Exhibit 10.36
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Contract No.: IMPREC 004
Confidential portions omitted and filed separately with the Commission. Deleted
text (represented by "XXXX" in the text and an asterisk in the margin) indicates
such omissions.
AGREEMENT made as of this 30th of March, 1996, by and between Imprint
Records, Inc. 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000
(hereinafter "Company"), and Xxxx Xxxx, 0000 Xxxx Xxxxx, #000, Xxxxxxxxx,
Xxxxxxxxx (hereinafter "You" or "Artist").
1. SERVICES.
1.01 During the term of this Agreement (the "Term") You will render Your
exclusive services as a performing artist for the purpose of making Master
Recordings for Company, You will cause those Master Recordings to be produced,
and You will Deliver those Master Recordings to Company, as provided in this
Agreement.
1.02 Your obligations will include furnishing the services of the producers
of those aster Recordings and all other third parties rendering services in
connection with those Master Recordings, subject to the terms of this Agreement,
and You will be solely responsible for engaging and paying them. Without
limitation of the foregoing, Company will not unreasonably refuse to account and
pay advances and royalties, if any, to a producer, approved in advance by
Company, so long as you have forwarded an executed letter of direction in
Company's standard form (together with an executed copy of Company's standard
producer's declaration), with no such producer being in a "pay" position prior
to Company having recouped the applicable Recording Costs for the Album project
concerned at the so-called "net artist rate" and provided further, that Company
has pre-approved in writing the material terms and conditions of such producer's
engagement (including, without limitation, the producer's advance and royalty
rate).
2. TERM.
2.01 The Term shall consist of an Initial Period and of the Option Periods
(defined below) for which Company shall have exercised the options hereafter
provided. The Initial Period and each Option Period are each hereafter sometimes
referred to as a "Contract Period". The Initial Period shall commence on the
date hereof and shall continue until thirty days after the Delivery to Company
of Your Recording Commitment for the Initial Period.
2.02 You grant Company seven (7) separate options to extend that Term for
additional Contract Periods ("Option Periods"). Each Option Period shall begin
immediately after the end of the Current Contract Period and shall continue
until the earlier of the dates referred to in paragraphs (a) and (b) immediately
below:
(a) the date fifteen (15) months after the Delivery to Company of the
Committed Album made in fulfillment of Your
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Recording Commitment for the Contract Period concerned under Article 3 below; or
(b) the date twelve (12) months after the initial commercial release
in the United States of the Album required to be delivered in fulfillment of
Your Recording Commitment for the Contract Period concerned; but will not end
earlier than twelve (12) months after the date of the commencement of the
Contract Period concerned.
Company may exercise each of those options by sending You a written notice not
later than the expiration date of the Contract Period which is then in effect
(the "Current Contract Period"). If Company exercises such an option, the Option
Period concerned will begin immediately after the end of the Current Contract
Period and shall continue until the earlier of the dates referred to in
paragraphs 2.02 (a) and (b) above.
3. RECORDING COMMITMENT.
3.01 Your Recording Commitment hereunder is as follows. During each Option
Period (as distinguished from the Initial Period), You shall record for and You
shall deliver to Company one (1) Album. The Albums delivered hereunder in
fulfillment of Your Recording Commitment are sometimes referred to collectively
herein as the "Committed Albums" and individually as a "Committed Album". You
shall deliver to Company the Album constituting Your Recording Commitment for a
Contract Period (other than the Initial Period) no later than one hundred twenty
(120) days after the commencement of that Contract Period. During the Initial
Period, You shall record for and You shall deliver to Company no less than four
(4) "master demos", as that term is generally understood in the recording
industry. You shall deliver to Company the "master demos" constituting Your
Recording Commitment for the Initial Period no later than one hundred twenty
(120) days following the full execution of this Agreement and the budget for
such "master demos" shall be approved by Company prior to the commencement of
recording. Notwithstanding anything to the contrary contained herein, whenever
the word Master Recordings is used in this Agreement, they shall apply to the
master demos that You are required to record and deliver in the Initial Period.
Furthermore, Company agrees that the "all-in" budget for the "master demos" to
be recorded and delivered during the Initial Period shall be no less than forty
thousand ($40,000.00) dollars.
4. RECORDING PROCEDURES.
4.01 Company and You shall mutually approve all recording personnel
(including producers), the Musical Compositions or other Selections (including
medleys), the studios, the recording dates and a detailed recording budget
(collectively, the Recording
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Elements"). Notwithstanding the foregoing, a studio will be deemed approved by
Company if Company determines that it is a first-class recording studio and that
its use would neither cause labor difficulties for any other reason nor cause
expenditures inconsistent with the approved Recording Budget (as defined
hereinbelow) or delays inconsistent with the anticipated delivery or release
schedule. Company may reject any request to record a Committed Album within six
(6) months of the Delivery of the prior Album. You shall neither commence
recording nor incur costs unless Company has approved in writing each Recording
Element and the budget. If Company disapproves any budget item or Recording
Element, Company's decision (including, at Company's election, Company's
designation of one (1) or more Recording Elements) shall be final subject to
consultation with You. Company agrees that the recording budget for the Album to
be recorded during the First Option Period, if any, shall not be less than one
hundred thirty five thousand dollars ($135,000.00) and that the recording budget
for the Album to be recorded during the Second Option Period, if any, shall not
be less than one hundred fifty thousand dollars ($150,000.00).
4.02 (a) You shall notify the appropriate Local of the American Federation
of Musicians in advance of each recording session.
(b) You will comply with the following procedures in connection with
the requirements of the U.S. Immigration Law:
(1) Before each recording session:
(i) You will require each background instrumentalist,
background vocalist, and other person to be employed in connection with the
session to complete and sign the EMPLOYEE INFORMATION AND VERIFICATION
("employee") section of a U.S. Immigration and Naturalization Service Employment
Eligibility Certificate (Form I-9), unless You have already obtained such a
Certificate from the person concerned within the past three (3) years;
(ii) You will complete and sign the EMPLOYER REVIEW AND
VERIFICATION ("employer") section of each such Certificate; and
(iii) You will attach copies of the documents establishing
identity and employment eligibility which You examine in accordance with the
instructions in the employer section. If any such person is engaged during a
session You will comply with subsections (i) through (iii) above, with respect
to that person, before (s)he renders any services.
(2) You will not permit any such person who fails
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to complete the employee section, or to furnish You with the required
documentation, to render any services in connection with Recordings to be made
under this agreement.
(3) You will deliver those Certificates and documents to Company
promptly, and in no event later than the Delivery of the Recordings concerned.
(4) You will comply with any revised or additional verification
and documentation requirements of which Company advises You in the future.
(c) As and when required by Company, You shall allow Company's
representatives to attend any or all recording sessions hereunder.
(d) You shall timely supply Company with all of the information
Company needs in order: (1) to make payments due in connection with such
Recordings; (2) to comply with any other obligations Company may have in
connection with the making of such Master Recordings; and (3) to prepare to
release Phonograph Records derived from such Master Recordings. Without limiting
the generality of clause (2) of the preceding sentence:
(1) You shall furnish Company with all information Company
requires to comply with its obligations under Company's union agreements,
including, without limitation, the following:
(i) If a session is held to record new tracks intended to be
mixed with existing tracks (and if such information is requested by the American
Federation of Musicians), the dates and places of the prior sessions at which
such existing tracks were made, and the AFM Phonograph Recording Contract (Form
"B") number(s) covering such sessions;
(ii) Each change of title of any composition listed in an
AFM Phonograph Recording Contract (Form "B"); and
(iii) A listing of all the musical selections contained in
Recordings Delivered to Company hereunder; and
(2) You will furnish Company with all of the immigration control
documentation required by subparagraph 4.01(b) above, at the same time as the
AFM or AFTRA session reports, tax withholding forms, and other documentation
required by us in order to make the payments to the session musicians and other
employees concerned, if any.
(e) (i) All Master Recordings shall be recorded under Company's
current Phonograph Record Labor Contract with the AFM;
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all musicians who render services in connection with the recording of such
Master Recordings (including instrumentalists, if any) will be paid by Company,
on Your behalf, the scale set forth in the said Labor Contract; and Company, on
Your behalf, shall pay the required contributions to the Pension Welfare Fund.
(ii) All AFTRA members whose performances are embodied in the
Master Recordings will be paid by Company, on Your behalf, the rates applicable
under the current AFTRA Code of Fair Practices for Phonograph Recordings.
Company shall, on Your behalf, if necessary, also pay to the AFTRA Pension and
Welfare Fund any contribution required to be made under the AFTRA Code based on
compensation to other performers whose performances are embodied on the
applicable Master Recordings recorded hereunder.
(iii) The foregoing representations and warranties are included
for the benefit, respectively, of the AFM, AFTRA, and the AFM and AFTRA members
whose performances are embodied in the applicable Master Recordings, and for the
benefit of Company, and may be enforced by AFM and/or AFTRA or their respective
designees, as the case may be, and by Company.
(iv) You shall furnish or shall cause the applicable Producer to
furnish Company with copies of all union contracts and/or union session reports
so that all payments may be made by Company, on Your behalf, in a timely fashion
to the proper parties thereunder; and if You fail to do so with the result that
Company is required to pay any penalty sum for making a late payment under the
applicable union agreements, such payments shall be a direct debt from You to
Company which, in addition to any other remedy Company may have, Company may
recover from any monies otherwise payable to You.
4.03 You shall deliver the Masters to Company, at the offices of Company
and to the attention of the Vice President of A&R promptly after their
completion. All original session tapes and any derivatives/reproductions thereof
shall be delivered to Company concurrently (or, if Company elects, maintained at
a location designated by Company, in its name and subject to its control) and at
Company's sole expense. Each Master shall be subject to Company's approval as
for the manufacture and sale of Phonograph Records. Upon Company's request, You
shall re-record any Musical Composition or other Selection until such delivery
standard is met. You shall deliver to Company fully mixed, leadered, edited,
sequenced, equalized and unequalized Master Recordings (including a final
two-track equalized tape copy), satisfactory to Company for the manufacture and
sale of Phonograph Records, and all original and duplicate Master Recordings of
the material recorded, together with the multi-track tape and three (3) safety
copies thereof; all materials for use in the packaging and marketing of the
Records (including information for "label copy" and liner notes, such as
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title, recording dates, timing, publisher, composer, lyricist, producer and
performer of each musical composition embodied on the Master Recordings); all
third party clearances and consents (including mechanical licenses) (it being
understood that: (A) as between Company and you, Company shall be responsible
for preparing the actual paperwork in connection therewith; and (B)
notwithstanding anything to the contrary contained in this paragraph 4.03, You
shall obtain and deliver all first-use licenses and licenses for any so-called
"samples" for non-Controlled Compositions recorded hereunder). No Master shall
be deemed "delivered" or "Delivered" to Company until You have fully complied
with this paragraph. Company's election to pay You a Delivery payment or to
release a Record derived from a Master shall not be deemed an acknowledgment
that "Delivery" thereof was properly made; accordingly, Company shall be deemed
to have waived neither its right to require complete performance thereafter nor
its remedies for Your failure to perform.
4.04 Each Master shall embody the Artist's performance as the sole featured
artist of a single Musical Composition previously unrecorded by the Artist and
shall be recorded in its entirety in a recording studio. No Masters shall be
recorded in whole or in part at live concerts or other live performances unless
an authorized officer of Company agrees to the contrary in writing. Each
Committed Album shall embody no fewer than thirty five (35) minutes in playing
time and containing no fewer than ten (10) Musical Compositions unless Company
otherwise agrees to the contrary in writing. You shall not record or deliver
hereunder, nor shall Company be obligated to accept, Masters constituting a
Multiple Album. However, if You shall do so and Company shall accept those
Masters hereunder, then, at Company's election, for the purpose of calculating
the number of Masters recorded and delivered hereunder, those Masters shall be
deemed to be only one (1) Album. Masters delivered hereunder shall not contain
selections designed to appeal to specialized or limited markets including, but
not limited to gospel, Christmas and/or children's music, unless otherwise
approved prior the recording thereof by Company.
4.05 You further agree to irrevocably direct in writing the person who has
possession of any and all tapes of masters or digital masters recorded hereunder
that all such tapes and masters are Company's property and that such person
shall be obligated to deliver such tapes and masters
to Company upon its written request.
4.06 If You shall for any reason whatsoever except for a verified medical
reason (excluding any illness related to drugs, alcohol or any self-induced or
personally exacerbated cause, and otherwise subject to the terms hereof,
including without limitation paragraph 17) materially and/or unreasonably delay
the commencement of or be unavailable for any recording sessions for the
Masters, You shall, upon Company's demand, pay Company an amount equal to
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the expenses or charges paid or incurred by Company by reason thereof. Company
may, without limiting Company's other rights and remedies, deduct that amount
from any monies payable (excluding mechanical royalties) by Company hereunder or
under any other agreement between You and Company or Company's affiliates.
