[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
OEM PURCHASE AND DEVELOPMENT AGREEMENT
between
TOUCHTUNES DIGITAL JUKEBOX, INC.
and
Bose(R) CORPORATION
This Agreement is made as of June 2, 2000 between TouchTunes Digital Jukebox,
Inc. ("TouchTunes"), and Bose Corporation, a Delaware Corporation ("Bose"), who
hereby agree as follows:
1. INTRODUCTION
Bose designs, develops, manufactures and sells audio equipment, including
speakers, amplifiers, transducers and other electronic devices and
circuitry.
TouchTunes desires to use premium performance jukeboxes developed jointly
by TouchTunes and Bose. Bose desires to work with TouchTunes to develop
customized jukeboxes designed to meet the specifications and requirements
of TouchTunes and to become a supplier of such jukeboxes to TouchTunes.
TouchTunes has entered into a Master Lease Agreement with its parent
company, TouchTunes Music Corporation ("TMC") providing for the terms and
conditions under which TouchTunes (the "Lessor") leases to TMC (the
"Lessee"), among other movable property such jukeboxes which are purchased
at the demand and in accordance with the instructions of TMC.
TouchTunes sell and/or leases Jukeboxes to TMC and TMC sells and/or leases
Jukeboxes to Jukebox operations that are responsible for installing
jukeboxes in various locations.
2. DEVELOPMENT OF THE SYSTEM
2.1 The System. For purposes of this Agreement, the "system" shall mean a
"Jukebox" developed jointly by Bose and TouchTunes as defined in the
Product Description attached to this Agreement as Schedule A.
2.2 System Specifications. If either party wishes to amend or modify the
agreed-upon specifications relating to the Jukebox, such party shall
specify the desired change in writing to the other party. Each party
agrees
not to unreasonably withhold its approval of any suggested change.
Bose and TouchTunes shall each have the right to approve the
acoustical performance of the Jukebox, prior to the initiation by
Bose of manufacturing of the Jukebox.
2.3 Good Faith Cooperation. Bose and TouchTunes acknowledge that this
Agreement cannot possibly cover or contemplate all aspects of the
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
working relationship between Bose and TouchTunes that will develop or
be required in connection with the design, development and production
of the Jukebox. Accordingly, Bose and TouchTunes each agree to act in
good faith and in a commercially reasonable manner in performing
their respective obligations under this Section 2.
3. TERM OF PURCHASE AND SALE OF SYSTEMS
3.1 Purchase and Sale. TouchTunes agrees to purchase from Bose, and Bose
agrees to sell to TouchTunes, complete Jukeboxes in such quantities
as are agreed between the parties from time to time which are
manufactured in accordance with Schedule B. TouchTunes agrees to
purchase Jukeboxes from Bose beginning in June 2000 at quantities
agreed to in accordance with Schedule B.
A Jukebox is defined as a system which is ready to accept the hard drive
in order to be a complete and operational ("Jukebox"). It will be
TouchTunes' or TMC's sole responsibility to install the hard drive into
the Jukebox. TouchTunes agrees to purchase from Bose, and Bose agrees to
sell to TouchTunes, Jukeboxes as defined in Schedules A and C in such
quantities as are agreed between the parties from time to time which are
manufactured in accordance with Schedule B.
Reference Schedule F Jukebox Manufacturing Locations
3.2 Pricing. The price of each Jukebox purchased by TouchTunes from Bose
shall be as set forth on the Price Schedule attached to this
Agreement as Schedule B. In the event of any change in the Jukebox
design or specifications from that contemplated as of the date of the
Agreement, Bose shall be entitled, with the written consent of
TouchTunes (which consent may not be unreasonably withheld or
delayed), to modify the pricing terms set forth on Schedule B to take
into account such changes. Cost reductions or cost increases for the
purchased components and/or manufacturing purchase price variances
directly attributable to Jukebox production will be jointly shared
between Bose and TouchTunes through Jukebox pricing as set forth on
Schedule B. All pricing terms on such Price Schedule exclude all
excise, sales, use and other taxes, all of which shall be paid by
TouchTunes. Payment to Bose for Jukeboxes shall be made as set forth
in Schedule E.
In the event that TouchTunes does not purchase quantities of
Jukeboxes in accordance with Schedule B, that TouchTunes has not
provided Bose with reasonable notice and, as a result, Bose has
incurred penalty charges from suppliers or has suffered component
parts pricing increases, TouchTunes will reimburse Bose for such
costs. Costs of excess material due to volume changes will be
reimbursed by TouchTunes if TouchTunes has not provided Bose with
reasonable notice. Bose shall credit to the benefit of TouchTunes
the cost of such material once the material is used in production, or
at TouchTunes' option, Bose will use its best efforts to obtain the
maximum credit from respective material suppliers by returning as
much material as possible.
