EXHIBIT 10(aw)
[GRAPHIC OMITTED]
Digital Broadcasting Site System
Site Operations Agreement
With
Wherehouse Entertainment, Incorporated
AGREEMENT made this th day of 1999, by and between Wherehouse
Entertainment, Incorporated ("Wherehouse") and XxxxxxxxxxxXxxxx.xxx 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, WHEREHOUSE 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.
a. The Term of this agreement shall commence on the date hereof and
end five (5) years thereafter. The Term of this agreement shall
automatically renew itself for successive five (5) year periods
thereafter, unless terminated by WHEREHOUSE by provision to DMC
of written notice of its intention not to renew this agreement,
not later than 120 days prior to the expiration of the then
current term.
b. WHEREHOUSE and DMC will conduct a test of the system at six (6)
sites. Once the six sites are up and running, a ninety (90) day
test period will begin. If at any time during this ninety day
period WHEREHOUSE decides that it is not in its best interests to
continue, WHEREHOUSE may at its discretion cancel this agreement.
c. During the test period, the Advertising Standards and Practices
(outlined in Exhibit C) will be adjusted if necessary to the
mutual satisfaction of both WHEREHOUSE and DMC in advance of the
large scale deployment of sites.
2. Digital Music System.
a. License. DMC hereby grants to WHEREHOUSE a revocable license to
use, throughout the Term hereof and in the manner set forth
herein, systems for up to 609 stores. Additional stores can be
added with mutual agreement by the parties.
b. Installation; Equipment ownership. DMC shall, at its sole
cost and expense, install the DBS Equipment in the Premises,
in locations selected by WHEREHOUSE and reasonably approved
by DMC.
The DBS Equipment shall at all times remain the sole and
exclusive property of DMC. WHEREHOUSE 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. WHEREHOUSE shall not attempt
to transfer, sell, lien, pledge or encumber the DBS
Equipment. WHEREHOUSE shall not move the DBS Equipment. If
WHEREHOUSE requires the equipment moved, it shall request it
in writing. If so requested, DMC shall schedule time to move
the equipment. Upon the expiration or earlier termination
hereof, WHEREHOUSE 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 WHEREHOUSE 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 WHEREHOUSE quarterly, in arrears.
If DMC agrees to a sharing percentage greater than 25% with any other music
retailer (such as Trans World Entertainment or The WIZ), DMC will adjust
the sharing percentage with Wherehouse so that it is equal to the higher
percentage.
4. Programming.
a. Music Selection: DMC will provide music to each DBS system
during the hours of WHEREHOUSE's normal business operations
during the Term of this agreement at no cost to WHEREHOUSE.
WHEREHOUSE may select its preferences of music categories
from those set forth on Exhibit B, attached hereto.
Throughout the Term hereof, DMC will reasonably incorporate
WHEREHOUSE's preferences through regular updates of the
musical programming.
b. WHEREHOUSE will request specific music tracks, and DMC will
program the music as requested by WHEREHOUSE.
5. Advertising.
a. DMC will play up to 12 minutes of audio advertising spots
per hour throughout each programming day.
b. DMC will place visual advertisements on each speaker.
c. DMC shall not place or play advertisements in WHEREHOUSE's
locations that are competitive to WHEREHOUSE.
d. DMC will not sell advertising to WHEREHOUSE's coop
advertisers unless the dollars received by DMC are
incremental to the dollars already being received by
WHEREHOUSE for its coop programs.
e. DMC will be allowed to solicit "Pay-for-Play" revenue from
record and movie companies.
f. All ads will comply with the DMC Advertising Standards and
Practices as defined in Exhibit C.
6. Demographics.
Throughout the term of this agreement, WHEREHOUSE will, upon request,
provide to DMC reasonably detailed information concerning the 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:
XxxxxxxxxxxXxxxx.xxx, Incorporated
Xxx Xxxx Xxxxxx
Xxxxxxxx, XX. 00000
Attn: Xxxxx XxXxxxx, President and Chief Executive Officer
With a copy to:
Lev, Berlin & Xxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, XX. 00000
Attn. Xxxxx X. Xxxxxx, Esq.
