EXHIBIT 10.23
[Hillsborough, NC]
MUZAK(R)
LICENSE AGREEMENT
Dated February 01, 1996
MUZAK(R)
LICENSE AGREEMENT
TABLE OF CONTENTS
X. XXXXX OF LICENSE.......................................... 3
1.1 As to Services.................................... 3
1.2 As to Proprietary Marks........................... 4
1.3 Rights Retained................................... 4
II. PROVISION OF SERVICES..................................... 5
2.1 Services.......................................... 5
2.2 Satellite-Delivered Services...................... 6
2.3 Delivery by Recorded Media........................ 9
2.4 Adjunct Services.................................. 10
2.5 Alternate Delivery Means.......................... 10
2.6 Service Delivery Equipment........................ 11
III. TERM...................................................... 12
3.1 Term.............................................. 12
3.2 Renewal of Rights................................. 12
3.3 Notice from Licensee.............................. 16
IV. EXCLUSIVITY............................................... 17
4.1 In the Territory.................................. 17
4.2 Future Services................................... 17
4.3 No Other Services................................. 18
4.4 Promotion of All Services......................... 20
V. STANDARDS OF SERVICE AND TRAINING......................... 21
5.1 Operations in General............................. 21
5.2 Sales............................................. 22
5.3 Protection of Services............................ 23
5.4 Training.......................................... 24
5.5 Confidentiality................................... 24
VI. FEES AND ROYALTIES........................................ 26
6.1 Initial Fee....................................... 26
6.2 Market Fee........................................ 27
6.3 Royalty Fee....................................... 28
6.4 DBS Surcharge..................................... 28
6.5 Recorded Media Charges............................ 29
6.6 Adjunct Services Charges.......................... 29
6.7 Payment Schedule.................................. 29
6.8 Gross Xxxxxxxx.................................... 30
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VII. RECORDS, REPORTS, AND INSPECTIONS......................... 31
7.1 Records........................................... 31
7.2 Reports........................................... 32
7.3 Audit............................................. 32
VIII. MARKETING AND PROMOTION................................... 35
8.1 Advertisements.................................... 35
8.2 Yellow-Pages Advertising.......................... 36
8.3 Additional Assistance by Muzak.................... 36
IX. MULTI-TERRITORY ACCOUNTS PROGRAM; CABLE RADIO/TV.......... 36
X. DEFAULT AND TERMINATION OF THIS AGREEMENT................. 38
10.1 Default of Licensee............................... 38
10.2 Default of Muzak.................................. 41
10.3 Additional Remedies............................... 42
10.4 Force Majeure..................................... 43
XI. RELATIONSHIP OF THE PARTIES UPON TERMINATION OR
EXPIRATION OF THIS AGREEMENT.............................. 43
11.1 Action Required of Licensee....................... 43
11.2 Action Required of Muzak.......................... 44
XII. TRANSFER OF BUSINESS OR CONTROL OF LICENSEE............... 45
12.1 By Licensee and its Owners........................ 45
12.2 Consent of Muzak.................................. 45
12.3 Collateral........................................ 47
12.4 Transfer to Family Member......................... 48
12.5 By Muzak.......................................... 48
XIII. PROPRIETARY MARKS......................................... 48
13.1 Ownership......................................... 48
13.2 Infringement...................................... 49
13.3 Use............................................... 49
13.4 Substitution of Proprietary Marks................. 50
XIV. MISCELLANEOUS............................................. 51
14.1 Representations of Licensee....................... 51
14.2 Representations of Muzak.......................... 51
14.3 Independent Contractor............................ 52
14.4 Release........................................... 52
14.5 No Waiver......................................... 53
14.6 Notices........................................... 54
14.7 Entire Agreement.................................. 55
14.8 Severability...................................... 55
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14.9 Captions.......................................... 55
14.10 Binding Effect.................................... 56
14.11 Counterparts...................................... 56
14.12 Attorney's Fees................................... 56
14.13 Applicable Law.................................... 56
14.14 All Remedies...................................... 56
14.15 Limitation........................................ 57
14.16 No Warranties..................................... 57
14.17 No Implied Rights................................. 58
14.18 Survival.......................................... 58
14.19 Conversion........................................ 59
14.20 Most Favorable Terms.............................. 59
XV. ACKNOWLEDGEMENTS.......................................... 60
15.1 Independent Investigations........................ 60
15.2 Disclosure........................................ 60
15.3 Opportunity to Review............................. 61
EXHIBITS
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Exhibit A - Music Services
Exhibit B - Adjunct Services (Music-Related and Other)
Exhibit C - Marks
Exhibit D - Technical Specifications
Exhibit E - Sales of Adjunct Services
Exhibit F - Adjunct Services Revenue Sharing
Exhibit G - MUZAK(R) Multi-Territory Accounts Program
Exhibit H - Agreements Not To Be Superseded
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MUZAK(R)
LICENSE AGREEMENT
THIS MUZAK(R) LICENSE AGREEMENT ("Agreement") is made and entered into this
_______ day of ___________________________, 19 , by and between MUZAK LIMITED
PARTNERSHIP, a Delaware limited partnership ("Muzak"), and SUNCOM
COMMUNICATIONS, L.L.C., a _____________ limited liability company ("Licensee").
RECITALS:
--------
WHEREAS, Muzak has developed and owns a system (the "Muzak System") for
the production and delivery to licensees and subscribers of licensees of
subscription music services, adjunct communications services, and related
equipment, which system currently includes Muzak's unique software control
system for satellite distribution of multiple program services;
WHEREAS, the characteristics of the Muzak System also include, without
limitation, subscription music services, with certain unique and varied program
contents developed using distinctive and, in some cases, proprietary
program-scheduling techniques, which are set forth in Exhibit A attached hereto
and incorporated herein by reference (the "Music Services"); distinctive adjunct
services relating to the sequencing, changing, and switching of music-program
communications (the "Music-Related Adjunct Services") and to the delivery of
advertising, data and
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video communications (the "Other Adjunct Services"), (collectively the "Adjunct
Services"), which are set forth in Exhibit B attached hereto and incorporated
herein by reference; and delivery methods and procedures for both the Music
Services and the Adjunct Services (jointly, the "Services");
WHEREAS, Muzak identifies the Muzak System and the Services by means of
certain trade names, service marks, trademarks, logos, emblems, and indicia of
origin, including but not limited to the xxxx "MUZAK(R)" and such other trade
names, service marks, and trademarks as are set forth on Exhibit C attached
hereto and incorporated herein by reference (the "Proprietary Marks"), which
Proprietary Marks represent Muzak's high standards of quality and service; and
WHEREAS, Licensee desires to market and distribute the Services to
customers (the "Subscribers") who enter into agreements providing for receipt of
the Services at certain locations (the "Subscriber Premises"), and wishes to
obtain a license for that purpose from Muzak;
NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments of each party to the other party set forth herein, hereby agree as
follows:
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X. XXXXX OF LICENSE
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1.1 As to Services.
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(a) Subject to the terms and conditions herein contained, Muzak
hereby grants to Licensee an exclusive license, and Licensee hereby agrees, to
engage in the business of providing the Services to Subscribers at Subscriber
Premises located solely within the following areas (such areas being hereinafter
referred to as the "Territory"): the Counties of Alamance, Caswell, Chatham,
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Cumberland, Davidson, Davie, Durham, Forsyth, Granville, Guilford, Harnett,
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Xxxx, Lee, Moore, Orange, Person, Xxxxxxxx, Rockingham, Stokes, Surry, Wake, and
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Yadkin, all in the State of North Carolina. Except as specifically authorized by
------------------------------------------
the Multi-Territory Sales Committee in connection with the Multi-Territory
Accounts Program as described in Article IX below and Exhibit G attached hereto,
or by Muzak in connection with certain Adjunct Services sales as described in
Exhibit E attached hereto, Licensee shall not provide the Services to Subscriber
Premises located outside the Territory.
(b) Licensee and Muzak recognize that some outlying areas of
the Territory may at some future date be more efficiently served by a Muzak
licensee who operates in a territory adjoining the Territory. Licensee therefore
shall have the right at any time to present to Muzak a written request for
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reallocation of such outlying areas of the Territory to an adjoining licensee.
Any such reallocation shall be effective upon the written consent thereto of
both Muzak and the adjoining licensee. Muzak's consent shall not be unreasonably
withheld.
1.2 As to Proprietary Marks. Subject to the terms and conditions herein
-----------------------
contained, Muzak grants to Licensee, and Licensee accepts, a license to use the
Proprietary Marks solely in connection with Licensee's provision of the Services
as provided in this Agreement. Licensee shall at all times seek to market and
sell the Services through use of the Proprietary Marks.
1.3 Rights Retained. The grant of rights in Sections 1.1 and 1.2 above
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does not include the grant of the following rights, which are retained by Muzak:
(a) The right to use, and to license others to use, the Muzak
System and the Proprietary Marks for the provision of the Services to Subscriber
Premises which are located outside the Territory.
(b) The right to provide the Services, and to use the Proprietary
Marks in connection therewith, to transportation common carriers (including,
without limitation, operators of automobiles, ships, airplanes, trains, or
buses) which sell or
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provide transportation common carrier services, in whole or in part, within the
Territory, it being understood that the reservation of such right shall not be
construed as limiting Licensee's right to provide the Services to transportation
common carriers located wholly within the Territory.
(c) The right to provide a foreground music service by Recorded Media
(as hereinafter defined) under the "YESCO(R)" name and trademark to existing
dealers of the "YESCO(R)" Foreground Music Service and their customers pursuant
to existing contractual obligations or agreements with such dealers; provided,
however, that Muzak shall not authorize such dealers to distribute any of the
Services or use the Proprietary Marks within the Territory.
II. PROVISION OF SERVICES
---------------------
2.1 Services. Muzak shall supply Licensee with the Services for and
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during the term hereof, for use by Licensee solely in accordance with the terms
of this Agreement. Muzak reserves the right to add a Service and, except with
respect to the "Environmental Music by MUZAK(R)" and the "Foreground Music
One(R)" Music Services, to substitute a different Service or discontinue the
distribution of a Service, if Muzak reasonably determines that such addition,
substitution, or discontinuation will be beneficial to its business and the
business of its
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licensees in general and gives Licensee at least six (6) months' prior notice of
such addition, substitution or discontinuation. Any such addition, substitution
or discontinuation will be reflected in an amendment of Exhibit A or Exhibit B,
as the case may be, and will not affect the validity of this Agreement, which
shall, in all respects, be deemed modified to provide for such addition,
substitution, or discontinuation.
2.2 Satellite-Delivered Services.
----------------------------
(a) Subject to Section 2.3, Licensee agrees to deliver the Music
Services to Subscribers by such means as meet the standards and technical
specifications set forth in Exhibit D attached hereto and incorporated herein by
reference and the other terms and conditions of this Agreement. Muzak may modify
the standards and specifications set forth in Exhibit D from time to time if
Muzak reasonably believes that such modifications are necessary to maintain or
improve the quality of delivery of the Services to Subscribers or to maintain or
improve the effectiveness or quality, or reduce the price, of the Service
Delivery Equipment (as hereinafter defined); provided, however, that no such
modifications shall have the effect of rendering the satellite receivers and
associated antennae (collectively, the "Earth Stations") then in use by Licensee
or Subscribers in the Territory incapable of receiving satellite transmissions,
or any other equipment then in use by Licensee or Subscribers in the
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Territory for the reception of the Services incapable of receiving the Services,
unless such modifications are necessitated by law or by the exercise of the
rights of third parties under the express terms of Muzak's satellite-space
contracts; and provided further, that Muzak shall provide Licensee with six (6)
months' prior notice of any changes to those standards and specifications in
Exhibit D that pertain to the Service Delivery Equipment and Licensee's
obligations under Section 2.6 below.
(b) In the event that the Services are delivered by "Direct-Broadcast
Satellite" ("DBS"), which permits the satellite transmission of Services by
Muzak directly to the premises of a Subscriber, the following shall apply:
(i) Muzak shall, promptly after receipt of written notice from
Licensee, commence DBS delivery of the Services to Subscribers who have
Earth Stations suitable for receipt of such delivery. Subject to the
provisions of Exhibits E and G hereto, if Muzak delivers Services by
DBS directly to the Subscriber Premises, Muzak shall not discontinue
such delivery until the earlier of the following: (A) the date which
Licensee designates, or (B) one hundred eighty (180) days after the
effective date of the termination or expiration (without renewal of
license rights) of this Agreement. In the event Muzak discontinues
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delivery of Services in violation of this subsection (b) (i), Muzak
agrees to the granting of a temporary injunction against it on the
condition that the duration of such injunction does not exceed ten (10)
days. Such injunction may be granted on an ex parte basis if Muzak
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fails to appear at the hearing following twelve (12) hours' notice by
telephone to the twenty-four (24) hour telephone number of the Muzak
DBS Division. During the ten (10) day temporary injunction period,
Licensee may seek to have such temporary relief converted to a
permanent injunction in a hearing on the merits following appropriate
notice to Muzak.
(ii) During the above-referenced 180-day (or shorter, if
Licensee so designates) period, Licensee shall remain obligated to
perform the duties and be subject to the restrictions applicable to it
under the terms of this Agreement with respect to such continuing DES
delivery of the Services, including without limitation those terms
which obligate Licensee to pay royalties, fees, charges, and surcharges
(but only with respect to Gross Xxxxxxxx [as hereinafter defined] and
fees and charges to Subscribers served by means of DES), but not
including terms which require Licensee to pay a market fee or which
restrict Licensee from offering or selling the services of others.
During such 180-day (or shorter) period, under no circumstances shall
Licensee use the Proprietary Marks
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except as necessary in association with the continuing provision of the
Services by DBS to Subscribers. In addition, during such period Muzak
shall not be precluded from appointing one or more distributors of the
Services in the Territory and from giving to such distributors any
rights previously accorded to Licensee under this Agreement or any
related agreement.
2.3 Delivery by Recorded Media. Certain Services, as reasonably
--------------------------
designated by Muzak, may be delivered by means of, among other things, magnetic
tape or compact disc, in analog or digital form (the "Recorded Media"). Muzak
shall at all times retain title to, and all ownership rights in, any Recorded
Media whether furnished to Licensee or to a Subscriber. Licensee shal not sell,
assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any
Recorded Media. Licensee shall (i) prohibit all Subscribers who receive Services
delivered by Recorded Media from selling, assigning, transferring, conveying,
giving away, pledging, mortgaging, or otherwise encumbering any of such Recorded
Media, (ii) promptly notify Muzak in the event it becomes aware that any
Subscriber has violated any such prohibition, (iii) cooperate with Muzak in the
immediate termination of the provision of Services to any Subscriber which has
violated any such prohibition, and (iv) take such further action as is requested
by Muzak (at Muzak's expense) to enforce such prohibition.
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2.4 Adjunct Services. All sales of the Adjunct Services shall be
----------------
conducted in the manner provided in Exhibit E attached hereto and incorporated
herein by reference.
2.5 Alternate Delivery Means. In the event of a failure of Muzak's
------------------------
satellite transmissions of the Services, Muzak shall use its reasonable best
efforts promptly to restore such transmissions. In addition, by no later than 30
days after the date of this Agreement, Muzak shall provide Licensee with tape
cassettes (or other form of Recorded Media) containing 72 hours of
"Environmental Music by MUZAK(R)" programming and 72 hours of "Foreground Music
One(R)" programming, at no cost to Licensee, which Licensee shall retain for
emergency use in the event of a failure of Muzak's satellite transmissions of
the Music Services. Should any such failure of satellite transmissions continue
for a period in excess of 48 hours, Muzak shall use its reasonable best efforts
promptly to provide Licensee with additional tape cassettes (or other form of
Recorded Media), at no cost to Licensee, to be used until such failure has been
corrected. All Recorded Media provided to Licensee or to Subscribers under the
terms of this Section 2.5 shall be subject to all other provisions of this
Agreement pertaining to Recorded Media, including, without limitation, Section
2.3.
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2.6 Service Delivery Equipment.
--------------------------
(a) Licensee, at its expense (except as provided in subsection (b) below),
shall obtain and maintain equipment (including, without limitation, Earth
Stations) to enable Licensee to receive and distribute the Services and shall
obtain and make available to the Subscribers equipment to enable the Subscribers
to receive the Services. (All equipment used to receive or distribute the
Services, including such equipment as is owned by Subscribers, is hereinafter
collectively referred to as the "Service Delivery Equipment.") The Service
Delivery Equipment, except Subscriber-owned equipment that is not sold to the
Subscriber by Licensee, shall conform to Muzak's standards and specifications in
effect on the date Licensee installs such Equipment at the Subscriber Premises.
The standards and specifications in effect as of the date hereof are attached
hereto in Exhibit D.
(b) Muzak shall, at no cost to Licensee, provide Licensee with two (2) Earth
Stations for Licensee's use (at such locations in the Territory as Licensee
determines) in receiving the Services during the term of this Agreement. Muzak
shall at all times retain title to, and all ownership rights in, the Earth
Stations that it provides to Licensee, and Licensee shall not under any
circumstances sell, assign, transfer, convey, give away, pledge, mortgage, or
otherwise encumber such Earth
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Stations. Licensee shall, at Muzak's expense (except with respect to the
obtaining of any required permits, which shall be at Licensee's expense up to
$500 per Earth Station), install the Earth Stations which Muzak provides to
Licensee, and shall, at its own expense, maintain such Earth Stations in good
working condition; provided, however, that in the event any Earth Station
provided to Licensee is, through no negligent or intentional act or failure to
act of Licensee, defective or in need of replacement parts or repair, Muzak,
after receipt of notice thereof, shall promptly provide or arrange for such
replacement parts and repair as are necessary to restore such Earth Station to
good working order.
III. TERM
----
3.1 Term. Except as otherwise provided herein, the term of this Agreement
----
shall begin as of the date set forth in the introductory paragraph of this
Agreement and shall continue in full force and effect for a period of ten (10)
years from such date.
3.2 Renewal of Rights.
-----------------
(a) If Muzak reasonably determines that the performance of Licensee during
the term stated in Section 3.1 is not sufficiently satisfactory to warrant
renewal of Licensee's
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license rights hereunder, then, at least two years prior to the date of
expiration described in Section 3.1 of this Agreement, Muzak shall notify
Licensee that it does not intend to renew Licensee's license rights and provide
the specific reasons for such decision. Such notification is intended to give
Licensee the opportunity to assign its rights under this Agreement, or to make
satisfactory its performance, it being understood that any such assignment is
subject to Muzak's prior approval as provided in Article XII hereof.
(i) In determining whether or not to renew Licensee's license
rights, Muzak shall consider Licensee's performance under this
Agreement. In evaluating Licensee's performance, Muzak shall consider
such factors as, among others, the following: Licensee's total
xxxxxxxx for all Services, the trend of Licensee's new xxxxxxxx and
cancellations (and the reasons therefor), local market conditions and
the degree of Licensee's market penetration in the Territory.
(ii) In the event Muzak notifies Licensee that Muzak does not
intend to renew Licensee's license rights because Muzak has reasonably
determined that Licensee's performance is not sufficiently
satisfactory to warrant renewal of Licensee's license rights
hereunder, Licensee shall have a period of six months from the date of
such
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notice to attempt to improve its performance. At the end of such
six-month period, Muzak shall reconsider the adequacy of Licensee's
performance and if such performance has sufficiently improved so that
it is no longer inadequate, Muzak shall rescind its notice of
intention not to renew Licensee's license rights. Conversely, if at
the end of such six-month period Muzak determines that Licensee's
performance remains inadequate, Muzak shall inform Licensee of the
reasons for such determination and send to Licensee a final notice of
nonrenewal.
