This agreement (sometimes referred to herein and in the attached Annex A as the
"Label Agreement") is made as of October 28, 1999, between ANTRA MUSIC GROUP,
INC., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (hereinafter "ANTRA") and
LEGAL GRIND ENTERTAINMENT, INC. with an address at 0000 Xxxxxx Xxx, Xxxxx 000,
Xxxxxxx Xxxxx, XX 00000 (hereinafter "you" or "LGE").
1. Term.
(a) ANTRA hereby engages you to furnish exclusively to ANTRA
Recordings by various artists to be determined in the manner
provided in paragraph 2 hereof. The term of this agreement
(the "Term") shall be for an initial period ("Initial Label
Period") commencing on the date hereof and ending twenty-four
(24) months from the date hereof.
(b) Additionally, you hereby xxxxx XXXXX one (1) separate option
to extend the term of this agreement for an additional Label
Period ("Label Option Periods"). ANTRA may exercise said
option by sending you a notice at any time before the end of
the Initial Label Period. The Label Option Period shall
commence upon the expiration of the Initial Label Period and
shall end twenty-four (24) months thereafter.
2. Artists.
(a) During the Term you shall offer to enter into an agreement
(the "Furnishing Agreement") with ANTRA with respect to any
artist with respect to whose recordings or recorded
performances Xxxxxxxx Xxxxxx (individually and collectively
hereinafter referred to as a "Principal" or "Principals") or
you have or control all or part of the recording and/or
distribution rights directly or indirectly. As used herein
"you" shall mean LGE, any Principal, or any of LGE's present
or future shareholders, or any corporation or other entity
owning or controlling any of the foregoing. Neither you nor
any Principal nor any party described above shall enter into
agreements for the Recordings or services of recording artists
during the Term except as permitted herein. You shall submit
at least five (5) Artists in each Label Period. You shall
submit each of the following artists in the Initial Label
Period (collectively, the "Initial Artists"): Xxxxxxxx Xxxxxx
p/k/a "Shiva Black" and Xxxxx Xxxxx; it being the intention of
the parties hereto that you cannot deliver the services of any
of the Initial Artists to a third party. In the event you fail
to submit at least five (5) proposed artists within the first
eighteen (18) months of each Label Period (or, if you fail to
deliver the services of the Initial Artists within the first
three months of the Initial Label Period for Xxxxxxxx Xxxxxx
and the first nine months of the Initial Label Period for
Xxxxx Xxxxx), the Period shall be suspended until the date
sixty (60) days after your submission of all required proposed
artists, and the expiration of the term of the applicable
Label Period shall be extended by the length of the
suspension. Each artist whom you propose shall be submitted to
ANTRA as follows:
(i) You shall deliver to the president and to the most
senior executive of A&R of ANTRA a finished Master
Recording or a tape "demo" recording of no less than
four (4) songs by such a proposed artist. You shall
also supply any other information which will enable
ANTRA to make an informed decision regarding the
potential of such proposed artist, including without
limitation the date(s) and location(s) of any live
personal appearances by such artist which are then
known to you together with pictorial and biographical
material (to the extent available). Concurrently
therewith you will send a notice to ANTRA's Vice
President of Business and Legal Affairs, indicating
that you are submitting an artist. At ANTRA's
election and expense, ANTRA may require, in addition
to or in lieu of the foregoing demo tapes, a personal
audition by such proposed artist at a place
designated by ANTRA. Notwithstanding anything
contained herein, in connection with Xxxxxxxx Xxxxxx,
you shall deliver master recordings constituting a
full length album (including all interludes) within
ninety (90) days after the full execution of this
Agreement; such master recordings shall include
finished, mixed and mastered versions of recordings
you previously played for Xxxxxx Xxxxxxx of ANTRA.
(ii) If within thirty (30) business days from the receipt
of the material set forth above (or the audition
described in (i) above, if such is requested) ANTRA
has not accepted in writing such artist, ANTRA shall
be deemed to have rejected such artist. In such
event, you shall have no right to enter into
recording agreements relating to such rejected
artists during the term.
(b) Your submission to ANTRA of any artist shall constitute your
warranty and representation that there is (or will be within
ten (10) days after ANTRA's notification to you of its
acceptance of such artist) a contract covering such artist's
recording services which enables you to perform your
obligations to ANTRA under this agreement and that such
contract shall be in accordance with the terms of the
Furnishing Agreement attached as Annex A hereto and
incorporated herein (hereinafter the "Artist Agreement"). An
accepted artist is sometimes referred to herein as an
"Artist." You and ANTRA shall be deemed to have entered into a
Furnishing Agreement in the form attached hereto as "Annex A"
with respect to each Artist submitted by you and accepted by
ANTRA hereunder, and the terms and conditions under which you
shall deliver the Recordings of such Artist shall be governed
solely by the provisions of this agreement and the Furnishing
Agreement with respect thereto. You agree with respect to each
Artist accepted hereunder to have such Artist execute a
document in the form of Exhibit A to the Furnishing Agreement
(the "Inducement Letter"); you and ANTRA shall be deemed to
have entered into a Furnishing Agreement with respect to an
Artist upon the
terms of "Annex A," as modified thereafter in accordance with
this letter agreement as of the date on which ANTRA accepts
such Artist, except that ANTRA may at any time refuse to
continue to perform thereunder until you have delivered to
ANTRA a copy of the Artist Agreement and Inducement Letter
signed by Artist and all other applicable parties.
Notwithstanding anything contained herein, if any Artist you
furnish hereunder is less than 18 years of age, you will
undertake all required legal and other proceedings to assure
that contracts entered into between you and such Artist and
between ANTRA and such Artist (in connection with the
Inducement Letter, for example), will not be subject to
rejection by such Artist because such Artist is less than the
age of 18.
(c) Except as specifically provided otherwise, you shall enter
into agreements with Artists in a form substantially similar
to the form of the Furnishing Agreement as annexed hereto,
except where such terms are specifically related to you and
not Artist. In no event shall you grant an Artist any right or
agree to any restriction or obligation greater than granted to
you in the Furnishing Agreement. In no event shall you modify
such agreement (for example, but without limitation, rights
with respect to option periods), without ANTRA's consent.
Accordingly, notwithstanding the termination of this
agreement, the provisions of the Furnishing Agreement with
respect to each Artist will continue in effect.
(d) It is understood that although both this agreement and the
Furnishing Agreement annexed hereto as Annex A refer to
"Term", "initial period" and " option period" such references
to the term of the agreements are not intended to be
coterminous, i.e., such terms used herein refer to the periods
of this agreement and such terms as used in the Furnishing
Agreement refer to the periods of the Furnishing Agreement
unless indicated otherwise. Accordingly, notwithstanding the
expiration or termination of the terms of this agreement, the
provisions of the Furnishing Agreement with respect to each
Artist will continue in effect.
(e) In the event of any inconsistency or contradiction between
this agreement and a Furnishing Agreement, the terms of this
agreement shall govern.
3. Obligations of LGE.
(a) Album Artwork.
(i) In connection with each Album delivered hereunder, you
shall prepare at your expense all Album Artwork (as
hereinafter defined) and shall deliver camera-ready copies
thereof to ANTRA not later than concurrently with the delivery
of the master recordings for the applicable Album.
Notwithstanding the foregoing, you shall not commence the
production of any Album Artwork until ANTRA has approved the
concept
for such Album Artwork and the individuals whom you intend to
engage to produce such Album Artwork. As used herein, the term
"Album Artwork" means all artwork, photography and related
materials, including without limitation all camera-ready
mechanicals in disc, tape, CD and any other configuration
required by ANTRA, for the packaging of each Album of each
Recording Commitment in connection with this Agreement.
(ii) All Album Artwork shall contain all such materials,
information, logos and other items that ANTRA customarily
includes on its album packaging for albums (including, if
applicable, advisory labels concerning lyrics), shall conform
with the template ANTRA generally uses for its releases, shall
not contain any readily-identifiable third-party product or
logo, and shall be, in all respects, in conformity with all
applicable governmental rules and regulations. All Album
Artwork shall be subject to ANTRA's reasonable approval. ANTRA
shall advise, consult with and assist you with respect to the
foregoing requirements for the legal and manufacturing
elements of Album Artwork.
(iii) Upon your delivery of Album Artwork for a particular
Album, ANTRA shall determine the cost for the manufacture of
packaging therefrom. If ANTRA determines that the
manufacturing costs for any configuration will exceed ANTRA's
then-current standard manufacturing costs for such
configuration, ANTRA shall notify you prior to manufacturing
packaging from such Album Artwork and give you the opportunity
to redesign such Album Artwork so that the manufacturing costs
do not exceed such standard costs. If you do not redesign the
applicable Album Artwork to come within ANTRA's standard costs
in all configurations within ten (10) days after ANTRA's
notice to you, ANTRA shall have the right, at its election, to
(i) create different Album Artwork for such album if it is not
reasonably possible for ANTRA to re-design such Album Artwork
to come within ANTRA's standard costs (in which event you
shall promptly repay to ANTRA all amounts paid or incurred by
ANTRA in connection with such Album Artwork, and if you fail
to do so, ANTRA may, in addition to its other rights and
remedies, recoup such amounts from any and all advances,
royalties, mechanical royalties and other monies payable
hereunder), (ii) redesign the Album Artwork as provided by you
to come within such standard costs in all configurations, or
(iii) use the Album Artwork provided by you, in which case you
shall pay such excess manufacturing costs to ANTRA upon demand
and, in addition to all of its other rights and remedies,
ANTRA shall have the right to withhold a reserve from any
monies otherwise payable hereunder in an amount reasonably
related to the estimated amount of such excess and to recoup
such excess from any and all monies payable hereunder.
(iii) In the event you do not deliver Album Artwork for any
Album prior to or concurrently with the delivery of the master
recordings for such
Album, ANTRA shall have the right to prepare such Album
Artwork. Upon submission to you by ANTRA of a xxxx for the
cost to prepare such Album Artwork, you shall promptly within
fifteen (15) days reimburse ANTRA for the cost to prepare such
Album Artwork; if you fail to make such payment, ANTRA shall
have the right to deduct such amounts from any monies payable
hereunder.
(b) Street Teams. In connection with each Record delivered
hereunder, you shall hire or cause to be hired at your expense
national "street" promotion teams to promote Records released
hereunder throughout the United States, including without
limitation, in retail stores, clubs, schools, record pools,
parties, parks, concerts, sporting events, magazines,
newsletters and tip sheets, restaurants, malls and arcades.
Such street promotion should include, without limitation,
flyers, stickers and xxxxxx.
4. Territory.
The territory of this agreement and of each Furnishing Agreement shall
be the universe.
5. Obligations of Principal.
This agreement is expressly conditioned on the following:
(a) It is understood and agreed that the active participation of
the Principals in your business affairs, and their active
participation in the performance of your obligations hereunder
are a vital part of this agreement. During the term, the
Principals shall render their services related to the
recording industry exclusively to ANTRA. Neither you nor any
Principal may have a direct or indirect interest in any
Recording or recording agreement unless such Recording or
agreement is subject hereto.
(b) In the event of the death or incapacity of any Principal
and/or in the event that any Principal shall cease for
whatever reason to be actively engaged in your management in a
controlling capacity or shall cease to perform his obligations
hereunder or under the Furnishing Agreements, ANTRA shall have
the right, without liability of any kind whatsoever, by giving
you written notice thereof, (i) to terminate the Term of this
agreement, as of the date of such notice subject to ANTRA's
other rights herein; (ii) to continue with the term of this
agreement (subject to ANTRA's rights and/or remedies provided
herein and in the Furnishing Agreements); and/or (iii) in the
event of such cessation of services is not caused by death or
permanent incapacitation, to demand and receive from you the
return of all unrecouped Advances hereunder. Notwithstanding
the foregoing, in the event that ANTRA terminates the Term of
this agreement pursuant to
this paragraph, ANTRA's obligations regarding Advances and
royalties shall be set forth in your agreement with the
Artist concerned.
(c) In connection with each Record to be released by ANTRA
hereunder,
6. Advances.
(a) Except as otherwise specifically provided herein, all monies
paid to you, or paid at your request, or paid by ANTRA on your
behalf during the Term of this agreement or of the Furnishing
Agreements (other than royalties paid pursuant to Article 11
of the Furnishing Agreements) shall be deemed Advances against
and recoupable from royalties payable pursuant to the
Furnishing Agreements as provided in paragraph 7 below.
(b) During each Label Period (the initial Label Period and the
Label Option Period), ANTRA will advance Recording Costs
incurred in connection with the creation of demonstration
recordings for artists that are submitted for ANTRA's
consideration hereunder, provided you submit a budget in
advance of commencing such recordings and such Recording
Costs, as embodied in the budget, have been pre-approved by
ANTRA. Any and all such Recording Costs incurred in connection
with a submitted artist who becomes an Artist hereunder shall
reduce and be deducted from the Recording Fund for the first
Album to be Delivered by you for the Artist concerned.
