ex10_2.htm


    
      Exhibit
10.2

      


      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.



     

    BROADCAST
FACILITIES, Inc.

     

     

    SERVICES
AND FACILITIES AGREEMENT

     

    This
Agreement is made as of April 1, 2008 and is by and between Broadcast Facilities
Inc., (“BFI”), a
Delaware Corporation, located at 3030 Andrita Street, Los Angeles, California
90065 and Playboy Entertainment Group, Inc. (“PEGI”), a Delaware Corporation
with offices located at 2706 Media Center Dr., Los Angeles, California 90065,
and whose telephone and facsimile numbers are (323) 276-4000 and (323) 276-4505,
respectively (“Customer”).

     

    RECITALS

     

    A.           Whereas,
BFI currently leases fully protected capacity on satellite transponders from
Intelsat USA Sales Corp. (“Intelsat”) and has sufficient
capacity thereon to resell to Customer transponder capacity sufficient for the
transmission of Customer’s current thirteen (13) standard definition (“SD”) television channels (the
“SD Channels”) and
currently sufficient for Customer’s high definition (“HD”) channel(s) ***** (the
“HD Channels” and
together with the SD Channels, the “Channels”) should they be
launched by Customer in the future to cable MSOs, DTH operators and SMATV
systems in North America (collectively, the “Digital Channel Services”),
all in accordance with the technical specifications set forth in Exhibit
A;

     

    B.           Whereas,
BFI operates the Andrita Studios, an integrated production, post-production,
network origination and satellite transmission facility at 3030 Andrita Street
in Los Angeles, California (“Andrita”) and BFI desires to
provide to Customer the Digital Channel Services along with certain additional
services including:  (i) compression, encryption, downlinking of
Customer’s Playboy en Espanol Channel and uplinking of the SD Channels
(collectively with the Digital Channel Services and as further specified in
Section 1(a), the “Transmission
Services”), all in accordance with the details and  technical
specifications set forth in Exhibits A & B; (ii) network playback of all of
the SD Channels (excluding Playboy en Espanol), including Decocast services for
four (4) of the SD Channels (as further specified in Section 1(b), the “Network Playback Services”
and, together with the Transmission Services, the “Origination Services”), all in
accordance with the technical specifications set forth in Exhibit B; (iii) a
dedicated radio studio (the “Andrita Radio Studio”), in
accordance with the technical specifications set forth in Exhibit B and as
further specified in Section 1(c); (iv) post production services that include:
one (1) dedicated Final Cut Pro editing bay and *****  dedicated Final
Cut Pro edit stations (as further specified in Section 1(d), the “Dedicated Post Production
Services”) in accordance with the technical specifications set forth in
Exhibit B; (v) 

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    VOD
encoding, VOD concatenation and VOD propagation to cable headends, Telco systems
and DTH operators via CMC, inDemand, or direct delivery via hard drive or direct
digital file delivery via fiber circuits or the internet (the “VOD Services”) in accordance
with the technical specifications set forth in Exhibit B, and as further
specified in Section 1(e); (vi) five (5) closed offices and twenty-one (21)
office cubes including associated services such as parking, janitorial services,
security, access to common conference room facilities (all such services to be
provided at least at the same level and quality as they were provided as of the
date hereof) (the “Dedicated
Office Facilities”) in accordance with the specifications set forth in
Exhibit B and as further specified in Section 1(f); and (vii) tape vault space
for Customer’s tapes that are required for the Network Playback Services, the
Dedicated Post Production Services, the VOD Services or the Additional Services,
said tape vault to be exclusive to Customer, managed by Customer’s employees and
to only contain active tapes  (the “Tape Vault
Services”).  The Transmission Services, the Network Playback
Services, the Andrita Radio Studio, the Dedicated Post Production Services, the
VOD Services, the Dedicated Office Facilities and the Tape Vault Services shall
collectively be referred to as the “Dedicated BFI
Services.”  In addition, BFI will have a right of first refusal
to provide Customer with physical tape duplication services and conversion
between the standards set forth on the Playboy Rate Card, provided Customer
intends to use a non-affiliated third party for these services and provided BFI
meets generally accepted industry pricing, quality and delivery standards (the
“Duplication/Conversion
Services”), as described in Section 1(h).  In addition,
Customer will have the option to secure certain optional services, including but
not limited to encoding services other than the VOD Services, production
services, supplemental post-production services including additional Final Cut
Pro editing bays, audio suites, voice over booth(s), graphics bay(s), digital
archive services, IPTV services, Decocast services in addition to the four (4)
dedicated Decocast services provided in the Network Playback Services, off-air
compliance recording and fiber connectivity, all as set forth in Exhibit C
(collectively, the “Optional
Services”) and Exhibit D (the “Playboy Rate Card”) and as
further specified in Section 1(i).  In addition, in the event Customer
launches HD Channel(s) during the Term, BFI will provide the HD compression, HD
uplink and HD space capacity (collectively, the “HD Transmission Services”),
and the HD network playback (the “HD Network Playback Services”)
required to originate these HD Channel(s), provided BFI has the capacity and
facilities available for the HD Channel(s) *****, all as further specified in
Sections 1(j) and 1(k).  In addition to the Dedicated Office
Facilities, BFI will also provide five (5) closed offices and five (5) office
cubes including associated services such as parking, janitorial services,
security, access to common conference room facilities (all such services to be
provided at least at the same level and quality as they were provided as of the
date hereof) (the “Additional
Office Facilities”) in accordance with the specifications set forth in
Exhibit B and as further specified in Section 1(l).  The Dedicated BFI
Services, the Duplication/Conversion Services, the Optional Services, the HD
Transmission Services, the HD Network Playback Service and the Additional Office
Facilities shall collectively be referred to as the “Andrita Services;”
and

     

    C.           Whereas,
Customer currently operates 13 SD Channels and manipulates and distributes the
SD Channels and additional media to multiple broadcast television platforms
including but not limited to Cable MSOs, DTH Operators, SMATV Systems, and VOD
Platforms and whereas Customer and BFI have simultaneous with the execution of
this Agreement entered into an agreement through which BFI has purchased certain
assets from 

     

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Customer
or its affiliates necessary to provide the Andrita Services and under which
Customer has committed to enter into a service agreement to purchase the Andrita
Services from BFI under the terms and conditions contained herein during the
Term of this Agreement as defined below;

     

    Now,
therefore, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereby agree as
follows:

     

     

    
      	
              1.

            	
              Services and
      Facilities: BFI will provide Customer the following services and
      facilities from and in BFI’s facilities at Andrita on the terms and
      conditions set forth herein:

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              The Transmission
      Services, in accordance with the details and
      technical specifications set forth in Exhibits A & B, using the Galaxy
      23 (“G
      23”) Transponder 5, 15 and/or 23 or such
      other satellite transponder(s) and/or satellite(s) that may replace
      G 23 Transponder 5, 15 or 23, or their replacements due to the
      failure of G 23 Transponders 5, 15 or 23 to meet technical specifications
      materially equivalent to those set forth in
      Exhibit A (the “BFI SD
      Transponders”).  The Transmission
      Services will be provided for the entire Term.  The Transmission
      Services will initially be provided for 13 SD Channels (including Playboy
      TV en Espanol).  *****.  The parties acknowledge that the Channel
      known as Club Jenna XX.5 will terminate at midnight EST on March 27,
      2008.  If during the Term Customer commences the origination of
      any additional SD Channel(s), Customer must utilize BFI for the
      Transmission Services required to originate said additional
      Channel(s) (the “Additional SD
      Channel(s)”) and BFI will provide Customer
      with the Transmission Services for the Additional SD Channel(s) pursuant
      to this Agreement, provided BFI has the capacity and facilities available
      for the Additional SD
      Channel(s).  Upon Customer’s reasonable request at any time,
      BFI shall, within five (5) days, notify Customer of the number of
      Additional SD Channel(s) for which BFI has the capacity and facilities to
      provide Transmission Services at such time.  BFI shall be
      responsible for responding to any failure of a BFI SD Transponder and/or
      G23, including providing all appropriate notices to
      Customer.  Customer and BFI shall reasonably cooperate with each
      other in connection with the response to any such failure, including
      technical communications to third parties.  Customer shall be
      solely responsible for providing notice of any such failure to third
      parties, including but not limited to Customer’s affiliates.  For all
      purposes of this agreement, an “affiliate” shall mean with respect to any
      “person” (which shall mean an individual,
      a partnership, a corporation, a limited liability company, an association,
      a joint stock company, a trust, a joint venture, an unincorporated
      organization, any other business entity or a governmental
      entity (or any department, agency, or political subdivision thereof)), any
      other person directly or indirectly controlling or controlled by or under
      direct or indirect common control with such specified person; and for
      purposes of this definition,
      “control,” as used with respect to any
      person shall mean the possession, directly or indirectly, of the power to
      direct or cause the direction of the management or policies of such
      person, whether through the ownership of voting securities, by agreement or
      otherwise.  For purposes of this definition, the terms
      “controlling,” controlled by” and “under common control
      with” shall have
      correlative meanings.

