EXCLUSIVE ARTIST RECORDING AGREEMENT
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AGREEMENT, made and entered into this 1st day of July, 1999, by and between
the parties, ANTRA MUSIC GROUP, INC., d/b/a ANTRA MUSIC GROUP, of 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000 (hereinafter referred to as "Company")
and XXXXX XXXXX p/k/a "XXXX XXX" a/k/a "AGENT 99", and XXXXXX XXXXXX p/k/a
"MISTA BOOKA", and XXXXXX XXXXX p/k/a "JD REVENGE", and CHENJERAI XXXXXXXXX
p/k/a "HYPNO" a/k/a "MISTA CHENJERAI", and XXXXXX XXXXXXX p/k/a "GEE" a/k/a
"KILLAHAHA" a/k/a "WATER WATER", individually and collectively, and collectively
professionally known as "SPOOKS" (hereinafter referred to collectively as
"Artist"), c/o Osse & Xxxxx, P.C., 00 X. 00xx Xx., XX XX 00000, Attn: Xxxxxxxx
X. Xxxx, Esq.
WHEREAS Company is in the business of exploiting and dealing in phonograph
records and derivatives thereof; and,
WHEREAS Company wishes to produce or cause the production of certain
recordings embodying Artist's performances, as more particularly set forth
herein; and,
-i-
WHEREAS Artist wishes to have Company produce or cause the production and
distribution of certain recordings, as more particularly set forth below:
NOW THEREFORE, in consideration of the representations and warranties, and
the mutual promises hereinafter set forth, and for such other good
consideration, receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions.
For the purpose of this Agreement, the following terms shall mean:
(a) "Master" - the equivalent of a 7 inch, 45 rpm, single-sided
recording embodying the recorded performances of the Artist and intended for use
in the manufacture and sale of phonograph records.
(b) "Single" - the equivalent of a 7 inch, 45 rpm, or a 12 inch, 33 1/3
rpm double-sided phonograph record embodying thereon at least two (2) Masters.
(c) "EP" - a record embodying thereon between five (5) and eight (8)
Masters, provided, however, that in the event that more than one (1) of such
Masters embody the same musical composition, such record shall be deemed to be a
12 inch single.
(d) "LP" - the equivalent of as 12 inch, 33 1/3 rpm, double-sided long
playing phonograph record embodying thereon the equivalent of not less than nine
(9) Masters nor less than thirty-five (35) minutes.
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(e) "Records", "phonograph records", "recordings", and "derivatives"
mean and include all forms of recording and reproductions, now known or which
may hereafter become known, manufactured or sold primarily for home and/or
jukebox use and/or use on or in means of transportation, including, without
limiting the generality of the foregoing, magnetic recording tape, film,
electronic video recordings and any other medium or device for the reproduction
of artistic performances (whether such artistic performances are of a type now
known or hereafter devised) manufactured or sold for home use and/or jukebox use
on or in means of transportation, whether embodying: (i) sound alone; or, (ii)
sound synchronized with visual images, e.g. "sight and sound devices".
(f) "Retail list price" means the retail list price or applicable list
price in, at Company's election, the country of sale or manufacture (exclusive
of all taxes, discounts, duties and packaging).
(g) "Composition" means a musical composition or medley consisting of
words or music, whether in the form of instrumental and/or vocal music contained
on a Master. Different versions of a Composition embodied on the same phonograph
record will be considered one (1) Composition (and one (1) selection) for all
purposes hereunder.
(h) "Recording Costs" means all costs incurred for and with respect to
the production of Masters embodying Artist's performances including, but not
limited to, sums payable to the individual producer(s) for the production of
Masters embodying Artist's performances. Recording costs include, without
limitation, union scale, the costs of all instruments, musicians, vocalists,
conductors, arrangers, orchestrators, copyists, etc., payments to a trustee or
fund based on wages to the extent required by any agreement between Company and
any labor organization or trustee, all studio costs, tape, editing, mixing,
mastering, engineering, travel, per diems, production fees, rehearsal halls,
costs of non-studio facilities and equipment, dubbing, transportation of
instruments and other costs and expenses incurred in producing the Masters
hereunder, from time to time, and all other costs which are customarily
recognized as Recording Costs in the Phonograph record industry.
(i) "Territory" means the universe.
(j) "Controlled Composition" means a Composition which is written or
composed, in whole or in part, by Artist or any individual producer of Artist's
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recordings hereunder, or owned or controlled directly or indirectly by Artist or
such individual producers, or by any person, firm or corporation associated or
affiliated with Artist or such individual producers.
(k) "Recorded Composition" means a Controlled Composition which is
recorded by Artist hereunder or contained on any Master recording subject to
this agreement.
(l) "Mid-priced record" means a record which bears a suggested retail
list price in the applicable country of the Territory of at least Two Dollars
($2.00) but not more than Three Dollars ($3. 00) (or the equivalent in the
applicable foreign currency) less than the suggested retail list price of
Company's or Company's licensee's, as applicable, then-current newly-released
top-line records in the same configuration or format. Notwithstanding the
foregoing, in respect of Company's commercial exploitation, if any, of
audio-visual Program hereunder, the term mid-priced record shall mean an
audio-visual Program which bears a suggested retail list price in the applicable
country of the Territory of at least sixty percent (60%) but not more than
eighty-five percent (85%) of Company's or Company's licensee's, as applicable,
suggested retail list price of the applicable audiovisual Program full priced
as initially released in the applicable country of the Territory in the same
configuration or format.
(m) "budget record" means a record which bears a suggested retail list
price in the applicable country of the Territory which is more than Three
Dollars (03.00) (or the equivalent in the applicable foreign currency) less than
the suggested retail list price of Company's or Company's licensee's, as
applicable, then-current newly-released top-line records in the same
configuration or format. Notwithstanding the foregoing, in respect of Company's
commercial exploitation, if any, of audiovisual Programs hereunder, the term
"budget record" shall mean an audio visual device which bears a suggested retail
list price in the applicable country of the Territory of less than sixty percent
(60%) of Company's or Company's licensee's, as applicable, suggested retail list
price of the applicable audio-visual device full priced as initially released in
the applicable country of the Territory in the same configuration or format.
2. Exclusive Recording Services. Company hereby engages Artist to perform
as a recording artist exclusively for Company pursuant to the terms and
conditions of this agreement and to render such services as Company may require
in connection with the recording, production and exploitation of phonograph
records and to furnish the services of such person(s) approved by Company who
shall perform as the individual producer(s) of Masters hereunder and who shall
perform all functions, responsibilities and services requested by Company.
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Artist hereby accepts such engagement and agrees to furnish such services
exclusively in the Territory to Company for a period of one (1) year commencing
on the date hereof ("Initial Period") and any exercised option periods
hereinafter set forth. The Initial Period as the same may be extended is
hereinafter called the "Term". Artist hereby irrevocably grants to Company the
option to extend the Initial Period for Five (5) further consecutive renewal
periods of one (1) year each. Each option shall be deemed automatically
exercised, unless Company sends written notice to the contrary to Artist at any
time prior to the date that the Term would otherwise expire. Each year of the
Term shall sometimes hereinafter be referred to as a "Contract Year".
3. Recording Obligation.
(a) During the Term, Artist warrants that Artist shall perform for the
purpose of making phonograph records in the Territory for Company, in a
recording studio selected by Company, embodying Compositions not theretofore
recorded by Artist, and Artist shall perform for the recording of the number of
Masters embodying the performances of Artist as hereinafter provided. Company
shall have the right and opportunity to have a representative attend each
recording session.
(b) During the first Contract Year of the Term hereof, Company shall
request and upon such request Artist shall perform for the recording of Masters
sufficient to constitute one (1) twelve inch (12") Single. It is understood and
agreed that the foregoing is a "minimum recording obligation" and that during
said first Contract Year. Company shall have the right to request, and upon such
request Artist shall perform for, the recording of such number of additional
Masters as Company may request which, when combined with the Masters
constituting the minimum recording obligation in respect of that Contract Year,
are sufficient to constitute up to two (2) LPs.
(c) During each of the second and third Contract Period, if any, of the
Term hereof, Company shall request, and upon such request Artist shall perform
for, the recording of Masters sufficient to constitute two (2) twelve inch (12")
Singles. It is agreed that the foregoing is a "minimum recording obligation" and
that during each of said Contract Period, Company shall have the right to
request, and upon such request Artist shall perform for, the recording of such
number of additional Masters as Company may request which, when combined with
the Masters constituting the minimum recording obligation for such Contract
Period, are sufficient to constitute up to two (2) LPs.
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(d) During each of the fourth through sixth Contract Period, if any, of
the Term hereof, Company shall request, and upon such request Artist shall
perform for, the recording of Masters sufficient to constitute one (1) LP. It is
agreed that the foregoing is a "minimum recording obligation" and that during
each of said Contract Period, Company shall have the right to request, and upon
such request Artist shall perform for, the recording of such number of
additional Masters as Company may request which, when combined with the Masters
constituting the minimum recording obligation for such Contract Period, are
sufficient to constitute up to two (2) LPs.
(e) Unless Company gives its written consent to the contrary, each
phonograph record hereunder (and the Masters embodied therein) shall be a
"studio" record (as hereinafter defined) solely embodying Artist's performance
of Compositions which have been written, composed and recorded subsequent to the
commercial release through normal retail trade channels in the United States of
the immediately prior phonograph record hereunder and which have not previously
been released in the form of phonograph records or otherwise commercially
exploited. As used herein, the phrase "studio" record shall mean a record
comprised solely of Masters embodying recordings of performances by Artist given
in a first-class recording studio, as opposed to before an audience or in any
other venue.
(f) Company shall, at its election, select or approve each of the
Compositions to be recorded hereunder. Artist shall have the absolute right to
confer with Company in regard to selection or approval of the compositions and
Company shall give serious consideration to the Artist's preferences in this
regard.
(g) Each Master shall be subject to Company's approval as satisfactory
for the manufacture and sale of commercially and technically satisfactory
phonograph records. Upon Company's request, Artist shall perform for the
re-recording of any Composition recorded hereunder until a Master which, in
Company's sole judgment, is satisfactory for the manufacture and sale of
commercially and technically satisfactory phonograph records shall have been
obtained and delivered to Company.
(h) If Artist fails to appear at any recording session of which Artist
has been given reasonable notice, for any reason other than labor disagreements,
fire, catastrophe or Act of God, Company shall have the right to charge any of
its out-of-pocket expenses in respect to such session against Artist's
royalties, if and when earned. If, during any Contract Year, Artist records more
than the applicable minimum recording obligations for such Contract Year,
Company may apply all or part of the excess against the minimum recording
obligation for any subsequent Contract Year. If Company obtains, from any
person, firm or corporation, the right to produce phonograph records from any
sound recordings made by Artist prior to the date hereof, Company may apply such
recordings to the minimum recording obligation in any Contract Year.
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(i) Notwithstanding any of the above, in no event shall Artist's
recording commitment hereunder exceed six (6) long playing Albums, absent
further written consent by the parties.
4. Negative Covenants.
(a) Artist warrants that during the Term, Artist shall not either
directly or by or through others permit, license, or consent to the use of
Artist's name (real and/or professional), likeness, voice, biographical material
or other identification (individually and collectively "Artist's
Identification") for or in connection with the recording or exploitation of
phonograph records for anyone other than Company in the Territory.
(b) Artist further warrants that Artist shall not either directly or by
or through others do any of the following prior to the "restriction date" (as
hereinafter defined):
(i) use, perform in connection with the use of, license, authorize,
consent to or permit any person or entity to use, Artist's Identification for or
in connection with the making, recording, releasing or otherwise exploiting in
the Territory any phonograph record including, but not limited to, so-called
"live" recordings (as such term is generally understood in the record industry),
embodying any Composition contained on a Master hereunder; or
(ii) perform for the purpose of making, recording, releasing or
otherwise exploiting in the Territory any phonograph records including, but not
limited to, so-called "live" recordings as such term is generally understood in
the record industry), embodying any Composition contained on a Master hereunder.
