subscription video-on-demand license agreement · netflix netherlands svod agmt d23 gpc...

Netflix Netherlands SVOD Agmt D23 GPC (13-08-2013) - 1 -

SUBSCRIPTION VIDEO-ON-DEMAND LICENSE AGREEMENT THIS SUBSCRIPTION VIDEO-ON-DEMAND LICENSE AGREEMENT (this

Agreement”), dated as of [#] August 2013 (“Effective Date”), is entered into by and between Columbia Pictures Corporation Ltd. a United Kingdom corporation (“Licensor”), and Netflix Luxembourg S.à r.l., a Luxembourg limited liability company (“Licensee”). For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. DEFINITIONS. All capitalized terms used herein and not otherwise defined in this Agreement

shall have the meanings set forth below.

1.1. “3D” shall mean as defined in clause 2.22.2.

1.2. “4K” shall mean as defined in clause 2.2.

1.3.1.2. “Animated TV Series” shall mean a fully animated television series, each episode of which is a half broadcast hour or less.

1.4.1.3. “Applications” shall mean web applications created by developers using Application Programming Interfaces (commonly known as APIs) released by Licensee, which web applications will enable Registered Users and other users in the Territory, as applicable, to, for example, access Licensee’s website; add or remove a movie from a Registered User’s “queue;” or receive and watch, via Approved Delivery , a trailer, Promotional Preview or Included Program. For the avoidance of doubt, the playback of Included Programs through the use of Applications and Playback Clients:

1.4.1.1.3.1. shall be available to Registered Users only;

1.4.2.1.3.2. shall be hosted and authenticated by the SVOD Service;

1.4.3.1.3.3. shall be subject to the terms and conditions of this Agreement (including, without limitation, the Usage Rules and Content Protection Requirements and Obligations as set out in Schedule B);

1.4.4.1.3.4. may require the launch of a separate web-browser window or similar user experience (i.e., the launch of a new playback window or web page) in which the Included Program will be playable;

1.4.5.1.3.5. shall be Netflix-branded; and

1.4.6.1.3.6. shall be on an Approved Device.

1.5.1.4. “Approved Delivery” shall mean the streaming delivery of an encrypted (except with respect to files which are not Included Programs, such as promotional materials) digital electronic file over the public, global network of interconnected networks known as the Internet or “Worldwide Web”, using technology which is currently known as Internet Protocol, solely to an IP-addressable device. In no event shall Approved Delivery include downloading; provided that the limited buffering or caching of a temporary file that is inaccessible after initial viewing shall not be deemed downloading in violation of the requirements for Approved Delivery.

1.6.1.5. “Approved Device” shall mean a Software Device or Hardware Device (i) designed to directly receive audio-visual programming and a decryption key via Approved Delivery and output such programming for exhibition on its associated video monitor and (ii) capable of enforcing (a) the security and content protection specifications set forth on Schedule B attached hereto or such other specifications reasonably agreed to by the parties and (b) the usage rules set forth on Schedule D attached hereto.

1.7.1.6. “Approved Format” shall mean a digital electronic media file compressed and encoded for secure transmission (a) in a Content Protection System and resolution in accordance with the specifications set forth in Schedule B attached hereto or (b) such other format as Licensor may approve in Licensor’s sole discretion.


1.8.1.7. “Approved Protection System” shall have the meaning set forth in Clause 1.2 of Schedule B.

1.9.1.8. “Avail Term” shall have the meaning assigned in Clause 3 hereof.

1.10.1.9. “Availability Date” with respect to an Included Program shall mean the date on which such program is first made available by Licensor for exhibition hereunder in accordance with Clause 4.1.

1.11.1.10. “Availability List” shall mean a list of Feature Films and/or Television Episodes that are available by Licensor for licensing hereunder in accordance with Clause 5.2.

1.12.1.11. “Basic TV” shall mean the delivery and/or exhibition of a motion picture, television show or other entertainment product by any means of transmission to a television set or other viewing device by any technology (whether now known or hereafter devised), which may be advertising supported, where the consumer is charged a monthly or other periodic subscription fee for the first or lowest tier (i.e, “basic” tier) of service, in excess of any obligatory fees or charges for the subscriber to receive Free TV signals, regardless of whether such exhibition is on a regularly scheduled (i.e., linear) basis and/or made available to the consumer on an on-demand basis (i.e., where the timing of such delivery and/or exhibition is not pre-determined, but rather is at the consumer’s discretion). With respect to delivery of content on Basic TV which is not by means of a closed system (i.e., coaxial cable networks, digital satellite networks or closed digital subscriber lines (ADSL), in each case within the private domain of a service provider) but rather by means of Internet transmission (e.g., Internet simulcast, Internet on-demand), such content shall be made available only on an authenticated basis (i.e., where access is pre-conditioned on a consumer’s existing, authenticated subscription to the linear, closed system Basic TV service). For clarity, Basic TV does not include any Subscription Pay TV, Free TV or SVOD.

1.13.1.12. “Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) any day on which banks in Los Angeles, California are closed or are authorized to be closed.

1.14.1.13. “Clips” shall mean up to two (2) trailers or excerpts at any one time from each Included Program made available to Licensee by Licensor.

1.15.1.14. “Current DTV” shall mean a Feature Film that has not been Theatrically released in The Netherlands or the US and which Licensor makes available for license hereunder. Current DTVs shall be designated by Licensor as either (i) “Premium DTVs” for those Current DTVs having a minimum production budget of three million US Dollars ($3,000,000 USD) per title and/or which are either franchises or sequels or (ii) “Non-Premium DTVs” for any not qualifying as a Premium DTV.

1.16.1.15. “Current TVM” shall mean any feature-length, television movie that is initially exhibited on a US broadcast television network and which Licensor makes available for license hereunder. A Current TVM shall be designated by Licensor as either (i) a “Premium TVM” for any Current TVM having a minimum production budget of three million US Dollars ($3,000,000 USD) and/or which is either a franchise or a sequel or a (ii) “Non-Premium TVM” for any not qualifying as a Premium TVM.

1.17.1.16. “Current Series” shall mean a Television Series which Licensor makes available for license hereunder where at least one season of the series is being broadcast either (i) in The Netherlands or the U.S. for the first time during the Avail Term; or (ii) is still in production during the applicable Avail Year; provided, however, that Current Series does not include “Breaking Bad” or “The Blacklist”. Current Series shall be designated as “Current Series – 1 Hour” (i.e., where the duration of each episode is one broadcast hour) and “Current Series – Half Hour” (i.e., where the duration of each episode is a half broadcast hour).

1.17. “EST” or “Electronic Sell-Through” shall mean the distribution by which an electronic digital file embodying an Included Program in encrypted form is distributed to a user either:


1.17.1. pursuant to a user transaction, for a separate material transactional monetary fee (i.e., per movie or per episode) and ); or

1.17.2. bundled with the purchase of a physical product or service where such product or service has a retail value greater than the retail value of such Included Program; and

1.18. on a non-subscription basis and non-ad supported basis, whereby such user is licensed to download a copy of such content or access such content from a digital locker or cloud (whether or not the user can also view such program or programs simultaneously with the transmission thereof) and retain or access such copy for playback an unlimited number of times.

1.19.1.18. “Event of Force Majeure” in respect of a party shall mean any reasonably unforeseeable act, cause, contingency or circumstance beyond the reasonable control of such party, including, without limitation, any governmental action, nationalization, expropriation, confiscation, seizure, allocation, embargo, prohibition of import or export of goods or products, regulation, order or restriction (whether foreign, federal or state), war (whether or not declared), civil commotion, disobedience or unrest, insurrection, public strike, riot or revolution, fire, flood, drought, other natural calamity, damage or destruction to plant and/or equipment, or any other accident, condition, cause, contingency or circumstance (including without limitation, acts of God within or without the United States), but shall not include an inability to pay for whatever reason.

1.20.1.19. “Feature Film(s)” shall mean those feature-length films, with a rating in the Netherlands of 16 or less, or in the absence of a rating in The Netherlands, an MPAA rating (or potential rating) of R or less, which Licensor makes available for license hereunder, including any Current DTV, Current TVM, Second Pay Features, Recent Features, and Library Features. Feature Films made available by Licensor and licensed by Licensee shall be Included Programs for all purposes of this Agreement.

1.21.1.20. “Free TV” shall mean the scheduled linearly programmed delivery and/or exhibition of a motion picture, television show or other entertainment product by any means of transmission to a television set or other viewing device by any technology (whether now known or hereafter devised), which shall be advertising supported and/or contain programming breaks (except in the case of the NPO/VPRO), where the consumer is not charged any fees or charges (other than any compulsory fees charged by a government or governmental agency assessed on those who use television sets) . For clarity, Free TV does not include Subscription Pay TV or Basic TV.

1.22.1.21. "FVOD/AVOD" shall mean the delivery of a program to a viewer located in the Territory via a delivery system in a service which is not supported by subscriptions, which may or may not be advertising supported and which permits the viewer to stop and start, pause, fast-forward and rewind the exhibition of the program in its entire discretion, at a time chosen by the viewer, (i.e. the viewer can independently select his/her desired viewing time without reference to a list of possible viewing times pre-established by the exhibition of the service provider) without charge to the viewer (other than any compulsory fees charged by a government or governmental agency assessed on those who use television sets).

1.23.1.22. “Holdback(s)” shall have the meaning set out in Clause 4.2.2.

1.24.1.23. “Hardware Device” shall mean an individually addressed and addressable IP-enabled hardware device used by a Registered User, excluding tablets, desktop or laptop personal computers and mobile phones, that contains an integrated Licensee-branded Playback Client, including, without limitation, a set-top box (including without limitation a box with an integrated personal digital recorder (DVR) and/or web browser), an Internet-enabled television, a media extender, a home theater, a game console (including without limitation the PlayStation 3, Xbox 360 and Nintendo Wii, and any successor platforms thereto), a network-connected Blu-ray and/or DVD player, and a portable device.


1.25.1.24. “High Definition” shall mean resolutions higher than 345,600 viewable pixels, in the case of NTSC, or 414,720 viewable pixels, in the case of PAL, but no greater than 2,073,600 viewable pixels, in the case of either NTSC or PAL.

1.26.1.25. “Home Theatre” means on-demand exhibition and/or sell-through of any program on a material premium basis prior to the LVR of such program.

1.27.1.26. “Included Program” shall mean any Feature Film and/or Television Episode made available by Licensor and licensed by Licensee hereunder in accordance with the terms of this Agreement.

1.28.1.27. “Launch Date” shall mean the date on which the SVOD Service is commercially available offering full-length major studio feature film and/or television programming to the general public in the Territory.

1.29.1.28. “Library Feature” shall mean (i) a Feature Film which Licensor makes available for license hereunder with an Availability Date that is ten (10) years or more from such film’s initial Theatrical release date in the US, and which shall be designated by agreement between the parties Tier A, Tier B or Tier C, (ii) Library DTVs and (iii) Library MOWs.

1.30.1.29. “Library DTV” shall mean a Feature Film that has not been Theatrically released in the US and/or The Netherlands, released direct to video and which Licensor makes available for license hereunder with an Availability Date that is five (5) years or more from such film’s initial local video release in the US.

1.31.1.30. “Library MOW” shall mean any feature-length, television movie that is initially exhibited on a US broadcast television network and which Licensor makes available for license hereunder with an Availability Date that is five (5) years or more from such film’s initial broadcast in the US.

1.32.1.31. “Library Series” shall mean a Television Series that is not a Current Series or a Non-Returning Series which Licensor makes available for license hereunder, with an Availability Date that is at least three (3) years following the last season of production.

1.33.1.32. “Licensed Language” shall mean for:

1.33.1.1.32.1. Second Pay Features (i) the English language and (ii) Dutch; with or without subtitles in English and Dutch (and where available, dubbed in Dutch); and

1.33.2.1.32.2. For all Included Programs other than Second Pay Features (i) the English language, (ii) the original language version (if the original language is other than English) and (iii) Dutch; with or without subtitles in English and Dutch (and where available, dubbed in Dutch).

1.34.1.33. “License Period” with respect to each Included Program shall mean the period during which Licensee may exhibit such Included Program as specified in Clause 4.2.1.

1.35.1.34. ”Local Video Release Date” or “LVR” means, in respect of each Included Program, the first day on which any DVD or Blu-ray disc or EST embodying such Included Program is authorized by Licensor (or any affiliate of Licensor) to be made available to consumers in the Territory for rental or EST.

1.36.1.35. “Major Studio” shall mean Paramount Pictures, Twentieth Century Fox Film Corporation, The Walt Disney Company, Universal Studios, Sony Pictures Entertainment Inc., Warner Bros., Dreamworks, and Metro-Goldwyn-Mayer Inc.

1.37.1.36. “Mobile Device” shall mean an individually addressed and addressable IP-enabled mobile hardware device of a user, excluding a tablet, desktop or laptop or personal computer, supporting an Approved Format and generally receiving transmission of a program over a transmission system designed for mobile devices such as GSM, UMTS, LTE and IEEE 802.11 (“wifi”).


1.38.1.37. “Non-Returning Series” shall mean a Television Series that (i) has been cancelled or is no longer in production and (ii) does not qualify as a Current Series hereunder which Licensor makes available for license hereunder, including all broadcast seasons thereof, with an Availability Date that is less than three (3) years following the last season of production. Non-Returning Series shall be designated as “Non-Returning – 1 Hour” (i.e., where the duration of each episode is one broadcast hour) and “Non-Returning – Half Hour” (i.e., where the duration of each episode is a half broadcast hour).

1.39.1.38. “Non-Theatrical Exhibition” shall mean the exhibition of a motion picture, television show or other entertainment product to audiences at the physical facilities (i) of airplanes, trains, ships and other forms of common carrier transportation, (ii) of schools, colleges and other educational institutions, government agencies, libraries, religious and civic groups, holiday camps, clubs and services organizations, (iii) of non-public areas of hotels, motels and other lodging; (iv) in permanent or temporary military installations, shut-in institutions, prisons, hospitals, retirement centers, offshore drilling rigs, logging camps and construction camps; and (v) industrial, corporate, retail and commercial establishments, and for which exhibition an admission fee may be charged.

1.40.1.39. “Personal Computer” shall mean an IP-enabled desktop or laptop device with persistent storage, keyboard and monitor, designed for multiple office and other applications using a silicon chip/microprocessor architecture and shall not include any Portable Devices. A Personal Computer must support one of the following operating systems: Windows XP, Windows 7, Windows 8, Mac OS, Chrome OS, subsequent versions of any of these, and other operating system agreed in writing with Licensor.

1.41.1.40. “Personal Use” shall mean the private viewing by one or more persons on an Approved Device in non-public locations and, provided that the consumer’s use of Approved Devices in such locations is personal, in public locations; provided, however, that any such viewing for which a premises access fee or other admission charge is imposed (other than any fee related only to access such non-residential venue for other general purposes) or any such viewing that is on a monitor provided by such non-residential venue (or by a third party under any agreement or arrangement with such non-residential venue) shall not constitute a “Personal Use.”

1.42.1.41. “Playback Client” shall mean a device or application that can play or render Included Programs received from the SVOD Service. A Playback Client may be integrated into an Approved Device at time of manufacture or may be downloaded to an Approved Device after manufacture. A Playback Client may be implemented via an Application. A Playback Client must incorporate an Approved Protection System or be installed on an Approved Device that incorporates an Approved Protection System. “Playback License” shall mean a secure electronic token which grants a Playback Client permission to play an Included Program. Playback Clients which provide Link Layer Protection Playback do not require Playback License in order to play an Included Program.

1.43.1.42. “Promotional Preview” with respect to an Included Program shall mean a video clip of such Included Program commencing at the beginning of such Included Program and running no longer than five (5) consecutive minutes thereafter (“Maximum Preview Duration”), with no additions, edits or any other modifications made thereto.

1.44.1.43. “Registered User” shall refer to each unique user of an Approved Device registered with the SVOD Service and authorized to view an exhibition of an Included Program as part of the SVOD Service.

1.45.1.44. “Recent Feature” shall mean a Feature Film: 1.45.1.1.44.1. which Licensor makes available for license hereunder; 1.45.2.1.44.2. Theatrically released in the US, 1.45.3.1.44.3. which has an Availability Date in accordance with clause 4.1 less than ten

(10) years from initial Theatrical release in the US,


and which may be designated as either a Recent Re-Run or a Re-Run according to the Availability Dates set out in clause 4.1 below.

1.46.1.45. “Security Breach” shall mean a Security Flaw that results from a failure by Licensee to meet the content protection requirements and/or procedures as set out in this Agreement that may result, in Licensor’s reasonable, good faith belief, in harm to Licensor. For clarity, a Security Breach does not include a Territorial Breach or a geofiltering Security Flaw.

1.47.1.46. “Second Pay Features” shall mean a Feature Film which:

1.47.1.1.46.1. was originally produced in English;

1.47.2.1.46.2. was not originally produced in black and white;

1.47.3.1.46.3. either (i) had a Theatrical release in the US and The Netherlands, in each case on 15 or more screens, or (ii) had a Theatrical release in the US and either no release in The Netherlands or on fewer than 15 screens in The Netherlands ; and

1.47.4.1.46.4. has not been previously exhibited in The Netherlands other than as set forth in clause 4.2.2(a) ; and

1.47.5.1.46.5. is made available by Licensor for license hereunder (subject always to Licensor’s obligations in clause 5.2);

1.47.6.1.46.6. has an Availability Date during the applicable Avail Year.

A Second Pay Feature which qualifies under clause 1.46.3(i) above shall be a “Second Pay Features Local Release”, and a Second Pay Feature which qualifies under clause 1.46.3(ii) above shall be a “Second Pay Feature Non-Local Release”.