(b) Muzak shall also have the right not to renew Licensee's license rights
if Licensee engages in conduct which Muzak reasonably deems inimical to the best
interests of the Muzak System (including the interests of the MUZAK(R) licensees
in such System). The exercise of Muzak's rights as stated in this subsection (b)
shall be subject to the following conditions:
(i) In the event such conduct constitutes a breach of this
Agreement, Muzak shall have the absolute right not to renew Licensee's
license rights, provided that Muzak has notified Licensee of such
breach, such breach occurred (or Muzak first became aware of such
breach) no more than six months before Muzak's nonrenewal notice to
Licensee, and Licensee has neither cured nor challenged such breach
within the period specified in Section 10.1(c)
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hereof, and provided further that Muzak's nonrenewal notice to
Licensee states that it constitutes a final notice of nonrenewal; and
(ii) In the event that such conduct does not constitute a breach
of this Agreement, Muzak shall notify Licensee within 90 days of its
discovery of the objectionable conduct that it considers such conduct
to be inimical to the best interests of the Muzak System (including
the interests of the MUZAK(R) licensees in such System). If, after two
such notices, Licensee again engages in conduct which Muzak reasonably
deems to be inimical to the best interests of the Muzak System
(including the interests of the MUZAK(R) licensees in such System),
then (whether or not such conduct is similar to the conduct referred
to in either of the earlier notices) Muzak may notify Licensee of that
fact and of the further fact that as a result of such conduct, it does
not intend to renew Licensee's license rights. This notice shall
constitute a final notice of nonrenewal.
(c) In the event that, in accordance with the provisions of this Section
3.2, Muzak notifies Licensee of its intention not to renew Licensee's license
rights, then Muzak shall have no obligation to offer to renew such license
rights; provided, however, that if, in the case of the final nonrenewal
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notice sent pursuant to subparagraph (a) or subparagraph (b)(ii) above,
Licensee challenges, by litigation commenced no later than 120 days after the
date of such final nonrenewal notice, the propriety of such notice, such notice
shall become effective only after such litigation is finally resolved in favor
of Muzak. It is understood and agreed that Licensee's right to challenge the
final nonrenewal notice sent under subparagraph (b)(i) of this Section 3.2
shall be exercised, if at all, by means of Licensee's challenge under Section
10.1 of this Agreement of the breach supporting such nonrenewal. For purposes
hereof, final resolution shall include Licensee's failure to make a timely
appeal of a court decision in favor of Muzak. If Muzak does not so notify
Licensee, then Muzak shall be required to offer to enter into a new license
agreement with Licensee upon expiration of this Agreement, which new license
agreement shall correspond to the form of license agreement which Muzak is then
bona fide offering to licensees (or prospective licensees) serving (or proposing
to serve) licensed territories of comparable size to that proposed to be
licensed to Licensee under such new agreement.
3.3 Notice from Licensee. Notwithstanding Section 3.2, Muzak shall have no
--------------------
obligation to offer to renew Licensee's license rights unless, after written
notice from Muzak sent to Licensee no less than eight (8) and no more than
twelve (12) months prior to the date of expiration described in Section 3.1
16
of this Agreement advising Licensee of the effect of this Section 3.3, Licensee
shall have given Muzak written notice of its desire to renew its license rights
not less than six (6) months nor more than twelve (12) months prior to the date
of expiration described in Section 3.1 of this Agreement.
IV. EXCLUSIVITY
.1 In the Territory. Subject to the provisions of Sections 1.3 and 2.4
----------------
(including Exhibit E hereto) above, Article IX below (including Exhibit G
hereto), and the Licensee's In-Store Advertising Agreement described in Exhibit
H attached hereto, during the term of this Agreement, Muzak shall not authorize
anyone other than Licensee to (i) provide the Services in the Territory or (ii)
use the Proprietary Marks in the Territory.
.2 Future Services. Muzak shall conduct research and development to
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maintain and improve the quality of the Services and the methods used to
distribute them. In the event that Muzak develops new subscription music
services, or new communications services in the nature of the Adjunct Services,
after the date hereof, Muzak shall amend Exhibit A or Exhibit B, as the case may
be, in the manner provided in Section 2.1 above (including the requirement of at
least six months' prior notice to Licensee of such amendment) to add such new
Services thereto, thereby giving
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Licensee the right and, subject to Exhibit E hereto, the obligation to
distribute such Services in the Territory under the terms of this Agreement.
.3 No Other Services. During the term of this Agreement, except as
-----------------
otherwise approved in writing by Muzak, neither Licensee nor any of the persons
or entities holding (either directly, indirectly, or beneficially) a controlling
ownership interest in Licensee shall, either directly or indirectly, for itself,
or through, on behalf of, or in conjunction with any person or entity:
(a) Participate or permit any of its employees, officers, or directors to
participate, either directly or indirectly in the distribution in the Territory
of any communications service substantially the same as or similar to the
Adjunct Services (except a communications service distributed by any such person
or entity pursuant to a contract or agreement in effect on the date the Adjunct
Service which is the same as or similar to such communications service is first
offered to Licensee by Muzak), or any subscription music service other than the
Music Services, including, without limitation, a radio program service which is
provided through special reception devices tuned only to that station's signal
and any music programming that is provided to commercial or residential
locations by means of cable television or cable radio; provided,
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however, that the foregoing shall not become effective with respect to such
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other subscription music services that are distributed by Recorded Media until
the later of (i) January 1, 1993, (ii) the first date Licensee may cancel or
otherwise terminate the agreement under which Licensee is the distributor of
such other music services without causing a breach of such agreement (provided
such agreement was in effect on March 1, 1990), or (iii) with reference to the
distribution of such music services to any particular customer, the first date
Licensee may either substitute the Music Services for such other music services
or cancel or terminate the agreement with such customer without causing a breach
of such agreement (provided such customer agreement was in effect on September
1, 1990); and provided further, that if, as a result of Licensee's acquisition
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of another music business or the assets thereof during the term of this
Agreement, Licensee becomes the assignee of a customer agreement for such other
music or communications services or an agreement under which Licensee is the
distributor of such other music or communications services and Licensee cannot
substitute the Services for such other services without causing a breach of such
agreement, Licensee may provide such other services to the customers receiving
such services on the date of assignment through the remaining term (without
reference to renewal rights) of such agreement. Indirect participation shall
include participation as an officer, director, owner (which term shall not
include the holder of 5% or less of the common stock of a
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publicly-held entity), partner, employee, or consultant of an entity
distributing such other communications or subscription music service.
(b) Divert or permit any of its employees, officers, or directors to
divert any existing or prospective Subscriber to any competitor in the
Territory, by direct or indirect inducement or otherwise, or do or perform,
directly or indirectly, any other act injurious or prejudicial to the goodwill
associated with Muzak, the Proprietary Marks, or the Services.
(c) Display in any location in the Territory any trade names, trademarks,
or service marks of any other business providing subscription music services or
providing communications services substantially similar to the Adjunct Services
except if permitted to sell or distribute such services in the Territory
pursuant to Paragraph (a) above.
.4 Promotion of All Services. Throughout the term of this Agreement,
-------------------------
Licensee shall use its reasonable best efforts actively to promote, market, and
distribute each of the Services (except as otherwise provided in Article 4 of
Exhibit E hereto).
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V. STANDARDS OF SERVICE AND TRAINING
5.1 Operations in General. In order to maintain the reputation and goodwill
---------------------
of Muzak, the Services, and the Proprietary Marks, Licensee shall:
(a) Comply with all federal, state, and local laws, rules and
regulations, and timely obtain all permits, certificates, and licenses,
necessary in the reasonable judgment of Licensee for the proper conduct of the
business licensed hereunder (the "Business").
(b) Maintain an office in the Territory and promptly notify Muzak in
the event Licensee moves the office to a new location within the Territory;
provided, however, that if Licensee is also the Muzak licensee in a territory
adjacent to the Territory and maintains an office in that territory that
adequately serves Subscribers in both such territories, Licensee need not
maintain an office in the Territory.
(c) Be responsible for paying for all performing rights licenses
necessary for the distribution of the Services; provided, however, that Muzak
shall be responsible for paying for the license with SESAC to the extent
required for Licensee's distribution of the Services.
21
(d) Be responsible for paying all applicable local, state and federal
taxes of whatever nature, now or hereafter enacted, relating to Licensee's
provision of the Services, and all accounts and other indebtedness of every kind
incurred by Licensee in the conduct of the Business.
(e) Hold itself out to the public as an independent contractor,
operating under a license from Muzak. In the event Licensee elects to exhibit
the MUZAK(R) name on its stationery or vehicles, such exhibition shall be in a
conspicuous place and only in juxtaposition with Licensee's corporate name.
5.2 Sales. Licensee (or, if Licensee is a corporate or partnership entity,
-----
those individuals responsible for managing the Business) shall devote full-time
and reasonable best efforts to the sale, distribution, and support of all the
Services (it being understood that such obligation shall not be construed as
prohibiting Licensee from selling goods and services in addition to the
Services, provided such sale does not violate Section 4.3 above, or requiring
Licensee to sell certain Adjunct Services as described in Article 4 of Exhibit E
hereto). Without limiting the generality of the foregoing, prior to the
beginning of each consecutive twelve (12)-month period during the term of this
Agreement, with the first such period to begin on the first anniversary of the
date of this Agreement, Muzak and Licensee shall mutually set a Services sales
goal for Licensee. Such goal
22
shall be based on the amount of Gross Xxxxxxxx, plus the amount of xxxxxxxx for
the sale of Recorded Media and Adjunct Services, which Muzak and Licensee
mutually believe can be attained by Licensee during such twelve (12)-month
period, taking into consideration such factors as the size and other distinctive
characteristics of the Territory, the size and trend of Licensee's past Gross
Xxxxxxxx and other xxxxxxxx, Licensee's prior sales of each Service, and
economic conditions affecting the Territory. Licensee shall use its best efforts
to meet such sales goals during each respective twelve (12)-month period.
5.3 Protection of Services. Licensee shall not alter in any way the
----------------------
Services or any products (including Service Delivery Equipment) owned by Muzak
and in the possession of Licensee. Without limiting the generality of the
foregoing, Licensee shall not substitute or add any musical selections or other
material in or to any Service (except in extraordinary circumstances, with the
prior written consent of Muzak, which in such circumstances shall not be
unreasonably withheld). Licensee shall not represent that any product or
equipment not produced by Muzak has been produced by Muzak; provided, however,
that the foregoing shall not preclude Licensee from displaying the MUZAK(R) name
on items not produced by Muzak, including promotional items, if Muzak has
authorized such display. Licensee shall report to Muzak any unauthorized
reception of the Services promptly after becoming aware of any such unauthorized
reception, and shall
23
further cooperate with Muzak in protecting against and preventing the
unauthorized reception of the Services. Licensee shall not record, copy, or
reproduce all or any part of any Service and shall expressly prohibit, including
by written agreement if possible, Subscribers from recording, copying, or
reproducing all or any part of any Service.
5.4 Training. Muzak shall make available to Licensee and its employees
--------
training programs designed to maintain and improve Licensee's sales and delivery
of the Services; provided, however, that this obligation shall cease in the
event Muzak determines that such programs (or any sessions thereof) are not
cost-effective. For all such programs, Muzak shall provide instructors and
training materials, for which Muzak reserves the right to charge a reasonable
tuition fee. Licensee or its employees shall be responsible for any and all
other expenses incurred by them in connection with such training programs,
including without limitation the costs of transportation, lodging, meals, and
any wages.
5.5 Confidentiality. During the term of this Agreement and thereafter,
---------------
neither Muzak nor Licensee (including any persons or entities listed on the last
page of this Agreement) shall use for its own purposes or divulge to any third
party any trade secrets or confidential information of the other. As used herein
(i) the term "third party" shall not include any party otherwise lawfully
24
in receipt of the trade secrets or confidential information to be divulged; or
any employee, attorney, accountant, or consulting engineer of Muzak or Licensee,
as the case may be, provided that such individual agrees not to further use or
disclose such trade secrets or confidential information; or any person or entity
providing credit or financing to Muzak or Licensee, as the case may be, provided
such person or entity (and any representative thereof) is similarly charged with
maintaining the confidence of such trade secrets and confidential information;
or any representative of a governmental authority or other person or entity to
whom disclosure is required by compulsion of law, provided notice of the demand
for such disclosure is given, within 48 hours of receipt of such demand, to the
party owning the confidential information or trade secrets required to be
disclosed; and (ii) the term "confidential information" means information
designated as such in writing by the party owning such information, as well as
customer lists and revenue data (without further designation), but does not
include information that has become part of the public domain through
publication or other similar communication. During the term of this Agreement
Muzak shall not require that Licensee disclose to Muzak the name and address of
any Subscriber other than (i) for the purpose of participation in the
Multi-Territory Accounts Program, (ii) to permit delivery of the Services under
the Licensee's In-Store Advertising Agreement, and (iii) to permit delivery of
the Services by such technological means as require such information
25
for such delivery. Licensee understands and agrees that if Muzak is unable to
perform any of its obligations hereunder as a result of its inability to obtain
such Subscriber information, such nonperformance shall not be deemed a breach of
this Agreement.
VI. FEES AND ROYALTIES
6.1 Initial Fee. If this Agreement is entered into in connection with the
-----------
renewal or continuation (including amendments and adjustments of territories) of
rights granted under a prior agreement between Muzak (or its predecessor) and
Licensee (or its predecessor in the Territory), Licensee shall not be required
to pay any initial fee to Muzak. If this Agreement is not entered into in
connection with such renewal or continuation of rights granted under such a
prior agreement, Licensee shall pay to Muzak an initial fee of Five Thousand
Dollars, plus the amount, if any, paid by Muzak to purchase the rights of any
former licensee in the Territory in any Multi-Territory Contracts and certain
Adjunct Services Subscriber Agreements (as defined in Exhibits E and G hereto),
receipt of which initial fee is hereby acknowledged. The initial fee shall be
deemed fully earned and nonrefundable upon execution of this Agreement and
assignment of such subscriber contracts and agreements in consideration of the
administrative and other expenses incurred by Muzak in granting this license to
Licensee.
26
6.2 Market Fee. Licensee shall pay to Muzak, in accordance with Section
----------
6.7 each calendar month, a market fee in the amount set forth below for
Licensee Category C and based upon information then available in the report
-------------------
entitled County Business Patterns by State and a U.S. Summary, as published by
----------------------------------------------------
the Bureau of the Census, United States Department of Commerce or any successor
publication (the "U.S. Business Pattern Report") and, in the case of Category I
below, the population within the Territory.
Licensee Number of Businesses and/or Monthly
Category Population Within Territory Market Fee
-------- --------------------------- ----------
A 70,000 or more businesses $950
B 60,000 through 69,999 businesses 900
C 50,000 through 59,999 businesses 850
D 40,000 through 49,999 businesses 770
E 30,000 through 39,999 businesses 690
F 20,000 through 29,999 businesses 610
G 10,000 through 19,999 businesses 530
H 5,000 through 9,999 businesses 450
I ("Junior 4,999 or fewer businesses or population of 350
Franchise") 100,000 or less
Upon a determination by Muzak, based upon the information then available in the
U.S. Business Pattern Report (or, in the case of Category I, the U.S. Census),
that the number of businesses or population within the Territory has changed so
as to require the recategorization of the Business, Muzak will so notify
Licensee. Any adjustment in the market fee resulting from such recategorization
shall become effective for the calendar month immediately following the month in
which such notice is given. Cumulative adjustments in the market fee during the
term of this
27
Agreement shall not exceed two (2) categories from that shown above in this
Section 6.2.
6.3 Royalty Fee. Licensee shall pay to Muzak each month a royalty fee
-----------
in the amount of ten percent (10%) of Licensee's Gross Xxxxxxxx, as defined in
Section 6.8 below.
6.4 DBS Surcharge. In consideration of Muzak's development and
-------------
implementation of DBS, Licensee shall pay to Muzak a surcharge (the "DBS
Surcharge") throughout the term of this Agreement; provided, however, that
Licensee's obligation to pay the DES Surcharge shall no longer exist after
Licensee (and/or any predecessor of Licensee in the Territory) has paid to Muzak
the DBS surcharge with respect to the Territory for a cumulative total of
ninety-six (96) consecutive calendar months (including any months preceding the
date of this Agreement during which Licensee [or its predecessor in the
Territory] paid such DBS Surcharge with respect to the Territory). The DBS
Surcharge shall be equal to the following percentage of Licensee's Gross
Xxxxxxxx:
28
Calendar Months
(Including any applicable DBS Surcharge
months preceding the date (Percentage of
of this Agreement) Gross Xxxxxxxx)
------------------------- ---------------
1 through 12 0.50%
13 through 24 1.25%
25 through 60 1.75%
61 through 96 1.00%
thereafter 0.00%
6.5 Recorded Media Charges. Licensee shall pay Muzak's standard
----------------------
Recorded Media charges, as the same may be set forth by Muzak from time to time
in writing, for all Recorded Media distributed to Licensee or the Subscribers.
Muzak shall not increase such Recorded Media charges prior to January 1, 1993,
and increases thereafter shall not exceed ten percent (10%) per annum.
6.6 Adjunct Services Charges. Licensee shall pay Muzak's Adjunct
------------------------
Services charges in accordance with the terms set forth in Exhibit F attached
hereto and incorporated herein by reference.
6.7 Payment Schedule. All monthly payments required by Sections 6.3 and
----------------
6.4 shall be paid within forty-five days of the end of the month in which the
applicable Services are provided to the Subscribers, and shall be submitted
together with any reports or statements required under Section 7.2 hereof. All
Market Fee charges required by Section 6.2, all Recorded Media charges required
by Section 6.5, and all Adjunct Services charges
29
required by Section 6.6 shall be paid within forty-five days after the date of
Muzak's billing to Licensee. Any payment of fees due to Muzak that is not
actually received by Muzak by the due date shall be deemed overdue. If any
payment is deemed overdue, simple interest may be assessed on such overdue
payment. Such interest shall accrue on a daily basis from the due date until the
date of payment, at the lesser of (i) the prime rate of The First National Bank
of Chicago per annum in effect at the beginning of the calendar quarter, or (ii)
the highest rate of interest permitted by law in Licensee's State. Entitlement
to such interest shall not limit any other remedies available under law or this
Agreement as a result of the overdue payment.
6.8 Gross Xxxxxxxx. "Xxxxx Xxxxxxxx" means all amounts billed or
--------------
otherwise charged to a Subscriber by Licensee in connection with (1) the
provision of any Music Service, and (2) the lease or rental (but not the sale)
of Service Delivery Equipment and other equipment used to receive and distribute
such Music Service but not including (i.e., excluding) equipment that is not
used primarily in the provision or reception of a Music Service. Notwithstanding
the foregoing, "Gross Xxxxxxxx" shall not include any amount billed or otherwise
charged to a Subscriber by Licensee for (a) the provision of any Music Service
on Recorded Media, (b) Music-Related Adjunct Services, or (c) the lease or
rental of any Service Delivery Equipment used with Recorded Media. "Gross
Xxxxxxxx" also shall not include (i) any
30
amounts billed to Subscribers as (and separately stated on the xxxxxxxx or
otherwise separately determinable as) sales or similar excise taxes; (ii)
one-time installation charges billed not later than ninety (90) days following
completion of such installation; (iii) charges for service of Subscriber-owned
equipment, provided that such charges are separately determinable; (iv) ad hoc
(i.e., extraordinary) charges for service actually performed on
----
Subscriber-leased or Subscriber-owned equipment; and (v) late-payment penalties
or interest charges imposed by Licensee, provided that such penalties and
charges do not exceed standard industry practice. Licensee may deduct from its
Gross Xxxxxxxx (i) amounts paid by Licensee as performing rights fees to ASCAP,
BMI, or similar performing rights organizations with respect to the Music
Services other than those distributed by Recorded Media, and (ii) the amount of
any xxxxxxxx that were previously reported to Muzak as part of Licensee's Gross
Xxxxxxxx but which, in the month of the deduction, were written off by Licensee
as uncollectible in accordance with federal income tax standards of
uncollectibility.
