WALL STREET RECORDS LLC
c/o A&M Records, Inc.
Worldwide Plaza
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated: As of March 13,1998
Xxxxxxx Xxxxxxx Xxxxx, Xx.
(professionally known as "Xxxxxx")
c/x Xxxx, Xxxxx & Xxxxx
Xxx Place, Second Floor
0000 Xxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Dear Xx. Xxxxx:
The following constitutes your and our agreement ("Contract"):
1. Services. During the term of this Contract ("Term") you
shall, in accordance with the provisions hereof, render to us your services and
furnish to us the services of one (1) or more producers for the purpose of
recording and delivering to us Masters.
2. Term.
(a) The Term shall consist of an "Initial Period" and of the
"Renewal Periods" for which we shall have exercised the options
hereafter provided. We shall have six (6) separate options, each to
extend the Term for a Renewal Period. The Initial Period and each
Renewal Period are each hereafter sometimes referred to generally as a
"Contract Period." Each Renewal Period is hereafter sometimes referred
to respectively in chronological order as the "First Renewal Period,"
"Second Renewal Period," "Third Renewal Period," "Fourth Renewal
Period," "Fifth Renewal Period," and "Sixth Renewal Period." We may
exercise each option to extend the Term for a Renewal Period by giving
you notice of our election to do so at any time prior to the
commencement of the Renewal Period for which our option is exercised;
(b) (i) The Initial Period shall commence on the date hereof
and shall continue until the date nine (9) months, or such
fewer number of days of which we may advise you in writing,
after the initial release in the United States, if any, of the
Album required to be delivered to us in
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fulfillment of your "Recording Commitment" (defined below)
hereunder for the Initial Period, which initial release, for
purposes of this subparagraph 2(b)(i) only, shall be deemed to
occur on the earlier of: (1) the date of the actual initial
release in the United States, if any, of that last Album; or
(2) the date that is one hundred twenty (120) days after your
delivery to us of that last Album. No days between November 15
and February 15 of the next calendar year shall be taken into
account for purposes of determining the duration or end of that
one hundred twenty (120) day period referred to in the
immediately preceding sentence; and
(ii) Each Renewal Period shall run consecutively, shall
commence upon the expiration of the immediately-preceding
Contract Period and shall continue until the date nine (9)
months, or such fewer number of days of which we may advise you
in writing, after the initial release in the United States, if
any, of the Album required to be delivered to us in fulfillment
of your Recording Commitment for that Renewal Period, which
initial release, for purposes of this subparagraph 2(b)(ii)
only, shall be deemed to occur on the earlier of: (1) the date
of the actual initial release in the United States, if any, of
that last Album; or (2) the date that is sixty (60) days after
your delivery to us of that last Album. No days between
November 15 and February 15 of the next calendar year shall be
taken into account for purposes of determining the duration or
end of that sixty (60) day period referred to in the
immediately preceding sentence; and
(c) Notwithstanding the foregoing, if as of the last date on
which we have the right to extend the Term for a Renewal Period
pursuant to subparagraph (b)(i) or (b)(ii) above, we have failed to
exercise our option to extend the Term for the next Renewal Period, the
then-current Contract Period nonetheless shall continue until you
notify us in writing of that failure, referring specifically to this
subparagraph 2(c). If we fail to exercise our option to extend the Term
for the next Renewal Period on or before the date that is thirty (30)
days after we receive that specific written notice from you, then the
Term shall end on the date that is thirty (30) days after we receive
that notice from you, as if that date were the original expiration date
of the Term, without any liability or additional obligation to you in
connection therewith.
3. Recording Commitment.
(a) Your "Recording Commitment" is as follows: During each
Contract Period, you shall record for and you shall deliver to us, at a
minimum, Masters sufficient to constitute one (1) LP, plus, at our
option, Masters sufficient to constitute one additional (1) Optional
LP; provided, however, that in the aggregate, without your prior
consent, you shall not have the obligation to deliver to us hereunder
in excess of seven (7) Required Albums. We may exercise our
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option for the Optional LP to be recorded and delivered to us during a
Contract Period by giving you reasonable, written notice of our
election to do so at any time prior to the expiration of that Contract
Period. Each Album required to be delivered to us in fulfillment of
your Recording Commitment is hereinafter sometimes referred to
generally as a "Required Album." Accordingly, you might be required to
record for and deliver to us as many as seven (7) Required Albums. The
Required Albums are sometimes referred to as the "First Album," "Second
Album," "Third Album," "Fourth Album," "Fifth Album," "Sixth Album,"
and "Seventh Album," respectively; and
(b) You shall deliver to us the First Album no later than
ninety (90) days after the date hereof. During each Renewal Period, you
shall deliver to us the Required Album no later than four (4) months
after the commencement of the particular Renewal Period. You shall not
without our prior written consent (which we shall not unreasonably
withhold), however, either (i) commence the recording of any Masters
for any Required Album prior to the date that is eight (8) months after
the date of your delivery to us of the immediately-prior Required Album
or (ii) deliver to us a Required Album prior to the date that is ten
(10) months after the date of your delivery to us of the
immediately-prior Required Album. Notwithstanding the foregoing, if you
deliver to us any Required Album (other than the First Album) after the
applicable delivery dates set forth in this subparagraph (b), you shall
not be in material breach of this Contract, provided that such Required
Album is delivered to us no later than sixty (60) days after we notify
you in writing of your failure to timely deliver to us such Required
Album. Notwithstanding anything to the contrary contained herein, you
shall deliver to us each Required Album as and when required hereunder
so that all seven (7) Required Albums are delivered to us within seven
(7) years after the date hereof.
4. Recording Procedures.
(a) You shall designate and submit to us for our approval
(which we shall not unreasonably withhold) the producer of each of the
Masters, the Musical Compositions or other Selections which shall be
embodied in those Masters, all other individuals rendering services in
connection with the recording of those Masters, the studios at which
those Masters shall be recorded, and the dates of recording of those
Masters (collectively referred to as "Recording Elements"). You shall
also prepare and submit to us for our approval, which we shall not
unreasonably withhold, a proposed budget for all "Recording Costs" (as
defined below) setting forth in such detail as is reasonably required
by us all costs and expenses to be paid or incurred for the production,
recording and delivery to us of the Masters ("Recording Budget"). No
recording sessions shall be commenced nor shall any commitments be made
or costs incurred hereunder with respect to any Masters unless and
until we shall have approved in writing each Recording Element and the
Recording Budget for those Masters. If we shall disapprove of any
Recording Element submitted by you or of the Recording
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Budget submitted by you, then our decision (including, at our election,
our designation of the Recording Budget or of one (1) or more Recording
Elements in substitution for the Recording Budget or any Recording
Elements submitted by you and disapproved by us) shall be final;
(b) You shall furnish to us at such times as we shall
require all union contract forms, report forms, invoices and other
information that we shall require so that we promptly may pay all
Recording Costs, otherwise comply with any of our obligations in
connection with the Masters, release Phonograph Records embodying the
Masters and otherwise exploit the Masters;
(c) At our election, recording sessions for the Masters
shall be conducted under our or our designee's recording license;
(d) Our representatives may attend recording sessions for
the Masters;
(e) You shall deliver to us the Masters promptly after their
completion. All original session tapes and any derivatives or
reproductions thereof shall be delivered to us concurrently, or, at our
election, maintained at a recording studio or other location designated
by us, in our name and subject to our control. Each Master shall be
subject to our approval as commercially and technically satisfactory
for the manufacture and sale of Phonograph Records, and, upon our
request, you shall re-record any Musical Composition or other Selection
until a Master that is commercially and technically satisfactory to us
shall have been obtained. Except with respect to the Masters
constituting the First Album, each Master shall be deemed to be
commercially satisfactory if that Master is substantially consistent in
artistic quality and form with your musical performances recorded in
Masters previously delivered to and accepted by us in fulfillment of
your Recording Commitment;
(f) Each Master shall embody your vocal and instrumental
performances as the sole featured artist of a single Musical
Composition and shall be newly-recorded in its entirety in a recording
studio. Accordingly, no Masters shall be recorded in whole or in part
at live concerts or other live performances. Each Required Album shall
embody recordings of no fewer than ten (10) and no more than thirteen
(13) Musical Compositions. You shall not record or deliver hereunder
nor shall we be obligated to accept Masters constituting a Multiple
Album. If, however, you shall do so and we shall accept those Masters
hereunder, then, at our election, for the purpose of calculating the
number of Masters recorded and delivered hereunder, those Masters shall
be deemed to constitute only one (1) Album;
(g) Any Master Recording which is not recorded or delivered
in all respects in accordance with the terms hereof shall not apply
towards the
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fulfillment of your Recording Commitment, unless we otherwise consent
in writing. Furthermore, if we shall make any payments with respect to
any Master Recording which is not recorded for or delivered to us in
all respects in accordance with the terms hereof, you shall pay to us,
upon our demand, the amount thereof and, without limiting our other
rights and remedies, we may deduct that amount paid or incurred by us
for any reason from any monies payable by us hereunder; and
(h) If for any reason you delay the commencement of or are
unavailable for any recording sessions for the Masters, you shall pay
us, upon our demand, an amount equal to the expenses or charges paid or
incurred by us by reason thereof. Without limiting our other rights and
remedies, we may deduct that amount paid or incurred by us for any
reason from any monies payable by us hereunder. Notwithstanding
anything to the contrary contained in this subparagraph (h), we shall
not demand you to pay to us the amount of any expenses or charges paid
or incurred by us by reason of your delaying the commencement of or
unavailability for any recording sessions if such expenses or charges
were due to any reason which was beyond your reasonable control, or
which you could not have reasonably avoided; provided, however, that we
shall have the right to deduct the amount of any such expenses or
charges paid or incurred by us from any monies payable by us hereunder
other than mechanical royalties.
5. Recording Costs.
(a) We shall pay the Recording Costs of those Masters
recorded at recording sessions conducted in accordance with the terms
hereof in an amount not in excess of the approved Recording Budget. If
the Recording Costs of any Masters shall exceed the Recording Budget
therefor designated by us or approved by us in writing for any reason,
other than solely in respect of our wrongful act or omission, you shall
be solely responsible for and shall pay promptly the excess. If,
however, we pay the excess, you shall pay to us, upon our demand, the
amount thereof and, without limiting our other rights and remedies, we
may deduct all such amounts paid or incurred by us for any reason from
any monies payable by us hereunder. Notwithstanding anything to the
contrary contained in this subparagraph (a), we shall not demand you to
pay to us the amount of any excess Recording Costs paid or incurred by
us if such excess was due to any reason which was beyond your
reasonable control or which you could not have reasonably avoided;
provided, however, that we shall have the right to deduct the amount of
any such excess Recording Costs paid or incurred by us from any monies
payable by us hereunder. You shall be solely responsible for and shall
pay any payments to any individuals rendering services in connection
with the recording of the Masters which exceed union scale unless the
excess and the recipient thereof shall have been specified in the
approved Recording Budget. You shall also be solely responsible for and
shall pay any
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penalties incurred for late payments caused by your delay in submitting
union contracts forms, report forms, or invoices or other documents.
If, however, we pay any excess not approved by us in writing or any
penalties, you shall pay to us, upon our demand, the amount thereof,
and, without limiting our other rights and remedies, we may deduct that
amount from any monies payable by us hereunder; and
(b) The term "Recording Costs" shall include, without
limitation, all minimum union scale payments made to you, all payments
made to any other individuals rendering services in connection with the
production and recording of the Masters (including, without limitation,
the individual producers and co-producers of the Masters), all other
payments which are made pursuant to any applicable law or regulation or
the provisions of any collective bargaining agreement between us and
any union or guild (including, without limitation, payroll taxes and
payments to union pension and welfare funds and/or health and
retirement funds), all amounts paid or incurred for studio or hall
rentals, tape, engineering, editing, mixing, remixing, instrument
rentals and cartage, mastering, transportation and accommodations,
immigration clearances, trademark and service xxxx searches and
clearances, any so-called "per diems" for any individuals (including
you) rendering services in connection with the recording of the
Masters, together with all other amounts paid or incurred in connection
with the production, recording and delivery to us of the Masters.
Recording Costs shall be recoupable from royalties payable by us
hereunder.
