MUSIC AND SERVICE AGREEMENT
This Music and Service Agreement (this "MSA") entered into as of ___________, 200_, by and between TouchTunes™ Music
Corporation, a Nevada corporation ("TouchTunes") and ___________________________________, a __________ corporation
WHEREAS TouchTunes markets and distributes state-of-the-art digital coin-operated jukeboxes and other hard drive based
WHEREAS Operator has business clients (each, a "Location Owner") who will permit Operator to place and install jukeboxes
provided by TouchTunes (the "TT Jukeboxes") in the business establishments of the Location Owner situated in the United States
(the "Location Owner Establishments"); and
WHEREAS Operator wishes to have TouchTunes provide, and TouchTunes wishes to provide Operator with, certain services
with respect to the TT Jukeboxes and a Tune Central™ product that may be connected to the TT Jukebox (“Tune Central”)
pursuant to the terms hereof; and
WHEREAS This agreement shall supersede and replace any previous music and service agreement that is currently in effect,
effective as of the next expiration date of such agreement; and
WHEREAS Unless otherwise agreed upon in writing by TouchTunes and Operator, this MSA shall apply to (i) TT Jukebox(es)
and Tune Central(s) delivered to Operator on or hereafter the date hereof, and (ii) TT Jukebox(es) and Tune Central(s) for which
previous music and service agreements are currently in effect, effective as the expiration date of such agreement(s); and
WHEREAS In addition to applying this MSA, Tune Central(s) shall be governed by Tune Central Agreements entered into
between Operator and TouchTunes.
NOW THEREFORE, in consideration of the mutual promises and warranties contained in this MSA, the parties hereby agree as
1. Music Services.
TouchTunes will make available a wide range of musical titles ("Titles") for selection by Operator upon the following terms:
(a) Each TT Jukebox delivered to Operator will be pre-loaded with up to 1,700 Titles on its hard disk.
(b) Each Tune Central delivered to Operator shall have the capability to store in excess of 100,000 Titles on its hard drive. Such
Titles shall be accessible once Operator has connected Tune Central to a TT Jukebox.
(c) During the first sixty (60) days following initial installation by Operator of a TT Jukebox at a Location Owner Establishment,
Operator will have, subject to the TT Jukebox having local internet access from Location Owner Establishment using TouchTunes’
internet service provider, the unlimited right to replace any existing Title stored on the TT Jukebox’s hard disk or to add additional
Titles by downloading another Title from the central music library of TouchTunes.
(d) During the first thirty (30) days following initial installation by Operator of each TT Jukebox at a Location Owner
Establishment which does not have local internet access, as described in paragraph (c) above, Operator shall have, the unlimited
right to replace any existing Title stored on the TT Jukebox’s hard disk or to add additional titles by downloading another Title
from the central music library of TouchTunes.
(e) Paragraphs (c) and (d) hereof shall not apply to subsequent installations by Operator of a TT Jukebox when relocating TT
Jukebox to different Location Owner Establishments.
(f) After the expiration of the sixty (60) day period described in paragraph (c) above, or the thirty (30) day period described in
paragraph (d), as the case may be, Operator may download Titles provided for in Annex A of this MSA.
(g) Technical support from TouchTunes to Operator will be available via a special service telephone number. Operator agrees
that it will not disclose this special service telephone number to any Location Owner or any other person .
2. Installation of TT Jukeboxes.
2.1 Operator shall notify TouchTunes in writing of the date and place of each installation and shall notify TouchTunes of any TT
Jukebox that is non-operational for more than forty-eight (48) hours following its installation.
2.2 Operator shall provide TouchTunes with the name, address, city, state, zip code, telephone number, fax number, contact,
location type and the location’s clientele profile with respect to each Location Owner Establishment in which a TT Jukebox will be
or is installed. Operator shall insure that each TT Jukebox installed shall have uninterrupted access to a standard grounded AC
(110 volts) continuous electrical power source and a 24-hour operational standard analog telephone line as specified in the TT
Jukebox Operator Manual.