VII. RECORDS, REPORTS, AND INSPECTIONS
---------------------------------
7.1 Records. Licensee shall prepare, and retain at its principal place of
-------
business for at least two (2) years thereafter, complete and accurate books,
records, and accounts of the Business. Such books, records, and accounts shall
fairly
31
represent the results of operations of such business, as determined on an
accrual basis, and shall be kept in sufficient detail to permit the transactions
included in such operations to be clearly identifiable and traceable to
underlying documentation. Licensee shall make available such records and books
of account to Muzak or its representatives if requested by Muzak for inspection
and audit as provided in Section 7.3.
7.2 Reports. Licensee shall submit to Muzak, together with the payments
-------
described in Section 6.7, royalty and fees reports, in such detail as Muzak may
from time to time reasonably request, accurately reflecting all Gross Xxxxxxxx
during the periods to which such payments pertain.
7.3 Audit.
-----
(a) Muzak or its representatives may, upon giving Licensee 30 days'
(or 10 days' in the case of an audit following a request for Muzak's consent to
a transfer under Article XII hereof) written notice, enter the premises of
Licensee (and of any person doing business [an "affiliated person"] controlling,
controlled by or under common control with Licensee) during normal business
hours for inspection and audit of the business and records of Licensee and of
such affiliated person, provided that such inspection and audit shall be no more
extensive than is required to verify that none of Licensee's or such affiliated
32
person's revenues should have been reported as Gross Xxxxxxxx or as charges for
Recorded Media and Adjunct Services and that Licensee's payments to Muzak have
been properly computed in accordance with the provisions of Article VI of this
Agreement. Licensee shall cooperate with any such inspection and audit. Muzak
shall not assess Licensee for amounts found, as a result of such audit, to be
owing hereunder if such amounts derive from a reporting period that ended more
than two years prior to the date such audit commenced, provided that Licensee
has not knowingly maintained false books or records, or knowingly submitted
false reports to Muzak.
(b) During any audit hereunder, Muzak or its representatives (at
Muzak's cost and expense) may make mechanical copies of only those books and
records of Licensee that are necessary for the verification of Licensee's
statements and accountings to Muzak and were physically examined as part of the
audit. Muzak shall take reasonable precautions to safeguard the confidentiality
of such copies and shall destroy any such copies upon the mutually-confirmed
completion of the audit and payment in full of any royalties and other charges
determined to be owing to Muzak as a result of the audit. Nothing contained
herein shall be construed as in any way limiting Muzak's right manually to copy
or make abstracts of Licensee's or any affiliated person's books and records or
to make any notes or the like whatsoever; provided, however, that such manual
copies or
33
abstracts (and any copies thereof) shall be destroyed upon the mutually-
confirmed completion of the audit.
(c) In the event that any audit conducted by or on behalf of Muzak
results in a determination that there has been either an underpayment or
overpayment of the amounts due Muzak hereunder, then within 30 days after such
determination, Licensee or Muzak, as the case may be, shall pay to the other the
amount of such underpayment or overpayment; provided, however, that in the event
that Licensee disputes the results of any such audit, the parties shall attempt
to resolve the matter by conducting a new audit under the joint supervision of
their respective independent certified public accountants. In the event that
such new audit resolves the dispute, the cost of each party's independent
certified public accountants shall be borne by the respective party. In the
event that such new audit fails to resolve the dispute, the matter shall be
resolved by arbitration under the rules of the American Arbitration Association,
and the losing party shall pay both parties' entire costs of the second audit.
(d) If it is determined as a result of an audit that there has been an
underpayment of seventeen percent (l7%) or more of the amounts due Muzak for any
given calendar year, Licensee shall pay to Muzak, within thirty (30) days after
such determination and in addition to all other amounts due under this
34
Agreement, a penalty equal to fifteen percent (15%) of the underpayment for that
year. The foregoing remedies shall be in addition to any other remedies Muzak
may have for such underpayment.
(e) Muzak and Licensee shall confirm, at the conclusion of the audit
and following payment of any monies found owing as a result of the audit, that
such audit has been completed and that the periods audited shall not be audited
again absent a showing that Licensee knowingly maintained false books and
records for such period.
VIII. MARKETING AND PROMOTION
-----------------------
8.1 Advertisements. Licensee shall cooperate with any advertising or
--------------
promotional campaigns conducted by Muzak in accordance with sound business
practices. Licensee shall promptly discontinue any advertising or promotion
which Muzak informs Licensee is, in Muzak's judgment, inimical to Muzak's
reputation. Without limiting the generality of the foregoing, Licensee shall
submit to Muzak upon request samples of all advertising and promotional plans
and materials that Licensee proposes to use. Licensee shall amend any such plans
and materials as requested by Muzak upon receipt of notice from Muzak that such
plans or materials fail to comply with the requirements of this Section 8.1. In
the event that Muzak notifies Licensee
35
to amend any advertising or promotional plans previously approved by Muzak's
predecessors-in-interest, Licensee shall have up to 180 days after the date of
such notice to make such amendments.
8.2 Yellow-Pages Advertising. Each year during the term of this Agreement,
------------------------
Licensee shall ensure that it is listed in at least one "trademark ad" under the
appropriate classification in the yellow pages of one major-market telephone
book in the Territory. Muzak will reimburse Licensee for the annual cost of one
such "trademark ad" within thirty (30) days after receipt from Licensee of the
invoice for the advertisement.
8.3 Additional Assistance by Muzak. Within the limits of its available
------------------------------
personnel, Muzak, when so requested by Licensee, shall make available technical
and marketing assistance to Licensee. The charges for such assistance shall be
mutually agreed upon by the parties.
IX. MULTI-TERRITORY ACCOUNTS PROGRAM; CABLE RADIO/TV
------------------------------------------------
9.1 Multi-Territory Accounts Program. Recognizing that potential
--------------------------------
Subscribers with substantial numbers of Subscriber Premises located throughout
the United States represent a significant potential market for Licensee and
other Muzak licensees marketing the Services, and that the effective marketing
of the Services to such accounts frequently requires a
36
coordinated effort by Muzak and its licensees, Muzak, in conjunction with a
Multi-Territory Sales Committee, shall establish and maintain during the term of
this Agreement a Multi-Territory Accounts Program. The Multi-Territory Accounts
Program and the Multi-Territory Sales Committee are more fully described in
Exhibit G attached hereto and incorporated herein by reference. Licensee and
Muzak agree to participate in the Multi-Territory Accounts Program as set forth
in Exhibit G and otherwise to abide by the terms of Exhibit G. Without limiting
the generality of the foregoing, Licensee agrees to participate during the term
of this Agreement in all Multi-Territory Contracts (as defined in Exhibit G)
that pertain to Subscriber Premises in the Territory.
9.2 Cable Radio/TV. In the event that (i) a provider of cable television or
--------------
cable radio programming requests that Muzak provide music for such programming
that cannot otherwise be provided by Licensee utilizing the Music Services, and
(ii) such programming will be distributed to residences (but not to commercial
locations) in the Territory, then prior to Muzak's providing such music, Muzak
and Licensee shall jointly determine their respective interests in the revenues
deriving from the provision of such music to such provider.
37
X. DEFAULT AND TERMINATION OF THIS AGREEMENT
-----------------------------------------
10.1 Default of Licensee.
-------------------
(a) Licensee shall be deemed to be in default under this Agreement,
and all rights granted herein shall, at the option of Muzak, immediately
terminate upon notice thereof to Licensee (without opportunity to cure), if at
any time:
(i) Licensee shall file in any court pursuant to any statute
either of the United States or of any State a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver
or trustee of all or a portion of Licensee's property, or if there is
commenced against Licensee any such petition which is not opposed by
Licensee or not dismissed within ninety days after such filing, or if
Licensee admits in writing its inability to pay its debts or makes a
general assignment for the benefit of creditors, or if Licensee makes
general application to Licensee's creditors to settle, compromise, or
extend the time of payment of all of Licensee's obligations; or
(ii) there occurs a voluntary or involuntary transfer or purported
transfer of an interest in Licensee or in this Agreement in violation
of Article XII.
38
(b) Licensee shall be deemed to be in default under this Agreement,
and all rights granted herein shall terminate, if any of the following events
shall occur and not be cured, in the time and manner provided in subsection (c)
below, following notice thereof from Muzak:
(i) if Licensee fails to comply with any of its obligations
under this Agreement and Muzak has been or is reasonably likely to be
in any way damaged thereby, or if any representation made by Licensee
herein is found to be untrue when and as made and Muzak has been or is
reasonably likely to be in any way damaged thereby; or
(ii) if Licensee ceases to distribute the Music Services or
ceases to operate or otherwise abandons the Business; or
(iii) if Licensee loses the right to transact business in any
jurisdiction included in the Territory and Licensee refuses to surrender to
Muzak its license rights hereunder with respect to such jurisdiction; or
(iv) if Licensee knowingly maintains false books or records, or
submits false reports to Muzak.
39
(c) Licensee shall have thirty (30) days after its receipt from Muzak
of a written notice of default within which to remedy any default as defined in
subsection (b) above (or, if the default cannot reasonably be cured within such
thirty (30) days, to initiate within that time substantial and continuing action
to cure the default) and to provide evidence thereof to Muzak. If any such
default is not cured within that time (or, if appropriate, substantial and
continuing action to cure the default is not initiated within that time), or
such longer period as applicable law may require, this Agreement shall terminate
following Licensee's receipt of a Notice of Termination reciting Licensee's
failure to cure or commence to cure and setting forth a definite termination
date, which shall be no sooner than 5 business days following Licensee's receipt
of such Notice or such longer period as applicable law may require; provided,
however, that in the event the existence of such default is disputed by
Licensee, and Licensee notifies Muzak of such dispute within 10 days after
receipt of Muzak's notice of default and thereafter promptly proceeds to take
all steps necessary to resolve such dispute, including (if necessary) the
commencement of litigation by no later than 30 days after receipt of Muzak's
notice of default, such termination shall not become finally effective until 10
days after the date such dispute is finally resolved in favor of Muzak. For
purposes hereof, final resolution shall include without limitation Licensee's
failure to make a timely appeal of a court decision in favor of Muzak.
Notwithstanding anything in
40
this paragraph (c) to the contrary, in the event that the final resolution in
favor of Muzak of Licensee's dispute of a notice of default is by means of a
court decision and such court also specifically decides that, at each successive
level of Licensee's legal challenge to the notice of default, Licensee had a
strong likelihood of success on the merits (without application by the court of
any balance-of-hardships tests), Licensee shall have 30 days from the date of
such final resolution to cure the default; in such event, if such cure is not
effectuated by the end of such 30-day period, the termination shall then become
immediately effective.
10.2 Default of Muzak. Muzak shall be deemed to be in default, and
Licensee shall have the right to terminate this Agreement, if Muzak fails to
comply with any of its obligations under this Agreement, and Licensee has been
or is reasonably likely to be in any way damaged thereby, and such failure is
not cured within thirty (30) days after Muzak's receipt of a written notice of
default from Licensee (or, if the default cannot reasonably be cured within such
thirty (30) days, if such cure has not been initiated and is not continuing
within that time); provided, however, that in the event the existence of such
default is disputed by Muzak, and Muzak notifies Licensee of such dispute within
10 days after receipt of Licensee's notice of default and thereafter promptly
proceeds to take all steps necessary to resolve such dispute, including (if
necessary) the
41
commencement of litigation by no later than 30 days after receipt of Licensee's
notice of default, such termination shall not become effective until 10 days
after the date such dispute is finally resolved in favor of Licensee. For
purposes hereof, final resolution shall include Muzak's failure to make a timely
appeal of a court decision in favor of Licensee. Notwithstanding anything in
this Section 10.2 to the contrary, in the event that the final resolution in
favor of Licensee of Muzak's dispute of a notice of default is by means of a
court decision and such court also specifically decides that, at each successive
level of Muzak's legal challenge to the notice of default, Muzak had a strong
likelihood of success on the merits (without application by the court of any
balance-of-hardships tests), Muzak shall have 30 days from the date of such
final resolution to cure the default; in such event, if such cure is not
effectuated by the end of such 30-day period, the termination shall then become
immediately effective.
10.3 Additional Remedies. No termination of this Agreement shall
affect any obligation, including any obligation arising as a result of a default
of this Agreement, of any party accrued up to the date of termination or limit
any additional rights or remedies provided the nondefaulting party under this
Agreement or under law.
42
10.4 Force Majeure. Neither Muzak nor Licensee shall have any
liability to the other or to any other person as a result of the failure of
either of such parties to perform its obligations hereunder, nor shall such
failure be considered a breach of this Agreement, if such failure is due to
fire, flood, other act of God, strike or other event or situation beyond the
control of such party acting in accordance with sound business practices.
XI. RELATIONSHIP OF THE PARTIES UPON TERMINATION OR EXPIRATION OF THIS
AGREEMENT
11.1 Action Required of Licensee. Upon termination or expiration
---------------------------
(without renewal of license rights) of this Agreement, Licensee shall, subject
to Section 2.2(b), Section 2.4 (including Exhibit E), and Article IX (including
Exhibit G), immediately
(a) Cease to distribute the Services to Subscribers and
shall not thereafter, directly or indirectly, represent itself to the public or
hold itself out as a licensee of Muzak;
(b) Cease to use, in any manner whatsoever, the Services and
the Proprietary Marks. Without limiting the generality of the foregoing,
Licensee shall immediately cancel any assumed name or equivalent registration
which contains the xxxx "MUZAK(R)" or any other service xxxx or trademark of
Muzak, or otherwise permit Muzak to effect such cancellation;
43
(c) Sell to Muzak at Licensee's cost of acquisition, if any, all
manuals, instructions, sales literature, and other materials related to the
Services or the Proprietary Marks and retain no copy or record of any of the
foregoing except Licensee's copies of this Agreement and any other document
which Licensee reasonably needs for compliance with specific provisions of state
or federal law;
(d) Dismantle (if necessary) and dispose of as Muzak requests (at
Muzak's cost) all Earth Stations, Recorded Media, and other equipment provided
Licensee by Muzak; and
(e) Promptly pay all sums indisputably owing to Muzak.
11.2 Action Required of Muzak. Upon termination or expiration (without
------------------------
renewal of License rights) of this Agreement, Muzak shall promptly pay all sums
indisputably owing to Licensee. Muzak shall not provide or directly or
indirectly make available to any successor licensee in the Territory (including
any owned affiliates) any of Licensee's customer lists or customer contract
termination dates or terms; provided, however, that Muzak may transfer to such
successor licensee any contract rights purchased by Muzak from Licensee under
the terms of Exhibits E and G hereto.
44
XII. TRANSFER OF BUSINESS OR CONTROL OF LICENSEE
-------------------------------------------
12.1 By Licensee and its Owners. Muzak has entered into this Agreement
--------------------------
in reliance on the business skills, financial capacity, and personal character
of Licensee and its owners. Accordingly, Licensee shall not permit the transfer
of any interest in or of Licensee that would have the effect, alone or together
with other previous, simultaneous, or proposed transfers, of directly or
indirectly transferring a controlling interest (whether in stock, partnership
interests or otherwise) in this Agreement, Licensee, or a major portion of the
assets used in the Business without the prior written consent of Muzak and
without otherwise complying with the requirements of this Article XII. Any such
purported assignment or transfer, by operation of law or otherwise, not having
the written consent of Muzak and not otherwise complying with the requirements
of this Article XII shall be null and void and shall constitute a material
breach of this Agreement.
12.2 Consent of Muzak. Muzak shall not unreasonably withhold its
----------------
consent to a transfer described in Section 12.1; provided, however, that Muzak
may require any or all of the following as conditions of its approval:
(a) All of Licensee's accrued monetary obligations to Muzak shall
have been satisfied (or otherwise provided for to
45
Muzak's satisfaction, including without limitation the escrowing with counsel at
closing of the full amount of such obligations);
(b) The transferee and its owners shall enter into a written
assignment, in a form reasonably satisfactory to Muzak, assuming and agreeing to
discharge all of Licensee's obligations under this Agreement;
(c) The transferee shall demonstrate to Muzak's reasonable
satisfaction that (i) the transferee has the personal character and the
financial resources to conduct the Business, (ii) the transferee personally has
the general business experience to conduct the Business or will employ during
the term of this Agreement a general manager with such business experience to
conduct the Business, and (iii) the transferee is not in a position to use the
information obtained as a licensee of Muzak in a manner that will be harmful to
Muzak outside the Territory; and
(d) The transferee shall pay Muzak a transfer fee as follows:
(i) For any transfer to an existing licensee of Muzak (or any
entity owned or controlled by or having common ownership with an
existing licensee of Muzak), the sum of $1,000; or
46
(ii) For any other transfer, (A) the sum of $2,500 for a
Business having Gross Xxxxxxxx (as defined herein) of $20,000 per
month or less, and (B) the sum of $5,000 for a Business having Gross
Xxxxxxxx (as defined herein) in excess of $20,000 per month.
In the event Muzak fails to respond to any request for approval of a
transfer to another MUZAK(R) licensee within 20 business days and to all others
within 30 business days of its receipt of a completed application for transfer,
then the request shall be deemed approved, subject only to Muzak's receipt of
notification of the transferee's assumption of Licensee's obligations, and of
the assignment to the transferee of Licensee's rights, under this Agreement.
12.3 Collateral. Muzak will not require approval of the assignment,
----------
transfer, pledge, or hypothecation of all or any part of the assets of the
Business, excluding this Agreement, and, if Licensee is a corporation, all or
any part of the stock of said corporation, to banks or other lending
institutions as collateral security for loans made directly to or for the
benefit of the Business. However, such approval will be required for any
proposed assignment of this Agreement.
12.4 Transfer to Family Member. An individual may transfer his or her
-------------------------
interest in Licensee or this Agreement to a member of
47
his or her immediate family or to a corporation controlled by such individual,
provided that the requirements set forth in paragraphs (a), (b), and (c) of
Section 12.2 are met. No transfer fee shall be required for any such transfer.
12.5 By Muzak. Muzak shall have the right to transfer or assign all or
--------
any part of its rights or duties hereunder to any person or entity. Muzak shall
promptly notify Licensee of any such transfer.
XIII. PROPRIETARY MARKS
-----------------
13.1 Ownership. Muzak represents that it is the owner of all right,
---------
title, and interest in and to the Proprietary Marks. Muzak will take all steps,
including the taking of legal action, reasonably necessary to preserve and
protect the ownership and validity in and of the Proprietary Marks. Licensee
shall not directly or indirectly contest the validity or Muzak's ownership of
the Proprietary Marks. In the event that litigation involving the Proprietary
Marks is instituted or threatened against Licensee, Licensee shall promptly
notify Muzak and shall cooperate in the defense or settlement of such
litigation, which Muzak shall have the right to control at its expense. Licensee
expressly understands and acknowledges that Muzak is the owner of all right,
title, and interest in and to the Proprietary Marks and the goodwill associated
with and symbolized by them.
48
Licensee's use of the Proprietary Marks pursuant to this Agreement does not give
Licensee any ownership interest or other interest in or to the Proprietary
Marks, except the license granted by this Agreement.
13.2 Infringement. Licensee shall promptly notify Muzak of any
------------
suspected infringement of the Proprietary Marks, and of any challenge to Muzak's
ownership of, or Licensee's right to use, the Proprietary Marks. Subject to
Section 13.1, Muzak shall have the sole right to decide whether an
administrative or judicial proceeding, or other action, should be undertaken in
response to any such suspected infringement or challenge, and, if any such
proceeding or action is to be undertaken, to initiate and control such
proceeding or action at its expense. In the event Muzak elects to undertake any
such proceeding or action, Licensee agrees to cooperate with Muzak in such
effort. Licensee shall have no right to institute any litigation against a third
party relating to the Proprietary Marks without Muzak's prior written consent.