7. Royalties.
(a) Pursuant to Article 7 of the Furnishing Agreements, ANTRA has
agreed to pay you certain royalties in connection with the
sale of records thereunder. The royalties set forth therein
are inclusive of any royalty you may be required to pay the
Artist, the individual producer of any Masters and any other
third parties, and you shall be solely responsible for the
payment of royalties to (i) each Artist in accordance with the
exclusive recording agreement between you and each such Artist
("Artist Agreement") and (ii) each individual producer of the
Masters. You shall notify ANTRA of the royalty which you must
pay each Artist in accordance with the Artist Agreement as
well as any royalty which you must pay an independent third
party producer (i.e., excluding Principal, Artist, or any
person under contract to you or Artist). With respect to each
Artist, the royalties payable to Artist and the independent
producers shall be called the "Artist Share." The share of
royalties pursuant to Article 7 of the Furnishing Agreements
retained by you after payment of the Artist's Share shall be
called the "Label Share." The royalty provisions of the Artist
Agreements shall be such that in no event shall the Label
Share with respect to any Artist be less than four percent
(4%) on USNRC Net Sales of LPs (with
proportionate reductions on all sales for which reduced
royalties are payable under the Furnishing Agreements). The
Term "Label Share" as used in this agreement and the
Furnishing Agreements shall also sometimes be deemed to refer
to all the label Shares of the Furnishing Agreements
collectively.
(b) All advances or other offsets with respect to a particular
Artist (as distinguished from such payments made to you which
do not flow to the benefit of a particular Artist) shall be
recouped vis-a-vis the Artist at the Artist Share royalty
rate. All Advances made by you to any Artist shall be charged
to that Artist's royalty account. If an Artist account is so
recouped, then ANTRA shall make applicable royalty payments on
your behalf, to such Artist.
(c) The Label Share with respect to recordings of any particular
Artist may be used to recoup any Advances or other offsets
with respect to such Artist which have not been recouped from
Artist Share or may be used to recoup any Advances which may
be made to you.
(d) You or Artist shall be responsible for engaging any producer
rendering producing services under a Furnishing Agreement. Any
such agreement with a producer must provide that such producer
will be responsible for any recording Costs which cause the
Artist to exceed the budget or Recording fund (as the case may
be) provided in the Furnishing Agreement applicable to such
Artist, and that, in addition to any other remedies ANTRA may
have, such overage may be used as an offset against any
amounts payable to such producer. Any such agreement shall
also provide that the Producer shall look solely to you for
payment of his advances, fees, royalty accountings and
payments. To the extent such royalties in the producer account
exceed advances paid to such producer and other amounts which
may be offset against such royalties, you or Artist shall
timely and properly make such excess payments to such
producer.
8. Direct Engagement.
In the event ANTRA exercises or intends to exercise its right to extend
a Furnishing Agreement for an option period and you do not desire to
continue to furnish such Artist's services, then you shall so advise
ANTRA and, if ANTRA so elects, you shall assign ANTRA all your rights
from such date onwards with respect of such Artist and such Artist's
Recordings, and you shall have no interest therein.
9. Furnishing Agreements.
It is understood that the Furnishing Agreements contain various
obligations on ANTRA's part which relate to a particular Artist and not
to other Artists. Accordingly, your remedies relating to obligations
regarding one Artist's Furnishing Agreement shall not apply to other
Furnishing Agreements.
10. Incorporation By Reference.
The terms and conditions of the Furnishing Agreements are incorporated
herein by reference as fully and completely as if set forth herein,
including, but not limited to, all recitals, warranties and
acknowledgments therein. Any word not specifically herein defined shall
bear the meaning ascribed to it in the Furnishing Agreements. In
particular but without limitation, the validity, construction,
jurisdiction, cure, recourse, and notice provisions of the Furnishing
Agreement shall be deemed to govern this agreement.
11. Unique Services.
You acknowledge that the Principal's services hereunder and the rights
and privileges granted to ANTRA in connection with the Principal's
abilities as a talent finder and record company executive are of a
special, unique, unusual, extraordinary and intellectual character
which gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated for in damages in an action at
law, and that a breach by the Principal of the provisions of this
agreement will cause ANTRA great and irreparable injury and damage, and
that ANTRA shall be entitled to injunctive and other equitable relief,
in addition to whatever legal remedies are available to ANTRA, to
prevent or cure any such breach or threatened breach.
12. Compensation.
Neither you nor Principal shall be entitled to any compensation for
your services hereunder, except as specifically set forth herein or in
the Furnishing Agreement.
13. Marketing.
Provided that an inadvertent failure to consult with you will not be
deemed a breach hereof, at your request, during the term hereof, ANTRA
will endeavor to consult with you regarding the initial United States
marketing campaign in connection with each Album Delivered in
fulfillment of a Recording Commitment under each Furnishing Agreement
hereunder.
14. Entire Agreement.
This writing sets forth the entire understanding between the parties
hereto with respect to the subject matter hereof, and no modification,
amendment, waiver, or discharge of this document shall be binding upon
you or us unless confirmed by a
written instrument signed by an officer of the company to be charged.
No waiver of any provision of or default under this agreement nor any
failure to exercise rights hereunder shall prejudice our rights or your
rights thereafter, nor shall it form precedent for the future.
If the foregoing corresponds to your understanding as it does ours,
please so indicate by signing below.
Very truly yours, AGREED AND ACCEPTED:
ANTRA MUSIC GROUP, INC. LEGAL GRIND
ENTERTAINMENT, INC.
By:/s/ By:/s/
----------------------- --------------------------
An Authorized Signatory
Federal Tax ID No. 00-0000000
ANNEX A
ANTRA MUSIC GROUP, INC.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Dated: As of October 28, 1999
Legal Grind Entertainment, Inc.
0000 Xxxxxx Xxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Dear Xxxxxxxx:
The following constitutes your and our agreement ("Contract"):
1. Services. During the term of this Contract ("Term") you shall, in
accordance with the provisions hereof, furnish to us in the Territory the
exclusive recording services of ____________ p/k/a ____________(hereinafter
collectively and individually referred to as "Artist") and furnish to us the
services of one (1) or more producers for the purpose of recording and
delivering to us Masters featuring the performances of Artist.
2. Term.
(a) The Term shall consist of an "Initial Period" and of the
"Renewal Periods" for which we shall have exercised the options
hereafter provided. We shall have seven (7) separate options, each to
extend the Term for a Renewal Period. The Initial Period and each
Renewal Period are each hereafter sometimes referred to generally as a
"Contract Period." Each Renewal Period is hereafter sometimes referred
to respectively in chronological order as the "First Renewal Period,"
"Second Renewal Period," "Third Renewal Period," "Fourth Renewal
Period," "Fifth Renewal Period," "Sixth Renewal Period" and "Seventh
Renewal Period." We may exercise each option to extend the Term for a
Renewal Period by giving you notice of our election to do so at any
time prior to the commencement of the Renewal Period for which our
option is exercised;
(b) (i) The Initial Period shall commence on
the date hereof and shall continue until the date nine (9)
months, or such fewer number of days of which we may advise
you in writing, after the initial release in the United
States, if any, of the Album required to be delivered to us in
fulfillment of the "Recording Commitment" (defined below)
hereunder for the Initial Period, which initial release, for
purposes of this subparagraph 2(b)(i) only, shall be deemed to
occur on the earlier of: (1) the date of the actual initial
release in the United States, if any, of that last Album; or
1
(2) the date that is one hundred twenty (120) days
after your delivery to us of that last Album. No days between
November 15 and February 15 of the next calendar year shall
be taken into account for purposes of determining the duration
or end of that one hundred twenty (120) day period referred
to in the immediately preceding sentence; and
(ii) Each Renewal Period shall run consecutively,
shall commence upon the expiration of the immediately
preceding Contract Period and shall continue until the date
nine (9) months, or such fewer number of days of which we may
advise you in writing, after the initial release in the United
States, if any, of the Album required to be delivered to us in
fulfillment of the Recording Commitment for that Renewal
Period, which initial release, for purposes of this
subparagraph 2(b)(ii) only, shall be deemed to occur on the
earlier of: (1) the date of the actual initial release in the
United States, if any, of that last Album; or (2) the date
that is sixty (60) days after your delivery to us of that last
Album. No days between November 15 and February 15 of the next
calendar year shall be taken into account for purposes of
determining the duration or end of that sixty (60) day period
referred to in the immediately preceding sentence; and
(c) Notwithstanding the foregoing, if as of the last date on
which we have the right to extend the Term for a Renewal Period
pursuant to subparagraph (b)(i) or (b)(ii) above, we have failed to
exercise our option to extend the Term for the next Renewal Period, the
then-current Contract Period nonetheless shall continue until you
notify us in writing of that failure, referring specifically to this
subparagraph 2(c). If we fail to exercise our option to extend the Term
for the next Renewal Period on or before the date that is sixty (60)
days after we receive that specific written notice from you, then the
Term shall end on the date that is sixty (60) days after we receive
that notice from you, as if that date were the original expiration date
of the Term, without any liability or additional obligation to you in
connection therewith.
3. Recording Commitment.
(a) Your "Recording Commitment" is as follows: During each
Contract Period, you shall deliver to us, at a minimum, commercially
satisfactory Masters featuring the vocal performances of Artist
sufficient to constitute one (1) LP, plus, at our option, Masters
sufficient to constitute one additional (1) Optional LP; provided,
however, that in the aggregate, without your prior consent, you shall
not have the obligation to deliver to us hereunder in excess of seven
(7) Required Albums. We may exercise our option for the Optional LP to
be recorded and delivered to us during a Contract Period by giving you
reasonable, written notice of our election to do so at any time prior
to the expiration of that Contract Period. Each Album required to be
delivered to us in fulfillment of your Recording Commitment is
hereinafter sometimes referred to generally as a "Required Album."
Accordingly, you might be required to deliver to us as many as seven
(7) Required Albums. The Required Albums are sometimes referred to as
the "First Album," "Second Album," "Third Album," "Fourth Album,"
"Fifth Album, "Sixth Album" and "Seventh Album," respectively; and
2
(b) You shall deliver to us the First Album no later than
ninety (90) days after the date hereof. During each Renewal Period, you
shall deliver to us the Required Album no later than three (3) months
after the commencement of the particular Renewal Period. You shall not
without our prior written consent (which we shall not unreasonably
withhold), however, either (i) commence the recording of any Masters
for any Required Album prior to the date that is ten (10) months after
the date of your delivery to us of the immediately-prior Required Album
or (ii) deliver to us a Required Album prior to the date that is twelve
(12) months after the date of your delivery to us of the
immediately-prior Required Album. Notwithstanding anything to the
contrary contained herein, you shall deliver to us each Required Album
as and when required hereunder so that all eight (8) Required Albums
are delivered to us within seven (7) years after the date hereof.
4. Recording Procedures.
(a) You shall designate and submit to us for our approval the
producer of each of the Masters, the Musical Compositions or other
Selections which shall be embodied in those Masters, all other
individuals rendering services in connection with the recording of
those Masters, the studios at which those Masters shall be recorded,
and the dates of recording of those Masters (collectively referred to
as "Recording Elements"). You shall also prepare and submit to us for
our approval, a proposed budget for all "Recording Costs" (as defined
below) setting forth in such detail as is reasonably required by us all
costs and expenses to be paid or incurred for the production, recording
and delivery to us of the Masters ("Recording Budget"). No recording
sessions shall be commenced nor shall any commitments be made or costs
incurred hereunder with respect to any Masters unless and until we
shall have approved in writing each Recording Element and the Recording
Budget for those Masters. If we shall disapprove of any Recording
Element submitted by you or of the Recording Budget submitted by you,
then our decision (including, at our election, our designation of the
Recording Budget or of one (1) or more Recording Elements in
substitution for the Recording Budget or any Recording Elements
submitted by you and disapproved by us) shall be final;
(b) You shall furnish to us at such times as we shall require
all union contract forms, report forms, invoices and other information
that we shall require so that we promptly may pay all Recording Costs,
otherwise comply with any of our obligations in connection with the
Masters, release Phonograph Records embodying the Masters and otherwise
exploit the Masters;
(c) At our election, recording sessions for the Masters shall
be conducted under our or our designee's recording license;
(d) Our representatives may attend recording sessions for the
Masters;
(e) You shall deliver to us the Masters promptly after their
completion. All original session tapes and any derivatives or
reproductions thereof shall be delivered to us concurrently, or, at our
election, maintained at a recording studio or other location
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designated by us, in our name and subject to our control. Each Master
shall be subject to our approval as commercially and technically
satisfactory for the manufacture and sale of Phonograph Records, and,
upon our request, you shall re-record any Musical Composition or other
Selection until a Master that is commercially and technically
satisfactory to us shall have been obtained;
(f) Each Master shall embody Artist's vocal and instrumental
performances as the sole featured artist of a single Musical
Composition and shall be newly-recorded in its entirety in a recording
studio. Accordingly, no Masters shall be recorded in whole or in part
at live concerts or other live performances. Each Required Album shall
embody recordings of no fewer than ten (10) and no more than thirteen
(13) Musical Compositions. You shall not record or deliver hereunder
nor shall we be obligated to accept Masters constituting a Multiple
Album. If, however, you shall do so and we shall accept those Masters
hereunder, then, at our election, for the purpose of calculating the
number of Masters recorded and delivered hereunder, those Masters shall
be deemed to constitute only one (1) Album;
(g) Any Master Recording which is not recorded or delivered in
all respects in accordance with the terms hereof shall not apply
towards the fulfillment of your Recording Commitment, unless we
otherwise consent in writing. Furthermore, if we shall make any
payments with respect to any Master Recording which is not recorded for
or delivered to us in all respects in accordance with the terms hereof,
you shall pay to us, upon our demand, the amount thereof and, without
limiting our other rights and remedies, we may deduct that amount paid
or incurred by us for any reason from any monies payable by us
hereunder; and
(h) If for any reason you delay the commencement of or you or
Artist are unavailable for any recording sessions for the Masters, you
shall pay us, upon our demand, an amount equal to the expenses or
charges paid or incurred by us by reason thereof. Without limiting our
other rights and remedies, we may deduct that amount paid or incurred
by us for any reason from any monies payable to you and/or Artist by us
hereunder.
