Exclusive Recording Artist Agreement
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This Agreement is made as of the 11th day of November, 2000 by and
between PARALLAX ENTERTAINMENT, INC. (hereinafter "Parallax") and Xxxx Xxxxxxx,
Xxxxxx Xxxxx, and Xxxxx Coffee, both individually and jointly, and p/k/a "TEK 3"
(hereinafter "Artist").
1. ARTIST'S WARRANTIES AND REPRESENTATIONS
1.01. Artist represents and warrants that: (a) it is authorized,
empowered and able to enter into and fully perform its obligations under this
Agreement; (b) neither this Agreement nor the fulfillment thereof by any party
infringes upon the rights of any other person or entity; (c) it has not and will
not do anything that impairs Parallax's rights under this Agreement, nor will it
permit any other person or entity to do so; and (d) Artist is resident in the
United States of America for income tax purposes.
1.02. Artist further represents and warrants that: (a) there now exist
no prior recorded performances by Artist other than those listed on the attached
Exhibit A; (b) that it owns all of the rights in and to the Masters listed on
Exhibit A; (c) none of the Masters delivered to Parallax by Artist, nor the
performances embodied thereon, nor any other Materials, nor any use thereof by
Parallax or its grantees, licensees or assigns, will violate or infringe upon
the rights of any third party. "Materials," as used in this Paragraph, means all
Controlled Compositions, each name used by Artist, any logo used by Artist, and
all other musical, artistic, literary and other materials, ideas and other
intellectual properties furnished by Artist or any other producer engaged by
Artist and contained or used in connection with any Masters made hereunder, or
the packaging, sale, advertising or other exploitation thereof. Notwithstanding
the foregoing, the parties acknowledge that the recordings listed in Exhibit A
are being acquired by Parallax under this Agreement, and shall count toward
Artist's Minimum Recording Commitment. In addition, the parties acknowledge that
Artist has already begun recording its Minimum Recording Commitment for the
Initial Period.
2. TERM AND RECORDING COMMITMENT
2.01. The Term of this Agreement shall be for an Initial Period
commencing on the date hereof and expiring nine months thereafter.
2.02. Artist hereby grants to Parallax three (3) separate and
irrevocable options to extend the Term of this Agreement for further periods
(the "Option Periods") commencing immediately upon the expiration of the Initial
Period and expiring nine months after delivery to Parallax of the Minimum
Recording Commitment for said Option Period. Each option shall be exercised when
Parallax sends a written notice to Artist that the option is being exercised at
least sixty days prior to the commencement of the Option Period; provided that
Parallax shall have a right to cure any failure to send such notice at any time
up to ten days following receipt of a written notice from Artist that the
deadline for exercising an option has passed.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 1
2.03. During the Term of this Agreement (as the same may be extended)
Artist agrees to produce and Artist shall deliver to Parallax Masters comprising
sound alone sufficient to comprise the following (the "Minimum Recording
Commitment"):
(a) during the Initial Period-- one (1) Album (the "First Album")
(b) during the First Option Period--one (1) Album (the "Second Album")
(c) during the Second Option Period--one (1) Album (the "Third Album")
(d) during the Third Option Period--one (1) Album (the "Fourth Album")
2.04. Notwithstanding anything else herein to the contrary:
(a) Each Album shall be delivered to Parallax within five (5) months after
the commencement of the applicable Initial Period or Option Period.
(b) Artist shall not commence the recording of any Album hereunder earlier
than three (3) months following delivery to Parallax of the prior album.
(c) Parallax shall not be obliged to accept delivery of any Album hereunder
earlier than nine months following the date of delivery to Parallax of the prior
album. If any such premature delivery is tendered, the contractual date of
delivery hereunder of such Album shall be deemed to be the date one year
following the date of delivery of the prior album, provided that the prior album
has been recorded and delivered in all respects in accordance with the
provisions of this Agreement and comprises acceptable Masters as herein
provided.
(d) In the event that, during the Initial Period or the Option Periods,
Artist produces more than the Minimum Recording Commitment, Parallax shall at
its sole option be entitled to treat such additional material (or some of it) as
counting towards the Minimum Recording Commitment (or not) but said additional
material shall be and remain the sole and exclusive property of Parallax subject
to the provisions of this Agreement.
