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HomeMy WebLinkAbout2005-158 Agrmt - Playboy Channel PLAYBOY ENTEBT1UNMENT CBOU~ INC. July 14, 2005 Ms. Kari Olson The City Of Ashland, Oregon by and through its Ashland Fiber Network Department 90 N. Mountain Avenue Ashland, OR 97520 Re: MSO #6892 Dear Ms. Olson: Enclosed please find a fully executed copy of the Playboy Televis!ion License Agreement dated as of June I, 2005. sii;elY, ~ Laura Glass Senior Mar, Legal & Risk Management Administration Ig Enclosures cc (w/enc): (wo/ enc): S. Damico, C. Rodriguez J. Blinderman, R. Liebrecht, A. Peries, D. Shelebian, C. Zulfer 2706 MEDIA CENTER DRIVE/LOS ANGELES, CALIFORNIA 90065/323 276-4000/FAX 323 276-4502 PLAYBOY TELEVISION LICENSE AGREEMENT This Agreement is made as of June 1, 2005 between PLAYBOY ENTERTAINMENT G;ROUP, INC. (IIPlayboyll), a Delaware corporation, located at 2706 Media Center Drive, Los J\ngeles, CA 90065, phone 323-276-4000, fax 323-276-4500, and THE CITY OF ASHLAND, OREG<)N BY AND THROUGH ITS ASHLAND FIBER NETWORK DEPARTMENT, an Oreaon municipality with offices at 90 N. Mountain Avenue, Ashland, Oregon 97520, and whose telephone and facsimile numbers are 541-552-2316 and 541-552-2436 respectively (IIAffiliatell). Subject to the terms hereof, Playboy hereby grants to Affiliate the non-exclusivE~ license for television distribution and/or reception and distribution, as applicable, of the Service in the Territory (as defined below) on Systems to Affiliate's Basic Subscribers by Cable Technology, SMA TV, MMDS, LMDS, OVS, and/or by way of Digital Subscriber Lines via thE~ telephone infrastructure of the incumbent independent local exchange telephone company within Affiliate's Operating Area (as defined below). The Basic Subscribers may then ordel' the Service on a Subscription Purchase basis, including SVOD, (in which case those Basic Subscribers become Service Subscribers) or as a pay-per-view event on a Demand Purchase bosis. Affiliate is also given a non-exclusive license to use the Marks as set forth below. 1. THE SYSTEMS. The systems listed below (the IISystemsll) are hereby authorized to distribute the Service: Name & Address Of Systems Playboy ID # Type Of Service Esti mated Launched Date Of Launch Ashland/ Ashland 6893 cable - monthly - 07/05/05 90 N. Mountain Avenue Director's Cut Ashland, OR 97520 Affiliate represents and warrants that all Systems are wholly owned by Affiliate, or in the case of Systems that are receiving the Service via Digital Subscriber Lines, Affiliate represents and warrants that each of Affiliate's Systems listed above or added during the Term of this Agreement is and will remain a System for which Affiliate has the authority to provide video programming either because Affiliate owns, controls, manages, or operates such System or pursuant to an enforceable written Transmission Agreement with such System as provided in Paragraph 4 hereof. Additional Systems may be added on not less than fifteen (15) days' prior written notice supplied to Playboy. Affiliate may drop any System once added to the Systems included hereunder upon not less than thirty (30) days' prior written notice to Playboy. 2. ADDITIONAL DEFINITIONS. As used in this Agreement, the following terrns shall have the respective meanings indicated below. a. Basic Subscriber: Any single family dwelling which is receiving or which is authorized to receive any level of programming services which may be purchased from any System. If the single family dwelling happens to be a Unit ~, an apartment or condominium unit) each such Unit shall be deemed to be a separate Basic Subscriber. g: \legal\laura\k\ashland 6/10/05 PB SUPERPPV11 04 b. Billina Period: Any calendar month during which the Service is offeredto Affiliate's Service Subscribers and/or Demand Purchasers. Only the initial Billing Period may be a partial month. c. Cable Technoloay: The means of delivering video programming by coaxial, fiber- optic or other type of cable, specifically excluding via the Internet or World 'Nide Web. Notwithstanding the foregoing, the use of IP technology to deliver video programming shall not be prohibited if and so long as each of the following conditions is met: (1) such use of IP Technology employs a commercially adopted conditional access and control method under the control of Affiliate; and (2) such IP-based delivery of video programming terminotes prior to the delivery of such video programming from a device under the sole control of Affi iate (e,g. a set-top box) to a device not under the control (or sole control) of Affiliate (e.g, a television or monitor). d. Demand Purchase: Each individual purchase of the Service from the Affiliate by a Basic Subscriber in a Unit, which, at the conclusion of the period so purchased (be it a time period or an event), requires a further transactional decision by the Basic Subscriber to continue receiving the Service, specifically excluding VOD, The Basic Subscribers who purchase the Service in such a manner shall be known as "Demand Purchasers." e. Digital Subscriber Lines: The means of delivering video programming to television set-top boxes by using modems on either end of a single copper twisted pair wire or fiber optic telephone line (sometimes referred to herein as "DSL") specifically excluding via thE~ Internet or World Wide Web. Notwithstanding the foregoing, the use of IP technology to deliver video programming shall not be prohibited if and so long as each of the following conditions is met: (1) such use of IP Technology employs a commercially adopted conditional access and control method under the control of Affiliate; and (2) such IP-based delivery of video programming terminates prior to the delivery of such video programming from a device under the sole control of Affiliate (e.g, a set-top box) to a device not under the control (or sole control) of ;\ffiliate (e.g. a television or monitor). f. Direct Broadcast Satellites: The means of delivering video programming direct to the home by a single high-powered satellite to K- or Ku-band satellite reception dishes and referred to herein as "DBS." Such means of delivery also may be referred to herein as IIDTH Technology. II g. FCC: Federal Communications Commission. h. LMDS Systems: The means of delivering video programming by direct broadcasts to single family or multiple dwellings containing Units by the use of microwave frequencies, including only those frequencies classified by the FCC as Multichannel Multipoint Distribution Service, Multipoint Distribution Service, Instructional Television Fixed Service, and Operational Fixed Service, i. Marks: The service marks, trademarks, trade names and logos owned by Playboy or its parent corporation, Playboy Enterprises International, Inc., including without limitation "PLAYBOY", IIPLAYMATE", "PLAYBOY TV," "PLAYBOY TELEVISION," and the RABBIT HEAD Design, all of which are being licensed exclusively for use in connection with the distribution and the promotion, marketing and sale of the Service. j. MMDS Technoloay: The means of delivering analog or digital video programming by direct broadcasts to single family or multiple dwellings containing Units by the use of microwave frequencies, including only those frequencies classified by the FCC as Multichannel g:\legol\louro\k\oshlond 611 0/05 2 PB, SUPERPPVll 04 Multipoint Distribution Service, Multipoint Distribution Service, Instructional Television Fixed SeNice, and Operational Fixed SeNice. k, Operatina Area: Any geographic area where an owner or operator of a Service System has a franchise or license from an appropriate governmental authority to operate a Video Distribution System and is operating a Video Distribution System within such areo, I. OVS: Any facility consisting of a set of transmission paths and associated signal generation, reception and control equipment that is designed to provide video pro~lramming to multiple subscribers within a service area and that the certification for which is approved by the FCC pursuant to 47 C.F.R. 76.1502, other than via the Internet or WorldWide Web, Notwithstanding the foregoing, the use of IP technology to deliver video programming shall not be prohibited if and so long as each of the following conditions is met: (1) such use of IP Technology employs a commercially adopted conditional access and control mE~thod under the control of Affiliate; and (2) such IP-based delivery of video programming