6. Rights.
(a) All Master Recordings and Audio-Visual Recordings
recorded during the Term which embody your performances, from the
inception of the recording thereof, and all artwork created for use in
connection with any reproduction thereof ("Artwork") shall be deemed,
for purposes of copyright law throughout the universe, works made for
hire for us by you and all other persons rendering services in
connection with those Master Recordings, Audio-Visual Recordings and
Artwork as our employees for hire. Those Master Recordings and
Audio-Visual Recordings, from the inception of the recording thereof,
and all Phonograph Records and other reproductions made therefrom,
together with the performances embodied therein and all copyrights
therein and thereto and all renewals and extensions thereof, and all
Artwork and all copyrights in and to all Artwork and all renewals and
extensions thereof, shall be entirely our property throughout the
universe, free of any claims whatsoever by you, or any other person,
firm, or corporation. Accordingly, we shall have the exclusive right to
obtain registration of copyright (and all renewals and extensions)
throughout the universe in those Master Recordings, Audio-Visual
Recordings and Artwork in our name, as the owner and author thereof. If
for any reason we shall be deemed not to be the author of those Master
Recordings, Audio-Visual Recordings or Artwork, this Contract shall
constitute an irrevocable transfer to us
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of ownership of copyright (and all renewals and extensions) throughout
the universe in those Master Recordings, Audio-Visual Recordings or
Artwork (as applicable) and, accordingly, you hereby grant, transfer,
convey and assign directly to us the entire right, title and interest
throughout the universe, including, without limitation, the copyright,
the right to secure copyright registration and any and all copyright
renewal rights, in and to all Master Recordings and Audio-Visual
Recordings recorded during the Term which embody your performances and
in and to all Artwork;
(b) You shall, upon our request, cause to be executed and
delivered to us transfers of ownership of copyright (and all renewals
and extensions) in those Master Recordings, Audio-Visual Recordings and
Artwork and any other documents as we may deem necessary or appropriate
to vest in us the rights granted to us in this Contract, and you hereby
irrevocably appoint us your attorney-in-fact for the purpose of
executing those transfers of ownership and other documents in your
names;
(c) Without limiting the generality of the foregoing, we and
any person, firm, or corporation designated by us shall have the
exclusive, perpetual right throughout the universe to manufacture,
sell, distribute and advertise Phonograph Records, Audio-Visual Records
and other reproductions embodying those Master Recordings or
Audio-Visual Recordings under any trademarks, trade names or labels,
and to lease, license, convey and otherwise exploit and use those
Master Recordings by any method (whether now known or unknown) and in
any medium (whether now known or unknown) and to perform publicly
Phonograph Records, Audio-Visual Records and other reproductions
embodying those Master Recordings or Audio-Visual Recordings, all upon
such terms as we may approve, or we may refrain from doing any or all
of the foregoing;
(d) If you are entitled to any reversion of the copyright or
other right, title and interest in and to Masters (or any of them)
pursuant to the laws of the United States or any other country of the
world, and that reversion is effected, then you hereby irrevocably
license to us exclusively the entire worldwide right, title and
interest, including, without limitation, the copyright in and to any
such Master so acquired by you pursuant to the laws of the United
States or any other country of the world, all for the duration of the
copyright (and any renewals or extensions thereof) in and to such
Master ("License Period"). In that event, we and any person, firm or
corporation designated by us shall have the exclusive right throughout
the universe during the License Period to manufacture, sell, distribute
and advertise Phonograph Records, Audio-Visual Records and other
reproductions embodying the Masters or Audio-Visual Recordings under
any trademarks, trade names or labels or to lease, license, convey and
otherwise exploit and use those Masters or Audio-Visual Recordings by
any method (whether now known or unknown) and in any medium (whether
now known or unknown) and to perform publicly Phonograph Records,
7
Audio-Visual Recordings and other reproductions embodying the Masters
or Audio-Visual Recordings all upon such terms as we may approve, or we
may refrain from doing any or all of the foregoing, all in accordance
with the provisions of this Contract. We shall have no obligation to
pay to you any monies in connection with the grant set forth in this
subparagraph 6(d) except that we shall continue to credit to your
royalty account hereunder royalties earned by you in accordance with
the provisions hereof on exploitations of the Masters occurring during
the License Period as if we had continued to own the entirety of all
right, title and interest, including, without limitation, the copyright
in and to the Masters or Audio-Visual Record Recordings in accordance
with the provisions of subparagraph 6(a), (b) and (c) above. You
expressly acknowledge and agree that no provision of any applicable
law, rule or regulation (including, without limitation, the copyright
laws and regulations of the United States or Canada) permits you to
terminate the transfer, grant, conveyance or assignment to us of the
copyright in and to Master Recordings or Audio-Visual Recordings
provided in this paragraph 6 or any other reversion of the copyright or
other right, title and interest in and to the Masters. If any such law,
rule or regulation shall apply at any time after the date hereof, you
shall not exercise any rights pursuant to that law, rule or regulation;
and
(e) All matters relating to trademarks, notices, including,
without limitation, UPC symbols (i.e., barcoding), or disclosures
deemed advisable by us or our attorneys, and any matter other than the
cover layout and the picture of the art to be used on the particular
Required Album will be determined by us in our sole discretion.
7. Name and Likeness.
(a) We and any person, firm or corporation designated by us
shall have the perpetual, worldwide right to use and to permit others
to use your name (both legal and professional, and whether presently or
hereafter used by you), likeness, and other identification, and
biographical material concerning you, and the name and likeness of any
producer rendering services in connection with Master Recordings
recorded by you during the Term for purposes of trade and advertising.
We shall have the further right to refer to you during the Term as our
exclusive recording artist and you in your activities in the
entertainment field shall use reasonable efforts to be billed and
advertised during the Term as our exclusive recording artist. The
rights granted to us pursuant to this subparagraph 7(a) with respect to
your name, likeness, other identification and biographical material
concerning you shall be exclusive during the Term and nonexclusive
thereafter. Accordingly, but without limiting the generality of the
foregoing, you shall not authorize or permit any person, firm, or
corporation other than us to use during the Term your legal or
professional name or your likeness in connection with the advertising
or sale of Phonograph Records. Notwithstanding anything to the contrary
contained herein, during the Term, you
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shall not use any name other than the professional name utilized by you
as of the date of this Contract without first obtaining our prior
written consent thereto;
(b) You are the sole owner of each professional name used by
you during the Term and no other person, firm or corporation has or
will have the right to use that name in connection with Phonograph
Records during the Term. We shall have the right, at our election, to
cause a search to be instituted to determine whether there have been
any third party uses of any names used by you for Phonograph Record
purposes. Further, we shall have the right, at our election, to apply
for registration of your name to be made in favor of you for Phonograph
Record and/or other entertainment purposes in the United States Patent
and Trademark Office or such other federal institution as may then be
charged with accepting those registrations. Any amounts paid by us in
connection with any search or registration shall be deemed to be
Recording Costs pursuant to subparagraph 5(b) above. If any search
undertaken by us indicates or leads us reasonably to believe that your
name should not be used hereunder, then you and we shall determine
mutually a substitute name to be used by you. Nothing contained herein
shall release you from your indemnification of us in respect of our use
of any of your names, whether legal or professional or otherwise; and
(c) (i) Intentionally deleted;
(ii) Intentionally deleted; and
(iii) Intentionally deleted.
8. Advances. We shall pay to you as advances recoupable from
royalties earned by you hereunder the following amounts for the following
Required Albums payable at the following times:
(a) For the First Album, Twenty-Five Thousand Dollars
($25,000), payable promptly after the execution of this Contract
("Execution Advance"), and the Fund Balance (defined below) payable
promptly after the "Delivery Date" (defined below) for the First Album.
The "Recording Fund" for the First Album shall be Three Hundred
Twenty-Five Thousand Dollars ($325,000); and
(b) For each Required Album other than the First Album: (A)
the "Pre-Delivery Payment" (defined below), payable promptly after our
receipt of your written notice indicating that recording sessions for
the Required Album for which the advance is payable have actually
commenced in accordance with all of the terms of this Contract
(including, without limitation, the provisions of subparagraph 4(a)
above); and (B) the Fund Balance (defined below), payable promptly
after the Delivery Date. For each Required Album, if any, after the
First
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Album, the Recording Fund shall be the "Formula Amount" (defined
below), but no less than the "Minimum Amount" and no more than the
"Maximum Amount" set forth in the Schedule below:
SCHEDULE
--------
The "Formula Amount" for the Second Album shall mean an amount equal to
two-thirds (2/3) of the royalties (after retention of reserves) earned
by you hereunder from Net Sales through Normal Retail Distribution
Channels in the United States of the First Album, computed as of end of
the applicable "Fund Calculation Period" (defined below) and for each
Required Album after the Second Album shall mean an amount equal to the
product of (i) one-half (1/2) and (ii) two-thirds (2/3) of the
royalties (after retention of reserves) earned by you hereunder from
Net Sales through Normal Retail Distribution Channels in the United
States of the two (2) Required Albums initially released immediately
prior to the Required Album for which the Formula Amount is being
calculated, computed as of the end of the applicable Fund Calculation
Period for Required Albums in question. The term "Fund Calculation
Period" shall mean the period commencing on date of the initial
commercial release in the United States of the Required Album for which
royalty earnings are being computed and ending on the date twelve (12)
months thereafter;
(c) The term "Pre-Delivery Payment" shall mean an amount
equal to ten percent (10%) of the "Minimum Amount" for the applicable
Required Album set forth in the Schedule above. The term "Fund Balance"
shall mean the amount by which the Recording Fund exceeds the aggregate
of the Recording Costs for the applicable Required Album, the
Pre-Delivery Payment for the applicable Required Album (or the
Execution Advance with respect to the First Album) and any other
advances paid in connection with the applicable Required Album. The
term "Delivery Date" shall mean the later of the date of your delivery
to us of all Masters constituting the applicable Required Album in
accordance with all of the terms of this Contract and the date on which
we determine the aggregate Recording Costs for that Required Album; and
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(d) You acknowledge and agree that any and all advances paid
by us hereunder shall constitute prepayment of session union scale to
you, and you agree to timely complete and appropriately deliver any
documentation required by the applicable union to document and
effectuate each such prepayment.
9. Royalties.
(a) In consideration of our copyright ownership set forth
herein, any rights licensed to us herein, our right to use your name,
likeness and biographical materials as provided herein, and the other
agreements, representations and warranties contained herein, on Net
Sales of Phonograph Records embodying Masters, we shall pay to you a
royalty computed by multiplying the Royalty Base Price, less the
deductions hereafter provided, by the applicable royalty rate set forth
below:
(i) On Phonograph Records sold in the United States the
royalty rate shall be:
(A) (1) Fifteen percent (15%) on Albums;
(2) The royalty rate pursuant to subparagraph
9(a)(i)(A)(1) above on Net Sales through Normal
Retail Distribution Channels in the United
States ("Qualifying Sales") of a particular
Required Album embodying solely newly-recorded
Masters in the form of Conventional cassette
tapes and Compact Discs ("Qualifying Album")
which exceed five hundred thousand (500,000)
units, but which do not exceed one million
(1,000,000) units, shall be the royalty rate
set forth in that subparagraph, plus
one-quarter percent (.25%). The royalty rate
pursuant to subparagraph 9(a)(i)(A)(1) above on
Qualifying Sales of a particular Qualifying
Album in the United States which exceed one
million (1,000,000) units shall be the royalty
rate set forth in that subparagraph (without
regard to the operation of the provisions of
this subparagraph 9(a)(i)(A)(2)) plus one-half
percent (.50%). Any increases in the royalty
rate set forth in subparagraph 9(a)(i)(A)(1)
above resulting from the operation of the
provisions of this subparagraph 9(a)(i)(A)(2)
shall be disregarded for the purpose of
computing any other royalty rates pursuant to
this paragraph 9 which apply to sales of
Records outside the United States or which are
a percentage of or otherwise based upon the
royalty rate set forth in subparagraph
9(a)(i)(A)(1) above; and
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(B) Ten percent (10%) on Singles;
(ii) On Phonograph Records sold in Canada the royalty rate
shall be:
(A) Twelve percent (12%) on Albums; and
(B) Eight percent (8%) on Singles;
(iii) On Phonograph Records sold in the United Kingdom the
royalty rate shall be:
(A) Twelve percent (12%) on Albums; and
(B) Eight percent (8%) on Singles;
(iv) On Phonograph Records sold in Austria, Belgium,
Denmark, Finland, France, Germany, Greece, Holland, Italy, Norway,
Portugal, Spain, Sweden or Switzerland, the royalty rate shall be:
(A) Ten percent (10%) on Albums; and
(B) Six and one-half percent (6.50%) on Singles;
(v) On Phonograph Records sold in Japan, Australia or New
Zealand, the royalty rate shall be:
(A) Ten percent (10%) on Albums; and
(B) Six and one-half percent (6.50%) on Singles; and
(vi) On Phonograph Records sold outside the United States,
Canada, the United Kingdom and those countries set forth in
subparagraphs 9(a)(iv) and (v) above, the royalty rate shall be:
(A) Eight percent (8%) on Albums; and
(B) Five percent (5%) on Singles;
(b) Notwithstanding the foregoing:
(i) (A) On Phonograph Records sold through a direct
mail or mail order distribution method (including, without
limitation through so-called "record clubs"), or through any
combination of the
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foregoing, the royalty rate shall be one-half (1/2) of the
otherwise applicable royalty rate, but in no event shall
your royalty in respect of those sales exceed an amount
equal to fifty percent (50%) of the Net Receipts from the
sale of those Phonograph Records (whether or not sold by an
affiliate of ours);
(B) On Phonograph Records sold through retail stores
in connection with special radio or television
advertisements (sometimes referred to as "key outlet
marketing") ("Key Outlet Campaign") whether alone or in
combination with any direct mail or mail order distribution
method, the royalty rate shall be one hundred percent (100%)
of the otherwise applicable royalty rate and notwithstanding
anything to the contrary herein, we shall have the right to
recoup fifty percent (50%) of any and all of the costs paid
or incurred by us or our licensees in respect of such Key
Outlet Campaigns from any and all royalties earned by you
under this Contract;
(ii) On Phonograph Records sold for use as premiums or in
connection with the sale, advertising, or promotion of any other
product or service, the royalty rate shall be one-half (1/2) of the
otherwise applicable royalty rate and the Royalty Base Price of
those Phonograph Records shall be deemed to be an amount equal to
the monies actually received by us from the sale of those Phonograph
Records, unless manufactured and sold by an affiliate or licensee of
ours, in which event the Royalty Base Price shall be deemed to be
the price used by that affiliate or licensee in accounting to us;
(iii) On Mid-Price Records the royalty rate shall be
two-thirds (2/3) of the otherwise applicable royalty rate, and on
Budget Records the royalty rate shall be one-half (1/2) of the
otherwise applicable royalty rate;
(iv) On Phonograph Records sold to the United States
Government, its subdivisions, departments or agencies (including
Phonograph Records sold for resale through military facilities) or
to educational institutions or libraries, the royalty rate shall be
one-half (1/2) of the otherwise applicable royalty rate;
(v) On Long-Play Singles, the royalty rate shall be one-half
(1/2) of the otherwise applicable royalty rate for Albums, and on
EPs the royalty rate shall be two-thirds (2/3) of the otherwise
applicable royalty rate for Albums;
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(vi) On Multiple Albums, the royalty rate shall be the
