General Content Security & Service Implementation



EXCLUSIVE OUTPUT LICENSE AGREEMENTThis Exclusive Output License Agreement (this “Agreement”) is entered into as of September ____, 2013 (“Effective Date”) by and between HBO Ole Acquisitions LLC, a Delaware limited liability company (“HBO Ole”), and CPT Holdings, Inc., a Delaware corporation (“Studio”).RECITALSWHEREAS, HBO Ole and Studio entered into that certain Revised and Restated Memorandum of Agreement effective as of January 1, 2001, as amended, for the license by HBO Ole from Studio of certain motion pictures and other content with availability dates during the period commencing January 1, 2001 and expiring March 31, 2008 (the “2001 Agreement”);WHEREAS, HBO Ole and Studio entered into that certain Memorandum of Understanding effective as of April 1, 2008, for the license by HBO Ole from Studio of certain motion pictures and other content with availability dates during the period commencing April 1, 2008 and expiring March 31, 2014 (the “2008 MOU,” together with this Agreement, the “Applicable Agreements”) ;WHEREAS, the 2008 MOU includes an option exercisable by Studio, to extend the terms of such 2008 MOU for an additional four (4) years for the license by HBO Ole from Studio of certain motion pictures and other content with availability dates during the period commencing April 1, 2014 and expiring March 31, 2018 (the “Initial Extension Option”);WHEREAS, the terms and conditions of the 2008 MOU and the terms and conditions of the 2001 Agreement, to the extent not modified by the 2008 MOU, together constitute the binding agreement between the parties until such time as a new long form is executed and delivered;WHEREAS, Studio desires to exercise its Initial Extension Option; andWHEREAS, the parties now desire to enter into a new long form for the license by HBO Ole from Studio of certain motion pictures and other content with availability dates during the Term (as defined below) upon the terms set forth herein.NOW THEREFORE, for the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: AGREEMENTLICENSED SERVICES: The term “Licensed Service” shall mean each of:the HBO- and MAX-branded Subscription Television services, wholly owned and operated by HBO Ole or an affiliate of HBO Ole (under common control) in the Territory that are set forth in Exhibit A and, subject to Studio’s prior written approval not to be unreasonably withheld, and any other HBO- and MAX-branded service wholly owned and operated by HBO Ole which is hereafter launched by HBO Ole in the Territory (hereinafter each a “Primary Channel” and collectively the “Primary Channels.”) The term “control” of an entity shall mean the power to direct the policies and the management of such entity, whether through the ownership of voting securities or otherwise; the Multiplex Channels (as defined in subparagraph (b) of this Section 1) that are set forth on Exhibit A attached hereto. HBO Ole may launch one (1) or more additional Multiplex Channels as a complement to any Primary Channel in any country in the Territory; provided, however, that such Multiplex Channel meets the criteria in subparagraph (b) of this Section 1 below (the “Primary Channels” and the “Multiplex Channels”, each a “Linear Licensed Service” and, collectively, the “Linear Licensed Services”); and the SVOD services wholly owned and operated by HBO Ole or an affiliate of HBO Ole (under common control) in the Territory and known as HBO On Demand, HBO Go, MAX On Demand and Max Go, each hereinafter an “SVOD Service” and, collectively, the “SVOD Services,” in each case solely as an enhancement to an “SVOD-Enhanced Linear Service,” which means solely the following Primary Channels: HBO, HBO2 and Max, as further set forth herein and Section 4 (Rights Granted). Only subscribers of the SVOD-Enhanced Linear Services, HBO or HBO 2 may receive HBO On Demand and HBO Go; and only subscribers of the SVOD-Enhanced Linear Service, Max, may receive Max on Demand and Max Go; so long as each such SVOD-Enhanced Linear Service continues to be a core/flagship channel of the Licensed Services. The SVOD Services shall only be made available to the respective subscribers of the SVOD Enhanced Linear Services, as described above, solely as an enhancement thereto and not as a standalone or an a la carte SVOD service, nor bundled or combined with any other SVOD service; provided, however, that an Approved Set-Top Box which is provided to subscribers of a Closed System Approved Transmission Means, by the system operator of such Closed System Approved Transmission Means, that provides access to an SVOD service from any third party programming service shall not constitute a breach of the foregoing, so long as HBO Ole does not authorize such third party programming service or its Affiliates to sell, market or bundle any SVOD Services. The SVOD Services shall not exhibit or contain advertising of any kind. Each SVOD Service must have substantially similar branding to the applicable SVOD-Enhanced Linear Service. In no event shall HBO Ole make the SVOD Services available to any subscriber of Linear Licensed Services distributed in a basic tier. For the avoidance of doubt, the SVOD Services shall not be sub-distributed, co-branded, syndicated, “white-labeled” or “powered by.” Studio’s content shall not comprise more than one-third of the total programming available on each of the SVOD Services. SVOD Services may be made available to subscribers at an additional charge to such subscribers of SVOD-Enhanced Linear Services, whether included in, or in addition to, the monthly fee paid by such subscribers for the applicable SVOD-Enhanced Linear Service, it being understood and agreed that any such additional charge shall count towards HBO Affiliate Sales Revenues in counting EBUs under Section 11 of this Agreement. [The term “HBO Affiliate Sales Revenues” as used in this Agreement means gross revenues payable to HBO Ole from subscriptions to the Licensed Services.] [PENDING FURTHER DISCUSSION.]A “Multiplex Channel” shall mean any Subscription Television service wholly owned and operated by HBO Ole in the Territory that meets the following criteria:such Multiplex Channel has the same programming, titles and brand name as its related Primary Channel;such Multiplex Channel is made available, sold and marketed only to subscribers who receive the related Primary Channel; such Multiplex Channel may be made available to subscribers at an additional charge to such subscribers, whether included in, or in addition to, the monthly fee paid by such subscribers for the applicable Primary Channel, it being understood and agreed that any such additional charge shall count towards HBO Affiliate Sales Revenues in counting EBUs under Section 11 of this Agreement; provided, that pricing differences due to differences in basic and premium packages (to the extent permitted by subparagraph (c) below), operators having different tiering capabilities, or operator’s carriage capacity limitations will not be considered separately identifiable charges; andsuch Multiplex Channel is either listed on Exhibit A or approved by Studio in writing, such approval not to be unreasonably withheld.The Linear Licensed Services shall not be distributed in any basic tier, including on a Basic Television basis, in any country of the Territory, except as strictly set forth as follows: [HBO Ole may offer an HBO-branded Linear Licensed Service (and exhibit Included Films on such service) on a Basic Television basis in any country in the Territory where such service was already offered on a Basic Television basis as of January 1, 2009]. Notwithstanding anything to the contrary herein, no HBO-branded Linear Licensed Service shall contain commercials or advertising. [HBO TO PROVIDE NUMBER OF HBO BASIC SUBSCRIBERS AS OF EFFECTIVE DATE.] INCLUDED FILMS: The “Included Films” shall mean the programs set forth in this Section 2. Studio has no obligation to produce or release the respective maximum number of programs in any category, but may not withhold any program which would qualify as a First Run Film, a Local Film, and or an Applicable MFP/MFTV/DTV hereunder, except as expressly otherwise provided herein.Included Films in the Stub Avail Year. HBO hereby acknowledges that Studio has satisfied its obligations with respect to providing HBO Ole the Availability Lists (as defined below in subparagraph (j)) for all Included Films (other than Made for Digital Films) for the Stub Avail Year and the Availability Lists for all Included Films for Avail Year 1. Studio hereby acknowledges that HBO Ole has satisfied its obligations with respect to the selection of all applicable Included Films for the Stub Avail Year.First Run Films and Local Films:First Run Films. In each Avail Year (as defined in Section 5 below), HBO shall license as Included Films hereunder, the number of First Run Films equal to the lesser of: the number of films that qualify as First Run Films in such Avail Year and thirty-seven (37). A “First Run Film” is a first run live action or animated motion picture (excluding Documentaries, Concert Films, and Filmed Stage Plays) which meets the following criteria: (A) such motion picture had a theatrical release in the U.S. by a Major Studio (as defined below); (B) such motion picture has an Avail Date no later than the earliest to occur of: twenty-four (24) months from the date of the initial theatrical release in the U.S., twelve (12) months after HVSD in the latest to occur of Argentina, Brazil, or Mexico, and fifteen (15) months after the HVSD in the earliest to occur of Argentina, Brazil or Mexico (subject to Section 13(a) below with respect to Delayed Avail Films, as defined in Section 13(a)), (C)?such motion picture was released on at least one hundred (100) screens in the U.S. within six (6) consecutive months from the initial U.S. theatrical release (the “One Hundred Screens Requirement”), (D)? Studio controls the Licensed Rights (as defined in Section 4(b)) in such motion picture in the Territory for the applicable License Period (as defined in Section 7), and (E)?such motion picture had at least US$1?million Domestic Box Office (as defined Section 2(b)(iii). Notwithstanding the foregoing (but subject to the overall cap of thirty-seven (37) First Run Films per Avail Year): (A) up to five (5) films per Avail Year which would otherwise meet the qualifications hereinabove for First Run Films but which have Domestic Box Office below US$1?million (“Under $1M?First Run Films”) may be included as First Run Films hereunder; and (B) any motion picture that would qualify as a First Run Film, except that it was not theatrically released in the U.S. by a Major Studio, may be included as a First Run Film hereunder provided that Studio must control Subscription Television, Basic Television, and Free Broadcast Television rights for such film in the Territory plus at least one Top 10 Territory (as defined herein) for the applicable License Period. For purposes of this Agreement, “Top 10 Territory” shall mean any one (1) of the following territories: Australia, France, Germany, Italy, Japan, South Korea, South Africa, Spain, the United Kingdom, or Scandinavia (i.e., Denmark and Sweden plus at least one (1) of the following: Norway, Iceland or Finland), as their political boundaries exist as of the Effective Date of this Agreement; provided that if such political boundaries change after the Effective Date of this Agreement the parties shall discuss such change in good faith. For purposes of this Agreement, “Major Studio” shall mean and include the primary U.S. theatrical distribution divisions of each of The Walt Disney Company, DreamWorks SKG, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox, Metro-Goldwyn-Mayer, Universal Studios and Warner Bros. With respect to each of Warner Bros., Sony Pictures Entertainment and The Walt Disney Company, the term “Major Studio” also includes any affiliate of Studio controlled by, controlling or under common control with Studio (“Studio Affiliate”). In addition, for purposes of this Section, any motion pictures produced by production companies such as CBS Films, Lionsgate, Relativity, Film District, The Weinstein Company, Village Roadshow, Castle Rock, Morgan Creek, and New Regency Productions, that are not released by any of the Major Studios listed above shall also be treated as a Major Studio release, provided, however, that such films are theatrically released in the U.S. comparable to the manner such films would have been theatrically released in the U.S. by a Major Studio. The means of determining comparability of theatrical release shall be negotiated in good faith. Further, for purposes of this Agreement, “Documentary” shall not include: (i) fictional audiovisual works presented as a documentary; (ii) other audiovisual works which incorporate some (but are not comprised primarily of) documentary footage; or (iii) films that includes live or unscripted footage, interviews or partial reenactments or dramatization, the overall emphasis of which is not intended to be on fact, which are not intended to deal with cultural, artistic, historical, social, scientific, political, economic or similar subject in a factual manner, which are satirical, or which are intended to be a “fake” documentary (e.g. “Borat” or “Bruno”) or “mockumentary” (e.g. “Spinal Tap”), regardless of whether any participant therein is unaware of the same; “Concert Film” means film consisting solely of footage of a live concert; “Filmed Stage Play” shall mean a film consisting solely of footage of the performance of a live stage play; and “Home Video Street Date” or “HVSD” shall mean the date on which an Included Film (other than an Included Library Film) is first made available in the applicable country for distribution to the general public in the DVD format, Blu Ray format or a similar successor (both in format and volume of units).Local Films. In each Avail Year, HBO shall license as Included Films hereunder, the number of Local Films equal to the lesser of: the number of films that qualify as Local Films for such Avail Year and three (3). A “Local Film” means a motion picture which meets the following criteria: (i) such motion picture is originally produced in the language of the Territory (i.e. Spanish or Portuguese); (ii) such motion picture was theatrically released in the Territory by Studio or any Studio Affiliate not more than twenty-four (24) months prior to the Avail Date for such motion picture; (iii) such motion picture has not been theatrically released in the United States or which would otherwise fail to meet the qualifications in Section 2(b)(i) for First Run Films; and (iv)?(A) produced by Studio, or (B) Studio has at least fifteen percent (15%) equity interest in the production costs or (C) Studio controls the Licensed Rights, Basic Television rights and Free Broadcast Rights in the Territory and the theatrical rights of such motion picture in three (3) of the following countries: Mexico, Argentina, Chile, Colombia, and Brazil, for the applicable License Period. For the avoidance of doubt, if any such Local Film in an Avail Year meets the qualifications under 2(b)(i) for First Run Films, then such Local Film shall be considered a First Run Film and shall count against the cap of thirty-seven (37) First Run Films for such Avail Year. For the avoidance of doubt, Local Films shall not otherwise be considered “First Run Films” hereunder and shall not be included in the cap of thirty-seven (37) First Run Films per Avail Year. The determination of which First Run Films fall within the cap of thirty-seven (37) First Run Films for each Avail Year shall be based upon Domestic Box Office with the highest Domestic Box Office films qualifying first. For purposes of this Agreement, the term “Domestic Box Office” means gross theatrical box office receipts in the U.S. and Canada as reported in Variety; provided that if Variety no longer reports such information, the parties shall use Rentrak or another mutually agreed recognized independent industry source for such information. If Studio reasonably believes that the latest of such reports is not the most current number of receipts, it shall have the right to provide a certificate setting forth the correct amount as reported by Rentrak. The measure of Domestic Box Office and the One Hundred Screens Requirement applicable to First Run Films shall be measured over the six (6) consecutive month period commencing on the date of First Run Film’s initial U.S. theatrical release.Restricted Films. HBO Ole understands and agrees that any motion picture, the Licensed Rights (as defined in Section 4(b)) to which are not unilaterally controlled by Studio as of the Avail Date (and during the applicable License Period) and/or the exercise of which otherwise requires the consent or approval of a third party (a “Restricted Film”), shall be excluded from the terms of this Agreement unless the exercise in the Territory by HBO Ole of the Licensed Rights to any such Restricted Film is approved by the party who jointly controls such rights with Studio and/or who otherwise has the right to approve or disapprove the exercise in the Territory of the Licensed Rights to such Restricted Film, including, without limitation, the terms of any license of such rights. Prior to offering such Licensed Rights for the Licensed Language (as defined below) version of such Restricted Film to any third party for exploitation in the Territory, Studio shall first negotiate with HBO Ole regarding such rights and shall use good faith reasonable efforts to obtain any approval necessary to grant such rights to HBO Ole. In the event such other party(ies) withhold such approval with respect to any such Restricted Film, Studio shall be free to negotiate with third parties and enter into agreements concerning the exercise in the Territory of the Licensed Rights to the Licensed Language version of such Restricted Film; provided that Studio shall not enter into any agreement with any third party regarding the exercise of Licensed Rights in the Territory to the Licensed Language version of any such Restricted Film upon terms which are more favorable in the aggregate than the terms offered by HBO Ole without first offering HBO Ole the opportunity to enter into an agreement with Studio upon the same terms as any third party offer Studio is willing to accept. In this regard, Studio shall notify HBO Ole in writing of the terms of any such third party offer which Studio desires to accept and HBO Ole shall have five (5) consecutive days from the date of such notice within which to notify Studio that HBO Ole has elected to enter into an agreement with Studio upon such terms. Notwithstanding anything to the contrary set forth herein, the right described herein shall not apply if the party who jointly controls such rights with Studio and/or otherwise has the right to approve or disapprove the exercise in the Territory of the Licensed Rights to the Licensed Language version of such Restricted Film (i)?disapproves the exercise in the Territory of the Licensed Rights to the Licensed Language version of such Restricted Film by any party upon any terms; (ii)?specifically disapproves the exercise in the Territory by HBO Ole of the Licensed Rights to the Licensed Language version of such Restricted Film upon any terms; or (iii)?disapproves of or contractually prohibits Studio from granting such rights; provided that Studio will use good faith reasonable efforts to obtain the third party’s approval for HBO Ole to license such Restricted Films. In addition, Studio shall have no obligation to make available to HBO Ole hereunder the Licensed Rights in the Territory to any motion picture theatrically released by Studio or any Studio Affiliate releasing entities in the United States where such rights were disposed of prior to the Avail Date pursuant to any co-production or co-financing arrangement pursuant to which Studio lacks the right to make such motion picture available to HBO Ole hereunder.Excess Films. If for any Avail Year during the Avail Term (as defined in Section 5), Studio has available qualifying First Run Films in excess of the annual cap of thirty-seven (37) First Run Films (each, an “Excess Film”), the following will apply with respect to each such Excess Film: Studio may elect to roll over the Avail Date of such Excess Film into the first ninety (90) consecutive days of the following Avail Year; provided, that any Excess Films rolled over into the following Avail Year shall count against the applicable caps for such Avail Year, including the overall cap of thirty-seven (37) First Run Films, of which no more than five (5) may be Under $1M First Run Films. If such Excess Film is not rolled over into the following Avail Year per subsection (A) above, HBO Ole shall nonetheless license such Excess Film in the current Avail Year to fill any remaining Applicable MFP/MFTV/DTV Film (as defined below) slots in such Avail Year, at the CPS (as defined below in Section 9) of $0.075 per EBU that is applicable to Applicable MFP/MFTV/DTV Films set forth in Section 9(c).Applicable Made-For-Pay/Made-For-TV and Direct-to-Video Films: In each Avail Year, HBO shall license as Included Films hereunder, the number of Applicable Made-For-Pay/Made-For-TV and Direct-to-Video Films equal to the lesser of: the number of films that qualify as Applicable Made-For-Pay/Made-For-TV/Direct-to-Video Films for such Avail Year and twenty-two (22). A “Made-For-Pay Film” means a motion picture which meets the following criteria: (A) such motion picture was first exhibited in the U.S. on the Home Box Office, Inc. (“HBO”) domestic pay television service, another U.S. premium pay television service (e.g., Showtime, Starz, and Epix), or an SVOD service licensing content in the premium pay television window (e.g., Netflix) (“Premium SVOD”) provided that in the case of Premium SVOD, such motion picture had a minimum production budget of Five Million Dollars $5,000,000.00; in each case not more than twenty-four (24) months before its respective Avail Date; (B) such motion picture was distributed in the U.S. by Studio or by HBO for initial exhibition on the HBO domestic pay television service, or such other U.S. premium pay television or Premium