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EXHIBIT 10.54
BACKGROUND/FOREGROUND MUSIC SERVICE LICENSE AGREEMENT
AGREEMENT made between the AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND
PUBLISHERS (hereinafter called "SOCIETY"), located at Xxx Xxxxxxx Xxxxx Xxx
Xxxx, Xxx Xxxx 00000 and International Cablecasting Technologies Inc.
(hereinafter called "LICENSEE"), located at 00000 X. Xxxxxxx Xxxx., Xxx
Xxxxxxx, XX 00000
as follows:
1. SCOPE OF LICENSE. SOCIETY grants to LICENSEE and LICENSEE accepts for
the period commencing June 1, 1994 and ending May 31, 1999, a non-exclusive
license to perform publicly, or cause to be performed publicly, in the United
States, its territories and possessions, non-visually, by means of "Background/
Foreground Music Service" (as hereinafter defined) and not otherwise, in the
premises of "Subscribers of LICENSEE" (as hereinafter defined) and not
elsewhere, non-dramatic renditions of the separate musical compositions of which
SOCIETY shall, during the term hereof, have the right to license such performing
rights. This license does not extend to or include the public performance of any
rendition or performance of any opera, operetta, musical comedy, play, or like
production as such, in whole or in part.
Except as expressly herein otherwise provided, nothing herein contained
shall be construed as authorizing LICENSEE to grant to others any right to
reproduce or perform by any means, method or process whatsoever, any of the
musical compositions licensed hereunder, or as authorizing "Subscribers of
LICENSEE" to perform or reproduce compositions licensed hereunder by any method
or process whatsoever except the reproduction of such compositions by means of
equipment at the premises of such "Subscribers of LICENSEE" designated in the
agreement between each such respective Subscriber and LICENSEE.
The term "Background/Foreground Music Service" as used in this agreement
shall mean: (1) the transmission to the premises of "Subscribers of LICENSEE" of
renditions of musical compositions (whether vocal or instrumental); or (2) the
furnishing of the means to make such renditions in the premises of "Subscribers
of LICENSEE", or by transmissions to persons outside of the premises by means of
a music-on-hold telephone system operated by the Subscriber at its premises,
provided such renditions are limited to those made by the mechanical
reproduction of music by equipment made available by LICENSEE to its Subscribers
only, and not by equipment otherwise available to the general public.
The term "Subscribers of LICENSEE", as used in this agreement, shall mean
all persons, firms and corporations subscribing to the said
Background/Foreground Music Service. Any person, firm or corporation which is
furnished with a Background/Foreground Music Service by a third party, but which
is billed for such service only by LICENSEE, or which is billed for such service
by a third party authorized to perform such billing by LICENSEE for the benefit
of LICENSEE, shall be deemed to be a Subscriber of LICENSEE, provided that
LICENSEE shall cause such third party to furnish SOCIETY upon entering into this
Agreement and on or before each succeeding January 1, April 1, July 1 and
October 1 during the term hereof, a list of all Subscribers billed in such
manner. Such lists shall specify the name of each such Subscriber and the total
number of Subscribers of LICENSEE so billed.
2. LIMITATIONS ON LICENSE.
A. This license shall not extend to or be deemed to include or authorize
the recording of, or the manufacture of any recordings or any other device used
as a means of reproducing, any musical composition of which the right of
performance is licensed under this agreement.
B. This license shall not under any circumstance extend to (i) any premises
to which an admission fee is charged at the time LICENSEE'S
Background/Foreground Music Service is provided, or at which dancing in
conjunction with LICENSEE's Background/Foreground Music Service occurs; or (ii)
any broadcast transmission by any television station or radio station; or (iii)
any transmission by any cable television or cable radio operation, to any
private home, apartment, guest room in a hotel or motel, or other similar
location; or (iv) any transmission by any Background/Foreground Music Service to
any private home apartment, guest room in a hotel or motel, or other similar
location.