To Wherehouse:
Wherehouse Entertainment, Incorporated:
00000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx XX, Chairman and CEO
With a copy to:
8. Integration; Disclaimers.
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: WHEREHOUSE and DMC hereby
acknowledges that neither party has made any representation or
warranty, express or implied, except as specifically set forth
herein. Additionally, each party hereby releases and holds each
other, its affiliates 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 either party willful misconduct and in all events
waives any claim for lost profits or other consequential damages
in this connection.
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.
XxxxxxxxxxxXxxxx.xxx, Incorporated
____________/S/______________________
By: Xxxxx XxXxxxx
Its: President and Chief Executive Officer
Wherehouse Entertainment, Incorporated
____________/S/______________________
By: Xxxxx X. Xxxxxx
Its: Chief Marketing and Merchandise Officer
Exhibit A
The Premises
To be completed:
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
00 Xxxx, Classic
31 Rock, Hard
32 Rock, Soft
33 Romantic
34 Site Favorites
35 Sophisticated
36 Top 40
37 Upbeat
Exhibit C
DMC Advertising Standards and Practices
DMC-SPECIFIC CODE
1.1 Advertisements must be appropriate to the demographics of the store.
1.2 Advertisements for or that contain alcohol, tobacco, sex, condoms,
offensive language are not permitted except in pre-approved locations.
1.3 Advertisements for religious or political messages or that express specific
opinions and special interest are not permitted.
1.4 Advertisements that are competitive to the store or merchandise and
services in the store are not permitted.
1.5 All audio spots will be either 10 or 20 seconds in length. Run-overs, such
as 11 second spots are not permitted.
1.6 Pacing for audio spots will not exceed typical conversational speed.
1.7 Pre-produced spots must be reviewed by DMC to ensure that all standards are
met.
STANDARD ADVERTISING CODE - Principles
2.1 All advertisements should be legal, decent, honest and truthful.
2.2 All advertisements should be prepared with a sense of responsibility to
consumers and to society.
2.3 All advertisements should respect the principles of fair competition
generally accepted in business.
2.4 No advertisement should bring advertising into disrepute.
STANDARD ADVERTISING CODE - Substantiation
3.1 Before submitting an advertisement for publication, advertisers must hold
documentary evidence to prove all claims, whether direct or implied, that
are capable of objective substantiation.
3.2 If there is a significant division of informed opinion about any claims
made in an advertisement they should not be portrayed as universally
agreed.
3.3 If the contents of non-fiction books, tapes, videos and the like have not
been independently substantiated, advertisements should not exaggerate the
value or practical usefulness of their contents.
3.4 Obvious untruths or exaggerations that are unlikely to mislead and
incidental minor errors and unorthodox spellings are all allowed provided
they do not affect the accuracy or perception of the advertisement in any
material way.
STANDARD ADVERTISING CODE - Legality
4.1 Advertisers have primary responsibility for ensuring that their
advertisements are legal.
4.2 Advertisements should contain nothing that breaks the law or incites anyone
to break it, and should omit nothing that the law requires.
STANDARD ADVERTISING CODE - Decency
5.1 Advertisements should contain nothing that is likely to cause serious or
widespread offense. Particular care should be taken to avoid causing
offense on the grounds of race, religion, sex, sexual orientation or
disability.
5.2 Advertisements may be distasteful without necessarily conflicting with 5.1
above. Advertisers are urged to consider public sensitivities before using
potentially offensive material.
5.3 The fact that a particular product is offensive to some people is not
sufficient grounds for objecting to an advertisement for it.
STANDARD ADVERTISING CODE - Honesty
6.1 Advertisers should not exploit the credulity, lack of knowledge or
inexperience of consumers.
STANDARD ADVERTISING CODE - Truthfulness
7.1 No advertisement should mislead by inaccuracy, ambiguity, exaggeration,
omission or otherwise.
STANDARD ADVERTISING CODE - Matters of opinion
8.1 Advertisers may give a view about any matter, including the qualities or
desirability of their products, provided it is clear that they are
expressing their own opinion rather than stating a fact.