terminates prior to the delivery of such video programming from a device under the sole control of Affiliate (e,g, a set-top box) to a device not under the control (or sole control) of Affiliate (e.g. a television or monitor). m. Service(s): Subject to the assignment provisions set forth in Paragrap h 14 hereof, the adult-oriented pay television programming services currently known as "Playboy TV Classic" and III1Playboy TV Director's Cut" and the SVOD derivative thereof to be provided to Affiliate hereunder, whether such service is identified as "Playboy Television," "Playboy TV," "Playboy TV Director's Cut" "Playboy TV Classic, II or any other service mark designated by Playboy. Such services shall sometimes collectively be referred to as the "Service(s)." When used in conjunction with SVOD, the Service shall refer to all content provided by Playboy for distribution on a SVOD basis. n. Service Subscriber: Any Basic Subscriber to whom any System provides or is authorized to provide the Service on a Subscription Purchase basis, The Service Subscriber count for any Billing Period shall be as follows: Affiliate shall add (i) the total numbEH of Service Subscribers in all Systems at the last day of such Billing Period and (ii) the total number of Service Subscribers in all Systems at the last day of the then immediately preceding Billing Period, and shall then divide such sum by two. o. Sianal: Playboy's regular satellite signal including any program blockouts and Playboy's separate free preview satellite signal, if any, including all the related video, audio, and data signals downlinked on the main carriers and subcarriers of such satellite signals. p. SMATV Technoloav: The means of delivering video programming by satellite to a master antenna which then utilizes coaxial, fiber-optic or other type of cable to Basic Subscribers, provided no such cables cross public rights of way. q. Subscription Purchase: The purchase by a Basic Subscriber of the Service for a period of time on a subscription basis, most commonly monthly, which automatically renews itself for the following period if the Service Subscriber does not take affirmative steps to discontinue reception, specifically excluding the capability for a Basic Subscriber to control the exhibition of the Service with functionality such as play, stop, rewind, and fast forward, commonly known as Subscription Video-On-Demand or SVOD, The Basic Subscribers who purchase the Playboy Service in such 0 manner shall be known as "Subscription Purchasers" or "Service Subscribers." r. Subscription Video-On-Demand C'SVOD"): An offering of programs derived from the Playboy TV Service made available on a Subscription Purchase basis (for or without an g:\legol\loura\k\ashland 6/10/05 3 PEl SUPERPPV11 04 additional charge) to Subscription Purchasers on a VOD basis. Subscription Purchosers of the Playboy Service who receive the Playboy SVOD Service shall sometimes collectively be referred to as "Subscription Purchasers" or "Service Subscribers." s. Territorv: Subject to the restrictions set forth in subparagraph 5.c. bEllow and/or such other restrictions that Playboy may impose from time to time, for both the Playboy TV Classic and Playboy N Director's Cut service: The geographic boundaries of the United States and/or, in the English language only, to United States territories and possessions. t. Transmission Aqreement: Shall mean and refer to a valid and binding written agreement which Affiliate has entered into with a System permitting a System to transmit the Service or permitting Affiliate to use such System's infrastructure to transmit the Service via DSL in compliance with the terms and conditions of this Agreement. u. Unit: Each apartment available for rent by the general public in an apartment building or condominium. v. Video-On Demand ("VOD"): The capability for a Service Subscriber to order (other than pursuant to a prescribed schedule) and control the exhibition of individual programs comprising the SVOD Service with functionality such as play, stop, rewind, and fast forward when provided on a Demand Purchase basis. 3. CONTENT OF SERVICE, a. Playboy shall, in its sole discretion, include such programming in the Service as it deems appropriate from time to time to deliver an adult-oriented pay television service. The number of programs and total number of programming hours that comprise the SVOD Service shall be at Network's sole discretion. Affiliate shall have no right to alter, substitute or delete or otherwise modify the Service as provided by Playboy, provided, however, that Affiliate may digitize, compress and transmit the signals for the Service through real time encodE~rs. Playboy shall have the exclusive right to extend, reduce or otherwise change the hours during which the Service is being delivered to the Systems. b. Affiliate may not in any way imply that any non-Service Programmino is a part of or is connected in any way with the Service. Affiliate shall not exhibit or transmit any Service programming at any time other than as scheduled by Playboy. Affiliate hereby acknowledges that from time to time Playboy may modify the programming to be supplied as part of the Service without prior notice, and Playboy shall not be held liable in any way by Affiliate for such changes. 4. TRANSMISSION, DISTRIBUTION AND USE OF THE SERVICE. a. Playboy shall use commercially reasonable efforts to transmit thE~ Service by means of such communications satellite(s) as may be designated by Playboy to Affiliate, or Affiliate may elect to receive the Service from a Playboy-licensed alternate provider of the Service (the "Alternate Provider"). (i) Should Affiliate wish to receive the Service from such Alternate Provider, then Affiliate shall notify Playboy in writing of Affiliate's choice and of the identity of the Alternate Provider from whom Affiliate plans to receive the Service. Affiliate also shall enter into a written agreement with such Alternate Provider governing the provisions of the delivery of the Service to Affiliate (the "Alternate Signal Agreement"), Playboy shall have no liability or obligations under the Alternate Signal Agreement, the Alternate Signal Agreernent shall be subject to all provisions of this Agreement, Affiliate shall make all payments in a till"lely manner g:\legol\lauro\k\ashlond 6/10/05 4 PE:, SUPERPPVll 04 due the Alternate Provider under the Alternate Signal Agreement and Affiliate shall look solely to the Alternate Provider for the delivery of the Service and the performance of the Alternate Signal Agreement. In no event shall any breach or default or other failure to perform under the Alternate Signal Agreement relieve Affiliate of Affiliate's obligations under this Agreement including to pay Playboy the Service Charge and to provide reports and records to Playboy. In the event of a breach or other failure to perform by the Alternate Provider under thE~ Alternate Signal Agreement Affiliate promptly shall notify Playboy in writing, setting forth in reasonable detail the specifics of such breach or failure to perform. (ii) In the event Affiliate receives the Service via the Alternate P!'ovider, it is expressly understood that in the event this Agreement is terminated, Playboy may oeauthorize the signals comprising the Service without liability to Affiliate or the Alternate Provider. b. REDISTRIBUTION: Provided that Affiliate obtains a valid Transmission Agreement Affiliate shall have the right at Affiliate's expense to, demodulate, remodulate and redistribute the Signal over the facilities of the Affiliate owned, controlled, managed or operated System for reception by such System of Affiliate. The redistributed signal of the Service shall be of broadcast quality and shall in all other ways and at all other times comply with all other terms and conditions contained herein for distribution of the Signal. c. SUBDISTRIBUTION: (i) Except as explicitly provided for in this subparagraph 4.c., subdistribution of the Service is expressly prohibited, It shall be deemed "Prohibited Subdistribution" to transmit the signal of the Service to a non-Affiliate "DSL" system opE~rator, a "C- Band satellite operator," an operator of "broadcast television," an operator of "low-powered television," or via Cable Technology, DBS, MMDS, OVS, or SMATV Technology, MMDS Technology or SMATV Technology, as such terms are now or hereafter generally defined in the poy television