SVOD service; provided, that, in the case of a co-production between Studio and either HBO or such other service, the requirements of this clause (B) shall also be satisfied if HBO or such other service distributes such motion picture in the United States and Studio or a Studio Affiliate controls worldwide premium pay television rights outside the United States and Canada; and (C) for which Studio controls the Licensed Rights in the Territory for the applicable License Period.A “Made-For-TV Film” means a motion picture which meets the following criteria: (A)?such motion picture was first exhibited in the United States on Free Broadcast Television or Basic Television not more than twenty-four (24) months before its respective Avail Date; and (B)?that satisfy either or both of the following criteria: (1)?such motion picture distributed by Studio or a Studio Affiliate in the U.S and/or (2) a motion picture for which? Studio acquired worldwide basic television and free broadcast television rights outside the United States and Canada (regardless of whether they were distributed by Studio or an affiliate in the United States); and (C)?Studio controls the Licensed Rights in such motion picture in the Territory for the applicable License Period. A “Direct-to-Video Film” means a motion picture that meets the following criteria: (A) such motion picture was released by one of Studio’s home video releasing label(s) not more than twenty-four (24) months before its respective Avail Date; and (B)?Studio controls the Licensed Rights, Basic Television rights and Free Broadcast Television rights in the Territory plus at least one Top 10 Territory for such motion picture for the applicable License Period. If Studio has not provided twenty-two (22) Applicable MFP/MFTV/DTV Films (including Excess Films) for license by HBO Ole hereunder in any Avail Year, Studio may include as a Direct-to-Video Film hereunder for such Avail Year a theatrically-released motion picture that does not meet the One Hundred Screens Requirement as long as such motion picture meets the requirements in (A) and (B) and in addition, such motion picture is also released by Studio’s home video releasing division in the U.S. under “comparable conditions” to a bona fide direct-to-video release of its own product. For clarity, “comparable conditions” to a bona fide direct to video release of Studio’s own product means that upon HBO Ole’s written request, Studio shall provide documents substantiating that such motion picture was released under such comparable conditions.Excess Films (including Under $1M First Run Films) which Studio elects to include as Applicable MFP/MFTV/DTV Films pursuant to Section 2(b)(v)(B) above, provided that for each Avail Year, Applicable MFP/MFTV/DTV Films defined in Sections 2(c)(i)-(iii) above that are available for such Avail Year will qualify first hereunder and any remaining unused slots, up to the annual limit of twenty-two (22) films hereunder, may then be used for Excess Films. Made For Digital Programs. In each Avail Year, HBO shall license as Included Films hereunder, the number of Made For Digital Programs equal to the lesser of: the number of programs that Studio makes available as a Made For Digital Program for such Avail Year and two (2). A “Made For Digital Program” means a first run live action or animated program which meets the following criteria: (i) such program was initially released for distribution on a Free-On-Demand basis; (ii) Studio controls the Subscription Television rights in such program in the Territory for the applicable License Period (as defined below); (iii) such program is either a full-length feature film or all of the episodes of a given season of a series packaged as a single program, provided that each such episode shall have a minimum run time of five (5) minutes and the program has a minimum total run time of sixty (60) minutes; in each case that was made available as a full-length feature film, a single program, or individual episodes in its release on a Free-On-Demand basis; and (iv) Studio makes such program available to HBO Ole for license hereunder. Exclusive Library Films. In each Avail Year, HBO shall license as Included Films hereunder the number of Exclusive Library Films equal to the lesser of: the number of films that Studio makes available to HBO Ole for license hereunder as Exclusive Library Films and ninety (90). An “Exclusive Library Film” means a live action or animated motion picture, excluding Documentaries, Concert Films, and Filmed Stage Plays that Studio makes available to HBO Ole for license hereunder as an Exclusive Library Film, which meets the following criteria: (A) such motion picture was theatrically released in the U.S. more than twenty-four (24) months before its respective Avail Date; or (B) such motion picture was theatrically released in the U.S. twenty-four (24) or fewer months before its respective Avail Date, but has been authorized for exhibition on Subscription Television, Basic Television and/or Free Broadcast Television in any country of the Territory during such period. For the avoidance of doubt, any First Run Film licensed pursuant to Section 2(b)(v)(A) (i.e., excess First Run Films rolled over into the next Avail Year) or Section 13(a) (i.e., Delayed Avail Films) shall not qualify as an Exclusive Library Film under this 2(e)(i) until after its initial License Period as a First Run Film pursuant to any of the Applicable Agreements. Exclusive Library Films shall include “Mega Library Films,” which means an Exclusive Library Film: (A) which generated not less than US$100 million in Domestic Box Office; and (B) that Studio makes available to HBO Ole for license hereunder as a Mega Library Film; and “Early Recycled Library Films” which means a First Run Film that Studio makes available to HBO Ole for licensing hereunder as an Exclusive Library Film within seven (7) years following the last day of such First Run Film’s license period under an Applicable Agreement. HBO Ole shall license a minimum of ninety (90) Exclusive Library Films (including Mega Library Films and Early Recycled Library Films) per Avail Year; provided that?HBO Ole shall not be required to license (A) more Mega Library Films than the lesser of (w) fifteen (15) and (x)?the number of Mega Library Films offered to HBO Ole hereunder in each Avail Year, and (B)?more Early Recycled Library Films than the lesser of (y)?twenty (20) and (z)?the number of Early Recycled Library Films offered to HBO Ole hereunder in each Avail Year. For the avoidance of doubt, HBO Ole may license a number of Exclusive Library Films in any Avail Year which qualify as Mega Library Films and/or Early Recycled Films that exceeds the numbers set forth hereinabove (if made available by Studio), and such excess number of Mega Library Films and/or Early Recycled Films shall be priced as provided in Section 9(e). Subject to Section 2(b)(iv) (i.e., Restricted Films) and Studio continuing to own or control the necessary Subscription Television rights, Studio shall make available to HBO Ole for Subscription Television exhibition on the Linear Licensed Services as an Early Recycled Library Film each First Run Film licensed pursuant to an Applicable Agreement hereunder and, for the avoidance of doubt, subject to the volume requirements set forth in Section 2(e)(iii), HBO Ole may elect whether to license such film as an Early Recycled Library Film hereunder. Exclusive Library Films (including Mega Library Films) may only be deemed by Studio as Early Recycled Library Films during their initial License Periods as Included Library Films hereunder. Without limiting the generality of the foregoing, an Early Recycled Library Film that is also a Mega Library Film may be deemed by Studio as either an Early Recycled Library Film or a Mega Library Film during its initial License Period as an Included Library Film hereunder and shall count towards the volume requirements set forth in Section 2(e)(iii) above of either an Early Recycled Library Film or a Mega Library Film, but not both. A Mega Library Film licensed as an Early Recycled Library Film shall be deemed a Mega Library Film and not an Early Recycled Library Film subsequent to its initial License Period as an Included Library Film hereunder. The CPS for an Early Recycled Library Film shall be as set forth in Section 9(d) for its initial License Period as an Included Library Film, and Section 9(d) or Section 9(e) for each subsequent License Period as an Included Library Film, depending upon whether such film is a Mega Library Film. Studio shall use reasonable efforts to make available to HBO Ole a sufficient number and variety of Mega Library Films such that a Mega Library Film made available in one Avail Year will not be made available in a consecutive Avail Year.Non-Exclusive Library Films. In each Avail Year, HBO shall license as Included Films hereunder the number of Non-Exclusive Library Films equal to the lesser of: the number of films that Studio makes available to HBO Ole for license hereunder as Non-Exclusive Library Films and forty (40). A “Non-Exclusive Library Film” means a motion picture which would otherwise be included as an Exclusive Library Film hereunder but which: (A) will be made available for exclusive license only against Subscription Television and Basic Television services in the Territory (whether local and/or pan-regional); (B) was initially theatrically released ten (10) years or more prior to the applicable Avail Date, and (C) that Studio makes available to HBO Ole for license as an Non-Exclusive Library Film hereunder. Prequels and Sequels. Prior to authorizing any third party Subscription Television licensee in the Territory to exploit on a Subscription Television basis, the prequel or sequel of any First Run Film that has been licensed under an Applicable Agreement, Studio shall first offer such prequel or sequel to HBO Ole for license hereunder as an Included Library Film [PENDING FURTHER DISCUSSION].Substantiation of Qualifying Criteria. Upon HBO Ole’s written request, Studio shall provide reasonable and customary substantiation for the Domestic Box Office, screen requirements and other requirements, as reasonably requested for HBO Ole to verify the qualification of the Included Films hereunder (including the applicable category of Included Films). For the avoidance of doubt, there shall be no double counting of screens or revenue for the purpose of determining such qualifications.Avail Lists; Designation or Selection of Included Films. Timing of Avail Lists. No later than August 1 of each year during the Avail Term, Studio shall provide HBO Ole with: (A) a list of all motion pictures which qualify as First Run Films or Local Films for the subsequent Avail Year (the “FRF and Local Films List”); (B) a list of all motion pictures which qualify as Applicable MFP/MFTV/DTV Films (including any Excess Films) for the subsequent Avail Year (the “MFP/MFTV/DTV List”); (C) a list of motion pictures that Studio is making available to HBO Ole for license as Made For Digital Programs for the subsequent Avail Year (the “Made For Digital List”); (D) a list of all motion pictures that Studio is making available to HBO Ole for license as Exclusive Library Films for the subsequent Avail Year (the “Exclusive Library List”); and (E) a list of all motion pictures that Studio is making available to HBO Ole for license as Non-Exclusive Library Films for the subsequent Avail Year (the “Non-Exclusive Library List”); provided however that with respect to Avail Year 1, Studio shall provide HBO Ole with the Made For Digital List no later than January 1,2014. The Non-Exclusive Library List may be a separate list, or an annotation of an Exclusive Library List. The FRF and Local Films List, the MFP/MFTV/DTV List, the Made For Digital List, the Exclusive Library List, and the Non-Exclusive Library List may be individually referred to hereinafter as an “Avail List” and, collectively, as the “Avail Lists.” For the avoidance of doubt, and notwithstanding anything to the contrary, Studio may replace or remove titles from any Avail List at any time prior to the Avail Notice Date (as defined in subparagraph (v) below).Content of Avail Lists; Tentative Avail Dates. Each Avail List shall contain tentative Avail Dates (each, a “Tentative Avail Date” and, collectively, the “Tentative Avail Dates”) for each Included Film, which Tentative Avail Dates may be subject to change at any time prior to the Avail Notice Date. Each Avail List shall clearly designate the category (i.e. First Run Film, etc.) in which the listed motion picture or program qualifies, or is being made available in Studio’s sole discretion as the case may be, as an Included Film. Without limiting the generality of the foregoing, each Exclusive Library Film that Studio is making available as a Mega Library Film or an Early Recycled Library Film, shall be clearly designated as such on the Exclusive Library List.FRF and Local Films Lists. In addition to the information set forth above in subparagraph (ii), each FRF and Local Films List shall denote the Domestic Box Office for First Run Films. Exclusive Library List. In addition to the information set forth above in subparagraph (ii), each Exclusive Library List shall include: (A)?the actual Avail Dates, if known, for Exclusive Library Films; and (B)?the re-designation of Early Recycled Library Films to Exclusive Library Films when such films no longer meet the criteria of Early Recycled Library Films. In addition, Studio shall use reasonable efforts to include information that is available regarding films available for selection as Exclusive Library Films in the succeeding Avail Year; provided, however, that Studio’s failure to do so shall not constitute a breach.Selection of Included Library Films. On an Avail Year by Avail Year basis, HBO Ole shall notify Studio of its selection(s) of Exclusive Library Films and Non-Exclusive Library Films, no later than ninety (90) consecutive days after delivery of the applicable Avail List. If HBO Ole fails to select the number of Exclusive Library Films, or the number of Non-Exclusive Library Films, to be licensed for an Avail Year within such ninety (90) day period, then Studio shall have the right to designate which films HBO Ole will license as Exclusive Library Films, or Non-Exclusive Library Films as the case may be, which, together with HBO Ole’s selections, would comprise the minimum number of Exclusive Library Films and the minimum number of Non-Exclusive Library Films required to be licensed by HBO Ole hereunder for such Avail Year. Exclusive Library Films and Non-Exclusive Library Films which are selected by HBO Ole for license hereunder may sometimes be collectively referred to herein as “Included Library Films”.Selection of Excess Applicable MFP/MFTV/DTV Films and Excess Made for Digital Programs. In any Avail Year, if there are more than twenty-two (22) motion pictures that qualify as Applicable MFP/MFTV/DTV Films (including Excess Films) or if Studio makes more than two (2) Made For Digital Programs available to HBO Ole for license, HBO Ole shall have the right, in its sole discretion, to choose which Applicable MFP/MFTV/DTV Films it will license to comprise the twenty two (22) Applicable MFP/MFTV/DTV Films and which Made For Digital Programs it will license to comprise the two (2) Made for Digital Programs, required to be licensed for such Avail Year. HBO Ole shall notify Studio of its selections within thirty (30) consecutive days of receiving the applicable Avail List. If HBO Ole fails to select the number of Applicable MFP/MFTV/DTV Films, or the number of Made For Digital Programs, to be licensed for an Avail Year within such thirty (30) day period, then Studio shall have the right to designate which films HBO Ole will license as Applicable MFP/MFTV/DTV Films, or Made for Digital Programs as the case may be, which, together with HBO Ole’s selections, would comprise the minimum number of Applicable MFP/MFTV/DTV Films and the minimum number of Made For Digital Programs required to be licensed by HBO Ole hereunder for such Avail Year. Confirmation of Avail Dates. Tentative Avail Dates shall be confirmed by Studio no later one-hundred and five (105) consecutive days prior to the actual Avail Date for each Included Film (the “Avail Notice Date”); provided, however, that (A) if Studio does not confirm the Avail Date for an Included Film by the Avail Notice Date, the parties shall discuss such situation and (B) Studio shall nonetheless provide confirmation no later than ninety (90) consecutive days prior to the actual Avail Date for such Included Film. Solely with respect to each Included Library Film, if Studio has not confirmed the Tentative Avail Date for such Included Library Film by the Avail Notice Date, then the Tentative Avail Date shall be deemed the Avail Date for such Included Library Film. In the event that the Avail Date of any Exclusive Library Film or any Non-Exclusive Library Film differs from such film’s Tentative Avail Date, HBO Ole agrees either (A)?to license such film beginning on its actual Avail Date; or (B)?to select an alternate Exclusive Library Film, if the affected film is an Exclusive Library Film, or an alternate Non-Exclusive Library Film, if the affected film is a Non-Exclusive Library Film, for license hereunder during the applicable Avail Year; provided, however, that if the actual Avail Date occurs in an Avail Year other than the Avail Year in which the Tentative Avail Date occurs, then HBO Ole shall select an alternate Exclusive Library Film, or an alternate Non-Exclusive Library Film, as the case may be in accordance with this subparagraph (iv).EXHIBITION DAYS: With respect to each Included Film: For each Applicable MFP/MFTV/DTV, Made for Digital Program and Included Library Film, up to one hundred (100) Exhibition Days across all of the Primary Channels of the Linear Licensed Services in the aggregate on a per country basis and not on a per channel or per service basis. For clarity, HBO Ole may not take more than one hundred Exhibition Days in a given country of the Territory even if it has taken fewer than one hundred Exhibition Days in another country of the Territory. As such, HBO Ole shall take no more than a total of one hundred (100) Exhibition Days in each country of the Territory, regardless of the number of channels. For further clarity, each overlapping Exhibition Day, regardless of the scheduled time for each exhibition, of an Included Film within one country shall be counted as a separate Exhibition Day.For each First Run Film and Local Film, up to one hundred fifty (150) Exhibition Days across all of the Primary Channels of the Linear Licensed Services in the aggregate, on a per country basis and not on a per channel or per service basis. For clarity, it is not the intent of the parties that the maximum permitted number of Exhibition Days equal one hundred fifty (150) Exhibition Days multiplied by the total number of countries in the Territory to be taken across every country in the Territory. As such, HBO Ole shall take no more than a total of one hundred fifty (150) Exhibition Days in each country of the Territory, regardless of the number of channels. For further clarity, overlapping exhibitions of an Included Film within one country shall be counted as a separate Exhibition Day.For the Caribbean Basin only, thirty (30) Exhibition Days for HBO Caribbean and thirty (30) Exhibition Days for MAX Caribbean (if applicable), which Exhibition Days shall be in addition to and not included within the Exhibition Day limitations set forth in Sections 3(a) or 3(b) above. “Exhibition Day” shall mean, for each channel, the twenty-four (24)-hour period (commencing at 6 a.m. local time) during which a film may be exhibited a maximum of two (2) times on such channel.The limitations set forth in this Section 3 shall refer to Subscription Television exhibition only and shall not be deemed to limit HBO Ole’s exploitation of Included Films by means of SVOD (as defined below and granted under this Agreement), it being understood that exhibitions on the SVOD Service do not count against Exhibition Days.RIGHTS GRANTED; RIGHT OF FIRST NEGOTIATION; RESERVATION OF RIGHTS: Defined Terms. Capitalized terms used in this Section 4 and elsewhere in the Agreement shall have the meanings set forth below: “Approved Device” means any Game Console, IP Connected Blu-Ray Player, IP Connected Television, IP Connected Set-Top Box, Mobile Phone, Personal Computer, and/or Tablet; provided, however, that each such device satisfies all of the Content Protection Requirements and Obligations set forth in Exhibit C and the Usage Rules set forth in Exhibit D.“Approved Set-Top Box” means a set-top device approved in writing by Studio designed for the exhibition of audio-visual content exclusively on a conventional television set, using a silicon chip/microprocessor architecture. Approved Set- Top Box shall not include a personal computer or any form of mobile device.“Approved Transmission Means” means the Closed System Approved Transmission Means and the SVOD Approved Transmission Means, in each case protected by one of the content protection systems approved listed in Exhibit C. In no event shall “Approved Transmission Means” include downloading; provided that the limited buffering or caching of a temporary file that is inaccessible after initial viewing shall not be deemed downloading in violation of this definition.“Authorized Version” with respect to each Included Film, means the version made available by Studio to HBO Ole for distribution on a Subscription Television and SVOD basis hereunder. Unless otherwise approved and agreed by Studio, “Authorized Version” shall not include any 3D version of an Included Film.“Basic Television” means a linear schedule of audio-visual programming that is (i) pre-programmed solely by the service operator and not the subscriber; (ii) delivered from a remote source together with other program services solely for non-interactive television viewing in a Private Residential Dwelling Unit simultaneously with such delivery, (iii) primarily supported by advertisement revenues or containing a substantial amount of advertising; (iv) the signal for which is fully encrypted and originates solely within the Territory; and (v) that is authorized to be received by a subscriber in consideration for an obligatory periodic subscription fee charged to the subscriber on no more frequently than a monthly basis (the “Basic Tier Fee”) for access to the service together with other program services on the basic tier. For clarity, Basic Television does not include Subscription Television, Video-On-Demand, pay-per-view, Free-On-Demand, Free Broadcast Television, Home Video, or Non-Theatrical.