(e) Each Album delivered shall consist of not less than ten (10) Masters
and not less than forty-five (45) nor more than seventy-four (74) minutes of
Artist's performances. Each Master shall consist of not less than two minutes
and thirty seconds of Artist's performances. No album consisting of Artist's
"live" performances shall be deemed to be in fulfillment of any of Artist's
obligations hereunder except that upon mutual consent, in writing, a live
recording may be accepted in fulfillment of Artist's Minimum Recording
Commitment. If any such performances are recorded during the Term hereof,
Parallax shall be the owner thereof and shall have the right to exploit same
under the same terms as
EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 2
contained herein for the First Album, except that no advance will be paid to
Artist. No Multiple Albums shall be delivered hereunder without Parallax's prior
written consent; any such Multiple Album delivered to and accepted by Parallax
shall be deemed a single Album for all purposes hereof. No Mini-Album shall form
part of the Minimum Recording Commitment unless expressly agreed in writing by
Parallax at its absolute discretion.
(f) Artist shall deliver to Parallax each Master hereunder in the form of a
digital two-track stereo tape master, as well as reference discs which are
representative of such tape masters. Artist shall also deliver at the same time
any multi-track master tapes recorded in connection with the same project. The
two-track stereo master tape shall be fully edited, mixed, equalized and
leadered for the production of parts from which satisfactory Phonograph Records
can be manufactured.
(g) As used in this Agreement, "delivery" shall mean the receipt of all
tape masters as provided herein, as well as Artist's submission to Parallax in
written form of all necessary information, consents, licenses and permissions
that Parallax requires to manufacture, distribute and release the Masters as
Phonograph Records, including, but not limited to, mechanical licenses, credits,
musician and producer releases, and any information required to be delivered to
unions or other third parties. Payment of funds due at delivery by Parallax
shall not be deemed a waiver of information or documents required hereunder.
(h) Artist shall be available to Parallax and shall perform for the
purposes of making such music videos at such times and places as Parallax shall
reasonably agree with Artist. The cost of making such music videos shall be
deemed advances hereunder and shall be fifty percent (50%) recoupable from all
sources, excluding Mechanical Royalties and merchandise royalties, payable to
Artist hereunder.
(i) Parallax shall release a minimum of one thousand copies of each Album
delivered by Artist, within ninety days of its delivery. Parallax shall have a
right to cure any failure to timely make such release at any time up to ten days
following receipt of a written notice from Artist that the deadline for release
has passed. Failure to cure by Parallax shall entitle Artist to buy the
unreleased Masters for one hundred ten percent (110%) of the Recording Costs
spent by Parallax on the Masters, provided that Artist delivers written notice
of its ,intent to buy the Masters within ten days of the expiration of
Parallax's right to cure, and pays the purchase price in full within ninety days
of delivery of its notice of intent.
3. GRANT OF RIGHTS
3.01. During the Term of this Agreement, Artist shall furnish to
Parallax its exclusive recording services throughout the Universe. Any contract
entered into by Artist or on Artist's behalf during the Term hereof or any
extensions thereof for Artist's performances in television or radio broadcasts
or motion pictures or stage productions shall specifically exclude the right to
use any recording of such performance for the manufacture and sale of Phonograph
Records or music videos unless previously authorized in writing by Parallax,
which authority shall not be unreasonably withheld.
EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 3
Artist shall promptly deliver to Parallax copies of the pertinent provisions of
each such contract and Artist will cooperate fully with Parallax in any
controversy dispute or litigation which may arise in relation to the rights of
Parallax under this Paragraph.
3.02. Artist hereby grants and assigns to Parallax all rights of every
kind and the complete, unconditional, exclusive, perpetual, unencumbered title
throughout the Universe in and to all results and products of Artist's services
and performances hereunder(being the recording of musical performances and the
sound recordings in Exhibit A), any and all Masters, records, tapes, sound
recordings, music videos, long form videos, and other material of every kind
made or authorized by Parallax hereunder or otherwise produced during the
Initial Term and/or Option Terms and which include the voice, instrumental or
other sound and/or visual effects, services, or performances of Artist,
including without limitation the right to record, reproduce, broadcast,
transmit, publish, sell, exhibit, distribute, advertise, exploit, perform, and
use the same separately or in combination with any other material for any
purpose in any manner, under any label, trademark, or other identification and
by any means or method, whether known or not now known, invented, used, or
contemplated, and to refrain from all or any part thereof.