industry, or any other entity for the rebroadcasting or retransmission of the Smvice or its programming to any customer or end user of any such entity. Any such authorization requests received by Affiliate shall be forwarded to Playboy or another party designated by Playboy. It also shall be deemed Prohibited Subdistribution to enter into an agreement to authorize reception of the Service by any commercial establishment including without limitotion hotels, motels, restaurants and bars. (ii) It shall be deemed "Permitted Subdistribution" for Affiliate to enter into a Transmission Agreement with a System by which it authorizes and deauthorizes Service Subscribers and/or Demand Purchasers within such System's Operating Area pursuant to requests received from such System, as authorized by Playboy; provided that however, Affiliate shall be responsible for each Permitted Subdistributor's compliance with all of thE~ terms and conditions of this Agreement and provided further that Affiliate shall be wholly and primarily responsible for the payment of any Service Charges required hereunder on bE!half of any Permitted Subdistributor. Affiliate shall be required to provide annual Certification, by no later than March 1 of each year during the Term, representing and warranting that each System is in compliance with the Transmission Agreement. (iii) Affiliate represents and warrants that if any Permitted Subdistributor commences or engages in any form of Prohibited Subdistribution or should be in breach or otherwise be in default under this Agreement or the Transmission Agreement then Affiliate must immediately: (1) notify Playboy in writing that such Prohibited Subdistribution, breach or default has occurred. g:\legal\laura\k\ashland 6/1 0/05 5 PB SUPERPPVll 04 (2) notify the applicable subdistributor immediately to cease and desist from the prohibited subdistributor; or (3) take all appropriate action to cause such subdistributor or cure the breach or default in a timely manner and/or terminate the Transmission Agreement; and (4) deauthorizations by such subdistributor. prevent Service authorizations or d, In the event of Prohibited Subdistribution, breach, or default Affiliate shall remain liable for the Service Charges for all Service Subscribers and/or Demand Purchasers sold by such subdistributor. In addition, Playboy shall have the option to demand that Affiliate within thirty (30) days of receipt of notice from Playboy, pay Playboy one hundred percent CI 00%) of the revenue derived by any Prohibited Subdistributors from Service Subscribers and/or Demand Purchasers, e. Affiliate shall have the right to (i) distribute the Service over an affiliatE~d System or Permitted Subdistributor System; (ii) digitize, compress or encode as necessary to hansmit and deliver the signal of the Service, (iii) re-uplink and transmit the Service to any satellite for transmission and distribution to Affiliate's employees or to affiliated Systems or Permitted Subdistributor Systems for technical testing purposes upon written notice to Ployboy ("Test Period"). During the Test Period of any such System, Affiliate shall not be required to pay Service Charges as required under Section 6, provided Affiliate provides the Service at no charge during this time period and each Test Period, which shall be limited to a maximum of three (3), does not exceed thirty (30) days. f. Playboy shall be permitted to scramble the signals comprising thl3 Service as Playboy deems fit. g. Affiliate shall, at its own expense, obtain and install such earth station receivers and other equipment as shall be necessary to enable Affiliate's Systems to receive, descramble and transmit and deliver to Service Subscribers and/or Demand Purchasers the signals comprising the Service. The signals delivered to Service Subscribers and/or Demand Purchasers shall be securely scrambled by the System or otherwise rendered secure by the SystE~m. h, In the event Playboy should switch communications satellites or scrambling technology after the commencement of the Term of this Agreement Affiliate shall have the right to terminate this Agreement upon sixty (60) days' written notice to Playboy if such satellite or scrambling change materially impacts Affiliate's ability to earn revenue or conduct business under this Agreement. 5. USE OF THE SERVICE. a. Affiliate shall market, transmit and deliver the Service solely as a premium Wt., non-basic), program service only as permitted herein to single family dwellings or apartment or condominium buildings. Apartment buildings or condominium buildings may be so served only within the franchise boundaries of the Systems. Distribution of the Service os a monthly programming service is also permitted. Affiliate shall not make available all or any part of the Service or the Marks for any sponsorship, advertising, promotional public service or commercial announcement of any party, product or service, The Playboy TV Service may be offered to Subscription Purchasers as a stand-alone premium monthly service or in conjunction with the SVOD Service for or without an additional fee. The SVOD Service may not be offerE~d as a stand- alone service and may only be made available to Subscription Purchasers as an "add-on" g:\legol\laura\k\ashland 6/10/05 6 PI3 SUPERPPVll 04 feature to the Playboy TV Service. Neither the Service nor any portion thereof may be offered to Basic Subscribers on a VOD basis other than as part of a SVOD Subscription Purchase. b. Affiliate, both initially in its launch of the Service in any System or Systems, and at all times thereafter, will market and promote the Service in accordance with the following: (i) Affiliate will publicize the Service by at least two methods, including, without limitation, barker channels, printed program guides, electronic program guides, cross channelllspotsll and billstuffers. (ii) The promotion of the Service, as a pay-per-view service, shall include promotion of the ordering technology in each System, which technology available for Demand Purchases of the Service shall be equal to or better than (in Playbols reasonable opinion) the technology available for similar pay-per-view purchases of other services. (iii) In Playbols reasonable opinion, the overall promotion of the Service in exposure, value and cost to Affiliate shall be substantially equal to the promotion of any other pay-per-view service on a System-by-System basis. c. Affiliate shall not permit and shall take all necessary, appropriate, and commercially reasonable precautions to prevent any use of the Service by (i) any porty which is not a paying Service Subscriber and/or Demand Purchaser or (ii) any party which charges an admission fee, cover charge or IIminimumll, or to a commercial establishment or non-residential building (including, without limitation, any restaurant hotel/motel. tavern, bar, club, fraternal organization, hospital or correctional facility), or to any communal room in an otherwise residential building (including without limitation, any lobby or social room in an apartment house, dormitory or similar place). d, Affiliate shall not permit and shall take all necessary, appropriate and commercially reasonable precautions to prevent any unauthorized or unlawful use, reproduction, exhibition or distribution of any part of the Service or the Marks. It shall be deemed an unauthorized exhibition to allow the Service to be exhibited to the occupants of an apartment or other Unit which is not being charged a distinct monthly or per-viewing fee per Unit for exhibition of the Service. 