13.3 Use. Licensee's right to use the Proprietary Marks is limited to
---
such uses as are authorized under this Agreement. Licensee shall not use the
Proprietary Marks as part of its corporate or other legal name. Licensee shall
comply with Muzak's instructions at Muzak's cost in filing and maintaining the
requisite trade name or fictitious name registrations, and
49
shall execute any documents reasonably deemed necessary by Muzak or its counsel
to obtain protection for the Proprietary Marks or to maintain their continued
validity and enforceability. Unless otherwise authorized or required by Muzak,
Licensee shall use the Proprietary Marks without prefix or suffix and shall
comply with Muzak's instructions regarding the use of the federal registration
symbol and other trademark or service xxxx designations.
13.4 Substitution of Proprietary Marks. Muzak reserves the right to
---------------------------------
add Proprietary Marks and, except with respect to the MUZAK(R) trademark, to
substitute different Proprietary Marks, or discontinue the use of Proprietary
Marks, for use in identifying the Services if Muzak's currently owned
Proprietary Marks no longer can be used, or if Muzak determines that such
addition, substitution, or discontinuation will be beneficial to its business
and provides to Licensee at least six (6) months' prior notice of such addition,
substitution or discontinuation. All such additions, substitutions or
discontinuations will be reflected in an amendment of Exhibit C and shall not
affect the validity of this Agreement, which shall, in all respects, be deemed
modified to provide for such addition, substitution or discontinuation.
50
XIV. MISCELLANEOUS
-------------
14.1 Representations of Licensee. Licensee represents and warrants to
---------------------------
Muzak that, on the date of this Agreement:
(a) If Licensee is a trust, corporation, or partnership, it is duly
organized, in good standing, and qualified to do business in all jurisdictions
included in the Territory; all controlling ownership interests in Licensee are
directly and indirectly held by those persons and entities listed on the
signature pages hereof, and no other persons or entities own any controlling
interests in Licensee; and it has all necessary power and authority to execute,
deliver, and perform this Agreement.
(b) There are no actions, suits, proceedings, or investigations in
any court or before any governmental agency or instrumentality which affect or
are reasonably likely to affect Licensee's ability to perform its obligations
under this Agreement.
14.2 Representations of Muzak. Muzak represents and warrants to Licensee
------------------------
that, on the date of this Agreement, it is duly organized and in good standing
as a limited partnership under the laws of the State of Delaware and has all
necessary power and authority to execute, deliver, and perform this Agreement.
51
14.3 Independent Contractor. Muzak and Licensee are independent contractors
----------------------
vis-a-vis each other and neither party, nor their respective employees and
agents, are or are to be construed to be either legal or implied agents,
servants or employees of the other party or to have authority to act for or on
behalf of the other party. No acts taken or assistance given by one party to the
other pursuant to this Agreement will be construed to alter this relationship.
Without limiting the generality of the foregoing, but subject to the terms of
the Multi-Territory Accounts Program as described herein, Section 2.4 (including
Exhibit E), the In-Store Advertising Agreement between Muzak and Licensee, and
any other written contract between Muzak and Licensee, nothing in this Agreement
shall authorize one party to make any contract, agreement, warranty or
representation on behalf of the other party or to incur any debt or obligation
in the other party's name, and the other party shall in no event assume
liability for, or be deemed liable hereunder as result of, any such action.
Without limiting the rights of a party to enforce its rights hereunder, a party
shall not be liable to a third party by reason of any action or omission of the
other party in the conduct of its business.
14.4 Release. Muzak and Licensee hereby release and forever discharge each
-------
other, and their respective predecessors, successors, representatives, assigns,
agents, owners, employees, officers, and directors ("Designees"), of and from
any claims,
52
debts, liabilities, demands, obligations, costs, expenses, actions, and causes
of action of every nature, character, and description, vested or contingent,
which such releasing party now owns or holds, or has at any time heretofore
owned or held, or may at any time own or hold, against the other party or its
Designees, arising prior to and including the date of this Agreement and
relating to any prior franchise or license agreement; provided, however, that
this release shall not apply to any royalties or other monies owed, whether or
not previously reported as owing, from Licensee to Muzak; and further provided
that this release shall not apply to any claims, debts, liabilities, demands,
obligations, costs, expenses, actions and causes of action of every nature,
character and description, vested or contingent which are (i) at any time raised
or asserted by any party against the other party as a defense, counterclaim, or
crossclaim in any arbitration or litigation; (ii) of which the other party is
advised within 120 days of the date hereof; or (iii) the existence of which
could not now be reasonably known to a party and of which the other party is
advised within 120 days of the claiming party's knowledge thereof.
14.5 No Waiver. No failure of a party to exercise any right or power
---------
reserved to it in this Agreement or to insist upon compliance by the other party
with any obligation or condition in this Agreement, and no custom or practice of
the parties at variance with the terms hereof, shall constitute a waiver of such
53
party's rights to demand exact compliance with any of the terms of this
Agreement. Waiver by a party of any particular default shall not affect or
impair such party's right with respect to any subsequent default of the same or
of a different nature, and, except as otherwise expressly provided herein, any
delay, forbearance, or omission of a party to exercise any power or right
arising hereunder shall not affect or impair such party's right thereafter to
exercise that or any other power or right.
14.6 Notices. Unless otherwise expressly provided herein, any and all
-------
notices required or permitted under this Agreement shall be in writing and shall
be personally delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, to the respective parties at the following
addresses unless and until a different address has been designated by written
notice to the other party:
Notices to Muzak: MUZAK
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: ____________________
Notices to Licensee: SUNCOM COMMUNICATIONS, L.L.C.
XXXXX XXXXX
000 X. 00 XX.
XXX, XX 00000
Notice by certified or registered mail shall be deemed to have been given at the
date and time of receipt.
54
14.7 Entire Agreement. This Agreement, the documents referred to herein,
----------------
and the exhibits and attachments hereto, constitute the entire, full, and
complete agreement between the parties concerning the subject matter hereof, and
supersede all prior agreements except those set forth in Exhibit H (the terms of
which shall remain in effect to the extent not expressly contradicted by the
terms hereof). Except for those amendments referred to in Sections 2.1, 2.2 and
13.4 and Exhibits E, F, and G, no amendment of this Agreement shall be binding
on either party unless mutually agreed to by the parties and executed by their
authorized officers or agents in writing.
14.8 Severability. Each portion, part, and term of this Agreement shall be
------------
considered severable, and if, for any reason, any portion, part, or term herein
is determined by a court or agency with valid jurisdiction to be contrary to any
existing or future law or regulation and invalid, it shall not impair the
operation of, or have any other effect upon, the other portions, parts, or terms
of this Agreement that remain otherwise intelligible.
14.9 Captions. All captions in this Agreement are for convenience only and
--------
do not in any way limit or amplify the provisions hereof.
55
14.10 Binding Effect. This Agreement shall be binding upon and shall
--------------
inure to the benefit of the parties hereto and, subject to Article XII, their
respective heirs, executors, representatives, successors, and assigns.
14.11 Counterparts. This Agreement may be executed in several
------------
counterparts, and all of such counterparts together shall constitute one
agreement binding on all parties thereto, notwithstanding that all parties are
not signatory to the original or same counterpart.
14.12 Attorney's Fees. If any action or proceeding is brought for the
---------------
enforcement of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and other costs incurred
in the action or proceeding, in addition to any other relief to which it or they
may be entitled.
14.13 Applicable Law. This Agreement shall be interpreted and construed
--------------
under the laws of the State of Colorado without reference to conflicts of law.
14.14 All Remedies. No right or remedy conferred upon or reserved to
------------
Muzak or Licensee by this Agreement is intended to be exclusive of any other
right or remedy herein or by law or equity provided, but each shall be
cumulative of every other right or
56
remedy. Without limiting the generality of the foregoing, Licensee acknowledges
that its violation of the terms of Sections 4.3, 5.5, or 11.1 will result in
irreparable injury to Muzak for which no adequate remedy at law may be
available, and Licensee accordingly agrees that Muzak may seek to obtain the
issuance of an injunction prohibiting any conduct by Licensee in violation of
such terms.
14.15 Limitation. Licensee shall commence any action relating to Muzak's
----------
offer or sale of license rights hereunder to Licensee, or the execution of this
Agreement by Licensee, within one (1) year from the later of the date of
execution of this Agreement or the date Licensee reasonably should have
discovered the event or non-occurrence of the event first giving rise to the
action, and Licensee shall commence any other action arising hereunder within
two (2) years from the date Licensee reasonably should have discovered the event
or non-occurrence of the event first giving rise to such action. Licensee agrees
that any such claim not commenced within such time periods shall be barred, it
being understood that the assertion of any such claim as a defense, counterclaim
or cross-claim shall not be barred by this paragraph.
14.16 No Warranties. Muzak makes no warranties or guarantees upon which
-------------
Licensee may rely, and assumes no liability or obligation to Licensee, by
providing any waiver, approval,
57
consent or suggestion to Licensee in connection with this Agreement, or by
reason of any neglect, delay, or denial of any request therefor.
14.17 No Implied Rights. Except as expressly provided to the contrary
-----------------
herein, nothing in this Agreement is intended, nor shall be deemed, to confer
upon any person or legal entity other than Licensee, Muzak, Muzak's officers,
partners, and employees, and such of Licensee's and Muzak's respective
successors and assigns as may be contemplated (and, as to Licensee, permitted)
by Article XII hereof, any rights or remedies under or by reason of this
Agreement.
14.18 Survival. All provisions of this Agreement that pertain to
--------
Licensee's rights and duties regarding Licensee's delivery of the Services to
certain Subscribers after the date of expiration or termination of this
Agreement shall survive such expiration or termination to the extent necessary
to give full effect to such rights and duties. All other covenants and
obligations of Muzak or Licensee that are to be performed or observed after the
expiration or termination of this Agreement, including, without limitation,
those set forth in Sections 5.5 and 14.3, Article XI, and Exhibits E and G,
shall also survive such expiration or termination.
58
14.19 Conversion. Upon the expiration or earlier termination of this
----------
Agreement, in the event the addressability feature of Muzak's DBS facilities
permits Muzak to switch Licensee's music subscribers to another subscription
music supplier and Muzak has received written permission from such music
supplier and blanket indemnification from Licensee, then within a reasonable
time following Licensee's written direction to Muzak, Muzak shall perform one
such switch with respect to each such subscriber at the following cost to
Licensee: the greater of (i) Muzak's standard switching charge then in effect,
or (ii) Muzak's incremental out-of-pocket costs directly attributable to the
making of such switches.
14.20 Most Favorable Terms. In the event that after September 1, 1990 Muzak
--------------------
grants for the first time (and not pursuant to or in renewal of any agreement in
existence at September 1, 1990) to any other U.S. licensee of Muzak (i.e., a
distributor of the Services in a territory within the United States) financial
or other material terms (other than temporary or transient adjustments and
accommodations) that are more favorable than the terms set forth herein, Muzak
must offer such more favorable terms to Licensee; provided, however, that if,
and to the extent, Muzak is required by the laws and regulations of the State in
which another licensee resides or operates its business to offer such other
licensee more favorable terms than those set forth herein, Muzak shall not be
required to offer such
59
more favorable terms to Licensee but shall notify the then-president of the IPMA
of the imposition of such legal or regulatory requirement.
XV. ACKNOWLEDGEMENTS
----------------
15.1 Independent Investigations. Licensee acknowledges that it has conducted
--------------------------
an independent investigation of the business licensed hereunder, and recognizes
that the business venture contemplated by this Agreement involves business risks
and that its success will be largely dependent upon the ability of Licensee as
an independent person or entity. Muzak expressly disclaims the making of, and
Licensee acknowledges that it has not received, any warranty or guarantee,
express or implied, as to the potential volume, profits, or success of the
business venture contemplated by this Agreement.
15.2 Disclosure. Licensee acknowledges that it received a copy of this
----------
Agreement and all exhibits and attachments thereto, and agreements relating
thereto, at least five (5) business days prior to the date on which this
Agreement was executed. Licensee further acknowledges that it received the
disclosure documents required by the Trade Regulation Rule of the Federal Trade
Commission entitled "Disclosure Requirements and Prohibitions Concerning
Franchising and Business Opportunity Ventures" at
60
least ten (10) business days prior to the date on which this Agreement was
executed.
15.3 Opportunity to Review. Licensee acknowledges that it has read and
---------------------
understands this Agreement and the exhibits and attachments hereto, and
agreements relating hereto, and that Muzak has accorded Licensee ample time and
opportunity to consult with advisors of Licensee's own choosing about the
potential benefits and risks of entering into this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement on the day and year first above written.
MUZAK LIMITED PARTNERSHIP,
a Delaware limited partnership
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: President
Licensee:
SUNCOM COMMUNICATIONS, L.L.C., a
Delaware limited liability company
By: /s/ Xxxxx X. Xxxxx
----------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman
61
Each of the undersigned (i) owns, directly, indirectly, or
beneficially, a controlling interest in Licensee; (ii) has read this Agreement;
and (iii) agrees to be bound by those provisions of this Agreement that impose
obligations on the owners of controlling interests in Licensee.
------------------------------------------
(Typed Name) _____________________________
Date: ____________________________________
Address:__________________________________
------------------------------------------
(Typed Name) _____________________________
Date: ____________________________________
Address:__________________________________
------------------------------------------
(Typed Name) _____________________________
Date: ____________________________________
Address:__________________________________
------------------------------------------
(Typed Name) _____________________________
Date: ____________________________________
Address:__________________________________
EXHIBIT A
---------
MUSIC SERVICES
I. BROADCAST SERVICES
Services intended for Direct Broadcast Subscribers or for local re-broadcast to
-------------------------------------------------------------------------------
Subscribers (by means of telephone lines, FM Radio Subcarriers ("SCA"), 950 MHz
-----------
(UHF), cable and MDS, as more fully set forth in Exhibit D, and such other means
as are authorized in writing from time to time by Muzak.)
1. ENVIRONMENTAL MUSIC BY MUZAK(R) (to be distributed by means of
East and West coast feeds for as long as Stimulus
Progression(R) remains a valid concept)
2. FOREGROUND MUSIC ONE(R)
3. HITLINE(R)
4. LIGHT CLASSICAL
5. CONTEMPORARY JAZZ FLAVORS(SM)
6. EXPRESSIONS(SM)
7. COUNTRY CURRENTS(SM)
8. JUKEBOX GOLD(SM)
9. HOT FM(SM)
10. CONTEMPORARY INSTRUMENTALS
11. LATINO
12. SPECIALTY CHANNELS (various formats, as designated by Muzak
from time to time)
II. RECORDED MEDIA SERVICES
1. TONES(R) (various formats, as designated by Muzak from time to
time)
EXHIBIT B
---------
ADJUNCT SERVICES
I. MUSIC-RELATED ADJUNCT SERVICES
------------------------------
1. DAYPARTING
DAYPARTING means that automatic program sequencing, utilizing
an in-place Muzak addressable receiver, of two or more program
formats on a regularly scheduled basis, with the same schedule
running without further change from the original format, each
day, for seven days per week.
2. WEEKPARTING
WEEKPARTING means that automatic program changing, utilizing
an in-place Muzak addressable receiver, of a single program
source with the option to change programs each day, seven days
per week.
3. COMBINED
COMBINED means a combination format of both dayparting and
weekparting.
4. SWITCHING
SWITCHING means the controlled switching of a single program
Subscriber to another single program from the Muzak DBS
computer controlled headend utilizing the in-place Muzak
addressable receiver.
II. OTHER ADJUNCT SERVICES
----------------------
1. ADPARTING (various number of message inserts as designated by
Muzak from time to time)
ADPARTING means that audio promotion and messaging service
provided directly to the end user via an in-place Muzak
addressable DBS system. This service is designed for "spot"
message inserts originating from the Muzak DBS Operational
Control Facility utilizing a computer control head-end system.
2. BROADCAST DATA
BROADCAST DATA means that enhanced service which operates
through the in-place Muzak addressable DBS
B - 1
receiver and provides a one-way data communication channel for
point-to-multipoint distribution. This service is designed for
a distribution of data files and/or text messaging originating
through the Muzak DBS Operational Control Facility utilizing a
computer control head-end system.
3. BROADCAST VIDEO
BROADCAST VIDEO means that occasional use non-dedicated one-
way point-to-multipoint direct broadcast service utilizing an
in-place Muzak addressable DBS system and adjunct video
receiver. This service is designed as a video broadcast
distribution system for an end user's private network and is
managed and controlled through the Muzak DBS Operational
Control Facility.
B - 2
EXHIBIT C
---------
MARKS
MUZAK(R) AUDIO MARKETING SERVICES(SM)
ADCASTER(R) DAYPARTING(SM)
ADPARTING(R) ENVIRONMENTAL MUSIC(SM)
FOREGROUND MUSIC ONE(R) FM ONE(SM)
FM-1(R) IN-STORE ADCASTING(SM)
HITLINE(R) UNICART(TM)
MARKETING ON HOLD(R)
MUSIC PLUS(R)
SOUND BUSINESS SOLUTIONS(R)
STIMULUS PROGRESSION(R)
TONES(R)
EXHIBIT D
---------
TECHNICAL SPECIFICATIONS
I. LOCAL DISTRIBUTION SYSTEMS
--------------------------
Licensor and licensee acknowledge that the Muzak Program Services
should be delivered to the end subscriber at the highest fidelity
possible consistent with local conditions and reasonable business
judgment, therefore:
1. Telephone lines from central studio to Telco central office and to
broadcasting facilities should be equalized for a minimum frequency
response of 50-8000 Hz.
2. Telephone lines to individual subscribers from central offices need
not be equalized. If only low quality facilities are available,
consideration should be given to local equalization at subscriber
premises or replacement of Telco lines with SCA or DBS delivery.
3. SCA contracts shall include the following minimum equipment and
performance standards particularly if the SCA generator is not
furnished by the licensee.
A. SCA Frequency Typically 67 kHz or 92
kHz
B. SCA Injection 9% +/- 0.5%
C. SCA Deviation +/- 6 kHz = 100% modulation
50-5000 Hz +1, -3 dB
D. SCA Frequency Response (95% of low pass
filter)
E. SCA Total Harmonic
Distortion Less than/equal to 1%
(unweighted)
F. SCA Signal To Noise Ratio Greater than/equal to 50 dB
G. AM Noise (referenced to carrier) Greater than/equal to -50 dB
H. Incidental AM Greater than/equal to -45 dB
I. Crosstalk (Main to Sub Channel) Greater than/equal to -40 dB
D - 1
J. Pre-emphasis Curve 150 micro seconds
K. Automatic Muting Defeatable if desired
4. Local distribution may be made by UHF (950 MHz) transmitters as
authorized by the FCC. Maximum frequency range shall be used whenever
possible if full frequency range program material is available at the
transmitter.
5. Local distribution may be made by MDS transmitters as authorized by the
FCC. Maximum frequency range shall be used whenever possible if full
frequency range program material is available at the transmitter.
6. Local distribution may be made by DBS. Receivers used, whether designed
or furnished by Muzak, shall be capable of receiving and demodulating
program material broadcast from Ku-band satellite transponder in
accordance with generally accepted trade specifications and practice.
Equipment utilized shall be UL approved and conform to the
specifications listed below.
The earth station consists of an antenna assembly and a Ku-band
addressable satellite audio receiver with tuning and control
instructions transmitted via the Network and Control Data Channel.
