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Home My WebLink About2005-191 CONT Addendum - Great Lakes Data Systems ~_ NETWORKS 5 Hudson Street, 17th Floor w York, NY 10014 May 6, 2005 PO :.=~ PG Vendor I l7 , J.' Date . . ( , ,;:'.'5 .L....~~c~' /' . /~ ((' ~-1:::'.e ~ '((i Ih:')t'")"-. U+{h!.~' t6f VIA OVERNIGHT MAIL The City of Ashland, by and through it's electric utilities' Ashland Fiber Network 90 North Mountain Avenue Ashland, OR 97520 Attention: Michael F. Ainsworth Re: Afffiliation Agreement and Addendunl to Affiliation Agreement: Great Lakes Group Monthly Minimum Dear Michael: Enclosed is an executed copy of the Affiliation Agreement dated January 1, 2005 and the Addendum to the Affiliation Agreement between The City of Ashland, by and through it's electric utilities' Ashland Fiber Network and iN Demand L.L.C. Please feel :free to contact your Affiliate Representative, Rod Veatch at 303-712-3369, if you have any questions or comments Very truly yours, ".~' ,. r ..,.. ,~: \. t' I 1:_ :.." , , ( . , " '. - .... i'..!' i . '/ i I . o'; i . \ I , ".' '.~. ..._1 ~ Laura McCauley'-" '-' ~ - Ii,' /1/ 4 .. Enclosure cc: Rod Veatch Joe Sparacio Michael D' Antonio cc (w/o encl.): James Cofer Debbie Barackman Lisa Shab ....l~i'l'..h'I.:."" PAY-PER.VIEW sPtd,l..r"",..,. EVENTS .... ):h.''''.'''''l''':,,, movies ON DEMAND events ON DEMAND ~~II'tq.~ INI....fO,~ ~L/ INI-ll:::l concert lUHeaOH ADDENDUM TO iN DEMAND L.L.C. (HiND") AFFILIATION AGREEMENT The undersigned Affiliate has entered into an Affiliation Agreement with iN]) dated as of January 1, 2005, (the "Agreement") and has delivered an executed copy of such Agreement to iND. Affiliate is a customer of Great Lakes Data Systems, Inc. ("GLDS") and hereby elects as of the date set forth below to be included as one of various systems that are participating in a pool to consolidate payments for the purpose of satisfying the monthly PPV requiren1ent set forth in Section 4 of the Agreement, subject to the te:rms and conditions set forth herein. In accordance with Section 6 of the Agreement, Affiliate grants to iND the right to obtain directly frOlTI GLDS, at no cost to iND, the statements and other information that is required from Affiliate under such section. All capitalized terms used but not defined herein shall have the meanings set forth in the Agreement. 1. Without derogating from iND's rights or remedies under the Agreement or otherwise, iND hereby agrees that that for so long as iND receives electronic reports from GLDS on behalf of Affiliate on a timely basis in accordance with Section 6 of the Agreement, and for so long as iND receives all License Fees payable to iND under the Affiliation Agreement on a timely basis in accordance with the terms thereof, iND shall evaluate the monthly PPV minimum requirement with respect to Affiliate as part of the GLDS Minimum. Notwithstanding the foregoing accomodation, iND may terminate its services to Affiliate at any time in accordance with the terms and conditions set forth in the Agreement. Any failure by GLDS to make payment or provide reports on behalf of Affiliate shall be treated as a default by Affiliate. 2. Affiliate hereby acknowledges that in the levent of any conflict between the terms and conditions of GLDS' Digital Authorization and Billing Service Agreerrlent and the Agreement, the terms and conditions of the Agreement shall govern the rights and obligations of Affiliate and iND without giving effect to this Addendum. Affiliate hereby authorizes iND to provide a copy of its executed Agreement, as well as a copy of this Addendum, to GLDS. 3. Affiliate represents that as of the date set forth below, Affiliate is current in all payments owed to iN DEMAND and GLDS. IN WITNESS WHEREOF, Affiliate and iND have duly executed and delivered this Addendum to the iND Affiliation Agreement as of 'trF {(. i. 'l ,2005. THE CITY OF ASHLAND, BY AND THROUGH IT'S ELECTRIC UTILITIES' ASHLAND FIBER NETWORK iN DEMAND L.L.C. \. \ By: Title: ..-((../\ -_-.."'~'~ ,.'.or ('.H. . ,,' . ..... /: ~',- f J".' , .:. /.:. J : ,.,: ~~/ < .'.....:.. ~ Title: < V r / .} (.;> I. ) "7r:=- t.-. G:\Distribution\AffAgt\The City of Ashland\GL.Addendum.Ol05.doc IN DEMAND L.L.C. AFFILIATION AG~REEMENT THIS AGREEMENT is made this 1 st day of January, 2005 (the "Agreement"), by and between iN DEMAND L.L.C. CiND"), a Delaware limited liability company, with offices at 345 Hudson Street, New York, New York 10014, and THE CITY OF ASHLAND, BY AND THROUGH IT'S ELECTRIC UTILITIES' ASHLAND FIBER NETWORK (",Affiliate"), an Oregon corporation with offices at 90 North Mountain Avenue, Ashland, OR 97520. WHEREAS, iND is engaged in the business of providing a pay-per-view service consisting of the transmission of motion pictures and other programming by satellite to cable and other distribution systems, for the retransmission of such motion pictures and other programming by cable and other distribution systems to subscribers on a pay-per-view basis by means of the iND pay-per-view channels (the "Service"), and of providing related materials and services. Affiliate desires to receive the Service from iND and iND desires to provide to Affiliate such transmissions and related services in accordance with the terms and conditions set forth in this Agreement NOW, THEREFORE, in consideration of the mutual promises herein contained and for other good and valuable consideration~, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Definitions: In addition to the words, tenus and phrases defined elsewhere in this Agreement, the words, terms and phrases (and variations thereot) defined in this Section 1 shall, for the purposes of this Agreement, have the meanings ascribed to them below. (a) Availability Date shall mean, with respect to each Standard Motion Picture, the date on which such Standard Motion Picture's license period commen<:es. (b) Channel shall mean each iND pay-per-view channel comprising the Service (as defined above) and provided by iND to Affiliate and Systems hereund(~r. (c) Deemed Analog PPY Subscriber shall mean a PPY Subscriber that does not receive more than eight (8) Channels (excluding adult channels such as Hot Choice). (d) Deemed Digital PPY Subscriber shall mean a PPY Subscriber that receives more than eight (8) Channels (excluding adult channels such as Hot Choi'ce). (e) Eligible Svstem shall mean each of: (i) cable television systems, (ii) satellite master antenna television systems ("'SMA TV"), and (iii) single or multichannel multipoint distribution systems ("MDS" and "MMDS", respectively). (l/lO/OS) -1- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc (t) Event shall mean programming (other than motion pictures) transmitted on the Channel(s) when so designated by iND. (g) Gross Revenues shall mean all charges billed by or on behalf of Affiliate to, or otherwise payable by, all PPY Subscribers with respect to an exhibition of a Program, including, without limitation, Late Charges. Except as expressly provided in Section 5(b) hereof, refunds or credits issued to PPV Subscribers by or on behalf of Affiliate shall not constitute a valid deduction from Gross Revenues. (h) Incremental Ordering Fees shall mean all charges billed by or on behalf of Affiliate to PPY Subscribers with respect to the availability of addressabh~ or impulse technology or other specific order entry tt~chnology relating to the availability of any Channel(s), which results in PPY Subscribers paying more than the regular charges for such Program. (i) Late Charges shall mean fees billed to PPY Subscribers in excess of the regular fees charged to PPY Subscribers for the exhibition of a Program, which fees are imposed by or on behalf of Affiliate to process orders received by or on behalf of Affiliate on the day of the exhibition of such Program or, in special circumstances with iND's prior written consent, a few days prior to the exhibition of such Program. (j) Launch Forms shall mean such written and/or electronic: document(s) provided by iND, in such form and containing such information as iND shall require pertaining to an Eligible System. (k) License Fee shall have the rneaning set forth in Section 4(b) hereof. (1) PPY Subscriber shall mean, with respect to a Program, those Subscribers who elect to receive an exhibition of such Program on the Channe1(s). (m) Program shall mean each Standard Motion Picture, Special IMotion Picture and Event. (n) Settop Box shall mean an addressable settop box or (equivalent built-in component). (0) Special Motion Picture shall mean a motion picture transmitted on the Channel(s) and so designated in advance by iND. (p) Standard Motion Picture shall mean a motion picture transmitted on the Channel(s) other than a Special Motion Picture. (q) Subscriber shall mean a person residing in a private dwelling unit who is a subscriber to Affiliate's System. (r) System shall mean each Eligible System owned or operated by Affiliate within the Territory and for which i1\'O shall have received completed Launch Fonns. From and after the date hereof, Eligible Systems owned or operated by Affiliate within the Territory may become Systems hereunder upon iND's authorization of such Eligible System (Ill 0/05) -2- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l05.doc as a System hereunder, and Systems shall cease to be Systems hereunder upon iND's de- authorization of such System. (s) Term shall mean the period provided for in Section 2 hereof. (t) Territory shall mean the franchise area within the United States receiving cable television distribution service from the System(s) of Affiliate. The: foregoing notwithstanding, "Territory" may include relevant franchise areas within United States commonwealths, territories and possessions. and within the Caribbean, if specifically authorized by iND in writing. (u) VCR Functionality shall rnean the abilityofa viewer to fast-forward, pause or rewind a program being viewed. 