1.48.1.47. “Security Flaw” shall mean a circumvention or failure of the Licensee’s secure distribution system, geofiltering technology or physical facilities.

1.49.1.48. “Software Device” shall mean an IP-enabled, uniquely addressable Personal Computer, Tablet or Mobile Device that is not certified by Licensee as a Hardware Device and is capable of playing back content from the SVOD Service solely through the utilization of a software-based Playback Client; provided, however that Mobile Devices shall constitute Software Devices solely when receiving such audio-visual programming through the public Internet (as described in Clause 1.41.5).

1.50.1.49. “Subscription Pay TV” means the delivery and/or exhibition of a motion picture, television show or other entertainment product by any means of transmission to a television set or other viewing device by any technology (whether now known or hereafter devised) where the consumer is charged a recurring fee and/or periodic access charge for the right to receive a specified level of programming which is separate and distinct from, and in excess of, any subscription fees charged in relation to Basic TV, and which exhibits continuous, linear regularly-scheduled programming on a daily basis. Notwithstanding anything to the contrary contained herein, the delivery of content on Subscription Pay TV by means of Internet simulcast shall be only on an authenticated basis (i.e., where access is pre-conditioned on a consumer’s existing, authenticated subscription to the closed system Subscription Pay TV service).

1.51.1.50. “Subscription Video-On-Demand” or “SVOD” shall mean the delivery of multiple programs to a subscriber in response to the request of such subscriber (i) for which the subscriber is charged a recurring fee and/or periodic (e.g., monthly) fee for the right to receive such programming, and is not charged a per-program(s) or per-exhibition(s) fee, (ii) the exhibition start time of which is at a time specified by the subscriber in its discretion, and (iii) which may or may not be advertising supported.

1.52.1.51. “SVOD Service” shall mean the Subscription Video-On-Demand programming service branded “Netflix” (or successor brand) at all times during the Term, 100% owned and operated by Licensee, and made available via Approved Delivery only to Registered


Users in the Territory to Approved Devices (for exhibition on each such Approved Device’s associated video monitor in a format designed for viewing on such video monitor); provided that non-Registered Users may access certain limited portions of the SVOD Service, such as Clips, Promotional Previews, box art and synopses, it being acknowledged and agreed that non-Registered Users may not playback Included Programs from the SVOD Service.

1.53.1.52. “Tablet” shall mean any individually addressed and addressable IP-enabled device with a built-in screen and a touch screen keyboard, for which user input is primarily via touch screen, that is designed to be highly portable, not designed primarily for making voice calls, and runs on one of the following operating systems: Windows 8, iOS, Android, WebOS or RIM’s QNX Neutrino, subsequent versions of any of these, and other operating systems agreed in writing with Licensor (each, a “Permitted Tablet OS”) Tablet shall not include Zunes, Personal Computers, game consoles (including Xbox Consoles), set-top-boxes, portable media devices, PDAs, mobile phones or any device that runs an operating system other than a Permitted Tablet OS.

1.54.1.53. “Taxes” shall mean all federal, state, local, foreign and other net income, gross income, gross receipts, sales, use, value added, goods and services, ad valorem, transfer, franchise, profits, withholding, payroll, excise, stamp, real or personal property, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, but excluding any related penalties and interest, imposed by any federal, territorial, state, local, or foreign government or any agency or political subdivision of any such government. Sales, use, value added, goods and services, and similar taxes shall be referred to as VAT.

1.55.1.54. “Television Episode(s)” shall mean serialized broadcast television program episodes which Licensor makes available for license hereunder. Each Television Episode made available by Licensor and licensed by Licensee shall be an Included Program for all purposes of this Agreement.

1.56.1.55. “Television Series” or “TV Series” shall mean a single series of Television Episodes including all available broadcast seasons thereof and may be designated as Current Series, Non-Returning Series, Library Series, “Breaking Bad”, Animated TV Series and, subject to clause 5.1.6, The Blacklist.

1.57.1.56. “Term” shall have the meaning assigned in Clause 3 hereof.

1.58.1.57. “Territory” shall mean the Kingdom of the Netherlands and the Grand Duchy of Luxembourg.

1.59.1.58. “Territorial Breach” shall mean a Security Flaw that results in any of the Included Programs being delivered to persons outside the Territory, where such delivery outside the Territory results in actual or threatened harm to Licensor as a result of Licensee’s failure to comply with its obligations in Clause 4 of Schedule B.

1.60.1.59. “Theatrical Exhibition” shall mean the exhibition of a motion picture or programming (regardless of the means of delivery or mode of exhibition) in conventional or drive-in theatres open to the general public for which a fee is charged for admission. “Theatrical” has a correlative meaning.

1.60. “UHD” (Ultra High Definition) shall mean content with a resolution of 3840 x 2160. UHD is also known as “4K”.

1.61. “Usage Rules” shall mean those usage rules set forth on Schedule D attached hereto.

1.62. “VCR Functionality” shall mean the capability of a subscriber to perform any or all of the following functions with respect to the delivery of an Included Program: stop, start, pause, play, rewind and fast forward.

1.63. “VOD” or “TVOD” or “PPV” means the delivery and exhibition of a motion picture, television show or other entertainment product, where the timing of same is either (a) in the case of PPV, scheduled or pre-determined and not at the consumer’s discretion, or (b) in the


case of VOD or TVOD, the timing of same is not scheduled or pre-determined but rather at the consumer’s discretion, in all cases, for which a transactional charge is assessed to the consumer for the privilege of viewing each separate exhibition of such motion picture, television show or other entertainment product (or multiple exhibition of such motion picture, television show or other entertainment product over a limited viewing period), in all cases which is not primarily advertising supported (and in any event, no advertising shall interrupt any content during the exhibition thereof). Each of VOD, TVOD and PPV does not include SVOD and shall not include delivery or exhibition for which the consumer is charged a “club” or other similar “access” fee (which fee shall not, for purposes of this definition, be deemed to include any basic cable, digital/data plan, equipment rental fee or Internet access fee) for the privilege of being able to view motion pictures, television shows or other entertainment products via VOD/TVOD/PPV unless such “club” or similar access fee is non-creditable against, and/or does not subsidize or otherwise affect the retail price for any per-exhibition consumer transaction fees and provided that in all events is a charge that is more than merely a fee to gain access to the VOD/TVOD/PPV programs alone. VOD/TVOD/PPV does not include programming offered on an FVOD/AVOD, SVOD, Subscription Pay TV, Basic TV or Free TV basis, and any per-transaction or per-view offering bundled with a SVOD or FVOD/AVOD proposition, and not part of a wider Subscription Pay TV service, for which the full a la carte per-transaction/per-view retail pricing of the program on such per-transaction/per-view offering is impacted by such bundle relative to the per-transaction/per-view retail price for such program on the same platform’s VOD/TVOD/PPV service that is not bundled with an SVOD or FVOD/AVOD proposition, subject to Clause 2.4.5iii, would not qualify as VOD/TVOD/PPV hereunder. [#The cross reference no longer exists. It was a clause re 2 for 1’s in the UK agmt]

2. LICENSE.

2.1. Grant of License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a limited non-exclusive (and exclusive as set out in Clause 4.2.2) license to transmit each Included Program for exhibition during its License Period solely in the Licensed Language and in the medium of Subscription Video-On-Demand on the SVOD Service to Registered Users in the Territory and subject at all times to the Usage Rules. Without limiting the foregoing, each such transmission of an Included Program shall be solely by Approved Delivery in an Approved Format to a Registered User’s Approved Device (via Applications and/or Playback Clients on same) located in the Territory, subject to Licensee’s obligations set forth in Clause 4 of Schedule B, for exhibition on each such Approved Device’s associated video monitor in a format designed for viewing on such video monitor. In addition, for the avoidance of doubt, the foregoing license shall be limited to authorized exhibition for Personal Use. Licensee shall have the right to exploit the Subscription Video-On-Demand rights using VCR Functionality.

2.2. 3D and 4K: The rights granted hereunder shall also include so called three dimensional format rights ("3D and 4K formats, in each case where available. The parties acknowledge that”) , to extent Licensor and Licensee (or their respective affiliates) are finalizingholds the rights and for which materials are available and subject to agreement for the exploitation of first pay animated features in between the United States (the “US Agreement”), which shall contain definitionsparties on costs for 3D and4K, and upon execution of the US agreement, such definitions of 3D materials.

2.2.2.3. and 4K: The Parties commit to discuss the grant of 4K rights in good faith at the

earlier of Licensee having the technical capability to make content available in 4K shall be deemed automatically incorporated into this Agreement.or upon Licensor licensing 4K rights to another distributor in the EU.


2.3.2.4. Restrictions on License. Licensee agrees that it is of the essence of this Agreement that, without the specific written consent of Licensor, or except as otherwise set forth herein: (a) the license granted hereunder may not be assigned, licensed or sublicensed in whole or in part, nor may any Included Program be sub-distributed in any way, separate and apart from the SVOD Service (i.e. other than the technical distribution of the SVOD Service by third party contractors (namely technical hosting, billing, signup and streaming partners which provide technical delivery services on behalf of Licensee to subscribers) in accordance with clause 25; (b) no Included Program may be delivered, transmitted or exhibited other than as set forth in Clause 2.1; (c) except as otherwise provided for in Clauses 2.6 and 2.7 of Schedule B, each Included Program must remain in its approved level of resolution and not up-converted; and (d) no person or entity shall be authorized or permitted by Licensee to do any of the acts forbidden herein. Licensor reserves the right to conduct an initial inspection of and approve the picture quality and user experience of the SVOD Service within sixty (60) days of the Launch Date. Thereafter, when Licensee makes any modification that results in a material adverse change to the picture quality and user experience of the SVOD Service, Licensee shall so notify Licensor, and Licensor shall have the right to inspect and approve such modified picture quality and user experience. Licensee shall immediately notify Licensor of any unauthorized transmissions or exhibitions of any Included Program of which it becomes aware. Notwithstanding anything to the contrary in this Agreement, including without limitation this Clause 2.3, Licensee shall be permitted to offer the SVOD Service, including the Included Programs licensed hereunder, on Approved Devices via Approved Delivery where a Registered User must use a third party software or service (including without limitation an Application) and/or make payment to a third party to access the SVOD Service (e.g., pay an additional charge or subscription fee to a service provider in order to access the bundled service that provides the ability to subscribe to the SVOD Service) (“Third Party Fees”); provided that Licensee represents and warrants that it shall not receive any portion of such Third Party Fees at any time and provided, further, that such Third Party Fees are not charged on a transactional video-on-demand or per-view basis. Such third parties may also offer interactive features, such as chat functionality or other communication features, that overlay the SVOD Service but are not initiated by Licensee. By way of example only, the SVOD Service may be offered through a game console such as the Sony PlayStation 3 or Microsoft Xbox, wherein access to the SVOD Service by Registered Users through such Approved Device requires the payment of a Third Party Fee to Sony Corporation of America or Microsoft Corporation (in addition to subscription fees billed by Licensee) for access to the SVOD Service or a tier of or bundled service that includes the SVOD Service.

2.4.2.5. Reservation of Rights. All licenses, rights and interest in, to and with respect to the Included Programs, the elements and parts thereof, and the media of exhibition and exploitation thereof, not specifically granted herein to Licensee, shall be and are specifically and entirely reserved by and for Licensor. Without limiting the generality of the foregoing, each of Licensor and Licensee acknowledges and agrees: 2.4.1.2.5.1. that Licensee has no right in the Included Programs or the images or sound

embodied therein, other than the right to exhibit the Included Programs in strict accordance with the terms and conditions set forth in this Agreement;

2.4.2.2.5.2. that this Agreement shall not grant to Licensee or any other person or entity any right, title or interest in or to the copyright or any other right in the Included Programs, nor any ownership or other proprietary interests in the Included Programs;

2.4.3.2.5.3. that for the avoidance of doubt, without the prior written approval of Licensor, the fee charged for the SVOD Service mayshall be affectedunaffected in any way by the purchase of other programs, products or services ,, other than in the case of bundling with an electronics product for limited durations consistent with current practices and industry standards in the Territory (but in no event shall the subscription bundled with the product be longer than 12 months) provided that the product with which such subscription is bundled shall have a retail value of no less than the


standalone retail value of the subscription and subject always to the following: (i) the SVOD Service shall remain solely Licensee-branded (the parties acknowledge, however, that the SVOD Service may be marketed by or otherwise promoted in connection with third parties and therein contain branding or other marks of any such third party), (ii) Licensee shall at all times market, promote and otherwise offer the SVOD Service directly as a standalone service to Registered Users (and potential Registered Users) in the Territory, and (iii) in respect of Registered Users billed by a third party for the applicable fee, Licensee (or its authorized third party contractors) shall be responsible for all other subscriber relationship and fulfillment matters (i.e., other than billing) in respect of such Registered Users;

2.4.4.2.5.4. that Licensor retains the right to fully exploit the Included Programs and Licensor’s rights in the Included Program’s without limitation or holdback of any kind except as set out herein, whether or not competitive with Licensee, and

2.4.5.2.5.5. Carveouts: for the avoidance of doubt:

(i) the definitions of SVOD and Subscription Pay TV as used herein shall include any Licensor authorized “free trials” (provided that any such “free trial” greater than one (1) month in duration shall require Licensor’s prior written approval (such approval not to be unreasonably withheld) and time-limited promotions (including with third parties) designed to encourage sampling of a service and to enlist new subscribers, as approved by Licensor (such approval not to be unreasonably withheld), and provided that approval shall not be required where third parties (other than Registered Users) purchase from Licensee promotional trial subscriptions to be bundled with an electronic device, at a higher than de minimis price, for limited durations consistent with current practices and industry standards in the Territory (e.g., up to 6 months duration (or longer if industry standard in the Territory is longer than 6 months))but in no event shall such bundled subscription be longer than 12 months) provided that the product with which such subscription is bundled shall have a retail value of no less than the standalone retail value of the subscription.

(ii) VOD/PPV/TVOD may include any time-limited promotions that are consistent with Licensor’s current practices and industry standards in the Territory as of the Effective Date with respect to promotional offerings, e.g., customer loyalty programs, 2 for 1’s etc. provided that any such offerings are not intended to have a material impact on the consumption of such Included Programs on the SVOD Service in the Territory and that, in any event, any “per transaction” promotion shall not exceed five (5) Included Programs in a single transaction; and further

(iii) Licensor may use up to five (5) Second Pay Features and/or Current DTVs/TVMs per Avail Year in limited trials and promotions during such Included Program’s License Period involving Sony company products and services by means of FVOD/AVOD/SVOD (“Sony Promotion”) provided such usage last no longer than 2 months, does not occur during first 3 months of the License Period, and if more than 7 days then (x) Licensor shall give Licensee 25% discount on the License Fee for such Second Pay Features and/or Current DTVs/TVMs and (y) it shall be solely as part of a retail offering. Licensor shall provide Licensee with advance written notice of a Sony Promotion at least fifteen (15) days prior to the Availability Date of the applicable Included Program(s).

2.5.2.6. Fraud Detection. Licensee shall consistently track information indicating fraudulent

viewing and distribution activity on the SVOD Service, including, without limitation, license issuances by Registered User and IP address, device registration and de-authorization, customer ID’s, play data and number of current streams by Registered User and review its procedures with Licensor from time to time.


2.6.2.7. Notice of Hardware Devices: Licensee agrees that on the reasonable request of Licensor from time to time, Licensee shall supply an updated list of Hardware Devices within a reasonable time period.

3. TERM. Subject to earlier termination pursuant to the terms of this Agreement, the period during which Licensor shall be required to make Included Programs available and Licensee shall be required to license Included Programs pursuant to this Agreement shall be the period starting on 9 September 2013 and ending 8 September 2016 (“Avail Term”). Beginning on 9 September 2013, each twelve month period is an “Avail Year”. The Avail Year beginning on 9 September 2013 is “Avail Year 1,” the Avail Year beginning on 9 September 2014 is “Avail Year 2”, the Avail Year beginning on 9 September 2015 is “Avail Year 3”. In no event shall Licensee have the right to exploit any Included Program prior to the commencement of the Avail Term or its License Period or after the end of its License Period. Each party acknowledges that the License Period for an Included Program may expire after the end of the Avail Term. The “Term” of this Agreement shall commence on the Effective Date and expire on the last day of the last License Period to expire for an Included Program licensed hereunder. Notwithstanding the foregoing, no termination or expiration of this Agreement, howsoever occasioned, shall relieve either party hereunder of any obligations that are expressly or impliedly created before or that expressly or impliedly continue after any such termination or expiration hereof.

4. AVAILABILITY DATE; LICENSE PERIOD.

4.1. Availability Date. The Availability Date for each Included Program shall be as determined by Licensor in its sole discretion and, in any event, in accordance with the below:

Program type Availability Date Second Pay Features One month after the expiry of the immediately preceding

Subscription Pay TV window and in any event, no later than 18 months after LVR in The Netherlands

Library Features Theatrically released Library Feature Films/ Library DTVs/ Library MOWs: -Avail Year 1 – as per Schedule A; -Avail Years 2 and 3 – as determined by Licensor.

Current DTV One month after the expiry of the immediately preceding Subscription Pay TV window and in any event, no later than 18 months after LVR in The Netherlands.

Current TVM One month after the expiry of the immediately preceding Subscription Pay TV window and in any event, no later than 18 months after: -LVR in The Netherlands, and if no LVR in The Netherlands, -initial U.S. broadcast on any form of television (Free TV/Basic TV/Subscription Pay TV)

Non-Returning Series

As determined by Licensor. The Availability Date for Avail Year 1 Included Programs on Schedule A are set forth thereon.