The Muzak Ku-band addressable satellite audio receiver is designed
utilizing FM Squared subcarrier modulation and operates with a fully
saturated video transponder with tuning and control instructions
transmitted via the Network and Control Data Channel. The system design
has a margin equal to or greater than 3 dB to allow for signal
degradation due to transponder variation, precipitation, pointing error
or LNB degradation.
Listed below are the DBS earth station technical specifications as of
July 1, 1990:
RECEIVER SPECIFICATIONS
-----------------------
Subcarrier Tuning 0.15 to 8.20 MHz
Tuning and Control 9600 Asynchronous FSK
data Channel Occupying
20 kHz
RF Input Level -30 to -65 dBm
D-2
RF Input Frequency 950 MHz to 1450 MHz
RX Threshold (click) 78.5 +/1- 1 dB/Hz
IF Bandwidth 16 MHz
IF Frequency 70 MHz
Peak Deviation 30 kHz Peak
Audio Noise Reduction Panda I Adaptive Preemphasis
Expander or Equivalent
ANTENNA AND LNB SPECIFICATIONS
------------------------------
1.0 Meter Antenna 1.2 Meter Antenna
Size: 1.0 Meter Offset Fed 1.2 Meter Offset Fed
Paraboloid Paraboloid
Gain: 40.7 dB at 12.0 GHz 42.3 dB at 12.5 GHz
VSWR: 1.3 Maximum 1.3 Maximum
LNB: 1.6 dB Minimum 1.6 dB Minimum
II. AUDIO DISTRIBUTION SYSTEM
-------------------------
In general, the 25 or 70 volt distribution system shall be used for low
level music and paging applications. Amplifiers shall be sized to maintain
less than 1% Total Harmonic Distortion throughout the system with a
minimum frequency response of 50-10,000 Hz +1- 3 dB. Loudspeakers shall
have the minimum power handling capacity of 10 xxxxx. Matching
transformers shall be multi-tap with a minimum frequency response of 70-
10,000 Hz. All amplifiers shall be UL approved. All wiring and
installations shall be made in accordance with accepted standards of
Broadcast Engineering Practice and the National Electrical Code as well as
local building codes that may apply.
III. RECEPTION AND PLAYBACK EQUIPMENT
--------------------------------
All subscriber reception and playback equipment produced, either directly
or under subcontract by Muzak for sale to licensees, shall conform to the
standards and specifications of NAB, FCC and RIAA reflecting the state of
the art. All equipment shall be UL approved.
D-3
Detailed specifications of specific equipment currently in production as
of March 1990 will be furnished to licensee upon request. Disclosure of
proprietary information shall be limited to information for the proper
installation, operation and maintenance of the respective equipment
furnished.
IV. C-BAND SATELLITE RECEPTION EQUIPMENT
------------------------------------
If C-band satellite equipment is utilized for program reception, the
following general satellite system specification applies:
The satellite distribution system is designed to meet rigid performance
criteria. However, certain facets of the total system are beyond the
control of Muzak. These include, but are not limited to, weather
conditions at the transmit or receiver site, sun position relative to the
satellite position at the receiving location and proper maintenance of the
receiver site.
The single channel per carrier (SCPC) earth station consists of a minimum
5 meter antenna, a Low Noise Amplifier (LNA) and a C-band SCPC satellite
audio receiver.
AUDIO CHARACTERISTICS
---------------------
Audio Output Impedance 600 ohms, balanced
Audio Output Level Adjustable, 0 to +18
dBm
Audio Noise Reduction 2:1 companding
Audio Signal-to-Noise Ratio Greater than 50 dB CCITT 468
Weighted
Audio Bandwidth 7.5 kHz
Frequency Response 50-7.5 kHz +/- 1.0 dB
Total Harmonic Distortion Less than or equal to 1%
RECEIVER SPECIFICATIONS
-----------------------
RF Input Level -30 dBm maximum
RF Input Frequency 3.7 to 4.2 GHz
RF Output Impedance 75 ohms, unbalanced
IF Frequency Range 00-00 XXx
Xxxxxxxxx Selection Synthesized in 25 kHz
steps
Peak Deviation 30 kHz
Power Consumption 7 Xxxxx 110V/60 Hz
D-4
EXHIBIT E
SALES OF ADJUNCT SERVICES
Capitalized terms used but not defined in this Exhibit E shall have
the meanings set forth in the body of the MUZAK(R) License Agreement to which
this Exhibit is attached (the "License Agreement").
1. Contract Form; Earth Station. All sales of the Adjunct Services to
----------------------------
Subscribers in the Territory shall be reflected in a fully executed MUZAK(R)
Adjunct Services Subscriber Contract substantially in the form of Schedule 1
----------
attached hereto. Any material modification to said Contract form shall require
the prior written consent of (i) Muzak and Licensee for Subscribers located
within the Territory that are not Multi-Territory Accounts (as defined in
Exhibit G to the License Agreement) or (ii) the Multi-Territory Sales Committee
(as defined in Exhibit G) for Subscribers which are Multi-Territory Accounts
pursuant to Exhibit G. No such modification shall conflict with the License
Agreement (including without limitation the provisions of this Exhibit E).
Licensee shall provide Muzak with the Adjunct Services Subscriber Contract,
executed by the Subscriber, at the time Licensee requests Muzak to commence
delivery of one or more Adjunct Services to the Subscriber, and Muzak shall
provide Licensee with a copy of the Contract executed by Muzak for itself (to
the extent stated in such Contract) and as Licensee's agent. Licensee shall
ensure that prior to commencement of delivery of the Adjunct Services to a
Subscriber, an Earth Station has been installed at each Subscriber Premises in
the Territory where such Adjunct Services are to be received. Without limiting
the foregoing, the delivery of the Adjunct Services shall be by such means as
meet the technical specifications set forth in Exhibit D to the License
Agreement.
2. Additional Equipment. Muzak shall provide to each Subscriber
--------------------
receiving the "Data" Adjunct Service, data receiving equipment designed to
operate with the MUZAK(R) satellite receiver (the "Data Receiving Equipment")
and to each Subscriber receiving the "Video" Adjunct Service video receiving
equipment designed to operate with MUZAK(R) satellite equipment (the "Video
Receiving Equipment"). It is the parties' intent that if a Subscriber requires
an encrypting card, machine or other instrumentality, such Subscriber shall bear
the expense thereof. The Data Receiving Equipment and/or the Video Receiving
Equipment, as the case may be, shall be installed and maintained by Licensee as
directed by Muzak. All service and maintenance by Licensee to any Data Receiving
Equipment or Video Receiving Equipment shall be limited to "swap out"
replacement of a defective unit, and Muzak agrees to maintain an adequate supply
of such replacements for 24-hour delivery to Licensee. Muzak shall retain all
rights
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of ownership in the Data Receiving Equipment and the Video Receiving Equipment
and, at the termination of the applicable Adjunct Services Subscriber Contract,
Licensee shall remove the Data Receiving Equipment and the Video Receiving
Equipment and deliver each such item as directed by Muzak. Licensee shall not,
and shall use its reasonable best efforts not to permit any other person or
entity to, alter or reproduce in any way the Adjunct Services, the Data
Receiving Equipment, the Video Receiving Equipment, or any other equipment or
materials provided by Muzak in connection with the Adjunct Services.
3. Effect of Termination or Expiration of License Agreement.
--------------------------------------------------------
3.1 Multi-Territory Accounts. In the event the License Agreement
------------------------
terminates or expires (without renewal) prior to the termination of a Multi-
Territory Contract (as defined in Exhibit G) for Adjunct Services being
delivered in the Territory, Licensee's rights with respect to such Contract
shall be governed by Article 4 of said Exhibit G.
3.2 Subscribers That Are Not Multi-Territory Accounts.
-------------------------------------------------
a. Subject to paragraph b. below, in the event the License Agreement
terminates or expires prior to the termination of an Adjunct Services Subscriber
Contract for Services being delivered in the Territory and such Contract is not
a Multi-Territory Contract, then Licensee shall sell to Muzak all of its rights
in such Adjunct Services Subscriber Contract, together with related equipment
(including the Earth Station if applicable), for a price determined in the
manner set forth in this Section 3.2. Upon such sale, Muzak shall assume all of
Licensee's obligations relative to performance of such Subscriber Contract and
with respect to such related equipment accruing after the date of transfer. In
the event such termination or expiration of the License Agreement is due to the
bona fide, arm's length purchase of Licensee's subscriber contracts for a price
based on a multiple of Recurring Adjunct Services Gross Xxxxxxxx (as hereinafter
defined), Muzak's purchase price hereunder shall be determined by multiplying
50% of such arm's length multiple times the Recurring Adjunct Services Gross
Xxxxxxxx attributable to the Adjunct Services Subscriber Contract being
purchased. In all other cases, Muzak's purchase price hereunder shall be the
result of multiplying 50% of the Prevailing Adjunct Services Multiple (as
hereinafter defined) times the Recurring Adjunct Services Gross Xxxxxxxx
attributable to such Contract. As used herein, (i) the term "Recurring Adjunct
Services Gross Xxxxxxxx" means the average recurring monthly xxxxxxxx to a
Subscriber for the Adjunct Services and related equipment, net of sales taxes,
and (ii) the term "Prevailing Adjunct Services Multiple" means the average of
the
E-2
arm's length multiples used to determine the purchase prices of the three most
recently reported (to Muzak) sales of the businesses of MUZAK(R) licensees, to
the extent such prices were based on arm's length multiples of Recurring Adjunct
Services Gross Xxxxxxxx and such multiples can be independently verified as
such. Notwithstanding the foregoing, in the event that (i) prior to the date of
Muzak's purchase of Licensee's rights under an Adjunct Services Subscriber
Contract, Licensee and/or Muzak have received formal notice that such Contract
will be terminated (without renewal) for reasons unrelated to the transfer
thereof to Muzak, and (ii) the number of calendar months remaining between the
date of such purchase by Muzak and the date of such termination of the Contract
is less than the Prevailing Adjunct Services Multiple, then the purchase price
of Licensee's rights in such Contract shall be determined by multiplying such
remaining number of months in the Contract term by 50% of the Recurring Adjunct
Services Gross Xxxxxxxx attributable to such Contract.
b. Licensee shall not be required to sell to Muzak its rights in any
Adjunct Services Subscriber Contract described in this Section 3.2 to the extent
such rights pertain to the Music-Related Adjunct Services. In addition, Licensee
shall not be required to sell to Muzak its rights in any Other Adjunct Services
Subscriber Contract that does not pertain to the provision of the Adjunct
Services to any Subscriber locations outside of Licensee's Territory. Section
2.2(b) (i) and (ii) of the License Agreement shall control with respect to the
rights retained by Licensee under this paragraph b.
3.3 Adjacent Territories. In the event of a termination of the MUZAK(R)
--------------------
License Agreement of a MUZAK(R) licensee operating in a territory that adjoins
Licensee's Territory, Licensee agrees to provide the Adjunct Services to
Subscribers in such adjoining territory upon the request of Muzak for such
period of time and upon such other terms as are then agreed to by Muzak and
Licensee.
4. Licensee's Inability to Provide Adjunct Services.
------------------------------------------------
4.1 Third-Party Contract. In the event that Licensee is offering in the
--------------------
Territory a communications service which is the same as or similar to any
Adjunct Service as a result of a third-party contract or agreement in effect at
the time Muzak first notifies Licensee that such Adjunct Service has been added
to Exhibit B to the License Agreement, Licensee shall have no obligation under
the License Agreement to market, offer, or sell such Adjunct Service until
Licensee ceases doing business with such third party.
4.2 Rights of Muzak and Adjacent Licensees. During such period as
--------------------------------------
Licensee is not marketing, offering or selling an
E-3
Adjunct Service in the Territory for the reasons provided in Section 4.1 above,
either Muzak or, at the request of Muzak, a MUZAK(R) licensee operating from a
MUZAK(R) territory that adjoins the Territory shall have the right to market,
offer, and sell such Adjunct Service in the Territory. Licensee shall give Muzak
at least 30 days' prior written notice of the date on which Licensee will cease
doing business with the third party as referred to in Section 4.1 above. After
such date, (i) Licensee shall commence marketing, offering, and selling such
Adjunct Service in accordance with the License Agreement and (ii) Muzak and any
MUZAK(R) licensees operating in territories adjacent to the Territory shall no
longer have the right to market, offer, or sell such Adjunct Service in the
Territory except under the terms of a MUZAK(R) Adjunct Services Subscriber
Contract in effect on such date; provided, however, that Licensee shall have the
right to purchase from Muzak or such other MUZAK(R) licensee, as the case may
be, the licensee's rights under any such Adjunct Services Subscriber Contract,
as well as the related equipment, for a price determined in the manner set forth
in Section 3.2 above.
4.3 Adjacent Territories. In the event that a MUZAK(R) licensee
--------------------
operating in a territory that is adjacent to Licensee's Territory is unable to
market, offer, or sell an Adjunct Service for the reasons set forth in Section
4.1 above, Licensee agrees (i) to market, offer, and sell such Adjunct Service
in such adjacent territory upon the request of Muzak for such period of time and
upon such other terms as are then agreed to by Muzak and Licensee, and (ii) to
sell to such adjacent licensee its rights in any Adjunct Services Subscriber
Contract described in Section 4.2 above upon the terms described in said Section
4.2.
4.4 Use of Proprietary Marks. In the event that Muzak or an adjacent
------------------------
licensee (including Licensee in its capacity as such an adjacent licensee)
markets, offers, or sells an Adjunct Service under the conditions described in
Sections 4.1 through 4.3 above, none of the Proprietary Marks, other than those
associated specifically with such Adjunct Service (including the "MUZAK(R)"
Proprietary Xxxx if, and only to the extent that, it is specifically associated
with such Adjunct Service), shall be used for such marketing, offering and sales
purposes. Without limiting the generality of the foregoing, in such case neither
Muzak nor the adjacent licensee shall market such Adjunct Service in the
affected licensee's territory under the MUZAK(R) yellow-pages listing.
5. Multi-Territory Accounts. In the event Adjunct Services are provided to
------------------------
a Multi-Territory Account under the Multi-Territory Accounts Program described
in Article IX and Exhibit G of the License Agreement, the terms of such Program
shall control over the terms set forth herein.
E-4
Schedule 1
----------
MUZAK(R) ADJUNCT SERVICES [LOGO OF
SUBSCRIBER AGREEMENT MUZAK]
1. This Adjunct Services Subscriber Agreement ("Agreement") is made this_______
day of _____________ 19__ between MUZAK LIMITED PARTNERSHIP, acting as agent
for the Servicing Muzak Affiliates listed in Exhibit A and Exhibit B hereto
as now existing or subsequently amended by MUZAK, and for itself
(specifically with respect to paragraphs 7, 8, 10, 11, and 12)
(collectively, "MUZAK" and ____________________________________________ (the
"Subscriber").
2. This Agreement shall remain in effect for a term of___________ months from
_____________________, 19___ and shall be automatically renewed for
subsequent________-month terms unless terminated at the end of any term by
either party by written notice given to the other party at least ninety (90)
days prior to the end of such term. This Agreement shall become binding when
signed by Subscriber and accepted and approved by MUZAK. Subject to the
terms and conditions of this Agreement, MUZAK shall provide to the
Subscriber at the commercial locations ("Premises") set forth in Exhibit B,
one or more of the following services (the "Services") as indicated below:
______________________________________________________________________________
3. [_] ADPARTING(SM) SERVICES are delivered by Direct Broadcast Satellite (DBS)
to a MUZAK-supplied DBS Audio Receiver. (5 Spot Minimum.)
A. Number of Premises:___________.
B. Number of spots per scheduled hour:_____________.
C. Message length: [_] 20 seconds; [_] 30 seconds.
D. Price per Premises per month: $________.
E. If AdParting(SM) Services are to be provided for less than term
described above, specify months of provision:
____________________________________________________________________
____________________________________________________________________
F. Describe special needs relating to advertising (e.g., scheduling):
____________________________________________________________________
____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
4. [_] BROADCAST DATA SERVICES are delivered by DBS to a MUZAK-supplied DBS
Audio Receiver equipped to receive MUZAK Data Services. Charges for
Broadcast Data Services are composed of a monthly charge per Premises
based on data transmissions totaling up to 500 kilobytes (for all
Premises) from the originating location, plus a per-message charge for
additional kilobytes of transmission.
A. Number of Premises:___________.
B. Basic Monthly Data Charge per Premises: $_______.
C. Per-message charge for additional kilobytes of transmission: $_____.
D. Describe special needs and/or related charges for Broadcast Data
Services:________________________________________________________
____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
5. [_] BROADCAST VIDEO SERVICES are delivered by DBS to a MUZAK-supplied Video
Receiver providing access to one-way video reception In conjunction with
a MUZAK-supplied DBS Antenna and Audio Receiver.
A. Basic Monthly Charge for Basic Broadcast Video Service as described
above is $________per Premises.
Note: Monthly charge does not Include costs for transponder time, which
will be charged separately to Subscriber on a per-use basis. Subscriber
assumes the responsibility and cost of video production.
B. Describe special needs and/or related charges for transmission and
transponder services:_________________________________________________
______________________________________________________________________
______________________________________________________________________________
6. Monthly charges indicated herein are billed monthly In advance and
commence on completion of installation of appropriate reception
equipment as designated above. Subscriber agrees to pay all charges for
the Services as indicated herein.
THE TERMS AND CONDITIONS SET FORTH ON THE REVERSE SIDE ARE PART OF THIS
AGREEMENT.
Subscriber:________________________ MUZAK LIMITED PARTNERSHIP
___________________________________
(Print Name of Business Entity) By:________________________________
By:________________________________ Title:_____________________________
Title:_____________________________
Address:___________________________ 000 Xxxxx 00xx Xxxxxx, Xxxxx 000
___________________________________ Xxxxxxx, XX 00000
INITIATING MUZAK AFFILIATE:
___________________________________
(Print Name of Business Entity)
By:________________________________
Title:_____________________________
Address:___________________________
7. SUBSCRIBER MATERIALS. Subscriber shall provide to MUZAK at Subscriber's
sole expense and at such times and places and in such forms as are
reasonably requested by MUZAK, those data, video, advertising, and other
materials (if any) which are to be incorporated in the Services prior to
transmission to the Premises. Such materials are hereinafter collectively
referred to as the "Subscriber Materials". Subscriber shall be solely
responsible for the content of all Subscriber Materials, but Muzak
reserves the right to refuse to transmit any Subscriber Materials the
content, transmission, or broadcast of which it believes could infringe
upon the rights of others or otherwise be unlawful or the form of which
does not comply with MUZAK's requests as provided above. Subscriber shall
comply with all applicable governmental laws, rules, and regulations
pertaining to the Subscriber Materials and their use in the Services.
Subscriber shall indemnify and hold harmless MUZAK and its officers,
agents, partners, and employees from and against any and all claims,
liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees), including without limitation claims for infringement of
proprietary rights, misrepresentation, and defamation, arising out of or
attributable in whole or in part to the Subscriber Materials. This
indemnity shall survive the expiration or earlier termination of this
Agreement.
8. EQUIPMENT.
a. With respect to any items of equipment that are provided hereunder to
Subscriber by MUZAK including but not limited to Earth Stations, MUZAK
shall maintain such items in good operating condition: provided, however,
that such maintenance shall be exclusively limited to that resulting from
ordinary and proper use of the equipment. All other maintenance, repair
and replacement of such equipment shall be paid by Subscriber in
accordance with MUZAK's customary charges therefor. MUZAK'S OBLIGATIONS
UNDER THIS PARAGRAPH ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR
IMPLIED, RELATING TO THE EQUIPMENT, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. Except for MUZAK's
maintenance obligations resulting from ordinary and proper use of the
equipment as set forth above, Subscriber shall indemnify MUZAK and hold
it harmless from and against any and all losses, claims, and expenses
relating to the equipment provided hereunder to Subscriber, including
without limitation losses caused by accident, fire, theft, or misuse of
the equipment. Subscriber shall provide electrical outlets and power as
needed for the equipment.
b. Subscriber shall not, directly or indirectly, sell, mortgage, pledge,
or otherwise dispose of or encumber any MUZAK-owned equipment provided to
Subscriber, nor shall it change the location of, tamper with, or alter in
any manner such equipment. Subscriber shall execute such further
documents as are necessary or desirable to protect MUZAK's interests in
such equipment shall, adequately insure such equipment against damage or
loss and present evidence of such insurance to MUZAK upon request, and
shall, upon the expiration of earlier termination of this Agreement,
promptly return to MUZAK all of such equipment in good condition (or pay
the full replacement value thereof).