5. Recording Costs.
(a) We shall pay the Recording Costs of those Masters recorded
at recording sessions conducted in accordance with the terms hereof in
an amount not in excess of the approved Recording Budget. If the
Recording Costs of any Masters shall exceed the Recording Budget
therefor designated by us or approved by us in writing for any reason,
you shall be solely responsible for and shall pay promptly the excess.
If, however, we pay the excess, you shall pay to us, upon our demand,
the amount thereof and, without limiting our other rights and remedies,
we may deduct all such amounts paid or incurred by us for any reason
from any monies payable to you and/or Artist by us hereunder. You shall
be solely responsible for and shall pay any payments to any individuals
rendering services in connection with the recording of the Masters
which exceed union scale unless the excess and the recipient thereof
shall have been specified in the approved Recording Budget. You
4
shall also be solely responsible for and shall pay any penalties
incurred for late payments caused by your or Artist's delay in
submitting union contracts forms, report forms, or invoices or other
documents. If, however, we pay any excess not approved by us in writing
or any penalties, you shall pay to us, upon our demand, the amount
thereof, and, without limiting our other rights and remedies, we may
deduct that amount from any monies payable to you and/or Artist by us
hereunder; and
(b) The term "Recording Costs" shall include, without
limitation, all minimum union scale payments made to you or Artist, all
payments made to any other individuals rendering services in connection
with the production and recording of the Masters (including, without
limitation, the individual producers and co-producers of the Masters),
all other payments which are made pursuant to any applicable law or
regulation or the provisions of any collective bargaining agreement
between us and any union or guild (including, without limitation,
payroll taxes and payments to union pension and welfare funds and/or
health and retirement funds), all amounts paid or incurred for studio
or hall rentals, tape, engineering, editing, mixing, remixing,
instrument rentals and cartage, mastering, transportation and
accommodations, immigration clearances, trademark and service xxxx
searches and clearances, any so-called "per diems" for any individuals
(including you or Artist) rendering services in connection with the
recording of the Masters, together with all other amounts paid or
incurred in connection with the production, recording and delivery to
us of the Masters. Recording Costs shall be recoupable from royalties
payable by us hereunder.
6. Rights.
(a) All Master Recordings and Audio-Visual Recordings recorded
during the Term which embody Artist's performances, from the inception
of the recording thereof, and all artwork created for use in connection
with any reproduction thereof ("Artwork") shall be deemed, for purposes
of copyright law throughout the universe, works made for hire for us
and all other persons rendering services in connection with those
Master Recordings, Audio-Visual Recordings and Artwork as our employees
for hire. Those Master Recordings and Audio-Visual Recordings, from the
inception of the recording thereof, and all Phonograph Records and
other reproductions made therefrom, together with the performances
embodied therein and all copyrights therein and thereto and all
renewals and extensions thereof, and all Artwork and all copyrights in
and to all Artwork and all renewals and extensions thereof, shall be
entirely our property throughout the universe, free of any claims
whatsoever by you or Artist, or any other person, firm, or corporation.
Accordingly, we shall have the exclusive right to obtain registration
of copyright (and all renewals and extensions) throughout the universe
in those Master Recordings, Audio-Visual Recordings and Artwork in our
name, as the owner and author thereof. If for any reason we shall be
deemed not to be the author of those Master Recordings, Audio-Visual
Recordings or Artwork, this Contract shall constitute an irrevocable
transfer to us of ownership of copyright (and all renewals and
extensions) throughout the universe in those Master Recordings,
Audio-Visual Recordings or Artwork (as applicable) and, accordingly,
you and Artist hereby grant, transfer, convey and assign directly to us
the entire right, title and interest throughout the universe,
including, without
5
limitation, the copyright, the right to secure copyright registration
and any and all copyright renewal rights, in and to all Master
Recordings and Audio-Visual Recordings recorded during the Term which
embody Artist's performances and in and to all Artwork;
(b) You shall, upon our request, cause to be executed and
delivered to us transfers of ownership of copyright (and all renewals
and extensions) in those Master Recordings, Audio-Visual Recordings and
Artwork and any other documents as we may deem necessary or appropriate
to vest in us the rights granted to us in this Contract, and you hereby
irrevocably appoint us your attorney-in-fact for the purpose of
executing those transfers of ownership and other documents in your
names;
(c) Without limiting the generality of the foregoing, we and
any person, firm, or corporation designated by us shall have the
exclusive, perpetual right throughout the universe to manufacture,
sell, distribute and advertise Phonograph Records, Audio-Visual Records
and other reproductions embodying those Master Recordings or
Audio-Visual Recordings under any trademarks, trade names or labels,
and to lease, license, convey and otherwise exploit and use those
Master Recordings by any method (whether now known or unknown) and in
any medium (whether now known or unknown) and to perform publicly
Phonograph Records, Audio-Visual Records and other reproductions
embodying those Master Recordings or Audio-Visual Recordings, all upon
such terms as we may approve, or we may refrain from doing any or all
of the foregoing;
(d) If you or Artist are entitled to any reversion of the
copyright or other right, title and interest in and to Masters (or any
of them) pursuant to the laws of the United States or any other country
of the world, and that reversion is effected, then you and Artist
hereby irrevocably license to us exclusively the entire worldwide
right, title and interest, including, without limitation, the copyright
in and to any such Master so acquired by you or Artist pursuant to the
laws of the United States or any other country of the world, all for
the duration of the copyright (and any renewals or extensions thereof)
in and to such Master ("License Period"). In that event, we and any
person, firm or corporation designated by us shall have the exclusive
right throughout the universe during the License Period to manufacture,
sell, distribute and advertise Phonograph Records, Audio-Visual Records
and other reproductions embodying the Masters or Audio-Visual
Recordings under any trademarks, trade names or labels or to lease,
license, convey and otherwise exploit and use those Masters or
Audio-Visual Recordings by any method (whether now known or unknown)
and in any medium (whether now known or unknown) and to perform
publicly Phonograph Records, Audio-Visual Recordings and other
reproductions embodying the Masters or Audio-Visual Recordings all upon
such terms as we may approve, or we may refrain from doing any or all
of the foregoing, all in accordance with the provisions of this
Contract. We shall have no obligation to pay to you or Artist any
monies in connection with the grant set forth in this subparagraph 6(d)
except that we shall continue to credit to your royalty account
hereunder royalties earned by you in accordance with the provisions
hereof on exploitations of the Masters occurring during the License
Period as if we had continued to own the entirety of all right, title
and interest, including, without limitation, the copyright in and to
the Masters or Audio-Visual Record Recordings in accordance with the
provisions of subparagraph 6(a), (b) and (c) above. You expressly
6
acknowledge and agree that no provision of any applicable law, rule or
regulation (including, without limitation, the copyright laws and
regulations of the United States or Canada) permits you or Artist to
terminate the transfer, grant, conveyance or assignment to us of the
copyright in and to Master Recordings or Audio-Visual Recordings
provided in this paragraph 6 or any other reversion of the copyright or
other right, title and interest in and to the Masters. If any such law,
rule or regulation shall apply at any time after the date hereof, you
and Artist shall not exercise any rights pursuant to that law, rule or
regulation; and
(e) All matters relating to trademarks, notices, including,
without limitation, UPC symbols (i.e., barcoding), or disclosures
deemed advisable by us or our attorneys, and any matter other than the
cover layout and the picture of the art to be used on the particular
Required Album will be determined by us in our sole discretion.
7. Name and Likeness.
(a) We and any person, firm or corporation designated by us
shall have the perpetual, worldwide right to use and to permit others
to use your and Artist's name (both legal and professional, and whether
presently or hereafter used by you or Artist), likeness, and other
identification, and biographical material concerning you and Artist,
and the name and likeness of any producer rendering services in
connection with Master Recordings recorded during the Term for purposes
of trade and advertising. We shall have the further right to refer to
you and Artist during the Term as our exclusive recording artist and
you and Artist in your activities in the entertainment field shall use
reasonable efforts to be billed and advertised during the Term as our
exclusive recording artist. The fights granted to us pursuant to this
subparagraph 7(a) with respect to your and Artist's name, likeness,
other identification and biographical material concerning you and
Artist shall be exclusive during the Term and nonexclusive thereafter.
Accordingly, but without limiting the generality of the foregoing, you
and Artist shall not authorize or permit any person, firm, or
corporation other than us to use during the Term your or Artist's legal
or professional name or your or Artist's likeness in connection with
the advertising or sale of Phonograph Records. Notwithstanding anything
to the contrary contained herein, during the Term, you and Artist shall
not use any name other than the professional name utilized by you and
Artist as of the date of this Contract without first obtaining our
prior written consent thereto;
(b) You and Artist are the sole owners of each of your
respective professional names used by you and Artist during the Term
and no other person, firm or corporation has or will have the right to
use that name in connection with Phonograph Records during the Term. We
shall have the right, at our election, to cause a search to be
instituted to determine whether there have been any third party uses of
any names used by you and Artist for Phonograph Record purposes.
Further, we shall have the right, at our election, to apply for
registration of your and/or Artist's names to be made in favor of you
and/or Artist for Phonograph Record and/or other entertainment purposes
in the United States Patent and Trademark Office or such other federal
institution as may then be charged with accepting those registrations.
Any amounts paid by us in connection with any search or
7
registration shall be deemed to be Recording Costs pursuant to
subparagraph 5(b) above. If any search undertaken by us indicates or
leads us reasonably to believe that your and/or Artist's name should
not be used hereunder, then you and/or Artist (as the case may be) and
we shall determine mutually a substitute name to be used. Nothing
contained herein shall release you from your indemnification of us in
respect of our use of any of your and/or Artist's names, whether legal
or professional or otherwise; and
8. Advances. We shall pay to you as advances recoupable from royalties
earned by you and Artist hereunder the following amounts for the following
Required Albums payable at the following times:
(a) For the First Album, Ten Thousand Dollars ($10,000),
payable promptly after the execution of this Contract and Forty
Thousand Dollars ($40,000) on or before November 23, 1999 (collectively
the "Execution Advance"), and the Fund Balance (defined below) payable
promptly after the "Delivery Date" (defined below) for the First Album.
The "Recording Fund" for the First Album shall be Two Hundred Fifty
Thousand Dollars ($250,000); and
(b) For each Required Album other than the First Album: (A)
the "Pre-Delivery Payment" (defined below), payable promptly after our
receipt of your written notice indicating that recording sessions for
the Required Album for which the advance is payable have actually
commenced in accordance with all of the terms of this Contract
(including, without limitation, the provisions of subparagraph 4(a)
above); and (B) the Fund Balance (defined below), payable promptly
after the Delivery Date. For each Required Album, if any, after the
First Album, the Recording Fund shall be the amount set forth in the
Schedule below:
SCHEDULE
(c) The term "Pre-Delivery Payment" shall mean an amount equal
to five percent (5%) of the "Amount" for the applicable Required Album
set forth in the Schedule above. The term "Fund Balance" shall mean the
amount by which the Recording Fund exceeds the aggregate of the
Recording Costs for the applicable Required Album, the Pre-Delivery
Payment for the applicable Required Album (or the Execution Advance
with respect to the First Album) and any other advances paid in
connection with the applicable Required Album. The term "Delivery Date"
shall mean the later of the date of your delivery to us of all Masters
constituting the applicable Required Album in accordance with all of
the terms of this Contract and the date on which we determine the
aggregate Recording Costs for that Required Album; and
8
(d) You acknowledge and agree that any and all advances paid
by us hereunder shall constitute prepayment of session union scale to
you and/or Artist, and you and Artist agree to timely complete and
appropriately deliver any documentation required by the applicable
union to document and effectuate each such prepayment.