            


    

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              The Network Playback Services, in
      accordance with the details set forth in Exhibit B, all specifically for
      creation, playback and transmission of the SD Channels and data
      appurtenant thereto.  The Network Playback Services will be
      provided for the entire Term.  The Network Playback Services
      will initially be provided for 12 SD Channels (not including Playboy TV en
      Espanol).  *****.  The parties acknowledge that the
      Channel known as Club Jenna XX.5 will terminate at midnight EST on March
      27, 2008.  If during the Term Customer commences the origination
      of any Additional SD Channel(s) pursuant to this Agreement, Customer
      must utilize BFI for the Network Playback Services required to originate
      said Additional SD Channels and BFI will provide the Network Playback
      Services for the Additional SD Channel(s), provided BFI has the capacity
      and facilities available for the
      Additional SD Channel(s).  Upon Customer’s reasonable request at any time,
      BFI shall, within five (5) days, notify Customer of the number of
      Additional SD Channel(s) for which BFI has the capacity and facilities to
      provide Network Playback Services at such
      time.

            


    

     

     

    
      	
               
      

            	
              (c)

            	
              The Andrita Radio Studio (as it is
      currently configured or with improvements thereto made at BFI’s sole discretion, unless Customer
      requests in writing that BFI provide additional equipment, software and/or
      functionality for the
      Andrita Radio Studio (and upon such a request, the parties shall negotiate
      in good faith regarding additional fees and charges), in accordance with
      the details set forth in Exhibit B.  The Andrita Radio Studio
      will be provided for the first thirty-six (36) months of the Term (the
      “Andrita Radio
      Studio Term”).  At
      Customer’s option, one hundred and twenty
      (120) days prior to the end of the Andrita Radio Studio Term, BFI and
      Customer will commence good faith negotiations on the terms and conditions
      for an extension of
      the Andrita Radio Studio Term.  In the event BFI and Customer
      fail to reach agreement on the terms and conditions for an extension of
      the Andrita Radio Studio Term prior to the end of the Andrita Radio Studio
      Term, BFI shall be free from any obligation to provide Customer
      with the Andrita Radio Studio facilities after the Andrita Radio Studio
      Term.

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              The Dedicated Post Production
      Services, in accordance with the details set forth in Exhibit
      B.  The Dedicated Post Production Services will be provided for the first
      thirty-six (36) months of the Term (the “Dedicated Post
      Production Services Term”).  Customer shall have
      the option to extend the Dedicated Post Production Services Term on the
      then-existing terms and conditions for the remainder of the Term, provided Customer
      provides BFI with written notice thereof no later than ninety (90) days
      prior to the end of the Dedicated Post Production Services
      Term.

            


    

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              The VOD Services including VOD
      encoding, VOD concatenation and VOD propagation to cable headends, Telco systems and DTH
      operators *****, all in accordance with the
      details set forth in Exhibit B.  The VOD Services will be
      provided for the Term.

            


    

     

     

    
      	
               
      

            	
              (f)

            	
              The Dedicated Office Facilities,
      in accordance with the details set forth in Exhibit B.  The
      Dedicated Office
      Facilities will be provided for the first thirty-six (36) months of the
      Term (the “Dedicated
      Office Facilities Term”).  Customer shall have
      the option to extend the Dedicated Office Facilities Term on the
      then-existing terms and conditions for the remainder of the Term, provided
      Customer provides BFI with written notice thereof no later than ninety
      (90) days prior to the end of the Dedicated Office Facilities
      Term.

            


    

     

     

    
      	
               
      

            	
              (g)

            	
              The Tape Vault Services, in
      accordance with the details set forth in Exhibit
      B.  The
      Tape Vault Services shall be provided for the
  Term.

            


    

     

     

    
      	
               
      

            	
              (h)

            	
              The Duplication/Conversion
      Services in accordance with the details set forth in Exhibit B and at the
      rates set forth on the Playboy Rate Card shall be provided for the Term;
      provided, that, if
      Customer is
      considering performing itself (or by its affiliates) these services, it
      shall notify BFI at least ***** days in advance.  If
      Customer is considering using a non-affiliated third party for these
      services, it may do so only if BFI is not meeting generally accepted industry pricing,
      quality and delivery standards for such services.  If Customer believes that BFI is not
      meeting generally accepted industry pricing, quality and delivery
      standards for such services, it shall notify BFI in writing, specifying
      where BFI does not
      meet generally accepted industry pricing, quality and delivery standards
      for such services.  Following its receipt of any such notice,
      BFI shall have ***** to address the issues raised by
      Customer (or, if new equipment is required to address the issue, such longer period
      as may be reasonably required to purchase and deploy such
      equipment).  If, at the end of such period, Customer and BFI
      agree that BFI has addressed the pricing, quality or delivery issues, then
      Customer may not use a non-affiliated third party for these
      services.  Otherwise, Customer may use a non-affiliated third
      party for these services.

            


    

     

     

    
      	
               
      

            	
              (i)

            	
              The Optional Services, at
      Customer’s option and in accordance with
      and subject to the details set forth in Exhibit C and the Playboy
      Rate
      Card.  Customer may elect to receive any of the Optional
      Services at any time during the Term, subject to BFI having sufficient
      capacity  (as solely determined by BFI) available at the time of
      Customer’s request to provide the requested
      services.  Exhibit D may be modified at any time
      during the Term, upon mutual agreement of BFI and
      Customer.

            


    

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (j)

            	
              The HD Transmission Services, and
      in accordance with the details and technical specifications set forth in
      Exhibits A and Exhibit B, using the Galaxy 13 (“G
      13”) Transponder 11 or 13, or such other
      satellite transponder(s) and/or satellite(s) that may replace G 13
      Transponder 11 or 13 or their replacements due to the failure of G 13
      Transponder 11 or 13 to meet technical specifications materially
      equivalent to those set forth in Exhibit A (the
      “BFI HD
      Transponder” and together with the BFI SD
      Transponders, the “BFI
      Transponders”); provided that BFI has the
      capacity and facilities available to provide the HD Transmission Services
      as determined on a HD Channel by HD Channel basis.  The HD
      Transmission Services will be provided from the date they commence for the
      remainder of the Term.  Customer must utilize the HD
      Transmission Services for all HD Channels it launches during the Term,
      *****.  Upon Customer’s request at any time, BFI shall, within five (5)
      days, notify Customer of the number of HD Channels for which BFI has the
      capacity and facilities to provide HD Transmission Services at such
      time.  BFI shall be responsible for responding to any failure of
      a BFI HD Transponder and/or G13, including
      providing all appropriate notices to Customer.  Customer and BFI
      shall reasonably cooperate with each other in connection with the response
      to any such failure, including technical communications to third parties.
      Customer shall be solely responsible for
      providing notice of any such failure to Customer’s third parties, including but not
      limited to Customer’s
    affiliates.

            


    

     

     

    
      	
               
      

            	
              (k)

            	
              The HD Network Playback Services,
      in accordance with the details in Exhibit B, all specifically for the
      creation, playback
      and transmission of HD Channel(s) and data appurtenant thereto; provided
      that BFI has the capacity and facilities available to provide the HD
      Network Playback Services as determined on a HD Channel by HD Channel
      basis.  The HD Network Playback Services will be provided from the
      date they commence for the remainder of the Term.  Customer must
      utilize the HD Network Playback Services for all HD Channels it launches
      during the Term, *****.  Upon
      Customer’s reasonable request at any time,
      BFI shall, within
      five (5) days, notify Customer of the number of HD Channels for which BFI
      has the capacity and facilities to provide HD Network Playback Services at
      such time.