C. This license shall not extend to or be deemed to include or authorize
the public performance of any musical composition licensed hereunder at any
premises during any month in which the Subscriber uses commercial announcements
in conjunction with LICENSEE's Background/Foreground Music Service, if such
commercial announcements are provided by an entity wholly unrelated to LICENSEE,
and LICENSEE receives no consideration whatsoever for the performance of such
commercial announcements; provided, however that this license shall be deemed to
include and authorize such performances if LICENSEE shall have paid the
appropriate monthly license fee for such premises specified in Sub-Paragraph
"5.C." hereof, as provided in Paragraph "6" hereof. As used in this
Sub-Paragraph "2.C." the term "wholly unrelated to LICENSEE shall mean an entity
in which LICENSEE has no ownership interest, over which LICENSEE has no control
and with which LICENSEE has no contractual relation regarding the performance of
such commercial announcements at the premises of the subject Subscriber, and the
term "LICENSEE receives no consideration" shall mean that no compensation for
the performance of such commercial announcements (in money or any other form is
paid to LICENSEE, directly or indirectly, for such announcements.
3. LICENSEE'S WARRANTIES.
A. LICENSEE warrants, represents and agrees that the fees set forth in
Paragraph 5 of this agreement will be paid by LICENSEE with respect to all
premises to which any Background/Foreground Music Service is furnished directly
or indirectly by LICENSEE or any enterprise which controls, is controlled by, or
is under the same control as, LICENSEE.
B. LICENSEE further warrants and represents that each and every one of its
agreements with its Subscribers hereafter made, as well as all renewals or
extensions of existing agreements, will contain the following provision
"The Subscriber shall not transmit the programs nor use the service outside
the premises designated in this agreement."
4. LIST OF COMPOSITIONS.
LICENSEE agrees to furnish to SOCIETY during the term of this agreement,
commencing with the receipt of a written request therefor from SOCIETY, a list
of all the musical compositions included in LICENSEE's
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Background/Foreground Music Service and furnished to Subscribers of LICENSEE.
Such list shall specify the title of each composition, its composer and author,
and the date of performance at the premises of Subscribers of LICENSEE (if
known). Should SOCIETY request such list, it will be sufficient for LICENSEE to
furnish to SOCIETY any printed form of program furnished by LICENSEE to its
Subscribers; however, should SOCIETY notify LICENSEE in writing that such
printed form of program does not meet the requirements of this provision,
LICENSEE shall furnish to SOCIETY, no more than ninety days after such written
notification, a list which does meet those requirements.
5. LICENSE FEES.
In consideration of the license herein granted, LICENSEE agrees to pay
SOCIETY with respect to each premises of each Subscriber of LICENSEE to which
LICENSEE'S Background/Foreground Music Service is furnished, the following
license fees:
A. The appropriate annual license fee set forth below for each premises of
each Subscriber other than the premises specifically mentioned in Sub
Paragraphs "B" and "C" of this Paragraph "5", without exception or deduction
for any reason, including, but not limited to: hotels, motels, night clubs,
restaurants, bars, grills, taverns, cocktail lounges and other establishments
in which food or beverages are served, stores, shops, supermarkets, health
clubs, automobile showrooms, gasoline service stations and other establishments
where goods or services are sold or offered to the public at retail, and each
such premises located in a shopping center:
CONTRACT YEAR ANNUAL LICENSE FEE
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June 1, 1994 - May 31, 1995 $46.25
June 1, 1995 - May 31, 1996 47.00
June 1, 1996 - May 31, 1997 48.00
June 1, 1997 - May 31, 1998 48.75
June 1, 1998 - May 31, 1999 49.50
B. The appropriate annual license fee set forth below for each of the
following premises of each Subscriber only: an office, factory or plant; a bank;
an office or a professional building; a doctor's, dentist's or other
professional office; a hospital, clinic, nursing or rest home or rehabilitation
center; a funeral home or mortuary; a library, school, college or university; a
church; a private club owned and operated by the members as a non-commercial
venture; an apartment house or residence; a governmental office; a park or
recreation area owned and operated by the government excluding private or
commercial concessions or leased areas; a garage; a security or commodity