4.07 Company may, at its election, discontinue any recording sessions for
the Masters if in Company's judgment the Recording Costs incurred or to be
incurred will exceed the approved Recording Budget or if the Masters being
produced will not be satisfactory.
5. RECORDING COSTS.
5.01 Company shall pay the Recording Costs of the Masters recorded at
recording sessions conducted in accordance with the terms hereof in an amount
not in excess of the Recording Budget approved by Company in writing. If the
Recording Costs of any Masters shall exceed the Recording Budget approved by
Company solely and directly due to Your acts or omissions, You shall be solely
responsible for and shall promptly pay the excess. If, however, Company shall
pay the excess, You shall, upon Company's demand, pay to Company the amount
thereof and Company may, without limiting Company's other rights and remedies,
deduct that amount from any monies (other than mechanical royalties) payable by
Company hereunder or under any other agreement between You and Company or
Company's affiliates. You shall be solely responsible for and shall pay any
payments to any individuals rendering services in connection with the recording
of the Masters which exceed union scale unless the excess and the recipient
thereof shall have been specified in the Recording Budget approved by Company.
You shall also be solely responsible for and shall pay any penalties incurred
for late payments caused by Your delay in submitting union contracts forms,
report forms, or invoices or other documents. If, however, Company shall pay any
excess not approved by Company or any penalties, You shall, upon Company's
demand, pay Company the amount thereof, and Company may, without limiting
Company's other rights and remedies, deduct that amount from any monies payable
(other than mechanical royalties) by Company hereunder or under any other
agreement between You and Company or Company's affiliates.
5.02 Recording Costs shall mean and include all union scale payments
(including "excess" scale payments) made to the Artist, all payments made by
Company to any other individuals rendering services in connection with the
recording of the Masters, all other payments which are made by Company pursuant
to any applicable law or regulation or the provisions of any collective
bargaining agreement between Company and any union or guild, all amounts paid or
incurred for studio or hall rentals, tape, engineering, editing, instrument
rentals and cartage, mastering, mixing, re-mixing, "sweetening", transportation
and accommodations, immigration
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clearances, trademark and service xxxx searches and clearances, "sample"
clearances any so-called "per diems" for any individuals (including the Artist)
rendering services in connection with recording of the Masters, together with
all other amounts paid or incurred by Company in connection with the recording
of the Masters. Recording Costs shall be recoupable from royalties (other than
mechanical royalties) payable by Company hereunder or under any other agreement
between You and Company or Company's affiliates. The costs of metal parts other
than lacquer, copper or equivalent masters, and payments to the AFM Special
Payments Fund and the Music Performance Trust Fund based upon record sales
(so-called "per-record royalties"), will not be recoupable from Your royalties
or reimbursable by You. Notwithstanding the foregoing, You agree that the
Advances hereunder include the prepayment of session union scale as provided in
the applicable union codes, and You agree to complete any documentation required
by the applicable union to implement this sentence. Notwithstanding anything to
the contrary contained herein, after the initial release of any Master,
additional Recording Costs with respect to each such Master incurred by Company
and which may be recoupable hereunder will not exceed five thousand dollars
($5,000.00) per Master without the express prior written consent of Artist.
Notwithstanding the foregoing, You agree that the Advances hereunder include the
prepayment of session union scale as provided in the applicable union codes, and
You agree to complete any documentation required by the applicable union to
implement this sentence.
6. RIGHTS.
6.01 Subject to the terms, conditions and restrictions expressly set forth
in this Agreement, all Master Recordings (as distinguished from the underlying
musical composition) recorded during the Term which embody the performances of
the Artist, from the inception of the recording thereof, shall, for purposes of
copyright law, be deemed "works-made-for-hire" for Company by You, the Artist,
and all other persons rendering services in connection with those Master
Recordings, as Company's "employees-for-hire". Those Master Recordings (as
distinguished from the underlying musical composition), from the inception of
the recording thereof, and all Phonograph Records and other reproductions made
therefrom, together with the performances embodied therein and all copyrights
therein and thereto throughout the Territory, and all renewals and extensions
thereof, shall be entirely Company's property, free of any claims whatsoever by
You or any other person, firm, or corporation. Company shall, accordingly, have
the exclusive right to obtain registration of copyright (and all renewals and
extensions) in those Master Recordings (as distinguished from the underlying
musical composition), in Company's name, as the owner and author thereof. If
Company shall be deemed not to be the author of those Master Recordings or those
Master Recordings are deemed not to be "works-made-for-hire", this agreement
shall
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constitute an irrevocable transfer to Company of ownership of copyright (and all
renewals and extensions) in those Master Recordings (as distinguished from the
underlying musical composition). You shall, upon Company's request, cause to be
executed and delivered to Company transfers of ownership of copyright (and all
renewals and extensions) in those Master Recordings (as distinguished from the
underlying musical composition) and any other documents as Company may deem
necessary or appropriate to vest in Company the rights granted to Company in
this Agreement, and You hereby irrevocably appoint Company Your attorney-in-fact
for the purpose of executing those transfers of ownership and other documents in
Your names. Company shall give You seven (7) business days notice before signing
any document in Your name, provided Company may dispense with that waiting
period when necessary, in Company's judgment, to protect or enforce Company's
rights. As a non-material obligation, Company shall provide You with copies of
documents signed by Company in Your or Artist's name. Without limiting the
generality of the foregoing, Company and any person, firm, or corporation
designated by Company shall have the exclusive, perpetual and worldwide right to
manufacture, sell, distribute and advertise Phonograph Records embodying those
Master Recordings under any trademarks, trade names or labels, and to lease,
license, convey or otherwise use or dispose of those Master Recordings by any
method now or hereafter known in any field of use and to perform publicly
Phonograph Records and other reproductions embodying those Master Recordings,
all upon such terms as Company may approve, or Company may refrain from doing
any or all of the foregoing.
6A.01 The provisions of this Article 6A shall only apply provided You have
fully complied with all Your material obligations under this Agreement.
Company's inadvertent failure to comply with any provision of this Article 6A
shall not be a breach of this Agreement.
6A.02 Company will not, without Your consent, commercially release
"outtakes" on Phonograph Records or otherwise exploit such outtakes in the
United States during the Term hereof. "Outtakes" shall mean preliminary,
unfinished Master Recordings made under this Agreement.
6A.03 Company shall consult with You in connection with Company's selection
of the so-called "A" sides and "B" sides of Singles released in the United
States; provided that Company's inadvertent failure to do so shall not be deemed
a breach hereof and, furthermore, provided that in the event of a disagreement,
Company's decision will be final.
6A.04 During the Term, Company will not sell Records derived from Master
Recordings delivered in fulfillment of Your Recording Commitment as "cut-outs"
in the United States until the earlier of
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(i) twelve (12) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.05 In the event Company elects to sell Records hereunder as cut-outs
following the period twelve (12) months from the date of initial United States
release of such Records, Company shall so notify You, and shall offer You the
opportunity to purchase such inventory (provided that no failure by Company to
give such notice and/or offer said opportunity to You shall constitute a breach
hereof) at a price equal to the price at which Company elected to sell such
Records to third parties. You may notify Company of Your desire to purchase
Company's inventory in the United States of such Records, provided that You
tender payment-in-full therefor within five (5) business days following the date
of Your notice. You shall be deemed to have rejected such opportunity if You do
not respond in writing within five (5) business days following Company's offer
to You of the opportunity to purchase such Records.
6A.06 During the Term, Company will not, without Your consent, sell any
Committed Album as a Budget Record in the United States until the earlier of (i)
twelve (12) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.07 During the Term, Company will not, without Your consent, sell any
Committed Album as a Mid-Priced Record in the United States until the earlier of
(i) nine (9) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.08 (a) (i) If, during the Term, Company releases in the United States a
"Greatest Hits" or "Best Of" type Album consisting of Master Recordings recorded
hereunder, Company shall consult with You regarding the selections to be
included on such "Greatest Hits" or "Best Of" type Album.
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(ii) With respect to any "Greatest Hits" or "Best Of" type
Album to be released in the United States during the Term, if Company shall so
request, You shall Deliver to Company within ninety (90) days following such
request up to two (2) sides (the "New Side(s)"), consisting of newly recorded
material, for (without limitation) inclusion in said "Greatest Hits" or "Best
Of" type Album.
(b) Provided You are in compliance with Your material obligations
hereunder, if Company releases any such "Greatest Hits" or "Best Of" type
Album during the Term hereof in the United States in accordance with
subparagraph 6A.08 (a) above, then Company shall pay to You an Advance (the
"Greatest Hits Advance") equal to the amount by which
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX exceeds the unrecouped
balance of Your royalty account hereunder, provided, however, in no event
shall the Greatest Hits Advance be less than the actual Recording Costs
approved by Company in connection with the New Sides, if any plus
* XXXXXXXXXXXXXXXXXXXXXXXXX. Any Greatest Hits Advance payable to You pursuant
to this paragraph 6A.08 (b) shall be made as follows:
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX upon the delivery of the New Sides,
if any, and the balance promptly after the initial United States release of
the "Greatest Hits" or "Best Of" type Album concerned. Notwithstanding the
foregoing, if Company requests the New Sides and You fail or refuse to deliver
the New Sides, then no Greatest Hits Advance shall be payable to You in
connection with Company's release of any such "Greatest Hits" or "Best Of"
type Album.
(c) Company shall pay any and all costs (the "New Side(s) Costs")
incurred in connection with such "Greatest Hits" or "Best Of" type Album and
the same shall be deducted from the Greatest Hits Advance otherwise payable to
You hereunder. The applicable Greatest Hits Advance payable and the New
Side(s) Costs shall be charged against and recoupable at any time from any and
all royalties (other than mechanical royalties) accruing to Your credit
hereunder. Neither any "Greatest Hits" or "Best Of" type Album(s) nor any New
Side(s) shall be deemed part of Your Recording Commitment hereunder.
(d) The royalty rate applicable to a given Master Recording embodied
on a "Greatest Hits" or "Best Of" type Album shall be the highest royalty rate
actually attained hereunder for the Contract Period in which such Master
Recording was recorded. The royalty rate applicable to the New Sides shall be
equal to the highest royalty rate attributable to any of the other Master
Recordings embodied on such "Greatest Hits" or "Best of" type Album.
6A.09 During the Term, with respect to audio Records manufactured for
sale in the United States, Company shall not
* - Confidential portions omitted and filed separately with the Commission.
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during any one (1) year without Your consent, such consent not to be
unreasonably withheld, initially couple more than three (3) Masters made
hereunder with recordings not embodying Artist's performances. The immediately
preceding sentence shall only apply provided that Your royalty account hereunder
is in a "recouped position" (as such term is commonly understood in the
recording industry) as of the semi-annual accounting period immediately prior to
the semi-annual accounting period when Company initially couples a Master made
hereunder with recordings not embodying Artist's performances. Notwithstanding
the first sentence of this paragraph 6A.09, no such consent shall be required
for "sampler" Records.
6A.10(a) Provided you have fulfilled all Your material obligations under
this Agreement, Company will commercially release each Album recorded in
fulfillment of Your Recording Commitment in the United States within one hundred
thirty (130) days after the delivery of the masters concerned. If Company fails
to do so You may notify Company, within thirty (30) days after the end of the
one hundred eighty (180) day period concerned, that You intend to terminate the
Term of this Agreement unless Company releases the Album within sixty (60) days
after Company's receipt of Your notice (the "cure period"). If Company fails to
commercially release the Album in the United States before the end of the cure
period You may terminate the Term of this Agreement by giving Company notice
within thirty (30) days after the end of the cure period. On receipt by Company
of Your termination notice the Term of this Agreement will end and all parties
will be deemed to have fulfilled all of their obligations under it except those
obligations which survive the end of the Term (e.g., warranties, re-recording
restrictions and obligation to pay royalties). Your only remedy for failure by
Company to release an Album will be termination in accordance with this
paragraph. If You fail to give Company either of those notices within the period
specified, Your right to terminate will lapse.
(b) The running of the one hundred thirty (130) day and the sixty (60)
day cure period referred to in paragraph 6A.10(a) will be suspended (and the
expiration date of each of those periods will be postponed) for the period of
any suspension of the running of the Term of this Agreement under paragraph
17.01. If any such one hundred thirty (130) day or sixty (60) day cure period
would otherwise expire on a date between October 15th and the next February 16th
its running will be suspended for the duration of the period and between October
15th and February 16th and its expiration date will be postponed by the same
amount of time (i.e., one hundred twenty-four (124) days).