            


    

     

     

    
      	
               
      

            	
              (l)

            	
              The Additional Office Facilities,
      in accordance with the details set forth in Exhibit B. The Additional Office Facilities
      will be provided for the first forty-five (45) days of the Term (the
      “Additional
      Office Facilities Term”).  Customer shall have
      the option to extend the Additional Office Facilities Term on the
      then-existing terms and conditions for the next forty-five
      (45) days of the Term by providing BFI with written notice
      thereof.

            


    

     

     

    
      	
               
      

            	
              (m)

            	
              Notwithstanding anything to the
      contrary in this Agreement, this Agreement shall only apply to content
      transmitted via broadcast, cable television, DTH, SMATV or any Telco system (e.g.
      Verizon, AT&T, etc.), and shall not apply to any content that is
      transmitted over the Internet or any equivalent or successor technology
      (including transmission via any IP or TCP/IP protocol, or any equivalent
      or successor protocols), unless said Internet
      transmission is incorporated in the transmissions and/or protocol utilized
      by Customer’s broadcast, cable television,
      DTH, SMATV, or Telco
systems.

            


    

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
              2.

            	
              Customer’s
      Channels.

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              Customer shall be solely
      responsible for the content of the Channels and the creation and
      delivery of said content to BFI, and Customer shall have the sole and
      exclusive right to license the reception of the Channels.  BFI
      shall have no rights whatsoever to the content of the Channels except
      those required to perform the Andrita Services reflected
      herein as directed to do so by the Customer.  BFI shall have no
      right to alter in any manner the content of the Channels except as
      required to perform the Andrita Services reflected herein, as directed by
      Customer.  Customer will be solely responsible for
      all billing and collection from all persons and entities that have been
      authorized to receive the Channels.  BFI shall not be
      entitled to any of
      such sums collected.

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              Upon Customer’s request with respect to specific
      Customer content, BFI
      shall, at no cost to Customer, promptly delete such content from all
      computer systems owned or controlled by BFI and, at Customer’s option and payment of
      BFI’s current Playboy Rate Card, BFI
      shall also provide Customer with a digital copy of such deleted content, in a
      format reasonably acceptable to BFI.  In the event BFI does not
      have a rate card rate for these services, Customer and BFI shall negotiate
      in good faith to establish the rates for these
      services.

            


    

     

     

    
      	
               
      

            	
              (c)

            	
              BFI shall only authorize or
      de-authorize headends
      (or any similar delivery mechanism) as instructed in writing by Customer,
      and shall promptly do so upon its receipt of any such
      instruction.  BFI shall provide Customer with a list of all
      Customer IRDs currently authorized by BFI’s encryption system upon
      Customer’s
  request.

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              From time to time during the Term,
      at Customer’s request, BFI shall reasonably
      cooperate with Customer in connection with additional projects involving
      the Andrita Services, so long as such cooperation does not
      require BFI to incur
      any additional, non de minimis costs.  To the extent that such
      cooperation would require BFI to incur any new additional, non de minimis
      costs, BFI shall notify Customer and the parties shall meet to discuss
      whether to alter or continue the proposed project, and any addition
      fees or charges to be paid by Customer, in good
    faith.

            


    

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              Term.  BFI
      shall commence providing the Andrita Services on the date hereof (the
      “Commencement
      Date”), and this Agreement shall continue for a period of sixty
      (60) months from the Commencement Date (the “Initial
      Term”).  During the Term, BFI shall provide each Andrita
      Service to Customer for the period set forth in the applicable provision
      of Section 1.  Customer shall have the option to extend the
      Initial Term for an additional thirty-six (36) months on terms and
      conditions that are substantially the same as the then-existing terms and
      conditions (the “Option
      Term”).  Customer shall provide written notice to BFI of
      its intention to exercise the Option Term no later than one hundred and
      twenty (120) days prior to the expiration of the Initial
      Term.  The “Term” shall consist of
      the Initial Term together with the Option Term and the Transition Period,
      if applicable, but in any case shall end at the termination of this
      Agreement if terminated earlier pursuant to the terms
    hereof.

            


    

     

     

    
      	
              4.

            	
              Fees.  As
      full consideration for the Dedicated BFI Services, HD Transmission
      Services and HD Network Playback Services, Customer shall pay to BFI per
      month (prorated for partial months) the following amounts, as set forth
      below (the “Monthly
      Charges”), as well as any fees set forth below for
      Duplication/Standards Conversion Services and/or Optional Services, as
      applicable (“Additional
      Charges”).

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              Subject to Section 4(b), Customer
      shall remit to BFI the following
      amounts:

            


    

     

     

    
      	
               
      

            	
              (i)

            	
              The
      Transmission Services:

            


    

     

     

    *****
per month per SD Channel

     

     

    
      	
               
      

            	
              (ii)

            	
              The
      Network Playback Services:

            


    

     

     

    *****
per month per SD Channel with an annual ***** increase on each anniversary of
the Commencement Date.

     

     

    
      	
               
      

            	
              (iii)

            	
              The
      Andrita Radio Studio:

            


    

     

     

    *****
per month with an annual ***** increase on each anniversary of the Commencement
Date.

     

     

    
      	
               
      

            	
              (iv)

            	
              The
      Dedicated Post Production Services:

            


    

     

     

    *****
per month for one Final Cut Pro edit bay with an annual ***** increase on each
anniversary of the Commencement Date.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    *****
per month for ***** Final Cut Pro work stations with an annual ***** increase on
each anniversary of the Commencement Date.

     

     

    
      	
               
      

            	
              (v)

            	
              The
      VOD Services:

            


    

     

     

    The
rates reflected in Exhibit D with an annual ***** increase on each anniversary
of the Commencement Date.

     

     

    
      	
               
      

            	
              (vi)

            	
              The
      Dedicated Office Facilities:

            


    

     

     

    *****
per square foot per month with an annual ***** increase on each anniversary of
the Commencement Date.

     

     

    
      	
               
      

            	
              (vii)

            	
              Tape
      Vault Services:

            


    

     

     

    *****
per month with an annual ***** increase on each anniversary of the Commencement
Date.

     

     

    
      	
               
      

            	
              (viii)

            	
              Duplication/Conversion
      Services:

            


    

     

     

    The
rates reflected in Exhibit D with an annual ***** increase on each anniversary
of the Commencement Date.

     

     

    
      	
               
      

            	
              (ix)

            	
              The
      Optional Services:

            


    

     

     

    The
rates reflected in Exhibit D with an annual ***** increase on each anniversary
of the Commencement Date.

     

     

    
      	
               
      

            	
              (x)

            	
              The
      HD Transmission Services:

            


    

     

     

    The
prevailing rate that BFI generally charges to third parties for substantially
equivalent HD Transmission Services at the time the Customer HD Channel is
launched.  Upon
Customer’s request, BFI shall provide
Customer with a list of its
then-current rates for such services.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (xi)

            	
              The
      HD Network Playback
Services:

            


    

     

     

    The
prevailing rate that Customer is paying for Network Playback Services for SD
Channels at the time the Customer HD Channel is launched.

     

     

    
      	
               
      

            	
              (xii)

            	
              The
      Additional Office
      Facilities:

            


    

     

     

    *****
per square foot per month with an annual ***** increase on each anniversary of
the Commencement Date, if applicable.

     

     

    
      	
               
      

            	
              (b)

            	
              The Monthly Charges (for the
      Dedicated BFI Services (other than the VOD Services), HD Transmission
      Services and HD Network Playback Services, as
      applicable) will be paid in advance and shall be due no later than the
      first day of the month in which the applicable Dedicated BFI Services are
      to be rendered (the “Due
      Date”).  As a courtesy, BFI
      shall send an invoice for the Monthly Charges thirty (30) days
      prior to the Due Date, provided that Customer’s failure to receive an invoice
      shall not relieve Customer of its obligation to pay the Monthly Charges by
      the Due Date.  To the extent that any Dedicated
      BFI Services (excluding the VOD Services, the Origination Services, the HD
      Network Playback Services and the HD Transmission Services) are not
      provided following such advance payment, Customer shall be entitled as its
      sole remedy (except only payment suspension if and as applicable under
      Section 12) to a credit equal to a pro rated (per applicable Channel and
      per applicable other channels) portion of the Monthly Charges for the
      period and with respect to such service(s) that are not provided (in each
      case, which is not also caused by any action or inaction of
      Customer).  In the event that Customer is entitled to suspend
      payments pursuant to Section 12, below; and, if Customer so suspends, then
      Customer shall not be entitled to any credit hereunder with respect to
      such suspended periods; provided that, to the extent that any resumed
      payment under Section 12 includes amounts paid for such suspended periods, then Customer
      shall be entitled to a credit hereunder with respect to the amounts paid
      for such suspended periods.