2. Term: The initial term of the Agreenlent shall commence on the date first set forth above and shall terminate on the date five (5) years thereafter. This Agreenllent shall be automatically renewed for successive one (1) year periods unless: (i) either party notifies the other in writing no later than one hundred twenty (120) days before the end of the initial tenn or renewal term then in effect of its intention not to so renew the term; or (ii) the A.greement is otherwise terminated pursuant to the tenns herein. Upon such notification, this Agreement shall terminate at the end of such initial or renewal term then in effect. The initial and all renewal terms are hereinafter referred to colle:ctively as the "Term". 3. License and Channel Carria2:c: (a) Subject to the terms and conditions of this Agreement, iND hereby grants to Affiliate a non-exclusive license to cablecast Programs on the Channel(s) during the Term within the Territory, solely on a pay-per-view basis and only to PPY Subscribers and solely by means of a System. For the avoidance of doubt, Affiliate shall not have the right to exhibit any Program(s) or distribute any Channel(s) by means of satellite, DSL or the internet. (b) The foregoing notwithstanding, as determined by iND, certain Programs from certain selected programming suppliers shall be scheduled, exhibited and promoted on the Channel(s) but shall not be licensed for exhibition by iND. Those Programs shall be licensed for exhibition on the Channe1(s) directly by Affiliate from the respective programming suppliers. If Affiliate is not able to secure exhibition rights from a particular programming supplier to its Programs, Affiliate shall blackout such Programs and with the express written permission of iND may substitute duplicah~s of iND' s other Programs then being exhibited by Affiliate on the Channel(s) and shaH pay iND the applicable license fees for the substituted programming. (c) Affiliate shall offer each Program to Subscribers for the payment of a separate, distinct material charge. Affiliate shall not offer other programming to Subscribers in connection with any Program in any manner which would indicate that such other (1110/05) -3- G :\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l 05.doc programming is part of or connected with such Program or any Channel(s). Without limiting the generality of the foregoing, Affiliate shall not charge any fee related to the availability of any Program(s) and/or any Channel(s) (other than the retail price for the exhibition of such Program), including, without limitation, Incre1mental Ordering Fees and any access, club or membership fee. Subscribers may be charged a monthly or periodic access~1 service or equipment use fee (but not a club or membership fee) also applicable to progralnming other than Programs, when such fee also covers the ability to receive (i) the basic or entry (i.e., lowest) tier of service or addressability or (ii) the basic or entry (i.e., lowest) tiler of digital service; provided, however, that such monthly or periodic access, service or equipment use fee shall not be credited against the License Fee payable for the exhibition of any Program. (d) Affiliate shall not authorize or pennit the exhibition of any Program or any Channel(s) in non-residential establishments, including, without limitation: (i) any locations open to the public; (ii) locations where an admlission fee, cover charge, minimurn or like sum is charged; (iii) commercial establishments, such as restaurants and bars, (i\') other non- residential buildings, such as hospitals, police stations, nursing homes, prisons, penal institutions, schools, libraries, and (v) or any public or common area in a residential building (such as an apartment house lobby) or otherwise. (e) Affiliate shall not authorize or permit the exhibition of any Program or any Channel(s) in hotels, motels, fraternities, sororities or dormitories without the prior written consent ofiND (which may be revoked at any time). In the event that iND consents to such exhibition, such consent shall not be eff(~ctiv{~ until such time as Affiliate shall have entered into written agreements with such locations, which agreements require that such establishments bill separately for each ProgralTI furnished to Subscribers by Affiliate, and that iND and the program suppliers shall have the right to audit the books and re(;ords of such establishments, and to take excerpts and make copies of such books and records for the purpose of verifying the accuracy of the statelnents delivered by Affiliate to iND pursuant to Section 6 hereof. (f) Each System shall carry the Channel(s) set forth in the complleted Launch Forms received by iND. No System shall cease to carry any Channel without the prior written consent of iND; provided, however, that a System converting from analog distribution to digital distribution or video-on-demand distribution may cease to carry one or more Channels upon not less than one hundred twenty (120) days' prior written notice to iND in accordance with the guidelines furnished by iND. In the event that Affiliate acquires any System that carried one or more Channds prior to its acquisition by Affiliate, Affiliate shall cause such System to continue to can)' such Channel(s) (and/or to honor any other distribution requirements previously impose:d by iND on such System) through what would have been the term of the affiliation agreement applicable to such System prior to such acquisi ti on. (1/1 0105) -4- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.1 OS.doc 4. License Fee: (a) With respect to each Program, Affiliate shall pay to iND an amount equal to the License Fee for each exhibition of such Program. The foregoing notwithstanding, in the event that iND notifies Affiliate to pay one or more programming suppliers directly for certain Programs, Affiliate shall pay to such programming supplier all License Fees for such Programs as provided herein, and concurren1tly with such payment to such programming supplier, Affiliate shall pay to iND an amount equal to the transmission or othelr fee, if any, set forth with respect to such Program in a written notice from iND. (b) "License Fee" shall mean: (i) with respect to each Standard Motion Picture: (A) with respect to each (~xhibition of such Standard Motion Picture ordered by a Deemed Analog PPV Subscriher, an amount equal to the greatt:r of: (I) the minimum amount for such PPV Subscriber as specified in a written notice fronl iND, or (II) 55% (or some other percentage specified by iND which is less than or equal to 60010) of the Gross Revenues from each exhibition of such Standard Motion Picture~ and (B) with respect to each ,exhibition of such Standard Motion Picture ordered by a Deemed Digital PPV Subscriher, an amount equal to the great(~r of: (I) the minimum amount for such PPV Subscriber as specified in a written notice fron] iND, or (II) 600/0 of the Gross Revenues from each exhibition of such Standard Motion Picture~ and (ii) with respect to each exhibition of each Special Motion Picture and/or Event, an amount equal to the License Fee specified by iND in written notice to Affiliate. (c) Notwithstanding anything herein to the contrary, with respect to each month commencing upon the month in which occurs the date four (4) months after the date first set forth above (or, if such date is not the first day of a month, the first day of the next succeeding month), in the event that the amount of License Fees otherwise payable hereunder for such month is less than Five Hundred Dollars ($500), Affiliate shall remit to iND, concurrently with the License Fees for such month, an amount sufficient to cause the aggregate amount paid to iND for such month to equal Five Hundred Dollars ($500). The foregoing notwithstanding and without derogating frOtn iND' s rights or remedies hereunder or otherwise, iND agrees that for so long as iND receives electronic reports from Affiliate on a timely basis in accordance with Section 6 of this Agreement and for so long as Affiliate has paid all License Fees payable to iND hert:under on a timely basis in accordance with the terms herein, iND shall treat the threshold for such monthly minimum requirement as being equal to Two Hundred and Fifty Dollars ($250) instead of Five Hundred Dollars ($500). (1110105) -5- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc 5. Payment of License Fees: (a) Payments. All payments due to iND from Affiliate for any exhibition of a Program during a month shall be made to iND by the last day of the next succeeding calendar month, except as may be otherwise specified by iND. In no event shall Affiliatt~ reduce the amount of any payment hereunder by the amount of any alleged overpayment. Any payment not made when due shall bear interest thereon at the monthly rate equal to one and one-half percent (112 %) above the prime lending rate of J.P. Morgan Chase computed from the due date until paid; provided, however, that if such rate is in excess of the maximum permitted by law in the jurisdiction in which such debt aCCJrues, then the rate of such interest shall be the maximum permitted by law. (b) Refunds and Credits. (i) Except as expressly provided in Section 5(b )(ii) hereof",,'ilth respect to Events of Force Majeure, any refunds or credits issued to PPY Subscribers by Affiliate shall not reduce the amount payable by Affiliate hereunder. (ii) iND agrees that Affiliate shall not be responsible for payment of License Fees for PPY Subscribers who ordered but did not receive all or a substantial portion of such Program where Affiliate is prevented from delivering such Progra:rn due to an occurrence beyond its control (an "Event of Force Maieure"), except in those instances where (A) Affiliate does not issue any refund or credit to such PPY Subscribers or (B) iND notifies Affiliate in writing that Affiliate must seek outside insurance or self-insure for failure to deliver a Program to its PPY Subscribers or (C) Affiliate has failed to