Dutch Joint Venture Agreement

Exhibit 10.13


JOINT VENTURE AGREEMENT


among


ALCAS HOLDING B.V.


and


MUZAK LIMITED PARTNERSHIP


August 2, 1995


TABLE OF CONTENTS
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Page
---- I. ORGANIZATION, NAME AND
CAPITALIZATION OF THE COMPANY.............. - 1 -
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1.1 Incorporation.................................. - 1 -
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1.2 Proprietary Marks.............................. - 2 -
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1.3 Initial Capital................................ - 2 -
---------------
1.4 Subscription of Company Shares................. - 2 -
------------------------------
1.5 Additional Equity.............................. - 2 -
-----------------
1.6 Initial Indebtedness........................... - 3 -
--------------------
1.7 Additional Indebtedness........................ - 3 -
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II. BUSINESS OF THE COMPANY.............................. - 3 -
-----------------------
2.1 Purpose........................................ - 3 -
-------
2.2 Distributors................................... - 4 -
------------
2.3 ALCAS as Distributor........................... - 4 -
--------------------
2.4 License of Intangibles and Provision of
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Services....................................... - 4 -
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III. DIRECTORS, MANAGEMENT, SHAREHOLDERS, AUDITS......... - 5 -
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3.1 Board of Managing Directors.................... - 5 -
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3.2 Proxy Holders........................................ - 5 -
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3.3 Fundamental Issues............................. - 5 -
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3.4 Deadlock....................................... - 6 -
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3.5 Shareholder Actions............................ - 8 -
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3.6 Financial Statements, Auditors and Fiscal
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Year........................................... - 8 -
----
IV. RESTRICTIONS ON DISPOSITION OF STOCK................. - 8 -
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4.1 Restrictions................................... - 8 -
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4.2 Voluntary Disposition of Shares................ - 8 -
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V. RIGHT TO ACQUIRE SHARES............................... - 10 -
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5.1 Triggering Event............................... - 10 -
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5.2 Right of Election.............................. - 10 -
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5.3 Cumulative Rights.............................. - 11 -
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5.4 Automatic Dissolution.......................... - 11 -
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5.5 Dissolution by Mutual Consent.................. - 11 -
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VI. CONFIDENTIALITY...................................... - 11 -
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VII. NON-COMPETITION..................................... - 12 -
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VIII. MUZAK'S PROPRIETARY MARKS.......................... - 12 -
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8.1 Ownership...................................... - 12 -
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8.2 Infringement................................... - 13 -
------------
8.3 Use............................................ - 13 -
---
8.4 Substitution of Proprietary Marks.............. - 14 -
---------------------------------


IX. MISCELLANEOUS PROVISIONS............................. - 14 -
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9.1 Nonwaiver of Rights............................ - 14 -
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9.2 Terms of Agreement............................. - 14 -
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9.3 Assignment..................................... - 15 -
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9.4 Integration.................................... - 15 -
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9.5 Severability................................... - 15 -
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9.6 Notices........................................ - 16 -
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9.7 Necessary Measures and Good Faith; No Agency... - 16 -
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9.8 Governing Law.................................. - 17 -
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9.9 Closing........................................ - 17 -
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9.10 Captions....................................... - 17 -
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9.11 Counterpart Originals.......................... - 17 -
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EXHIBITS


EXHIBIT A - Articles of Incorporation of the Company


EXHIBIT B - MUZAK's Proprietary Marks


EXHIBIT C - Distributor Agreement


EXHIBIT D - Software and Programming Provided by MUZAK and Services Provided
by ALCAS


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THIS AGREEMENT is entered into this second day of August, 1995 by and among ALCAS HOLDING B.V., a Netherlands corporation, having its principal business office at Naarden ("ALCAS") and MUZAK LIMITED PARTNERSHIP, a Delaware, U.S.A. limited partnership, having its principal business office at 2901 Third Avenue, Suite 400, Seattle, Washington 98121 ("MUZAK").


WITNESSETH
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WHEREAS, ALCAS and MUZAK desire to establish on the terms and conditions hereinafter set forth a Netherlands corporation to engage in the production and distribution of music, advertising, data, visual merchandising and business television throughout Europe;
WHEREAS, the primary contribution of ALCAS to the corporation shall be to provide access to its distribution network as a distributor for the corporation as well as programming and marketing support, and the primary contribution of MUZAK to the corporation shall be its knowledge and experience in satellite delivery of services, its technical know-how, and programming;
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:


I. ORGANIZATION, NAME AND
CAPITALIZATION OF THE COMPANY
-----------------------------


1.1 Incorporation. In connection with the execution of this Agreement,
------------- the parties shall cause the organization under the laws of the Netherlands of a new corporation named "MUZAK EUROPE B.V." (the "Company"). The Articles of Association of said new corporation shall be substantially in the form of Exhibit A attached hereto and made a part hereof. The Company will have its principal office in Hilversum, Netherlands. The parties hereby agree to take such steps and to execute such documents as may be necessary to qualify the Company to do business in the Netherlands, and elsewhere throughout Europe as