9. ADDITIONAL CHARGES.
a. In addition to the fees specified on the reverse side of this
Agreement, Subscriber shall pay to MUZAK any sales, use, excise, or other
taxes or governmental charges (except income taxes) arising under this
Agreement. Subscriber shall also pay to MUZAK any incremental increases
in ASCAP, BMI, or other licensing fees resulting from the services
supplied under this Agreement.
b. Late payments of fees and charges due hereunder are subject to late-
payment and interest charges not to exceed the maximum rate permitted by
law.
c. MUZAK may increase any or all of the charges stated on the reverse
side of this Agreement on an annual basis by providing at least 15 days'
prior written notice to Subscriber; provided, however, that any such
increase may not exceed 10% of the then existing charge without the
approval of Subscriber. Should any such increase exceed 10% and not be
approved by Subscriber. MUZAK may elect to terminate the Agreement. Such
termination shall not release Subscriber from any obligations which
accrued prior to the time of such termination. Such termination shall not
affect any other agreement Subscriber may have with MUZAK.
10. ASSIGNMENT. Subscriber shall not assign its rights or delegate its duties
under this Agreement without the prior written consent of MUZAK which
consent shall not be unreasonably withheld. Any assignment of this
Agreement by Subscriber without MUZAK'S written consent shall be void and
shall at MUZAK'S option constitute a breach hereof by Subscriber. In the
event Subscriber ceases to do business at any Premises, Subscriber shall
return to MUZAK in the manner designated by MUZAK all MUZAK-owned
equipment installed at such Premises; such cessation shall not, however,
reduce Subscriber's payment obligations hereunder unless MUZAK otherwise
agrees in writing. This Agreement shall be fully assignable by MUZAK.
Subject to the foregoing, this Agreements shall be binding upon and shall
inure to the benefit of the partners and their respective successors,
representatives, and assigns.
11. LIMITATION OF LIABILITY. In the event MUZAK fails to provide one or more
of the Services to any Premises for a period of twenty-four consecutive
hours, and Subscriber provides MUZAK with written notice thereof within
48 hours after such failure, the following shall occur. Subscriber's
account shall be credited with an amount equal to one-thirtieth of the
recurring monthly charge for the affected Service for each such 24 hour
reported period. Notwithstanding the foregoing, in no event shall MUZAK
be responsible or liable (and no credit shall be given) for any failure
of MUZAK to perform its obligations hereunder due to Acts of God,
strikes, emergencies, mechanical failures, regulatory or other
governmental action, or inaction of Subscriber, its employees, agents,
or invitees, a breach of the Agreement by Subscriber, or any other cause
beyond MUZAK's reasonable control. In no event shall MUZAK be liable for
incidental, consequential or special damages arising out of or relating
to this Agreement. Without limiting the foregoing, under no
circumstances will MUZAK be responsible for the reception of the
services by the Subscriber at any Premises or for the accuracy or
completeness of the information or other material included in the
Services.
12. TERMINATION BY MUZAK. If Subscriber fails to perform any of its
obligations hereunder and does not cure such failure within thirty days
after written notice thereof from MUZAK, or if Subscriber becomes
insolvent or bankrupt, MUZAK, in addition to all other rights it may
have under law or this Agreement, shall have the rights (i) to declare
all amounts to be paid by Subscriber during the remaining term hereof
immediately due and payable, (ii) to cease providing the Services to
Subscriber, and (iii) immediately to enter the Premises and take
possession of all MUZAK-owned equipment without liability to Subscriber
therefore and without relieving Subscriber of its obligations under the
Agreement. Subscriber shall reimburse MUZAK for all costs and expenses,
including reasonable attorneys' fees and court costs, incurred in
connection with MUZAK's exercise of its rights under this Agreement.
MUZAK shall have the right to terminate this agreement in the event
that there is only one Servicing Muzak Affiliate providing services to
Subscriber hereunder and the Muzak(R) license rights of such servicing
Muzak Affiliate have expired or terminated without renewal.
13. SERVICING MUZAK AFFILIATES. Subscriber acknowledges and agrees that all
services to be provided by MUZAK hereunder shall be provided by the
Servicing Muzak Affiliate identified in Exhibit A as being responsible
for a particular Premises. Subscriber further acknowledges that MUZAK is
entering into and executing this Agreement on behalf of and as agent for
each such Servicing Muzak Affiliate with respect to each Premises served
by each such Servicing Muzak Affiliate and that the Xerographic copies of
this Agreement provided to each such Servicing Muzak Affiliate for each
such Premises shall be deemed for all purposes a counterpart original of
the Agreement.
14. APPLICABLE LAW. In the event of a dispute affecting Premises located in
one State, this Agreement shall be governed by and in accordance with
the laws of that State applicable to contracts made and to be performed
wholly within such State and venue shall rest with the court of general
jurisdiction located in the county where the subject servicing Muzak
Affiliate maintains its principal place of business. In the event of a
dispute affecting Premises located in more than one State, this Agreement
shall be governed by and in accordance with the laws of the State of
Washington applicable to contracts made and to be performed wholly with
such State, and Subscriber consents to the personal jurisdiction of the
State and federal courts of the State of Washington for purposes of
litigation affecting this Agreement. If any provision of this Agreement
is deemed unenforceable in whole or in part by a Court of competent
jurisdiction, the parties agree that such Court shall amend or alter such
provision so as to effectuate the intent of such provision and of this
Agreement to the maximum extent that is enforceable.
15. MISCELLANEOUS.
a. This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and supersedes all prior
conversations, representations, promises, and warranties, whether verbal
or written, with respect to such subject matter. No modification of this
Agreement shall be valid unless made in writing and signed by each party;
provided however, that MUZAK shall have the right to modify or terminate
this Agreement to the extent necessitated by a modification or
termination of any license or lease agreement applicable to its provision
of the Services.
b. The waiver of a breach of any provision of this Agreement shall not be
construed as a waiver of any subsequent breach of the same or of a
different provision of this Agreement.
c. Each party represents and warrants that it has the power and authority
to enter into this Agreement and discharge its obligations hereunder, and
each person executing this Agreement on behalf of a party represents and
warrants that he or she has the power and authority to sign this
Agreement on behalf of such party.
d. All notices required under this Agreement shall be in writing and
personally delivered or sent, postage prepaid, by certified or registered
mail, return receipt requested to the parties at their addresses set
forth on the reverse side (or such other address as is hereafter,
provided by a party to the other party).
EXHIBIT A
SERVICING MUZAK AFFILIATES
--------------------------------------------------------------------------------
ALABAMA MONTANA
Electronic Engineers, Birmingham, AL Shag Xxxxxx, Butte, MT
Electro-Systems, Dothan, AL American Music, Great Falls, MT
Service Associates, Huntsville, AL Music Systems, Kalimpell, MT
Business Sound, Mobile, AL
Electronic Engineers, Montgomery, AL NEBRASKA
Xxxxxx Engineering, Kearney, NE
ALASKA Business Music Inc., Lincoln, NE
Northern Television, Anchorage, AK Business Music Inc., Omaha, NE
Background Music, Fairbanks, AK
NEVADA
ARKANSAS Musaire, Inc., Las Vegas, NV
Xxxxxxxx Communications, Fayetteville, AR Dynamic Sound, Reno, NV
Tempo Sound, Harrison, AR
Business Music, Inc., Little Rock, AR NEW HAMPSHIRE
Muzak, Exeter, NH
ARIZONA
SunCom Group, Scottsdale, AZ (Phoenix) NEW JERSEY
Tucson Music, Tucson, AZ World Music, Springfield, NJ
CALIFORNIA NEW MEXICO
Muzak, Anaheim, CA Business Music, Inc. Albuquerque, NM
Serban Sound, Bakersfield, CA
Muzak, Burbank, CA (Los Angeles) NEW YORK
Attuned to Music, Chico, CA Comcast, Buffalo, NY
American Music Network, Fresno, CA Arranged Sound, Johnson City, NY (Binghamton)
American Music Network, Modesto, CA Functional Communications, Latham, NY (Albany)
Musi-Cal, Riverside, CA Muzak, Long Island City, NY (New York City)
Muzak, Roseville, CA (Sacramento) NCC Systems, Potsdam, NY
American Music Network, Salinas, CA Accent Communications Systems, Poughkeepsie, NY
Comcast, San Diego, CA Functional Communications, Rochester, NY
Muzak, San Francisco, CA Functional Communications, Syracuse, NY
Muzicraft, Santa Barbara, CA NCC Systems, Watertown, NY
Muzicraft, Ventura, CA
NORTH CAROLINA
COLORADO SunCom Group, Charlotte, NC
Comcast, Colorado Springs, CO SunCom Group, Hillsborough, NC
Comcast, Denver, CO Independence Communications, Kinston, NC
Warner Music & Communications, Rocky Mount, NC
CONNECTICUT Background Music, Wilmington, NC
Comcast, Hartford, CT
Muzak, Milford, CT NORTH DAKOTA
Music Systems, Inc., Bismark, ND
DISTRICT OF COLUMBIA Music Systems, Inc., Fargo, ND
Music Inc., Washington, DC
OHIO
FLORIDA Port Erie Communications, Ashtabula, OH
Xxxxxx Sound, Ft. Xxxxx, FL Ohio Musicue, Canton, OH
Florida Sound, Jacksonville, FL Muzak, Cincinnati, OH
Melody Inc., Miami, FL Ohio Music Corporation, Cleveland, OH
Xxxxxx Music, Ocala, FL Muzak, Columbus, OH
Comcast, Orlando, FL Audio Inc., Dayton, OH
Electro-Systems, Panama City, FL Xxxxxx Communications, Toledo, OH
Electro-Systems, Tallahassee, FL Hudix Music, Youngstown, OH
Tropical Music, Tampa, FL
Harmony Music & Sound, W. Palm Beach, FL (Palm Beach) OKLAHOMA
Lawton Business Music, Lawton, OK
GEORGIA Business Music, Inc., Oklahoma, OK
Xxxxxx Sound, Albany, GA Granite Sound, Tulsa, OK
Xxxxxx Sound, Atanta, GA
Carolina-Georgia Sound, Augusta, GA OREGON
Background Music, Phonix City, AL (Columbus, GA) Muzak, Eugene, OR
Xxxxxx Sound, Macon, GA Muzak, Medford, OR
Georgia Music & Sound, Savannah, GA Muzak, Portland, OR
HAWAII PENNSYLVANIA
Xxxxxxx Audio Engineering, Honolulu, HI Independence Communications, Harrisburg, PA
Comcast, Hollidaysburg, PA
IDAHO Independence Communications, Norristown, PA (Philadelphia)
Mountain West Audio, Boise, ID Independence Communications, Pittsburgh, PA
Idaho Mountain West, Idaho Falls, ID Comcast, Scranton, PA
ILLINOIS SOUTH CAROLINA
Muzak, Chicago, IL Carolina Sound Communications, Charleston, SC
Kickapoo Broadcasting, Danville, IL Background Music, Columbia, SC
WSOY, Decantur, IL Carolina Sound Communications, Myrtle Beach, SC
Comcast, Moline, IL
Comcast, Peoria, IL SOUTH DAKOTA
Ouincy Broadcasting, Quincy, IL Music of Rapid City, Rapid City, SD
Springfield Advertising, Springfield, IL Midco Communications, Sioux Falls, SD
INDIANA TENNESSEE
Service Associates, Evansville, IN Xxxxx Sound & Visual, Bristol, TN
Comcast, Fort Xxxxx, IN Service Associates, Chattanooga, TN
Comcast, Indianapolis, IN Service Associates, Knoxville, TN
Music Engineering, South Bend, IN Mid-South Music & Sound, Memphis, TN
Service Associates, Nashville, TN
IOWA
Music Services, Inc., Des Moines, IA TEXAS
Brite & Rich, Le Mars, IA (Sioux City) Audioplan, Abilene, TX
D.B. Acoustics, Marion, IA (Cedar Rapids) Business Music, Inc., Amarillo, TX
AVCOM, Austin, TX
KANSAS Beaumont Business Music, Beaumont, TX
XxXxxxxxxx Sound, Wichita, KS ABC Music, Big Spring, TX
Brownwood Business Music, Brownwood, TX
KENTUCKY Gulf Business Music, Corpus Christi, TX
P & M Electronics, Ashland, KY Comcast, Dallas, TX
Lexington Music & Sound, Lexington, KY Muzicom, El Paso, TX
Planned Music of Kentucky, Louisville, KY Comcast, Ft. Worth, TX
T F M Sound, Harlingen, TX
LOUISIANA Xxxx Broadcasting, Houston, TX
American Sound & Music, Baton Rouge, LA Business Music, Inc., Lubbock, TX
Metro Communications, Lafayette, LA Pioneer Music, Midland, TX
Dixie Music, Lake Charles, LA W. Texas Business Music, San Angelo, TX
Business Sound, Metairie, LA (New Orleans) Texas Wired Music, San Antonio, TX
Business Music, Shreveport, LA Whitsound, Taxarkana, TX
Comcast, Tyler, Tx
MAINE Wichita Business Music, Wichita Falls, TX
PBC Sound Systems, Bangor, ME
UTAH
XXXXXXXX Xxxxxxxx Xxxx Xxxxx, Xxxx Xxxx Xxxx, XX
Audio Communications Network, Baltimore, MD
VERMONT
MASSACHUSETTS Music Services of Vermont, Essex Junction, VT (Burlington)
Muzak, Waltham, MA (Boston)
VIRGINIA
MICHIGAN Independence Communications, Charlottesville, VA
Muzi-Tronics, Cadillac, MI Independence Communications, Newport News, VA
Muzi-Tronics, Grand Rapids, MI Independence Communications, Richmond, VA
Muzi-Tronics, Kalamazoo, MI Business Communications, Roanoke, VA
Range Telecommunications, Marquette, MI
Blue Water Music, Port Huron, MI WASHINGTON
XxxXxxxxx Broadcasting, Saginaw, MI Muzak, Seattle, WA
Comcast, Warren, MI (Detroit) Muzak, Spokane, WA
Xxxxxxx Sound, Yakima, WA
MINNESOTA
Business Music, Inc., Cold Springs, MN (St. Cloud) WEST VIRGINIA
Business Music Service, Duluth, MN Xxx X. Xxxxx, Beckley, WV
Muzak, Minneapolis, MI Wheeling Services, Wheeling, WV (Parkersbury/Wheeling)
Custom Communications, Rochester/Winona, MN
Business Music, Inc., Wilmar, MN WISCONSIN
Northern Musicast, Appleton, WI
MISSISSIPPI Central Communications, Eau Claire, WI
Melody Music Company, Columbus, MS Xxxxxxx Electronics, Madison, WI
Mississippi Sound, Greenwood, MS Wisconsin Music Network, Milwaukee, WI
Metro Communications, Jackson, MS Forward Electronics, Plover, WI
Forward Electronics, Wausau, WI
MISSOURI
Xxxxxx Communications, Jefferson City, MO WYOMING
Audio Acoustics, Joplin, MO Background Music, Cheyenne, WY
Audio Communications, Network, Kansas City, MO
Audio Acoustics, Poplar Bluff, MO
Audio Communications, Network, St. Louis, MO
Audio Acoustics, Springfield, MO
EXHIBIT B
SERVICED PREMISES
List of all Serviced Premises (With Corresponding Reference to Muzak Affiliate
Responsible for each such Serviced Premises)
--------------------------------------------------------------------------------
Serviced Premises Servicing Muzak Affiliates
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MSA-EB
EXHIBIT F
---------
ADJUNCT SERVICES REVENUE SHARING
BROADCAST DATA SERVICES ("Data")
--------------------------------
Revenues from the sale of Data under the terms of an Adjunct Services Subscriber
Contract shall be shared between Muzak and Licensee on a 60/40 basis for a
three-year period starting August 1, 1989. Muzak will receive the 60% share for
the three-year period. Commencing August 1, 1992, revenue for Data will be
shared between Muzak and Licensee on a 50/50 basis.
ADPARTING SERVICES ("AdParting")
--------------------------------
Revenues from the sale of Adparting under the terms of an Adjunct Services
Subscriber Contract shall be shared between Muzak and Licensee on a 60/40 basis,
with Muzak receiving the 60% share.
BROADCAST VIDEO SERVICES ("Video")
----------------------------------
Revenues from the sale of Video under the terms of an Adjunct Services
Subscriber Contract shall be shared between Muzak and Licensee on a 60/40 basis,
with Muzak receiving the 60% share.
DAYPARTING, WEEKPARTING, COMBINED, AND SWITCHING
------------------------------------------------
Services will be provided at flat fee as published from time to time by Muzak.
The fees charged by Muzak for Dayparting, Weekparting and Switching services
will not be increased from the date of the MUZAK(R) License Agreement to which
this Exhibit is attached through December 31, 1993 and thereafter none of such
fees shall increase by more than 10% per annum.
Notes:
-----
1. Licensee will pay all sales commissions to local sales personnel if the
above-mentioned Adjunct Services are sold by the Licensee. Muzak will pay
sales commissions to Muzak National Sales personnel if the above-mentioned
Adjunct Services are sold by Muzak National Sales personnel.
2. The 3% Multi-Territory Accounts sales commissions will not apply to the
Adjunct Services.
3. Whichever of Muzak and Licensee receives revenues from the Subscriber under
the terms of the applicable Adjunct Services Subscriber Contract shall,
within 45 days after receipt of each payment of such revenues, provide the
other party with a report showing the date and amount of such payment and
pay to the other party such other party's share
F-1
of the revenues, as provided herein: The party that is responsible for the
collection of revenues from a Subscriber under the terms of the applicable
Adjunct Services Subscriber Contract shall use its best efforts to ensure
that payments are made in a complete and timely manner by such Subscriber
and shall be responsible for paying any federal, state, or local taxes
relating to the provision of the Adjunct Services to the Subscriber to the
appropriate taxing authority. All payments of such revenues shall be
promptly remitted to the other party, without credit, offset or deduction of
any kind or nature whatsoever except that the party responsible for
collection of revenues from a Subscriber may deduct the other party's pro
rata share of any sales or similar taxes required to be collected in
connection with the provision of the Adjunct Services, as well as such other
deductions as have been agreed to by the parties.
F-2
EXHIBIT G
---------
MUZAK(R) MULTI-TERRITORY ACCOUNTS PROGRAM
Muzak and various of its licensees, working through a "Multi-Territory
Sales Committee," have developed a Multi-Territory Accounts Program (the
"Program"), pursuant to which Muzak and its licensees will provide the Services
to certain Subscribers who own or operate Subscriber Premises located in the
MUZAK(R) territories of at least four MUZAK(R) licensees. The purpose of this
Exhibit G is to set forth the terms and conditions under which the Program will
operate. Capitalized terms used but not defined in this Exhibit G shall have the
meanings set forth in the body of the MUZAK(R) License Agreement to which this
Exhibit is attached.
1. Definitions. As used herein, the following terms shall have the
-----------
meanings set forth below:
1.1 Affiliate shall mean a person or entity (including Licensee)
---------
that has the right to offer and sell the Services under the terms of a license
agreement with Muzak, as well as an owned affiliate of Muzak.