6, PAYMENT TO PLAYBOY. a. Affiliate shall pay to Playboy, with respect to each Billing Period, not later than thirty (30) calendar days following the expiration of such Billing Period, the IIService Chargell calculated as hereinafter set forth in this Agreement. Playboy may change the Service Charge at any time on not less than ninety (90) daysl prior written notice to Affiliate. b. The Service Charge for Demand Purchases shall equal the greater of Two Dollars and Seventy-Eight Cents ($2.78) per Demand Purchase or forty percent (40%) of the total gross revenues earned by Affiliate frolT) Demand Purchases. The Service Charge for monthly Service Subscribers shall be calculated as set forth in subparagraph 6(c) below. Revenues shall be considered Ilearnedll regardless of whether the Affiliate collects payments due it from any Service Subscriber and/or Demand Purchaser. c. The Service Charge for Subscription Purchases shall be calculated as follows: (i) If a System either does not offer the SVOD Service as part of the Playboy TV Service or offers the SVOD Service as an add-on feature for an additional charge, the Service Charge for Subscription Purchases of the Playboy TV Service (excluding the SVOD g:\legal\laura\k\ashland 611 0/05 7 PB SUPERPPVll 04 Service) shall equal the greater of Five Dollars and Eighty-One Cents ($5.81) per Service Subscriber or forty percent (40%) of the total gross revenues earned by Affiliate from such monthly subscription purchase. (ii) If a System offers the SVOD Service as an add-on fea"ure to the Playboy TV Service for no additional charge, the Service Charge for Subscription PLJchases of the Playboy TV Service shall equal the greater of Six Dollars And Thirty-One Cents ($6.31) per Service Subscriber or forty percent (40%) of the total gross revenues earned by Affiliat~~ from such monthly subscription distribution. (iii) If a System offers the SVOD Service as an add-on feature to the Playboy TV service for an additional charge, the Service Charge for Subscription Purchases of the SVOD Service shall equal the greater of Fifty Cents (50c) per SVOD Service Subscriber or forty percent (40%) of the total gross revenues earned by Affiliate from such monthly subscription distribution, d. All payments required under this Paragraph 6 shall be via a check drawn on a United States bank account and sent to Playboy Entertainment Group, Inc., 2740 Paysphere Circle, Chicago, Illinois 60674-2740 for credit to account no, 2292148. e. Any amounts not paid by Affiliate within thirty (30) days of when due shall accrue interest at the lesser rate of one and one-half percent (1-1/2%) per month or at the hi~;;Jhest lawful rate, compounded monthly from the date such amounts were first due until they are paid, f. In thE~ event of a dispute between Affiliate and Playboy as to any amounts properly due from Affiliate to Playboy, Affiliate shall pay that portion of the amounts not in dispute in accordance with the terms of this Paragraph 6, and before or at the time of payment shall notify Playboy of the grounds for disputing the remaining unpaid balance. Interest shall not accrue on such balance for a period of fourteen (14) calendar days during which time the parties shall use their best efforts to negotiate a settlement. 7, CROSS-DEFAULT. In addition to and without derogating from any other rights Playboy may have hereunder, or otherwise, any material breach or default by Affiliate (or its successors or assigns), including but not limited to, of any agreement(s) between Spice Entertainment Inc. ("Spice") and/or Spice Hot Entertainment Inc. (IISpice Hot") alld/or Spice Platinum Entertainment Inc. ("Spice Platinumll) and/or Playboy and Affiliate (or its successors or assigns) (collectively, the "Other Agreementsll), may also be deemed by Playboy to be a breach or default by Affiliate under this Agreement and any material breach or default by Affiliate (or its successors or assigns) under this Agreement may also be deemed to be a breach cr default by Affiliate of any or all Other Agreements, and in the event of any such material breach or default then Spice, Spice Hot, Spice Platinum, or Playboy, as applicable shall be entitled to oxercise any and all of its rights and remedies under the applicable agreements with respect thereto as if such breach or default occurred under any or all of such agreements. 8. REPORTS AND RECORDS. a. Affiliate sholl provide the following information on a monthly basi~, during the entire Term of this Agreement within twenty (20) days after the conclusion of each calendar month hereunder: (i) the total number of Basic Subscribers on the first and last day of each such month; g:\legal\laura\k\ashland 6/10/05 8 PB SUPERPPVll 04 (ii) the total number of such Basic Subscribers on the first and last day of each such month who are capable of making a Demand PUrchase; (iii) the total number of Demand Purchases made by Affiliate's Basic Subscribers during the entire such month; (iv) the total number of Subscription Purchases in effect as of the first and last day of each such month, the retail prices in effect for each such type of purchose @&, the retail price of the Service on an a la carte basis and all possible multi-pay packaQle bases) on both the first and last day of each such month, including a brief description of the difference in the various packages responsible for pricing differences shall be forwarded to Playboy at the outset of this Agreement and shall be updated by Affiliate as adjustments are made; and (v) the total number of Subscription Purchasers receivinQI the SVOD Service, the retail rate charged for such SVOD Service, and the Subscription Purchaser usage of individual programs comprising the SVOD service, if available. b. For each delivery method of the Service (analog cable, digital coble, SMATV, MMDS, LMDS, OVS, and DSL) Affiliate shall supply to Playboy, with payment of the Service Charge and on a form provided by Playboy, any information regarding the number of Demand Purchases, Basic Subscribers, Units, Service Subscribers, SVOD Service Subscribers, resale charges assessed by Systems or other information reasonably necessary to determine the C1mounts due Playboy from the sale of the Service to Service Subscribers. Within ninety (90) days otter the end of each of Affiliate's fiscal years during any portion of which this Agreement is in effect, Affiliate shall furnish to Playboy either (a) a letter addressed to Playboy from Affiliate's independent certified public accountants to the effect that they have examined Affiliah3's financial statements for such fiscal year and have reviewed the Service Subscriber and Demand Purchase information which Affiliate supplied to Playboy during the fiscal year and that the information supplied to Playboy is accurate or (b) in the event that Affiliate does not retain independent certified public accountants, a letter addressed to Playboy signed by Affiliate's ChiE~f Operation Officer or Chief Financial Officer which attests to the completeness and accuracy of all reports and statements supplied to Playboy. Affiliate's obligation to supply such letters shall continue atter the termination of this Agreement until Playboy receives the required letter with respect to the last fiscal year during any portion of which this Agreement is in effect. c, Should any of the information being supplied to Playboy as required by this Paragraph 8 pertain to the SeNice being received via the Alternate Provider (the "Alternate Provider Information"), then such Alternate Provider Information shall be set forth separately from all other information being supplied by Affiliate. d. Affiliate shall keep true and accurate books and records relating to the Service in accordance with generally accepted accounting principles. All of Affiliate's records and accounts relating to the Service shall be available for inspection and copying and for audit by Playboy and its representatives during normal business hours, at any time, during the term of this Agreement and for three (3) years thereafter. The exercise by Playboy of any right to inspect or to audit at any time or the acceptance by Playboy of any statement or payment shall be without prejudice to any other rights or remedies available to Playboy and shall not preclude Playboy from thereafter disputing the accuracy of any such payment or statement and Affiliate shall remain fully liable for any balance due under the terms of this Agreement. If any audit discloses an underpayment of five percent (5%) or more with respect to the Service Charge reported on any three (3) Billing Periods audited, Affiliate agrees, in addition to rE~-calculation and making immediate payment of the Service Charge due based on the true information, together with interest thereon the prime rate announced from time to time by the LaSalle National Bank or any other nationally recognized bank (the "Prime Rate"), to pay 011 costs and g:\legal\laura\k\ashland 6/10/05 9 PB SUPERPPV11 04 expenses incurred by Playboy for such audit and inspection, including attorneys' fees and costs in connection therewith or with enforcing the collection thereof. Neither Playboy's acceptance of any information, nor Playboy's inspection or audit of Affiliate's records or accounts, will prevent Playboy from later disputing the accuracy or completeness of any payments madE~ or of any information supplied by Affiliate. 