(c) The phrase, "restriction date", as used in subparagraph 4(b) above,
shall mean, on a Composition by Composition basis, the later of (i) the date
five (5) years subsequent to the date of delivery to Company of a Master
embodying that Composition, or (ii) the date two (2) years following the
expiration or other termination of the Term of this agreement.
5. Rights Granted to Company. All Masters recorded by Artist during the
Term, together with Masters acquired by Company hereunder and all records and
other reproductions derived therefrom, together with the performances embodied
therein, shall, from inception of their creation, be entirely the property of
Company in perpetuity, throughout the Territory, free of any claim whatsoever by
Artist, or by any persons deriving any rights or interests from Artist
including, without limitation, all rights of copyright therein now or in the
future granted or permitted by law and the right to renew such copyright and
Artist hereby assigns and conveys all of the foregoing rights and interests to
Company. Without limiting the generality of the foregoing, Company and its
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designee(s) shall have the exclusive and unlimited right to all the results and
proceeds of Artist's recording services rendered during the Term, including, but
not limited to, the exclusive, unlimited and perpetual rights throughout the
Territory:
(a) To manufacture, advertise, sell, lease, license, distribute or
otherwise use or dispose of, in any or all fields of use by any method now or
hereafter known, records and other derivatives (in any speed, size or format
whatsoever) embodying the Masters subject hereto, all upon such terms and
conditions as Company may elect; and all such rights may be exercised by firms
owned or controlled by Company or by persons or entities acting pursuant to
Company's authorization.
(b) To use and publish, and to permit others to use and publish,
Artist's name (real and professional, including any professional name heretofore
or hereafter adopted by Artist), photographs, portrait, likeness and
biographical material concerning Artist for advertising and trade purposes, in
connection with all Masters recorded by Artist and all Pictures produced during
the Term, including but not limited to, in the marketing, sale or other
exploitation of records and all merchandise of any kind. Artist shall have the
absolute right to confer with Company to approve the hereinabove matters,
however Artist's approval may not be unreasonably withheld, and in the event of
a disagreement, Company's decision shall prevail;
(c) To obtain copyrights and renewals thereof in sound recordings made
by Artist during the Term, in Company's name as owner and employer-for-hire of
such sound recordings;
(d) The right to release derivatives of any one or more of the Masters
on any medium or device now or hereafter known, under any name, trademark or
label which Company and/or its subsidiaries, affiliates and licensees may from
time to time elect; and
(e) To perform the records publicly and to permit public performances
thereof by means of radio broadcast, television or any other method now or
hereafter known.
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6. Royalties, Company shall pay to Artist the following all inclusive
royalties for the sale of phonograph records derived from the Masters against
which all advances and other chargeable costs paid to or on behalf of Artist,
including, without limitation, the sums referred to in Paragraphs 1(g), 8 and 9
shall be chargeable and Company shall recoup such sums from the following
royalties:
(a)(i) First LP: A royalty of Twelve Per Cent (12%)
Second LP: A royalty of Twelve and One-Half Per Cent(12 1/2%)
Third LP: A royalty of Thirteen Per Cent (13%)
Fourth LP: A royalty of Thirteen and One-Half Per Cent (13 1/2%)
Fifth LP: A royalty of Fourteen Per Cent (14%)
Sixth LP: A royalty of Fourteen and One-Half Per Cent (14 1/2%)
(ii) All singles: A royalty of Ten Per Cent (10%)
of the retail list price for all phonograph records derived from the
Masters delivered to Company during the Term hereof, manufactured and sold for
distribution at retail in the United States and not returned.
(iii) In the event an LP or single exceeds U.S. sales of Five Hundred
Thousand Units (500,000.00), royalties for additional sales for such LP or
single shall increase by One-Half of One Percent (.5%)
(iv) In the event any LP or single exceeds U.S. sales of One Million
Units (1,000,000), royalties for such additional sales for such LP shall
increase by an additional One-Half of One Per Cent (.5%)
(b) A royalty equal to the following percentages of the royalty rate
referred to in paragraph 6(a) above, for all records derived from the Masters
delivered to Company manufactured and sold for distribution at retail outside of
the United States, and not returned:
Canada: Ninety Per Cent (90%)
Europe, United Kingdom, E.E.C., Japan, Australia, New Zealand,
Africa, Brazil, Italy, Malaysia, Mexico, Netherlands, and
Venezuala: Seventy-Five Per Cent (75%)
Remainder of Foreign World: Sixty Per Cent (60%)
(c) As to records derived from Masters sold in the United States through
record clubs or similar sales plans or devices, Artist shall receive a sum equal
to Forty Per Cent (40%) of Company's net royalty receipts from such sales.
(d) As to records derived from Masters sold for distribution outside of
the United States through record clubs or similar sales plans or devices, Artist
shall receive a sum equal to one-half (1/2) of the applicable royalty rate
provided for in subparagraph 6(b) above.
(e) As to records not consisting entirely of Masters recorded hereunder,
whether such records are sold by Company or by a third party pursuant to a
license from Company, Artist's royalties otherwise payable hereunder shall be
pro-rated on the basis of the number of such Masters which are on such records
compared to the total number of royalty bearing recordings on such records.
(f) Royalties on phonograph records included in albums, jackets, boxes,
or any other type of package or container (herein collectively referred to as
"containers") shall be based solely upon the retail list price of such
phonograph records in containers less all taxes and duties and also less
Company's customary container charge, which at the present time is fifteen per
cent (15%) of the retail list price for album jackets and 12 inch single
jackets; twenty per cent (20%) of the retail list price for pre-recorded tapes
and Singles with so-called "picture sleeves" or "picture jackets"; and
twenty-five per cent (25%) of the retail list price for records made for digital
playback including, without limitation, so-called "compact discs".
(g) As to long-playing records, discs or tapes (other than promotional
records hereinafter provided for) on which the retail list price is one-half
(1/2) or less than the regular retail list price of Company's records, the
royalty rate shall be one-half (1/2) of the basic rate otherwise applicable.
(h) As to records sold in the form of pre-recorded tape by Company or
Company's licensee, the royalty rate shall be the full rate payable under this
agreement.
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(i) In computing the number of records sold hereunder, Company shall
have the right to deduct returns and credits of any nature, including without
limitation, those on account of any return or exchange privilege, (ii)
defective merchandise, and (iii) errors in billing or shipment. Company shall
have the right to withhold a reasonable portion of Artist's royalties as a
reserve, in accordance with its standard accounting practices and procedures,
however in no event shall such reserves exceed Twenty-Five Per Cent (25%), and
such reserves shall be liquidated within Eighteen Months (18) for U.S. sales,
and within Thirty Months (30) for foreign sales.
(j) Company shall have the right to include or to license others to
include any one or more of the Masters in promotional records on which such
Masters and other recordings are included, which promotional records are
designed for sale at a substantially lower price than the regular price of
Company's LPs. No royalties shall be payable on sales of such promotional
records. Company shall confer with Artist in regard to such promotional records,
and Artist shall consent to such promotional records, which consent shall not be
unreasonably withheld.
(k) Company shall have the right to license the Masters to third parties
for phonograph record use and all other types of use on a flat-fee basis.
Company shall credit Artist's royalty account with twenty-five per cent (25%) of
the net amounts received by Company under each such license.
(l) No royalties shall be payable in respect of (i) records given away
or furnished on a "no-charge" basis to "one-stops", rack jobbers, distributors
or dealers, whether or not affiliated with Company; (ii) such additional
"no-charge" records distributed during short term special promotions or
marketing campaign; (iii) records given away or sold at below stated wholesale
prices for promotional purposes to disc jockeys, record reviewers, radio and
television stations and networks, motion picture companies, music publishers,
Company's employees, Artist, or other customary recipients of promotional
records or for use on transportation facilities; (iv) records sold as scrap,
salvage, overstock, or "cut-outs"; (v) records sold below cost; and (vi)
"sampler" records intended for free distribution to automobile purchasers.
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(m) For the sale of records which include Masters subject hereto which
are sold through the method known as "key outlet marketing" by distribution
through retail fulfillment centers in connection with special advertisements on
radio or television, the method known as direct mail or mail order, or by any
combination of the methods set forth above, Company shall credit Artist's
royalty account with a sum equal to forty percent (40%) of Company's net royalty
receipts from such sales.
(n) The royalty rate for records sold for sale in Armed Forces Post
Exchanges shall be one-half (1/2 the applicable basic rate provided for in
subparagraphs 6(a) and 6(b) above.
(o) The royalty rate payable hereunder for records sold as "premiums"
shall be one-half (1/2) of the basic rate otherwise applicable and the retail
list price for such records shall be deemed to be Company's actual sales price.
Company shall be entitled to use and publish, and to license or permit others to
use and publish, Artist's Identification with respect to the products or
services in connection with such "premium" records provided that such use is not
an endorsement of the product or service, such entitlement limited to a period
of fifteen (15) months after such records' complete release.
(p) As to records sold at a discount to "one-stops", rack jobbers,
distributors or dealers, whether or not affiliated with Company, in lieu of the
records given away or furnished on a "no-charge" basis as provided in
subparagraph 6(l) above, the applicable royalty rate otherwise payable hereunder
with respect to such records shall be reduced in the proportion that said
discount wholesale price bears to the usual stated wholesale price.
(q) As to records derived from the Masters recorded hereunder and sold
by Company or its licensees in the "CD" format, the royalty rate shall be the
applicable royalty rate set forth above but, for the purpose of calculating such
royalty, the retail list price of the record shall be deemed to be the retail
list price for Company's then current regular similar records in analog CD
format or, with respect to such records released by Company's licensees outside
the United States, the retail list price for such licensee's then current
regular top-line similar records in analog cassette tape format. As used herein,
the term "CD" means a record which is made for digital playback and includes,
without limitation, so-called "compact discs".
(r) With respect to any Master embodying Artist's performances hereunder
together with the performances of another artist or artists to whom Company is
obligated to pay royalties in respect of phonograph records embodying the joint
performances contained on such Master; (i) the royalty rate to be used in
determining the royalties payable to Artist in respect of such Master shall be
computed by multiplying the royalty rate otherwise applicable thereto by a
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fraction, the numerator of which shall be one and the denominator of which shall
be the total number of royalty artists whose performances are embodied on such
Master; and (ii) in determining the portion of Recording Costs applicable to
such Master which shall be charged against Artist's royalties if and when
earned, such proportion shall be computed by multiplying the aggregate amount of
such Recording Costs by the same fraction used in determining the royalties
payable to Artist in respect of such Master.
It is specifically understood and agreed, however, that Artist shall not be
required to perform hereunder together with any such other artist or artists
unless Artist shall have consented thereto and that no such joint recording
shall be counted toward the fulfillment of Artist's minimum recording commitment
hereunder unless Company shall specifically consent in writing, to count such
joint recording toward the fulfillment of such recording commitment.
(s) Royalties for phonograph records sold for distribution outside of
the United States shall be computed in the same national currency as Company is
accounted to by its licensees and as to sales made outside of the United States,
shall be paid at the same rate of exchange as Company is paid, provided,
however, that royalties on phonograph records sold outside the United States
shall not be due and payable by Company until payment therefor has been received
or credited to Company's account in the United States in United States dollars,
and provided further that if Company shall not receive payment in the United
States or in United States dollars and shall be required to accept payment in
foreign currency or in a foreign country, Company shall deposit to the credit of
Artist (and at the expense of Artist) in such currency in a depository selected
by Artist, payments so received applicable to royalties hereunder, and shall
notify Artist promptly thereof. Deposit as aforesaid shall fulfill the
obligations of Company as to phonograph record sales to which such royalty
payments are applicable.
