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Exhibit 10.6
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TRADEMARK LICENSE AGREEMENT
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Between
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
as Licensor
and
PLAYBOY TV INTERNATIONAL, LLC
as Licensee
August 31, 1999
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.
TABLE OF CONTENTS
Page
RECITALS .....................................................................4
1. DEFINITIONS..........................................................4
2. GRANT OF LICENSE.....................................................8
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2.1 Grant of Exclusive License..................................8
2.2 PEGI's Assignment of Local Revenues Under Existing
Trademark Licenses........................................9
2.3 Supplemental Programs.......................................9
2.4 All Other Rights Retained by Licensor.......................9
2.5 Restriction on Sub-Licensing................................9
2.6 Duration of License.........................................9
2.7 Licensee's * * *............................................9
2.8 Restrictions on Modifications of Trademarks.................9
2.9 Additional Marks...........................................10
3. TRADEMARK LICENSE FEE...............................................11
3.1 Trademark License Fee for Trademarks.......................11
3.2 Payment Terms..............................................11
3.3 Maintenance of Records and Audit Rights....................12
4. QUALITY CONTROL.....................................................12
4.1 Program Restrictions.......................................12
4.2 Advertising and Home Shopping Restrictions.................13
4.3 Compliance with Program Supply Agreement...................13
4.4 Inspection Rights..........................................13
5. TITLE AND PROTECTION OF THE TRADEMARKS; USE OF THE TRADEMARKS.......13
5.1 Title......................................................13
5.2 Form.......................................................14
5.3 Maintenance of Distinctive Quality of Trademarks...........14
5.4 Advertising and Publicity..................................14
5.5 Licensee Web Sites.........................................15
6. OWNERSHIP OF THE TRADEMARKS.........................................15
6.1 Prosecution and Maintenance of Trademarks..................15
6.2 Cooperation of Licensee....................................15
6.3 Covenant of Licensee.......................................16
6.4 Covenant of Licensor.......................................16
6.5 Cooperation of Parties to Register Trademarks..............16
7. INFRINGEMENTS.......................................................16
7.1 Notice.....................................................16
7.2 Control of Proceedings.....................................16
7.3 Procedures and Costs.......................................17
8. REPRESENTATIONS AND WARRANTIES......................................17
8.1 By Licensor................................................17
8.2 By Licensee................................................17
9. INDEMNIFICATION.....................................................17
9.1 By Licensor................................................17
9.2 By Licensee................................................18
9.3 Procedure..................................................18
9.4 Survival...................................................19
10. TERMINATION.........................................................19
10.1 Expiration of Term.........................................19
10.2 Early Termination on Breach................................19
11. EFFECTS OF TERMINATION..............................................20
11.1 Survival of Obligations....................................20
11.2 Termination of Rights......................................20
11.3 Further Assurances.........................................20
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12. EQUITABLE RELIEF....................................................20
13. DISPUTE RESOLUTION..................................................20
13.1 General Agreement Regarding Dispute Resolution.............20
13.2 Notification and Negotiation...............................21
13.3 Mediation..................................................21
13.4 Arbitration................................................21
13.5 Damages....................................................21
13.6 Statute of Limitations.....................................21
13.7 Confidential Negotiations..................................21
14. MISCELLANEOUS.......................................................22
14.1 Binding Effect; No Assignment..............................22
14.2 Invalidity.................................................22
14.3 Waivers, Remedies Cumulative, Amendments...................22
14.4 Notices....................................................23
14.5 Governing Law..............................................24
14.6 Service of Process; Forum..................................24
14.7 Additional Provisions to Enforce Awards....................24
14.8 Entire Agreement...........................................24
14.9 Rules of Construction......................................24
14.10 Counterparts...............................................24
14.11 Relationship Between the Parties...........................25
14.12 Time is of the Essence.....................................25
SCHEDULE I
CURRENT TRADEMARKS
SCHEDULE II
REGISTERED AND PENDING TRADEMARKS IN THE TERRITORY
SCHEDULE III
LICENSOR'S EXISTING TRADEMARK AGREEMENTS
TO BE ASSIGNED TO LICENSEE
THIS TRADEMARK LICENSE AGREEMENT (this "Agreement") is made and entered
into on August 31, 1999, between PLAYBOY ENTERPRISES INTERNATIONAL, INC., a
Delaware corporation (the "Licensor") and PLAYBOY TV INTERNATIONAL, LLC, a
Delaware limited liability company (the "Licensee").
RECITALS
WHEREAS, Licensor is the owner of certain rights in and to certain
Trademarks as defined below and identified in Schedule I hereto;
WHEREAS, Licensor wishes to permit Licensee to use the Trademarks in
connection with the operation of its business, pursuant to the Operating
Agreement and the Program Supply Agreement (each, as defined below), on the
terms and subject to the conditions of this Agreement; and
WHEREAS, Licensee acknowledges the reputation and quality of goods and
services heretofore sold or distributed under the Trademarks and Licensor's
desire to safeguard, promote and enhance that reputation by ensuring the future
quality of goods and services sold or distributed under the Trademarks.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, and intending to be legally bound, the parties
agree as follows:
1. DEFINITIONS.
In this Agreement (including the Recitals hereto) the following terms
will have the following meanings:
"Additional Marks" has the meaning set forth in Section 2.9.
"AdulTVision Content Category" means Channels and programming
consistent with the AdulTVision channel as operated by PEGI in the United States
prior to March 15, 1999 and expressly includes any program supplied under the
Program License Agreement that is branded with an "AdulTVision" (or variation
thereof) Trademark. The AdulTVision Content Category expressly excludes any
programming supplied under the Program License Agreement or Supplemental Program
that is branded with a "Playboy" (or variation thereof) Trademark.
"Affiliate" means any Person, directly or indirectly through one or
more intermediaries, controlling of, controlled by, or under common control with
the specified Person. The term "control" (and "controlled" and "controlling,"
respectively), as used in the immediately preceding sentence, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of the specified Person (whether by the
holding of shares or other equity interests, the possession of voting or
contract rights or otherwise). Notwithstanding the foregoing, Licensee will not
be deemed to be an Affiliate of Licensor, PEGI, or VSI.
"Agreement Outline" means the Playboy TV International, LLC Agreement
Outline dated as of December 16, 1998, as amended.
"After Tax Basis" means a basis such that any payment (the "Original
Payment") received or deemed to have been received by a Person (the "recipient")
will be supplemented by a further payment to the recipient so that the sum of
the two payments will equal the Original Payment, after taking into account (x)
all taxes that would result from the receipt or accrual of such payments, if
legally required, and (y) any reduction in taxes that would result from the
deduction of the expense indemnified against, if legally permissible. In the
event that the expense indemnified against is used to reduce taxes by way of
amortization or depreciation, payments made on an After Tax Basis will be
refunded in each taxable year of the recipient in which such expense is
deductible in an amount equal to the sum of (i) the tax savings attributable to
such deduction plus (ii) any reduction in taxes that would result from the
deduction of any amounts described in clause (i) as increased hereby. All
payments hereunder will be calculated on the assumptions that the recipient was
subject to tax at the highest marginal rates of tax applicable to such class of
taxpayer and that it could benefit from the deduction of any expense at such
rate of tax. In the event that a taxing authority will treat any indemnification
payment as not includible in gross income or disallow any deduction taken into
account hereunder, the indemnification will be recomputed and further payments
or refunds made.