8A. Minimum Annual Compensation
(a) The aggregate amount of the compensation paid to you under
this agreement shall not be less than the "Designated Dollar Amount" (as defined
below) per Fiscal Year. "Fiscal Year", in this paragraph, means the annual
period beginning on the date of commencement of the Term, and each subsequent
annual period through the seventh such annual period, during the Term.
(b) If you have not received compensation equal to the
Designated Dollar Amount under this agreement for a Fiscal Year, we shall pay
you the amount of any deficiency before the end of that Fiscal Year; at least
forty (40) days before the end of each Fiscal Year you shall notify us if you
have not received compensation equal to the Designated Dollar Amount under this
agreement for that Fiscal Year, and of the amount of the deficiency. Each such
payment shall constitute an Advance and shall be applied in reduction of any and
all monies due or becoming due to you under this agreement. We may not withhold
or require you to repay any payment made to you pursuant to or subject to this
paragraph 8A.
(c) As used in this paragraph 8A, the "Designated Dollar
Amount" shall be:
(1) Nine Thousand Dollars ($9,000) for the first
Fiscal Year of this agreement;
(2) Twelve Thousand Dollars ($12,000) for the second
Fiscal Year of this agreement; and
(3) Fifteen Thousand Dollars ($15,000) for each of
the third through seventh Fiscal Years of this agreement.
If in any Fiscal Year the aggregate amount of the compensation paid to you under
this agreement exceeds the Designated Dollar Amount, such excess compensation
shall apply to reduce the Designated Dollar Amount for any subsequent Fiscal
Years.
(d) You acknowledge that this paragraph is included to avoid
compromise of our rights (including our entitlement to injunctive relief) by
reason of a finding of applicability of California law, but does not constitute
a concession by us that California law is actually applicable.
9. Royalties.
(a) In consideration of our copyright ownership set forth
herein, any rights licensed to us herein, our right to use your and
Artist's name, likeness and biographical
9
materials as provided herein, and the other agreements, representations and
warranties contained herein, on Net Sales of Phonograph Records embodying
Masters, we shall pay to you a royalty computed by multiplying the Royalty Base
Price, less the deductions hereafter provided, by the applicable royalty rate
set forth below:
(i) On Phonograph Records sold in the United States the
royalty rate shall be:
(A) Eighteen percent (18%) on the First Album, Second
Album, Third Album, Fourth Album, Fifth Album, Sixth
Album and Seventh Album;
(B) Eleven percent (11%) on Singles;
(ii) On Phonograph Records sold in Canada the royalty rate
shall be:
(A) Fourteen percent (14%) on Albums; and
(B) Nine percent (9%) on Singles;
(iii) On Phonograph Records sold in the United Kingdom the
royalty rate shall be:
(A) Fourteen percent (14%) on Albums; and
(B) Nine percent (9%) on Singles;
(iv) On Phonograph Records sold in Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Holland, Italy, Norway, Portugal, Spain,
Sweden or Switzerland, the royalty rate shall be:
(A) Twelve percent (12%) on Albums; and
(B) Eight percent (8%) on Singles;
(v) On Phonograph Records sold in Japan, Australia or New
Zealand, the royalty rate shall be:
(A) Twelve percent (12%) on Albums; and
(B) Eight percent (8%) on Singles; and
(vi) On Phonograph Records sold outside the United States,
Canada, the United Kingdom and those countries set forth in subparagraphs
10
9(a)(iv) and (v) above, the royalty rate shall be:
(A) Nine percent (9%) on Albums; and
(B) Five and one half percent (5.5%) on Singles;
(b) Notwithstanding the foregoing:
(i) (A) On Phonograph Records sold through a direct mail or
mail order distribution method (including, without limitation through
so-called "record clubs"), or through any combination of the foregoing,
the royalty rate shall be one-half (1/2) of the otherwise applicable
royalty rate, but in no event shall your royalty in respect of those
sales exceed an amount equal to fifty percent (50%) of the Net Receipts
from the sale of those Phonograph Records (whether or not sold by an
affiliate of ours);
(B) On Phonograph Records sold through retail stores in
connection with special radio or television advertisements (sometimes
referred to as "key outlet marketing") ("Key Outlet Campaign") whether
alone or in combination with any direct mail or mail order distribution
method, the royalty rate shall be one hundred percent (100%) of the
otherwise applicable royalty rate and notwithstanding anything to the
contrary herein, we shall have the right to recoup fifty percent (50%)
of any and all of the costs paid or incurred by us or our licensees in
respect of such Key Outlet Campaigns from any and all royalties earned
by you under this Contract;
(ii) On Phonograph Records sold for use as premiums or in
connection with the sale, advertising, or promotion of any other
product or service, the royalty rate shall be one-half (1/2) of the
otherwise applicable royalty rate and the Royalty Base Price of those
Phonograph Records shall be deemed to be an amount equal to the monies
actually received by us from the sale of those Phonograph Records,
unless manufactured and sold by an affiliate or licensee of ours, in
which event the Royalty Base Price shall be deemed to be the price used
by that affiliate or licensee in accounting to us;
(iii) On Mid-Price Records the royalty rate shall be
two-thirds (2/3) of the otherwise applicable royalty rate, and on
Budget Records the royalty rate shall be one-half (1/2) of the
otherwise applicable royalty rate;
(iv) On Phonograph Records sold to the United States
Government, its subdivisions, departments or agencies (including
Phonograph Records sold for resale through military facilities) or to
educational institutions or libraries, the royalty rate shall be
one-half (1/2) of the otherwise applicable royalty rate;
(v) On Long-Play Singles, the royalty rate shall be one half
(1/2) of
11
the otherwise applicable royalty rate for Albums, and on EPs the
royalty rate shall be two-thirds (2/3) of the otherwise applicable
royalty rate for Albums;
(vi) On Multiple Albums, the royalty rate shall be the lesser
of: (A) the otherwise applicable royalty rate and (B) the otherwise
applicable royalty rate multiplied by a fraction, the numerator of
which is the Royalty Base Price of the Multiple Album and the
denominator of which is the product of the Royalty Base Price of a
top-line single-disc Album in the configuration in question and the
number of discs contained in the Multiple Album;
(vii) On Phonograph Records in the form of Digital Records the
royalty rate shall be:
(A) Seventy Five percent (75%) of the otherwise
applicable royalty rate for all Digital Records other than
Compact Discs; and
(B) Eighty percent (80%) of the otherwise applicable
royalty rate on Compact Discs;
(viii) On Masters licensed by us to others for their
manufacture and sale of Phonograph Records or for any other uses (other
than those for which a royalty is payable in accordance with
subparagraph (x)(B) below), your royalty shall be an amount equal to
fifty percent (50%) of our Net Receipts from the sale of those
Phonograph Records or from those other uses of the Masters;
(ix) On Audio-Visual Recordings embodying the performances of
Artist, your royalty shall be as follows:
(A) On Audio-Visual Records your royalty shall be
computed in accordance with the provisions of this paragraph 9
applicable to Albums, except on sales of Audio-Visual Records
in the United States the royalty rate pursuant to subparagraph
9(a)(i) above shall be deemed to be eighteen percent (18%) and
on sales of Audio-Visual Records outside of the United States
the royalty rate pursuant to subparagraphs 9(a)(ii) through
9(a)(v) above shall be deemed to be twelve percent (12%).
Notwithstanding anything to the contrary contained herein, the
royalty payable to you pursuant to this subparagraph (ix)(A)
on the exploitation of Audio-Visual Recordings in the United
States or Canada shall be inclusive of any royalties or other
monies required to be paid or incurred by us (or otherwise
deducted from monies payable to us) to any person, firm or
corporation for the synchronization, reproduction and/or
public performance of any Selection in the Audio-Visual
Recording in question and, without limiting any of our other
rights or remedies hereunder or otherwise, we shall have the
right to deduct from the royalty payable to you pursuant to
this subparagraph (ix)(A) an amount equal to those sums
12
required to be paid to any person, firm or corporation in
connection therewith;
(B) On Audio-Visual Records manufactured and sold by
a non-affiliated licensee of ours, however, in the United
States or elsewhere, your royalty shall be an amount equal to
fifty percent (50%) of our Net Receipts from the sale of those
Audio-Visual Records (rather than the royalty computed in
accordance with the immediately preceding subparagraph (A));
and
(C) Notwithstanding anything to the contrary
contained herein, the exploitation of Audio-Visual Recordings
by means of any so-called "video jukebox" shall be deemed to
be non-royalty bearing and promotional in nature for all
purposes of this Contract; and
(D) On Mid-Price Audio-Visual Records the royalty
rate shall be three-fourths (3/4) of the otherwise applicable
royalty rate, and on Budget Audio-Visual Records the royalty
rate shall be one-half (1/2) of the otherwise applicable
royalty rate;
(x) On New Records your royalty shall be the lesser of the
following:
(A) Seventy-five percent (75%) of the otherwise
applicable royalty rate applied to the Royalty Base Price of
the New Record concerned; and
(B) An amount equal to the product of (1) our Net
Receipts from the exploitation of those New Records, and (2)
the otherwise applicable royalty rate;
(c) Notwithstanding the foregoing:
(i) No royalties shall be payable on Phonograph Records
furnished as free or bonus Phonograph Records to members, applicants,
or other participants in any record club or other direct mail
distribution method; on Phonograph Records distributed for promotional
purposes to radio stations, television stations or networks, record
reviewers, or other customary recipients of promotional Phonograph
Records; on so-called "promotional sampler" Phonograph Records; on
Phonograph Records sold as scrap or as "cut-outs"; or on Phonograph
Records (whether or not intended for sale by the recipient) furnished
on a no-charge or free basis (such as, but not limited to, Phonograph
Records commonly described in the record industry as "free goods" or
"freebies") or sold at less than fifty percent (50%) of their regular
wholesale price to distributors, subdistributors, dealers, or others,
whether or not the recipients thereof are affiliated with us. We shall
not distribute Phonograph Records embodying solely Masters in the
United States at
13
no-charge for sale by the recipient thereof other than in accordance
with our thencurrent general policy applicable at the time of our
distribution of those Records which, in the United States on the date
of this Contract, is the distribution of the following Phonograph
Records at no charge intended for sale by the recipient thereof (1) on
a regular basis, as follows: Fifteen (15) Albums and EPs in the form of
Conventional vinyl discs and cassette tapes for each eighty-five (85)
of those Albums and EPs sold (that is, fifteen (15) Albums and EPs in
the form of conventional vinyl discs and cassette tapes are distributed
at no charge out of each one hundred (100) of those Albums and EPs
distributed for sale by the recipient thereof); twenty (20) Albums and
EPs in the form of Digital Records (including, without limitation,
Compact Discs) for each eighty (80) of those Albums sold (that is,
twenty (20) Albums in the form of Digital Records are distributed at no
charge out of each one hundred (100) of those Albums distributed for
sale by the recipient thereof); and thirty (30) Singles and Long-Play
Singles in all forms and configurations for each seventy (70) Singles
and Long-Play Singles sold in any form or configuration (that is,
thirty (30) Singles and Long-Play Singles in all forms and
configurations are distributed at no charge out of each one hundred
(100) Singles and Long-Play Singles distributed in any form or
configuration for sale by the recipient thereof); and thirty (30)
Phonograph Records other than Albums, EPs, Singles and Long-Play
Singles, if any, for each seventy (70) of those Phonograph Records sold
in any form or configuration (that is, thirty (30) Phonograph Records
other than Albums, EPs, Singles and Long-Play Singles, if any, are or
would be distributed at no charge out of each one hundred (100) of
those Phonograph Records distributed for sale by the recipient
thereof); and (2), from time to time in connection with short-term or
other special sales programs of limited duration, such additional
Records as we in the exercise of our business judgment determine. We
shall distribute Phonograph Records in the form of New Records
embodying solely Masters in the United States at no-charge for sale by
the recipient thereof in accordance with our then-current general
policy applicable to Compact Discs at the time of our distribution of
those Records;
(ii) Royalties on Phonograph Records (whether or not intended
for sale by the recipient thereof) sold at a discount to distributors,
subdistributors, dealers, or others, whether or not affiliated with us
(except for Phonograph Records sold at less than fifty percent (50%) of
their regular wholesale price, for which no royalties are payable
hereunder) shall be reduced in the same proportion as the regular
wholesale price of those Phonograph Records is reduced on those sales;
(iii) For purposes of computing royalties, there shall be
deducted from the Royalty Base Price (or other applicable price, if
any, upon which royalties are calculated) of Phonograph Records
hereunder an amount equal to twenty percent (20%) thereof for all
Phonograph Records in the form of Conventional cassette tapes and
twenty-five percent (25%) thereof for Phonograph Records in all other
forms, whether now known or hereafter devised;
14
(iv) Phonograph Records distributed by any of our affiliates
shall be deemed sold for the purposes of this Contract only if sold by
that affiliate to one of its independent third party customers and
final payment is received therefor by us in United States Dollars in
the United States;
(v) The royalty payable to you hereunder on a Phonograph
Record or other device embodying Masters together with other Master
Recordings shall be computed by multiplying the otherwise applicable
royalty rate by the "Reduction Factor." As used herein, the term
"Reduction Factor" shall mean, at our election, (A) a fraction, the
numerator of which shall be the number of Selections contained on the
Masters which are embodied on that Phonograph Record or other device
and the denominator of which shall be the total number of Selections
embodied on that Phonograph Record or other device or (B) a fraction,
the numerator of which shall be the playing time of the Selections
contained on the Masters which are embodied on that Phonograph Record
or other device and the denominator of which shall be the total playing
time of the Phonograph Record or other device in question. For any
Phonograph Record or other device for which a finite running or playing
time does not exist, the running or playing time of that Phonograph
Record or other device shall be deemed to be one hundred twenty (120)
minutes; and
(vi) The royalty payable to you hereunder and the Recording
Costs hereunder on a Master embodying your performances jointly with
any other artist or musician to whom we are obligated to pay a royalty
in respect of that Master shall be computed by multiplying the
otherwise applicable royalty rate and Recording Costs by a fraction,
the numerator of which shall be one (1) and the denominator of which
shall be the sum of one (1) and the total number of other artists or
musicians whose performances are embodied on that Master; and
(d) You hereby expressly authorize us and our licensees to collect and
receive on your behalf any royalties or other monies which may be payable in the
United States pursuant to the Audio Home Recording Act allocable to featured
performers and which is otherwise determined to be payable to you in respect of
your performances in Masters ("AHRA Monies"). We shall credit to your account
that portion of AHRA Monies received by us which is specifically allocable to
Masters and otherwise payable to you (less any portion thereof which may be
payable to any third party, including, without limitation, any producer of
Masters). You shall execute any further documentation which we reasonably deem
necessary or desirable to effectuate the foregoing provisions of this
subparagraph (d). Without limiting the foregoing, you shall not have the right
hereunder or otherwise to be paid or to have credited to your account any
portion of AHRA Monies received by us or otherwise received on our behalf
pursuant to the Audio Home Recording Act which is allocable to the owner of the
sound recording.