broker; an insurance or real estate agency; a finance or loan office; a savings
and loan association; a warehouse; a trucking terminal which is limited to
operators of such trucks and maintenance men and to which other members of the
public are not generally admitted; a research organization or laboratory; a room
occupied solely as a rest room (or lounge); a room occupied solely as a
reception or information area or an employee's cafeteria in such respective
premises; and each such premises located in a shopping center:
CONTRACT YEAR ANNUAL LICENSE FEE
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June 1, 1994-May 31, 1995 5.00% of "gross xxxxxxxx," for
all such premises
June 1, 1995-May 31, 1996 5.00% of "gross xxxxxxxx," for
all such premises
June 1, 1996-May 31, 1997 5.00% of "gross xxxxxxxx," for
all such premises
June 1, 1997-May 31, 1998 5.00% of "gross xxxxxxxx," for
all such premises
June 1, 1998-May 31, 1999 5.00% of "gross xxxxxxxx," for
all such premises
C. The appropriate monthly license fee set forth below for each premises of
each Subscriber which used commercial announcements in conjunction with
LICENSEE'S Background/Foreground Music Service, subject to the provisions of
Sub-Paragraph "2.C." hereof; provided, however, that should a subscriber insert
public address announcements concerning goods or services sold or offered to the
public at its premises, where no compensation (in money or any other form) is
paid to anyone, directly or indirectly, for such announcements, then the license
fee payable for said Subscriber shall be that specified in Sub-Paragraphs "A"
and "B" of this Paragraph "5", as appropriate:
CONTRACT YEAR MONTHLY LICENSE FEE PER FLOOR
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June 1, 1994 - May 31, 1995 $5.14
June 1, 1995 - May 31, 1996 5.22
June 1, 1996 - May 31, 1997 5.33
June 1, 1997 - May 31, 1998 5.42
June 1, 1998 - May 31, 1999 5.50
D. As used in this agreement, the term "gross xxxxxxxx" shall:
(i) include all sums (including the reasonable value of any merchandise,
service, or anything of value in lieu of or in addition to cash
consideration) due to LICENSEE from its Subscribers in connection with
(a) its provision of its Background/Foreground Music Service: and (b)
its lease (including conditional sale) of equipment to Subscribers
used in connection with such Background/Foreground Music Service;
(ii) exclude all sums due to LICENSEE from its Subscribers only for the
following: (a) bona fide sale (not including conditional sale) of
equipment; (b) the lease of equipment to Subscribers which is
extraneous and unrelated to such Background/Foreground Music Service;
(c) any sales, use or excise taxes which are collected from
Subscribers and actually paid to any Federal, State or local taxing
authority; (d) one-time installation charges billed not later than 90
days following completion of the subject installation work; (e) all ad
hoc charges (i.e., extraordinary or one-time charges) for service and
maintenance work actually performed on subscriber-leased or
subscriber-owned equipment provided that said ad hoc charges are
separately billed, not later than 90 days following the completion of
the subject service and maintenance work; (f) the license fees paid to
SOCIETY pursuant to this agreement; (g) the amount of any xxxxxxxx
(previously included as "gross xxxxxxxx") which are written off as
uncollectible, provided, however, that any amounts written off as
uncollectible that are later collected shall be reported as and when
collected; (h) any penalties, for late payments or finance or
interest charges imposed on Subscribers by LICENSEE.
E. For each premises for which a fee is payable under Sub-Paragraphs "A"
or "C" of this Paragraph "5", and for which the agreement between the
subscriber of LICENSEE and LICENSEE shall commence on any day from the first
through the fifteenth day of any month, or terminate on any day from the
sixteenth through the last day of any month, the fee shall be paid in full for
such month. For each such premises for which for such agreement shall commence
on any day from the sixteenth through the last day of any month, or terminate
on any day from the first through the fifteenth day of any month, no fee shall
be payable for such month.
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F. The minimum total due SOCIETY under this agreement shall be as follows:
CONTRACT YEAR MINIMUM MONTHLY LICENSE FEE
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June 1, 1994 - May 31, 1995 $144
June 1, 1995 - May 31, 1996 148
June 1, 1996 - May 31, 1997 152
June 1, 1997 - May 31, 1998 156
June 1, 1998 - May 31, 1999 160
If LICENSEE has not been engaged in the background/foreground music business for
six months, this provision shall not apply until LICENSEE shall have completed
six months in said business.