            


    

     

     

    
      	
               
      

            	
              (c)

            	
              The Additional Charges for the VOD Services, the Additional
      Office Facilities, the Duplication/Conversion Services and the Optional
      Services, as detailed in Exhibit C and Exhibit D, shall be invoiced after
      the applicable services are rendered to Customer and payment shall be due within thirty (30)
      days after Customer’s receipt of the invoice, unless
      otherwise specified.

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              All payments shall be made via
      electronic transfer to: BFI’s account as
      follows:

            


    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Incoming
Standard Domestic Wiring Instructions:

    Pay to
Bank:             
*****

    Address:                   
*****

                                    
*****

     

    ABA:                       
*****

     

    Beneficiary:              
Broadcast Facilities
Inc

                                   
3030 Andrita
Street

                                   
Los Angeles, CA 90065

     

     

    Account to
Credit    *****


     

     

    ACH
Instructions

    Same as standard domestic wiring
instructions, plus specify account type:  checking


     

     

    SWIFT Method
Instructions:

    Bank
Name:            *****

    Swift
Code:             *****

    Account
Number:    *****

    Account
Name:       *****

    Beneficiary Customer: *****

     

     

    
      	
               
      

            	
              (e)

            	
              The Monthly Charges and Additional
      Charges (as applicable) shall apply to each month, or fraction thereof
      (paid on a pro-rata
      basis), that the applicable Andrita Services are provided to Customer and
      accrue through and include the date that any Andrita Services are
      discontinued in whole or in part, as provided for herein.  Each
      month will be considered to have thirty (30) days for billing
      purposes.  Customer may dispute any or all charges after receipt
      of the applicable invoice.  If Customer disputes any charges,
      the parties shall work together in good faith to resolve such dispute;
      provided, however, if the parties do not resolve such dispute(s), then
      either party may bring the matter to binding arbitration for full and
      final resolution pursuant to the rules of the American Arbitration
      Association in Los
      Angeles and before
      one arbitrator.  If the resolution of such a dispute is that a party owes money to
      the other party, the party that owes money shall promptly pay such money
      to the other party, plus any applicable interest as set forth in the next
      sentence.  Any late payments of undisputed amounts due and
      payable hereunder to BFI shall be with interest at
      the annual rate equal to the “Prime Rate” as reported on the thirtieth day
      after the date of the invoice in The Wall Street Journal (or, if such day
      is not a business day, the first business day immediately after such
      day) plus five percent (5%), computed
      from the Due Date (with respect to Monthly Charges) or from the date that
      is thirty (30) days following Customer’s receipt of the applicable
      invoice for Additional Charges, continuing until the date on which payment
      is made.  If Customer fails to
      make payment of an undisputed amount when due, then BFI shall have the
      right to 

            


    

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
       

      
        	
                 
      

              	
                 

              	
                discontinue any of the Andrita
      Services and/or terminate this Agreement ten (10) days following
      BFI’s written notice to Customer of
      such breach that is not cured by Customer within such
      ten (10) day period.  If BFI notifies Customer that its payment
      of an undisputed amount is more than five (5) days late two (2) times or
      more within any twelve (12) month period, then Customer shall deposit with
      BFI an amount equal to the total Monthly
      Charges and Additional Charges for the month in which the second notice
      was issued as a security deposit which shall either be applied to the last
      Monthly Charges and Additional Charges of the Initial Term or Option Term,
      as applicable, or be returned to
      Customer within ten (10) days after the termination of this Agreement by
      Customer due to an uncured breach by BFI.  In the event the
      Agreement is terminated by BFI due to any uncured breach by Customer
      (including Customer’s failure to pay any amounts due
      pursuant to this Agreement and failure to cure such default within ten
      (10) days after notice thereof), BFI shall be entitled to retain any
      deposit hereunder in addition to any other rights or claims BFI may have
      pursuant to this Agreement and/or by
      law

              


      

    

     

    
      	
               
      

            	
              (f)

            	
              Records;
      Inspection and Audit Rights.

            


    

     

     

    
      	
               
      

            	
              (i)

            	
              During the Term *****, BFI shall maintain accurate
      records arising from or related to the Andrita Services provided
      hereunder, including accounting records and documentation produced in
      connection with the
      provision of the Andrita Services; provided, that BFI shall maintain such
      records for any longer duration required by any laws, statutes,
      ordinances, regulations, rules, notice requirements, court decisions,
      agency decisions, directives and orders of any government and any
      governmental department or agency that is applicable to Customer and of
      which BFI has reasonable prior notice, and Customer shall pay any
      incremental, out-of-pocket, non-de minimis costs incurred by BFI in
      connection with any such longer
      retention.

            


    

     

     

    
      	
               
      

            	
              (ii)

            	
              Upon reasonable written notice
      from Customer (which notice may be given once per year of the Term), BFI
      shall make available to Customer or its representatives reasonable access
      to *****, copies of, the records with
      respect to the
      Andrita Services invoiced hereunder, during regular business
      hours.  Customer shall have the right to review and audit such
      records at its sole cost and expense to verify such amounts.  In
      the event of any discrepancies or disputes between the amounts
      charged by BFI and BFI’s records, BFI and Customer shall
      work together to resolve such dispute.  If the resolution of
      such a dispute is that a party owes money to the other party, the party
      owing such amount shall pay it to the other party within thirty
      (30) days following resolution of the
      dispute.  *****.

            


    

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    
      	
              5.

            	
              Performance
      Standard.  BFI shall endeavor to meet the industry
      standard of 99.95% availability for the Network Playback Services, the
      Transmission Services (excluding the Digital Channel Services) and the HD
      Network Playback Services and the HD Transmission Services (excluding the
      Digital Channel Services), should they be applicable, of the
      Customer-provided media in accordance with the Customer-provided playlist
      (the “Performance
      Standard Services”) calculated on a Channel by Channel basis on an
      annual basis during the Term of this Agreement.  In the event there is a material
      degradation of the Performance Standard Services ***** (unless such material degradation
      is the result of the Customer-provided media, including any satellite feed
      arranged by Customer, or Customer-provided playlist, or in the event that
      the Customer-provided media and playlist are not delivered to BFI in
      conformance with Exhibit B), such event shall be considered an
      outage.  If during any twelve (12) month period,
      BFI’s Performance Standard Services
      falls below a 99.95% availability standard on a Channel by Channel basis
      (the “Performance
      Standard”); then BFI shall issue a prorated
      credit to Customer against the applicable
      charges.  In addition to the applicable
      credit, should BFI fail to meet or exceed the Performance Standard, on a
      Channel by Channel basis during any twelve (12) month period BFI shall be
      deemed in default of the Performance Standard for the applicable
      Channel.  BFI shall have the right to cure said
      default as follows:  If during the ninety (90) days following
      BFI’s default of the Performance
      Standard (the “Performance Standard Cure
      Period”), said Performance Standard Cure
      Period to commence at 12:01 AM/ET on the morning following the day BFI defaulted
      on the Performance Standard, BFI is in compliance with the Performance
      Standard (as prorated over a ninety (90) day period), BFI shall be deemed
      to have cured the Performance Standard default, and the Performance
      Standard, as calculated on a twelve (12)
      month basis, shall commence anew.  Should BFI fail to meet the
      Performance Standard during the Performance Standard Cure Period (the
      “Cure Period
      Default”), Customer may terminate the
      applicable Performance Standard Services on a Channel by Channel basis
      (only with respect to those Channels for which the Performance Standard
      was not met) and be relieved of the charges for the Origination Services
      on such Channels (on a Channel by Channel basis) going forward following
      such termination as provided for herein,
      provided that (i) Customer delivers written notice of its intent to terminate
      the Origination Services for the Channel(s) (the “Customer Channel Performance
      Termination”) no later than ***** after the occurrence of the
      Cure Period Default;
      (ii) Customer delivers written notice of the effective termination date,
      which can be any date left in the Term (the “Customer Channel Effective
      Termination Date”), to BFI within *****
      after BFI’s receipt of the Customer Channel
      Performance
      Termination, and (iii) Customer is not delinquent  in any
      amounts owed under this Agreement or is not otherwise in material breach
      of this Agreement either on the date of any such written notice or on the
      Customer Channel Effective Termination Date.   If Customer does not deliver
      written notice to BFI of its intent to terminate within the specified time
      periods, or is in material breach of this Agreement either on the date of
      such written notice or on the date of such termination, Customer will be
      deemed to have waived the Cure Period
      Default, as well as Customer’s right to terminate the
      Performance Standard Services, as applicable to a Channel, as a result of
      such purported default; provided, however that Customer’s failure to provide BFI notice
      shall not alleviate BFI of its obligation
      to issue Customer a prorated credit against applicable charges as a result
      of BFI’s failure to meet the Performance
      Standard.

