Vod, Svod & Dhe License Agreement

VOD, SVOD & DHE LICENSE AGREEMENT

THIS VOD, SVOD & DHE LICENSE AGREEMENT (this “Agreement”), dated as of August 1, 2011 (“Effective Date”), is entered into by and between CPT Holdings, Inc., a Delaware corporation with an address at 10202 West Washington Boulevard, Culver City, California 90232 (“Licensor”), and Sky Brasil Serviços Ltda., a Brazilian company duly registered with CNPJ/MF 72.820.822/0001-20 and address at Av. Das Nações Unidas, 12.901, 15th floor, City of São Paulo, State of São Paulo, Brazil (“Licensee”). For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

GENERAL TERMS AND CONDITIONS OF VOD & SVOD LICENSE AGREEMENT

(“VOD/SVOD General Terms”)

1. DEFINITIONS. When used in this Agreement (and not otherwise defined herein) the following capitalized terms have the meanings set forth below. Section references are to sections in these VOD/SVOD General Terms unless stated otherwise.
2. “License Period” with respect to each Included Program means the period during which Licensee shall make such title available for exhibition on a Video-On-Demand basis hereunder (“VOD License Period”) or for exhibition on an SVOD basis hereunder (“SVOD License Period”), as specified in Section 4.3 of these VOD/SVOD General Terms.
3. “SVOD Customer” shall refer to each unique user of an Approved Device authorized by Licensee to receive an exhibition of a SVOD Included Program from the SVOD Service in accordance with the terms and conditions hereof.
4. “VOD Customer” shall refer to each unique user of an Approved Device authorized by Licensee to receive an exhibition of a VOD Included Program from the VOD Service in accordance with the terms and conditions hereof.
5. “VOD Customer Transaction” means each order transaction initiated by a VOD Customer whereby a VOD Customer is authorized by Licensee to receive an exhibition of all or a part of a single VOD Included Program from the VOD Service in exchange for a corresponding per-transaction fee.
6. “VOD Viewing Period” means, with respect to each VOD Customer Transaction, the time period (a) commencing at the time the VOD Customer is initially technically enabled to view a VOD Included Program but in no event earlier than its VOD Availability Date, and (b) ending on the earlier of (i) 48 hours after the VOD Customer first commences viewing such VOD Included Program and (ii) the expiration of the VOD License Period for such VOD Included Program.

1. LICENSE
2. Rights Granted. Licensor hereby grants to Licensee, and Licensee hereby accepts, a limited non-exclusive, non-transferable, non-sublicensable license to exhibit on the terms and conditions set forth herein (a) each VOD Included Program on a Video-On-Demand basis on the VOD Service during its VOD License Period pursuant solely to a VOD Customer Transaction and (b) each SVOD Included Program on an SVOD basis on the SVOD Service during its SVOD License Period, in either case during the VOD/SVOD Term, in each case solely in the Authorized Version, in the Licensed Language to Customers in the Territory, delivered in the Approved Format by the Approved Transmission Means (Streaming only, not Electronic Downloading) for reception by an Approved Device for Personal Use viewing on such Approved Device’s associated video monitor or television set in accordance with the VOD Usage Rules or SVOD Usage Rules, as applicable, and subject at all times to the Content Protection Requirements and Obligations set forth in Schedule B. Licensee shall have the right to exploit the Video-On-Demand and SVOD rights using “VCR functionality,” meaning the capability of a Customer to perform any or all of the following functions with respect to the exhibition of an Included Program: stop, start, pause, play, rewind and fast forward, but not including recording capability. Licensor shall not be subject to any holdback at any time with respect to the exploitation of any Included Program in any version, language, territory or medium or by any transmission means, in any format to any device in any venue or in any territory.
3. High Definition. Unless otherwise authorized by Licensor in writing, Licensee shall exhibit the VOD Included Programs and SVOD Included Programs in Standard Definition resolution only. Licensor may, from time to time during the VOD/SVOD Term and in its sole discretion, authorize Licensee to exhibit certain VOD Included Programs and SVOD Included Programs in High Definition resolution by providing Licensee with written notice of which such Included Programs are available for exhibition in High Definition.
4. Promotional Restrictions. Licensee shall not be permitted in any event to offer or conduct promotional campaigns for the VOD Included Programs offering free buys, including without limitation “two-for-one” promotions (by coupons, rebate or otherwise) without Licensor’s prior written consent. Licensee shall not charge any club fees, access fees, monthly service fees or similar fees for general access to the VOD Service (whether direct or indirect), or offer the VOD Included Programs on a subscription basis or negative option basis (i.e., a fee arrangement whereby a customer is charged alone, or in any combination, a service charge, a separate video-on-demand charge or other charge but is entitled to a reduction or a series of reductions thereto on a title-by-title basis if such customer affirmatively elects not to receive or have available for reception such title) without Licensor’s prior written consent.
5. Avail Year 1 Availability. During Avail Year 1, the Licensed Service (expressly including the VOD Service and the SVOD Service) shall make Included Programs available (i.e., deliver Included Programs in accordance with Section 2.1 above) only to Approved Devices of authenticated subscribers of Licensee’s SKY TV subscription pay television servicein the Territory (“SKY TV”), and not to any device of any other person. After Avail Year 1 the Licensed Service may make Included Programs available to Approved Devices of both (i) subscribers of SKYTV and (ii) non subscribers of SKY TV.

