Content of the Service. (a) Throughout the Term, the Service shall be a twenty-four (24)-hour per day, high-quality, professionally-produced programming service consisting exclusively of international news and news features providing coverage of global events and news analysis, similar to the programming on the program schedule attached hereto as Exhibit B. Network shall, during each month of the Term, send a copy of its monthly program schedule to Affiliate, in care of: Programming Department. Network agrees that the Service will not contain [*] subject to the qualifications set forth in Section 3(i) hereof. For purposes of this Section 3(a), a "financial news service" shall mean a service that carries more than [*] of regularly scheduled business and/or financial news in any hour during the period beginning at 8:00 a.m. and ending at 6:00 p.m., prevailing Eastern Time, on any business day. Notwithstanding the foregoing, a service may carry up to [*]. Notwithstanding anything contained in Section 3(a)(ix) to the contrary, during the period commencing on the date hereof and continuing until the first date on which the Service is distributed to at least [*] subscribers (the "Benchmark Date"), the Service may include up to [*] between the hours of 2:00 a.m. and 9:00 a.m., prevailing Eastern Time. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. (b) Network shall make available to Affiliate not less than [*] of the Service, to be used at [*]. All commercial announcement time provided to Affiliate hereunder shall be equally distributed throughout each and every hour of the Service and shall not occur between the actual or apparent end of one program and the actual or apparent beginning of another program; provided, however, that nothing contained in this Section 3(b) shall be construed to required Network to edit or re-edit certain programs provided by non-affiliated sources, unless Network is so doing for its own commercial use or insertion by other distributors of the Service. Affiliate agrees that it will not use its commercial announcement time in the Service to insert "tune-in spots" (i.e., announcements that instruct a subscriber to tune in at a later time for a particular program on another programming service). If the total amount of commercial announcement time on the Service (including time allocated to Affiliate hereunder) exceeds [*] per hour, the commercial announcement time made available to Affiliate shall increase by [*] and thereafter fifty percent (50%) of such time in excess of [*] and every increase thereafter (e.g., if Network increases the total amount of commercial announcement time on the Service to [*] per hour, then Affiliate will receive an additional [*] of commercial announcement time, i.e., a total of [*]. Network shall properly "tone-switch," using industry-recognized equipment, via audible or inaudible signals, all commercial announcement minutes to enable Affiliate to insert its commercial announcements. If Network fails properly to "tone-switch" or otherwise identify Affiliate's commercial announcement minutes to enable Affiliate to insert its commercial announcements, then Affiliate shall have the right, without first notifying Network, to preempt the Service to insert its commercial announcements. Network shall reimburse Affiliate for all costs incurred by Affiliate or any affiliate of Affiliate associated with any change by Network from audible to inaudible signals. Affiliate shall have the right to preempt any commercial or promotional announcement included in the Service that relates to any multichannel video programming distributor other than Affiliate, and Network agrees to provide a separate "tone-switch" or otherwise identify any and all such announcements to facilitate such preemption. Affiliate shall have the right to retain for itself all of the proceeds derived from the sale of the commercial announcement time furnished to it hereunder. Network shall have no obligation to submit to Affiliate any of the proceeds derived from the sale of any commercial announcement time on the Service that is not required to be allocated to Affiliate hereunder. (c) If for any reason, including, without limitation, causes beyond the control of Network, Affiliate, in good faith, determines that (i) the Service includes programming prohibited in Section 3 hereof and Network has failed to cure such content breach within three (3) days of written notice from Affiliate specifying such breach and the reason(s) therefor, or if the Service includes programming substantially similar in nature to programming that Network has previously been notified constitutes a content breach (the "Prohibited Programming"), and/or (ii) includes programming that is not of at least the quantity, quality, type and content as required in Sections 