WALL STREET RECORDS LLC
d/b/a ANTRA RECORDS
c/o A&M Records, Inc.
Worldwide Plaza
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated: As of August 19, 1998
Xxxxx Xxxx
(currently, professionally known as "Baby S")
c/x Xxxxxxx & Xxxxxxx
0000 00xx Xxxxxx
Xxxxx 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Dear Xx. Xxxx:
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 three (3) 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," and "Third 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 last
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 last 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 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
(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 the
Initial Period, you shall record for and deliver to us, at a minimum,
Masters sufficient to constitute one (1) Album, plus, at our option,
Masters sufficient to constitute one (1) additional Optional Album,
and during each Renewal Period, if any, you shall record for and
deliver to us, at a minimum, Masters sufficient to constitute one (1)
Album, plus, at our option, Masters sufficient to constitute one
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(1) additional Optional Album; 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" (defined below). We may exercise our option for the Optional
Album 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 sixty (60) days after the date hereof. You shall deliver to us
the Optional Album, if any, during the Initial Period no sooner than
ten (10) and no later than twelve (12) months following delivery to us
of the First Album. During each Renewal Period, you shall deliver to
us the Required Album no later than three (3) months after the
commencement of the particular Renewal Period. You shall not without
our prior written consent, 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 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 your and
our mutual approval 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 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 the Recording Budget submitted by
you, then our decision (including, at our election, our designation of
the Recording Budget
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in substitution for the Recording Budget 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. The costs paid or incurred by our representatives to
attend recording sessions for the Masters shall be borne solely by us
and shall not be recoupable from royalties earned by you hereunder;
(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;
(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 constitute a Master in fulfillment of your Recording Commitment,
unless we otherwise consent in writing or unless we actually
commercially exploit the Master Recording, in which event that Master
Recording that is commercially exploited by us in our sole discretion
shall constitute a Master, provided, however, that you agree that
Master
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Recordings delivered by you to us as so-called "B-sides" and used as
such shall not apply towards the fulfillment of your Recording
Commitment. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, our commercial exploitation of a
Master Recording which was not recorded or delivered in all respects
in accordance with the terms hereof shall not relieve you of your
obligation to provide us with all necessary consents, approvals and
other delivery materials required by us under this Contract
(including, without limitation, the materials set forth in
subparagraph 18(i) below) for the release of Phonograph Records
embodying that Master Recording and for the manufacture of album
covers or other packaging therefor, and all of your representations,
warranties and covenants hereunder, as well as the provisions of
paragraph 19 below, shall continue to apply with respect to that
Master Recording. 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.
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, 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. You shall be
solely responsible for and shall pay any payments to any individuals
rendering services in connection
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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 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. Notwithstanding the foregoing, royalties payable by us
to the AF of M Music Performance Trust Fund or Special Payments Fund
or any sums payable solely in respect of the sale of Phonograph
Records hereunder to any union or union trust fund or similar fund
based on Record sales shall not be deemed to be Recording Costs and
shall not be recoupable 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
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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
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 reasonably
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. We shall not, however,
exercise the power of attorney granted to us in this subparagraph 6(b)
unless and until you shall have failed to execute and deliver to us
those instruments of transfer of copyright and/or any other documents
within five (5) days after your receipt of our request therefor;
(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
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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, 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;
(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; and
(f) Notwithstanding anything to the contrary
contained herein, provided that you are not in breach of the material
terms hereof which as of the date in question were required to have
then been performed:
(i) We shall not during the Term in the
United States sell or license for sale Phonograph Records
embodying Masters as premiums without your prior consent,
which you shall not unreasonably withhold;
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(ii) The initial commercial release through
Normal Retail Distribution Channels in the United States, if
any, of each Required Album shall be on our then-current
so-called "top pop" label;
(iii) During the Term in the United States,
we shall not reproduce or exploit commercially on Phonograph
Records any so-called "outtakes" of Master Recordings without
your prior consent, which you shall not unreasonably
withhold; and
(iv) During the Term, we shall not use or
authorize the use of any Master in the soundtrack of any
theatrical motion picture which is then-currently rated "X"
or "NC-17" by the Motion Picture Association of America
without your prior consent, which you shall not unreasonably
withhold.