            


    

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      	
              6.

            	
              Service
      Interruptions.  Notwithstanding any contrary provision
      herein and except only to the extent resulting from BFI’s willful
      misconduct or intentional breach of this Agreement, BFI shall not be
      responsible for and shall not be in default of this Agreement as a result
      of, nor shall it be held liable for any damages, claims, losses, or costs
      and expenses on account of, any interruption of the Andrita Services,
      including the Origination Services, to the extent that such interruption
      or failure occurs due to any of the following:  (i) damage to
      any equipment or interruptions in the Andrita Services caused by
      electrical storms, fire, weather, flood, natural disaster, national
      emergency or war, sabotage, riots, governmental authority (only where such
      act of government or governmental authority is not caused by BFI’s
      intentional breach of its obligations under this Agreement, acts of God,
      willful or criminal misconduct of third parties beyond BFI’s reasonable
      control, or other forces outside the control of BFI; (ii) interference
      from other communications systems, whether licensed or not, that use the
      same frequency bands as the Transmission Services herein, provided, that
      BFI shall use commercially reasonable efforts in its reasonable discretion
      to mitigate or eliminate any such interference; (iii) any interruption or
      out of specification performance of the BFI Transponder, any associated
      satellite transponders; (iv) conditions, which are beyond the control of
      BFI, that threaten the safety of operations and maintenance personnel; (v)
      occasional interruptions due to passing of the sun within the beamwidth of
      any associated BFI Transponder during the spring and fall equinox periods
      beyond BFI’s reasonable control and customary care in the industry; (vi)
      degradation or interruptions of the Channel due to protection switching;
      (vii) outage or interruption or degradation due to atmospheric attenuation
      of the Channel; (viii) such planned interruptions for testing or
      maintenance as may be agreed to in advance between Customer and BFI; (ix)
      any failure of Customer to fulfill an obligation hereunder where the
      failure of Customer to perform such obligation causes a service
      interruption; and/or (x) compliance by BFI with action by any court,
      agency, legislature or other governmental authority that makes it unlawful
      for BFI to provide the Andrita Services or any part thereof in accordance
      with this Agreement, in each case only where such action is not caused by
      BFI’s intentional breach of its obligations under this Agreement; provided that, with respect to
      the VOD Services, the
      Origination Services, the HD Network Playback Services and the HD
      Transmission Services, Customer shall be entitled as
      its sole remedy (except for the termination right as applicable under
      Section 5 and in addition to payment suspension if and as applicable under
      Section 12) to a credit pro rated (per applicable Channel and per
      applicable other channels and with respect to the applicable
      service(s)) on the
      Monthly Charges and applicable Additional Charges for the period of any
      such interruption in clauses (i)-(iv), (vi) and (x) (in each case, which
      is not also caused by
      any action or inaction of Customer) to the extent that such credit is
      provided to BFI by Intelsat.  In the event that Customer is
      entitled to suspend payments pursuant to Section 12, below; and, if
      Customer so suspends, then Customer shall not be entitled to any credit
      hereunder with respect to such suspended periods; provided that, to the
      extent that any resumed payment under Section 12 includes amounts paid for
      such suspended periods, then Customer shall be entitled to a credit
      hereunder with respect to the amounts paid for such suspended
      periods.  For the sake of clarity, BFI shall not be
      responsible for any service interruptions for:  (x) services or
      facilities arranged by the Customer and not provided by BFI, (y) any feeds
      into BFI provided by third parties or Customer whether arranged by BFI or
      not and any interruption caused by or related to any media or playlist
      provided by or on behalf of
  Customer.  *****.

            


    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
              7.

            	
              Representations,
      Warranties and Covenants.

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              By
      BFI.  BFI
      warrants, represents
      and covenants to Customer
that:

            


    

     

     

    
      	
               
      

            	
              (i)

            	
              it is in compliance with and will
      throughout the Term continue to comply in all material respects with all
      laws with respect to its rights and obligations under this
      Agreement;

            


    

     

     

    
      	
               
      

            	
              (ii)

            	
              it has the power and authority to
      enter into this
      Agreement and to fully perform its obligations
      hereunder;

            


    

     

     

    
      	
               
      

            	
              (iii)

            	
              it shall provide the Andrita
      Services in accordance with and subject to the terms and conditions set
      forth in this Agreement, and in a generally professional and workerlike
      manner;

            


    

     

     

    
      	
               
      

            	
              (iv)

            	
              it has a valid and enforceable written
      agreement with Intelsat for satellite transponder capacity which extends
      beyond the Term of this Agreement, such agreement as of the date hereof
      provides BFI with the necessary satellite transponder capacity for and
      allows BFI to provide the relevant Andrita
      Services specified in this Agreement, and BFI shall maintain such
      agreement in full force during the
Term;

            


    

     

     

    
      	
               
      

            	
              (v)

            	
              subject only to paragraph 5, it
      makes no representation or warranty, expressed or implied, regarding the
      performance of the
      BFI Transponders and/or the equipment utilized in providing the Andrita
      Services, including without limitation the compression system, the encoder
      and third party services, including those services and/or equipment
      provided by Intelsat, utilized in the performance of the Andrita
      Services, provided that BFI will take all necessary steps to enforce its
      rights against Intelsat for the benefit of
  Customer;

            


    

     

     

    
      	
               
      

            	
              (vi)

            	
              it shall not use the name of or
      logo of the Channels or the names, titles or logos of any of its
      programs, or the
      names, voices, photographs, likenesses or biographies of any individual
      participant or performer in, or contributor to, any program or any
      variations thereof, for any purposes other than in the provision of the
      Andrita Services as expressly authorized herein, without the
      express authorization to do so (except in each case for non-commercial use
      permitted under applicable
law);

            


    

     

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (vii)

            	
              it has obtained, and shall
      maintain in full force during the Term hereof, such federal, state and
      local authorizations
      as are material and are necessary to operate the business it is conducting
      in connection with its rights and obligations under this
      Agreement;

            


    

     

     

    
      	
               
      

            	
              (viii)

            	
              it has no knowledge of any
      misrepresentation, breach of warranty or covenant made by BFI
      hereunder;

            


    

     

     

    
      	
               
      

            	
              (ix)

            	
              execution and performance of its obligations
      hereunder does not constitute a breach of any other agreement to which BFI
      or its controlled affiliates are a
party;

            


    

     

     

    
      	
               
      

            	
              (x)

            	
              it will, or will cause its
      affiliates to, comply in all material respects with its agreement with
      Intelsat;
      and

            


    

     

     

    
      	
               
      

            	
              (xi)

            	
              execution and performance of its
      obligations hereunder does not violate the rights (including patents and
      patent applications; registered, unregistered and applications to register
      trademarks, service marks, and other indicators of source or
      origin; registered,
      unregistered and applications to register copyrights; trade secrets;
      know-how, inventions, processes, designs, specifications, formulas, and
      all other intellectual property rights (“Intellectual
      Property”)) of any person or entity,
      provided that BFI
      makes no representation, warranty or covenant with respect to any content
      or programming included or related to the Channels or any content or
      programming produced utilizing the Andrita Radio Studio (“Radio
      Content”).

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              By
      Customer.

            	
              Customer warrants, represents and covenants to
      BFI that:

            


    

     

     

    (i)           it is in compliance with and will
throughout the Term continue to comply in all material respects with all laws
applicable to, or with respect to, the Channels and the provision of the
Channels to BFI, Radio Content produced by or for Customer, and
Customer’s rights and obligations under this
Agreement, including without limitation, Federal Communications Commission rules
and regulations governing the Channels and Radio Content, if any, all relevant
provisions of the Cable Television Consumer Protection
and Competition Act of 1992, as amended, and the Communications Act of 1934, as
amended and any regulations promulgated under any applicable law or any of the
foregoing;

     

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    (ii)           it has the power and authority to enter
into this Agreement and to
fully perform its obligations hereunder;

     

     

    (iii)           it shall provide the Channels to BFI at
its sole cost and expense (together with any necessary equipment as the parties
agree to be added, if any, including without limitation, backup or reserve
equipment as Customer shall
require to decode Customer-provided inbound feeds), in accordance with and
subject to the terms and conditions set forth in this
Agreement;

     

     

    (iv)           it has obtained, and shall maintain in
full force during the Term, such federal, state and local authorizations as are material
and necessary to operate the business it is conducting in connection with its
rights and obligations under this Agreement.