3.2.1 Inventory Financing Protection:
TouchTunes will extend the Inventory Financing Protection
("IFP") Agreement, signed by TouchTunes August 26, 1999,
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
accepted by Bose February 7, 2000 through the term of this
Agreement. The terms of the ("IFP") are expressly incorporated
into this agreement. From time to time, when requested by
TouchTunes, Bose agrees to review the need for ("IFP").
3.3 Purchase Orders
Submission of Purchase Order. TouchTunes shall submit to Bose a hard
copy purchase order for Jukeboxes to be purchased by TouchTunes from
Bose during the year beginning June 1, 2000. On a monthly basis,
TouchTunes will provide Bose with a purchase order release which
specifies a requested delivery date, which shall be at least 98-
calendar days following the date of delivery of the purchase order.
All purchase order releases for 98-calendar days lead time are
considered "firm and frozen." Purchase order release quantities
should be in unit quantities equal to multiples of trailer capacity
to be determined by Bose and TouchTunes.
Beyond the purchase order release quantities, the quantities forecast
can be changed accordingly except as noted in section 8.2:
Greater than 98-calendar days: no limit to changes
0_98 calendar days: firm and frozen
Bose will respond to all change orders within ten business days.
Confirmation of Purchase Order. Within ten business days after the
receipt by Bose of all documents comprising each purchase order and
purchase order release, Bose shall provide TouchTunes with a written
confirmation notice relating to the purchase order and/or purchase
order release.
Termination of Purchase Orders. TouchTunes shall have the right to
cancel any purchase order in whole or in part at any time, subject to
the following provisions. Such cancellation shall become effective
upon written notification by TouchTunes to Bose. TouchTunes agrees to
pay Bose all costs which were incurred by Bose Corporation in
performance of the purchase order up to the date of cancellation and
which are properly allocable to such order under recognized
commercial accounting practices. TouchTunes will be responsible for
materials that are deemed obsoleted and unique to the Jukebox upon
cancellation of purchase order and/or purchase order releases. Bose
will use its best efforts to minimize the amounts for the said
materials by returning as much material as possible to respective
suppliers. Bose will respond within ten business days as to
obsolete/unique amounts.
3.4 Production Forecasts. TouchTunes shall make available to Bose by the
fifth calendar day of each month, for planning purposes only, an
estimate of TouchTunes' delivery requirements from Bose for the
Jukebox for the next 12 months.
3.5 Shipment; Title and Risk of Loss. TouchTunes shall arrange for
shipment of jukeboxes to the designated warehouse in accordance with
the shipment schedule specified by TouchTunes. Delivery of jukeboxes
by Bose Corporation to TouchTunes shall be Ex Works, Sainte-Xxxxx,
Quebec. Without regard to freight being prepaid or collect, title
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
and risk of loss shall pass to TouchTunes upon departure of truck
from the Bose manufacturing facility.
TouchTunes acknowledges that this document or copies of this document may
be filed with the appropriate authorities as a financing statement and
agrees to execute and deliver such other documents as Bose may request in
order to perfect Bose Corporation's security interest granted hereby.
Bose acknowledges that it will provide necessary certificates of origin or
other necessary documents relating to the Jukeboxes in order for TMC to
import the Jukeboxes into the United States from Canada.
3.6 TouchTunes and TMC Lessor and Lessee Relationship. Bose acknowledges
that it has been informed by TouchTunes that TouchTunes leases, as
Lessor, to TMC, as Lessee, among other moveable property, the
jukeboxes, which are purchased by TouchTunes at the demand and in
accordance with the instructions of TMC. This Section 3.6 shall
constitute a disclosure in this Agreement of such Contract of Leasing
with respect to the jukeboxes.
3.7 Ownership of Jukeboxes. TouchTunes, TMC and Bose acknowledge that it
is their intention that TouchTunes purchases from Bose, and Bose
sells to TouchTunes the jukeboxes upon the terms and conditions set
forth in this Agreement and that ownership title of the jukeboxes
shall solely vest in TouchTunes, and that TMC shall have no right,
title or interest in such jukeboxes, other than the right to maintain
possession and use of such jukeboxes and lease such jukeboxes in
conformity with the Master Lease Agreement and other rights expressly
provided therein or in this Agreement until, ownership title of such
jukeboxes passes to TMC in conformity with such Master Lease
Agreement.
4. WARRANTY AND SUPPORT
4.1 Warranty
As acknowledged by Bose, TouchTunes and TMC have entered into the
Master Lease Agreement and it is Bose's intention to have the
warranties set out in this Section 4.1 of the Agreement to the
benefit of both TouchTunes and TMC.
General. Bose warrants solely to TouchTunes and to TMC that the Bose
content of the Jukeboxes sold and delivered under this Agreement
shall be free from defects in materials and workmanship under normal
and intended usage, for a period of 12 months from the date of
purchase. Bose warrants solely to TouchTunes and to TMC that the Bose
transducers contained in the Jukeboxes sold and delivered under this
Agreement shall be free from defects in materials and workmanship
under normal and intended usage for a period of five years from the
date of purchase. The warranty on components not originally
manufactured by Bose (i.e., all components except for the
transducers, amplifiers and cabinetry) will be limited to the
original manufacturer's warranty and will be passed through to
TouchTunes and to TMC when transferable. This warranty does not cover
defects or damages due to water, chemical or sealant intrusion, or
defects or damages resulting from negligence, casualty, accident,
fire, disaster, misuse, or improper installation, nor does it apply
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
to Jukeboxes that have been modified or repaired by a party other
than Bose or a party authorized by Bose, TouchTunes, or TMC to do so.