lesser of: (A) the otherwise applicable royalty rate and (B) the
otherwise applicable royalty rate multiplied by a fraction, the
numerator of which is the Royalty Base Price of the Multiple Album
and the denominator of which is the product of the Royalty Base
Price of a top-line single-disc Album in the configuration in
question and the number of discs contained in the Multiple Album;
(vii) On Phonograph Records in the form of Digital Records
the royalty rate shall be:
(A) Eighty percent (80%) of the otherwise applicable
royalty rate for all Digital Records other than Compact
Discs; and
(B) One hundred percent (100%) of the otherwise
applicable royalty rate on Compact Discs;
(viii) On Masters licensed by us to others for their
manufacture and sale of Phonograph Records or for any other uses
(other than those for which a royalty is payable in accordance with
subparagraph (x)(B) below), your royalty shall be an amount equal to
fifty percent (50%) of our Net Receipts from the sale of those
Phonograph Records or from those other uses of the Masters;
(ix) On Audio-Visual Recordings embodying the performances
of Artist, your royalty shall be as follows:
(A) On Audio-Visual Records your royalty shall be
computed in accordance with the provisions of this paragraph
9 applicable to Albums, except on sales of Audio-Visual
Records in the United States the royalty rate pursuant to
subparagraph 9(a)(i) above shall be deemed to be twenty
percent (20%) and on sales of Audio-Visual Records outside
of the United States the royalty rate pursuant to
subparagraphs 9(a)(ii) through 9(a)(v) above shall be deemed
to be fifteen percent (15%). Notwithstanding anything to the
contrary contained herein, the royalty payable to you
pursuant to this subparagraph (ix)(A) on the exploitation of
Audio-Visual Recordings in the United States or Canada shall
be inclusive of any royalties or other monies required to be
paid or incurred by us (or otherwise deducted from monies
payable to us) to any person, firm or corporation for the
synchronization, reproduction and/or public performance of
any Selection in the Audio-Visual Recording in question and,
without limiting any of our other rights or remedies
hereunder or otherwise, we shall have the right to deduct
from the
14
royalty payable to you pursuant to this subparagraph (ix)(A)
an amount equal to those sums required to be paid to any
person, firm or corporation in connection therewith;
(B) On Audio-Visual Records manufactured and sold by
a non-affiliated licensee of ours, however, in the United
States or elsewhere, your royalty shall be an amount equal
to fifty percent (50%) of our Net Receipts from the sale of
those Audio-Visual Records (rather than the royalty computed
in accordance with the immediately preceding subparagraph
(A)); and
(C) Notwithstanding anything to the contrary
contained herein, the exploitation of Audio-Visual
Recordings by means of any so-called "video jukebox" shall
be deemed to be non-royalty bearing and promotional in
nature for all purposes of this Contract; and
(D) On Mid-Price Audio-Visual Records the royalty
rate shall be three-fourths (3/4) of the otherwise
applicable royalty rate, and on Budget Audio-Visual Records
the royalty rate shall be one-half (1/2) of the otherwise
applicable royalty rate;
(x) On New Records your royalty shall be the lesser of
the following:
(A) Seventy-five percent (75%) of the otherwise
applicable royalty rate applied to the Royalty Base Price of
the New Record concerned; and
(B) An amount equal to the product of (1) our Net
Receipts from the exploitation of those New Records, and (2)
the otherwise applicable royalty rate;
(c) Notwithstanding the foregoing:
(i) No royalties shall be payable on Phonograph Records
furnished as free or bonus Phonograph Records to members,
applicants, or other participants in any record club or other direct
mail distribution method; on Phonograph Records distributed for
promotional purposes to radio stations, television stations or
networks, record reviewers, or other customary recipients of
promotional Phonograph Records; on so-called "promotional sampler"
Phonograph Records; on Phonograph Records sold as scrap or as
"cut-outs"; or on Phonograph Records (whether or not intended for
sale by the recipient) furnished on a no-charge or free basis (such
as, but not limited to, Phonograph Records commonly described in
15
the record industry as "free goods" or "freebies") or sold at less
than fifty percent (50%) of their regular wholesale price to
distributors, subdistributors, dealers, or others, whether or not
the recipients thereof are affiliated with us. We shall not
distribute Phonograph Records embodying solely Masters in the United
States at no-charge for sale by the recipient thereof other than in
accordance with our then-current general policy applicable at the
time of our distribution of those Records which, in the United
States on the date of this Contract, is the distribution of the
following Phonograph Records at no charge intended for sale by the
recipient thereof (1) on a regular basis, as follows: Fifteen (15)
Albums and EPs in the form of Conventional vinyl discs and cassette
tapes for each eighty-five (85) of those Albums and EPs sold (that
is, fifteen (15) Albums and EPs in the form of conventional vinyl
discs and cassette tapes are distributed at no charge out of each
one hundred (100) of those Albums and EPs distributed for sale by
the recipient thereof); twenty (20) Albums and EPs in the form of
Digital Records (including, without limitation, Compact Discs) for
each eighty (80) of those Albums sold (that is, twenty (20) Albums
in the form of Digital Records are distributed at no charge out of
each one hundred (100) of those Albums distributed for sale by the
recipient thereof); and thirty (30) Singles and Long-Play Singles in
all forms and configurations for each seventy (70) Singles and
Long-Play Singles sold in any form or configuration (that is, thirty
(30) Singles and Long-Play Singles in all forms and configurations
are distributed at no charge out of each one hundred (100) Singles
and Long-Play Singles distributed in any form or configuration for
sale by the recipient thereof); and thirty (30) Phonograph Records
other than Albums, EPs, Singles and Long-Play Singles, if any, for
each seventy (70) of those Phonograph Records sold in any form or
configuration (that is, thirty (30) Phonograph Records other than
Albums, EPs, Singles and Long-Play Singles, if any, are or would be
distributed at no charge out of each one hundred (100) of those
Phonograph Records distributed for sale by the recipient thereof);
and (2), from time to time in connection with short-term or other
special sales programs of limited duration, such additional Records
as we in the exercise of our business judgment determine. We shall
distribute Phonograph Records in the form of New Records embodying
solely Masters in the United States at no-charge for sale by the
recipient thereof in accordance with our then-current general policy
applicable to Compact Discs at the time of our distribution of those
Records;
(ii) Royalties on Phonograph Records (whether or not
intended for sale by the recipient thereof) sold at a discount to
distributors, subdistributors, dealers, or others, whether or not
affiliated with us (except for Phonograph Records sold at less than
fifty percent (50%) of their regular wholesale price, for which no
royalties are payable hereunder)
16
shall be reduced in the same proportion as the regular wholesale
price of those Phonograph Records is reduced on those sales;
(iii) For purposes of computing royalties, there shall
be deducted from the Royalty Base Price (or other applicable price,
if any, upon which royalties are calculated) of Phonograph Records
hereunder an amount equal to twenty percent (20%) thereof for all
Phonograph Records in the form of Conventional cassette tapes and
twenty-five percent (25%) thereof for Phonograph Records in all
other forms, whether now known or hereafter devised;
(iv) Phonograph Records distributed by any of our
affiliates shall be deemed sold for the purposes of this Contract
only if sold by that affiliate to one of its independent third party
customers and final payment is received therefor by us in United
States Dollars in the United States;
(v) The royalty payable to you hereunder on a Phonograph
Record or other device embodying Masters together with other Master
Recordings shall be computed by multiplying the otherwise applicable
royalty rate by the "Reduction Factor." As used herein, the term
"Reduction Factor" shall mean, at our election, (A) a fraction, the
numerator of which shall be the number of Selections contained on
the Masters which are embodied on that Phonograph Record or other
device and the denominator of which shall be the total number of
Selections embodied on that Phonograph Record or other device or (B)
a fraction, the numerator of which shall be the playing time of the
Selections contained on the Masters which are embodied on that
Phonograph Record or other device and the denominator of which shall
be the total playing time of the Phonograph Record or other device
in question. For any Phonograph Record or other device for which a
finite running or playing time does not exist, the running or
playing time of that Phonograph Record or other device shall be
deemed to be one hundred twenty (120) minutes; and
(vi) The royalty payable to you hereunder and the
Recording Costs hereunder on a Master embodying your performances
jointly with any other artist or musician to whom we are obligated
to pay a royalty in respect of that Master shall be computed by
multiplying the otherwise applicable royalty rate and Recording
Costs by a fraction, the numerator of which shall be one (1) and the
denominator of which shall be the sum of one (1) and the total
number of other artists or musicians whose performances are embodied
on that Master; and
17
(d) You hereby expressly authorize us and our
licensees to collect and receive on your behalf any royalties or other
monies which may be payable in the United States pursuant to the Audio
Home Recording Act allocable to featured performers and which is
otherwise determined to be payable to you in respect of your
performances in Masters ("AHRA Monies"). We shall credit to your
account that portion of AHRA Monies received by us which is
specifically allocable to Masters and otherwise payable to you (less
any portion thereof which may be payable to any third party, including,
without limitation, any producer of Masters). You shall execute any
further documentation which we reasonably deem necessary or desirable
to effectuate the foregoing provisions of this subparagraph (d).
Without limiting the foregoing, you shall not have the right hereunder
or otherwise to be paid or to have credited to your account any portion
of AHRA Monies received by us or otherwise received on our behalf
pursuant to the Audio Home Recording Act which is allocable to the
owner of the sound recording.
10. Royalty Payments and Accountings.
(a) We shall send to you statements for royalties payable
hereunder on or before the date ninety (90) days after the end of each
of our then-current semi-annual accounting periods (currently ending on
June 30 and December 31), together with payment of royalties, if any,
earned by you hereunder during the semi-annual period for which the
statement is rendered (based on our receipts in the United States
during the accounting period for which the statement is rendered), less
all advances and charges under this Contract. Notwithstanding the
foregoing, after the Term, no royalty statement shall be required to be
rendered for any semi-annual accounting period in which less than Five
Thousand Dollars ($5,000) in royalties are credited to your account
(whether by exploitation of Masters or liquidation of reserves) unless
(i) royalties are otherwise actually payable to you for that
semi-annual accounting period; or (ii) you notify us in writing of your
request that we render to you a statement for the semi-annual
accounting period in which we receive that request on the date
otherwise required hereunder. We shall have the right to retain, as a
reserve against charges, credits, or returns, such portion of payable
royalties as shall be commercially reasonable and customary in the
industry in our best business judgment. You shall reimburse us on
demand for any overpayments, and we may also deduct the amount thereof
from any monies payable to you hereunder. Royalties paid by us on
Phonograph Records subsequently returned shall be deemed overpayments;
(b) No royalties shall be payable to you on sales of
Phonograph Records or other exploitations of Masters by any of our
affiliates or licensees until payment on those sales has been received
by us in the United States. Sales or other exploitations by an
affiliate or licensee shall be deemed to have occurred in the
semiannual accounting period during which that affiliate or
18
licensee shall have rendered to us and we shall have received in the
United States accounting statements and payments for those sales or
other exploitations of Masters;
(c) (i) Royalties on exploitations of Masters outside
of the United States shall be computed in the national
currency in which our licensees or affiliates or other
distributors pay us, shall be credited to your royalty account
hereunder at the same rate of exchange at which our licensees
or affiliates or other distributors pay us, and shall be
proportionately subject to any foreign withholding or
comparable taxes which may be imposed upon our receipts. You
shall not be entitled to any portion of a tax credit which may
be available to us or to any of our licensees or affiliates in
connection with any foreign taxes withheld from our receipts,
from the applicable price in computing the Royalty Base Price,
or from any other source; and
(ii) If we shall not receive payment in United
States dollars in the United States for any exploitations of
Masters outside of the United States, royalties on those
exploitations shall not be credited to your royalty account
hereunder. If all advances and other recoupable charges under
this Contract are then-currently recouped and if we are able
to do so, we shall accept payment for those exploitations in
foreign currency and shall deposit in a foreign bank or other
depository, at your expense, in that foreign currency, that
portion thereof, if any, as shall equal the royalties which
would have been payable to you hereunder on those
exploitations had payment for those exploitations been made to
us in United States dollars in the United States. The
foregoing deposit shall not be reflected on your accounting
statements hereunder. Deposit as aforesaid shall fulfill our
royalty obligations hereunder as to those sales. If any law,
ruling or other governmental restriction limits the amount an
affiliate or licensee can remit to us, we may reduce your
royalties hereunder by an amount proportionate to the
reduction in our affiliate's or licensee's (as appropriate)
remittance to us;
(d) You shall be deemed to have consented to all royalty
statements and all other accountings rendered or required to be
rendered by us hereunder and each royalty statement and other
accounting shall be conclusive, final, and binding, shall constitute an
account stated, and shall not be subject to any objection for any
reason whatsoever, unless you give us notice stating the specific basis
for that objection within two (2) years after the date rendered or
required to be rendered. You may not maintain any action, suit, or
proceeding of any nature against us in respect of any royalty statement
or other accounting rendered or required to be rendered by us hereunder
(or in respect of the accounting period to which it relates or was to
relate) unless you commence that action, suit, or proceeding against us
in a court of competent jurisdiction within
19
two (2) years after the date rendered or required to be rendered. If
you shall commence an action, suit, or proceeding against us concerning
royalty statements or other accountings rendered or required to be
rendered by us to you hereunder, the scope of that action, suit or
proceeding shall be limited to a determination of the amount of
royalties, if any, payable to you for the accounting periods in
question, and your sole remedy shall be the recovery of those
royalties;
(e) We shall maintain books and records concerning the sale
of Phonograph Records hereunder. You shall have the right to designate
an independent certified public accountant on your behalf (who shall
not be compensated on a contingent fee basis), at your own expense, to
examine those books and records (but not any of our books or records
relating to the manufacture of Phonograph Records hereunder) solely for
the purpose of verifying the accuracy of royalty statements and other
accountings rendered by us hereunder, only during our normal business
hours and only upon reasonable written notice. Our books and records
relating to a particular royalty statement or other accounting may be
examined only within two (2) years after the date rendered or required
to be rendered. We shall have no obligation to permit you to examine
our books or records relating to any particular royalty statement or
other accounting more than once. Prior to rendering a report to you
with respect to the examination of our books and records as aforesaid,
the independent certified public accountant engaged by you shall first
review his or her tentative written findings with a designated
representative of our finance department in order to remedy any factual
errors and clarify any issues that may have resulted from
misunderstanding. You hereby acknowledge that our books and records
contain confidential trade information. Neither you nor your
independent certified public accountant or other representatives shall
communicate at any time to any others or use on behalf of any other
person, firm or corporation any facts or information obtained as a
result of any such examination of our books and records. Further, prior
to the commencement of any examination of our books and records in
accordance with the provisions of the subparagraph (e), you shall cause
the independent certified public accountant engaged by you to sign a
letter in a form approved by us which acknowledges his or her agreement
(and the agreement of his or her firm) to be bound by the foregoing.