(e) The royalty payable to you hereunder includes all royalties due
you, Artist, the individual producers and all other persons in connection with
the sale of Records or other exploitation of Masters made hereunder.
15
10. Royalty Payments and Accountings.
(a) We shall send to you statements for royalties payable
hereunder on or before the date ninety (90) days after the end of each of our
then-current semi-annual accounting periods (currently ending on June 30 and
December 31), together with payment of royalties, if any, earned by you
hereunder during the semiannual period for which the statement is rendered
(based on our receipts in the United States during the accounting period for
which the statement is rendered), less all advances and charges under this
Contract. Notwithstanding the foregoing, after the Term, no royalty statement
shall be required to be rendered for any semi-annual accounting period in which
less than Five Thousand Dollars ($5,000) in royalties are credited to your
account (whether by exploitation of Masters or liquidation of reserves) unless
(i) royalties are otherwise actually payable to you for that semi-annual
accounting period; or (ii) you notify us in writing of your request that we
render to you a statement for the semi-annual accounting period in which we
receive that request on the date otherwise required hereunder. We shall have the
right to retain, as a reserve against charges, credits, or returns, such portion
of payable royalties as shall be commercially reasonable and customary in the
industry in our best business judgment. You shall reimburse us on demand for any
overpayments, and we may also deduct the amount thereof from any monies payable
to you hereunder. Royalties paid by us on Phonograph Records subsequently
returned shall be deemed overpayments;
(b) No royalties shall be payable to you on sales of
Phonograph Records or other exploitations of Masters by any of our affiliates or
licensees until payment on those sales has been received by us in the United
States. Sales or other exploitations by an affiliate or licensee shall be deemed
to have occurred in the semiannual accounting period during which that affiliate
or licensee shall have rendered to us and we shall have received in the United
States accounting statements and payments for those sales or other exploitations
of Masters;
(c) (i) Royalties on exploitations of Masters outside of
the United States shall be computed in the national currency in which
our licensees or affiliates or other distributors pay us, shall be
credited to your royalty account hereunder at the same rate of
exchange at which our licensees or affiliates or other distributors
pay us, and shall be proportionately subject to any foreign
withholding or comparable taxes which may be imposed upon our
receipts. You shall not be entitled to any portion of a tax credit
which may be available to us or to any of our licensees or affiliates
in connection with any foreign taxes withheld from our receipts, from
the applicable price in computing the Royalty Base Price, or from any
other source; and
(ii) If we shall not receive payment in United States
dollars in the United States for any exploitations of Masters outside
of the United States, royalties on those exploitations shall not be
credited to your royalty account hereunder. If all advances and other
recoupable charges under this Contract are then currently recouped and
if we are able to do so, we shall accept payment for those
exploitations in foreign currency and shall deposit in a foreign bank
or other
16
depository, at your expense, in that foreign currency, that portion
thereof, if any, as shall equal the royalties which would have been
payable to you hereunder on those exploitations had payment for those
exploitations been made to us in United States dollars in the United
States. The foregoing deposit shall not be reflected on your
accounting statements hereunder. Deposit as aforesaid shall fulfill
our royalty obligations hereunder as to those sales. If any law,
ruling or other governmental restriction limits the amount an
affiliate or licensee can remit to us, we may reduce your royalties
hereunder by an amount proportionate to the reduction in our
affiliate's or licensee's (as appropriate) remittance to us;
(d) You shall be deemed to have consented to all royalty
statements and all other accountings rendered or required to be rendered by us
hereunder and each royalty statement and other accounting shall be conclusive,
final, and binding, shall constitute an account stated, and shall not be
subject to any objection for any reason whatsoever, unless you give us notice
stating the specific basis for that objection within one (1) year after the
date rendered or required to be rendered. You may not maintain any action,
suit, or proceeding of any nature against us in respect of any royalty
statement or other accounting rendered or required to be rendered by us
hereunder (or in respect of the accounting period to which it relates or was
to relate) unless you commence that action, suit, or proceeding against us in
a court of competent jurisdiction within one (1) year after the date rendered
or required to be rendered. If you shall commence an action, suit, or
proceeding against us concerning royalty statements or other accountings
rendered or required to be rendered by us to you hereunder, the scope of
that action, suit or proceeding shall be limited to a determination of the
amount of royalties, if any, payable to you for the accounting periods in
question, and your sole remedy shall be the recovery of those royalties;
(e) We shall maintain books and records concerning the sale
of Phonograph Records hereunder. You shall have the right to designate an
independent certified public accountant on your behalf (who shall not be
compensated on a contingent fee basis), at your own expense, to examine those
books and records (but not any of our books or records relating to the
manufacture of Phonograph Records hereunder) solely for the purpose of
verifying the accuracy of royalty statements and other accountings rendered by
us hereunder, only during our normal business hours and only upon reasonable
written notice. Our books and records relating to a particular royalty
statement or other accounting may be examined only within one (1) year after
the date rendered or required to be rendered. We shall have no obligation to
permit you to examine our books or records relating to any particular royalty
statement or other accounting more than once. Prior to rendering a report to
you with respect to the examination of our books and records as aforesaid, the
independent certified public accountant engaged by you shall first review his
or her tentative written findings with a designated representative of our
finance department in order to remedy any factual errors and clarify any
issues that may have resulted from misunderstanding. You hereby acknowledge
that our books and records contain confidential trade information. Neither you
nor your independent certified public accountant or other representatives
shall communicate at any time to any others or use on behalf of any other
person, firm or corporation any facts or information obtained as a result of
any such examination of our books and records. Further, prior to the
commencement of
17
any examination of our books and records in accordance with the provisions of
the subparagraph (e), you shall cause the independent certified public
accountant engaged by you to sign a letter in a form approved by us which
acknowledges his or her agreement (and the agreement of his or her firm) to be
bound by the foregoing. The rights hereinabove granted to you shall constitute
your sole and exclusive rights to examine our books and records;
(f) We shall have the right to deduct from any monies payable
to you and/or Artist hereunder any amounts paid by us to you and/or Artist or
to any person, firm or corporation representing you and/or Artist or incurred
by us on your and/or Artist's behalf or on behalf of any person, firm or
corporation representing you and/or Artist, if those monies are not otherwise
required to be paid or incurred by us hereunder (unless we expressly agree in
writing that the payment in question is non-deductible or is only recoupable
from royalties earned by you and/or Artist hereunder). Accordingly, all
amounts paid or incurred by us for the services of third parties to market and
promote sales of Phonograph Records embodying Masters shall be recoupable from
royalties earned by you and Artist hereunder; and
(g) We shall have the right to deduct from any monies payable
to you and/or Artist hereunder any amounts which are required to be deducted
from any of those monies under any statute, regulation, treaty or other law,
or under any union or guild agreement, and you and Artist shall promptly
execute and deliver to us any forms or other documents as may be required in
connection therewith. If we fail for any reason to deduct and instead pay any
of those monies required to be deducted from monies payable to you and/or
Artist hereunder, and if, as a result, we are required by any statute,
regulation, treaty or other law or union or guild agreement to pay to any
third party any amounts which were paid to you and/or Artist but which were
required to be deducted, then, without limiting any of our other rights or
remedies in that event, you shall pay to us, upon our demand, the amount of
those monies which were paid to you and/or Artist but which were required to
be deducted, or, at our election, we may deduct from any monies payable to you
and Artist hereunder the amount of those monies paid to you and/or Artist but
which were required to be deducted.
11. Musical Composition Licenses.
(a) You hereby grant to us and our designees the irrevocable
nonexclusive right to reproduce each Controlled Composition on Phonograph
Records and to distribute those Phonograph Records in the United States and
Canada on the following terms and conditions:
(i) Mechanical royalties shall be payable for
Controlled Compositions on Net Sales of Phonograph Records in the
United States and Canada at the following rates:
(A) On Phonograph Records sold in the
United States, the rate for each Controlled Composition
embodied thereon shall be the
18
United States Controlled Composition Mechanical Rate. The term "United
States Controlled Composition Mechanical Rate" shall mean an amount
equal to seventy-five percent (75%) of the "United States Mechanical
Rate." The term "United States Mechanical Rate" shall mean an amount
equal to the minimum statutory royalty rate (without regard to playing
time) provided in the United States Copyright Act for the reproduction
of Musical Compositions as of the "Determination Date" (defined
below);
(B) On Phonograph Records sold in Canada,
the rate for each Controlled Composition embodied thereon
shall be the Canadian Controlled Composition Mechanical
Rate. The term "Canadian Controlled Composition Mechanical
Rate" shall mean an amount equal to seventy-five percent
(75%) of the Canadian Mechanical Rate. The term "Canadian
Mechanical Rate" shall mean an amount equal to the minimum
statutory royalty rate (without regard to playing time)
provided in the Canadian Copyright Act for the reproduction
of Musical Compositions as of the Determination Date. If no
such statutory royalty rate exists, then the term "Canadian
Mechanical Rate" shall mean the minimum, standard mechanical
royalty rate provided in mechanical licenses between record
companies and unrelated publishers in Canada which are
issued by C.M.R.R.A. (or any successor) as of the
Determination Date. If no such standard mechanical royalty
rate exists, however, then the term "Canadian Mechanical
Rate" shall mean the mechanical royalty rate which we may,
in good faith, negotiate at arm's-length with unrelated
publishers effective as of the Determination Date. In no
event, however, shall the number of Canadian pennies
constituting the Canadian Mechanical Rate exceed the number
of United States pennies constituting the United States
Mechanical Rate in effect as of the Determination Date; and
(C) The term "Determination Date" shall
mean the date of delivery to us of the first (1st) Master
embodying the Musical Composition in question or, if
earlier, the date on which that first (1st) Master was
required to be delivered to us hereunder;
(ii) Notwithstanding the foregoing: The mechanical
royalty rate on a Controlled Composition which is an arrangement of a
public domain work shall be that percentage of the United States
Controlled Composition Mechanical Rate or the Canadian Controlled
Composition Mechanical Rate, as applicable, that is equal to the
percentage of the arrangement of the Controlled Composition which is
original in the arrangement and therefore subject to copyright in
accordance with the rules and regulations of ASCAP and/or BMI and for
which ASCAP and/or BMI provides written documentation of that
percentage of the originality in and to that arrangement of a
Controlled Composition, the mechanical royalty rate for a Controlled
Composition recorded in an EP, Long-Play Single, Mid-Price Record,
Budget Record or Records sold through record clubs shall be
three-fourths (3/4) of the United States Controlled Composition
Mechanical Rate or the Canadian
19
Controlled Composition Mechanical Rate, as applicable; if any
particular Record (including, without limitation, so-called "cassette
Singles") embodies more than one (1) of the same or different
recordings of the same Controlled Composition, then the United States
Controlled Composition Mechanical Rate or Canadian Controlled
Composition Mechanical Rate, as the case may be, shall be payable only
once on all reproductions of that Controlled Composition in that
Record, and no mechanical royalties shall be payable for the
reproduction of any Controlled Composition on a Phonograph Record
unless the timing of the Controlled Composition in question as
recorded in the Master embodied on that Phonograph Record exceeds one
(1) minute and thirty (30) seconds in length;
(b) The term "Outside Selection" shall mean each Selection
which is not a Controlled Composition. You acknowledge that as an element of
your delivery to us of a Master, you are required to cause the issuance to us
of licenses to reproduce mechanically each Outside Selection in all Phonograph
Records sold in the United States or Canada on the Required Terms. The term
"Required Terms" shall mean mechanical royalty rates and otherwise on terms
that do not exceed the mechanical royalty rates and that otherwise are no less
favorable to us and our designees than those provided in the standard
mechanical licenses issued by The Xxxxx Xxx Agency, Inc. or any successor for
Phonograph Records sold in the United States and by C.M.R.R.A. or any
successor for Phonograph Records sold in Canada, except (i) the royalty rate
for the mechanical reproduction of Outside Selections on Phonograph Records
sold in the United States or Canada must not exceed the United States
Mechanical Rate or the Canadian Mechanical Rate above, as applicable, and (ii)
no royalties shall be payable for the mechanical reproduction of Outside
Selections on Phonograph Records sold in the United States or Canada for which
no Record royalties are payable under paragraph 9 above or otherwise. If for
any reason you fail to cause the issuance to us of a license for the
mechanical reproduction of any Outside Selection as and when required
hereunder, we shall have the right, at our election and without limiting our
other rights or remedies in that event, to negotiate and execute licenses for
the mechanical reproduction of each such Outside Selection on Phonograph
Records distributed in the United States or Canada on terms and conditions
which are determined solely by us or our designees. Solely for purposes of
subparagraph (e) below, those licenses so procured by us shall be deemed to be
on terms no less favorable to us or our designees than the Required Terms.