(t) It is understood and agreed by the parties hereto that the royalties
payable pursuant to this paragraph 6 are intended to and shall include any and
all royalties payable to Artist and the producer(s) of Masters hereunder. With
respect to any phonograph record hereunder which does not consist entirely of
Masters produced by Artist, the royalty rate specified in subparagraph 6(a)
shall be reduced by an amount equal to the basic royalty rate payable to the
producer(s) of the applicable Master(s), and all other royalties provided for in
paragraph 6 shall be reduced proportionately. Any advances payable by Company to
a third party producer of Masters hereunder which advances are not recouped by
Company from royalties payable to such third party producer shall be recouped by
Company from any royalties otherwise payable by Company hereunder, except
mechanical royalties.
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(u) In the event Company licenses Masters for phonograph record use in
connection with any third party compilation album (other than such compilation
albums distributed by means of "key outlet marketing") or in connection with any
so-called "soundtrack album" or records derived therefrom, then, in lieu of any
other payment due under this agreement, Company shall credit Artist's royalty
account with fifty percent (50%) of the net royalties actually received by
Company or credited to Company's account against an advance already received in
connection with the applicable phonograph record.
(v) With respect to mid-priced records, the royalty rate shall be
two-thirds (2/3) of the applicable basic rate provided for in subparagraphs 6(a)
and 6(b) above.
(w) With respect to budget records, the royalty rate shall be one-half
(1/2) of the applicable basic rate provided for in subparagraphs 6(a) and 6(b)
above.
7. Accountings and Audits.
(a) Accountings as to royalties payable by Company to Artist hereunder
shall be made by Company to Artist on or before the first day of October for the
period ending the preceding June 30th, and on or before the first day of April
for the period ending the preceding December 31st, together with payment of
accrued royalties, if any, earned by Artist during such preceding half-year. All
royalty statements and all other accounts rendered by Company to Artist shall be
binding upon Artist and not subject to any objection by Artist for any reason
unless specific objection in writing, stating the basis thereof is given to
Company within twenty-one (21) months from the date rendered. No generalized
objection (such as, but not limited to, a generalized claim of overreporting of
deductions or underreporting of income or any similar generalization) shall be
deemed a valid objection.
(b) Artist shall have the right to appoint a Certified Public Accountant
or attorney, who is not then currently engaged in an outstanding audit of
Company, to examine Company's books and records as the same pertain to this
agreement provided that such examination shall take place at Company's offices
during normal business hours, on reasonable notice, not more than once in each
calendar year during which Artist receives a statement and at Artist's sole cost
and expense. Notwithstanding the foregoing, Company's books and records relating
to any particular royalty statement may be examined as aforesaid only within
fifteen (15) months after the date rendered and Company shall have no obligation
to permit the examination of such books and records relating to any particular
statement more than once. The right conferred by this subparagraph (b) shall
constitute Artist's sole right to examine Company's books and records.
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(c) Neither Artist nor any person or entity acting for or on behalf of
Artist shall have the right to commence any examination of Company's books and
records unless and until the person or entity engaging in any such examination
has agreed in writing, that neither the individual nor the firm engaging in such
examination, nor any representatives thereof, shall at any time or in any manner
either directly or indirectly, disclose or communicate to any person, firm or
corporation, other than Artist or Artist's attorneys or accountants (and such
recipients shall also have executed and delivered to Company similar agreements)
any information acquired from Company's books and records during any such
examination, or any information of any kind concerning any matters reflecting or
relating to Company's business or the business of Company's affiliated companies
obtained through such examination, without regard to whether any or all of such
information would otherwise be deemed confidential material, except pursuant to
legal process issued in connection with a court proceeding. Artist shall cause
Company to receive one (1) copy of any audit report prepared as a result of any
examination of Company's books and records.
(d) If Artist or any person or entity acting for or on behalf of Artist
shall commence suit on any controversy or claim concerning royalty accountings
rendered hereunder, said claims and the scope of the proceedings shall be
limited to determination of the amount of the royalties due for the accounting
period(s) concerned, and neither Artist nor any person or entity acting for or
on behalf of Artist shall seek or be entitled to any equitable relief (other
than an accounting) or any other relief except recovery of royalties found
owing. The recovery of any such royalties shall be the sole remedy available to
Artist by reason of any claim related to Company's royalty accountings or
payments, except in the event of an intentional bookkeeping or accounting error.
Without limiting the generality of the foregoing, neither Artist nor any person
or entity acting for or on behalf of Artist shall have any right to seek or
obtain termination of this agreement or of the Term hereof or any injunction
against Company and/or any third party and/or other equitable (other than an
accounting) relief against Company and/or any third party or avoid the
performance of the Artist's obligations hereunder by reason of any claim
relating to Company's royalty accountings or payments.
8. Payment of Recording Costs. Subject to Artist's compliance with the
provisions hereinbelow set forth, Company shall pay all specifically approved
Recording Costs incurred for the production of the Masters to be recorded
hereunder all of which Recording Costs shall be deemed advances hereunder.
(a) Prior to the commencement of recording in each instance hereunder,
Artist shall obtain Company's approval of each of the following, in order,
before proceeding further, however Artist shall have the absolute right to
confer with Company, and Artist's approval may not be unreasonably withheld.
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(i) Selection of individual or co-producer(s) of the applicable
Masters.
(ii) Selection of material, including the number of Compositions to
be recorded.
(iii) Selection of dates of recording and studios where recording is
to take place, including the cost of recording there. Unless otherwise expressly
agreed by Company, the scheduling and booking of all studio time will be done by
Company.
(iv) A proposed budget (which Artist will submit to Company
sufficiently in advance of the planned commencement of recording to give Company
a reasonable time to review and approve or disapprove it at least fourteen (14)
days before the planned commencement of recording).
(v) Artist shall not enter into or authorize any third party to enter
into any agreements on Company's behalf or incur, directly or indirectly, any
liability or expense of any kind for which Company is or may be held liable, in
connection with any recording session hereunder or otherwise, without having
first obtained Company's prior written approval as to the nature, extent and
limit thereof, except with regard to the payment of items identified in the
budget approved by Company with respect thereto, provided that the amount of
such payment does not exceed the amount budgeted for such item.
(b) If applicable, Artist shall notify the appropriate Local of the
American Federation of Musicians in advance of each recording session.
(c) Artist shall timely supply Company with all of the information it
needs in order: (i) to make payments due in connection with such recordings;
(ii) to comply with any other obligations Company may have in connection with
the making of such recordings; and (iii) to prepare to release phonograph
records derived from such master recordings. Without limiting the generality of
the foregoing, Artist shall deliver to Company or its designee copies of all
substantiating invoices, receipts, vouchers and similar satisfactory documentary
evidence of Recording Costs.
(d) Nothing in this agreement shall obligate Company to commence,
continue or permit the commencement or continuation of any recording or other
similar activity, even if previously approved, if Company reasonably anticipates
that the Recording Costs of the applicable Masters will exceed those specified
in the approved budget or that the Masters being produced will not be
satisfactory.
(e) All Recording Costs shall constitute advances hereunder. Any
Recording Costs in excess of a budget initially established pursuant to
paragraph 8(a)(iv) above, or other amount approved by Company, whichever is
applicable, shall be Artist's sole responsibility and shall be paid by Artist
promptly (or reimbursed by Artist if Company elects, in the exercise of its sole
14
discretion, to pay the same on Artist's behalf). Those amounts will also be
recoupable from all sums becoming due under this agreement or otherwise to the
extent to which they have not actually been paid or reimbursed as provided in
the preceding sentence, excluding mechanical royalties.
(f) All Recording Costs and advances hereunder shall be recoupable from
royalties otherwise payable under this agreement. If, at any time during the
Term hereof, Company elects to pay any additional sums to or on behalf of
Artist, other than the royalties referred to in paragraph 6 and 12 hereof and
the Recording Costs provided for in this paragraph, then such sums shall be
deemed additional advances hereunder and shall be recoupable by Company from
record royalties otherwise payable under this agreement, excluding mechanical
royalties. Without limiting the foregoing, if Company engages the services of
independent promoters or marketing consultants in connection with the promotion
or marketing of phonograph records hereunder, then fifty (50) percent of
Company's actual costs in engaging those services will constitute advances to
Artist, and shall be deducted by Company from any and all record royalties
accruing or becoming payable pursuant to this agreement or any other agreement
between Company and Artist. The expenditures referred to in the preceding
sentence, if any, shall be within Company's sole discretion. At Artist's
request, Company shall provide Artist with reasonable details of such
expenditures.
9. Artwork and Publicity. During the Term, Artist shall be reasonably
available at Company's request and expense, whenever the same will not
unreasonably interfere with other professional activities of Artist, to appear
for photography, poster and cover art, etc., under the direction of Company or
its nominees to appear for interviews with representatives of the communications
media and Company's publicity personnel and to perform other reasonable
promotional services.
10. Delivery Requirements. Artist shall deliver to Company a two-track
stereo tape for each Master produced hereunder, which tapes shall be fully
edited, remixed and leadered prior to delivery to Company, so that they are in
proper form for the production of the parts necessary for the manufacture of
commercial phonograph records. Each and every original session tape, including
the multi-track Masters, and parts thereof, and each and every mother, Master,
acetate copy or other derivative shall also be delivered to Company. Company
shall be entitled to remix, re-edit and rerecord any Master delivered hereunder
at its sole discretion. Any costs incurred by Company in any such remixing,
re-editing and re-recording as well as any a costs incurred by Company in the
mastering process shall be deemed additional advances to Artist against
royalties otherwise payable hereunder, excluding mechanical royalties. Masters
shall not be deemed to have been "delivered" hereunder and "delivery" of Masters
shall not be deemed to have occurred unless and until Artist has (i) thoroughly
15
and completely performed all of Artist's obligations under this agreement with
respect to such Masters; (ii) executed all consents, approvals, licenses and
permissions as Company may deem necessary or desirable, in the exercise of its
sole discretion, in relation to the use of the Masters hereunder; and (iii)
Company has approved each Master in accordance with the provisions of paragraph
3(g) above.
11. Further Assurances. Artist hereby agrees to execute any further
documents which Company may deem necessary or desirable to effectuate the intent
and substance of this agreement. If Artist shall fail or refuse to execute and
deliver any such document promptly following Company's request therefor, Artist
hereby appoints Company as Artist's true and lawful attorney-in-fact to execute
such documents in Artist's name and on Artist's behalf. Such power of attorney
is irrevocable and is coupled with an interest.
12. Publishing and Administration.
(a) As used in this paragraph 12 only, the term "you" shall refer to
Artist's publishing designee and any other person, firm or corporation owning or
controlling the right, title and interest in and to the Recorded Compositions.
You warrant and represent that you are or shall become member or affiliate of
either Broadcast Music Incorporated ("BMI") or the American Society of
Composers, Authors and Publishers ("ASCAP"). You hereby irrevocably assign,
transfer and otherwise set over to Company's publishing designee (hereinafter
referred to as "Publisher") and its successors and assigns in perpetuity: (i) in
regard to LPs one (1) through three (3) and all singles released during that
period, an undivided one-half interest in and to each and every Recorded
Composition, including the title, lyrics, and music thereof, and in and to the
worldwide copyright therein (and all renewals and extensions thereof) and in and
to all other rights and interests therein of every kind, nature and description,
whether presently known or hereafter to come into existence; and (ii) in regard
to LPS four (4) through (6) six, and all singles released during that period, an
undivided forty (40%) percent interest in and to each and every Recorded
Composition, including the title, lyrics, and music thereof, and in and to the
worldwide copyright therein (and all renewals and extensions thereof) and in and
to all other rights and interests therein of every kind, nature and description,
whether presently known or hereafter to come into existence.