"BMI" means Bloomfield Mercantile, Inc., a Panama corporation.
"Channels" means the television channels owned or operated in the
Media by Licensee, or its subsidiaries, now or in the future (each, a
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"Channel").
"Company Programming" has the meaning set forth in the Program Supply
Agreement.
"Content Category" means the Playboy Content Category, the Spice
Content Category or the AdulTVision Content Category, as applicable.
"End Date" means the date on which the license granted hereunder
terminates, whether as the result of the expiration of the term or as the result
of any earlier termination pursuant to Section 10.
"Existing Library Programs" has the meaning set forth in the Program
Supply Agreement.
"Fiscal Year" means the calendar year. "Fiscal Year 1" means the first
fiscal year of the Licensee, "Fiscal Year 2" means the second fiscal year, and
so on.
"Funding Date" means the date on which PEGI and Lifford make their
respective initial cash capital contributions to the Licensee pursuant to
Section 3.1 of the Operating Agreement.
"Japan Venture" means The Playboy Channel Japan, Inc., a company
formed under the laws of Japan.
"Licensee" has the meaning set forth in the Introduction, or such
successor or assignee as may be permitted herein.
"Licensee Indemnified Parties" has the meaning set forth in Section
9.1.
"Licensee Originated Marks" has the meaning set forth in Section 2.6.
"Licensee Web Sites" has the meaning set forth in Section 5.5.
"Licensor" has the meaning set forth in the Introduction or such
successor or assignee as may be permitted herein.
"Licensor Indemnified Parties" has the meaning set forth in Section
9.2.
"Lifford" means Lifford International, Ltd., an international
business company formed under the laws of the British Virgin Islands.
"Losses" has the meaning set forth in Section 8.1.
"Media" means all forms of television exhibition, transmission and
distribution whether now existing or developed in the future and whether on a
subscription, pay-per-view or free basis, including but not limited to the
following: (i) conventional VHF or UHF television broadcast, (ii) basic cable
and pay cable, (iii) "over the air pay" subscription television (STV), (iv)
direct broadcasting by satellite (DBS), (v) master antenna television systems
(MATV), (vi) multipoint distribution services (MDS), (vii) multichannel
multipoint distribution services (MMDS), (viii) satellite master antenna
televisions systems (SMATV), and (ix) microwave transmission; provided, however,
that Media will exclude, to the extent applicable, distribution of programs by
Streaming (as defined below) through any form of television.
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"Net Channel Revenues" has the meaning set forth in Section 3.1.
"New Venus" means the new entity or entities to be formed by
Licensee and Imagen Satelital, S.A. pursuant to the Operating Agreement.
"Operating Agreement" means the Operating Agreement for Playboy TV
International, LLC, entered into concurrently herewith, as may be amended from
time to time.
"PEGI" means Playboy Entertainment Group, Inc., a Delaware
corporation and a member of Licensee.
"Person" means an individual, general partnership, limited partnership,
limited liability company, corporation, trust, estate, association or any other
entity.
"Playboy Content Category" means Channels and programming consistent
with the "Playboy" channel as operated by PEGI in the United States and
expressly includes any program supplied under the Program License Agreement that
is branded with a "Playboy" (or variation thereof) Trademark. The Playboy
Content Category expressly excludes any programming supplied under the Program
License Agreement or Supplemental Program that is branded with a "Spice" (or
variation thereof) Trademark or an "AdulTVision" (or variation thereof)
Trademark.
"Program Supply Agreement" means the Program Supply Agreement between
PEGI and Licensee, executed concurrently herewith, as may be amended from time
to time.
"Proposed Activity" has the meaning set forth in Section 2.7.
"PTVLA Trademark License Agreement" means the Trademark License
Agreement entered into as of November 10, 1998 (effective as of June 14, 1996)
between Licensor and Playboy TV-Latin America, LLC.
"Reference Rate" means the reference rate as set by BankAmerica from
time to time.
"Remediable Breach" has the meaning set forth in Section 9.2.
"Spice Content Category" means Channels and programming consistent with
the "Spice" channel as operated by PEGI in the United States and expressly
includes any program supplied under the Program License Agreement that is
branded with a "Spice" (or variation thereof) Trademark. The Spice Content
Category expressly excludes any programming supplied under the Program License
Agreement or Supplemental Program that is branded with a "Playboy" (or variation
thereof) Trademark.
"Streaming" means * * *
"Supplemental Programs" has the meaning set forth in the Operating
Agreement.
"Termination Date" has the meaning set forth in Section 10.2.
"Territory" means the World, except for the United States and Canada
and their territories and possessions worldwide.
"Threshold Revenues" has the meaning set forth in Section 3.1.
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"Trademark License Fee" means the fees payable by Licensee in
consideration of the rights granted hereunder, which fees will be paid in the
form of the Initial Trademark License Fee and the Annual Trademark License Fee,
each as defined in Section 3.1.
"Trademarks" means the trademarks identified on Schedule I hereto
(which Schedule identifies the Trademarks by applicable Content Category), the
URL or domain name of any Licensee Web Sites and any Additional Marks (each of
which will be identified with a Content Category by Licensor).
"Trade Materials" means trade presentations, business cards, invoices,
stationery and other similar printed matter reflecting the names under which
Licensee conducts business as permitted under the Operating Agreement.
"VSI" means Victoria Springs Investments Ltd., a British Virgin
Islands corporation and a member of Licensee.
2. GRANT OF LICENSE.
2.1 Grant of Exclusive License.
(a) Upon and subject to the terms and conditions set forth in
this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts,
an exclusive license throughout the Territory to use the Trademarks in
connection with (i) the operation and distribution of the Channels, (ii) the
sub-licensing of Company Programming (other than acquired Supplemental Programs)
to third parties, and (iii) non revenue-generating business activities which are
ancillary and related to the activities described in (i) and (ii), including but
not limited to Trade Materials and the promotion of the Channels and related
marketing, distribution and advertising activities; provided, that promotion or
marketing over the internet will be limited to the Licensee Web Sites. In
addition to the Trademarks, Licensor grants to Licensee, and Licensee hereby
accepts, a limited license to use such additional trademarks of Licensor (e.g.,
"Playmate of the Month") as are included in the programs provided by PEGI under
the Program Supply Agreement, which license will be limited solely to customary
presentation and logo credits in the title and end credits sequences of such
programs and credit blocks in advertising therefor. Notwithstanding the above,
Licensee's exclusivity will not apply to: (i) customary presentation and logo
credits in the title and end credits sequences of programs licensed to others as
permitted in the Program Supply Agreement and credit blocks in advertising
therefor; (ii) use of the Trademarks in any television service which is not
intended for general reception in the Territory but which is received in the
Territory due to unintentional spillover; or (iii) PEGI's right to use the
"Playboy" name and logos in connection with the operation of a * * * as defined
in and pursuant to the terms of the Operating Agreement. Licensee acknowledges
that the Content Categories represent distinct content, style and production
values and Licensee will not use, and will not have the right to permit any
other Person to use, any Trademark for a use outside its designated Content
Category.