7. NAME AND LIKENESS.
7.01 (a) (1) Company and any person, firm or corporation designated by
Company shall have the perpetual right throughout the
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Territory to use and to permit others to use the Artist's name (both legal and
professional, and whether presently or hereafter used by the Artist), likeness,
other identification and biographical material concerning the Artist, and You
shall assist Company in securing such rights with respect to the name and
likeness of any producer or other person rendering services in connection with
Master Recordings recorded by the Artist during the Term for purposes of trade
and advertising. Company shall have the further right to refer to the Artist
during the Term as Company's exclusive recording artist and You shall in all
Your activities in the entertainment field use reasonable efforts to cause the
Artist to be billed and advertised during the Term as Company's exclusive
recording artist. The rights granted to Company pursuant to this paragraph with
respect to the Artist's name, likeness, other identification and biographical
material concerning the Artist shall be exclusive during the Term and
nonexclusive thereafter. Accordingly, but without limiting the generality of the
foregoing, neither You nor the Artist shall authorize or permit any person,
firm, or corporation other than Company to use during the Term the Artist's
legal or professional name or the Artist's likeness in connection with the
advertising or sale of Phonograph Records.
(2) Company will make available to You for Your approval any
pictures of the Artist or biographical material about the Artist which Company
proposes to use for packaging, advertising or publicity in the United States
during the Term of this Agreement. Company will not use any such material which
You disapprove in writing within five (5) business days from the time such
materials are made available to You, provided You furnish substitute material,
satisfactory to Company in its sole and reasonable discretion, in time for use
within Company's production and release schedules. In any event, Company shall
not be required to incur expenses beyond those customary for one (1) photograph
shooting for each Album hereunder. This subparagraph will not apply to any
material previously approved by You or used by Company. No inadvertent failure
to comply with this subparagraph will constitute a breach of this Agreement, and
You will not be entitled to injunctive relief to restrain the continuing use of
any material used in contravention of this subparagraph. You shall have the
right to submit photographs, likenesses and biographical material of Artist and
Your submission of same shall constitute Your approval thereof.
(b) You shall not render any services or authorize or permit Your name
or likeness or any biographical material concerning You or the Artist to be used
in any manner by any person, firm or corporation in the advertising, promoting
or marketing of blank magnetic recording tape or any other product or device
primarily intended for home use, whether now known or hereafter developed, which
may be used for the fixation of sound alone or sound together with visual
images.
13
7.02 It is hereby expressly agreed that, as between You, Artist and
Company, Company shall exclusively own and control all materials comprising the
artwork (including, without limitation, art, photographs, graphic designs, etc.)
and other items created or used in connection with the exploitation of
Phonograph Records hereunder (the "Art Materials"), including, without
limitation, all copyrights and the right to secure copyright throughout the
world and in perpetuity. You hereby grant to Company the perpetual, exclusive,
and worldwide right to use and/or sublicense others to use, Your name, logo, and
likeness, and, to the extent that You are able to assist Company in obtaining
same, the names, logos and likenesses of all other persons embodied in the Art
Materials, for the manufacture, sale and distribution of merchandise in non-Tour
situations ("Merchandising Uses"), including, without limitation, in connection
with t-shirts and other clothing, posters, stickers and novelties.
Notwithstanding anything to the contrary contained herein, Company agrees to
obtain Your approval (not to be unreasonably withheld) each time on a
merchandise-by-merchandise basis prior to engaging in any such Merchandising
Uses and, furthermore, agrees to use its reasonable efforts not to engage in any
exactly similar Merchandising Uses which actually conflict with the then-current
merchandising programs taking place by You or a third party authorized by You.
Furthermore, Company agrees to pay to You fifty percent (50%) of its net
receipts (as that term is currently understood in the merchandising industry) in
connection with the Merchandising Uses specifically referred to in this
paragraph 7.02, which payment will not be cross-collateralized against any other
account of Yours on the books of Company.
7.02.1 Notwithstanding the foregoing, in the event that neither Company nor
its merchandising designee has exploited the Art Materials or any other
materials for Merchandising Uses and has no current arrangement or anticipated
arrangement to do so, if You receive a bonafide third party offer with respect
to the commercial exploitation of Artist's names, logos and/or likenesses in
connection with the manufacture, sale and distribution of merchandise other than
Phonograph Records ("Merchandising Uses"), including, without limitation, in
connection with T-shirts and/or other clothing, posters, stickers and novelties,
then the following will apply:
(a) You agree that neither You nor any person or entity affiliated
with You, directly or indirectly, will enter into any agreement with any third
party with respect to such commercial exploitation unless You first:
(i) notify Company in writing ("Your Notice") of the proposed
agreement with such third party;
(ii) furnish Company with complete copies of all the instruments
constituting the proposed agreement (the "Outside
14
Proposal"); and
(iii) offer to enter into an agreement with Company on the same
terms and conditions as contained in the Outside Proposal.
(b) If Company does not accept Your offer within five (5) business
days after receipt of Your Notice ("Offer Period") You may then enter into the
agreement set forth in the Outside Proposal provided that agreement is
consummated within forty-five (45) business days after the end of the Offer
Period upon the same terms and conditions and in the same form as set forth in
the Outside Proposal. If that agreement is not so consummated within the
forty-five (45) business day period set forth above, the right of preemption
granted to Company in this paragraph 7.02.1 will be revived. Artist may not
enter into any agreement for said "Merchandising Use" (i.e., non-tour situation)
for a one year period following the expiration of the forty-five (45) day
business period.
(d) No failure by Company to accept an Outside Proposal will be deemed
to waive or otherwise affect any of Company's rights. Without limiting the
generality of the preceding sentence, Company will not be deemed bound by any
proposed waiver, consent, or other agreement required or contemplated to be made
by Company by an Outside Proposal which Company does not preempt.
8. ADVANCES.
8.01 All monies paid to You or on Your behalf or to or on behalf of any
person, firm or corporation representing You, other than royalties payable
pursuant to this Agreement, shall constitute Advances hereunder. Each payment
made by Company to anyone else on behalf of You or to or on behalf of any
person, firm or corporation representing You will also constitute an Advance if
it is made under this Agreement, if it is made with the consent of You, if it is
required by law, or if it is made by Company to satisfy an obligation incurred
by You or the Artist in connection with the subject matter of this Agreement.
8.02 (a) Conditioned upon Your full performance of all Your obligations
hereunder, Company shall pay You the following amounts, which shall constitute
Advances hereunder. With respect to each Album recorded and delivered hereunder
in fulfillment of Your Recording Commitment, the amount, if any, by which the
sum designated below as the "Recording Fund" exceeds the Recording Costs for
that Album, payable promptly after the delivery to Company of that Album or, if
later, promptly after Company's determination of the Recording Costs for that
Album:
(i) For the Album recorded during the third Option
15
Period, the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
(ii) For the Album recorded during the fourth Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
(iii) For the Album recorded during the fifth Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXXX.
(iv) For the Album recorded during the sixth Option Period, the
Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX and no more than
* XXXXXXXXXXXXXXXXXXXXX.
(v) For the Album recorded during the seventh Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
The "Formula Amount" for a particular Album recorded and Delivered hereunder
in fulfillment of Your Recording Commitment shall mean an amount equal to
sixty-six and two-thirds percent (66 2/3%) of whichever of the following
amounts is less: (A) the amount of the royalties, after the retention of
reserves, earned by You hereunder from Net Sales through Normal Retail
Channels in the United States ("USNRC Net Sales") of the immediately preceding
Album delivered hereunder in fulfillment of Your Recording Commitment; or (B)
the average of the amounts of such royalties so earned by You hereunder on the
two (2) immediately preceding Albums delivered hereunder in fulfillment of
Your Recording Commitment. In either case, the amount of royalties with
respect to any preceding Album shall be computed as of the end of the month in
which occurs the date which is twelve (12) months following the initial
commercial release in the United States of the preceding Album concerned.
Notwithstanding the foregoing, with respect to any applicable Album which is
not delivered to Company within thirty (30) days after the applicable period
provided for in paragraph 3.01 above, the Recording Fund for that Album shall
be reduced by ten percent (10%) of the otherwise applicable Recording Fund for
each month (or portion thereof) until that Album is delivered; provided,
however, that such delay is solely and directly caused by Artist's acts or
omissions. For the purpose of computing royalties with respect to the
calculation under this paragraph 8.02, and only for such purpose, a reserve
against anticipated returns and credits will not be established for any Album
during any semi-annual accounting period in excess of twenty percent (20%) of
the aggregate number of
* - Confidential portions omitted and filed separately with the Commission.
16
units of that Album shipped to Company's customers.
* (b) XXXXXXXXXXXX percent of all sums paid or incurred by Company in
connection with independent marketing and publicity, and the independent
promotion of Phonograph Records hereunder, if any, shall be deemed to
constitute Advances hereunder, provided Company shall not recoup from Your
royalties hereunder (excluding mechanical royalties) more than
* XXXXXXXXXXXXXXXXXXXX with respect to each particular Single nor more than
* XXXXXXXXXXXXXXXXXXXXXXX with respect to each particular Album.
(c) Within five (5) business days following the full execution of
* this Agreement, Company shall pay to You XXXXXXXXXXXXXXXXXXXX which payment
shall be deemed an Advance against, and shall be fully recoupable from, all
royalties (other than mechanical royalties) otherwise payable hereunder.
(d) Within five (5) days following the commencement of the First
* Option Period, if any, Company shall pay to You XXXXXXXXXXXXXXX, which payment
shall be deemed an Advance against, and shall be fully recoupable from, all
royalties (other than mechanical royalties) otherwise payable hereunder and,
furthermore, which payment shall specifically be deemed to be an Advance
against and a prepayment of any and all applicable union session payments due
and owing to Artist in connection with the recording of the Album required to
be recorded and delivered during such First Option Period.
(e) Within five (5) days following the commencement of the Second
* Option Period, if any, Company shall pay to You XXXXXXXXXXXXXXXX, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Second Option Period.
(f) Within five (5) days following the commencement of the Third
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXX of the difference between the
Approved Recording Fund for the Album required to be recorded and delivered
* during such Third Option Period and XXXXXXXXXXXXXXX of the actual Recording
Costs for the Album which was recorded and delivered during the Second Option
Period, which payment shall be deemed an Advance against, and shall be fully
recoupable from, all royalties (other than mechanical royalties) otherwise
payable hereunder and, furthermore, which payment shall specifically be deemed
to be an Advance against and a prepayment of any and all applicable union
session payments due and
* - Confidential portions omitted and filed separately with the Commission.
17
owing to Artist in connection with the recording of the Album required to be
recorded and delivered during such Third Option Period.
(g) Within five (5) days following the commencement of the Fourth
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXXX percent of the
difference between the Approved Recording Fund for the Album required to be
recorded and delivered during such Fourth Option Period and
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX percent of the actual Recording Costs for the
Album which was recorded and delivered during the Third Option Period, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Fourth Option Period.
(h) Within five (5) days following the commencement of the Fifth
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXX percent of the
difference between the Approved Recording Fund for the Album required to be
recorded and delivered during such Fifth Option Period and
* XXXXXXXXXXXXXXXXXXXXXXXXXX percent of the actual Recording Costs for the Album
which was recorded and delivered during the Fourth Option Period, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Fifth Option Period.
(i) Within five (5) days following the commencement of the Sixth
Option Period, if any, Company shall pay to You the greater of
* (i)XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
percent of the difference between the Approved Recording Fund for the Album
required to be recorded and delivered during such Sixth Option Period
* XXXXXXXXXXXXXXX percent of the actual Recording Costs for the Album which was
recorded and delivered during the Fifth Option Period, which payment shall be
deemed an Advance against, and shall be fully recoupable from, all royalties
(other than mechanical royalties) otherwise payable hereunder and,
furthermore, which payment shall specifically be deemed to be an Advance
against and a prepayment of any and all applicable union session payments due
and owing to Artist in connection with the recording of the Album required to
be recorded and delivered during such Sixth Option Period.
* - Confidential portions omitted and filed separately with the Commission.
18
(j) Within five (5) days following the commencement of the Seventh
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXX or (ii) XXXXXXXXXXX percent of the difference between the
Approved Recording Fund for the Album required to be recorded and delivered
* during such Seventh Option Period and XXXXXXXXXXXXXXXX percent of the actual
Recording Costs for the Album which was recorded and delivered during the
Sixth Option Period, which payment shall be deemed an Advance against, and
shall be fully recoupable from, all royalties (other than mechanical
royalties) otherwise payable hereunder and, furthermore, which payment shall
specifically be deemed to be an Advance against and a prepayment of any and
all applicable union session payments due and owing to Artist in connection
with the recording of the Album required to be recorded and delivered during
such Seventh Option Period.
9. ROYALTIES.
9.01 Company will pay You an "all-in" royalty, during the term of
copyright in the country concerned of Masters embodied in Phonograph Records
delivered hereunder computed at the applicable percentage indicated in the
Royalty Schedule below, of the applicable Royalty Base Price in respect of Net
Sales of such Phonograph Records (other than Audiovisual Records) consisting
entirely of Master Recordings recorded under this Agreement during the
respective Contract Periods specified below and sold by Company or Company's
licensees through Normal Retail Channels:
ROYALTY SCHEDULE
------------------------------------------------------------------------------
UNITED STATES
-------------
Master Recordings Long-Play
made during the: Albums Singles Singles
------------------------------------------------------------------------------
* Initial Period XXX XXX XXX
First Option
* Period, if any XXX XXX XXX
Second Option
* Period, if any XXX XXX XXX
Third Option
* Period, if any XXX XXX XXX
Fourth Option
* Period, if any XXX XXX XXX
Fifth Option
* Period, if any XXX XXX XXX
* - Confidential portions omitted and filed separately with the Commission.