1.2 Assigned Person shall have the meaning set forth in Section 1.7
---------------
below.
1.3 Commission shall mean 3% of the recurring gross xxxxxxxx to the
----------
Multi-Territory Account during the initial term of the Multi-Territory Contract
for Music Services (other than Music Services delivered either by Recorded Media
or in conjunction with in-store advertising provided by POP Radio Corporation)
provided to Subscriber Premises of the Multi-Territory Account located in
Licensee's Territory, plus 3% of the gross xxxxxxxx to the Multi-Territory
Account for certain equipment, as designated by the Committee, installed at such
Subscriber Premises; provided, however, that in calculating such gross xxxxxxxx
for purposes of determining the Commission, (i) a Multi-Territory Contract with
an initial term of more than 5 years shall be deemed to have a term of 5 years,
and (ii) there shall be taken into account only that portion (if any) of the
recurring gross xxxxxxxx for Music Services that exceeds the recurring gross
xxxxxxxx payable to Licensee under a contract that is superseded by the Multi-
Territory Contract.
1.4 Committee shall mean the "Multi-Territory Sales Committee"
---------
referred to above, as further described in Article 3 below.
G-1
1.5 Licensee means the person or entity referred to as "Licensee" in
--------
the MUZAK(R)License Agreement to which this Exhibit is attached.
1.6 Multi-Territory Account shall mean a potential Subscriber that
-----------------------
(a) owns or operates 50 or more Subscriber Premises located in the MUZAK(R)
territories of at least four Affiliates, and (b) is set forth on the then-
current Multi- Territory Account List.
1.7 Multi-Territory Account List shall mean a document that is
----------------------------
periodically prepared by the Committee and disseminated to the Affiliates and
that specifies the Subscribers which meet the requirements of Section 1.6(a) and
the name of the respective person or entity who is assigned responsibility for
the multi-territory marketing of the Services to each such Multi-Territory
Account, which person or entity shall in each case be either Muzak or the
Affiliate licensed by Muzak to operate in the MUZAK(R) territory in which the
headquarters of the Multi-Territory Account are located. (Such person or entity
is referred to herein as the "Assigned Person"). Each such Multi-Territory
Account List shall remain in effect until a new Multi-Territory Account List is
prepared and disseminated. No Subscriber shall be added to the Multi-Territory
Account List without the prior written consent of the Affiliate in whose
MUZAK(R) territory the headquarters of such Subscriber are located. Licensee may
at any time and from time to time petition the Committee for removal of a
Subscriber from the Multi-Territory Account List if no multi-territory sale is
made to the Subscriber within 12 months of the inclusion of such Subscriber in
the Multi-Territory Account List.
1.8 Multi-Territory Contract shall have the meaning set forth in
------------------------
Section 2.2 below.
1.9 MUZAK(R) territory shall mean a geographical area in the United
------------------
States in which an Affiliate has certain exclusive rights to offer and sell the
Services.
2. Procedures for Subscriber Contracts with Multi-Territory Accounts. The
-----------------------------------------------------------------
following procedures will apply with respect to Subscriber Contracts for
Services and related equipment and services provided to Multi-Territory
Accounts:
2.1 Marketing. The Assigned Person will oversee the marketing
---------
approaches to each respective Multi-Territory Account. Unless Licensee is the
Assigned Person with respect to such Account, Licensee will not independently
approach a Multi-Territory Account location for marketing purposes without the
prior written consent of the Assigned Person. Licensee will provide such
marketing assistance to the Assigned Person, with respect to a Multi-Territory
Account that has its headquarters or one or more Subscriber Premises in
Licensee's Territory, as is
G-2
reasonably requested by the Assigned Person. If Licensee is the Assigned Person,
Licensee shall market the Services to the Multi-Territory Account in a diligent
and proper manner. The Assigned Person shall not visit or otherwise contact the
headquarters of any Multi-Territory Account located in Licensee's Territory
without informing Licensee and soliciting Licensee's participation in such visit
or other contact.
2.2 Contract Form and Terms. Unless otherwise authorized in writing
-----------------------
by the Committee, all Subscriber Contracts with Multi-Territory Accounts for the
sale of the Music Services and related equipment and services shall be
substantially in the form of the MUZAK(R) Multi-Territory Music Service
Agreement that is attached as Schedule 1 to this Exhibit G and all Subscriber
----------
Contracts with Multi-Territory Accounts for the sale of Adjunct Services and
related equipment and services shall be substantially in the form of the
MUZAK(R) Adjunct Services Subscriber Contract described in Exhibit E of the
MUZAK(R) License Agreement to which this Exhibit is attached (either or both, as
the case may be, the "Multi-Territory Contract"). The specific terms (pricing,
length of contract period, etc.) set forth in the Multi-Territory Contract with
a specific Multi-Territory Account shall be as determined by the Committee,
subject to Section 3.2 below. Any material variations in the Multi-Territory
Contract shall require the prior consent of the Committee. Licensee understands
and agrees that, in performing its obligations and exercising its rights with
respect to a Multi-Territory Contract, Licensee shall be bound by the terms set
forth therein and shall have no right independently to amend or otherwise alter
any such terms.
2.3 Commissions.
-----------
(a) Licensee shall pay a Commission with respect to the Multi-Territory
Contract to the Assigned Person by no later than 60 days after Licensee is
provided with a copy of the fully executed Multi-Territory Contract.
(b) In the event that (1) Licensee is (A) invited by the Assigned
Person, (B) the licensee within whose territory the headquarters of such Account
are located, or (C) designated by the Committee to assist the Assigned Person in
the marketing of the Services to the Multi-Territory Account, and (2) the
Committee determines that Licensee (or an employee of Licensee) substantially
assisted the Assigned Person in such marketing (including for example by
maintaining contact with the Multi-Territory Account on behalf of the Assigned
Person and by delivery of the Multi-Territory Contract executed by the Multi-
Territory Account or the performance of other useful services), the Assigned
Person shall pay to Licensee (and not to any salesman or agent of Licensee in an
individual capacity) 1/3 of the Commission it receives. Such payment shall be
made in
G-3
installments as the Subscriber Premises of the Multi-Territory Account commence
receiving the Services.
2.4 Insurance. To facilitate the marketing of the Services to
---------
Multi-Territory Accounts, each Affiliate, including Licensee, shall maintain in
full force and effect such workmen's compensation coverage and liability
insurance coverage as is reasonably required from time to time by the Committee,
and shall provide evidence of such coverage to the Committee from time to time
as requested.
3. The Committee.
-------------
3.1 Composition; Action.
-------------------
(a) The Committee shall at all times consist of six members, three
of whom shall be appointed annually by the International Planned Music
Association (or, in the event such Association is at any time not in existence,
such organization of the MUZAK(R) licensees as succeeds such Association) (the
"IPMA") and three of whom shall be appointed annually by Muzak. Of the three
members appointed by the IPMA, two shall be IPMA members and the third shall be
an Affiliate (or, in the case of a corporate or partnership Affiliate, an owner,
officer, or key employee of such Affiliate) who may be, but need not be, a
member of the IPMA. Of the three members appointed by Muzak, two shall be
officers or employees of Muzak and the third shall be an Affiliate (or, in the
case of a corporate or partnership Affiliate, an owner, officer, or key employee
of such Affiliate) who may be, but need not be, a member of the IPMA.
(b) The Committee shall meet as often as is necessary to maintain
the Program, but in no event less frequently than quarterly: All members of the
Committee shall be given reasonable prior written or telephone notice of any
Committee meeting. At any meeting of the Committee the presence of five or more
members (participating by phone or in person) shall constitute a quorum for the
transaction of business. All decisions of the Committee shall require the
affirmative vote of at least five members of the Committee during a Committee
meeting. Members may participate in a meeting of the Committee by conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in the
meeting shall constitute presence of the person at such meeting.
(c) In the event a member retires from the Committee prior to the
end of his or her term of appointment, or is otherwise unable to serve until the
end of such term, the entity that appointed such member shall promptly appoint a
replacement member to serve until the end of such term.
G-4
(d) Muzak shall bear the costs associated with the meetings of the
Committee and Muzak and the IPMA shall bear such other costs of the Committee as
they may from time to time agree.
3.2 Guidelines. The Committee shall adopt guidelines from time to time
----------
to govern its operations; provided, however, that such guidelines shall not
conflict with the provisions set forth in this Exhibit G. Such guidelines shall
include general pricing guidelines for Multi-Territory Contracts. After adoption
by the Committee, such guidelines (until revision by the Committee) shall be
binding on Muzak and all such Affiliates.
4. Cessation of Rights to Continue to Provide Services After Termination of
------------------------------------------------------------------------
License Agreement.
-----------------
4.1 Cessation of Affiliate's Contract Rights. If the MUZAK(R) License
----------------------------------------
Agreement of an Affiliate (the "Terminating Affiliate") terminates or expires
(without a renewal) prior to the termination of a Multi-Territory Contract that
pertains to Subscriber Premises in the Terminating Affiliate's MUZAK(R)
territory, the Terminating Affiliate shall cease to have any right to provide
any music or other services to such Subscriber Premises during the remaining
term of such Multi-Territory Contract. Accordingly, in the event of a
termination of Licensee's MUZAK(R) License Agreement, Licensee shall sell to
Muzak all of its rights in all Multi-Territory Contracts, and all related
equipment, that pertain to Subscriber Premises in Licensee's Territory, with
such sale to be for the price(s) described in Section 4.2 below. Upon such sale,
Muzak shall assume all of Licensee's obligations relative to performance of such
Multi-Territory Contract and with respect to such related equipment accruing
after the date of transfer. In addition, in the event of a termination of the
MUZAK(R) License Agreement of an Affiliate in a MUZAK(R) territory that adjoins
Licensee's Territory, Licensee agrees to provide the Services to the Subscriber
Premises of the Multi-Territory Account in such adjoining territory upon the
request of Muzak for such period of time and upon such other terms as are then
agreed to by Muzak and Licensee.
4.2 Purchase of Contract Rights.
---------------------------
4.2.1 Music Services. In the event that Licensee is a Terminating
--------------
Affiliate, the price applicable to Muzak's purchase of the rights of Licensee in
a Multi-Territory Contract for the provision of Music Services (and the related
equipment, including the Earth Station) shall be determined as provided in this
subsection 4.2.1. In the event that the MUZAK(R) License Agreement of Licensee
has expired without renewal or is otherwise terminated due to the bona fide,
arm's length purchase of Licensee's subscriber contracts for a price based on a
multiple
G-5
of Recurring Music Gross Xxxxxxxx (as hereinafter defined), Muzak's purchase
price hereunder shall be determined by multiplying such arm's length multiple
times the Recurring Music Gross Xxxxxxxx attributable to the Subscriber Premises
of the Multi-Territory Account located in the Territory. If, however, no such
arm's length multiple can be fairly or accurately determined under the
circumstances, Muzak's purchase price hereunder shall be the result of
multiplying the Prevailing Music Multiple (as hereinafter defined) times the
Recurring Music Gross Xxxxxxxx attributable to the Subscriber Premises of the
Multi-Territory Account located in the Territory. As used herein, (i) the term
"Recurring Music Gross Xxxxxxxx" means the average recurring monthly xxxxxxxx to
a Subscriber for the Music Services and related equipment, net of sales taxes
and (ii) the term "Prevailing Music Multiple" means the average of the arm's
length multiples used to determine the purchase prices of the three most
recently reported (to Muzak) sales of the businesses of MUZAK(R) licensees, to
the extent such prices were based on arm's length multiples of Recurring Music
Gross Xxxxxxxx and such multiples can be independently verified as such.
Notwithstanding the foregoing, in the event that (i) prior to the date of
Muzak's purchase of Licensee's rights under a Multi-Territory Contract, Licensee
and/or Muzak have received formal notice that such Multi-Territory Contract will
expire or be terminated (without renewal) for reasons unrelated to the transfer
thereof to Muzak, and (ii) the number of calendar months remaining between the
date of such purchase by Muzak and the date of such expiration or termination of
the Contract is less than the above-described arm's length multiple or
Prevailing Music Multiple (as the case may be), then the purchase price of
Licensee's rights in such Multi-Territory Contract shall be determined by
multiplying such remaining number of months in the Contract term by the
Recurring Music Gross Xxxxxxxx attributable to such Contract. To facilitate the
determination of the Prevailing Music Multiple, if Licensee's MUZAK(R) business
is sold and the purchase price is determined wholly or in part by application of
a multiple to Licensee's Recurring Music Gross Xxxxxxxx, Licensee agrees to
inform Muzak of such multiple promptly after such sale occurs; if the purchase
price of such business is not determined by application of a multiple to
Licensee's Recurring Music Gross Xxxxxxxx, Licensee agrees to inform Muzak of
the amount of the purchase price, the amount of Licensee's Recurring Music Gross
Xxxxxxxx as of the date of closing and the method that was used to determine the
purchase price.
4.2.2 Adjunct Services. The price applicable to Muzak's purchase of
----------------
the rights of Licensee in a Multi-Territory Contract for the provision of the
Adjunct Services (and the related equipment, including the Earth Station) shall
be determined as provided in this subsection 4.2.2. In the event the termination
or expiration of the MUZAK(R) License Agreement of Licensee is due to the bona
fide, arm's length purchase of
G-6
Licensee's subscriber contracts for a price based on a multiple of Recurring
Adjunct Services Gross Xxxxxxxx (as hereinafter defined), Muzak's purchase price
hereunder shall be determined by multiplying such arm's length multiple times
50% of the Recurring Adjunct Services Gross Xxxxxxxx attributable to the
Subscriber Premises of the Multi-Territory Account located in the Territory. In
all other cases, Muzak's purchase price hereunder shall be the result of
multiplying 50% of the Prevailing Adjunct Services Multiple (as hereinafter
defined) times the Recurring Adjunct Services Gross Xxxxxxxx attributable to the
Subscriber Premises of the Multi-Territory Account located in the Territory. As
used herein, (i) the term "Recurring Adjunct Services Gross Xxxxxxxx" means the
average recurring monthly xxxxxxxx to a Subscriber for the Adjunct Services and
related equipment, net of sales taxes and (ii) the term "Prevailing Adjunct
Services Multiple" means the average of the arm's length multiples used to
determine the purchase prices of the three most recently reported (to Muzak)
sales of the businesses of MUZAK(R) licensees, to the extent such prices were
based on arm's length multiples of Recurring Adjunct Services Gross Xxxxxxxx and
such multiples can be independently verified as such. Notwithstanding the
foregoing, in the event that (i) prior to the date of Muzak's purchase of
Licensee's rights under a Multi-Territory Contract pertaining to Adjunct
Services, Licensee and/or Muzak have received formal notice that such Contract
will be terminated (without renewal) for reasons unrelated to the transfer
thereof to Muzak, and (ii) the number of calendar months remaining between the
date of such purchase by Muzak and the date of such termination of the Contract
is less than the Prevailing Adjunct Services Multiple, then the purchase price
of Licensee's rights in such Multi-Territory Contract shall be determined by
multiplying such remaining number of months in the Contract term by 50% of the
Recurring Adjunct Services Gross Xxxxxxxx attributable to such Contract. To
facilitate the determination of the Prevailing Adjunct Services Multiple, if
Licensee's MUZAK(R) business is sold and the purchase price is determined wholly
or in part by application of a multiple to Licensee's Recurring Adjunct Services
Gross Xxxxxxxx, Licensee agrees to inform Muzak of such multiple promptly after
such sale occurs; if the purchase price of such business is not determined by
application of a multiple to Licensee's Recurring Adjunct Services Gross
Xxxxxxxx, Licensee agrees to inform Muzak of the amount of the purchase price,
the amount of Licensee's Recurring Adjunct Services Gross Xxxxxxxx as of the
date of closing and the method that was used to determine the purchase price.
4.3 Effect on License Agreement. To the extent there is an inconsistency
---------------------------
or conflict between the terms of this Article 4 and the provisions set forth in
the body of the MUZAK(R) License Agreement to which this Exhibit G is attached,
the provisions of this Article 4 shall control. Without limiting the generality
of the foregoing, this Exhibit G shall control over Section 2.2(b) (i) of said
License Agreement.
G-7
5. Affiliate's Failure to Perform.
------------------------------
5.1 No Discontinuance of Services. Under no circumstances shall an
-----------------------------
Affiliate discontinue the distribution of the Services or provision of related
goods and services to a Multi-Territory Account without providing the Committee
at least 96 hours' written notice of its intention to discontinue such
distribution.
5.2 Effect of Failure. In the event that an Affiliate (the "Failing
-----------------
Affiliate") fails to perform its obligations under the terms of a Multi-
Territory Contract and does not cure such failure within 30 days after notice of
such failure by the Committee (or, if such cure cannot be accomplished within 30
days. if the Failing Affiliate does not promptly commence such cure and
diligently pursue it toward completion during such 30-day period and then
accomplish such cure as soon as reasonably possible thereafter), an Affiliate
operating from a MUZAK(R) territory that is adjacent to the Failing Affiliate's
MUZAK(R) territory, as selected by the Committee, shall thereafter be authorized
to perform the obligations and exercise the rights (including rights to receive
payments) of the Failing Affiliate under such Contract until the termination
thereof. Notwithstanding the foregoing, if at any time a Failing Affiliate fails
to provide the Services to a Subscriber Premises in accordance with a Multi-
Territory Contract and does not cure such failure within 72 hours after receipt
of actual or written notice from the Committee, an Affiliate operating from a
MUZAK(R) territory that is adjacent to the Failing Affiliate's MUZAK(R)
territory, as selected by the Committee, shall have the right immediately to
provide the Services to such Subscriber Premises, and the Failing Affiliate
shall reimburse such Affiliate for the costs associated therewith.
6. Disputes. Subject to the last sentence of this Section 6, all disputes
--------
of any kind, nature or description arising in connection with the operation of
the Program that after a reasonable period of time have not been resolved by
less formal means shall be submitted for resolution to a three-person panel
composed of the then-current President of the IPMA, the then-current President
of Muzak, and a third person selected by the two aforementioned individuals. The
dispute shall be resolved according to such rules as are established by such
panel, and the decision of the panel with respect to such dispute shall be
binding on Muzak and the Affiliates. In the event that (i) either Muzak or
Licensee does not wish to use such panel to resolve such dispute, (ii) it
becomes impossible to convene such a panel, or (iii) the panel is unable after a
reasonable period of time to resolve a dispute, the dispute shall be submitted
to the offices of the American Arbitration Association in Seattle, Washington,
Chicago, Illinois, or New York, New York (as determined by the Committee) for
resolution.
G-8
7. Amendment. This Exhibit G may be amended by the action of the Committee,
---------
acting in accordance with the requirements of paragraph (b) of Section 3.1
(which such paragraph may not be amended without the prior written approval of
Licensee and Muzak); provided, however, that such amendment shall not take
effect until 30 days after the Committee provides written notice thereof to
Licensee and Muzak.
8. Distribution of Revenues. In the event that, under the terms of a
------------------------
Multi-Territory Contract, an Assigned Person collects recurring revenues from a
Multi-Territory Account that are then payable by the Assigned Person to one or
more of the Affiliates, the Assigned Person shall, within 30 days after receipt
of each payment of such revenues, provide such Affiliates with a report showing
the date and amount of such payment and pay to such Affiliates such Affiliates'
share of the revenues, without credit, offset or deduction of any kind or nature
whatsoever other than sales or similar taxes required to be collected in
connection with the provision of Services under the Multi-Territory Contract and
such other deductions as have been agreed to by such Affiliates.