(b) During the term of this Agreement, Licensor will not itself
use or authorize any other Person to use the Trademarks or any confusingly
similar designation in connection with any television channel or service in the
Territory or the distribution of any programming in the Media in the Territory.
In the event that Licensor (or any of its Affiliates) licenses, or directly
uses, any of the Trademarks in the
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Territory in connection with an activity which is not included in the license
granted to the Licensee hereunder, but which activity is likely to harm
Licensee, the Channels, or Licensee's rights under this Agreement or the Program
Supply Agreement (taking into account local customs in the region of the
Territory where such activity is being conducted), Licensee may object to such
other license or use. In the event that Licensee so objects, Licensor and
Licensee will attempt in good faith to resolve any such objection.
(c) Notwithstanding the previous paragraphs of this Section 2.1,
Licensee acknowledges that until Playboy TV-Latin America, LLC is contributed to
it, Licensee's rights in the Trademarks will be limited by and subject to the
rights under the PTVLA Trademark License Agreement.
2.2 PEGI's Assignment of Local Revenues Under Existing Trademark
Licenses. To the extent that Licensor (or its Affiliates) has granted existing
trademark licenses to third parties in connection with PEGI's licensing of
Library Programs to such parties in the Territory, and such trademark licenses
include a separate license fee or other payment relating to the trademark
license, Licensor hereby assigns to Licensee all of its rights to receive
license fees or other payments thereunder with respect to periods from and after
July 1, 1999 and any rights relating to the accounting for and collection of
such license fees or other payments. A complete list of such existing trademark
license agreements is set forth in Schedule III. Licensor does not assign, and
expressly reserves for itself, all rights of approval and control over the
licensed trademarks and all remedies for breach of the permitted uses of the
trademarks pursuant to such trademark licenses and any other license of
trademarks ancillary to the licensing of Company Programming (as provided in the
Program Supply Agreement).
2.3 Supplemental Programs. The license granted hereunder includes
the Licensee's (and its subsidiaries') right to place the Trademarks on
Supplemental Programs produced by Licensee.
2.4 All Other Rights Retained by Licensor. All rights not expressly
granted to Licensee hereunder are reserved to Licensor for its own use and
benefit and, in its sole discretion to grant to one or more other Persons.
2.5 Restriction on Sub-Licensing. Licensor acknowledges that for
Licensee to conduct its business Licensee will need to procure licenses of the
Trademarks for use by systems operators and other distributors of the Channels
and by other licensees of the Company Programming for the purposes of
distributing, marketing or advertising such Channels or Company Programming,
(each, a "Permitted Sublicensee"). Licensee acknowledges that New Venus will not
be a Permitted Sublicensee and that Licensor will enter into a separate
trademark license agreement with New Venus as provided in the Operating
Agreement. Licensor agrees that it will enter into trademark sublicense
agreements with Licensee and Permitted Sublicensees. The terms of such
sublicense agreements will be consistent with Licensor's customary practices for
licenses of similar scope and will provide Licensor with rights of approval and
control reasonably satisfactory to Licensor; provided, that the license fee or
other payment terms will be in the discretion of Licensee. To facilitate the
foregoing, Licensor and Licensee will develop standard form licensing agreements
as soon as reasonably practicable following the date hereof. The Licensee will
not otherwise sub-license any of the Trademarks without the prior written
consent of Licensor.
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2.6 Duration of License. The license granted under Section 2.1 will
continue in force until the expiration or termination of this Agreement in
accordance with the provisions of Section 10.
2.7 Licensee's * * * If Licensor (or any of its affiliates) proposes to
enter into a new license of the Trademarks in any region of the Territory for
any use other than those covered by this Agreement (other than with respect to
any addition of the "Playboy" Magazine or an option or renewal of a license
granted prior to the commencement of the Agreement) (a "Proposed Activity"), * *
*. The provisions of this Section 2.7 will not apply in the event that Licensor
(or its Affiliate) determines to engage directly in an activity in any region of
the Territory.
2.8 Restrictions on Modifications of Trademarks. Licensee will not use,
cause or authorize to be used any word, device, design, slogan or symbol
confusingly similar to any of the Trademarks. Without limiting the generality of
the foregoing, during the term of this Agreement, the following will not be used
by Licensee, including but not limited to use on or in connection with the
Channels or the Company Programming without, in each case, Licensor's prior
written approval:
(a) permutations of any or all of the Trademarks; or
(b) secondary or combination marks including or derived from
any of the Trademarks; or
(c) new words, devices, designs, slogans or symbols derived
from any of the Trademarks; or
(d) new words, devices, designs, slogans or symbols created
especially for use with the Channels or the Company Programming as part of the
Channels which do not derive from, include or represent a permutation of any of
the Trademarks ("Licensee Originated Marks").
Notwithstanding the foregoing, Licensor will not withhold consent
for (i) any permutation of any Trademark that is modified to include a
geographic location within the Territory (e.g., "Spice Channel Norway") for use
of such permutation within the identified geographic location; and (ii) any
Licensee Originated ▇▇▇▇ unless it reasonably determines that such Licensee
Originated ▇▇▇▇ or Licensee's intended use thereof would be detrimental to the
Trademarks or Licensor. Upon termination of this Agreement, Licensee will
immediately cease all use of any Licensee Originated Marks and ownership of such
Licensee Originated Marks will vest equally with Licensee and Licensor; provided
that neither Licensor nor Licensee will make any use of any such Licensee
Originated Marks without the prior written consent of the other.
2.9 Additional Marks. Licensor hereby agrees to include as Trademarks
licensed hereunder in the applicable Content Category (i) any trademarks or
permutations, secondary, combination or derivative marks owned by Licensor and
used in connection with the broadcast, transmission, advertising or promotion of
the Playboy Channel, the Spice Channel or AdulTVision television services in the
United States provided that the same are, in Licensor's reasonable
determination, at such time applicable to the respective Channels or Company
Programming, as the case may be, and are available for use by Licensee pursuant
hereto and are available for registration by Licensor in regions of the
Territory in which Licensee intends to use such trademarks, and (ii) any other
▇▇▇▇ to which Licensor consents pursuant to Section 2.8 above (all of such marks
are collectively referred to as the "Additional Marks"). The parties understand
and agree
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that, notwithstanding anything to the contrary contained herein, no Additional
Marks or Licensee Originated Marks will be subject to any of the
representations, warranties or protection, maintenance or indemnification
obligations of Licensor hereunder and that if in Licensor's reasonable
discretion based on Licensee's use in the Territory of such Additional Marks
Licensor elects to register any such Additional Marks in the Territory, Licensee
will reimburse Licensor for the costs of such registration and the maintenance
thereof during the term of this Agreement. Licensee will at Licensor's request
register and maintain any Licensee Originated ▇▇▇▇ that Licensor approves
pursuant to Section 2.8.