“Closed System Approved Transmission Means” means delivery of a television signal (which may be analog or digital) using any of the following closed systems: cable (including without limitation coaxial cable systems, Encrypted UHF (i.e., Encrypted digital terrestrial television), fiber optic cable systems, and/or hybrid fiber-coaxial systems), MMDS, DVB, satellite, digital subscriber line, and IPTV.“Encrypted” means, with respect to a signal, that both the audio and video portions of such signal have been changed, altered or encoded to securely and effectively prevent the intelligible reception of such signal without the use of fully authorized decoding equipment to restore both the audio and video signal integrity.“Free Broadcast Television” means a linear schedule of audio-visual programming that is pre-programmed solely by the service operator and not the viewer, delivered from a remote source together with other program services that is transmitted by analog or digital terrestrial over the air means, and which can be intelligibly received by a standard television antenna without any other device, without payment of any fees or charges (other than any compulsory fees charged by a government or governmental agency assessed on those who use television sets) and for which the broadcaster thereof receives no fees or payments (other than revenues from commercial advertisements); and in no event including Non-Theatrical.“Free-On-Demand” or “FOD” means the exhibition of a program on a stand-alone program service at a time selected by the viewer in such viewer’s discretion, for which no charge is assessed to such viewer and in no event including Non-Theatrical. “Game Console” means a device designed primarily for the playing of electronic games which is also capable of receiving protected audiovisual content via a built-in IP connection, and transmitting such content to a television or other display device, including Xbox. “High Definition” or “HD” means any resolution that is (a) 1080 vertical lines of resolution or less (but at least 720 vertical lines of resolution) and (b) 1920 lines of horizontal resolution or less (but at least 1280 lines of horizontal resolution). “Home Video” shall mean the exploitation of a motion picture embodied in a Physical Medium that is rented or sold for the sole purpose of private viewing where no admission fee is charged with respect to such viewing. In addition, for the purposes of this Agreement, Home Video shall expressly include manufacture-on-demand (a motion picture Physical Medium manufactured to order), and in-store digital download (download for a per-picture transaction charge at a fixed location separate from the consumer’s residence (e.g., kiosk in retail store) to a storage device). Home Video shall also include any digital entitlements (including digital or electronic copies) to a motion picture that are granted to or otherwise offered to any purchaser of a Physical Medium embodying such motion picture (e.g., UltraViolet, digital copy, disc-to digital, “virtual locker”/”sky locker” or similar rights) and such digital entitlements shall be treated, for purposes of this Agreement, the same as the Physical Medium for such motion picture. For the avoidance of doubt, the digital entitlements described in the immediately preceding sentence shall not constitute Video-On-Demand.“Internet” means the public, global network of interconnected networks known as the Internet or “Worldwide Web”, using technology which is currently known as Internet Protocol.“IP Connected Blu-ray Player” means a device capable of playing Blu-ray discs which is also capable of receiving protected audiovisual content via a built-in IP connection, and transmitting such content to a television or other display device. “IP Connected Set-Top Box” means a consumer-provided set-top device capable of receiving protected audio-visual content via a built-in IP connection, and transmitting such content to a television or other display device.“IP Connected Television” means a television capable of receiving and displaying protected audiovisual content via a built-in IP connection. “IPTV” means the transmission of a signal over cable, DTH, VDSL, ADSL, DSL, FTTH, BPL or other means using Internet Protocol (“IP”), via a closed system available only to authorized subscribers of the Linear Licensed Services solely while in such subscriber’s Private Residential Dwelling Unit. A content service (including the Linear Licensed Service(s)) delivered via IPTV shall not be made available as an IPTV service or via a website or URL.“Mobile Delivery” means the transmission or retransmission in whole or in part of audio and/or visual signals via cellular wireless networks integrated through the use of: (i) any of the following protocols: 2G (GSM, CDMA-1), 3G (UMTS, CDMA-2000), 4G (LTE, WiMAX), or (ii) any additional protocols, or successor or similar technology as may be agreed in writing from time to time.“Mobile Device” means either a Tablet or a Mobile Phone.“Mobile Phone” means an individually addressed and addressable IP-enabled mobile hardware device of a user, generally receiving transmission of a program over a transmission system designed for mobile devices such as GSM, UMTS, LTE and IEEE 802.11 (“wifi”) and designed primarily for the making and receiving of voice telephone calls. Mobile Phone shall not include a personal computer or tablet.“Non-Theatrical” means the exhibition of an audio-visual program in or initiated in any non-theatrical venue or facility (excluding private domestic residences) by a service provided by such non-theatrical venue or facility, provided that such venue or facility is not primarily engaged in the business of exhibiting motion pictures to the public, including: educational institutions (including dormitories); industrial, corporate, retail and commercial establishments; government and civic/community organizations; libraries; museums; parks, beaches, and campgrounds; prisons; churches, convents and monasteries; hospitals, nursing homes and hospices; retirement homes; orphanages; airplanes, cruise ships, ships, river boats, ferries, buses/coaches, and trains; marine and military installations; community and/or social clubs; hotels, motels, inns and lodges; holiday camps; film societies; and cemeteries.“Personal Computer” means an IP-enabled desktop or laptop device with a hard drive, keyboard and monitor, designed for multiple office and other applications using a silicon chip/microprocessor architecture and supporting one of the following operating systems: Windows XP, Windows 7, Mac OS, subsequent versions of any of these, and other operating system agreed in writing with Studio. Personal Computer shall not include any portable devices. “Personal Use” means the private, non-commercial viewing of audio-visual programs on an Approved Device in a Private Residential Dwelling Unit; and, provided that the viewing is personal and non-commercial, the viewing of audio-visual programs on an Approved Device in public locations. “Physical Medium” means a tangible recording or storage medium now known or hereafter devised, including videotape, video disks, video cassette, laser video disc, Blu-ray Disc, DVD, hard drive, portable media devices, flash drives, memory sticks, floppy disks, zip drives and portable storage devices.“Private Residential Dwelling Unit” means: (a) a private residence; and (b) the private temporary dwelling units (not including public or common areas) solely within the following venues: hotels/motels, nursing homes, hospitals, mining camps, military barracks, and colleges and universities.“Standard Definition” means (a) for NTSC, any resolution equal to or less than 480 lines of vertical resolution (and equal to or less than 720 lines of horizontal resolution) and (b) for PAL, any resolution equal to or less than 576 lines of vertical resolution (and equal to or less than 720 lines of horizontal resolution).“Streaming” means the transmission of a digital file containing audio-visual content from a remote source for viewing concurrently with its transmission, which file, except for temporary caching or buffering of a portion thereof (but in no event the entire file), may not be stored or retained for viewing at a later time (i.e., no leave-behind copy – no playable copy as a result of the stream – resides on the receiving device). Subscription Television” means a linear schedule of audio-visual programming that is (i) pre-programmed solely by the service operator and not the subscriber; (ii) authorized to be received by such subscriber in consideration for a fixed and separately allocable or identifiable fee charged by such service operator (x) over and above the “Basic Tier Fee” (as defined in subparagraph (a)(v) of this Section 4) charged to such subscriber by such service operator for Basic Television services and (y) charged no more frequently than on a monthly basis, and not on a negative option basis (i.e., a fee arrangement whereby a subscriber is charged alone, or in any combination, a service or other charge but is entitled to a reduction or a series of reductions thereto on a title-by-title or service-by-service basis if such subscriber affirmatively elects not to receive or have available for reception such title or such service), but not referring to any fee in the nature of an equipment rental or purchase fee; (iii) without any commercials or advertising; and (v) delivered from a remote source solely for non-interactive viewing in a Private Residential Dwelling Unit simultaneously with such delivery. “Subscription Television” does not include Free Broadcast Television, Basic Television, Subscription Video-On-Demand, Non-Theatrical, Video-On-Demand, pay-per-view, Free-On-Demand, or home-video. “SVOD” or “Subscription Video-On-Demand” shall mean the point-to-point electronic delivery of a single program or programs to a subscriber in response to the request of such subscriber the exhibition start time of which is at a time specified by such subscriber in its discretion and that is authorized to be received by such subscriber for viewing as a Personal Use, without advertising of any kind, in consideration for a fixed periodic fee charged no more frequently than on a monthly basis, and not on a per program(s) or per exhibition(s) basis, and not on a negative option basis (i.e., a fee arrangement whereby a subscriber is charged alone, or in any combination, a service or other charge but is entitled to a reduction or a series of reductions thereto on a title-by-title or service-by-service basis if such subscriber affirmatively elects not to receive or have available for reception such title or such service), but not referring to any fee in the nature of an equipment rental or purchase fee (the “SVOD Fee”). SVOD does not include Free-On-Demand, Video-On-Demand, pay-per-view, manufacture-on-demand or in-store download-on-demand (including, without limitation, via kiosks, servers, the Internet and all location-based and web-based delivery), electronic sell-through, Home Video, Free Broadcast Television, Basic Television, Subscription Television, or Non-Theatrical.“SVOD Approved Transmission Means” means the delivery of a digital electronic file, Encrypted at either the Streaming or file level of delivery via the Internet or Mobile Delivery.“Tablet” means any individually addressed and addressable IP-enabled device with a built-in screen and a touch screen keyboard, for which user input is primarily via touch screen, that is designed to be highly portable, not designed primarily for making voice calls, and runs on one of the following operating systems: iOS, Android (where the implementation is marketed as “Android” and is compliant with the Android Compliance and Test Suites (CTS) and Compatibility Definition Document (CDD)), RIM’s QNX Neutrino, or Windows 7 or 8 (each, a “Permitted Tablet OS”). “Tablet” shall not include personal computers, game consoles, set-top-boxes, portable media devices, PDAs, mobile phones or any device that runs on an operating system other than a Permitted Tablet OS.“Video-On-Demand” or “VOD” means the exhibition of a program for which a separate, discrete and supplemental fee is charged to the viewer (except for programs offered on a time-limited promotional basis) for the privilege of viewing such program on a time-limited basis, whether such viewing is at a time selected by such viewer in such viewer’s discretion or at a time scheduled by the service operator; and excluding Non-Theatrical.Rights Grant. Subject at all times to all of the terms and conditions of this Agreement, including Section 26 (Copy Protection), Exhibit C (Content Protection Requirements and Obligations) and Exhibit D (Usage Rules), Studio hereby grants HBO Ole an exclusive (as described in Section 17) license to transmit, exhibit and exploit the Authorized Version of each Included Film’s Licensed Language (as defined below) version(s) during the License Period applicable to each such Included Film, in the Territory in the following media (collectively, the “Licensed Rights”): In the case of First Run Films, Local Films and Applicable MFP/MFTV/DTV Films only: (A) by means of Subscription Television in High Definition and Standard Definition over the Linear Licensed Services via the Closed System Approved Transmission Means to an Approved Set-Top Box for viewing on such device’s associated television monitor, (B) by means of SVOD in High Definition and Standard Definition over the SVOD Services, HBO On Demand and MAX on Demand, via the Closed System Approved Transmission Means to an Approved Set-Top Box for viewing on such device’s associated television monitor, and (C) by means of SVOD over the SVOD Services, HBO Go and Max Go, via the SVOD Approved Transmission Means in Standard Definition and High Definition for reception and viewing on Game Consoles, IP Connected Blu-Ray Players, IP Connected Televisions, and IP Connected Set-Top Boxes and solely in Standard Definition for reception and viewing on Mobile Phones, Personal Computers and Tablets; provided, however, that in the case of subparagraph (C) herein, such SVOD exhibition right shall include U.S. Films, Local Films, and Applicable MFP/MFTV/DTV Films licensed under the 2008 MOU as long as: (x) such films have Avail Dates commencing on or after April 1, 2008; and (y) the License Periods applicable to such films have not expired prior to the Effective Date; and In the case of all Included Library Films and Made For Digital Programs licensed hereunder, solely by means of Subscription Television over the Linear Licensed Services via the Closed System Approved Transmission Means to an Approved Set-Top Box for viewing on such device’s associated television monitor.If Studio elects to distribute or exploit First Run Films in the Territory on a stand-alone Free-On-Demand basis during the License Periods of such First Run Films, then Studio shall notify HBO Ole in writing thereof (the “FOD Exploitation Notice”) and Studio and HBO Ole shall negotiate in good faith regarding such exploitation for a period of forty-five (45) consecutive days from the date of HBO Ole’s receipt of the FOD Exploitation Notice. If the parties cannot reach a mutually satisfactory agreement in writing with respect to the exploitation of such stand-alone Free-On-Demand rights within such forty-five (45) consecutive day period, Studio shall be free thereafter to make, accept and/or finalize offers from third parties with respect thereto and shall be deemed to have satisfied all of its obligations hereunder. In the event the parties reach an agreement with respect to the exploitation of Free-On-Demand rights, then such rights and/or holdbacks as so agreed upon shall be deemed to be included herein and subject to the terms of this Agreement upon the negotiated terms, until such time as the parties enter into a formal amendment with respect thereto. If Studio elects to distribute or exploit First Run Films in the Territory on a Video-On-Demand basis during the License Periods of such First Run Films, Studio shall notify HBO Ole in writing thereof (the “VOD Exploitation Notice”) and Studio and HBO Ole shall negotiate in good faith regarding such exploitation for a period of thirty (30) consecutive days from the date of HBO Ole’s receipt of the VOD Exploitation Notice. If the parties cannot reach a mutually satisfactory agreement in writing with respect to the exploitation of such Video-On-Demand rights within such thirty (30) consecutive day period, Studio shall be free thereafter to make, accept and/or finalize offers from third parties with respect thereto and shall be deemed to have satisfied all of its obligations hereunder. In the event the parties reach an agreement with respect to the exploitation of such rights, then such rights and/or holdbacks as so agreed upon shall be deemed to be included herein and subject to the terms of this Agreement upon the negotiated terms, until such time as the parties enter into a formal amendment with respect thereto.Notwithstanding subparagraphs (c) and (d), commencing April 1, 2014, Sony may exploit up to seven (7) First Run Films (“FOD/VOD Titles”) per Avail Year, on a Free-On-Demand and/or Video-On-Demand basis on program service(s) fully owned by any Studio Affiliate subject to the Studio Window (as defined in Section 17(f)), without engaging in good faith negotiations with HBO Ole with respect thereto. Notwithstanding Sections 9 (CPS) and Section 11 (License Fees), the CPS for each such FOD/VOD Title (unless also an SVOD Carve-Out Program as defined in Section 17(f)) shall be discounted at fifteen percent (15%) and the license fees for any such FOD/VOD Title shall be calculated using the EBU from only the first month of such film’s license period. Studio shall provide notice to HBO Ole of each such First Run Film no less than nine (9) months prior to Studio’s first exploitation thereof on Free-On-Demand and/or Video-On-Demand. Any and all rights in and to the Included Films not expressly granted to HBO Ole hereunder are expressly reserved by Studio. Without limiting the generality of the foregoing, the Licensed Rights do not include (i) the delivery of programming to a viewer for which a separate, discrete, or supplemental charge is made to the viewer for the privilege of viewing each exhibition of such program (e.g., electronic sell-through, video-on-demand, pay-per-view, etc.), (ii) Home Video, DVD, Blu-ray, any physical media, or any other system whereby pre-recorded audio-visual materials are located where the viewer is located (even if the ability to view such materials requires activation or authorization from a remote source); provided that the foregoing shall not be deemed to prohibit the transmission of any Included Film to a device (e.g., TiVo) which will record and store the film for concurrent and/or later playback by the subscriber as long as the recording is solely the result of independent action taken by the subscriber and is not promoted or encouraged in any way by HBO Ole and solely to the extent applicable law permits, or (iii) exploitation of Included Films on a Non-Theatrical basis. Studio and HBO Ole acknowledge and agree that, subject to the provisions of Section 18 below and the rights granted to HBO Ole hereunder, Studio may exploit any and all reserved rights prior to, concurrently with and following HBO Ole’s exploitation of the rights granted any and all rights herein. Studio acknowledges and agrees that the overspill outside the Territory of the transmission of a Licensed Service which is primarily intended for reception in the Territory shall not constitute a breach hereof; provided, however, that such transmission outside the Territory was not authorized by HBO Ole, the program signal is Encrypted and HBO Ole maintains industry-standard geofiltering mechanisms in accordance with the terms hereof and the content protection schedule attached hereto, such overspill is not promoted or marketed to persons outside the Territory, and no revenue is derived by HBO Ole from such overspill.TERM; AVAIL TERM; EXTENSION OPTION; AVAIL YEARS; TERMINATION OF MOU: The “Term” of this Agreement shall commence as of the Effective Date and shall expire the earlier to occur of: (i) the last day of the last License Period to expire hereunder or (ii) the earlier termination of this Agreement. Studio hereby exercises its Initial Extension Option under the 2008 MOU and HBO Ole hereby acknowledges and agrees that all conditions related to such Initial Extension Option have been satisfied. Accordingly, Studio shall be required to make programs available for licensing hereunder and HBO Ole shall be required to license such programs hereunder during the period commencing April 1, 2014 and expiring March 31, 2018 (the “Initial Avail Term”).