Service Letter Agreement/copyright Clearinghouse

COPYRIGHT CLEARINGHOUSE, INC. LETTERHEAD]


August 20, 1996


Mr. Mouli Cohen President and CEO Aristo International Corporation 152 W. 57th Street New York, NY 10019


Re: "PLAYNET" Service Agreement


Dear Mouli:


The following is the agreement between us pursuant to which we ("we" or "us") will provide music licensing and consulting services to you or any companies through which you now or in the future do business.


1. Services. We shall provide music licensing and consulting services in matters relating to the system currently to be called "Playnet", which is an on-line "virtual" jukebox. These services will include the key activities set forth in Phase One and Phase Two on Exhibit A attached hereto. It is understood that we will contact ASCAP, BMI, RIAA and such individual record labels and publishers if and as we deem appropriate, with regard to blanket and per play license fees for the performance of selections through the Playnet system. We will attempt to negotiate an accounting standard with licensors for payment of blanket and per play fees that may be due as a result of the installation of the Playnet system. At such time as you are required to begin the continuing distribution of per play royalties to licensors, we agree to negotiate in good faith, a fee for providing such services to you. We will provide you with a bi-weekly written report (due every other Friday) of the progress being made, and the companies and societies being contacted.


2. Compensation. You shall pay us a minimum, non-cumulative, non-returnable, monthly retainer against hourly fees. Hourly fees are $300 for Ron Gertz, $250 for Doug Brainin, $250 for an additional attorney designated by us as necessary, and $150 for associates. For the first three months of the agreement, the retainer shall be $25,000 per month. Thereafter, the retainer shall be $20,000 per month. Retainer fees are due on the first of each month. We shall inform you when monthly billings are about to exceed the retainer. You shall reimburse us for our


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reasonable expenses incurred in connection with rendering services, provided such expenses receive your prior approval. Invoices for approved overages and expenses will be billed monthly, and are due and payable upon receipt. All statements will be prepared with sufficient detail to permit you to identify the person performing the work, the specific task performed and the amount of time spent.


a. Additional compensation:


i. At the end of the first full year of operation, you will also
pay to us a minimum floor of one (1)% of 100% of your gross
receipts, or 10% of your net revenues for the year, whichever is
greater.


ii. At the end of each three-month period, if this agreement has
not been terminated by you, we shall receive options to purchase
25,000 shares of your stock at $5.50 per share (i.e., a total of
100,000 shares at the end of the first year), which options shall
be exercisable only between September 1, 1997 (and not before) and
December 31, 2005, after which time su ...