19
Sixth Option
* Period, if any XXX XXX XXX
Seventh Option
* Period, if any XXX XXX XXX
FOREIGN
-------
Territory All Records
------------------------------------------------------------------------------
* Canada, U.K. XXXX percent of the otherwise applicable
rate set forth in the United States
Royalty Schedule above in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
* Germany, Italy, France, Japan XXXX percent of the otherwise applicable
rate set forth above in the United
States Royalty Schedule in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
* Rest of World XXXX percent of the otherwise applicable
rate set forth above in the United
States Royalty Schedule in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
The royalty rates set forth in this paragraph 9.01 are sometimes referred
to herein as Your "basic royalty rate(s)".
9.02 Notwithstanding anything to the contrary contained in the Royalty
Schedule hereinabove, and with respect to each Album Delivered in fulfillment
of Your Recording Commitment hereunder, the royalty rate applicable to USNRC
Net Sales of top-line Albums pursuant to the terms hereof shall be the royalty
rate specified in the Royalty Escalation Schedule below.
* - Confidential portions omitted and filed separately with the Commission.
20
ROYALTY ESCALATION SCHEDULE
Album Net Sales in the United States of top-line
recorded: Albums (determined in accordance with Company's
standard accounting procedures).
* LPs XXX XXX XXX XXX XXX
------
* 1 XXX XXX XXX XXX XXX
* 2 XXX XXX XXX XXX XXX
* 3 XXX XXX XXX XXX XXX
* 4 XXX XXX XXX XXX XXX
* 5 XXX XXX XXX XXX XXX
* 6 XXX XXX XXX XXX XXX
* 7 XXX XXX XXX XXX XXX
The Contract Period royalty increase provisions applicable to Master
Recordings made after the Initial Period and the royalty escalations set forth
in paragraph 9.02 above will not apply to any Recording not Delivered within
the time prescribed for its Delivery in paragraph 3.01 above.
9.03 (a) The royalty rate on Phonograph Records sold through so-called
* "record clubs" shall be XXXXXX of the otherwise applicable royalty rate if
* manufactured and sold by Company, and an amount equal to XXXXXX of the Net
Royalty from the sale of those Phonograph Records if manufactured and sold by
Company's licensees.
(b) If, pursuant to Company's agreement with any record club
licensee distributing Records hereunder through a direct mail or mail order
operation ("Club Agreement") (1) the aggregate number of our Records
(including Records hereunder) distributed thereunder during any particular
period of time as "free" or "bonus" records shall exceed the aggregate number
of our Records (including Records hereunder) sold thereunder during that
period (hereinafter such excess Records are referred to as "Excess Club
Records"); and (2) the number of Records hereunder distributed thereunder
during that time period by such licensee as "free" or "bonus" Records shall
exceed the number of records hereunder sold during that time period by such
licensee (hereinafter such excess Records are referred to as "Excess Club
Artist Records") then Company shall credit Your royalty account hereunder with
a portion of the adjusting royalty payment, if any, made by such licensee to
Company in respect of the Excess Club Records distributed by that licensee
during that time period, which portion shall be determined by multiplying
fifty percent (50%) which shall be the aggregate number of Excess Club Artist
Records distributed by that licensee during that time period and the
denominator of which shall be the Aggregate Qualifying Excess Club Records (as
defined in the following sentence), including Excess
* - Confidential portions omitted and filed separately with the Commission.
21
Club Artist Records, distributed by that licensee during that time period. As
used in the preceding sentence, "Aggregate Qualifying Excess Club Records"
shall mean the aggregate number of "free" or "bonus" records in the excess of
records sold with respect to each artist signed to Company (or other royalty
participant) whose "free" or "bonus" records distributed pursuant to a Club
Agreement exceed the number of their records which are sold thereunder during
the applicable time period.
9.04 In respect of any Master Recording leased by Company to others
for their distribution of Phonograph Records in the United States, Company
* will pay You XXXXX of Company's net receipts from Company's licensee. ("Net
receipts", in the preceding sentence, means receipts as computed after
deduction of all copyright, AFM and other applicable third party payments.) If
another artist, a producer, or any other Person is entitled to royalties on
sales of such Records, that payment will be divided among You in the same
ratio as that among Your respective basic royalty percentage rates.
9.05 (a) The royalty rate on any Budget Record, soundtrack Record,
any Multiple Record Set or any "picture disc" (i.e., a disc Record with
* artwork reproduced on the surface of the Record itself) will be XXXXXXXXXXX of
the applicable basic royalty rate prescribed in paragraph 9.01. The royalty
rate on any Mid-Priced Record and any Record sold for distribution through
* military exchange channels will be XXXXXXXXXXXXXXXXXXXXX of the applicable
basic royalty rate prescribed in paragraph 9.01. The royalty rate on any
Record which is not an Album, Single or a Long-Play Single will be
* XXXXXXXXXXXXXXXXX of the applicable basic Album royalty rate prescribed in
paragraph 9.01. The royalty rate on any compact disc Record will be
* XXXXXXXXXXXXXXXXXXXXXX of the rate which would otherwise be applicable under
this Agreement. The royalty rate on any digital compact cassette ("DCC") or
* any Mini-disc Record will be XXXXXXXXXXX percent of the rate which would
otherwise be applicable under this Agreement. The royalty rate for any Record
* in a New Configuration will be XXXXXXXXXX the rate which would otherwise be
applicable hereunder. The provisions set forth in the immediately preceding
sentence shall apply until fifteen (15) months following the initial release
of any Master delivered hereunder as embodied on such New Configuration.
Thereafter, the royalty for Records sold in the form of New Configuration
shall be negotiated in good faith by the parties, taking into account, among
other things, the then-prevailing industry standards. Notwithstanding anything
to the contrary contained herein, Company shall have the right to release,
distribute and sell such Records prior to the completion of such negotiations,
and to accrue royalties to Your account hereunder at the royalty rate set
forth herein. Notwithstanding anything to the contrary in the immediately two
(2) preceding sentences, in the event Company adopts a general policy
applicable to the majority of new artists signed exclusively to Company which
provides for a royalty rate reduction with respect to records in compact disc
or
* - Confidential portions omitted and filed separately with the Commission.
22
DCC or Mini-disc configuration more favorable to such new artist than the
royalty rate reduction provided herein, You shall receive the benefit of such
general policy, on a prospective basis only.
* (b) The royalty rate on a Multiple Album will be XXXXXXXXXXX of the
applicable basic Album royalty rate prescribed in paragraph 9.01, if the
Royalty Base Price of that Album is the same as the Royalty Base Price
applicable to the top-line single-disc Conventional Albums marketed by Company
or its Licensee in the territory where the Album is sold at the beginning of
the royalty accounting period concerned. If a different Royalty Base Price
applies to a Multiple Album, the royalty rate prescribed in the preceding
sentence will be adjusted in proportion to the variance in the Royalty Base
Price (but will not be more than the applicable Album royalty rate prescribed
in paragraph 9.01). That adjustment of the royalty rate will be made by using
the following formula:
(X divided by Y) multiplied by Z = adjusted royalty rate.
(Subject to the parenthetical limit in the second
sentence of this subparagraph.)
("X" represents the Royalty Base Price for the Multiple Album concerned; "Y"
represents the Royalty Base Price for such top-line single-disc Records in the
Multiple Album multiplied by the number of disc Records in the Multiple Album
concerned; and "Z" equals the otherwise applicable basic royalty rate.)
9.06 (a) Except as otherwise specifically set forth herein, on Masters
licensed by Company on a flat-fee or a royalty basis for the sale of
Phonograph Records or for any other uses, the royalty rate shall be an amount
* equal to XXXXXXXXXXXX of the Net Flat Fee or Net Royalty, as applicable, from
such exploitation of the Masters.
(b) To the extent permissible at law, You hereby assign to Company
all right, title and interest in and to any and all royalties or other
payments to which You are or may become entitled to receive (herein "Your
Share") under the Audio Home Recording Act of 1992, as it may be amended (the
"Act"), or any implementing or similar legislation requiring the payment of
copyright royalties in connection with the sale of recording devices or blank
tapes or any other recordable device (e.g., digital audio tape, DCC). Upon
receipt by Company of such royalties or payments, Company shall credit Your
royalty account with one hundred percent (100%) of Your Share of such
royalties or payments received. In order to effectuate the foregoing, You
shall execute and deliver to Company a letter of direction address to the
Register of Copyrights of the U.S. Copyright Office and You agree to execute
and deliver to Company any other document or documents as may be reasonably
necessary to cause the payment to Company of Your Share of such royalties or
payments. It is expressly understood and agreed that
* - Confidential portions omitted and filed separately with the Commission.
23
except as provided above in this paragraph 9.06(b), Company shall be entitled
to retain for its own use and benefit any royalties or payments received by
Company pursuant to the Act.
9.07 Audiovisual Royalties shall be computed on the Audiovisual Records
Royalty Base Price; otherwise, in accordance with the provisions of this
Agreement applicable to Conventional Albums and: If manufactured and sold by
* Company, XXXXXXXXXXXX on U.S. sales, XXXXXXXX ex-U.S. If manufactured and sold
by Licensees (in the U.S. or elsewhere), and on Audiovisual Recordings
licensed or otherwise furnished by Company for exploitation other than on
* Audiovisual Records, XXXXXXXXXXXX of Net Receipts. Audiovisual royalties (and
receipts payments) are "all-in" (inclusive of, without limitation, payments to
publishers).
9.08 Notwithstanding anything to the contrary contained in this
Article 9:
(a) In respect of Joint Recordings, the royalty rate to be used in
determining the royalties payable to You shall be computed by multiplying the
royalty rate otherwise applicable by a fraction, the numerator of which shall
be one (1) and the denominator of which shall be the total number of royalty
artists whose performances are embodied on a Joint Recording. The term "Joint
Recording" shall mean any Master Recording embodying the Artist's performances
and any performances by another artist with respect to which Company is
obligated to pay royalties. There shall not be any Joint Recordings without
Your approval.
(b) The royalty rate on a Phonograph Record embodying Master
Recordings made hereunder together with other Master Recordings will be
computed by multiplying the royalty rate otherwise applicable by a fraction,
the numerator of which is the number of Selections embodying Master Recordings
made hereunder and contained on the particular record concerned and the
denominator of which is the total number of Selections contained on such
Record. The royalty rate on an Audiovisual Record containing Audiovisual
Recordings made hereunder and other audiovisual works will be determined by
apportionment based upon actual playing time on the Record concerned.
(c) No royalties shall be payable to You in respect of Phonograph
Records sold or distributed (with the intention that such recipient will not
resell same) by Company or Company's licensees for promotional purposes, as
cut-outs, at close-out prices, for scrap, at less than inventory cost or at
fifty percent (50%) or less of the Record's highest posted wholesale price
(whether or not intended for resale), as "free", "no charge" or "bonus"
Records (whether or not intended for resale), to Company's employees or
* - Confidential portions omitted and filed separately with the Commission.
24
those of Company's licensees and their relatives, or to radio stations.
(d) If records derived from the Masters are sold to distributors or
others (with the intention that such recipient will resell same) for less than
Company's highest posted wholesale price, or at a discount therefrom, but for
more than fifty percent (50%) of such wholesale price, then, for purposes of
this paragraph, a percentage of such records shall be deemed non-royalty bearing
records, which percentage shall be an amount equal to the percentage of such
lesser amount or the applicable discount.
(e) Company may elect from time to time to compute and pay You
royalties hereunder on a royalty base different than the Royalty Base Price
provided herein, as long as such computation does not materially affect the net
amount of royalties otherwise payable to You at that time hereunder.
(f) If legislation requiring the payment of copyright royalties for
the public performance of Phonograph Records is enacted or is currently in
existence in any country and Company or its affiliate in the country concerned
receives such royalties solely attributable to Master Recordings produced
hereunder, and performing artists are not entitled to receive similar royalties
in such country from a collection society or other Person other than Company or
its affiliates, then with respect to performances in the United States, Company
shall accrue to Artist's royalty account hereunder that portion of such
royalties as is required by Company's collective bargaining agreement with the
American Federation of Musicians or the American Federation of Television and
Radio Artists, as applicable, and with respect to performances outside the
United States, as required by law. If no such agreement and/or law applies,
Company shall pay an amount equal to fifty percent (50%) of the net amounts
directly allocable to the Master Recordings produced hereunder so received by
Company less all payments to third parties (and Artist shall be responsible in
any event for all required payments to producers or other parties engaged by
Artist in connection with recording of the Master Recordings hereunder).