7. Name and Likeness.
(a) (i) 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 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;
(ii) During the Term, you shall submit to us
or we shall make available to you at our offices in New York,
New York for your inspection, photographs of you and
biographies concerning you for use in connection with the
exploitation of Masters. Notwithstanding anything to the
contrary contained herein, we shall not use any photographs
of you or biographies concerning you in connection with our
exploitation of
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Masters in the United States unless those photographs and
biographies shall have been either submitted or approved by
you hereunder, which approval you shall not withhold
unreasonably. If you shall fail to submit to us sufficient
photographs and biographies and if we shall have failed to
receive your written notice of your objection to the
photographs and biographies made available to you within five
(5) business days after we shall have made them available to
you for your inspection, we shall be free to utilize such
photographs and biographies as we shall reasonably require in
connection with our exploitation of Masters; and
(iii) In connection with the initial release
in the United States of any Required Album during the Term,
you shall have the right to review and approve the "Artwork"
defined in paragraph 6 above that we intend to use on the
front cover of the packaging for each Required Album as
initially released in the United States on the terms and
conditions set forth in this subparagraph. Within a reasonable
time after our receipt of your written request therefor, we
shall inform you of the status of any Artwork that we
then-currently intend to use initially on the front cover of
the packaging for each Required Album as initially released in
the United States during the Term. Nothing contained in this
Contract or otherwise, however, shall obligate us to obtain
your approval of any Artwork hereunder later than five (5)
business days after that Artwork is made available to you for
your review in accordance with subparagraph (ii) above if to
do so after the five (5) business day period would delay or
reasonably threaten to delay our release or scheduled release
of a Required Album embodying the Artwork. You shall have the
right to approve of that Artwork that we intend to use on the
front cover of the packaging of the particular Required Album
as initially released in the United States on the same terms
and conditions that you have the right to review and approve
photographs and biographical materials concerning you
pursuant to the provisions of subparagraph (ii) above. Your
disapproval of any Artwork shall not be based on the per-unit
manufacturing cost of the Artwork for any Album hereunder or
on the initial cost to create the Artwork for any particular
Album hereunder. We shall have no obligation hereunder or
otherwise, with or without your approval, to utilize any
Artwork on any Albums embodying Masters if the per-unit
manufacturing costs of that Artwork on each Album would exceed
our then-current, standard per-unit manufacturing costs of
artwork used for Albums in our catalogue generally;
(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
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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) As used herein, the term "Merchandising
Agreement" shall mean an agreement pursuant to which you or
an entity on your behalf ("Grantor") sell, transfer, convey,
assign, license, or otherwise dispose of any right to
reproduce and/or exploit your name, likeness, or logo, or
other materials concerning you on or in connection with any
products or services, other than Phonograph Records, which
are intended to be sold to the public through retail outlets,
at tour venues or otherwise. The term "Merchandising
Agreement" shall not include any agreement whose subject
matter is the commercial endorsement of any product or
service not embodying your name, likeness or logo of you.