Recent Re-Run Between 43 and 55 months post LVR in The Netherlands Re-Run More than 55 months post LVR in The Netherlands Library Feature The first (1st) day of the eleventh (11th) year or more from the

date of first Theatrical Exhibition in the Territory. Current Series (for The most recent season of a Current Series must be no more


avoidance of doubt, excluding “Breaking Bad” and “The Blacklist”)

than the later of twelve (12) months after the first broadcast in (a) The Netherlands or (b) the US, of the first episode in that season on any form of television (Free TV/Basic TV/Subscription Pay TV). For the avoidance of doubt, provided the most recent season of a TV Series satisfies the twelve (12) month threshold, all seasons of such TV Series shall be considered “Current Series”. The Availability Dates for Avail Year 1 Current Series are set out in Schedule A.

Library Series As determined by Licensor. The Availability Date for Avail Year 1 Included Programs on Schedule A are set forth thereon.

Animated TV Series As determined by Licensor. The Availability Date for Avail Year 1 Included Programs on Schedule A are set forth thereon.

“Breaking Bad” Seasons 1 – 5A at the commencement of Avail Year 1 and Season 5B one month after the expiry of the immediately preceding Subscription Pay TV window, as set forth on Schedule A.

“The Blacklist” As per clause 5.1.6(a)

4.2. License Period; Holdbacks/Exclusivity.

4.2.1. The License Period for each Included Program shall commence on its Availability Date and shall expire according to the table below:

Program type License Period Second Pay Features 6 months Current DTV & Current TVM

12 months

Recent Re-Run & Re-Run

12 months

Library Feature 12 months Television Series 12 months Breaking Bad As set forth on Schedule A The Blacklist As per clause 5.1.6 (a)

4.2.2. With respect to Included Programs below, during the License Period Licensee shall be

the exclusive (subject to clauses 4.2.2(b)(ii) and (iii) and (c)(i) and (ii) below) SVOD licensee in The Netherlands during its License Period, and the following “Holdbacks” shall apply as set out below:

(a) Second Pay Features, Current DTVs and Current TVMs : Prior to and during the License Period of each such Included Program, Licensor shall not license or authorize or permit any exhibition (other than the SVOD exhibition by Licensee pursuant to this Agreement) of such Included Program or the promotion of any exhibition (other than promotion of exhibition on the SVOD Service) of such Included Program (including, but not limited to, any resolution, format, dimension (e.g., 3D), and all cut and edited versions and those produced for other media) in The Netherlands; provided, however, that pre-promotion of an immediately


following exhibition window may be allowed during the final 30 days of its License Period. Notwithstanding the foregoing, Licensor (and its affiliates) may exhibit, or authorize exhibition of, such Included Programs in the Netherlands solely by the following means of exhibition: (i) prior to its License Period: Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/Blu-ray, EST, VOD/TVOD/PPV, and Subscription Pay TV by a single Subscription Pay TV licensee in the Territory (which Subscription Pay TV agreement may contain SVOD rights are licensed as part of any Subscription Pay TV agreement to the extent that such exploitation is limited to a tethered and authenticated (i.e., where access to an Included Program is pre-conditioned on a consumer’s existing, authenticated subscription to such Subscription Pay TV channel) SVOD offering owned and operated by, and branded with, such Subscription Pay TV licensee (“Authenticated SVOD”);Subscription Pay TV and/or SVOD; and (ii) during its License Period: Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/Blu-ray, EST, and VOD/TVOD/PPV.

(b) “Breaking Bad”: Licensor shall make available the TV Series “Breaking Bad” (including each episode and season thereof) in The Netherlands on the basis that: (i) prior to its License Period, Licensor (and its affiliates) may exploit, or authorize

exploitation of, the Included Programs in The Netherlands solely by the following means of exhibition: Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/Blu-ray, EST, VOD/TVOD/PPV, Free TV, linear Basic TV, Subscription Pay TV and(which Subscription Pay TV agreement may contain SVOD rights licensed as part of any Subscription Pay TV agreement to the extent that such exploitation is limited to a tethered and authenticated (i.e., where access to an Included Program is pre-conditioned on a consumer’s existing, authenticated subscription to such Subscription Pay TV channel) SVOD offering owned and operated by, and branded with, such Subscription Pay TV licensee (“Authenticated SVOD”)) Catch Up Rights pursuant to clause 4.2.2(b)(iii) and Simulcast Rights pursuant to clause 4.2.2(b)(iii); and

(ii) during to its License Period, Licensor (and its affiliates) may exploit, or authorize exploitation of, the Included Programs in The Netherlands solely by the following means of exhibition: Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/Blu-ray, EST, VOD/TVOD/PPV, Free TV and, linear Basic TV and, Catch Up Rights pursuant to clause 4.2.2(b)(iii) and Simulcast Rights pursuant to clause 4.2.2(b)(iii))..

(iii) in respect of the period described in clause 4.2.2(b)(i) and (ii) above, Licensor may grant limited (a) catch up rights (i.e. up to 30 days after broadcast) in connection with licenses for Free TV/linear Basic TV/Subscription Pay TV (as applicable), and for clarity not on a standalone or a la carte service, which shall contain commercial interruptions (if any) or programming breaks in accordance with broadcaster and/or industry standards with respect to so-called ‘catch up’ rights (“Catch Up Rights”) and (b) simulcast rights in connection with licenses for Free TV/linear Basic TV/Subscription Pay TV (as applicable) (i.e. simultaneous retransmission of the substantially unaltered, unabridged linear Free TV/linear Basic TV/Subscription Pay TV signals (as applicable) except for programming and/or advertising that is “blacked out” due to rights issues or legal restrictions), and for clarity not on a standalone or a la carte service (“Simulcast Rights”).


(c) “The Blacklist” (if applicable): Licensor shall make available the TV Series “The Blacklist” (if made available by Licensor in accordance with clause 5.1.6) (including each episode and season thereof) in The Netherlands on the basis that: (i) prior to and during its License Period, Licensor (and its affiliates) may exploit,

or authorize exploitation of, the Included Programs in The Netherlands solely by the following means of exhibition : Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/Blu-ray, EST, VOD/TVOD/PPV, Free TV and linear Basic TV and, linear Basic TV, SVOD (where such SVOD rights are licensed as part of any Free TV and/or Basic TV agreement) Catch Up Rights pursuant to clause 4.2.2(c)(ii) and and Simulcast Rights pursuant to clause 4.2.2(c)(ii); and [#As per term sheet]

(ii) in respect of the period described in clause 4.2.2(c)(i) above, Licensor may grant limited (a) Catch Up Rights and (b) Simulcast Rights in connection with licenses for Free TV/linear Basic TV (as applicable).

Excerpts. Notwithstanding anything to the contrary, Licensor (and its affiliates) shall not, and shall not license or permit any third party to, license, exhibit, distribute, transmit, display or otherwise exploit any excerpts of any such Included Programs (including each episode thereof, if applicable) in the Territory unless solely for promotional, marketing and advertising purposes, and only to the extent that such excerpts, when taken together, would not constitute a significant portion of such Included Program (and episode thereof, if applicable).

4.2.3. Licensor shall make available each Recent Feature, Library Feature, Library DTV, Library MOW and TV Series (other than “Breaking Bad” and “The Blacklist”) on the basis that each is non-exclusive and no holdbacks shall apply.

4.2.4. Notwithstanding anything to the contrary, all rights granted for Luxembourg are non-exclusive and no holdbacks shall apply.

4.2.5. For the avoidance of doubt, there are no holdbacks against Theatrical Exhibition, Non-Theatrical Exhibition, Home Theatre, DVD/BluRay, EST or VOD/TVOD/PPV. For clarity, no held back rights may be exploited with any other rights or exploitation, save as set forth in clauses 4.2.2(b)(iii) and (c)(ii) above. Notwithstanding anything to the contrary contained herein and for the avoidance of doubt, any exploitation of the Included Programs on a transactional basis in the Territory shall be strictly in accordance with the definitions of VOD/TVOD/PPV and EST herein. [#Have deleted the part marked out in this clause on the basis that in each sub-clause of 4.2.2 there is an example of one right being exploited together with another eg Subscription Pay with SVOD, Free with Catch Up, etc]

5. LICENSING COMMITMENT; SELECTION.

5.1. For each Avail Year during the Term, Licensee shall select and license, from availability lists furnished by Licensor in accordance with Clause 5.2, a volume of Included Programs in accordance with the following, to the extent made available by Licensor:

5.1.1. Second Pay Features: For each Avail Year, Licensee shall license all Second Pay Features with an Availability Date during such Avail Year, to the extent made available by Licensor (subject always to Licensor’s obligations in Clause 5.2), up to a maximum of twenty (20) per Avail Year (“Volume Cap”), in descending order by North American Box Office as follows:


(a) Licensee shall license all Second Pay Features Local Release, up to the Volume Cap; and then

(b) If the Volume Cap is not reached, then Licensee shall license all Second Pay Features Non-Local Release up to the Volume Cap.

For purposes of the above, “North American Box Office” shall mean the combined US and Canadian theatrical box office gross as reported in the Daily Variety (or where not so published, as reported in an equivalent publication).

Licensee shall be under no obligation to license documentaries.

5.1.2. Current DTVs and Current TVMs: For each Avail Year, Licensee shall license all Current DTVs and Current TVMs with an Availability Date during such Avail Year, to the extent made available by Licensor (subject always to Licensor’s obligations in Clause 5.2), up to a maximum of eight (8) Current DTVs and Current TVMs (in the aggregate) (“Volume Cap”), taking all Premium Current DTVs/Current TVMs first up to the Volume Cap and if the Volume Cap is not reached then, making up the remainder from a mix of Non Premium Current DTVs and Current TVMs.

5.1.3. Recent Features, Library Features, Library DTVs and Library MOWs: Licensee shall license a volume of Recent Features and Library Features across all categories such that the total value of the License Fees for Recent Features and Library Features in the aggregate shall be no less than annual minimum commitments set out below:

(a) Recent Features, Library Features, Library DTVs and Library MOWs for Avail Year 1 to be selected across categories – annual commitment of €[#] €1,153,080 and as provided in Exhibit [#].

(b) Recent Features, Library Features, Library DTVs and Library MOWs for Avail Year 2 to be selected across categories – annual commitment of €1,264,174 of which at least 20% of the value of Included Programs selected shall be Library Films

(c) Recent Features, Library Features, Library DTVs and Library MOWs for Avail Year 3 to be selected across categories – annual commitment of €1,390,591 of which at least 20% of the value of Included Programs selected shall be Library Films

5.1.4. Television Series:

(a) Licensee shall license a volume of episodes of Television Series such that the total value of the License Fees for Television Series in the aggregate shall be no less than (each, an “Annual Television Spend”):

Avail Year Annual Television Spend (€)

Avail Year 1 €969,775 and as provided in as provided in Exhibit [#].

Avail Year 2 €969,775

Avail Year 3 €1,149,249

5.1.5. “Breaking Bad”: Licensor shall make available, and LicenseLicensee shall license, all seasons of “Breaking Bad” in accordance with Schedule A.

5.1.6. “The Blacklist:”

(a) Licensor in its sole discretion may elect to license “The Blacklist” to Licensee for €7,662 per episode for a twelve (12) month License Period. In the event


Licensor exercises its option to license “The Blacklist” to Licensee, it shall provide Licensee with no less than 60 days prior written notice of such TV Series’ Avail Date which in any event shall be no later than twelve (12) weeks after the initial linear broadcast in The Netherlands of the last episode of season 1.

(b) Where Licensor exercises its option in accordance with clause 5.1.6(a) above, and where a second season of “The Blacklist” is produced, Licensor shall make available and Licensee shall license both seasons 1 and 2 in Avail Year 2 for the same License Fee as the License Fee per episode for Season 1 for a twelve (12) month License Period.

(c) All License Fees for seasons 1 and 2 of “The Blacklist” payable for each Avail Year shall be incremental to the Annual Television Spend set out in clause 5.1.4 above.

(d) In addition to the incremental spend set out in 5.1.6 (c) above, in Avail Year 3, where Licensee has licensed Seasons 1 and 2 in Avail Year 2, Licensee shall license an incremental €168,557 on TV Series in Avail Year 3. For the avoidance of doubt, this obligation shall apply regardless of whether Season 3 of “The Blacklist” is produced, and for the avoidance of doubt, Licensor may in its sole discretion (without obligation) make available Season 3 of “The Blacklist” for Avail Year 3, and, if made available, Licensee may in its sole discretion (without obligation) license Season 3 of “The Blacklist” for Avail Year 3.

5.2. Availability Lists; Availability Date Notice; Selection. Licensor shall furnish Licensee

with availability lists (“Availability Lists”), which shall include Availability Dates, for all product categories at least 90 days for Second Pay Features and 150 calendar days (for all other Included Programs other than The Blacklist) prior to commencement of each Avail Year 2 and Avail Year 3, and for clarity each Availability List shall include all Second Pay Features, all Current DTVs and all Current TVMs having an Availability Date in such Avail Year. Licensor may, by providing written notice to Licensee, modify the Availability Date of any title(s) (other than the Avail Year 1 Availability List) up to the date that is sixty (60) days prior to the specified Availability Date of such title(s), provided that in any event any such modified Availability Date(s) shall (i) still be subject to the parameters set forth in Clause 8 and (ii) in respect of any Second Pay Features, Current DTV/TVM, Recent Features and TV Series only, be immaterial and in no event greater than thirty (30) days from its initial Availability Date. Availability Lists for Recent Features, Library Features, Library DTVs, Library MOWs and Television Series shall include at least one hundred twenty-five percent (125%) of the value obligations set forth above of same, from which Licensee may select, and shall be of comparable type and quality to the titles made available by Licensor for Avail Year 1 (e.g., box office receipts, age, genre, etc.). Licensee shall make its selections for each Avail Year no later than thirty (30) calendar days following Licensor’s delivery of such Availability Lists.

5.3. With respect to Avail Year 1, Licensor shall make available, and Licensee shall license, the Included Programs set forth on Schedule A which shall count towards the minimum licensing commitments set forth above for Avail Year 1.

6. WITHDRAWAL OF PROGRAMS.

6.1. Licensor may withdraw any Included Program or related materials at any time because of (a) an Event of Force Majeure, loss of rights, unavailability of necessary duplicating materials or any pending or threatened litigation, judicial proceeding or regulatory proceeding or in order to minimize the risk of liability in connection with a rights problem with such program, or (b) upon ninety (90) days’ prior written notice, if Licensor elects to theatrically re-release or


reissue such program or make a theatrical, direct-to-video or television remake or sequel thereof, or such program is placed on DVD moratorium in the Territory (except in the case of a re-release, re-issue, remake or moratorium in the Territory, in which case thirty (30) days’ prior written notice shall be sufficient). For any Included Program withdrawn pursuant to this Clause 6.1, Licensor shall provide a mutually agreed upon comparable replacement, or refund to Licensee or credit against Licensee payables within sixty (60) calendar days of the effective date of such withdrawal, a pro rata amount of all License Fees paid to Licensor for withdrawn Included Programs for which the License Period has not begun or has not expired, such pro rata amount to be calculated based upon the percentage of the applicable License Period for each such Included Program that remains as of the effective date of such withdrawal.

6.2. Withdrawal by Licensee. Notwithstanding anything to the contrary in this Agreement, Licensee shall have the right to temporarily suspend or permanently withdraw any Included Program (or one or more episodes of the same) from the Licensee Service at any time for any reason. Such suspension or withdrawal pursuant to this Clause 6.2 shall not relieve Licensee of its payment obligations hereunder. Notwithstanding the foregoing, in the event Licensee reasonably believes that it should temporarily suspend or permanently withdraw any Included Program(s) from the SVOD Service because continued distribution of such Included Program(s) may, in Licensee’s reasonable, good faith determination, create material legal liability for Licensee and/or its affiliates, Licensee shall alert Licensor in writing and request that Licensor exercise its withdrawal and/or suspension rights pursuant to clause 6.1 (which such withdrawal and/or suspension Licensor shall not unreasonably refuse or delay) and the resulting right of mutually agreed upon replacement title or refund/credit in accordance with such clause.

7. LICENSE FEE; PAYMENT.

7.1. License Fee. In consideration of the rights granted hereunder and subject to Clauses 4 and 5, Licensee shall pay to Licensor a license fee determined in accordance with this Clause 7 for:

7.1.1. the Included Programs licensed by Licensee hereunder (other than “The Blacklist”) as set forth in Schedule A and Schedule C attached hereto; and

7.1.2. subject to the exercise of Licensor’s option in clause 5.1.6 (a) above for “The Blacklist”, as provided in clause 5.1.6 (a)

respectively (each, a “License Fee”). The License Fee specified herein is expressed in Euro.

7.2. Payment Terms: Subject in each instance to Clause 8, the total License Fee for all Included Programs (other than “The Blacklist”) licensed in each Avail Year shall be due and payable in equal quarterly installments over each Avail Year, with the first such quarterly payment due on the 15th day of the calendar month immediately following the date of this Agreement. Subject to the exercise of Licensor’s option in clause 5.1.6 (a), the annual License Fee for “The Blacklist” shall be payable in equal quarterly installments over the applicable License Period with the first such quarterly payment due on the 15th day of the calendar month immediately following the initial Availability Date.

7.3. The parties acknowledge and agree that the provisions of this Clause 7 are of the essence. Licensee covenants and agrees to make all payments to Licensor hereunder in a timely manner. Without prejudice to any other right or remedy available to Licensor, any late payment will bear interest accruing from its due date at a rate equal to the lesser of 2% above the prime rate of interest announced by Barclays Bank at such time per year and the maximum rate permitted by applicable law.