3.03. Without in any way limiting the generality of the foregoing,
Artist hereby grants to Parallax the following rights throughout the Universe
which Parallax may use or refrain from using as it elects in Parallax's sole
discretion:
(a) the exclusive right during the Term hereof to manufacture, distribute,
and sell anywhere in the Universe Phonograph Records and music videos
reproducing Artist's performances;
(b) the exclusive right for the full periods of copyright to manufacture,
distribute, and sell throughout the Universe Phonograph Records and music videos
produced from Masters made during the Terms hereunder;
(c) the exclusive right in all media and forms to advertise, publicize, and
exploit anywhere in the Universe Phonograph Records and music videos produced
during the Terms hereunder by any and every means, particularly, but without
limiting the generality ,of the foregoing, to use the name, including the
professional name, approved photograph, and/or likeness of, and approved
biographical material concerning Artist for advertising, publicizing, and
otherwise exploiting said Phonograph Records and music videos, said approval not
to be unreasonably withheld;
(d) the exclusive right to authorize public performances in the Universe of
Phonograph Records and music videos produced during the Terms hereunder;
(e) the right to permit and authorize others to exercise, directly or
through persons designated by them, any and all of Parallax's rights hereunder.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 4
3.04. (a) Each Master (including all sound recordings embodied thereon)
produced hereunder or embodying Artist's performances and recorded during the
Initial Term shall belong to Artist. Artist grants Parallax a security interest
in and to its copyright in the First Album to secure recoupment of all sums
expended by Parallax in the recording and promotion of all Albums recorded under
this agreement. Artist further agrees to execute any document reasonably
necessary to perfect such security interest. In the event Artist fails to
execute any such documents or instruments Artist hereby irrevocably grants to
Parallax power of attorney, coupled with an interest, to execute all such
security agreements.
(b) Each Master (including all sound recordings embodied thereon) produced
hereunder or embodying Artist's performances and recorded during the Terms
shall, from the inception of its creation, be considered a "work made for hire"
for Parallax within the meaning of the U. S. Copyright Law. If it is determined
that a Master does not so qualify, then such Master, together with all rights in
it (including the sound recording copyright), shall be deemed, and are hereby
transferred and assigned to Parallax by this Agreement. Artist agrees to execute
and deliver to Parallax any and all documents or instruments which Parallax may
request in order to confirm Parallax's acquisition and/or title to the Masters
(including the copyright) as described herein. In the event Artist fails to
execute any such documents or instruments Artist hereby irrevocably grants to
Parallax power of attorney, coupled with an interest, to execute all such
documents of conveyance. All Masters recorded by Artist from the inception of
the recording thereof and all reproductions derived therefrom, together with the
performances embodied thereon, shall be entirely the property of Parallax in
perpetuity, throughout the Universe, free of any claim whatsoever by Artist or
any persons deriving any rights or interests therefrom.
3.05. Artist shall not authorize or permit Artist's performances to be
recorded for any purpose without obtaining an express written approval of
Parallax, and Artist shall take reasonable' measures to prevent the manufacture,
distribution and sale of Phonograph Records or music videos containing its
performances (and the use of Artist's name and likeness in connection therewith)
by any person or entity other than Parallax, its successors, licensees and
assigns.
3.06. Artist grants Parallax the right to include any Master produced
and delivered hereunder in a soundtrack or compilation album, at any time, and
without any further advance, except that royalties shall be payable as provided
herein.
3.07. As used in this Agreement, "Phonograph Records" shall mean any
and all mechanical reproductions of the Masters produced and delivered
hereunder, in any format, whether now known or unknown, including but not
limited to compact discs, cassette tapes, vinyl records, DAT tapes or any future
format.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 5
4. RECORDING COSTS AND PROCEDURES
4.01. Advances payable to Artist pursuant to this Agreement are and
shall be inclusive of all costs incurred in the course of producing and
recording Masters hereunder (including without limitation, the costs of studio
time, musician fees, union payments, instrument hire, producer's fees, and the
cost of tape editing, mixing, remixing and mastering, advances, and other
similar costs customarily regarded in the industry as being recording costs).
All such costs are sometimes herein referred to as "recording costs" and shall
be paid by Parallax and constitute advances recoupable from royalties payable
hereunder. Parallax shall, in accordance with the provisions of this Agreement,
deduct and retain out of said advances such sums as may be necessary to pay the
said recording costs. In the event that, as a result of an event within the
control of the Artist, any recording costs shall exceed the amount of the
recording fund specifically referred to in Paragraph 5.01 below, then the excess
costs shall (if paid by Parallax) constitute a loan to Artist payable on demand
and without prejudice to Parallax's other rights and the same shall, at
Parallax's election, be recoverable by Parallax out of any monies payable by
Parallax to Artist or on Artist's behalf hereunder.
4.02. Parallax and Artist shall, prior to the commencement of any
recording: (a) mutually designate the producer(s) of all Masters hereunder; and
(b) agree on a budget for recording costs. Parallax shall not unreasonably
withhold its consent to any budget for recording costs that is less than ninety
percent (90%) of the recording fund for that album as specified in Paragraph
5.01.