     

     

    (v)           It has obtained or will obtain at its
sole expense all rights necessary for the delivery of the Channels to BFI and for BFI to
provide the applicable Andrita Services with respect to such Channel (but
expressly excluding the intellectual property rights specifically associated
with the Andrita Services), including, without limitation, obtaining
all necessary Intellectual Property,
including without limitation, all trademarks, copyrights, licenses and any and
all other proprietary, Intellectual Property and other use rights necessary in
connection therewith, and at all times during the Term obtaining all necessary rights, title and
interest in and to the names, titles or logos of the Channels (or any successors
thereto) and Radio Content, or any of their programs, or the names, voices,
photographs, music, likenesses or biographies of any individual participant or performer in, or
contributor to, any program or Radio Content or any variations thereof and to
perform its obligations hereunder;

     

     

    (vi)           it shall not, without BFI’s prior written approval, use any name
or logo of BFI (including any name or logo associated with Andrita Studios) for any
purpose (except for non-commercial use permitted under applicable
law);

     

     

    (vii)           to Customer’s actual knowledge, there is no actual
or pending investigation involving the Channels (or any content included in the
Channels) or Radio Content
or any pending proceeding against Customer (or any of its principals or
affiliated companies) for the violation of any federal, state or local law or
regulation, as applicable;

     

     

    (viii)          there are no outstanding (or, to the
best of Customer’s knowledge, threatened) judgments or pending claims,
liens, charges, restrictions, or encumbrances on or related to the Channels or
any programming provided as part thereof or any Radio Content that may
materially interfere with BFI’s rights or obligations under this
Agreement;

     

     

    (ix)           it has no knowledge of any
misrepresentation, breach of warranty or covenant made by Customer hereunder;
and

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (x)           execution and performance of its
obligations hereunder does not constitute a breach of any other agreement to
which Customer or its controlled affiliates are a party, and does
not violate the rights (including intellectual property rights) of any person or
entity.

     

     

    
      	
               
      

            	
              (xi)

            	
              Insurance.

            


    

     

        
a)           Customer
will provide and maintain during the Term, the following insurance
coverages:

    


    1.           Statutory
Workers’ Compensation and Employers’ Liability insurance with a limit of
liability on the latter of not less than *****.  Customer shall use
commercially reasonable efforts to cause its Workers’ Compensation carrier(s) to
waive insurer’s Right of Subrogation with respect to BFI and affiliated
companies.

    


    2.           A
Comprehensive General Liability Insurance and/or Excess Umbrella Liability
policy which shall contain coverage parts for blanket
contractual  (excluding breach of contract coverage), broad form
property damage, third party property damage, severability of interest, and
primary, not contributing coverage.  Customer shall provide coverage
with primary limits of liability and/or excess umbrella liability coverage with
not less than ***** combined single limit each occurrence.

    


    3.           Customer
shall waive all rights of subrogation on behalf of any insurance company
insuring their interests.

    


        
b)           Prior to use
of any Andrita facilities, Customer shall cause its insurance carrier(s) to add
BFI and its respective successors, assigns, licensees, officers, agents,
directors, owners, shareholders, and employees as additional insureds as their
respective interests may appear hereunder.

    


        
c)           Customer
will deliver to BFI original certificates of insurance and policy endorsements
evidencing the insurance coverage herein specified.  Thirty (30) days
notice of cancellation shall be given to BFI prior to cancellation or
non-renewal.  If Customer fails to deliver said insurance
certificate(s), BFI’s failure to request delivery shall in no way be construed
as a waiver of its obligation to provide the insurance coverage specified in
these paragraphs.

    


        
d)           Failure by
Customer to comply with the provision of this Insurance section could result in
suspension of the use of the Andrita facilities as determined by BFI, effective
upon thirty (30) days’ prior written notice to Customer, unless the failure is
cured during such period.

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

     

    
      	
              8.

            	
              Indemnification.

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              Customer’s
      Indemnification.  Subject to the
      limitations set forth in Section 10, Customer shall indemnify,
      defend and hold harmless BFI, its successors, parents, subsidiaries,
      affiliates, and the officers, directors, employees, agents and
      subcontractors of all of them, from and against all claims, costs, losses,
      damages and expenses (including without limitation,
      reasonable attorneys’ fees and costs) arising from
      claims by third parties (collectively “Losses”) resulting
      from:  (i) the content of any Channel or Radio Content,
      including without limitation, any claim for libel, slander, defamation, invasion of
      privacy, violation of publicity rights, infringement of Intellectual
      Property rights or violation of any other third party right; (ii) any
      claim by a third party related to the failure or interruption (including
      without limitation as a result of the delivery or
      non-delivery) of, or defect in, the carriage or reception of any Channel
      and/or any dispute between Customer and any of its systems and/or
      subscribers pertaining to the Channels provided by means of the Andrita
      Services, and (iii) any claim by a third party
      arising from the uncured breach by Customer of any representation,
      warranty, or material obligation of Customer hereunder.  The
      terms of this Section 8(a) shall survive the Term (or any extension
      thereof), expiration or termination of the Agreement for a
      period of three (3) years
thereafter.

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              BFI’s
      Indemnification.  Subject to the
      limitations set forth in Section 10 and Customer’s indemnity under Section
      8(a)(i-iv), BFI shall indemnify, defend and hold harmless Customer,
      its successors,
      parents, subsidiaries, affiliates, and the officers, directors, employees,
      agents and subcontractors of all of them, from and against all Losses
      resulting from (i) any claim by a third party (to whom BFI is providing
      uplinking or other similar services) relating to
      BFI’s services so provided to such
      third party, and (ii) any claim by a third party arising from the uncured
      breach by BFI of any representation, warranty, or material obligation of
      BFI hereunder.  The terms of this Section 8(b) shall survive the Term (or any
      extension thereof), expiration or termination of the Agreement for a
      period of three (3) years
      thereafter.

            


    

     

     

    
      	
              9.

            	
              Defense
      of Claim.  In the event of any
      claim or other assertion of liability by third parties with respect to
      which a party is
      entitled to indemnification under the preceding section, the party seeking
      indemnification (the “Indemnified Party”) shall notify the indemnifying
      party (the “Indemnifying
      Party”), in writing,
      promptly after the Indemnified Party receives notice of such claim, and in no event later
      than fifteen (15) days after receipt of a summons from or a complaint
      filed in any court or other governmental agency or body; provided,
      however, that the failure to give such notice shall not affect the rights
      of the Indemnified Party hereunder except to
      the extent that such failure has materially prejudiced the Indemnifying
      Party’s ability to defend such
      claim.  The Indemnifying Party may use counsel of its own
      choosing (with the Indemnifying Party remaining responsible for all costs and expenses of such
      counsel).  

            


    

     

     

    
      
         

      

      
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              The Indemnifying Party may not
      settle any claim hereunder for anything other than monetary damages
      without the Indemnified Party’s written consent, which shall not
      be unreasonably withheld.  The Indemnifying Party shall keep the Indemnified
      Party reasonably advised of the progress of any proceedings related to
      such claim, and of any settlement discussions or proposals with respect
      thereto.  If the Indemnifying Party fails to defend any such
      claim within a reasonable time after notice thereof or
      if counsel to the Indemnified Party advises the Indemnified Party that a
      conflict of interest with respect to the joint defense exist, the
      Indemnified Party shall be entitled to undertake the defense, compromise
      or settlement of such claim at the expense of
      and for the account and risk of the Indemnifying
      Party.  Notwithstanding any provision in this section to the
      contrary, the Indemnified Party shall have the right, at its sole expense,
      to participate in, the defense, compromise or settlement of any claim
      hereunder.

            


    

     

     

    
      	
              10.