(b) You hereby irrevocably assign to Publisher, its successors and
assigns, the sole and exclusive perpetual worldwide rights of administration,
exploitation and promotion with respect to the Recorded Compositions, including,
without limitation, the sole and exclusive perpetual worldwide right to, exploit
and license the use of the Recorded Compositions including in any and all media
16
throughout the world, to substitute new titles for the Recorded Compositions, to
make any arrangement, adaptation dramatization or translations of the Recorded
Compositions, to secure copyright registration of the Recorded Composition in
the name of Publisher and your publishing designee, collect and receive any and
all monies derived from the exploitation of the Recorded Compositions throughout
the world, excluding the writer's share of public performance royalties. You
acknowledge that the extent and manner of exploitation of the Recorded
Compositions shall be entirely within the discretion of Publisher. It is agreed
that mechanical licenses for the use of Record Compositions on records recorded
under this agreement shall be issued on the terms specified in paragraph 13
below.
(c) Publisher shall pay to you:
(i) The writer royalties set forth in the royalty guidelines
attached hereto as Exhibit A;
(ii) An amount equal to fifty percent (50%) of the "Net Publisher's
Share of Income" (as such term in hereinafter defined) received by Publisher in
the course of administering and exploiting its rights in Recorded Compositions.
"Net Publisher's Share of Income" shall mean any and all sums actually received
by Publisher from the exploitation of the Recorded Compositions throughout the
world, including, without limitation, the publisher's share of public
performance fees paid by the performing rights society with which Publisher and
you or your publishing designee are affiliated, (hereinafter referred to as
"Gross Receipts"), less the following:
(A) The writer royalties and other sums which shall be payable
to you pursuant to Paragraph 12(c)(i)hereof;
(B) All actual and documented costs of administration directly
applicable to the Recorded Composition including, without limitation:
(1) copyright fees;
(2) the collection or other fee actually charged by a
collection agent who renders services with respect to the Recorded Compositions;
and
(3) the actual costs and expenses of printing, arranging,
editing, exploiting and selling printed editions of the Recorded Compositions,
including, but not limited to, sales agency expenses, as well as the actual
direct costs and expenses incurred in recording demonstration records, making
tape copies thereof and preparing leadsheets.
(d)(i) To the extent the writer royalties required to be paid by
Publisher exceed those indicated in the writer royalty guidelines attached
hereto as Exhibit 1, Publisher shall have the right to deduct the amount of such
excess from the share of Net Publisher's Share of Income otherwise payable to
you pursuant to Paragraph 12(c) hereof.
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(ii) Publisher shall not be required to pay any royalties on
professional or complimentary printed copies of the Recorded Compositions or
copies of mechanical derivatives of the Recorded Compositions which are
distributed gratuitously to performing artists, orchestra leaders and disc
jockeys or for advertising, promotional or exploitation purposes. Furthermore,
no royalties shall be payable to you on consigned copies of the Recorded
Compositions unless paid for, and not until such time as an accounting therefore
can properly be made.
(iii) Publisher shall deduct, account and pay royalties to each of
the third party songwriters of the Recorded Compositions hereunder provided that
such songwriters have entered into an agreement with Publisher as set forth in
subparagraph (f)(iv) below. If any such songwriter has not entered into such an
agreement, then you warrant, represent, covenant and agree that you shall pay to
such songwriter(s) all royalties (and all other sums due such songwriter(s))
with respect to each exploitation of the applicable Recorded Composition
hereunder due to those songwriter(s) who fail or refuse to enter into such an
agreement. The songwriters will collect any songwriter share of performance
income directly from the performing rights society with which they are
affiliated and Publisher shall have no obligation in such regard.
Notwithstanding that Publisher may from time to time enter into separate
songwriter and/or co-publishing agreements with Artist or Artist's publishing
designee, covering one or more Recorded Compositions hereunder, Artist on
Artist's own behalf and on behalf of Artist's respective publishing designee,
shall and does hereby waive and relinquish the right to receive songwriter
royalties or publishing income from Publisher under agreements and you shall be
solely responsible for and shall pay any and all songwriter royalties and
publishing income due to the songwriter(s) and publishing entities from whom you
derived the rights in and to each Recorded Composition hereunder.
(iv) You shall not be entitled to share in any advance payments,
guarantee payments or minimum royalty payments which Publisher may receive in
connection with any subpublishing agreement, collection agreement, licensing
agreement or other agreement covering the Recorded Compositions.
(e) You hereby grant to Publisher the perpetual right to use and to
permit others to use your name (including any professional name heretofore or
hereafter adopted by you), photograph, likeness and biographical material
concerning you, and the titles of the Recorded Compositions in connection with
the printing, sale, advertising, distribution and exploitation of music, folios,
recordings, performances, player rolls and otherwise concerning the Recorded
Compositions, or to refrain therefrom.
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(f) (i) You hereby authorize and empower Publisher or any of
its officers as your true and lawful attorney (with full power of substitution
and delegation), in your name, and in your place and stead, or in Publisher's
name, to take and do such action, and to make, sign, execute, acknowledge and
deliver any and all instruments or documents, which Publisher from time to time
may deem necessary to vest in Publisher, or its designees, successors, assigns
and licensees, all of the rights or interests granted by you under this
Paragraph 12, including without limitation, such documents as Publisher may deem
necessary to secure to Publisher or its designees, to the extent provided for
herein, the worldwide copyrights in and to the Recorded Compositions for the
entire term of copyright and for any and all renewals and extensions thereof.
The foregoing power is acknowledged by you to be coupled with an interest and to
be irrevocable.
(ii) You shall execute and deliver to Publisher such
documents and instruments with respect to the Recorded Compositions as Publisher
in its sole judgment may deem necessary to effectuate the intent and purposes of
this agreement or to evidence the rights granted to Publisher herein. If you
fail or are unable to execute any document or instrument consistent with the
terms hereof, Publisher will be fully entitled to do so on your behalf pursuant
to the power-of-attorney granted pursuant to Paragraph 12(f)(i) hereof, and such
agreement, document or instrument thereupon will be fully as valid, effective
and operative as if personally executed by you.
(iii) Upon Publisher's request, you shall execute and
deliver to Publisher a separate agreement in Publisher's customary form with
respect to each Recorded Composition. Publisher shall have the right, pursuant
to the terms and conditions hereof, to execute such separate agreement on behalf
of you. Except as specifically set forth in the last sentence of paragraph
12(d)(iii) above, such separate agreement shall supplement and not supercede
this agreement and in the event of any conflict between the provisions of such
separate agreement and the agreement set forth in this Paragraph 12, the
provisions of this Paragraph 12 shall control. The failure of you or Publisher
to execute such separate agreement, whether or not you are requested to execute
same, shall not affect the rights of Publisher to each Recorded Composition.
(iv) Whenever any individual who is not a party to this
agreement shall collaborate in the creation of a Recorded Composition hereunder,
said Recorded Composition shall be subject to the terms and conditions of this
paragraph 12 and you warrant, represent and agree that prior to any such
collaboration you shall advise said third party that all Compositions so created
must be published and owned by Publisher on a basis which is at least as
favorable to Publisher, in the exercise of its reasonable judgment, as the terms
and conditions hereof. In the event of any such collaboration, you shall
promptly notify Publisher of the nature and extent of such other persons
contribution to the applicable Composition and you shall cause such other person
to execute a separate Songwriter's Agreement with Publisher, in Publisher's
customary form, covering said Composition.
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(g) Publisher may take such action as it deems necessary,
either in your name or in its own name, against any person to protect the rights
and interest acquired by Publisher hereunder. You will, at Publisher's request
and expense, cooperate fully with Publisher in any controversy which may arise
or litigation which may be brought concerning Publisher's rights and interests
acquired hereunder. Publisher shall have the right, in its absolute discretion,
to employ and to institute or defend any action or proceeding and to take any
other proper steps to protect the right, title and interest of Publisher in and
to the Recorded Compositions and every portion thereof and in that connection,
to settle, compromise or in any other manner dispose of any matter, claim,
action or proceeding and to satisfy any judgment that may be rendered, in any
manner as Publisher in its sole discretion may determine. Any legal action
brought by Publisher against any alleged infringer of the Recorded Compositions
shall be initiated and prosecuted by Publisher, and if there is any recovery
made by Publisher as a result thereof, after deduction of the expense of
litigation, including but not limited to reasonable attorneys' fees and court
costs, a sum equal to fifty percent (50%) of such net proceeds shall be paid to
you.
(h) Publisher shall account to you for royalties and other
sums payable pursuant to this Paragraph 12 upon the same terms and conditions as
Company is required to account to Artist pursuant to Paragraph 7 hereof. Your
rights and Publisher's rights and obligations with respect to such accountings
shall be the same as Artist's rights and Company's rights and obligations
pursuant to Paragraph 7 hereof. Publisher shall have the right to retain a
portion of mechanical royalties payable hereunder as a reserve against potential
returns and credits. All accounting statements and payments for royalties
payable pursuant to this Paragraph 12 or Paragraph 13 shall be included as a
part of the accountings referred to in Paragraph 7 hereof. Notwithstanding
anything to the contrary contained herein, no monies shall be payable to you
pursuant to paragraph 12(c) above until such time as record royalties would
otherwise be payable to Artist pursuant to paragraph 7 hereof. In connection
with the foregoing, Publisher shall have the right to remain any sums which
might otherwise be payable to you pursuant to paragraph 12(c) and first apply
such sums toward the reduction of the unrecouped balance, if any, of Artist's
record royalty account hereunder.
(i) All sums payable to you and all rights granted by you, and
all representations, warranties, grants and obligations made or undertaken by
you pursuant to this Paragraph 12 shall apply to each person comprising you only
to the extent of such person's authorship; contribution to or ownership or
control of the Recorded Composition concerned. Upon the recording hereunder of a
Recorded Composition, you shall advise Company in writing of the extent of each
person's contribution to and interest in such Recorded Composition, and all
royalties payable hereunder in respect thereof all be divided and paid
accordingly.
(j) Conditional upon your complete compliance with the terms
herewith, Company shall be responsible to pay you the following
20
co-publishing and/or writers' advances, which advances shall become payable to
you within one week after delivery of the completed LP master recordings:
(k) Company's co-publishing and administration rights
hereunder shall vest only in recorded compositions hereunder which are
commercially released by Company or at the direction of Company.
(i) first LP, Twenty-Five Thousand Dollars, ($25,000), all
of which is payable within Three (3) business days after full execution of this
agreement by all the parties;
(ii) second LP, Forty Thousand Dollars ($40,000);
(iii) third LP, Sixty Thousand Dollars ($60,000);
(iv) fourth LP, Eighty Thousand Dollars ($80,000);
(v) fifth LP, One Hundred Thousand Dollars ($100,000);
(vi) sixth LP, One Hundred Twenty Thousand Dollars
($120,000).
13. Mechanical Copyright Licenses. Company shall be responsible for
payment of mechanical copyright royalties directly to the copyright proprietors
of Compositions embodied in Masters hereunder. Artist shall assist Company in
obtaining mechanical licenses from the copyright proprietors of the Compositions
embodied upon the Masters delivered to Company hereunder, which licenses shall
be in the general form utilized by The Xxxxx Xxx Agency, Inc. or otherwise
acceptable to Company. The Controlled Compositions recorded pursuant to this
agreement are hereby licensed to Company at the rates set forth below and
mechanical royalties in respect thereof shall only be payable on records for
which royalties are payable pursuant to Paragraph 6 hereof:
(a) Seventy-five percent (75%) of the minimum statutory rate
at the time of release, however in the event of sales exceeding five hundred
thousand (500,000) units, Eighty-seven and one-half percent (87 1/2%) of the
minimum statutory rate, or, in the event of sales exceeding One Million
(1,000,000) units, then One Hundred percent (100%) of the minimum statutory
rate.