propt;:rly maintain and/or operate its technical facilities. Affiliate shall notify iND in writing within two (2) days of an Event of Force Majeure. Such notice shall include, without limitation, police reports, technical logs, any related reports setting forth the explanation for the Event of Force Majeure and the number ofPPV Subscribers affected thereby. Any disagreements between iND and Affiliate as to what constitutes an Event of Force Majeure will be dt~termined by reference to iND's arrangement with the relevant Program supplier. iND shall determine in its sole discretion what constitutes a "substantial portion" of a Program, and will notify Affiliate accordingly. For the avoidance of doubt, if a live Event continues past its scheduled ending time, any failure of Affiliate to continue exhibition of such Event shall not constitute an "Event of Force Majeure" unless otherwise specifically agreed by iND in "-'/riting. (iii) Affiliate shall ensure that each System retains records during the period set forth in Section 6(d) hereof substantiating the basis for each refund and credit. The parties acknowledge and agree that a claim by a consumer shall not in and of itself constitute a satisfactory basis for each refund or credit without evidence of confirmation of such claim by the applicable System. The basis for each refund and credit shall be subject to audit pursuant to the provisions of Section 6 hereof and, without limiting iNI:f s rights and remedies hereunder or otherwise, Affiliate shall be responsible f<,>f any amounts that may be payable to iND and iND's programming suppliers as a result of any refunds or credits not expressly permitted pursuant to this Agreetllent. (Ill 0105) -6- G:\Distribution\i\ffAgt\ The City of Ashland\AffiliationAgt.l 05.doc (iv) Affiliate shall notify iND in writing within five (5) business days of an Affiliate Loss in any of its Systems and the reasons therefor. An '''Affiliate Loss'~ shall mean each occurrence where all or a substantial portion of a Program was not trans:mitted to, or received by, a PPY Subscriber to such Prograrn and such loss was not beyond the control of Affiliate. ( c) Affiliate shall charge and bill each PPY Subscriber for each exhibi tion of each Program ordered by such PPY Subscriber. Afifiliate shall be responsible for the collection of all monies due from each PPY Subscriber. The License Fee for each exhibition of each Program shall be payable to iND for each PPV Subscriber whether or not Affiliate actually receives payment of all or a portion of the retail charge from such PPY Subscriber. 6. Reports and Audit: (a) Direct Reporting. Affiliate and each System shall participate in iND's direct reporting program in compliance with the requirements thereof (including, without limitation, the reporting requirements set f0l1:h herein) at all times during the Term. Such requirements are set forth in Schedule A hereto. (b) Statements. At the times set forth in Schedule A hereto, Affiliate shall furnish to iND or its designated representative, in FTP format (or such other fonnat(s) designated by, and provided or approved in advance by, iND) and according to the standard file layouts furnished to Affiliate by iND, statements containing the information set forth on Schedule A hereto. If Affiliate uses a computer billing service or third party vendor, Affiliate hereby grants to iND the right to obtain directly frorn such billing service or vendor, at no cost to iND, the information that is required pursuant to this Section 6. ( c) Research. iND shall have the right to commission and creatt: reports and studies which shall incorporate data received from its affiliates, including, without limitation, Systems. Affiliate will cooperate and participate in conducting marketing tests, surveys and other research as reasonably requested by iND, and in rendering such other assistance and information as reasonably requested by iND. At iND's request, Affiliate shaH deliver the requisite information directly to a third party research firm designated by iND; provided, however, that Affiliate may require such research firm to enter into a non-disclosure agreement with Affiliate solely in form and substance acceptable to iND. Any studies or research reports prepared at iND' s request and based upon information or data compiled by such research firm shall be owned by iND; provided, however, that such reports or studies shall be distributed to and/or used only by iND and its affiliates for business purposes related to PPY. Notwithstanding anything herein to the contrary, any subscriber lists provided by Affiliate in connection with research conducted pursuant to this Section shall be deemed confidential information that is subject to the provisions of Section 15 hereof. (d) Audit. Affiliate shall keep accurate and complete books and records of billings, Subscribers, Program sale and all other records (including, without limitation, electronic records) substantiating reports and statements required to be supplied to iND by Affiliate, together with the results of all System audits relating to security review (~, theft (1/10/05) -7- G:\Distribution\A.ffAgt\The City of Ashland\Affiliatioru\gt.1 05.doc of services) and other matters relevant to the License Fees and Channels hereunder. At any time during the Term and for a period of three (3) years thereafter, upon reasonable advance notice to Affiliate, iND and iND' s program suppliers (and any third party auditor retained by iND and/or any program supplier(s)) shall have reasonable access to audit, at its eost, all such books and records and to take excerpts and nlake copies therefrom. Affiliate shall ensure that iND's audit rights shall extend to all relevant billing and other systems of Affiliate and of its Systems (including, without limitation, asset management systems). If an audit reveals an underpayment by Affiliate that was intentional or exceeds 50/0 of the amounts payable hereunder or the actual PPV Subscriber counts with respect to any period audited by iND, then in addition to any other rights and remedies iND or any such program suppliers may have, Affiliate will pay all costs and expense:s incurred by iND or such program suppliers (including, without limitation, an allocation of internal iND audit group costs) for the audit and all unreported and/or misrepresented monies due iND plus interest thereon at the rate set forth in Section 5(a) hereof. Neither iND' s acceptance of any information or payment nor iND's or any program supplier's inspection or audit of Affiliate's records or accounts shall prevent iND from later disputing the accuracy or completeness of any paYlnent made or information supplied by Affiliate. (e) General. Without limiting the generality of the foregoing, Affiliate shall deliver to iND a written report of any audit of Affiliate andlor any System conducted by or on behalf of a programming supplier or the intelnal audit staff of Affiliate and/or any System. Without derogating from Affiliate's obligations hereunder and without limiting iND' s rights and remedies hereunder or otherwise, in the event that Affiliate cannot produce the requisite supporting documentation for amounts payable hereunder, iND shall be entitled to make reasonable assumptions regarding such amounts (in accordance with iND's then-current policy regarding establishment of such amounts) and Affiliate shall be responsible for payment of those amounts in accordance with the terms hereof. 7. Affiliate Costs: Except as otherwise specifically provided in this Agreement, Affiliate shall be responsible for all costs and expenses in connection with the exercise of the rights herein granted. Affiliate shall pay any and all taxes, fees and other sirnilar charges which are or may be imposed or assessed against Affiliate and/or which arise out of Affiliate's distribution of the Program(s) and/or the Channel(s) or Affiliate's sale, rental, license, exhibition, possession or use of any Program and/or any Channel or any equipment used in connection therewith, and/or which are based upon or measured by revenues derived by Affiliate under this Agreement (including, without limitation, any tax or charge such as a sales, seat or use tax based upon any goods or services furnished to Affiliate by iND which goods or services are then passed on or shovvn to Affiliate's Subscribers). 8. Si~nal Delivery bv iND: (a) The video and audio signals of the Channels shall be translmitted to the Systems by iND or its designee from one or more communications satellites designated by iND from time to time. (l / I 0/05) -8- G:\Distribution\AffAgt\The City of Ashland\Affiliatioru\gt.l 05.doc (b) iND may, on sixty (60) days' advance written notice to Affiliate:, change any satellite or satellites used to transmit one or more Channels to another comrnunications satellite or satellites, as the case may be. The foregoing notwithstanding, iND may, on an emergency basis, change any satellite or satellites used to transmit one or more Channels on less than sixty (60) days' advance written notice, in which case iND shall give Affiliate notice of the change as soon as feasible by the most practicable means. 