TouchTunes or, at TouchTunes' option, TMC will be solely responsible
to purchase extended warranties for component parts not manufactured
by Bose from the original component manufacturer. Bose will provide
assistance to TouchTunes or TMC to obtain these extended warranties;
however, TouchTunes or TMC will be responsible for all payments and
additional costs associated with the extended warranties.
Traceability. Bose will provide to TouchTunes serialization for each
individual Jukebox and the following components: I/O Board,
touchscreen monitor, xxxx acceptor, amplifiers, managers button,
remote control, lower detachable loudspeakers (141JB), PC and UPS.
TouchTunes or, at TouchTunes' option, TMC will be responsible for all
updates to the Jukebox serialization once the Jukeboxes are placed in
the field.
Procedures. TouchTunes or TMC shall notify Bose of any Bose component
parts or Bose workmanship which it believes to be defective during
the applicable warranty period. Defective Bose manufactured component
parts shall be returned by TouchTunes or TMC to the facility
designated by Bose, whereupon Bose shall examine and test such
components, repair or replace any such components found to be
defective and promptly return such components to TouchTunes or TMC.
All replaced parts shall become the property of Bose. Bose shall make
available as required Bose manufactured spare parts to be purchased
by TouchTunes or TMC. Bose shall designate the method of shipment
required for return of Bose manufactured components and shall
reimburse TouchTunes or TMC for all cost of shipment except for such
Bose manufactured components which upon testing by Bose prove not to
be defective. If faulty workmanship is identified, Bose and
TouchTunes, or TMC will agree to the most cost-effective way to
repair or replace the faulty workmanship in each individual
situation.
Bose will transfer all warranties for non-Bose component parts of the
Jukeboxes to TouchTunes and to TMC. TouchTunes or TMC will
communicate and deal directly with the original manufacturer both
during the warranty period and after the warranty expires at
TouchTunes' or TMC's expense.
Limitations.
(a) The provisions of the foregoing warranties are in lieu of any
other warranty, whether express or implied, written or oral
(including any warranty of merchantability or fitness for a
particular purpose). The foregoing warranties extend to TouchTunes
and to TMC only and shall not be applicable to any other person or
entity, including without limitation customers of TouchTunes or of
TMC except in the event that TouchTunes or TMC sells the Jukebox to
another party in which case the remaining warranty will pass to the
new owner of the Jukebox.
(b) Bose Corporation's liability arising out of the design,
manufacture, sale or delivery of the Jukeboxes or their use or
disposition, whether based upon warranty, contract, tort or
otherwise, shall not exceed the actual purchase price paid by
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
TouchTunes to Bose for such Jukebox. In no event shall Bose be liable
to TouchTunes or TMC or any other person or entity for special,
incidental or consequential damages (including without limitation
loss of profits, loss of data or loss of use damages) arising out of
the design, manufacture, sale or delivery of the Jukeboxes.
4.2 Support and Maintenance. TouchTunes or, at TouchTunes' option, TMC
shall be solely responsible for providing maintenance and support to
users of the Jukeboxes, including maintenance and support relating to
the Jukeboxes included therein. Bose shall provide technical support
to maintenance and support to maintenance personnel of the Jukeboxes.
Any defects identified by TouchTunes or TMC after the commencement of
commercial shipments of the Jukeboxes and the expiration of the Bose
warranty shall be resolved by Bose at TouchTunes' or TMC's expense
and discretion, within two weeks, to the extent possible using
commercially reasonable efforts. Bose will support TouchTunes or TMC
with technical seminars for TouchTunes' or TMC's maintenance
personnel or by other methods as determined by Bose.
Support and Maintenance. Refer to Schedule G - Replacement Parts
Availability
4.3 Procurement Responsibility
TouchTunes will procure the computer (and all internal components
including the TouchTunes Sound card and the XCP card) and the UPS
directly from the suppliers and is responsible for the shipment of
these components to the Bose manufacturing facility, on consignment.
Bose will mount/secure these items into the Jukebox and perform all
tests as a complete system less hard drive. All defects found in the
TouchTunes supplied components are the responsibility of TouchTunes
unless such defects are Bose induced.
5. INTELLECTUAL PROPERTY RIGHTS
5.1 Ownership of Patents
Patent Rights Unilaterally Originated. Patent rights relating to
inventions originated solely by an employee or employees of one party
in connection with the design and development of the Jukebox shall
vest in such party.
Ownership of Patent Rights Jointly Originated. Patent rights relating
to inventions originated jointly by employees of Bose and TouchTunes
or TMC in connection with the design and development of the Jukebox
shall vest in Bose and TMC jointly, each party to have an equal and
undivided interest in such patent rights.
