EXHIBIT 10(au)
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Digital Broadcasting Site System
Site Operations Agreement
With
▇▇▇▇▇▇ & ▇▇▇▇▇ College Bookstores
AGREEMENT made this 20th day of May 1999, by and between ▇▇▇▇▇▇ & Noble
College Bookstores ("BNCB") and ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Incorporated ("DMC").
WHEREAS, DMC is in the business of providing a system which integrates
various patent pending technologies to deliver site-selected audio programming,
broadcast advertising and on-wall billboard advertising, known as the Digital
Broadcast Site system ("DBS"); and
WHEREAS, BNCB wishes DMC to install a DBS system or systems in its place or
places of business, identified on Exhibit A, attached hereto (the "Premises").
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the parties hereto do hereby agree as follows:
1. Term. The Term of this agreement shall commence on the date hereof and
end 60 days after the end of the test period. The Term of this agreement shall
automatically renew itself for successive five (5) year periods thereafter,
unless terminated by BNCB by provision to DMC of written notice of its intention
not to renew this agreement, not later than 30 days prior to the expiration of
the then current term. The test period shall continue until a charter advertiser
(or equivalent) is signed for audio and billboard advertising or when parties
agree that the test period has been satisfied.
2. Digital Music System.
a. License. DMC hereby grants to BNCB a revocable license to use,
throughout the Term hereof and in the manner set forth herein, three
hundred (300) DBS systems and such additional systems as will be necessary
to outfit all seventy-five (75) stores as and when approved by BNCB and
DMC.
b. Installation; Equipment ownership. DMC shall, at its sole cost and
expense, install the DBS Equipment in the Premises, in locations selected
by BNCB and reasonably approved by DMC. The DBS Equipment shall at all
times remain the sole and exclusive property of DMC. BNCB shall execute and
permit DMC to file any financing statement or other documentation necessary
to preserve or perfect DMC's ownership of the DBS Equipment. BNCB shall not
attempt to transfer, sell, lien, pledge or encumber the DBS Equipment. BNCB
shall not move the DBS Equipment without the prior written consent of DMC.
Upon the expiration or earlier termination hereof, BNCB shall immediately
provide DMC access to the Premises or subsequent location of the DBS
Equipment in order to remove same.
c. Maintenance. DMC will maintain, service and replace all components
of the DBS system throughout the Term hereof at its sole cost and expense.
3. Advertising Revenue Participation. DMC shall pay to BNCB twenty-five per
cent (25%) of the gross revenues, which DMC receives from advertising sponsors,
which is attributable to the Premises' participation as a DBS site. DMC shall
pay such percentage of advertising revenue to BNCB quarterly, in arrears.
4. Programming
a. Music Selection: DMC will provide music to each DBS system during
the hours of BNCB's normal business operations during the Term of this
agreement at no cost to BNCB. BNCB may select its preferences of music
categories from those set forth on Exhibit C, attached hereto. Throughout
the Term hereof, DMC will reasonably incorporate BNCB's preferences through
regular updates of the musical programming.
5. Advertising.
A. Audio Advertising. DMC will play audio advertising spots throughout each
programming day.
B. BNCB will have the use of two (2) audio spots per zone.
C. BNCB and DMC will agree on guidelines for all advertising.
6. Demographics. Throughout the term of this agreement, BNCB will, upon
request, provide to DMC reasonably detailed information concerning the typical
number of its customers and clientele in each store each day.
7. Notices. All notices hereunder shall be made by first class mail,
national overnight delivery service, telecopier or hand-delivery to the
following addresses:
To DMC:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President and Chief Executive Officer
With a copy to:
Lev, Berlin & ▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Attn. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To: BNCB:
________________________________
________________________________
________________________________
________________________________
With a copy to:
________________________________
________________________________
________________________________
________________________________
8. Integration;Disclaimers.
A. A. Sole Agreement: This agreement constitutes the sole and exclusive
understanding of the parties with respect to the subject matter
hereof.
B. No Warranties; Waiver of Claims: BNCB hereby acknowledges that DMC has
made no representation or warranty, express or implied, except as
specifically set forth herein. BNCB hereby releases and holds DMC, its
affiliates, BNCBs, employees and agents harmless from and against any
loss, claim, liability or damage relating or with regard to the
transactions contemplated by or discussed herein other than those
caused by DMC's willful misconduct and in all events waives any claim
for lost profits or other consequential damages in this connection.
C. The ability to page through the DBS is specifically not certified for
emergency use, and BNCB indemnifies DMC against any claims arising
from the use of the DBS system in emergency situations.
9. Binding Effect. This agreement shall be binding upon the parties hereto,
their heirs, successors and assigns.
10. Governing Law. This agreement shall be governed by the laws of the
State of Connecticut, without giving effect to principles of conflicts of law.
11. This agreement shall be exclusive to BNCB. DMC shall not enter into a
marketing agreement with any other competitor in the college bookstore market.
This exclusivity will expire after twelve (12) months if DMC has not concluded a
similar deal with ▇▇▇▇▇▇ & ▇▇▇▇▇.
12. DMC will consult with BNCB to coordinate any other DMC installations in
BNCB client schools.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Incorporated
_________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President and Chief Executive ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ College Bookstores
_________________________________
By: ____________________________
Its: __________________________
Exhibit A
The Premises
Exhibit B
Music Categories
1 Acoustic Guitar
2 All Time Favorites
3 Broadway Favorites
4 Caribbean
5 Classical
6 Classical, Light
7 Contemporary Hits
8 Contemporary, Adult 45+
9 Contemporary, Adult, Hot
10 Contemporary, Adult, Mainstream
11 Country, Classic
12 Country, Hits
13 Dance
14 Dixieland
15 Easy Listening Mix
16 Ethereal / Ambient
17 Exotic
18 Futuristic / Space
19 Great Movie Themes
20 Hip Hop
21 Inspirational
22 Instrumental
23 Jazz
24 Jazz, Light
25 New Age
26 Piano Selections
27 Rhythm & Blues
28 Rhythm & Blues, Classics
29 Rock, Alternative
▇▇ ▇▇▇▇, Classic
31 Rock, Hard
32 Rock, Soft
33 Romantic
34 Site Favorites
35 Sophisticated
36 Top 40
37 Upbeat
[GRAPHIC OMITTED]
This letter, when signed by ▇▇▇▇▇▇ & ▇▇▇▇▇ College Bookstores (BNCB) and
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (DMC), will modify the Site Operations Agreement dated May
20, 1999.
DMC agrees to increase the Advertising Revenue Participation in Paragraph 3
of the referenced agreement in the following manner:
DMC shall increase by 5% of Gross Revenues, the Advertising Revenue
Participation for each of the two (2) spots that BNCB does not reserve in
advance. The lead-time for reservation will be worked out between BNCB and
DMC based on operating practicality.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Incorporated
_________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President and Chief Executive ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Noble College Bookstores
_________________________________
By: ____________________________
Its: __________________________