6. REPORTS AND PAYMENTS.
A. LICENSEE shall submit monthly reports to SOCIETY setting forth
separately the following:
(i) "Gross xxxxxxxx" to all Subscribers;
(ii) "Gross xxxxxxxx" to all Subscribers described in Paragraph "5.A.",
and the amounts excluded from "gross xxxxxxxx" for each item set
forth in Paragraph "5.D.ii.";
(iii) The number of all Subscribers described in Paragraph "5.A.";
(iv) "Gross xxxxxxxx" to all Subscribers described in Paragraph "5.B.",
and the amounts excluded from "gross xxxxxxxx" for each item set
forth in Paragraph "5.D.ii.";
(v) The number of all Subscribers described in Paragraph "5.B.";
(vi) "Gross xxxxxxxx" to all Subscribers described in Paragraph "5.C.",
and the amounts excluded from "gross xxxxxxxx" for each item set
forth in Paragraph "5.D.ii.";
(vii) The number of all subscribers described in Paragraph "5.C.";
(viii) The license fees payable to SOCIETY pursuant to the terms of this
agreement for the month covered by the report.
(ix) The names and addresses of all suppliers of music used in LICENSEE's
Background/Foreground Music Service.
B. LICENSEE shall submit said monthly reports on or before the last day of
each month, covering the period of the preceding calendar month.
C. SOCIETY shall supply forms for said monthly statements free of charge to
LICENSEE.
D. LICENSEE shall remit, with each monthly report, the full amount of
license fees shown due for the month covered by the report.
E. Accounting and payments shall be made on a billing basis. LICENSEE
shall have a right of reduction or rebate for all bad accounts which are
written off as uncollectible, provided, however, that any accounts that are
written off as uncollectible that are later collected in whole or in part shall
be reported and paid for as and when collected.
F. If any monthly payment required by Paragraph "5" or "6" is not received
by SOCIETY within fifteen days after the date it was due, LICENSEE agrees to pay
SOCIETY a finance charge of 1% per month from the date the payment was due.
7. AUDITS.
A. SOCIETY shall have the right by its duly authorized representatives, at
any time during customary business hours, to examine the books and records of
account of LICENSEE to such extent as may be necessary to verify any and all
statements rendered and accountings made hereunder, and under prior license
agreements with SOCIETY.
B. SOCIETY shall give LICENSEE not less than forty-five days' written
notice of its intention to make such an examination.
C. LICENSEE shall give SOCIETY's auditor full access to all relevant
records of LICENSEE, including names and addresses of, and any other pertinent
information concerning, the Subscribers of LICENSEE. SOCIETY agrees to instruct
its auditors not to make any list of names and addresses of Subscribers of
LICENSEE except insofar as necessary for the verification of LICENSEE'S
statements and accountings to SOCIETY, and to destroy any such list upon
completion of the audit or, if a deficiency be found as to which such data may
be relevant, upon the payment or other disposition of such audit deficiency.
D. In the event any such audit shows LICENSEE to have underpaid the license
fees due SOCIETY by 5% or more, LICENSEE shall pay a finance charge on the
license fees shown due of 1% per month from the date(s) the license fees should
have been paid pursuant to this agreement.
E. In the event any such audit shows LICENSEE to have underpaid the license
fees due SOCIETY by less than 5%, LICENSEE shall pay a finance charge on the
license fees shown due of 1% per month from the date SOCIETY demands payment of
such amount.
8. RIGHT TO RESTRICT. SOCIETY reserves the right, at any time and from time
to time, in good faith, to restrict the performance of compositions from musical
comedies, operas, operettas, and motion pictures, or any other composition
being excessively performed, only for the purpose of preventing harmful effect
upon such musical comedies, operas, operettas, motion pictures, or compositions
in respect of other interests under the copyrights thereof; provided, however,
that the maximum number of compositions which may be at any time thus restricted
shall not exceed three hundred and moreover that limited licenses will be
granted upon application entirely free of additional charge as to restricted
compositions, if and when the copyright owners thereof are unable to show
reasonable hazards to their major interests likely to result from such
performances; and provided further that SOCIETY shall not exercise such right to
restrict any such composition for the purpose of permitting the fixing or
regulating of fees for the recording or transcribing of such composition; and
provided further that in no case shall any charges, "free plugs" or other
consideration be requirements in respect of any permission granted to perform a
restricted composition; and provided further that in no event shall any
composition, after the initial radio or television broadcast thereof, be
restricted for the purpose of confining further performances thereof to a
particular program or licensee.