9. PROMOTION, MARKETING AND SALES AND TRADEMARK APPROVALS. a. Playboy shall provide marketing and promotional advice and information as it deems necessary. b, Playboy shall have the right to review and approve, in advance, any of Affiliate's publicity about the Service. c. Affiliate has not and will not acquire any proprietary rights in any of the Marks or any trade names, trademarks, service marks or logos associated with Playboy and/or its parent company, Playboy Enterprises International, Inc. by reason of this Agreement or otherwise. Affiliate further acknowledges the great value of the goodwill associated with the Morks and the public renown and recognition of the same, and that the Marks have a distinctiveness and a secondary meaning that is firmly associated in the minds of the trade and general public with Playboy and/or its parent company, and that any additional goodwill in the Marks which may be created through the use of the Marks by Affiliate shall inure to the sole benefit of Playboy and/or its parent company as the case may be. Affiliate may use the Marks only if it is clear that the Marks used are service marks for the programs and program services of Playboy which Affiliate distributes and such use shall be in accordance with any further instructions that may be issued by Playboy and/or its parent company from time to time; provided, however, any use of any mark that is not consistent with prior approved uses requires the prior express written approval of Playboy and/or its parent company. Affiliate shall submit any initial use of the Marks to Playboy for Playboy's prior written approval at least ten (10) working days prior to their intended use. Such submission shall be made simultaneously to President Playboy Television, 2706 Media Center Drive, Los Angeles, CA 90065 and to the General Counsel, Playboy Enterprises International, Inc., 680 N. lake Shore Drive, Chicago, Illinois 60611. Playboy, through either of such officers may disapprove of any use. Affiliate will not disseminate any material that has not been preapproved by Playboy in accordance with the terms hereof. Any such approval must be granted or withheld within five (5) business days of Playboy's receipt of materials for approval. Failure by Playboy to respond within five (5) business days of Playboy's receipt of materials for approval will be deemed disapproval, although a response for purposes of this paragraph may be given telephonically. Unless otherwise specified by Playboy, 011 materials involving the Marks shall include the following notice: "PLAYBOY AND RABBIT HEAD DESIGN ARE MARKS OF AND USED UNDER LICENSE WITH PLAYBOY ENTERPRISES INTERNATIONAL, INC." d. At Playboy's request Affiliate shall provide Playboy with all avoilable data regarding the marketing and promotion of the Service by Affiliate, Affiliate also agre'es to render such other assistance to Playboy which Playboy may reasonably request and which Affiliate can reasonably provide in connection with any marketing test, survey, poll, or other resE~arch which Playboy may undertake. 10. REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION. a. Playboy and Affiliate each represent and warrant to the other that each has the requisite power and authority to enter into this Agreement and to perform fully ii's respective obligations hereunder, and that this Agreement has been duly executed by it and constitutes a valid obligation enforceable against it in accordance with the terms hereof. g:\legal\laura\k\ashland 6/1 0/05 10 PB SUPERPPVll 04 b. Playboy represents and warrants to Affiliate that it will exercise reasonable efforts to ensure that the Service as supplied to Affiliate pursuant to this Agreement, if and when presented by Affiliate in the manner and at the times permitted herein, will contain no libelous or slanderous material and will not violate any copyright, right of privacy or literary or dramatic right of any person. c. With respect to carriage of the Service as a monthly subscription Service and/or a Demand Purchase basis: (i) Playboy represents and warrants that it has, by thG date this Agreement is fully executed, applied for a IIthrough-to-the-viewer" music performcmce license from each of the fT'lajor performing rights societies, ASCAP and BM!. Playboy shall l3ndeavor to obtain a "through-to-the-viewer" music performance license from those organizotions to the extent they make such license available to Playboy on commercially reasonable terms. (ii) If ASCAP or BMI refuses to make available to Playboy a "through-to- the-viewer" music performance license, or offers such license on commercially unreasonable terms, Playboy shall not be required to initiate litigation to compel the music performing rights society(ies) to grant a "through-to-the-viewer" music performance license. (iii) It due to a court order or other governmental decree from a body of competent jurisdiction, or as a result of one or more of ASCAP's or BMI's failure to offer one on a commercially reasonable basis, such IIthrough-to-the-viewerll license is not availablE! to Playboy, Playboy shall continue to maintain a license "through to the headend" provided such license is available from ASCAP and/or BMI on commercially reasonable terms. (iv) If and when Playboy obtains a "through-to-the-viE,werll music performance license, Playboy shall maintain such license throughout the term of the Agreement, unless such license is no longer available due to a court order or other governmE!ntal decree from a body of competent jurisdiction in which event subparagraph lO.c.(iii) hereinabove shall apply. d. With respect to both carriage on a Subscription Purchase basis and as a Demand Purchase service, Playboy will defend, indemnify, and hold harmless the Affiliate for any breach of these representat"ions and warranties. e. Under no circumstances shall the Affiliate be responsible for any retroactive fees related to music performing licenses. f. Subject to Paragraph lO,g., Affiliate and Playboy shall each indemnify, defend and forever hold the other, its affiliated corporations and other entities, partners, officers, directors, employees and agents (collectively the "Indemnitees") harmless from all liabilities, claims, costs, damages and expenses (including without limitation, reasonable counsel fees) (collectively "Claims") of third parties arising from the performance of each party hereunder, and Affiliate shall indemnify, defend and hold harmless Playboy and other Indemnitees from all Claims by any Service Subscriber, and/or Demand Purchaser (except with respect to Claims relating to the specific content of the Service); provided that in each case where such indemnification is sought: (i) the Indemnitee promptly notifies the indemnitor of the Cloim to which the indemnification relates: (ii) the indemnitor shall control fully any litigation, compromisE~, settlement or other resolution or disposition of such Claim; and g:\legol\louro\k\oshlond 6/10/05 11 PB SUPERPPV11 04 (iii) the Indemnitee fully cooperates with the reasonable requests of the indemnitor in the indemnitor's defense of such Claim, g, Notwithstanding the above, Playboy's indemnification of Affiliate will be valid in the event of a criminal prosecution arising from the content of the Service, only in the event each of the following conditions is met: (i) Immediate telephone contact be made with both the General Counsel's office of Playboy in Chicago at (312) 751-8000 and Playboy's counsel in Los Angeles at (323) 276-4000, or other numbers hereafter specified by Playboy. Such telephone notification should be immediately followed with a letter containing copies of all papers that have been served and giving complete information then available regarding the incident. (ii) Playboy shall have the right to fully control choice of counseL determine in advance the terms of retention, and control the litigation, compromise, settlement or other resolution of such Claim. (iii) Playboy will assist in defended actions only and will not be responsible in cases where there is any admission of guilt by anyone charged with violation of the law as to the content of Service programming. Settlement or dismissal of any case will not be allowed, except with Playbols prior written consent. (iv) Actual or prospective parties involved in such prosecution shall make no voluntary disclosure regarding support or lack thereof by Playboy under this policy, h. Notwithstanding any other provision in this Agreement Playboy shall not have any liability to Affiliate or any other party with respect to any failure of Playboy and/or on Alternate Provider to deliver the Service if such failure is due to any malfunction, failure, or misoperation of the equipment or facilities of Playboy and/or the Alternate Provider, any action or claim by any third party, any labor dispute or any other cause beyond Playboy's and/or the Alternate Provider's control (including, without limitation, the termination or expiration of any of Playboy's and/or the Alternate Provider's arrangements relating to communications satellite facilities and/or the unavailability to Playboy and/or the Alternate Provider of communications satellite facilities on terms satisfactory to Playboy and/or the Alternate Provider). i. This indemnity provision shall not be valid or enforceable until such time as the Agreement is fully executed. 