EXHIBIT 10
SETTLEMENT AGREEMENT
This Settlement Agreement (hereafter "Agreement") is effective as of
the date executed below by and between Ecast, Inc. ("Ecast"), a Delaware
corporation having its principal place of business at 000 0xx Xxxxxx, Xxxxx 000,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 and TouchTunes Music Corporation ("TouchTunes"),
a Nevada corporation, having its principal place of business at 0 Xxxxxxxx
Xxxxx, 0xx Xxxxx, Nun's Island (Montreal), Xxxxxx X0X 0X0, Xxxxxx.
RECITALS
WHEREAS, TouchTunes is the owner of the entire right, title and
interest in United States Patent No. 6,308,204 (the "'204 patent");
WHEREAS, Ecast is the owner of certain intellectual property rights in
United States Patent No. 5,341,350 (the "'350 patent"), including the right to
sublicense the `350 patent, by virtue of a license agreement between Ecast and
the record owner of the '350 patent, NSM Music Group Limited ("NSM Gp");
WHEREAS, on December 21, 2001, Ecast filed a "First Amended Complaint
for Declaratory Relief of Patent Non-Infringement and/or Invalidity, Intentional
Interference with Contract; Unfair Competition" against TouchTunes in the United
States District Court for the Northern District of California, civil action
C01-4298 PJH;
WHEREAS, on January 10, 2002, TouchTunes filed an answer and
counterclaims in response to Ecast's first amended complaint, alleging
infringement of the '204 patent by Ecast and by third party Xxxx International
Inc., a Michigan corporation having its principal place of business in Grand
Rapids, Michigan;
WHEREAS, on December 3, 2003, Ecast filed suit against TouchTunes for
infringement of the '350 patent in the United States District Court for the
Northern District of California, civil action No. C03-5416 PJH;
WHEREAS, on January 6, 2004, TouchTunes filed an answer and
counterclaims in civil action C03-5416 alleging infringement of the '204 patent
against Ecast and Rock-Ola Manufacturing Corporation, a Delaware corporation
having its principal place of business at 0000 000xx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000 ("Rock-Ola").
WHEREAS, TouchTunes and Ecast desire to settle and dismiss all of the
pending patent litigations between them relating to the '204 and '350 patents;
and
WHEREAS, TouchTunes and Ecast each desire to obtain a non-exclusive
license to make, have made, use, sell and offer to sell the inventions described
and claimed in the respective '204 and '350 patents.
NOW, THEREFORE, in consideration of the promises and mutual covenants
set forth below, and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
PART I
SETTLEMENT OF ALL PENDING LITIGATIONS
1.1 Within five (5) business days following execution of this
Agreement, Ecast and TouchTunes will file a joint stipulated dismissal with
prejudice under Federal Rules of Civil Procedure 42(a)(1) and 42(a)(c) of all
claims and counterclaims asserted by either party in civil action Nos. C01-4298
PJH and C03-5416 PJH, with each party to bear its own costs. Ecast and
TouchTunes agree to take any and all other necessary steps to terminate the
litigations involving the '204 and '350 patents. Within five (5) business days
following execution, Ecast will also
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withdraw the Petition for Writ of Mandamus it filed in the U.S. Court of Appeal
for the Federal Circuit on April 20, 2004.
CONSIDERATION AND PAYMENTS
2.1 Ecast agrees to pay TouchTunes $4.00 million as full and final
settlement of the pending litigations between the parties. The settlement amount
is due and payable as of the date of this Agreement. However, Ecast may pay the
settlement amount in the manner set forth in Paragraphs 2.2 through 2.5 below.
2.2 Within 24 hours of the execution of this Agreement, Ecast shall pay
TouchTunes an initial payment of $500,000, paid to TouchTunes by either
certified check or bank draft.
2.3 Ecast shall also make ongoing payments to TouchTunes of $0.0050
(50/100 of a United States cent) for each play of any song on any device,
including digital jukeboxes, operating on any Ecast network or powered by Ecast
("Ecast Device") until the full amount of the settlement ($4.00 million) has
been satisfied. This ongoing payment applies to all songs played on any Ecast
Device, i.e., regardless of whether an end customer pays for the song. The
accrued payments under this Paragraph shall be paid by Ecast on a quarterly
basis within thirty (30) days after the end of each quarter, namely within
thirty (30) days after March 31, June 30, September 30 and December 31, provided
that the first payment be made thirty (30) days after June 30, 2004. Each
payment must be accompanied by a report having sufficient detail to determine
the combined total number of songs played on all Ecast Devices. Each report
shall include a certification of accuracy by Ecast's Chief Financial Officer.