9. Transmission of the Channel(s) bv Affiliate: (a) General. (i) Affiliate shall, at its sole expense, obtain and install one or more earth stations, decoders at each System headend, and any other equipment neceSSat~f to receive, descramble or otherwise process and distribute the Channels throughout the Term. Each System's earth station, decoders and all such equipment shall be of first-class technical quality and shall be operated and maintained by Affiliate in good working order and in compliance with all applicable laws. Aftiliatt: shall be solely responsible for reception of the video and audio signals for the Channel(s) from the designated satellites to each System and transmission of the signals to its Subscribers, and all costs of whatever kind incurred with respect thereto. (ii) Affiliate shall use its best efforts to maintain a high quality of signal transmission for the Channels. Without limiting the generality of the foregoing, the signals shall be at least equal in quality to the reception signals of other cable television services transmitted by Affiliate to its Subscribers. (iii) Unless otherwise expressly approved by iND in writing, Affiliate shall assign separate dedicated channels for transnlission of each of the Channels throughout the Term. Except as otherwise approved by iND, each System shall carry the Channel(s) in numerical sequence in accordance with iND's designation. The Channel(s) shall be used solely for the transmission of the iND services and shall be identified as such. If the signal of any Channel is digitally compressed or rate re-multiplexed on any System (after initial compression of the signal by iND), the digital compression or rate re-multiplexing system and technology utilized shall be subject to th(~ prior written approval ofiND, which approval shall not be unreasonably withheld. In no event shall the video or audio components of the signal of any Channel be carried at a data rate: less than that used by iND wi th respect to such Channel, without iND's prior written approval. (iv) Affiliate shall conlply with all requirements (including any "blackout" requirements for Programs) of program suppliers or iND with respect to the cablecasting or distribution of any Program. (v) iND reserves all rights in and to all signal distribution capacity contained within the bandwidth of the Programs as received at each System, including, without limitation, any data included in the vertical blanking interval and the MPEG-2 stream. (1/10/05) -9- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l 05 .doc (b) Limitations on Distribution: Slecurity. (i) Affiliate shall ensure that the signals of all of the Channels shall be scrambled (if analog) or encrypted so that they may be received only by PPY Subscribers. Affiliate and each System shall employ such security systems, encryption tnethods and procedures, in accordance with industry standards and as iND deems appropriate, to prevent non-Subscribers and non-authorized persons from receiving and duplicating all or any part of any Program. Affiliate shall maintain a System audit policy to ensure that the signals of all of the Channels are scrambled (if analog) or encrypted and in any case are secun~ and that no theft of services has occurred or is OCCUlTIng. (ii) In the event that thene is a failure of Affiliate's secmity systems resulting in the delivery or reception of any unsecured signal of any Channel or any Program, Affiliate immediately shall take all steps necessary to re-secure or cause the appropriate parties to re-secure the affected signal(s), and shall immediately (and in no event later than twenty four (24) hours after such failure occurs) notify iND both of such failure and of the re- securing of the affected signal(s). Notwithstanding anything to the contrary set forth below in Section 14 and without limiting either the generality of said Section 14 or iND' s rights and remedies hereunder or otherwise, iND shall have the right immediately to cease providing the Programs and the Channels to Affiliate in those Systems affected by such security breach and, upon thirty (30) days' notice (or such shorter time as may be required in accordance with any agreements that iND may have with third parties), to terminate this Agreement with respect to such Systems, in which event all rnonies then due with respect to such Systems shall immediately become due and payabh~ and iND shall have no further obligations hereunder with respect to such Systems. (iii) Affiliate shall not authorize, recommend or promote any copying or duplication of the Channel(s) or the Progralns. Upon notice and during regular business hours or otherwise as required by its progranlming suppliers, iND or its designee may visit the premises of Affiliate and each System to observe such security systems and to assure proper exhibition of the Channel(s) and the lPrograms. (iv) Additional restrictions are set forth in Schedule B hereto. The parties acknowledge and agree that additional obligations may be required with re5:pect to copy protection, copy control and other security and rights management issues. iND shall notify Affiliate in writing of all such restrictions imposed upon iND, and such restrictions shall thereby be added hereto and made a part of this Agreement as if fully set forth herein. 10. Pro2;ramminf! on the Channcl(s): (a) Except as set forth in Section 3(b) hereof and in this Section 10, Affiliate shall exhibit each Channel in its entirety when and exactly as delivered to Affiliate, including, without limitation, all programming included therein and all titles, credits and copyright notices related to such programming~ and all Enhancements, without any additions, interruptions, delays, commercial or other insertions, alterations or deletions of any kind to any Channel's format or any programming transmitted on any Channel. Without limiting the (1110105) -10- G:\Distribution\A.ffAgt\The City of Ashland\AffiliationAgt.l 05.doc generality of the foregoing, Affiliate shall not transmit commercial or other messages of any kind on any Program or on any Channel, and Affiliate shall not permit the overlay of any material onto any Channel. (b) Enhancements shall mean those improvements to or modifications of a signal of any Channel (or of any Program) or supplenlental information included in such signal that are or become available during the Term, an:: contained in the signal of such Channel (or Program, as the case may be) being deli vered to Affiliate and are related to the programming on such signal (~, 16x9 NTSC or additional audio or data information), including all information contained therein (~, all language and stereo versions of the alldio signal, closed captioning data, program identification, content advisory data~ timing and rating data, copy protection data and ghost canceling da1ta), including without limitation the Vertical Interval Test signal and any information contained in the Vertical Blanking Interval (including without limitation fields 1 and 2 of line 21). (c) All programming decisions shall be in iND~s sole discretion, including, without limitation, the selection, scheduling, substitution and withdrawal of any and all programming (including, without limitation, Programs and interstitial programming). As between iND and Affiliate, all licenses, rights and interests in, to and with respect to each Program, all elements and parts thereof, and nl1edia or methods of exhibition or exploitation of each Program not specifically granted to Affiliate under this Agreement shall be and are specifically and entirely reserved to iND and may be fully exploited and utilized by iND without limitation during the Term. (d) Without limiting the generality of the foregoing, iND may withdraw any Program from exhibition hereunder upon wriltten notice to Affiliate. 11. Advertisine and Promotion: Proeram Guides: (a) Advertising and Promotion. (i) Affiliate shall use commercially reasonable efforts to promote the sale of Programs on the Channel(s) and to maxirrlize sales to Affiliate's Subscribers. (ii) Affiliate and each System shall promote the availability of each Major Studio Picture (including, without limitation, via on-air, and print guides) on a comparably favorable basis as compared with the promotion of similar Major Studio Pictures that are of similar genre, Domestic Box Office, home video to PPV window, sell through/rental status and duration of license period. "Maior Studio Picture" shall mean a motion pic,:ture licensed from Universal, Fox, Paramount, Warner Bros., New Line, DreamWorks, Disney, Sony or MGM, their respective affiliates, and/or any other supplier of motion picture product as iND may designate from time to time by written notice to Affiliate. (iii) In the event that iND provides Affiliate with a marketing based rate card for a Program: (A) any System that does not return a signed copy of the ratle card prior to such Program shall be deemed to have selected the "No Marketing" option set forth on such rate card; and (B) Affiliate shall ensure that each System performs the level ofnlarketing that (l/10/05) -] 1- G:\DistributionV\ffAgt\The City of Ashland\AffiliationA.gt.] 05.doc such System has selected and retains records during the period set forth in Section 6(d) hereof supporting the fact that that level of marketing was performed. The perfDrmance of the requisite level ofmarketing shall be subject to audit pursuant to the provisions of Section 6 hereof and, without limiting iND's rights and remedies hereunder or otherwise, Affiliate shall be responsible for any amounts that may be payable to iND and iND's programming suppliers as a result of the failure of any Syste:m to support the requisite level of marketing. (iv) In the event that iND is required by any programming supplier to require Affiliate to pay guaranteed license fees with respect to certain Program,s, iND may impose certain minimum marketing requirelnents upon the Systems, and Affiliate shall ensure that each System performs such level of marketing and retains records during the period set forth in Section 6( d) hereof SUPP011ing the fact that that level of marketing was performed. The performance of the requisite level of marketing shall be subject to audit pursuant to the provisions of Section 6 hereof. (v) Affiliate shall, upon request by iND, furnish to iND: (A) a copy of all print and video promotional materials furnished to Subscribers for each Systenn at the same time that Affiliate furnishes such materials to said Subscribers, together with any and all trade ads, media buys and other similar promotional material, and (B) a Systern-by-System report of all cross-channel promotional spots of Programs exhibited by each System, which report shall identify each such promotional