7.4. Taxes. The amounts to be paid by Licensee under this Agreement shall include all taxes. The parties agree that no VAT will be charged or collected pursuant to the reverse-charge mechanism under the EU VAT Directive. If any Taxes are required by applicable law to be


collected by Licensor from Licensee, Licensor shall promptly provide Licensee with a valid tax invoice that fully meets the requirements of the taxing authority of the region in which such Taxes are due. Each party shall indemnify the other for failure to pay any Taxes payable by such party pursuant hereto and/or applicable law.

7.5. Withholding Taxes. Licensee may withhold from its payments to Licensor any Taxes required to be withheld by applicable law unless Licensor provides Licensee with documentation sufficient to verify that Licensor is eligible for a reduced rate of withholding pursuant to the Luxembourg-United Kingdom Tax Treaty. Licensee shall (i) remit legally required amount from payment to Licensor to the applicable taxing authority, and (ii) deliver to Licensor original documentation or a certified copy evidencing such remittance to permit Licensor to obtain a credit or withholding in respect of such amounts withheld (a “Withholding Tax Receipt”). In the event Licensee does not provide a Withholding Tax Receipt in accordance with the preceding sentence, the Licensee shall be liable to and shall reimburse Licensor for the withholding Taxes deducted from payments due Licensor.

7.6. Pursuant to the Double Taxation Convention between Licensor’s country and Licensee’s country, Licensor shall apply for an exemption from or reduction of withholding tax pursuant to such Double Taxation Convention and shall be responsible for delivering to Licensee appropriate documentation (such as a Certificate of Fiscal Residence, if required pursuant to the applicable Double Taxation Convention); provided that Licensee shall provide to Licensor all assistance, documentation and information reasonably required for Licensor to obtain such exempt or reduced withholding.

7.7. Other Taxes. Except as otherwise provided in this Agreement, Licensee shall be solely responsible to determine, collect, bear, remit, and pay, and shall hold Licensor forever harmless from and against, any and all Taxes (including interest and penalties on any such amounts, but other than Licensor’s corporate income and similar taxes), payments, or fees required to be paid to any third party now or hereafter imposed or based upon the importation, licensing, rental, delivery, exhibition, possession, or use hereunder to or by Licensee of the Included Programs, Created Masters, or Marketing Materials, or any print or any Copy thereof.

7.8. Payment Direction. Unless and until Licensee is otherwise notified by Licensor, all payments due to Licensor hereunder shall be made in Euro by wire or ACH transfer to Licensor as follows:

Barclays Bank 1Churchill Place, London E14 5HP United Kingdom Account No: 10072052 Swift Code: BARCGB22 IBAN: GB71BARC20000010072052 [#To confirm these details]

8. PHYSICAL MATERIALS AND TAXES.

8.1. Delivery

8.1.1. The Parties agree that where an English language version Copy (as defined below) has already been delivered (or otherwise provided) to Licensee (e.g., pursuant to any other agreement between Licensee and any affiliate of Licensor) that complies with Parts 1 – 8 of the Technical Specification, Licensee may at Licensee’s discretion (and upon confirmation from Licensor) use the same Copy for the purposes of this Agreement. In such event: [#Cross reference to equivalent sections of new tech spec]

a) Licensee shall so notify Licensor (e-mail sufficient); b) Licensor shall confirm Licensee notification to use the same copy (email

sufficient);


c) delivery shall be deemed to have occurred by Licensor to Licensee under this Agreement; and

d) Licensor shall not be required to re-deliver the relevant source materials to Licensee to effectuate delivery and acceptance hereunder.

8.1.2. Where an English language version Copy (as defined below) is deemed delivered in

accordance with Clause 8.1.18.1.1 above, Licensor shall also deliver in accordance with Parts 1 – 8 of the Technical Specification below, a separate sub-title, and where available and at Licensee’s request, a dub in each Licensed Language, along with the applicable local materials set forth in Parts 1 – 8 of the Technical Specification, by no later than sixty (60) days prior to the Availability Date for each Included Program, unless mutually agreed otherwise by the parties. The parties agree that for any Included Program for which the Availability Date is less than ninety (90) calendar days after the Effective Date, Licensor shall provide materials as soon as practicable and in any event no later than August 15, 2013.

8.1.3. Copies. Except for an Included Program delivered in accordance with Clauses

8.1.18.1.1 and 8.1.28.1.2, Licensor shall provide a copy and related materials for each Included Program in HD (and successor formats,3D in accordance with clause 2.2 and 4K in accordance with 2.3, in each case where available) and SD as set forth in and in compliance with the Parts 1 – 8 of the “Technical Specification” set out in Schedule E (each, a “Copy”) (for clarity, together with subtitles (and where available and at Licensee’s request dubs) in accordance with in Schedule E, in all Licensed Languages. Licensor shall deliver such materials by sixty (60) days prior to the Availability Date for each Included Program unless mutually agreed otherwise by the parties. The parties agree that for any Included Program for which the Availability Date is less than ninety (90) calendar days after the Effective Date, Licensee shall receive materials as soon as practicable and in any event no later than August 15, 2013.

8.1.4. Subject to Licensor’s delivery of the relevant Copy for the Included Program, Licensee

shall reimburse Licensor the applicable amount set forth in Schedule E for sub-titles and/or dubs (if delivered) (the “Conforming and Delivery Costs”) associated with the conforming of subtitle tracks, conforming of dub tracks (as applicable), transcoding of video file and delivery of final files for each Included Program, which shall be due and payable after receipt of a valid invoice from Licensor. The parties hereto acknowledge and agree that this provision is agreed to on a one-time only, non-precedential basis.

8.1.5. Without limiting Licensor’s delivery obligations, if Licensor does not provide dubbed

and/or subtitled versions of an Included Program pursuant to the previous clauses, then Licensee shall (after written attempt to obtain delivery from Licensor) have the right to create, at Licensee’s sole cost, subject to any third party contractual restrictions of which Licensee has received notice, a subtitled version of such Included Program in the Licensed Language (including translations of synopses, titles, etc.). All rights, including copyrights and trademarks, in such subtitled versions of the Included Programs licensed hereunder, shall vest in Licensor upon creation thereof, subject only to any third party rights therein and the rights granted herein to Licensee hereunder during the Term hereof. Licensee acknowledges and agrees that Licensee is not granted and is not acquiring any ownership rights in or of, or interest in, any copy, Included Program or subtitled version of an Included Program by reason of Licensee’s permitted use or manufacture thereof. Licensee’s rights in any such sub-titled versions shall be assigned on a quit-claim basis to Licensor provided that Licensor so requests and reimburses Licensee for one hundred percent (100%) of the actual costs incurred in the creation of such subtitled version as evidenced in writing. In the event of any such assignment, Licensee shall deliver (free of any delivery charge) to Licensor copies (or access to copies) of all such requested subtitled versions created by Licensee.


8.1.6. Notwithstanding the foregoing, Licensee’s obligations to assign, deliver (or provide

access to) any subtitled files shall at all times be subject to any third party rights and restrictions with respect thereto. In connection with the creation of any subtitled version (not including the underlying Included Program) by Licensee or its agents, Licensee shall be responsible for obtaining all necessary third party rights, consents and clearances of which it has received written notice with respect thereto and Licensee shall indemnify Licensor for any claims arising from Licensee’s exploitation of such subtitled version to the extent that such claims result from Licensee’s failure to obtain such rights, consents or clearances.

8.1.7. Artwork, Marketing Materials. For each Included Program, Licensor shall deliver (or

make available) to Licensee at least sixty (60) days prior to the applicable Availability Date, Marketing Materials (as defined in clause 12.112.1) (which in the case of trailers, EPKs and extracts only shall be as available (based on age of title)) (including original language versions of the artwork specified in Paragraph 9 (Artwork) of Schedule E)) for each Included Program in original language, via access to Licensor’s website at www.sonypicturestelevision.com (or any successor website). In addition, localized language versions of the artwork specified in Paragraph 9 (Artwork) of Schedule E shall be supplied, where available, in accordance with Schedule E either via the above website, via Licensee’s website at box.com or via Licensor’s EAGL service (as notified by Licensor). The parties agree that for any Included Program for which the Availability Date is less than sixty (60) calendar days after the Effective Date, delivery hereunder shall be made as soon as practicable.

8.1.8. For each Included Program, Licensor shall deliver (or make available) to Licensee all

available music cue sheets via access to Licensor’s website at https://euconnect.spe.sony.com/spidr (or any successor website) with respect to such Included Program.

8.2. [Intentionally omitted]

8.3. Return. Within 30 days following the later of (a) the termination or expiration of this Agreement and (ii) the last day of the License Period with respect to each Included Program, Licensee shall at Licensor’s election either return all Copies to Licensor or to a Licensor-designated facility or laboratory or erase or degauss all such Copies and supply Licensor with a certification of erasure or degaussing of such Copies.

8.4. Loss, Theft, Destruction. Upon the loss, theft or destruction (other than as required hereunder) of any Copies of an Included Program, Licensee shall promptly furnish Licensor with proof of such a loss, theft or destruction by affidavit setting forth the facts thereof.

8.5. Licensor’s Property. Each Copy of the Included Programs and all Marketing Materials are the property of Licensor, subject only to the limited right of use expressly permitted herein, and Licensee shall not permit any lien, charge, pledge, mortgage or encumbrance to attach thereto.

9. RATINGS

9.1. Licensor shall provide (delivery via box.com or XML sufficient or excel) Licensee with US MPAA ratings (where available) and may at Licensee’s discretion, provide local theatrical/home entertainment ratings for Included Programs (where available) for Licensee’s general reference and, it being acknowledged by the parties that any US MPAA ratings or logos and/or theatrical/home entertainment ratings or logos (regardless of whether they are applicable to online exploitation) may be proprietary to the issuing classification

https://euconnect.spe.sony.com/spidr�


body. Any use by Licensee of such proprietary ratings logos shall be as between Licensee and the relevant classification body.

9.2. Where no advisory information is provided by Licensor with respect to any Included Program with the initial delivery of such Included Program, Licensee may, for clarity (and subject always to local law), apply its own rating to such Included Program (and, at Licensee’s discretion, such rating may be an “unrated” or “not rated” rating, or, at Licensee’s option, Licensee may instead not assign a rating to such Included Program if it is Licensee’s practice to not assign a rating in the Territory to certain content, in Licensee’s discretion, for which no advisory information is provided by the applicable licensor). Licensor shall be able to view such rating (if any) via the SVOD Service and in the event Licensor reasonably disagrees with such rating (if any), the parties shall discuss such rating in good faith. Licensee shall update any rating which the parties mutually agree should be changed.

9.3. In the event that a compulsory content classification body with requisite authority and jurisdiction (“Compulsory Regime”) is established within the Territory applicable for content distributed by means of SVOD via Approved Delivery, and/or in the event that the Compulsory Regime (if any) issues updated rules, regulations or otherwise requires the display of rating information for SVOD content delivered via Approved Delivery in a manner different than previously required, then both parties shall comply with such Compulsory Regime (each party’s own compliance as determined by the discretion of such party) and not knowingly do anything to put the other party in breach of the then-current law.

9.4. In the event that a non-compulsory classification scheme in the Territory exists (“Non-Compulsory Regime”), each of Licensor and Licensee may voluntarily submit to such Non-compulsory Regime, each in its sole discretion. For the avoidance of doubt, neither party shall be under any obligation to join any Non-Compulsory Regime, nor in the event a party elects to join a Non-Compulsory Regime, shall either party prevent the other from later leaving such Non-Compulsory Regime.

9.5. The parties agree to discuss in good faith the implementation (if applicable) of such Compulsory Regime (or such Compulsory Regime’s updated rules) (in all cases, if any) in the context of distribution of the Included Programs hereunder.

9.6. Where no agreement is reached in relation to the implementation of the Compulsory Regime within thirty (30) days of such Compulsory Regime’s establishment (or such Compulsory Regime’s updated rules) (in all cases, if any), either party shall have the right but not the obligation, upon written notice, to withdraw such affected Included Program(s), and Licensor shall have no obligation to supply and Licensee shall have no obligation to license the relevant Included Program(s), provided always that the withdrawing party reasonably believes that the Licensee’s continued distribution in its then current manner would violate the then-current law or would result in the violation of a material term of any written agreement or other material requirement imposed on the withdrawing party by the Compulsory Regime or government body administering the implementation of the Compulsory Regime in the relevant country within the Territory.

9.7. Solely in the event Licensor fails to comply with an obligation imposed on the Licensor under the rules and regulations of a Compulsory Regime, and as a result of such failure, Licensee is prohibited under the terms of such Compulsory Regime to make Included Program(s) available on the SVOD Service, Licensor shall refund to Licensee (or credit against Licensee’s payables hereunder), a prorated amount of the relevant License Fee(s) for such Included Program(s) paid to Licensor.

If Licensee is prohibited from making an Included Program(s) available on the SVOD Service as a result of Licensee’s failure to comply with an obligation imposed on the Licensee under the rules and regulations of a Compulsory Scheme, the License Fee(s) for such Included Program(s) shall remain payable to Licensor.

10. CONTENT PROTECTION & SECURITY.


10.1. General. Licensee shall, throughout the Term, maintain the security systems, procedures and technologies (including, without limitation, Content Protection Systems) that are no less stringent or robust than those which Licensee employs with respect to licensed films from other licensors, but in no event less than industry standard. As of the Effective Date, Licensee represents and warrants that it implements, and will continue to implement throughout the remainder of the Term, the systems, procedures and technologies set forth on Schedule B and Schedule D. Subject to the foregoing, Licensee shall maintain and upgrade such security systems, procedures and technologies (including, without limitation, encryption methods) as necessary and commercially reasonable to prevent theft, pirating, unauthorized exhibition (including, without limitation, exhibition to non-Registered Users and exhibition outside the Territory), unauthorized copying or duplication of any video reproduction or compressed digitized copy of any Included Program. In the event Licensor embeds, encodes or otherwise inserts, or if applicable, associates copy control information in or with the Included Programs prior to delivery to Licensee, Licensee shall “pass through” such copy control information without intentional alteration, modification or degradation in any manner. Licensee shall not authorize any use of any video reproduction or compressed digitized copy of any Included Program for any purpose other than as is expressly permitted herein. Licensor or its representative shall have the right, at a time and date to be mutually agreed upon, to conduct an initial inspection and review Licensee’s security systems, procedures and technologies at Licensee’s places of business (including off-site facilities, if any, used by Licensee) within sixty (60) calendar days of the Launch Date. Thereafter, when Licensee makes any material and negative modification to its security systems, procedures and technologies, Licensee shall so notify Licensor, and Licensor shall have the right, at a time and date to be mutually agreed upon, to inspect and review such modified security systems, procedures and technologies at Licensee’s affected places of business (including off-site facilities, if any, used by Licensee).

10.2. Suspension Notice. Licensee shall notify Licensor immediately upon learning of the occurrence of any Security Breach or Territorial Breach, and shall provide Licensor with specific information describing the nature and extent of such occurrence. Licensor shall have the right to suspend the availability (“Suspension”) of the Included Programs on the SVOD Service at any time during the Avail Term in the event of a Security Breach or Territorial Breach by delivering a notice to Licensee of such suspension (“Suspension Notice”). Upon receipt of a Suspension Notice, Licensee shall take steps immediately to remove the Included Programs or make the Included Programs inaccessible from the SVOD Service as soon as commercially feasible (but in no event more than three (3) calendar days after receipt of such notice). The parties acknowledge that a Suspension pursuant to this Clause 10.2 may be occasioned in the absence of a Licensee Event of Default (e.g., in the event the DRM is hacked through no fault of Licensee), and that in such event, (i) no further rights or obligations shall accrue on the part of either party after such a Suspension with regard to such Suspension, and (ii) Licensor shall likewise suspend all distributors and licensees of similar Licensor content with similar distribution rights which employ such technology.

10.3. Reinstatement/Termination. If the cause of the Security Flaw that gave rise to a Suspension is corrected, repaired, solved or otherwise addressed in the sole judgment of Licensor, the Suspension shall terminate upon Licensor’s delivery to Licensee of a notice thereof (“Reinstatement Notice”) and Licensor’s obligation to make the Included Programs available on the SVOD Service shall resume. For clarity, no period of Suspension shall extend the Avail Term in time, and upon a notice that a Suspension has ended, the Avail Term shall end as otherwise provided herein. As soon as practicable after the delivery of a Reinstatement Notice to Licensee, Licensee may include the Included Programs on the SVOD Service. If more than two Suspensions occur during the Avail Term for any reason under any provision of this Agreement, or any single Suspension lasts


for a period of three months or more, Licensor shall have the right, but not the obligation, to terminate this Agreement by providing written notice of such election to the Licensee.

10.4. Obligation to Monitor. Licensee shall have the obligation to notify Licensor promptly of any Security Breaches or Territorial Breaches of which it becomes aware.

10.5. Content Protection Requirements and Obligations. Licensee shall at all times strictly comply with the Content Protection Requirements and Obligations attached hereto as Schedule B and incorporated herein by this reference.

