EXHIBIT 10.30
Joint Venture Agreement
As of September 17, 1996
RE: BET Movies . Starz13
The purpose of this Joint Venture Agreement (this "Agreement") is to set
forth certain mutual understandings between Black Entertainment Television, Inc.
("BET") QE divided by, Ltd. ("QE divided by"), and Encore Media Corporation
("EMC"), with respect to the material terms of their agreement to form a venture
(the "Venture") to conduct the business of BET Movies - Starz13 in the Territory
(as hereinafter defined). The parties agree to use their reasonable best efforts
to negotiate in good faith, as soon as reasonably practicable, definitive
documentation embodying the terms set forth herein and other customary terms for
the Venture (the "Owners Agreement"). Subject to the negotiation and execution
of the Owners Agreement, and approval by the Board of Directors or other
governing body of each of the parties hereto, this Agreement, as modified by the
Owners Agreement, shall constitute a binding agreement among the parties hereto.
If such board or other governing body approval is not received on or before
October 31, 1996, this Agreement shall automatically terminate.
1. Business Purpose. The Venture will be engaged in the programming and
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distribution of BET Movies - Starz13, a multiplex pay tv channel of Starz-encore
8 (the "Business") throughout the United States and its territorial possessions
(the "Territory").
2. Structure/Equity.
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a. The Venture will be structured as a limited liability company or
limited partnership, the specific form of which will be selected with a view
towards maximizing overall limited liability protection and tax efficiencies for
each of the parties hereto.
b. Initial equity ownership shall be as follows:
(i) BET 49%
(ii) QE+ 49%
(iii) EMC 2%
3. Capitalization.
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a. QE+ and EMC shall collectively provide to the Venture,
on an ongoing basis, the following:
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(i) certain movies licensed by QE+ and/or EMC in
their first pay television window, with black talent
(actors, directors, producers, etc.) and/or black themes,
in accordance with their multiplex rights:
(ii) certain movies licensed by QE and/or EMC which
are in pay windows subsequent to their first pay
television window, with black talent (actors, directors,
producers, etc.) and/or black themes, in accordance with
their multiplex rights; and
(iii) Use of the Starz!3 name.
b. BET shall provide to the Venture, on an annual basis, except as
otherwise noted, the following:
(i) Promotional avails on Black Entertainment Television
Network ("BET Network"), to be used for promotion of BET
Movies & Starz!/Encore Multiplexes: the number of spots
delivered by BET for promotion of BET Movies and
Starz!/Encore Multiplex is based upon the following
formula:
Prime Time: 4.000 30-second spots x 1.8 black household
Xxxxxxx rating x current number of BET black households.
Day Time: 4.000 30-second spots x 0.9 black household
Xxxxxxx rating x current number of BET black households.
The number of spots will be adjusted accordingly,
depending upon a change of black household ratings or the
number of BET black households. The number of prime time
promotional avails per year, each with a 30 second
duration, shall be provided evenly over the days of each
week of the year, between the hours of 7:00 p.m. and
11:00 p.m., EST, and the number of day time promotional
avails per year, each with a 30 second duration, shall be
provided evenly over the days of each week of the year,
between the hours of 9:00 a.m. and and 7:00 p.m, and 11:00
p.m. and 1:00 a.m., EST. The foregoing promotional avails
shall be reduced by 2/3 after the fifth full calender year
of the Venture.
(ii) Celebrity endorsement for BET Movies, including but not
limited to: (A) S "A" list spokespersons, who are
reasonably acceptable to the Managing Member (as defined
below), and (B) 40 additional spokesperson, who are
reasonably acceptable to the Managing Member. (NOTE: "A"
list is not a static list)
(iii) Twelve full page, 4 color ads, one in each edition of BET
weekend,
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reasonably acceptable to the Managing Member. (NOTE: On an
occasional basis. BET may substitute a feature length
editorial or other feature in place of an ad, however, the
primary emphasis must be on ads and not editorials or
features.).
(iv) Twelve to fifteen Screen Scene segments per month,
reasonably acceptable to the Managing Member.