The rights hereinabove granted to you shall constitute your sole and
exclusive rights to examine our books and records;
(f) We shall have the right to deduct from any monies
payable to you hereunder any amounts paid by us to you or to any
person, firm or corporation representing you or incurred by us on your
behalf or on behalf of any person, firm or corporation representing
you, if those monies are not otherwise required to be paid or incurred
by us hereunder (unless we expressly agree in writing that the payment
in question is non-deductible or is only recoupable from royalties
earned by you hereunder). Accordingly, all amounts paid or incurred by
20
us for the services of third parties to market and promote sales of
Phonograph Records embodying Masters shall be recoupable from royalties
earned by you hereunder; and
(g) We shall have the right to deduct from any monies
payable to you hereunder any amounts which are required to be deducted
from any of those monies under any statute, regulation, treaty or other
law, or under any union or guild agreement, and you shall promptly
execute and deliver to us any forms or other documents as may be
required in connection therewith. If we fail for any reason to deduct
and instead pay any of those monies required to be deducted from monies
payable to you hereunder, and if, as a result, we are required by any
statute, regulation, treaty or other law or union or guild agreement to
pay to any third party any amounts which were paid to you but which
were required to be deducted, then, without limiting any of our other
rights or remedies in that event, you shall pay to us, upon our demand,
the amount of those monies which were paid to you but which were
required to be deducted, or, at our election, we may deduct from any
monies payable to you hereunder the amount of those monies paid to you
but which were required to be deducted.
11. Musical Composition Licenses.
(a) You hereby grant to us and our designees the irrevocable
non-exclusive right to reproduce each Controlled Composition on
Phonograph Records and to distribute those Phonograph Records in the
United States and Canada on the following terms and conditions:
(i) Mechanical royalties shall be payable for Controlled
Compositions on Net Sales of Phonograph Records in the United
States and Canada at the following rates:
(A) On Phonograph Records sold in the United States,
the rate for each Controlled Composition embodied thereon
shall be the United States Controlled Composition Mechanical
Rate. The term "United States Controlled Composition
Mechanical Rate" shall mean an amount equal to seventy-five
percent (75%) of the "United States Mechanical Rate." The
term "United States Mechanical Rate" shall mean an amount
equal to the minimum statutory royalty rate (without regard
to playing time) provided in the United States Copyright Act
for the reproduction of Musical Compositions as of the
"Determination Date" (defined below);
(B) On Phonograph Records sold in Canada, the rate
for each Controlled Composition embodied thereon shall be
the Canadian Controlled Composition Mechanical Rate. The
term "Canadian Controlled Composition Mechanical Rate" shall
mean an
21
amount equal to seventy-five percent (75%) of the Canadian
Mechanical Rate. The term "Canadian Mechanical Rate" shall
mean an amount equal to the minimum statutory royalty rate
(without regard to playing time) provided in the Canadian
Copyright Act for the reproduction of Musical Compositions
as of the Determination Date. If no such statutory royalty
rate exists, then the term "Canadian Mechanical Rate" shall
mean the minimum, standard mechanical royalty rate provided
in mechanical licenses between record companies and
unrelated publishers in Canada which are issued by
C.M.R.R.A. (or any successor) as of the Determination Date.
If no such standard mechanical royalty rate exists, however,
then the term "Canadian Mechanical Rate" shall mean the
mechanical royalty rate which we may, in good faith,
negotiate at arm's-length with unrelated publishers
effective as of the Determination Date. In no event,
however, shall the number of Canadian pennies constituting
the Canadian Mechanical Rate exceed the number of United
States pennies constituting the United States Mechanical
Rate in effect as of the Determination Date; and
(C) The term "Determination Date" shall mean the
date of delivery to us of the first (1st) Master embodying
the Musical Composition in question or, if earlier, the date
on which that first (1st) Master was required to be
delivered to us hereunder;
(ii) Notwithstanding the foregoing: The mechanical
royalty rate on a Controlled Composition which is an
arrangement of a public domain work shall be that percentage
of the United States Controlled Composition Mechanical Rate
or the Canadian Controlled Composition Mechanical Rate, as
applicable, that is equal to the percentage of the
arrangement of the Controlled Composition which is original
in the arrangement and therefore subject to copyright in
accordance with the rules and regulations of ASCAP and/or BMI
and for which ASCAP and/or BMI provides written documentation
of that percentage of the originality in and to that
arrangement of a Controlled Composition; the mechanical
royalty rate for a Controlled Composition recorded in an EP,
Long-Play Single, Mid-Price Record, Budget Record or Records
sold through record clubs shall be three-fourths (3/4) of the
United States Controlled Composition Mechanical Rate or the
Canadian Controlled Composition Mechanical Rate, as
applicable; if any particular Record (including, without
limitation, so-called "cassette Singles") embodies more than
one (1) of the same or different recordings of the same
Controlled Composition, then the United States Controlled
Composition Mechanical Rate or Canadian Controlled
Composition Mechanical Rate, as the case may be, shall be
payable only once on all
22
reproductions of that Controlled Composition in that Record;
and no mechanical royalties shall be payable for the
reproduction of any Controlled Composition on a Phonograph
Record unless the timing of the Controlled Composition in
question as recorded in the Master embodied on that
Phonograph Record exceeds one (1) minute and thirty (30)
seconds in length;
(b) The term "Outside Selection" shall mean each Selection
which is not a Controlled Composition. You acknowledge that as an
element of your delivery to us of a Master, you are required to cause
the issuance to us of licenses to reproduce mechanically each Outside
Selection in all Phonograph Records sold in the United States or Canada
on the Required Terms. The term "Required Terms" shall mean mechanical
royalty rates and otherwise on terms that do not exceed the mechanical
royalty rates and that otherwise are no less favorable to us and our
designees than those provided in the standard mechanical licenses
issued by The Xxxxx Xxx Agency, Inc. or any successor for Phonograph
Records sold in the United States and by C.M.R.R.A or any successor for
Phonograph Records sold in Canada, except (i) the royalty rate for the
mechanical reproduction of Outside Selections on Phonograph Records
sold in the United States or Canada must not exceed the United States
Mechanical Rate or the Canadian Mechanical Rate above, as applicable,
and (ii) no royalties shall be payable for the mechanical reproduction
of Outside Selections on Phonograph Records sold in the United States
or Canada for which no Record royalties are payable under paragraph 9
above or otherwise. If for any reason you fail to cause the issuance to
us of a license for the mechanical reproduction of any Outside
Selection as and when required hereunder, we shall have the right, at
our election and without limiting our other rights or remedies in that
event, to negotiate and execute licenses for the mechanical
reproduction of each such Outside Selection on Phonograph Records
distributed in the United States or Canada on terms and conditions
which are determined solely by us or our designees. Solely for purposes
of subparagraph (e) below, those licenses so procured by us shall be
deemed to be on terms no less favorable to us or our designees than the
Required Terms. Nothing contained in this subparagraph amends or
modifies your obligation to deliver to us and our designees licenses
for the mechanical reproduction of all Selections recorded in the
Masters as a condition for the delivery to us of Masters or waives the
provisions of subparagraph 11(i) below;
(c) (i) Notwithstanding anything to the contrary
contained herein, for Net Sales in the United States, the
maximum aggregate mechanical royalty rate for all
Selections, including Controlled Compositions, contained on
a Phonograph Record, regardless of the number of Selections
contained thereon, shall be the product of (A) the United
States Controlled Composition Mechanical Rate and (B) ten
(10) for an Album, five (5) for an EP, and two (2) for a
Single and a Long-Play
23
Single; and for Net Sales in Canada, the maximum aggregate
mechanical royalty rate for all Selections, including
Controlled Compositions, contained on a Phonograph Record,
regardless of the number of Selections contained thereon,
shall be the product of (A) the Canadian Controlled
Composition Mechanical Rate and (B) ten (10) for an Album,
five (5) for an EP, and two (2) for a Single and a Long-Play
Single;
(ii) Notwithstanding the foregoing, if we
release a Multiple Album embodying solely Masters hereunder,
then, solely with respect to that Multiple Album, the
maximum aggregate mechanical royalty rate for Net Sales of
that Multiple Album in the United States or Canada shall be
the otherwise applicable maximum set forth in subparagraph
11(c)(i) above for Net Sales of Albums in the United States
or Canada, as applicable, multiplied by a fraction, the
numerator of which is the Royalty Base Price of that
Multiple Album in the United States or Canada, as
applicable, and the denominator of which is the highest
Royalty Base Price of an Album which is not a Multiple Album
in the configuration or format in question released on our
top-line label in the United States or Canada, as
applicable, as of the date of our initial release through
normal retail distribution channels in the United States or
Canada, as applicable, of that Multiple Album; and
(iii) Notwithstanding anything to the contrary
contained herein, royalties for the mechanical reproduction
of any Selection in any Phonograph Record distributed in the
United States or Canada shall be payable only on Net Sales
of that Phonograph Record in question for which in a Record
royalty is payable hereunder pursuant to paragraph 9 above;
and
(d) We shall account for and pay royalties for the
mechanical reproduction of Controlled Compositions in accordance with
the provisions of subparagraphs (a), (d), (e), and (g) of paragraph 10
above, except that we shall send to you statements for those mechanical
royalties on or before May 31st for the quarter-annual period ending
the preceding March 31st, on or before August 31st for the
quarter-annual period ending the preceding June 30th, on or before
November 30th for the quarter-annual period ending the preceding
September 30th, and on or before the last day of February for the
quarter-annual period ending the preceding December 31st;
(e) If for any reason we are required to pay royalties for
the mechanical reproduction of any particular Selection (including a
Controlled Composition) or for the mechanical reproduction of all
Selections that are mechanically reproduced in a particular Phonograph
Record in excess of the applicable amounts fixed in subparagraphs (a),
(b) or (c) above, the royalties payable by us for the mechanical
reproduction of Controlled Compositions on
24
Phonograph Records hereunder shall be reduced by an amount equal to
such excess. If that excess is greater than the amount of royalties
payable for the mechanical reproduction of Controlled Compositions on
the Phonograph Record in question, then upon our demand, you shall pay
to us an amount equal to the amount by which those excess mechanical
royalties exceed the royalties payable for the mechanical reproduction
of Controlled Compositions. In addition to all of our other rights and
remedies, we may deduct that amount of that excess from any and all
royalties or other monies payable to you under this Contract;
(f) Upon our request, you shall cause the issuance to us and
our designees of licenses to reproduce all Selections mechanically on
Phonograph Records hereunder distributed outside the United States and
Canada on terms no less favorable to us and our designees than those
generally applicable to Phonograph Record manufacturers in each country
in question. The obligation to account for and pay royalties for the
mechanical reproduction of Selections on sales of Phonograph Records
outside of the United States shall be that of our affiliates and
licensees;
(g) If the copyright in any Controlled Composition is owned
or controlled by a person, firm or corporation other than you, you
shall cause that person, firm or corporation to grant to us and our
designees the same rights as you are required to grant to us and our
designees pursuant to this paragraph 11;
(h) You hereby grant to us and our designees, at no fee,
royalty, or other cost to us or our designees, the irrevocable,
non-exclusive, worldwide right in perpetuity to reproduce and publicly
perform each Controlled Composition in Audio-Visual Recordings, to
distribute Audio-Visual Records embodying those Audio-Visual
Recordings, and otherwise to exploit in any manner and through any
media those Audio-Visual Recordings. You shall, upon our request, cause
the issuance to us and our designees, at no fee, royalty, or other cost
to us or our designees, the irrevocable, non-exclusive, worldwide right
in perpetuity to reproduce and publicly perform each Selection which is
not a Controlled Composition in Audio-Visual Recordings, to distribute
Audio-Visual Records embodying those Audio-Visual Recordings, and
otherwise to exploit in any manner or media those Audio-Visual
Recordings. If we or our designees shall pay any such fee, royalty, or
other cost, then you shall, upon our demand, pay us the amount thereof,
and we may, in addition to all of our other rights and remedies, deduct
that amount from any monies payable by us hereunder, including without
limitation, from those royalties payable pursuant to paragraph 9 above
in respect of the exploitation of AudioVisual Recordings in the United
States or Canada;
(i) Any assignment, license or other agreement made with
respect to Controlled Compositions shall be subject to the terms
hereof;
25
(j) You grant to us and our designees the irrevocable right
throughout the world in perpetuity to (A) print and reproduce on the
packaging of Phonograph Records, at our election, the title and lyrics
to each Controlled Composition embodied in a Master and (B) digitally
encode in a Master or transmit together with the transmission of the
Master the title and/or lyrics to each Controlled Composition embodied
in a Master, all without payment to you or any other person, firm or
corporation of any monies or other consideration in connection
therewith. You also shall cause to be granted to us and our designees
the irrevocable right throughout the world in perpetuity to (A) print
and reproduce on the packaging of Phonograph Records embodying Masters,
at our election, the title and lyrics to each Selection embodied in a
Master that is not a Controlled Composition and (B) digitally encode in
a Master or transmit together with the transmission of the Master the
title and/or lyrics to each Selection embodied in the Master which is
not a Controlled Composition, all without payment to you or any other
person, firm or corporation of any monies or other consideration in
connection therewith. If we are required to pay any monies to any
person, firm or corporation for the printing, reproduction, encoding,
or transmission of the title or lyrics of any Selection recorded in a
Master as aforesaid, then you shall, upon our demand, pay to us an
amount equal to those monies paid by us in connection therewith and we
may, in addition to all of our other rights or remedies, deduct that
amount from any monies payable by us hereunder; and
(k) Notwithstanding anything to the contrary contained in
this Contract, we shall not recoup any advances or other charges
against royalties under this Contract from mechanical royalties payable
for Controlled Compositions on Net Sales of Records in the United
States or Canada, except: (i) pursuant to any provision hereof in which
we have the right to demand payment or reimbursement to us (such as,
but not limited to, our right pursuant to subparagraph 5(a) above to
demand payment for excess Recording Costs); (ii) to the extent provided
or permitted by the provisions of subparagraph 10(a) above in
connection with the overpayment to you of any monies hereunder, of this
paragraph 11; or (iii) pursuant to the indemnity provisions of
paragraph 19 below.