11. CUTTING, EDITING AND INTERRUPTION.

11.1. Subject to Clause 11.2, Licensee shall not make, or authorize any others to make, any modifications, deletions, cuts, alterations or additions in or to any Included Program without the prior written consent of Licensor. For the avoidance of doubt, no panning and scanning, time compression or so-called “up-conversion” (except as stated in Clause 2.6 of Schedule B) and similar modifications shall be permitted. Without limiting the foregoing, Licensee shall not delete the copyright notice or credits from the main or end title of any Included Program or from any other materials supplied by Licensor hereunder. No exhibition of any Included Program hereunder shall be interrupted for intermission, commercials or any other similar commercial announcements of any kind (namely no pre/mid/post roll advertising nor shall any advertising be displayed on the same page/window of the SVOD Service from which the Included Program is viewed). Nothing herein shall prevent Licensee from promoting other content available on the SVOD Service (provided such promotion does not occur before or during the transmission of the Included Program, after a user has initiated full playback of such Included Program and before a user pauses/stops such playback). Further, notwithstanding anything to the contrary in this clause, but without in any way limiting Licensee’s security obligations pursuant to Section 10 or Licensee’s indemnification obligations pursuant to Section 15.2, neither Licensee nor its affiliates shall be responsible or liable for any acts or omissions of, or resulting from a consumer’s use of, an Approved Device and/or any third party software which alters the effect of the placement of advertising in accordance with this clause 11 (including any Application or Playback Client) (e.g., a user’s use of functionalities inherent in his or her Approved Device).

11.2. Notwithstanding anything to the contrary in this Clause 11, Licensee shall not be responsible for any third party modifications to Included Programs or overlays that obscure or otherwise interact with Included Programs and result from Registered User’s use of his or her Approved Device and/or from the operation of any third party hardware and/or software and are not initiated by Licensee (collectively, “Program Overlays”); provided that (i) Licensee shall include in its terms of service with third parties who develop Applications a requirement that any Program Overlays conform to industry standard, (ii) no Program Overlay may alter or modify the Usage Rules, and (iii) if Licensee becomes aware of any third party implementing a Program Overlay in an Included Program in violation of the applicable terms of service, Licensee shall use reasonable means to address such violation and/or, in its reasonable discretion, revoke such third party access to the Included Programs and/or SVOD Service. For the purpose of this Agreement, “industry standard” with respect to Program Overlays shall constitute those modifications or overlays implemented by (i) Comcast, Xfinity, StreamPix, TiVo, Xbox or PlayStation, Viaplay, HBO, Ziggo, UPC and KPN (solely with respect to overlays implemented within each such entity’s subscription or ad-supported video programming service) or any other ad-supported or subscription video programming service in the Territory to which Licensor licenses content delivered by a triple play provider or over multichannel video programming distributors, or (ii) Hulu, Crackle, Lovefilm or any other ad-supported or subscription video programming service delivered over the Internet in the Territory to which Licensor licenses


content; with respect to similarly situated content. For the avoidance of doubt, this Clause 11 shall not affect or limit Licensor’s withdrawal rights pursuant to Clause 6.

11.3. Notwithstanding anything to the contrary contained herein, In the event Licensee creates materials by “down-converting” a HD Copy supplied by Licensor to an SD Copy, Licensee shall not alter the aspect ratio of the output frame. No other forms of down-converting (other than of a digital file Copy in accordance with the immediately preceding sentence) is permitted under this Agreement.

12. PROMOTIONS.

12.1. Licensee shall have the right to use or authorize the use of written summaries, extracts, synopses, photographs and trailers prepared and provided or made available by Licensor or, if altered by Licensee or used other than on the SVOD Service (e.g., in television advertisements or Internet banner ads) (subject to the below), approved in writing in advance by Licensor (provided such approval is not required for text-based materials altered by Licensee (e.g., synopses)) (“Marketing Materials”) and, subject to Clause 12.2 below, Promotional Previews, solely for the purpose of advertising, promoting and publicizing the exhibition of the Included Programs on the SVOD Service and the right to advertise, publicize and promote, or authorize the advertising, publicity and promotion of the exhibition of any Included Program on the SVOD Service during the time periods and other restrictions specified below. Notwithstanding anything to the contrary, any display art that has been approved for use on the SVOD Service shall be deemed approved for promotional and marketing uses (including without limitation in blogs, emails and social media), provided that (i) the title of the Included Program is always visible (i.e., included in such use) and (ii) in any event, Licensor’s approval shall always be required for use in paid advertisements for the SVOD Service (if any).

12.1.1. Licensee may promote the upcoming exhibition of Included Programs on the SVOD Service in printed materials distributed directly and solely to Registered Users not earlier than thirty (30) days prior to the Availability Date of such Included Program and continue promoting such availability through the last day of such Included Program’s License Period.

12.1.2. Licensee shall have the right to promote the upcoming exhibition of Included Programs to the general public and on the SVOD Service during the period starting thirty (30) days before its Availability Date and to continue promoting such availability through the last day of the License Period with respect to such Included Program.

12.1.3. Licensee shall not promote the availability of any Included Program on the SVOD Service after the expiration of the License Period for such Included Program; provided that promotion undertaken by means of printed materials that have previously been distributed, or other kinds of promotional activity conducted during any Included Program’s License Period (or permitted pre-promotion period) that remain public after the expiry of the License Period and would not typically be recalled or taken down (such as tweets or posts regarding the Included Program) shall not be required to be collected back after the expiration of the License Period.

12.1.4. Marketing, promotional and advertising materials for Included Programs shall conform to the following:

(a) If an announcement, promotion or advertisement is more than 10 days in advance of such program’s Availability Date, Licensee shall only announce and/or promote and/or advertise (in any and all media) its future availability on the SVOD Service by referring to its specific Availability Date. By way of example, in such case “Coming to ______ on September 10” would be acceptable, but “Coming soon on _______” would not be acceptable.


(b) If an announcement, promotion or advertisement is 10 or fewer days in advance of such program’s Availability Date, Licensee shall have the right to announce and/or promote and/or advertise (in any and all media) its future availability by referring generally to its upcoming availability or referring to its specific Availability Date. By way of example, in such case both “Coming to ______ on September 10” and “Coming soon on _______” would be acceptable.

12.2. Licensor hereby grants to Licensee a limited, non-exclusive license to exhibit Promotional Previews on the SVOD Service via Approved Delivery in accordance with Clause 12.1 above, subject to any contractual restrictions of which Licensor notifies Licensee in writing. Notwithstanding anything to the contrary herein, in the event that any guild, union, or collective bargaining agreements or other third party agreements to which Licensor or its affiliates is or becomes a party requires a maximum duration for video clips that is shorter than the Maximum Preview Duration in order to avoid a residual, reuse or other fee in connection therewith, Licensor shall so notify Licensee in writing and Licensee shall either (i) shorten the duration of each affected Promotional Preview(s) on the SVOD Service in accordance with the terms of the notice (“Revised Preview Duration”) as soon as reasonably possible, but in no event longer than two (2) Business Days after receipt of such notice, or (ii) cease using the affected Promotional Preview(s). In addition to and without limiting any other remedy available to Licensor hereunder, in the event that Licensee exceeds the Maximum Preview Duration or any Revised Preview Duration (in the case of a Revised Preview Duration, after Licensee shortens the duration of such preview in accordance with the preceding sentence), Licensee shall indemnify Licensor for the costs of any residual, reuse or other fee payable by Licensor or its affiliates under the applicable guild, union or collective bargaining agreement(s) as a result thereof. Without limiting the foregoing, Licensor shall have the right to terminate (a) Licensee’s right to use a Promotional Preview for a particular Included Program on a case-by-case basis if Licensor reasonably believes that such Promotional Preview is not appropriate for all audiences or may violate the terms of any of Licensor’s agreements with, or may adversely affect Licensor’s material relations with any third party and (b) Licensee’s general right to use Promotional Previews under this Agreement if Licensor withdraws such general right from all other Internet SVOD distributors of Licensor’s content in the Territory (i.e., distributors who are authorized to deliver Licensor’s content for exhibition via the public Internet). Licensor shall give Licensee written notice of any such termination, in which event Licensee shall cease using the applicable Promotional Preview(s) within two (2) Business Days after receipt of such notice. For the avoidance of doubt, Licensee need not encrypt Promotional Previews or trailers.

12.3. Notwithstanding anything to the contrary herein, Licensee acknowledges and agrees that, subject to the conditions specified in this 12.3, it shall be permitted to make the SVOD Service, including, without limitation, the Included Programs (and associated Copies), Promotional Previews and Marketing Materials hereunder available for promotional purposes to non-Registered Users within the Territory, solely via Approved Delivery and solely as exhibited on such non-Registered Users’ Approved Devices, at no charge to such non-Registered Users and for a limited trial period not to exceed one (1) month in each instance (a “Free Trial”). Licensee’s right to include Included Programs in each Free Trial is subject to the following:

12.3.1. In addition to the Included Programs, all other programs available on the SVOD Service must be made available for exhibition to non-Registered Users as part of the Free Trial.

12.3.2. Prior to enabling a trial period for a Free Trial for a non-Registered User, Licensee will require such non-Registered User to input account credentials which may include, among other things, user name, password, email address and/or information necessary, such as credit card information or bank account numbers, to allow Licensee to obtain payment from the non-Registered User after the Free Trial, or some combination


thereof. If permitted by applicable law, and other than in relation to payment by prepaid top up card, Licensee shall, if applicable, notify non-Registered users that it shall charge such non-Registered Users for a subscription following the expiration of the Free Trial without obtaining further consent or any further information from such Registered User other than the consent obtained at the beginning of the Free Trial.

12.3.3. Licensee may not enable a trial period for a Free Trial for any non-Registered User who was previously authorized by Licensee using the same account credentials to participate in a Free Trial within the last twelve (12) months.

For the avoidance of doubt, except for Licensee’s limited ability to provide non-Registered Users trial access to the SVOD Service (including without limitation Included Programs) as part of a Free Trial, all relevant provisions of the Agreement shall remain in full force and effect, including Schedule B and Schedule D.

12.4. The rights granted in this Clause 12 above shall be subject to, and Licensee shall comply with, any and all restrictions or regulations of any applicable guild or union and any third party contractual provisions with respect to the advertising and billing of the Included Program in accordance with such instructions as Licensor may advise Licensee in writing. In no event shall Licensee be permitted to use any excerpts from an Included Program, other than (i) as provided by Licensor or (ii) Promotional Previews used in accordance with Clause 12.2.

12.5. Notwithstanding the foregoing, Licensee shall not, without the prior written consent of Licensor, (a) modify, edit or make any changes to the Marketing Materials (except in accordance with Licensee’s standard promotional practices), or (b) promote the exhibition of any Included Program on the SVOD Service by means of contest or giveaway. Appropriate copyright notices shall at all times accompany all Marketing Materials displayed on the SVOD Service and/or any promotions and/or advertising created by or on behalf of Licensee. For the avoidance of doubt, Licensee shall not be responsible for any Program Overlays on Marketing Materials (“Advertising Overlays”); provided that (i) Licensee shall include in its terms of service with third parties who develop Applications a requirement that any Program Overlays conform to industry standard and (ii) if Licensee becomes aware of any third party implementing an Advertising Overlay in violation of the applicable terms of service, Licensee shall use reasonable means to address such violation and/or, in its reasonable discretion, revoke such third party access to the Included Programs and/or SVOD Service.

12.6. The names and likenesses of the characters, persons and other entities appearing in or connected with the production of Included Programs shall not be used separate and apart from the Marketing Materials which will be used solely for the purpose of advertising of the exhibition of such Included Programs, and no such name or likeness shall be used so as to constitute an endorsement or testimonial, express or implied, of any party, product or service, by “commercial tie-in” or otherwise. Licensee shall not use Licensor’s name or logo or any Included Program or any part of any Included Program as an endorsement or testimonial, express or implied, by Licensor, for any party, product or service including Licensee or any program service or other service provided by Licensee; provided, however, that Licensee may use Licensor’s name and logo for promotional purposes on the SVOD Service, and in connection with marketing and promotional activities, with Licensor’s prior written consent.

12.7. Within 90 calendar days after the last day of the Term, Licensee shall destroy (or at Licensor’s request, return to Licensor) all Marketing Materials for such Included Program which have been supplied by Licensor hereunder.

12.8. Promotions on the SVOD Service may position Subscription Video-On-Demand in a positive light, but in no event shall any such promotion contain negative messages about other means of film or television distribution.


13. LICENSOR’S REPRESENTATIONS AND WARRANTIES. Without limiting any other representation, warranty or covenant of Licensor herein, Licensor hereby represents and warrants to Licensee that:

13.1. It is a company duly organized under the laws of the state of its organization and has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder.

13.2. The execution and delivery of this Agreement by Licensor has been duly authorized by all necessary corporate action.

13.3. This Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of Licensor, enforceable in accordance with the terms and conditions set forth in this Agreement, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally, and by general equitable or comparable principles.

13.4. Music rights: With respect to the exploitation of Included Programs as authorized herein, the communication to the public/making available to the public via communication to the public rights to any music compositions contained in each of the Included Programs (collectively “Communication to the Public Rights”), are either (a) controlled by BUMA/STERMA with respect to the Netherlands and SACEM with respect to Luxembourg and (collectively “PROs”) any other relevant collecting society with requisite authority and jurisdiction in the Territory with respect to the Communication to the Public Rights (and subject to clause 13.5, reproduction/mechanical rights) (each and collectively, the “PRO”) from which licenses on commercial terms and conditions covering Licensee’s transmissions of Included Programs in the Territory are available, (b) controlled by Licensor to the extent required for the licensing of the exhibition in accordance herewith (and not available for licensing through PROs), in which event no additional clearance of, or payment with respect to, such Communication to the Public Rights shall be required by Licensee associated with Licensee’s transmissions or other delivery of the Included Programs hereunder, or (c) in the public domain. In the event that music referenced in (a) above is included in an Included Program, Licensee shall be responsible for obtaining, if and to the extent required, a license from the relevant PROs for Communication to the Public Rights. Except as set forth in (b) above, Licensor does not represent or warrant that Licensee may exercise the Communication to the Public Rights without obtaining a valid communication to the public license and without payment of a Communication to the Public Rights royalty or license fee to a PRO, and if a Communication to the Public Rights royalty or license fee is required to be paid in connection with the exhibition of Included Programs permitted hereunder, Licensee shall be responsible for the payment thereof and shall hold Licensor free and harmless therefrom. [#Regarding the Nordics, we determined that the PRO’s in the territories were not collecting an additional “reproduction” fee for the proposed SVOD exhibition. It was our position that the term “communication to the public” was broad enough to cover all fees charged by the governing PRO’s. With respect to Holland, BUMA/STERMA has a tariff in place for SVOD. We have been unable to confirm with SACEM so to that end we have added the wording below that addresses the point in the event that the collecting societies collect for mechanicals.]

13.5. Excluding the Communication to the Public Rights, Licensor has obtained all necessary rights for the exploitation of the musical compositions and sound recordings (to the fullest extent permissible from the publisher and/or licensor of such rights (i.e., a worldwide buyout for all media now known or hereafter devisedbasis)) embodied within the Included Programs with respect to the exploitation of content in the Territory as authorized herein. Notwithstanding the foregoing, to the extent that any such buyout of reproduction rights is not recognized in any portion of the Territory, such reproduction rights shall be treated in the same manner as Communication to the Public Rights hereunder.


14. LICENSEE’S REPRESENTATIONS AND WARRANTIES. Without limiting any other representation, warranty or covenant of Licensee herein, Licensee hereby represents, warrants and covenants to Licensor that:

14.1. It is a company duly organized under the laws of the state of its organization and has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder.

14.2. The execution and delivery of this Agreement has been duly authorized by all necessary corporate action.

14.3. This Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of Licensee, enforceable against such party in accordance with the terms and conditions set forth in this Agreement, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally, and by general equitable or comparable principles.

14.4. No Included Program shall be transmitted or exhibited except in accordance with the terms and conditions of this Agreement. Without limiting the generality of the foregoing, no Included Program shall be exhibited to any person other than a Registered User within the Territory as part of the SVOD Service in the medium of Subscription Video-On-Demand, or transmitted other than by Approved Delivery in an Approved Format to Approved Devices for Personal Use. Notwithstanding the foregoing, Licensor acknowledges that Licensee cannot guarantee that current geofiltering technology as at the date of this Agreement shall be effective in every instance.

15. INDEMNIFICATION.

15.1. Licensor shall indemnify and hold harmless Licensee and its representatives (with respect to a party, its officers, directors, equity owners, employees and other representatives and its parents, subsidiaries and affiliates (and their officers, directors, equity owners, employees and other representatives (collectively, the “Representatives”)) from and against any and all claims, damages, liabilities, costs and expenses, including reasonable outside counsel fees, incurred by the foregoing in any action or proceeding brought by a third party arising from or in connection with the breach by Licensor of any of its representations or warranties or any material provisions of this Agreement including Section (24) caused by Licensor, its employees, affiliates and third party contractors and claims that any of the Included Programs (including Copies) or Marketing Materials, under U.S. and/or applicable law, infringe upon the trade name, trademark, copyright, music synchronization, literary or dramatic right or right of privacy of any claimant or constitutes a libel or slander of such claimant provided, however, that Licensee shall promptly notify Licensor of any such claim or litigation. Notwithstanding the foregoing, the failure to provide such prompt notice shall diminish Licensor’s indemnification obligations only to the extent Licensor is actually prejudiced by such failure. In addition, Licensor shall not be required to indemnify Licensee or its Representatives for any claims resulting from Licensee exhibiting Included Programs or using Marketing Materials in a form other than as delivered (or deemed delivered) by Licensor or due to Licensee’s editing or modification of any Included Programs or Marketing Materials or Licensee’s authorization of a third party to do any of the foregoing.

