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EXHIBIT 10.1
DATED February 21, 2000
(1) JUPITER TELECOMMUNICATIONS CO., LTD
-AND-
(2) JUPITER PROGRAMMING COMPANY CO., LTD
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LONG TERM CARRIAGE AGREEMENT
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LATHAM & WATKINS
99 Bishopsgate
London
EC2M 3XF
Tel: 020 7710 1000
Fax: 020 7374 4460
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THIS AGREEMENT is made on the 21st day of February 2000
BETWEEN:
(1) JUPITER TELECOMMUNICATIONS CO., LTD, a kabushiki kaisha organised in
Japan, whose principal place of business is at 4-41-42 Higashi
Ikebukuro, Toshima-ku, Tokyo 170-0013, Japan ("JCOM"); and
(2) JUPITER PROGRAMMING COMPANY CO., LTD a kabushiki kaisha organised in
Japan, whose principal place of business is at Tokyo Opera City Tower
35F, 20-2, 3-chome, Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-14 , Japan
("JPC").
WHEREAS:
(A) JCom is a leading Multi-Systems Operator in Japan and JPC is involved in
the programming of a number of Japanese television channels covering
such genre as movies, sports, business news and shopping.
(B) The parties intend to enter into a long term carriage agreement, whereby
JCom shall carry cable television channels and services supplied by JPC.
IT IS AGREED as follows:
1. DEFINITIONS
Capitalised terms and expressions in this Agreement shall have the
following meaning:
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"CHANNELS" the Current Channels and the Future
Channels, and each a "Channel";
"CHANNEL PERFORMANCE" the performance of a Channel as assessed
by surveys conducted in accordance with
recognised professional standards,
including information on viewer
satisfaction and other relevant data;
"CURRENT CHANNELS" CSN, Golf Network, Shop Channel, J
Sports and Discovery Japan;
"FUTURE CHANNELS" any channel in which, during the Term of
this Agreement, JPC takes a Significant
Position;
"LICENSE FEE" the license fee payable in relation to
each Channel calculated, in the case of
JCom, on a per subscriber basis as
validated and agreed from time to time;
"SIGNIFICANT POSITION" control exercised through: (a) the
direct or indirect ownership of twenty
percent (20%) or more of the stock,
shares or other voting
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interests; or
(b) the direct or indirect ownership of
stock, shares or other voting interests
together with a contract for affiliate
sales in relation to any undertaking
that owns or operates programming of a
cable television channel or is otherwise
able to offer a cable television channel
to a cable operator.
"TERM" the term of the Agreement as set out in
Clause 7.
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2. CARRIAGE OF CHANNELS
2.1 Subject to the terms of this Agreement, JCom agrees to carry and
JPC agrees to exercise its Significant Position in favour of
providing, each of the Current Channels for as long as JPC
retains a Significant Position in such Current Channel.
2.2 Subject to the terms of this Agreement, JCom agrees to carry and
JPC agrees to exercise its Significant Position in favour of
providing, each Future Channel in which JPC takes a Significant
Position for as long as JPC retains a Significant Position in
each Future Channel, provided that the initial proposed
investment in each Future Channel shall be discussed with JCom
before JPC invests to enable agreement to be reached between them
in good faith.
2.3 Subject to any licence granted in respect of sub-Clauses 2.1 and
2.2 above, JPC retains all rights, title and interest in and to
the Channels.
3. QUALITY OF CHANNELS
3.1 JPC agrees to use its best endeavours (within commercially
acceptable limits) to ensure that each Channel is, and continues
to be, of good quality and is better or not dissimilar in quality
than other competing channels of a similar genre taking into
account trends in the cable television industry.
3.2 If the average Channel Performance over a period of twelve months
is demonstrably worse than the previous twelve month period or is
demonstrably worse as against the average Channel Performance of
competing channels of a similar genre over a period of twelve
months, JCom and JPC agree to meet to decide what action should
be taken to improve the Channel Performance. Remedies may
include, but shall not be limited to, changing the Channel
content, modifying the marketing strategies, reviewing the
License Fee for the Channel, changing the Channel's package or
tier position or, if none of these provides a viable alternative,
ultimately ceasing carriage of the Channel by JCom.
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4. LICENSE FEE
4.1 For so long as JCom remains a leading provider of cable
television channels in Japan, JCom shall be required to pay
License Fee payments to JPC on no less favourable terms than are
offered by JPC to any other cable operator unless specifically
agreed otherwise by JCom. To the extent that JPC offers a License
Fee to any party on better terms than those offered to JCom (save
as agreed otherwise between JPC and JCom), JPC shall reimburse
JCom an amount equal to the difference in monetary terms.
4.2 In consideration of JPC's undertaking set out in Clause 3.1, JCom
shall be required to pay License Fee payments to JPC on no less
favourable terms to JPC than are offered by JCom to channels of a
similar genre.
4.3 Where License Fee payments cannot meet the requirements of both
Clause 4.1 and 4.2, JPC and JCom shall discuss the Licence Fee to
enable agreement to be reached between them in good faith.
4.4 Within the Term and subject to Clause 3.2, JCom and JPC will meet
to review the License Fee for each Channel every three years
commencing on the date that the License Fee is agreed for that
Channel. In evaluating the amount of the License Fee, the parties
shall only take into consideration changes in costs or operating
conditions for JCom and JPC that are significant.
5. MARKETING AND BUSINESS CO-OPERATION
5.1 The parties will meet at least twice each year during the Term to
discuss marketing plans, joint marketing activities, business
operations and any other activities leading to further
development of business for both JCom and JPC.
6. DIGITAL SERVICES DEVELOPMENT
6.1 The parties agree to jointly develop interactive video services
and PPV/NVOD for cable digital services.
6.2 Each party agrees to assign senior and other staff on a fulltime
or part time basis, as is considered appropriate by the parties,
to an entity or group of entities involved in developing new
content for digital carriage.
7. TERM
7.1 The initial term of this Agreement shall be 10 years following,
which the Agreement shall be subject to automatic renewal for
periods of 3 year, terminable by 3 month's notice in writing to
the other party.
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8. VARIATION
8.1 A variation of this Agreement is valid only if it is in writing
and signed by or on behalf of JCom and JPC.
9. ASSIGNMENT
9.1 Neither party may assign or transfer or purport to assign or
transfer any of its rights or obligations under this Agreement
without the prior written consent of the other.
10. GOVERNING LAW
10.1 This Agreement shall be governed and construed by the laws of
Japan.
IN WITNESS WHEREOF the parties have executed this document on the date
first above written.
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Signed by [ ] )
a duly authorised )
representative for )
and on behalf of ) /s/ T. Ishibashi
JUPITER )
TELECOMMUNICATIONS CO., LTD )
Signed by [ ] )
a duly authorised )
representative for )
and on behalf of ) /s/ T. Moriizumi
JUPITER )
PROGRAMMING )
COMPANY CO., LTD )
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