12. Audio-Visual Recordings.
(a) Upon our request, you shall appear for the making of
Audio-Visual Recordings embodying your performances on the following
terms:
(i) We shall designate the Musical Compositions which
shall be embodied in the Audio-Visual Recordings, the producer
and director of the Audio-Visual Recordings, all other
individuals rendering services in connection with the
production of the Audio-Visual Recordings, the storyboard and
script for the production of the Audio-Visual
26
Recordings, and the locations at and the dates on which the
Audio-Visual Recordings shall be produced (collectively
referred to as "Audio-Visual Production Elements") or, at our
election (with your approval, which you shall not unreasonably
withhold), you shall designate and submit to us for our
approval one (1) or more Audio-Visual Production Elements;
(ii) We shall pay the Audio-Visual Production Costs of the
Audio-Visual Recordings in an amount not in excess of a budget
designated or approved by us in writing. "Audio-Visual
Production Costs" shall mean and include all minimum union
scale payments made to you in connection with the production of
the Audio-Visual Recordings, all payments which are made to any
other individuals rendering services in connection with the
production of the Audio-Visual Recordings, all other payments
which are made pursuant to any applicable law or regulation or
the provisions of any collective bargaining agreement between
us and any union or guild (including, without limitation,
payroll taxes and payments to union pension and welfare funds),
all amounts paid or incurred for studio, hall, location or set
rentals, tape, film, other stock, engineering, editing,
instrument rentals and cartage, transportation and
accommodations, immigration clearances, any so-called "per
diems" for any individuals (including you) rendering services
in connection with the production of the Audio-Visual
Recordings, together with all other amounts paid or incurred in
connection with the production and delivery to us of the
Audio-Visual Recordings. One hundred percent (100%) of the
Audio-Visual Production Costs shall be recoupable from
royalties payable under this Contract on the reproduction or
other exploitation of all Audio-Visual Recordings and
Audio-Visual Records. Only fifty percent (50%) of the aggregate
Audio-Visual Production Costs of each Audio-Visual Recording
shall be recoupable from royalties payable under this Contract
on the reproduction or other exploitation of Masters in
Phonograph Records reproducing sound alone; moreover, only
fiftypercent (50%) of the cost of producing so-called
"electronic press kits" shall be recoupable from your royalties
hereunder;
(iii) The Audio-Visual Recordings shall be produced in
accordance with the rules and regulations of all labor unions
and guilds having jurisdiction over the production thereof;
(iv) You shall cooperate with us and our designees fully
and to perform to the best of your ability in connection with
the production of the Audio-Visual Recordings; and
(v) If the Audio-Visual Production Costs exceed the
budget approved by us in writing, unless as a result of a cause
solely within our control, you shall be solely responsible for
and shall promptly
27
pay that excess. If, however, we pay any excess Audio-Visual
Production Costs, you shall pay to us, upon our demand, an
amount equal to that excess. If for any reason you delay the
commencement of or are not available for any scheduled
appearance by you relating to the production of the
Audio-Visual Recordings, you shall pay to us, upon our demand,
an amount equal to the expenses or charges paid or incurred by
us by reason thereof. Notwithstanding anything to the contrary
contained herein, without limiting our other rights and
remedies, we may deduct the foregoing amounts from any monies
payable by us hereunder;
(b) Our rights in the Audio-Visual Recordings and our rights
to use your name and the name, likeness, and other identification and
biographical material concerning you are set forth in paragraphs 6 and
7 hereof, wherein the terms "Master Recordings" and "Phonograph
Records" include Audio-Visual Recordings and Audio-Visual Records,
respectively; and
(c) Audio-Visual Recordings shall not apply in fulfillment
of your Recording Commitment. We shall have no obligation, except as
expressly otherwise provided in this paragraph 12, to pay to you any
monies in connection with the production of Audio-Visual Recordings.
13. Warranties, Representations and Covenants. You hereby
warrant, represent, covenant and agree as follows:
(a) You have the right and power to enter into this
Contract, to grant the rights granted by you to us hereunder, and to
perform all of the terms hereof. Without limiting the generality of the
foregoing, no Musical Composition, other Selection or any other
material recorded by you shall be subject to any re-recording or other
restrictions;
(b) During the Term, you shall become and remain members in
good standing of any labor union or guilds with which we may at any
time have an agreement lawfully requiring your membership;
(c) All recording sessions for the Masters shall be
conducted in all respects in accordance with the terms of the AF of M
Phonograph Record Labor Agreement, of the AFTRA Code for the Phonograph
Industry, and of the agreements with all other labor unions and guilds
having jurisdiction over the recording of the Masters;
(d) None of the following will violate or infringe upon the
rights of any person, firm or corporation, including, without
limitation, contractual rights, copyrights, rights of publicity and
rights of privacy: any name or other identification used by you; any
Controlled Compositions; any other Selections; and any materials,
ideas, or other properties furnished or designated by you and
28
embodied or contained in or used in connection with the Masters or the
packaging of or the advertising for the Phonograph Records embodying
the Masters;
(e) All recordings embodying your performances heretofore
have been released commercially in the United States on Phonograph
Records;
(f) You shall not at any time, directly or indirectly, give
or offer to give any consideration of any kind to any radio or
television station or network, to any employee thereof, or to any
person, firm, or corporation controlling or influencing that station or
network's programming for the purpose of securing the broadcast or
promotion of any Phonograph Records hereunder;
(g) Except as otherwise specifically provided herein, we
shall have no obligation hereunder or otherwise to pay any person,
firm, or corporation any amounts in connection with the exercise of any
of our rights hereunder, including, without limitation, our rights with
respect to the recording or exploitation of Master Recordings; and
(h) Without limiting the generality of anything
contained in the foregoing, you shall neither authorize the production
of, nor shall you produce for or deliver to us, any Master for which
the recording method known as "sampling" shall have been utilized to
record in that Master any sound or material created, owned or
controlled by any third party.
14. Recording Restrictions.
(a) During the Term, you shall not enter into any agreement
or make any commitment which would interfere with your performance of
any of the terms hereof. Further, during the Term, you shall not
perform for or render services in connection with the recording of any
Master Recordings for use or reproduction in Phonograph Records by any
person, firm, or corporation other than us. After the Term, you shall
not perform prior to the Restriction Date for any person, firm or
corporation other than us, for the purpose of making Phonograph Records
or Master Recordings, any Selection recorded hereunder or under any
other agreement between you and us or our affiliates. The term
"Restriction Date" shall mean the later of (i) the date five (5) years
subsequent to the last date on which a Master Recording embodying that
Selection was delivered to us and (ii) the date two (2) years
subsequent to the date on which the Term ended; and
(b) You shall not at any time manufacture, distribute, or
sell or authorize the manufacture, distribution, or sale by any person,
firm, or corporation other than us of Phonograph Records embodying (i)
any performance rendered by you during the Term or (ii) any performance
rendered
29
by you after the Term of a Selection recorded hereunder if that
performance shall have been rendered prior to the Restriction Date
applicable to that Selection. Furthermore, you shall not record or
authorize or knowingly permit to be recorded for any purpose any such
performance without in each case taking reasonable measures to prevent
the manufacture, distribution, or sale at any time by any person, firm,
or corporation other than us of Phonograph Records embodying that
performance. Specifically, but without limiting the generality of the
foregoing, if during the Term you perform any Selection or if after the
Term you perform any Selection prior to the Restriction Date applicable
thereto, you will not authorize or knowingly permit that Selection to
be recorded unless pursuant to a written contract containing an express
provision that neither that performance nor the recording thereof will
be used directly or indirectly for the purpose of making Phonograph
Records. Upon our request, you shall promptly deliver to us a copy of
the pertinent provisions of each such contract and you shall cooperate
fully and reasonably with us in any controversy which may arise or
litigation which may be instituted relating to our rights pursuant to
this paragraph.
15. Unique Services. You expressly acknowledge that your
services hereunder are of a special, unique, intellectual, and extraordinary
character which gives them peculiar value, and that, in the event of a breach by
you of any term hereof, we will be caused irreparable injury which cannot
adequately be compensated by money damages. Accordingly, we shall be entitled to
injunctive relief, in addition to any other rights or remedies which we may
have, to enforce the terms of this Contract.
16. Certain Remedies.
(a) We may, at our election, suspend the running of the Term
and our obligations hereunder upon written notice to you (i) if for any
reason whatsoever your voice or ability to perform as an
instrumentalist shall become materially impaired, (ii) if you shall
refuse, neglect, fail, or be unable to fulfill any of your obligations
hereunder, or (iii) if as a result of an Act of God, accident, fire,
labor controversy, riot, civil commotion, act of public enemy, law,
enactment, rule, order, or act of any government or governmental
instrumentality, failure of technical facilities, failure or delay of
transportation facilities, illness or incapacity of you, or others, or
other cause of a similar or dissimilar nature not reasonably within our
control, we are hampered in the recording, manufacture, distribution,
or sale of Phonograph Records or our normal business operations become
commercially impractical. A suspension shall be for the duration of any
such event or contingency, and, unless we notify you to the contrary in
writing, the Contract Period during which that event or contingency
shall have commenced shall be automatically extended by a number of
days equal to the total number of days of the suspension, or such fewer
number of days of which we may advise you in writing. If any period of
suspension arising from events other than (i) the impairment of your
voice or ability to perform as an instrumentalist, (ii) your
30
refusal, neglect, failure, or inability to fulfill any of your
obligations hereunder, or (iii) any other event affecting a substantial
portion of the United States recording industry, shall exceed six (6)
consecutive months in duration, you may give to us notice at any time
during the continuation of that period of suspension after the date six
(6) months after its commencement, of your desire that we discontinue
such period of suspension and that the Term be terminated if we fail to
do so ("Termination Request"). If we shall fail to give to you notice
of our discontinuance of that period of suspension within ten (10)
business days after our receipt of your Termination Request, the Term
shall expire and we shall have no obligations or liabilities to you
hereunder, except for our obligations with respect to Masters delivered
hereunder prior to that termination, if any. Notwithstanding the
foregoing, a suspension of the Term pursuant to this subparagraph 16(a)
shall not suspend our royalty accounting and payment obligations
hereunder unless the event causing that suspension materially affects
our ability to make payments or render statements. No suspension shall
in any manner suspend or otherwise impair our rights under this
Contract;
(b) If your voice or ability to perform as an
instrumentalist shall become impaired or if you shall refuse, neglect,
fail, or be unable to fulfill any of your obligations hereunder,
including, without limitation, your obligation to record for and
deliver to us Masters within the time periods set forth in paragraph 3
above, we may, without limiting our other rights or remedies, terminate
the Term upon written notice to you, in which event we shall have no
obligations or liabilities to you under this Contract, except for our
obligations, if any, with respect to Masters recorded prior to that
termination. If we so terminate the Term, you shall pay us, on demand,
an amount equal to any unrecouped advances hereunder, other than any
advances attributable to and paid in respect of a Required Album
theretofore delivered by you to us; and
(c) In addition to our other rights hereunder, we shall have
the right, at our election and for any reason, with or without cause,
to terminate the Term at any time by written notice to you.
