, private, limited screenings,and releases made on no more screens and for no longer than required in order to comply with Academy Award qualification rules, regardless of whether an admission fee is charged.

(z)“Initial Video-On-Demand Release” of a Picture shall mean the first day of its initial residential Video-On-Demand release to the general public within the Territory.

(aa)“In-Store Digital Download” shall mean the transmission or distribution of a motion picture for which a transaction charge is made to the customer for the privilege of downloading the particular motion picture on a per-transaction basis by any meansin any intangible, digital or electronic form now known or hereafter devised from an apparatusin a fixed locationoutside of a customer’s residence (e.g.,a kiosk in a retail store), whether such motion picture is stored in the apparatus or delivered to the apparatus from an off-site server, to any Storage Device.For purposes hereof, In-Store Digital Download shall be deemed to be included in the definition of Home Video. For the avoidance of doubt, In-Store Digital Download shall not include operating on a subscription basisfor which a periodic fee is chargeduntil the end of the First License Period for a Picture; provided, however, that two-for-one discounts, bundled or installment sales shall not constitute operating on a subscription basis.

(bb)“Internet” shall mean the non-licensed, open access, open to the general public (as opposed to an intranet), data delivery network or networks for point-to-point or point-to-multipoint transfer of digital information (including but not limited to video, audio and text) using open protocols (e.g., TCP or IP), wired or wireless, to any device capable of accommodating open protocol, including TV’s, PC’s, set-top boxes and other Internet-enabled devices.

(cc)“Internet Subscriber” shall mean each consumer that subscribes to or is authorized to access an STE Service delivered via the Internet (regardless of technology used), whether on an a la carte or bundled basis. For clarity, IPTV is not the Internet and a consumer that subscribes to an STE Service delivered solelyvia IPTV (and not the Internet) shall not be an Internet Subscriber.