4.03. Artist shall be properly rehearsed and shall appear at the times
and places designated by Parallax after consultation with and reasonable notice
to Artist from time to time for all recording sessions required hereunder and at
each session Artist shall tender their professional services to the best of
their ability. Parallax and Artist shall mutually designate the material to be
recorded and each Master shall be subject to Parallax's approval as technically
satisfactory and similar in style to Artist's current performances. Upon
Parallax's request, Artist shall re-record any material until a Master, which in
Parallax's sole judgment is satisfactory, shall have been obtained.
4.04. The Masters delivered to Parallax by Artist under this Agreement
and the performances embodied therein shall be produced in accordance with the
rules and regulations of the American Federation of Musicians, the American
Federation of Television and Radio Artists and all other unions having
jurisdiction. Artist is or will become and remain, to the extent necessary to
fulfill this Agreement, a member in good standing of all labor unions or guilds
in which membership may be required for the performance of Artist's services
hereunder.
4.05. Artist shall not perform for or in connection with (and shall not
permit any other person or entity to use Artist's name or likeness in connection
with) the recording or exploitation of any Phonograph Record embodying any
Composition recorded by Artist under this Agreement prior to a date four (4)
years subsequent to the expiration or termination of the term of this Agreement,
or any extensions thereof.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 6
4.06. Without limiting the foregoing, Parallax shall not be required to
make any payments of any kind for, or in connection with, the acquisition,
exercise or exploitation of rights by Parallax except as specifically provided
in this Agreement. Artist shall be solely responsible for all sums due to labor
unions or guilds, individual musicians, producers and all other persons or
entities entitled to receive royalties or other payments in connection with the
sale of Phonograph Records derived from Masters hereunder, although Parallax
will undertake to make all such payments to the extent of the recording fund
specified in Paragraph 5.01. None of the persons whose performances are embodied
in the Masters or whose services are used in recording the Masters shall be
bound by any agreement that would restrict such performances or services, or to
the extent they are otherwise bound or restricted, Artist shall obtain all
necessary clearances in writing.
5. ADVANCES AND RECORDING FUND
5.01. As advances against and recoupable from royalties payable
hereunder, Parallax agrees to pay with respect to each Album constituting the
Minimum Recording Commitment hereunder a sum equal to the amount by which the
greater of (1) the applicable sum set forth below; or (2) a sum equal to
two-thirds of the royalties actually accruing to Artist on the immediate prior
Album exceeds (3) the sum of the documented receipts for the recording costs
concerned and any other advances made to Artist prior to delivery of the
applicable Album("Album Recording Fund"):
Album Recording Fund: First Album $10,000
Second Album $20,000
Third Album $35,000
Fourth Album $50,000
5.02. If net sales through normal retail channels in the United States
for which royalties are payable pursuant to Paragraph 6.01 (a) below, net of
applicable reserves of any album shall exceed seventy-five thousand (75,000)
units as of the date nine (9) months after the initial release of that album in
the United States, then the Album Recording Fund on the next subsequent album
shall be increased by Ten Thousand Dollars ($10,000).
5.03. The advances due under Paragraph 5.01 shall be payable promptly
following the delivery to Parallax of (a) the Minimum Recording Commitment; (b)
the documents required under Paragraph 2.04(g); and (c) all invoices pertaining
to the recording of the Minimum Recording Commitment. With respect to payments
to be made following delivery. Parallax shall have the right to withhold ten
percent (10%) for ninety (90) days to provide for anticipated costs which have
not yet been paid.
5.04. All advances paid to Artist or on Artist's behalf shall be
recoupable against the royalties payable under this Agreement, from whatever the
source, except that advances shall not be recoupable against Mechanical
Royalties except as provided for in Paragraph 8.01.
EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 7
6. ROYALTIES
6.01. Subject to Artist's compliance with all obligations required of
Artist hereunder and subject as otherwise granted herein, Parallax will pay to
Artist for the rights granted herein and for the services performed hereunder
the royalties set out below, being percentages of one hundred percent (100%) of
the Parallax's published wholesale price, exclusive of taxes and duties actually
paid by Parallax, and the container cost deductions specified below for all
records and music videos manufactured, sold and not returned, and for which
Parallax is paid, reproducing exclusively Masters recorded hereunder, namely:
(a) With respect to sales for distribution in the United States of Albums
reproducing exclusively Masters hereunder: Twenty Five percent (25%). This
royalty reverts to Twenty percent (20%) if this Agreement is assigned to a Major
Record Label or a label distributed by a Major Record Label.
(b) The royalty rate with respect to 12-inch singles shall be twenty
percent (20%). This royalty reverts to fifteen percent (15%) if this Agreement
is assigned to a Major Record Label or a label distributed by a Major Record
Label.