Additionally, we shall have the right, at our election, with or without
cause, to refuse to permit you to fulfill your then-current Recording
Commitment for any Contract Period including, without limitation, by
discontinuing recording sessions for any Masters and ceasing the
payment of Recording Costs for any Masters. If we refuse to permit you
to fulfill your minimum Recording Commitment for any Contract Period,
other than as a result of an event or contingency referred to in
subparagraph 17(a) above, we shall have no obligations or liabilities
to you in connection therewith unless within forty five (45) days after
our refusal you shall notify us of your desire to fulfill your minimum
Recording Commitment for that Contract Period and within thirty (30)
days after our receipt of that notice we shall fail to advise you in
writing that we shall permit you to fulfill your minimum Recording
Commitment for that Contract Period. If we shall fail to so advise you
in writing that we shall permit you to fulfill your minimum Recording
Commitment for that Contract Period, the Term shall
31
expire as of the end of that thirty (30) day period and we shall have
no obligations or liabilities to you whatsoever in connection with our
failure to permit you to fulfill your Recording Commitment for that
Contract Period. We shall, however, pay to you promptly after the
expiration of that thirty (30) day period, as an advance recoupable
from royalties hereunder or under any other agreement between you and
us or our affiliates, an amount equal to the minimum union scale
payments which would have been required to have been paid to you for
each Required Album for that Contract Period that we did not permit you
to record. For the purposes of the foregoing, an Album shall be deemed
to be comprised of eight (8) Masters.
17. Producer and Other Royalties.
(a) You shall cause any and all producers of the Masters to
execute a Producer Declaration in the form attached hereto as Exhibit A
prior to the commencement of recording sessions for any Masters
hereunder. Without limiting the generality of anything set forth in
paragraph 4 above, no recording sessions shall be commenced nor shall
we have any obligation to pay to you any advances for the Masters
pursuant to paragraph 8 above unless and until you shall have entered
into a binding agreement with any and all producers of the applicable
Masters and we shall have received an executed Producer Declaration
from any and all producers of the applicable Masters;
(b) You shall be solely responsible for and shall pay all
royalties and other compensation which may be payable to any producers
of the Masters or to any producers or directors of Audio-Visual
Recordings or to any others rendering services in connection with the
recording of the Masters and the production of Audio-Visual Recordings
or otherwise entitled to compensation in respect of the exploitation of
Masters or Audio-Visual Recordings; and
(c) We may, but shall not be obligated to, enter into an
agreement with any producers of the Masters or any producer or director
of any Audio-Visual Recordings which provides for the payment by us,
rather than you, of royalties or other compensation payable to any such
producer or director; provided, however, that any such agreement shall
contain standard terms and conditions and we shall consult with you
prior to our entering into any such producer agreement, provided you
are reasonably personally available therefor. We shall consider in good
faith your recommendations with respect to such agreements, provided,
however, that our decisions with respect thereto shall be final and our
failure to so consult with you in accordance with this subparagraph
17(c) shall not constitute a breach of the Contract. We may deduct any
amounts payable by us to those producers or directors of Masters or
Audio-Visual Recordings from any monies payable by us hereunder.
Furthermore, for the purposes of the recoupment of any advances or
charges under this Contract, the royalty rates contained in paragraph 9
with respect to those Masters and
32
Audio-Visual Recordings shall be deemed reduced by the amount of the
applicable royalty rates with respect to Masters and Audio-Visual
Recordings payable by us to any such producers or directors. Any
advances payable by us to those producers or directors which are not
recouped by us from royalties payable to those producers or directors
may be recouped by us from any royalties or other sums payable by us
hereunder.
18. Definitions.
(a) The term "Album" shall mean a twelve (12) inch
thirty-three and a third (33-1/3) rpm long-playing vinyl-disc
Phonograph Record of no fewer than forty-five (45) minutes in playing
time or its cassette tape or other equivalent or substantial equivalent
in any form or configuration, and, where the context requires, Masters
sufficient to constitute a twelve (12) inch thirty-three and a third
(33-1/3) long-playing vinyl-disc Phonograph Record of no fewer than
forty-five (45) minutes in playing time or its tape or other equivalent
or substantial equivalent in any form or configuration. The maximum
playing time of an Album shall not exceed the maximum number of minutes
capable of being reproduced pursuant to the technological
specifications of the format or configuration concerned, which shall be
designated by us in our reasonable good faith discretion;
(b) The term "Audio-Visual Record" shall mean a Phonograph
Record embodying visual images;
(c) The term "Audio-Visual Recording" shall mean a Master
Recording embodying visual images;
(d) (i) The term "Budget Audio-Visual Record" shall mean an
Audio-Visual Record which bears a Royalty Base Price in the country in
question which is sixty-six and two-thirds (66-2/3%) percent or less of
the Royalty Base Price in that country of top-line Audio-Visual Records
on which recordings of the majority of our artists are initially
released in that country;
(ii) The term "Budget Record" shall mean a Phonograph
Record which bears a Royalty Base Price in the country in
question which is sixty-six and two-thirds (66-2/3%) percent
or less of the Royalty Base Price in that country of top-line
Phonograph Records on which recordings of the majority of our
artists are initially released in that country;
(e) The term "Compact Disc" shall mean a Digital Record in
any configuration (e.g., Album, Single, EP) in disc form primarily
reproducing sound (but not together with visual images), the signals of
which are read and transmitted from that disc by means of laser;
33
(f) The term "Controlled Composition" shall mean a Musical
Composition or other Selection, written or composed by you, in whole or
in part, alone or in collaboration with others, or which is owned or
controlled, in whole or in part, directly or indirectly, by you, or any
person, firm or corporation in which you have a direct or an indirect
interest;
(g) The terms "Conventional Phonograph Record,"
"Conventional cassette tapes," "Conventional vinyl discs" and
"Conventional Album" shall refer to black vinyl discs or analog tape
cassettes of customary quality;
(h) The term "Digital Records" shall mean Records in any
configuration (e.g., Album, Single, EP), the signals of which are
encoded and decoded by digital technology, whether now known or
hereafter devised, as opposed to analog technology, and shall include,
without limitation, Compact Discs, digital audio tapes, mini discs and
digital compact cassettes. Notwithstanding the foregoing, the term
"Digital Records" shall not mean a Record exploited by means of direct
transmission (whether digital or otherwise) via satellite, cable or
other direct transmission to the consumer over wire or through the air,
which shall constitute a New Record hereunder for all purposes;
(i) The term "delivery to us" or words of similar
connotation used in connection with Master Recordings or Masters shall
mean delivery to our Production Manager at our offices in New York, New
York of all of the following: a two-track sequenced, equalized,
fully-mixed and mastered digital audio tape and/or U-matic 1630 tape in
proper form for the production of the parts necessary to manufacture
Phonograph Records therefrom and all consents, approvals, copy
information, credits, mechanical licenses for all Selections recorded
in those Master Recordings or Masters and other material and documents
required by us to release Phonograph Records embodying those Master
Recordings or Masters and to manufacture album covers or other
packaging therefor (including, without limitation, Artwork). Our
election to pay to you any monies which were otherwise required to have
been paid upon or promptly after your delivery to us of Masters or our
election to release any Phonograph Record derived from any Master shall
not be deemed to be an acknowledgment by us that delivery to us of that
Master or Masters has been completed in accordance with the provisions
of this subparagraph (i). Further, in either event, we shall not be
deemed to have waived our right to require your complete and proper
performance thereafter of your obligation to deliver to us any Masters
or any of our remedies for your failure to do so in accordance with the
provisions hereof;
(j) The term "EP" shall mean a twelve (12) inch thirty-three
and a third (33-1/3) rpm or forty-five (45) rpm vinyl-disc Phonograph
Record, or its cassette tape or other equivalent or substantial
equivalent in any form or
34
configuration, embodying no fewer than four (4) Musical Compositions
and no more than seven (7) Musical Compositions;
(k) The term "Long-Play Single" shall mean a twelve (12)
inch thirty-three and a third (33-1/3) rpm or forty-five (45) rpm
vinyl-disc Phonograph Record, or its cassette tape equivalent or other
equivalent or substantial equivalent in any form or configuration,
embodying one (1) or more recordings of no more than three (3)
different Musical Compositions;
(1) The term "Master Recording" shall mean every form of
recording (whether now known or unknown), embodying sound alone, or
sound accompanied by visual images, which may be used in the recording,
production, or manufacture of Phonograph Records;
(m) The term "Master" shall mean a Master Recording
embodying your performances recorded during the Term;
(n) (i) The term "Mid-Price Audio-Visual Record" shall mean
an Audio-Visual Record bearing a Royalty Base Price in the
country in question in excess of sixty-six and two-thirds
(66-2/3%) percent and less than eighty (80%) percent of the
Royalty Base Price in that country of top-line Audio-Visual
Records on which recordings of the majority of our artists are
initially released in that country;
(ii) The term "Mid-Price Record" shall mean a Phonograph
Record bearing a Royalty Base Price in the country in question in
excess of sixty-six and two-thirds (66-2/3%) percent and less
than eighty (80%) percent of the Royalty Base Price in that
country of top-line Phonograph Records on which recordings of the
majority of our artists are initially released in that country;
(o) The term "Multiple Album" shall mean a single package
containing two (2) or more Albums, or their cassette tape or other
equivalent or substantial equivalent in any form or configuration,
which is sold as a single unit, and, where the context requires, Master
Recordings sufficient to constitute a single package containing two (2)
or more Albums, or their tape or other equivalent or substantial
equivalent in any form or configuration, which is sold as a single
unit;
(p) The terms "Musical Composition" and "Composition" shall
mean a single musical composition and, for the purposes of computing
mechanical royalties hereunder, shall include a medley;
(q) (i) With respect to Masters other than Audio-Visual
Recordings, the term "Net Receipts" shall mean the flat-fee, if
specifically
35
attributable solely to one (1) or more Masters, or the royalty,
as the case may be, received by us from a person, firm or
corporation from the exploitation by that person, firm or
corporation of rights in those Masters, less all costs paid or
incurred by us in connection with the exploitation of those
rights and the collection of those monies, less all taxes and
adjustments and less all royalties or other sums payable by us to
any person, firm or corporation in connection with the
exploitation of those rights, including, without limitation,
royalties for the mechanical reproduction of the Selections
embodied in those Masters, but excluding royalties or other sums
payable to producers of those Masters, which shall be borne
solely by you; and
(ii) With respect to Audio-Visual Recordings, the term
"Net Receipts" shall mean an amount equal to the flat-fee, if
specifically attributable solely to one (1) or more Audio-Visual
Recordings, or the royalty, as the case may be, received by us
from a person, firm or corporation from the exploitation by that
person, firm or corporation of rights in those Audio-Visual
Recordings, less twenty percent (20%) of those monies as a
distribution fee, less all costs paid or incurred by us in
connection with the exploitation of those rights and the
collection of those monies and less all taxes and adjustments and
less all royalties or other sums payable by us to any person,
firm or corporation in connection with the exploitation of those
rights, including, without limitation, royalties for the
mechanical reproduction of the Selections embodied in those
Audio-Visual Recordings, but excluding royalties or other sums
payable to producers of the Masters embodied in those
Audio-Visual Recordings and producers or directors of those
Audio-Visual Recordings, which shall be borne solely by you;
(r) The term "Net Sales" shall mean ninety-percent (90%) of
gross sales for which final payment has been received by us in United
States Dollars in the United States, after deducting from gross sales
returns, credits, and reserves against anticipated returns and credits;
(s) The term "Net Sales through Normal Retail Distribution
Channels" shall mean Net Sales of Phonograph Records hereunder through
our principal distributor in the country in question for resale through
record or other retail stores for which a Record royalty is payable
hereunder after the retention of reserves (and, without limiting the
generality of the foregoing, shall exclude sales or distributions
referred to in paragraph 9(b) above);
(t) The term "New Record" shall mean a Phonograph Record in
any software medium in which recorded music is not in general
commercial distribution in the United States as of January 1, 1997,
including, without limitation, the sale of Phonograph Records (or other
exploitation of Masters)
36
through the telephone, satellite, cable or other direct transmissions
to the consumer over wire or through the air (as distinguished from
radio or television advertised sales of Phonograph Records described in
subparagraph 9(b)(i) above);
(u) The terms "Phonograph Record" and "Record" shall mean
every form of reproduction (whether now known or unknown), embodying
sound alone, or sound accompanied by visual images, distributed
primarily for home use, school use, jukebox use, and use in means of
transportation, including, without limitation, discs of any speed or
size, reel-to-reel tapes, cartridges, cassettes, other pre-recorded
tapes, or any digital copy, including, without limitation, so-called
"temporary copy";
(v) The term "Royalty Base Price" shall mean the following
amounts for the following Phonograph Records:
(i) (A) With respect to Phonograph Records (other than
Audio-Visual Records) sold in the United States or Canada, the
SRLP except as set forth below; and
(B) With respect to royalties payable on Net Sales
of Phonograph Records in the United States or Canada for which
the Royalty Base Price is the SRLP, we shall have the right, at
any time, at our election, to calculate royalties hereunder on
the basis of our principal distributor's price (before
consideration of any discounts resulting from the distribution
of free goods), from time to time, to its customers in the
United States of Phonograph Records, in lieu of the SRLP of
those Phonograph Records, multiplied by an "uplift." As used in
the immediately-preceding sentence, the term "our principal
distributors price" shall mean the lowest wholesale price paid
by the largest category of customers to our principal
distributor in the United States during the relevant
semi-annual accounting period. If we elect to do so, then we
shall calculate that "uplift" as a fraction, the numerator of
which is the SRLP of a Comparable Phonograph Record immediately
prior to our discontinuance of retail-based calculations and
the denominator of which is our principal distributor's price
(before consideration of any discounts resulting from the
distribution of free goods) to its customers in the United
States of a Comparable Phonograph Record immediately prior to
our discontinuance of retail-based calculations. The
application of the foregoing provisions of this subparagraph
shall not result in a reduction in the amount of royalties
otherwise payable to you hereunder on a
configuration-by-configuration basis immediately prior to our
discontinuance of retail-based calculations. For purposes of
this subparagraph, the term
37
"Comparable Phonograph Record" shall mean a Phonograph Record
of the same configuration, with the same packaging, and in the
same price category as the Phonograph Record in question; and
(ii) With respect to Phonograph Records (other than
Audio-Visual Records) sold outside of the United States and
Canada:
(A) If an SRLP is established or utilized by our
licensee (whether or not affiliated with us) in a
particular country in accounting to us, then that
particular SRLP established or utilized by our licensees
shall apply to Phonograph Records hereunder;
(B) If an SRLP is not established or utilized by
our licensee (whether or not affiliated with us) in a
particular country in accounting to us on sales of
Phonograph Records, then, at our election, (1) the price
upon which mechanical royalties are generally computed and
paid by major record companies (including, without
limitation, our then-current principal distributor) in the
country in question pursuant to the then-current agreement
between major record companies and the mechanical
reproduction rights society in that country or (2) an
amount computed by multiplying the lesser of (aa) that
percentage utilized by our affiliate or licensee in
computing a retail related price or constructed price on
which royalties are paid to us and (bb) one hundred
twenty-six percent (126%), by the lowest of (aa) the
so-called "published price to dealers," (bb) the lowest
wholesale price paid to our or our affiliate's or
licensee's principal distributor in the country in
question by the largest category of customers during the
relevant semiannual accounting period and (cc) the
wholesale price which our licensee (whether or not
affiliated with us) in a particular country uses in
accounting to us for royalties.
