SOUND CHOICE® HELP LICENSE AGREEMENT
FOR COMMERCIAL KARAOKE OPERATORS

("HELP OPERATOR LICENSE")
This agreement ("the Agreement" or "this Agreement") is a binding agreement between Phoenix Entertainment Partners, LLC, a North Carolina limited liability company having its principal place of business at 12245 Nations Ford Road, Suite 501, Pineville, NC 28134 ("the Licensor"), and
[LICENSEE DETAILS TO BE INSERTED]
("the Licensee").
PURPOSE OF AGREEMENT. A commercial karaoke operator who wishes to use karaoke accompaniment tracks that bear the SOUND CHOICE® registered trademarks in a different format and/or on different media from manufacturer-original compact discs cannot do so without the permission of the owner of those trademarks. The purpose of this Agreement is to provide the Licensee on a nonexclusive basis with the right to use the SOUND CHOICE® registered trademarks in connection with commercial karaoke shows, including by the display of the SOUND CHOICE® registered trademarks during those shows, and to establish the terms on which that license is granted.
  1. GENERAL DEFINITIONS. Unless the context clearly requires otherwise, the following terms have the following definitions for purposes of this Agreement. Other terms may defined elsewhere throughout the Agreement.
    1. The terms "Medium" and "Media" (used alone) refer to any mechanism for storing digital files of any type, including hard drives, USB drives, solid-state media, compact discs (CDs), digital versatile discs (DVDs), portable digital music players, other mechanisms not yet invented, and the like.
    2. The term "Track" refers to a single, unitary audiovisual work stored on a Medium, typically including a karaoke sound recording of a single musical work synchronized to a display of lyrics, cues, and other material.
    3. The term "Covered Track" refers to a Track described in subparagraph 3(a) below.
    4. The term "Marks" refers to the trademarks identified in U.S. Trademark Registrations No. 1,923,448 and No. 4,099,045 (SOUND CHOICE), and No. 2,000,725 and No. 4,099,052 (SOUND CHOICE & Design, also known as the Sound Choice Logo). "Marks" also includes the Licensor's distinctive trade dress as applied to karaoke accompaniment tracks, comprising the non-functional elements of changing-color lyrics, singing cues, the particular typeface and layout of the lyrics, and logos and other graphical elements.
    5. The term "Commercial Karaoke Show" refers to the production of a live karaoke entertainment show or the provision of live karaoke services to a third party, whether for pay (or in-kind trading, such as free drinking privileges at a bar), without pay (such as for advertising or trial purposes, or gratuitous services rendered to a nonprofit organization or cause), or ancillary to the commercial purposes of a third party (such as services rendered to attract paying patrons to an event, contest, or commercial establishment), using a Karaoke System (defined below) physically located on the site of the live karaoke entertainment show or at the location where the live karaoke services are rendered. The location (e.g., a private residence, school, church, outdoor event) at which the show is performed or services are rendered is not the determining factor as to whether or not the activity is a "commercial business."
    6. The term "Karaoke System" refers to a single Medium (or associated set of Media intended to be used as a single unit) capable of being used as a source of Tracks for a Commercial Karaoke Show, but not a manufacturer-original compact disc or set consisting solely of manufacturer-original compact discs.
    7. A Track is deemed to be "in use" when it is made available to be played at a Commercial Karaoke Show using a Karaoke System.
    8. The term "including" means "including without limitation" or "including but not limited to."
    9. The term "Commencement Date" means the date on which this Agreement is accepted by the Licensor.
    10. The term "Territory" means the geographic area specified in paragraph 2(c) below.
  2. LICENSE GRANT.
    1. Subject to the terms and conditions herein, the Licensor hereby grants to the Licensee a limited nonexclusive license ("the License") to use the Marks within the Territory as follows:
      1. To display the Marks during a Commercial Karaoke Show to one or more patrons during the provision of live karaoke services;
      2. To place one or more Covered Tracks in use in connection with a Commercial Karaoke Show;
      3. To identify Covered Tracks in a physical or electronic song listing used in connection with a Commercial Karaoke Show;
      4. To duplicate the Marks in connection with the storing of Covered Tracks upon any Medium; and
      5. To identify Licensee as a SOUND CHOICE® HELP program participant in sales and marketing materials and advertising.
    2. The license grant provided herein shall not apply to any Licensee who resides in or provides commercial services in the State of New York. Instead, the Covenant Not to Sue as provided in paragraph 6 below shall apply, subject to the Licensee's adherence to all of its obligations hereunder.