(c) The royalty rate with respect of 7-inch singles and other records shall
be fifteen percent (15%). This royalty reverts to twelve percent (12%) if this
Agreement is assigned to a Major Record Label or a label distributed by a Major
Record Label.
(d) The royalty rate with respect to the following is fifteen percent (15%)
[thirteen percent (13%) if this Agreement is assigned to a Major Record Label or
a label distributed by a Major Record Label]: records sold to any government
body, PX sales, sales to educational institutions, record clubs, soundtrack
records, compilation records, budget records (defined as a record which is sold
at a wholesale price of at least fifty percent but less than eighty percent of
Parallax's published wholesale price), and EP records (defined as records
containing between three and nine Masters); except that the royalty rate for
compilations released exclusively on the Parallax label shall be twenty five
percent (25%) [twenty percent (20%) if this Agreement is assigned to a Major
Record Label or a label distributed by a Major Record Label.] Royalties for
soundtracks and compilations on which Artist appears with other performers shall
be pro-rated in the same proportion that Artist's Master(s) bear to the entire
album.
(e) Foreign royalty rate: The rate for the records manufactured by Parallax
or Parallax's affiliates and sold in Canada will be eighty five percent (85%) of
the applicable royalty rate, and sales outside the United States and Canada will
be seventy five percent (75%) of the applicable royalty rate. The royalty rate
for masters licensed by Parallax outside the United States shall be fifty
percent (50%) of the net income therefrom. Net income shall mean all income
received less third party out of pocket expenses to establish the license, third
party out of pocket collection costs, foreign currency exchange, wire transfer
fees and applicable taxes.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 8
(f) Royalty rate for music videos sold and not returned shall be twenty
percent (20%) of Parallax's published wholesale price. The royalty rate for
videos licensed by Parallax shall be fifty percent (50%) of the net income
therefrom.
7. ROYALTY PAYMENTS
7.01. Royalties earned hereunder will be accrued semi-annually and
paid, less all advances, taxes, and any other charges, within sixty (60) days
following each June 30th and December 31 st for the preceding six (6) month
period, in accordance with Parallax's regular accounting practices. Parallax
shall, however, have the right to establish reasonable reserves for returns and
exchanges, said reserves not to exceed thirty percent (30%). Each reserve
established hereunder shall be liquidated at the end of the following
semi-annual period. If Parallax makes any overpayment of royalties (e.g., by
reason of an accounting error or paying royalties on Records returned later),
Parallax shall have the right to offset such overpayment against any subsequent
payment due to Artist from Parallax, excluding mechanical royalties and
merchandise royalties.
7.02. Each royalty payment hereunder shall be accompanied by a
statement in accordance with Parallax's regular accounting practices. Each
statement shall become binding upon Artist and Artist shall neither have nor
make any claim against Parallax with respect to such statement, unless Artist
shall advise Parallax, in writing, of the specific basis of such claim within
two (2) years after the date Parallax mails such statement. Parallax's
accounting books and records will be kept and maintained in accordance with
generally accepted accounting principles, consistently applied.
7.03. Artist shall not be entitled to recover damages or to terminate
this Agreement for any reason because of a claimed breach by Parallax of its
material obligations hereunder, unless Parallax has failed to remedy such breach
within sixty (60) days following receipt of written notice thereof. Artist will
not have the right to xxx Parallax in connection with any royalty accounting, or
xxx Parallax for royalties accrued by Artist during the period a royalty
accounting covers, unless Artist commences the suit within two (2) years after
the date when the statement in question is rendered to Artist. If Artist
commences suit on any controversy or claim concerning royalty accountings
rendered to Artist under this Agreement, the scope of the proceeding will be
limited to the determination of the amount of royalties due for the accounting
periods covered and reasonable attorney fees, and the court will have no
authority to consider any other issues or award any relief except recovery of
any royalties found owing. Artist's recovery of any such royalties and
attorney's fees will be the sole remedy available to Artist by reason of
Parallax's royalty accountings. Without limiting the generality of the preceding
sentence, Artist will not- have any right to seek termination of this Agreement
or avoid the performance of their obligations under it by reason of any such
claim. However, in the event that Parallax is found by a court to have breached
its obligation to account for and pay royalties to Artist, then any unexercised
options to extend the term of this agreement shall be void. Artist's remedy for
Parallax's willful refusal to permit it to record its Minimum Recording
Commitment shall be an option to terminate this Agreement.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 9
7.04. Parallax agrees that Artist may, not more than once during any
calendar year, but only once with respect to any statement rendered hereunder,
audit its books and records for the purpose of determining the accuracy of
Parallax's statements to Artist. If Artist wishes to perform any such audit,
Artist will be required to notify Parallax at least ten (10) days before the
date when Artist plans to begin the audit plans to begin the audit. If Artist's
audit has not been completed within one (1) month from the time Artist begins
it, Parallax may require Artist to terminate it on seven (7) days notice to
Artist and Parallax will not be required to permit Artist to continue the
examination after the end of that seven (7) day period. Artist shall not be
entitled to examine any manufacturing records or any other records which do not
report sales of Records or calculation of net receipts on which royalties are
accruable hereunder. All audits shall be made during regular business hours, and
shall be conducted on Artist's behalf by an independent Certified Public
Accountant and/or a licensed attorney. Each examination shall be made at
Artist's sole expense at Parallax's regular place of business in the United
States, where the books and records are maintained.
