BANG & OLUFSEN AMERICA, INC.
PRIME SITE MARKETING AGREEMENT (UNION SQUARE)
This Agreement. made as of the 6th day of January, 1999, between Bang &
Olufsen America, Inc., a Delaware corporation (hereinafter referred to as "BOA")
and Xxxxxx Electronics, Inc., a New York corporation whose principal place of
business is 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred
to as "Dealer") and which desires to do business as provided herein at certain
retail space commonly known as 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx (hereinafter
referred to as the "Premises"), under the assumed name of Bang & Olufsen - Union
Square
WHEREAS, BOA is the exclusive distributor in the United States of high
quality audio and video products produced by Bang & Olufsen a/s of Denmark and
its subsidiaries and affiliates (hereinafter collectively referred to as "B&O
a/s") and sold under B&O's Proprietary Marks (as defined below), including the
trademark "Bang & Olufsenr",
WHEREAS, in furtherance of the Prime Site System (as defined below), BOA
will grant to selected dealers the right to conduct business using the trade
name "Bang & Olufsenr" and featuring B&O's Proprietary Marks in selected
locations under certain terms and conditions,
WHEREAS, BOA wishes to encourage and support the establishment of Prime
Site retail stores of a high standard and with a common and distinctive
appearance, the business of which will be the sale, installation and maintenance
of "Bang & Olufsenr" products under special systems of operation for Prime Sites
developed by BOA,
WHEREAS, Dealer wishes to operate a Prime Site at the location designated
below, using the Prime Site System and B&O's Proprietary Marks, and
WHEREAS, Dealer acknowledges the importance of maintaining uniform
procedures, policies and standards of quality, presentation and service as
required under the Prime Site System.
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
I. APPOINTMENT OF DEALER AND TERMS OF APPOINTMENT
A. BOA, as the exclusive agent of B&O a/s the United States for
distributing and implementing the Prime Site System as licensee of B&O's
Proprietary Marks in connection with that system, hereby designates Dealer as
one of its authorized Prime Site dealers in the United States. As a Prime Site
dealer, Dealer shall sell audio and video products produced by B&O a/s and sold
under B&O's Proprietary Marks. Dealer shall operate solely under the assumed
name set forth on the first page of this Agreement, unless BOA shall otherwise
consent. BOA grants Dealer the right to use the Prime Site System and B&O's
Proprietary Marks for the purpose of establishing and operating a Prime Site at
the Premises (all capitalized terms as defined below) in accordance with the
terms of this Agreement and of the Manual (as defined below). Dealer hereby
accepts such appointment under the terms and conditions herein set forth.
B. In granting Dealer the appointment described above, BOA reserves the
right to increase or decrease the number of authorized Prime Site dealers in any
area at any time. Further. this Agreement. and the appointment of Dealer under
it, shall not restrict the right of BOA to increase or decrease the number of
its authorized dealers in any area at any time or otherwise restrict the right
of BOA to sell "Bang & Olufsenr" products.
C. Certain operating and other provisions applicable to the Business are
set forth in the Rider attached to this Agreement as Exhibit No.1.
II. DEFINITIONS. In this Agreement:
A. The phrase "B&O's Proprietary Marks" means "Bang & Olufsenr" and the
other trademarks, trade names and service marks of B&O a/s and BOA. whether or
not those trademarks, trade names and service marks are registered and whether
or not they exist now or are acquired in the future.
B. The term "Business" means the business to be operated by the Dealer at
the Premises under the name "Bang & Olufsenr" as provided for by this Agreement,
the Exhibits to it and the Manual.
C. The phrase "Distinctive Shop Fittings" means all shop fittings,
including, without limitation, facade, signs, fixtures (including trade
fixtures), decorations and other display elements sold or leased by BOA and/or
its affiliates to Dealer for use at the Premises.
D. The phrase "Lease Documents" means those agreements relating to the
lease of the Premises, copies of which are attached hereto as Exhibit No.2,
collectively, and all amendments and supplements thereto.
E. The term "Manual" means the written specification of the Prime Site
System supplied by BOA, as amended or updated by BOA from time to time.
F. The phrase "Prime Site" means a retail store for Products operated in
accordance with the Prime Site System.
G. The phrase "Prime Site System" means the distinctive business format and
methods of operation and the designs developed by BOA for the interior and
exterior appearance of Prime Sites, as specified in the Manual and other written
advice given by BOA from time to time.
H. The term "Products" means the audio and video products produced by B&O
a/s and sold under the trademark "Bang & Olufsenr" or under other of B&O's
Proprietary Marks, and where the context permits, the customer services to be
made available in the Business in accordance with the Manual.
III. THE MANUAL.
A. The Manual is an integral part of this Agreement. It describes the Prime
Site System and specifies the support provided by BOA and the obligations of the
Dealer in setting up and operating the Business.
B. Dealer shall comply with all its obligations as set out in the Manual
except insofar as they are inconsistent with an expressed term of this Agreement
or are varied by BOA in writing. Failure to do so will be a breach of this
Agreement.
C. BOA will give Dealer written notice of updates and amendments to the
Manual, which will be in effect immediately unless such notice otherwise states.
D. BOA will give Dealer sufficient copies of the Manual and its updates and
amendments. Dealer agrees to keep the copies secure and confidential, make no
further copies, provide access to the Manual only to responsible members of its
staff, and ensure that its contents are not disclosed to unauthorized staff or
any third parties.
IV. PURCHASE OF THE PRODUCTS.
A. BOA agrees to sell the Products to Dealer, which agrees to purchase the
Products from BOA in accordance with the terms and conditions set forth herein.
BOA reserves the right to change any terms or conditions relating to purchase
and sale of the Products, including but not by way of limitation, price and
payment terms, at any time.