10. ROYALTY PAYMENTS AND ACCOUNTINGS.
10.01 Company shall send to You statements for royalties payable hereunder
on or before October 1st for the semi-annual period ending the preceding June
30th and on or before April 1st for the semi-annual period ending the preceding
December 31st, together with payment of royalties, if any, earned by You
hereunder during the semi-annual period for which the statement is rendered,
less all Advances and other charges under this Agreement. Company shall have the
right to retain, as a reserve against charges, credits, or returns, such portion
of payable royalties as shall be reasonable in Company's best business judgment.
With respect to Albums sold
25
hereunder, Company's reserve shall not exceed thirty-five percent (35%) of the
number of such records shipped. With respect to Singles sold hereunder,
Company's reserve shall not exceed fifty percent (50%) of the number of such
records shipped, unless Company reasonably believes a particular release
justifies a higher reserve. Reserves shall be fully liquidated no later than the
end of the fourth full accounting period following the period in which such
reserve was initially established. Records returned will be apportioned between
royalty-free records and records on which royalties are payable in the same
proportion as such records were shipped to customers. You shall reimburse
Company on demand for any overpayments, and Company may also deduct the amount
thereof from any monies payable (other than mechanical royalties) to You
hereunder or under any other agreement between You and Company or Company's
affiliates. Royalties paid by Company on Phonograph Records subsequently
returned shall be deemed overpayments.
10.02 No royalties shall be payable to You on sales of Phonograph Records
by any of Company's licensees or distributors until payment on those sales has
been received by Company in the United States. Sales by a licensee or
distributor shall be deemed to have occurred in the semi-annual accounting
period during which that licensee or distributor shall have rendered to Company
accounting statements and payments for those sales.
10.03 (a) Royalties on Phonograph Record sales outside of the United States
shall be computed in the national currency in which Company's licensees pay to
Company, shall be credited to Your royalty account hereunder at the same rate of
exchange at which Company's licensees pay to Company, and shall be
proportionately subject to any withholding or comparable taxes which may be
imposed upon Company's receipts.
(b) If Company shall not receive payment in United States dollars in
the United States for any sales of Phonograph Records outside of the United
States, royalties on those sales shall not be credited to Your royalty account
hereunder. Company shall, however, at Your written request and if Company is
reasonably able to do so, accept payment for those sales in foreign currency and
shall deposit in a foreign bank or other depository, at Your expense, in that
foreign currency, that portion thereof, if any, as shall equal the royalties
which would have been payable to You hereunder on those sales had payment for
those sales been made to Company in United States dollars in the United States.
Deposit as aforesaid shall fulfill Company's royalty obligations hereunder as to
those sales. If any law, ruling or other governmental restriction limits the
amount a licensee can remit to Company, Company may reduce Your royalties
hereunder by an amount proportionate to the reduction in Company's licensee's
remittance to Company.
10.04 (a) Company will maintain books and records which
26
report the sales of Phonograph Records, on which royalties are payable to You.
You may, but not more than once a year, at Your own expense, examine those books
and records, as provided in this paragraph 10.04 only. You may make those
examinations only for the purpose of verifying the accuracy of the statements
sent to You under paragraph 10.01. All such examinations shall be in accordance
with GAAP procedures and regulations. You may make such an examination for a
particular statement only once, and only within three (3) years after the date
when Company sends You that statement under paragraph 10.01. You may make such
an examination only during Company's usual business hours, and at the place
where Company keeps the books and records to be examined. If You wish to make an
examination You will be required to notify Company at least thirty (30) days
before the date when You plan to begin it. Company may postpone the commencement
of Your examination by notice given to You not later than five (5) business days
before the commencement date specified in Your notice; if Company does so, the
running of the time within which the examination may be made (and any action
brought thereon) will be suspended during the postponement. If Your examination
has not been completed within six (6) weeks from the time You begin it (unless
such delay is primarily due to the acts or omissions of Company), Company may
require You to terminate it on seven (7) business days notice to You at any
time; Company will not be required to permit You to continue the examination
after the end of that seven (7) business day period. You will not be entitled to
examine any manufacturing records or any other records that do not specifically
report sales or other distributions of Phonograph Records on which royalties are
payable to You. You may appoint a certified public accountant to make such an
examination for You, but not if (s)he or his/her firm has begun an examination
of Company's books and records for any Person except You unless the examination
has been concluded and any applicable audit issues have been resolved. Such
certified public accountant will act only under a Letter of Confidentiality
which provides that any information derived from such audit or examination will
not be knowingly released, divulged or published to any person, firm or
corporation, other than to You or to a judicial or administrative body in
connection with any proceeding relating to this Agreement.
(b) Notwithstanding the penultimate sentence of paragraph 10.04(a), if
Company notifies You that the representative designated by You to conduct an
examination of Company's books and records under paragraph 10.04(a) is engaged
in an examination on behalf of another Person ("Other Examination"), You may
nevertheless have Your examination conducted by Your designee, and the running
of the time within which such examination may be made shall be suspended until
Your designee has completed the Other Examination, subject to the following
conditions:
(1) You shall notify Company of Your election to that effect
within fifteen (15) days after the date of Company's
27
said notice to You;
(2) Your designee shall proceed in a reasonably continuous and
expeditious manner to complete the Other Examination and render the final report
thereon to the client and Company; and
(3) Your examination shall not be commenced by Your designee
before the delivery to Company of the final report on the Other Examination,
shall be commenced within thirty (30) days thereafter, and shall be conducted in
a reasonably continuous manner.
(The preceding provisions of this paragraph 10.04(b) will not apply if Company
elects to waive the provisions of the penultimate sentence of paragraph 10.04(a)
which require that Your representative shall not be engaged in any Other
Examination.)
10.05 If You have any objections to a royalty statement, You will give
Company specific notice of that objection and Your reasons for it within three
(3) years after the date when Company sends You that statement under paragraph
10.01. Each royalty statement will become conclusively binding on You at the end
of that three (3) year period, and You will no longer have any right to make any
other objections to it. You will not have the right to xxx Company in connection
with any royalty accounting, or to xxx Company for royalties on Records sold
during the period a royalty accounting covers, unless You commence the suit
within that three (3) years period. If You commence suit on any controversy or
claim concerning royalty accountings rendered to You under this agreement in a
court of competent jurisdiction (as provided in paragraph 23.09 below), the
scope of the proceeding will be limited to determination of the amount of the
royalties due for the accounting periods concerned, and the court will have no
authority to consider any other issues or award any relief except recovery of
any royalties found owing. Your recovery of any such royalties will be the sole
remedy available to You or the Artist by reason of any claim related to
Company's royalty accountings. Without limiting the generality of the preceding
sentence, neither You nor the Artist will have any right to seek termination of
this Agreement or avoid the performance of Your obligations under it by reason
of any such claim.
10.06 Company shall have the right to deduct from any amounts (other than
mechanical royalties) payable to You hereunder that portion thereof as may be
required to be deducted under any statute, regulation, treaty or other law, or
under any union or guild agreement, and You shall promptly execute and deliver
to Company any forms or other documents as may be required in connection
therewith.
10.07 Each payment made by Company to You or the Artist under this
Agreement, other than union scale payments under Article
28
5 hereof, shall, at Company's election, be made by a single check payable to
Xxxx Xxxx. All payments herein are contingent upon Company receiving properly
completed W-9 and/or 1001 IRS tax forms, as applicable.
11. MUSICAL COMPOSITION LICENSES.
11.01 You hereby grant to Company and Company's designees an irrevocable
non-exclusive license, under copyright, to reproduce each Controlled
Composition on Phonograph Records and to distribute those Phonograph Records
in the United States and Canada.
11.02 Mechanical royalties shall be payable for each Controlled
Composition on Net Sales of Phonograph Records and at the following rates:
(a) On Phonograph Records sold in the United States, the rate (the
"United States Mechanical Rate") for each Controlled Composition embodied
* thereon shall be equal to XXXXXXXXXXX percent of the minimum statutory royalty
rate (without regard to playing time) provided for in the United States
Copyright Act which is applicable to the reproduction of Musical Compositions
as of the date of the United States release of the first Master hereunder
embodying the Controlled Composition in question, or, if earlier, as of the
date that is sixty (60) days prior to the date upon which that first Master
was required to be delivered hereunder.
(b) On Phonograph Records sold in Canada, the rate (the "Canadian
Mechanical Rate") for each Controlled Composition embodied thereon shall be
* equal to XXXXXXXXXXX percent of the prevailing rate agreed upon by the
Canadian recording industry and the Canadian music publishing industry or its
mechanical collection representative which is applicable to the reproduction
of Musical Compositions as of the date of the Canadian release of the first
Master hereunder embodying the Controlled Composition in question or, if
earlier, as of the date that is sixty (60) days prior to the date upon which
that first Master was required to be delivered hereunder; provided, however,
in no event shall the Canadian Mechanical Rate be greater than the applicable
United States Mechanical Rate.
11.03 Notwithstanding the foregoing:
(a) The mechanical royalty rate for a Controlled Composition
* contained on a Mid-Priced Record or a Budget Record shall be XXXXXXXXXXXXXX of
the United States Mechanical Rate or the Canadian Mechanical Rate, as
applicable. The mechanical royalty rate on a Controlled Composition which is a
* copyrighted arrangement of a public domain work shall be XXXXXXXXXX of the
United States Mechanical Rate or the Canadian Mechanical Rate, as applicable.
No mechanical royalties shall be payable on any Phonograph Records for
* - Confidential portions omitted and filed separately with the Commission.
29
which no royalties are payable pursuant to Article 9 above. No mechanical
royalties shall be payable on any Controlled Composition having a playing time
of less than ninety (90) seconds.
(b) The maximum aggregate mechanical royalty rate for all Selections,
including Controlled Compositions, contained on a Phonograph Record for sales in
the United States or Canada shall be the product of (1): the United States
Mechanical Rate or the Canadian Mechanical Rate, as applicable, for the first
Master recorded in connection with the particular Album or EP project concerned
and (2): ten (10) for Albums (containing one (1) or more discs or the tape
equivalent), four (4) for EPs, and two (2) for Singles and Long-Play Singles,
regardless of the number of Selections contained thereon, unless that above
referenced 'limitations' are exceeded solely on account of Company's request. If
the aggregate mechanical royalty rate applicable to all of the Selections
embodied on any Phonograph Record hereunder shall exceed the applicable maximum
aggregate royalty rate set forth above for that Phonograph Record, then the
aggregate mechanical royalty rate for the Controlled Compositions, if any,
contained thereon shall be reduced by an amount equal to such excess. If the
aggregate mechanical royalty rate applicable to all of the Selections embodied
on that Phonograph Record shall, even as reduced in accordance with the
immediately preceding sentence, still exceed the applicable maximum aggregate
mechanical royalty rate for that Phonograph Record, then You shall, upon
Company's demand, pay Company an amount equal to the additional mechanical
royalties payable as a result of that excess and Company may, in addition to all
of Company's other rights or remedies, deduct that amount from any monies
payable (other than mechanical royalties) by Company hereunder or under any
other agreement between You and Company or Company's affiliates.
11.04 Company will compute Mechanical Royalties on Controlled Compositions
as of the end of each calendar quarter-annual period in which there are sales or
returns of Records on which mechanical royalties are payable to You. On the next
May 15th, August 15th, November 15th, or February 15th, Company will send a
statement covering those royalties and will pay any net royalties which are due.
Mechanical Royalty reserves maintained against anticipated returns and credits
will not be held for an unreasonable period of time; retention of a reserve for
two (2) years after it is established will not be considered unreasonable in any
case; provided, if the reserve policy with respect to mechanicals changes in
connection with a majority of our similarly situated artists, then You will be
similarly treated. If any overpayment of mechanical royalties is made to any
Person You will reimburse Company for it; Company may also recoup it from any
payments due or becoming due to You. If Company pays any mechanical royalties on
Records which are returned later, those royalties will be considered
overpayments. If the total amount of the mechanical royalties which Company pays
on any Record consisting of Master
30
Recordings made under this agreement (including mechanical royalties for
Compositions which are not Controlled Compositions) is higher than the limit
fixed for that Record under subparagraph 11.03(b), that excess amount will be
considered an overpayment also. Paragraphs 10.04 and 10.05 will apply to
mechanical royalty accountings.
11.05 You shall, upon Company's request, use Your best efforts to cause the
issuance to Company and Company's designees of mechanical licenses to reproduce
on Phonograph Records Selections which are not Controlled Compositions and to
distribute those Phonograph Records in the United States and Canada. Those
mechanical licenses shall be at rates and on terms no less favorable to Company
and Company's designees than those contained in the standard mechanical license
issued by the Xxxxx Xxx Agency, Inc. or any successor with respect to Phonograph
Records distributed in the United States and by CMRRA or any successor with
respect to Phonograph Records distributed in Canada; provided, however, in no
event shall those rates exceed one hundred percent (100%) of the applicable
minimum statutory rates set forth in paragraph 11.02 above. You shall also, upon
Company's request, use Your best efforts to cause the issuance to Company and
Company's designees of mechanical licenses to reproduce Selections on Phonograph
Records hereunder and to distribute those Phonograph Records outside the United
States and Canada on terms no less favorable to Company and Company's designees
than those generally applicable to Phonograph Record manufacturers in each
country in question. The obligation to account and pay mechanical royalties on
sales of Phonograph Records outside of the United States shall be that of
Company's licensees.