(v) BET Movies sponsorship of "Black Events" reasonably
acceptable to the Managing Member.
(vi) Use of the BET name and logo, subject to BET approval.
(vii) The reasonable efforts of Xxx Xxxxxxx and BET to do their
best to (A) promote and influence distribution of BET
Movies by multichannel video distributors, and (B)
interface with the Black creative community for access and
publicity.
c. BET shall be obligated to fund all operating costs of the Venture
up to a maximum amount of $24.1 million in accordance with the "BET Movies Cost
Analysis" faxed to Xxx Xxxxxxx from Xxxxxxx Xxxxxx on September 12, 1996
(attached hereto as Exhibit A), of which 80% shall be in the form of mandatory
capital contributions, and 20% in the form of loans to the Venture. Thereafter,
all capital needs of the Venture shall be provided by the parties hereto in
accordance with their respective equity ownership interests, and shall be made
only with the prior approval of all of the parties hereto.
4. Distributions/Profits and Losses.
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a. As between the parties hereto, all distributions of available
cash shall be made:
(i) First, to BET in an amount necessary to repay all loans made
by BET to the Venture.
(ii) Thereafter, to the parties hereto, in accordance with their
respective equity ownership interests.
b. Any profits and losses of the Venture will be allocated to each
of the parties hereto in accordance with their respective equity ownership
interests.
5. Governance.
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a. Except as provided below in this paragraph 5, the business
affairs and day-to-day management of the Venture shall be directed and
controlled by EMC (the "Managing Member").
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b. Specific matters requiring approval of all of the parties hereto:
(i) Sale of all or substantially all of the Venture's assets.
(ii) Material change in the Business of the Venture.
(iii) Additional capital calls in excess of the amount specifies
in paragraph 3.c. above.
(iv) Material change in pricing of BET Movies.
c. In the event that during any year of the Venture, the year end
Starz! subscriber distribution is less than 70% of the projection as provided on
Exhibit B hereto, then for the immediately following fiscal year of the Venture,
BET will have the right to approve the costs and expenditures of the Venture, as
set forth in the Venture's budget for such year.
6. Miscellaneous
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a. Transfer. Prior to the execution of the Owners Agreement, neither
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party will be entitled to transfer any of its rights or obligations hereunder or
any of its interest in the Venture without the express written consent of the
other party, provided that either party will be entitled to transfer its rights
hereunder and/or its interest in the Venture to any Affiliate of such party but
such transfer will not serve to release the transferring party from any of its
obligations hereunder. The term "Affiliate" of a party, as used herein shall
mean an individual, corporation, partnership, limited liability company or other
entity (a "Person") that Controls, is Controlled by,or is under common Control
with such party, and "Control" means the possession, directly or indirectly, of
the power to direct the management and policies of a Person, whether by
ownership of voting securities, by contract, or otherwise. A "Controlled
Affiliate" of a Person is an Affiliate of such Person which such Person
Controls. It is the intention of the parties hereto that the Owners Agreement
shall provide an exit mechanism for the parties hereto, after the expiration of
five years. Such provision shall be mutually agreeable to the parties.
Notwithstanding the foregoing, BET shall have the right to transfer up to (10%)
of its interest in the Venture to attract either the 5 "A" list spokespersons
referenced in Paragraph 3.b. hereof or such other spokespersons or persons of
influence, in any case reasonably acceptable to the Managing Member.
b. Confidentiality. Any dissemination of confidential information or
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any disclosure or announcements public or private regarding the existence or
terms of this agreement is subject to approval of all equity holders, provided
that a party may disclose such information or make a public announcement (with
prior notice to the other party) if required by a valid, binding and
non-appealable court order or applicable securities laws.
c. Governing Law. This Agreement will be governed in all respects by
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the laws of Colorado.
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d. Counterparts. This Agreement may be executed in counterparts and
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each will be deemed an original.
The parties indicate their agreement to the foregoing by signing in the space
provided below.
By: [SIGNATURE ILLEGIBLE]
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BET
By: [SIGNATURE ILLEGIBLE]
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QE divided by
By: [SIGNATURE ILLEGIBLE]
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EMC
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