Affiliation Agreement

EXHIBIT 10.72


AFFILIATION AGREEMENT


THIS AGREEMENT ("Agreement"), dated as of November 29, 1995, is by and
----------- between DMX INC., a Delaware corporation, with offices at 11400 West Olympic Boulevard, Suite 1100, Los Angeles, California 90064-1507 ("DMX") and AlphaStar Television Network, Inc., a Delaware corporation, with offices at 208 Harbor Drive, Building One, 1st Floor, Stamford, Connecticut 06904 ("Affiliate").


WHEREAS:


A. Affiliate has established or is in the process of establishing a direct broadcast service satellite-based television system in North America ("DBS Distribution System"); and


B. Affiliate desires to obtain the right to distribute the "Service" (as defined herein) via the DBS Distribution System.


NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:


1. DEFINITIONS.
-----------


Attached hereto as Schedule "A" is a glossary containing the definitions of capitalized terms used in this Agreement.


2. TERM.
----

The term of this Agreement shall be for five (5) years commencing as of the date hereof with one (1) automatic renewal for an additional five-year period unless either party notifies the other in writing at least six (6) months prior to the expiration of the initial five-year period of its desire not to renew. In the event this Agreement expires or terminates for any reason other than a termination by DMX as a result of Affiliate's breach or misrepresentation, DMX shall continue to license Affiliate to distribute the Services to Subscribers pursuant to the terms and conditions of this Agreement for a period of time that is the shorter of twelve (12) months or that number of months necessary for Affiliate to continue to serve Subscribers who purchased subscriptions to the Services that have not expired prior to said expiration or termination.


3. RIGHTS.
------


DMX hereby grants to Affiliate, and Affiliate hereby accepts, the right and obligation during the term hereof to launch and distribute the Service throughout the Distribution Area by means of the DBS Distribution System for reception at Private Residences and Commerical Establishments. The provisions regarding the distribution of the Service for reception at Commercial Establishments are set forth on Schedule "B" attached hereto.


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4. CONTENT OF THE SERVICE.
----------------------


(a) Channels. The Service as provided by DMX shall consist of at least
-------- sixty (60), but no more than One Hundred and Twenty (120), channels of audio music transmitted without commercial interruption, 24 hours a day, 7 days a week, in digital format. The channels will each be comprised of a different format of music, including, for example, but without limitation, jazz, classical, adult contemporary, rock, country, urban, "oldies" and latin music. DMX may, upon reasonable notice to Affiliate, make changes in the channels or in the genre of music. Channels may be added or deleted by DMX from time to time, provided that the rights and obligations of DMX and Affiliate Shall remain unaffected thereby. DMX shall use reasonable efforts to provide that the content of the Service is generally consistent with national broadcast standards applicable to musical programming.


(b) Affiliate may, at its option, and at its sole cost and expense, add channels ("Simulcast Channels") to be transmitted along with the Service for the simulcast of other programming. Simulcast Channels may only be transmitted and received by utilizing the proprietary technology referred to in Paragraph 6, below. In no event shall Affiliate's carriage of Simulcast Channels (i) affect DMX's right to receive license fees pursuant to Paragraph 8 below, which shall remain unaffected by such carriage; or (ii) cause DMX to incur any liability, cost or expense whatsoever.


(c) Other Content. The Service shall also include such data, transmission
------------- formats and other content as may be, in the judgment of DMX, necessary or appropriate to the transmission, reception and processing of the signal carrying the Service.


5. DELIVERY OF THE SERVICE BY DMX.
------------------------------


(a) DMX's Transmission of Service. Throughout the term hereof, DMX
----------------------------- shall transmit the Service's signal in such a manner that the Basic Service (as hereinafter defined) is able to be received using Affiliate's technology.


(b) Technical Information To Be Provided. DMX shall provide to Affiliate
------------------------------------ in a timely manner all information as may be necessary or appropriate concerning the following matters: (i) the technical specifications of the manner in which the Service will be provided to Affiliate, (ii) the technical specifications of all land-based equipment which Affiliate will be required to provide hereunder for reception and further transmission of the audio signals; and (iii) the technical information necessary for the deciphering or unscrambling of DMX's encrypted code. It is specifically understood, however, that nothing in the foregoing provisions shall be deemed either to give Affiliate any right in DMX's proprietary technology or to require DMX to provide any information with respect thereto not required by Affiliate in order to fulfill its obligations under this Agreement.


6. DISTRIBUTION OF THE SERVICE BY AFFILIATE.
----------------------------------------


(a) The DBS Distribution System. Throughout the term hereof Affiliate
--------------------------- shall distribute the Service via the DBS Distribution System. The term "DBS Distribution System" shall mean the distribution system for television programming services whereby the Service's signal is received at Affiliate's uplink facility and then is up-linked to a DBS communications satellite for transmission to Affiliate Subscribers.


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(b) Quality of Transmissions. Affiliate shall monitor the quality of the
------------------------ transmission of the Service to Service Subscribers, and shall promptly take all commercially reasonable steps necessary to maintain the high digital quality of the transmission and to correct any problems with the transmission of the Service which are within Affiliate's ability to control.