Prior to the commencement of negotiations between Grantor and
any third party, you shall notify us of Grantor's desire or
intention to commence negotiations to enter into a
Merchandising Agreement. We shall have the right, at our
election, at any time within one hundred twenty (120) days
after our receipt of that notice from you, to cause Grantor
immediately to enter into good faith negotiations with us
concerning the terms and conditions of a Merchandising
Agreement. If for any reason we and Grantor are unable to
agree on the terms and conditions of a Merchandising
Agreement within thirty (30) days after our notice to you
requesting the commencement of those good faith negotiations,
then Grantor shall have the right to enter into negotiations
for a Merchandising Agreement with any third party, subject
to the provisions of subparagraph 7(c)(ii) below;
(ii) Prior to Grantor entering into any
Merchandising Agreement, you shall cause Grantor to first
offer to us the right to enter into a Merchandising Agreement
with Grantor for the same bona fide advance and pursuant to
the same bona fide terms as may be offered by Grantor to a
responsible, unrelated third party. The terms of any such
offer shall, however, provide only for the payment to Grantor
of cash in a lump sum or installments. You shall give us
written notice of any such bona fide and acceptable offer
which sets forth the name of the prospective merchandiser,
the advance and all other terms and conditions
11
of the offer. If we fail to notify you that we are exercising
our option to enter into a Merchandising Agreement with
Grantor within thirty (30) days after our actual receipt of
your written notice to us, then Grantor shall have the right
to enter into a Merchandising Agreement with the prospective
merchandiser, provided that the terms of that Merchandising
Agreement are the same as the terms set forth in your written
notice to us. If, however, Grantor does not enter into and
execute written documentation of that Merchandising Agreement
with the prospective merchandiser within sixty (60) days
after our failure to give you notice as set forth in this
subparagraph 7(c)(ii), then you shall repeat the procedure
set forth in this subparagraph 7(c)(ii) prior to Grantor
entering into a Merchandising Agreement with any third party;
and
(iii) Without limiting the generality of any
of our rights herein, nothing contained in the foregoing
provisions of this subparagraph 7(c) is intended to grant,
license or assign to you any right in or to any Artwork
whether or not used on or in connection with the sale of
Phonograph Records hereunder, all of which are hereby
expressly reserved.
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, the Recording Fund shall be
Two Hundred Fifty Thousand Dollars ($250,000), Fifty Thousand Dollars
($50,000) of which shall be payable promptly after the execution of
this Contract ("Execution Advance"). The "Fund Balance" (defined
below) shall be payable promptly after the "Delivery Date" (defined
below) for the First Album. On your behalf, you hereby irrevocably
request, authorize and direct us to pay to and in time name of CIW2,
Inc. (federal tax identification number 00-0000000) Ten Thousand
Dollars ($10,000) of the Execution Advance; 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 (defined below). For each
Required Album, if any, after the First 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:
12
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 the
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
(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.
13
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) Thirteen percent (13%) 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-half percent (.50%). 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 percent
(1%). 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
(B) Ten percent (10%) on Singles;
(ii) On Phonograph Records sold in Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Greece, Holland,
14
Italy, Japan, New Zealand, Norway, Portugal, Spain, Sweden,
Switzerland, or the United Kingdom, the royalty rate shall be:
(A) Nine percent (9%) on Albums; and
(B) Seven and one-half percent (7.50%) on
Singles;
(iii) On Phonograph Records sold outside the
United States and those countries set forth in subparagraph
9(a)(ii) above, the royalty rate shall be:
(A) Seven and twenty one-hundredths
percent (7.20%) on Albums; and
(B) Six percent (6%) 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
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
15
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) (A) 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;
(B) Notwithstanding the foregoing, we
shall not, during the Term without your prior written
consent, reduce the royalty rate specified in
subparagraph 9(a)(i) above payable to you hereunder
on Net Sales through Normal Retail Distribution
Channels in the United States of any Required Album
solely because we sell that Required Album as a
Mid-Price Record in the United States prior to the
date that is twelve (12) months after the date of the
initial release through Normal Retail Distribution
Channels in the United States of that Required Album.