spot, when such spot ran and on what channel. (b) Promotional Restrictions. (i) Affiliate shall use marketing and promotional materials supplied by iND, and shall not alter or modify said materials in any way without iND's prior written consent; provided, however, that subject to this Section 11 (b), Affiliate may add local customization and ordering information. (ii) Affiliate shall cOlnply with all restrictions on operations, marketing and promotion with respect to any Program irnposed by the supplier of such Program or iND, and shall not publish or disseminate any material which violates any instructions or restrictions imposed by iND on Affiliate. Without limiting the generality of the foregoing, Affiliate shall not itself, and shall not permit any System to, post any material on any website that has not been specifically approved by iND for internet distribution. (iii) Without limiting the generality of the foregoing, Affiliate shall comply with all instructions regarding screen and advertising credits (including, without limitation, instructions as to sequence, type style, relative size and prominence, and conte:nt of credits) furnished to Affiliate by iND or contained in any publicity informational materials furnished to Affiliate by or on behalf of iND, and shall not in any way change credits contained in any material furnished by or on behalf of iND. (iv) Affiliate shall not use the names, logos, and likenesses of any character, person, or entity appearing in or connected with the production of any Program or the Channel(s) or iND's name or logo other than for purposes of advertising the cablecast of such Program, and no name, logo, or likeness shall be used so as to constitute an (l/1010S) -12- G:\Distribution\A.ffAgt\The City of Ashland\AffiliationA.gt.l OS.doc endorsement or testimonial, expressed or implied, of any party, product, servIce, or commercial venture. (v) No materials produced and distributed by or on behalf of Affiliate and no materials produced and distributed by iND including the programs, shall contain any material which would or might libel, slander lOr defame any party or which would or might infringe upon or violate any contract right, common law or other right (including, without limitation, any trademark, copyright, perfornling right, dramatic right, right of privacy or publicity) of any party or violate any law. As between Affiliate and iND, the payment of any royalties to ASCAP or BMI or SESAC with regard to the exhibition of Programs on the Channels shall be the sole responsibility of iND. (vi) Under no circumstanc(~s may Affiliate transmit, exhibit~ circulate, or otherwise publish after the exhibition period for a Program any advertising materials relating to such Program or any Channel(s), nor may the marketing materials supplie:d by iND or prepared by or on behalf of Affiliate be used to promote any other program, ,channels, or service other than the exhibition of the applieable Program(s) on the Channell)). Affiliate shall not offer its subscribers any other television service or programming in a m,anner which would imply or create confusion that such other service or programming is a part of the services provided by iND hereunder or originated by iND or any iND member or affiliate. (vii) Affiliate shall prOlTIote "iN DEMAND" as its provider ofpay-per-view programming in all marketing materials and promotions conducted or authorized by Affiliate, in each case in accordance with such instructions and guidelines as iN Demand shall issue from time to time. (viii) The names, logos and marks "iND" and "iN DEMAND", and the names of certain of iND's programs and promotions, are the exclusive property of iND. Affiliate has not acquired and shall not acquire any proprietary or other rights therein by reason of this Agreement. Affiliate shall not, without iND's prior written approval, use such names or marks for any purpose other than in material intended solely to advis(: Subscribers or potential Subscribers of the availability and scheduling of the Channel(s). Without limiting the generality of the foregoing, Affiliiate shall not use "iND", "iN DEMAND" or any of the names or logos ofiND's programs or promotions in a corporate name or a trade name. Materials used by Affiliate may refer to '"iND", "iN DEMAND" and other names, logos and/or marks of iND only if it is clear that such names, logos and marks are service marks for iND or for the programs, program services or promotions of iND which Affiliate distributes. (c) Program Guides. (i) Affiliate shall ensure that with respect to any electronic or printed program guide or program navigator or user interface r~Program Guide") mad,e available to its Subscribers, the Programs, the Channel(s) and the programming information relating thereto shall be as readily and conveniently accessed in or through such Electronic Programming Information Tool as is any premium pay television service. Affiliate shall ensure that each Program Guide adheres to all restrictions imposed by iND or iND's programming suppliers, complies with iND' s guidelines applicable thereto, and includes all (1/10105) -13- G:\Distribution\AffAgt\The City of Ashland\AffiliationA.gt.1 05.doc programming rating and content advisory infc)rmation furnished by iND (either directly or through materials furnished to program guide publishers). Upon request, Affiliate shall provide iND with a copy or illustration of any Program Guide used by Affiliate in any System. (ii) Affiliate shall instruct each publisher and provider of Program Guides to list "iN", "iND", "iN PPY" or "iND PPV~' as the Channel identifier in their respective Program Guides. (iii) Neither Affiliate nor any System may exhibit commercial advertising: (A) on or as part of any Program Guide (including, without limitation, on a buy screen), or (B) at any time after a Subscriber selects the exhibition of a Program from the time of such selection until the commencement of such exhibition of such Program, during such exhibition or after the end of such exhibition until the viewer is returned to the graphic user interface (or other navigation screen) or electronic program guide. (iii) Neither Affiliate nor any System may enter into an agn~ement with any provider of motion picture product pursuant to which such third party will have a branded presence on any graphic user interface (or other navigation screen) or electronic program guide of Affiliate or such System, without the prior written consent of iND. 12. Representations and Warranties (a) Affiliate represents and warrants to, and covenants with, iND that: (i) it has the power and authority to enter into this Agreement and to fully perform ills respective obligations hereunder, in each case with resp(~ct to itself and with respect to each System; (ii) this Agreement has been executed by its duly authorized representative; and (iii) Affiliate shall ensure that each System complies with the obligations imposed on Affiliate hereunder with respect to Systems and has notified each System of such obligations in de:tail, and that Affiliate is under no obligation, contractual or otherwise, which might in any lNay interfere with its full and complete performance of this Agreement. (b) iND represents and warrants to Affiliate that: (i) it has the power and authority to enter into this Agreement and to fully perform its respective obligations hereunder; and (ii) this Agreement has been executed by its duly authorized representative. 13. Indemnification: (a) iND assumes liability for, and shall indemnify, defend, protect, save and hold harmless Affiliate and its parent and the respective shareholders, directors, officers, employees and agents of the foregoing (the "Affiliate Indemnified Parties") frmn and against any and all claims, actions, suits, costs, liabilities, judgments, obligations, losses, penalties, expenses or damages (including, without lirrlitation, reasonable legal fees and expenses) of whatsoever kind and nature imposed on, incurred by or asserted against any of the Affiliate (l/10105) -14- G:\Distribution\AffAgt\The City of Ashland\Affiliatioru\gt.1 05.doc Indemnified Parties, arising out of: (i) any breach or, solely with respect to third party claims, alleged breach by iND of any representation or warranty or covenant made, or obligation assumed, by iND pursuant to this Agreement, or (ii) any materials produced and distributed by iND that contain any material that libels, slanders or defames any party or which infringes upon or violates any contract right, common law or other right (including, without limitation, any trademark, copyright, performing right, dramatic right, right of privacy or publicity) of any party or violates any law or regulation. The provisions of this Section 13(a) shall apply, without limitation, to claims brought by Affiliate against iND. (b) Affiliate assumes liability for, and shall indemnify, defend, protect, save and hold harmless iND and its members and th{~ respective shareholders, directors, officers, employees and agents of the foregoing (the Hi~~D Indemnified Parties") from and against any and all claims, actions, suits, costs, liabilitic~s, judgments, obligations, loss(~s, penalties, expenses or damages (including, without limitation, reasonable legal fees and (;~xpenses) of whatsoever kind and nature imposed on, in(~urred by or asserted against any of the iND Indemnified Parties, arising out of: (i) any breach or, solely with respect to third party claims, alleged breach by Affiliate of any representation or warranty or covenant made, or obligation assumed, by Affiliate pursuant to this Agreement, or (ii) any materials produced and distributed by Affiliate that contain any material that libels, slanders or defames any party or which infringes upon or violates any contract right, common law or other right or restriction (including, without limitation, any trademark, copyright, performing right, dramatic right, right of privacy or publicity) of