Other Rights. Except as provided above in this Section 5.1., TMC and
Bose shall each retain ownership of all intellectual property rights
relating to the Jukebox that are already owned by the respective
parties.
Licensee. TouchTunes is a licensee of the Fraunhaufer and Xxxxxxxx
for MMP and MP3 Technology.
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
5.2 Trademarks
Trademark License. Bose is the owner of the trademark "Bose" (both in
logo form and nonlogo form), which is registered with the United
States Patent and Trademark Office and similar offices or agencies in
various foreign countries (the "Trademark"). Bose hereby grants a
limited, nonassignable, nonexclusive license to TouchTunes to use the
Trademark either alone or in conjunction with other names, phrases or
logos approved in writing by Bose, solely on and in connection with
the Jukebox manufactured by, for or on behalf of TouchTunes.
TouchTunes and TMC agree to prominently display the Trademark on each
Jukebox and in all marketing literature relating to the Jukebox. This
limited license shall terminate on the date of termination of this
Agreement, except with respect to TouchTunes products incorporating
Jukeboxes that were purchased by TouchTunes from Bose prior to the
date of termination.
Marketing and Advertising. Bose, TouchTunes and TMC shall agree upon
guidelines for usage of the Trademarks by Bose, TouchTunes and TMC in
connection with the marketing or advertising of the Jukebox, and
Bose, TouchTunes and TMC shall comply with such guidelines. Bose,
TouchTunes and TMC agree that all national media advertising and all
other advertising copy of first impression, which contains any usage
of the Trademarks shall be subject to Bose, TouchTunes' and TMC's
approval of such usage, both as to style and context, prior to
release, which approval shall not be unreasonably withheld or
delayed.
TouchTunes, TMC and Bose agree to share marketing information for the
purpose of obtaining knowledge of customers and performance of the
system for future product enhancements. Upon reasonable notice from
Bose, TouchTunes or TMC shall provide to Bose if authorized by
operators, a list of contacts and installation sites for the Jukebox
within 30 days of the request.
TouchTunes and TMC agree not to offer on-screen advertising of
products and/or companies that jeopardize Bose Corporation's position
as a quality sound provider as provided in Schedule D, or which
violate advertising standards or standards of decency or good
taste,without prior written consent from Bose, which Bose shall not
unreasonably withhold. . Bose and TouchTunes shall annually review in
good faith the adequacy of the product categories outlined on
Schedule D."
Quality Assurance. TouchTunes and TMC shall use their best efforts to
provide Bose with accurate and timely field failure information. In
addition, Bose, as licenser of the Trademark, shall have the right to
inspect the processing, packaging and installation of all Jukeboxes
in connection with which the Trademark is used, for the limited
purpose of protecting and maintaining the standards of quality
established by Bose for products sold under the Trademark. TouchTunes
and TMC shall permit Bose Corporation's authorized personnel to enter
TouchTunes' and TMC's premises at all reasonable times, with
reasonable advance notice, to inspect TouchTunes' and TMC's
processing, packaging and installation operations relating to
Jukeboxes in connection with which the Trademark is used and to
inspect and test Jukeboxes to be sold under or in connection with the
Trademark. If Bose at any time finds that any Jukeboxes in connection
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
with which the Trademark is used are not being processed, packaged or
installed in accordance with this Agreement, Bose may notify
TouchTunes or TMC in writing of all deficiencies, and if TouchTunes
or TMC fails to take prompt action to correct all such deficiencies
Bose may, at its election, terminate the license granted pursuant to
Section 5.2 effective 30 days after serving written notice of such
termination unless such deficiencies are corrected within such time.
TouchTunes and TMC will "do their best efforts" to ensure that
connections to house systems will be at a sufficiently acceptable
sound quality to be determined by TouchTunes or TMC, and Bose.
Standards for quality sound Jukebox installations will be established
by TouchTunes or TMC and Bose based on the sound performance at
mutually agreed to reference sites. At the option of Bose, Bose will
make its best efforts to train TouchTunes or TMC to identify
performance of Jukebox systems that do not meet the agreed to
benchmark for quality sound. ("Jukebox systems" include secondary
products connected to the TouchTunes jukebox.) TouchTunes and TMC
will make their best efforts to notify Bose of all house systems
connected to Jukeboxes and the brand of product connected. Bose
reserves the right to review such installations.
Trademark Notice. TouchTunes and TMC shall cause to appear on
products and advertising materials using the Trademark, reasonable
legends, markings and notices indicating ownership by Bose of the
Trademark, acceptable in substance and form to both parties.
Reservation of Rights. Bose expressly reserves, and TouchTunes and
TMC expressly acknowledge, that Bose possesses the exclusive
ownership of the Trademark and all related statutory and common law
rights and privileges. Use of the Trademark by TouchTunes or TMC
shall inure to the benefit of Bose.