            	
              Limitation
      of Liability.  NOTWITHSTANDING
      ANYTHING TO THE CONTRARY HEREIN, BFI SHALL NOT BE LIABLE TO CUSTOMER AND
      CUSTOMER SHALL NOT BE LIABLE TO BFI, FOR ANY AMOUNTS REPRESENTING THEIR OR
      THEIR CUSTOMERS’ RESPECTIVE LOSS OF PROFITS, LOSS OF
      BUSINESS, OR DIRECT OR INDIRECT SPECIAL, EXEMPLARY, CONSEQUENTIAL, OR
      PUNITIVE DAMAGES ARISING FROM THE PERFORMANCE OR NONPERFORMANCE OF THIS
      AGREEMENT, OR ANY ACTS OR OMISSIONS ASSOCIATED THEREWITH OR RELATED TO THE
      USE OF ANY SERVICES FURNISHED HEREUNDER,
      WHETHER THE BASIS OF THE LIABILITY IS BREACH OF CONTRACT, TORT (INCLUDING
      NEGLIGENCE AND STRICT LIABILITY), STATUTE, OR ANY OTHER LEGAL THEORY AND
      WHETHER ASSERTED AS INDEMNIFICATION OR
  OTHERWISE.

            


    

     

     

    
      	
              11.

            	
              Force
      Majeure.  Except as herein specifically provided to the
      contrary, neither BFI nor Customer shall have any rights against the other
      party hereto for the non-operation, malfunction, or failure of facilities
      or equipment or the non-furnishing of the Andrita Services by BFI or the
      Channels by Customer if such non-operation, malfunction, failure or
      non-furnishing is due to any cause beyond the other party’s reasonable
      control, which may include:  an act of God, fire, lockout,
      flood, tornado, hurricane, strike or other labor dispute, riot or civil
      commotion, earthquake, war, act of government or governmental
      instrumentality (whether federal, state or local and in each case, only
      where such act of government or governmental instrumentality is not caused
      by the other party’s intentional breach of its obligations under this
      Agreement, or other cause beyond such party’s reasonable control (all
      together, “Force
      Majeure”).  For the avoidance of doubt, a “cause beyond a
      party’s reasonable control” will not include occurrences arising from the
      willful misconduct or negligence of the party asserting protection
      hereunder.  BFI shall take all reasonable actions available to
      it to restore the Andrita Services following a Force Majeure event as soon
      as practical.  *****.

            


    

     

     

     

    
      
         

      

      
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              12.

            	
              Payment
      Suspension.  Customer shall be entitled to suspend
      applicable payments for Monthly Charges for Origination Services and, if
      and to the extent applicable, for HD Transmission Services, if the
      transmission of the Channel(s) are interrupted (an “Interruption” or
      “Interrupted”) due to Force Majeure, or if BFI is incapable of
      providing the Andrita Services, provided, however, that such payments will
      be made once the Channel(s) are no longer Interrupted and/or the Andrita
      Services are resumed.  Credit will be given to Customer on the
      following month’s bill on that portion of the Monthly Charges that is
      affected by any Interruption of the transmission of the Channel(s) or the
      Andrita Services due to Force Majeure pursuant to the terms of Section 6,
      above.  Further, if and to the extent that an Interruption
      occurs as a result of a
      negligent, grossly negligent, or an intentional breach by BFI of its
      obligations under this Agreement, then Customer shall be entitled
      (as its sole remedy) to a credit on the following month’s bill on that
      portion of the Monthly Charges that is affected by any Interruption of the
      transmission of the Channel(s).   In addition, Customer
      shall also be entitled to a credit on and up to the applicable Monthly
      Charges if a negligent,
      grossly negligent, or an intentional breach by BFI of its
      obligations under this Agreement has interrupted Customer’s access
      to and/or use of the Dedicated Office facilities or Tape Vault
      Services.  Customer shall not be entitled to suspend payments
      for any Monthly Charges if the Channel is interrupted due to Customer’s
      failure to deliver the Channel(s) to the Andrita for any
      reason.

            


    

     

     

    
      	
              13.

            	
              Termination.  This
      Agreement may be terminated prior to the end of the Initial Term or Option
      Term, if applicable, as follows:

            


    

     

     

    
      	
               
      

            	
              (a)

            	
              in the event of a breach
      of any material term
      and/or condition, representation and/or warranty contained herein (except
      as otherwise provided in Section 4 (e) or Section 5), the non-breaching
      party may terminate upon ***** prior written notice providing,
      with reasonable specificity, the cause of such termination,
      unless such breach is cured during such period or if incapable of cure
      during such period then good faith efforts to cure have commenced,
      providing in such case cure will be effected in no more than *****;

            


    

     

     

    
      	
               
      

            	
              (b)

            	
              by BFI, as provided in Section 4, in the event of
      a failure by Customer to make payment of the Monthly Charges and cure such
      failure within ***** after notice
      thereof;

            


    

     

     

    
      	
               
      

            	
              (c)

            	
              if a Force Majeure event continues
      for more than ***** and precludes a party from
      performing its obligations hereunder, the other party
      may terminate this Agreement upon written notice of such termination;
      and

            


    

     

     

    
      	
               
      

            	
              (d)

            	
              by Customer in part on a
      Channel-by-Channel basis in the event that BFI fails to meet or exceed the
      Performance Standard, as provided in Section 5 of this
      Agreement.

            


    

     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

     

    
      	
              14.

            	
              Transition
      Period.  Upon termination of this Agreement by Customer
      pursuant to Section 13(a),13(c) or 13(d), or expiration of this Agreement,
      BFI shall continue to provide the Andrita Services for an additional
      wind-down period ***** (the “Transition Period”) to
      allow Customer to transition the Andrita Services from
      BFI.  During such Transition Period BFI shall provide to
      Customer or Customer’s designee, any transition assistance (the “Transition Assistance”)
      reasonably requested to facilitate the orderly transfer of the Andrita
      Services to the Customer and/or its designee.  Customer shall
      pay to Andrita any costs Andrita incurs to provide the Transition
      Assistance.  During the Transition Period, BFI shall continue to
      provide all Andrita Services that have not been transitioned from BFI
      pursuant to, and on the same terms and conditions (including charges and
      Performance Standards) set forth in this Agreement; provided, that the
      Monthly Charges shall be reduced to reflect any Andrita Services that have
      been transitioned from BFI.  Notwithstanding the foregoing, if
      Customer terminates this Agreement pursuant to Section 13(d), the
      Performance Standards shall not apply to the Transition Assistance, and
      BFI shall only be obligated to provide the Transition Assistance at the
      same level (if and only to the extent technically and reasonably
      practicable and without any obligation to acquire or otherwise use new,
      replacement or additional equipment or additional resources) as it was
      providing the applicable services at the time Customer provided its notice
      of termination.  This Agreement shall terminate fully upon
      Customer’s transition of all Andrita Services provided hereunder from
      BFI.

            


    

     

     

    
      	
              15.

            	
              Technology and
      Facilities.  BFI shall, without increasing the Charges or
      passing through any expenses to Customer, ensure that all material
      equipment used by Customer employees, and all facilities provided by BFI
      pursuant to this Agreement and in which Customer employees will be
      present, to the extent necessary to provide the Andrita Services, shall be
      maintained in good working order, and shall promptly repair or otherwise
      correct any material errors or other issues reported by Customer or its
      employees with respect to such material equipment and
      facilities.

            


    

     

     

    
      	
              16.

            	
              Sarbanes
      Oxley.  If Customer notifies BFI that all or any material
      part of the Andrita Services are, as determined by Customer’s auditors
      and/or outside counsel, significant under Sarbanes Oxley to Customer’s
      internal control over financial reporting, BFI shall provide Customer with
      a service auditor’s report on BFI’s controls placed in operation and tests
      of operating effectiveness (otherwise known as a Type II Report) as
      defined in SAS No. 70; provided, that if BFI incurs any non de-minimis
      costs in connection with the preparation of such report and BFI is not
      already preparing such a report for another customer,
    *****.

            


    

     

     

    
      	
              17.

            	
              Governing Law and
      Jurisdiction.  This Agreement shall be governed by and
      interpreted under the laws of the State of California, without regard to
      conflict of law rules.  The parties agree that all litigation
      related to this Agreement shall be brought in any state or federal court
      in Los Angeles County and each party hereby submits itself to the
      exclusive in personam jurisdiction of such court for purposes of any such
      litigation.  Neither party shall object to venue in any such
      court on the grounds of an inconvenient forum or
  otherwise.

            


    

     

     

    
      
         

      

      
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              18.