2.3 Operator must ensure that all TT Jukeboxes communicate with TouchTunes’ central server on at least a monthly basis.
2.4 If the Music Service is connected by Operator to a jukebox that was originally manufactured by a company other than
TouchTunes and that has been modified using a kit supplied by TouchTunes, then Operator shall post the following notice on the
front of the jukebox in a place clearly visible to the public: “This jukebox has been modified using a kit manufactured by
TouchTunes Music Corporation. The audio and video content available on this jukebox is provided by TouchTunes Music
Corporation. TouchTunes Music Corporation has no affiliation with the manufacturer of this jukebox.”
MSA Ver. 4 – S – 2004 1/8
3.1 TouchTunes shall be solely responsible for the payment of any royalties or payments owing to performers, artists or their
representatives associated with the TT Jukebox provided it is operated by Operator in accordance with this MSA.
3.2 Operator shall apply promptly for (and shall be solely responsible for the payment of any and all fees and expenses, including,
without limitation, personal property taxes, associated with) any state and local licenses required for the installation and/or
operation of each TT Jukebox.
4. Ownership and Right to Assign.
4.1 Operator acknowledges that TouchTunes has, in connection with certain of TouchTunes’ financing arrangements, assigned
and set over and may in the future assign and set over to TouchTunes’ lenders (the "Lenders") all of TouchTunes’ right, title and
interest in, to and under this MSA and Operator hereby consents to such assignment.
4.2 Upon termination of this MSA for any TT Jukebox or Tune Central unit, TouchTunes shall disable and reformat the hard drive
of such TT Jukebox or Tune Central unit, remove all music software, and intellectual property from said hard drive and all rights
connected with the hard drive shall terminate. Operator may retain ownership of the hard drive. Operator acknowledges that
upon the termination of this MSA, all rights to download, publicly perform or otherwise use the music, software and intellectual
property contained in or stored on the hard drive shall terminate.
5. Billing and Amounts Due and Owing to TouchTunes.
5.1 In consideration of the service provided hereunder, Operator shall pay licensing fees to TouchTunes pursuant to Annex A
hereto (the “Fees”)
5.2 As further detailed in Annex A, billing for the Fees will commence on date upon which the TT Jukebox first communicates
with the TT central server (“Start Bill Date”).
5.3 Operator agrees to abide by the methods of calculating and paying the Fees and any other amounts due and owing to
TouchTunes in accordance with the provisions of Annex A, entitled Fees, Billing and Payment Procedures, which is hereby
incorporated and made part of this MSA.
5.4 The parties hereby agree that TouchTunes shall have the right to amend any and all provisions of Annex A attached hereto,
subject to a thirty (30) day written notice issued by TouchTunes (“Amendment Notice”). Any amendments to Annex A shall apply
to all TT Jukebox(es) and Tune Central units delivered to Operator, or renewed hereunder, following the Amendment Notice.
6. Promotions and Advertising Revenues.
6.1 To supplement revenues, TouchTunes shall attempt to obtain sponsors who will provide advertisements to be broadcast or
displayed on each TT Jukebox subject to this MSA. Operator will make every effort to ensure that Location Owners permit such
advertisements on each TT Jukebox installed at said Location Owner Establishments. Promotions and advertisements to be
broadcast or displayed on any TT Jukebox subject to this MSA shall be in accordance with all applicable laws and regulations.
6.2 Weekly net advertising contributions on a per TT Jukebox basis shall be shared by TouchTunes and Operator as detailed in
Annex A of this MSA.
6.3 At the request and sole cost of Operator and no more than once per calendar year, TouchTunes shall provide Operator with a
certificate from its auditors as to the amount of Operator’s share of net advertising contributions for the preceding fiscal year of
7.1 Operator understands and agrees that nothing in this MSA or otherwise confers on Operator any exclusive right or interest in
any given territory, or type of establishment. Operator recognizes that TouchTunes may have previously leased and/or sold, and
TouchTunes may continue to lease and/or sell, TT Jukeboxes to or in conjunction with other third party operators.