2.4 TouchTunes shall have the right, upon not less than thirty (30)
days' written notice, to have made available to an independent auditor, solely
for the purpose of examining and making copies thereof, all of Ecast's relevant
books and records for the purpose of verifying
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the accuracy of Ecast's statements hereunder. Such examination shall occur
during normal business hours and at the place where Ecast normally maintains
such books and records. TouchTunes shall have the right to conduct such audit
once during each calendar year at TouchTunes' sole cost and expense; provided,
however, that in the event that any such examination reveals a verified
underpayment to TouchTunes of more than five (5%) percent, the reasonable costs
and expenses of such examination shall be borne by Ecast.
2.5 Notwithstanding the payments set forth in Paragraph 2.3, Ecast
shall pay to TouchTunes a minimum payment of $100,000 per quarter ($400,000 per
calendar year) until the full amount of the settlement ($4.00 million) has been
satisfied. However, Ecast is required to make only three quarterly payments for
the year 2004. The minimum payment of $100,000 per quarter is in lieu of the
per-play payments should the per-play payments not reach $100,000 in a
particular quarter.
2.6 When the total payments under this Agreement reach $4.00 million
(through minimum payments and/or accrued payments), no further payments under
this Agreement will be due to TouchTunes.
2.7 Ecast and TouchTunes agree that all payments due from Ecast under
this Agreement shall be made in United States currency and shall be subject to a
Security Agreement executed by the parties on or before the Effective Date of
this Agreement in the form attached hereto as Exhibit "A."
2.8 Interest shall accrue on any late payment by Ecast under this
Agreement at a rate corresponding to the United States prime rate plus three
percent, compounded monthly.
PART II
CROSS PATENT LICENSE GRANTS
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3.1 TouchTunes hereby grants to Ecast a non-exclusive, non-transferable
license to use, make, have made, sell, offer to sell, import and distribute
digital jukebox systems covered by the '204 patent, including any continuation,
continuation-in-part or divisional applications based upon the '204 patent, and
any reissued or reexamined patent based upon the '204 patent.
3.2 Ecast hereby grants to TouchTunes a non-exclusive, non-transferable
license to use, make, have made, sell, offer to sell, import and distribute
digital jukebox systems covered by the '350 patent, including any continuation,
continuation-in-part or divisional application based upon the '350 patent, and
any reissued or reexamined patent based upon the `350 patent.
PART III
MUTUAL COVENANT NOT TO ASSERT
4.1 The parties agree that, as of the date of this Agreement, neither
party is in violation of any of the other party's United States patents or any
United States patents under which either of the parties has rights. Each party
hereby agrees that it will not assert any existing patent against any current
product of the other party. Each party also hereby agrees that it will not
assert any existing patent against any manufacturer, distributor, operator or
end user of any current product of the other party.
PART IV
MISCELLANEOUS PROVISIONS
5.1 Within five (5) business days following execution of this
Agreement, the parties will prepare and issue the joint press release attached
as Exhibit B. Neither party will issue any further press release relating to
civil action Nos. C01-4298 PJH and C03-5416 PJH, without prior written consent
of the other party.
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5.2 The parties agree that they will not make disparaging statements
about the other party to the press, to potential customers, investors or any
other third party regarding any patents owned or licensed by either party as of
the date of this Agreement or the digital jukebox systems manufactured and sold
by either party and accused of infringement as of the date of this Agreement.
Each party may engage in normal marketing and sales activities.
5.3 The parties agree that within five (5) business days following
execution of this Agreement, they will prepare and file a joint motion with the
Court requesting that the Court vacate its Claim Construction Order dated
December 20, 2002. Each party agrees that it will not seek to enforce against
the other party Paragraph 19 of the Stipulated Protective Order Regarding
Confidential Information (entered May 3, 2002). The parties will also file a
joint request to have the Court strike Paragraph 19 of the Stipulated Protective
Order Regarding Confidential Information entered on May 3, 2002.