15.2. Licensee shall indemnify and hold harmless Licensor and its Representatives from and against any and all claims, damages, liabilities, costs and expenses, including reasonable outside counsel fees, incurred by the foregoing in any action or proceeding brought by a third party arising from or in connection with (i) the breach of any representation, warranty or other material provision of this Agreement by Licensee,(including Section 24) caused by Licensee, its employees, affiliates and third party contractors (ii) from the exhibition of any material (other than Marketing Materials exhibited in strict accordance with this Agreement and Licensor’s instructions therefor), in connection with or relating, directly or indirectly, to


such Included Programs, or (iii) the infringement upon or violation of any right of a third party other than as a result of the exhibition of the Included Programs in strict accordance with the terms of this Agreement; provided, however, that Licensor shall promptly notify Licensee of any such claim or litigation. Notwithstanding the foregoing, the failure to provide such prompt notice shall diminish Licensee’s indemnification obligations only to the extent Licensee is actually prejudiced by such failure.

15.3. In any case in which indemnification is sought hereunder:

15.3.1. At the indemnifying party’s option, the indemnifying party may assume the handling, settlement or defense of any such claim or litigation. If the indemnifying party assumes the handling, settlement or defense of any such claim or litigation, the party to be indemnified shall cooperate in the defense of such claim or litigation, and the indemnifying party’s obligation with respect to such claim or litigation shall be limited to holding the indemnified party harmless from any final judgment rendered on account of such claim or settlement made or approved by the indemnifying party in connection therewith, and expenses and reasonable attorneys fees of the indemnified party incurred in connection with the defense of such claim or litigation prior to the assumption thereof by the indemnifying party and any reasonable out-of-pocket expenses for performing such acts as the indemnifying party shall request. If the indemnifying party does not assume the handling, settlement or defense of any such claim or litigation, the indemnifying party shall, in addition to holding the indemnified party harmless from the amount of any damages awarded in any final judgment entered on account of such claim, reimburse the indemnified party for reasonable costs and expenses and reasonable outside attorneys fees of the indemnified party incurred in connection with the defense of any such claim or litigation; and

15.3.2. The party seeking indemnification shall fully cooperate with the reasonable requests of the other party in its participation in, and control of, any compromise, settlement, litigation or other resolution or disposition of any such claim. The indemnifying party shall not consent to the entry of any final judgment in any action without the indemnified party’s prior written approval except, in the case where Licensor is the indemnifying party, where such consent involves the agreement not to further exploit an Included Program.

16. REPORTING OBLIGATIONS. Licensee shall report electronically to Licensor at [email protected] the following information: on a monthly basis, within thirty (30) calendar days after the end of each calendar month, a written report detailing the aggregate number of unique Registered User viewers for each Included Program and the aggregate number of Registered User stream starts, in each instance with respect to the Territory; provided, however, that Registered Users attributable to a “free trial” of or other promotion for the SVOD Service shall not be included. Additionally, Licensee shall provide Licensor, at least once during each calendar quarter, with an informal business review, which if available and not subject to confidentiality restrictions will include (1) data and discussion regarding the performance and relative performance of Included Programs on the SVOD Service, Hardware Devices and/or Software Devices such as the performance of Included Programs by content type (e.g., episodic vs. feature) and age; (2) additional streaming data, such as the percentage of Registered Users actively streaming content on the SVOD Service; the average number of concurrent streams and registered Approved Devices used by actively streaming Registered Users; (3) the percentage of Registered Users who during the applicable reporting period have registered with such Registered User’s account more than six (6) Approved Devices (including any Approved Devices which are de-registered during such period); and (4) such other information that Licensor may reasonably request from time to time. Without limiting the foregoing, the parties agree to meet no less than two (2) times during each calendar year to discuss any additional reporting requirements, including information related to fraud heuristics. In the event that Licensee reports on a per country basis to any other Major Studio licensor with an


SVOD license agreement in the Territory, Licensee shall notify Licensor and the parties shall discuss such per country reporting capabilities in good faith.

17. TERMINATION.

17.1. Without limiting any other provision of this Agreement and subject to Clause 17.6, upon the occurrence of a Licensee Termination Event (as defined below), Licensor may, in addition to any and all other rights which it may have against Licensee, immediately terminate this Agreement or any license hereunder with respect to an Included Program by giving written notice to Licensee and/or accelerate the payment of all monies payable under this Agreement such that they are payable immediately and to retain such monies, it being acknowledged that, subject to clauses 17.2 to 17.4, Licensee’s material obligations hereunder include full, non-refundable payment of 100% of the license fees described in this Agreement regardless of any early termination of this Agreement due to a Licensee Termination Event unless expressly provided otherwise herein. Whether or not Licensor exercises such right of termination, Licensor shall, upon the occurrence of any Licensee Event of Default (as defined below), have no further obligation to deliver Copies or Marketing Materials to Licensee and Licensor shall have the right to require Licensee to immediately return all Copies and Marketing Materials to Licensor. In addition to any and all other remedies in respect of a Licensee Event of Default which Licensor may have under applicable law, Licensor shall be entitled to recover from Licensee all payments past due from Licensee to Licensor hereunder, together with interest, compounded monthly, at the lesser of 2% above the prime rate of interest announced by Bank of America at such time or the maximum rate permitted by law, plus reasonable outside attorney fees, and all costs and expenses, including collection agency fees, incurred by Licensor to enforce the provisions thereof. Furthermore, upon a Licensee Event of Default, Licensor shall have the right to immediately suspend delivery of all Included Programs and Marketing Materials with respect thereto and/or suspend Licensee’s right to exploit any Included Programs, licensed hereunder, without prejudice to any of its other rights hereunder. As used herein, a “Licensee Event of Default” shall mean the occurrence of any of the following: (A) Licensee (x) fails to timely perform or breaches any of its material obligations hereunder or otherwise materially breaches this Agreement, (y) fails to make timely payment of fees under this Agreement or (z) assigns or otherwise transfers this Agreement in violation of this Agreement; or (B) upon (i) Licensee becoming unable to pay its debts; (ii) a petition being presented or a meeting being convened for the purpose of considering a resolution for the making of an administration order, the winding-up, bankruptcy or dissolution of Licensee; (iii) Licensee becoming insolvent; (iv) a petition under any bankruptcy or analogous act being filed by or against Licensee (which petition, if filed against Licensee, shall not have been dismissed by the relevant authority within 60 days thereafter); (v) Licensee executing an assignment for the benefit of creditors; (vi) a receiver being appointed for the assets of Licensee; (vii) Licensee taking advantage of any applicable bankruptcy, insolvency or reorganization or any other like statute; or (viii) the occurrence of any event analogous to the foregoing. As used herein a “Licensee Termination Event” shall mean: (I) the occurrence of a curable Licensee Event of Default described in sub clause (A) above that Licensee has failed to cure within 30 days written notice from Licensor of the occurrence of such default; (II) the occurrence of a non-curable Licensee Event of Default described in sub clause (A)(z) above; (III) the occurrence of a Licensee Event of Default described in sub clause (B) above; and (IV) the occurrence of breach by Licensee of its confidentiality obligations under Clause 24.

17.2. Where Licensee seeks consent to a Change of Control in accordance with clause 18.118.1, and Licensor refuses such consent solely because such Change of Control is to a Prohibited Entity as defined in clause 17.317.3 below, Licensor may, in its discretion accelerate monies payable under the Agreement such that they are payable immediately and to retain such monies (it being acknowledged that Licensee’s material obligations hereunder include the payment of those certain License Fees set forth immediately below, regardless of early


termination due to Licensee’s Change of Control to a Prohibited Entity) in accordance with the following (and for avoidance of doubt, the Licensor’s acceleration right in clause 17.1 shall not apply):

17.2.1. if such termination occurs during the first eighteen (18) months of the Term, Licensor may declare immediately due and payable those License Fees that, but for such termination, would become due hereunder during the first twenty-four (24) months of this Agreement (solely to the extent not already paid); or

17.2.2. if such termination occurs after the first eighteen (18) months of the Term, Licensor may declare immediately due and payable, those License Fees that, but for such termination, would become due and payable in the six (6) month period following the notice of termination (or such shorter period of time if the remainder of the Term is less than six (6) months).

17.3. For the purposes of the above, “Prohibited Entity” shall mean a direct competitor of Licensor’s affiliate in its capacity as a consumer electronics manufacturer (or their affiliates) or to a direct competitor of Licensor as a distributor of content (or their affiliates).

17.4. For any Change of Control for which Licensor does not provide prior written consent in accordance with clause 18.118.1 that results in termination by Licensor (other than in accordance with clause 17.2)) the Licensor’s right to the acceleration of monies payable as provided in clause 17.117.1 (and 17.2) shall not apply, such exclusion being without prejudice to any right or remedy available to Licensor in the event of such termination (including as the case may be, acceleration of license fees, eg, if ever so determined by a court of competent jurisdiction).

17.5. Subject to Clause 17.617.6, in the event Licensor materially defaults in the performance of any of its material obligations hereunder or Licensor becomes insolvent, or a petition under any bankruptcy act shall be filed by or against Licensor (which petition, if filed against Licensor, shall not have been dismissed within 60 days thereafter), or Licensor executes an assignment for the benefit of creditors, or a receiver is appointed for the assets of Licensor, or Licensor takes advantage of any applicable insolvency or reorganization or any other like statute (each of the above acts is hereinafter referred to as a “Licensor Event of Default”), and Licensor fails to cure such Licensor Event of Default within 30 days after delivery by Licensee to Licensor of written notice of such Licensor Event of Default, then Licensee may, in addition to any and all other rights which it may have against Licensor, immediately terminate this Agreement by giving written notice to Licensor.

17.6. Notwithstanding anything to the contrary contained in Clauses 17.117.1 to 17.417.4 hereof, no termination of this Agreement for any reason shall relieve or discharge, or be deemed or construed as relieving or discharging, any party hereto from any duty, obligation or liability hereunder which was accrued as of the date of such termination (including, without limitation, the obligation to pay any amounts payable hereunder accrued as of such date of termination).

18. ASSIGNMENT.

18.1. Subject to Clause 2.3, Licensee may assign this Agreement to a direct or indirect wholly-owned subsidiary of Licensee or to a person or entity which is under common control with Licensee (the term “control” meaning the power to unilaterally direct the policies and management of Licensee, whether through the ownership of voting securities or otherwise), but in no event an unaffiliated third party, that in each case is a U.S. legal entity (or which is a legal entity of any country in which any assignee of Licensor, if any, is formed) and that does not have a tax presence in any other country provided further that such assignment shall not release Licensee from any of its obligations hereunder. Licensee shall provide Licensor with prompt written notice of any such assignment, which notice shall include the assignee’s name and address, and the assigned territories. Other than explicitly set forth in the first two sentences of this Clause 1818, Licensee shall not sell, assign, sublicense, sub-


distribute, transfer, mortgage, pledge or hypothecate this Agreement or any rights or licenses thereunder in whole or in part, or delegate any of its duties or obligations hereunder, without obtaining the prior written consent of Licensor such consent not to be unreasonably withheld or delayed, nor shall any of the Agreement or said rights or licenses be assigned or transferred or duties delegated by Licensee to any third party by operation of law (including, without limitation, by merger, consolidation or Change of Control (as hereinafter defined) or otherwise.

18.2. A “Change of Control” shall occur: (i) with respect to a party that is a Public Company (as defined herein), if as a result of any event (including but not limited to any stock acquisition, acquisition of securities convertible into or exchangeable for voting securities, merger, consolidation or reorganization) any one or more persons or entities who together beneficially own, directly or indirectly, more than 20% of the combined voting power of the then-outstanding securities of such party immediately prior to such event (the “Public Company Controlling Shareholder(s)”) together fail to own, after such event, more than 20% of the combined voting power of the then-outstanding securities of such party (or any successor, resulting or ultimate parent company or entity of such party, as the case may be, as a result of such event); or (ii) with respect to a party which is not a Public Company (as defined herein), if as a result of any event (including but not limited to any stock acquisition, acquisition of securities convertible into or exchangeable for voting securities, merger, consolidation or reorganization) any one or more persons or entities who together beneficially own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding securities of such party immediately prior to such event (the “Non-Public Company Controlling Shareholder(s)”) together fail to own, after such event, more than 50% of the combined voting power of the then-outstanding securities of such party (or any successor, resulting or ultimate parent company or entity of such party, as the case may be, as a result of such event); or (iii) merger or consolidation with an unaffiliated third party company, corporation or organization, or sale or other disposition of all or substantially all of the assets of Licensee to an unaffiliated third party. “Public Company” means any company or entity (i) whose securities are registered pursuant to the Securities Act of 1933, as amended, (ii) whose securities are traded in any national or international stock exchange or over the counter market or (iii) which is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended.

19. HEADINGS. The titles of the paragraphs of this Agreement are for convenience only and shall not in any way affect the interpretation of this Agreement.

20. NON-WAIVER OF BREACH; REMEDIES CUMULATIVE. A waiver by either party of any of the terms or conditions of this Agreement shall not, in any instance, be deemed or construed to be a waiver of such terms or conditions for the future or of any subsequent breach thereof. No payment or acceptance thereof pursuant to this Agreement shall operate as a waiver of any provision hereof. All remedies, rights, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation, or agreement of either party.

21. NOTICES. All notices hereunder shall be in writing and shall be sent by certified (return receipt requested) or registered mail, by air courier service, by personal delivery, or by facsimile to the address or fax number of the party for whom it is intended as follows, or to such other address or fax number as any party may hereafter specify in writing:

If to Licensor:

Sony Pictures Entertainment Inc. 10202 West Washington Boulevard Culver City, California 90232 Attention: General Counsel Facsimile: 310-244-0510


with a copy to: Columbia Pictures Corporation Limited Sony Pictures Europe House 25 Golden Square, London W1F 9LU Attention: Senior Vice President, Legal Affairs Facsimile: (44) (0)207 533 1235

If to Licensee: Netflix Luxembourg, S.à r.l. 13-15, Avenue de la Liberté, L-1931 Luxembourg, Grand -Duchy of Luxembourg

With a copy to: Netflix, Inc. Maple Plaza 345 North Maple Drive Suite 300 Beverly Hills, CA 90210 Attention: Kelly Merryman, Vice President, Content Facsimile: 310-734-2999 Netflix, Inc. 100 Winchester Circle Los Gatos, California 95032 Attention: General Counsel Facsimile: 408-540-3642

Notice given by personal delivery or facsimile shall be deemed given upon delivery and notice given by overnight delivery or courier service shall be deemed given the first Business Day following the Business Day of delivery to the overnight delivery service.

22. GOVERNING LAW/ARBITRATION. This Agreement shall be construed and enforced in accordance with the laws of the State of California without regard to the choice of law principles thereof. Any controversy or claim arising out of or relating to this Agreement, including but not limited to its enforcement, arbitrability or interpretation shall be submitted to final and binding arbitration, to be held in Los Angeles County, California, before a single arbitrator, in accordance with California Code of Civil Procedure §§ 1280 et seq. The arbitrator shall be selected by mutual agreement of the parties or, if the parties cannot agree, then the arbitrator shall be appointed by JAMS/Endispute. The arbitration shall be a confidential proceeding, closed to the general public. The arbitrator shall issue a written opinion stating the essential findings and conclusions upon which the arbitrator’s award is based. The parties will share equally in payment of the arbitrator’s fees and arbitration expenses and any other costs unique to the arbitration hearing (recognizing that each side bears its own deposition, witness, expert and attorney’s fees and other expenses to the same extent as if the matter were being heard in court). Nothing in this Clause 2222 shall affect either party’s ability to seek from a court injunctive or equitable relief at any time.

23. FORCE MAJEURE. Neither party shall in any manner whatsoever be liable or otherwise responsible for any delay or default in, or failure of performance resulting from or arising out of or in connection with any Event of Force Majeure, and no such delay, default in, or failure of performance shall constitute a breach by either party hereunder.


24. CONFIDENTIALITY. Other than as may be required by law, or governmental authority, or to enforce its rights hereunder, and subject to the following sentence, neither party shall, without the express written consent of the other, publicly divulge or announce, or in any manner disclose to any third party, other than its attorneys, advisors, directors, employees, agents, shareholders, accountants, parent entities or auditors, profit participants, or pursuant to Guild obligations (each of whom shall be subject to the confidentiality provision hereof) on a need-to-know basis, any of the specific terms and conditions of this Agreement, including, without limitation, the License Fees payable hereunder and any reporting information provided pursuant to the terms of the Agreement. Neither party shall issue any press release regarding the existence of or terms of this Agreement without the prior written consent of the other party.

24.1.1. Confidential Information. Each Party acknowledges and agrees that all business and technical information provided to it by the other Party pursuant to this Agreement constitutes confidential and/or proprietary information of the other Party (“Confidential Information”). Confidential Information shall include all oral, written or recorded confidential and/or proprietary information about or related to the disclosing Party or its business, including without limitation (a) the terms and conditions of this Agreement and (b) any information or materials related to programming, including without limitation, plots, characters, storylines, treatments, themes, characters, screenplays, scripts, storyboards, production elements, special effects, artwork and other creative elements. Notwithstanding the foregoing, Confidential Information does not include information that (i) is or becomes publicly available without breach of this Agreement; (ii) is rightfully received from a third Party under no obligation of confidentiality who did not acquire or disclose such information by a wrongful or tortious act; or (iii) can be shown by documentation to have been developed by the receiving Party without reference to any Confidential Information. The burden of proof with respect to establishing that any of the foregoing exceptions applies is on the receiving Party.