3(a), 3(f) and/or 3(g) hereof and/or as referenced in Exhibit B hereto, and Network has failed to cure such content breach within thirty (30) days of written notice from Affiliate specifying such breach and the reason(s) therefor (the "Deviating Programming"), then Affiliate may, in addition to any and all remedies available to Affiliate hereunder, at law or in equity, at its option, (A) (1) preempt the Prohibited Programming and/or the Deviating Programming in any or all Systems; and/or (2) receive credit against the Fees or Renewal Fees, notwithstanding anything contained in Section 10 hereof to the contrary, in the proportion that the hours of Prohibited Programming and/or Deviating Programming each calendar day bears to the total hours the Service is transmitted each day, such credit to be applied against the Fees or Renewal Fees in any month; or (B) discontinue carriage of the Service on any or all Systems and delete such System or Systems from Schedule 1 hereto, effective at any time by giving notice to Network within ten (10) days thereof. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. (d) Commencing on the date for which Affiliate first pays Fees hereunder, no less than once per day in alternating day parts, but including each and every day part, the Service shall include the following audible message: "This programming is brought to you, in part, by fees paid by your local cable or satellite television company." (e) During the Term, Network shall provide the Service in its entirety to Affiliate. As used herein, "in its entirety" means that the programming 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. If Network does not provide the Service in its entirety to Affiliate (i.e., the programming received by any subscriber to the Service at a given point in time is different from the programming received by any Service Subscriber at such point in time), then, in addition to any other remedies available to Affiliate, at law or in equity, Affiliate shall have the unconditional right to receive, exhibit, distribute, subdistribute and authorize the reception of the programming included in the Service as provided to Affiliate and/or the additional programming in the exercise of Affiliate's rights hereunder. Network shall not propose or impose upon Affiliate or any affiliate of Affiliate, nor shall Affiliate or any affiliate of Affiliate be obligated to pay, any surcharge or other cost, charge or fee (other than the Fees provided for in Section 5 hereof for the primary feed) for receipt and distribution of the Service in its entirety or for the distribution of any additional programming in the event Network does not provide the Service in its entirety to Affiliate. (f) At least [*] of the hours of the programming on the Service each day shall be original programming distributed exclusively on the Service at all times throughout the Term. No episode will appear on the Service in the same time slot more than (3) in any seven (7)-day period and no episode will appear on the Service more than [*] times in any seven (7)-day period regardless of the time slot. For purposes of this Agreement, "original programming" shall mean (i) programming that is produced by or on behalf of Network, (ii) programming that is significantly altered or customized or includes interstitial programming or introductory program openings and closings, in either case sufficient to "brand" or identify the programming as a production of Network, or (iii) programming that has not previously been exhibited or distributed by any other video or audio programming services distributor within the Territory. (g) Network agrees that in no event will it authorize more than [*] per calendar week of broadcast television exhibition of the Service, any portion thereof or any programming derived therefrom within the Distribution Area of any System, except that up to three (3) hours of programming on the Service each calendar week may be exhibited on broadcast television if it is derived from material produced, packaged and provided by the Canadian Broadcasting Company ("CBC"), for so long as the CBC is affiliated with Network; provided, however, that if, at the time a system becomes a System hereunder, Network is party to a written agreement that authorizes a broadcast television station to broadcast the Service, any portion thereof or any programming derived therefrom in the Distribution Area of such System and such station is doing so, then this Section 3(g) shall not apply to such system until sixty (60) days following the date on which such system becomes a System hereunder. Notwithstanding the foregoing, Network may authorize (i) the broadcast television exhibition of Breaking News (as defined herein) that appears on the Service by a local broadcast television pursuant