STANDARD ADVERTISING CODE - Fear and distress
9.1 No advertisement should cause fear or distress without good reason.
Advertisers should not use shocking claims or images merely to attract
attention.
9.2 Advertisers may use an appeal to fear to encourage prudent behavior or to
discourage dangerous or ill-advised actions; the fear likely to be aroused
should not be disproportionate to the risk.
STANDARD ADVERTISING CODE - Safety
10.1 Advertisements should not show or encourage unsafe practices except in the
context of promoting safety. Particular care should be taken with
advertisements addressed to or depicting children and young people.
10.2 Consumers should not be encouraged to drink and drive. Advertisements,
including those for breath testing devices, should not suggest that the
effects of drinking alcohol can be masked and should include a prominent
warning on the dangers of drinking and driving.
STANDARD ADVERTISING CODE - Violence and anti-social behavior
11.1 Advertisements should contain nothing that condones or is likely to provoke
violence or anti-social behavior.
STANDARD ADVERTISING CODE - Protection of privacy
12.1 Advertisers are urged to obtain written permission in advance if they
portray or refer to individuals or their identifiable possessions in any
advertisement. Exceptions include most crowd scenes, portraying anyone who
is the subject of the book or film being advertised and depicting property
in general outdoor locations.
12.2 Advertisers who have not obtained prior permission from entertainers,
politicians, sportsmen and others whose work gives them a high public
profile should ensure that they are not portrayed in an offensive or
adverse way. Advertisements should not claim or imply an endorsement where
none exists.
12.3 Prior permission may not be needed when the advertisement contains nothing
that is inconsistent with the position or views of the person featured.
Advertisers should be aware that individuals who do not wish to be
associated with the advertised product may have a legal claim.
12.4 References to anyone who is deceased should be handled with particular care
to avoid causing offense or distress.
STANDARD ADVERTISING CODE - Testimonials and endorsements
13.1 Advertisers should hold signed and dated proof, including a contact
address, for any testimonial they use. Testimonials should be used only
with the written permission of those giving them.
13.2 Testimonials should relate to the product being advertised.
13.3 Testimonials alone do not constitute substantiation and the opinions
expressed in them must be supported, where necessary, with independent
evidence of their accuracy.
13.4 Fictitious endorsements should not be presented as though they were genuine
testimonials.
13.5 References to tests, trials, professional endorsements, research facilities
and professional journals should be used only with the permission of those
concerned.
STANDARD ADVERTISING CODE - Prices
14.1 Any stated price should be clear and should relate to the product
advertised. Advertisers should ensure that prices match the products
illustrated.
14.2 If the price of one product is dependent on the purchase of another, the
extent of any commitment by consumers should be made clear.
14.3 Price claims such as 'up to' and 'from' should not exaggerate the
availability of benefits likely to be obtained by consumers.
STANDARD ADVERTISING CODE - Guarantees
15.1 The full terms of any guarantee should be available for consumers to
inspect before they are committed to purchase. Any substantial limitations
should be spelled out in the advertisement.
15.2 Advertisers should inform consumers about the nature and extent of any
additional rights provided by the guarantee, over and above those given to
them by law, and should make clear how to obtain redress.
15.3 'Guarantee' when used simply as a figure of speech should not cause
confusion about consumers' legal rights.
STANDARD ADVERTISING CODE - Comparisons
16.1 Comparisons can be explicit or implied and can relate to advertisers' own
products or to those of their competitors; they are permitted in the
interests of vigorous competition and public information.
16.2 Comparisons should be clear and fair. The elements of any comparison should
not be selected in a way that gives the advertisers an artificial
advantage.
STANDARD ADVERTISING CODE - Denigration
17.1 Advertisers should not unfairly attack or discredit other businesses or
their products.
17.2 The only acceptable use of another business's broken or defaced products in
advertisements is in the illustration of comparative tests, and the source,
nature and results of these should be clear.
STANDARD ADVERTISING CODE - Exploitation of goodwill
18.1 Advertisers should not make unfair use of the goodwill attached to the
trademark, name, brand, or the advertising campaign of any other business.
STANDARD ADVERTISING CODE - Imitation
19.1 No advertisement should so closely resemble any other that it misleads or
causes confusion.
