SUBSCRIPTION VIDEO-ON-DEMAND LICENSE AGREEMENT

THIS SUBSCRIPTION VIDEO-ON-DEMAND LICENSE AGREEMENT (this Agreement”), dated as of ______, 2012(“Effective Date”), is entered into by and between Colgems Limited, a United Kingdom corporation(“Licensor”), and NetflixLuxembourg S.àr.l., a Luxembourg limited liability company (“Licensee”). For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

  1. DEFINITIONS. All capitalized terms used herein and not otherwise defined in this Agreement shall have the meanings set forth below.
  2. “Animated Half Hour” shall mean a fully animated television series, each episode of which is a half broadcast hour.
  3. “Applications” shall mean web applications created by developers using Application Programming Interfaces (commonly known as APIs) released by Licensee, which web applications will enable Registered Users and other users in the Territory, as applicable, to, for example, access Licensee’s website; add or remove a movie from a Registered User’s “queue;” or receive and watch, via Approved Deliveryon an Approved Device [#SPE: To discuss and note remaining requirement we would like to clarify that playback can only take place using a Playback Client and that “Applications” effect a connection to the Neflix service but are not responsible for protecting and rendering content],a trailer, Promotional Preview or Included Program. For the avoidance of doubt, the playback of Included Programs through the use of Applications and Playback Clients shall be:
  4. available to Registered Users only; andwill be
  5. hosted and authenticated by the SVOD Service;,
  6. subject to the terms and conditions of this Agreement (including, without limitation, the Usage Rules and Content Protection Requirements and Obligations as set out in Schedule B);, and shall
  7. require the launch of a separate web-browser window or similar user experience (i.e., the launch of a new playback window or web page) in which the Included Program will be playable;and
  8. /or be Netflix-branded, and all Applications shall include a Netflix-branded logo.
  9. “Approved Delivery” shall mean the streaming delivery of an encrypted (except with respect to files which are not Included Programs, such as promotional materials) digital electronic file over the public, global network of interconnected networks known as the Internet or “Worldwide Web”, using technology which is currently known as Internet Protocol, solely to an IP-addressable device. In no event shall Approved Delivery include downloading; provided that the limited buffering or caching of a temporary file that is inaccessible after initial viewing shall not be deemed downloading in violation of the requirements for Approved Delivery. For purposes of clarification, Approved Delivery shall include without limitation streaming delivery over the public Internet accessed (i) through the use of Blu-ray discs or other optical media that contain certain client software (excluding any Blu-ray discs or other optical media that contain pre-recorded long-form audiovisual content) that will initiate and authenticate (by utilizing the disc or optical media in an Approved Device) the transmission of data via IP (e.g., “BD-Live” technology) from the SVOD Service; (ii) through any private, closed or walled-garden IP networks(but in no event through any closed and proprietary cellular audio-visual content service or through any closed and proprietary satellite, cable or fiber optic audio-visual content service); and (iii) through the use of Applications and Playback Clients. [#To discuss]
  10. “Approved Device” shall mean a Software Device or Hardware Device (i) designed to directly receive audio-visual programming and a decryption key via Approved Delivery and output such programming for exhibition on its associated video monitor and (ii) capable of enforcing (a) the security and content protection specifications set forth on Schedule B attached hereto or such other specifications reasonably agreed to by the parties and (b) the usage rules set forth on Schedule D attached hereto.
  11. “Approved Format” shall mean a digital electronic media file compressed and encoded for secure transmission (a) in a Content Protection System and resolution in accordance with the specifications set forth in Schedule B attached hereto or (b) such other format as Licensor may approve in Licensor’s sole discretion.

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

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

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

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

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

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

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

1.14“Current Series” shall mean a Television Serieswhich Licensor makes available for license hereunder where at least one season of the series is being broadcast either (i) in the Territory or the U.S. for the first time during the Avail Term; or (ii) is still in production during the applicable Avail Year. Current Series shall be designated as “Current Series – 1 Hour” (i.e., where the duration of each episode is one broadcast hour) and “Current Series – Half Hour” (i.e., where the duration of each episode is a half broadcast hour).

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

1.16.“Feature Film(s)” shall mean those feature-length films which Licensor makes available for license hereunder, includingany Library Feature. Feature Films made available by Licensor and licensed by Licensee shall be Included Programs for all purposes of this Agreement.

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

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

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

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

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

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

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

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

1.27 “Launch Pack” shall mean the titles agreed between the parties as listed in ScheduleA. [#TBC]

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

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

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

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

1.321.30“Licensed Language” shall mean for each Included Program(i) the original language version, (ii) English (if the original language is other than English), (iii)Swedish (if the original language is other than Swedish), (iv)Norwegian (if the original language is other than Norwegian), (v)Finnish (if the original language is other than Finnish), and (vi)Danish (if the original language is other than Danish).

1.331.31“License Period” with respect to each Included Program shall mean the period during which Licensee may exhibit such Included Program as specified in Clause 4.2.

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

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

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

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

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

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

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

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

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

1.431.41“Registered User” shall refer to each unique userresident in the Territoryof an Approved Device registered with the SVOD Service and authorized to view an exhibition of an Included Program as part of the SVOD Service. [#To discuss]

1.46“Security Breach” shall mean a Security Flaw that results or may reasonably result in the unauthorized availability of any Included Program or any other motion picture that originated in its compressed form from files obtained from the SVOD Service, which unauthorized availability mayresult in actual or threatenedharm to Licensor. For clarity, a Security Breach does not include a Territorial Breach or a geofiltering Security Flaw. [# To discuss. Previously agreed and standard definition for Security Breach must be uniform across all agmts.]

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

1.48“Software Device” shall mean an IP-enabled, uniquely addressable Personal Computer, Tablet or Mobile Device that is not certified by Licensee as a Hardware Device and is capable of playing back content from the SVOD Service solely through the utilization of a software-based Playback Client; provided, however that Mobile Devices shall constitute Software Devices solely when receiving such audio-visual programming through the public Internet (as described in Clause 1.2). For the avoidance of doubt, Mobile Devices shall not constitute Software Devices when receiving audio-visual programming through any closed and proprietary cellular audio-visual content service (e.g., an equivalent in the Territory to Verizon’s V-Cast video service), or through any closed and proprietary satellite, cable or fiber optic audio-visual content service (e.g. Cablevision or TelefonicaIPTV). [#To discuss]