(b) Notwithstanding the rate specified in subparagraph 13(a)
above and under the United States Copyright laws, it is specifically understood
and agreed that the maximum copyright royalty rate which Company will be
required to pay hereunder, regardless of the number of Compositions (including
Controlled Compositions) contained thereon, shall be not greater than ten (10)
times the above stated minimum statutory rate for Lps, not greater than eleven
(11) times the stated minimum statutory rate for CDs; not greater than five (5)
times the above stated minimum statutory rate for EPs; and not greater than
twice the above stated minimum statutory rate for singles.
21
14. Artist's Warranties and Indemnification. Artist warrants and
represents the following:
(a) There are now in existence no prior recorded performances
by Artist which have not yet been released in the form of phonograph records.
(b) There are no restrictions with respect to Compositions
Artist is legally able to perform for Company hereunder.
(c) No contract or agreement of any kind entered into by
Artist prior to the time of the execution hereof or during the Term hereof will
interfere in any manner with complete performance of the within agreement by
Artist.
(d) Artist has the right to use Artist's name, (real and
professional) grants to Company for the Territory the exclusive right to use and
allow others to use said names and any other name(s)used by Artist for
phonograph record purposes during the Term hereof and the exclusive right to
such use thereafter in connection with recordings subject hereto; Company's use
of such names in accordance with the terms hereof will not infringe upon the
rights of any third party.
(e) Artist is over eighteen (18) years of age.
(f) That neither the Masters nor the performances embodied
thereon, and no use thereof by Company or its grantees, licensees or assigns
will constitute a libel or slander of any person or violate or infringe upon the
rights of any third party.
(g) That neither the music, title, lyrics or other material
comprising the Compositions to be recorded hereunder, nor any part thereof, will
be a copy of any other copyrighted work or infringe or violate any rights of any
third party and that no adverse claim exists or shall exist thereon.
(h) The Masters and the performances embodied thereon shall be
produced in accordance with the rules and regulations of the American
Federation of Musicians and the American Federation of Television and Radio
Artists, if applicable, and in accordance with the rules and regulations of said
unions and all other unions having jurisdiction.
(i) Company shall not be required to make any payments of any
nature for, or in connection with, the rendition of Artist's services or the
acquisition, exercise or exploitation of rights by Company pursuant to this
agreement, except as specifically set forth herein. Without limiting the
generality of the foregoing, except as specifically set forth herein, Artist
warrants and represents that Artist shall be solely responsible for and shall
make any and all payments becoming due to any person, firm or corporation,
including, but not limited to, the individual producers hereunder, in connection
with the rendition of Artist's services or the acquisition, exercise or
exploitation of rights by Company pursuant to this agreement.
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(j) If any Compositions are recorded hereunder which are not
Controlled Compositions, Artist warrants and represents that Company shall be
able to obtain mechanical licenses therefor for the United States and Canada at
rates which are no greater than the applicable "Statutory Rate" (as hereinafter
defined) and on terms no less favorable to Company than those contained in the
then current standard license form utilized by the Xxxxx Xxx Agency, Inc. and
Artist shall assist Company in obtaining said mechanical licenses. As used
herein, the phrase "Statutory Rate" means, with respect to each Composition
embodied in a Master hereunder, the fixed (without regard to playing time)
mechanical royalty rate in effect pursuant to the United States Copyright Act or
the Canadian Copyright Act (as the context so requires) at the earlier of the
time of commercial release of such Master.
(k) Neither Artist nor any representative of Artist shall
directly or by or through others deliver or authorize or permit the delivery of
any recordings embodying Masters hereunder to any person or entity other than
Company (for promotion or any other purpose) at any time prior to Company's
commercial release thereof for sale through normal retail trade channels in the
United States.
(1) Artist agrees to and does hereby indemnify, save and hold
Company harmless of and from any and all losses and damages (including
reasonable attorneys' fees) arising out of or connected with any breach of this
agreement or any warranty, representation, promise or covenant made by Artist
herein, or any bona fide claim by one or more third parties which is
inconsistent with any of the warranties, representations, promises or covenants
made by Artist herein. Artist agrees to reimburse Company, on demand, for any
payment made by Company at any time after the date hereof with respect to any
liability or claim to which the foregoing indemnity applies. Pending the
determination of any claim involving such alleged breach or failure, Company and
Publisher may withhold sums due Artist and Artist's publishing designee(s)
hereunder in an amount reasonably related to such, claim(s). If no claim is
presented within one (1) year after monies are received by or credited to
Company, then any sums withheld shall be released to Artist. Further, Artist
shall have the right to post a bond for the full amount of any claims in lieu of
Company withholding funds. Company's and Publisher's rights to indemnification
and payments hereunder shall fully vest in regard to claims reduced to final,
non-appealable judgements.
15. Failure of Performance.
(a) Company may, by written notice to Artist, suspend the
operation of the Term for the duration of the following contingencies if by
reason of such contingencies, it is materially hampered in the recording,
manufacture, distribution or sale of records, or its normal business operations
become commercially impracticable: labor disagreements, fire, catastrophe,
shortage of materials, or any cause beyond Company's control. A number of days
equal to the total of all such days of suspension shall be added to the Contract
Year in which such contingency occurs and the dates for
23
the exercise by Company of its options as set forth in Paragraph 2 and the date
of commencement of subsequent Contract Years shall be deemed extended
accordingly, not to exceed six (6) months.
(b) In the event of any default or material breach by Artist
in the performance of any of Artist's duties or obligations hereunder (including
the obligation in the event of any material breach by Artist of Artist's
warranties, representations, liabilities, authorizations, restrictions or
agreements contained herein, then the Contract Year in effect at the time of
said default or breach shall, unless Company notifies Artist in writing to the
contrary, be automatically extended for a period equal to all or, at Company's
election, any part of the period of such default or breach, plus an additional
period of sixty (60) days, and the dates for the exercise by Company of its
options as set forth in Paragraph 2 above, and the date of the commencement of
Subsequent Contract Years shall be deemed extended accordingly. No exercise by
Company of its approval rights or any other rights or remedies hereunder shall
constitute or be deemed to constitute a refusal to allow Artist to perform
hereunder, nor shall same preclude or in any way limit Company's right to
exercise any of the rights and/or remedies set forth in this subparagraph (b),
or otherwise.
(c) In the event of any default or material breach by Artist
in the performance of any of Artist's duties or obligations hereunder including
the obligation to timely deliver Masters hereunder), or in the event of any
breach by Artist of Artist's warranties, representations, liabilities,
authorizations, restrictions or agreements contained herein, then, in addition
to all of Company's other rights and remedies, including as set forth in
subparagraph (b) above and unless Company notifies Artist to the contrary,
Company's obligations hereunder shall be automatically suspended, including, but
not limited to, its obligation to account and/or pay royalties including, but
not limited to mechanical copyright royalties and advances, for the duration of
such default or breach and until the same has been cured.
(d) In the event of any default or material breach by Artist
in the performance of any of Artist's duties or obligations hereunder (including
the obligation to timely deliver Masters hereunder), or in the event of any
breach by Artist of Artist's warranties, representations, liabilities,
authorizations, restrictions or agreements contained herein, then, in addition
to all of Company's other rights and remedies, including as set forth in
subparagraphs (b) and (c) above, Company shall have the right, upon written
notice to Artist, to terminate the Term.
(e) Without limiting the generality of subparagraphs (b)and
(c) above, it is specifically agreed that any default or material breach by
Artist or their respective publishing designee(s) in the performance of any of
its or their respective duties or obligations pursuant to paragraph 12 hereof,
and any material breach by Artist or their respective publishing designee(s) of
any of the warranties, representations, liabilities, authorizations,
restrictions or agreements contained herein shall constitute and be deemed a
default and material breach by Artist in the performance
24
of Artist's material obligations under this agreement and shall entitle Company
to exercise the rights and remedies described in subparagraphs (b) and c) above,
in addition to any other rights or remedies which Company may have at law, in
equity or otherwise.
(e) Notwithstanding anything to the contrary contained in this
agreement, it is specifically acknowledged and agreed that any suspension by
Company of its obligation under this agreement shall automatically serve to
suspend the obligations of Publisher hereunder including, but not limited to,
the obligation to account and/or pay royalties, for the duties of such
suspension hereunder. In addition to the foregoing, and without limiting the
generality thereof, it is agreed that any suspension by Publisher of its
obligations hereunder shall automatically serve to suspend the obligations of
Company hereunder, as described above, for the duration of any such suspension.
16. Individual Producers. Company shall select or at its election
approve of the individual producer(s) of the Masters embodying Artist's
performances hereunder. The parties agree that regardless of who or whom is
chosen as Producer(s) he agrees to furnish his services in connection therewith
as and when requested by Company in accordance with the terms and provisions of
this agreement. Artist shall cause each and every person or entity who performs
at any time or renders services of any kind in connection with the production
and/or recording of Masters hereunder to execute and deliver to Company an
inducement letter in the form of Exhibit "B" (annexed hereto and made a part
hereof)or in such other form as Company may reasonably request or approve in
writing. Unless otherwise expressly agreed in writing by Company, Artist shall
be responsible for and shall pay each and every producer of Masters hereunder.
17. Approvals and Consents. Whenever in this agreement Artist's
approval or consent is required, Company may require Artist to formally give or
withhold such approval or consent by giving Artist written notice requesting the
same and by furnishing Artist with the information or material in respect of
which such approval or consent is sought. Artist shall give Company written
notice of approval or disapproval within five (5) business days after such
notice is received by Artist. In the event of disapproval or no consent, the
reasons therefor shall be stated. Failure to give such notice to Company as
aforesaid shall be deemed to be consent or approval. In the event that mutual
approval or consent between Company and Artist or Artist's representative is
required pursuant to the terms or conditions of this agreement with respect to
any matter, and in the further event of a disagreement or failure to mutually
approve or consent with respect thereto, then Company's decision with respect
thereto shall control conclusively.
18. Additional Recording Rights. Artist agrees not to record or
authorize or knowingly permit to be recorded for any purpose any performance for
a third party without in each case taking reasonable measures to prevent the
manufacture, distribution and sale at any time by any person other than Company
of phonograph records and other
25
devices for home use and/or jukebox use and/or use on or in means of
transportation embodying such performance. Specifically, without limiting the
generality of the foregoing, Artist agrees that:
(a) If, during the Term, Artist performs any Composition for
the purposes of making transcriptions for radio or television or soundtracks for
motion picture films, or
(b) If, during the period referred to in Paragraph 4(b)
hereof Artist performs for any such purpose any Composition which shall have
been recorded pursuant to this agreement, then, in either event, Artist will do
so only pursuant to a written contract containing an express provision that
neither such performance nor any recording thereof will be used directly or
indirectly for the purpose of making phonograph records or any other device for
home use and/or jukebox use and/or use on or in means of transportation. Artist
will promptly furnish to Company a copy of the pertinent provisions of each such
contract and will cooperate fully with Company in any controversy which may
arise or litigation which may be brought relating to the rights of Company under
the paragraph.
19. Merchandising Rights.
(a) Artist hereby grants to Company the exclusive right during
the Term hereof and throughout the Territory to use and/or sublicense to others
the use of Artist's name(s) (both real and professional), logotype, likenesses,
voice and/or performances for merchandising and other commercial purposes,
whether or not related to the manufacture and sale of phonograph records,
including, without limitation in connection with the sale (whether through
"flyers", "bouncebacks" and similar album inserts, or otherwise) of t-shirts and
other clothing, posters, stickers, novelties and telephone message services.
Upon Company's request, Artist shall execute a license agreement in addition to
this agreement to evidence such license, which license agreement shall contain
standard terms and provisions used the licensing of name and likeness rights for
merchandising purpose, though the failure on the part of the Artist to do so
shall not diminish the rights of Company with respect to the merchandising of
the aforesaid properties.