Nothing contained in this subparagraph amends or modifies your obligation to
deliver to us and our designees licenses for the mechanical reproduction of
all Selections recorded in the Masters as a condition for the delivery to us
of Masters or waives the provisions of subparagraph 11(i) below;
(c) (i) Notwithstanding anything to the contrary contained
herein, for Net Sales in the United States, the maximum aggregate
mechanical royalty rate for all Selections, including Controlled
Compositions, contained on a Phonograph Record, regardless of the
number of Selections contained thereon, shall be the product of (A)
the United States Controlled Composition Mechanical Rate and (B) ten
(10) for an Album, five (5) for an EP, and two (2) for a Single and a
Long-Play Single, and for Net Sales in Canada, the maximum aggregate
20
mechanical royalty rate for all Selections, including Controlled
Compositions, contained on a Phonograph Record, regardless of the
number of Selections contained thereon, shall be the product of (A)
the Canadian Controlled Composition Mechanical Rate and (B) ten (10)
for an Album, five (5) for an EP, and two (2) for a Single and a
Long-Play Single;
(ii) Notwithstanding the foregoing, if we release a
Multiple Album embodying solely Masters hereunder, then, solely with
respect to that Multiple Album, the maximum aggregate mechanical
royalty rate for Net Sales of that Multiple Album in the United States
or Canada shall be the otherwise applicable maximum set forth in
subparagraph 11(c)(i) above for Net Sales of Albums in the United
States or Canada, as applicable, multiplied by a fraction, the
numerator of which is the Royalty Base Price of that Multiple Album in
the United States or Canada, as applicable, and the denominator of
which is the highest Royalty Base Price of an Album which is not a
Multiple Album in the configuration or format in question released on
our top-line label in the United States or Canada, as applicable, as
of the date of our initial release through normal retail distribution
channels in the United States or Canada, as applicable, of that
Multiple Album; and
(iii) Notwithstanding anything to the contrary
contained herein, royalties for the mechanical reproduction of any
Selection in any Phonograph Record distributed in the United States or
Canada shall be payable only on Net Sales of that Phonograph Record in
question for which in a Record royalty is payable hereunder pursuant
to paragraph 9 above; and
(d) We shall account for and pay royalties for the mechanical
reproduction of Controlled Compositions in accordance with the provisions of
subparagraphs (a), (d), (e), and (g) of paragraph 10 above; and
(e) If for any reason we are required to pay royalties for
the mechanical reproduction of any particular Selection (including a
Controlled Composition) or for the mechanical reproduction of all Selections
that are mechanically reproduced in a particular Phonograph Record in excess
of the applicable amounts fixed in subparagraphs (a), (b) or (c) above, the
royalties payable by us for the mechanical reproduction of Controlled
Compositions on Phonograph Records hereunder shall be reduced by an amount
equal to such excess. If that excess is greater than the amount of royalties
payable for the mechanical reproduction of Controlled Compositions on the
Phonograph Record in question, then upon our demand, you and/or Artist shall
pay to us an amount equal to the amount by which those excess mechanical
royalties exceed the royalties payable for the mechanical reproduction of
Controlled Compositions. In addition to all of our other rights and remedies,
we may deduct the amount of that excess from any and all royalties or other
monies payable to you and/or Artist under this Contract;
(f) Upon our request, you shall cause the issuance to us and
our designees a license to reproduce all Selections mechanically on Phonograph
Records hereunder distributed outside the United States and Canada on terms no
less favorable to
21
us and our designees than those generally applicable to Phonograph Record
manufacturers in each country in question, The obligation to account for and
pay royalties for the mechanical reproduction of Selections on sales of
Phonograph Records outside of the United States shall be that of our
affiliates and licensees;
(g) If the copyright in any Controlled Composition is owned
or controlled by a person, firm or corporation other than you or Artist, you
shall cause that person, firm or corporation to grant to us and our designees
the same rights as you and Artist are required to grant to us and our
designees pursuant to this paragraph 11;
(h) You and Artist hereby grant to us and our designees, at
no fee, royalty, or other cost to us or our designees, the irrevocable,
non-exclusive, worldwide right in perpetuity to reproduce and publicly perform
each Controlled Composition in Audio-Visual Recordings, to distribute
Audio-Visual Records embodying those Audio-Visual Recordings, and otherwise to
exploit in any manner and through any media those Audio-Visual Recordings. You
and Artist shall, upon our request, cause the issuance to us and our
designees, at no fee, royalty, or other cost to us or our designees, the
irrevocable, non-exclusive, worldwide right in perpetuity to reproduce and
publicly perform each Selection which is not a Controlled Composition in
Audio-Visual Recordings, to distribute Audio-Visual Records embodying those
Audio-Visual Recordings, and otherwise to exploit in any manner or media those
Audio-Visual Recordings. If we or our designees shall pay any such fee,
royalty, or other cost, then you and Artist shall, upon our demand, pay us the
amount thereof, and we may, in addition to all of our other rights and
remedies, deduct that amount from any monies payable by us hereunder,
including without limitation, from those royalties payable pursuant to
paragraph 9 above in respect of the exploitation of Audio-Visual Recordings in
the United States or Canada;
(i) Any assignment, license or other agreement made with
respect to Controlled Compositions shall be subject to the terms hereof; and
(j) You and Artist grant to us and our designees the
irrevocable right throughout the world in perpetuity to (A) print and
reproduce on the packaging of Phonograph Records, at our election, the title
and lyrics to each Controlled Composition embodied in a Master and (B)
digitally encode in a Master or transmit together with the transmission of the
Master the title and/or lyrics to each Controlled Composition embodied in a
Master, all without payment to you, Artist or any other person, firm or
corporation of any monies or other consideration in connection therewith. You
and Artist also shall cause to be granted to us and our designees the
irrevocable right throughout the world in perpetuity to (A) print and
reproduce on the packaging of Phonograph Records embodying Masters, at our
election, the title and lyrics to each Selection embodied in a Master that is
not a Controlled Composition and (B) digitally encode in a Master or transmit
together with the transmission of the Master the title and/or lyrics to each
Selection embodied in the Master which is not a Controlled Composition, all
without payment to you or any other person, firm or corporation of any monies
or other consideration in connection therewith. If we are required to pay any
monies to any person, firm or corporation for the printing, reproduction,
encoding, or transmission of the title or lyrics of any Selection recorded
in a
22
Master as aforesaid, then you shall, upon our demand, pay to us an amount
equal to those monies paid by us in connection therewith and we may, in
addition to all of our other rights or remedies, deduct that amount from any
monies payable by us hereunder.
12. Audio-Visual Recordings.
(a) Upon our request, Artist shall appear for the making of
Audio-Visual Recordings embodying Artist's performances on the following
terms:
(i) We shall designate the Musical Compositions which
shall be embodied in the Audio-Visual Recordings, the producer and
director of the Audio-Visual Recordings, all other individuals
rendering services in connection with the production of the
Audio-Visual Recordings, the storyboard and script for the production
of the Audio-Visual Recordings, and the locations at and the dates on
which the Audio-Visual Recordings shall be produced (collectively
referred to as "Audio-Visual Production Elements");
(ii) We shall pay the Audio-Visual Production Costs
of the Audio-Visual Recordings in an amount not in excess of a budget
designated or approved by us in writing, which for the video in
connection with Artist's First Album under the Recording Commitment is
$75,000. "Audio-Visual Production Costs" shall mean and include all
minimum union scale payments made to Artist in connection with the
production of the Audio-Visual Recordings, all payments which are made
to any other individuals rendering services in connection with the
production of the Audio-Visual Recordings, all other payments which
are made pursuant to any applicable law or regulation or the
provisions of any collective bargaining agreement between us and any
union or guild (including, without limitation, payroll taxes and
payments to union pension and welfare funds), all amounts paid or
incurred for studio, hall, location or set rentals, tape, film, other
stock, engineering, editing, instrument rentals and cartage,
transportation and accommodations, immigration clearances, any
so-called "per diems" for any individuals (including you and Artist)
rendering services in connection with the production of the
Audio-Visual Recordings, together with all other amounts paid or
incurred in connection with the production and delivery to us of the
Audio-Visual Recordings. One hundred percent (100%) of the
Audio-Visual Production Costs shall be recoupable from royalties
payable under this Contract on the reproduction or other exploitation
of all Audio-Visual Recordings and Audio-Visual Records. Fifty percent
(50%) of the aggregate Audio-Visual Production Costs of each
Audio-Visual Recording shall be recoupable from royalties payable
under this Contract on the reproduction or other exploitation of
Masters in Phonograph Records reproducing sound alone;
(iii) The Audio-Visual Recordings shall be produced
in accordance with the rules and regulations of all labor unions and
guilds having jurisdiction over the production thereof;
(iv) You and Artist shall cooperate with us and our
designees fully
23
and to perform to the best of your and Artist's ability in
connection with the production of the Audio-Visual
Recordings; and
(v) If the Audio-Visual Production Costs
exceed the budget approved by us in writing, you shall be
solely responsible for and shall promptly pay that excess.
If, however, we pay any excess Audio-Visual Production Costs,
you shall pay to us, upon our demand, an amount equal to that
excess. If for any reason you or Artist delay the
commencement of or are not available for any scheduled
appearance by Artist relating to the production of the
Audio-Visual Recordings, you shall pay to us, upon our
demand, an amount equal to the expenses or charges paid or
incurred by us by reason thereof. Notwithstanding anything to
the contrary contained herein, without limiting our other
rights and remedies, we may deduct the foregoing amounts from
any monies payable by us hereunder;
(b) Our rights in the Audio-Visual Recordings and our rights
to use your and Artist's name and the name, likeness, and other identification
and biographical material concerning you and Artist are set forth in
paragraphs 6 and 7 hereof, wherein the terms "Master Recordings" and
"Phonograph Records" include Audio-Visual Recordings and Audio-Visual Records,
respectively; and
(c) We are under no obligation to produce Audio-Visual
Recordings hereunder. Notwithstanding the foregoing, we agree to produce one
(1) Audio-Visual Recording in connection with the First Album in fulfillment
of the Recording Commitment in the initial Contract Period, provided that
music videos remain a viable tool among major record companies in the music
industry for the marketing and promotion of Records of the same genre as
Artist's. Audio-Visual Recordings shall not apply in fulfillment of your
Recording Commitment. We shall have no obligation, except as expressly
otherwise provided in this paragraph 12, to pay to you or Artist any monies in
connection with the production of Audio-Visual Recordings.