to an agreement for the exchange of such footage; (ii) limited and infrequent broadcast television exhibitions of the Service, any portion thereof or programming derived therefrom, for which Network has exclusive rights to broadcast such programming in the Territory; and (iii) limited and infrequent broadcast television exhibition(s) of the Service, any portion thereof or programming derived therefrom, for promotional purposes; provided, that Network significantly customizes the programming described in subclauses (ii) and (iii) above with an emblem or "bug" containing "NWI" as its ▇▇▇▇. For purposes of this Section 3(g), "Breaking News" shall mean any unscheduled international news program that includes live on-the-scene footage (or the closest equivalent thereto) and would command immediate public attention. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. (h) Network agrees that during the Term it shall, at its sole expense, include as part of the signal of the Service, closed-captioning to the full extent required by law and to the extent required to ensure that Affiliate is in compliance with any and all laws requiring closed captioning. This includes, without limitation, meeting any and all benchmarks for captioning programming as set forth in Part 79 of Federal Communications Commission ("FCC") regulations. Network also agrees to cooperate with Affiliate to the extent necessary to establish compliance with any such laws or regulations. Network acknowledges and agrees that, except as set forth in Section 4(d) hereof with respect to the delivery of closed-captioning service to Service Subscribers, neither Affiliate, any affiliate of Affiliate, any System nor any other video distribution system or enterprise distributing the Service hereunder shall have any liability in connection with Network's failure to prepare, insert or include closed-captioning in the Service as required by this Section 3(h). Accordingly, Network shall indemnify, defend and forever hold harmless Affiliate, any affiliate of Affiliate and each of their respective present and former officers, shareholders, directors, employees, partners and agents, as provided in Section 9 hereof, against and from any and all losses, liabilities, claims, costs (including, without limitation, any costs of preparing and including closed-captioning in the Service), damages and expenses, including, without limitation, fines, forfeitures, attorneys' fees, disbursements and court or administrative costs, arising out of Network's breach of this Section 3(h). (i) For purposes of this Agreement, "direct on-air sales programming" shall mean any programming that includes the direct on-air marketing, offering for sale and/or sales of products and/or services, including, without limitation, home-shopping, infomercials and direct response advertising, regardless of the length of such programming, which may include product or service demonstrations, promotions, testimonials and/or referrals and may be in a documentary, talk-show, news, information or other disguised format. Direct on-air sales programming shall not include Network's regularly scheduled commercial announcement time (i.e., the commercial announcements distributed throughout the Service during other programming that are generally two (2) minutes or less in length and primarily used for promotional announcements or third party advertising of products and services that are not directly sold to the viewer during such commercial announcements). Commencing on the Benchmark Date, (i) any direct on-air sales programming included in the Service shall be subject to preemption by Affiliate in any or all Systems, in Affiliate's sole and absolute discretion, upon at least thirty (30) days' notice to Network, and no System shall be obligated to distribute any such direct on-air sales programming; and (ii) Affiliate shall have the right in any or all Systems to insert programming and advertisements of its choice on the channel otherwise identified with the Service during any period that the Service contains any direct on-air sales programming; provided, that Affiliate shall, at the beginning of any programming that it so inserts, indicate that such programming is not Service programming. Notwithstanding Affiliate's preemption rights hereunder, if Affiliate elects, at its option, to distribute any or all of the direct on-air sales programming included in the Service in any System(s), Network shall fully indemnify Affiliate, as provided in Section 8 hereof, for any and all Costs (as defined herein) arising out of or relating in any way to its distribution of any such direct on-air sales programming.
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Sources: Affiliation Agreement (Current Media, Inc.), Affiliation Agreement (Current Media, Inc.)