5.4 If either party defaults in any material way in its performance of
any of the terms of this Agreement, and such default is not cured within thirty
(30) days after written notice of such default by the other party, then the
other party may terminate the Agreement upon written notice. Such right of
termination shall not limit any other legal or equitable remedies or means of
redress to which the other party may be lawfully entitled.
5.5 The parties may disclose the existence of this Agreement. However,
the specific terms of this Agreement shall be considered confidential by the
parties and shall not be disclosed to any third party without obtaining the
prior written consent of the other party. The parties may disclose, without
prior written consent, this Agreement and the specific terms hereof as is
required by applicable law, rule, or regulation, or as is compelled by a court
or governmental agency, authority, or body.
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5.6 If disclosure of this Agreement to a third party, in whole or in
part, becomes reasonably necessary to further the legitimate business interests
of Ecast or TouchTunes (e.g., to financial consultants, financiers, lenders,
auditors, business consultants, legal consultants, those performing due
diligence business evaluations and the like having a need to know such
information for the benefit of a party to this Agreement), then such disclosure
can be made without the advance approval of the other party.
5.7 This Agreement and the rights of Ecast and of TouchTunes shall be
interpreted, governed, construed, applied and enforced in accordance with the
laws of the State of California or the United States of America, as applicable.
Any dispute arising under this Agreement shall be resolved in a court of
appropriate jurisdiction in San Francisco, California. Both parties consent to
the jurisdiction and venue of such court. Should suit be commenced concerning
any provision of this Agreement or any party's performance hereunder, the
prevailing party in such litigation shall be entitled to receive, in addition to
any other sums, its costs and actual attorneys' fees.
5.8 The undersigned represent that they have full corporate power and
authority to execute and deliver this Agreement on behalf of the respective
parties.
5.9 Any notice or request required or permitted to be given under or in
connection with this Agreement or the subject matter hereof shall be in writing
and shall be deemed to have been sufficiently given when sent by registered air
mail or overnight courier, postage or charges prepaid and addressed as follows:
---------------------------------------------------------------------------------------------------------
IF TO President IF TO President
ECAST: Ecast, Inc. TOUCHTUNES: TouchTunes Music Corporation
000 0xx Xxxxxx 0 Xxxxxxxx Xxxxx
Xxxxx 000 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 Nun's Island (Montreal)
X.X.X. Xxxxxx X0X 0X0
Xxxxxx
---------------------------------------------------------------------------------------------------------
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The date of receipt of any notice shall be deemed to be the date of postmark or
when received by certified mail.
5.10 Should any provision or part of this Agreement be found to be
invalid or unenforceable, only that particular provision or part shall be
inoperative, and all provisions and parts of this Agreement shall continue in
full force and effect and remain binding on all the parties.
5.11 This agreement shall be binding upon and inure to the benefit of
the respective parties, their respective legal successors, heirs,
administrators, assigns and each of them.
5.12 Neither party may assign this Agreement (or any aspect or portion
of this Agreement) without the express advance written consent of the other
party.
5.13 If any ambiguity or question of intent arises with respect to any
provision of this Agreement, the Agreement will be construed as if drafted
jointly by the parties and no presumption or burden of proof will arise favoring
or disfavoring either party by virtue of authorship of any of the provisions of
this Agreement.
5.14 This instrument contains the entire understanding and the entire
and only agreement between the parties and supersedes all pre-existing
agreements between them respecting its subject matter. Any representation,
promise, or condition in connection with such subject matter which is not
expressly incorporated in this Agreement shall not be binding upon either party.
No modification, renewal, extension, waiver, or termination of this Agreement or
any of its provisions shall be binding upon the party against whom enforcement
of such modification, renewal, extension, waiver or termination is sought,
unless made in writing and signed on behalf of such party by one of its
executive officers.
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5.15 This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any such counterpart.
5.16 Each party hereby releases the other party from any and all
claims, damages, liabilities, actions, and causes of action, of every kind and
nature whatsoever, whether now known or unknown, which the parties ever had, now
has or may have against each other, arising or occurring prior to the date of
this Agreement, including but not limited to those which have been or could have
been asserted in civil action Nos. C01-4298 PJH and/or C03-5416 PJH. Each party
to this Agreement acknowledges that it is familiar with the provisions of
California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Each party to this Agreement, being aware of such code section, agrees to waive
any rights it may have thereunder, as well as under any other statute or common
law principles of similar effect.