    3. The Territory shall consist of the following geographic location(s):

      [INSERT TERRITORY]
  3. QUALITY CONTROL AND RESTRICTIONS ON LICENSE. The parties agree that the License shall be limited by the following quality control provisions and license restrictions as a part of the Licensor's effort to maintain control over the quality of the Tracks in use by and services provided by Licensee in connection with the Marks.
    1. COVERED TRACKS. The License extends exclusively to Tracks that meet all of the following quality control conditions, irrespective of the manner in which the Track was created or obtained:
      1. The Track embodies a karaoke recording originally produced by or for, and released in compact disc plus graphics (CD+G) format by, Slep-Tone Entertainment Corporation on or before December 31, 2009;
      2. The Track bears one or more instances of the Sound Choice Logo in which the representation of the musical staff in the logo is rendered the color red during display ("Red Logo Tracks");
      3. The musical component of the Track is rendered in (A) the MPEG-1 (or MPEG-2) Audio Layer III ("MP3") audio coding format encoded at an average bit rate of not less than 192 kilobits per second of audio and not upconverted from a lower bit rate, or (B) lossless Waveform Audio File Format ("WAV"), or (C) uncompressed Audio Interchange File Format ("AIFF"), or (D) any other format expressly approved in writing by Licensor;
      4. Neither the musical component nor the graphical component of the Track contains uncorrected voids, flaws, or imperfections that are reasonably perceptible upon playback, except that the musical component or graphical component of any Track containing or implying a profanity may be censored to prevent the display or audible expression of the profanity;
      5. Except for modifications as described above, no part of the Track (including the Marks) has been altered from the original, including by the removal, mutilation, or modification of any copyright or trademark notice, title or composer information, or the Marks.
    2. NON-COVERED TRACKS. The License does not extend to any of the following ("Non-Covered Tracks"):
      1. Tracks produced as part of and bearing the insignia of the SOUND CHOICE GEM Series ("Blue Logo Tracks");
      2. Tracks first released in original format on or after January 1, 2010; or
      3. Tracks that bear the Marks or any aspect of them but that fail to meet one or more of the conditions specified in subparagraph (a) of this paragraph.
      Nothing in this Agreement shall be deemed to permit or prohibit the placing in use of any Track that does not bear the Marks or any aspect of them (e.g., the Tracks of other producers).
    3. USE OF NON-COVERED TRACKS. The use of Non-Covered Tracks, not otherwise authorized (e.g., by separate license agreement or by the exclusive use of paid-for original media), shall be deemed to be a breach of this Agreement.
    4. GEOGRAPHIC RESTRICTIONS. The License is restricted to coverage of the Licensee's operations within the Territory as defined above. For Licensees who reside and operate entirely outside the United States of America, the Territory shall be deemed also to include all other geographic areas where the Licensee has an unrestricted right to operate by virtue of being domiciled in the expressly stated Territory. By way of example and not restriction, if the Territory consists of a member state of the European Union, the Territory shall also consist of all European Union states to which the Single Market applies. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to authorize operation in any part of the United States of America not expressly defined above as part of the Territory.
    5. SUBLICENSING, STREAMING, OR OTHER REDISTRIBUTION. Unless the parties have separately executed a Central Server Rider (and except upon such terms as are provided in a Central Server Rider) and the fee therefor has been paid, the License shall not extend to the sublicensing, streaming, or other redistribution of any Track bearing the Marks to any other person or entity through any mechanism. Notwithstanding the preceding sentence, the Licensee may temporarily transfer possession of a Karaoke System as part of a bona fide employer-employee or contractor relationship, whereby the Licensee authorizes the employee or contractor to provide live karaoke entertainment services in Licensee's name in the same manner as would be permitted under this Agreement if the Licensee provided the entertainment directly. The Licensee must bind the employee or contractor to carry out the live karaoke entertainment services under conditions that are at least as restrictive as the provisions of this Agreement.