13. Warranties. Representations and Covenants. You hereby warrant,
represent, covenant and agree as follows:
(a) You have the right and power to enter into this Contract,
to grant the rights granted by you to us hereunder, and to perform all of the
terms hereof. Without limiting the generality of the foregoing, no Musical
Composition, other Selection or any other material recorded hereunder shall be
subject to any re-recording or other restrictions;
(b) During the Term, Artist shall become and remain a member
in good standing of any labor union or guilds with which we may at any time
have an agreement lawfully requiring Artist's membership;
(c) All recording sessions for the Masters shall be conducted
in all respects in accordance with the terms of the AF of M Phonograph Record
Labor Agreement, of the AFTRA Code for the Phonograph Industry, and of the
agreements with all other labor unions and guilds having jurisdiction over the
recording of the Masters;
24
(d) None of the following will violate or infringe upon the
rights of any person, firm or corporation, including, without limitation,
contractual rights, copyrights, rights of publicity and rights of privacy: any
name or other identification used by you or Artist; any Controlled Compositions;
any other Selections; and any materials, ideas, or other properties furnished or
designated by you or Artist and embodied or contained in or used in connection
with the Masters or the packaging of or the advertising for the Phonograph
Records embodying the Masters
(e) All recordings embodying Artist's performances heretofore
have been released commercially in the United States on Phonograph Records;
(f) Neither you nor Artist shall at any time, directly or
indirectly, give or offer to give any consideration of any kind to any radio or
television station or network, to any employee thereof, or to any person, firm,
or corporation controlling or influencing that station or network's programming
for the purpose of securing the broadcast or promotion of any Phonograph Records
hereunder;
(g) Except as otherwise specifically provided herein, we shall
have no obligation hereunder or otherwise to pay any person, firm, or
corporation any amounts in connection with the exercise of any of our rights
hereunder, including, without limitation, our rights with respect to the
recording or exploitation of Master Recordings. You are solely responsible for
and will pay all sums due Artist, the individual producers of each Master
hereunder, and all other persons entitled to receive royalties or other payments
in connection with the exploitation of Masters hereunder; and
(h) Without limiting the generality of anything contained in
the foregoing, you and Artist shall neither authorize the production of, nor
shall you produce for or deliver to us, any Master for which the recording
method known as "sampling" shall have been utilized to record in that Master any
sound or material created, owned or controlled by any third party.
(i) There is in existence between you and Artist a valid and
enforceable written agreement (the "Artist Agreement") pursuant to which Artist
is required to perform exclusively for you during the term of this agreement and
that contains appropriate provisions to allow you to comply with your
obligations hereunder. You will not modify or amend the Artist Agreement nor
waive your rights thereunder in any manner that might impair the rights granted
to us hereunder. You will take all steps necessary and desirable to keep the
Artist Agreement in full force and effect during the term hereof Simultaneously
with the execution of this agreement, you will deliver to us an agreement
between us and Artist in the form of inducement letter attached hereto as
Exhibit "A"; you hereby give your consent and approval to the contents thereof
and said Exhibit "A" is hereby made a part hereof You will require full and
complete performance by the Artist of the Artist Agreement.
(j) "Artist" refers to the individual(s) named in Paragraph I
above as
25
well as any individual who at any given time during the term hereof then records
with the above-named individuals (other than background vocalists and
instrumentalists). The substitution of, addition to, or subtraction from any of
the present members of Artist may be done only upon the prior written approval
of you and us, provided that any substituted or added individual must agree in
writing to be bound by all of the terms and conditions of this agreement. You
will promptly deliver to us documents executed by such substituted or added
member necessary or advisable in our judgment to confirm that the new member has
agreed to be so bound.
14. Recording Restrictions.
(a) You warrant and represent that you have the sole and
exclusive right to the services of Artist as required herein. During the Tenn,
neither you nor Artist shall enter into any agreement or make any commitment
which would interfere with your and Artist's performance of any of the terms
hereof. Further, during the Term, neither you nor Artist shall perform for or
render services in connection with the recording of any Master Recordings for
use or reproduction in Phonograph Records by any person, firm, or corporation
other than us. After the Term, you and Artist shall not perform prior to the
Restriction Date for any person, firm or corporation other than us, for the
purpose of making Phonograph Records or Master Recordings, any Selection
recorded hereunder or under any other agreement between you or Artist and us or
our affiliates. The term "Restriction Date" shall mean the later of (i) the date
five (5) years subsequent to the last date on which a Master Recording embodying
that Selection was delivered to us and (ii) the date two (2) years subsequent to
the date on which the Tenn ended. Your agreement with the individual producer of
each Master hereunder will restrict said producer from producing a Composition
produced by such individual hereunder on another Master for any person or
company other than us for at least two (2) years from the date of delivery to us
of such Master; and
(b) You and Artist shall not at any time manufacture,
distribute, or sell or authorize the manufacture, distribution, or sale by any
person, firm, or corporation other than us of Phonograph Records embodying (i)
any performance rendered by Artist during the Term or (ii) any performance
rendered by Artist after the Term of a Selection recorded hereunder if that
performance shall have been rendered prior to the Restriction Date applicable to
that Selection. Furthermore, Artist shall not record nor shall you or Artist
authorize or knowingly permit to be recorded for any purpose any such
performance without in each case taking reasonable measures to prevent the
manufacture, distribution, or sale at any time by any person, firm, or
corporation other than us of Phonograph Records embodying that performance.
Specifically, but without limiting the generality of the foregoing, if during
the Term Artist performs any Selection or if after the Term Artist performs any
Selection prior to the Restriction Date applicable thereto, you and Artist will
not authorize or knowingly permit that Selection to be recorded unless pursuant
to a written contract containing an express provision that neither that
performance nor the recording thereof will be used directly or indirectly for
the purpose of making Phonograph Records. Upon our request, you shall promptly
deliver to us a copy of the pertinent provisions of each such contract and you
shall cooperate fully and reasonably with us in
26
any controversy which may arise or litigation which may be instituted relating
to our rights pursuant to this paragraph.
15. Unique Services. You expressly acknowledge that 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 of
any term hereof, we will be caused irreparable injury which cannot adequately be
compensated by money damages. Accordingly, we shall be entitled to injunctive
relief, in addition to any other rights or remedies which we may have, to
enforce the terms of this Contract.
16. Certain Remedies.
(a) We may, at our election, suspend the running of the Term
and our obligations hereunder upon written notice to you (i) if for any reason
whatsoever your voice or ability to perform as an instrumentalist shall become
materially impaired, (ii) if Artist shall refuse, neglect, fail, or be unable
to fulfill any of Artist's obligations hereunder, or (iii) if as a result of an
Act of God, accident, fire, labor controversy, riot, civil commotion, act of
public enemy, law, enactment, rule, order, or act of any government or
governmental instrumentality, failure of technical facilities, failure or delay
of transportation facilities, illness or incapacity of you, Artist, or others,
or other cause of a similar or dissimilar nature not reasonably within our
control, we are hampered in the recording, manufacture, distribution, or sale of
Phonograph Records or our normal business operations become commercially
impractical. A suspension shall be for the duration of any such event or
contingency, and, unless we notify you to the contrary in writing, the Contract
Period during which that event or contingency shall have commenced shall be
automatically extended by a number of days equal to the total number of days of
the suspension, or such fewer number of days of which we may advise you in
writing. If any period of suspension arising from events other than (i) the
impairment of Artist's voice or ability to perform as an instrumentalist, (ii)
your or Artist's refusal, neglect, failure, or inability to fulfill any of your
obligations hereunder, or (iii) any other event affecting a substantial portion
of the United States recording industry, shall exceed six (6) consecutive
months in duration, you may give to us notice at any time during the
continuation of that period of suspension after the date six (6) months after
its commencement, of your desire that we discontinue such period of suspension
and that the Term be terminated if we fail to do so ("Termination Request"). If
we shall fail to give to you notice of our discontinuance of that period of
suspension within ten (10) business days after our receipt of your Termination
Request, the Term shall expire and we shall have no obligations or liabilities
to you hereunder, except for our obligations with respect to Masters delivered
hereunder prior to that termination, if any. Notwithstanding the foregoing, a
suspension of the Tenn pursuant to this subparagraph 16(a) shall not suspend our
royalty accounting and payment obligations hereunder unless the event causing
that suspension materially affects our ability to make payments or render
statements. No suspension shall in any manner suspend or otherwise impair our
rights under this Contract;
(b) If Artist's voice or ability to perform as an
instrumentalist shall become impaired or if you or Artist shall refuse, neglect,
fail, or be unable to fulfill any of
27
your obligations hereunder, including, without limitation, Artist's obligation
to record for and deliver to us Masters within the time periods set forth in
paragraph 3 above, we may, without limiting our other rights or remedies,
terminate the Term upon written notice to you, in which event we shall have no
obligations or liabilities to you under this Contract, except for our
obligations, if any, with respect to Masters recorded prior to that termination.
If we so terminate the Term, you shall pay us, on demand, an amount equal to any
unrecouped advances hereunder, other than any advances attributable to and paid
in respect of a Required Album theretofore delivered by you to us; and
(c) In addition to our other rights hereunder, we shall have
the right, at our election and for any reason, with or without cause, to
terminate the Term at any time by written notice to you. Additionally, we shall
have the right, at our election, with or without cause, to refuse to permit you
to fulfill your then-current Recording Commitment for any Contract Period
including, without limitation, by discontinuing recording sessions for any
Masters and ceasing the payment of Recording Costs for any Masters. If we refuse
to permit you to fulfill your minimum Recording Commitment for. any Contract
Period, other than as a result of an event or contingency referred to in
subparagraph 17(a) above, we shall have no obligations or liabilities to you in
connection therewith unless within forty five (45) days after our refusal you
shall notify us of your desire to fulfill your minimum Recording Commitment for
that Contract Period and within thirty (30) days after our receipt of that
notice we shall fail to advise you in writing that we shall permit you to
fulfill your minimum Recording Commitment for that Contract Period. If we shall
fail to so advise you in writing that we shall permit you to fulfill your
minimum Recording Commitment for that Contract Period, the Term shall expire as
of the end of that thirty (30) day period and we shall have no obligations or
liabilities to you whatsoever in connection with our fault to permit you to
fulfill your Recording Commitment for that Contract Period. We shall, however,
pay to you promptly after the expiration of that thirty (30) day period, as an
advance recoupable from royalties hereunder or under any other agreement between
you and us or our affiliates, an amount equal to the minimum union scale
payments which would have been required to have been paid to you for each
Required Album for that Contract Period that we did not permit you to record.
For the purposes of the foregoing, an Album shall be deemed to be comprised of
eight (8) Masters.
17. Producer Provisions.
(a) You shall cause any and all producers of the Masters to
execute a Producer Declaration in the form attached hereto as Exhibit B prior to
the commencement of recording sessions for any Masters hereunder. Without
limiting the generality of anything set forth in paragraph 4 above, no recording
sessions shall be commenced nor shall we have any obligation to pay to you any
advances for the Masters pursuant to paragraph 8 above unless and until you
shall have entered into a binding agreement with any and all producers of the
applicable Masters and we shall have received an executed Producer Declaration
from any and all producers of the applicable Masters,
(b) You shall be solely responsible for and shall pay all
royalties and other compensation which may be payable to any producers of the
Masters or to any
28
producers or directors of Audio-Visual Recordings or to any others rendering
services in connection with the recording of the Masters and the production of
Audio-Visual Recordings or otherwise entitled to compensation in respect of the
exploitation of Masters or Audio-Visual Recordings; and
(c) We may, but shall not be obligated to, enter into an
agreement with any producers of the Masters or any producer or director of any
Audio-Visual Recordings which provides for the payment by us, rather than you,
of royalties or other compensation payable to any such producer or director;
provided, however, that any such agreement shall contain standard terms and
conditions and we shall consult with you prior to our entering into any such
producer agreement, provided you are reasonably personally available therefor.
We shall consider in good faith your recommendations with respect to such
agreements, provided, however, that our decisions with respect thereto shall be
final and our failure to so consult with you in accordance with this
subparagraph 17(c) shall not constitute a breach of the Contract. We may deduct
any amounts payable by us to those producers or directors of Masters or
Audio-Visual Recordings from any monies payable by us hereunder. Furthermore,
for the purposes of the recoupment of any advances or charges under this
Contract, the royalty rates contained in paragraph 9 with respect to those
Masters and Audio-Visual Recordings shall be deemed reduced by the amount of the
applicable royalty rates with respect to Masters and Audio-Visual Recordings
payable by us to any such producers or directors. Any advances payable by us to
those producers or directors which are not recouped by us from royalties payable
to those producers or directors may be recouped by us from any royalties or
other sums payable by us hereunder.
(d) In the event of your dissolution or the liquidation of
your assets, or the filing by or against you of a petition for liquidation or
reorganization under Title II of the United States Code as now or hereafter in
effect or under any similar statute relating to insolvency, bankruptcy,
liquidation or reorganization, or in the event of the appointment of a trustee,
receiver or custodian for you or for any of your property, or in the event that
you make an assignment for the benefit of creditors or commit any act for or in
bankruptcy, or you become insolvent, or in the event you fail to fulfill any of
your obligations under this agreement for any other reason, then at any time
after the occurrence of any such event, in addition to any other remedies which
may be available, we will have the right, exercisable by notice to you, either
to (a) terminate the term of this agreement, or (b) to require Artist to render
Artist's personal services directly to us for the remaining balance of the term
of this agreement, including any extension thereof, for the purpose of
fulfilling your obligations hereunder, upon all the same terms and conditions as
are herein contained. In the event we exercise option (b) above, Artist will be
deemed substituted for you as a party to this agreement as of the date of our
option exercise, and, in respect of Masters subsequently delivered hereunder,
the royalties and any Advances payable hereunder will be those payable pursuant
to the Artist Agreement.