B. All orders from Dealer are subject to acceptance by BOA at its principal
office in Mount Prospect, Illinois, or wherever subsequently relocated. BOA
shall have the right to cancel any orders placed by Dealer or refuse or delay
the shipment thereof if Dealer shall fail to keep its account current or to meet
payment schedules or other credit or financial requirements established by BOA,
or, if in BOA's sole opinion Dealer's credit shall become impaired, or Dealer
has otherwise violated the terms and conditions of this Agreement or the Lease
Documents. BOA expressly reserves the right to change credit or financial
requirements for dealers at any time. The cancellation of such orders or the
withholding of shipments by BOA shall not be construed as termination or breach
of this Agreement by BOA. BOA will otherwise use its best reasonable efforts to
make deliveries within a reasonable time in accordance with orders accepted from
Dealer, but it shall not be liable to Dealer for any damages, consequential or
otherwise, for any error in the filling of orders, or for failure to deliver or
delay in delivery. In the event of BOA's inability to supply the total demands
made by its dealers for the Products, for any reason, BOA shall have the right
to apportion the available Products among any or all of its dealers in such
manner and make delivery at such times as it may deem appropriate.
C. The Products shall be sold to Dealer at prices and terms established by
BOA and in effect at the time of acceptance of each of Dealer's orders. BOA
shall have the right to reduce or increase prices to Dealer at any time without
notice to Dealer. When a new price schedule is issued by BOA, it shall
automatically supersede all prior schedules on and after its effective date.
D. Prices of the Products shall not include taxes of any nature, however
denominated, and Dealer shall pay such taxes in full when invoiced by BOA or, in
lieu thereof, shall provide BOA with tax exemption certificates acceptable to
appropriate taxing authorities.
E. In the event of a decrease in published current dealer prices (except as
described hereinafter in this Section), Dealer shall be paid or credited with
money or provided Product of a value equal to the difference between the price
actually paid (less applicable special allowances and cash discounts, if any) by
Dealer for all Products in Dealer's unsold inventory for which payment has been
received by BOA and which were shipped to Dealer by BOA during the ninety (90)
day period prior to the effective date of the new dealer price applicable to
such Products, provided that Dealer submits an inventory report to BOA within
thirty (30) days after notification of such price decrease, and that such report
is verified to BOA's satisfaction. In the event of a decrease in published
current dealer prices in connection with a product "close-out." BOA shall have
the option to determine, in its sole discretion, whether, and if so, to what
extent to provide Dealer with the price protections described in the preceding
sentence.
V. ADDITIONAL SERVICES OF BOA. Throughout the term of this Agreement, BOA
may, but shall not be obligated to, provide administrative, marketing and
management support and know-how to Dealer, which shall include:
A. Training courses for Dealer's staff, to be held at such times and places
as BOA may prescribe.
B. Regular consultation with and advice from BOA specialists, including
periodic visits to the Premises by such advisers as BOA considers appropriate.
C. Advice and updates on shop display, refurbishment, equipment layout,
decor and signs.
D. Development of advertising, promotional and direct mail programs,
including sales material and assistance with arranging display areas for that
material.
E. Development of tape and software updates to run the computerized Product
demonstration facility included in the Prime Site System.
F. Provision of standard formats for all stationery, documents and
promotional materials used in the Business.
VI. ADDITIONAL OBLIGATIONS OF DEALER. Dealer agrees to conduct the Business
as a high quality, distinctive retail store in accordance with the Prime Site
System, and agrees specifically:
A. To sell or provide in the course of the Business only the Products that
Dealer purchases from BOA, together with such additional goods or services as
BOA may specifically require or authorize as set forth on Exhibit No.5 attached
hereto and made a part hereof, as the same may be modified or supplemented from
time to time by written agreement of BOA and Dealer; provided. however, that the
merchandising of such additional goods and services from time to time shall be
subject to BOA's prior approval. Prior to opening the Business for retail trade,
Dealer shall purchase Products from BOA in sufficient quantities for display and
initial inventory to meet the requirements provided in the Manual. Dealer
acknowledges that BOA is entitled at any time to require it to withdraw existing
goods or services or to make available new goods or services. which may include
the introduction of new business items to further attract attention to the main
business of the Business.
B. To comply with all provisions of the Lease Documents.
C. To observe strictly the provisions of the Manual, except as they may be
modified in writing by BOA.
D. To not, directly or indirectly, sell, aid or facilitate in any way the
sale of Products from a location other than the Premises, as defined above,
without specific written authority from BOA to sell the Products at such other
location. Dealer further agrees to not sell the Products in connection with any
solicitation by telephone, mail order, Internet or other electronic means, and
agrees to engage in reasonable efforts to provide each retail customer with an
in-person demonstration of the Products; provided, however, that Dealer may
advertise, but not sell. Products on the Internet; provided, however, that any
list or description of Products shall be made by means of a link to the Bang &
Olufsenr Web Site or by such other means as BOA may approve in writing from time
to time.
E. To use B&O's Proprietary Marks and materials copyrighted by B&O a/s or
BOA only in store displays, newspaper, magazine, radio and television and other
advertising material promoting the Business. Dealer agrees not to use, or cause
the use of, B&O's Proprietary Marks or such copyrighted materials in any
unlawful manner in advertising or otherwise, or in any manner which may directly
or indirectly tend to lessen the value and goodwill of B&O's Proprietary Marks
and such copyrights. Dealer agrees not to use B&O's Proprietary Marks as part of
Dealer's own name or business identity, except in the trade name of the
Business. Nothing contained herein shall give to Dealer any interest in B&O's
Proprietary Marks and copyrighted materials of B&O a/s or BOA, except the
license to use them as provided herein. Dealer's right to use B&O's Proprietary
Marks and such copyrighted materials in any fashion, including without
limitation in Dealer's assumed name, and in a Web Site or E-Mail Address, shall
terminate immediately upon the termination of this Agreement.
F. To conform at all times to the standards set out in the Manual with
regard to products, services to customers and conduct of the Business.
G. To ensure that there are sufficient management and staff to properly
operate the Business, that all management and staff receive adequate training to
enable them to operate the Business to the required standard and that all
management and staff maintain the highest standards of dress, conduct, courtesy
and service as approved by BOA. The management and staff for the Business shall
be employed and compensated solely by Dealer.
H. To ensure that its management and staff keep confidential the contents
of the Manual, the software programs provided and all other information they
obtain about the Prime Site System and about the business of BOA and B&O a/s
which is not available to the general public, and to not disclose such
confidential information to unauthorized staff or to any third party.
