Playboy Enterprises Inc. Contracts
Sample Business Contracts
Affiliation Agreement for DBS Satellite Exhibition of Cable Programming [Amendment No. 2] - Playboy Entertainment Group Inc. and DirecTV Inc.
EXECUTION VERSION
SECOND AMENDMENT TO AFFILIATION AGREEMENT
FOR DBS SATELLITE EXHIBITION
OF CABLE PROGRAMMING BY AND BETWEEN
PLAYBOY ENTERTAINMENT GROUP, INC. AND DIRECTV, INC.
This Second Amendment (the "Second Amendment") to that certain AFFILIATION
AGREEMENT FOR DBS SATELLITE EXHIBITION OF CABLE PROGRAMMING dated as of
November 15, 1993, as amended by the First Amendment dated as of April 19, 1994
(as so amended, the "Agreement") by and between Playboy Entertainment Group,
Inc. a Delaware corporation ("Programmer") with offices at 9242 Beverly Blvd.,
Beverly Hills, CA 90210, and DIRECTV, Inc., a California corporation with
offices at 2230 East Imperial Highway, El Segundo, CA 90245 ("Affiliate"), is
hereby made and entered into this 26th day of July, 1995, as follows:
1. Amendments. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto amend the
Agreement, pursuant to Section 13 thereof, as follows:
A. Schedule. The first sentence of Section 1(b) is hereby amended to
read as follows:
(b) The "Service" shall mean and consist of the national
feed (or, if Programmer uses multiple feeds for the Service, such
other of such multiple feeds designated by Affiliate) of the
programming service commonly known as "Playboy TV," which shall
consist of entertainment programming for adult audiences,
presented (i) on a 10-hour per day schedule from 8 PM (eastern
time) until 5:59 AM (eastern time), or (ii) commencing August 21,
1995 (the "24 Hour Launch Date"), on a 24-hour per day schedule
as the parties shall mutually agree upon (each such 10 hour or 24
hour exhibition time block, as the case may be, shall be referred
to hereinafter as an "Exhibition Day"), the content of which
Programmer may determine in its sole discretion, including the
substitution or withdrawal of any scheduled programs, and of
commercial, promotional or other announcements.
B. PPV Offerings. The last sentence of Section 1(c) is hereby
amended to delete the period at the end of the sentence and add the following
clause thereafter:
; and provided further, commencing on the 24 Hour Launch Date and
continuing for such time as the Service is presented on a 24-hour
per day schedule, Affiliate shall exhibit the Service through the
PPV Offerings in 2 blocks of 12 hours each per Exhibition Day.
C. Launch Fees. The following paragraph is hereby inserted as
Section 2(g):
(g) With respect to each of the periods from September 15
to October 14, 1995, and from October 15, 1995 to November 14,
1995 (each, a "Calculation Period"), Affiliate shall deduct
"Launch Fees" from the applicable percentage of Gross Receipts
paid to Programmer, which Launch Fees shall equal the difference
of the applicable percentage of Gross Receipts otherwise payable
to
1
<PAGE>
EXECUTION VERSION
Programmer for such Calculation Period minus $267,000. (For
example, in the event the applicable percentage of Gross Receipts
otherwise payable to Programmer for the period from September 15
to October 14, 1995 equals $400,000, then Affiliate shall deduct
Launch Fees in the amount of $400,000 minus $267,000, or
$133,000, from the Gross Receipts paid to Programmer.) In the
event the aggregate Launch Fees deducted by Affiliate for the two
Calculation Periods equal less than $200,000, Affiliate shall
deduct from the applicable percentage of Gross Receipts otherwise
payable to Programmer for the second Calculation Period that
amount equal to the difference between $200,000 and the aggregate
Launch Fees for the two Calculation Periods. Notwithstanding the
foregoing, in the event Affiliate discontinues carrying the
Service on a 24-hour basis at any time prior to August 20, 1996,
Affiliate shall pay to Programmer, within 60 days of such
termination of 24 hour programming, an amount equal to the
product of the Launch Fees previously deducted by Affiliate and
any amounts received by Affiliate from Programmer pursuant to
this Section 2(g), times 12 minus the number of months during
which the Service is offered on a 24-hour basis, divided by 12.
(For example, in the event 24 hour programming of the Service is
discontinued after 5 months, Affiliate would return to Programmer
7/12 of all Launch Fees and other amounts paid by Programmer to
Affiliate under this Section 2(g).)