    6. PROFESSIONAL SERVICES. The Licensee agrees that for the protection of the Marks, the business goodwill symbolized thereby, and the integrity of the Sound Choice brand, in each instance in which the Licensee causes to be played a Track bearing the Marks in connection with a Commercial Karaoke Show, the services provided thereby shall be of professional quality using equipment and media of quality and capacity that are appropriate to the venue where the services are being provided.
    7. DISCOVERY OF DISQUALIFYING CONDITIONS. In the event that the Licensee discovers by any means that any Covered Track in use fails to meet one or more of the requirements and conditions of this paragraph, Licensee agrees to remove the deficient Track from its associated Karaoke System until such time as the defect has been corrected. In the event that the Licensee discovers by any means that any aspect of the Licensee's services that is regulated by this paragraph fails to meet one or more of the requirements and conditions of this paragraph, Licensee agrees to discontinue making those services available until such time as the deficiency has been corrected.
    8. NO LICENSEE-CREATED TRACKS. Nothing in this Agreement shall be construed to permit the Licensee to add the Marks to any Track that did not carry the Marks in its original format and medium.
    9. RIGHT TO INSPECT. In order to ensure the protection of the Marks and the business goodwill symbolized thereby, the Licensor shall have the right, at reasonable times and at the Licensor's expense, to inspect the Licensee's Karaoke System(s) and Covered Tracks and to observe the Licensee in its delivery of the professional services described in this paragraph.
    10. DISCLOSURES REGARDING OPERATIONS. In order to ensure the protection of the Marks and the business goodwill symbolized thereby, the Licensor shall have the right, at reasonable times, to require the Licensee to identify the Commercial Karaoke Shows that the Licensee regularly plays. Such identification shall include the name and location of the venue and the days and times when the services are provided. The failure to disclose the existence of a regular Commercial Karaoke Show in response to a request from the Licensor may result in the License being deemed not to apply to the undisclosed Commercial Karaoke Show.
  4. LICENSE FEE. As consideration for the grant of the License, the Licensee agrees to pay to the Licensor (or as the Licensor directs) a license fee ("the License Fee") as follows:
    1. PAYMENT AMOUNT. The License Fee shall be $[AMOUNT TO BE INSERTED] per month. The Licensee shall be entitled to discounts for prepayment according to the following schedule:
      • Prepayment of 6 months in advance, 4% discount, rounded to the nearest whole dollar;
      • Prepayment of 12 months in advance, 8% discount, rounded to the nearest whole dollar;
      • Prepayment of 18 months in advance, 12% discount, rounded to the nearest whole dollar;
      • Prepayment of 24 months in advance, 16% discount, rounded to the nearest whole dollar;
    2. COMMITMENT TERM; EARLY TERMINATION. The Licensee has selected a commitment term of [INSERT NUMBER OF MONTHS] months ("the Commitment Term"), beginning on the Commencement Date. The Licensee may voluntarily terminate the License at any time upon payment of an early termination fee of $30 for each unfulfilled month remaining in the Commitment Term, which the Licensor and the Licensee agree reflects fair and appropriate consideration for the early termination of the License by the Licensee.
    3. PRICING GUARANTEE. The Licensor may increase the payment amount as defined above only upon 30 days' written notice to the Licensee. No increase may become effective until the expiration of six months following the end of the Commitment Term, provided that the Licensee timely makes all scheduled monthly payments.
    4. PAYMENT DATE. The Commencement Date shall establish a Payment Date which shall be the same day each month during the term of this Agreement. If the Commencement Date is the 29th, 30th, or 31st of a month, the Payment Date for any month having fewer than the corresponding number of days will be moved to the 1st of the next month. (EXAMPLE: Payment Date is the 30th; February payment date would be moved to March 1.)