6. INTELLECTUAL PROPERTY INDEMNITY
6.1 By Bose
Indemnity. Except as provided below, Bose shall defend and indemnify
TouchTunes and TMC from and against any damages, liabilities, costs
and expenses (including reasonable attorneys' fees and court costs)
arising out of any claim that the Jukebox purchased and/or licensed
hereunder infringes a valid United States or Canadian patent or
copyright or infringes a trade secret of a third party, provided that
(i) TouchTunes shall have promptly provided Bose written notice
thereof and reasonable cooperation, information and assistance in
connection therewith, and (ii) Bose shall have sole control and
authority with respect to the defense, settlement or compromise
thereof. Should any Jukebox delivered hereunder become or, in Bose
Corporation's opinion, be likely to become the subject of such a
claim, Bose may, at its option, either procure for TouchTunes the
right to continue purchasing and using such Jukebox, or replace or
modify such Jukebox so that it becomes noninfringing. In such event,
Bose may withhold further shipments of infringing or potentially
infringing Jukeboxes.
Limitations. Bose shall have no liability or obligation to TouchTunes
and TMC hereunder with respect to any patent, copyright or trade
secret infringement or claim thereof based upon (i) compliance with
designs, plans or specifications of TouchTunes or TMC, (ii) use of
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
the Jukebox by TouchTunes or TMC in combination with devices or
products where the Jukebox would not itself be infringing, (iii) use
of the Jukebox by TouchTunes or TMC in an application or environment
for which it was not designed or contemplated, (iv) modifications of
the Jukebox by TouchTunes or TMC, or (v) any claims of infringement
of a patent, copyright or trade secret in which TouchTunes or TMC, or
any affiliate or customer of TouchTunes or TMC has an interest or
license. The foregoing states the entire liability of Bose with
respect to infringement of patents, copyrights and trade secrets by
the Jukebox or any part thereof or by their operation.
6.2 By TouchTunes and TMC. Except as provided below, TouchTunes and TMC
shall defend and indemnify Bose from and against any damages,
liabilities, costs and expenses (including reasonable attorneys fees
and court costs) incurred by Bose as a result of or arising from
TouchTunes' or TMC's activities under the Agreement, including,
without limitation, product liability, customer warranty and service
claims, provided that (i) Bose shall have promptly provided
TouchTunes and TMC written notice thereof and reasonable cooperation,
information and assistance in connection therewith, and (ii)
TouchTunes or TMC shall have sole control and authority with respect
to the defense, settlement or compromise thereof.
7. TECHNICAL AND COMMERCIAL INFORMATION
No proprietary information disclosed by either party to the other in
connection with this Agreement shall be disclosed to any person or entity
other than the recipient party's employees and contractors directly
involved with the recipient party's use of such information who are bound
by written agreement to protect the confidentiality of such information,
and such information shall otherwise be protected by the recipient party
from disclosure to others with the same degree of care accorded to its own
proprietary information. Information will not be subject to this provision
if it is or becomes a matter of public knowledge without the fault of the
recipient party, if it was a matter of written record in the recipient
party's files prior to disclosure to it by the other party, or if it was
or is received by the recipient party from a third person under
circumstances permitting its unrestricted disclosure by the recipient
party. Upon termination of this Agreement, each party shall promptly
deliver to the other all proprietary information of the other party in the
possession or control of such party and all copies thereof
Notwithstanding the foregoing, in this Section 7, TouchTunes and TMC shall
be considered collectively as a "party" while Bose shall be considered
individually as a "Party".
8. TERM OF AGREEMENT; TERMINATION
8.1 Term of Agreement. This Agreement shall continue in effect until
May 31, 2003. This Agreement shall be automatically extended for
successive one-year periods unless either party, on or before the
date six months prior to the commencement of any renewal period,
provides written notice to the other party of its election not to
extend the Agreement for an additional renewal period.
8.2 Termination for Cause. Notwithstanding the provisions of Section 8.1,
if either party shall default in the performance of its obligations
under this Agreement, including Bose repeated failure to meet
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
scheduled shipment dates except in cases of excusable delays as
defined in Section 9.3 or after any 3 month period starting Sept. 1,
2000 if TouchTunes Jukebox Purchase Orders are *** or more below the
monthly average of the annualized quantities as outlined in Schedule
B, the other party may serve written notice to the defaulting party
specifying the claimed default. The defaulting party shall use its
best efforts to correct any such default promptly. If the claimed
default is not corrected within such reasonable time as is agreed by
the parties, or within 30 days in the absence of such agreement, the
nondefaulting party shall have the right to terminate this Agreement
by delivering written notice of termination to the defaulting party
within 30 days following the expiration of such cure period.
8.3 Post Termination Rights and Obligations. The following rights and
obligations shall survive the expiration or termination of this
Agreement to the extent necessary to permit their complete
fulfillment or discharge:
(a) the right of Bose to receive payment for and the
obligation of TouchTunes to pay Bose for any Jukeboxes
shipped by Bose prior to the time of termination; and for
any production, prototype and development costs incurred
12 months prior to the time of termination which can be
reasonably substantiated by Bose.