11.06 If the copyright in any Controlled Composition is owned or controlled
by a person, firm or corporation other than You, You shall use Your best efforts
to cause that person, firm or corporation to grant to Company and Company's
designees the same rights as You are required to grant to Company and Company's
designees pursuant to this paragraph.
11.07 You hereby grant to Company and Company's designees at no fee,
royalty, or other cost to Company or Company's designees, the irrevocable,
non-exclusive, worldwide right to reproduce and publicly perform each Controlled
Composition on Audiovisual Recordings, to distribute Audiovisual Records
embodying those Audiovisual Recordings, and to otherwise exploit in any manner
and through any media those Audiovisual Recordings. You shall, upon Company's
request, cause the issuance to Company and Company's designees, at no fee,
royalty, or other cost to Company or Company's designees, the irrevocable,
non-exclusive, worldwide right to reproduce and publicly perform each Selection
which is not a Controlled Composition on Audiovisual Recordings and to
distribute Audiovisual Records embodying those Audiovisual Recordings, and to
otherwise exploit in any manner or media those Audiovisual
31
Recordings. If Company or Company's designees shall pay any such fee, royalty,
or other cost, You shall, upon Company's demand, pay Company the amount thereof,
and Company may, in addition to all of Company's other rights and remedies,
deduct that amount from any monies payable (other than mechanical royalties) by
Company hereunder or under any other agreement between You and Company or
Company's affiliates. Without limiting the generality of the foregoing, it is
understood and agreed that Company's rights under this paragraph 11.07 include
the right to reproduce and publicly perform, at no fee, royalty or other cost to
Company or Company's designees, Controlled Compositions and Non-Controlled
Compositions in television and/or radio commercials advertising Phonograph
Records made hereunder.
11.08 Any assignment, license or other agreement made with respect to
Controlled Compositions shall be subject to the terms hereof.
12. AUDIOVISUAL RECORDINGS.
12.01 (a) Upon Company's reasonable request, You shall cooperate with
Company and perform to the best of Your ability for the making of Audiovisual
Recordings, in accordance with all applicable labor unions and guilds. You and
Company shall mutually designate the following "Audiovisual Production
Elements": Musical Compositions, personnel (including producer and director),
storyboard, script, locations and production dates. Company shall pay all costs
incurred in connection with the production of Audiovisual Recordings within the
written budget approved by Company in writing. To the extent permissible, You
hereby waive any right to be paid union scale payments in connection with
Audiovisual Recordings. All costs incurred in connection with the production of
Audiovisual Recordings shall be recoupable from royalties payable to You from
the exploitation of Audiovisual Recordings; one-half (1/2) of such costs (not to
exceed sixty thousand dollars ($60,000.00 for each audiovisual recording) shall
be recoupable from royalties payable (other than mechanical royalties) to You in
connection with the exploitation of audio-only Master Recordings.
(b) Company shall be the sole owner of all worldwide rights in and to
each Audiovisual Recording, including the worldwide copyrights therein and
thereto. Without limiting the foregoing, it is agreed that Company's right to
use Your name and information in the Audiovisual Recordings is set forth in
Paragraphs 6 and 7, and the terms "Master Recordings" and "Phonograph Records"
shall include Audiovisual Recordings and Audiovisual Records, respectively.
13. WARRANTIES, REPRESENTATIONS AND COVENANTS.
You hereby warrant, represent and covenant that:
32
13.01 You have the right, power and capacity to enter into this Agreement,
to grant the rights granted by You to Company hereunder, and to perform all of
the terms hereof. You have not done nor shall You do anything to impair
Company's rights hereunder.
13.02 During the Term You shall be a member in good standing of any union
or guilds requiring such membership. All recording sessions shall be conducted
in all respects in accordance with the terms of the AFM Phonograph Record Labor
Agreement, the AFTRA Code for the Phonograph Industry and any other applicable
union or guild agreements.
13.03 (a) Your name, masters, Selections embodied on masters and/or
materials supplied to Company by You hereunder will not violate the legal rights
of any party, including, without limitation, any contractual rights, copyrights,
rights of publicity/privacy or trademark/tradenames.
(b) You are the sole owner of the professional name "Xxxx Xxxx". Only
Company will have the right to use such name in connection with Records during
the Term.
13.04 All existing recordings of Your performances have been commercially
released in the Territory on Phonograph Records.
13.05 Except as specifically provided herein, Company shall have no
obligation to pay any party in connection with the exercise of any of Company's
rights hereunder (including, without limitation, Company's rights with respect
to the recording or exploitation of Master Recordings).
14. RECORDING RESTRICTIONS.
14.01 During the Term, You shall not enter into any agreement or make any
commitment which would interfere with Your performance of any of the terms
hereof nor shall the Artist perform for or render services in connection with
the recording of any Master Recordings for any person, firm, or corporation
other than Company. After the expiration or termination of the Term, You shall
not, prior to the later of the following dates, perform for any person, firm or
corporation other than us, for the purpose of making Phonograph Records or
Master Recordings, any Selection which shall have been recorded hereunder or
under any other agreement between You and Company or Company's affiliates: (a)
the date five (5) years subsequent to the date on which that Selection shall
have been last delivered to Company in a Master Recording recorded hereunder, or
(b) the date three (3) years subsequent to the expiration or termination of the
Term (the later date in respect of any Selection being hereinafter sometimes
referred to as the "Restriction Date").
33
14.02 You shall not at any time manufacture, distribute, sell or authorize
the manufacture, distribution, or sale by any Person besides Company of
Phonograph Records embodying a performance rendered by You during the Term. You
shall not record or permit the recording of any such performance without taking
reasonable measures to prevent the manufacture, distribution, or sale at any
time by any Person besides Company of Phonograph Records embodying that
performance.
14.03 (a) During the Term, the Artist will not render any musical
performances (audiovisual or otherwise) for the purposes of making any motion
picture or other audiovisual work ("Picture", below) for any person, firm or
corporation other than us, and no other person, firm or corporation other than
Company will be authorized to produce, distribute, exhibit, or otherwise exploit
any Picture which contains any musical performance (audiovisual or otherwise) by
the Artist, without an express written agreement providing that:
(1) the Picture concerned will not contain performances by the
Artist of more than four (4) Musical Compositions, in whole or in part; and
(2) not more than one-half (1/2) of any version of the Picture
may consist of featured musical performances (defined below) by the Artist or
anyone else.
(b) "Featured musical performance", in this paragraph, means:
(1) any visual performance of a Musical Composition; and
(2) any background performance of a Musical Composition which is
intended as a focus of audience attention, whether or not the visual matter is
related dramatically to the lyrics or concept of the Musical Composition.
14.04 Artist may perform as a background musician ("sideman") accompanying
a featured artist for the purpose of making Phonograph Records for others,
provided:
(a) You have then fulfilled all of Your material obligations under
this Agreement, and the engagement does not interfere with the continuing prompt
performance of Your obligations to Company.
(b) (1) Artist will not render a solo or "step-out" performance, and
(2) The musical style of the recording will not be
34
substantially similar to the characteristic musical style of Recordings made by
Artist for Company.
(c) Artist will not record any material which Artist has then recorded
for Company, and will not agree to be restricted from recording the same
material for Company.
(d) Artist will not accept the sideman engagement unless the Person
for whom the recordings are being made agrees in writing, for Company's benefit,
that:
(1) Artist's name may be used in a courtesy credit
to Imprint Records on the Album liners used for such Records, in the same
position as the credits accorded to other sidemen and in type identical in size,
prominence and all other respects; and
(2) Except as expressly provided in section =14.04(d)(1) above,
neither Artist's name (or any similar name), nor any picture, portrait or
likeness of Artist will be used in connection with such Recordings, including,
without limitation, on the front covers of Album containers, on sleeves or
labels used for Singles, or in videos, advertising, publicity or any other form
of promotion or exploitation, without Company's express written consent, which
Company may withhold in its unrestricted discretion.
(e) Before Artist accepts the sideman engagement You will notify
Company of the name of the Person for whom the recordings are being made and the
record company which will have the right to distribute the Records. Your notice
will be addressed to Company's Vice President, Business Affairs.
14.05 Artist may serve as a producer for the purpose of making Phonograph
Records for others, provided:
(a) You have then fulfilled all of Your material obligations under
this Agreement, and the engagement does not interfere with the continuing prompt
performance of Your obligations to Company; and
(b) Artist will not produce recordings of any material which Artist
has then recorded for Company, and will not agree to be restricted from
recording the same material for Company if Artist is a writer or co-writer of
such material; and
(c) Artist will not accept the producing engagement unless the Person
for whom the recordings are being produced agrees in writing, for Company's
benefit, that:
(1) Artist's name may be used in advertising, label and packaging
credits comparable in size, prominence and placement to the credits generally
accorded to record producers; and
35
(2) Except as expressly provided in section 14.05(c)(1) above,
neither Artist's name (or any similar name), nor any picture, portrait or
likeness of Artist, will be used in connection with such Recordings, including,
without limitation, on the front of any Record package or in any advertising,
publicity or any other form of promotion or exploitation without Company's
express written consent, which Company may withhold in its unrestricted
discretion.
(d) Before Artist accepts the producing engagement You will notify
Company of the name of the Person for whom the recordings are being made and the
record company which will have the right to distribute the Records; provided
Your inadvertent failure to so notify Company shall not be deemed a breach of
this agreement. Upon notice from Company, You shall cure such failure on a
prospective basis.
15. Intentionally Deleted.
16. UNIQUE SERVICES.
16.01 You expressly acknowledge that Your and the Artist's services
hereunder are of a special, unique, intellectual, and extraordinary character
which gives them peculiar value, and that in the event of a breach by You or the
Artist of any term hereof, Company will be caused irreparable injury which
cannot adequately be compensated by money damages. Accordingly, Company shall be
entitled to injunctive relief, in addition to any other rights or remedies which
Company may have, to enforce the terms of this Agreement.
16.02 You acknowledge that Your failure to timely complete Your Delivery
obligation will jeopardize Company's investment in the Artist in that it may
adversely affect Artist's career and appearance in the public eye and will have
an adverse impact upon Company's ability to properly market and promote records
embodying Artist's performances and to build Artist's career. You further
acknowledge that Company relies upon timely Delivery in order to establish its
release schedule and marketing and promotional policies; that failure to timely
Deliver adversely affects Company's ability to support its overhead costs,
promotional costs and other expenditures necessary to properly record, promote
and market phonograph records; and that such failure to timely Deliver will
cause Company substantial damages in an amount not readily susceptible of
computation.
17. CERTAIN REMEDIES.
17.01 If You do not fulfill any portion of Your Recording Commitment within
the time prescribed in paragraph 3.02, Company will have the following options:
36
(a) to suspend Company's obligations to make payments to You under
this Agreement until You have cured the default;
(b) to terminate the term of this Agreement at any time, whether or
not You have commenced curing the default before such termination occurs; and
(c) to require You to repay to Company the amount, not then recouped,
of any Advance previously paid to You by Company and not specifically
attributable under Article 8 to an Album which has actually been fully
Delivered.
Company may exercise each of those options by sending You the appropriate
notice. If Company terminates the term under clause 17.01(b) all parties will be
deemed to have fulfilled all of their obligations under this agreement except
those obligations which survive the end of the term (such as indemnification
obligations, re-recording restrictions, and Your obligations under clause
17.01(c)). No exercise of an option under this paragraph will limit Company's
rights to recover damages by reason of Your default, its rights to exercise any
other option under this paragraph, or any of its other rights.
17.02 If because of: act of God; inevitable accident; fire; lockout, strike
or other labor dispute; riot or civil commotion; act of public enemy; enactment,
rule, order or act of any government or governmental instrumentality (whether
federal, state, local or foreign); failure of technical facilities; illness or
incapacity of any performer or producer; or other cause of a similar or
different nature not reasonably within Company's control; Company is materially
hampered in the recording, manufacture, distribution or sale of records, then,
without limiting Company's rights, Company shall have the option by giving You
notice to suspend the running of the then-current Contract Period for the
duration of any such contingency plus such additional time as is necessary so
that Company shall have no less than thirty (30) days after the cessation of
such contingency in which to exercise its option, if any, to extend the term of
this agreement for the next following Option Period. If any suspension imposed
under this paragraph by reason of an event affecting no Record manufacturer or
distributor except Company continues for more than six (6) months, You may, by
notice, request Company to terminate the suspension by notice given to You
within sixty (60) days after its receipt of Your notice. If Company does not do
so, the term of this Agreement will terminate at the end of that sixty (60) day
period (or at such earlier time which Company may designate by notice to You),
And all parties will be deemed to have fulfilled all of their obligations under
this Agreement except those obligations which survive the end of the term (such
as warranties, re-recording restrictions and Company's obligation to pay
royalties).