5.17 The parties acknowledge and agree that Paragraphs 3.1 and 3.2 of
Part II of this Agreement constitute a contract under which both parties are
licensors of intellectual property as provided in Section 365(n) of Xxxxx 00,
Xxxxxx Xxxxxx Code (the "Bankruptcy Code"). Both parties acknowledge that if the
other party, as a debtor-in-possession, or any trustee of any bankruptcy estate
of either party in any bankruptcy case under the Bankruptcy Code (the
"Bankruptcy Trustee"), rejects this Agreement, the other party may elect to
retain its rights under this Agreement as provided in Section 365(n) of the
Bankruptcy Code. Upon written request of
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the rejected party to the rejecting party, or the Bankruptcy Trustee, the
rejecting party or such Bankruptcy Trustee will not interfere with the rights of
the rejected party as provided in this Agreement or the Bankruptcy Code.
DISCLAIMERS
6.1 Neither party makes an express or implied warranty or
representation as to the scope or validity of their respective licensed patents.
6.2 Each party represents and warrants: (a) that it has the full power
to enter into this Agreement; (b) that it has not entered into and shall not
enter into any agreement with another party which is inconsistent or in conflict
with this Agreement in any respect; and (c) that it owns the rights to the
licensed patents as described herein. In addition, Ecast specifically represents
and warrants that it has the right to sublicense the `350 patent.
6.3 Each party further represents and warrants that in executing this
Agreement, it does not rely upon any promises, inducements, or representations
made by any party or third party with respect to this Agreement or any other
business dealings with any party or third party, now or in the future.
6.4 Each party also represents and warrants that it is not presently
the subject of a voluntary or involuntary petition in bankruptcy or the
equivalent thereof, does not presently contemplate filing any such voluntary
petition, and does not presently have reason to believe that such an involuntary
petition will be filed against it.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by their respective duly authorized officers or
representatives.
ECAST, INC. TOUCHTUNES MUSIC CORPORATION
By: /s/ Xxxxxx Xxxx-Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
--------------------------- ----------------------------
Printed Name: Xxxxxx Xxxx-Xxxxx Printed Name: Xxxx X. Xxxxxxxxx
Title: President and CEO Title: President and CEO
Date: April 23, 2004 Date: April 23, 2004
------------------------- --------------------------
Xxxxxxxx & Xxxxxxxx LLP Xxxxx & Vanderhye, P.C.
(Attorneys for Ecast, Inc.) (Attorneys for TouchTunes Music
Corporation)
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxx
--------------------------- ----------------------------
Printed Name: Xxxxxx X. Xxxxxx Printed Name: Xxxxxx Xxxxxx
Date: April 23, 2004 Date: April 23, 2004
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EXHIBIT A
SECURITY AGREEMENT
This SECURITY AGREEMENT ("SECURITY AGREEMENT") is effective as of the
date executed below by and between Ecast, Inc., a California corporation, having
a principal place of business located at 000 0xx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx ("Debtor"), in favor of TouchTunes Music Corporation, a
Nevada corporation, having its principal place of business at 0 Xxxxxxxx Xxxxx,
0xx Xxxxx, Nun's Island (Montreal), Xxxxxx X0X 0X0, Xxxxxx (the "SECURED
PARTY").
RECITAL
In order to induce the Secured Party to enter into that certain
Settlement Agreement and Cross License by and between Debtor and the Secured
Party of even date herewith (the "SETTLEMENT AGREEMENT"), Debtor has agreed to
enter into this Security Agreement and to grant the Secured Party the security
interest in the Collateral described below.
AGREEMENT
NOW, THEREFORE, in consideration of the above recital and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor hereby agrees with the Secured Party as follows:
1. DEFINITIONS AND INTERPRETATION. When used in this Security
Agreement, the following terms shall have the following respective meanings:
"COLLATERAL" shall have the meaning given to that term in Section 2
hereof.
"LIEN" shall mean any security interest, mortgage, pledge, lien or
other encumbrance.
"OBLIGATIONS" shall mean all monetary obligations, including interest,
owed by Debtor to the Secured Party pursuant to Article 2 of the Settlement
Agreement.