11. TERM OF AGREEMENT. a. The initial Term of this Agreement shall commence on the day on which any System previously identified first makes the Service available to Service Subscri bers and/or Demand Purchasers. Such Term shall end on Julv 31, 2008 provided, however, that this Agreement shall be deemed automatically extended for successive one (1) -year periods upon the expiration of the initial or any succeeding Term. Nevertheless, Playboy shall hove the right hereunder to terminate this Agreement without liability to Affiliate, on not less than ninety (90) days' prior written notice should Playboy generally discontinue distribution of the SE3rvice to the cable television marketplace. b. In addition to any other remedies it may have in law or in equity, Playboy may terminate this Agreement by giving Affiliate at least ten (10) days' prior written notice, in the event that Affiliate has breached any of its obligations hereunder and such breach (which shall be specified in such notice) is not cured by Affiliate within five (5) days of such noticE~. g: \legal\laura\k\ashland 6/1 0/05 12 PB SUPERPPV11 04 12. FORCE MAJEURE. Except as otherwise provided herein, neither party shall be liable to the other party for damages of any kind which are due to: acts of god; natural disasters; governmental acts or omissions; national emergencies; insurrections; riots, or wars; strikes; lock- outs or other labor difficulties or other similar causes beyond the parties' reasonable control (not including such party's insolvency or financial condition) or; negligent or intentional acts or omissions of the other party; provided, however, that in the case of such other PClrty'S acts or omissions, each party shall use its reasonable best efforts to continue to comply with all of its respective obligations hereunder. The term of this Agreement shall be suspended during the period when a party is unable to fulfill its obligations hereunder by reason of the occurrence of a force majeure event, Should the force majeure event continue for a minimum of fifteen (15) calendar days in the aggregate and either party is unable to perform its obligations hereunder during such time, then the other party, in its sole discretion, may terminate this Agreernent, 13, GOVERNING LAWS, OBLIGATIONS, ETC. This Agreement shall be governed by and interpreted under the laws of the State of California. 14. ASSIGNMENT. Affiliate may not assign this Agreement without the express written consent of Playboy. It is acknowledged that this Agreement, and the terms and conditions contained herein, shall be binding on all successors and assigns of Affiliate. Playboy may assign this Agreement or Clny portion of its rights or obligations hereunder without Affiliat'e's consent, provided that if, as a result of such assignment the Service shall no longer be generally identified as a ''Playboy'' Service by or through the use of the Marks thereon or the Service sholl no longer include any "Playboy-identified" programming, Affiliate may terminate this Agreement on not less than ninety (90) days' prior written notice. 15. NOTICES. All notices, requests, demands, consents, directions and other communications provided for hereunder shall be in writing and be either delivered by facsimile transmission ("fax"), with confirmed electronic receipt, or by means of U,S. certified mail, return receipt requested; or if to Playboy to Playboy Entertainment Group, Inc., 2706 ME~dia Center Drive, Los Angeles, CA 90065, ATTN: Programming Distribution, fax no. 323-276-4500 with a copy to General Counsel, Playboy Enterprises International Inc., 680 N. Lake Shore DrivE~, Chicago, Illinois 60611, fax no" 312-266-2042; and if to Affiliate at Affiliate's (not the Systems') address set forth on the first page of this Agreement, or, as to each party, at such other address as shall be designated by such party in a written notice to the other party. All notices shall, whEm mailed or faxed, be deemed effective on the date deposited in the mail or on the date receipt of such fax is so confirmed. 16. ADHERENCE TO TELECOMMUNICATIONS ACT OF 1996. On May 22, 2000 the United States Supreme Court affirmed the decision of the United States Circuit Court of Delaware which held that Section 505 of the Telecommunications Act of 1996 is unconstitutional. The Supreme Court also affirmed the Circuit Court's finding that Section 504 of the Act could provide the viewer protection that Section 505 sought if cable operators provided awareness to the consumer of its options regarding audio and video signal bleed. Section 504 of the Telecommunications Act of 1996 provides, in part: Upon request by a cable service subscriber, a cable operator shall, without charge, fully scramble or otherwise fully block the audio and video programming of ea8h channel carrying such programming so that one not a subscriber does not receive it. "Scramble" defined. As used in this section, the term "Scramble" means to rearrange the content of the signal of the programming so that the programming cannot bG viewed or heard in an understondable manner. g:\legal\laura\k\ashland 6110/05 13 PB SUPERPPV11 04 Attached hereto and identified as Section 504 Compliance Information ore solutions and options for creating consumer awareness of Section 504, By entering into this Agreement, Affiliate agrees to comply with the Telecommunications Act of 1996 and Section 504 and incorporate, as appropriate, any or all of these materials into the marketing and on-air messages that are communicated to the consumer. 18. CONFIDENTIALITY: Neither Playboy nor Affiliate shall disclose to any third party (other than its respective employees, in their capacity as such), any information with respect to the financial terms and provisions of this Agreement except: (i) to the extent necessary to comply with law or the valid order of a court of competent jurisdiction, in which event the porty making such disclosure shall so notify the other and shall seek confidential treatment of such information, (ii) as part of its norll1al reporting or review procedure to its parent company, its auditors and its attorneys, provided, however, that such parent company, auditors and attorneys agree to be bound by the provisions of this paragraph and (iii) in order to enforce its rights pursuant to this Agreement. 19. ENTIRE AGREEMENT. This Agreement (including Exhibits/Attachments, etc. hereto) constitutes the entire Agreement between the parties with respect to the transactions contemplated herein and may not be modified or changed except in a writing executed by all parties hereto. This Agreement supersedes and merges all prior written or oral agreements, communications, commitments, or understandings with respect to the matters pI'ovided for herein. Each party acknowledges that it is entering into this Agreement in reliance only upon the provisions herein set forth, and not upon any covenants, representations, warranties or other considerations not set forth herein. 