(b) If Artist shall fail to do so upon request, Company shall
have the right to apply for and obtain in its own name, and at its own expense,
federal and worldwide registration of trademark and/or servicemark for Artist's
professional name and/or logotype in connection with the use thereof in all
areas the entertainment industry, including without limitation, in connection
with the recording and sale of phonograph records, the establishment of
fanclubs, the rendition of concert and live performances, and the sale of
clothing and other merchandise Artist shall execute any document and/or perform
any act necessary to evidence Company's rights in and to said servicemarks
trademarks, logotypes and other properties. If Artist fails to do so, an officer
of Company may do so on Artist's behalf.
(c) Company agrees to credit to Artist's royalty account with
fifty percent (50%) of the net income derived by Company
26
from the exploitation of the rights granted to it by virtue of (a) and (b)
above. For the purposes hereof, "net income" shall mean the gross income
actually received by Company which is derived directly and solely from such use
of the rights granted to it by this Paragraph, less direct expenses actually
incurred by Company relative thereto including but not limited to: (i) costs of
collection; (ii) commissions and/or royalties payable to third parties; (iii)
costs of packing, shipping, storing, postage and insurance; (iv) costs of
manufacture and design; and (v) advertising and promotion expenses.
(d) Royalties payable in respect of such merchandising
activity shall be accounted for and paid, in the manner otherwise provided
herein.
20. Audiovisual Programs.
(a) In addition to Artist's recording and delivery commitments
as set forth in this agreement, Artist shall comply with requests, if any, made
by Company in connection with the production of video-tape and/or films with
soundtracks substantially featuring performances of Artist (hereinafter,
"Programs"). In this connection, Artist shall appear on dates and at places
requested by Company for the filming, taping or other fixation of Programs.
Artist shall perform services with respect thereto as Company deems desirable in
a timely and first-class manner. Artist acknowledges that the production of
Programs involves matters of judgment with respect to art and taste, which
judgment shall be exercised by Company solely in its own discretion and that
Company's decisions with respect thereto shall be final, however, Artist shall
have the absolute right to confer with Company in regard to these important
matters.
(b) (i) Each Program produced during the Term of the
agreement shall be owned by Company (including the worldwide copyrights therein
and thereto and all extensions and renewals thereof) to the same extent as
Company's rights in Master recordings made under this agreement.
(ii) Company will have the unlimited right to
manufacture Videograms, as defined below, of the Programs and to rent, sell,
distribute, transfer, sublicense or otherwise deal in such Videograms under any
trademarks, tradenames and labels; to exploit the Programs by any means now or
hereafter known or developed; or to refrain from any such exploitation,
throughout the world. A "Videogram" is hereby defined as any device, now or
hereafter known or developed, that enables a Program to be perceived visually,
with or without sound, when used in combination with or as part of a piece of
electronic, mechanical or other apparatus.
(c) (i) Following Company's receipt of invoices therefor,
Company agrees to pay all costs actually incurred in the production of Programs
made at Company's request hereunder, provided such costs have been previously
approved by Company in writing. In
27
this connection, prior to commencing production of any Program, Company shall
create, or at its election, approve, in writing, a detailed budget for each
Program. Said budget shall include the following information: (i) the musical
compositions and other material to be embodied thereon; (ii) the general concept
therefor and (iii) the producer, director, and any other key personnel therefor.
Following Company's notification to Artist, which need not be in writing, that
said budget is completed and approved, Artist shall commence production of the
Program. All costs incurred in excess of the applicable approved budget shall
be Artist's sole responsibility and Artist agrees to pay and discharge all such
excess costs. In the event Company agrees to pay any such excess costs on
Artist's behalf, Artist shall, upon demand, reimburse Company for such excess
costs and/or Company may deduct such excess costs from any and all monies due to
Artist pursuant to this or any other agreement between Company and Artist. All
costs and expenses of the type set forth in subparagraph 20(c) (ii) below for
which Company is responsible as aforesaid, which costs arise out of or in
connection with the production of the Program(s) hereunder, shall be fully
recoupable from Video Net Receipts (as defined below) and from record royalties
otherwise payable under this agreement. "Video Net Receipts" shall mean monies
earned and received by Company from exploitation of Programs less (i) a gross
distribution fee of (A) thirty-five (35%) percent in respect of broadcast,
telecast, cablecast or other exploitation and (B) forty percent (40%) in respect
of broadcast, telecast, cablecast or other exhibition outside the United States,
and (ii) any out-of-pocket expenses, copyright, union and other third party
payments, taxes and adjustments borne by Company in connection with exploitation
and collection and receipt by Company of such monies.
(ii) Fifty (50%) percent of the following sums, if
any, paid by Company in connection with each Program shall be an advance, and
shall be recoupable by Company in the manner set forth in subparagraph 20(c)(i)
above:
(A) All expenses incurred by Company in
connection with the preparation and production of the Program and the conversion
of the Program to "video masters" that are made to serve as prototypes for the
duplication of the Videograms of the Program;
(B) All of Company's direct out-of-pocket
costs (such as for rights, artists (including Artist), other personnel,
facilities, materials, services, and the use of equipment) in connection with
all steps in the production of the Program and the process leading to and
including the production of the aforesaid video masters (including, but not
limited to, packaging costs and the costs of making and delivering duplicate
copies of such video masters); and
(C) If in connection therewith Company
furnishes any of its own facilities, materials, services or equipment for which
Company has a standard rate, the amount of such standard rate or if there is no
standard rate, the market value for the services or thing furnished.
28
(iii) All sums that Company in its sole discretion
deems necessary or advisable to pay in connection with the production of
Programs and the exploitation of Company's rights therein in order to clear
rights or to make any contractual payments that are or may become due on the
part of Company, to Artist or any other person, firm or corporation by virtue of
the exploitation of Company's rights therein, in order to avoid, satisfy or make
unnecessary any claims or demands by any person, firm or corporation claiming
the right to payment therefor, including, but not limited to, any payment to an
actual or alleged copyright owner, patent owner, union, union-related trust
fund, pension plan or other entity, and any payment for an actual or alleged
re-run fee, residual, royalty, license fee or otherwise shall constitute
advances against and shall be recoupable out of all royalties becoming payable
to Artist pursuant to this. No payment pursuant to this subparagraph 20(c) (iii)
shall constitute a waiver of any of Artist's express or implied warranties and
representations.
(d) (i) Conditioned upon Artist's full and faithful
performance of all of the material terms and conditions of this agreement,
Company shall pay Artist royalties egual to fifty percent (50%) of Company's
Video Net Receipts with respect to Company's exploitation of Programs subject to
this agreement. Monies earned and received by Company or credited to Company's
account from any licensee (rather than monies earned and received by the
licensee) in respect of exploitation of Programs shall be included in the
computation of Video Net Receipts.
(ii) With respect to any royalty obligations Company
may have to any other person, firm or corporation who supplied services or
rights used in connection with Programs, including, without limitation,
producers, directors, extras, and music publishers, such royalties shall be paid
out of and deducted from Video Net Receipts, prior to the payment of the
royalties otherwise payable to Artist in respect of Programs.
(iii) With respect to audiovisual material embodying,
Programs made hereunder together with other audiovisual material, royalties
payable to Artist shall be computed by multiplying the royalties otherwise
applicable by a fraction, the numerator of which is the amount of playing time
in such audiovisual material of Programs made hereunder and the denominator of
which is the total playing time of such audiovisual material. With respect to
such audiovisual material, only a fraction of the joint production costs
incurred in connection therewith shall be attributable to Programs and
chargeable hereunder, the numerator of which is the amount of playing time of
the material which contains Programs and/or footage featuring or concerning
Artist, and the Denominator of which is the total playing time of such
audiovisual material; provided that any such production costs which are
particularly attributable to Programs and/or Artist hereunder shall not be
apportioned as joint production costs as aforesaid.
(e) Company shall have the right to use and allow others to
use each Program solely for advertising and promotional purposes with no payment
to Artist.
29
(f) (i) During the Term of this agreement, no person, firm or
corporation other than Company will be authorized to make, sell, broadcast or
otherwise exploit audio-visual materials featuring Artist unless: (i) Artist
first notifies Company of all of the material terms and conditions of the
proposed agreement pursuant to which the audio-visual materials are to be made,
sold, broadcast or otherwise exploited, including, but not limited to, the
titles of the musical compositions covered by the proposed agreement, the format
to be used, the manner of exploitation proposed and the identities of all
proposed parties to the agreement, and (ii) Artist offers to enter into an
agreement with Company, containing the same terms and conditions described in
such notice and otherwise in the same form as this agreement, but with payments
to Artist that are one hundred percent (100%) of the payments to Artist in such
proposed agreement. If Company does not accept receipt of same, Artist may then
enter into that proposed agreement within the same parties mentioned in such
notice, subject to subparagraph 20(f) (ii) hereof and provided that such
agreement consummated with those parties within thirty (30) days after the end
of that sixty (60) day period upon the same terms and conditions set forth in
Artist's notice and offer to Company. If that agreement is not consummated
within said thirty (30) day period, no party except Company will be authorized
to make, sell, broadcast or otherwise exploit such audio-visual materials unless
Artist first offers to enter into an agreement with Company as provided in the
first sentence of this subparagraph 20(f). Company will not be required, as a
condition of accepting any offer made to Company pursuant to this subparagraph
20(f) to agree to any terms or conditions which cannot be fulfilled by Company
as readily as by any other part (for example but without limitation, the
employment a particular producer or director).
(ii) If Company does not accept an offer made to it
pursuant to this subparagraph 20(f), such non-acceptance shall not be considered
a waiver of any of Company's rights pursuant to this agreement. Such rights
include, without limitation, the right to prevent Artist from exploiting
audiovisual material featuring Artist in the form of Videograms, and the right
to prevent Artist from authorizing any use of Masters owned by or exclusively
licensed to Company unless Company so agrees. Artist shall not act in
contravention of such rights.
(g) In all other respects (e.g., the times for accountings to
be rendered, and warranties and representations made by Artist) Programs,
Videograms and video masters shall be governed by the same terms and conditions
as are applicable to Masters subject to this agreement.
(h) Conditional upon Artist performing faithfully hereunder,
Company agrees that in regard to the first LP, Company shall cause to be
produced not less than one (1) Audiovisual Program. In regard to the second LP,
Company shall cause to be produced not less than two (2) Audiovisual Programs,
conditional upon the gross unit sales of the first LP exceeding Two Hundred
Thousand Units (200,000).
30
(i) In regard to Audiovisual Programs produced for commercial
sale and related purposes, Company shall pay Artist a royalty of ten (10%)
percent in regard to such sales and related commercial use.
21. INTENTIONALLY DELETED.
22. Unions. Artist agrees that Artist is, or will become, and that
Artist will remain during the Term a member in good standing of any labor unions
with which Company may, at any time, have agreements lawfully requiring such
union membership. The provisions of the applicable collective bargaining
agreement shall be deemed incorporated herein to the same extent as if fully set
forth herein.
23. Eguitable Relief. Artist expressly agrees that Artist's services
hereunder are of a special unique character and that in the event of a breach by
Artist of any term, condition or covenant herein, Company shall be entitled to
injunctive relief in addition to any other remedies available to it.
24. Use of Name(s). So long as this agreement is in effect, Artist
shall not assign Artist's professional name(s) (or any other name(s) utilized in
connection with records subject hereto) or permit the use of such names by any
other individual(s), firm(s) or corporation(s) without Company's prior written
consent, and any attempt to do so shall be null and void and shall convey no
other right or title. The parties acknowledge that other than Company, no other
person, firm or corporation has the right to use said names or permit them to be
used in connection with phonograph records, and that Artist has the authority to
grant to Company the exclusive right to use said names in the Territory in
accordance with all of the terms and conditions of this agreement and Company
shall have the exclusive right to use said names as aforesaid. Artist shall not
waive, release, assign or forfeit its exclusive rights to said names.