[Studio shall have the option (the “Extension Option”) to extend the Initial Avail Term for a period of five (5) consecutive years commencing April 1, 2018 and expiring March 31, 2023 (the “Extension Period”) with such notice to extend provided in writing to HBO Ole in accordance with the notice provision set forth in Section 47 no later than October 1, 2017 (and if such notice is not timely provided to HBO Ole in accordance with such Section 47, Studio shall be deemed to have waived the foregoing election); provided that such option shall be on the condition that, during the Extension Period, the Closed System Approved Transmission Means as granted hereunder are expanded to include future delivery methods (e.g., Internet, mobile and other new media) (collectively, the “Future Delivery Means”) to the extent that any such Future Delivery Means have been granted by Studio to other Subscription Television Licensees for delivery of Subscription Television (excluding Studio Affiliates and licensees in the U.S.) (“3rd Party Subscription Television Licensees”); provided, however that Studio shall have the right to require HBO Ole to match any directly related terms and conditions agreed to by any such 3rd Party Subscription Television Licensees.? HBO Ole’s distribution using such Future Delivery Means shall be subject to: (i) the same terms and conditions as HBO Ole is then subject to for the Licensed Services, including that the Licensed Services are delivered solely via Subscription Television or SVOD, as the case may be, (ii) security and copy protection requirements which are no less robust than those required herein (including Exhibit C), and (iii) security and copy protection requirements which Studio deems no less robust than those in place with other premium pay television licensees (excluding Studio Affiliates and licensees in the U.S.) who have such rights.] [PENDING FURTHER DISCUSSION].The period during the Term commencing October 1, 2013 and expiring March 31, 2014 (the “Stub Avail Year”), the Initial Avail Term and the Extension Period (if any) shall collectively be the “Avail Term”. Each 12-consecutive month period during the Initial Avail Term and the Extension Period shall be an “Avail Year” as further set forth in the table below: Initial Avail TermAvail Year 1April 1, 2014 – March 31, 2015Avail Year 2April 1, 2015 – March 31, 2016Avail Year 3April 1, 2016 – March 31, 2017Avail Year 4April 1, 2017 – March 31, 2018Extension Period (if any)Avail Year 5April 1, 2018 – March 31, 2019Avail Year 6 April 1, 2019 – March 31, 2020Avail Year 7 April 1, 2020 – March 31, 2021Avail Year 8 April 1, 2021 – March 31, 2022Avail Year 9 April 1, 2022 – March 31, 2023Notwithstanding the foregoing, this Agreement shall continue in full force and effect beyond the Avail Term until the end of the License Period for the last Included Film licensed hereunder, but in no event will any such period be deemed an Avail Year. The License Period for each Included Film shall be as provided in Section 7 below.The parties agree that the 2008 MOU, and the 2001 Agreement to the extent incorporated therein, shall be deemed terminated as of the Effective Date of this Agreement, upon the full execution of this Agreement. No party shall have any further rights or obligations under the 2008 MOU or the 2001 Agreement except as (a) to the rights and obligations accruing on or before such Effective Date and (b) as set forth herein.MFN: If, during the Term, HBO Ole and any Major Studio enter into an output license agreement, or a series of license agreements, that in the aggregate, would constitute an output license agreement (a “Major Studio Output Agreement”) that contains pricing and/or payment terms that are more favorable to such Major Studio than those set forth in this Agreement, then HBO Ole shall provide prompt written notice to Studio and Studio shall have the option to amend the terms of this Agreement to incorporate such terms (as a whole) retroactive to the effective date of such Major Studio Output Agreement. [PENDING FURTHER DISCUSSION].LICENSE PERIOD: Studio shall license Included Films to HBO Ole for the following license periods (individually, a “License Period”, and/or collectively, the “License Periods”):First Run Films and Local Films: In the case of First Run Films (excluding First Run Films which are designated as Applicable MFTV/MFP/DTV Films) and Local Films, twenty-seven (27) consecutive months commencing on such film’s Avail Date.Applicable MFP/MFTV/DTV Films, Made for Digital Programs, and Included Library Films: In the case of each Applicable MFP/MFTV/DTV Film, Made for Digital Program, Included Library Film, and each Excess (First Run) Film which is designated as an Applicable MFTV/MFP/DTV Film, fifteen (15) consecutive months commencing on such film’s Avail Date.SVOD Window: During the applicable License Period, each First Run Film, Local Film and each Applicable MFTV/MFP/DTV Film (an “SVOD-Eligible Film”) may be made available on an SVOD Service any time within thirty (30) days after the day on which such SVOD-Eligible Film is first exhibited on the corresponding SVOD-Enhanced Linear Service, for a period not to exceed six (6) months in the aggregate (which, for clarity, each or any of the six (6) months may be non-consecutive). HBO Ole shall not exhibit such SVOD-Eligible Film on an SVOD basis during the final three (3) consecutive months of the License Period in the case of an SVOD-Eligible Film that is an Applicable MFP/MFTV/DTV or the final fifteen (15) consecutive months of the License Period in the case of an SVOD-Eligible Film that is a First Run Film or a Local Film, or, for clarity, outside of any such film’s License Period or, for further clarity, prior to the premiere exhibition of such film on the corresponding SVOD-Enhanced Linear Service. TERRITORY: The “Territory” consists of the following, subject to any trade restrictions which may be in force or may come into force during or after the Term in which event the country subject to the trade restriction shall be automatically removed from the definition of Territory, and as their political boundaries exist as of the Effective Date of this Agreement; provided that if such political boundaries change after the Effective Date of this Agreement the parties shall discuss such change in good faith: Anguilla, Antigua & Barbuda, Argentina, Aruba, Bahamas, Barbados, Belize, Bolivia, Bonaire, Brazil, British Virgin Islands, Cayman Islands, Chile, Colombia, Costa Rica, Cuba (if, upon HBO Ole’s written request that Cuba be added to the Territory, Studio determines in its sole discretion that it is permitted under applicable laws to license, without restriction, programs for exhibition on the Licensed Services in Cuba during the Term, and then only for so long as Studio determines that applicable law continues to permit such license), Curacao, Dominica, Dominican Republic, Ecuador, El Salvador, French Guiana, Grenada, Guadeloupe, Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, Mexico, Montserrat, Nicaragua, Panama, Paraguay, Peru, Saba, St. Eustatius, St. Kitts-Nevis, St. Maarten, St. Lucia, St. Vincent & Grenadines, Surinam, Trinidad & Tobago, Turks & Caicos, Uruguay, and Venezuela. Notwithstanding the foregoing, HBO Ole acknowledges and agrees that: (a) the license granted by Studio to exhibit Included Films in the Bahamas shall be on a non exclusive basis; and (b) notwithstanding Section 2 (Included Films) and Section 4 (Rights Granted) Studio may not have any or all SVOD rights for Included Films in certain Caribbean countries of the Territory but that such films shall nonetheless qualify as Included Films under their respective categories solely for exhibition on a Subscription Television basis over the Linear Licensed Services. CPS (COST PER SUBSCRIBER): The term Cost Per Subscriber (“CPS”) shall mean the License Fee per EBU (as defined in Section 11 below) to be paid by HBO Ole for each Included Film hereunder.First Run Films: For First Run Films having a License Period consisting of an Extended Window, the CPS shall be calculated as follows:$0.72 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$200 million (hereinafter, “Category #1”). $0.60 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$100 million but less than US$200 million (hereinafter, “Category #2”).$0.48 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$50 million but less than US$100 million (hereinafter, “Category #3”).$0.36 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$25 million but less than US$50 million (hereinafter, “Category #4”).$0.24 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$10 million but less than US$25 million (hereinafter, “Category #5”).$0.12 per EBU in respect of each First Run Film which had Domestic Box Office equal to or more than US$5 million but less than US$10 million (hereinafter, “Category #6”).$0.09 per EBU in respect of each First Run Film which had Domestic Box Office less than US$5 million (hereinafter, “Category #7”)Local Films: $0.072/EBU in respect of each Local Film.Applicable MFP/MFTV/DTV Films: $0.075/EBU in respect of each Applicable MFP/MFTV/DTV Film (including Excess Films which Studio has elected to treat as Applicable MFP/MFTV/DTV Films pursuant to Section 2(b)(v)(B)). Early Recycled Library Films/ Mega Library Films: $0.075/EBU in respect of Included Library Films which are Early Recycled Library Films (for the first License Period only) and/or Mega Library Films. Exclusive Library Films (non-Mega, non-Early Recycled): $0.04/EBU in respect of Included Library Films which are neither Early Recycled Library Films nor Mega Library Films. Non-Exclusive Library: $53,625 flat License Fee for the first Avail Year, escalating in each subsequent Avail Year by five percent (5%) of the License Fee of the prior Avail Year.Made For Digital Programs: $31,500 flat License Fee for the first Avail Year, escalating each subsequent Avail Year by five percent (5%) of the License Fee of the prior Avail Year.CPS Adjustments During the Avail Term. The CPS for First Run Films made available in each Avail Year (each an “Eligible Avail Year”), shall be calculated as set forth below. Notwithstanding the foregoing, if in any Eligible Avail Year the quotient (“Q1”) of the total number of First Run Films falling within Categories #5 through #7 (“X”) divided by the total number of First Run Films falling within Categories #1 through #7 (“Y”) is lower than the 6 year average of the quotient (“Q6”) of X divided by Y for the period commencing April 1, 2008 through March 31, 2014 (i.e., Avail Years 1 through 6 under the 2008 MOU), then the CPS for each of the Lowest Performing Adjusted Films (as defined below) in such Eligible Avail Year shall be as set forth in the table below. The “Lowest Performing Adjusted Films” for an Eligible Avail Year shall mean that number of First Run Films with the lowest performing Domestic Box Office for such Eligible Avail Year, which number shall be equal to the product of (i) the numerical difference between Q1 and Q6 and (ii) the total number of First Run Films falling within Categories #1 through #7 in such Eligible Avail Year.CATEGORIESCPS PER EBU#4 $27.5m < $50m$0.36#5 $11m < $27.5m$0.24#6 $5.5m < $11m$0.12#7 Under $5.5m$0.09By way of example, if X for Avail Year 7 is 15 and Y for Avail Year 7 is 37, then Q1 for Avail Year 7 is 40.5%. If Q6 for Avail Years 1-6 is equal to 54.1%, then the numerical difference between 54.1% and 40.5% is 13.6%. 13.6% of 37 films Avail Year 7 equals 5 films. Accordingly, those 5 First Run Films falling within Categories #4- #7, starting with the Lowest Performing Domestic Box Office titles shall be priced as set forth in the table above.EBU NUMBER: “EBUs” or “EBU” means the total monthly HBO Affiliate Sales Revenues (as measured at the end of the applicable month) [net of (i) any applicable withholding taxes and other remittance taxes, revenue tax and impositions or any similar deductions which substitute for or are in the nature of withholding or revenue taxes as required by applicable law, such as the Condecine tax, and (ii) any Restricted Funds (as defined below))] [UNDER REVIEW WITH SONY TAX GROUP AND TO BE DISCUSSED IN CONTEXT OF LANGUAGE IN 2008 MOU], in U.S. Dollars, as set forth in HBO Ole’s audited financial statements in accordance with U.S. GAAP, divided by U.S$7.00.LICENSE FEES: HBO Ole shall pay to Studio a license fee: (i) for each Included Film that is a Non-Exclusive Library Film or a Made For Digital Program, the amounts as set forth in Section 9(g) and 9(h), respectively and (ii) for each Included Film other than a Non-Exclusive Library Film or a Made For Digital Program, an amount equal to the product of the CPS for such Included Film as set forth in Section 9, multiplied by the greater of (A) the EBUs per month averaged over the first fifteen (15) consecutive months of the License Period for such Included Film (as described in Section 13(a) below); and (B) 2,000,000 (which shall be the “HBO Ole EBU Guarantee”); in each case of (i) and (ii), the “License Fee”. Except as expressly provided otherwise in this Agreement, the License Fees and the fees and prices used to calculate it, are exclusive of and unreduced by any applicable tax, levy or charge, the payment of which shall be the responsibility of HBO Ole (other than any taxes which result or become applicable due to an assignment by Studio pursuant to Section 21 to a non-US entity).PAYMENT TERMS: Time of Payment. HBO Ole shall pay the License Fees for each Included Film in three installments as follows: With respect to each Included Film, other than those with flat License Fees, on or prior to the last day of the second (2nd) consecutive month of such Included Film’s License Period, HBO Ole shall pay to Studio an amount (“First Estimated Payment”) equal to forty-one percent (41%) of the product of (a) the CPS for such Included Film, as set forth in Section 9, multiplied by (b) the greater of (i) the total EBUs over the first month of the Included Film’s License Period and (ii) 2,000,000. With respect to each Included Film with a flat License Fee, on or prior to the last day of the second (2nd) consecutive month following the commencement of such Included Film’s License Period, HBO Ole shall pay to Studio forty-one percent (41%) of such Included Film’s License Fee; With respect to each Included Film, other than those with flat License Fees, on or prior to the last day of the seventh (7th) consecutive month of such Included Film’s License Period, HBO Ole shall pay to Studio an amount (“Second Estimated Payment” and, together with the First Estimated Payment, the “Estimated Payments”) equal to forty-one percent (41%) of the product of (a) the CPS for such Included Film, as set forth in Section 9, multiplied by (b) the greater of (i) the average monthly EBUs over the first six (6) consecutive months of the Included Film’s License Period and (ii) 2,000,000. With respect to each Included Film with a flat License Fee, on or prior to the last day of the seventh (7th) consecutive month following the commencement of such Included Film’s License Period, HBO Ole shall pay to Studio forty-one percent (41%) of such Included Film’s License Fee; andWith respect to each Included Film, other than those with flat License Fees, HBO Ole shall calculate the License Fee for such film after the first fifteen (15) consecutive months of its License Period have elapsed. Such License Fee shall equal the product of (a) the CPS for such Included Film, as set forth in Section 9, multiplied by (b) the greater of (i) the average monthly EBUs over the first fifteen (15) consecutive months following the commencement of the Included Film’s License Period and (ii) 2,000,000. If the License Fee exceeds the Estimated Payments, then HBO Ole shall pay to Studio the difference between the Estimated Payments paid to date and the total License Fee calculated pursuant to this Section 13(a)(iii) on or prior to the last day of the sixteenth (16th) consecutive month following the commencement of such Included Film’s License Period. If the Estimated Payments exceeds the License Fee, then Studio shall either refund the excess License Fee paid by HBO Ole within thirty (30) consecutive days following HBO Ole’s submission of substantiation of such overpayment, or credit such overpayment to HBO Ole against future License Fees subject to the following sentence. In the event that there is any excess License Fee in the last month of the Term, Studio shall refund such excess within thirty (30) consecutive days following HBO Ole’s submission of documents substantiating such overpayments. With respect to each Included Film with a flat License Fee, on or prior to the last day of the sixteenth (16th) consecutive month following the commencement of such Included Film’s License Period, HBO Ole shall pay to Studio eighteen percent (18%) of such Included Film’s License Fee.Payments and Statements: Each payment to Studio will be in U.S. Dollars accompanied by a written report detailing the calculation of such payment (including a detailed calculation of EBUs and any discount thereof, including the nature and amount of each such individual discount, taken pursuant to Section 18(e)) and such other information as Studio shall reasonably request from time to time pertaining to the statement. [RESTRICTED FUNDS ISSUE PENDING FURTHER DISCUSSION.]AVAIL DATES: The dates on which Included Films shall be available for exploitation by HBO Ole hereunder (each, an “Avail Date”) shall be determined by Studio in Studio’s sole discretion, subject to the requirements set forth below: First Run Films: The Avail Date for each First Run Film (other than First Run Films described in Section 2(b)(v)(A)), shall commence no later than the earliest to occur of: (i) twenty-four (24) months after the date of the initial theatrical release in the U.S.; (ii) twelve (12) months after the HVSD in the latest to occur of Argentina, Brazil or Mexico; and (iii) fifteen (15) months after the HVSD in the earliest to occur of Argentina, Brazil or Mexico; provided, however, that Studio may except six (6) films per Avail Year, for which the Avail Date shall be no later than thirty (30) months after initial U.S. theatrical release (“Delayed Avail Films”). Made-For-TV Films: The Avail Date for each Made-For-TV Film shall commence no later than the earliest to occur of: (i)?twenty-four (24) months after date of the initial U.S. television exhibition on Free Broadcast Television or Basic Television; (ii) twelve (12) months after the HVSD in the latest to occur of Argentina, Brazil or Mexico; and (iii) fifteen (15) months after the HVSD in the earliest to occur of Argentina, Brazil or Mexico.Direct-to-Video Films: The Avail Date for each Direct-to-Video Film shall commence no later than the earliest to occur of: (i)?twenty-four (24) months after its U.S. HVSD; (ii) twelve (12) months after the HVSD in the latest to occur of Argentina, Brazil or Mexico; and (iii) fifteen (15) months after the HVSD in the earliest to occur of Argentina, Brazil or Mexico. Made-For-Pay Films: The Avail Date for each Applicable Made-For-Pay Film shall commence no later than the earliest to occur of: (i)?twenty-four (24) months after its initial U.S. television exhibition on HBO, Showtime, Starz, Epix, an equivalent premium pay television service or a Premium SVOD service; (ii) twelve (12) months after the HVSD in the latest to occur of Argentina, Brazil or Mexico; and (iii) fifteen (15) months after the HVSD in the earliest to occur of Argentina, Brazil or Mexico.Local Films: The Avail Date for each Local Film shall commence no later than the earliest to occur of: (i) twenty-four (24) months after the date of the initial theatrical release in any country in the Territory; (ii) twelve (12) months after the HVSD in the latest to occur of Mexico, Brazil, or Argentina; and (iii) eighteen (18) months after the HVSD in the earliest to occur of Mexico, Brazil or Argentina.Included Library Films and Made For Digital Programs: The Avail Date for each Included Film which is an Included Library Film or a Made For Digital Program shall be determined by Studio.LICENSED LANGUAGES: For each Included Film, the “Licensed Languages” shall mean, (i) Spanish and/or Portuguese dubbed; and/or (ii) original language with Spanish and/or Portuguese subtitles. Notwithstanding the foregoing, Included Films for which the original language is French may not be exhibited in any of the territories that constitute the French DOM-TOM, including without limitation, Martinique, Guadeloupe and/or French Guiana, unless dubbed in Spanish and/or Portuguese. The parties hereby acknowledge and agree that certain Licensed Service subscribers may receive the Licensed Service through set-top boxes or other devices that permit subscribers to take a separate action that results in the elimination of subtitles and dubbing. No provision of this Agreement shall be construed to restrict Licensed Service subscribers’ ability to employ such devices to view Included Films without subtitles or dubbing.FILM MATERIALS: No later than ninety (90) consecutive days prior the Avail Date of each Included Film, Studio shall deliver or provide HBO Ole access to the materials (video/audio elements or mezzanine digital files) (“Materials”) for such Included Film. HBO Ole shall pay all actual costs (including, without limitation, all taxes, duties, shipping, insurance and freight charges) in connection with the importation of all Materials into the Territory. Materials for Included Films for which Studio is delivering High Definition Materials shall conform to the Deliverables/Technical Specifications applicable to such High Definition Materials and Materials for Included Films for which Studio is delivering or providing Standard Definition Materials shall conform to Deliverables/Technical Specifications applicable to such Standard Definition Materials, in each case as set forth in Exhibit B, including a “clean video” original language version of each Included Film (i.e., no burned-in subtitles) and Spanish and/or Portuguese dubbed and/or subtitled versions, in each case solely to the extent available to Studio. If any of the Materials for any Included Film are incomplete or do not conform to the technical specifications set forth on Exhibit B, as applicable, HBO Ole shall notify Studio in writing specifying the defects (“Defect Notice”). Such Defect Notice shall be delivered within thirty (30) consecutive days of receipt by HBO Ole of the last item required for delivery of the applicable Included Film provided by Studio. Studio shall have the right to cure the defects specified in the Defect Notice within sixty (60) consecutive days from the date Studio receives such Defect Notice. If the defects set forth in the Defect Notice remain uncured after such sixty (60) day period, HBO Ole may elect either of the following, in its sole discretion: (i)?waive the defects (including without limitation the late delivery of Materials) or (ii) select a substitute film to replace the effected Included Film.To the extent that a Spanish and/or Portuguese dubbed and/or subtitled version of an Included Film is not available to Studio, HBO Ole may, at HBO Ole’s sole cost