3. TRADEMARK LICENSE FEE.
3.1 Trademark License Fee for Trademarks. The license fee for the
trademark license granted hereunder for Fiscal Year 1 through the end of Fiscal
Year 10 (the "Initial Trademark License Fee") is included in the Rights
Acquisition Fee described in the Operating Agreement. Commencing in Fiscal Year
11 and for each Fiscal Year through the End Date, the Licensee will pay to
Licensor a trademark license fee (the "Annual Trademark License Fee") calculated
as a percentage of Net Channel Revenues (as defined below) as compared to Net
Channel Revenues generated in Year 10 ("Threshold Revenues"). Beginning in
Fiscal Year 11, the Annual Trademark License Fee for a given year will equal the
sum of the following: (a) * * * of Net Channel Revenues that exceed Threshold
Revenues (up to $50,000,000 in excess of Threshold Revenues), plus (b) * * * of
Net Channel Revenues that exceed the sum of Threshold Revenues plus $50,000,000.
"Net Channel Revenues" will mean, for a given Fiscal Year, all revenues received
by the Channels during such year, as reflected in the audited year end
statements of each Channel or the License, as applicable; provided, that for any
Fiscal Year in which Licensee owns less than 50% of the Japan Venture, revenues
received by the Japan Venture will be excluded from the calculation of Net
Channel Revenues and Threshold Revenues.
3.2 Payment Terms.
(a) The Initial Trademark License Fee will be payable by Licensee
in accordance with the terms of payment of the Rights Acquisition Fee as set
forth in the Operating Agreement.
(b) The Annual Trademark License Fee payable for Fiscal Year 11
and for each subsequent Fiscal Year through the End Date will be payable as
follows: (i) Licensee will pay to Licensor an estimate of the Annual Trademark
License Fee for each Fiscal Year within thirty (30) days after the end of such
Fiscal Year, which will be calculated based on Licensee's unaudited financial
statements for the such Fiscal Year; and (ii) Licensee will calculate the final
Annual Trademark Licensee Fee for such Fiscal Year within thirty (30) days after
the delivery of the Licensee's audited financial statements for the relevant
Fiscal Year and a "true-up" payment will by paid by Licensee or Licensor, as
appropriate to reconcile any underpayment or overpayment of the Annual Trademark
Licensee Fee.
(c) Payments of the Annual Trademark License Fee will be made by
wire transfer of immediately available funds, net of any withholding required by
applicable law. Licensor will from time to time designate one or more accounts
into which such payments will be made and may designate one or more Affiliates
to receive such payments.
(d) Any payment not made within thirty (30) days of its due date
will bear interest from the date due to and including the date payment in full
is made at the Reference Rate in effect on the date payment was
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due.
(e) The Annual Trademark License Fee will be paid in U.S.
Dollars. To the extent the calculation of the Annual Trademark License Fee is
based on revenues received in other currencies, such revenues will be calculated
using the exchange rate published in the Wall Street Journal, as of the last day
of the Fiscal Year for which such payment applies.
3.3 Maintenance of Records and Audit Rights.
(a) Licensee will keep accurate books of account and records
covering all transactions relating to or arising out of this Agreement. Licensee
will permit Licensor and its nominees, employees, accountants, agents and
representatives to (i) have reasonable access to and inspect such books and
records during normal business hours upon reasonable notice, and (ii) to conduct
an examination of all such books and records. Licensee will maintain in good
order and condition all such books and records for a period of two (2) years
after the expiration of the term of this Agreement or the earlier termination of
this Agreement, or, in the event of a dispute between the parties hereto, until
such dispute is resolved, whichever date is latest. Receipt or acceptance by
Licensor of any sums paid by Licensee hereunder will not preclude Licensor from
exercising its rights hereunder.
(b) If an inspection or examination referred to in paragraph (a)
above discloses, or Licensor or Licensee otherwise discovers, an underpayment of
an Annual Trademark License Fee, the amount of such underpayment plus interest
thereon from the date of underpayment to and including the date of payment in
full at the Reference Rate in effect on the date payment was due will be paid by
Licensee to Licensor not later than thirty (30) days after determination
thereof. If such underpayment by Licensee is in excess of ten percent (10%) of
the aggregate fee earned during any period under inspection, Licensee will, in
addition to paying Licensor the amount of such underpayment plus interest,
reimburse Licensor for all reasonable costs and expenses of conducting such
inspection or examination.
(c) If an inspection or examination referred to in paragraph (a)
above discloses, or Licensor or Licensee otherwise discovers, an overpayment of
an Annual Trademark License Fee, the amount of such overpayment will be credited
against future payments owed by Licensee, unless the period for which the
overpayment was made is the final period covered by this Agreement, in which
case the amount of the overpayment will be paid by Licensor to Licensee within
thirty (30) days after determination thereof.
4. QUALITY CONTROL.
All Company Programming and other material transmitted by Licensee or
licensed to third parties will comply with the specifications set forth in this
Section 4.
4.1 Program Restrictions. Although the Company Programming will depict
nudity and will allow strong or explicit language, Licensee is prohibited from
transmitting or licensing and covenants that it will not permit the transmission
or licensing of scenes or other material depicting any of the following: (i) the
glorification of violence or gratuitous violence; (ii) rape, non-consensual
intercourse or other non-consensual sexual activity; (iii) bondage, incest,
sadism or masochism, bestiality, extreme sexual explicitness or the graphic
close-up of genitals; or (iv) child pornography, including, without limitation,
instances where an actor
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is the legal age for consent but is portrayed as under the legal age for
consent. In that regard, no actor will appear nude or engaged in sexual conduct
in any Company Programming who is not at least eighteen (18) years of age.
Notwithstanding the foregoing, the standards applied by PEGI from time to time
for the "Playboy TV" and "Spice" channels in the United States will be the
controlling standards for the applicable Content Category and any materials
transmitted by PEGI on either the "Playboy TV" or "Spice" channels (or supplied
by PEGI pursuant to the Program Supply Agreement) will be deemed acceptable for
transmission by the Licensee on its "Playboy" or "Spice" Channels, respectively.
4.2 Advertising and Home Shopping Restrictions. All advertising
transmitted on the Channels and all direct marketing activities conducted on the
Channels will comply with the specifications set forth in this Section 4.2 and
all applicable laws and regulations in the Territory. Licensee will not transmit
advertising or direct marketing programs which advertise or promote any of the
following: (i) firearms (or advertisements from any gun lobby organization) and
other weapons, explosives or fireworks; (ii) massage parlors, telephone sex
lines, real time interactive internet sex services, sex clubs, sexually explicit
audio-visual products (e.g., X-rated or similar "hard core" videos), sex toys,
materials depicting graphic sexual conduct or depicting any matter subject to
the restrictions set forth in Section 4.1 above; (iii) classified advertising,
including, but not limited to, psychics or similar persons or services; (iv)
religious organizations and cults; or (v) magazines featuring nudity which
compete with any edition of the "Playboy" magazine in the Territory (or any
product or service carrying the brand of any such magazine). Further, Licensee
will not advertise or promote the Channels or otherwise use the Trademarks in
any Media in connection with any of the foregoing. Notwithstanding the
foregoing, any advertising or direct marketing programs provided by PEGI under
the Program Supply Agreement or otherwise expressly approved by PEGI will be
deemed acceptable for transmission over a Channel.