D. Advertising. The second, fourth, fifth, sixth and last sentences
of Section 4(d) are hereby deleted effective as of June 30, 1995, and the first
sentence of Section 4(d) is hereby amended to read as follows:
(d) Affiliate may expend such amounts as it deems necessary
or desirable, in its sole discretion after June 30 1995, during
any 12-month period (with each 12-month period starting on the
Service Commencement Date as defined in Section 6(a) or the
anniversary thereof) (a "12-Month Period") for marketing,
advertising and promoting the distribution of the Service via the
DBS Distribution System.
E. Playboy Magazine Advertisements. Section 4(e) is hereby amended
to delete the second sentence and add the following sentences after the last
sentence thereof:
Programmer shall provide to Affiliate one free advertisement
(promoting the distribution of the Service via the DBS
Distribution system or any other aspect of Affiliate's business,
in Affiliate's sole discretion,) in Playboy Magazine, for each
advertisement purchased by Affiliate in Playboy Magazine after
August 21, 1995 at the applicable market rate; provided, however,
in no event shall Programmer be required to provide more than 2
free advertisements to Affiliate in any one year period
commencing on July 1 and ending on June 30 of a given year.
Affiliate shall have sole discretion as to whether such free
advertisement is a national advertisement or consists of regional
advertisements placed in each of the 12 Regions.
2
<PAGE>
EXECUTION VERSION
F. Exclusivity. The word "and" which is the last word in clause (x) of
Section 5(a) is hereby deleted; and the period at the end of clause (xi) of
Section 5(a) is hereby deleted and replaced with:
; and
In addition, a new clause (xii) is hereby added to Section 5(a), to read as
follows:
(xii) shall not offer adult audience entertainment
programming (e.g., "Spice") on a 24-hour per day basis (other
than the Service) during the 60 days commencing with the 24 Hour
Launch Date.
2. Exhibit A. Programmer and Affiliate acknowledge and agree that
Exhibit A is hereby amended to read as set forth in the attached Revised Exhibit
A.
3. No Other Amendment. Except as specifically provided in Sections 1 and 2
above, all terms and provisions of the Agreement shall remain unmodified and in
full force and effect; provided however, that in the event that Affiliate
discontinues carrying the Service on a 24-hour per day basis at any time during
the Term, the amendments set forth in Sections 1 and 2 above (excluding
Affiliate's obligation to pay Programmer the amounts set forth in the
penultimate sentence of Section 1.C) shall be of no further force and effect;
and provided further, that with respect to Section 4(d) of the Agreement,
Affiliate's obligation to expend any minimum amount on marketing, advertising
and promotion of the distribution of the Service shall be prorated to equal only
that proportion of any 12-Month Period during which the Service is not offered
on a 24-hour per day basis.
4. Counterparts. This Second Amendment may be executed in counterparts,
each of which shall be deemed an original, and all such counterparts together
shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Second Amendment
through their duly authorized representatives as of the date first set forth
above.
ACCEPTED AND AGREED TO:
Playboy Entertainment Group, Inc. DIRECTV, Inc.
By: /s/ James L. English By: /s/ Lawrence N. Chapman
------------------------------ ------------------------
Name: James L. English Name: Lawrence N. Chapman
---------------------------- ----------------------
Title: President Worldwide Network Title: Senior Vice President
--------------------------- ---------------------
3
<PAGE>
EXECUTION VERSION
REVISED EXHIBIT A
-----------------
PROGRAMMER'S RATE CARD FOR NON-HOTEL/MOTEL DISTRIBUTION
-------------------------------------------------------
For the period prior to August 21, 1995:
----------------------------------------
<TABLE>
<CAPTION>
Required
--------
Marketing,
----------
Advertising,
-----------
Promotion
---------
Per Capita Gross Receipts* Affiliate Expenditure Programmer
------------------------- --------- ----------- ----------
Share** By Affiliate Share**
-------- ------------ -------
<S> <C> <C> <C>
$0.00-$1.099 53% 3% 47%
$1.10-$1.599 55% 1.5% 45%
$1.60-Above 58% 0% 42%
</TABLE>
For the period beginning August 21, 1995:
----------------------------------------
<TABLE>
<CAPTION>
Per Capita Gross Receipts* Affiliate Programmer
------------------------- ---------- ----------
Share** Share**
------- -------
<S> <C> <C>
$0.00-$1.099 53% 47%
$1.10-$1.599 55% 45%
$1.60-above 58% 42%
</TABLE>
*The "Per Capita Gross Receipts" for any month shall be determined by
taking the amount of Gross Receipts for such month and dividing that amount by
the number of DIRECTV Subscribers as of the fifteenth calendar day of such
month.
** As of January 1, 1995, the Affiliate Share and Programmer Share is
currently 60% and 40%, respectively, as a result of the adoption of Favored Fees
pursuant to Section 2(f) of the Agreement.
4