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required.
1.2 Proprietary Marks. Subject to the terms and conditions herein
----------------- contained, MUZAK hereby grants to the Company an exclusive, nontransferable license to use and to sublicense distributors to use the Proprietary Marks now or hereafter set forth on Exhibit B on or in connection with the distribution of music, advertising, data, visual merchandising and business television throughout Europe. The Company is granted no other license hereby, and specifically is granted no license, right or permission to use the Proprietary Marks except in connection with the business to be operated under this Joint Venture Agreement. ALCAS shall not have any right to use the Proprietary Marks. The foregoing license shall terminate upon the dissolution of the Company and/or upon the sale by MUZAK of all of its shares of the Company's stock; provided, however, that the Company shall be entitled to a sixty day transition period following a dissolution or sale by Muzak in order to change its name and remove the Proprietary Marks from its equipment, supplies and marketing materials in an orderly fashion.
1.3 Initial Capital. The initial authorized capital of the Company shall
--------------- be 4.000.000 Netherlands guilders, divided into 4.000.000 shares of one (1) Netherlands guilder nominal value each, of which authorized capital 970.000 shares shall be issued and paid up in cash at the incorporation of the Company.
1.4 Subscription of Company Shares. It is agreed that ALCAS shall
------------------------------ subscribe to 485.000 shares against payment of 485.000 Netherlands guilders and MUZAK shall subscribe to 485.000 shares against payment of 485.000 Netherlands guilders.
1.5 Additional Equity. It is contemplated by the parties that additional
----------------- capital requirements of the Company shall be met, to the extent possible, by borrowing. However, upon a determination by the Board of Managing Directors of the Company that additional shareholders' equity is necessary, the parties, as shareholders of the Company, shall take such steps as may be deemed necessary or appropriate by the Board of Managing Directors to increase their respective equity investments in the Company by issuance of additional shares of capital stock,


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contributions to capital or otherwise. All such increases in equity investment by the parties shall be pro rata to each shareholding, and the requirement that each party make any additional investment shall be conditional upon (a) the making of a pro rata additional investment by the other party; and (b) the absence of a material breach by the other party of any provision of this Agreement. In no event shall MUZAK or ALCAS be required to invest additional amounts in excess of 275.000 Netherlands guilders.


1.6 Initial Indebtedness. It is contemplated by the parties that ABN
-------------------- AMRO, a Netherlands bank, shall lend the Company 800.000 Netherlands guilders as part of the initial capitalization of the Company. The parties shall take all steps as are necessary to cause such indebtedness to be incurred by the Company on the terms and conditions as the parties may deem appropriate.


1.7 Additional Indebtedness. In the event that the Board of Managing
----------------------- Directors of the Company determines that it is necessary or desirable for the Company to raise funds by incurring additional indebtedness, the parties shall take such steps as are necessary to cause such indebtedness to be authorized and incurred by the Company on such terms and conditions as the Board of Managing Directors may deem appropriate. In no event shall the Company incur additional indebtedness in excess of 550.000 Netherlands guilders.


II. BUSINESS OF THE COMPANY
-----------------------


2.1 Purpose. The purpose of the Company shall be to provide distribution
------- of music, advertising, data, visual merchandising and business television (collectively, the "Services") throughout Europe and activities incident thereto and to engage in such other related activities as the General Meeting of Shareholders of the Company by amending the Articles of Association of the Company shall determine are in the best interest of the Company. The intention of this Agreement is for both parties to provide all Services through the Company. Satellite provided services


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shall exclusively by both parties be provided through the Company. However, each party may provide Services (other than satellite provided Services) to distributors (other than distributors who have entered into distributor agreements with the Company) in Europe. To the extent a party provides Services to a distributor who has entered into a distributor agreement with the Company, such party shall provide such Services for the relevant territory on an exclusive basis through the Company.
2.2 Distributors. The Company shall appoint and maintain a network of
------------ distributors throughout Europe (each a "Distributor" and collectively "Distributors") to market and distribute a music, advertising, data, visual merchandising and business television services (the "Services") within a prescribed territory (the "Territory") to customers who enter into agreements providing for receipt of the Services at certain commercial locations ("Subscriber Premises"), such Distributor Agreement substantially in the form of Exhibit C attached hereto.
2.3 ALCAS as Distributor. Following execution of this Agreement, the
-------------------- Company shall appoint and enter into a Distributor Agreement with one or more controlled subsidiaries of ALCAS, and such subsidiaries shall agree to act, as exclusive distributors of the Services to subscribers located within the Benelux.
2.4 License of Intangibles and Provision of Services. The parties
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