4.3 Compliance with Program Supply Agreement. In addition to and not by
way of limitation of Sections 4.1 or 4.2 above, all Company Programming and
other material transmitted by Licensee will comply with the terms and conditions
of the Program Supply Agreement.
4.4 Inspection Rights. Licensee will submit all new advertising and
other uses of the Trademarks (including any Supplemental Program) for Licensor's
approval at least ten (10) days in advance of the proposed use, or, in the case
of advertisements, at least ten (10) days in advance of the media deadline for
submission of the proposed advertisements. If Licensor does not reply to any
such submission within ten (10) days, such submission will be deemed approved.
5. TITLE AND PROTECTION OF THE TRADEMARKS; USE OF THE TRADEMARKS.
5.1 Title. Licensee hereby acknowledges that except for the license
expressly granted in this Agreement, Licensee has not acquired and will not
acquire any rights, title or interest in the Trademarks by reason of this
Agreement and further acknowledges each of the following: the great value of the
goodwill associated with the Trademarks; the worldwide recognition thereof; that
the proprietary rights therein (including, without limitation, all rights that
Licensor may have by virtue of international agreements that protect famous
marks and common law rights) and the goodwill associated therewith, as between
Licensor and Licensee, are solely owned by and belong to Licensor; that the
Trademarks and other related words, devices, designs and symbols are inherently
distinctive or have secondary meaning firmly associated in the mind of the
general public
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with Licensor, its subsidiaries and Affiliates and its or their activities; and
that all additional goodwill associated with the Trademarks created through the
use of such Trademarks by Licensee will inure to the sole benefit of Licensor.
Licensee agrees not to use the Trademarks in any manner which, directly or
indirectly, would dilute, demean, ridicule or otherwise tarnish the image of the
Trademarks or Licensor or any of its Affiliates. During and after the term
hereof, Licensee will not:
(a) attack or question the validity of, or assist any individual
or entity in attacking or questioning, the title or any rights of or claims by
any or all of Licensor, and its Affiliates and their respective licensees and
sub-licensees, in and to the Trademarks or any other trademark, intellectual
property or intangible property of Licensor or its Affiliates;
(b) directly or indirectly seek for itself or assist any third
party to use or acquire any rights, proprietary or otherwise, in any patent,
trademark, copyright or such other intellectual or intangible property
associated or connected with Licensor, its Affiliates, their publications,
published material or activities, without, in each case, the prior express
written consent of Licensor;
(c) in any way seek to avoid Licensee's duties or obligations
under this Agreement because of the assertion or allegation by any individual or
entity that any or all of the Trademarks are invalid or by reason of any contest
concerning the rights of or claimed by Licensor; or
(d) file or prosecute one or more trademark applications in
connection with Licensee's use or intended use of the Trademarks or any ▇▇▇▇ or
designation of any kind that is confusingly similar to or dilutive of the
Trademarks, unless expressly requested to do so in writing by Licensor.
5.2 Form. Licensee will use the Trademarks in the form stipulated by
Licensor and will include such trademark and copyright notices as Licensor may
request in connection with the protection of Licensor's ownership of the
Trademarks. Licensee will also observe all reasonable directions given by
Licensor as to colors and size of the representations of the Trademarks and
their manner and disposition in connection with the Company Programming.
5.3 Maintenance of Distinctive Quality of Trademarks. The use of
the Trademarks by Licensee will at all times be in keeping with and seek to
maintain their distinctiveness and reputation as determined by Licensor.
5.4 Advertising and Publicity. Licensee will have the right to develop
and distribute in the Territory advertising, publicity and promotional materials
relating to the Channels and the Company Programming as part of the Channels,
including advertising telecasts of the Company Programming or any person
appearing therein (unless Licensor has specifically notified Licensee to the
contrary) and the sub-licensees of the Company Programming as set forth in
Section 2.3 will have the right to develop and distribute advertising, publicity
and promotional materials relating to the Company Programming they have
sub-licensed; provided, however, that any such materials (other than material
obtained directly from Licensor) will comply with the following restrictions:
(a) all such materials will comply with the restrictions set
forth in Section 4.2 and be subject to Licensor's approval rights pursuant
14
to Section 4.4;
(b) all such materials will clearly identify the Trademarks
with a legible credit line with the wording "`Playboy' (or the `Rabbit Head
Design', etc.) is the ▇▇▇▇ of and used with the permission of Playboy
Enterprises International, Inc." or similar words as Licensor may designate
from time to time; and
(c) in no event may any advertising, publicity or promotional
material using the names of Licensor or any of its Affiliates, the name of any
program supplied under the Program License Agreement or the name of any person
appearing in a program licensed under the Program License Agreement be used to
constitute an endorsement or any party, sponsor, product or service.
Other than as expressly set forth in this Agreement, Licensee will make no use
of the Trademarks or any confusingly similar designation without the prior
express written consent of Licensor. Licensee similarly agrees that it will not
authorize or purport to authorize any third party to make any such use and, if
Licensor's consent thereto is obtained in accordance with Section 2.5, it will
expressly provide in any applicable third party agreements that such third
parties will only be entitled to use such names and marks on material supplied
to them by Licensee in accordance with Licensee's rights hereunder.
5.5 Licensee Web Sites. Licensee will have the right to create and
maintain web sites which are designed for the purpose of promoting one or more
of the Channels and that are created and maintained in accordance with the
Operating Agreement (the "Licensee Web Sites"). The materials included on the
Licensee Web Sites will comply with all restrictions set forth in this
Agreement, including but not limited to Section 4.2, 4.4 and 5.3 hereof.
Licensor will own the URL and domain name for each Licensee Web Site.
6. OWNERSHIP OF THE TRADEMARKS.
6.1 Prosecution and Maintenance of Trademarks. Licensor will pay all
renewal fees and take such other actions as are necessary to prosecute the
applications for and maintain the registrations of the Trademarks set forth in
Schedule I throughout the Territory during the term of this Agreement.
6.2 Cooperation of Licensee. Licensee will on request give to Licensor
or its authorized representative any information as to its use of the Trademarks
which Licensor may require and will during the term of this Agreement render any
assistance reasonably required by Licensor in registering and maintaining the
registrations of the Trademarks.
6.3 Covenant of Licensee. Licensee will not make any representation or
do any act to the effect that it has any right, title or interest in or to the
ownership or use of any of the Trademarks except pursuant to this Agreement.