and expense, dub and/or subtitle such Included Film in the Spanish and/or Portuguese languages, solely in strict accordance with all third party contractual restrictions and Studio’s technical specifications. Without limiting the generality of the foregoing, HBO Ole shall pay the costs of residuals, use or royalty payments due in connection with dubbing, voice, likeness or translation of an Included Film and all actual third party costs incurred to create any materials required by HBO Ole to transmit Licensed Language versions to subscribers. All costs of preparing video reproductions of each Included Film shall be borne by HBO Ole. For the avoidance of doubt, title in and to all film Materials, including the modifications specifically permitted in Section 27, HBO-Ole created dubbed and/or subtitled versions and materials permitted in subparagraph (b) of this Section 16, and HBO-Ole created advertising and promotional materials, shall vest in Studio, subject to a royalty-free license for HBO Ole to use such Materials during the applicable License Period(s). HBO Ole shall execute such documents as Studio may reasonably request to evidence that title in and to such Materials is vested in Studio. HBO Ole shall provide Studio, upon Studio’s reasonable advance written notice and subject to Studio’s payment of applicable duties, shipping, insurance and freight charges (if any), unrestricted access to any versions of Included Films and/or materials created by HBO Ole as follows: (i) if provided to Studio digitally or electronically, then without any other charge to Studio; and (ii) if required by and provided to Studio in a physical format, then Studio shall reimburse HBO Ole for fifty percent (50%) of the cost of raw stock. Solely to the extent that only HD materials for an Included Film are provided, and in connection with HBO Ole’s exhibition of such Included Film in Standard Definition, HBO Ole may down-convert the HD digital file or master of such Included Film to Standard Definition resolution; provided, however, that such down-conversion does not alter the original aspect ratio of the HD digital file or master. Solely to the extent that only SD materials for an Included Film are provided, and in connection with HBO Ole’s exhibition of such Included Film in High Definition, HBO Ole may up-convert the SD digital file or SD master of such Included Film to High Definition resolution, subject to the following: (a) such up-conversion does not alter the original aspect ratio of the SD digital file or SD master; (b) during each exhibition of such Included Film, HBO Ole clearly and effectively indicates to viewers that such exhibition is not in actual HD; (c) HBO Ole indemnifies, defends, and holds Studio harmless from and against any and all losses in connection with such upconversion; and (d) HBO Ole provides to Studio access to any such up-converted versions of such Included Film at no charge to Studio. Studio shall have the right at any time to audit the quality of such upconversion.Within three (3) months after the end of the License Period for each Included Film, HBO Ole shall at Studio’s election either erase or degauss all Materials of such Included Film and supply Studio with a certification of erasure or degaussing upon request from Studio, or return all Materials to Studio or its designee. Studio shall bear shipping costs and any taxes imposed in connection with its return of materials. HBO Ole shall not be responsible for the inadvertent loss or destruction of any such materials.PROMOTION:With respect to each Included Film, HBO Ole may promote the exhibition of such Included Film on the Licensed Services beginning sixty (60) consecutive days prior to the commencement of the License Period of such Included Film, in any broadcast, print or other media, including without limitation the internet and/or world wide web, subject to the provisions this Section 16. On a case by case basis, Studio shall use commercially reasonable efforts to permit HBO Ole to begin promotion up to ninety (90) consecutive days in advance of the Avail Date, where such permission does not violate an existing license agreement to which Studio is a party. Subject to the provisions of this Section 16, HBO Ole shall have the right to include in any promotional or advertising materials used to advertise and publicize the exhibitions of the Included Films on the Licensed Services (as distinguished from advertising and publicizing the Licensed Services itself or any other product or service): (a) the names or likenesses of actors appearing in the Included Film, (b) the name of Studio and any other person or company connected with the production of the Included Film and receiving credit in the titles thereof or (c) any trademark used in connection with that Included Film (collectively, “Identification and Credits”), but only in accordance with Studio’s written instructions as to such Identification and Credits, which shall be furnished to HBO Ole with delivery of the Materials. HBO Ole warrants that (i) it shall fully comply with all instructions furnished in writing to HBO Ole with respect to such Identification and Credits (including size, prominence and position), and any other restrictions provided by Studio including the restrictions set forth in Exhibit E, and (ii) the same shall not be used so as to constitute an endorsement, express or implied, of any party, product or service, including, without limitation, the Licensed Service(s), other than the exhibition of such Included Film on the Licensed Service(s), nor shall the same be used as part of a commercial tie-in (as distinguished from the standard practice of selling commercial advertising time). Any advertising or promotional material created by HBO Ole using materials not provided by Studio for that purpose, promotional contests and/or sweepstakes to be conducted by HBO Ole and any sponsorship of any Included Film (as distinguished from the standard practice of selling commercial advertising time) shall require the prior written consent of Studio. HBO Ole acknowledges that its right to use the names, images or likenesses of persons performing services in connection with any Included Film pursuant to this Section 16 is subject to various limitations and restrictions contained in contracts that Studio has with third parties. In the event HBO Ole fails to comply with Studio’s written instructions as to Identification and Credits and fails to obtain from Studio a prior written waiver of such compliance, HBO Ole shall indemnify and hold harmless the Studio Indemnified Parties from and against any and all Claims arising out of or related to any such addition, subtraction or modification and any other failure by HBO Ole to adhere to and observe Studio’s written instructions. Studio shall have the option to assume the handling, settlement or defense of any such claim or litigation within the foregoing indemnification. Subject to the provisions of this Section 16, HBO Ole shall have the right to advertise, publicize and promote the exhibition of the Included Film on the Licensed Service(s) by any means or media (but specifically excluding the right to create and/or disseminate items of merchandise, whether given away or sold, which include any reference to the Included Film, to Studio, or to any person or entity involved in the creation of such Included Film; provided, however, that (a) HBO Ole shall not exhibit or authorize others to exhibit excerpts of the Included Film (i) greater than one (1) minute in duration if such Included Film was produced as a television product; or (ii) greater than four (4) minutes in duration if such Included Film is a motion picture which was produced as other than a television product (but in no event more than two (2) minutes of one (1) continuous scene of such Included Film) unless specifically authorized by Studio in writing, (b) such excerpts shall include only series regulars of such Included Film if such Included Film is a television series, (c) HBO Ole shall responsible for obtaining clearances of all music rights for music used in such excerpts, and (d) any use of any excerpts of such Included Film shall be subject to the various limitations and restrictions contained in the contracts that Studio has with third parties.HBO Ole shall have the right to conduct free limited-run previews of the Included Films on the Linear Licensed Services (“Open Previews”) throughout the Territory. HBO Ole may conduct Open Previews without the prior approval of Studio, subject to the following conditions:HBO Ole may authorize only “Licensed Operators” (i.e., operators who exhibit Included Films only via Subscription Television and the Closed System Approved Transmission Means (except that the signal during an Open Preview need not be Encrypted)) to conduct Open Previews.HBO Ole may authorize Licensed Operators to transmit the Linear Licensed Services to all Subscription Television subscribers not currently receiving the Linear Licensed Services, for a period not to exceed sixty-one (61) consecutive hours.HBO Ole may not authorize any single Licensed Operator to conduct an Open Preview more than once in any calendar month or more than three (3) times in any calendar year.HBO Ole may authorize an Open Preview in more than one country at a time if a participating Licensed Operator is authorized to distribute the Linear Licensed Services in more than one country in the Territory. In such a case, HBO Ole may authorize an Open Preview by such Licensed Operator simultaneously in all countries in the Territory where such Licensed Operator distributes the Linear Licensed Services.HBO Ole may not authorize every Licensed Operator in any single country to conduct an Open Preview during the same weekend. HBO Ole shall limit the availability of Open Preview to not more than twenty-five percent (25%) of all television households in any single country of the Territory. HBO Ole shall obtain prior written consent from Studio to include Free Preview Restricted Films (as hereinafter defined) in any Open Preview. A “Free Preview Restricted Film” shall mean any Included Film so designated on the most recent availability list delivered by Studio to HBO Ole containing such Included Film.Within sixty (60) consecutive days after any Open Preview, HBO Ole agrees to deliver to Studio a written report, based upon the best information available to HBO Ole, showing the results (e.g. the change in subscriber levels) of such Open Preview. For the avoidance of doubt, SVOD Services shall not be offered as part of any free promotional preview, including without limitation Open Previews. HOLDBACKS: Applicable MFP/MFTV/DTV Films. No version of any Applicable MFP/MTV/DTV Film shall be authorized for exhibition in the Territory (other than the Bahamas) by means of Free Broadcast Television, Subscription Television, Basic Television, or SVOD prior to or during the License Period, and by means of Subscription Television and Basic Television for thirty (30) consecutive days following the License Period, nor shall there be any authorized promotion of any such exhibition by means of Free Broadcast Television, Subscription Television, Basic Television or SVOD, prior to or during the first fourteen (14) consecutive months of the fifteen (15) consecutive month License Period for such Applicable MFP/MTV/DTV Film.First Run Films and Local Films. No version of any First Run Film or Local Film shall be authorized for exhibition in the Territory (other than the Bahamas) by means of Subscription Television, Basic Television or SVOD prior to or during the License Period, and by means of Subscription Television and Basic Television for thirty (30) consecutive days following the License Period, nor shall there be any authorized promotion of any such exhibition by means of Subscription Television, Basic Television or SVOD, prior to or during the first twenty-six (26) consecutive months of the twenty-seven (27) consecutive month License Period for such First Run Film or Local Film. In addition, no version of such First Run Films or Local Films shall be authorized for exhibition by means of Free Broadcast Television prior to or during the first twenty-one (21) consecutive months of the License Period, nor shall there be any authorized promotion of any such exhibition by means of Free Broadcast Television, prior to or during the first nineteen (19) consecutive months of the twenty-seven (27) consecutive month License Period.Exclusive Library Films and Made For Digital Programs. No version of any Exclusive Library Film or of any Made For Digital Included Film shall be authorized for exhibition by means of Free Broadcast Television, Subscription Television or Basic Television in the Territory (other than the Bahamas) during such film’s License Period nor shall there be any authorized promotion of any such exhibition by means of Free Broadcast Television, Subscription Television or Basic Television during the first fourteen (14) months of such film’s fifteen (15) consecutive month License Period. Non Exclusive Library Films. No version of any Non-Exclusive Library Film shall be authorized for exhibition by means of Subscription Television or Basic Television in the Territory (other than the Bahamas) during such film’s License Period, nor shall there be any authorized promotion of any such exhibition by means of Subscription Television or Basic Television during the first fourteen (14) months of such film’s fifteen (15)-month License Period. Notwithstanding the restrictions set forth above, Studio may grant non-exclusive licenses for the broadcast of French language versions of any Included Films for exhibition by means of any form of television, and may permit the promotion of any such exhibition, within any of the countries that constitute the French DOM-TOM, including without limitation, Martinique, Guadeloupe and/or French Guiana, prior to, during, or after the License Period. Notwithstanding anything to the contrary in this Agreement, the parties acknowledge and agree that, within any of the countries that constitute the Caribbean (other than the Dominican Republic), Studio may not have the ability to grant HBO Ole an exclusive license for the broadcast of Spanish language (whether dubbed or subtitled) versions of any Included Film for Subscription Television exhibition and further that Studio may not be able to holdback against the exhibition of original language versions of any Included Film. Each such Included Film shall be subject to a 50% pro rata reduction in EBUs with respect to each such country of the Caribbean (other than the Bahamas). Notwithstanding the restrictions set forth above, Studio shall have the right to carve out a non-exclusive window to interrupt the License Period for any First Run Film that is designated by Studio as an SVOD Carve-Out Program (each, an “SVOD Carve-Out Program”), for a period of time specified by Studio in its sole discretion; provided, however, that such period commences no earlier than the commencement of the sixteenth (16th) months after the commencement of the applicable program’s License Period and continues for no longer than three (3) consecutive months (“Studio Carve-Out Window”).? Such election shall be made by providing HBO Ole written notice no less than nine (9) months prior to the commencement of the intended Studio Carve-Out Window for such SVOD Carve-Out Program.? During the Studio Carve-Out Window and notwithstanding anything to the contrary herein, Studio shall have the non-exclusive right to exploit each SVOD Carve-Out Program on any program service fully owned by Studio or a Studio Affiliate in the Territory as follows: up to five (5) SVOD Carve-Out Programs by means of SVOD. ?For clarity, any and all such SVOD Carve-Out Programs must be the same Included Programs as those Studio selected as FOD/VOD Titles if any. During each Studio Carve-Out Window for an SVOD Carve-Out Program, Studio shall have the non-exclusive right to exploit (including promoting the exploitation of) such SVOD Carve-Out Program. Notwithstanding Sections 9 (CPS) and 11 (Payment Terms), the CPS for such SVOD Carve-Out Program shall be discounted at fifteen percent (15%) and the license fees for any such SVOD Carve-Out Program shall be calculated using the EBU from only the first month of such SVOD Carve-Out Program’s license period applies. For purposes of this Section 18, the applicable holdbacks against Free Broadcast Television, Subscription Television, and Basic Television shall apply to the exhibition of Included Films in such media (i.e., Free Broadcast Television, Subscription Television, and Basic Television) over the Internet and on mobile/wireless devices such as cell phones.Other than as explicitly set forth above in subparagraphs (a) through (d) and subparagraph (g) of this Section 18, there shall be no holdbacks on Studio’s rights to exploit any Included Film in any version, language, territory, medium, or media or by any transmission means, in any format, to any device in any venue at any time. CONFIDENTIALITY: All financial terms and provisions of this Agreement (including, without limitation, all subscriber numbers) shall be kept confidential and shall not be disclosed to any third party except: (a)?as required by law or court order; (b) pursuant to the rules and regulations of the United States Securities and Exchange Commission (or other applicable securities regulatory body); (c) pursuant to other rules or regulations of any securities exchange on which the party receiving the confidential information or its parent company’s securities are listed; (d)?to the parties’ employees, partners, parents, auditors, attorneys, financial advisers and profit participants, provided each agrees to be bound by this provision; (e)?in order to enforce either party’s rights in a legal proceeding; or (f)?in connection with a proposed investment, acquisition, merger or loan, to a third party with which the disclosing party has executed a letter of intent, memorandum of understanding, commitment letter or similar instrument (even if subject to the execution of definitive agreements) to enter into such proposed transaction if such third party agrees in writing to be bound by this provision.PROGRAMMING RESTRICTIONS: [HBO TO DISCUSS CLASSIFICATIONS WITH PROGRAMMING AND MARKETING GROUP] Notwithstanding anything contained herein to the contrary, HBO Ole agrees that, without Studio’s prior written consent (to be granted or withheld in Studio’s sole and absolute discretion): (i) no more than [fifteen percent (15%)] of each Licensed Service shall be allocated to Adult Programming and (ii) no Adult Programming shall be exhibited [PROMOTED OR LISTED][STUDIO TO CONSIDER DELETING BRACKETED LANGUAGE] on the same screen as a screen on the Licensed Service which an Included Film is exhibited, promoted or listed, and no Adult Program will be classified within the same genre/category as any Included Film, provided that HBO Ole shall not be prevented from listing the titles and related Included Film information in alphabetic menu listings, alphabetic program guides, listings based on Included Film attributes (e.g., box office release dates), or end-user-generated search results, whether or not next to or adjacent to Adult Programming. If HBO Ole violates the terms of this Section 18 with respect to any Licensed Service, then Licensor shall have the right to cause HBO Ole to immediately cease exploiting any Included Film on such Licensed Service. As used herein, “Adult Programming” means any motion picture or related promotional content that (i) has been rated or X or (ii) is unrated, was not released by a Major Studio and would have received X rating if it had been submitted to the MPAA for rating. [PENDING FURTHER DISCUSSION.]ASSIGNMENT: This Agreement may not be assigned by HBO Ole or Studio, either voluntarily or by operation of law, without the prior written consent of the other, except that (a)?either party may assign this Agreement to any U.S. entity with which it may be merged or consolidated or which acquires all or substantially all of its assets, provided that such U.S. entity with which it is merged or consolidated or which acquires all or substantially all of its assets agrees in writing to assume of all its obligations under this Agreement and (b)?either party may assign this Agreement to a U.S. entity controlling, controlled by or under common control with such party. Any purported assignment or transfer by either party of any of its rights or obligations under this Agreement other than in accordance with the provisions of this section shall be ERNING LAW: This Agreement shall be governed by the laws of the State of California and the United States of America applicable to contracts made and performed entirely therein, without giving effect to choice-of-law provisions thereof. STUDIO REPRESENTATIONS AND INDEMNITY: Studio hereby represents, warrants and covenants to HBO Ole that it has obtained and shall subject to Sections 8 and 17, throughout the License Periods of the Included Films hereunder, maintain the Licensed Rights granted to HBO Ole herein. Studio shall indemnify and hold HBO Ole and its partners, subsidiaries and affiliates and its and their respective officers, directors, successors and assigns (collectively, the “HBO Ole Indemnified Parties”), harmless from any and all claims, together with reasonable costs and expenses (including outside legal costs) arising by reason of any breach of any covenant, agreement, undertaking or any provision of this Agreement by Studio or any inaccuracy in any representation or warranty made by Studio hereunder or any claim alleging that the exhibition of any of the Included Films in strict accordance with this Agreement or the exercise of any rights or privileges granted herein in strict accordance with this Agreement infringe upon the trade name, trademark, copyright, music synchronization, literary or dramatic right or right of privacy or right of publicity of any claimant or constitutes a libel or slander of such claimant, except for any claims with respect to music performance and mechanical reproduction rights; provided, that HBO Ole shall promptly notify Studio of any claim or litigation to which the indemnity set forth in this Section