7.2 TouchTunes recognizes that Operator may have previously installed and/or operated other types of entertainment or
amusement systems that are not covered by this MSA. TouchTunes agrees that Operator shall not be in breach of this MSA if
Operator continues to install and/or operate such other systems.
8.1 TouchTunes agrees that it will not operate TT Jukeboxes or any coin or currency-operated or pay-for-play music
entertainment equipment in Location Owner Establishments to compete with Operator. Nothing in this MSA shall prevent
TouchTunes from installing or seeking to install TT Jukeboxes or other equipment in other venues or types of establishments of
any kind whatsoever. The parties hereto acknowledge that due to the innovative design and technology of the TT Jukeboxes,
TouchTunes is uniquely equipped to develop new markets.
9. Operator’s Representations, Warranties and Covenants.
9.1 Operator represents, warrants and covenants solely for the benefit of TouchTunes that:
(a) Operator shall install each TT Jukebox subject to this MSA only in Location Owner Establishments located within the United
States for which Operator has procured appropriate rights to install and operate such TT Jukebox and shall not install them in any
establishments outside the United States. For purposes of this MSA, the installation of TT Jukeboxes shall be limited to the 48
(b) Operator shall not alter, remove or replace any trademark or notice thereof or notice of patent, copyright or other such
proprietary marking or insignia displayed or otherwise appearing on any TT Jukebox subject to this MSA.
(c) Operator shall not make copies of TouchTunes’ copyrighted materials, including any printed matter concerning any TT
Jukebox provided to Operator without TouchTunes’ prior written consent, nor shall Operator infringe on any trademark, patent,
MSA Ver. 4 – S – 2004 2/8
copyright or any other intellectual property right in any way associated with the operation of any TT Jukebox including with
respect to the Hard Drive.
(d) Operator shall not install any TT Jukebox in any Location Owner Establishment not operated in all material respects in
accordance with applicable laws. Operator shall comply with all laws and ordinances applicable to the installation and/or
operation of TT Jukeboxes and in particular shall use its best efforts to comply with all laws or ordinances regulating noise or
decibel levels or requiring abatement procedures for noise emissions.
(e) Operator has the right, power and authority to enter into this MSA and to perform all of its obligations hereunder.
(f) The performance of the terms of this MSA and of Operator’s obligations to TouchTunes hereunder will not breach any other
agreement by which Operator is bound.
(g) Operator shall not make use of the Hard Drive or any of the music, software or intellectual property associated with any TT
Jukebox during the term of this Agreement. The Operator shall keep the Hard Drive inside each TT Jukebox free and clear of any
and all claims, liens or encumbrances, except for those placed on such Hard Drive by TouchTunes.
(h) Operator shall not modify or adjust in any manner the bios settings for the Hard Drive (the "Bios Settings") at any time. In the
event that the Bios Settings are modified or adjusted, TouchTunes’ product warranty and representations and warranties herein
shall be terminated. Operator will make every effort to ensure that Location Owners do not modify or adjust in any manner the
Bios Settings at any time.
(i) Operator shall post the notice set forth in paragraph 2.4 above before installing any such jukebox.
(j) Operator shall be solely responsible for the installation and assembly of any conversion kit provided by TouchTunes. Such
installation and assembly shall comply with all safety and regulatory requirements.
10. TouchTunes’ Representations and Warranties.
10.1 TouchTunes represents and warrants solely for the benefit of the Operator that:
(a) TouchTunes has the right, power and authority to enter into this MSA and to perform all of its obligations hereunder.
(b) The performance of the terms of this MSA and of TouchTunes’ obligations to Operator hereunder will not breach any separate
agreement by which TouchTunes is bound.