6.4 Covenant of Licensor. Licensee acknowledges that the Trademarks are
not registered for the Media in each country of the Territory. Schedule II lists
each country in the Territory where Licensor has obtained a trademark
registration or has an application for such registration pending. Licensor will
make all reasonable efforts to obtain trademark registrations in additional
countries in the Territory as reasonably requested by Licensee. To facilitate
the foregoing, Licensee
15
will provide Licensor with written notice indicating the Trademarks and
countries where Licensee wishes Licensor to obtain trademark registrations,
which will be prioritized by Licensee in accordance with the timing and scope of
its anticipated activities in such countries. Licensor makes no representation
or warranty that it can obtain the requested trademark registrations in any such
country.
6.5 Cooperation of Parties to Register Trademarks. Each party will, if
reasonably requested by the other, do all such acts and execute all such
documents as may be necessary to confirm the license granted hereunder in
respect of any of the Trademarks and to record Licensee as a registered user of
the registered Trademarks on the trademarks register throughout the Territory.
Licensee hereby agrees that any such entry with respect to any Channel or other
activity of Licensee on any trademark register may be canceled by Licensor on
termination of this Agreement with respect to such Channel or other activity of
Licensee, for whatever reason, and that it will assist Licensor insofar as may
be necessary to achieve such cancellation including by executing any necessary
documents.
7. INFRINGEMENTS.
7.1 Notice. Each party will as soon as it becomes aware thereof give
the other written notice of (i) any use or proposed use by any other Person of a
trade name, trademark or trade dress or mode of promotion or advertising which
amounts or might amount either to infringement in the Territory of Licensor's
rights in connection with the Trademarks or to passing-off in the Territory, and
(ii) any allegation or claim by any other Person that any of the Trademarks are
invalid within the Territory or that use of any of the Trademarks infringes any
rights of another party or that any of the Trademarks are otherwise attacked or
open to attack within the Territory.
7.2 Control of Proceedings. Licensor will have the sole right to
control and conduct all proceedings relating to any claim or suit arising out of
or relating to any of the matters described in Section 7.1 and to decide what
action (if any) to take in respect thereof. Licensee expressly covenants no
discussions by Licensee whatsoever with any and all claimants and litigants, no
compromise or settlement by Licensee of any claim or suit and no negotiations by
Licensee with respect to any compromise or settlement will be had, made or
entered into without the prior written approval of Licensor.
7.3 Procedures and Costs. Licensor will bear the cost of all
proceedings pursuant to this Section 7 and will be entitled to retain any
damages recovered pursuant to such proceeding. Licensee will provide any
assistance reasonably requested by Licensor, and Licensee will agree to being
joined as a party in any such proceeding at the request of Licensor. The parties
may mutually agree to jointly conduct and control any such proceeding, in which
case the costs and proceeds thereof will be borne equally by the parties.
8. REPRESENTATIONS AND WARRANTIES
8.1 By Licensor. Licensor represents and warrants that, except as set
forth in the Schedules hereto (i) it is duly authorized to enter into the
transactions contemplated by this Agreement; (ii) this Agreement is a valid and
binding obligation of Licensor, enforceable against it in accordance with its
terms; (iii) the performance of Licensor's obligations hereunder does not
violate any agreement, law, rule or regulation binding on Licensor or Licensor's
charter documents; (iv) it has, and will continue
16
to have, all rights in and to the Trademarks necessary to fulfill its
obligations hereunder; (v) except for the licenses between Licensor and third
parties listed in Schedule III or ancillary to the licensing of Company
Programming (as provided in the Program Supply Agreement), the use of the
Trademarks by Licensee as contemplated herein will not infringe on the rights of
third parties; (vi) the trademark licenses between Licensor and third parties
which Licensor is assigning to Licensee are valid, enforceable and assignable,
the licensees under such licenses have not pre-paid the license fees, if any,
due thereunder (except in accordance with the terms of such licenses), and, to
the best of Licensor's knowledge and belief, such licensees do not have any
claims, offsets or defenses which are adverse to Licensee's rights hereunder;
and (vii) Licensor has disclosed all material information relating to the rights
granted hereunder, and that all such information is true and correct to the best
of Licensor's knowledge and belief.
8.2 By Licensee. Licensee represents and warrants that: (i) it is duly
authorized to enter into the transactions contemplated by this Agreement; (ii)
this Agreement is a valid and binding obligation of Licensee, enforceable
against it in accordance with its terms; (iii) the performance of Licensee's
obligations hereunder does not violate any agreement, law, rule, or regulation
binding on Licensee or Licensee's charter documents; and (iv) it will not use
the Trademarks except as authorized by this Agreement.
9. INDEMNIFICATION.
9.1 By Licensor. Licensor will indemnify and hold harmless Licensee,
and its respective members, managers, directors, officers, shareholders,
employees, agents, representatives and Affiliates (collectively, the "Licensee
Indemnified Parties"), on an After Tax Basis, from and against all claims,
losses, damages (including loss of profits and consequential damages awarded to
unrelated third parties, if any, but excluding loss of profits and consequential
damages otherwise suffered by the Licensee Indemnified Parties), expenses,
judgements, costs and liabilities (including reasonable attorneys' fees and
costs) (collectively, "Losses") incurred by the Licensee Indemnified Parties
arising from Licensor's breach of any obligation, representation or warranty
contained in this Agreement, including any Losses resulting from any claim of
infringement or misappropriation relating to Licensee's authorized use of the
Trademarks, but excluding any Losses resulting from the use of any Trademark in
a country where Licensor has not obtained a trademark registration relating to
the Media, does not have a pending application for such registration or where a
pending application is not sufficient, under the laws of such country, to permit
the grant of licensed rights hereunder. Notwithstanding the foregoing, any
claims for indemnification that Licensee Indemnified Parties may have pursuant
to this Section 9.1 will exclude claims based on information known by BMI (or
its Affiliates) as of the Funding Date, whether or not such information formed
the basis of issues raised by BMI during Due Diligence (as defined in the
Operating Agreement) and whether or not asserted prior to the Walk Away Notice
(as defined in the Operating Agreement) or thereafter. In the event of a dispute
regarding a claim for indemnification, the Licensee Indemnified Party will have
the burden or proof in establishing the validity and amount of the claims and
Licensor will have the burden or proof in establishing any defense to such
claim, including but not limited to a defense asserted by Licensor that BMI (or
its Affiliates) had knowledge of the requisite facts.
9.2 By Licensee. Licensee will indemnify and hold harmless
Licensor and its directors, officers, shareholders, employees, agents,
17
representatives and affiliates (collectively, the "Licensor Indemnified
Parties"), on an After Tax Basis, from and against all Losses incurred by the
Licensor Indemnified Parties arising from Licensor's breach of any obligation,
representation or warranty contained in this Agreement, including Losses
resulting from any unauthorized use by Licensee or any of its authorized
sub-licensees of the Trademarks.