25. Benefit, Assignment. This agreement shall inure to the benefit of
and be binding upon the successors, permitted assigns and representatives of the
parties hereto. Company may, at its election, assign this agreement, in whole or
in part, or any of its rights or remedies hereunder to any third party. Artist
shall not have the right to assign this agreement without Company's prior
written consent.
26. Severability. If any clause, sentence, paragraph or part of this
agreement or the application thereof to any person, shall for any reason be
adjudged by a court of competent jurisdiction to be invalid, such judgment shall
not affect the remainder of this agreement, which shall continue in full force
and effect but such judgment shall be limited and confined in its operation to
the clause, sentence, paragraph or part thereof directly involved in the
controversy in which such judgment shall have been rendered and to the person
involved.
27. Notices. All notices hereunder required to be given to Company
shall be sent to Company at its address first mentioned
31
herein and all royalty statements and payments and any and all notices to Artist
shall be sent to Artist at their respective addresses first written above, or
such other address as each party respectively may hereafter designate by notice
in writing to the other. All such notices shall be in writing and, except for
royalty statements, shall be sent by registered or certified mail, return
receipt requested, and the day of mailing of any such notice shall be deemed the
date of the giving thereof. All notices to Company shall be served upon Company
at the address first indicated above. A copy of all notices to Company shall be
sent to Xxxxx X. Xxxxx, Esq., 0000 Xxxxxx Xx. Xxxxx 0000; Xxxxx., XX 00000. A
copy of all notices to Artist shall be sent to Osse and Xxxxx, P.C., attn:
Xxxxxxxx Xxxx, Esq., at the address first indicated above.
28. Minimum Recording Commitment/Delivery.
(a) If, in respect of any Contract Year of this agreement,
Company fails to request Masters to constitute the minimum recording obligation
provided for in Paragraph 3 hereof, and if, within thirty (30) days after the
expiration of the applicable Contract Year, Artist shall notify Company by
certified mail of Artist's request that Company record such of Artist's
performances as will fulfill Company's minimum obligation hereunder, then
Company shall, within thirty (30) days after its receipt of such request,
request such performances or, if Company fails to do so, then the Term of this
agreement shall automatically expire and Company shall have no liability to
Artist in connection with any such failure. In the event that Artist does not so
notify Company within such thirty (30) day period, then Company shall be under
no obligation to Artist for failure to request Masters constituting such minimum
recording obligation.
(b) Artist shall perform for the recording of Masters so that
Masters (fully edited and mixed) together with all necessary approvals consents,
licenses and permissions shall be delivered to Company during each Contract Year
in accordance with the following schedule:
(i) Each set of Masters sufficient to constitute a
Single shall be delivered within thirty (30) days following Company's request
therefor.
(ii) Each set of Masters sufficient to constitute an
LP shall be delivered to Company within sixty (60) days following Company's
request therefor.
(c) Notwithstanding anything to the contrary contained in this
agreement, neither the Initial Period nor any subsequent contract Year hereunder
shall expire sooner than the one hundred fifty (150) days following the date of
Artist's delivery to and Company's acceptance of, in accordance with all of the
terms and conditions of this agreement, all of the Masters requested by Company
prior to the expiration of the Initial Period or the applicable Contract Year,
and the then current Contract Year shall be automatically extended in accordance
with the above.
29. Cure. Company shall not be deemed to be in breach of
32
any of its obligations hereunder unless within thirty (30) days after Artist
learns of such alleged breach Artist serves specific written notice upon Company
of the nature of such breach and Company shall have failed to cure such breach,
if any, within thirty (30) days following its receipt of such written notice.
30. Legal Representation. The parties acknowledge that they have
retained separate and independent counsel and have been fully advised regarding
every aspect of this agreement; that no party in any sense participated in the
selection of the other parties' counsel; that they have read and understood
this agreement; and they believe that the provisions of this agreement are fair
and equitable.
31. Choice of Law, Venue, Legal Fees. This agreement is entered into in
Commonwealth of Pennsylvania and shall be construed in accordance with the laws
of said state applicable to contracts to be wholly performed therein. The
Pennsylvania courts (state and federal) only shall have jurisdiction of any
controversies regarding this agreement; any action or other proceeding which
involves such a controversy will be bought in those courts, in the County of
Philadelphia, and not elsewhere.
32. Entire Agreement, Waiver. This writing sets forth the entire
understanding between the parties with respect to the subject matter hereof, and
no modification, amendment, waiver, termination or discharge of this agreement
shall be binding upon Company or Artist unless confirmed by a written instrument
signed by an officer of Company and Artist. No waiver of any provision or
default under this agreement shall effect the rights of Company thereafter.
33. Headings. The headings used in this agreement are for convenience
only and are not to be used to construe this agreement.
THE COMPANY AND PUBLISHER HAVE MADE AND MAKE NO REPRESENTATION OR
WARRANTY WITH RESPECT TO ANY MATTER PROVIDED FOR IN THIS AGREEMENT INCLUDING (i)
THE AMOUNTS, IF ANY, OF NET ROYALTIES OR ROYALTIES REALIZABLE FROM RECORDINGS OR
PHONOGRAPH RECORDS; OF NET INCOME REALIZABLE FOR MERCHANDISING; OF GROSS
RECEIPTS OR INCOME REALIZABLE FROM PROGRAMS; OR OF ROYALTIES OR NET PUBLISHERS
SHARE OF INCOME REALIZABLE ON THE PUBLISHING OF COMPOSITIONS, OR (ii) ANY
EFFORTS COMPANY AND/OR PUBLISHER MAY EXERT TO REALIZE ANY SUCH AMOUNTS, COMPANY
AND PUBLISHER HAVING NO LIABILITY FOR ANY FAILURE TO REALIZE ANY THEREOF.
33
ARTIST ACKNOWLEDGES THAT ARTIST HAS READ EACH AND EVERY PART OF THIS
AGREEMENT. ARTIST HEREBY ACKNOWLEDGES ARTIST'S UNDERSTANDING THAT THIS
AGREEMENT IS AN IMPORTANT LEGAL DOCUMENT PURSUANT TO WHICH COMPANY IS GRANTED
ARTIST'S EXCLUSIVE RECORDING SERVICES FOR THE UNIVERSE FOR A PERIOD OF UP TO
SEVEN (7) YEARS, AS SUCH PERIOD MAY BE EXTENDED IF ARTIST'S OBLIGATIONS UNDER
THE AGREEMENT ARE NOT TIMELY FULFILLED. ARTIST ALSO ACKNOWLEDGES ARTIST'S
UNDERSTANDING THAT THE AGREEMENT GRANTS TO COMPANY'S PUBLISHING AFFILIATE AN
UNDIVIDED FIFTY PERCENT (50%) INTEREST, INCLUDING THE COPYRIGHT INTEREST AND
AN UNDIVIDED ONE HUNDRED PERCENT (100%) ADMINISTRATION INTEREST IN THE MUSICAL
COMPOSITIONS WHICH ARE WRITTEN, COMPOSED, OWNED AND/OR CONTROLLED BY ARTIST
AND EMBODIED ON MASTER RECORDINGS WHICH ARE SUBJECT TO THIS AGREEMENT. ARTIST
HEREBY WARRANTS AND REPRESENTS THAT ARTIST HAS BEEN ADVISED OF ARTIST'S RIGHT
TO RETAIN INDEPENDENT LEGAL COUNSEL AND COMPANY HAS RECOMMENDED THAT ARTIST
34
RETAIN LEGAL COUNSEL IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF THIS
AGREEMENT.
ARTIST WARRANTS THAT THEY ARE ABOVE THE AGE OF MAJORITY. ARTIST
ACKNOWLEDGES THAT THIS AGREEMENT BINDS ARTIST INDIVIDUALLY AND COLLECTIVELY, AND
THAT IN THE EVENT OF A BREAK-UP OF THE GROUP, SUCH AS A LEAVING MEMBER, DEATH,
INCAPACITY, ETC., EACH AND EVERY ARTIST IS STILL BOUND UNDER THIS EXCLUSIVE
AGREEMENT.
IN CONSIDERATION FOR ARTIST'S PROMISES HEREUNDER, CONTEMPLATING
ARTIST'S FULL AND FAITHFUL PERFORMANCE, COMPANY SHALL PAY ARTIST A RECORDING
BUDGET ADVANCE AGAINST ROYALTIES OF THE AGGREGATE SUM OF TWENTY-FIVE THOUSAND
DOLLARS ($25,000.00), PAYABLE UPON THE EXECUTION OF THIS AGREEMENT BY ALL
PARTIES.
THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT IS NULL AND VOID, AND THE
PARTIES OBLIGATIONS HEREUNDER TERMINATED, IN THE EVENT THAT COMPANY FAILS TO
SECURE A NATIONAL DISTRIBUTION DEAL WITHIN ONE (1) YEAR AFTER THE COMPLETE
EXECUTION OF THIS AGREEMENT.
THE PARTIES AGREE THAT THE RECORDING BUDGET FOR EACH LP SHALL BE AS
FOLLOWS:
MINIMUM MAXIMUM
LP 1 $50,000.00 $150,000.00
LP 2 75,000.00 175,000.00
LP 3 75,000.00 200,000.00
LP 4 100,000.00 225,000.00
LP 5 100,000.00 250,000.00
LP 6 125,000.00 275,000.00
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year hereinabove first written.
WITNESS OUR HANDS AND SEALS.
ARTIST: BY:
ANTRA MUSIC GROUP, INC. d/b/a
ANTRA MUSIC GROUP
COMPANY" /s/ Xxxxx Xxxxx
---------------------------------
By:/s/ Xxxxxx X. Xxxxxxx Xxxxx Xxxxx, p/k/a "XXXX XXX"
---------------------------- and also p/k/a "Agent 99"
signature
Title: CEO
------------------------- /s/ Xxxxxx Xxxxxx
DULY AUTHORIZED REPRESENTATIVE ---------------------------------
Xxxxxx Xxxxxx, p/k/a "Mista Booka"
/s/ Xxxxxx Xxxxx Soc. Sec. #: ###-##-####
-------------------------------
Xxxxxx Xxxxx,p/k/a"JD/Vengence" /s/ Chenjerai Xxxxxxxxx
----------------------------------
Chenjerai Xxxxxxxxx, p/k/a "Hypno"
and also p/k/a "Mista Chenjerai"
/s/ Xxxxx Xxxxxxx
-------------------------------
Xxxxx Xxxxxxx, p/k/a "Gee" and
also p/k/a "Killahaha"/"Water Water"
-35-
EXHIBIT "A"
To Agreement dated ____________________________, by and between Antra Music
Group' INC. -with- Five (5) Individuals p/k/a "SPOOKS"
WRITER ROYALTY GUIDELINES
a) Eight cents (8 cents) per copy for each regular piano copy which is
sold in the United States and Canada for which Publisher has received payment
in the United States.
b) Ten percent (10%) of the wholesale selling price for each copy of
orchestrations and all other arrangements including vocal scores and
instrumental arrangements of the Recorded Compositions, issued by Publisher and
sold in the United States and Canada for which Publisher has received payment
in the United States.
c) A fraction of ten percent (10%) of the wholesale selling price of
each composite work issued by Publisher, containing Recorded Compositions, sold
in the United States and Canada for which Publisher has received payment in the
United States. The numerator of said fraction shall be the number of Recorded
Compositions contained in such composite work, and the denominator thereof shall
be the total number of musical compositions contained therein.
d) Fifty percent (50%) of the sums actually received by Publisher in
the United States under any mechanical, transcriptions and synchronization
licenses for uses of the Recorded Compositions in the United States and Canada.
e) Subject to paragraphs (j) and (k) of this Schedule, fifty percent
(50%) of the sums actually received by Publisher in the United States from
sub-publishers in countries outside of the United States and Canada with respect
to uses of Recorded Compositions.
f) Fifty percent (50%) of the sums actually received by Publisher in
the United States from Publisher's licensees deriving from the exploitation in
the United States and Canada by
1
Publisher's licensees of Recorded Compositions in any of the forms specified in
paragraphs (b) and (c) of this Schedule.
g) Fifty percent (50%) of the sums actually received by Publisher in
the United States from uses of Recorded Compositions within and outside of the
United States and Canada from any other resources now known or hereafter coming
into existence: not specifically provided for herein.
h) No royalty shall be payable for promotional material not sold or
re-sold.
i) If any copies for which royalties have been paid are returned to
Publisher, royalties so paid shall be credited to Publisher and allowed on the
next statement.
j) Writer shall not be entitled to receive any part of the fees
collected or received by Publisher through or from any performing rights society
for uses within, and outside of, the United States in instances where only the
publisher's share of royalties or receipts is paid to Publisher.
k) In no event shall Writer be entitled to share in any advance
payments, guarantee payments or minimum royalty payments which Publisher may
receive in connection with any subpublishing agreement, collection agreement,
licensing agreement or other agreement covering any of the Composition.