any party or violates any law, or (iii) any sweepstakes or other promotion conducted by or on behalf of Affiliate; (iv) the infringement, or inducing or contributing to infringement, actual or all(~ged, of any patent, copyright, mask work, trademark, trade secret or other intellectual property right, which claim is based upon the manufacture, use or sale of equipment or software used or provided by Affiliate (or authorized by Affiliate for use) in connection with the distribution of any Program(s) and/or any Channel(s) hereunder. The provisions of this Section 13(b) shall apply, without limitation, to claims brought by iND against Affiliate. (c) In any case in which indemnification, including indemnification otherwise provided for in this Agreement, is sought: (i) the party seeking the indemnification (the "Indemnified Party") shall promptly notify the party from whom such indelTlnification is sought (the "Indemnifying Party") of any claim or legal proceeding which gives rise to the Indemnified Party's right to seek indemnification; (ii) the Indemnified Party shall afford the Indemnifying Party the opportunity to participate in, or fully control, any proce'eding and the compromise, settlement, resolution or other disposition of such claim or procee::ding; (iii) the Indemnified Party shall have the right, but not the obligation, to join in and be represented by its own counsel, at its own cost and expense; and (iv) the Indemnified Party shall fully cooperate with the Indemnifying Party (but without responsibility for out-of-pocket expenses) in connection with the Indemnifying Party's participation in, and control of, any proceeding and the compromise, settlement, resolution or other disposition of such claim or proceeding; provided, however, that if such compromise, settlement, resolution or other disposition could have an adverse effect on the Indemnified Party, the Indemnified Party's (I/1 0/05) ..15- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc consent to such compromise, settlement, resolution or other disposition shall be required but shall not be unreasonably withheld. 14. Termination: (a) IfiND ceases to provide a satellite-delivered pay-per-view service, iND shall have the right to terminate this Agreement wholly or in part by sixty (60) days' prior written notice to Affiliate, in which event all monies then owing shall immediately become due and payable and iND shall have no further obligations hereunder. (b) If Affiliate fails to make payment or any part thereof to iND when due, or ifit fails to remedy any other default within thirty (30) days (or such shorter period as may be required in accordance with any agreements that iND may have with third parties) after notice from iND, or if a Bankruptcy Event (as defined below) occurs, iND shall have the right, in addition to whatever other rights and remedies iND may have hereunder or otherwise, to terminate this Agreement wholly or in part by written notice to Affiliate, in which event all monies then owing shall immediately become due and payable and iND shall have no further obligations hereunder except, in the event of a partial termination, with respect to the Systems not so terminated. Whether or not iND exercises any such right of termination, iND shall, upon the occurrence of any such failure or event of default, have no further obligation to deliver the Channel(s). (c) In addition to any other rights and remedies available hereunder or otherwise: (i) in the event of default, iND shall be entitled to recover from Affiliah~ reasonable attorney's fees, costs and expenses, including collection agency fees, incurrE:d by iND to enforce the provisions hereof, and (ii) if this Agreement is assumed in the course of Affiliate's bankruptcy case by a trustee or debtor-in-poss{~ssion pursuant to Section 365 ofthe Bankruptcy Code (such party being herein referred to as the c."Bankrupt Party"), iND shall be entitled to recover as a part of the default to be cured by such trustee or debtor-in-possession any reasonable legal fees and expenses paid or incurred by iND in attempting to remedy a breach by Affiliate hereunder prior to Affiliate's filing of a petition under the Bankruptcy Code and/or in effecting an assumption of this Agreement by Affiliate's trustee or debtor-in-possession. (d) A Bankruptcy Event shall be deemed to have occurred if Affiliate or any direct or indirect parent thereof: (i) files a petition, answer or consent seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended (the ""Bankruptcy Code"), or any other applicable Federal or State bankruptcy law or other similar law C"Any Bankruptcy Law"); or (ii) consents or becOInes subject to the institution of proceedings under Any Bankruptcy Law or to the filing of any petition thereunder or to the appointment of, or taking possession by, a receiver, liquidator, assignee, trustee, custodian, s(~questrator or similar official of it or of any substantial part of its property; or (l/10/05) -16- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc (iii) fails generally to pay its debts as such debts become due or otherwise becomes insolvent; or (iv) takes any corporate action in furtherance of any aforesaid action; or (v) becomes the subject of a decree or order by a court havingjurisdiction in the premises for relief in respect of it (and such decree or order shall continue un stayed and in effect for a period of sixty (60) consecutive days): (A) under Any Bankruptcy Law, (B) appointing a receiver, liquidator, assignee~, trustee, sequestrator or similar official of it or of any substantial part of its property, or (C) ordering the winding-up or liquidation of its affairs; or (vi) pursuant to Any Bankruptcy Law has its rights hereunder become exercisable by a trustee or debtor-in-possession who elects to reject this Agree'ment. 15. Confidentialitv: Neither iND nor Affiliate shall disclose to any third party (other than theitrespective employees, in their capacity as such) any information with respect to the terms and provisions of this Agreement and/or any subscriber information relating to any Program (other than aggregated information that does not identify Affiliate or its Systems or Subscribers), except: (a) to the extent necessary to comply with law or the valid order of a court of competent jurisdiction, in which event the party making such disclosure shall so notify the other and shall seek confidential treatment of such information, (b) as part of its normal reporting or review procedure to its parent company (and, in the caSI~: of iND, its owner companies), its auditors and its attorneys, provided, however, that such parent company (and owner companies, as the cas{~ may be), auditors and attorneys agree to be bound by the provisions of this Section 15, ((;) in order to enforce its rights pursuant to this Agreement in a legal proceeding, and (d) to such programming suppliers as shall have a contractual right to such information, provided, however, that such programming suppliers agree to be bound by the provisions of this Section 15. In addition, Affiliate shall not, without iND' s prior written approval, publicly divulge or announce or in any manner disclose any research or buyrate information obtained by Affiliate or iND to any third party, other than its parent company, auditors and attorneys, provided that such parent company, auditors and attorneys agree to be bound by the provisions of this Section 15. 16. General: (a) Assignment. This Agreement, including both its obligations and benefits, shall pass to, and be binding on, the respective assignees, transferees and successors .of each of the parties; provided, that Affiliate shall give iND prior notice of any assignment, transfer or other encumbrance of this Agreement or any of Affiliate's rights or obligations hereunder and such assignment, transfer or encumbrance shall not be valid unless iND consents thereto in writing. In the event of a sale or transfer of one or more System(s), Affiliate shall not be relieved of any of its obligations hereunder, unless and until the purchaser or trans ferree, as the case may be, has entered into a valid and binding agreement pursuant to which it assumes the obligations of Affiliate hereunder with regard to each such System(s). (l/10/05) ..17 - G:\Distribution'V\ffAgt\The City of Ashland\AffiliationAgt.1 05.doc (b) Waiver. No course of dealing between the parties shall operate as a waiver of any of either party's rights under this Agreement. No delay or omission on the part of either party in exercising any right under this Agreenaent shall operate as a waiver of such right or any other right hereunder. No waiver shall be binding against the party asserted to have made such waiver unless it is in writing and signed by one otherwise authorizt:d to execute this Agreement on behalf of such waiving party. A waiver by either party of any of the terms or conditions of this Agreement in any instance or a waiver by either party of any breach of this Agreement shall not be deemed or constnled to be a waiver of such terms or conditions for the future or a waiver of any subsequent breach 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 eit~er party. Acceptance of any payment by iND after its due date shall not constitute a waiver by iND of any of its rights hereunder. Nothing in this Agreenlent shall be construed as in any way limiting iND's rights and remedies in law or equity against Affiliate or any System for services provided to Affiliate or such System pursuant to this. Agreement. (c) Notices. All notices, statements (exclusive of billings), and other documents required to be given in writing shall be by personal (or messenger) delivery, by registered or certified mail or by telecopier (except as herein otherwise expressly provided) and shall be addressed as follows: If to Affiliate: The City of Ashland, by and through it's electric utilities" Ashland Fiber Network 90 North Mountai n A venue Ashland, OR 97520 