(c) Each TT Jukebox subject to this MSA provides musical entertainment, and may be operated in the United States as permitted
11.1 If Operator (a) fails to pay any Fee, amount owing, charge, or other amount herein provided, within fifteen (15) days after the
same is due and payable and such failure remains unremedied fifteen (15) days after written notice thereof from TouchTunes; (b)
fails to observe any provisions, covenants or undertakings referred to in paragraphs, 9.1(b), 9.1(c), 9.1(d), 9.1(g), 9.1(h), 9.1(i) or
9.1(j); (c) fails to observe, keep or perform any other provision, covenant or undertaking of this MSA and such failure remains
unremedied fifteen (15) days after written notice thereof from TouchTunes; (d) becomes insolvent or bankrupt or becomes a debtor
in a bankruptcy proceeding; or (e) makes an assignment for the benefit of creditors or if a receiver or trustee is appointed over a
substantial portion of Operator’s property (either of such events, a "Default"), then TouchTunes shall have the right to any one or
more of the following remedies:
(i) To terminate this MSA.
(ii) To take possession of each Hard Drive inside a TT Jukebox subject to this MSA, without demand or notice,
wherever the same may be located, without any court order or other process of law. Operator hereby waives any and all damages
occasioned by such taking or repossession, and Operator shall hold TouchTunes harmless for any and all damages and claims that
might be asserted by a Location Owner or other third parties that might be occasioned by such taking or repossession. Any such
taking or repossession shall not constitute a termination of this MSA and Operator shall be and remain liable for the full
performance of all obligations on the part of Operator to be performed under this MSA, unless TouchTunes expressly so notifies
Operator in writing to the contrary. Operator will make every effort to ensure that Location Owners permit TouchTunes to enforce
its rights of repossession under this paragraph (ii), and to ensure that each Location Owner waives any and all damages occasioned
by such taking or repossession.
(iii) To sue for and recover all amounts owing hereunder (including amounts described in (iv) below) with respect to
each TT Jukebox theretofore delivered to Operator.
(iv) To declare the entire amount owing hereunder, including without limitation all Fees then accrued and thereafter
accruing (through the term of this MSA for the minimum weekly Fees payable pursuant to Annex A hereto), immediately due and
payable as to each TT Jukebox theretofore delivered to Operator, without notice of demand to Operator.
(v) To pursue any other remedy at law or in equity.
Any such remedies are cumulative, and may be exercised concurrently or separately.
12. Governing Law, Suits and Arbitration.
12.1 This MSA shall be governed by the laws of the State of New York. If any provision of this MSA is found to be illegal or
unenforceable, such a finding shall not invalidate the remaining provisions of this MSA.
12.2 Alternatively, but solely at the option of the aggrieved party, the parties agree that claims, disputes or controversies arising
from or in connection with this MSA may be resolved in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and the judgment upon the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof and shall be final and binding upon the parties.
MSA Ver. 4 – S – 2004 3/8
12.3 In the event any action or proceeding to enforce any term or provision of this MSA is instituted, the prevailing party shall be
awarded all costs and expenses incurred in connection therewith, including reasonable attorney’s fees and expert witness fees, and
in the case of an arbitrated dispute, the non-prevailing party shall be responsible for arbitral fees and expenses.
12.4 In any suit, action or proceeding brought by Operator against TouchTunes, Operator agrees that Operator’s damages, if any,
shall be limited to direct damages only, and Operator shall make no claim for, and shall not be awarded, any special, contingent,
incidental, or consequential damages even if TouchTunes knows or should have known of the possibility of such damages, nor
shall damages for lost profits, business interruption, opportunity costs or the like be awarded to Operator.
13. Term and Termination.
13.1 The duration of this MSA for each TT Jukebox shall be for a term of: (one must be circled)
A. 12 months
B. 24 months
C. 36 months at $149.00
commencing on the day each TT Jukebox has been delivered to Operator, or the effective date the Operator’s previous MSA was
superseded and replaced by this Agreement, as the case may be (the “Term”) . Provided that neither party has delivered a written
notice of non-renewal to the other party thirty (30) days prior to the end of the Term, the Term shall be renewed automatically for
consecutive periods of twelve (12) months under the same terms and conditions of this MSA, with Fees prevailing at the time of
renewal as described in Annex A, or as amended pursuant to paragraph 5.3 herein. This agreement and the obligation of
TouchTunes to continue to provide TT Jukeboxes shall be conditional upon TouchTunes being satisfied at all times during the
term of this MSA with the financial situation and credit worthiness of the Operator.