37
17.03 If Company refuses, without cause, to permit You to fulfill Your
minimum Recording Commitment for any Contract Period, (irrespective of whether
or not You have commenced recording the particular Album for such Recording
Commitment), other than as a result of an event or contingency referred to in
paragraph 17.01 above, Company shall have no obligations or liabilities to You
in connection therewith unless You shall notify Company of Your desire to
fulfill Your minimum Recording Commitment for that Contract Period and within
thirty (30) days after Company's receipt of that notice Company shall fail to
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period. If Company shall fail to so
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period, the Term shall expire as of the
end of that thirty (30) day period and Company shall have no obligations or
liabilities to You whatsoever in connection with Company's failure to permit You
to fulfill Your Recording Commitment for that Contract Period. Company shall,
however, pay You promptly after the expiration of that thirty (30) day period,
as an advance recoupable from royalties (other than mechanical royalties)
hereunder or under any other agreement between You and Company or Company's
affiliates, an amount equal to the minimum union scale payments which would have
been required to have been paid to the Artist for each Album of Your Recording
Commitment for that Contract Period that Company did not permit You to record,
less any Advances already paid to You in connection with such Album(s) but in no
event less than twenty thousand dollars ($20,000.00). Solely for the purposes of
the foregoing: (i) an Album shall be deemed to be comprised of eight (8)
Masters; and (ii) Artist shall be deemed to be comprised of one (1) member.
18. PRODUCER AND OTHER ROYALTIES.
18.01 You shall be solely responsible for and shall pay all royalties and
other Compensation which may be payable to any producers of the Masters or to
any others rendering services in connection with the recording of the Masters.
18.02 Notwithstanding the foregoing, Company may (but shall not be
obligated to) enter into an agreement with any producer (or other royalty
participant) of the Masters which provides for the payment by Company, rather
than You, of royalties or other compensation payable to that producer. In that
event (or in the event Company pays any such party pursuant to a letter of
direction) Company may deduct any amounts payable by Company to that producer or
director from any royalties or other sums payable by Company hereunder or under
any other agreement between You and Company or Company's affiliates.
Furthermore, for the purposes of the recoupment of any Advances or charges under
this Agreement, the royalty rates contained in Article 9 with respect to those
Masters shall be deemed reduced by the amount of the applicable royalty
38
rates with respect to Masters which are contained in Company's agreement with
any producer (or such party). Any Advances payable by Company to a producer
(or such party) which are not recouped by Company from royalties payable to
that producer may be recouped by Company from any royalties or other sums
payable by Company hereunder or under any other agreement between You and
Company or Company's affiliates.
19. DEFINITIONS.
19.01 The term "Advance" shall mean prepayment of royalties. Company may
recoup Advances from royalties to be paid to You or on Your behalf pursuant to
this Agreement. Except as otherwise set forth herein, Advances shall be
non-refundable.
19.02 The term "Album" shall mean an audio only long-playing Phonograph
Record which is not an EP, Single, or Long- Play Single, and where the context
requires, Master Recordings sufficient to constitute a long-playing audio only
Phonograph Record.
19.03 The term "Audiovisual Record" shall mean a Record embodying an
Audiovisual Recording.
19.04 The term "Audiovisual Recording" shall mean every form of Master
Recording embodying visual images.
19.05 The term "Container Charge" shall mean the applicable percentage,
specified as follows, of the Gross Royalty Base applicable to the particular
* Record concerned: XXXXXXXXXXXXXXX percent for Singles packaged in color or
other special printed sleeves, and for Albums, EPs, and Long-Playing Singles
in disc form packaged in Company's standard singlefold jackets without any
special elements (such as, but not limited to, plastic, cardboard, or printed
* inner sleeves, inserts, or attachments); XXXXXXXXXX percent thereof for all
other Albums, EPs or Long-Playing Singles in disc form, and for all other
* sound-only Phonograph Records in disc form; and XXXXXXXXXX percent thereof for
Audiovisual Records, all Phonograph Records in tape form, such as reel-to-reel
tapes, cartridges, cassettes (whether audio or video) and for all other
* recorded devices, but XXXXXXXXXXX percent for compact disc Records, digital
audio tape, DCC, Mini-disc and all Records in New Configurations.
Notwithstanding anything to the contrary contained herein, in the event that
the majority of the agreements by and between Company and the majority of
other recording artists signed to exclusive recording agreements with Company
contain provisions for Container Charges less than those provided for herein,
then this agreement shall be deemed automatically amended to contain such more
favorable terms.
19.06 The term "Contract Period" shall mean the Initial
* - Confidential portions omitted and filed separately with the Commission.
39
Period or any Option Period of the Term (as they may be suspended or extended).
19.07 The term "Controlled Composition" shall mean that portion of a
Musical Composition or other Selection, written or composed by You alone or in
collaboration with others, or which is owned or controlled, in whole or in part,
directly or indirectly, by You or any person firm or corporation in which You
have a direct or indirect interest.
19.08 The terms "Conventional Phonograph Record", "Conventional discs and
tapes" and "Conventional Album" shall refer to discs or tapes of the quality
used for the majority of units of a particular Phonograph Record released. If,
at any particular time, Company has ceased to regularly manufacture plain, black
"vinyl" disc records and only manufactures tapes, compact discs and/or "premium
vinyl" (e.g., so-called "half-speed mastered") discs, then the terms
"Conventional discs" or "Conventional Album in disc form", and the like, shall
refer to conventional tapes.
19.09 Intentionally deleted.
19.10 The term "EP" shall mean an audio only Phonograph Record embodying no
fewer than five (5) different Musical Compositions and no more than seven (7)
different Musical Compositions.
19.11 The term "Long-Play Single" shall mean an audio only Phonograph
Record embodying no more than four (4) different Musical Compositions.
19.12 The term "Master Recording" shall mean every form of recording,
whether now known or unknown, embodying sound, or sound accompanied by visual
images, which may be used in the recording, production, or manufacture of
Phonograph Records.
19.13 The term "Masters" shall mean Master Recordings embodying the
performances of the You recorded hereunder.
19.14 (a) The term "Mid-Priced Record" shall mean a Phonograph Record which
bears a Gross Royalty Base at least twenty percent (20%) lower, but not more
than thirty-five percent (35%) lower than the Gross Royalty Base applicable to
Company's then-current highest prevailing "top-line" record of comparable
repertoire and in the same configuration (e.g., Album, Multiple Record Set, Long
Play Single, tape cassette, compact disc, etc.) released by Company or Company's
licensees in the territory concerned.
(b) The term "Budget Record" shall mean a Phonograph Record which
bears a Gross Royalty Base greater than thirty-five
40
percent (35%) lower than the Gross Royalty Base applicable to Company's
then-current highest prevailing "top line" record of comparable repertoire and
in the same configuration (e.g., Album, Multiple Record Set, Long Play Single,
tape cassette, compact disc, etc.) released by Company or Company's licensees
in the territory concerned.
19.15 The term "Multiple Album" shall mean an Album which contains two
(2) or more units of a particular configuration of Record, which is sold as a
single unit.
19.16 The terms "Musical Composition" and "Composition" shall mean a
single musical composition and, for the purposes of computing mechanical
royalties hereunder, shall include medleys and spoken word pieces. 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.
19.17 The term "Net Receipts" shall mean an amount equal to the gross
monies received by Company in the United States from a person, firm or
corporation from the exploitation by that person, firm or corporation of
rights in Audiovisual Recordings (including any monies received by Company for
* the use of Audiovisual Recordings in Audiovisual Records) less XXXXXXXX
percent of those gross monies as a distribution fee, and less all costs paid
or incurred by Company in connection with the exploitation of those rights and
* the collection of those monies (such costs not to exceed percent XXXXXXXXXXXX.
19.18 The term "Net Royalty" or "Net Flat Fee" shall mean the gross
royalty or gross flat fee received by Company in the United States from a
person, firm or corporation from the exploitation by that person, firm or
corporation of rights in Masters (other than Audiovisual Recordings), less all
costs paid or incurred by Company in connection with the exploitation of those
rights and the collection of those monies, and less all royalties or other
sums payable by Company to any person, firm or corporation in connection with
the exploitation of those rights, except for royalties or other sums payable
to producers of those Masters, which shall be borne solely by You.
* 19.19 The term "Net Sales" shall mean XXXXXXXXXXX percent of gross sales
to wholesale and retail customers, less returns, credits and reserves against
anticipated returns and credits. Notwithstanding anything to the contrary
contained herein, in the event that the majority of the agreements by and
between Company and the majority of other recording artists signed to
exclusive recording agreements with Company contain provisions for Net Sales
greater than those provided for herein, then this agreement shall be deemed
automatically amended to contain such more favorable terms.
* - Confidential portions omitted and filed separately with the Commission.
41
19.20 The term "Net Sales through Normal Retail Channels" shall refer to
Net Sales of Phonograph Records hereunder through Company's principal
distributor in the country in question for resale through record or other
retail stores for which a royalty is paid hereunder (and, without limiting the
generality of the foregoing, shall exclude sales or distributions referred to
in paragraph 9.03, 9.04 and 9.05 above);
19.21 The terms "Phonograph Record" and "Record" shall mean every form of
reproduction, whether now known or unknown, embodying sound alone, or sound
accompanied by visual images, distributed primarily for home use, school use,
jukebox use, and use in means of transportation, including, without
limitation, discs of any speed or size, reel-to-reel tapes, cartridges,
cassettes, or other pre-recorded tapes.
19.22 The term "New Configuration" shall mean any configuration of record
not specifically referred to herein.
19.23 The term "Royalty Base Price" shall mean the amount specified below
("Gross Royalty Base") applicable to the Phonograph Records concerned, less
all excise, purchase, value added, or similar taxes (included in the Royalty
Base Price) and less the applicable Container Charge.
(a) WITH RESPECT TO RECORDS SOLD FOR DISTRIBUTION IN THE UNITED
STATES and CANADA: The Gross Royalty Base for an Audiovisual Record is the
amount computed under section (1) below. The Gross Royalty Base for a Record
reproducing sound only is the amount computed under section (1) or section (2)
* below, whichever is XXXXX:
(1) Company's published subdistributor price applicable to the
price series of the unit concerned at the commencement of the accounting
* period in which the sale occurs, less XXXXXXXXXXXX percent; or
* (2) XXXXXXXX of the prevailing industry suggested retail list
price applicable to Records in the same configuration and the same wholesale
price category as the unit concerned. In this section (2):
(i) A "similar U.S. Record company" means one which does
not distribute its own Records directly to wholesalers and retailers on a
nation-wide basis throughout the United States but does so through a third
party distribution company.
(ii) The "wholesale price" of a Record distributed by
another similar U.S. record company means its published price corresponding
most closely in amount to a subdistributor price for a Record in the same
configuration published by Company.
* - Confidential portions omitted and filed separately with the Commission.
42
(iii) The "wholesale price category" of a Record
distributed by Company includes: (A) that Record; and (B) Records in the same
configuration sold by other similar U.S. record companies whose wholesale
prices for those Records correspond most closely in amount to our published
subdistributor price for the Company-distributed Record concerned.
(iv) "Prevailing industry suggested retail list price"
means the average of the suggested retail list prices assigned to Records in
the wholesale price category concerned by the similar U.S. Record company(ies)
which publish suggested retail list prices or, if there are no such suggested
retail list prices, the prevailing retail equivalent prices generally accepted
in the record industry applicable to the Records in the wholesale price
category concerned.
Royalties will be calculated separately with respect to each price series
in which units of a particular Record release are sold during the semiannual
accounting period concerned. References to published prices in this section
refer to those in effect at the commencement of the accounting period
concerned.
(b) WITH RESPECT TO RECORDS (INCLUDING AUDIOVISUAL RECORDS) SOLD FOR
DISTRIBUTION OUTSIDE OF THE UNITED STATES AND CANADA: The Gross Royalty Base
* is XXXXXX of the following: XXXXXXXXXXXX percent of Company's or Company's
licensee's published price to dealers ("p.p.d.") applicable to the price
series of the unit concerned in the country of sale.
19.24 The term "Selection" shall mean a Musical Composition, poem,
dramatic work, comedy routine, or other verbal expression.
19.25 The term "Single" shall mean an audio-only seven (7") inch disc
Phonograph Record or its tape or other equivalent, embodying no more than two
(2) Compositions.
19.26 The term "Territory" shall mean the universe.
19.27 The term "other agreement between You and Company or Company's
affiliates" and like words shall mean any other agreement between You or any
entity furnishing Your services and Company or Company's affiliates which
relates to recordings embodying Your performances.
19.28 The term "Person" "person" or "Party" shall mean any individual,
corporation, partnership, association or other organized group of persons or
the legal successors or representatives of the foregoing.
20. INDEMNITY.
* - Confidential portions omitted and filed separately with the Commission.