2
EXHIBIT "B" to the Agreement dated ________________ by and between ANTRA
MUSIC GROUP, INC. with Five (5) Individuals p/k/a "SPOOKS"
THIS LETTER AGREEMENT MUST BE COMPLETED AND SIGNED BY EACH PERSON (OTHER THAN
ARTIST) PERFORMING AS A PRODUCER, CO-PRODUCER, MIXER, ENGINEER, VOCALIST,
MUSICIAN OR IN ANY OTHER CAPACITY IN CONNECTION WITH RECORDINGS MADE UNDER
THE AGREEMENT TO WHICH THIS EXHIBIT "B" IS ATTACHED.
ANTRA MUSIC GROUP INC.
0000 Xxxxxx Xx.,
Xxxxx., XX 00000
Dated: ________________________, 19__
[NAME AND ADDRESS]
To:____________________
Dear __________________
We have entered into an Exclusive Recording Agreement (the "Recording
Agreement") with "SPOOKS" ("Artist"). You have advised us that pursuant to an
agreement between you and Artist, Artist is entitled to your services as more
particularly set forth below.
Artist has advised us that you have performed and may continue to
perform in certain capacities including, but not limited to as a producer,
co-producer, mixer, engineer, vocalist, musician and/or consultant with respect
to certain master recordings (the "Masters") and as a writer and/or composer of
certain musical compositions to be embodied on phonograph records containing
Artist's recorded performances.
We hereby accede to your involvement with respect to such phonograph
record projects provided, however, that in consideration
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of our approval relating to such involvement, and as an inducement for us to do
so, you hereby confirm, warrant and guaranty to us:
1. (a) That Artist has the right, insofar as you are concerned, to
enter into the Recording Agreement and to assume all of the obligations,
warranties and undertakings to us on the part of Artist therein contained, and
that Artist will continue to have such rights until the said obligations,
warranties and undertakings have been fully performed and discharged.
All of the warranties and representations on the part of
Artist contained in the Recording Agreement concerning you are true and correct
insofar as you are concerned.
You will duly and to the best of your ability, perform and
discharge all of the obligations and undertakings of the Recording Agreement
insofar as same are required of you and which Artist has undertaken to procure
you to do so and perform in the Recording Agreement.
If during the term of the Recording Agreement or any extension
thereof, Artist shall cease to be entitled to make your services available to us
in accordance with the terms of the Recording Agreement or fails or refuses to
make your services available to us, you shall, at our request, do all such acts
and things as shall give us the same rights, privileges and benefits as we would
have had under the Recording Agreement if Artist had continued to make same
available to us, and we shall be entitled to enforce such rights, privileges and
benefits directly against you.
You hereby consent and agree that we may, in our own name,
institute any action or proceeding against you to enforce our rights under the
Recording Agreement and/or pursuant hereto. (f) No termination of your agreement
with Artist shall cause to diminish your liability and obligation to us pursuant
to the Recording Agreement.
We shall own all right, title and interest, including the copyright in
and to the Masters which are produced, co-produced, mixed, re-mixed, engineered
and/or edited by you or which contain your recorded performance(s) including,
but not limited to your performances as a musician and/or vocalist and we shall,
in connection therewith, be entitled to exploit the Masters in all
configurations in all media throughout the universe, in perpetuity, as we or our
licenses, in our sole discretion may determine.
We shall have the exclusive right to use and publish and to permit
others to use and publish your name, likeness,
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biographical material or other identification for or in connection with the
recording or exploitation of phonograph records embodying the Masters throughout
the world.
4. You shall not enter into or authorize any third party to enter into
any agreements on our behalf or incur, directly or indirectly, any liability or
expense of any kind for which we are or may be held liable, in connection with
any recording session or otherwise in connection with the production of the
Masters.
5. In the event that any Master(s) shall contain a musical composition,
or any part thereof, which is written or composed, in whole or in part by you or
owned or controlled directly or indirectly by you or by any person, firm or
corporation with which you are or may be associated or affiliated, than you
agree that with respect thereto, you shall and do hereby assign to our
publishing designee and its successors, and assigns, an undivided fifty percent
(50%) of your interest in and to the copyright and all other rights therein and
thereto. You warrant and represent that in no event shall your interest in and
to the copyright of any musical composition referred to above be less than the
percentage equal to your distribution as a writer and/or composer thereof. You
further, agree that all rights in such composition(s) shall be administered
exclusively by our publishing designee in accordance the terms and conditions of
the Recording Agreement.
6. You shall execute and deliver to us and/or our publishing affiliate
such documents and instruments with respect to the Masters and musical
compositions hereunder which we may in our sole judgment deem necessary or
desirable to effectuate the intent and purposes of this agreement or to evidence
the rights granted herein. If you fail or are unable to execute any document or
instrument consistent with the terms hereof, we shall be fully entitled to do so
on your behalf as your true and lawful attorney, and such agreement, document or
instrument thereupon will be fully as valid, effective and operative as if
personally executed by you. The foregoing power is acknowledged by you to be
coupled with an interest and to be irrevocable. Prior to the recording, in each
instance, of any Master embodying a musical composition described in paragraph 5
above, you shall complete, execute and deliver to us a copyright assignment in
the form annexed hereto as Exhibit ?1? and made a part hereof.
7. You hereby represent and warrant that you have the right and
authority to make and enter into this agreement and that neither
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your services nor the results or proceeds thereof will violate or infringe upon
the copyright or other rights of any third party. You shall indemnify and hold
us and our publishing affiliate harmless from any and all claims, damages or
expenses (including court costs and reasonable counsel fees) arising out of or
in connection with any claim which is inconsistent with the warranties and
representations contained herein. You hereby warrant and represent that you have
read and are familiar with the terms and conditions of the Recording Agreement
and that you have obtained independent legal counsel with respect to the
Recording Agreement and also with respect to this agreement.
You agree that you will not, for a period of Five (5) years after the
expiration of the Recording Agreement, perform the musical compositions or
material contained on any record referred to herein for anyone else for the
purpose of making phonograph records, or Two (2) years after delivery thereof,
whichever period is greater.
9. You shall look solely to Artist for any and all payments due in
connection with any and all of your services or rights granted hereunder, even
if Antra MusicGroup, Inc. (hereinafter referred to as Company suspend its
obligations to account to and/or pay royalties or other sums to Artist,
including, but not limited to, monies payable to you pursuant to paragraph 5
hereof. You hereby release and discharge Antra Music Group, Inc. and its
officers, principals, heirs, executors, administrators, successors and assigns
from all actions, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, executions, claims and
demands whatsoever, whether or not reflected in demand letters, in law,
admiralty or equity, which against Antra MusicGroup, Inc. and its respective
heirs, executors, administrators, successors and assigns you ever had, now have,
or hereafter can, shall or may, have for, upon, or by reason of any matter,
cause or thing whatsoever from the beginning of the world and continuing in
perpetuity relating to the copyrights and all other rights in and to the Masters
and musical compositions embodied therein. Without limitation of the foregoing,
in the event that Company elects to suspend its obligations to Artist, Company
shall have no obligation to you and no such suspension shall affect the validity
or enforceability of this agreement.
10. If any part of this agreement shall be invalid or unenforceable it
shall not affect the validity of the balance of this agreement. This agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which must be executed by Publisher to be effective and all
of which together shall constitute one and the same instrument.
11. Nothing contained in this letter shall be construed as an
amendment, modification or revision of the Recording Agreement which is hereby
specifically ratified and affirmed.
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If the foregoing correctly reflects the understanding between you and
us with respect to the subject matter hereof, kindly indicate .your agreement
thereto by signing your name in the space provided below.
Very truly yours,
ANTRA MUSIC GROUP , INC.
By: /s/ Xxxxxx X. Xxxxxxx CEO
-------------------------------
ACCEPTED AND AGREED TO,
INDIVIDUALLY AND ON BEHALF
OF MY PUBLISHING DESIGNEE
/s/ XXXXX XXXXX
---------------------------
XXXXX XXXXX
/s/ XXXXXX XXXXXX
---------------------------
XXXXXX XXXXXX
/s/ XXXXXX XXXXX
---------------------------
XXXXXX XXXXX
/s/ CHENJERAI XXXXXXXXX
---------------------------
CHENJERAI XXXXXXXXX
/s/ XXXXX XXXXXXX
---------------------------
XXXXX XXXXXXX
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THIS EXHIBIT "1" is part of the letter to the Agreement marked as Exhibit "B" to
the Agreement dated ___________________ __, 1999 by and between ANTRA MUSIC
GROUP, INC. with Five (5) Individuals p/k/a "SPOOKS".
TRANSFER OF COPYRIGHT - LPs 1 through 3
and all singles recorded during that period
For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned hereby transfers to the publishing designee of
AntraMusicGroup, Inc. an undivided one-half (1/2) and to the publishing designee
of "SPOOKS" an undivided one-half (1/2) of all right, title and interest in and
to the copyright and to the publishing designee of ANTRA MUSIC GROUP, Inc. one
hundred percent (100%) of the exclusive administration rights comprised in the
copyright, without limitation, in the musical composition(s) listed below:
TITLE WRITER(S)
"____________________" ________________ - ________________
(fill in percentage of writer's
contribution)
Dated: __________________ , 199_
________________________________
[Your Name]
[Need Not Be Signed if You
Are Not A Writer]
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THIS EXHIBIT "1" is part of the letter to the Agreement marked as Exhibit "B" to
the Agreement dated ___________________ __, 1999 by and between ANTRA MUSIC
GROUP, INC. with Five (5) Individuals p/k/a "SPOOKS".
TRANSFER OF COPYRIGHT - LPs 4 through 6
and all singles recorded during that period
For good and valuable consideration, receipt of which is hereby
acknowledged, the undersigned hereby transfers to the publishing designee of
AntraMusicGroup, Inc. an undivided Forty Per Cent (40%) and to the publishing
designee of "SPOOKS" an undivided Sixty Per Cent (60%) of all right, title and
interest in and to the copyright and to the publishing designee of
AntraMusicGroup, Inc. one hundred percent (100%) of the exclusive administration
rights comprised in the copyright, without limitation, in the musical
composition(s) listed below:
TITLE WRITER(S)
"____________________" _________________ - ______________
(fill in percentage of writer's
contribution)
Dated: __________________ , 199_
________________________________
[Your Name]
[Need Not Be Signed if You
Are Not A Writer]
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