1. AVAIL TERM; VOD/SVOD TERM
2. Avail Term. The “Avail Term” during which Licensor shall be required to make titles available for licensing and Licensee shall be required to license titles hereunder on a VOD basis and SVOD basis commences onAugust 1, 2011 (“Commencement Date”), and terminates after three (3) years. Each 12-month period from the Commencement Date or applicable anniversary thereofduring the Avail Term is an “Avail Year,” with the first such Avail Year being “Avail Year 1,” the second being “Avail Year 2,” and the third being “Avail Year 3.” It is acknowledged that the License Period for an Included Program may expire after the end of the Avail Term.
3. VOD/SVOD Term. The “VOD/SVOD Term” of this Agreement commences on the Effective Date and expires on the earlier to occur of (a)the last day of the last VOD License Period or SVOD License Period to expire hereunder and (b)the termination of this Agreement in accordance with the terms hereof.

1. COMMITMENT; AVAILABILITY DATE; LICENSE PERIOD.
2. Commitment.
3. VOD Included Program Commitment. Licensee shall license from Licensor all VOD Included Programs. “VOD Included Programs” are: (a) all Current Features with a VOD Availability Date during the Avail Term and (b) during each Avail Year, no fewer than twenty-five (25) Library Features.
4. SVOD Included Program Commitment. Licensee shall license from Licensor all SVOD Included Programs. “SVOD Included Programs” are, during each Avail Year, no fewer than two hundred (200) Library Film Equivalents. “Library Film Equivalent” means one of (a) one (1) Library Feature, (b) two (2) one-broadcast-hour Television Episode or (c) three (3) half-broadcast-hour Television Episodes. “Television Episode” means a one-half or one broadcast hour (as applicable) episode of a television series made available by Licensor during the VOD/SVOD Term and for which Licensor unilaterally controls without restriction the Necessary Rights.
5. Availability Lists. Licensor shall provide Licensee with periodic availability lists setting forth the Current Features and Library Features available for licensing hereunder along with their VOD Availability Dates and SVOD Availability Dates, as applicable. An availability list of Library Features for Avail Year 1 shall be provided promptly after full execution of this Agreement, and an availability list of Library Features for each subsequent Avail Year shall be provided at least sixty (60) days before the commencement of such Avail Year. Licensee shall choose the Library Features that shall be included as Included Programs at its sole discretion; but if Licensee fails to select the required number of Library Features for an Avail Year prior to thirty (30) days before the commencement of such Avail Year, Licensor shall have the right to designate such Library Features.
6. Availability Date.
7. VOD Availability Date. The VOD Availability Date for each VOD Included Program shall be as determined by Licensor in its sole discretion but not later than forty-five (45) days after the Home Video Rental Street Date.
8. SVOD Availability Date. The SVOD Availability Date for each SVOD Included Program shall be as determined by Licensor in its sole discretion.
9. License Period.
10. VOD License Period. The VOD License Period for each VOD Included Program commences on its VOD Availability Date and ends on the earlier of (a) a date established by Licensor in its sole discretion; provided, that (i) for each Current Feature, such date shall in no event be earlier than the earlier of (A) sixty (60) days after its VOD Availability Date for such Current Feature in the Territory and (B) the termination of this Agreement pursuant to Section 17.1 of Schedule A, and (ii) for each Library Feature, such date shall in no event be earlier than (a)twelve (12) months after its VOD Availability Date and (b) the termination of this Agreement for any reason. Notwithstanding anything to the contrary herein, Licensor shall have the right to substitute a new, comparable Library Feature to complete the VOD License Period of any Library Feature that Licensor elects to withdraw, effective at any time after the initial six (6) months of such withdrawn Library Feature’s VOD License Period have elapsed.
11. SVOD License Period. The SVOD License Period for each SVOD Included Program shall commence on its SVOD Availability Date and shall end on the earlier of (a) a date established by Licensor in its sole discretion; provided, that such date shall in no event be earlier than twelve (12) months after such SVOD Included Program’s SVOD Availability Date and (b) the termination of this Agreement for any reason.

1. PROGRAMMING. Licensee’s exhibition of each SVOD Included Program on the SVOD Service shall occur solely during a single periodlastingno longer than four (4) consecutive months during the applicable SVOD License Period(“SVOD Exhibition Window”), and not at any other time(s) during such SVOD License Period; it being agreed that different SVOD Included Programs may have different SVOD Exhibition Windows. Each VOD Included Program shall be made continuously available to VOD Customers on the VODService during its VOD License Period. The VOD Included Programs shall receive prominence consistent with programs of similar genre and appeal. [NTD: 04 months is not an acceptable term]

1. LICENSE FEES; PAYMENT. Licensee shall pay to Licensor the VOD License Fee and the SVOD License Fee (collectively, “License Fee”) determined in accordance with this Article 6. The License Fee is exclusive of and unreduced by any tax, levy or charge, the payment of which shall be the responsibility of Licensee.