24.1.2. Use of Confidential Information. Each Party represents and warrants to the other Party that it Party shall not use the other Party’s Confidential Information for any purpose, or disclose such information to any third party (except for attorneys, accountants, auditors, third party participants and/or the third party contractors, provided such parties have reason to know such information and are bound to confidentiality obligations (which shall not be waived) at least as protective as this Section 24), other than (i) as necessary to perform its obligations or enforce its rights under this Agreement or as required by law (and subject to the next sentence in this Section), (ii) to the extent it obtains prior written approval from the other Party, and/or (iii) to the extent it is legally compelled to disclose such Confidential Information by the valid order of a court of competent jurisdiction, in which event it shall so notify the other Party as promptly as practicable (and, if possible, prior to making any disclosure) and shall seek confidential treatment of such information, it being understood that the parties will cooperate in protecting against any such disclosure and/or obtaining a protective order narrowing the scope of such disclosure and/or use of the Confidential Information. If in the absence of a protective order the receiving Party is nonetheless compelled to disclose Confidential Information, the receiving Party may disclose only that portion of the Confidential Information which the receiving Party is advised in writing by counsel is so legally compelled, it must (if allowed by law) provide the disclosing party with immediate notice of such disclosure and receiving Party will exercise best efforts to obtain assurances that confidential treatment will be accorded such Confidential Information. Each Party shall take all reasonable measures to protect the secrecy of and avoid disclosure of Confidential Information, which measures shall be no less than reasonable care and shall include all of those measures that the receiving Party uses to protect its own Confidential Information. For the avoidance of doubt, each Party is responsible to the other Party herein for the actions or omissions of its employees, attorneys, accountants, auditors, third party participants and/or third party


contractors if such actions or omissions result in a breach of this Section 24. This Section 24 shall survive expiration or earlier termination of this Agreement.

24.1.3. Neither Party shall issue any press release regarding the existence of terms of this Agreement without the prior written consent of the other Party.

24.1.4. Each Party shall supply personally identifiable information to the other only in accordance with, and to the extent permitted by, applicable laws relating to privacy and data protection. Personally identifiable information supplied by Licensee to Sony shall be retained and used in accordance with the Sony Pictures Safe Harbor Privacy Policy, located at http://www.sonypictures.com/corp/eu_safe_harbor.html.

25. THIRD PARTY CONTRACTORS. Notwithstanding anything to the contrary contained herein, Licensor acknowledges and agrees that, in order for Licensee to operate and maintain the SVOD Service in the Territory or otherwise host, serve, exhibit and distribute Included Programs in the Territory, Licensee may use the communications, hosting, data processing and/or fulfillment services of third parties; provided, however, that Licensee will remain, in all respects, directly and primarily liable to Licensor for all of Licensee’s obligations hereunder and for all acts and omissions of such third parties, including any breach of this Agreement, or acts or omissions, which if taken by Licensee, would be a breach of this Agreement.

26. AUDIT. [Intentionally deleted]

27. SEVERABILITY. If any provision of this Agreement is determined by a court or arbitrator to be invalid or unenforceable, such determination shall not affect any other provision of this Agreement, each of which shall be construed and enforced as if such invalid or unenforceable provision were not contained herein.

28. COUNTERPARTS. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument.

29. NO THIRD PARTY BENEFICIARY. This Agreement is entered into for the express benefit of the parties hereto, their successors and permitted assigns and is not intended, and shall not be deemed, to create in any other natural person, corporation, company, and/or any other entity whatsoever any rights or interest whatsoever, including, without limitation, any right to enforce the terms hereof.

30. LIMITATION OF LIABILITY. Neither party shall be liable to the other for special, consequential or incidental losses or for lost profits.

31. PRESUMPTIONS. In interpreting the terms and conditions of this Agreement, no presumption shall be interpreted for or against a party as a result of the role of such party or such party’s counsel in the drafting of this Agreement.

32. ENTIRE UNDERSTANDING. This Agreement includes the entire understanding of the parties with respect to the subject matter hereof, and all prior agreements (written or oral) with respect to such subject matter have been merged herein. No representations or warranties have been made other than those expressly provided for herein. This Agreement may not be modified, except by a written instrument signed by the parties, and this provision may not be waived except by written instrument signed by the parties.

33. NO MODIFICATION OF OTHER AGREEMENTS. In no event shall this Agreement (i) modify the terms of any other agreement or licensing arrangement between the parties with respect to motion pictures, television programs or other entertainment content which are not the subject matter hereof or with respect to the Included Programs in territories other than the Territory or (ii) grant rights to or impose restrictions on either party with respect to such other content or territories.


34. Upon full execution of the US Agreement, the following provisions of the US Agreement shall be deemed automatically incorporated into this Agreement, superseding and replacing the corresponding provisions herein in their entirety, respectively: clause 2.4.4 (carveouts), clause 2.2 (definitions of 3D and 4K),, clause 17 (termination), clause 18 (assignment), clause 24 (confidentiality), and Schedule B. [#Requires further discussion.]

IN WITNESS WHEREOF, the duly authorized representatives of Netflix Luxembourg S.à r.l and Columbia Pictures Corporation Limited have executed this Agreement as of the date first written above.

COLUMBIA PICTURES CORPORATION LIMITED

NETFLIX LUXEMBOURG S.À R.L.

By: By:

Its: Its:

Comment [a1]: We note that clause 24 (confidentiality) is currently being amended in the UK, and in the alternative we could use the UK clause.


Schedule A

INCLUDED PROGRAMS - AVAIL YEAR 1 Television Series Year 1

Series Season Episodes Exclusivity Avail Date End Date Y1 Fee / Ep

(EUR) Y1 Total

Fee (EUR)

Breaking Bad 1 7 Exclusive 9-Sep-13 8-Sep-16 € 9,481 € 66,369




Breaking Bad 5a 8 Exclusive 9-Sep-13 8-Sep-16 € 9,481 € 75,850

Breaking Bad 5b 8 Exclusive 1-Mar-14

8-Sep-16 € 9,481 € 75,850

Drop Dead Diva 1 13 Non-Exclusive 9-Sep-13 8-Sep-14 € 5,267 € 68,476



Drop Dead Diva 4 13 Non-Exclusive 1-July-14 30-Jun-15 € 5,267 € 68,476

The Tudors 1 10 Non-Exclusive 9-Sep-13 8-Sep-14 € 2,298* € 22,985




The Boondocks 1 15 Non-Exclusive 9-Sep-13 8-Sep-14 € 460* € 6,895



Year 1 Total €969,775 *These License Fees are outside of the TV Series Ratecard in Avail Year 1, the TV Series Ratecard will apply for Avail Year 2 and Avail Year 3.


Library Feature / Recent Re-Run / Re-Run Title Selections for Avail Year 1

Title Year Tier Exclusivity Avail Date Lic. Period

Lic. Fee (EUR)

Grown Ups 2010 Recent Re-run A Non-Exclusive 01-May-14 12 months € 49,801 Just Go With It 2011 Recent Re-run A Non-Exclusive 01-Jul-14 12 months € 49,801 Karate Kid 2010 Recent Re-run A Non-Exclusive 01-May-14 12 months € 49,801 Other Guys, The 2010 Recent Re-run A Non-Exclusive 01-Jun-14 12 months € 49,801 Salt 2010 Recent Re-run A Non-Exclusive 01-May-14 12 months € 49,801 Easy A 2010 Recent Re-run B Non-Exclusive 15-May-14 12 months € 38,308 Eat Pray Love 2010 Recent Re-run B Non-Exclusive 01-Jun-14 12 months € 38,308 Social Network, The 2010 Recent Re-run B Non-Exclusive 01-May-14 12 months € 38,308 Tourist, The 2011 Recent Re-run B Non-Exclusive 01-Jun-14 12 months € 38,308 2012 2009 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731 Angels & Demons 2009 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731 Cloudy With A Chance Of Meatballs

2010 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731

Da Vinci Code, The 2006 Re-run A Non-Exclusive 09-Mar-14 12 months € 28,731 Hancock 2008 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731 Hitch 2005 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731 Paul Blart Mall Cop 2009 Re-run A Non-Exclusive 09-Sep-13 12 months € 28,731 Michael Jackson's This Is It 2009 Re-run B Non-Exclusive 09-Sep-13 12 months € 15,323 Open Season 2006 Re-run B Non-Exclusive 20-May-14 12 months € 15,323 Pineapple Express 2008 Re-run B Non-Exclusive 09-Sep-13 12 months € 15,323 Seven Pounds 2009 Re-run B Non-Exclusive 09-Sep-13 12 months € 15,323 Taking Of Pelham 123, The 2009 Re-run B Non-Exclusive 09Sep-13 12 months € 15,323 Zombieland 2009 Re-run B Non-Exclusive 09-Sep-13 12 months € 15,323 Crank: High Voltage 2006 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726 Did You Hear About The Morgans?

2010 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726

House Bunny, The 2008 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726 Punisher, The: War Zone 2008 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726 Underworld: Rise of the Lycans 2009 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726 XXX: State Of The Union 2005 Re-run C Non-Exclusive 09-Sep-13 12 months € 10,726 Bad Boys II 2003 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Big Daddy (1999) 1999 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Jumanji 1995 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Spider-Man 2002 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Spider-Man 2 2004 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Stuart Little 1999 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 Stuart Little 2 2002 Library A Non-Exclusive 09-Sep-13 12 months € 18,963 13 Going On 30 2004 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 Big Fish 2003 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 Hellboy 2004 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 National Security 2003 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 Not Another Teen Movie 2001 Library B Non-Exclusive 09-Sep-13 12 months € 10,535


Spanglish 2004 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 White Chicks 2004 Library B Non-Exclusive 09-Sep-13 12 months € 10,535 Glass House, The 2001 Library C Non-Exclusive 09-Sep-13 12 months € 6,321 Matilda 1996 Library C Non-Exclusive 09-Sep-13 12 months € 6,321 Bounty Hunter, The 2010 Recent Re-Run B Non-Exclusive 1-June-2014 12 months € 38,308 Green Hornet, The 2011 Recent Re-run A Non-Exclusive 1-June-2014 12 months € 49,801 District 9 2009 Re-Run A Non-Exclusive 9- Sep-2013 12 months € 28,731 Fun With Dick And Jan 2005 Re-Run A Non-Exclusive 1- Nov-2013 12 months € 28,731 Terminator Salvation 2009 Re-Run A Non-Exclusive 9- Sep-2013 12 months € 28,731 Total € 1,153,080


DTVS/MOWS – AVAIL YEAR 1

Title Start Date Type License Fee

DREW PETERSON: UNTOUCHABLE 9-Sep-2013 Premium MOW € 15,323 DETENTION (2012) 8-Jan-2014 Premium DTV € 15,323 RESIDENT EVIL: DAMNATION 26-Feb-2014 Premium DTV € 15,323 MEETING EVIL (2012) 22-Jan-2014 Premium DTV € 15,323 DARK TRUTH, A 6-Aug-2014 Premium DTV € 15,323 STARSHIP TROOPERS: INVASION 10-Mar-2014 Premium DTV € 15,323 SWAN PRINCESS CHRISTMAS, THE 21-Apr-2014 Premium DTV € 15,323 KILL FOR ME 13-Aug-2014 Premium DTV € 15,323

Netflix Netherlands SVOD Agmt D23 GPC (13-08-2013)

SCHEDULE B

CONTENT PROTECTION REQUIREMENTS AND OBLIGATIONS

1. Content Protection System. All Included Programs delivered by Licensee to, output

from or stored on an Approved Device must be protected by a content protection system that includes digital rights management, conditional access systems and digital output protection (such system, the “Content Protection System”). The Content Protection System shall (i) be fully compliant with all the compliance and robustness rules set forth in this Schedule B, and (ii) use only those rights settings, if applicable, set forth in this Schedule B or that are otherwise approved in writing by Licensor. Upgrades to or new versions of the Content Protection System that would materially and negatively affect the protection provided to Included Programs shall be approved in writing by Licensor.

1.1. Explicitly Prohibited. For the avoidance of doubt.

1.1.1. Unencrypted streaming of Included Programs is prohibited.

1.1.2. Unencrypted downloads of Included Programs is prohibited.

1.1.3. All Included Programs shall be transmitted and stored in a secure encrypted form. Included Programs shall never be transmitted to or between devices in unencrypted form.

1.2. Approved Protection Systems. The following protection systems are approved, with the conditions shown, as part of the Content Protection System, provided that Licensor shall have the right to withdraw its approval of a subsequent release by its publisher of any such protection system, upon reasonable advance written notice, in the event that release materially and negatively alters such protection system such that such protection system no longer enforces the relevant provisions of this Schedule B or the Usage Rules:

1.2.1. Windows Media DRM 10 (and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date). Windows Media DRM 10 is NOT approved for the delivery of Included Programs in High Definition to Software Devices;

1.2.2. Silverlight Powered by PlayReady and/or PlayReady (Windows Media DRM 11)( and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date);

1.2.3. Widevine Cypher 4.2 DRM (and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date);

1.2.4. Advanced Access Content Systems (“AACS”) specification version 0.95 (and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date). AACS is NOT approved for the delivery of Included Programs in High Definition to Software Devices;

1.2.5. Marlin Broadband v1.2.2 DRM in compliance with the Marlin Trust Management Organization’s robustness and compliance rules (and any


successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date);

1.2.6. Adobe Flash Access 2.0 (and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date);

1.2.7. Apple FairPlay (and any successor and/or update thereto that maintains a level of robustness that is equal to or greater than the robustness as of the Effective Date) but solely with respect to iOS devices; and/or

1.2.8. SSL Transport Layer Content Protection. For streaming only to Approved Devices other than personal computers, Licensee will use a system with SSL providing encryption and integrity protection of content where: (a) SSL shall be either Secure Socket Layer version 3 (SSLv3) or Transport Layer Security version 1 (TLSv1) or later transport layer security protocols; (b) clients shall be uniquely identifiable; (c) mutual authentication shall be provided by X.509 certificate based authentication, token based authentication or both; and (d) content protection shall be ensured by securing content keys using hardware resources and/or industry strength tamper resistance.

SSL Transport Layer Content Protection is NOT approved for the delivery of Included Programs in High Definition to Software Devices.

1.2.9. “http live streaming” (HLS) protocol. Licensor’s classification of http live streaming as an Approved Protection System is only temporary and Licensee shall migrate from use of http live streaming (implementations of which are not governed by any compliance and robustness rules nor any legal framework ensuring implementations meet these rules) to use of an industry accepted DRM or secure streaming method which is governed by compliance and robustness rules and an associated legal framework, by end March 31st, 2012. “http live streaming” is NOT approved for the delivery of Included Programs in High Definition to Software Devices.

1.3. High Definition Requirements (Both Hardware and Software Devices)

1.3.1. Where the integrity of the firmware is integral to the security of the content protection system, all firmware responsible for content protection must be validated for origin using digital signature validation or some other cryptographically secure validation mechanism (such as AES-128 encryption, CMAC using 128 bit or higher security encryption, HMAC using 128 bit or higher security, etc) before any firmware update is applied. Additionally, Licensee recommends Approved Device manufacturers implement secure boot.

1.3.2. Systems must not allow unencrypted video signals on busses accessible by users using widely available tools. Notwithstanding anything to the contrary herein, to the extent Licensor makes Included Programs available in High Definition for exhibition on Approved Devices that are Software Devices, this Clause 1.3.2 will apply to Software Devices.

1.4. Requirements for HD delivery to Software Devices. The requirements below shall apply for the delivery of HD Included Films to Software Devices.


1.4.1. Robust Implementation

1.4.1.1. Implementation of Approved Protection Systems on Software Devices shall, in all cases, use state of the art obfuscation mechanisms or trusted execution environments for the security sensitive parts of the software implementing the Content Protection System.

1.4.1.2. All Software Devices deployed by Licensee after end December 31st, 2013, SHALL support trusted execution environments. For the avoidance of doubt, this requirement applies to actual, physical devices which are deployed to Subscribers by Licensee only and does not apply to software Playback Clients or Applications distributed by Licensee.

1.4.2. For avoidance of doubt, HD content may only be output in accordance with Clause “Digital Outputs” above unless stated explicitly otherwise below.

1.4.3. If an HDCP connection cannot be established, as required by Clause “Digital Outputs” above, the playback of Included Programs over an output on a Software Device (either digital or analogue) must be limited to a resolution no greater than Standard Definition (SD). Notwithstanding the foregoing, as long as Licensee receives an affirmative response that HDCP is engaged, Licensee may deliver an Included Program in HD.

1.4.4. With respect to playback in HD over analog outputs on Software Devices that are registered for service in the Territory by Licensee after 31st December, 2011, Licensee shall either (i) prohibit the playback of such HD content over all analogue outputs on all such Software Device or (ii) ensure that the playback of such content over analogue outputs on all such Software Device is limited to a resolution no greater than SD. Licensor represents and warrants that it requires, and shall continue to require during the Term of this Agreement, the foregoing with respect to all other on-demand distributors and licensees of Licensor’s content (including Licensor’s affiliates) in the Territory.

1.4.5. Notwithstanding anything in this Agreement, if Licensee is not in compliance with this Clause, then, upon Licensor’s written request, Licensee will temporarily disable the availability of Included Programs in HD via the Licensee service within thirty (30) days following Licensee becoming aware of such non-compliance or Licensee’s receipt of written notice of such non-compliance from Licensor until such time as Licensee is in compliance with this Clause “Requirements for HD delivery to Software Devices”; provided that:

1.4.5.1. if Licensee can robustly distinguish between Software Devices that are in compliance with this Clause “Requirements for HD delivery to Software Devices”, and Software Devices which are not in compliance, Licensee may continue the availability of Included Programs in HD for Software Devices that it reliably and justifiably knows are in compliance but is required to disable the availability of Included Programs in HD via the Licensee service for all other Software Devices, and


1.4.5.2. in the event that Licensee becomes aware of non-compliance with this Clause, Licensee shall promptly notify Licensor thereof; provided that Licensee shall not be required to provide Licensor notice of any third party hacks to HDCP.