20. RELATIONSHIP. Nothing in this Agreement shall be deemed to create a relotionship of joint venture, principol-agent or partnership between the parties, and neither shall hold itself out in its advertising or in any manner that would indicate any such relationship between the parties, 21. HOLD HARMLESS. Affiliate shall pay and hold Playboy forever harmless from any and all sales, use, excise, income, franchise, corporate, and similar taxes (including, without limitation, any fees payable to local or state franchising authorities) and any other char~les now or hereafter imposed or based upon the rental, license, exhibition or possession for, to or by Affiliate of the Service or any part thereof (including, without limitation, any tax or charge based upon goods or services furnished to Affiliate by Playboy, which goods or services are then possed on to Affiliate's Service Subscribers and/or Demand Purchasers.) 22. WAIVERS. Any waiver of any provision of this Agreement must be in writing and signed by the party whose rights are being waived. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of tile same or any other provision of this Agreement. The failure of Affiliate or Playboy to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of such breach. All remedies, whether at law, in equity or pursuant to this Agreement shall be cumulative. 23. SEVERABILITY. The invalidity under applicable law of any provision of this Agreement shall not affect the validity of any other provision of this Agreement, and in the event that any provision hereof is determined to be invalid or otherwise illegal, this Agreement sl1all remain effective and shall be construed in accordance with its terms as if the invalid or illegal provision were not contained herein; provided, however, that both parties shall negotiate in good faith with respect to an equitable modification of the provision held to be invalid or unenforceable and provisions logically related to it. g:\legal\louro\k\oshlolld 6/1 0/05 14 PB SUPERPPVll 04 24. NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the exclusive benefit of the parties hereto and their permitted assigns, and no third party shall be a beneficiary ot or have any rights by virtue of, this Agreement. 25. A TIORNEYS' FEES AND COSTS, If any legal action or other proceeding is brought for the enforcement of this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions herein, the successful or prevailing party shall b<e entitled to recover its reasonable attorneys' fees and other costs incurred in such action or proceeding in addition to any other relief to which such party may be entitled. 26. NON-RECOURSE, Notwithstanding anything contained in this Agreenient to the contrary, it is expressly understood and agreed by the parties hereto that each and every representation, warronty, covenant undertaking, or agreement on the part of any individuaL and any recourse, whether in common law, in equity, by statute or otherwise, ogainst any individual is hereby forever waived and released. 27, HEADINGS. The headings, captions, and arrangements used in this AgrE~ement are, unless specified othE~rwise, for convenience of reference only and shall not be deer-ned to limit amplify, or modify the terms of this Agreement nor affect the meaning thereof, THE CITY OF ASHLAND, OREGON BY AND THROUGH ITS ASHLAND FIBER NETWORK DEPARTMENT & T'1 d?? /k fftA1V{J AFFILIATE NAME Biign~ ~- iJM. /..hAJ ., l-Jtl.- rl T lA. A..IIJ/J~ Na me of Sig natory /1 A.I,ftVCI/... ./j, /U&.c!Tt11'2- President PLAYBOY ENTERTAINMENT GROUP, INC. By~l TITLE: JONATHAN SUNDERMAN vlvE PRESIDENT, BUSINESS AND LEGAL AFFAIRS MSO # 6892 g:\legal\laura\k\ashlond 6/10/05 15 PB SUPERPPV11 04 SECTION 504 COMPLIANCE INFORMATION A message for our affiliates Playboy, at great expense and commitment has challenged Section ti05 of the Telecommunications Act of 1996, For most cable systems, Section 505 required operators to cease transmitting networks "primarily dedicated to adult programming" from 6 a.m, to 10 p.m. __ two-thirds of the broadcast day. We entered this legal challenge because of our long-standing commitment to support individual rights as well as cable system rights. After four years, Ploy boy's efforts were finally realized. On May 22, 2000 the United States Supreme Court affirmed the decision of, the U.S, District Court for the District of Delaware, which held that Section 505 is unconstitutional because it restricts protected speech, The Supreme Court affirmed that Section 504 of the Act which provides for free blocking on request is a less restrictive solution to the problem of signal bleed. As a result of this ruling, cable operators are legally permitted to carry channl31s that are designated as principally adult 24 hours a day. While signal and audio bleed may still exist full time carriage is permitted as long as cable customers are provided "adequate notice" of the availability of free blocking devices under Section 504 of the Act. While neither the Supreme Court nor the U.S. District Court set specific guidelines, Playboy Enterprises, Inc. believes that there needs to be a concerted effort to promote the option of consumer blocking ot least twice a year. As the industry moves toward more digital service, signal bleed will become a less significant issue. In the meantime, your participation in providing customers with notice of their rights under Section 504 is another way to demonstrate cable's ongoing history of providing responsible programming and giving their customers freedom of choice. We hope and believe the industry will acknowledge providing such informed choice is a responsibility shared by all of us. In a spirit of cooperation with our cable affiliates, Playboy has created. this Section 504 Awareness Kit to support your local efforts to notify your subscribers of their rights under the law, It gives you advertising and marketing suggestions and materials that can help to provide information on the availability of free blocking devices for your customers. Throughout the year, we will maintain contact with you and provide fresh materials to support your informational efforts with respect to Section 504. SECTION 504 COMPLlAr~CE INFORMATION g:\legal\louro\k\ashlond 6/10/05 16 AUGUST 2000 PBSUPER PPV11 04 Highlights of the US Court of Appeals Ruling on Section 504 "In the interest of ensuring that adequate notice be given in the future, we suggest that it be given along the following lines: MSOs should communicate to their subs the information that certain channels broadcast sexually oriented programming that signal bleed, i,e. partially discernible video imoges and full audio of those channels, may appear; that children may view signal bleed without their parents' knowledge or permission; that channel blocking devices that will block signal blE!ed are available free of charge from the subscriber's MSO; and that a request for a free dHvice to block the offending channel can b'e made by a telephone call to the MSO. "We hold therefore that Section 504 is a less restrictive alternative to Section 505 as long as MSOs provide "adequate notice" to their subscribers...lf adequate notice is not provided, Section 504 will no longer be a viable alternative to Section 50S." SECTION 504 COMPLIANCE INFORMATION g: \legal\laura\k\ashland 6/10/05 17 AUGUST 2000 PBSUPER PPV11 04 Marketing Suggestions Playboy has prepared some suggested methods by which to provide notice to your subscribers about voluntary blocking under Section 504. These components should be used accordin~J to guidance from your own legol counsel. On Hold Message (Cable System) now telecasts (Insert Adult Channels Here) 24 hours a day, These channels may be considered offensive to some viewers and are not intended for viewing by children. If you come upon any video or sound from any channels that you do not subscribe to and that you find to be offensive or inappropriate, you can have the channel blocked free of charge. (Ask our operator for more details. Or include system instructions) On Screen Crawl (Cable System) now telecasts (Insert Adult Channels Here) 24 hours a day, These channels may be considered offensive to some viewers and are not intended for viewing by children. If you come upon any video or sound from any channels that you do not subscribe to and that you find to be offensive or inappropriate, you can have the channel blocked free of charge. (Ask our operator for more details. Or include system instructions) Billing Notice (Cable System) now telecasts (Insert Adult Channels Here) 24 hours a day, These channels may be considered offensive to some viewers and are not intended for viewing by children. If you come upon any video or sound from any channels that you do not subscribe to and that you find to be offensive or inappropriate, you can have the channel blocked free of