    5. EACH SYSTEM SEPARATELY LICENSED. Each Karaoke System belonging to the Licensee must be separately licensed and will be the subject of its own payment terms.
    6. CREDIT CARD AUTOBILL REQUIRED. The Licensee shall provide the Licensor with a valid major credit card account (Mastercard, Visa, or Discover) to which all fees due under this Agreement shall be charged on or after the Payment Date each month. If a scheduled charge is dishonored for any reason, and a valid substitute card is not supplied within 10 calendar days of the Payment Date, the Licensee's account shall be suspended. The Licensor may impose a late fee of $10.00 or 10% of the outstanding amount, whichever is greater (or the maximum amount allowed by state law, if less) on any suspended account. A suspended account must be brought current, including all late fees, before reinstatement will occur.
  5. WHAT THIS AGREEMENT IS NOT. The parties agree as follows:
    1. This Agreement and the relationship established by it are entered into solely for the purpose of licensing the use of federally registered trademarks and do not constitute a business opportunity or franchise except where applicable law expressly provides otherwise. The Licensor is entering into this Agreement on the basis of the Licensor's good-faith belief that (i) the Licensee is or intends to be a professional karaoke host or operator or otherwise produces or intends to produce Commercial Karaoke Shows for entertainment purposes and (ii) the Licensee wishes to use the Marks and the Covered Tracks in connection with those karaoke services.
    2. The Licensor is not offering to provide and will not provide the Licensee with assistance in identifying locations at which to provide karaoke services or with assistance in marketing the Licensee's karaoke services beyond truthfully identifying the Licensee as a licensee if asked.
    3. The Licensor is not offering to control and will not control the Licensee's overall business or any part thereof, except in connection with the quality control provisions relating to use of the Marks.
    4. The Licensor derives no benefit whatsoever from and has no interest in the Licensee's acquisition of Covered Tracks or any other goods or services. This Agreement does not contemplate that the Licensee will acquire any goods or services from the Licensor or its affiliated companies. To the extent that the Licensee seeks to obtain any other goods or services from the Licensor or its affiliated companies, or the Licensor or its affiliated companies offer goods or services to the Licensee (including goods or services offered for free or for reduced rates), any exchange of goods or services between the Licensee and the Licensor or its affiliated companies shall be deemed to be unrelated to this Agreement.
    5. The Licensor is not offering to provide and will not provide the Licensee with a marketing or business plan for any business. The Licensee is not required or encouraged to adhere to any particular marketing plan or system in connection with its provision of services.
    6. The Licensor does not guarantee that the Licensee will derive revenue in any amount nor that the Licensee will derive more revenue from the use of the Marks than the Licensee pays to the Licensor under this Agreement.
    7. The Licensor does not guarantee the availability of any particular Track for use by the Licensee.
    8. This Agreement is confined in its subject matter solely to the use of the Marks and to no other intellectual property or right. The Licensor is unable to license, is not offering to license, and is not licensing any intellectual property right belonging to any third party, including the reproduction, distribution, or public performance of any musical work or sound recording underlying any Track or the trademark rights of any third party. The Licensee is responsible for obtaining any necessary licenses or permissions, or for ensuring that such licenses or permissions have been obtained by a responsible party, prior to any public performance of the underlying musical works.
    9. The Licensee is not prohibited or discouraged from using Tracks not containing the Marks or any aspect thereof that were produced by karaoke producers other than Slep-Tone Entertainment Corporation. The Licensee is not required by this Agreement to use Covered Tracks.
    10. No part of the License Fee is based upon the number of Commercial Karaoke Shows played by the Licensee, the amount of revenue derived therefrom, or any profits the Licensee may derive from its operations.
  6. COVENANT NOT TO SUE. Subject to the Licensee's performance of all obligations hereunder, the Licensor covenants that it will not sue the Licensee at law or in equity for undertaking any act identified in paragraph 2 above, or for undertaking such acts as are reasonably necessary to carry out any act identified paragraph 2 above.