6.1VOD License Fee.

6.1.1For each VOD Included Program during its VOD License Period, the “VOD License Fee” equals the greater of the following:

(a)the Per-Program Guarantee for such VOD Included Program; and

(b)the product of (i)the total number of VOD Customer Transactions for such VOD Included Program, multiplied by (ii) the greater of the Actual VOD Retail Price and the Deemed Price for such VOD Included Program, multiplied by (iii)the applicable VOD Licensor Share (“Actual VOD Per-Program Fee”).

6.1.2“Actual VOD Retail Price” means, for each VOD Included Program, the actual amount paid or payable by each VOD Customer (whether or not collected by Licensee) on account of such VOD Customer’s selection of such VOD Included Program from the VOD Service, excluding sales, use, consumption and similar taxes(“Sales Taxes”) that Licensee has actually collected from Customers and remitted to the relevant tax authority as required by applicable law. No other deductions shall be allowed unless otherwise agreed in writing between the parties. The Actual VOD Retail Price for each VOD Customer Transaction shall be established by Licensee in its sole discretion.

6.1.3“Deemed Price” means,for each VOD Included Program, the applicable amount set forth in the table below (it being agreed that the Deemed Price is applied for the purpose of calculating the VOD License Fees and is not intended to affect the Licensee’s determination of actual retail pricing), which such amount is exclusive of and unreduced by any tax, levy or charge, the payment of which shall be the responsibility of Licensee:

6.1.4“Per-Program Guarantee” means, for each VOD Included Program, shall be the applicable amount set forth in the table below:

6.1.5The “VOD Licensor Share” for each VOD Included Program isthe applicable amount set forth in the table below (it being agreed that such amount for Current Features is based on the number of days by which such title’s VOD Availability Date is after its Home Video Rental Street Date, abbreviated “HVR”):

6.2SVOD License Fee. For each month of the VOD/SVOD Term,the “SVOD License Fee” equals the product of the SVOD Customer Fee and the greater of (a) the Actual SVOD Subscribers and (b) the Guaranteed SVOD Subscribers.

6.2.1“Actual SVOD Customers” means, for a month,the number of SVOD Customers to the SVOD Service on the first day of such month and the last day of such month divided by two.

6.2.2“Guaranteed SVOD Customers” means, for a month,the applicable number of SVOD Customers set forth in the table below:

6.2.3The “SVOD Customer Fee” is BRL 0.90 (i.e., ninety cents of Real)and is exclusive of and unreduced by any tax, levy or charge, the payment of which shall be the responsibility of Licensee.

6.3Payment Terms.

6.3.1VOD. For each VOD Included Program that is a Current Feature, Licensee shall pay Licensor one hundred percent (100%) of the applicable Per-Program Guarantee no later than ten (10) BusinessDays after Licensor’s delivery to Licensee. For each VOD Included Program that is a Library Feature, (a) for Avail Year 1, Licensee shall pay Licensor fifty percent (50%) of the applicable Per-Program Guarantee immediately upon the full execution of this Agreement and the remaining fifty percent (50%) no later than six (6) months after the first paymentis due, and (b) for each other Avail Year, Licensee shall pay Licensor fifty percent (50%) of the applicable Per-Program Guarantee no later than ninety (90) days before the commencement of such Avail Year and the remaining fifty percent (50%) no later than six (6) months after the first payment is due. For each VOD Included Program, if the Actual VOD Per-Program Feeexceeds the Per-Program Guarantee, such excess amount is the “VOD Overage.” Licensee shall pay Licensor any VOD Overage within thirty (30) days after the end of the month during which the VOD Customer Transaction giving rise to such VOD Overage occurs.

6.3.2SVOD. Licensee shall pay Licensor fifty percent (50%) of the SVOD Monthly Minimum Fees for Avail Year 1 (i.e., 50% * BRL 0.90 * 50,000 * 12) immediately upon the full execution of this Agreement, and the remaining fifty percent (50%)no later than six (6) months after the first paymentis due. Licensee shall pay Licensor the SVOD Monthly Minimum Fees for each of Avail Year 2 and Avail Year 3 as follows: (a) fifty percent (50%) no later than ninety (90) days prior to the commencement of the applicable Avail Year and (b) the remaining fifty percent (50%) no later than six (6) months after the first payment is due. If the aggregate total SVOD Actual Monthly Fee due and payable at any time exceeds the amount of the SVOD Monthly Minimum Fee paid as of such time, such excess amount is the “SVOD Overage.” Licensee shall pay Licensor any SVOD Overage within thirty (30) days after the end of the month during which such SVOD Overage occurs.