Attention: Director of Electric Utilities If to iND: iN Demand L.L.C. 345 Hudson Street New York, New York 10014 Attention: Senior Vice President, Business Affairs With a separately delivered copy to: Attention: Senior Vice President, Distribution (or such other addresses as may be designated in writing by either party). Notice given by personal (or messenger) delivery or by registered or certified mail shall be d.eemed given upon receipt. Notice given by telecopier shall be deemed given upon receipt of a transmission confirmation. The foregoing notwithstanding, certain notifications from iND may be: (i) posted on iND's affiliate website, in which case such notice shall be deemed given on the date on which such notification is so posted, or (ii) sent via e-mail to a contact (1/10/05) -18- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc person of Affiliate designated for e-mail notification, in which case such notice shall be deemed given on the date on which such e-n1ail is sent. (d) Captions. The titles of the sections of this Agreement are for convenience only and shall not in any way affect the interpretation of this Agreement. (e) Choice of Law. This Agreem1ent and all matters or issues collateral hereto shall be governed by the laws of the State of New York applicable to contracts entered into and to be fully performed therein. (t) Survival. All representations and warranties contained in this Agreement or made in writing by Affiliate in connection herewith shall survive the execution and delivery of this Agreement and any investigation made by iNDor Affiliate or on their respective behalves, and such representations and warranties shall remain in effect so long as the party making such representations and warranties eontinues to have obligations hereunder. The provisions of Sections 6, 12, 13, 15 and 16 shall also survive the termination of this Agreement. (g) Merger. This Agreement constitutes the entire agreement between Affiliate and iND with respect to the subject matter hereof, replaces and supersedes all previous agreements and understandings whether written or oral pertaining thereto, and may be changed or modified only by an agreement in writing signed by Affiliate and iND. (h) Incorporation. Schedules A and B are hereby incorporated herein and made a part hereof. (i) Equitable Relief. It is expressly understood and agreed that in the event iND breaches any provision of this Agreement, the damage, if any, caused Affiliate thereby will not be irreparable or otherwise sufficient to entitle Affiliate to injunctive or other equitable relief. Affiliate acknowledges that Affiliate's rights and remedies in any such Program shall be strictly limited to the right, if any, to recover damages in an action at law, and Affiliate shall not be entitled by reason of any such breach to rescind this Agreement, or to restrain iND's exercise of any of the rights granted to iND hereunder, or to enjoin or restrain the Exhibition of any version of any ProbTfam hereunder, or any advertising, publicity or promotion in connection therewith. U) Severability. If any provision of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect in any jurisdiction, SUGh invalidity, illegality or unenforceability: (i) shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, and (ii) shall aftect neither such provision nor this ,A.greement in any other jurisdiction. If, moreover, any restriction or other provision of this Agreement shall for any reason be held to be too broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing such provision or restriction so as to be enforceable to the extent compatible with applicable law, the parties hereby agreeing that said restrictions and other provisions of this Agreement are fair and reasonable as at the date hereof. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or (1/10105) ..19- G:\DistributionV~ffAgt\The City of Ashland\AffiliationAgt.l05.doc unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. (k) Independent Contractors. Affil.iate and iND are independent contractors with respect to each other. Nothing herein shall create any association, partnership, joint venture, fiduciary or agency relationship between thenl. (1) No Third Party Beneficiaries. Except as expressly provided to the contrary in Section 16(a), this Agreement is not for the benefit of any third party and shall not be deemed to give any right or remedy to any such party whether referred to herein or not. The foregoing notwithstanding, Affiliate hereby gives iND the right to enforce the terms of this agreement against each and any System. (m) Consent to Jurisdiction. Affiliate hereby: (i) agrees that any litigation, action or proceeding arising out of or relating to this Agreement may be instituted in any state or federal court in the City of New York, (ii) waives any objection which it might have now or hereafter to the venue of any such litigation, action or proceeding, (iii) irrevocably submits to the jurisdiction of any such court in any such litigation, action or proceeding and (iv) waives any claim or defense of inconvenient forum. Affiliate hereby consents to service of process by registered mail, return receipt requested, at Affiliate's address and expressly waives the benefit of any contrary provision of foreign law. (n) Joint Participation in Drafting this Agreement. The parties acknowledge and confirm that each of their respective attorneys have participated jointly in the drafting, review and revision of this Agreement and that each party has had the benefit of its independent legal counsel's advice with respect to the terms and provisions hereof and its rights and obligations hereunder. Each party hereto, therefore, stipulates and agrees that the rule of construction to the effect that any ambiguities are to be or may be resolved against the drafting party shall not be employed in the int1erpretation of this Agreement to favor any party against another and that no party shall haVt: the benefit of any legal presutnption or the detriment of any burden of proofby reason of any ambiguity or uncertain meaning contained in this Agreement. (l/10/05) -20- G:\DistributionV\ffAgt\The City of Ashland\AffiliationAgt.l OS.doc IN WITNESS WHEREOF, Affiliate and iND have duly executed and derivered this Agreement as of the date and year first above written. THE CITY OF ASHLAND, BY AND THROUGH iN DEMAND L.L.C. IT'S ELECTRIC UTILITIES' ASHLAND FiIBER NETWORK Date: Y/z.f/~r- '" \ \ ! .'i \~~--- <.' / . '---~ Title: ,-/,~',. 'J') . . );7-... { (, L !, ~ " Date: ) j .!.)) By: ~~ (!-- Title: h~I'tI./~:;, ~x...... (1/10/05) -21- G:\Distribution\AffAgt\ The City of Ashland\AftiliationAgt.l OS.doc SCHEDULE A iN DEMAND L.L.C. AFFILIATION AGREEMENT Direct Reporting Requirements 1. Establishing Direct Reporting. (a) The parties acknowledge that certain testing and implementation must be conducted prior to full participation in iND's direct reporting program. However, notwithstanding anything to the contrary set forth in Section 14 of the Agreement and without limiting either the generality of said Section 14 or iND's rights and remedies hereunder or otherwise, if Affiliate and each System have not implemented iND's direct reporting program, iND may terminate this Agreement wholly or in part at any time upon written notice to Affiliate, in which event all monies then owing shall immed:iately be due and payable and iND shall have no further obligations hereunder except, in the event of a partial termination, with respect to the Systen1s not so terminated. (b) In accordance with the direct reporting program, Affiliate shall submit transaction and other data files to iND (or iND's authorized agent) via the internet during such times and in accordance with such specifications as shall be set forth by iND. As of the date hereof, the specific data requirements are outlined in this Schedule A. Such data requirements may be amended from time to time at the discretion of iND. In addition thereto, Affiliate shall designate a direct reporting contact to: (A) investigate and correct any records that are rejected by iND's direct reporting program for any reason whatsoever, and (B) correct and resubmit such records within five (5) business days. Affiliate shall furnish to iND all payment detail solely in the form of the invoice provided in advance by iND. Affiliate's direct reporting contact, as well as the type of billing system used by Affiliate and each System, as the case may be, to calculate the payments due to iND from Affiliate hereunder, shall be set forth in a written notice delivered by Affiliate to iND concurrently with the execution and delivery hereof. Affiliate shall give iND at least 120 days' prior written notice of any changes to the applicable billing systems. (c) As part of iN D's direct reporting program, concurrently with the execution and delivery hereof, Affiliate shall furnish to iND certain information related to data mapping purposes. Such information shall include, with respect to each System, without hmitation, the following: (i) The reporting structure of such System (listing of lowest level reporting entities within Affiliate, plus Affiliate-supplied rules for combining for payment or other reporting purposes)~ (ii) Such System's accounting cutoff dates, including, without limitation, billing system cutoff dates; (Ill 0/05) -1- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.1 OS.doc (iii) Such System's channel lineup; and (iv) Such System's standard credit reason code listing with explanations. 