(b) licenses in favor of customers of TouchTunes in respect of
products sold by TouchTunes prior to the termination of
this Agreement, and licenses in favor of TouchTunes in
respect of Jukeboxes that were purchased by TouchTunes
from Bose prior to the termination of this Agreement;
(c) the right of TouchTunes and of TMC to perform maintenance
and service relating to the Jukeboxes sold prior to the
termination of this Agreement;
(d) the obligations regarding confidentiality under Section 7;
and
(e) any cause of action or claim of either party because of
any breach or default by the other party prior to the
termination of this Agreement.
(f) In the event this contract is terminated, Bose will
provide to Touchtunes ASAP, all supplier molds, dies and
templates at a cost equivalent to the lower of either the
Net Book Value or the Fair Market Value. Bose will also
provide TouchTunes a list of all the Suppliers and a copy
of all Supplier contracts. Bose will assign to TouchTunes
and TMC all rights under such contracts and use its best
efforts to obtain all necessary consents to transfer such
contracts, if required.
8.4 Notwithstanding the foregoing, in Sections 8.1, 8.2 and 8.3 of this
Agreement, TouchTunes and TMC shall be considered collectively as a
"Party", while Bose shall be considered individually as a "Party".
9. MISCELLANEOUS
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
9.1 No Agency. This Agreement does not constitute Bose the agent or legal
representative of TouchTunes or of any subsidiary or affiliate of
TouchTunes, and does not constitute TouchTunes the agent or legal
representative of Bose. Neither party is granted any express or
implied right or authority to assume or to create any obligation,
agreement or undertaking on behalf of or in the name of the other or
to bind the other in any manner or thing whatsoever.
9.2 Authorization. Each party represents to the other that this Agreement
has been duly authorized, executed and delivered by it and that the
execution, delivery and performance of this Agreement will not
violate the provisions of any law, regulation, contract or court
order to which the party making this representation is subject or by
which it is bound.
9.3 Excusable Delays. Neither Bose nor TouchTunes shall be liable for any
loss or damage (including without limitation any special, incidental
or consequential damage) resulting from any delay in the performance
of any obligation hereunder which is due to any cause beyond its
control, including without limitations acts of nature, unavailability
of sources of energy, riots, wars, floods, epidemics, strikes or
slowdowns or acts or omission of the other party ("Unavoidable
Causes"). If at any time any party shall have reason to believe that
the performance of any of its obligations will not occur when
scheduled due to any Unavoidable Cause, such party shall provide
written notice to the other party indicating the cause of the delay.
Bose will use reasonable efforts to meet requested delivery dates,
but will not be liable for its failure to do so. Products for which
delivery is delayed due to any cause within TouchTunes control may be
placed in storage by Bose at TouchTunes risk and for its account.
TouchTunes shall be liable for all costs and expenses incurred by
Bose in holding or storing products for TouchTunes or at TouchTunes
request.
9.4 Assignment. Except as may be otherwise specifically permitted in this
Agreement, neither party may assign any of its rights or delegate any
of its duties under this Agreement without the prior written consent
of the other party (which shall not be unreasonably withheld or
delayed). Any attempt at assignment in violation of this Section 9.4
shall be void. Notwithstanding the foregoing: (I) either party may
cause any of its obligations under this Agreement to be performed by
one or more of its affiliates or subsidiaries not a party hereunder
(provided that such party shall remain responsible for the full
performance of all obligations of such party under this Agreement,
(ii) either party may assign this Agreement in connection with a
merger, consolidation or sale of all or substantially all of its
assets, (iii) TouchTunes and TMC shall have the right to assign to
each other any of their respective rights, duties and obligations
under this Agreement, and (iv) TouchTunes and TMC shall have the
right to assign this Agreement, and any rights, duties and
obligations under this Agreement to any affiliate or subsidiary, or
to lenders or other parties providing funding. The parties agree to
fully cooperate with each other and to execute any appropriate
document with respect to any assignment permitted under this
Agreement.
9.5 Notices. All notices, requests, consents and other communications in
connection with this Agreement shall be furnished in writing and
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
shall be sufficiently given if personally delivered or sent by
telecopy (effective as of the date of delivery) or sent by postage-
prepaid registered or certified mail (effective two days after being
so mailed) to the other party at the address specified below or such
other address as such party shall have specified in writing:
If to TouchTunes:
C/O: TouchTunes Digital Jukebox Inc.
0 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxx X0X 0X0
Attention: CEO or President
If to Bose:
Bose Corporation
Xxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Legal Department
9.6 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
9.7 Official Currency. Both parties agree that the currency to be used
for all calculations and payments shall be U.S. dollars.
9.8 Waiver. The waiver by either party of a breach or a default of any
provision of this Agreement shall not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any
delay or omission of the part of either party to exercise or avail
itself of any right, power or privilege that it has or may have under
the terms of this Agreement operate as a waiver of any right, power
or privilege.