8. MECHANICAL LICENSES AND ROYALTIES
8.01. All Controlled Compositions (defined as musical compositions
composed in whole or in part by any individual member of Artist) are hereby
licensed to Parallax and its licensees for reproduction on Phonograph Records
anywhere in the Universe. Royalties for the mechanical license herein granted
shall be at a rate equal to seventy-five percent (75%) of the minimum U. S.
statutory rate in effect at the time the recording is first released (including
the "long work" rate, if applicable) for royalty-bearing records sold and not
returned and for which Parallax is paid, excluding any instance where Parallax
and Artist are sharing income under Paragraph 6.01(e) above. In no event shall
the mechanical royalties payable hereunder for any Album exceed ten (10) times
the rate set forth above. The foregoing also applies to music videos, as well as
to any instance where such a license must be executed in favor of Parallax,
Parallax shall not recoup from mechanical royalties due to Artist any advances
payable to Artist except any advances of cash or consigned materials (or the
like) to Artist.
8.02. If any record contains one or more compositions which are not
Controlled Compositions, then Parallax will have the right to reduce the amount
of Mechanical Royalties payable on the Controlled Compositions by an amount
equal to the amount of mechanical royalties payable on non-Controlled
Compositions.
9. TRADEMARKS
9.01. Artist shall perform under the professional name, "Tek 3." Artist
warrants and represents that it is the sole owner of such name in connection
with Phonograph Records during the term hereof. Artist shall not use a different
name in connection with
EXCLUSIVE RECORDING ARTIST AGREEMENT -PAGE 10
Phonograph Records unless Artist and Parallax mutually agree in writing. Artist
agrees that Parallax may cause a search to be instituted for the purpose of
determining whether any professional name used by Artist has been or is being
used by another person in connection with Phonograph Records. Parallax may
require Artist to file a federal application for trademark protection to be made
in favor of Artist for Phonograph Record and/or entertainment purposes. Any
amounts up to One Thousand Seven Hundred Dollars ($1,700.00) expended by Artist
in successfully obtaining a requested trademark registration pursuant to this
Paragraph shall be reimbursed by Parallax and deemed Advances hereunder. If the
trademark search indicates that such name should not be used, Parallax and
Artist shall mutually agree on a substitute name for Artist. Nothing contained
herein shall release Artist from its indemnification of Parallax with respect to
Artist's use of such name.
10. FREE GOODS
10.01. No royalties shall be payable with respect to records given away
or furnished on a "no charge" basis to one-stops, rack jobbers, distributors,
dealers, radio stations, television stations or film companies, theatrical
hooking agencies, print media, music publishers or the like, provided that such
records do not exceed one hundred (100) non-royalty bearing Singles out of every
one thousand (1,000) Singles distributed and one hundred (100) non-royalty
bearing Albums out of every one thousand (1,000) Albums. Any record sold for
less than fifty percent (50%) of Parallax's published wholesale price will be a
non-royalty bearing record.
10.02. During each applicable contract period, Parallax shall provide
Artist with thirty (30) non-royalty bearing copies of Artist's then current
Album at no charge to the Artist.
ll. CONTAINER COSTS
11.01. Parallax's container deduction shall be a sum equal to: one
dollar ($1.00) for singles, one dollar and fifty cents ($1.50) for LPs and
cassettes, two dollars ($2.00) for double LP sets and compact discs, three
dollars ($3.00) for double cassettes, and four dollars ($4.00) for other
formats, including double compact disks, and all video formats.