Further, we shall not, during the Term without your
prior written consent, reduce the royalty rate
specified in subparagraph 9(a)(i) above payable to
you hereunder on Net Sales through Normal Retail
Distribution Channels in the United States of any
Required Album solely because we sell that Required
Album as a Budget Record in the United States prior
to the date that is eighteen (18) months after the
date of the initial release through Normal Retail
Distribution Channels in the United States of that
Required Album;
(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;
(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
16
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;
(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 (ix)(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
your performances, 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) and 9(a)(iii) 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 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;
17
(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));
(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 two-thirds (2/3) 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;
(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; and
(C) Notwithstanding the foregoing,
promptly after our receipt during the Term of your
written request therefor (which request shall not be
made prior to the date that is three (3) years after
the initial commercial release of a Required Album
hereunder in a particular configuration of a New
Record through Normal Retail Distribution Channels
in the United States and shall not be made more than
once at any time with respect to a particular
configuration of a New Record), we shall consider in
good faith (based on our then-current general
policies) your request that you and we-renegotiate
the percentage of the otherwise applicable royalty
rate (as opposed to the method of calculating the
royalty) for sales of New Records in that particular
configuration hereunder. Pending our determination,
the percentage of the otherwise applicable royalty
rate for sales of New Records in that particular
configuration shall be the percentage of the
otherwise applicable royalty rate set forth in
subparagraphs 9(b)(x)(A) or (B) above and
18
we shall continue to have the right to manufacture
and distribute those New Records. Further, we shall
have no obligation to consider any request made by
you that the percentage of the otherwise applicable
royalty rate for sales of New Records in any
configuration exceed one hundred percent (100%) of
the otherwise applicable royalty rate hereunder;
(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 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,
19
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) 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,
20
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 to
whom we are obligated to pay a royalty in respect of that
Master; and
(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
21
shall be required to be rendered for any semi-annual accounting period
in which less than Seven Thousand Five Hundred Dollars ($7,500) 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 reasonable in
our best business judgment. Promptly after your written request
therefor referring specifically to this subparagraph 10(a), which you
may render to us not more than once during each semi-annual accounting
period hereunder, we shall consult with you regarding the amount of
reserves which we intend to retain for the semi-annual accounting
period in question, provided that our failure to do so shall not
constitute a breach hereof. Our decision with respect thereto,
however, shall be final. We shall liquidate each reserve retained by
us as shall be reasonable in our best business judgment but not later
than the end of the fourth (4th) semi-annual accounting period
following that accounting period in which the reserve was initially
retained. Any accounting period in which returns exceed shipments of
Phonograph Records hereunder shall not be deemed to be one (1) of
those four (4) semi-annual accounting periods by the end of which a
particular reserve must be liquidated. You shall reimburse us on
demand for any overpayments, and we may also deduct the amount thereof
from any monies payable to you hereunder. Returns of Phonograph
Records distributed for sale in the United States shall be pro-rated
between Phonograph Records sold for which a Phonograph Record royalty
is payable hereunder and Phonograph Records distributed on a
"no-charge" or "free goods" basis for which no Phonograph Record
royalty is payable in the same proportion that those Phonograph
Records are initially invoiced. 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
semi-annual accounting period during which that affiliate or 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
22
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 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;
23
(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 (except as
required in a legal proceeding between you and us to enforce the
provisions hereof) 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 fights 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). Without limiting the foregoing, only fifty
percent (50%) of all amounts paid or incurred by 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
24
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). The United
States Controlled Composition Mechanical Rate shall
mean an amount equal to eighty-seven and one-half
percent (87.50%) of the United States Mechanical
Rate for each Controlled Composition on Qualifying
Sales of each Required Album which exceed five
hundred thousand (500,000) units;
(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 amount equal to seventy-five percent (75%) of the
Canadian Mechanical Rate. The term "Canadian
Mechanical Rate" shall
25
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
Master embodying the Musical Composition in question
or, if earlier, the date on which that first 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 reproductions of that Controlled
Composition in that Record; and no mechanical royalties shall
be payable for the reproduction of any
26
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 of Phonograph Records in the
following configurations in the United States, the maximum
aggregate mechanical royalty rate for all Selections,
including Controlled Compositions, contained on the
Phonograph Record in question, regardless of the number of
Selections contained thereon, shall be the product of (A) the
United States Controlled Composition Mechanical Rate and (B)
eleven (11) for an Album, five (5) for an EP, and two (2) for
a Single and a Long-Play Single; and for Net Sales of
Phonograph Records in the following
27
configurations in Canada, the maximum aggregate mechanical
royalty rate for all Selections, including Controlled
Compositions, contained on the Phonograph Record in question,
regardless of the number of Selections contained thereon,
shall be the product of (A) the Canadian Controlled
Composition Mechanical Rate and (B) eleven (11) 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. Notwithstanding the foregoing, royalties
for the mechanical reproduction of any Selection in any
Phonograph Record distributed in the United States or Canada
shall be payable on fifty percent (50%) of Required Albums
distributed in the United States on a no-charge basis
intended for sale by the recipient thereof as so-called
"standard free goods" (other than Required Albums distributed
in the United States at no-charge for resale by the recipient
thereof from time to time in connection with short-term or
other special sale programs);
(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;
28
(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
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,
29
including without limitation, from those royalties payable pursuant to
paragraph 9 above in respect of the exploitation of Audio-Visual
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;
(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); or (ii)
pursuant to the indemnity provisions of paragraph 19 below.