9.9 Integration and Interpretation. This Agreement contains the full
understanding of Bose and TouchTunes with respect to the development,
purchase and sale of Jukeboxes and supersedes all prior agreements,
covenants, arrangements, communications, representations,
understandings or warranties, whether oral or written by or between
the parties relating to the subject matter hereof. In the event of
any inconsistency between the terms of this Agreement and any
purchase order, invoice or any other written instrument given
hereunder, the terms of this Agreement shall control.
9.10 Amendments. No waiver, alteration, modification or amendment of any
provisions of this Agreement or any Purchase Order hereunder shall be
binding unless made in writing and signed by authorized
representatives of both TouchTunes and Bose.
9.11 Expenses. Except as otherwise provided in this Agreement, each party
shall be responsible for its own costs and expenses in performing its
obligations under this Agreement.
9.12 Captions. Captions or section headings contained in this Agreement
are for convenience of reference only, and in no way define or limit
the scope of the provisions contained herein.
9.13 Counterparts. This Agreement may be executed in two counterparts,
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
both of which together shall constitute one agreement binding on all
parties.
9.14 Exclusivity. Bose and TouchTunes agree that, for the term of this
Agreement, neither party shall contract with a third party for
manufacture or purchase of jukeboxes. Bose agrees that it shall use
its best efforts to prevent the use of the Bose products and
trademark on any other jukebox product and any other sales materials
related to any other jukebox products. Both parties acknowledge and
agree that Bose products are available on the open market and may be
incorporated into jukeboxes without the knowledge or consent of Bose.
9.15 Notwithstanding the foregoing and unless the context suggests
otherwise, in Section 9 of this Agreement: (I) a reference to
"TouchTunes" shall be deemed to be a reference to both TouchTunes
Digital Jukebox, Inc. and TMC, and (ii) TouchTunes Digital Jukebox,
Inc. and TMC shall be considered collectively as a "party" while Bose
shall be considered individually as a "party".
9.16 The parties agree that this Amendment and all documents,
correspondence, notices, etc. relating to this Amendment shall be in
the English language. Les parties declarent qu'ils exigent que cet
amendement ainsi que tous les documents, correspondance, avis, etc. y
relatifs soient rediges en anglais.
EXECUTED as a sealed instrument as of the date first indicated above.
TOUCHTUNES DIGITAL JUKEBOX, INC.
Signature: /s/Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: CEO, President
BOSE CORPORATION
Signature: /s/Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: President
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE A-PRODUCT & TEST SPECIFICATION
- Reference Production Specification Document PS 195300 Rev. 01 (currently
being updated from PS 95300 Rev. 00).
Reference sections:
1.2 Summary Product Description
1.3 Product Goal
1.4 Jukebox Styling
- Reference Test Specification Documentation TS 195300 (currently being updated
from TS
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE B-PRODUCTION SYSTEMS PRICING
Jukebox delivered to TouchTunes_ from Bose(R) Corporation
(as described in Schedule A and Schedule C) ***
Freight, duty, excise, sales, use and all other taxes
are the responsibility of TouchTunes.
Note: Production Systems pricing is based on the following assumptions.
. Jukeboxes to be delivered to the shipping docks, at the Bose manufacturing
facility in Xxxxxx-Xxxxx Xxxxxx, Xxxxxx.
. Volume consistent with shipping schedule below.
. Pricing is subject to change due to variations in quantity, product
specification or Unavoidable Causes as defined Section 9.3.
Shipping Schedule
*** invoiced June 1, 2000 to May 31, 2001
*** invoiced June 1, 2001 to May 31, 2002
*** invoiced June 1, 2002 to May 31, 2003
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE C-PRODUCTION UNIT PART LIST
TouchTunes and Bose(R) agree to procure parts as defined in Production
Specification Document PS195300 Rev 01. If either party wishes to amend or
modify the agreed-upon specification relating to the Jukebox, such party shall
specify the desired change in writing to the other party. Each party agrees not
to unreasonably withhold its approval of any suggested change. Current versions
of the Production Specification Document will be maintained at Bose and
TouchTunes.
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE D-QUALITY SOUND PRODUCT CATEGORIES
TouchTunes will not provide on-screen advertisements for the following product
categories: . Home audio systems, loudspeakers and radios
. Aviation headsets and/or noise reduction headsets
. OEM automotive sound systems
. Installed and/or portable professional sound systems
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE E-TOUCHTUNES FINANCING OF
PURCHASES FROM BOSE
Payment to Bose for Jukeboxes shall be made in ***. Bose agrees to ship the
Jukeboxes *** except in cases of unavoidable and excusable delays.
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE F-JUKEBOX MANUFACTURING LOCATION
Bose(R) Corporation confirms that the Jukeboxes will be manufactured at the Bose
wholly owned subsidiary, Bose Canada Inc., located in Xxxxxx-Xxxxx, Xxxxxx,
Xxxxxx. Bose reserves the right to transfer Jukebox manufacturing to another
manufacturing facility, provided however that such change of manufacturing
venue will not result in Buffalo Grove landed cost increases for TouchTunes.