12. INDEMNIFICATION
12.01. Artist agrees to and does hereby indemnify, save and hold
Parallax and its licensees harmless of and from any and all liability, loss,
damage, cost, or expense (including all legal expenses and reasonable attorney
fees) arising out of or connected with any breach of this Agreement or any claim
which is inconsistent with any of the warranties or representations made by
Artist in this Agreement, and Artist agrees to reimburse Parallax on demand for
any payment made or incurred by Parallax with respect to the foregoing if the
claim concerned is settled or has resulted in a final judgment against Parallax
or its licensees. Pending the determination of any claim with respect to which
Parallax is entitled to indemnity, Parallax may withhold monies which would be
otherwise payable to Artist up to the amount of its potential liability.
EXCLUSIVE RECORDING ARTIST AGREEMENT-PAGE 11
12.02. Parallax agrees to defend and does hereby indemnify, save and
hold Artist harmless of and from any and all liability, loss, damage, cost, or
expense (including all legal expenses and reasonable attorney fees) arising out
of or connected with any claim which is inconsistent with any of the warranties
or representations made by Parallax in this Agreement, and Parallax agrees to
reimburse Artist on demand for any payment made or incurred by Artist with
respect to the foregoing if the claim concerned is settled or has resulted in a
final judgment against Artist.
13. DEFAULT AND TERMINATION
13.01. In the event of any default or breach by Artist in the
performance of any of Artist's obligations hereunder, Parallax may, without
prejudice to its other rights, claims or remedies, suspend its obligations
hereunder for the duration of such default or breach and until the same has been
cured and may, at its option, extend the Term for a period equal to all or any
part of the period of such default or breach, and in such event the dates for
the exercise by Parallax of the Option Periods hereunder and the dates of
commencement of each subsequent Option Period shall be extended accordingly.
14. FORCE MAJEUR
14.01 If Parallax's material performance hereunder is delayed or
becomes impossible or impractical because of any act of God, fire, earthquake,
strike, act of government or any order, regulation, ruling, or action of any
labor union or association of artists affecting Parallax or Artist or the
phonograph record industry, Parallax, upon notice to Artist may suspend its
obligations under this Agreement for a period not to exceed ninety days, and in
such event the number of days equal to the number of days of such suspension
shall be added to the then-current period of the Term thereof. In the event that
Parallax's material performance hereunder is delayed or becomes impossible or
impractical because of any civil strife, Parallax, upon notice to Artist, may
suspend its obligations under this Agreement for the duration of such delay,
impossibility or impracticability and in such event the number of days equal to
the number of days of such suspension shall be added to the then-current period
of the Term thereof.
15. MERCHANDISING
15.01. Artist hereby grants Parallax the exclusive right to
manufacture, sell, license, distribute and exploit, throughout the Universe and
by mail-order and through retail sources of, without limitation, all merchandise
of every kind featuring the Artist (name/logo/likenesses), during the term of
this Agreement.
15.02. It is expressly agreed and understood that any contract for the
purpose of merchandising Artist entered into by Parallax during the Term shall
continue in full force and effect in accordance with the provisions thereof for
a period not to exceed one (1) year following the expiration of the term of this
Agreement.
EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 12
15.03. In the case of any such products or property manufactured and
sold by Parallax or by any associated company, Artist shall be entitled to a
royalty of thirty four percent (34%) of the adjusted gross receipts therefrom.
As used in this paragraph, the term "adjusted gross" shall mean gross revenues
from the sale of applicable merchandise, less venue commissions and state sales
tax where collected and actually paid. In the event that Parallax licenses to
others any of its rights under this clause, then Artist shall receive sixty
percent (60%) of the net receipts therefrom. As used in this paragraph, the term
"net receipts" shall be calculated as gross revenues from the sale of the
applicable merchandise, less the cost actually incurred and paid by Parallax or
its licensing company for manufacturing; sales personnel salaries and/or
commissions, venue commissions and state sales tax where collected and actually
paid.
15.04. Artist has the right of approval of all merchandising artwork,
so long as said approval is not unreasonably withheld. During the Term of this
Agreement, Artist shall cause the inclusion of Parallax's logo and proper name
at a reasonable size and position on all merchandise.
15.05. No royalties shall be payable with respect to merchandise given
away or furnished on a no-charge basis. Upon Artist's request, Parallax shall
provide Artist with twenty (20) non-royalty-bearing samples of each item of
merchandise at no charge.
15.06. The parties agree to negotiate in good faith a long-form
agreement for the sale of merchandise that is consistent with the terms
contained herein.
16. ARTWORK
16.01. Artist agrees that Parallax is the owner of any and all artwork,
LP jacket art, and promotional artistic renderings undertaken or completed
within the Term of this Agreement. Artist shall have the right to use artwork
which has been mutually approved by Parallax and Artist for the purpose of
merchandising.
