JOINT VENTURE AGREEMENT
AGREEMENT dated as of this June, 1997 between KALEIDOSCOPE, a corporation
organized under the laws of the state of Delaware ("Kaleidoscope") and SPORTS
MARKETING, INC. a corporation organized under the laws of the state of Delaware
("Sports."). Kaleidoscope and Sports Marketing, Inc. shall sometimes be referred
to collectively as the "Venture Partners and singly as a Venture Partner".
WHEREAS, the Venture Partners wish to work together in connection with the
staging of television boxing events and the exploitation of other ancillary
properties and rights in connection therewith;
WHEREAS, the Venture Partners together currently are in the process of
developing or have developed Boxcino(TM) a Latin American boxing championship,
BoxAsia, in Asian boxing championship and Pazienza pay-per-view events
(referred to as the Boxing project(s)). In addition, Sports Marketing, Inc.
desires that the Venture Partners jointly own rights pursuant to promotional
agreements with the boxers from Boxcino presently under the Promotion Agreements
with Sports Marketing, Inc and listed in Schedule A hereto as well as boxers
participating in BoxAsia, ("Subject Boxers")
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows;
1. General
A. "Event" shall refer to one or more boxing matches or series of matches
pursuant to any Boxing Project or which involves a Subject Boxer.
B. At the request of either party the parties shall conduct the business of
the joint venture through a Limited Liability Company consistent with the terms
of this Joint Venture Agreement.
C. The parties shall cooperate in developing and defining the Boxing
Projects and staging Events involving the Boxing Projects and Subject Boxers.
All Events and the terms thereof shall be subject to the mutual agreement of
each Venture Partner including the budget therefore. The parties shall negotiate
the terms of each Boxing Project and Event as well as the terms of any Limited
Liability Company Agreement in good faith and use their best efforts to
conclude an agreement consistent with the terms of this Venture Agreement.
II. RESPONSIBILITIES OF KALEIDOSCOPE
A. Kaleidoscope will be responsible for, and will use responsible efforts
in connection with, selling all television rights (including the negotiation of
domestic rights fees).
B. Kaleidoscope shall also be responsible entering into arrangements for
the television production and domestic and worldwide distribution of all Events
that are televised.
C. Kaleidoscope shall be responsible for obtaining the trademark of Boxcino
transferred to or licensed the Venture partners from KS&E.
III. RESPONSIBILITIES OF SPORTS MARKETING, INC.
A. Sports Marketing, Inc. shall be responsible for providing all of the
first-class boxing talent (including referees, judges and ring announcers) to be
used in connection with each of the Events.
B. Sports Marketing, Inc. shall be responsible for securing all of the
required licenses and appropriate sanctions in connection with Event to secure
that all Events are First-class events.
C. Sports Marketing, Inc. shall be responsible for obtaining the site for
each of the Events. Sports Marketing, Inc. shall not commit to using any site
without the prior approval of Kaleidoscope pursuant to Article 1C.
III. RESPONSIBILITIES OF THE VENTURE PARTNERS
A. Venture partners will be equally responsible for the international
distribution of the Events (including without limitation, the negotiation of all
international rights fees, distribution fees and advertising sales, if any).
B. Except to the extent a party is responsible for advancing such costs
pursuant to Article I or II the Venture Partners shall be equally responsible
for all cost and expenses incurred in connection with the staging and production
of all Events. Notwithstanding the foregoing, each of the Venture Partners shall
be responsible for their own travel and entertainment expenses incurred in
connection with the performance of their duties under Sections I, II and III,
respectively, of this Agreement.
C. The cost of all on-site management at each Event shall be provided by
Kaleidoscope and Sports Marketing, Inc. and all costs incurred therewith shall
be shared equally by the Venture Partners.
The sales, marketing and event management plan for the live Events shall be
agreed upon by the Venture Partners at least 3 months prior to the date
scheduled for each Event.
D. Each of the Venture Partners shall share equally in all rights to
promote and market each of the fighters used in the Events. Sports Marketing,
Inc. shall cause each fighter to enter into an exclusive agreement with the
Venture Partners and the joint venture for the marketing and promotion of their
professional fighting careers.
IV. GENERAL PROVISIONS
A. The terms of this agreement shall run for so long as the Events continue
to occur or a Subject Boxer is under a promoting agent with Sports Marketing,
Inc. This Agreement may be terminated by the Venture Partners against other
Venture Partner for non-performance of the material provisions of this Agreement
upon 30 days prior written notice with a right of such Venture Partner to cure
such non-performance of a material provision. The parties hereto may agree to
extend the term of this Agreement upon the written approval of each of the
parties.
(2)
B. All net profits and losses realized in connection with the Events shall
be divided evenly between the Venture Partners. Net profits or losses shall be
determined by subtracting the gross revenues received in connection with the
Events in any one year less the direct costs incurred in connection with staging
and producing said events (including the costs of any payments made to third
parties). The travel and entertainment costs of each party are specifically to
be absorbed by such party and shall not be considered a cost of the event for
the purposes of determining net profits or losses, a more detailed example of
the calculation of Net Income is set forth in Exhibit B which contains a
description of the types of revenues to be included in the Venture.
C. The parties hereto agree that any disputes between the parties shall be
determined by arbitration (arbitration provision).
D. This Agreement may be modified only upon the mutual consent of the
parties hereto. This Agreement shall be governed by and construed in accordance
with the laws of the state of New York
E. Each of the Venture Partners hereby indemnifies and holds the other
Venture Partners, their affiliates, officers, employees, directors and agents
harmless from all claims, demands, expenses (including reasonable attorney's
fees), liabilities, suits and proceedings that arise from, or may be
attributable to their own errors, omissions or fault.
F. Each party hereto agrees to hold in confidence all confidential
information disclosed to it in connection with the services provided for by this
Agreement.
G. All bills, invoices, payments, notices and other communication required
or permitted hereunder shall be deemed to be received (1) when hand delivered,
(2) Ten (10) days after the date of deposit in the United States mail, sent by
registered or certified mail, return receipt requested, postage prepaid, (3)
when delivered by document overnight delivery service (4) when sent by telecopy
provided that a confirmation copy is sent the next business day by first class
mail, return receipt requested, postage prepaid to the party to whom the same is
directed at the following addresses ( or any other address delivered by notice
to the other parties):
KALEIDOSCOPE: Kaleidoscope Media Group, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SPORTS MARKETING, INC. Sports Marketing Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx "X"
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(3)
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first written above
KALEIDOSCOPE MEDIA GROUP, INC. SPORTS MARKETING INC.
/s/ ILLEGIBLE /s/ XXXXXX X. XXXXXXX
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By: By:
Title: Title: PRESIDENT
(4)