Content of the Service. (a) Throughout the Term, the programming on the Service shall be a twenty-four consist of not less than ten (24)-hour 10) hours per dayday (initially, from 8:00 p.m. to 6:00 a.m. prevailing Eastern Time) of high-qualityquality adult programming with a sexual theme and format, professionally(including, but not limited to, R-produced programming service consisting exclusively of international news rated (or R equivalent non-rated) and news features providing coverage of global events and news analysis, NC-17 rated (or NC-17 equivalent non-rated) cable version motion pictures) substantially similar to the programming on the program schedule attached hereto as Exhibit B. B-1. The Service shall not contain any third party promotional material, including without limitation, commercials, advertising or infomercials, except that the Service may contain program sponsorship billboards, or acknowledgements. Nothing in this paragraph shall be deemed to limit Network's rights set forth in Section 7(e). The content of the Service shall also, be consistent with Network's standards and practices as of this date, attached hereto as Exhibit B-2. Notwithstanding anything in the foregoing which may be inconsistent herewith, the Service shall not contain any programming depicting rape, necrophilia; sadism, sadomasochism, bondage, incest, bestiality or programming involving or suggesting sexual activity with, between, or among minors. Network shall, during each month of the Term, send a one copy of its monthly program schedule to Affiliate, in care of: Programming Department. Network agrees that the Service will not contain [*] subject to the qualifications set forth in Section 3(i) hereof. For purposes of this Section 3(a)Vice President, a "financial news service" shall mean a service that carries more than [*] of regularly scheduled business and/or financial news in any hour during the period beginning at 8:00 a.m. and ending at 6:00 p.m., prevailing Eastern Time, on any business day. Notwithstanding the foregoing, a service may carry up to [*]. Notwithstanding anything contained in Section 3(a)(ix) to the contrary, during the period commencing on the date hereof and continuing until the first date on which the Service is distributed to at least [*] subscribers (the "Benchmark Date"), the Service may include up to [*] between the hours of 2:00 a.m. and 9:00 a.m., prevailing Eastern Time. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONSProgramming.
(b) Network shall make available to Affiliate not less than [*] of the Service, to be used at [*]. All commercial announcement time provided to Affiliate hereunder shall be equally distributed throughout each and every hour of the Service and shall not occur between the actual or apparent end of one program and the actual or apparent beginning of another program; provided, however, that nothing contained in this Section 3(b) shall be construed to required Network to edit or re-edit certain programs provided by non-affiliated sources, unless Network is so doing for its own commercial use or insertion by other distributors of the Service. Affiliate agrees that it will not use its commercial announcement time in the Service to insert "tune-in spots" (i.e., announcements that instruct a subscriber to tune in at a later time for a particular program on another programming service). If the total amount of commercial announcement time on the Service (including time allocated to Affiliate hereunder) exceeds [*] per hour, the commercial announcement time made available to Affiliate shall increase by [*] and thereafter fifty percent (50%) of such time in excess of [*] and every increase thereafter (e.g., if Network increases the total amount of commercial announcement time on the Service to [*] per hour, then Affiliate will receive an additional [*] of commercial announcement time, i.e., a total of [*]. Network shall properly "tone-switch," using industry-recognized equipment, via audible or inaudible signals, all commercial announcement minutes to enable Affiliate to insert its commercial announcements. If Network fails properly to "tone-switch" or otherwise identify Affiliate's commercial announcement minutes to enable Affiliate to insert its commercial announcements, then Affiliate shall have the right, without first notifying Network, to preempt the Service to insert its commercial announcements. Network shall reimburse Affiliate for all costs incurred by Affiliate or any affiliate of Affiliate associated with any change by Network from audible to inaudible signals. Affiliate shall have the right to preempt any commercial or promotional announcement included in the Service that relates to any multichannel video programming distributor other than Affiliate, and Network agrees to provide a separate "tone-switch" or otherwise identify any and all such announcements to facilitate such preemption. Affiliate shall have the right to retain for itself all of the proceeds derived from the sale of the commercial announcement time furnished to it hereunder. Network shall have no obligation to submit to Affiliate any of the proceeds derived from the sale of any commercial announcement time on the Service that is not required to be allocated to Affiliate hereunder.