9. Audit. In the event that, under the terms of a Multi-Territory
-----
Contract, the Assigned Person collects revenues from a Multi-Territory Account
that are then payable by the Assigned Person to one or more of the Affiliates,
the Committee shall have the right, upon 15 days' written notice, to audit those
books and records of the Assigned Person pertaining to the administration of
such Multi-Territory Contract for the sole purpose of verifying that such
payments were correctly calculated. During any such audit, the Committee may
make mechanical copies of only those books and records that are necessary for
the verification of such calculations and were physically examined as part of
the audit. The Committee shall take reasonable precautions to safeguard the
confidentiality of such copies and shall destroy any such copies on completion
of the audit and payment by the Assigned Person of any monies determined to be
owing as a result of the audit. Neither the Committee nor any Affiliate shall
assess the Assigned Person for amounts found, as a result of such audit, to be
owing if such amounts were first payable by the Assigned Person more than two
years prior to the date such audit commenced, provided that the Assigned Person
did not knowingly maintain false books and records regarding the Multi-Territory
Contract or knowingly make false payments to the Affiliates with respect to such
Multi-Territory Contract.
G-9
Schedule 1
----------
MUZAK(R) MULTI TERRITORY ACCOUNT [LOGO OF MUZAK]
SERVICE AGREEMENT
This Agreement ("Agreement") is made as of the _____ day __________, 1999__ by
and between MUZAK LIMITED PARTNERSHIP acting as agent for the Servicing Music
Suppliers listed on Exhibit "A" hereto as now existing or as subsequently
amended ("Supplier") and __________________________________ ("Subscriber")
The parties agree as follows:
1. MUSIC SERVICES
Suppliers provide MUZAK(R) subscription music programming (the "Music
Service") to commercial establishments. Subscriber owns, operates,
franchises or controls the commercial establishments listed in Exhibit "B"
("Services Premises"). The parties agree that, subject to paragraph 6
below, Supplier shall provide the Music Service to each of the Serviced
Premises. Music service description:______________________________________
__________________________________________________________________________
2. EQUIPMENT
For the consideration set forth in Section 3 below, Supplier shall provide
the following equipment to each Serviced Premises:
a. Purchased Equipment:___________________________________________________
__________________________________________________________________________
b. Other Equipment:_______________________________________________________
__________________________________________________________________________
(Subscriber may obtain additional equipment from Supplier on terms to be
negotiated on a location-by-location basis.)
3. FEES
In consideration of the services and equipment provided to Subscriber, and
in addition to the fees and charges referred to in Section 7 below,
Subscriber shall pay the following fees and charges to Supplier in the
manner set forth herein :
a. One-time charges:
Purchased Equipment (as specified above): $__________
Equipment Installation $__________
b. Recurring (monthly) charges:
Music Service and Equipment $__________
4. TERM
This Agreement shall remain in effect for sixty (60) months from _________
and shall be automatically renewed for subsequent sixty (60) month
period(s) unless terminated by either party by written notice delivered to
the other party at least ninety (90) days prior to the expiration of the
initial term or the applicable renewal term.
5. CONTINUATION OF AGREEMENT
THE TERMS AND CONDITIONS SET FORTH ON THE REVERSE SIDE ARE PART OF THIS
AGREEMENT.
________________________________________________________________________________
IN WITNESS WHEREOF the parties have entered into this Agreement as of the day
and year first above written.
Subscriber: Muzak Limited Partnership
________________________________ As Agent for the Servicing Music Suppliers
By:_____________________________ By:_______________________________________
Title:__________________________ Title:____________________________________
Address:________________________ 000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
________________________________
________________________________________________________________________________
6. INSTALLATION AND MAINTENANCE OF EQUIPMENT
Subscriber hereby grants to Supplier (subject to any necessary governmental
or third party approvals) the right to install all necessary equipment for
receiving the Music Service, including but not limited to and exterior
antenna or a satellite receiver "^^^." Supplier-owned equipment provided to
Subscriber hereunder shall be maintained by Supplier at no additional cost
to Subscriber: provided, however, that such maintenance shall be limited to
labor and repairs required by ordinary and proper use of such equipment.
Subscriber shall provide Supplier with reasonable access to the Serviced
Premises during normal business hours for purposes of performing required
maintenance. Supplier shall retain ownership of all equipment provided
hereunder that has not been purchased by Subscriber, and Subscriber shall
not transfer, encumber or in any way alienate such equipment. Subscriber
shall be responsible for any loss or damage to the Supplier-owned equipment
(reasonable wear and tear excepted) while installed at a Serviced Premises.
If the Music Service is no longer provided to a Serviced Premises,
Subscriber shall provide Supplier with reasonable access to such premises
for purposes of removing any Supplier-owned equipment. Upon the removal of
any Supplier-owned equipment, Supplier shall not be required to repair,
replace or otherwise reestablish the premises to their original condition.
7. PAYMENT TO SUPPLIER
With respect to each Serviced Premises. Subscriber shall pay the fees
specified herein. One-time charges shall be due and payable on a "Net 10
Days" basis. Recurring charges shall be payable monthly in advance and
shall be due on the first day of the calender month to which the charges
relate. Additionally, Subscriber shall pay to Supplier the incremental cost
of any increase in copyright fees charged by ASCAP, BMI or other similar
entities beyond what is charged as of the date hereof and any sales, use,
excise, or other taxes or governmental charges (except income taxes)
arising from this Agreement. Late payments shall be subject to an interest
charge at the maximum rate permitted by law. Annually during the term of
this Agreement Supplier may increase the recurring charges on 30 days'
prior written notice to Subscriber by a percentage increase equal to the
percentage increase in the Consumer Price Index. All Urban Consumers,
during the preceding year.
8. USE OF MUSIC SERVICE
Subscriber agrees that without the prior written consent of Supplier the
Music Service shall not be (i) performed in conjunction with commercial
announcements for which Subscriber or any other person receives
consideration of any kind or (ii) copied, recorded, dubbed or supplemented.
Subscriber further agrees that the Music service shall not be modified,
transmitted or retransmitted so as to be audible outside any Serviced
Premises.
9. FAILURE OR INTERRUPTION OF SERVICE
Supplier shall not be liable for any failure to perform its obligations
hereunder due to Acts of God, strikes, emergencies, mechanical failure,
regulatory or other governmental action, action or inaction by Subscriber,
its licensees, contractors, employees, agents or invitees, a breach of this
Agreement by Subscriber or any other cause beyond Supplier's control. For
any failure or interruption of the Music Service which is not excused under
the preceding sentence, which exceeds 24 consecutive hours in duration, and
of which Supplier receives written notice within 48 hours of such failure
or interruption, Supplier shall credit Subscriber's account with respect to
the affected Service Premises of an amount equal to one-thirtieth of the
recurring monthly charge for the Music Service for each 24-hour period
during which the failure or interruption continues. Said credit shall be
the sole and exclusive remedy of Subscriber with respect to any
interruption or failure of the Music Service. Supplier shall not be liable
for any incidental or consequential damages whatsoever.
10. ADDITIONS AND DELETIONS
In the event Subscriber wishes to add a Serviced Premises it shall give
Supplier 30 days' written notice of such addition. Within 10 days of
Supplier's receipt of such notice it shall advise Subscriber in writing if
it accepts the addition. If the addition is accepted Supplier shall
promptly install any equipment to be provided by Supplier and commence
providing the Music Service at the added premises. In the event Subscriber
wishes to delete a Serviced Premises, it shall give Supplier 30 days' prior
written notice of the deletion. Supplier shall promptly remove from the
deleted premises any Supplier-owned equipment. Subscriber's obligation with
respect to such deleted premises shall not cease unless Supplier is then
providing the Music Service to at least 95% of the Serviced Premises shown
in Exhibit B and (i) Subscriber has closed the deleted premises or (ii)
Subscriber has sold the deleted premises to an unrelated and unaffiliated
third party.
11. SERVICING MUSIC SUPPLIER
Subscriber acknowledges and agrees that all services to be provided by
Supplier hereunder shall be provided by the Servicing Music Supplier
identified in Exhibit "B" as being responsible for a particular Serviced
Premises. Subscriber further acknowledges that Supplier is entering into
and executing this Agreement on behalf of and as agent for each such
Servicing Music Supplier; that it is the express intent of both parties
hereto to establish privity of contract between Subscriber and each such
Servicing Music Supplier with respect to each Serviced Premises served by
each such Servicing Music Supplier and that the Xerographic copies of this
Agreement provided to each such Servicing Music Supplier for each such
Serviced Premises shall be deemed for all purposes a counterpart original
of this Agreement.
12. APPLICABLE LAW
In the event of a dispute affecting Serviced Premises located in one state
this Agreement shall be governed by and in accordance with the laws of that
state applicable to contracts made and to be performed wholly within such
state and venue shall rest with the court of general jurisdiction located
in the county where the subject Servicing Music Supplier maintains its
principal place of business. in the event of a dispute affecting Serviced
Premises located in more than one state this Agreement shall be governed by
and in accordance with the laws of the state where the Supplier which has
executed this Agreement as agent for the Servicing Music Suppliers
maintains its principal place of business, applicable to contracts made
and to be performed wholly within such state and venue shall rest with the
court of general jurisdiction located in the country where said Supplier
maintains such principal place of business. If any provision of this
Agreement is deemed unenforceable (in whole or in part by a Court of
competent jurisdiction the parties agree that such Court shall amend or
delete such provision so as to effectuate the intent of such provision and
of this Agreement to the maximum extent that is enforceable.
13. SUCCESSORS AND ASSIGNS
This Agreement is fully assignable by Supplier but may not be assigned by
Subscriber without the prior written consent of Supplier, which consent
shall not be unreasonably withheld.
14. DEFAULT AND REMEDIES
Default in payment or violation of any material term of this Agreement by
Subscriber shall cause, at Supplier's option, the entire contract balance
to become immediately due and payable as liquidated damages and Supplier
shall have the right to enter any Serviced Premises, discontinue service,
and remove the Supplier-owned equipment. Subscriber shall reimburse
Supplier for all costs and expenses including reasonable attorneys' fees
and costs, incurred in connection with Supplier's exercise of its rights
under this Agreement.
15. PREEXISTING CONTRACT
In the event a Servicing Music Supplier has a preexisting contract for a
Serviced Premises, then at the option of such Servicing Music Supplier such
contract shall remain in full force and effect until it expires (without
giving effect to any automatic renewal clause), but upon such expiration
this Agreement shall immediately take effect.
16. NOTICES
All notices required to be sent by either party shall be in writing and
shall be sent certified mail postage prepaid to the respective addresses
set forth below their signatures on the reverse side.
17. WHOLE AGREEMENT
This Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof and supercedes all prior agreements,
conversations, representations, promises of warranties (express or implied)
whether verbal or written. Except for a modification of the list of
Servicing Music Suppliers in Exhibits A and B, which may be made by
Supplier, no modification of this Agreement shall be valid unless made in
writing and signed by both parties.
EXHIBIT A
SERVICING MUSIC SUPPLIERS
--------------------------------------------------------------------------------
ALABAMA MONTANA
Electronic Engineers, Birmingham, AL Shag Xxxxxx, Butte, MT
Electro-Systems, Dothan, AL American Music, Great Falls, MT
Service Associates, Huntsville, AL Music Systems, Kalispell, MT
Business Sound, Mobile, AL
Electronic Engineers, Montgomery, AL NEBRASKA
Xxxxxx Engineering, Kearney, NE
ALASKA Business Music Inc., Lincoln, NE
Northern Television, Anchorage, AK Business Music Inc., Omaha, NE
Background Music, Fairbanks, AK
NEVADA
ARKANSAS Musaire, Inc., Las Vegas, NV
Xxxxxxxx Communications, Fayetteville, AR Dynamic Sound, Reno, NV
Tempo Sound, Harrison, AR
Business Music, Inc., Little Rock, AR NEW HAMPSHIRE
Muzak, Exeter, NH
ARIZONA
SunCom Group, Scottsdale, AZ (Phoenix) NEW JERSEY
Tucson Music, Tucson AZ World Music, Springfield, NJ
CALIFORNIA NEW MEXICO
Muzak, Anaheim, CA Business Music, Inc., Albuquerque, NM
Serban Sound, Bakersfield, CA
Muzak, Burbank, CA (Los Angeles) NEW YORK
Attuned to Music, Chico, CA Comcast, Buffalo, NY
American Music Network, Fresno, CA Arranged Sound, Johnson City, NY (Binghamton)
American Music Network, Modesto, CA Functional Communications, Latham, NY (Albany)
Musi-Cal, Riverside, CA Muzak, Long Island City, NY (New York City)
Muzak, Roseville, CA (Sacramento) NCC Systems, Potsdam, NY
American Music Network, Salinas, CA Accent Communications, Poughkeepsie, NY
Comcast, San Diego, CA Functional Communication, Rochester, NY
Muzak, San Francisco, CA Functional Communication, Syracuse, NY
Muzicraft, Santa Barbara, CA NCC Systems, Watertown, NY
Muzicraft, Ventura, CA
NORTH CAROLINA
COLORADO SunCom Group, Charlotte, NC
Comcast, Colorado Springs, CO SunCom Group, Hillsborough, NC
Comcast, Denver, CO Independence Communications, Kinston, NC
Warner Music & Communications, Rocky Mount, NC
CONNECTICUT Background Music, Wilmington, NC
Comcast, Hartford, CT
Muzak, Milford, CT NORTH DAKOTA
Music Systems, Inc., Bismarck, ND
District of Columbia Music Systems, Inc., Fargo, ND
Music Inc., Washington, DC
FLORIDA OHIO
Xxxxxx Sound, Ft. Xxxxx, FL Port Erie Communications, Ashtabula, OH
Florida Sound, Jacksonville, FL Ohio Musicue, Canton, OH
Melody Inc., Miami, FL Muzak, Cincinnati, OH
Xxxxxx Music, Ocala, FL Ohio Music Corporation, Cleveland, OH
Comcast, Orlando, FL Muzak, Columbus, OH
Electro-Systems, Panama City, FL Audio Inc., Dayton, OH
Electro-Systems, Tallahassee, FL Xxxxxx Communications, Toledo, OH
Tropical Music, Tampa, FL Hudix Music, Youngstown, OH
Harmony Music & Sound, W. Palm Beach, FL (Palm Beach)
OKLAHOMA
XXXXXXX Xxxxxx Business Music, Lawton, OK
Xxxxxx Sound, Albany, GA Business Music, Inc., Oklahoma, OK
Xxxxxx Sound, Atlanta, GA Granite Sound, Tulsa, OK
Carolina-Georgia Sound, Augusta, GA
Background Music, Phenix City, AL (Columbus, GA) OREGON
Xxxxxx Sound, Macon, GA Muzak, Eugene, OR
Georgia Music & Sound, Savannah, GA Muzak, Medford, OR
Muzak, Portland, OR
HAWAII
Xxxxxxx Audio Engineering, Honolulu, HI PENNSYLVANIA
Independence Communications, Harrisburg, PA
IDAHO Comcast, Hollidaysburg, PA
Mountain West Audio, Boise, ID Independence Communications, Norristown, PA (Philadelphia)
Idaho Mountain West, Idaho Falls, ID Independence Communications, Pittsburgh, PA
Comcast, Scranton, PA
ILLINOIS
Muzak, Chicago, IL SOUTH CAROLINA
Kickapoo Broadcasting, Danville, IL Carolina Sound Communications, Charleston, SC
WSOY, Decatur, IL Background Music, Columbia, SC
Comcast, Moline, IL Carolina Sound Communications, Myrtle Beach, SC
Comcast, Peoria, IL
Ouincy Broadcasting, Quincy, IL SOUTH DAKOTA
Springfield Advertising, Springfield, IL Music of Rapid City, Rapid City, SD
Midco Communications, Sioux Falls, SD
INDIANA
Service Associates, Evansville, IN TENNESSEE
Comcast, Fort Xxxxx, IN Xxxxx Sound & Visual, Bristol, TN
Comcast, Indianapolis, IN Service Associates, Chattanooga, TN
Music Engineering, South Bend, IN Service Associates, Knoxville, TN
Mid-South Music & Sound, Memphis, TN
IOWA Service Associates, Nashville, TN
Music Services, Inc., Des Moines, IA
Brite & Rich, Le Mars, IA (Sioux City) TEXAS
D.B. Acoustics, Marion, IA (Cedar Rapids) Audioplan, Abilene, TX
Business Music, Inc., Amarillo, TX
KANSAS AVCOM, Austin, TX
XxXxxxxxxx Sound, Wichita, KS Beaumont Business Music, Beaumont, TX
ABC Music, Big Spring, TX
KENTUCKY Brownwood Business Music, Brownwood, TX
P & M Electronics, Ashland, KY Gulf Business Music, Corpus Christi, TX
Lexington Music & Sound, Lexington, KY Comcast, Dallas, TX
Planned Music of Kentucky, Louisville, KY Muzicom, El Paso, TX
Comcast, Ft. Worth, TX
LOUISIANA T F M Sound, Harlingen, TX
American Sound & Music, Baton Rouge, LA Talt Broadcasting, Houston, TX
Metro Communications, Lafayette, LA Business Music, Inc., Lubbock, TX
Dixie Music, Lake Charles, LA Pioneer Music, Midland, TX
Business Sound, Metairie, LA (New Orleans) W. Texas Business Music, San Angelo, TX
Business Music, Shreveport, LA Texas Wired Music, San Antonio, TX
Whitsound, Texarkana, TX
MAINE Comcast, Tyler, TX
PBC Sound Systems, Bangor, ME Wichita Business Music, Wichita Falls, TX
MARYLAND UTAH
Audio Communications Network, Baltimore, MD Mountain West Audio, Salt Lake City, UT
MASSACHUSETTS VERMONT
Muzak, Waltham, MA (Boston) Music Services of Vermont, Essex Junction, VT (Burlington)
MICHIGAN XXXXXXXX
Xxxx-Tronics, Cadillac, MI Independence Communications, Charlottesville, VA
Muzi-Tronics, Grand Rapids, MI Independence Communications, Newport News, VA
Muzi-Tronics, Kalamazoo, MI Independence Communications, Richmond, VA
Range Telecommunications, Marquette, MI Business Communications, Roanoke, VA
Blue Water Music, Port Huron, MI
XxxXxxxxx Broadcasting , Saginaw, MI WASHINGTON
Comcast, Warren, MI (Detroit) Muzak, Seattle, WA
Muzak, Spokane, WA
MINNESOTA Xxxxxxx Sound, Yakima, WA
Business Music, Inc., Cold Springs, MN (St. Cloud)
Business Music Service, Duluth, MN WEST VIRGINIA
Muzak, Minneapolis, MN Xxx X. Xxxxx, Beckley, WV
Custom Communications, Rochester/Winona, MN Wheeling Services, Wheeling, WV (Parkersburg/Wheeling)
Business Music, Inc., Wilmar, MN
WISCONSIN
MISSISSIPPI Northern Musicast, Appleton, WI
Melody Music Company, Columbus, MS Central Communications, Eau Claire, WI
Mississippi Sound, Greenwood, MS Xxxxxxx Electronics, Madison, WI
Metro Communications, Jackson, MS Wisconsin Music Network, Milwaukee, WI
Forward Electronics, Plover, WI
MISSOURI Forward Electronics, Wausau, WI
Xxxxxx Communications, Jefferson City, MO
Audio Acoustics, Joplin, MO WYOMING
Audio Communications, Network, Kansas City, MO Background Music, Cheyenne, WY
Audio Acoustics, Poplar Bluff, MO
Audio Communications, Network, St. Louis, MO
Audio Acoustics, Springfield, MO
EXHIBIT B
SERVICED PREMISES
List of all Serviced Premises (With Corresponding Reference to Muzak Affiliate
Responsible for each such Serviced Premises)
--------------------------------------------------------------------------------
Serviced Premises Servicing Music Suppliers
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
MSA-EB
EXHIBIT H
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AGREEMENTS NOT SUPERSEDED
In-Store Advertising Agreement