"PERMITTED LIENS" shall mean (i) Liens imposed by any governmental
authority for taxes, assessments or charges not yet due or which are being
contested in good faith, (ii) bankers Liens and similar Liens (including rights
of set-off) in respect of bank deposits, (iii) purchase money Liens on equipment
acquired or held by Debtor incurred for financing the acquisition of the
equipment, or existing on equipment when acquired, if the Lien is confined to
the property and improvements and the proceeds of the equipment, and (iv) other
Liens agreed to in writing by the Secured Party.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of California from time to time.
All capitalized terms not otherwise defined herein shall have the
respective meanings given in the Security Agreement. Unless otherwise defined
herein, all terms defined in the UCC shall have the respective meanings given to
those terms in the UCC.
2. GRANT OF SECURITY INTEREST. As security for the Obligations, Debtor
hereby pledges and assigns to the Secured Party and grants to the Secured Party
a first priority security interest in all existing and future right, title and
interests of Debtor in and to the property described in Attachment
1 hereto (collectively and severally, the "COLLATERAL"), which Attachment 1 is
incorporated herein by this reference.
3. REPRESENTATIONS AND WARRANTIES. Subject to the right to grant
permitted liens, Debtor represents, warrants and covenants to the Secured Party
that as of the date hereof and at all times during which any Obligations are
outstanding (i) the Secured Party has a first priority perfected security
interest in the Collateral, except for Permitted Liens, (ii) Debtor is not
subject to any bankruptcy case or insolvency proceedings before any court in any
jurisdiction, (iii) in the ninety (90) calendar days preceding the effective
date hereof, Debtor has not received any credible threat from any third party to
subject the Debtor to any involuntary bankruptcy or insolvency proceeding, (iv)
the state of incorporation of Debtor is the State of California, (v) neither the
execution and delivery of this Security Agreement, nor the consummation of any
transaction contemplated hereby, nor the performance of this Security Agreement
conflicts with or results in a breach of any material agreement to which Debtor
is party or by which Debtor is bound, (vi) neither the execution and delivery of
this Security Agreement nor the consummation of any transaction contemplated
hereby, nor the fulfillment of the terms of this Security Agreement has
constituted or resulted in, or will constitute or result in, the violation of
any law, judgment, decree or governmental or administrative order, rule or
regulation applicable to Debtor, (vii) no consent of any other person (including
without limitation any shareholder, officer, director, or creditor of Debtor) is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and (viii) Debtor shall not enter into any
agreement that would conflict with Debtor's obligations hereunder.
4. COVENANTS RELATING TO COLLATERAL. Debtor hereby agrees until such
time as the Obligations are paid in full at Debtor's sole cost and expense (a)
to perform all acts that may be necessary to maintain, preserve, protect and
perfect the Collateral, the Lien granted to the Secured Party in the Collateral
in the state of incorporation of Debtor and the priority of such Lien, except
for Permitted Liens; (b) to pay promptly when due all taxes and other
governmental charges (including patent fees), all Liens, and all other charges
now or hereafter imposed upon or affecting any Collateral; (c) without at least
thirty (30) calendar days prior written notice to the Secured Party, not to
change Debtor's name or principal place of business or the location of its
assets, except in the ordinary course of business; (d) to procure, execute and
deliver from time to time any financing statements in Debtor's state of
incorporation, notices of lien on deposit accounts, and other writings
reasonably deemed necessary or appropriate by the Secured Party to perfect,
maintain and protect its Lien hereunder in Debtor's state of incorporation and
the priority thereof; (e) to provide assistance to the Secured Party in
perfecting, maintaining and enforcing the Lien in Debtor's state of
incorporation; and (f) not to sell, transfer or otherwise dispose of or transfer
any Collateral, provided, that licensing of the Collateral shall be acceptable,
and to keep the Collateral free of all Liens except Permitted Liens. If Debtor
fails to comply with the above covenants, Secured Party may seek specific
performance of the covenants and the prevailing party shall be entitled to
reasonable attorneys' fees.
5. FURTHER ASSURANCES. On a continuing basis, and at Debtor's sole cost
and expense, Debtor will cooperate with the Secured Party to maintain a UCC-1
financing statement filing in the Debtor's state of incorporation, as well as
notice filings with the United States Patent and Trademark Office, in order to
perfect, maintain and enforce the Secured Party's security interest in the
Collateral. If the law applicable to perfecting the Secured Party's security
interest shall change after the date hereof to require additional filings not
covered by this Section 5, then Debtor will cooperate with the Secured Party to
maintain such filings as are required by the changed law.