2. Daily Statements. With respect to each day during the Term, no later than the end of the next succeeding business day, Affiliate shall furnish to iND or its designated representative, in File Transfer Protocol ("FTP") format (or such other format(s) designated or approved in advance by iND) and according to the standard file layouts furnished to Affiliate by iND, a daily statement providing the detail for each buy or credit transaction with respect to each Program set forth below: (a) the title of the Program; (b) if Affiliate represents rnore than one reporting System, the Affiliate organization identification; (c) the universal base event number ("UBEN") assigned by or on behalf of iND that identifies the Program; (d) the unique subscriber identification of the PPV Subscriber; (e) whether the Program was transmitted by Affiliate to an analog Settop Box and/or a digital Settop Box; (f) the transaction amount (~, the retail price at which the Program was purchased by the PPV Subscriber, or in the case of a credit, the negative amount of such credit); (g) the type of credit grant(~d; provided, however, that credits may only be granted in accordance with the tenns of the Agreement and in accordance with Affiliate's reason code schedule approved in advance by iND; (h) the play date and time of the Program and the iND Channel on which the Program was viewed by the PPY Subscriber; (i) the date and time the Program was posted to the account of the PPY Subscriber; and (j) the methodology used by the PPV Subscriber to order the Program (~, ARU, ANI). 3. Monthlv Statements. In addition, with respect to each month during the Term, no later than date five (5) business days after the end of such month, Affiliate shall furnish to iND or its designated representative, in FTP format (or such other fonnat(s) designated by provided or approved in advance by iND) and according to the standard file layouts furnished to Affiliate by iND, a monthly statement containing: (a) A Subscriber file, with the following characteristics noted for each Addressable Subscriber: unique subscriber identification, Affiliate organization identification, subscriber zip code, household definition (i.e., analog, digital or both), channel lineup identification, and subscriber type (commercial, residential or test); (b) any additional equipnlent fees; (1110/05) -2- G:\Distribution\AJfAgt\The City of Ashland\AffiliationAgt.l OS.doc ( c) the number of Addressable Subscribers that use a Settop Box that has VCR Functionality integrated therein (through a side car or otherwise); (d) the number of Subscribers that use a Settop Box that has VCR Functionality integrated therein (through a side car or otherwise); (e) any additional equipment fees or Late Charges; (f) technical capacity of each System as of the end of such month; and (g) any other information iND may reasonably request in connection herewith. 4. Additional Reports. Upon request by iND, within two (2) days after exhibition of any Program, Affiliate shall furnish to iND (itself or through its computer billing service or third party vendor), in a form(s) or format(:s) provided or approved in advance by iND, a statement containing the number of Analog Subscribers who purchased such Program, the number of Digital Subscribers who purchased such Program, the prices charged for such Program and any other information which iND may reasonably request. In addition, Affiliate agrees to provide a reasonable amount of the foregoing information by telephone upon request by iND from time to time. In addition, with respect to each of Affiliate's fiscal years, upon request from iND, Affiliate shall furnish'to iND a letter frorn Affiliate's independent certified public accountants to the effect that they have examined the Subscriber and financial information which Affiliate supplied to iND during such fiscal year and that in the course of such examination nothing came to their attention which would cause them to believe that the information supplied to iND should be adjusted. 5. Definitions. (a) Addressable Subscriber shall mean, with respect to each System, each Subscriber to such System with at least one analog or digital Settop Box. (b) Analog Subscriber shall mean, with respect to each System, each Addressable Subscriber to such System that is not a Digital Subscriber. (c) Digital Subscriber shall mean, with respect to each System, each Addressable Subscriber to such System with at least one digital Settop Box. (1/1 0/05) -3- G:\Distribution\A.ffAgt\The City of Ashland\AffiliationAgt.105.doc SCIIEDULE B iN DEMAND L.L.C. AFFILIATION AGREEMENT Limitations on Distribution: Security (a) Neither Affiliate nor any Systeln shall transmit, cause, authorize or permit the transmission of any Program by means of any signal of a quality that is greater than 480 active lines, and/or is not interlaced, and/or is not a composite signal (other than the component analog output currently known as S-video or SuperVHS), unless copy protection technology which effectively prohibits copying is available, is approved by iND in writing prior to its implementation and is used to prot{~ct the output of such higher resolution signal. (b) Neither Affiliate nor any System shall transmit or cause or authorize the transmission of any Program through digital video output of a digital Settop Box, until such time that Affiliate installs and utilizes industry standard signal protection and '~opy control systems approved by iND in writing prior to its implementation for use with such digital outputs which effectively prohibits copying. (c) All digital Settop Boxes shall contain an NTSC Macrovision circuit or other equally effective copy protection technology approved by iND in writing for the analog output of such boxes. Affiliate shall, if requested by iND, cause each Systerfl to activate Macrovision (AGC and Colorstripe, except to the extent that Colorstripe has not been implemented in Settop Boxes manufactured prior to August 1, 2001) copy protection technology (or any other equivalent copy protection as approved by iND prior to its implementation) to the analog composite output of their digital Settop Boxes and/or to line- doubled analog output of such Settop Boxes:, in respect of all transmissions of any or all Programs hereunder. Affiliate agrees to take whatever other steps are required. to make the copy protection technology effective. (d) Affiliate and each System shall "pass through" Copy Control Information embedded or inserted in or associated with any Program, without alteration, modification or degradation. "Copv Control Information" shall mean copy control status infomlation for the purpose of enabling or triggering the responsive characteristics of a recording device or by "watermarking" that passively conveys the identity of the content or transmission source. (e) Settop Boxes shall be designed so that the removal of its Recordable Media is designed to be effected only for purposes of service, repair or upgrade conducted by a professional technician. "Recordable Media" shall mean hard drives, optical discs or other recordable media contained in the Settop Box. (t) Exhibitions of Programs hereunder shall be on a streamed basis. Affiliate shall not download all or any part of a Program to a Subscriber's Settop Box. Affiliate shall not deliver Programs directly to the hard drive (or other component having functionality (1/10/05) -1- G:\Distribution\AffAgt\The City of Ashland\AffiliationAgt.l OS.doc similar to that of a hard drive) ('"Hard Drive"') of a personal computer. Programs shall be delivered to Subscribers in a format that is designed to be transmitted from the Settop Box to a television or similar monitor and that cannot be transmitted from the Settop Box directly to a Hard Drive of a personal computer. Affiliate may neither produce nor deliver to Subscribers instruction manuals or other written instructions featuring the indirect connection of the Settop Box to the Hard Drive of a personal computer, nor shall Affiliate promote the indirect connection of the Settop Box to the Hard Drive of a personal computer. Affiliate shall instruct all installers not to make such indirect connection of the Settop Box to the Hard Drive of a personal computer. (1/1 0105) -2- G:\Distribution\AJfAgt\The City of Ashland\AffiliationAgt.l 05.doc ~~, CIT~Y RECORDER'S COp~y Page 1 / 1 CITY OF ASHLAND 20 E MAIN ST. ASHLAND, OR 97520 (541) 488-5300 06169 VENDOR: 003667 GREAT LAKES DATA SYSTEMS INC. SEIPPEL BLVD PO BOX 295 BEAVER DAM, WI 53916 SHIP TO: Ashland Fiber Network (541) 488-5354 90 N. MOUNTAIN ASHLAND, OR 97520 FOB Point: Terms: Net Req. Del. Date: Speciallnst: Req. No.: Dept.: IT Contact: Michael Ainsworth Confirming? No BILL TO: Account Payable 20 EAST MAIN ST 541-552-2028 ASHLAND, OR 97520 SUBTOTAL TAX FREIGHT TOTAL 60000.00 0.00 0.00 60,000.00 ~~.. Authoriz gnature VENDOR COpy C,ITY OF ASHLAND REQUISITION FORM THIS REQUEST IS A: D Change Order( existing PO # Date of Request: I Aug 1, 2005 Required Date of Delivery/Service: I. FY 05-06 Vendor Name Address: City, State, Zip: Telephone Number Fax Number Contact Name GREAT LAKES DATA SYSTEMS Inc. Seippel Blvd. P.O. Box 295 Beaver Dam, WI 53916 (920)-887-7651 (920)-887-7653 SOLICITATION PROCESS Small Procurement D Sole Source D Invitation to Bid! D Less than $5,000 D Written findings attached (Copies on file) D Quotes (Not required) Coooerative Procurement D Reauest for Pro~ D State of ORN/A contract (Copies on file) Intermediate Procurement D other government agency contract D Special I Exeml>t D (3) Written Quotes D Copy of contract attached D Written findings attached (Copies attached) D Emeraencv D Contract # D Written findings attached Description 'of SERVICES Per attached PROPOSAL PROFESSIONAL SERVICES PAY PER VIEW BilLING @$5,000 PER MONTH Item # Quantity Unit Description of MATERIALS Unit Price Total Cost TOTAl-cOST .. 0 Per attached QUOTE Project Number - - - - - - - - - - $6O,OQO - .-- Account Number 691.021(.00.604100 * Items and services must be charged to the appropriate account numbers for the fimmcia/s to reffect the actual expenditures accurat€'fy. By signing this requisition form, I certify that the information provided above meets the City of Ashland public contracting requirements, and the documentation can be provided upon request. Employee signatur.b~ ~~ Supervisor/Dept. Head Signature: Iff--~ 7~ Michael Ainsworth