I. To not introduce "improvements" or modifications to the Business which
are inconsistent with this Agreement or the Manual without prior written consent
of BOA and to permit BOA to incorporate any of Dealer's approved improvements
and modifications into BOA's own business and Prime Site System without
compensation to Dealer.
J. To conduct the Business at all times in strict compliance with all
applicable federal, state and local laws and regulations. Dealer shall at no
time engage in any unfair or unethical trade practices such as "bait and switch"
advertising, and shall make no false or misleading representations with regard
to B&O a/s, BOA, the Business or the Products.
K. (1) To permit BOA at all reasonable times (with or without notice) to
visit and inspect the Premises, and any warehouse, storage or other facilities
maintained in connection with the Business, and to test any equipment there and
any Products which are being or have been repaired.
(2) Within ten (10) days after receipt from BOA of notice in 'writing of
any deficiencies or failures of Dealer or the Business to meet BOA's standards
of quality, appearance, cleanliness and service, Dealer shall correct all such
deficiencies or failures. Such notice by BOA shall constitute a notice of
default under this Agreement.
L. To immediately disclose to BOA any serious customer complaints and any
conflicts of interest which might affect the Business, however arising.
M. To use materials and equipment supplied by BOA or made to designs
supplied by BOA only in the Business, in the manner provided for under this
Agreement.
N. To make no statement, representation or claim, and give no warranty
relating to the Business or the Products to customers or to the trade, except as
authorized in the Manual, in literature about the Products supplied by BOA, or
otherwise in writing by BOA.
0. To maintain adequate records and accounts, audited or reviewed by an
established and reputable firm of Certified Public Accountants, give BOA access
on demand to the records and accounts, and report on a regular basis to BOA all
relevant market data and accounts as required in the Manual using standard
communication forms to be provided by BOA.
P. Before opening the Business for retail trade, to prepare and submit to
BOA for review a three-year Business Plan and a one year Operating Plan, both to
be consistent with this Agreement and with the Manual.
Q. To provide reasonable consumer satisfaction in servicing Products. Such
service shall be performed in compliance with the standards set out in the
Manual by a qualified technician who is an employee of Dealer and has received
appropriate training for Product repair and installation provided or approved by
BOA. Such repair and installation shall always be carried out to the standards
set out in the Manual and to such other conditions as BOA may impose. As to any
Product not serviced by Dealer, Dealer shall assist each consumer seeking
service therefor by directing the consumer to the closest authorized service
center for Products and providing the consumer with the BOA "800" service
telephone number.
R. To pay the charges set out in the Manual or as advised from time to time
for each of the services referred to in the Manual, including to pay all of
Dealer's own expenses in attending training courses and in complying with its
obligations under this Agreement.
S. To honor such charge and credit cards and other payment plans as may
from time to time be issued or approved by BOA and to participate in, comply
with the terms of and promote any financial or leasing plans, programs or
procedures specified by BOA.
T. To immediately adopt all new or different marks, names or symbols
designated by BOA for use in addition to or substitution for any of B&O's
Proprietary Marks then in use, and to immediately discontinue the use of any of
B&O's Proprietary Marks the use of which in connection with the Prime Site
System BOA has chosen to discontinue or suspend, all at the sole cost and
expense of Dealer.
U. To not change its name or its d/b/a from those shown as such on the
first page of this Agreement, unless BOA shall have first consented thereto in
writing.
VII. THE PREMISES
A. Before the Business is opened, the Premises shall be converted and/or
updated to the then current interior and exterior design for the Prime Site
System. Without limiting the generality of the foregoing, Dealer agrees to
complete all interior and exterior work to the Premises pursuant to plans and
specifications approved by Landlord and BOA and shall open for business at the
Premises no later than 90 days from the date of this Agreement.
B. Dealer undertakes:
(1) At all times to perform and comply with the provisions of the Lease
Documents and each lease, sublease or license under which the Premises are held.
(2) At all times to maintain the standards of decoration, repair and
cleanliness of the interior and exterior of the Premises as described in the
Manual or approved in writing by BOA.
(3) Not to dispose of or in any way alter its interest in the Premises
except with the prior written consent of BOA.
(4) To ensure that all necessary consents and approvals for any alterations
to the Premises and for carrying on the Business at the Premises are applied
for, obtained and diligently observed.
C. Dealer agrees to purchase or lease such new Distinctive Shop Fittings as
BOA may develop for the Prime Site System in replacement of worn-out or outdated
shop fittings.
D. All shop and office equipment and miscellaneous supplies (other than
Distinctive Shop Fittings) are to be acquired in accordance with the Manual and
paid for by the Dealer.
E. Dealer shall keep all shop fittings in good condition and keep them
fully insured at its own expense.
VIII. B&O'S PROPRIETARY MARKS AND PRIME SITE SYSTEM.
A. Dealer recognizes BOA's right to use and to grant to others the right to
use B&O's Proprietary Marks, and hereby acknowledges and agrees that it has no
claim and will hereafter not assert any claim to ownership of B&O's Proprietary
Marks or any registration thereof in any jurisdiction, or to any goodwill
associated therewith, by reason of Dealer's licensed use of B&O's Proprietary
Marks. Dealer agrees that it does not and will not, during or after the term of
this Agreement, dispute the validity of B&O's Proprietary Marks, any
registration thereof or the rights of BOA, B&O a/s and their licensees thereto.
Dealer agrees that during the term of this Agreement Dealer will not use or
imitate any of B&O's Proprietary Marks or the Prime Site System or any of the
distinguishing characteristics of either except pursuant to the authorization
and license granted pursuant to this Agreement. Dealer further agrees that it
shall make use of B&O's Proprietary Marks only in accordance with the standards
specified herein, and it shall use them only to refer to and identify Products
so marked which are sold in the Business, or the companies involved in the
manufacture or distribution of such Products, and in no other way whatever.
Dealer further agrees that after the termination or expiration of this Agreement
for any reason, Dealer will not use or imitate any of B&O's Proprietary Marks or
the Prime Site System or any of the distinguishing characteristics of either.
Dealer shall in no event and at no time, either directly or indirectly, in any
manner or fashion, disparage the names or good will of BOA, B&O a/s, the B&O
Proprietary Marks, or the Prime Site System.