17. NOTICES
17.01. All notices, demands or the like which are required to be given
hereunder shall be in writing and may be served upon the other party personally
by Registered Mail, Return Receipt Requested, or by telecopy (facsimile). Notice
to Artist will be received by: and notice to Parallax will be received by: Xxxx
Xxxxxx, Parallax Entertainment, Inc., 00000 Xxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000.
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 13
18. PROMOTIONS AND ADVERTISING CAMPAIGNS
18.01. Any promotional monies spent by Parallax on behalf of Artist are
fifty percent (50%) recoupable from monies otherwise due to Artist from
Parallax, excluding Mechanical Royalties and merchandise royalties,
notwithstanding the source. Container costs shall not be considered promotional
monies. Any promotional monies spent on behalf of Artist in combination with
other Parallax Artists shall be recoupable from Artists on a pro-rata basis.
18.02. Parallax is not obligated to produce a promotional video for
Artist, but if Parallax undertakes to produce said video, the cost is fifty
percent (50%) recoupable from royalties, excluding Mechanical Royalties and
merchandise royalties, notwithstanding the source. The cost of producing
nonpromotional videos intended for resale are fully recoupable.
19. CONTROLLING LAW
19.01. This Agreement is entered into and performable in Dallas County,
Texas and the validity, interpretation and legal effect of this Agreement shall
be governed by Texas law. Venue for any legal action shall be in Dallas County,
Texas.
20. REMEDIES
20.01. Artist acknowledges, recognizes and agrees that his services
hereunder are of a special, unique, unusual, extraordinary and intellectual
character which gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated for by damages in an action of law.
Inasmuch as a breach of such services will cause Parallax irreparable damages,
Parallax shall be entitled to injunctive and other equitable relief, in addition
to whatever legal remedies are available, to prevent or cure any such breach or
threatened breach.
21. HEADINGS
21.01. The headings of the clauses herein are intended for convenience
only, and shall not be of any effect in construing the contents of this
Agreement.
22. RELATIONSHIP
22.01. Artist has the status of an independent contractor and nothing
herein contained shall contemplate or constitute Artist or its members as
Parallax's agents or employees. This Agreement does not and shall not be
construed to create a partnership or joint venture between the parties to this
Agreement
23. VALIDITY AND MODIFICATIONS
23.01. The invalidity or unenforceability of any provision shall not
affect the validity or enforceability of any other provision. This Agreement
contains the entire understanding of the parties relating to its subject matter.
EXCLUSIVE RECORDING ARTIST AGREEMENT - PAGE 14
No change of this Agreement will he binding unless signed by all parties hereto
or their duly authorized representatives. A waiver by either party of any
provision of this Agreement in any instance shall not be deemed to waive it for
the future. All remedies, rights, undertakings and obligations contained in this
Agreement shall be cumulative and none of them shall limit any other remedy,
right, undertaking or obligation.
24. ASSIGNMENT
24 01 . Parallax may assign its rights under this Agreement in whole or
in part to any Major Record Label, or its subsidiary or legal successor.
Parallax may assign its rights under this Agreement in whole or in part to any
other Company with Artist's consent, such consent not to be unreasonably
withheld.
25. LEGAL REPRESENTATION
25.01. Artist, by their signature hereto, confirms that Parallax has
advised Artist to take independent legal counsel, from a lawyer specializing
generally in the music business and specifically in the negotiation of recording
agreements, on the terms and conditions of this Agreement and on the obligations
being undertaken by Artist in executing the Agreement.
26. COOPERATION
26.01. Artist shall execute such other documentation and shall give
such further assurances as may reasonably be necessary or desirable for the
purpose of vesting, confirming, protecting or further assuring any of the rights
granted herein.
27. DISCLAIMER
27.01. Parallax has not made and does not hereby make any
representation or warranty with respect to the extent of the sale of records or
the exploitation of music videos hereunder.
SIGNED THIS 11th DAY OF NOVEMBER, 2000.
PARALLAX ENTERTAINMENT, INC.
By:_________________________
Xxxx Xxxxxx, President
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 15
ARTIST:
p/k/a TEK 3
------------------------
By:__________________________
Printed name: Xxxx Xxxxxxx
SSN: ###-##-####
By:__________________________
Printed name: Xxxxx Xxxxxx
SSN:###-##-####
By:__________________________
Printed name: Xxxxxx Xxxxx
SSN:###-##-####
Artist Address: 000 Xxxxxxxxx Xx.
----------------------------------
Xxxxxx, XX 00000
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EXHIBIT A
Appendix Of Existing Commercial Releases
Date Title Song Title Label
EXHIBIT B
APPROVED LABELS
EXCLUSIVE RECORDING ARTIST AGREEMENT- PAGE 16