12. Audio-Visual Recordings.
(a) Upon our request, and subject to your prior
professional commitments of which you shall notify us in writing upon
our request therefor, you shall appear for the making of Audio-Visual
Recordings embodying your performances on the following terms:
30
(i) We shall designate for your and our
mutual approval 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 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, you
shall designate and submit to us for your and our mutual
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, provided, however, that only
fifty-percent (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;
31
(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 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 AFofM
Phonograph Record Labor Agreement, of the AFTRA Code for the
Phonograph Industry, and of the
32
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 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 Master 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, unless you do so in accordance with the
provisions of paragraph 23 below.
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
33
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 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 seek 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 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
34
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. 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 16(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 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
35
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. 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 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
36
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;
(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;
37
(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 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
38
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 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
39
(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 of Phonograph Records hereunder for which final payment has
been received by us in United States Dollars in the United States,
after deducting from such 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 subparagraph 9(b) above, but shall include sales or
distributions referred to in subparagraph 9(b)(vii)(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) 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,
40
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 "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
41
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 semi-annual 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;
(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
42
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, 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 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. A courtesy copy of each notice to you
hereunder shall be sent to
43
Xxxxxxx & Xxxxxxx, 0000 00xx Xxxxxx, Xxxxx 000 Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
00000, to the attention of Xxxxxx Xxxxxxx, 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 of any 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) 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;
(c) Our payment obligations under this Contract are
conditioned upon your full and faithful performance of the terms
hereof;
(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
non-consent 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 an independent contractor. 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;
44
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. We shall not disclose
the results or findings of such physical examinations, except to our
representatives, as required by law or legal process, as required to
implement or secure the insurance policy in question or to enforce the
provisions of this subparagraph (m);
(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 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 your 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
45
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
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,
d/b/a ANTRA RECORDS
By: xxxxxxxxxxxxxxxxxxxxxxxx
------------------------
By: xxxxxxxxxxxxxxxxxxxxxxxxxxxx
----------------------------
AGREED AND ACCEPTED:
/s/ Xxxxx Xxxx
------------------------------
XXXXX XXXX, p/k/a "BABY S"
46
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 d/b/a ANTRA
Records ("ANTRA") c/o A&M Records, Inc., Worldwide Plaza, 000 0xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000 and Xxxxx Xxxx (currently professionally known as "Baby S"
and referred to below as "Artist") dated __________, 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
ANTRA, I hereby:
X. Xxxxx to ANTRA 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 ANTRA 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 ANTRA 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 ANTRA 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 ANTRA for use as a contribution to a collective
work and shall be considered a "Work made for hire." I further
acknowledge that ANTRA 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 ANTRA 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 ANTRA.
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 ANTRA, 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 X.X.X.xx. 106. 1
hereby grant to ANTRA 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 ANTRA
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 ANTRA.
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 ANTRA in accordance with the provisions of the
Artist Agreement, any recording for any person, firm or
corporation other than ANTRA which embodies, in whole or in
part, any of the selections recorded in the Masters.
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SS#:
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Address:
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A-2