B. Unless Dealer shall have received BOA's prior written consent and the
consent of the owner thereof, Dealer will not display or use at the Premises any
trademark, service xxxx or other marks or advertisements of any other person,
firm or corporation.
C. Any and all documents or other printed or written materials to which
Dealer intends to apply or affix B&O's Proprietary Marks, including without
limitation stationery, brochures, invoices, and advertising, must be approved by
BOA in writing prior to use thereof. On any and all such materials, B&O's
Proprietary Marks shall be used only in accordance with BOA's instructions and
after obtaining its consent. As between Dealer and BOA, B&O's Proprietary Marks
shall remain the property of BOA. Dealer will not have any right to use B&O's
Proprietary Marks other than as provided in this Agreement.
D. In order to protect the integrity of B&O's Proprietary Marks, BOA
requires that B&O's Proprietary Marks be used only in certain styles and
formats. Dealer agrees that if BOA objects to any use by Dealer of any of B&O's
Proprietary Marks, Dealer will immediately discontinue and cease such use
E. Dealer agrees to arrange for B&O's Proprietary Marks to appear, in a
style or format expressly approved by BOA, on all paper and plastic bags, and
all mailing and other packaging materials used by the Business, and Dealer
agrees to submit such articles for BOA's prior approval as to quality and style
and as to the representation of B&O's Proprietary Marks.
F. Dealer agrees not to use any signs or advertising in connection with the
Business except signs or advertising specifically approved in advance by BOA.
G. In the event that Dealer receives notice or knowledge or is informed of
any claim asserted by any third person that any of B&O's Proprietary Marks, or
any use thereof, infringes any trademark or other right of any person, Dealer
shall promptly notify BOA of such claim. Upon BOA's receipt of notice from
Dealer of any such claim, BOA shall take such action as it may deem reasonably
necessary to defend against such claim and, provided that such claim does not
arise out of or involve use of B&O's Proprietary Marks by Dealer in a manner not
authorized by this Agreement, will assume the costs of such defense and
indemnify and hold Dealer harmless from and against any loss incurred by Dealer
resulting directly and solely from an infringement claim arising from Dealer's
use of B&O's Proprietary Marks. In no event, however, shall BOA be liable to
Dealer for consequential or exemplary damages. BOA shall have sole authority to
settle, compromise or otherwise dispose of any such claim. Dealer agrees to
cooperate fully with BOA in the defense of any such claim.
H. In the event that Dealer learns of or obtains any information concerning
any actual or threatened infringement or piracy of B&O's Proprietary' Marks,
Dealer shall promptly notify' BOA. Upon receipt of notice of any such claim, BOA
shall take such action as it may deem reasonably necessary. BOA shall have sole
authority to settle, compromise or otherwise dispose of any claim based on such
notification. Dealer agrees to cooperate fully with BOA in regard to any such
claim.
IX. CONFIDENTIALITY.
A. Dealer agrees that it shall not disclose any information or knowledge
concerning the Prime Site System (including specifically, but without
limitation, the Manual), all of which is confidential, to any person other than
appropriate Dealer personnel as necessary in the operation of the Business.
Dealer shall not copy the Manual or other confidential information, and Dealer
shall use the Manual and other confidential information only as necessary in the
operation of the Business. The Manual and other confidential information shall
at all times remain the sole property of BOA, and the same shall promptly be
returned to BOA upon the termination of this Agreement.
B. To the extent permitted by law, Dealer agrees to require that each of
Dealer's employees execute a confidentiality agreement in substantially the form
attached hereto as Exhibit No.3. Dealer agrees to take all necessary steps to
enforce such agreement when it becomes aware of any violation thereof. and to
immediately report any such violation to BOA.
X. INDEMNIFICATION; INSURANCE AND ENFORCEMENT.
A. Except as otherwise provided in this Agreement, Dealer shall indemnify
and save BOA, B&O a/s and their respective successors and assigns, and their
officers. agents and employees, harmless from and against all claims. demands,
costs, and expenses, of whatever nature, arising out of the operation of the
Business; provided, however, that Dealer's indemnification obligations under
this Section X.A. shall not apply in respect of any claims or liability arising
solely out of BOA's acts or omissions (i) in the design and/or manufacture of
the Products or (ii) in respect of any infringement upon any patent, copyright
or trademark held by a third party.
B. Dealer shall maintain in effect during the term of this Agreement
insurance coverage of the type and in the minimum amounts set forth in Exhibit
No.4, which insurance shall name BOA and B&O a/s as additional insureds. Each
such contract of insurance shall contain agreements by the insurer that the
contract will not be canceled except upon at least thirty (30) days prior notice
to each of the insureds, that the act or omission of one insured will not
invalidate the contract or its coverage as to any other insured, and that the
insurer will furnish to BOA and Dealer evidence of the insurance coverage in
effect from time to time during the term of this Agreement. All such insurance
shall be issued by a carrier licensed to do business in the State of Illinois
and in the jurisdiction where the Business operates.
C. In the event of any legal proceedings or litigation between BOA and
Dealer with respect to this Agreement, the Lease Documents or the Manual, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
expenses in connection therewith from the non-prevailing party.
D. Should either party breach the terms of this Agreement, it is agreed
that the non-breaching party will suffer irreparable loss and damage as a result
of such breach. In addition to all other remedies available to it, the
non-breaching party shall be entitled to both temporary and permanent injunctive
relief to prevent a breach or contemplated breach of this Agreement by the
breaching party.
XI. DURATION OF AGREEMENT/RIGHT TO TERMINATE.
A. Subject to the provisions of Section XI.B. below, the term of this
Agreement shall commence on the date hereof and shall terminate on May 3 1,
1999; provided, however, that this Agreement shall automatically be renewed for
a period of seven years commencing June 1, 1999 and ending May 31, 2006 upon
execution and delivery of the Licensed Dealer Agreement substantially in the
form of Exhibit No.7 attached hereto. BOA and Dealer agree that they shall
execute and deliver such Licensed Dealer Agreement effective as of June 1, 1999.
B. Without prejudice to any remedy either party may have for breach or
nonperformance of this Agreement, BOA may terminate this Agreement as provided
below upon the occurrence of any of the following events:
1. BOA may terminate this Agreement effective immediately upon the
occurrence of any of the following events:
a. If the right of Dealer to occupy the Premises terminates for any reason,
or if Dealer shall be in default of any of its obligations under the Lease
Documents;
b. If Dealer breaches the provisions of Section VI.D, VI.E or VI.J, or
commits any other action or omission which in BOA's sole judgment adversely
affects the interests of BOA in promoting the marketing of Products;
c. If Dealer fails to make any payment when due under this Agreement any
Exhibit to this Agreement or the Manual and the same remains unpaid for a period
often days after delivery of written notice thereof to Dealer, or the Dealer
fails to make any payment when due under the Lease Documents;
d. If Dealer fails to meet its Product Service obligations under Section
VI.Q;
e. If Dealer for any reason, and at any time, vacates the Premises or
ceases to maintain the Business at the Premises in accordance with the Manual;
f. In the event of any breach of any representation or warranty under
Section XVI.A or XVI.B;
g. If Dealer makes any assignment or transfer, or any purported or deemed
assignment or transfer, in violation of this Agreement;
h. If Dealer is dissolved or liquidated, or a receiver is appointed for
Dealer; or
i. Upon the bankruptcy or insolvency of Dealer, or any assignment or
composition of Dealer for the benefit of creditors; or if a written warrant of
attachment or any similar process is issued by any court against all or any
substantial portion of Dealer's property or assets, and the writ, warrant of
attachment, or similar process is not released or bonded within fifteen (15)
days of the entry or levy.
2. BOA may terminate this Agreement if any of the following defaults shall
occur and Dealer shall fail to correct or cure such default within ten (10) days
after having received written notice of, or having otherwise become aware of,
such default:
a. If Dealer shall fail to satisfy its obligation to meet any minimum
purchase requirement required by Exhibit No.1 hereto;
b. If Dealer fails to adhere to all display requirements, including but not
limited to having on display, in working order and in good condition, all
Products to be on display as required by Exhibit No. I hereto;
c. If Dealer fails to present Products competently and in accordance with
BOA's standards; or
d. If Dealer shall be in default under any other of its obligations under
this Agreement (including the Lease Documents, the other Exhibits hereto and the
Manual) or shall be in default of any' payment obligations to BOA under any
other agreement between Dealer and BOA or any affiliate of BOA, other than those
defaults enumerated in Section XI.X.x above, and such default shall continue
after the expiration of any applicable grace or cure period; or
e. If a business other than Dealer shall be in default of any payment
obligations to BOA under any agreement with BOA or any affiliate of BOA provided
the Dealer and that business are under common control.
C. Neither BOA nor Dealer shall be liable to the other because of the
termination of this Agreement, for compensation, or reimbursement, or damages
for loss of prospective profits on anticipated sales or on account of
expenditures, investments, leases, or any type of commitments made in connection
with the business of either of them.
XII. RESPONSIBILITIES UPON TERMINATION.
A. Upon the termination of this Agreement, Dealer shall no longer be an
authorized Prime Site dealer for the Products, and Dealer shall immediately pay
all amounts owed, whether or not due, to BOA, on the effective date of
termination.
B. Upon the expiration or termination of this Agreement, Dealer shall (i)
discontinue forthwith any and all use of B&O's Proprietary Marks and the
copyrighted material of BOA or B&O a/s, including such use in advertising, (ii)
discontinue all operations of the Business, (iii) forthwith notify' and instruct
publications and others who may list or publish Dealer's name as a Prime Site
Dealer, including telephone directories, yellow pages, and other business
directories, to discontinue such listing of Dealer, and (iv) return to BOA all
promotional literature and material, including point of purchase materials and
displays, provided to Dealer by BOA.
C. Upon termination of this Agreement for any reason, BOA shall have the
option to repurchase from Dealer any or all new, current products in Dealer's
inventory at the net invoice prices at which such Products were originally
purchased by Dealer from BOA, less any discounts and allowances which BOA may
have given to Dealer for such Products and reasonable costs for handling and
processing. This option may be exercised by BOA at any time within thirty (30)
days after the effective date of termination of this Agreement. Dealer agrees to
deliver such repurchased Products to BOA in their original packages, and to
otherwise cooperate with BOA as requested by BOA in connection with BOA's
exercise of its repurchase right hereunder.
XIII. DEALER NOT AN AGENT.
A. This Agreement does not in any way create the relationship of principal
and agent between Dealer and BOA or B&O a/s, and in no circumstances shall
Dealer, its agents or employees be considered the agents of BOA or B&O a/s
Dealer shall not act or attempt to act or represent itself directly or by
implication as agent of BOA or B&O a/s, or in any manner assume or create or
attempt to assume or create any obligation or make any contract, agreement,
representation or warranty on behalf or in the name of BOA or B&O a/s, except
such Product warranties as may be previously authorized in writing by BOA. No
partnership, joint venture, agency, or employment is intended or created by this
Agreement.
B. During the term of this Agreement, Dealer shall hold itself out to the
public as an independent contractor operating the Business pursuant to a license
from BOA. Dealer agrees to take such further affirmative action as BOA may
require in this regard, including, without limitation, (i) exhibiting a notice
of Dealer's licensee status (in form prescribed by BOA) in a conspicuous place
on the Premises, (ii) making any and all "assumed name" or similar filings
required or permitted to be made under applicable state and local laws to
disclose the true identity of the Dealer, (iii) placing the phrase "an
authorized independent dealer of Bang & Olufsenr products" in a conspicuous
location on all advertising, promotional materials, letterhead, business cards,
forms and other printed materials, (iv) maintaining in good standing its
existence as an independent entity, and (v) taking such other action as BOA may
specify from time to time.
XIV. FORCE MAJEURE. Except as otherwise provided in this Section XIV,
neither party hereto shall be responsible for or liable for failure to perform
any part of this Agreement or for any delay in the performance of any part of
this Agreement, directly or indirectly resulting from or contributed to by any
foreign or domestic embargoes, acts of God or the public enemy; the adoption or
enactment of any law, ordinance, regulation, ruling or order directly or
indirectly interfering with the performance hereunder; or wars, fires, floods,
explosions, strikes, factory shut downs, work stoppages, slow-downs or other
differences with workmen; shortages of fuel, power, materials or labor, or delay
in or lack of the usual means of transportation; action taken to carry out the
intent or purpose of any law or administrative regulation or order having the
effect of law; compliance with any request by a governmental agency or official
thereof, extraordinary currency devaluations, taxes, or customs duties or other
similar charges or assessments; or other events or contingencies beyond the
reasonable control of such party; provided, however, that the foregoing shall
not apply to, and shall not excuse Dealer from any delay in respect of, any
payment of money required pursuant to this Agreement, the Lease Documents or the
Manual.
XV. ASSIGNMENT.
A. The relationship created between BOA and Dealer is personal in nature.
BOA, in entering into this Agreement, has relied upon the continued active
participation of certain individuals in the operations of Dealer. Dealer shall
have no right to assign this Agreement without the prior written consent of BOA.
This Agreement shall automatically terminate upon purported assignment or
transfer by Dealer thereof unless Dealer shall have given written notice to BOA.
together with all necessary information relating to the proposed assignment or
transfer and the proposed assignee or transferee, at least thirty (30) days
prior thereto, and shall have received the written consent (which consent may be
granted or withheld in BOA's sole discretion) of BOA to such assignment or
transfer within fifteen (15) days after BOA's receipt of Dealer's notice to BOA.
For purposes of this Agreement, any change in ownership or active management of
Dealer shall be deemed an assignment or transfer which requires the prior
consent of BOA. Dealer's obligations under this Agreement shall survive any
assignment or transfer by Dealer; provided, however, that so long as Dealer is a
publicly traded company, any transfer or series of transfers as part of a single
transaction, of the common stock of Dealer shall not require the prior consent
of BOA unless, as a result of such transfer or series of transfers. control of
Dealer is acquired by any manufacturer of consumer electronics products having
annual sales in the United States of $10,000,000 or more. For purposes of the
immediately preceding sentence, "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of Dealer, whether through the ownership of voting securities, by
contract or otherwise. Dealer's continuing responsibilities under this Agreement
shall apply should the Agreement be terminated hereunder.
B. BOA shall be authorized to assign or transfer this entire Agreement,
or any portion of its rights and obligations under this Agreement. Any
assignment or transfer of obligations hereunder by BOA shall, to the extent that
such obligations are assumed by the assignee or transferee, relieve BOA from
such obligations.
C. This Agreement shall be binding upon each of the parties to it and their
respective heirs, executors, administrators, successors, and assigns, but this
sentence shall not be deemed to authorize an assignment or transfer by Dealer in
violation of the other provisions of this Agreement.
XVI. INFORMATION FURNISHED TO BOA.
A. Dealer acknowledges that BOA has been induced to enter into this
Agreement by certain information (including, but not limited to, financial
statements) heretofore submitted by Dealer, which information BOA has relied on
in entering into this Agreement. Dealer warrants and represents that such
information is true, correct, complete and accurate. In the event that such
information contains any material misstatements, errors, or omissions of
material facts, BOA shall have the right to terminate this Agreement effective
immediately upon written notice to Dealer, and shall have all other rights under
law. Further, (i) if such misstatement, error or omission is the result of fraud
or (ii) if such misstatement is the result of a misrepresentation regarding any
material fact pertaining to the ownership of Dealer or Dealer's financial
information or financial reporting requirements to BOA, then at BOA's option any
and all other agreements with Dealer shall also be terminated effective
immediately upon written notice to Dealer.
B. In entering into this Agreement, BOA is also relying upon Dealer's
representation and warranty that Dealer's execution of this Agreement and
performance of its obligations hereunder will not constitute a violation or
breach, or cause Dealer to be in violation or breach, of any lease or other
contractual obligation that it has to any other person. Dealer hereby confirms
its representation and warranty to this effect.
XVII. PAYMENTS DUE. Notwithstanding anything to the contrary. contained in
the Agreement, all payments to be made by Dealer to BOA in respect of services
or goods (including, without limitation, fixtures) purchased prior to or during
the first six months of operation of the Business shall be deferred during such
period and shall not be due and payable until the first day immediately
following the expiration of such six month period; provided, however. that the
foregoing limitations shall not apply to Products purchased by Dealer from BOA,
it being agreed that such Products shall be purchased and paid for in accordance
with ordinary terms; and further provided, however, that this paragraph XVII
shall not apply if this Agreement renews or extends a prior Prime Site Marketing
Agreement between BOA and Dealer.
XVIII. RIGHT OF FIRST REFUSAL. If at any time during the term of this
Agreement Dealer receives from any entity or firm a bona fide offer for the
assignment of Dealer's right to occupy the Premises (any such bona fide offer
being hereinafter referred to as an "Offer"), or Dealer otherwise wishes to so
transfer its right to occupy the Premises, Dealer shall provide BOA with a
written notice setting forth the terms of such Offer or the other terms of such
transfer as soon as practicable. Within 60 days after receiving such notice, BOA
shall have the right (but not the obligation) to accept the assignment of the
right to occupy the Premises on the identical terms as set forth in such notice,
and may exercise same by delivering to Dealer notice of its intent to exercise
during such 60 day period. Upon delivery of such notice of intent to exercise,
the parties shall consummate the assignment of the right to occupy the Premises
as soon as practicable thereafter.
If any transfer of the right to occupy the Premises is made by Dealer with
the consent of BOA, BOA's right of first refusal shall survive such transfer.
XIX. EXHIBITS.
There are eight Exhibits to this Agreement, which are as follows:
Exhibit No. 1;
Exhibit No. 2 (Lease Documents);
Exhibit No. 3 (Employee Confidentiality Agreement);
Exhibit No. 4 (List of insurance coverage furnished by Dealer);
Exhibit No. 5 (Authorized non-Bang & Olufsenr products);
Exhibit No. 6 (Letter regarding the use of names);
Exhibit No. 7 (Licensed Dealer Agreement);
Exhibit No. 8 (Letter regarding Repurchase of Inventory).
The provisions of each of the Exhibits 1, 3, 4, 5 and 6 are part of this
Agreement.
XX. ENTIRE AGREEMENT. ETC.
A. This Agreement (including the Exhibits hereto) and the Manual embody the
entire agreement between the parties hereto in connection with the subject
matter hereof and supersede all prior agreements, if any. Any waiver, amendment
or modification of this Agreement, to be effective, must be in writing and
signed by the parties hereto. There are no oral or implied agreements, and no
oral or implied warranties between the parties.
B. It is expressly agreed that no stipulation. conditions or statements
contained in any purchase order or similar form which may be submitted by Dealer
in connection with its purchase of Products shall be binding upon BOA even
though orders given on such forms are accepted or filled by BOA. The terms and
conditions stated on BOA's invoices and/or acceptances of such Dealer orders
together with the terms and conditions stated herein, which shall be
incorporated therein by reference, shall control and, if no terms and conditions
appear thereon, then the terms of this Agreement shall be deemed controlling.
C. The waiver by BOA of any one default or provision of this Agreement or
the Manual shall not waive any subsequent defaults of the same provision on
another occasion, or any default of any other provision.
D. All terms and words used in this Agreement, regardless of the number and
gender form in which they are used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context or sense of this Agreement or any section or clause
herein may require, the same as if such words had been fully and properly
written in such number and gender form.
E. The provisions of this Agreement where the context or sense of this
Agreement so indicates shall survive any termination of this Agreement.
XXI. SEVERABILITY. If any provision in this Agreement, or its application
to any person or circumstance, is invalid or unenforceable, BOA may in its sole
discretion elect to terminate this Agreement. In the event that BOA does not so
elect to terminate this Agreement, the remainder of this Agreement or the
application of such invalid or unenforceable provision to other persons or
circumstances shall not be affected thereby.
XXII. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
XXIII. NOTICES. Notices given pursuant to the terms of this Agreement shall
be in writing and shall be delivered personally or by certified or registered
mail, addressed to Dealer at the address first set forth in this Agreement, and
to BOA, at Bang & Olufsen America, Inc., 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx
Xxxxxxxx, Xxxxxxxx 00000, Attention: President. Any personally delivered notice
shall be deemed given upon actual delivery. Any mailed notice shall be deemed to
have been received seven (7) days after the certified or registered mailing
date. The addresses for such notices may be changed from time to time by written
notice.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have entered into this Prime Site
Marketing Agreement on the day and year first above mentioned.
DEALER
BANG & OLUFSEN AMERICA, INC. XXXXXX ELECTRONICS, INC.
By: /s/ Xxx Xxx By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------ -----------------------------
Xxx Xxx, President Xxxxxx X. Xxxxxxxxx, Executive Vice
President and Chief Financial Officer
BANG & OLUFSEN AMERICA, INC.
PRIME SITE MARKETING AGREEMENT (UNION SQUARE)
EXHIBIT NO.1
BOA designates Xxxxxx Electronics, Inc., CL/b/a Bang & Olufsen - Union
Square ("Dealer") as one of its authorized dealers, subject to the terms and
conditions set forth in the Prime Site Marketing Agreement ("Agreement"), and
those terms and conditions set forth in this Exhibit No. 1.
1. DEALER AGREES:
A. To display at the Premises all Bang & Olufsenr products purchased and
owned by Dealer and such other Products as BOA may designate in 'writing from
time to time. BOA has the right to add to or delete any Product on such list at
any time on not less than 30 days notice.
B. To display the Products in an appropriate environment to be approved by
BOA.
C. RESERVED
D. To sell Products only to retail customers and only from the Premises,
and not to sell Products to any dealers, including dealers authorized by BOA or
otherwise.
E. To comply with such warranty and service requirements as may be
established by BOA from time to time with respect to Products sold by Dealer.
2. BOA AGREES to provide Dealer with marketing support in accordance with
the current marketing support program that BOA, in its discretion, may establish
from time to time, subject to any additional marketing support BOA has agreed in
writing to provide Dealer.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit No.1 to
Prime Site Marketing Agreement to be executed in duplicate.
BANG & OLUFSEN AMERICA, INC. XXXXXX ELECTRONICS, INC.
By: /s/ Xxx Xxx By: /s/Xxxxxxxx X. Xxxx
--------------------------- ---------------------------------
President Title: Executive Vice President and Chief
Financial Officer
Dated as of _______________
Exhibit Xx. 0
xx
Xxxx & Xxxxxxx Xxxxxxx, Inc.
Prime Site Marketing Agreement (Union Square)
LEASE DOCUMENTS
[to be inserted]
Exhibit No.3
to
Bang & Olufsen America, Inc.
Prime Site Marketing Agreement (Union Square)
EMPLOYEE CONFIDENTIALITY AGREEMENT
In consideration of employment of the undersigned by Xxxxxx Electronics,
Inc. ("Dealer"), the undersigned agrees as follows:
1. As used herein. the following terms shall have the following respective
meanings:
A. "BOA" means Bang & Olufsen America. Inc., a Delaware corporation.
B. "Business" means the business operated by Dealer under the name "Bang &
Olufsenr".
C. "Manual" means the written specifications of the Prime Site System
supplied by BOA, as amended or updated by BOA from time to time.
D. "Prime Site System" means the distinctive business format and methods of
operation and the designs developed by BOA for the interior and exterior
appearance of retail stores such as the Business operated in accordance with the
Manual.
2. The undersigned agrees not to disclose any information or knowledge
concerning the Prime Site System (including specifically, but without
limitation, the Manual), all of which is acknowledged to be confidential, to any
person, other than appropriate Dealer personnel as necessary in the operation of
the Business.
3. The undersigned further agrees not to copy the Manual or other
confidential information, and to use the Manual and other confidential
information only as necessary in the performance by the undersigned of duties on
behalf of Dealer.
4 The undersigned acknowledges that the Manual and other confidential
information shall at all times remain the property of BOA.
5. The obligations of the undersigned under this agreement shall continue
notwithstanding termination of the undersigned's employment relationship with
Dealer for any reason.
6. The covenants and obligations set forth in this agreement are intended
to benefit Dealer and BOA and shall be enforceable against the undersigned by
either Dealer ()~ BOA, as BOA may elect.
Date:____________________
Employee:
------------------------------------
Print Name:
Address:
Exhibit No.4
to
Bang & Olufsen America, Inc.
Prime Site Marketing Agreement (Union Square)
INSURANCE COVERAGE FURNISHED BY DEALER
Commercial General Liability Insurance with a combined single limit of at
least $1,000,000
Property Insurance with limits of at least $500,000
Business Interruption Insurance in form and with coverages reasonably
satisfactory to BOA
Exhibit No.5
to
Bang & Olufsen America, Inc.
Prime Site Marketing Agreement (Union Square)
LIST OF AUTHORIZED VENDORS OF NON-BANG & OLUFSENr PRODUCTS
Sony Video
Runco
Sharpvision
Mitsubishi
Marantz
Xxxxxxx Film Screen
Niles
Proton
Salamander Designs
BDI
Velodyne
Faroudja
Panamax
Monster Power
Exhibit No.6
to
Bang & Olufsen America, Inc.
Prime Site Marketing Agreement (Union Square)
Letter re Use of Names (see attached)
January 6, 1999
Xx. Xxxxxxxx Xxxx
Xxxxxx Electronics Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx Xxx Xxxxxx 00000
Re: Prime Site Marketing Agreement dated January 6, 1999 (together with all
amendments and supplements thereto and modifications, renewals, extensions and
restatements thereof, and all successor agreements thereto, the "Dealer
Agreement") between Bang & Olufsen America, Inc. ("BOA") and Xxxxxx Electronics,
Inc. ("Xxxxxx")
Dear Franklin:
This letter sets forth the terms and conditions under which BOA and Xxxxxx
shall xxxxx to each other the reciprocal right to use certain proprietary names
and trademarks owned by each of BOA and Xxxxxx. Capitalized terms used in this
letter and not otherwise defined herein shall have the meanings specified in the
Dealer Agreement.
In consideration of the mutual covenants and agreements set forth in this
letter and in the Dealer Agreement, Xxxxxx and BOA agree as follows:
1. Subject to the provisions of paragraph 3 of this letter, BOA hereby
grants to Xxxxxx the non-exclusive right and license during the term of this
letter to use the name "Bang & Olufsenr" and "Bang & Olufsen America, Inc." in
press releases, other public announcements and/or any documents, instruments or
certificates filed with any governmental authority ("Public Documents") pursuant
to any law, statute rule or regulation applicable to any corporation,
partnership, limited liability company or other legal entity any or all of the
securities of which are publicly traded (collectively, "Securities
Regulations").
2. Subject to the provisions of paragraph 3 of this letter. Xxxxxx hereby
grants to BOA the non-exclusive right and license during the term of this letter
to use the name "Xxxxxx Electronics, Inc." in connection (i) the advertisement
and promotion of BOA Products and/or BOA. its business and its licensed dealer
program as in effect from time to time and/or (ii) any press releases, other
public announcements and/or Public Documents filed with any governmental
authority pursuant to any applicable Securities Regulation.
3. Any use of the names "Bang & Olufsenr" and "Bang & Olufsen America,
Inc." by Xxxxxx shall be subject to the prior 'written approval of BOA and any
use of the name Xxxxxx Electronics, Inc." by BOA shall be subject to the prior
'written approval of Xxxxxx.
(a) Either party intending to use the name of the other party shall provide
written notice of such intent ("Notice of Use"). Any Notice of Use shall
specify' how the party's name is to be used, the medium in which such name shall
be used. and the duration of such use.
(b) The party receiving a Notice of Use ("Receiving Party") shall have ten
(10) days from the date of the receipt of such Notice of Use ("Objection
Period") within which to object to the use described therein. If objection is
made by the Receiving Party within the Objection Period, the party issuing the
Notice of Use ("Issuing Party") shall be prohibited from using the name of the
Receiving Party in the manner described in the Notice of Use. If no objection is
made by the Receiving Party within the Objection Period, the Issuing Party shall
be entitled to use the Receiving Party's name in the manner described in the
Notice of Use. Any objection to a Notice of Use shall be in the sole discretion
of the Receiving Party, except as provided in paragraph 3(c) below.
(c) Notwithstanding anything contained in this letter or the Dealer
Agreement to the contrary, neither party shall unreasonably withhold or delay
its consent to any Notice of Use relating to a Public Document to be issued or
filed pursuant to applicable Securities Regulations.
4. This letter shall remain in full force and effect so long as the Dealer
Agreement shall be in effect; provided, however, that any use described in a
Notice of Use which is implemented prior to the termination or expiration of
this Agreement shall have the duration described in such Notice of Use. For the
purposes of this letter a use shall be deemed to be implemented if there is then
in effect a binding contract, commitment or obligation with a third party with
regard to such use or if a Public Document has been published or filed which
includes such use.
5. Any notice or communication required or permitted to be given under this
letter shall be in writing and shall be delivered in the manner specified in the
Dealer Agreement.
6. To induce BOA to enter into this letter. Xxxxxx represents and warrants
to BOA as follows:
(a) The execution of this letter and the performance of its obligations
hereunder will not constitute a violation or breach of any obligation,
contractual or otherwise, that it may have to any other person or entity.
(b) As of the date hereof, Xxxxxx is not in default under the Dealer
Agreement and no event has occurred, and no condition exists, that with the
giving of notice or passage of time, or both, would constitute a default by
Xxxxxx under the Dealer Agreement.
7. This letter shall be governed by, and construed in accordance with, the
laws of the State of Illinois without reference to conflicts of law or choice of
law principles.
8. The Dealer Agreement shall remain unmodified and shall continue in full
force and effect.
9. This letter may be executed in multiple counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
Please acknowledge your acceptance of the terms and conditions of this
letter by signing a copy of this letter enclosed herewith and returning it to me
as soon as possible.
Sincerely
/s/ Xxx Xxx
------------------------
Xxx Xxx, President
Agreed and Accepted:
XXXXXX ELECTRONICS, INC.
By: /s/Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx
Its: Executive Vice President and Chief
Financial Officer
Date: January 6, 1999