In the event of a change in manufacturing venue, Bose will notify TouchTunes in
writing six months prior to the change.
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
SCHEDULE G-REPLACEMENT PARTS AVAILABILITY
In accordance with Section 4.2 of the Contract, Bose(R) and TouchTunes_ agree to
the following with respect to replacement part availability.
. All Bose sound system parts or sub-assemblies defined in the Jukebox
xxxx of materials will be available from Bose for a period extending
five years after the last build of that series Jukebox has been
produced.
. It is possible that after the last build of a series of the Jukeboxes
some Bose parts may become obsolete or unavailable. In the event that
Bose parts become obsolete or unavailable, Bose will offer equivalent
parts where possible or notify TouchTunes that they must advance
purchase a lifetime buy of parts due to become obsolete or unavailable.
. For non-Bose manufactured parts, Bose will secure commitment from its
suppliers to provide replacement parts support directly to TouchTunes
for a period extending five years after the last build of a series of
the Jukebox has been produced. In the event that the non-Bose
manufactured parts become obsolete or unavailable, non-Bose suppliers
will offer equivalent parts where possible or notify TouchTunes that
they must advance purchase a lifetime buy of parts due to become
obsolete or unavailable.
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
AMENDMENT NO. 1
THIS AMENDMENT No. 1 ("Amendment No. 1") to the OEM Purchase and
Development Agreement, dated as of June 2, 2000, by and between TouchTunes
Digital Jukebox, Inc., a Canadian corporation ("TouchTunes") and Bose
Corporation, a Delaware corporation ("Bose") (the "Agreement"), is entered into
by TouchTunes and Bose as of August 9, 2000.
Background
A. Pursuant to the Agreement, TouchTunes and Bose work together to
develop digital jukeboxes designed to meet the specifications and
requirements of TouchTunes. The Agreement further contemplates that
Bose will manufacture such jukeboxes and supply them to TouchTunes.
B. TouchTunes and Bose desire to amend the Agreement to provide that the
terms and conditions of the Agreement shall be kept confidential.
Terms
NOW, THEREFORE, in consideration of and subject to each of the covenants,
representations, warranties, terms and conditions hereinafter set forth,
intending to be legally bound, TouchTunes and Bose hereby agree as follows:
1. All capitalized terms used but not defined in this Amendment No.1 will
have the respective meanings ascribed to them in the Agreement.
2. The Agreement is hereby amended to restate Section 3.5 in its entirety
to read as follows:
"Shipment; Title and Risk of Loss. TouchTunes shall arrange for
shipment of jukeboxes to the designated warehouse in accordance with the
shipment schedule specified by TouchTunes. Delivery of jukeboxes by
Bose Corporation to TouchTunes shall be Ex Works, Sainte-Xxxxx, Quebec.
Without regard to freight being prepaid or collect, title and risk of
loss shall pass to TouchTunes upon departure of truck from the Bose
manufacturing facility.
Bose acknowledges that it will provide necessary certificates of origin
or other necessary documents relating to the Jukeboxes in order for TMC
to import that Jukeboxes into the United States from Canada."
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
3. The Agreement is hereby amended to add a second paragraph to Section 7
of the Agreement to read in its entirety as follows:
"The parties hereto agree that this Agreement, the terms and conditions
contained herein ("Confidential Information"), shall be treated as
confidential, and each party will and will cause its directors,
officers, attorneys and advisors to use reasonable measures and will
supervise its personnel so as to prevent the disclosure of such
Confidential Information. Notwithstanding the foregoing, nothing in
this Section 7 shall preclude either party from disclosing Confidential
Information if such information is requested by any federal or state
regulatory authority; provided, however, that if a party is required by
law or regulation to disclose any Confidential Information, such party
will promptly notify the other party of any request for such disclosure
so that the other party may seek a protective order or other appropriate
remedy or waive compliance with the applicable provisions of this
Agreement. If such protective order or other remedy is not obtained,
the disclosing party shall disclose only such Confidential Information
as is legally required to be disclosed, and shall use its best efforts
to ensure that confidential treatment is accorded to the Confidential
Information so disclosed. No party shall use any Confidential
Information for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. This Section 7 shall
survive the termination of this Agreement."
4. This Amendment No. 1 may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party
whose signature appears thereon, and all of which shall together
constitute one and the same instrument.
5. Except as expressly amended by this Amendment No. 1, the Agreement shall
continue in full force and effect in accordance with its terms and
conditions. This Amendment No. 1 is hereby incorporated by reference
into the Agreement and made a part thereof.
[Signatures begin on the next page]
[*** INDICATES THAT MATERIAL HAS BEEN OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST, WHICH THE COMPANY HAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to be duly executed by an authorized officer as of the date first above
written.
TOUCHTUNES DIGITAL JUKEBOX, INC.
By: /s/Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: CEO, President
BOSE CORPORATION
By: /s/Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: President