(iii) With respect to Audio-Visual Records sold in any
country of the world, an amount equal to the monies actually
received by us in the United States (or credited to us in final
reduction of an advance previously received by us in the United
States) from the sale of those Audio-Visual Records (rather
than their actual SRLP, wholesale price, published price to
dealers or any other price), after deduction of a distribution
fee of twenty percent (20%) of those monies; and
(iv) There shall be deducted from the Royalty Base Price
an amount equal to any excise, sales, value added or comparable
or similar taxes which are included therein;
38
(w) The term "Selection" shall mean a Musical Composition,
poem, dramatic work, comedy routine, or other verbal expression;
(x) The term "Single" shall mean a seven (7) inch vinyl-disc
Phonograph Record or its tape or other equivalent or substantial
equivalent in any form or configuration; and
(y) Except as otherwise herein provided, the term "SRLP"
shall mean those suggested retail list prices established by us or our
affiliates or licensees from time to time for Phonograph Records in a
particular configuration which shall be determined from time to time
with reference to the relevant wholesale price in a manner that shall
be applied consistently to a majority of our (or our licensees' or
affiliates') then-current recording artists. With respect to New
Records that are distributed by telephone, satellite, cable or other
direct transmissions over wire or through the air, the term "SRLP"
shall mean either those suggested retail list prices therefor, if any,
established by us or our affiliates in accordance with the terms of the
preceding sentence or those retail list prices charged to the ultimate
consumer therefor, excluding any shipping and handling charges in
connection therewith.
19. Indemnity. You hereby indemnify, save, and hold us harmless
from any and all damages, liabilities, costs, losses and expenses (including
legal costs and attorneys' fees) arising out of or connected with any claim,
demand or action by us or by a third party which is inconsistent with any of the
warranties, representations or covenants made by you in this Contract. You shall
reimburse us, on demand, for any payment made by us at any time with respect to
any damage, liability, cost, loss or expense to which the foregoing indemnity
applies. Pending the determination of any claim, demand or action, we may
withhold, at our election, payment of any monies otherwise payable to you
hereunder or under any other agreement between you and us or our affiliates in
an amount which does not exceed your potential liability to us pursuant to this
paragraph.
20. Assignment. We shall have the right, at our election and
with your approval (which you shall not unreasonably withhold), to assign this
Contract or any of our rights hereunder, in whole or in part, or to delegate any
of our obligations hereunder, in whole or in part, to any person, firm or
corporation. You shall not have the right to assign this Contract or any of your
rights or to delegate any of your obligations hereunder.
21. Notices. All notices to be given to you hereunder and all
statements and payments to be sent to you hereunder shall be addressed to you at
the address set forth on page 1 hereof or at such other address as you shall
designate in writing from time to time. All notices to be given to us hereunder
shall be addressed to us at the address set forth on page 1 hereof or at such
other address as we shall designate in writing from time to time. All notices
shall be in writing and shall either be
39
served by personal delivery, certified mail, return receipt requested, or
facsimile transmission (with a copy sent concurrently by certified mail, return
receipt requested), all charges prepaid, except that statements and payments may
be sent by regular mail. Notices to us must be sent to the attention of our
Senior Vice President, Business & Legal Affairs. Except as otherwise provided
herein, notices shall be deemed given when personally delivered, mailed as
aforesaid, or transmitted by facsimile (with a concurrent copy mailed as
aforesaid), all charges prepaid, except that notices of change of address shall
be effective only after actual receipt. A copy of each notice to us shall be
sent simultaneously to Xxxxxxxx, Xxxxxxxxxx & Xxxxx LLP, 00000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, to the attention of J. Xxxxxx Xxxxxxx,
Xx., Esq.
22. Miscellaneous.
(a) This Contract sets forth your and our entire
understanding relating to its subject matter. No modification,
amendment, waiver, termination or discharge of this Contract or any of
its terms shall be binding upon either of us unless confirmed by a
document signed by you and by a duly authorized officer of ours. No
waiver by you or us of any term of this Contract or of any default
hereunder shall affect your or our respective rights thereafter to
enforce that term or to exercise any right or remedy in the event of
any other default, whether or not similar;
(b) (i) We shall not be deemed to be in breach of any of our
obligations hereunder unless and until you shall have given us
specific written notice by certified or registered mail, return
receipt requested, describing in detail the breach and we shall
have failed to cure that breach within thirty (30) days after our
receipt of that written notice; and
(ii) Except with respect to any breach by you relating
to your recording of any Selection prior to the Restriction Date
applicable thereto, the delivery of Albums hereunder in
accordance with all the terms and provisions hereof and any of
the exclusive rights granted to us hereunder, you shall not be
deemed to be in breach of any of your obligations hereunder
unless and until we shall have given you specific written notice
by certified or registered mail, return receipt requested,
describing in detail that breach, and you shall have failed to
cure that breach within thirty (30) days after your receipt of
that written notice. Nothing contained in this subparagraph
22(b)(ii) shall limit our rights to seek injunctive relief
hereunder;
(c) Our payment obligations under this Contract are
conditioned upon your full and faithful performance of the terms
hereof;
40
(d) Wherever your approval or consent is required hereunder,
that approval or consent shall not be unreasonably withheld. We may
require you to formally give or withhold approval or consent by giving
you notice of our request that you do so and by furnishing you with the
information or material in respect of which the approval or consent is
sought. You shall give us written notice of your approval or
disapproval or of your consent or non-consent within five (5) days
after our notice is sent and in the event of your disapproval or
nonconsent your notice shall contain the specific reasons therefor.
Your failure to give us notice as aforesaid shall be deemed to be
consent or approval, as the case may be, with respect to the matter
submitted;
(e) Nothing herein contained shall constitute a partnership,
joint venture, or fiduciary relationship between you and us. Except as
otherwise expressly provided herein, you are performing your
obligations hereunder as independent contractors. Neither party hereto
shall hold itself out contrary to the terms of this subparagraph 22(e)
and neither you nor we shall become liable for any representation, act
or omission of the other contrary to the provisions hereof;
(f) This Contract shall not be deemed to give any right or
remedy to any third party whatsoever unless that right or remedy is
specifically granted by us in writing to that third party;
(g) The provisions of any applicable collective bargaining
agreement between us and any labor union or guild which are required by
the terms of that agreement to be included in this Contract shall be
deemed incorporated herein as if those provisions were expressly set
forth in this Contract;
(h) In the event of any action, suit, or proceeding arising
from or based upon this Contract brought by either party hereto against
the other, the prevailing party shall be entitled to recover from the
other its attorneys' fees in connection therewith in addition to the
costs of that action, suit, or proceeding;
(i) Except as otherwise expressly provided herein all rights
and remedies herein or otherwise shall be cumulative and none of them
shall be in limitation of any other right or remedy;
(j) THIS CONTRACT HAS BEEN ENTERED INTO IN THE STATE OF NEW
YORK AND ITS VALIDITY, CONSTRUCTION, INTERPRETATION AND LEGAL EFFECT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLES UNDER
NEW YORK LAW). THE VENUE FOR ANY ACTION, SUIT OR PROCEEDING ARISING
FROM OR BASED UPON THIS XXXXXXXX
00
XXXXX XX THE APPROPRIATE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF NEW YORK IN THE STATE OF NEW YORK. ACCORDINGLY, YOU AND WE AGREE
THAT ANY ACTION, SUIT OR PROCEEDING ARISING FROM OR BASED UPON THIS
CONTRACT SHALL BE COMMENCED IN AND DETERMINED BY THOSE APPROPRIATE
STATES AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK IN THE
STATE OF NEW YORK. IN CONNECTION WITH THE FOREGOING, YOU AND WE EACH
AGREE TO SUBMIT TO AND BE BOUND BY THE JURISDICTION OF THE APPROPRIATE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK IN THE STATE
OF NEW YORK;
(k) This Contract shall not become effective until signed by
you and countersigned by a duly authorized officer of ours;
(l) The paragraph headings herein are solely for the purpose
of convenience and shall be disregarded completely in the
interpretation of this Contract or any of its terms;
(m) We may at any time during the Term obtain, at our cost,
insurance on you. We or our designees shall be the sole beneficiary of
that insurance and neither you, nor any person, firm or corporation
claiming rights through or from you shall have any rights in that
insurance. You shall submit to such physical examinations and to
complete and deliver such forms as we may reasonably require and
otherwise to cooperate with us fully for the purpose of enabling us to
secure that insurance;
(n) Upon our request, you shall render your services at such
times and places as we may reasonably designate for the purpose of
assisting us in the marketing, advertising and promotion of Phonograph
Records hereunder. Among those services are engaging in interviews,
participating in press conferences, posing at photography sessions and
appearing on television and radio shows. Promptly after your submission
to us of invoices or other suitable documentation therefor, we shall
pay to you or reimburse you for the reasonable costs of travel and
accommodations which are actually paid or incurred by you in connection
with your services under this subparagraph 22(n), but you shall not pay
or incur any costs or expenses in connection with your services under
this subparagraph 22(n) which are to be paid or reimbursed by us unless
you and we mutually agree in writing on the nature and extent of those
costs and expenses. If we pay or incur any costs in connection with
your services pursuant to this subparagraph 22(n) ("Promotional
Services Costs"), those Promotional Services Costs shall not be
recoupable from royalties earned by you hereunder. If, however, any
third party pays to you any fee or other consideration for or in
connection with your services pursuant to this subparagraph 22(n) (such
as, but not limited to, a television appearance fee) and
42
we pay or incur any Promotional Services Costs in connection therewith,
then you shall pay to us all such fees and other consideration to the
extent of our Promotional Services Costs in connection therewith. If
you fail for any reason to pay to us those fees to the extent of our
Promotional Services Costs, then, at our election, the amount of all
such fees received by you from third parties in connection with you
services pursuant to this subparagraph 22(n) in an amount equal to our
Promotional Services Costs shall be deemed to be advances recoupable
from any and all monies payable to you pursuant to this Contract;
(o) You shall not render any services to or authorize or
permit your name or likeness or any biographical material concerning
you to be used in any manner by any person, firm or corporation in the
advertising, promoting or marketing of blank magnetic recording tape,
digital audio tape or any other product or device intended to be sold,
whether now known or hereafter developed, which may be used for the
fixation of sound alone or sound together with visual images;
(p) You acknowledge and agree that you have been represented
by independent legal counsel or have had the unrestricted opportunity
to be represented by independent legal counsel of your own choice for
purposes of advising you in connection with the negotiation and
execution of this Contract. Additionally, you acknowledge and agree
that either you or your independent legal counsel have had the
opportunity to investigate and inquire about all of the relevant facts
and circumstances in connection with your entering into and executing
this Contract. If you have not been represented by independent legal
counsel of your own choice for purposes of advising you in connection
with the negotiation and execution of this Contract, you acknowledge
and agree that your failure to be represented by independent legal
counsel in connection with your negotiation and execution of this
Contract was determined solely by you, without any interference by us
or any person, firm or corporation related to us;
(q) The provisions of the Immigration Reform and Control Act
("IRCA") are mandatory. You agree to complete the Immigration and
Naturalization Service Form I-9 ("Employment Eligibility Verification
Form") no later than concurrently with your execution of this Contract.