9.3 Procedure. If a claim by a third party is made against an
indemnified party, the indemnified party will promptly notify the indemnifying
party of such claim. Failure to so notify the indemnifying party will not
relieve the indemnifying party of any liability which the indemnifying party
might have, except to the extent that such failure materially prejudices the
indemnifying party's legal rights. The indemnifying party will have thirty (30)
days after receipt of such notice to undertake, conduct and control through
counsel of its own choosing (subject to the approval of the indemnified party,
such approval not to be unreasonably withheld) and at its expense, the
settlement or defense of such claim, and the indemnified party will cooperate
with the indemnifying party in connection therewith; provided, however, that (i)
the indemnifying party will permit the indemnified party to participate in such
settlement or defense through counsel chosen by the indemnified party, provided
that the fees and expenses of such counsel will be borne by the indemnified
party and (ii) the indemnifying party will reimburse the indemnified party for
the full amount of any Loss resulting from such claim and all related expenses
incurred by the indemnified party within the limits of this Section 9 as such
are incurred. If the indemnifying party does not notify the indemnified party
within thirty (30) days after actual receipt of the indemnified party's notice
of a claim of indemnity hereunder that it elects to undertake the defense
thereof (which may be with a reservation of rights by such indemnifying party)
or so notifies the indemnified party but fails to undertake or maintain such
defense promptly and in good faith so that a default is threatened, the
indemnified party will promptly notify the indemnifying party whether it desires
to undertake the defense of such claim. If the indemnifying party does not
within ten (10) business days thereafter elect to undertake the defense thereof
or undertake the defense thereof, as applicable, the indemnified party will have
the right to contest, settle or compromise the claim in the exercise of its
reasonable judgment and without prejudice to the rights of the indemnified party
to indemnification hereunder. Notwithstanding anything contained herein, the
indemnified party will not enter into any settlement or compromise that provides
for any remedy other than money damages without the prior written approval of
the indemnifying party, which approval will not be unreasonably withheld.
9.4 Survival. The provisions of this Section 9 will survive the
termination or expiration of this Agreement.
10. TERMINATION.
10.1 Expiration of Term. The term of this Agreement is fifty (50)
years, commencing on the date of formation of Licensee.
10.2 Early Termination on Breach. A party may without prejudice to
its other remedies terminate this Agreement by notice in writing to the
other on or after the occurrence of any of the following:
(a) the commission of one or more material breaches of this
Agreement by the other party which are not capable of remedy; provided that in
the case of a breach by the Licensee, such breach is not caused by PEGI as a
member or manager of Licensee.
18
(b) the commission of a material breach of this Agreement by the
other party which is capable of remedy (a "Remediable Breach") which will not
have been remedied within a period of one (1) month after the party in breach
has been given notice in writing specifying that Remediable Breach and requiring
it to be remedied; provided, however, that such one (1) month period will be
extended for such additional period as will be reasonably necessary if that
Remediable Breach is incapable of remedy within that one (1) month period and
during that one (1) month period the party in breach will diligently endeavor to
remedy that Remediable Breach, but only if such extension would not reasonably
be expected to have a material adverse effect on the party giving notice of such
breach, and further provided that any such breach by Licensee is not caused by
PEGI as a member or manager of Licensee.
(c) with respect to Licensor, PEGI has properly terminated
the Program Supply Agreement.
(d) with respect to Licensor, PEGI elects to dissolve Licensee as
the result of VSI (or its Affiliates that are members of Licensee) being in
default of its obligations under the Operating Agreement.
11. EFFECTS OF TERMINATION.
11.1 Survival of Obligations. The termination of this Agreement for
whatever reason will not affect any provision of this Agreement which is
expressed to survive or operate in the event of its termination and will not
prejudice or affect the rights of either party against the other in respect of
any breach of this Agreement or in respect of any moneys payable by one party to
the other with respect to any period prior to termination.
11.2 Termination of Rights. Upon the expiration or termination of this
Agreement, all rights of Licensee hereunder will immediately terminate and
automatically revert to Licensor and Licensee will cease to make any use of the
Trademarks. Further, Licensee will immediately amend its charter documents so
that its name no longer includes any reference to any trademark of Licensor or
any confusingly similar designation or ▇▇▇▇.
11.3 Further Assurances. Upon the expiration or termination of this
Agreement, the parties will promptly perform all other acts which may be
necessary or useful to render effective the termination of Licensee's interests
in the Trademarks and Licensee will execute any assignment, conveyance,
acknowledgment or other document that Licensor may reasonably request
relinquishing such interests and the goodwill associated therewith. Without
limiting the foregoing, Licensee hereby consents to any application which
Licensor may make to limit or terminate Licensee's status as a registered user
and irrevocably agrees not to contest, oppose or dispute such application.
12. EQUITABLE RELIEF.
Each of Licensor and Licensee acknowledges that any material breach of
this Agreement by such party, including, by way of example, Licensee's failure
to cease using the Trademarks upon the expiration or termination of this
Agreement, will result in irreparable harm to the other party for which there is
no adequate remedy at law. Accordingly, in such event, Licensor or Licensee, as
the case may be, will be entitled to preliminary or temporary equitable relief
in any Federal or State Court of competent jurisdiction located in Los Angeles
County, California pending a
19
final determination in accordance with Section 13, without the necessity of
posting bond unless otherwise required by applicable law by way of any or all of
the temporary and permanent injunctions and such other relief as any court of
competent jurisdiction may deem just and proper.
13. DISPUTE RESOLUTION.
13.1 General Agreement Regarding Dispute Resolution. Except as set
forth in Section 12, any dispute arising out of or relating to this Agreement
will be resolved in accordance with the procedures specified in this Section 13,
which will be the sole and exclusive procedures for the resolution of any such
disputes; provided, however, that this Section will not apply to any dispute
concerning the validity, ownership or control of the Trademarks, and instead any
such dispute will be litigated in a court of law. The Parties intend that these
provisions will be valid, binding, enforceable and irrevocable and will survive
any termination of this Agreement.
13.2 Notification and Negotiation. The parties will promptly notify
each other in writing of any dispute arising out of or relating to this
Agreement. The parties will attempt in good faith to resolve any dispute arising
out of or relating to this Agreement promptly by negotiation between executives
who have authority to settle the controversy. All reasonable requests for
information made by one party to the other will be honored.
13.3 Mediation. If any such dispute remains unresolved within thirty
(30) days of original notice thereof, the parties will endeavor to resolve any
dispute arising out of or relating to this Agreement by mediation under the CPR
Mediation Procedure for Business Disputes. Unless the parties agree otherwise,
the mediator will be selected from the CPR Panel of Neutrals with notification
to CPR.
13.4 Arbitration. Any controversy or claim arising out of or relating
to this Agreement or the breach, termination or validity thereof, which remains
unresolved forty-five (45) days after appointment of a mediator, will be settled
by arbitration by a sole arbitrator in accordance with the CPR Non-Administered
Arbitration Rules; provided, however, that if either party will not participate
in a non-binding procedure described above in Sections 13.2 and 13.3, the other
may initiate binding arbitration before expiration of the above period for
negotiation and mediation. The arbitration will be governed by the United States
Arbitration Act, 9 U.S.C. ss. 1-16, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction thereof. The place of
arbitration will be Los Angeles, California.