            	
              Assignment.  Neither
      party may assign this Agreement without the express written consent of the
      other party, not to be unreasonably withheld, provided
      that:  (a) Customer may assign its rights and obligations under
      this Agreement in connection with a merger or sale of all or substantially
      all of Customer’s assets, or to any purchaser or transferee of some or all
      of the Channels, including, but not limited to, any joint venture in which
      Customer is a participant; provided that the assignee is at least as
      capable as Customer in fulfilling Customer’s obligations under this
      Agreement (including payment obligations) and such assignee agrees to be
      bound by all of the terms and obligations of Customer pursuant to this
      Agreement as reasonably determined by BFI; and (b) BFI may assign its
      rights and obligations under this Agreement in connection with a merger or
      sale of all or substantially all of BFI’s assets; provided that the
      assignee is at least as capable as BFI of providing the services following
      the transaction and such assignee agrees to be bound by all of the terms
      and obligations of BFI pursuant to this Agreement as reasonably determined
      by Customer; provided, further, that, notwithstanding the foregoing, BFI
      may not assign any of its rights or obligations hereunder to any third
      party that is a competitor of Customer or its affiliates, where such
      company’s business is primarily the adult entertainment media
      industry.  Subject to the foregoing, it is acknowledged that
      this Agreement, and the terms and conditions contained herein, shall be
      binding on all successors and assigns of the
  parties.

            


    

     

     

    
      	
              19.

            	
              Notices.  All
      notices, requests, demands, consents, directions and other communications
      provided for hereunder shall be in writing and be either delivered by
      facsimile transmission (“fax”), with confirmed electronic receipt, or by
      means of U.S. certified mail, return receipt requested; if to BFI to 3030
      Andrita Street, Los Angeles, California 90065, *****; and if to Customer
      at Customer’s address set forth on the first page of this Agreement; or,
      as to each party, at such other address as shall be designated by such
      party in a written notice to the other party.  All notices
      shall, when delivered via fax shall be deemed effective on the date
      receipt of such facsimile is so confirmed, and when delivered via FedEx
      Express, UPS or other overnight carrier on the earlier of the actual
      delivery date or next business day.

            


    

     

     

    
      	
              20.

            	
              Confidentiality.  BFI
      and Customer shall hold in confidence the information contained in, or
      exchanged in connection with, this Agreement, however, either BFI or
      Customer may disclose the existence of this Agreement, but shall not
      disclose any specific terms and/or conditions including, but not limited
      to, the Monthly Charges and Additional Charges.  Nothing
      contained herein shall prevent Customer from disclosing such technical
      information as is required for reception of the Channel to the
      distribution systems.  Notwithstanding the foregoing, disclosure
      by either party is permitted: (a) to its principals, auditors, attorneys,
      investors, lenders, insurance agents, and proposed and actual successors
      in interest (in each case, who are bound by confidentiality obligations
      with respect to such disclosure), and (b) only to the extent necessary to
      comply with law, enforce its rights and perform its obligations under this
      Agreement.

            


    

     

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    
      	
              21.

            	
              Entire
      Agreement.  This Agreement constitutes the entire
      Agreement between the parties with respect to the transactions
      contemplated herein and may not be modified or changed except in writing
      executed by all parties hereto.  This Agreement supercedes and
      merges all prior written or oral agreements, communications, commitments,
      or understandings with respect to the matters provided for
      herein.  Each party acknowledges that it is entering into this
      Agreement in reliance only upon the provisions expressly herein set forth,
      and not upon any covenants, representations, warranties or other
      considerations not set forth herein, and that there are no warranties,
      representations or covenants which extend beyond the description of the
      express provisions of this
Agreement.

            


    

     

     

    
      	
              22.

            	
              Waivers.  Any
      waiver of any provision of this Agreement must be in writing and signed by
      the party whose rights are being waived.  No waiver of any
      right, obligation or breach of any provision hereof shall be or be deemed
      to be a waiver of any other or similar right or obligation, or preceding
      or subsequent breach of the same or any other provision of this
      Agreement.  The failure of Customer or BFI to enforce or seek
      enforcement of the terms of this Agreement following any breach shall not
      be construed as a waiver of such breach.  All remedies, whether
      at law, in equity or pursuant to this Agreement shall be
      cumulative.

            


    

     

     

    
      	
              23.

            	
              Relationship.  Nothing
      in this Agreement shall be deemed to create a relationship of joint
      venture, principal-agent or partnership between the parties, and neither
      shall hold itself out in its advertising or in any manner that would
      indicate any such relationship between the
  parties.

            


    

     

     

    
      	
              24.

            	
              Taxes.  Customer
      shall pay, or if required BFI will collect from Customer and forward, to
      the relevant taxing authority, and Customer will hold BFI harmless from
      any of the following imposed on Customer or BFI by such taxing
      authority:  all sales, use, universal service fee, excise and
      similar taxes (including, without limitation, any fees payable to local or
      state franchising authorities) and any other charges now or hereafter
      imposed upon Customer or the Channels or any part thereof (including,
      without limitation, any tax or charge based upon goods or services
      furnished to Customer by BFI, which goods or services are then passed on
      by Customer).

            


    

     

     

    
      	
              25.

            	
              Severability.  The
      invalidity under applicable law of any provision of this Agreement shall
      not affect the validity of any other provision of this Agreement, and in
      the event that any provision hereof is determined to be invalid or
      otherwise illegal, this Agreement shall remain effective and shall be
      construed in accordance with its terms as if the invalid or illegal
      provision were not contained herein; provided, however, that both parties
      shall negotiate in good faith with respect to an equitable modification of
      the provision held to be invalid or unenforceable and provisions logically
      related to it.

            


    

     

     

    
      
         

      

      
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              26.

            	
              No Third Party
      Beneficiaries.  The provisions of this Agreement are for
      the exclusive benefit of the parties hereto and their permitted assigns,
      and no third party shall be a beneficiary of, or have any rights by virtue
      of, this Agreement.

            


    

     

     

    
      	
              27.

            	
              Attorney’s Fees and
      Costs.  If any legal action or other proceeding is
      brought for the enforcement of this Agreement or in connection with any
      other matter related to this Agreement, the successful or prevailing party
      shall be entitled to recover its reasonable attorneys’ fees and other
      costs incurred in connection with such action or proceeding in addition to
      any other relief to which such party may be
  entitled.

            


    

     

     

    
      	
              28.

            	
              Non-Recourse.  Notwithstanding
      anything contained in this Agreement to the contrary, it is expressly
      understood and agreed by the parties hereto that each and every
      representation, warranty, covenant, undertaking, or agreement made in this
      Agreement was not made nor intended to be made as a personal
      representation, warranty, covenant, undertaking, or agreement on the part
      of any individual of either party, and any recourse, whether in common
      law, in equity, by statue or otherwise, against any individual is hereby
      forever waived and released.

            


    

     

     

    
      	
              29.

            	
              Headings.  The
      headings, captions and arrangements used in this Agreement are, unless
      specified otherwise, for convenience of reference only and shall not be
      deemed to limit, amplify or modify the terms of this Agreement nor affect
      the meaning thereof.

            


    

     

     

    
      	
              30.

            	
              Counterparts.  This
      Agreement may be executed in several counterparts, each of which shall be
      deemed an original and all such counterparts together shall constitute but
      one and the same instrument.  The parties also agree that this
      Agreement shall be binding upon the electronic transmission by each party
      of a signed signature page thereof to the other party.  If such
      an electronic transmission occurs, the parties agree that they will each
      also immediately post, by FedEx, a fully-executed original counterpart of
      the Agreement to the other party, provided that failure to do so or to
      have evidence of such original signatures shall not affect the binding
      nature of this Agreement on the parties
hereto.

            


    

     

     

    
      
         

      

      
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    In Witness Whereof, the parties hereto
have entered into this Agreement as of the date first above
written.

    


    


    


    
      	 
      	
              PLAYBOY
      ENTERTAINMENT GROUP, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Howard
      Shapiro

            
	 
      	 
      	
              Name:  Howard Shapiro

            
	 
      	 
      	
              Title:
      Vice President and
      Secretary

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              BROADCAST
      FACILITIES, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Simon
      Bax

            
	 
      	 
      	
              Name:
      Simon Bax

            
	 
      	 
      	
              Title:
      Chief Executive Officer and
Secretary

            


    

    


    


    


    
 

     

     

     

      Signature
Page to Services and Facilities Agreement