14.1 Operator shall indemnify and hold harmless TouchTunes, its affiliates, directors, officers, employees and agents, from and
against any and all claims, losses, liabilities, damages, and expenses, including without limitation, reasonable attorney and expert
witness fees, that result from a breach or alleged breach of any of warranties, representations and covenants of Operator set forth
herein in article 9
14.2 Subject to the limitations of paragraph 12.4 of this MSA, TouchTunes shall indemnify and hold Operator harmless from and
against all claims, losses, liabilities, damages, expenses and costs including, without limitation, reasonable attorney and expert
witness fees, which result from a breach of any of the warranties provided by TouchTunes herein or incurred by the settlement or
avoidance of any such claim. EXCEPT AS IS SPECIFICALLY AND EXPRESSLY STATED IN TOUCHTUNES’ PRODUCT
WARRANTY AND PARAGRAPH 14.2 TOUCHTUNES MAKES NO WARRANTIES, EITHER EXPRESS OR IMPLIED, AS
TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF ANY TT JUKEBOX,
ITS MERCHANTABILITY, OR ITS FITNESS FOR ANY PARTICULAR PURPOSE.
15.1 In the event that either party is unable to perform any of its obligations under this MSA, or to enjoy any of its benefits because
of natural disaster, actions or decrees of governmental bodies or labor disputes not the fault of the affected party (a "Force Majeure
Event"), the party who has been so affected shall immediately give notice to the other party and shall do everything possible to
resume performance. Upon receipt of such notice by the other party, all obligations under this MSA shall be immediately
suspended (except for Operator’s payment obligations with respect to any amounts due prior to the occurrence of the Force
Majeure Event). If the period of non-performance exceeds thirty (30) calendar days from the receipt of notice regarding the Force
Majeure Event, the party whose ability to perform has not been so affected may terminate this MSA by giving notice to the other
15.2 All notices or other documents under this MSA shall be in writing and delivered personally or by facsimile or mailed by
certified mail, postage prepaid, addressed to the parties at their last known business addresses.
15.3 The titles to the paragraphs of this MSA are solely for the convenience of the parties, and are not an aid for the interpretation
of this MSA.
15.4 This MSA shall be interpreted according to its terms, without any strict construction in favor for or against either party.
15.5 This MSA does not confer or convey any legal rights upon Operator as a partner of TouchTunes, and the parties expressly
disclaim any partnership interest or joint venture arising by virtue of this MSA. Except as otherwise expressly provided for in this
MSA, neither party to this MSA shall be considered the legal representative or agent of the other party to the MSA, nor shall any
party hereto have the right or authority to assume, create or incur any liability or obligation, express or implied, against, in the
name of or on behalf of any other party hereto.
15.6 With the exception of any of the Exhibit(s) and Schedule(s) referred to this MSA, and Tune Central Agreements, this
instrument constitutes the entire agreement between TouchTunes and Operator, and this MSA shall not be amended, altered or
changed except by a written agreement signed by the parties.
MSA Ver. 4 – S – 2004 4/8
15.7 Operator agrees to provide TouchTunes with such financial information with respect to Operator as TouchTunes shall
reasonably request, as well as bank and other references, and authorizes TouchTunes to contact these references and perform any
credit verification procedures on a periodic basis as TouchTunes deems appropriate. TouchTunes shall keep such information
15.8 Operator shall not assign this MSA without the prior written consent of TouchTunes, which consent shall not be unreasonably
withheld. TouchTunes reserves the right to assign this MSA to any other party or entity. This MSA shall inure to the benefit of,
and is binding upon, the parties and their personal representatives, successors and permitted assigns.
15.9 The terms and conditions contained herein and the obligations of the parties hereto are separate and distinct from any leasing
or financing arrangements or agreements entered into by either party with respect to the TT Jukebox(es).