1.4.6. Secure Video Paths:

The video portion of unencrypted content shall not be present on any user-accessible bus in any analog or unencrypted, compressed form. In the event such unencrypted, uncompressed content is transmitted over a user-accessible bus in digital form, such content shall be either limited to standard definition (720 X 480 or 720 X 576), or made reasonably secure from unauthorized interception.

1.4.7. Secure Content Decryption.

1.4.7.1. Decryption of (i) content protected by the Content Protection System and (ii) CSPs (as defined in Clause 2.1 below) related to the Content Protection System shall take place in an isolated processing environment such that decrypted content and CSPs are protected at all times in the device, including during transmission to the graphics card for rendering, from attack from other software processes on the device. “CSPs” shall mean keys, passwords, and any other information that are critical to the security robustness of the Content Protection System.

2. Outputs.

2.1. For Approved Devices with respect to which Licensee exercises sole control over design and manufacturing, if any, such devices shall limit analog outputs to a maximum resolution of 1080i and shall not permit analog outputs at a resolution of 1080p or greater.

2.2. The Content Protection System shall prohibit digital output of unprotected, unencrypted Included Programs. Notwithstanding the foregoing but subject to Clause 2.4A, the Content Protection System may allow a digital signal to be output if it is protected and encrypted by High Definition Copy Protection (“HDCP”) or Digital Transmission Copy Protection (“DTCP”). Further, the Content Protection System may implement (i) Digital Video Interface version 1.0 (“DVI”) without HDCP and allow only standard definition or scaled standard definition output on such interface on personal computer platforms in accordance with the allowances for DVI outputs through the DVD-CCA and/or (ii) an exception for unprotected analog and digital outputs to allow only standard definition or scaled standard definition output on such interface on personal computer platforms in accordance with the allowances for analog and digital outputs through the DVD-CCA; provided, however, that in the event that the DVD-CCA authorizes an exception to current or future DVD-CCA allowances for any such output for personal computer manufacturers, Licensor acknowledges and agrees that Licensee shall be entitled to the benefit of such exception. For the avoidance of doubt and notwithstanding anything to the contrary herein, the Content Protection System may allow High Definition content to be output via a digital output only if it is protected by HDCP or DTCP.


Defined terms used but not otherwise defined in this Clause 2.4 shall have the meanings given them in the DTCP or HDCP license agreements, as applicable.

2.2.1. An Approved Device that outputs decrypted Included Programs provided pursuant to the Agreement using DTCP shall:

2.2.1.1. Deliver system renewability messages to the source function;

2.2.1.2. Map the copy control information associated with the program; the copy control information shall be set to “copy never” in the corresponding encryption mode indicator and copy control information field of the descriptor;

2.2.1.3. Map the analog protection system (“APS”) bits associated with the program to the APS field of the descriptor;

2.2.1.4. Set the image_constraint_token field of the descriptor as authorized by the corresponding license administrator;

2.2.1.5. Set the eligible non-conditional access delivery field of the descriptor as authorized by the corresponding license administrator;

2.2.1.6. Set the retention state field of the descriptor as authorized by the corresponding license administrator;

2.2.1.7. Deliver system renewability messages from time to time obtained from the corresponding license administrator in a protected manner; and

2.2.1.8. Perform such additional functions as may be required by Licensor to effectuate the appropriate content protection functions of these protected digital outputs.

2.2.2. An Approved Device that outputs decrypted Included Programs provided pursuant to the Agreement using HDCP shall:

2.2.2.1. If requested by Licensor and if supported by a particular platform, deliver a file associated with the Included Programs named “HDCP.SRM” and, if present, pass such file to the HDCP source function in the set-top box as a System Renewability Message; and

2.2.2.2. Verify that the HDCP Source Function is fully engaged and able to deliver the Included Programs in a protected form, which means:

2.2.2.2.1. HDCP encryption is operational on such output,

2.2.2.2.2. Processing of the System Renewability Message associated with the Included Programs, if any, has occurred as defined in the HDCP Specification, and

2.2.2.2.3. There is no HDCP Display Device or Repeater on such output whose Key Selection Vector is in such System Renewability Message.


2.4A Exception Clause for Standard Definition, Uncompressed Digital Outputs on Windows-based PCs, Macs running OS X or higher and PCs running Chrome OS with a Widevine DRM described in Clause 1.2.3): HDCP must be enabled on all uncompressed digital outputs (e.g. HDMI, Display Port), unless the customer’s system cannot support HDCP.

2.3. In the event that Licensor provides to any entity to whom it licenses in the Territory, feature films or television programming with similar or earlier windows as the Included Programs licensed to Licensee hereunder an exception or allowance to any digital output requirement set forth herein, and such entity's content protection system, delivery mechanism and usage model are comparable to Licensee's, as reasonably determined by Licensor, Licensor will discuss in good faith with Licensee whether such an allowance would apply to Licensee hereunder.

2.4. The Content Protection System shall prohibit recording, transfer or copying of protected Included Programs onto recordable or removable media except as explicitly provided for in the Usage Rules.

2.5. The Content Protection System shall prohibit recording, transfer or copying of Included Programs onto external devices except as explicitly provided for in the usage rules or the definition of Approved Device.

2.6. For Approved Devices with High Definition output capability, standard definition Included Programs will be delivered to the device at a pixel resolution no greater than 345,600 visible pixels (in the case of NTSC), or 414,720 visible pixels (in the case of PAL), but the applicable Approved Device may up-scale such Included Programs to High Definition resolutions while maintaining all relevant output protections; provided that Licensee shall not advertise or represent the exhibition of such standard definition Included Programs as “high definition”.

2.7. High Definition streams (for Included Programs authorized by Licensor for transmission in High Definition) shall run up to a pixel resolution of 2,073,600 visible pixels delivered at a variety of bit-rates, up to a maximum of 10Mbps average bit rate.

3. Watermarking Requirements.

3.1. The Content Protection System must not remove or interfere with any embedded watermarks in any Included Program; provided, however, that nominal alteration, modification or degradation of such embedded watermarks during the ordinary course of Licensee’s encoding, encryption and/or distribution of Included Programs shall not be a breach of this Clause 3.1.

4. Geofiltering.

4.1. Licensee must utilize an industry standard geolocation service to verify that a Registered User is located in the Territory that must:

4.1.1. provide geographic location information based on DNS registrations, WHOIS databases and Internet subnet mapping.

4.1.2. provide geolocation bypass detection technology designed to detect IP addresses located in the Territory, but being used by Registered Users outside the Territory.


4.1.3. use such geolocation bypass detection technology to detect known web proxies, DNS based proxies, anonymizing services and VPNs which have been created for the primary intent of bypassing geo-restrictions.

4.2. Licensee shall use such information about Registered User IP addresses as provided by the industry standard geolocation service to prevent access to Included Programs, via the SVOD Service, from Registered Users outside the Territory.

4.3. Both geolocation data and geolocation bypass data must be updated no less frequently than every two (2) weeks.

4.4. Licensee agrees to periodically review geofiltering tactics during the Term of this Agreement.

4.5. Licensor acknowledges that Internet Protocol (IP) based geolocation and geofiltering technologies may in some cases be circumvented by highly proficient and determined individuals or organizations.

5. Embedded Information. Licensee’s delivery systems shall “pass through” any embedded copy control information without alteration, modification or degradation in any manner without intentional alteration, modification or degradation in any manner.

6. Network Service Protection Requirements.

6.1. All Included Programs in Licensee’s possession must be received and stored at content processing and storage facilities in a protected format using an approved protection system. Access to such Included Programs must be limited to authorized personnel who need such access for operational purposes and Licensee shall maintain auditable records of actual access.

6.2. Document security policies and procedures shall be in place. Documentation of policy enforcement and compliance shall be continuously maintained.

6.3. Physical access to servers must be limited and controlled and must be monitored by a logging system.

6.4. Auditable records of access, copying, movement, transmission, backups, or modification of Included Programs not encrypted with at least AES128 or the equivalent and of encryption keys for such Included Programs in Licensee’s possession must be securely stored for a period of at least one year.

6.5. Content servers must be protected from general internet traffic by “state of the art” protection systems including, without limitation, firewalls, virtual private networks, and intrusion detection systems. All systems must be updated, per Licensee’s standard operational procedures, to incorporate the latest security patches and upgrades. For the avoidance of doubt, Licensee may put encoded encrypted content onto internet facing servers for use by Approved Devices and.

6.6. All facilities which process and store Included Programs not encrypted with at least AES128 or the equivalent and encryption keys for such Included Programs must be available for Motion Picture Association of America and Licensor audits at times and places to be mutually agreed upon by Licensor and Licensee; provided, however, that any such inspection is conducted during Licensee’s normal business hours and does not materially interfere with Licensee’s operations or confidentiality obligations to third parties.


6.7. Any changes to Licensee’s security policies or procedures set forth in this Clause 6 that would materially and negatively affect the protection provided to Included Programs must be submitted to Licensor for approval.

6.8. Each Included Program must be returned to Licensor or securely destroyed pursuant to the Agreement at the end of such program’s License Period including, without limitation, all electronic and physical copies thereof.

7. PVR Requirements. Any device receiving playback licenses must not implement any personal video recorder capabilities that allow recording, copying, or playback of any Included Program except as explicitly specified in the Usage Rules.

8. Unencrypted Audio. Notwithstanding anything herein to the contrary, unencrypted streaming of audio files associated with Included Programs shall be permitted; provided that if Licensor reasonably determines that the streaming of unencrypted audio files associated with Included Programs is a source for theft or piracy of such audio, the parties agree to discuss in good faith whether the streaming of unencrypted audio files should continue to be permitted.]


Schedule C

License Fees – Rate Card

Second Pay Features Locally Released:

US Box Office ($) Fee per Title >$150m € 149,402 $100 – 150m € 122,587 $75 – 100m € 99,602 $50 – 75m € 80,447 $25 – 50m € 57,462 $10 – 25m € 42,139 $5 – 10m € 30,647 $0 – 5m € 26,816

5% annual increase shall be applied cumulatively in Avail Year 2 and Avail Year 3 Second Pay Features Non-Locally Released:

US Box Office ($) Fee per Title >$150m € 74,701 $100 – 150m € 61,293 $75 – 100m € 49,801 $50 – 75m € 40,224 $25 – 50m € 28,731 $10 – 25m € 21,070 $5 – 10m € 15,323 $0 – 5m € 13,408 Premium DTV / MOW € 15,323 Standard DTV / MOW € 9,577

5% annual increase shall be applied cumulatively in Avail Year 2 and Avail Year 3

Recent Re-Runs:

Tier Fee per Title Tier A € 49,801 Tier B € 38,308 Tier C € 22,985

No annual increase shall be applied cumulatively in Avail Year 2 and Avail Year 3 Re-runs:

Tier Fee Per Title Tier A € 28,731


Tier B € 15,323 Tier C € 10,726

No annual increase shall be applied cumulatively in Avail Year 2 and Avail Year 3 Library Features/Library DTVs/Library MOWs:

Tier Fee per Title Tier A € 18,963 Tier B € 10,535 Tier C € 6,321

No annual increase shall be applied cumulatively in Avail Year 2 and Avail Year 3 Television Series:

Category Fee per Episode Current Series – 1 Hour

€ 5,267

Current TV Series- Half Hour

€ 3,793 Non-Returning TV Series 1 Hour

€ 2,739 Non-Returning TV Series Half Hour

€ 1,896

Library Series – Tier A

€ 1,475 Library TV Series - Tier B

€ 1,264

Library TV Series - Tier C

€ 1,053 Animated Half Hour

€ 632

Breaking Bad (Fee per Episode/12 months)

€ 9,481


Schedule D Usage Rules

1. Playback Client

a. Each Playback Client must be uniquely identifiable.

b. Each Playback Client must be registered with a Registered User’s user account (each, a “User Account”) prior to receiving Included Programs or playback licenses.

2. User Accounts

a. Registered Users must have an active User Account prior to viewing an Included Program on the SVOD Service.

b. All User Accounts must be protected via account credentials consisting of at least a user-ID and password.

c. A Playback License (as described below) must timeout after 24 hours.

d. All User Accounts must have full account privileges applicable to such account, including purchasing power and the power to change account options, such that access to the account credentials (username and password) is sufficient to (i) enable purchases to be made and charged to the Registered User who is the account owner and (ii) change account options and subscription tiers to the extent applicable to such account.

3. Each User Account can have a maximum of 6 registered Playback Clients at a time. Playback Clients may be de-registered pursuant to Licensee’s standard de-registration procedures, which allows Playback Clients to be de-registered from either the client or the server side. After de-registration, a Registered User must re-present valid account credentials before Included Programs can be received and viewed.

4. Rendering of Included Programs on a Playback Client shall be possible only by the possession on the Playback Client of a Playback License or via Link Layer Protection Playback (which is playback via a secure streaming protocol which is an Approved Protection System where the issuance of a Playback License is not required).

5. Playback Licenses for all CPS except Link Layer Protection (which shall nonetheless meet the standard of this Clause 3 by providing for an analogous level of protection, pursuant to the Link Layer Protection Playback Business Rules set forth at Clause 3(l) below):

a. Only a single Playback License shall be issued per viewing of an Included Program.

b. Each Playback License shall be restricted to only registered Playback Clients.

c. Playback Licenses shall not be transferable or copyable between Playback Clients.

d. Included Programs not playable without a Playback License.

e. Only Licensee can authorize Playback Licenses for Included Programs on the SVOD Service.

f. Playback Licenses must be acquired at the start of viewing of an Included Program, and cannot be cached or stored on the applicable Approved Device after the earlier of viewing being stopped or 24 hours after the playback license was issued.


g. Playback Licenses are only delivered to Registered Users with User Accounts in good standing.

h. Playback Licenses shall expire period within 24 hours of being issued. Resuming playback (after a stop) of a previously viewed (including partially viewed) stream requires acquisition of a new playback license.

i. If a playback client receives a new Playback License while it already has a Playback License or is playing an Included Program authorized by another Playback License, any Included Program playing shall terminate, and the new Playback License shall replace any existing Playback Licenses (other than in the case of “picture-in-picture” streaming as described in sub clause j. below).

j. Each playback client may only have a single stream at a time (other than in the case of “picture-in-picture” streaming, in which case each such stream to the same device shall be counted towards the concurrent stream limit set forth in sub Clause m. below).

k. Prior to issuing a Playback License, a playback client must be authenticated with its associated User Account using the User Account credentials.

l. Link Layer Protection Playback Business Rules:

i. Only a single stream shall be initiated per viewing of an Included Program.

ii. Each stream shall be restricted to only registered Playback Clients.

iii. Streams shall not be recordable, copyable or transferable between Playback Clients.

iv. Included Programs are not playable without proper authorization by Licensee.

v. Only Licensee can provide streams for Included Programs on the SVOD Service.

vi. Streams cannot be cached or stored on the applicable Approved Device after the earlier of viewing being stopped or 24 hours after the start of playback.

vii. Streaming sessions shall expire in a period within 24 hours of being initiated. Resuming playback (after a stop) of a previously viewed (including partially viewed) stream requires initiation of a new stream.

viii. If a Playback Client receives a new stream while an existing stream was already in progress, any Included Program currently playing shall terminate, and the new stream shall replace any existing streams.

ix. Only a single streaming instance shall be allowed per Approved Device at any one time.

x. Prior to starting a streaming instance, a playback client must be authenticated with its associated User Account using the User Account credentials.

m. Only two (2) streaming instances (including any combination of Playback Licenses plus Link Layer Protection) may be active at one time associated with a single base level User Account (i.e., the lowest priced unlimited streaming plan); provided however, that nothing contained herein shall prevent Netflix from allowing Registered Users to add additional concurrent streams up to a maximum of four (4) concurrent streams for an additional fee. As of three (3) months from the Effective Date, Netflix represents that it shall have


agreements for the Territory with no less than three (3) Major Studios which permit at least four (4) concurrent streams per Registered User.

n. Streaming is only allowed to Registered Users with User Accounts in good standing.

6. Fraud Detection

a. Licensee shall require that each Registered User has agreed to be bound by and comply with the SVOD Service’s terms and conditions, which terms shall, at a minimum, set forth the permitted use of Included Programs by a Registered User, including that such programs are available to members for personal, non-commercial use only. Licensee will establish commercially reasonable procedures in accordance with prevailing industry standards to provide for appropriate action to be undertaken, in Licensee’s good faith discretion, with respect to any Registered User who violates the Terms of Use. Licensee shall use commercially reasonable efforts to ensure that Playback Licenses for a single account are only delivered to the relevant account holder, which may include members of a single household only.

b. Licensee will use appropriate anti-fraud heuristics to prevent unauthorized access of User Accounts. As part of this effort, Licensee will monitor operational statistics from the back end (for example, number of streams per Registered User in a given period, diversity of stream session locations in a given period, amount and location of concurrent sessions, etc.) to evaluate potential fraud.


Schedule E

Conforming and Delivery Costs

Prores File Delivery Video (including 1 sub conform)

Audio/subconform

RT (min) Feature 120 $500 $300 TV Episodic 60 $400 $200 TV Episodic 30 $200 $100

Notwithstanding anything to the contrary, all payments of the Conforming and Delivery Costs shall be made in US Dollars.

[JC to provide Euro amounts.]

Technical Specification

[attach 6-0]

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