(c) Equipment and Maintenance. Affiliate and/or its Distributors shall
------------------------- supply, install, service and maintain or shall arrange for the supply, installation, servicing and maintenance, at its and/or their own cost and expense, all such facilities, equipment and hardware, including, without limitation, equipment necessary to receive the Service from the satellite, wiring and tuner/receivers as may be necessary and appropriate for the transmission of the Service to each Affiliate Subscriber. The tuner/receivers to be utilized for the reception of the Service by Affiliate Subscribers shall (i) with respect to the Basic Service be the equipment provided by Affiliate and/or its Distributors for the reception of other television programming services ("AlphaStar Box"), and (ii) with respect to the Premium Tier be equipment manufactured by a manufacturer authorized by DMX for audio only reception ("DMX Box"). The specifications for both the AlphaStar Box and the DMX Box shall be such that they shall be compatible with standard stereophonic equipment requiring left and right audio jacks; and such that they shall be addressable on a receiver-by-receiver channel-by-channel basis.


(d) Security Measures. Affiliate shall take commercially reasonable and
----------------- practical security measures to prevent the reception of the Service by any person or at any location which is not at the time in question an Affiliate Subscriber.


(e) No Alteration Editing or Delay; Selection of Channels. Affiliate will
----------------------------------------------------- distribute the Service during the hours it is provided by DMX, without alteration, editing or delay of any kind, except as otherwise specifically permitted by DMX. However, Affiliate shall have the right, in consultation with DMX, to select the channels it wishes to distribute (consistent with the level of service selected pursuant to Paragraph 7, below).


7. AFFILIATE DISTRIBUTION.
----------------------


Affiliate shall distribute the Service to Affiliate Subscribers as a Basic Service with a Premium Tier. Basic Service shall be defined as the delivery of thirty (30) or fewer channels of the Service, to be selected by Affiliate in consultation with DMX, by means of an AlphaStar Box which is made available to Affiliate Subscribers as part of Affiliate's basic service and for which no separate charge is made. Premium Tier shall be defined as the delivery of at least thirty (30) channels more than the number of channels delivered in Basic Service up to a total of One Hundred Twenty (120) channels of the Service to an Affiliate Subscriber by means of a DMX Box which is made available to Affiliate Subscribers for a separate charge.


8. LICENSE FEES FOR PRIVATE RESIDENCES.
-----------------------------------


(a) Basic Service. The monthly license fee for the Basic Service shall be
------------- [*] per Affiliate Subscriber per month. This license fee may be increased by the percentage amount of any increase ("CPI Increase") in the United States Consumer Price Index (All Urban Index) over the prior calendar year, with 1995 being the base year.


(b) Premium Tier Service. The monthly license fee for the Premium Tier
-------------------- Service shall [*]


- --------------


* Indicates that material has been omitted and confidential treatment has
been requested therefore. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.


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The Minimum Fee may be increased by DMX no more than once each calendar year, upon at least ninety (90) days prior written notice to Affiliate, by a percentage no greater than the percentage increase in the Consumer Price Index for such calendar year compared to the immediately preceding calendar year.


(c) Performance Rights. The Minimum Fee may be increased by DMX in a
------------------ pro-rated amount to reflect any increase at the time in question of the license fees payable by DMX in the aggregate to American Society of Composers and Publishers, Inc. ("ASCAP"), Broadcast Music Inc. ("BMI") and SESAC ("SESAC") (or their respective successors) and to any other entity, government authority or other person in connection with performance rights or other copyrights necessary for the production, transmission and performance of the Service for Affiliate Subscribers at Private Residences as contemplated by this Agreement and paid or to be paid by DMX. [*]


(d) Accounting Periods. The license fees payable with respect to a given
------------------ calendar month shall be due and payable thirty days after the end of that calendar month.


(e) Late Payments. Any license fee that is unpaid after it is due shall
------------- accrue interest at one and one-half percent per month or the highest lawful rate, whichever is less, from the due date until payment is received by DMX.


(f) Gratis Distribution. Affiliate shall pay to DMX the license fees set
------------------- forth in this paragraph 8, with respect to each Affiliate Subscriber for each month during the term hereof. [*]


- ---------------


* Indicates that material has been omitted and confidential treatment has
been requested therefore. All such omitted material has been filed
separately with the Commission pursuant to Rule 24b-2.


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9. REPORTS AND AUDITS.
------------------


(a) Accounting Report Forms. Affiliate shall deliver to DMX, not later
----------------------- than thirty days after the end of each calender month, a statement, with respect to license fees payable for the month reported, including license fees for both Private Residences and Commercial Establishments, on a form provided by DMX, or on a form provided by Affiliate which will be subject to DMX's reasonable approval and which contains all reporting information reasonably required by DMX.


(b) Books and Records. Affiliate agrees to keep and maintain accurate
----------------- books and records of all matters directly relating to the payment of all license fees under this Agreement in accordance with generally accepted accounting principles. During the term and until two years after the last license fee is required to be paid hereunder, such books and records shall be available for inspection and audit by DMX, its employees or agents, at the expense of DMX, at Affiliate's offices, upon reasonable notice to Affiliate. Notwithstanding the foregoing, in the event an audit of Affiliate's books and records results in a deficiency variance in Affiliate's accounting payments which is [*] or more, then Affiliate shall pay or reimburse DMX for all third party expenses incurred by DMX in connection with the audit. The right of DMX to perform such inspection and audit shall be limited to once in any twelve-month period and shall be limited to an inspection and audit with respect to amounts payable in the current and prior two (2) calendar years only. [*]


(c) Music Performance Reports. Affiliate shall provide DMX wi ...