43
20.01 You hereby indemnify, save, and hold Company harmless from any and
all damages, liabilities, costs, losses and expenses (including legal costs and
reasonable attorneys' fees) arising out of or connected with any claim, demand
or action which is inconsistent with any of the warranties, representations,
covenants or agreements made by You in this Agreement, which has resulted in a
final non-appealable judgment or has been settled with Your written consent (it
being understood that Your consent shall be deemed given to any settlement not
in excess of Five Thousand ($5,000) Dollars). Notwithstanding the foregoing, if
You withhold consent to any settlement which Company is willing to make, the
foregoing indemnity shall apply and Company may settle such claim in its sole
discretion unless You promptly assume all costs of defending against such claim,
demand or action including, without limitation, court costs, reasonable
attorneys' fees, and direct expenses theretofore incurred by Company in
connection with said claim, demand or action; provided that in the event You
assume said costs, Company shall nonetheless have the right to settle such
claim, demand or action in its sole discretion without Your consent, provided
that, in such event, the foregoing indemnification shall not apply with respect
thereto. You shall reimburse Company, on demand, for any payment made by Company
at any time with respect to any damage, liability, cost, loss or expense to
which the foregoing indemnity applies. Pending the determination of any claim,
demand or action, Company may, at its election, withhold payment of any monies
(other than mechanical royalties) otherwise payable to You hereunder in an
amount which does not exceed Your potential liability to Company pursuant to
this paragraph; provided, however, that if You shall deliver to Company an
indemnity or surety bond, in a form and with a company acceptable to Company,
which in respect of such claim, demand or action shall cover the amount of such
claim, demand or action and Company's estimated attorneys' fees and legal costs
in connection therewith, then Company shall not withhold payment of monies
otherwise payable to You hereunder in respect of such claim, demand or action;
and provided further that Company shall liquidate any such withheld amounts if
within twelve (12) months no lawsuit has been commenced and active settlement
discussions are not then taking place. You may participate in the defense of any
claim referred to in this paragraph 20 through counsel of Your selection at Your
own expense, but Company will have the right at all times, in its sole
discretion, to retain or resume control of the conduct of the defense of such
claim.
21. ASSIGNMENT.
21.01 (a) Company shall have the right, at its election, to assign any of
Company's rights hereunder, in whole or in part, to any subsidiary, affiliated,
controlling or other related company, and to any Person, firm or corporation
owning or acquiring a substantial portion of Company's stock or assets, and any
rights
44
so assigned may also be assigned by the assignee. Company shall also have the
right to assign any of its rights hereunder to any of its licensees in order to
effectuate the purposes hereof. You shall not have the right to assign any of
Your rights hereunder.
(b) You may assign Your rights under this Agreement to a corporation,
all of whose capital stock is owned solely by You, subject to the following
conditions:
(1) The assignee will be subject to Company's approval in
Company's sole discretion;
(2) The assignment will not be effective until You =have
delivered to Company an instrument satisfactory to Company in Company's sole
discretion effecting the assignment and the assignee's assumption of Your
obligations, and Company has executed that instrument to evidence Company's
approval of it;
(3) No such assignment will relieve You of Your obligations under
this Agreement; and
(4) If such an assignment takes place, any further transfer of
the rights assigned will be subject to the same conditions.
22. NOTICES.
22.01 All notices to be given to You hereunder and all statements and
payments to be sent to You hereunder shall be addressed to You at the address
set forth on page 1 hereof or at such other address as You shall designate in
writing from time to time. All notices to be given to Company hereunder shall be
addressed to Company to the attention of the Vice President of Business Affairs
at the address set forth on page 1 hereof or at such other address as Company
shall designate in writing from time to time. All notices shall be in writing
and shall either be served by personal delivery, mail, or telegraph, all charges
prepaid. Except as otherwise provided herein, notices shall be deemed given when
personally delivered, mailed, or delivered to a telegraph office, all charges
prepaid, except that notices of change of address shall be effective only after
actual receipt. A copy of all notices to You shall be sent to Xx Xxxx, Esquire,
Xxxxxxx & Xxxxxxx, 4000 SunTrust Plaza, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx,
Xxxxxxx 00000-0000 provided, however, the inadvertent failure to send any such
copy shall neither impair the effectiveness of the notice sent nor constitute a
breach of this Agreement.
23. MISCELLANEOUS.
45
23.01 (a) This Agreement sets forth Your and Company's entire understanding
relating to its subject matter and all prior and contemporaneous understandings
relating to the same have been merged herein. No modification, amendment,
waiver, termination or discharge of this Agreement or any of its terms shall be
binding upon Company unless confirmed by a document signed by a duly authorized
officer of Company. No waiver by You or Company of any term of this Agreement or
of any default hereunder shall affect Your or Company's respective rights
thereafter to enforce that term or to exercise any right or remedy in the event
of any other default, whether or not similar.
(b) If any part of this Agreement is determined to be void, invalid,
inoperative or unenforceable by a court of competent jurisdiction or by any
other legally constituted body having jurisdiction to make such determination,
such decision shall not affect any other provisions hereof, and the remainder of
this Agreement shall be effective as though such void, invalid, inoperative or
unenforceable provision had not been contained herein. If the payments provided
by this Agreement shall exceed the amount permitted by any present or future law
or governmental order or regulation, such stated payments shall be reduced while
such limitation is in effect to the amount which is so permitted; and the
payment of such amount shall be deemed to constitute full performance by Company
of its obligations to You hereunder with respect to compensation during the term
when such limitation is in effect.
23.02(a) Company shall not be deemed to be in breach of any of Company's
obligations hereunder unless and until you shall have given Company specific
written notice by certified or registered mail, return receipt requested,
describing in detail the breach and Company shall have failed to cure that
breach within thirty (30) days after Company's receipt of that written notice.
(b) Except with respect to: (i) your obligation to timely Deliver any
Album hereunder, (ii) your warranties hereunder, (iii) where a specific cure
provision is provided herein, (iv) breaches incapable of being cured, or (v) an
application for injunctive relief, the failure by you to perform any of your
obligations hereunder shall not be deemed a breach of this Agreement unless
Company gives you written notice of such failure to perform and such failure is
not corrected within thirty (30) days from the date you receive such notice.
23.03 Company's payment obligations under this Agreement are conditioned
upon Your full and faithful performance of the terms hereof.
23.04 Wherever Your approval or consent is required hereunder, that
approval or consent shall not be unreasonably
46
withheld. Company may require You to formally give or withhold approval or
consent by giving You notice of Company's request that You do so and by
furnishing You with the information or material in respect of which the approval
or consent is sought. You shall give Company written notice of Your approval or
disapproval or of Your consent or non-consent within five (5) business days
after Company's notice is sent and, in the event of Your disapproval or
non-consent, Your notice shall contain the specific reasons therefor. Your
failure to give Company notice as aforesaid shall be deemed to be consent or
approval, as the case may be, with respect to the matter submitted.
23.05 Nothing herein contained shall constitute a partnership, joint
venture or other agency relationship between You and Company. Except as
otherwise expressly provided herein, You are performing Your obligations
hereunder as an independent contractor. Neither party hereto shall hold itself
out contrary to the terms of this paragraph, and neither You nor Company shall
become liable for any representation, act or omission of the other contrary to
the provisions hereof. You do not have the right to execute any agreement or
incur any obligation for which Company may be liable or otherwise bound.
23.06 This Agreement shall not be deemed to give any right or remedy to any
third party whatsoever unless that right or remedy is specifically granted by
Company in writing to that third party.
23.07 The provisions of any applicable collective bargaining agreement
between Company and any labor union or guild which are required by the terms of
that agreement to be included in this Agreement shall be deemed incorporated
herein as if those provisions were expressly set forth in this Agreement.
23.08 Except as otherwise expressly provided herein, all rights and
remedies herein or otherwise shall be cumulative and none of them shall be in
limitation of any other right or remedy.
23.09 (a) This Agreement shall be deemed to have been made in the State of
Tennessee and its validity, construction, breach, performance and operation
shall be governed by the law of the State of Tennessee applicable to contracts
made and to be performed in the State of Tennessee. The laws of the State of
Tennessee are of the essence of this Agreement.
(b) The parties hereto intend to and hereby confer exclusive
jurisdiction upon the courts of the State of Tennessee or of the United States
located in the State of Tennessee for any action, suit or proceeding relating to
this Agreement and each of the parties irrevocably consents to the jurisdiction
of each such court in respect of any such action, suit or proceeding. Each of
the parties irrevocably waives any objection that such party now
47
has or hereafter may have to the laying of venue of any such action, suit or
proceeding brought or maintained in any such court and further irrevocably
waives any claim that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum. To the extent permitted by
applicable Law, any judgment obtained in any such court may be enforced in any
court in any other jurisdiction anywhere in the world.
(c) Company hereby appoints Xxxxx Xxxxxx at his office located at
Imprint Records, 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000 as
Imprint's authorized agent to accept and acknowledge on Imprint's behalf service
of any and all process that may be served in any such action, suit or
proceeding. Imprint may at any time upon notice to Artist appoint any other
Person as its authorized agent. If no other Person is so appointed, the
Secretary of State of the State of Tennessee will be deemed to be the authorized
agent of Imprint.
(d) Artist hereby appoints Xxxx Xxxx, 0000 Xxxx Xxxxx, Xxxxxxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, or his office at such other address in Tennessee, as
Artist hereafter furnishes to Imprint, as Artist's authorized agent to accept
and acknowledge on Artist's behalf service of any and all process that may be
served in any such action, suit or proceeding. Artist may at any time upon
notice to Imprint appoint any other Person as its authorized agent. If no other
Person is so appointed, the Secretary of State of the State of Tennessee will be
deemed to be the authorized agent of Artist.
(e) Any and all service of process and any other notice in any such
action, suit or proceeding shall be effective against any party if given
personally or by registered mail or certified mail, return receipt requested, or
by any other means of mail that requires a signed receipt, postage prepaid.
Nothing herein contained shall be deemed to affect the right of a party to serve
process in any manner permitted by law.
23.10 This Agreement shall not become effective until signed by You and
countersigned by a duly authorized officer of Company.
23.11 (a) The paragraph headings herein are solely for the purpose of
convenience and shall be disregarded completely in the interpretation of this
Agreement or any of its terms.
(b) No deletion, addition, revision, change or other alteration in
drafts of this Agreement prepared prior to the execution of this Agreement shall
be used for the purpose of construction or interpretation of any term, provision
or language of this Agreement.
48
23.12 Company may at any time during the Term obtain, at Company's cost,
insurance on the lives of one (1) or more members of the Artist. Company or its
designees shall be the sole beneficiary of that insurance and neither You, nor
any member of the Artist, nor any person, firm or corporation claiming rights
through or from You or the Artist shall have any rights in that insurance. You
shall cause those members of the Artist as Company may designate to submit to
such physical examinations and to complete and deliver such forms as Company may
reasonably require and otherwise to cooperate with Company fully for the purpose
of enabling Company to secure that insurance. You shall not be deemed in breach
of this Agreement by reason of Artist's failure of his physical examination.
23.13 From time to time at Company's reasonable request and subject to Your
prior commitments, You shall appear for photography, artwork and similar
sessions under the direction of Company or Company's duly authorized agent,
appear for interviews with such representatives of newspapers, magazines and
other publications, and of publicity and public relations firms as Company may
arrange, and confer and consult with Company regarding Artist's performances
hereunder and other matters which may concern the parties hereto. Artist shall
also, if requested by Company, be available for personal appearances (including
performances) on radio, television, record stores and elsewhere, and to record
taped interviews, spot announcements, trailers and electrical transcriptions,
all for the purpose of advertising, promoting, publicizing and exploiting
records released or to be released hereunder and for other general public
relations and promotional purposes related to the record business of Company or
Company's subsidiary and related companies. Neither You nor Artist shall be
entitled to any compensation from Company for such services, other than minimum
union scale to Artist if such payment is required by applicable agreements.
23.14 You acknowledge that there exists no formal or informal fiduciary
relationship between You and Company and that there exists no special
relationship of trust and confidence between You and Company independent of the
contractual rights, duties and obligations set forth in this Agreement, and that
the future course of dealing between You and Company shall neither explicitly
nor implicitly indicate such a relationship or the undertaking of any such
extra-contractual duties or obligations by Company.
23.15 If Artist's voice should be or become materially and permanently
impaired or if Artist should otherwise become physically or mentally disabled in
performing, recording and/or personal appearances and/or if Artist should cease
to pursue a
49
career as an entertainer, Company may elect to terminate this agreement, by
notice to You at any time during the period in which such contingency arose or
continues and thereby be relieved of any liability for the executory provisions
of this agreement.
IN WITNESS WHEREOF, the parties hereto have this day signed in the spaces
provided below.
IMPRINT RECORDS
By: /s/ Xxxx Xxxx By: /s/ Xxx X. Xxxxxx
----------------------------------- ------------------------------
XXXX XXXX XXX XXXXXX, CEO
###-##-####
-----------
Social Security Number
50
Budget
Exhibit "A"
51