(c) If for any reason, including, without limitation, causes beyond the control of Network, Affiliate, in good faith, determines that (i) the Service includes programming prohibited in Section 3 hereof and Network has failed to cure such content breach within three (3) days of written notice from Affiliate specifying such breach and the reason(s) therefor, or if the Service includes programming substantially similar in nature to programming that Network has previously been notified constitutes a content breach (the "Prohibited Programming"), and/or (ii) includes programming that is not of at least the quantity, quality, type and content as required in Sections 3(a), 3(f) and/or 3(g) hereof and/or as referenced in Exhibit B hereto, and Network has failed to cure such content breach within thirty (30) days of written notice from Affiliate specifying such breach and the reason(s) therefor (the "Deviating Programming"), then Affiliate may, in addition to any and all remedies available to Affiliate hereunder, at law or in equity, at its option, (A)
(1) preempt the Prohibited Programming and/or the Deviating Programming in any or all Systems; and/or (2) receive credit against the Fees or Renewal Fees, notwithstanding anything contained in Section 10 hereof to the contrary, in the proportion that the hours of Prohibited Programming and/or Deviating Programming each calendar day bears to the total hours the Service is transmitted each day, such credit to be applied against the Fees or Renewal Fees in any month; or (B) discontinue carriage of the Service on any or all Systems and delete such System or Systems from Schedule 1 hereto, effective at any time by giving notice to Network within ten (10) days thereof. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(d) Commencing on the date for which Affiliate first pays Fees hereunder, no less than once per day in alternating day parts, but including each and every day part, the Service shall include the following audible message: "This programming is brought to you, in part, by fees paid by your local cable or satellite television company."
(e) During the Term, Network shall provide the Service in its entirety to Affiliate. As used herein, When the phrase "in its entirety" is used in this Section 3(b), it means that each subscriber of Affiliate receiving the Service shall be able to receive, at all points in time, all programming on received at each such point in time by any other subscriber to the Service, as received by and if any Service Subscriber subscriber to the service is receiving, at a given such point in time, shall be the same as programming that is different than the programming received by all other subscribers to any Subscriber (as defined herein) receiving the Service at such point in time. If Network does not provide the Service in its entirety to Affiliate (i.e., the programming received by any subscriber to the Service at a given point in time is different from the programming received by any Service Subscriber at such point in time), then, in addition to any other remedies available to Affiliate, at law or in equity, Affiliate shall have the unconditional right to receive, exhibit, distribute, subdistribute elect which of such programming it desires to receive and authorize the reception of the programming included in the Service as provided to Affiliate and/or the additional programming in the exercise of Affiliate's rights hereunder. Network shall not propose or impose upon Affiliate or any affiliate of Affiliate, nor shall Affiliate or any affiliate of Affiliate be obligated to pay, any surcharge or other cost, charge or fee (other than the Fees provided for in Section 5 hereof for the primary feed) for receipt and distribution of the Service in its entirety or for the distribution of any additional programming in the event Network does not provide the Service in its entirety to Affiliate.
(f) At least [*] of the hours of the programming on the Service each day shall be original programming distributed exclusively on the Service utilize at all times throughout the Term. No episode will appear on the Service in the same time slot more than (3) in any seven (7)-day period and no episode will appear on the Service more than [*] times in any seven (7)-day period regardless of the time slot. For purposes of this Agreement, "original programming" shall mean (i) programming that is produced by or on behalf of Network, (ii) programming that is significantly altered or customized or includes interstitial programming or introductory program openings and closings, in either case sufficient to "brand" or identify the programming as a production of Network, or (iii) programming that has not previously been exhibited or distributed by any other video or audio programming services distributor within the Territory.