You expressly acknowledge and agree that any and all payments to or on
behalf of you under this Contract are conditioned upon your delivery to
us of a completed Employment Eligibility Verification Form. This
provision shall not in any way modify or alter the fact that you are
performing your obligations hereunder as an independent contractor,
except as otherwise expressly provided in this Contract;
(r) Nothing contained in the Contract or otherwise shall be
deemed to authorize or permit you to pay or incur (and you shall not
pay or incur)
43
any cost or expenses without our prior written consent, which consent
we may withhold in our sole discretion; and
(s) Unless otherwise specified herein or unless the context
otherwise clearly requires, the masculine gender used herein includes
the feminine and neuter genders, and the grammatically plural form of
any term defined in the singular form hereunder shall also be the
plural form of such defined term, and the grammatically singular form
of any term defined in the plural form hereunder shall also be the
singular form of such defined term.
23. Sampling and Sampled Master. The following terms have the
following meanings: The term "Sampling" refers to the use and reproduction of
pre-existing music material in a Master Recording intended to be a "Master"; the
term "Other Material" refers to the pre-existing musical material which is used
or embodied in a Master Recording intended to be a "Master"; and the term
"Sampled Master" refers to a Master Recording which is delivered to us as a
"Master" subject to this Contract embodying Other Material. You warrant,
represent, covenant and agree as follows: concurrently with your delivery to us
of any Master Recording as a "Master" subject to this Contract, you shall notify
us in writing of any Sampling of Other Material in that Master Recording, and
you shall notify us in writing of the names and addresses of the recording
artist(s), recording companies, songwriters and publishers who have any right,
title or interest in and to the Other Material embodied in that Master Recording
intended to be delivered to us as a "Master" subject to this Contract as a
result of that Sampling; no Sampled Master shall violate or infringe on the
rights of any other person, firm or corporation, including, without limitation,
the copyrights owned or controlled by any other person, firm or corporation; as
between you, on the one part, and us, on the other part, you shall be solely
responsible for and shall account for and pay to the persons, firms or
corporations that own or control Other Material all monies to which those other
person, firms or corporations are entitled to as a result of the Sampling of any
Other Material in Sampled Masters subject to this Contract; and, as between you
and us, you shall be solely responsible for obtaining all consents and licenses
44
necessary or desirable in connection with the use and reproduction and licensing
the use and reproduction of Other Material in Sampled Masters. No royalties,
advances or other money shall be earned by or payable to you hereunder in
connection with any Sampled Master and no Sampled Masters shall be deemed to be
delivered to us in fulfillment of your Recording Commitment unless and until we
obtain documentation reasonably satisfactory to us of the foregoing.
If the foregoing correctly reflects your agreement with us,
please so indicate by signing below.
Very truly yours,
WALL STREET RECORDS LLC
By: /s/ xxxxxxxxxxxxxx
---------------------
By: /s/ xxxxxxxxxxxxxx
---------------------
AGREED AND ACCEPTED:
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx Xxxxxxx Xxxxx Xx., p/k/a "Xxxxxx"
Birth Date:______________________________
Soc. Sec. No.:___________________________
Union Affiliations:______________________
45
EXHIBIT A
PRODUCER DECLARATION
I, the undersigned, declare that I have read and understand
those relevant portions of the agreement between Wall Street Records LLC ("Wall
Street") c/o A&M Records, Inc., Worldwide Plaza, 000 0xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000 and Xxxxxxx Xxxxxxx Xxxxx, Xx. (professionally known as "Xxxxxx"
and referred to below as "Artist") dated as of March 13, 1998 ("Artist
Agreement") that pertain to my record production endeavors.
I hereby certify that I have produced or will have produced
certain master recordings embodying Artists featured performance ("Masters")
pursuant to an agreement between Artist and me ("Producer Agreement") which
provides for valuable consideration to be paid to me. As part of my material
obligations pursuant to the Producer Agreement and for the express and direct
benefit of Wall Street, I hereby:
X. Xxxxx to Wall Street the perpetual right to use and
publish and to permit others to use and publish my
name, signature, approved likeness, and approved
biographical material concerning me for advertising
and trade purposes in connection with the sale and
exploitation of masters and records manufactured from
masters recorded pursuant to the Artist Agreement, or
to refrain therefrom.
B. Agree to look solely to Artist for the payment of
any advances, fees and/or royalties, as the case may
be, and will not assert any claim in this regard
against Wall Street or attempt to prevent the
manufacture, sale or distribution of phonograph
records manufactured from Masters produced under the
terms and conditions of the Artist Agreement and the
Producer Agreement. Any payments that I receive from
Wall Street in connection with the exploitation of
Masters or my services pursuant to Producer Agreement
shall have been made solely as an accommodation to
Artist and nothing contained herein, in the Producer
Agreement or in the Artist Agreement shall constitute
me a beneficiary of or party to the Artist Agreement
or any other agreement between Wall Street and
Artist.
C. Acknowledge and agree that each Master recorded
under the Producer Agreement embodying the results
and proceeds of my services (i) is prepared within
the scope of the Artist's engagement of my personal
services and is a "work made for hire" or (ii) is
prepared as part of a long-playing phonograph record
(or its substantial equivalent) which constitutes a
work specially ordered
A-1
by Artist or Wall Street for use as a contribution to
a collective work and shall be considered a "work
made for hire." I further acknowledge that Wall
Street is the exclusive owner of copyright with
respect to each such Master and any "sound recording"
or "phonorecord" or "copy" manufactured therefrom
(individually and collectively called the "Work"),
and that Wall Street has the right to exercise all
rights of the copyright proprietor with respect
thereto, including, but not limited to, all exclusive
right specified in 17 U.S.C. ss. 106 and the
exclusive right to register copyright in the name of
Wall Street.
D. Notwithstanding the provisions of paragraph C above,
I agree that to the extent, if any, that I may be
deemed an "author" of any Work, I hereby irrevocably
transfer, grant, convey and assign to Wall Street,
exclusively, perpetually and throughout the universe,
all exclusive right, title and interest in and to
such Work, including, but not limited to, all
exclusive right of the copyright owner as specified
in 17 U.S.C. ss. 106. I hereby grant to Wall Street a
power of attorney, irrevocable and coupled with an
interest, to execute for me and in my name, all
documents and instruments necessary or appropriate to
effectuate the intents and purposes of this paragraph
D and to accomplish, evidence and perfect the rights
granted to Wall Street pursuant to this paragraph D
including but not limited to documents to apply for
and obtain all registration of copyrights in and to
any such Work, and documents to assign such
copyrights to Wall Street.
E. Agree that I shall not produce or co-produce, prior
to the date three (3) years after the Master shall
have been delivered to Wall Street in accordance with
the provisions of the Artist Agreement, any recording
for any person, firm or corporation other than Wall
Street which embodies, in whole or in part, any of
the selections recorded in the Masters.
_______________________________________
SS#:___________________________________
Address:_______________________________
_______________________________________
_______________________________________
X-0
XXXX XXXXXX RECORDS LLC
d/b/a ANTRA RECORDS LLC
c/o A&M Records, Inc.
Worldwide Plaza
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated: As of March 13, 1998
Xxxxxxx Xxxxxxx Xxxxx, Xx.
(professionally known as "Xxxxxx")
c/x Xxxx, Xxxxx & Xxxxx
Xxx Place, Second Floor
0000 Xxxxxxxx Xxxx, X.X.
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Dear Xx. Xxxxx:
Reference is made to our exclusive recording agreement with you dated
as of March 13, 1998 (the "Recording Agreement"). For good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, you and
we agree to amend the Recording Agreement as follows:
1. For purposes of paragraph 11 of the Recording Agreement, the term
"United States Controlled Composition Mechanical Rate" shall mean an amount
equal to one hundred percent (100%) of the United States Mechanical Rate and the
term "Canadian Controlled Composition Mechanical Rate" shall mean an amount
equal to one hundred percent (100%) of the Canadian Mechanical Rate.
2. Subparagraph 11 (a)(i)(C) of the Recording Agreement is hereby
deleted in its entirety and replaced with the following:
"(C) The term "Determination Date" shall mean the date of initial
release by us of the first Master embodying the Musical Composition in
question;"
3. The following is hereby added to the end of paragraph 11(c)(i) of
the Recording Agreement:
"Notwithstanding the foregoing provisions of this subparagraph (c)(i),
for Net Sales through Normal Retail Distribution Channels in the United
States of a particular
1
Required Album in excess of Seven Hundred Fifty Thousand (750,000)
units, the maximum aggregate mechanical royalty rate for all
Selections, including Controlled Compositions, contained on such excess
units of such Required Album, regardless of the number of Selections
contained thereon, shall be the product of the United States Controlled
Composition Mechanical Rate, and eleven (11), in lieu of the maximum
provided in the immediately preceding sentence for Net Sales of Albums
in the United States."
4. Paragraph 20 of the Recording Agreement is hereby deleted in its
entirety and replaced with the following:
"We shall have the right, at our election, to assign this Contract or
any of our rights hereunder, in whole or in part, or to delegate any of
our obligations hereunder, in whole or in part, to any person, firm or
corporation. You shall not have the right to assign this Contract or
any of your rights or to delegate any of your obligations hereunder."
5. All terms used herein but not otherwise defined herein shall have
the meanings ascribed to them in the Recording Agreement.
6. As amended hereby, the Recording Agreement is ratified, confirmed
and acknowledged to be in full force and effect.
If the foregoing correctly reflects your understanding and agreement
with us, please so indicate by signing in the space provided below.
Sincerely,
WALL STREET RECORDS LLC
d/b/a ANTRA RECORDS LLC
By: /s/ xxxxxxxxxxxxxxxxx
---------------------
By: /s/ xxxxxxxxxxxxxxxxx
---------------------
AGREED AND ACCEPTED:
/s/ Xxxxxxx X. Xxxxx Xx.
-----------------------------------------
Xxxxxxx Xxxxxxx Xxxxx Xx. p/k/a "Xxxxxx"
2
EXHIBIT A
PRODUCER DECLARATION
I, the undersigned, declare that I have read and understand
those relevant portions of the agreement between Wall Street Records LLC ("Wall
Street") c/o A&M Records, Inc., Worldwide Plaza, 000 0xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000 and Xxxxxxx Xxxxxxx Xxxxx, Xx. (professionally known as "Xxxxxx" and
referred to below as "Artist") dated as of March 13, 1998 ("Artist Agreement")
that pertain to my record production endeavors.
I hereby certify that I have produced or will have produced
certain master recordings embodying Artist's featured performance ("Masters")
pursuant to an agreement between Artist and me ("Producer Agreement") which
provides for valuable consideration to be paid to me. As part of my material
obligations pursuant to the Producer Agreement and for the express and direct
benefit of Wall Street, I hereby:
X. Xxxxx to Wall Street the perpetual right to use and
publish and to permit others to use and publish my
name, signature, approved likeness, and approved
biographical material concerning me for advertising
and trade purposes in connection with the sale and
exploitation of masters and records manufactured from
masters recorded pursuant to the Artist Agreement, or
to refrain therefrom.
B. Agree to look solely to Artist for the payment of any
advances, fees and/or royalties, as the case may be,
and will not assert any claim in this regard against
Wall Street or attempt to prevent the manufacture,
sale or distribution of phonograph records
manufactured from Masters produced under the terms
and conditions of the Artist Agreement and the
Producer Agreement. Any payments that I receive from
Wall Street in connection with the exploitation of
Masters or my services pursuant to Producer Agreement
shall have been made solely as an accommodation to
Artist and nothing contained herein, in the Producer
Agreement or in the Artist Agreement shall constitute
me a beneficiary of or party to the Artist Agreement
or any other agreement between Wall Street and
Artist.
C. Acknowledge and agree that each Master recorded under
the Producer Agreement embodying the results and
proceeds of my services (i) is prepared within the
scope of the Artist's engagement of my personal
services and is a "work made for hire" or (ii) is
prepared as part of a long-playing phonograph record
(or its substantial equivalent) which constitutes a
work specially ordered
A-1
by Artist or Wall Street for use as a contribution to
a collective work and shall be considered a "Work
made for hire." I further acknowledge that Wall
Street is the exclusive owner of copyright with
respect to each such Master and any "sound recording"
or "phonorecord" or "copy" manufactured therefrom
(individually and collectively called the "Work"),
and that Wall Street has the right to exercise all
rights of the copyright proprietor with respect
thereto, including, but not limited to, all exclusive
right specified in 17 U.S.C. ss. 106 and the
exclusive right to register copyright in the name of
Wall Street.
D. Notwithstanding the provisions of paragraph C above,
I agree that to the extent, if any, that I may be
deemed an "author" of any Work, I hereby irrevocably
transfer, grant, convey and assign to Wall Street,
exclusively, perpetually and throughout the universe,
all exclusive right, title and interest in and to
such Work, including, but not limited to, all
exclusive right of the copyright owner as specified
in 17 U.S.C. ss. 106. I hereby grant to Wall Street a
power of attorney, irrevocable and coupled with an
interest, to execute for me and in my name, all
documents and instruments necessary or appropriate to
effectuate the intents and purposes of this paragraph
D and to accomplish, evidence and perfect the rights
granted to Wall Street pursuant to this paragraph D
including but not limited to documents to apply for
and obtain all registration of copyrights in and to
any such Work, and documents to assign such
copyrights to Wall Street.
E. Agree that I shall not produce or co-produce, prior
to the date three (3) years after the Master shall
have been delivered to Wall Street in accordance with
the provisions of the Artist Agreement, any recording
for any person, firm or corporation other than Wall
Street which embodies, in whole or in part, any of
the selections recorded in the Masters.
/s/ Xxxxxxx X. Xxxxx
-------------------------------
A-2