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6. DEFAULT AND REMEDIES. Debtor shall be deemed in default under this
Security Agreement upon the occurrence and during the continuance of any breach
of this Security Agreement or the payment terms of Settlement Agreement (an
"EVENT OF Default"). Upon the occurrence and during the continuance of any such
Event of Default, the Secured Party shall have the rights of a secured creditor
under the UCC and all rights granted by this Security Agreement and by law.
7. MISCELLANEOUS.
(a) NOTICES. All notices, demands or communication under this Agreement
must be in writing, and shall be deemed to have been effectively given when: (i)
personally delivered; (ii) two (2) business days after posting in the United
States mails via prepaid, certified mail, return receipt requested; (iii)
delivered via email to the email address most recently provided to Debtor; or,
(iv) one (1) business day after dispatch via overnight or international courier
service, as the case may be, addressed as follows:
If to Debtor: Ecast, Inc.
Attention: _________________
000 0xx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
If to the Secured Party: TouchTunes Music Corporation
Attention: _________________
0 Xxxxxxxx Xxxxx, 0xx Xxxxx
Nun's Island (Montreal)
Xxxxxx X0X 0X0, Xxxxxx
With a courtesy copy to: Xxxxxxxx, Patch, Xxxxx & Bass, LLP
Xxx Xxxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
(b) NONWAIVER. No failure or delay on the Secured Party's part in
exercising any right hereunder shall operate as a waiver thereof or of any other
right nor shall any single or partial exercise of any such right preclude any
other further exercise thereof or of any other right.
(c) AMENDMENTS AND WAIVERS. This Security Agreement may not be amended
or modified, nor may any of its terms be waived, except by written instruments
signed by Debtor and the Secured Party. Each waiver or consent under any
provision hereof shall be effective only in the specific instances for the
purpose for which given.
(d) ASSIGNMENTS. This Security Agreement shall be binding upon and
inure to the benefit of the Secured Party and Debtor and their respective
successors and assigns; PROVIDED, HOWEVER, that Debtor may not sell, assign or
delegate rights and obligations hereunder without the prior written consent of
the Secured Party.
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(e) TERMINATION OF SECURITY INTEREST. Upon the indefeasible cash
payment in full of all Obligations, Debtor may terminate this Security Agreement
at any time and the security interest granted herein shall terminate and all
rights to the Collateral shall revert to Debtor. Upon termination of this
Security Agreement the Secured Party hereby authorizes Debtor to file any UCC
termination statements necessary to effect such termination and the Secured
Party will execute and deliver to Debtor any additional documents or instruments
as Debtor shall reasonably request to evidence such termination.
(f) CUMULATIVE RIGHTS, ETC. The rights, powers and remedies of the
Secured Party under this Security Agreement shall be in addition to all rights,
powers and remedies given to the Secured Party by virtue of any applicable law,
rule or regulation of any governmental authority or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be exercised
successively or concurrently without impairing the Secured Party's rights
hereunder. Debtor waives any right to require the Secured Party to proceed
against any Person or to exhaust any Collateral or to pursue any remedy in the
Secured Party's power.
(g) PARTIAL INVALIDITY. If at any time any provision of this Security
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Security Agreement nor the legality, validity
or enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
(h) EXPENSES. Debtor shall pay on demand all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by the
Secured Party in connection with custody, preservation or sale of, or other
realization on, any of the Collateral or the enforcement or attempt to enforce
any of the Obligations which is not performed as and when required by this
Security Agreement.
(i) GOVERNING LAW. This Security Agreement shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules (except to the extent governed by the UCC).
(j) COUNTERPARTS. This Security Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Security Agreement by
signing any such counterpart.
IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
executed and delivered as of the day and year first above written.
ECAST, INC.