13.5 Damages. Except as expressly provided below, the arbitrator is not
empowered to award damages in excess of compensatory damages and each party
hereby irrevocably waives any right to recover such damages with respect to any
dispute resolved by arbitration. The arbitrator will have the authority to
include, as an item of damages, the costs of arbitration, including reasonable
legal fees and expenses, incurred by the prevailing party and to apportion such
costs among the parties on a claim by claim basis as such party prevails
thereon. For purposes of the foregoing, the "prevailing party" will mean the
party whose final settlement offer (or other position or monetary claim) prior
to the start of arbitration is closest to the judgement awarded by the
arbitrator, regardless of whether such judgement is entered into in favor of or
against such party.
13.6 Statute of Limitations. The statute of limitations of the
20
State of California applicable to the commencement of a lawsuit will apply to
the commencement of an arbitration hereunder, except that no defenses will be
available based upon the passage of time during any negotiation or mediation
called for by the preceding paragraphs of this Section 13.
13.7 Confidential Negotiations. All negotiations pursuant to
Sections 13.2 and 13.3 are confidential and will be treated as compromise
and settlement negotiations for purposes of applicable rules of evidence.
14. MISCELLANEOUS.
14.1 Binding Effect; No Assignment. The provisions of this Agreement
will be binding on and inure to the benefit of the successors of each party
hereto; provided, however, that no party may assign, transfer, pledge,
hypothecate, charge or otherwise dispose of or subcontract any of its rights or
obligations hereunder without the prior written consent of the other party.
Notwithstanding the foregoing; (i) either party may assign its rights and
obligations hereunder to an Affiliate of such party, but the original party will
remain responsible and liable for such Affiliate's compliance with all of such
original party's obligations hereunder, and, in the case of an assignment by
Licensor, such Affiliate must be the owner of the Trademarks; and (ii) in the
event Lifford (or an Affiliate of Lifford which is then a member of Licensee)
elects to dissolve Licensee due to a breach by PEGI (or an Affiliate of PEGI
which is then a member of Licensee) of the Operating Agreement, Lifford (or such
Affiliate) cause Licensee's rights hereunder to be assigned to Lifford (or to an
Affiliate of Lifford), provided that Licensee's rights under the Program Supply
Agreement are assigned to the same assignee. Nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective permitted successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
14.2 Invalidity. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdictions.
14.3 Waivers, Remedies Cumulative, Amendments.
(a) No failure or delay by any of the parties hereto in
exercising any right, power or privilege under this Agreement will operate as a
waiver thereof nor will any single or partial exercise by any of the parties
hereto of any right, power or privilege preclude any further exercise thereof or
the exercise of any other right, power or privilege.
(b) Except as otherwise provided in this Agreement, the rights
and remedies herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
(c) No provision of this Agreement may be amended, modified,
waived, discharged or terminated, other than by the express written agreement of
the parties hereto nor may any breach of any provision of this Agreement be
waived or discharged except with the express written consent of the party not in
breach.
14.4 Notices. All notices, requests, demands and other communications
required to be given under this Agreement will be in writing and will
conclusively be deemed to have been duly given (a) when hand
21
delivered, (b) the next business day if sent by a generally recognized overnight
courier service that provides written acknowledgment by the addressee of
receipt, or (c) when received (with appropriate answer back), if sent by
facsimile transmission or other generally accepted means of electronic
transmission addressed as follows:
if to Licensor to:
Playboy Enterprises, Inc.
Attention: General Counsel
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Playboy Entertainment Group, Inc.
Attention: President
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
if to Licensee to:
Playboy TV International, LLC
c/▇ ▇▇▇▇▇▇▇▇ Television Group
Attention: Director Legal and Business Affairs
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
United States of America
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Greenberg, Glusker, Fields, Claman & Machtinger LLP
1900 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address, or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.
14.5 Governing Law. ALL QUESTIONS WITH RESPECT TO THIS AGREEMENT AND
THE RIGHTS AND LIABILITIES OF THE PARTIES WILL BE GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE , IRRESPECTIVE OF THE CHOICE OF LAWS PROVISIONS OF DELAWARE OR
OF ANY OTHER JURISDICTION.
14.6 Service of Process; Forum. Each party agrees that service by
registered or certified mail, return receipt requested, delivered to such party
at the address provided in Section 13.5 (Notices) above, will be deemed in every
respect effective service of process upon such person for all purposes of this
Agreement relating to mediation and arbitration. Each party irrevocably submits
to the jurisdiction of the courts of the State of California and to any federal
court located within such state for the purpose of any action or judgement with
respect to this Agreement,
22
regardless of where any alleged breach or other action, omission, fact or
occurrence giving rise thereto occurred. Each party hereby irrevocably waives
any claim that any action or proceeding brought in California has been brought
in any inconvenient forum.
14.7 Additional Provisions to Enforce Awards. The parties will take all
actions necessary for awards and other judgements relating to this Agreement to
be recognized and enforceable in the respective jurisdictions of organization of
Licensee, Licensor and their respective affiliates and, to the extent necessary,
in other jurisdictions in the Territory.
14.8 Entire Agreement. This Agreement, together with its attachments,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral and written, between the parties hereto with respect to the subject matter
hereof, including, but not limited to, any provisions relating to the Trademarks
contained in the Agreement Outline.
14.9 Rules of Construction.
(a) Headings. The section headings in this Agreement are inserted
only as a matter of convenience, and in no way define, limit, or extend or
interpret the scope of this Agreement or of any particular section.
(b) Tense and Case. Throughout this Agreement, as the context may
require, references to any word used in one tense or case will include all other
appropriate tenses or cases.
(c) Agreement Negotiated. The parties hereto are sophisticated
and have been represented by lawyers throughout the negotiation and execution of
this Agreement who have carefully negotiated the provisions hereof. As a
consequence, the parties do not believe the presumption of California Civil Code
Section 1654 and similar laws or rules relating to the interpretation of
contracts against the drafter of any particular clause should be applied in this
case and therefore waive its effects.
14.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
14.11 Relationship Between the Parties. This Agreement will not be
construed to place the parties in the relationship of partners or joint
venturers.
14.12 Time is of the Essence. Time will be of the essence with respect
to each and every obligation of Licensee and Licensor hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
LICENSOR:
PLAYBOY ENTERPRISES, INC.
23
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
SIGNATURES CONTINUED ON FOLLOWING PAGE
SIGNATURES CONTINUED FROM PRECEDING PAGE
LICENSEE:
PLAYBOY TV INTERNATIONAL, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Director
SCHEDULE I
CURRENT TRADEMARKS
Playboy Content Category:
* * *
Spice Content Category:
* * *
AdulTVision Content Category:
* * *
Additional Marks Associated With Specific Programming and Subject to Limited
License as Provided in Section 2.1(a):
* * *
24
SCHEDULE II
REGISTERED AND PENDING TRADEMARKS IN THE TERRITORY
* * *
[six pages omitted pursuant to confidential treatment request]
SCHEDULE III
LICENSOR'S EXISTING TRADEMARK AGREEMENTS
TO BE ASSIGNED TO LICENSEE
* * *