charge. (Ask our operator for more details. Or include system instructions) On Air Promotion Playboy has produced a :30 PSA television spot for use in barker and cross channel placement. This is a tasteful, information-laden spot that informs your subscribers of their right to have free blocking devices installed on channels with audio or signal bleed that they have not ordered. The spots are appropriate for all ages and all networks. Some suggested networks for inseltion include: CNN CNN Headline News ESPN Food Networks HGN Lifetime TBS TNT USA A viewing copy of this :30 spot has been distributed to all of our affiliates for review. A 3/4 inch or Beta SP copy of the tape con be ordered free of charge through your affiliate representativE!. The spot also is available as part of Playboy TV and Spice monthly affiliation air promotion reEds, Playboy will prepare and rnake available at no additional charge new PSA spots for your cross channel schedules during the year, Print Advertising A black and white ad slick will be enclosed in the package which will be forwarded to you under separate cover for insertion in local guides, newspapers or other appropriate system media venues. Additionally, a suggested snipe that notifies viewers of their right to order blocking devices as per Section 504 will be enclosed as well. This snipe can be used in any print matE~rials your system and legal counsel deems appropriate. SECTION 504 COMPLlAI\JCE INFORMATION g:\legal\laura\k\ashIClnd 6/10/05 18 AUGUST 2000 PBSUPER PPV11 04 Guide Letter - An Open Letter to Our Subscribers Dear Cable Subscriber: We at (Cable System)., believe the channel line-up we offer provides you with the widl3st choice of quality television programming. Over the years, we have changed our channel lineup to reflect the viewing neE~ds of our subscribers. Effective (date), (Cable System) will change the schedule of the pay-per-view, subscription-only channel(s), (Insert Adult Channels Here), from partial to full 24-hour service, These channels contain sexually oriented programming that some of our viewers may find offensive. Now that (Insert Adult Channels Here) (is/are) scheduled 24 hours a day, we want to remind you that if you do not subscribe to these channels, yet can discern any picture or sound from these channels, you can have them blocked free of charge. If you would like more information on how to block out these channels, please call phone number) during (hours). Sincerely, (General Manager) SECTION 504 COMPLIANCE INFORMATION g: \Iegal \laura\k\ashIClnd 6/10/05 19 AUGUST 2000 PBSUPER PPV11 04 Common Q&A Most likely your Customer Service Representatives and Installers will be the first to field requests or provide more information on your company's blocking device policy. The following information and questions are provided as a guideline for you to customize or enhance according to the advice of your own le~Jal counsel. Q. What is si,gnal bleed? A. Signal bleed occurs when a customer who has not ordered a specific chonnel can partially discern some video or audio from that program service, Q. Why Do Vve Need to Inform Our Customers of Free Blocking Devices? A. The United States Supreme Court has affirmed the decision of the U.S. District Court for the District of Delaware, which upheld (Cable System's) right to carry premium or pay-per-v!iew channels, that are designated as principally adult, 24 hours a day, even if some signal bleed occurs, as long as we adequately inform our customers of their right to have blocking equipment installed free. The cable industry has long endorsed making customers aware of the availability of blocking devices on a voluntary basis. Q. Which AcJult Channels does (Cable System) now offer 24 hours a day? (Indicate cmd select) Spice Ployboy TV Other Q. A. How are we informing our customers about free blocking devices? We are instituting the following (Select and adapt appropriate selections) · Schedule (:30 Public Service Announcements) on the availability of free blocking devices throughout the year · Inform current customers of our policy through cable guide editorial · Run PSA print ads in our guides · Issue CI press release · Run on-hold messages · Run on screen crawls · Mail billstuffer · Billing statement notification · (Other) SECTION 504 COMPLlA~JCE INFORMATION g:\legal\laura\k\ashland 6/10/05 20 AUGUST 2000 PBSUPER PPV1104 System Employee Notification Memo To: From: RE: Date: System ElTlployees General Manager Change In (Adult Service) Schedule (TBD) Effective (date) (Cable System) will begin offering (Insert Adult Channels Here) 24 hours (] day. On May 22, 2000 the United States Supreme Court affirmed the decision of the U.S. District Court for the District of Delaware which gave cable systems the right to resume 24-hour broCldcast of channels that are desi~lnated as principally adult 24 hours a day, While signal and audio bleed may still exist full time carriage is permitted as long as we provide our cable customers with adequate notice of the! availability of free blocking devices. To inform our customers of this blocking option, we intend to do the following: (Select and adapt appropriate selections) · Schedule :30 Public Service Announcements on the availability of free blocking devices throughout the year · Inform current customers of our policy through cable guide editorial · Run PSA print ads in our guides · Issue a press release · Run on-hold messages · Run on screen crawls · Mail billstuffer · Include billin~) notification · (Other) As you know, (Cable System) has always offered parental controls and blocking devices to our subscribers. However, with this new ruling, we want to be absolutely sure that our customers are aware of their legal rights with respect to voluntary blocking measures. All system employees, from installers and CSRs to front-office personneL should be fully oware of our blocking equipment policy. If you have any further questions, please see your (supervisor or other contact.) SECTION 504 COMPLlAf\JCE INFORMATION g:\legal\laura\k\ashland 6/1 0/05 21 ,A.UGUST 2000 PBSLPER PPV11 04 PLAYBOY OFFICE LOCATIONS New York 730 Fifth Avenue New York, NY 10019 Main 212-261-5000 Fax 212-957-2940 Los Angeles 2706 Media Center Drive Los Angeles, CA 9006El Main 323-276-4000 Fax 323-276-4t500 Chicago 680 North Lake Shore Drive Chicago, IL 60611 Main: 312-751-8000 Fax 312-751-3968 Atlanta 3675 Crestwood Parkway, Suite 400 Duluth, GA 30096 Main: 770-935-TI11 Fax: 770-935-9B 18 SECTION 504 COMPLIANCE INFORMATION g:\legal\laura\k\ashlond 6/10/05 22 AUGUST 2000 PBSUPER PPV11 04 CITY RECORDER'S COpy Page 1 / 1 r~' CITY OF ASHLAND 20 E MAIN ST. ASHLAND, OR 97520 (541) 488-5300 7/20/2005 06111 VENDOR: 009976 PLAYBOY ENTERTAINMENT GROUP, CREDIT AC 2740 PAYSPHERE CIRCLE CHICAGO, IL 60674-2740 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 MAl N ST 541-552-2028 ASHLAND, OR 97520 SUBTOTAL TAX FREIGHT TOTAL 3486.00 0.00 0.00 3,486.00 ~ -.:::t..~ _ ~ /' ~ - - ---;u;;}~~re VENDOR COPY <~\ ~~ ,........\-~ \\:..:. \, . '\ \~. \ G0~ ~ \!, \'i~ ~\l; \. S H LAN D ~\)~.\\\~ ~ ~; \ .,)U /I. / " / ./} ~ fI , l:..( ate of Request: I 6/23/05 I I July 1, 2005 I REQUISITION FORM THIS REQUEST IS A: D Change Order(existing PO # Vendor Name Address City, State, Zip Telephone Number Fax Number Contact Name PLA yaOy ENTERTAINMENT GROUP INC. 2740 Paysphere Circle Chicago, Illinois 60674-2740 Credit account II 2292148 SOLICITATION PROCESS Small Procurement X Sole Source D Invitation to Biel X Less than $5,000 D Written findings attached (Copies on file) o Quotes (Not required) Coooerative Procurement D ReQuest for Preloosal D State of ORf\NA contract (Copies on file) Intermediate Procurement D Other government agency contract X Soeciall ExemDt o (3) Written Quotes 0 Copy of contract attached D Written findings attached (Copies attached) D Emeraencv D Contract # D Written findings attached Description of SERVICES 50 sJbS~~~.s (315r~(/M. ~ ~2-qo.5b)c 12- _ D Per attached PROPOSAL Item # Quantity Unit Description of MATERIALS C~ ~~tMt t7~ p~4,~N\~""~ ~~rr-~ Unit Prlc:e Total Cost D Per attached QUOTE TOTAL COST Project Number _ _ _ _ _ _ . _ _ _ $ 3. t.l IJ:Z- Account NumberGrf~~ !If? f_ ~ f~t> ;>~?i~~ /~~ 'I< Items and services must be charged to the appropriate account numbers for the financia/s to reffect the actual expenditures accurately. 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 Slgna~ ~ Supervisor/Dept. Head Signature: