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SUPPLY AND
LICENSING AGREEMENT
This Supply And
Licensing Agreement (the “Agreement”) is entered into
as of February 19, 2007 (the “Effective Date”), by and
between Coca Cola Enterprises Inc., a Delaware corporation, having
a principal place of business at 2500 Windy Ridge Parkway, Atlanta,
GA 30339 and its U.S. subsidiaries (collectively
“CCE”), and USA Technologies, Inc., a Pennsylvania
corporation, with a principal place of business at 100 Deerfield
Lane, Malvern, PA 19355 (“USAT”).
RECITALS
WHEREAS, CCE is in
the business of owning and operating beverage vending machines, and
USAT is in the business of facilitating intelligent vending
solutions through the research, development, design, manufacture,
marketing and sale of hardware, software and firmware and the
research, development, design, manufacture, marketing and hosting
of vending solution application software; and
WHEREAS, CCE and
USAT have entered into a USALive Services Agreement on June 8, 2006
that relates to services to be provided to CCE by USAT where the
intelligent vending hardware offered by USAT has not been utilized
by CCE in a beverage vending machine; and
WHEREAS, CCE now
wishes to purchase intelligent vending hardware from USAT for use
in its beverage vending machines, and engage USAT to provide
certain modifications to its firmware and software to facilitate
interoperability with other service providers and USAT is willing
to provide such hardware and modifications;
NOW THEREFORE, in
consideration of the above, the mutual promises and covenants
contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as
follows:
1.
Purchase of
G6e-Port
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1.1 During the term
of this Agreement, USAT will provide CCE with USAT’s G6e-Port
hardware including SIM cards and embedded software
(“Products”) all in accordance with the terms and
conditions contained in this Agreement. All such purchases shall be
evidenced by a purchase order or other statement of work to be
signed by each of CCE and USAT. A description of the Product is set
forth in Exhibit A hereto.
1.2 CCE will
purchase its requirements of the Products from USAT in accordance
with the terms of the Agreement so long as USAT timely meets
CCE’s delivery schedule requirements and the Products comply
with all applicable warranties set forth in this
Agreement.
2.
Software/Firmware
License
2.1 Solely in
connection with the purchase of the Products pursuant to Section
6.1 and the MasterCard PayPass Participation Agreement attached
hereto as Exhibit E, which calls for the purchase of up to 7500
units, USAT grants for such units to CCE a license to use the
embedded software (“Product Firmware”) in the Products.
Additionally, from time to time, and at a price to be agreed upon,
USAT agrees to modify, adapt and translate the Product Firmware at
the request of CCE for the use of the Products in CCE’s
vending business.
3.
SIM
Cards
3.1 Each of the
Products will be supplied with a Subscriber Identity Module
(“SIM”) Card required to establish wireless
communications with a wireless service provider. Each SIM Card
shall be the property of USAT and USAT shall be responsible for
payment to the wireless carrier of all wireless service and other
charges associated with such SIM Cards.
3.2 Upon
CCE’s request, USAT will cooperate with the wireless service
provider to transfer ownership and the attendant responsibility for
payment from USAT to CCE. All costs imposed by the wireless carrier
for services and expenses related to and arising from such a
transfer are to be paid by and are the sole responsibility of
CCE.
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4.
Communication
Protocol Modifications
4.1 As configured
on the Effective Date, the Products shall be capable of
communicating vending machine events and transactions to
USAT’s USALive Network gateway, utilizing USAT’s data
communication protocols.
4.2 USAT will
provide CCE the capability to redirect the 7500 units funded in
part by MasterCard in order to allow the Products to communicate
vending machine event data and transaction data to a gateway
operated by CCE or a third party provider of data services that is
capable of receiving such communicated data. Such redirection
capability must be capable of implementation by instructions
provided to the Products over the wireless service provider’s
network and will not require physical access or proximity to the
Products.
4.3 Upon
CCE’s request, USAT will modify the data communication
protocols utilized for communication between the Products and the
USALive Network to conform to at least one alternative protocol of
CCE’s choosing so long as such protocol is compatible with
the Products and at a price and terms agreed to by the parties in
writing prior to USAT undertaking such modification. Any such
alternative protocol shall be provided by CCE and described on a
subsequently prepared Exhibit B in sufficient detail’
approved by USAT, and attached to this Agreement.
4.4 All right,
title and interest to intellectual property, including, but not
limited to inventions (whether or not patentable or subject to a
patent application or patent), works of authorship (whether or not
copyrightable or subject to a copyright registration application or
copyright registration) trade secrets or trademarks/service marks
(collectively “Intellectual Property”), related to the
Products, including adaptations, modifications and/or designs to
the Products for the purpose of operating under the alternative
protocols identified in Section 4 shall be the sole property of
USAT. As a result of modifying data communication protocols and
implementing CCE’s alternative protocol(s), USAT will acquire
no rights that interfere with, restrict or impede CCE’s
rights, or the rights of any constituent of The Coca-Cola Bottling
System, to use such alternative protocols for communications with
vending machines.
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5.
Settlement
Development
5.1 During the term
of this Agreement, USAT will use reasonable efforts in attempting
to meet a specific request by CCE for software development services
to provide an interface for inventory data and CCE’s
settlement system. Such software development services shall be at
no expense to CCE and specifications will be agreed to by the
parties in writing prior to USAT undertaking software development
services. The scope of this software to be developed is generally
described in Exhibit C attached hereto and entitled Statement of
Settlement Engine Development Services.
5.2 USAT shall own
all right, title and interest in Intellectual Property software
that USAT develops relating to the Settlement Engine pursuant to
this Section 5. USAT shall grant CCE a paid up, royalty free
license to use any software that USAT develops relating to the
Settlement Engine, so long as CCE is current on payments due USAT
under this Agreement. Notwithstanding the above, CCE also has the
rights to meet the business requirements of creating an interface
for inventory data and the CCE settlement system in other manners
if so desired. Therefore CCE is permitted to develop, or have a
3 rd
party
develop, and use an alternative interface for inventory data and
the Settlement Engine without encumbrance or interference from
USAT’s rights.
6.
Prices,
Payment, and Taxes
6.1 The price which
CCE will pay for each Product is $433.00 plus applicable taxes.
USAT hereby warrants and represents that it has the capacity to
calculate, collect and remit all appropriate taxes and that it will
be responsible for calculating, collecting and remitting such taxes
from CCE for each Product purchased. USAT shall have the right to
increase the price for each Product by reasonable prior notice to
CCE. Notwithstanding the foregoing, the per Product price for the
up to 7,500 units of Product being purchased by CCE from USAT in
connection with the MasterCard initiative described in Section 6.7
shall be $100, subject to CCE’s full performance under that
certain MasterCard PayPass Participation Agreement attached hereto
in
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Exhibit E and made
part hereof. USAT shall invoice CCE for $433.00 plus applicable
taxes and, upon payment of that invoice by CCE to USAT, USAT shall,
at the same time, issue an instant rebate to CCE for seventy-seven
percent (77%) of the total applicable sales tax owed for the
Product (“Instant Rebate”). For example, in a state
where the applicable sales tax rate is seven percent (7%),
CCE’s total invoice would be $433.00 plus $30.31 = $463.31.
The Instant Rebate issued by USAT would be $356.31 ($333.00 plus 7%
sales tax). Thus CCE’s total cost would be $107.00 ($100 plus
7% sales tax).
6.2 USAT hereby
undertakes to use reasonable efforts to deliver the Product to such
destinations as may be designated by CCE and agreed to by USAT, all
at the cost of CCE. The goods sold pursuant to this Agreement are
sold F.O.B. and C.I.F. the place of manufacture or Malvern,
Pennsylvania as designated by USAT. The risk of loss, damage, or
destruction of the goods for any reason shall be borne by USAT
until the Product has been duly delivered to CCE provided such
loss, damage, or destruction is not attributable solely to
CCE’s own negligence. The delivery dates specified in the
purchase orders or statement of work signed by USAT and CCE are
intended as firm delivery dates that must be met.
6.3 CCE shall have
thirty (30) business days following the day on which it receives a
shipment of Product to reject any portion of the shipment which
fails to conform to the specifications by giving written notice to
USAT specifying in reasonable detail the alleged nonconformity with
the specifications or other defect in the Product. Upon receipt of
such notification of nonconformance or defect and appropriate
samples of alleged nonconforming Product, USAT will have up to
fifteen (15) business days from receipt to inspect the affected
Product and perform any additional testing it considers
appropriate. In all cases in which the Parties agree that there is
a nonconformance or defect that was caused by USAT, USAT, at no
additional cost to CCE, shall promptly replace any nonconforming
Product, to be shipped to CCE at no additional cost to
CCE.
6.4
Taxes
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6.4.1 CCE shall be
responsible for all transfer, sales, use, value-added taxes,
duties, levies, tariffs or similar charges of any kind imposed by
any federal, state, local, or other governmental authority
associated with the per Product price for goods or services
purchased by CCE by USAT under this Agreement (“Taxes”)
to be billed and collected by USAT as set forth in Section 6.1
above.
6.4.2 In connection
with any goods or services provided to CCE by USAT under this
Agreement, USAT shall be responsible for (1) remittance of the
Taxes for which CCE shall be responsible where required by
operation of law [i.e., where CCE is not allowed by the taxing
jurisdiction to self-assess and directly remit such taxes], and the
filing of any related tax returns; and (2) all other taxes,
assessments, charges, duties, fees, levies or other governmental
charges, including federal, state, city, county, parish, foreign or
other income, franchise, capital stock, real property, personal
property, escheatment or unclaimed property, intangible,
withholding, FICA (or similar), unemployment compensation,
disability, environmental (including taxes under section 59A of the
Internal Revenue Code of 1986, as amended), fuel, excise, gross
receipts, alternative or add-on-minimum, estimated and all other
taxes of any kind for which USAT may have any liability imposed by
any governmental authority (including interest, penalties or
additions associated therewith) whether disputed or not, and
including any transferee or secondary liability in respect of any
tax (whether imposed by law, contractual agreement or otherwise)
and any liability in respect of any tax as a result of being a
member of any affiliated, consolidated, combined, unitary or
similar group; provided, however, that the foregoing shall not
relieve or discharge CCE for any primary liability for any of the
foregoing items, and CCE shall pay and, or discharge any such
primary liability
6.4.3 Each of the
parties will use its reasonable, good faith efforts legally to
minimize any taxes associated with the transactions contemplated in
this Agreement. The party requesting that such efforts be made by
the other party shall be responsible for all reasonable costs
associated with such request.
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6.5 USAT shall be
entitled to invoice CCE for Products upon delivery to CCE. All
amounts due under this Agreement will be payable within forty-five
(45) days of the invoice. Ownership of the Products shall vest in
CCE upon payment of the applicable invoice.
6.6 In connection with the CCE beverage vending machines utilizing
the Product, USAT and CCE shall
enter into a USALive Services Agreement in the form of Exhibit D
hereto.
7.
Term and
Termination
7.1 The initial
term of this Agreement shall commence upon the Effective Date and
shall end at 12:00 midnight on the third annual anniversary of the
Effective Date. This Agreement will automatically be renewed for
successive one-year periods thereafter unless either USAT or CCE
shall have delivered to the other written notice of its intention
not to renew this Agreement. A notice of non-renewal must be given
at
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