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day first written
TouchTunes™ Music Corporation [Insert Name]
MSA Ver. 4 – S – 2004 5/8
ANNEX A—BILLING AND PAYMENT PROCEDURES
Operator agrees to pay all Fees due and owing to TouchTunes for each TT Jukebox and Tune Central, as provided for in this
Annex A. The weekly music and service fees (“Weekly Fees”) payable by Operator to TouchTunes shall be determined based on
the billing programs provided for in this Annex A which Operator has selected for each Jukebox and which Operator. Operator
shall advise TouchTunes in writing of the billing program selected for each TT Jukebox or Tune Central.
1. Elite Program
(a) Under the Elite Program, Operator shall be responsible for collecting the revenues from each TT Jukebox. The
Weekly Fees payable by Operator to TouchTunes shall be 23% of the adjusted gross weekly revenues generated by each TT
Jukebox, excluding “Weekly Tune Central Gross Revenues”, as defined herein. “Weekly Tune Central Gross Revenues” shall be
the amount of revenue generated through the selection of Tune Central Titles. As used in this Annex, "adjusted gross weekly
revenues" is the amount remaining after deductions by Operator for payments made by Operator for certain taxes, if applicable, as
provided for in paragraph 10 of this Annex A. TouchTunes’ determination of adjusted gross weekly revenues shall be binding on
Operator unless Operator presents prima facie evidence of TouchTunes’ error.
(b) The minimum and maximum Weekly Fees due and owing to TouchTunes for each installed TT Jukebox is $29.95
and $54.95, respectively, plus any and all applicable taxes.
(c) Operator shall provide TouchTunes with immediate written notice when a TT Jukebox is not installed in a location
for whatever reason. In such event, the minimum Weekly Fees shall be reduced to $12.95. In order to qualify for this reduced fee,
no coinage or music plays can be registered by such TT Jukebox for the full week for which the reduced Weekly Fee is being
claimed. Any re-installation of the TT Jukebox shall automatically terminate any grace period and Operator shall be required to
pay Fees as of the date of re-installation
(d) In addition to the Weekly Fees described in paragraphs 1(a) and 1(b) hereof, Operator shall pay TouchTunes $0.18
per Title played from Tune Central (“Tune Central Title”), plus any and all applicable taxes.
(e) Notwithstanding paragraph (c), any Tune Central rented by Operator from TouchTunes under a Tune Central
Agreement (“TCA”) shall be governed by the terms and conditions of the TCA, including Operator paying $0.35 per Tune Central
Title, plus any and all applicable taxes, as defined in the TCA.
(f) Notwithstanding anything in this agreement to the contrary, in the event that Operator offers at least 20% but less
than 40% of selected Titles on any TT Jukebox free of charge (no money required to be inserted into the TT Jukebox to play such
Title), a background music fee (“Background Music Fee”) of $7.50 per week will be added to the Weekly Fees provided for in
paragraphs 1(a) and 1(b) herein. In the event that Operator offers 40% but less than 80% of selected Titles on any TT Jukebox free
of charge, a Background Music Fee of $15.00 per week will be added to the Weekly Fees provided for in paragraphs 1(a) and 1(b)
herein. In the event that Operator offers 80% or more of the selected Titles on any TT Jukebox free of charge, the TT Jukebox will
be deemed to be a background music system, and will be charged a fixed weekly Background Music Fee of $69.95. All Weekly
Fees and Background Music Fees charged by TouchTunes hereunder, will be charged with the applicable sales and use taxes.
2. Fixed Rate Program - With Basic Fee.
(a) The Weekly Fees payable by Operator to TouchTunes for each TT Jukebox shall include a $12.95 Basic Music and
Service Fee, plus $0.04 per Title played on each TT Jukebox, plus any and all applicable taxes. Titles that have been selected and
paid for that do not play (i.e.; “Overplay”), as well as any Titles played as background music or free plays shall be deemed to be
played Titles for the purpose of determining the Weekly Fees, as set forth in this paragraph.
(b) In addition to the Weekly Fees described in paragraph 2 (a) hereof, Operator shall pay TouchTunes $0.18 per Tune
Central Title, plus any and all applicable taxes.