applies; further provided, that the failure to promptly notify Studio shall diminish Studio’s indemnification obligations if and only to the extent Studio is actually prejudiced by such failure. At Studio’s option, Studio may, at its expense, assume the handling, settlement or defense of any such claim or litigation. If Studio assumes the handling, settlement or defense of any such claim or litigation, HBO Ole shall cooperate in the defense of such claim or litigation and Studio’s obligation with respect to such claim or litigation shall be limited to holding the HBO Ole Indemnified Parties harmless from any final judgment rendered on account of such claim or settlement made or approved by Studio in connection therewith, and expenses and reasonable outside counsel fees of the HBO Ole Indemnified Parties incurred in connection with the defense of such claim or litigation prior to the assumption thereof by Studio and any reasonable out-of-pocket expenses for performing such acts as Studio may reasonably request. If Studio does not assume the handling, settlement or defense of any such claim or litigation, Studio shall, in addition to holding the HBO Ole Indemnified Parties harmless from the amount of any damages awarded in any final judgment entered on account of such claim, reimburse the HBO Ole Indemnified Parties for reasonable costs and expenses and reasonable counsel fees of the HBO Ole Indemnified Parties incurred in connection with the defense of any such claim or litigation. HBO Ole shall not consent to the entry of any final judgment on account of any such claim, or any settlement on account of such claim which shall affect Studio’s rights, title, interests or obligations without Studio’s prior approval which shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, Studio does not make any representations or warranties with respect to the content of any Included Film being in compliance with any local law, regulation or other content restriction or requirement of the Territory. In the event that Studio is aware of any such restriction applicable to an Included Film, Studio shall use commercially reasonable efforts to notify HBO Ole of such restriction and provide HBO Ole an acceptable edited version of such Included Film, if available; provided, however, that Studio’s failure to comply with the foregoing shall only constitute a breach hereof in the event that such failure is willful, repeated and substantial. HBO OLE REPRESENTATIONS AND INDEMNITY: HBO Ole hereby represents, warrants and covenants to Studio that it (i) has obtained and shall maintain all licenses and other approvals necessary to own and operate the Licensed Services in the Territory and otherwise exploit the rights granted hereunder, (ii) shall comply with all applicable federal, state and local laws, ordinances, rules and regulations in exercising its rights, performing its obligations hereunder, and the operation of the Licensed Services [including any registrations and Condecine or other payments due to the Brazilian Cinema Agency or any other governmental authority required of HBO Ole or its affiliated entity assignees or sub-licensees under applicable law as a result of the exhibition of Included Films under this Agreement,] [UNDER REVIEW WITH SONY TAX GROUP AND PENDING FURTHER DISCUSSION] and (iii) shall be responsible for causing the relevant exhibitor and/or operator to pay the music performance rights and/or mechanical reproduction fees and royalties, if any, as set forth in Section 25. HBO Ole shall indemnify and hold Studio, its parent, subsidiaries and affiliates and its and their respective officers, directors, successors and assigns (collectively, the “Studio Indemnified Parties”), harmless from any and all claims arising from (a) the breach of any covenant, agreement, undertaking or any provision of this Agreement by HBO Ole or any inaccuracy in any representation or warranty made by HBO Ole hereunder, (b) the exhibition of any material (other than material contained in the Included Films or any promotional material related thereto as delivered by Studio) in connection with, or relating directly or indirectly to said Included Films and (c) the exhibition of the Included Films or the exercise of any rights or privileges granted herein in any way which violates any statutes, laws, or regulations of any government or governmental authority in the Territory. Studio shall promptly notify HBO Ole of any claim or litigation to which the indemnity set forth in this Section applies; provided, that the failure to promptly notify HBO Ole shall diminish HBO Ole’s indemnification obligation if and only to the extent HBO Ole is actually prejudiced by such failure. At HBO Ole’s option, HBO Ole may, at its expense, assume the handling, settlement or defense of any such claim or litigation. If HBO Ole assumes the handling, settlement or defense of any such claim or litigation, Studio shall cooperate in the defense of such claim or litigation and HBO Ole’s obligation with respect to such claim or litigation shall be limited to holding the Studio Indemnified Parties harmless from any final judgment rendered on account of such claim or settlement made or approved by HBO Ole in connection therewith, and expenses and reasonable outside counsel fees of the Studio Indemnified Parties incurred in connection with the defense of such claim or litigation prior to the assumption thereof by HBO Ole and any reasonable out-of-pocket expenses for performing such acts as HBO Ole may reasonably request. If HBO Ole does not assume the handling, settlement or defense of any such claim or litigation, HBO Ole, in addition to holding the Studio Indemnified Parties harmless from the amount of any damages awarded in any final judgment entered on account of such claim, shall reimburse the Studio Indemnified Parties for reasonable costs and expenses and reasonable counsel fees incurred in connection with the defense of any such claim or litigation. Studio shall not consent to the entry of any final judgment on account of any such claim, or settlement on account of any such claim which affects HBO Ole’s rights, title, interest or obligation (except for HBO Ole’s right to exhibit any Included Film under this Agreement) without HBO Ole’s prior approval, which shall not be unreasonably withheld.MUSIC RIGHTS: Studio represents and warrants that the performing and mechanical reproduction rights to any musical works contained in each of the Included Films, are either (i) controlled by ASCAP, BMI, SESAC or similar musical rights organizations, collecting societies or governmental entities having jurisdiction in the Territory, (ii) controlled by Studio to the extent required for the licensing of the exhibition and/or manufacturing of copies of the Included Films in accordance herewith or (iii) in the public domain. Studio does not represent or warrant that HBO Ole may exercise the performing rights and/or mechanical reproduction rights in the music without obtaining a valid performance and/or mechanical reproduction license and without payment of a performing rights royalty, mechanical royalty or license fee. If a performing rights royalty, mechanical royalty or license fee is required to be paid in the applicable country of the Territory in connection with the exhibition or manufacturing copies of an Included Film, then as between Studio and HBO Ole, HBO Ole shall be responsible for causing the relevant exhibitor and/or operator to make payment thereof, and shall hold Studio free and harmless therefrom. At HBO Ole’s written request, Studio shall furnish HBO Ole with all necessary and available information regarding the title, composer, publisher, recording artist and master owner of such music. COPY PROTECTION: HBO Ole represents and warrants that it has put in place state of the art secure and effective, stringent and robust security systems and technologies to prevent theft, pirating, unauthorized exhibition (including, without limitation, exhibition to non-subscribers and exhibition outside the Territory), unauthorized copying or duplication of any video reproduction or compressed digitized copy of any Included Film and that such security systems, procedures and technologies are and shall be no less stringent or robust than those which HBO Ole employs with respect to Included Films licensed from other licensors or than industry standard. HBO Ole shall maintain and upgrade such security systems, procedures and technologies (including, without limitation, encryption methods) as Studio shall determine in its sole discretion is necessary to prevent theft, pirating, unauthorized exhibition (including, without limitation, exhibition to non-subscribers and exhibition outside the Territory), and unauthorized copying or duplication of any video reproduction or compressed digitized copy of any Included Film. HBO Ole shall comply with all instructions relating to the foregoing given by Studio or Studio’s representative. HBO Ole shall comply with Studio’s specifications concerning the storage and management of its digital files and materials for the Included Films at HBO Ole’s sole expense, and as such specifications may be updated at any time during the Term. HBO Ole shall not authorize any use of any video reproduction or compressed digitized copy of any Included Film for any purpose other than as expressly permitted herein. Studio or its representative shall have the right to inspect and review HBO Ole’s security systems, procedures and technologies at HBO Ole’s places of business (including off-site facilities, if any) as Studio deems necessary, provided such inspection is conducted during regular business hours and does not interfere materially with HBO Ole’s operations. HBO Ole shall take such measures as are reasonably necessary to determine the existence of Security Breaches or Territorial Breaches and shall promptly notify Studio if any such occurrences are discovered. HBO Ole shall notify Studio immediately upon learning of the occurrence of any Security Breach or Territorial Breach, and shall provide Studio with specific information describing the nature and extent of such occurrence. Studio shall have the right to suspend the availability (“Suspension”) of its Included Films on the Licensed Services at any time during the Term in the event of a Security Breach or Territorial Breach by delivering a written notice to HBO Ole of such suspension (a “Suspension Notice”). Upon its receipt of a Suspension Notice, HBO Ole shall take immediate steps to remove the Included Films or make the Included Films inaccessible from the Licensed Services as soon as commercially feasible (but in no event more than three consecutive calendar days after receipt of such notice).If the cause of the Security Breach that gave rise to a Suspension is corrected, repaired, solved or otherwise addressed in the sole judgment of Studio, the Suspension shall terminate upon written notice from Studio and Studio’s obligation to make its Included Films available on the Licensed Services shall immediately resume. For clarity, no period of Suspension shall extend the Term in time, and upon a notice that a Suspension has ended, the Term shall end as otherwise provided in the Agreement unless earlier terminated in accordance with another provision of this Agreement. Upon receipt of such written notice, HBO Ole shall include the Included Films on the Licensed Services as soon thereafter as practicable. If more than one Suspension occurs during the Avail Term, or any single Suspension lasts for a period of three (3) months or more, Studio shall have the right, but not the obligation, to terminate this Agreement (“Security Breach Termination”) by providing written notice of such election to HBO Ole.HBO Ole shall at all times utilize content protection standards no less stringent or robust than the standards attached hereto as Exhibit C and incorporated herein by this reference.CUTTING AND EDITING: HBO Ole shall exhibit each Included Film as provided by Studio in its entirety in the form provided by Studio in the Licensed Language. HBO Ole may make such minor cuts or eliminations, at its own expense, as are necessary to conform to the requirements of any duly authorized public censorship authority, provided that in no event shall HBO Ole make any cuts that would adversely affect the artistic or pictorial quality of any Included Film, materially interfere with its continuity, and under no circumstances shall HBO Ole delete any copyright or trademark notice or credits incorporated in the Included Film as provided by Studio or delete or substitute any music contained in any Included Film; provided further that Studio shall be given the first opportunity to make such necessary cuts or edits. Any cuts and/or edits made by HBO Ole shall be made in accordance with all third party contractual restrictions. If Studio or any third-party contractual restriction prevents the editing of an Included Film to comply with the requirements of any duly authorized public censorship authority in the Territory, then Studio shall, upon receiving written notice from HBO Ole to such effect, immediately withdraw such Included Film, and the provisions of Section 30 shall apply.LIMITATION OF LIABILITY: Neither party shall be liable to the other for special, incidental or consequential damages, for lost profits or for interruption of business, unless such damages are a result of fraud, gross negligence, willful misconduct, breach of confidentiality, or third party claims. TAXES: Except as expressly provided otherwise in this Agreement, HBO Ole shall be solely responsible to determine, collect, bear, remit and pay, and shall hold Studio forever harmless from and against any and all taxes (including interest and penalties on any such amounts, but excluding corporate income taxes imposed on Studio’s net income that are not collected via withholding), payments or fees required to be paid to any third party now or hereafter imposed or based upon the importation, licensing, rental, delivery, exhibition, possession, or use hereunder to or by HBO Ole of the Included Films or any print, Copy, or materials of an Included Film, including, without limitation, all applicable national, regional or local value added, sales, use, consumption, and similar taxes (“Sales Taxes”), gross receipts taxes, services taxes, and similar taxes arising in connection with this Agreement. [Studio in turn shall hold HBO Ole forever harmless from against any and all Sales Taxes resulting from any other exhibition or distribution of the Included Films in the Territory by a third party not affiliated with HBO Ole that do not arise in connection with this Agreement and/or the exercise of the Licensed Rights hereunder.] [PENDING CONFIRMATION FROM SONY TAX GROUP] All License Fees and other payments due from HBO Ole to Studio under this Agreement are exclusive of and unreduced by any Sales Taxes. HBO Ole shall pay to Studio any Sales Taxes that are owed by HBO Ole under this Agreement which Studio is required to collect from HBO Ole under applicable law. Where applicable law requires HBO Ole to self-assess or reverse-charge Sales Taxes, HBO Ole shall be solely responsible for complying with such law. If applicable, HBO Ole may provide to Studio a valid Sales Tax exemption certificate, in which case Studio shall not collect the taxes covered by such certificate. If pursuant to Brazilian law or applicable law in another Territory, any registration and/or payment, such as Condecine, is due by HBO Ole or its affiliated entity assignees or sub-licensees as a result of the exhibition of the Included Films under this Agreement, then HBO Ole or such affiliated entities shall obtain the necessary registrations with the Brazilian Cinema Agency, or other applicable governmental authority, and shall make and not deduct from the License Fees any necessary payments, if applicable. [UNDER SONY TAX REVIEW AND PENDING FURTHER DISCUSSION.]License Fees and other payments made by HBO Ole to Studio under this Agreement shall be exclusive of and made free and clear of and without deduction or withholding for or on account of any tax, duty or other charges, of whatever nature imposed by any taxing or governmental authority, unless such deduction or withholding is required by applicable law, in which case HBO shall: (i) withhold the legally required amount from payment; (ii) remit such amount to the applicable taxing authority; and (iii) within thirty (30) consecutive days of payment, deliver to Studio original documentation or a certified copy evidencing such payment (“Withholding Tax Receipt”). In the event HBO Ole does not provide a Withholding Tax Receipt in accordance with the preceding sentence, HBO Ole shall be liable to and shall reimburse Studio for the withholding taxes deducted from payments. The parties agree that as of the Effective Date of this Agreement, based on the original contracting parties, territories, rights and currently applicable law, no withholding is required on payments from HBO Ole to Studio. If an assignment by HBO, pursuant to Section 21, causes an increased rate of tax withholding or deduction to apply to the payments to Studio, then the gross amount payable by HBO Ole to Studio shall be increased so that after such deduction or withholding, the net amount received by Studio will not be less than Studio would have received had HBO Ole not made the assignment; provided, however, that the foregoing shall not be applicable if an assignment by Studio, pursuant to Section 21, causes an increased rate of tax withholding or deduction to apply to the payments to Studio, in which case the first sentence of this Section 29(b) shall apply to payments made from HBO Ole to Studio.WITHDRAWAL: Studio shall have the right to withdraw any Included Film (“Withdrawn Film”) (a) because of an Event of Force Majeure (as defined in Section 32), loss of rights, or threatened litigation, judicial proceeding or regulatory proceeding or in order to minimize the risk of liability in connection with a rights problem with such Included Film, and (b) if Studio elects to theatrically re-release or reissue such Included Film or make a theatrical, direct-to-video or television remake or sequel thereof. With respect to any withdrawal initiated by Studio, Studio shall notify HBO Ole in writing of such withdrawal as soon as reasonably practicable after Studio determines or receives notice of the need for such withdrawal. HBO Ole shall cease exhibition of a Withdrawn Film on the Licensed Services as soon as reasonably practicable after receiving Studio’s notice of withdrawal. Withdrawal of an Included Film under this Section shall in no event be deemed a breach of this Agreement and HBO Ole shall not be entitled to any rights or remedies as a result of such withdrawal, except as otherwise expressly set forth in this Section. Without limiting the generality of the foregoing, HBO Ole shall not have any rights and hereby waives any right it may otherwise have been held to have, to recover for lost profits or interruptions of its business based upon any such withdrawal. In the event of any withdrawal of an Included Film pursuant to this Section before the last day of the License Period for such Included Film, Studio shall promptly commence a good faith attempt to agree with HBO Ole as to a substitute film for exhibition pursuant to the terms of this Agreement. HBO Ole shall have the right to exhibit such substitute film for the remainder of the License Period of the Withdrawn Film and shall have such rights and obligations with respect to such substitute film as if such substitute film were an Included Film. If the parties shall agree as to a substitute film, HBO Ole shall compute the duration of the remaining term of the License Period and the remaining number of authorized exhibitions with respect to such substitute film as if such substitute film were the Withdrawn Film but deeming the remaining term of the License Period of such substitute film to commence upon it being made available to HBO Ole by Studio. If an Included Film is withdrawn pursuant to this Section and Studio and HBO Ole have not reached an agreement for a substitute film within one (1) year of the date that an Included Film is withdrawn pursuant to this Section, Studio and HBO Ole shall negotiate in good faith a reduction in the License Fee for such Withdrawn Film. REPORTS; MAINTENANCE OF BOOKS AND RECORDS; AUDIT: On a quarterly basis and upon Studio’s written request, HBO Ole shall provide Studio the following information regarding the SVOD Services, to the extent available and non-confidential: (A) separately for each SVOD-Eligible Film, and separately for each month in such quarter, the number of registered users viewing such film, the number views/streams for such Included Film and the average number of minutes watched (i.e., across all users), (B) the demographics of registered users (along with focus group surveys and any demographic studies), and (C) research highlighting user viewing and Included Film selection behavior, the impact of marketing and promotions, and any other information regarding the direction of ongoing research. Without limiting the foregoing, HBO Ole shall make commercially reasonable efforts to provide Studio on a quarterly basis upon Studio’s request, such other relevant and available non-confidential information regarding usage of each SVOD Service and viewership of the SVOD-Eligible Films on an SVOD basis. At all times during the Term and for a period of two (2) consecutive years after the end of the License Period of the last Included Film licensed hereunder, HBO Ole shall keep or cause to be kept, at its principal office, full and complete books of account. Studio shall have the right at all reasonable times during usual business hours to (a)?audit, examine, and make copies or extracts of or from the books of account of HBO Ole; (b)?visit the facilities of HBO Ole; and (c)?discuss the affairs of HBO Ole with its officers, employees, attorneys, accountants, customers and suppliers. Such rights may be exercised through any agent of Studio designated by it. If such audit reveals that HBO Ole has underreported or misrepresented any item bearing upon the computation and/or any amounts payable to Studio, and there is a discrepancy of ten percent (10%) or more between the total amount shown to be due to Studio and the amount actually paid, HBO Ole shall pay to Studio (x)?all reasonable out-of-pocket expenses of HBO Ole incurred in the conduct of such audit and (y)?interest (which shall accrue on an annual basis) at an annual rate equal to the lesser of one hundred ten percent (110%) of the prime lending rate of J.P. Morgan Chase or the maximum rate permitted by law. HBO Ole shall use its best efforts to incorporate, into its license agreements with premium pay television (including Subscription Television) operators, provisions that subject such operators to examination and audit of their books and records relating to the distribution of the Licensed Services.FORCE MAJEURE: Neither party shall, in any manner whatsoever, be liable or otherwise responsible for any delay or default in, or failure of, performance resulting from or arising out of or in connection with any Event of Force Majeure and any such delay, default in, or failure of, performance shall not constitute a breach by either party hereunder; provided that HBO Ole’s obligation to pay any License Fees accrued prior to the occurrence of an Event of Force Majeure may be delayed but shall not be forgiven as a result of such Event of Force Majeure. “Event of Force Majeure” shall mean any reasonably unforeseeable act, cause, contingency or circumstance beyond the reasonable control of such party, including, without limitation, to the extent reasonably unforeseeable and beyond the reasonable control of such party, any governmental action, order or restriction (whether foreign, federal or state) war (whether or not declared), public strike, riot, labor dispute, Act of God, flood, public disaster or public transportation or laboratory dispute.FCPA: It is the policy of each of HBO Ole and Studio to comply and require that its vendors and licensees, respectively, to comply with the U.S. Foreign Corrupt Practices Act, 15 U.S.C. Section 78dd-1 and 78dd-2, and all other applicable anti-corruption laws (collectively, “FCPA”). Each represents, warrants and covenants that: (i) it is aware of the FCPA and will advise all applicable persons and parties supervised by it of the requirements of the FCPA; (ii) it has not taken and will not take, and to its knowledge, no one acting on its behalf has taken or will take any action, directly or indirectly, in violation of the FCPA; (iii) it has not caused and will not cause any party to be in violation of the FCPA; (iv) it is not a "foreign official" as defined under the U.S. Foreign Corrupt Practices Act, does not represent a foreign official, and will not share any fees or other benefits of this contract with a foreign official. Each party will indemnify, defend and hold harmless the other party and its Representatives for any and all liability arising from any violation of the FCPA caused or facilitated by such party. In addition, a conviction based on the violation of the FCPA shall constitute a breach of the Agreement entitling the non-breaching party to all applicable remedies under law.ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the parties, with respect to the subject matter hereof and all prior understandings are merged herein. This Agreement may be amended only by a written agreement executed by all of the parties hereto.ARBITRATION: All actions or proceedings arising out of or relating to this Agreement and/or the breach thereof (a “Proceeding”) shall be resolved in arbitration. In such an event, the Proceeding shall be submitted to JAMS (“JAMS”) for binding arbitration under its Comprehensive Arbitration Rules and Procedures if the matter in dispute is over $250,000 or under its Streamlined Arbitration Rules and Procedures if the matter in dispute is $250,000 or less (as applicable, the “Rules”). Such arbitration shall be held solely in Los Angeles, California, USA, in the English language. Each arbitration shall be conducted by an arbitral tribunal (the “Arbitral Board”) consisting of three (3) arbitrators who shall be retired judges knowledgeable in commercial and television distribution matters, one chosen by HBO Ole within thirty (30) consecutive days of notice of arbitration, one chosen by Studio within thirty (30) consecutive days of notice of arbitration and one chosen by the two (2) arbitrators selected by HBO Ole and Studio. If the arbitrators selected by HBO Ole and Studio fail to mutually agree upon the third arbitrator within thirty (30) consecutive days of the selection of both such arbitrators, then the third arbitrator shall be selected in accordance with the Rules. In each arbitration, the final outcome shall be determined by concurrence of any two (2) members of the Arbitral Board. The Arbitral Board shall assess the cost of the arbitration against the losing party. In addition, the prevailing party in any arbitration or legal proceeding relating to this Agreement shall be entitled to all reasonable expenses (including, without limitation, reasonable outside attorney’s fees). Each party shall be permitted to engage in formal discovery with respect to any dispute arising out of, in connection with or related to this Agreement, the provisions of Section 1283.05 of the California Code of Civil Procedure being incorporated herein by this reference.There shall be a record of the proceedings at the arbitration hearing and the Arbitral Board shall issue a Statement of Decision setting forth the factual and legal basis for the Arbitral Board's decision. If neither party gives written notice requesting an appeal within ten (10) consecutive business days after the issuance of the Statement of Decision, the Arbitral Board's decision shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Los Angeles County Superior Court or, in the case of HBO Ole, such other court having jurisdiction over HBO Ole, which may be made ex parte, for confirmation and enforcement of the award. If either party gives written notice requesting an appeal within ten (10) consecutive business days after the issuance of the Statement of Decision, the award of the Arbitral Board shall be appealed to three (3) neutral arbitrators (the "Appellate Arbitrators"), each of whom shall have the same qualifications and be selected through the same procedure as the Arbitral Board. The appealing party shall file its appellate brief within thirty (30) consecutive days after its written notice requesting the appeal and the other party shall file its brief within thirty (30) consecutive days thereafter. The Appellate Arbitrators shall thereupon review the decision of the Arbitral Board applying the same standards of review (and all of the same presumptions) as if the Appellate Arbitrators were a California Court of Appeal reviewing a judgment of the Los Angeles County Superior Court, except that the Appellate Arbitrators shall in all cases issue a final award and shall not remand the matter to the Arbitral Board. The decision of the Appellate Arbitrators shall be final and binding as to all matters of substance and procedure, and may be enforced by a petition to the Los Angeles County Superior Court or, in the case of HBO Ole, such other court having jurisdiction over HBO Ole, which may be made ex parte, for confirmation and enforcement of the award. The party appealing the decision of the Arbitral Board shall pay all costs and expenses of the appeal, including the fees of the Appellate Arbitrators and including the reasonable outside attorneys' fees of the opposing party, unless the decision of the Arbitral Board is reversed, in which event the costs, fees and expenses of the appeal shall be borne as determined by the Appellate Arbitrators.Neither party shall be entitled or permitted to commence or maintain any action in a court of law with respect to any matter in dispute until such matter shall have been submitted to arbitration as herein provided and then only for the enforcement of the Arbitral Board’s award, other than an action for interim relief. Each such action shall come under the exclusive jurisdiction of the Courts of the State of California and of the United States located in the City of Los Angeles, California. Subject to a party’s right to appeal pursuant to the above, neither party shall challenge or resist any enforcement action taken by the party in whose favor the Arbitral Board decided. All arbitration proceedings (including proceedings before the Appellate Arbitrators) shall be closed to the public and confidential and all records relating thereto shall be permanently sealed, except as necessary to obtain court confirmation of the arbitration award. The provisions of this Section 34 shall supersede any inconsistent provisions of any prior agreement between the parties.DEFAULT AND TERMINATION: Without limiting any other provision of this Agreement and subject to subparagraph (c) below, upon the occurrence of a HBO Ole Termination Event (as defined below), Studio may, in addition to any and all other rights which it may have against HBO Ole, immediately terminate this Agreement or any license with respect to an Included Film by giving written notice to HBO Ole. Whether or not Studio exercises such right of termination, Studio shall, upon the occurrence of any HBO Ole Event of Default (as defined below), have no further obligation to deliver materials to HBO Ole and Studio shall have the right to require HBO Ole to immediately return or destroy all materials to Studio. In addition to any and all other remedies in respect of an HBO Ole Event of Default which Studio may have in equity or at law, Studio shall be entitled to recover from HBO Ole all payments past due from HBO Ole to Studio hereunder. Furthermore, upon an HBO Ole Event of Default, Studio shall have the right to immediately suspend delivery of all Included Films and materials with respect thereto and/or suspend HBO Ole’s right to exploit any Included Films, licensed hereunder, without prejudice to any of its other rights hereunder. As used herein, an “HBO Ole Event of Default” means the occurrence of any of the following: (A) HBO Ole (x) fails to timely perform or breaches any of its material obligations hereunder or otherwise materially breaches this Agreement, (y) fails to make timely payment of fees under this Agreement, or (z) assigns or otherwise transfers this Agreement in violation of this Agreement; or (B) if HBO Ole (i) becomes insolvent; (ii) proposes an individual, company or partnership voluntary arrangement, restructuring with respect to any material part of its debts, liquidation, assignment for the benefit of creditors or any similar proceeding; (iii) has a receiver, administrator, liquidator, sequestrator, trustee, or manager appointed over the whole or any part of its business or assets; (iv) voluntarily commences a proceeding or files a petition, or a proceeding or petition is commenced or filed against HBO Ole, under any federal, state, or foreign bankruptcy or other similar insolvency law (which proceeding or petition, if commenced or filed against HBO Ole, shall remain undismissed or unstayed for thirty (30) days or more or an order is entered by a court of competent jurisdiction granting the relief sought by the proceeding or the petition); (v) has a resolution passed, proposed or considered for its winding up, bankruptcy, dissolution (including the appointment of provisional liquidators/interim receivers or special managers), reorganization, liquidation or similar proceeding; (vi) proposes or enters into any composition or arrangement with its creditors or any class of them; (vii) ceases or threatens to cease to carry on business or any significant portion of the business that it presently conducts; (viii) claims the benefit of any statutory moratorium; or (ix) suffers or there occurs in relation to HBO Ole, any event which is analogous or similar to any of the events or proceedings referred to in this paragraph in any part of the world. As used herein an “HBO Ole Termination Event” means (I) the occurrence of a curable HBO Ole Event of Default described in subclause (A) above that HBO Ole has failed to cure within thirty (30) days written notice from Studio of the occurrence of such default, or, if such default is the failure to make any payment, within thirty (30) calendar days of notice from Studio, (II) the occurrence of a non-curable HBO Ole Event of Default described in subclause (A) above and (III) the occurrence of an HBO Ole Event of Default described in subclause (B) above. Subject to subparagraph (c) below, in the event Studio materially defaults in the performance of any of its material obligations hereunder or Studio becomes insolvent, or a petition under any bankruptcy act shall be filed by or against Studio (which petition, if filed against Studio, shall not have been dismissed within thirty (30) days thereafter), or Studio executes an assignment for the benefit of creditors, or a receiver is appointed for the assets of Studio, or Studio takes advantage of any applicable insolvency or reorganization or any other like statute (each of the above acts is hereinafter referred to as a “Studio Event of Default”), and Studio fails to cure such Studio Event of Default within thirty (30) days after delivery by HBO Ole to Studio of written notice of such Studio Event of Default, then HBO Ole may, in addition to any and all other rights which it may have against Studio, immediately terminate this Agreement by giving written notice to Studio.Notwithstanding anything to the contrary contained in subparagraphs (a) or (b) above, no termination of this Agreement for any reason shall relieve or discharge, or be deemed or construed as relieving or discharging, any party hereto from any duty, obligation or liability hereunder which was accrued as of the date of such termination (including, without limitation, the obligation to pay any amounts payable hereunder accrued as of such date of termination).RETRANSMISSION ROYALTIES/PRIVATE COPY ROYALTIES: HBO Ole agrees that as between Studio and HBO Ole, (a) Studio is the owner of all retransmission and off-air videotaping rights in the Included Films and all royalties or other monies collected in connection therewith, (b) HBO Ole shall have no right to exhibit or authorize the exhibition of the Included Films by means of retransmission or to authorize the off-air videotaping of the Included Films, and (c) one hundred percent of all royalties, fees or other sums, whether statutory or otherwise, collected and payable in connection with retransmission and/or off-air taping of the Included Films (“Royalties”), shall be the exclusive property of Studio. If for any reason, HBO Ole collects Royalties, such collection shall be made solely on behalf of Studio, and HBO Ole shall immediately pay over such Royalties to Studio (i) without deduction of any kind and (ii) in addition to any License Fees, advances or costs payable to Studio under this Agreement.REMEDIES. No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise, and except as otherwise expressly provided for herein, each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by any of the parties hereto shall not constitute a waiver by such party of the right to pursue any other available remedies. Each of the foregoing provisions of this Section 37 shall be subject to any express limitations on HBO Ole’s remedies.WAIVER. No breach of any provision hereof may be waived unless in writing and a waiver by either party of any breach or default by the other party will not be construed as a continuing waiver of the same or any other breach or default under this Agreement.ATTACHMENTS. Any attached schedules, exhibits, other attachments and all of the written and printed parts thereof are a part of this Agreement.CONFLICTING LAW OR REGULATION. If any provision in this Agreement is determined by a court or arbitrator of competent jurisdiction to be invalid or unenforceable for any reason, such determination shall not affect any other provision, each of which shall be construed and enforced as if such invalid or unenforceable provision were not contained herein. NO THIRD PARTY BENEFICIARIES. This Agreement is entered into for the express benefit of the parties hereto, their successors and permitted assigns and is not intended, and shall not be deemed, to create in any other natural person, corporation, company, and/or any other entity whatsoever any rights or interest whatsoever, including, without limitation, any right to enforce the terms hereof.TRADEMARKS. HBO Ole acknowledges that as between HBO Ole and Studio the registered and unregistered trade names, logos, trademarks, characters and the titles of the Included Films and of Studio and its affiliates (the “Marks”) are the exclusive property of Studio. HBO Ole agrees not to use, or permit the use of, the Marks in advertisements or promotional material relating to the Licensed Service(s) or otherwise without the prior written approval of Studio. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of HBO Ole and Studio and their respective successors and assigns, subject to Section 21 of this Agreement.COUNTERPARTS. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument. CAPTIONS/DRAFTING. Article, Section or other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; and, no provision of this Agreement shall be interpreted for or against any party because that party or its legal representative drafted the provision.NOTICES: All notices hereunder shall be given in writing by personal delivery, overnight U.S. mail or overnight courier service, or fax (provided, that notice sent by fax shall be sent concurrently by courier service as described herein) as follows: If to Studio: CPT Holdings, Inc.10202 West Washington Boulevard Culver City, CA 90232 Attention: President, International DistributionFacsimile No.: (310) 244-1827 with a copy to: Sony Pictures Entertainment Inc. 10202 West Washington Boulevard Culver City, CA 90232 U.S.A. Attention: General Counsel Facsimile No.: (310) 244-0510 or at such other addresses as such party may designate in writing by notice delivered pursuant hereto. If to HBO Ole:HBO Ole Acquisitions LLC c/o HBO Latin America Group 396 Alhambra Circle, Suite 400Coral Gables, FL 33134 Attention: Executive Vice President – Programming AcquisitionsFacsimile No.: 305-442-6302 with a copy to:HBO Latin America Group396 Alhambra Circle, Suite 400Coral Gables, FL 33134 Attention: General Counsel Facsimile No.: 305-442-4711 or at such other addresses as such party may designate in writing by notice delivered pursuant hereto.Notices given by fax shall be deemed delivered on the business day on which they are received by the addressee as evidenced by a copy of the confirmation sheet showing the time and date of the transmission thereof, and all materials personally delivered shall be deemed served when received by the party to whom they are addressed. Express mail and courier materials shall be deemed served one (1) business day (two (2) business days if sent to a country different from sender’s) after sender’s delivery to the express mail or courier company.IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.CPT HOLDINGS, INC.By: Name: Title: Dated: __________________HBO OLE ACQUISITIONS LLCBy: Name: Gastón ComasTitle: Chief Executive OfficerDated: __________________EXHIBIT APRIMARY AND MULTIPLEX CHANNELS[To be provided by HBO]EXHIBIT BDELIVERABLES/TECHNICAL SPECIFICATIONSHIGH DEFINITION AND STANDARD DEFINITION MATERIALS[AGREED UPON SPECIFICATIONS TO BE INCORPORATED UPON RECEIPT OF WORD VERSION]EXHIBIT CCONTENT PROTECTION REQUIREMENTS AND OBLIGATIONSGeneral Content Security & Service ImplementationContent Protection System. All content delivered to, output from or stored on a device must be protected by a content protection system that includes digital rights management, conditional access systems and digital output protection (such system, the “Content Protection System”). The Content Protection System shall:be approved in writing by Studio (including any upgrades or new versions, which HBO Ole shall submit to Studio for approval upon such upgrades or new versions becoming available), be fully compliant with all the compliance and robustness rules associated therewith, and use only those rights settings, if applicable, that are approved in writing by Studio.be an implementation of one the content protection systems approved for UltraViolet services by the Digital Entertainment Content Ecosystem (DECE), and said implementation meets the compliance and robustness rules associated with the chosen UltraViolet approved content protection system, or be an implementation of Microsoft WMDRM10 and said implementation meets the associated compliance and robustness rules, orIf a conditional access system, be a compliant implementation of a Studio-approved, industry standard conditional access system, orBe a compliant implementation of other Digital Rights Management (DRM) system approved in writing by Studio. Studio hereby approves Apple Fairplay Streaming for the protection of streams only.The UltraViolet approved content protection systems DECE for both streaming and download and approved by Studio for both streaming and download are:Marlin BroadbandMicrosoft PlayreadyCMLA Open Mobile Alliance (OMA) DRM Version 2 or 2.1Adobe Flash Access 2.0 (not Adobe’s Flash streaming product)Widevine Cypher ?The content protection systems currently approved for UltraViolet services by DECE for streaming only and approved by Studio for streaming only are:Cisco PowerKeyMarlin MS3 (Marlin Simple Secure Streaming)Microsoft MediaroomsMotorola MediaCipherMotorola Encryptonite (also known as SecureMedia Encryptonite)Nagra (Media ACCESS CLK, ELK and PRM-ELK)NDS VideoguardVerimatrix VCAS conditional access system and PRM (Persistent Rights Management)The Licensed Service shall prevent the unauthorized delivery and distribution of Studio’s content (for example, user-generated / user-uploaded content) and shall use reasonable efforts to filter and prevent such occurrences.CI Plus Any Conditional Access implemented via the CI Plus standard used to protect Licensed Content must support the following: commit in good faith to sign the CI Plus Content Distributor Agreement (CDA) as soon as reasonably possible