SOCIETY reserves the right, at any time and from time to time, in good
faith, to restrict the performance of any compositions, over and above the
number specified in the previous paragraph, only as to which any suit has been
brought or threatened on a claim that such composition infringes a composition
not contained in SOCIETY'S repertory or on a claim that SOCIETY does not have
the right to license the performing rights in such composition.
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9. BREACH AND DEFAULT. Upon any breach or default by LICENSEE of any terms
herein contained, SOCIETY may give LICENSEE thirty days notice in writing to
cure such breach or default, and in the event such breach or default has not
been cured within the said thirty days, SOCIETY may then forthwith terminate
this license.
10. INDEMNIFICATION. SOCIETY agrees to indemnify, save and hold LICENSEE and
the respective Subscribers of LICENSEE harmless, and defend LICENSEE and such
Subscribers from and against any claim, demand or suit that may be made or
brought against it with respect to renditions given on LICENSEE's programs
during the term hereof in accordance with this license, of the separate musical
compositions copyrighted or composed by members of SOCIETY and in SOCIETY'S
repertory.
In the event of the service upon LICENSEE or any such Subscriber of any
notice, process, paper or pleading, under which a claim, demand or action is
made or begun against LICENSEE or any such Subscriber on account of any such
matter as is hereinabove referred to, LICENSEE shall promptly give SOCIETY
written notice thereof, and SOCIETY at its own expense shall have sole charge of
the defense of any such action or proceeding. LICENSEE, however, shall have the
right to engage counsel of its own, at its own expense, who may participate in
the defense of any such action or proceeding and with whom counsel for SOCIETY
shall cooperate. LICENSEE shall cooperate with SOCIETY in every way in the
defense of any such action or proceeding, and in any appeals that may be taken
from any judgments or orders entered therein, and shall execute all pleadings,
bonds or other instruments, but at the sole expense of SOCIETY, that may be
required in order properly to defend and resist any such action or proceeding,
and prosecute any appeals taken therein.
In the event of the service upon LICENSEE of any notice, process, paper or
pleading under which a claim, demand or action is made or begun against LICENSEE
on account of the rendition of any musical composition contained in SOCIETY's
repertory but not copyrighted or composed by members of SOCIETY, SOCIETY agrees
at the request of LICENSEE to cooperate with and assist LICENSEE in the defense
of any such action or proceeding, and in any appeals that LICENSEE may elect to
take from any judgments or orders therein.
11. NOTICES. All notices required or permitted to be given by either of the
parties to the other hereunder shall be duly and properly given if mailed to
such other party by registered or certified United States mail, addressed to
such other party at its main office for the transaction of business.
12. LIMITED RIGHT OF ASSIGNMENT. If LICENSEE shall cease to operate the
Background/Foreground Music Service referred to in this agreement and if
LICENSEE shall have discharged all the obligations of LICENSEE to SOCIETY under
this agreement, then LICENSEE shall have the right to assign this agreement for
the balance of its term upon the express condition that such assignee shall
accept such assignment and shall agree to assume and to carry out and perform
all the terms and conditions of this agreement on the part of the LICENSEE to be
kept and performed for the balance of the term of this agreement. Upon such
acceptance and assumption LICENSEE shall be relieved of any future obligations
hereunder. Except as hereinabove expressly provided, LICENSEE shall have no
right to transfer or assign this agreement, the rights granted hereunder being
personal to LICENSEE.
13. LIMITED RIGHT OF TERMINATION. If LICENSEE shall cease to operate the
Background/Foreground Music Service referred to in this agreement and if
LICENSEE shall have discharged all the obligations of LICENSEE to SOCIETY under
this agreement, then LICENSEE may terminate the license granted by this
agreement upon thirty days prior written notice to SOCIETY, but no such
termination shall relieve LICENSEE of any obligations hereunder as to
performances rendered, acts done and obligations incurred prior to the effective
date of such termination.
IN WITNESS WHEREOF this agreement has been duly executed by SOCIETY and
LICENSEE, this 4th day of April , 1995.
AMERICAN SOCIETY OF COMPOSERS, /s/ XXXXXX XXXXXXX
AUTHORS AND PUBLISHERS ---------------------------
LICENSEE
By /s/ XXX XXXXXXX By Xxxxxx X. Xxxxxxx
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4/24/95
Executive Vice President
[SEAL] --------------------------
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