(c) Notwithstanding paragraphs 2(a) and 2(b) hereof, any Tune Central rented by Operator from TouchTunes under a
Tune Central Agreement (“TCA”) shall be governed by the terms and conditions of the TCA, including Operator paying $0.35 per
Tune Central Title plus any and all applicable taxes, as defined in the TCA.
3. Ultra 16 Program
(a) Under the Ultra 16 Program, Operator shall be responsible for collecting the revenues from each TT Jukebox. The
Weekly Fees payable by Operator to TouchTunes shall be 16% of the adjusted gross weekly revenues generated by each TT
Jukebox. As used in this Annex, "adjusted gross weekly revenues" is the amount remaining after deductions by Operator for
payments made by Operator for certain taxes, if applicable, as provided for in paragraph 10 of this MSA. TouchTunes’
determination of adjusted gross weekly revenues shall be binding on Operator unless Operator presents prima facie evidence of
(b) In addition to the Weekly Fees described in paragraph 3(a) hereof, Operator shall pay TouchTunes $12.95 per week
for each TT Jukebox whether it has been installed in a Location Owner Establishment, or not, plus any and all applicable taxes.
(c) The maximum Fees due and owing to TouchTunes for each TT Jukebox per week is $79.95, plus any and all
(d) Notwithstanding paragraphs 3(a), 3(b) and 3(c) hereof, any Tune Central rented by Operator from TouchTunes under
a Tune Central Agreement (“TCA”) shall be governed by the terms and conditions of the TCA, including Operator paying $0.17
per Tune Central Title, plus any and all applicable taxes, as defined in the TCA.
MSA Ver. 4 – S – 2004 6/8
(e) Notwithstanding anything in this MSA to the contrary, in the event that Operator offers at least 20% but less than
40% of selected Titles on any TT Jukebox free of charge (no money required to be inserted into the TT Jukebox to play such
Title), a background music fee (“Background Music Fee”) of $7.50 per week will be added to the Weekly Fees provided for in
paragraphs 3(a) 3(b) and 3(c) herein. In the event that Operator offers 40% but less than 80% of selected Titles on any TT Jukebox
free of charge, a Background Music Fee of $15.00 per week will be added to the Weekly Fees provided for in paragraphs 3(a), 3(b)
and 3(c) herein. In the event that Operator offers 80% or more of the selected Titles on any TT Jukebox free of charge, the TT
Jukebox will be deemed to be a background music system, and will be charged a fixed weekly Background Music Fee of $94.95,
in lieu of Weekly Fees provided for in paragraphs 3(a), 3(b) and 3(c) herein. All Weekly Fees and Background Music Fees
charged by TouchTunes hereunder, will be charged with the applicable sales and use taxes.
4. Billing Program Change Fee Operator shall have the right to change the billing program for a TT Jukebox to billing
programs described in this Annex A. The effective date of any change shall be the Monday following the week Operator’s request
is received in writing by TouchTunes. All such changes requested by Operator shall be subject to a $149 administration fee.
5. Term & Price Protections. The original term of a Music & Service Agreement shall be for up to (2) two years. Operator
shall have the option to extend the MSA, with the same terms and conditions, including pricing. Operator shall have the option to
purchase one additional year at a price of $149. Contract extension must be decided and paid for by Operator prior to TouchTunes
delivering TT Jukebox to Operator.
6. Title Downloads. Title Downloads Operator may download a maximum of 365 Titles per twelve (12) month period,
commencing upon the Start Bill Date of the TT Jukebox. The downloading cost to Operator for each Title in excess of the 365
maximum per year is $1.50, payable to TouchTunes within thirty (30) days following the date of the invoice.
7. Revenue Enhancement. Operators subscribing to TouchTunes Revenue Enhancement Program (REP), shall pay $2.95 per
week for each TT Jukebox on REP and communicating with TouchTunes central servers via internet. TT Jukeboxes on REP and
communicating with TouchTunes central servers via toll-free telephone number shall pay $5.95 per week.