after this document is available for signature, so that HBO Ole can request and receive Service Operator Certificate Revocation Lists (SOCRLs)ensure that their CI Plus Conditional Access Modules (CICAMs) support the processing and execution of SOCRLs, liaising with their CICAM supplier where necessaryensure that their SOCRL contains the most up-to-date CRL available from CI Plus LLP.Not put any entries in the Service Operator Certificate White List (SOCWL, which is used to undo device revocations in the SOCRL) unless such entries have been approved in writing by Studio.Set CI Plus parameters so as to meet the requirements in the section “Outputs” of this schedule:StreamingGeneric Internet Streaming RequirementsThe requirements in this section 3 apply in all cases where Internet streaming is supported.Streams shall be encrypted using AES 128 (as specified in NIST FIPS-197) or other robust, industry-accepted algorithm with a cryptographic strength and key length such that it is generally considered computationally infeasible to break.Encryption keys shall not be delivered to clients in a cleartext (un-encrypted) state.The integrity of the streaming client shall be verified before commencing delivery of the stream to the client.HBO Ole shall use a robust and effective method (for example, short-lived and individualized URLs for the location of streams) to ensure that streams cannot be obtained by unauthorized users.The streaming client shall NOT cache streamed media for later replay but shall delete content once it has been rendered.Microsoft SilverlightThe requirements in this section “Microsoft Silverlight” only apply if the Microsoft Silverlight product is used to provide the Content Protection System.Microsoft Silverlight is approved for streaming if using Silverlight 4 or later version.Apple http live streamingThe requirements in this section “Apple http live streaming” only apply if Apple http live streaming is used to provide the Content Protection System.Use of Approved DRM for HLS key management. HBO Ole shall NOT use the Apple-provisioned key management and storage for http live streaming (“HLS”) (implementations of which are not governed by any compliance and robustness rules nor any legal framework ensuring implementations meet these rules) for protection of Studio content between HBO Ole servers and end user devices but shall use (for the protection of keys used to encrypt HLS streams) an industry accepted DRM or secure streaming method approved by Studio under section 2 of this Schedule. With respect to the above, HBO Ole is allowed to use HLS only (without a Studio approved DRM) for a temporary period and shall migrate from this to use of a Studio approved DRM by end April 1st, 2014.The m3u8 manifest file shall only be delivered to requesting clients/applications that have been authenticated in some way as being an authorized client/application.The streams shall be encrypted using AES-128 encryption (that is, the METHOD for EXT-X-KEY shall be ‘AES-128’).The content encryption key shall be delivered via SSL (i.e. the URI for EXT-X-KEY, the URL used to request the content encryption key, shall be a https URL).Output of the stream from the receiving device shall not be permitted unless this is explicitly allowed elsewhere in the schedule. No APIs that permit stream output shall be used in applications (where applications are used).The client shall NOT cache streamed media for later replay (i.e. EXT-X-ALLOW-CACHE shall be set to ‘NO’).Output of the Licensed Content over AirPlay Streaming and Airplay Mirroring is allowed in Standard Definition if AirPlay Link Encryption is used to protect interactions between the iOS device and the Apple TV, provided that HBO Ole may not output Licensed Content via AirPlay Streaming or Mirroring as set forth in this subsection unless HBO Ole has approval for such output from three Major Studios with respect to feature films licensed by such Major Studios for distribution on the Licensed Service and that HBO Ole migrates to use of more secure methods for protection of the link between iOS devices and Apple TV devices as soon as reasonably possible after such methods are available to HBO Ole’s developers. iOS applications shall include functionality which detects if the iOS device on which they execute has been “jailbroken” and shall disable all access to protected content and keys if the device has been jailbroken.REVOCATION AND RENEWALThe HBO Ole shall have a policy which ensures that clients and servers of the Content Protection System are promptly and securely updated in the event of a security breach (that can be rectified using a remote update) being found in the Content Protection System and/or its implementations in clients and servers. HBO Ole shall have a policy which ensures that patches including System Renewability Messages received from content protection technology providers (e.g. DRM providers) and content providers are promptly applied to clients and servers.ACCOUNT AUTHORIZATIONContent Delivery. Content, licenses, control words and ECM’s shall only be delivered from a network service to registered devices associated with an account with verified credentials. Account credentials must be transmitted securely to ensure privacy and protection against attacks.Services requiring user authentication:The credentials shall consist of at least a User ID and password of sufficient length to prevent brute force attacks.HBO Ole shall take steps to prevent users from sharing account credentials. In order to prevent unwanted sharing of such credentials, account credentials may provide access to any of the following (by way of example):purchasing capability (e.g. access to the user’s active credit card or other financially sensitive information)administrator rights over the user’s account including control over user and device access to the account along with access to personal information. RECORDINGPVR Requirements. Any device receiving playback licenses must not implement any personal video recorder capabilities that allow recording, copying, or playback of any protected content except as explicitly allowed elsewhere in this agreement.Copying. The Content Protection System shall prohibit recording of protected content onto recordable or removable media, except as such recording is explicitly allowed elsewhere in this agreement. Embedded InformationWatermarking. The Content Protection System or playback device must not intentionally remove or interfere with any embedded watermarks in licensed content.Embedded Information. HBO Ole’s delivery systems shall “pass through” any embedded copy control information without intentional alteration, modification or degradation in any manner; Notwithstanding the above, any alteration, modification or degradation of such copy control information and or watermarking during the ordinary course of HBO Ole’s distribution of licensed content shall not be a breach of this Embedded Information Section.OutputsOutput hardware/software integrity. If the licensed content can be delivered to a device which has any outputs (either digital or analogue), the Content Protection System must ensure that the hardware and software (e.g. device drivers) providing output functionality has not been tampered with or replaced with non-compliant versions.Digital Outputs. If the licensed content can be delivered to a device which has digital outputs, the Content Protection System shall prohibit digital output of decrypted protected content. Notwithstanding the foregoing, a digital signal may be output if it is protected and encrypted by High-Bandwidth Digital Copy Protection (“HDCP”) or Digital Transmission Copy Protection (“DTCP”). Exception Clause for Standard Definition, Uncompressed Digital Outputs on Windows-based PCs and Macs running OS X or higher). HDCP must be enabled on all uncompressed digital outputs (e.g. HDMI, Display Port), unless the customer’s system cannot support HDCP (e.g., the content would not be viewable on such customer’s system if HDCP were to be applied)Upscaling: Device may scale Included Films in order to fill the screen of the applicable display; provided that HBO Ole’s marketing of the Device shall not state or imply to consumers that the quality of the display of any such upscaled content is substantially similar to a higher resolution to the Included Film’s original source profile (i.e. SD content cannot be represented as HD content).GeofilteringThe Content Protection System shall take affirmative, reasonable measures to restrict access to Studio’s content to within the territory in which the content has been licensed.HBO Ole shall periodically review the geofiltering tactics and perform upgrades to the Content Protection System to maintain “state of the art” geofiltering capabilities.Without limiting the foregoing, HBO Ole shall utilize geofiltering technology in connection with each transmission of an Included Film, that is designed to limit distribution of Included Films to subscribers in the Territory, and which consists of, for IP-based delivery systems, IP address look-up to check that the IP address is within the Territory. In addition, HBO Ole shall verify that each customer to the HBO On Demand, MAX On Demand, HBO Go and/or Max Go SVOD Service is a subscriber to the applicable SVOD-Enhanced Linear Service, and HBO Ole shall only permit transmission of an Included Film to such customer if the home address that the customer supplied in connection with its subscription to the applicable SVOD-Enhanced Linear Service is within the work Service Protection Requirements.All licensed content must be received and stored at content processing and storage facilities in a protected and encrypted format using an industry standard protection systems.Document security policies and procedures shall be in place. Documentation of policy enforcement and compliance shall be continuously maintained.Access to content in unprotected format must be limited to authorized personnel and auditable records of actual access shall be maintained.Physical access to servers must be limited and controlled and must be monitored by a logging system.Auditable records of access, copying, movement, transmission, backups, or modification of content must be securely stored for a period of at least one year.Content servers must be protected from general internet traffic by “state of the art” protection systems including, without limitation, firewalls, virtual private networks, and intrusion detection systems. All systems must be regularly updated to incorporate the latest security patches and upgrades.All facilities which process and store content must be available for Motion Picture Association of America and Studio audits upon the request of Studio.Content must be returned to Studio or securely destroyed pursuant to the Agreement at the end of such content’s license period including, without limitation, all electronic and physical copies thereof.High-Definition Restrictions & RequirementsIn addition to the foregoing requirements, all HD content (and all Stereoscopic 3D content) is subject to the following set of restrictions & requirements:General Purpose Computer Platforms. HD content is expressly prohibited from being delivered to and playable on General Purpose Computer Platforms (e.g. PCs, Tablets, Mobile Phones) unless explicitly approved by Studio. If approved by Studio, the additional requirements for HD playback on PCs will include the following:Allowed Platforms. HD content for General Purpose Computer Platforms is only allowed on the device platforms (operating system, Content Protection System, and device hardware, where appropriate) specified below:Android. HD content is only allowed on Tablets and Mobiles Phones supporting the Android operating systems as follows:Ice Cream Sandwich (4.0) or later versions: when protected using the implementation of Widevine built into Android, orall versions of Android: when protected using an Ultraviolet approved DRM or Ultraviolet Approved Streaming Method (as listed in section 2 of this Schedule) either:implemented using hardware-enforced security mechanisms (e.g. ARM Trustzone) or implemented by a Studio-approved implementer, orall versions of Android: when protected by a Studio-approved content protection system implemented by a Studio-approved implementeriOS.? HD content is only allowed on Tablets and Mobiles Phones supporting the iOS operating systems (all versions thereof) as follows:when protected by an Ultraviolet approved DRM or Ultraviolet Approved Streaming Mean (as listed in section 2 of this Schedule) or other Studio-approved content protection system, andStudio content shall NOT be transmitted over Apple Airplay and applications shall disable use of Apple Airplay, andwhere the provisioned HLS implementation is used (e.g. so that native media processing can be used), the connection between the approved DRM client and the native HLS implementation shall be robustly and effectively secured (e.g. by mutual authentication of the approved DRM client and the native HLS implementation)Windows 7 and 8. HD content is only allowed on Personal Computers, Tablets and Mobiles Phones supporting the Windows 7 and 8 operating system (all forms thereof) when protected by an Ultraviolet Approved DRM or Ultraviolet Approved Streaming Mean (as listed in section 2 of this Schedule) or other Studio-approved content protection system. Robust ImplementationImplementations of Content Protection Systems on General Purpose Computer Platforms shall use hardware-enforced security mechanisms, including secure boot and trusted execution environments, where possible.Implementation of Content Protection Systems on General Purpose Computer Platforms shall, in all cases, use state of the art obfuscation mechanisms for the security sensitive parts of the software implementing the Content Protection System.All General Purpose Computer Platforms (devices) deployed by HBO Ole after end December 31st, 2013, SHALL support? hardware-enforced security mechanisms, including trusted execution environments and secure boot.All implementations of Content Protection Systems on General Purpose Computer Platforms deployed by HBO Ole (e.g. in the form of an application) after end December 31st, 2013, SHALL use hardware-enforced security mechanisms (including trusted execution environments) where supported, and SHALL NOT allow the display of HD content where the General Purpose Computer Platforms on which the implementation resides does not support hardware-enforced security mechanisms.Digital Outputs:For avoidance of doubt, HD content may only be output in accordance with section “Digital Outputs” above unless stated explicitly otherwise below.If an HDCP connection cannot be established, as required by section “Digital Outputs” above, the playback of Current Films over an output on a General Purpose Computing Platform (either digital or analogue) must be limited to a resolution no greater than Standard Definition (SD).An HDCP connection does not need to be established in order to playback in HD over a DVI output on any General Purpose Computer Platform that is registered for service by HBO Ole on or before the later of: (i) 31st December, 2011 and (ii) the DVI output sunset date established by the AACS LA. Note that this exception does NOT apply to HDMI outputs on any General Purpose Computing PlatformWith respect to playback in HD over analog outputs on General Purpose Computer Platforms that are registered for service by HBO Ole after 31st December, 2011, HBO Ole shall either (i) prohibit the playback of such HD content over all analogue outputs on all such General Purpose Computing Platforms or (ii) ensure that the playback of such content over analogue outputs on all such General Purpose Computing Platforms is limited to a resolution no greater than SD.Notwithstanding anything in this Agreement, if HBO Ole is not in compliance with this Section, then, upon Studio’s written request, HBO Ole will temporarily disable the availability of Current Films in HD via the HBO Ole service within thirty (30) days following HBO Ole becoming aware of such non-compliance or HBO Ole’s receipt of written notice of such non-compliance from Studio until such time as HBO Ole is in compliance with this section “General Purpose Computing Platforms”; provided that:if HBO Ole can robustly distinguish between General Purpose Computing Platforms that are in compliance with this section “General Purpose Computing Platforms”, and General Purpose Computing Platforms which are not in compliance, HBO Ole may continue the availability of Current Films in HD for General Purpose Computing Platforms that it reliably and justifiably knows are in compliance but is required to disable the availability of Current Films in HD via the HBO Ole service for all other General Purpose Computing Platforms, andin the event that HBO Ole becomes aware of non-compliance with this Section, HBO Ole shall promptly notify Studio thereof; provided that HBO Ole shall not be required to provide Studio notice of any third party hacks to HDCP.Secure Video Paths:The video portion of unencrypted content shall not be present on any user-accessible bus in any analog or unencrypted, compressed form. In the event such unencrypted, uncompressed content is transmitted over a user-accessible bus in digital form, such content shall be either limited to standard definition (720 X 480 or 720 X 576), or made reasonably secure from unauthorized interception. Secure Content Decryption.Decryption of (i) content protected by the Content Protection System and (ii) CSPs (as defined in Section 2.1 below) related to the Content Protection System shall take place such that it is protected from attack by other software processes on the device, e.g. via decryption in an isolated processing environment.HD Analogue Sunset, All Devices.In accordance with industry agreements, all Approved Devices deployed by HBO Ole after December 31, 2011 shall limit (e.g. down-scale) analogue outputs for decrypted protected Included Films to standard definition at a resolution no greater than 720X480 or 720 X 576, i.e. shall disable High Definition (HD) analogue outputs. HBO Ole shall investigate in good faith the updating of all Approved Devices shipped to users before December 31, 2011 with a view to disabling HD analogue outputs on such devices.Analogue Sunset, All Analogue Outputs, December 31, 2013In accordance with industry agreement, after December 31, 2013, HBO Ole shall only deploy Approved Devices that can disable ALL analogue outputs during the rendering of Included Films. For Agreements that do not extend beyond December 31, 2013, HBO Ole commits both to be bound by this requirement if Agreement is extended beyond December 31, 2013, and to put in place before December 31, 2013 purchasing processes to ensure this requirement is met at the stated time.Additional Watermarking Requirements.Physical media players manufactured by Licensees of the Advanced Access Content System are required to detect audio and/or video watermarks during content playback after 1st February, 2012 (the “Watermark Detection Date”). HBO Ole shall require, within two (2) years of the Watermark Detection Date, that any new devices capable of playing AACS protected Blu-ray discs and capable of receiving and decrypting protected high definition content from the Licensed Service that can also receive content from a source other than the Licensed Service shall detect and respond to the embedded state and comply with the corresponding playback control rules. Stereoscopic 3D Restrictions & RequirementsThe following requirements apply to all Stereoscopic 3D content. All the requirements for High Definition content also apply to all Stereoscopic 3D content.Downscaling HD Analogue Outputs. All devices receiving Stereoscopic 3D Included Films shall limit (e.g. down-scale) analogue outputs for decrypted protected Included Films to standard definition at a resolution no greater than 720X480 or 720 X 576,”) during the display of Stereoscopic 3D Included Films. EXHIBIT DSVOD USAGE RULESUsers must have an active Account (an “Account”). All Accounts must be protected via account credentials consisting of at least a userid and password.All content delivered to Approved Devices shall be streamed only and shall not be downloaded (save for a temporary buffer required to overcome variations in stream bandwidth) nor transferrable between devices.All devices receiving streams shall have been registered with HBO Ole by the user.The user may register up to four (4) Approved Devices which are approved for reception of SVOD Service streams.At any one time, there can be no more than one (1) simultaneous stream of programs from any content provider on a single SVOD Service Account.HBO Ole shall employ effective mechanisms to discourage the unauthorized sharing of account credentials. Such effective mechanisms could include ensuring that unauthorized sharing of Account credentials exposes sensitive details or capabilities, such as significant purchase capability or credit card details.HBO Ole shall not support or facilitate any service allowing users to share or upload video content unless HBO Ole employs effective mechanisms (e.g. content fingerprinting and filtering) to ensure that Studio content (whether an Included Film or not) is not shared in an unauthorized manner on such content sharing and uploading services.EXHIBIT ECLIP CLEARANCE CHECK LISTNo clip containing the following may be used in advertising or promotion: 1)????? Nudity2)????? Simulated sex scenes3)????? Cameo appearances 4)????? Product placements? 5)????? Set dressing/props6)????? Third party footage 7)????? Wardrobe containing, for example, an image or slogan that has not been cleared8)????? Locations - a location itself that appears identifiably in a scene or something at that location that appears in the scene that is restricted from use (such as a mural, sculpture or sign)9)????? Dialogue - particular lines from the script that, e.g., refer to a real person/company10)?? Music - though, most if not all licensed cues (and score) in Columbia films are now cleared for in-context ad/promo uses, this may still be an issue in rare instance. ................
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