By: /s/ Xxxxxx Xxxx-Xxxxx
------------------------------
Name: Xxxxxx Xxxx-Xxxxx
----------------------------
Title: President and CEO
---------------------------
AGREED:
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TOUCHTUNES MUSIC CORPORATION
as the Secured Party
By: /s/ Xxxx X. Xxxxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxxxx
-------------------------
Title: President and CEO
------------------------
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ATTACHMENT 1
TO SECURITY AGREEMENT
All right, title and interest of Debtor now owned or hereafter acquired
in or to any and all assets, which shall be considered the Collateral,
including, but not limited to:
(a) All goods, tangible property, whether real or personal, and general
intangibles, excluding, however, non-jukebox-related devices;
(b) All intellectual property including patents and patent applications
and the inventions reflected therein;
(c) All trademarks, trade names and service marks and any registrations
thereof, as well as the goodwill created thereby;
(d) All copyrights;
(e) Any and all trade secrets, moral rights and other intangible
property;
(f) All industrial property rights relating to the intellectual
property listed in (b) through (e);
(g) Any and all claims and actions for damages by way of past, present
and future use or infringement of any of the rights included above, with the
right, but not the obligation, to xxx for and collect such damages for said use
or infringement of the intellectual property rights identified above;
(h) All licenses or other rights to use any of the foregoing and all
license fees and royalties arising from such use, all to the extent permitted by
such licenses or rights;
(i) All amendments, renewals, extensions, continuations or divisions of
any of the foregoing;
(j) All cash, money, accounts, accounts receivable, contracts, chattel
paper, payment intangibles, securities (including shares or any equity interest
in any subsidiaries of Debtor), promissory notes, mortgages, documents,
instruments, investment property, letter-of-credit rights, and letters of
credit; and
(k) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
The foregoing notwithstanding, the term "Collateral" shall not include
any property, rights or licenses to the extent the granting of a security
interest therein would be contrary to applicable law.
EXHIBIT B
FOR IMMEDIATE RELEASE
LAS VEGAS, NEVADA, APRIL ____, 2004 - TOUCHTUNES(R) MUSIC CORPORATION
("TOUCHTUNES") (NASDAQ OTC BB: TTMC), and ECAST, INC. ("ECAST") are happy to
announce that they have settled their differences and reached an agreement,
under which they have cross-licensed TouchTunes' U.S. Patent No. 6,308,204 and
U.S. Patent No. 5,341,350 (which Ecast licenses from NSM Music Group Limited).
Also under the agreement, TouchTunes and Ecast will dismiss their respective
patent infringement lawsuits.
ABOUT TOUCHTUNES
TouchTunes is involved in the digital distribution of music content to
interactive, music-on-demand applications. The first such interactive,
music-on-demand application is its digital jukebox. TouchTunes is currently the
leading provider of interactive, music-on-demand, digital-downloading jukeboxes
to the coin-operated machine industry across the United States. TouchTunes has
signed agreements with Sony, EMI, BMG, Universal, Warner and their music
subsidiaries, which permit the secure transmission, storing and playing of
digitized copies of music masters on TouchTunes' central database and throughout
its network of digital jukeboxes. TouchTunes also has signed agreements with
various independent labels such as: Jive, Beggars Banquet and Epitaph Records.
TouchTunes is traded on the NASDAQ OTC BULLETIN Board under the symbol TTMC.
Important Legal Information
Certain statements made herein that are not historical are forward-looking
within the meaning of the federal securities laws. The work "expects" and
similar expressions are intended to identify forward-looking statements, but
their absence does not mean that the statement is not forward-looking. These
forward-looking statements involve known and unknown risks and uncertainties.
Many factors could cause the actual results, performance or achievements of
TouchTunes to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements, including, among others, the factors described in TouchTunes'
filings with the Securities and Exchange Commission. TouchTunes undertakes no
obligation to update publicly any forward-looking statement to reflect new
information, events or circumstances after the date of this release or to
reflect the occurrence of unanticipated events.
TouchTunes:
Xxxx Xxxxxxxxx
Tel.: (000) 000-0000
xxx.xxxxxxxxxx.xxx
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ABOUT ECAST
Founded in 1999, Ecast Inc. is privately owned with offices in San Francisco.
Ecast owns and operates a Location-Based Broadband Network that combines a
digital media proprietary software platform, a US-wide broadband network and
pay-per-use devices such as digital jukeboxes and games consoles. The platform
enables the secure delivery, management and accurate administration of rights
usage.
Ecast:
Xxxxxx Xxxx-Xxxxx
Tel.: (000) 000-0000
xxx.xxxxxxxx.xxx
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