(g) Network agrees that in no event will it authorize more than [*] per calendar week of broadcast television exhibition of the Service, any portion thereof or any programming derived therefrom within the Distribution Area of any System, except that up to three and which of such programming it will authorize for reception by PPV Satellite Subscribers (3as defined herein) hours of programming on the and Service each calendar week may be exhibited on broadcast television if it is derived from material produced, packaged and provided by the Canadian Broadcasting Company Satellite Subscribers ("CBC"as defined herein), for so long as the CBC is affiliated with Network; provided, however, that if, at the time a system becomes a System hereunder, foregoing rights of Affiliate and obligations of Network is party to a written agreement that authorizes a broadcast television station to broadcast the Service, any portion thereof or any programming derived therefrom in the Distribution Area of such System and such station is doing so, then this Section 3(g) shall not apply to such system until sixty (60) days following the date on which such system becomes a System hereunder. Notwithstanding the foregoing, limited testing by Network may authorize (i) the broadcast television exhibition of Breaking News (as defined herein) that appears on the Service by a local broadcast television pursuant to an agreement for the exchange of such footage; (ii) limited and infrequent broadcast television exhibitions of the Service, any portion thereof or programming derived therefrom, for which Network has exclusive rights to broadcast such programming in the Territory; and (iii) limited and infrequent broadcast television exhibition(s) of the Service, any portion thereof or programming derived therefrom, for promotional purposes; provided, that Network significantly customizes the programming described in subclauses (ii) and (iii) above with an emblem or "bug" containing "NWI" as its ▇▇▇▇. For purposes of this Section 3(g), "Breaking News" shall mean any unscheduled international news program that includes live on-the-scene footage (or the closest equivalent thereto) and would command immediate public attention. [*] CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONSspecific selected systems.
(h) Network agrees that during the Term it shall, at its sole expense, include as part of the signal of the Service, closed-captioning to the full extent required by law and to the extent required to ensure that Affiliate is in compliance with any and all laws requiring closed captioning. This includes, without limitation, meeting any and all benchmarks for captioning programming as set forth in Part 79 of Federal Communications Commission ("FCC") regulations. Network also agrees to cooperate with Affiliate to the extent necessary to establish compliance with any such laws or regulations. Network acknowledges and agrees that, except as set forth in Section 4(d) hereof with respect to the delivery of closed-captioning service to Service Subscribers, neither Affiliate, any affiliate of Affiliate, any System nor any other video distribution system or enterprise distributing the Service hereunder shall have any liability in connection with Network's failure to prepare, insert or include closed-captioning in the Service as required by this Section 3(h). Accordingly, Network shall indemnify, defend and forever hold harmless Affiliate, any affiliate of Affiliate and each of their respective present and former officers, shareholders, directors, employees, partners and agents, as provided in Section 9 hereof, against and from any and all losses, liabilities, claims, costs (including, without limitation, any costs of preparing and including closed-captioning in the Service), damages and expenses, including, without limitation, fines, forfeitures, attorneys' fees, disbursements and court or administrative costs, arising out of Network's breach of this Section 3(h).
(i) For purposes of this Agreement, "direct on-air sales programming" shall mean any programming that includes the direct on-air marketing, offering for sale and/or sales of products and/or services, including, without limitation, home-shopping, infomercials and direct response advertising, regardless of the length of such programming, which may include product or service demonstrations, promotions, testimonials and/or referrals and may be in a documentary, talk-show, news, information or other disguised format. Direct on-air sales programming shall not include Network's regularly scheduled commercial announcement time (i.e., the commercial announcements distributed throughout the Service during other programming that are generally two (2) minutes or less in length and primarily used for promotional announcements or third party advertising of products and services that are not directly sold to the viewer during such commercial announcements). Commencing on the Benchmark Date, (i) any direct on-air sales programming included in the Service shall be subject to preemption by Affiliate in any or all Systems, in Affiliate's sole and absolute discretion, upon at least thirty (30) days' notice to Network, and no System shall be obligated to distribute any such direct on-air sales programming; and (ii) Affiliate shall have the right in any or all Systems to insert programming and advertisements of its choice on the channel otherwise identified with the Service during any period that the Service contains any direct on-air sales programming; provided, that Affiliate shall, at the beginning of any programming that it so inserts, indicate that such programming is not Service programming. Notwithstanding Affiliate's preemption rights hereunder, if Affiliate elects, at its option, to distribute any or all of the direct on-air sales programming included in the Service in any System(s), Network shall fully indemnify Affiliate, as provided in Section 8 hereof, for any and all Costs (as defined herein) arising out of or relating in any way to its distribution of any such direct on-air sales programming.
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