  7. TERM AND TERMINATION.
    1. This Agreement shall extend from month to month until terminated.
    2. Subject to any term, tenure, and early termination provisions provided in paragraph 4 above, the Licensee may terminate this Agreement at any time by giving notice to the Licensor as provided herein.
    3. The Licensor may terminate this Agreement for good cause. The parties agree that "good cause" shall include (without limitation) the Licensee's breach of any material term of this Agreement coupled with the Licensee's failure to cure the breach (including any outstanding License Fee payments and required late fees, if applicable) within 30 days after notice from the Licensor.
    4. For purposes of calculating the License Fee:
      1. No termination by the Licensee shall become effective prior to the next Payment Date, and there shall be no proration of the License Fee for partial months caused by termination by the License Fee.
      2. Termination by the Licensor shall have immediate effect, and any License Fee shall be pro-rated based upon the termination date.
  8. WARRANTIES. The Licensor warrants and represents that it is the owner of the Marks and that it has the legal capacity to enter into this Agreement. The Licensee warrants and represents that the Licensee is or intends to be a professional karaoke host or operator or otherwise produces or intends to produce Commercial Karaoke Shows for entertainment purposes, and that the Licensee has the legal capacity to enter into this Agreement.
  9. DISCLAIMER OF IMPLIED WARRANTIES. EXCEPT AS EXPRESSLY NOTED ABOVE, NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO HAVE IMPLIED ANY WARRANTY OF ANY KIND, AND ALL IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, AND FITNESS FOR A PARTICULAR PURPOSE, ARE SPECIFICALLY DISCLAIMED.
  10. GOVERNING LAW.
    1. If the Licensee is domiciled in a country other than the United States of America, or if the Licensee is domiciled in or operates in the State of New York, this Agreement shall be governed by the substantive laws of the United States of America and of the State of North Carolina, without resort to the conflicts of laws provisions thereof.
    2. Otherwise, this Agreement shall be governed by the substantive laws of the state in which the Licensee is domiciled, including the conflicts of laws provisions thereof.
    3. In all cases, the place of making this Agreement is Mecklenburg County, North Carolina, United States of America.
  11. NOTICE. Any notice required or permitted to be given pursuant to this Agreement shall be delivered:
    1. Through an electronic messaging system provided on a website designated by the Licensor for this purpose; or
    2. Through electronic mail addresses designated by the receiving party for that purpose, if and only if the notice is acknowledged by the receiving party via return message;
    3. By U.S. Mail, via Certified Mail or with Delivery Confirmation, addressed to the receiving party at its address of record (indicated above), which address may be changed at any time by giving notice under this paragraph.
  12. ASSIGNMENT AND SUCCESSION. This Agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns and executors, administrators, personal representatives and heirs. The Licensor may transfer its interests in this Agreement freely and without prior notice to the Licensee. The Licensee may not transfer the Licensee's interests in this Agreement by any means or method without the express written permission of the Licensor, which permission may not be withheld without reason.
  13. ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire agreement between the parties on the subject matter to which it relates, and this Agreement may not be modified except
    1. by a writing signed by both parties, or
    2. by the Licensor's written notice to the Licensee of a change in terms coupled with the Licensee's failure to refuse, by written notice, the change in terms within 90 days after that notice was given (30 days in the case of a change in the License Fee), or
    3. as to any non-accepted change in terms under part (b) above, automatically, six months after the expiration of any Commitment Term or six months after the 90-day refusal period has expired, whichever is later.
    Any part of this Agreement that is found by a court of competent jurisdiction to be unenforceable shall be severed herefrom and the remaining terms enforced to the greatest extent possible.
  14. EXECUTION. If this Agreement is presented electronically, the Licensee consents to and acknowledges the delivery of this document electronically, and the parties may signify their agreement to these terms through the use of an electronic signature presented as the name of the signatory between forward slashes, e.g., /John Doe/; or by through a "click-through" acknowledgement on a webpage. An Agreement so signed or acknowledged shall be deemed the legal equivalent for all purposes of an Agreement signed using pen-and-ink.