8. Promotion & Advertising
Weekly net advertising contributions on a per TT Jukebox basis shall be shared by TouchTunes and Operator as follows: 90%
shall be to the account of TouchTunes and 10% to the account of Operator. For purposes hereof, "net advertising contributions"
shall mean advertising revenues of TouchTunes less any commissions, provisions, reserves, and all other direct costs incurred by
TouchTunes to generate advertising revenues. However, if Operator or a Location Owner declines to broadcast or display an
advertisement in one or more locations, the Operator’s share in net advertising contribution on a particular advertisement shall
decrease proportionately (based on the number of TT Jukeboxes Operator has placed in such Location Owner Establishment(s)).
Any net advertising contribution payments owing to Operator hereunder shall be paid thirty (30) days following the end of each
calendar quarter. In the event that any payments to be made to TouchTunes from Operator pursuant to this MSA shall be past due
(such payments "Overdue Amounts"), TouchTunes shall have a right of offset against Operator and shall retain any net advertising
contribution sharing proceeds to which Operator would otherwise be entitled under this paragraph until such time as all Overdue
Amounts have been satisfied. Should Operator not provide TouchTunes with accurate and complete Location Owner
Establishment information as provided for in Section 2 herein, Operator shall not be entitled to any net advertising contributions
under this paragraph.
(a) Remittances to TouchTunes for any amounts due and owing by Operator shall be made by electronic fund transfer as
contemplated by Article 4A of the Uniform Commercial Code. Prior to the date Operator installs its first TT Jukebox at a
Location Owner Establishment, Operator shall have executed and endorsed all documents necessary to establish an electronic fund
transfer procedure between Operator’s bank and TouchTunes’ bank. Operator shall pre-authorize TouchTunes and its bank to
make regular periodic withdrawal payments from Operator’s accounts for the amounts due to TouchTunes pursuant to the
Agreement and this Annex thereto. Operator shall maintain an account sufficiently funded to satisfy the payments as they become
due and owing to TouchTunes. Any electronic fund transfer that is unsuccessful due to insufficient funds will result in a $35.00
service charge per occurrence payable by Operator to TouchTunes. TouchTunes through its bank shall execute electronic fund
transfers for each monthly billing cycle (which cycle begins on the Monday of the week of the Start Bill Date for each TT
Jukebox). Each regular monthly billing cycle thereafter commences on the first Monday in each month and ends on the Sunday of
the week beginning with the last Monday of such month. TouchTunes shall provide an invoice to Operator 96 hours prior to
TouchTunes’ bank execution of any fund transfers.
(b) All amounts due and owing or otherwise payable to TouchTunes shall bear interest at an annual rate equal to the lower of 24%
or the maximum rate permitted by applicable law. Notwithstanding the foregoing, such specified rate of interest shall not excuse
or be construed as a waiver of Operator’s obligation to timely provide any and all payments owed to TouchTunes. Operator shall
be responsible for costs of collections of the amounts due to TouchTunes, including applicable interest.
MSA Ver. 4 – S – 2004 7/8
10. Gross Jukebox Revenue. Sales and other taxes assessed on gross revenues generated by TT Jukeboxes operated by Operator
(except for income taxes of TouchTunes or Operator) shall be paid by Operator from gross revenue before the remaining revenues
are subject to calculation of the Weekly Fees as provided for in this Annex A. Upon request, Operator shall provide TouchTunes
with evidence satisfactory to TouchTunes that Operator has paid such taxes. Sales or use tax or similar types of tax due under state
or local law for amounts due and owing to TouchTunes that are paid by TouchTunes will be added to amounts billed to Operator.
11. Billing Adjustments In extraordinary and unusual circumstances, as mutually agreed to by both parties, credits issued to
Operator will be reflected as billing adjustments for the billing period as determined and agreed to by the parties. In order to avoid
disruption to the regular billing cycle and the corresponding payment of the regular amounts due and owing to TouchTunes by
Operator, TouchTunes may issue separate invoices or credits for exceptional billing situations, or reflect such credits on the
subsequent monthly invoice.
MSA Ver. 4 – S – 2004 8/8