(e) If we elect to receive Artist's services directly under
the terms of the Inducement Letter pursuant to a claim by Artist that you are no
longer entitled to Artist's services, then our obligations to you under this
agreement will be automatically suspended until it is determined, through final,
non-appealable award judgment or arbitration) or
29
written settlement agreement, whether you are entitled to Artist's recording
services as required by this agreement. Further, we will have access to your
books and records so that we may, at our election, account and make payments
directly to Artist in accordance with the Artist Agreement, which payments will
fully satisfy our obligations to make payments to you hereunder during such
suspension. If and when you are so determined to have been entitled to Artist's
services as required herein, then (a) such suspension will terminate, (b) we
will pay you any amounts withheld during the suspension, less any amounts paid
by us to Artist, to any producer of Masters or other Recordings and to any other
persons or companies who may be entitled to receive royalties or other sums in
respect of Masters or other Recordings, any and all of which will be deemed to
have been paid hereunder, and (c) any Masters and other Recordings recorded by
Artist during such suspension will be deemed to be Masters or other Recordings,
as applicable, recorded hereunder. In the event you are so determined not to
have been entitled to Artist's services as required hereunder, then you will be
deemed to be in material breach of this agreement, and, without limiting any of
our rights or remedies, we may terminate the term of this agreement by notice to
you at any time, in which event the term hereof will be deemed to have been
terminated as of the date the suspension commenced. In the event we so terminate
the term hereof, Recordings made directly for us under the terms of the
Inducement Letter will be and remain our sole and exclusive property, not
subject to this agreement insofar as you are concerned, and we will have no
obligation whatsoever to pay any monies to you with respect to such Recordings,
whether earned before or after the effective date of such termination. If Artist
breaches the Artist Agreement, you will immediately notify us in writing of the
details of such breach. If you do not enforce any of your rights under said
agreement, we may, without limitation of our rights or remedies, enforce such
rights in your name and/or our name.
18. Definitions.
(a) The term "Album" shall mean a twelve (12) inch
thirty-three and a third (33-1/3) rpm long-playing vinyl-disc Phonograph Record
of no fewer than forty-five (45) minutes in playing time or its cassette tape or
other equivalent or substantial equivalent in any form or configuration, and,
where the context requires, Masters sufficient to constitute a twelve (12) inch
thirty-three and a third (33-1/3) long-playing vinyl-disc Phonograph Record of
no fewer than forty-five (45) minutes in playing time or its tape or other
equivalent or substantial equivalent in any form or configuration. The maximum
playing time of an Album shall not exceed the maximum number of minutes capable
of being reproduced pursuant to the technological specifications of the format
or configuration concerned, which shall be designated by us in our reasonable
good faith discretion;
(b) The term "Audio-Visual Record" shall mean a Phonograph
Record embodying visual images;
(c) The term "Audio-Visual Recording" shall mean a Master
Recording embodying visual images;
(d) (i) The term "Budget Audio-Visual Record" shall mean an
Audio-
30
Visual Record which bears a Royalty Base Price in the country in question which
is sixty-six and two-thirds (66-2/3%) percent or less of the Royalty Base Price
in that country of top-line Audio-Visual Records on which recordings of the
majority of our artists are initially released in that country;
(ii) The term "Budget Record" shall mean a Phonograph
Record which bears a Royalty Base Price in the country in question
which is sixty-six and two-thirds (66-2/3%) percent or less of the
Royalty Base Price in that country of top-line Phonograph Records on
which recordings of the majority of our artists are initially released
in that country;
(e) The term "Compact Disc" shall mean a Digital Record in any
configuration (e.g., Album, Single, EP) in disc form primarily reproducing sound
(but not together with visual images), the signals of which are read and
transmitted from that disc by means of laser,
(f) The term "Controlled Composition" shall mean a Musical
Composition or other Selection, written or composed by you, in whole or in part,
alone or in collaboration with others, by Artist, in whole or in part, alone or
in collaboration with others, or which is owned or controlled, in whole or in
part, directly or indirectly, by you, Artist, or any person, firm or corporation
in which you or Artist have a direct or an indirect interest
(g) The terms "Conventional Phonograph Record," "Conventional
cassette tapes," "Conventional vinyl discs" and "Conventional Album" shall refer
to black vinyl discs or analog tape cassettes of customary quality;
(h) The term "Digital Records" shall mean Records in any
configuration (e.g., Album, Single, EP), the signals of which are encoded and
decoded by digital technology, whether now known or hereafter devised, as
opposed to analog technology, and shall include, without limitation, Compact
Discs, digital audio tapes, mini discs and digital compact cassettes.
Notwithstanding the foregoing, the term "Digital Records" shall not mean a
Record exploited by means of direct transmission (whether digital or otherwise)
via satellite, cable or other direct transmission to the consumer over wire or
through the air, which shall constitute a New Record hereunder for all purposes;
(i) The term "delivery to us" or words of similar connotation
used in connection with Master Recordings or Masters shall mean delivery to our
Production Manager at our offices in Philadelphia, Pennsylvania of all of the
following: a two-track sequenced, equalized, fully-mixed and mastered digital
audio tape and/or U-matic 1630 tape in proper form for the production of the
parts necessary to manufacture Phonograph Records therefrom and all consents,
approvals, copy information, credits, mechanical licenses for all Selections
recorded in those Master Recordings or Masters and other material and documents
required by us to release Phonograph Records embodying those Master Recordings
or Masters and to manufacture album covers or other packaging therefor
(including, without limitation, Artwork). Our election to pay to you any monies
31
which were otherwise required to have been paid upon or promptly after your
delivery to us of Masters or our election to release any Phonograph Record
derived from any Master shall not be deemed to be an acknowledgment by us that
delivery to us of that Master or Masters has been completed in accordance with
the provisions of this subparagraph (i). Further, in either event, we shall not
be deemed to have waived our right to require your complete and proper
performance thereafter of your obligation to deliver to us any Masters or any of
our remedies for your failure to do so in accordance with the provisions hereof,
(j) The term "EP" shall mean a twelve (12) inch thirty-three
and a third (33-1/3) rpm or forty-five (45) rpm vinyl-disc Phonograph Record, or
its cassette tape or other equivalent or substantial equivalent in any form or
configuration, embodying no fewer than four (4) Musical Compositions and no more
than seven (7) Musical Compositions;
(k) The term "Long-Play Single" shall mean a twelve (12) inch
thirty-three and a third (33-1/3) rpm or forty-five (45) rpm vinyl-disc
Phonograph Record, or its cassette tape equivalent or other equivalent or
substantial equivalent in any form or configuration, embodying one (1) or more
recordings of no more than three (3) different Musical Compositions,
(1) The term "Master Recording" shall mean every form of
recording (whether now known or unknown), embodying sound alone, or sound
accompanied by visual images, which may be used in the recording, production, or
manufacture of Phonograph Records;
(m) The term "Master" shall mean a Master Recording embodying
Artist's performances recorded during the Term;
(n) (i) The term "Mid-Price Audio-Visual Record" shall mean an
Audio-Visual Record bearing a Royalty Base Price in the country in question in
excess of sixty-six and two-thirds (66-2/3%) percent and less than eighty (80%)
percent of the Royalty Base Price in that country of top-line Audio-Visual
Records on which recordings of the majority of our artists are initially
released in that country;
(ii) The term "Mid-Price Record" shall mean a Phonograph
Record bearing a Royalty Base Price in the country in question in excess of
sixty-six and two-thirds (66-2/3%) percent and less than eighty (80%) percent of
the Royalty Base Price in that country of top-line Phonograph Records on which
recordings of the majority of our artists are initially released in that
country;
(o) The term "Multiple Album" shall mean a single package
containing two (2) or more Albums, or their cassette tape or other equivalent or
substantial equivalent in any form or configuration, which is sold as a single
unit, and, where the context requires, Master Recordings sufficient to
constitute a single package containing two (2) or more Albums, or their tape or
other equivalent or substantial equivalent in any form or configuration, which
is sold as a single unit;
32
(p) The terms "Musical Composition" and "Composition" shall
mean a single musical composition and, for the purposes of computing mechanical
royalties hereunder, shall include a medley;
(q) (i) With respect to Masters other than Audio-Visual
Recordings, the term "Net Receipts" shall mean the flat-fee, if specifically
attributable solely to one (1) or more Masters, or the royalty, as the case may
be, received by us from a person, firm or corporation from the exploitation by
that person, firm or corporation of rights in those Masters, less all costs paid
or incurred by us in connection with the exploitation of those rights and the
collection of those monies, less all taxes and adjustments and less all
royalties or other sums payable by us to any person, firm or corporation in
connection with the exploitation of those rights, including, without limitation,
royalties for the mechanical reproduction of the Selections embodied in those
Masters, but excluding royalties or other sums payable to producers of those
Masters, which shall be borne solely by you; and
(ii) With respect to Audio-Visual Recordings, the term
"Net Receipts" shall mean an amount equal to the flat-fee, if
specifically attributable solely to one (1) or more Audio-Visual
Recordings, or the royalty, as the case may be, received by us from a
person, firm or corporation from the exploitation by that person, firm
or corporation of rights in those Audio-Visual Recordings, less twenty
percent (20%) of those monies as a distribution fee, less all costs
paid or incurred by us in connection with the exploitation of those
rights and the collection of those monies and less all taxes and
adjustments and less a royalties or other sums payable by us to any
person, firm or corporation in connection with the exploitation of
those rights, including, without limitation, royalties for the
mechanical reproduction of the Selections embodied in those
Audio-Visual Recordings, but excluding royalties or other sums payable
to producers of the Masters embodied in those Audio-Visual Recordings
and producers or directors of those Audio-Visual Recordings, which
shall be borne solely by you;
(r) The term "Net Sales" shall mean ninety-percent (90%) of
gross sales for which final payment has been received by us in United States
Dollars in the United States, after deducting from gross sales returns, credits,
and reserves against anticipated returns and credits;
(s) The term "Net Sales through Normal Retail Distribution
Channels" shall mean Net Sales of Phonograph Records hereunder through our
principal distributor in the country in question for resale through record or
other retail stores for which a Record royalty is payable hereunder after the
retention of reserves (and, without limiting the generality of the foregoing,
shall exclude sales or distributions referred to in paragraph 9(b) above);
(t) The term "New Record" shall mean a Phonograph Record in
any software medium in which recorded music is not in general commercial
distribution in the
33
United States as of January 1, 1999, including, without limitation, the sale of
Phonograph Records (or other exploitation of Masters) through the telephone,
satellite, cable or other direct transmissions to the consumer over wire or
through the air (as distinguished from radio or television advertised sales of
Phonograph Records described in subparagraph 9(b)(i) above);
(u) The terms "Phonograph Record," "Record" or "Recording(s)"
shall mean every form of reproduction (whether now known or unknown), embodying
sound alone, or sound accompanied by visual images, distributed primarily for
home use, school use, jukebox use, and use in means of transportation,
including, without limitation, discs of any speed or size, reel-to-reel tapes,
cartridges, cassettes, other pre-recorded tapes, or any digital copy, including,
without limitation, so-called "temporary copy";
(v) The term "Royalty Base Price" shall mean the following
amounts for the following Phonograph Records:
(i) (A) With respect to Phonograph Records (other than
Audio-Visual Records) sold in the United States or Canada, the SRLP
except as set forth below; and
(B) With respect to royalties payable on Net Sales of
Phonograph Records in the United States or Canada for which the Royalty
Base Price is the SRLP, we shall have the fight, at any time, at our
election, to calculate royalties hereunder on the basis of our
principal distributor's price (before consideration of any discounts
resulting from the distribution of free goods), from time to time, to
its customers in the United States of Phonograph Records, in lieu of
the SRLP of those Phonograph Records, multiplied by an "uplift." As
used in the immediately-preceding sentence, the term "our principal
distributor's price" shall mean the lowest wholesale price paid by the
largest category of customers to our principal distributor in the
United States during the relevant semi-annual accounting period. If we
elect to do so, then we shall calculate that uplift" as a fraction, the
numerator of which is the SRLP of a Comparable Phonograph Record
immediately prior to our discontinuance of retail-based calculations
and the denominator of which is our principal distributor's price
(before consideration of any discounts resulting from the distribution
of free goods) to its customers in the United States of a Comparable
Phonograph Record immediately prior to our discontinuance of
retail-based calculations. The application of the foregoing provisions
of this subparagraph shall not result in a reduction in the amount of
royalties otherwise payable to you hereunder on a
configuration-by-configuration basis immediately prior to our
discontinuance of retail-based calculations. For purposes of this
subparagraph, the term "Comparable Phonograph Record" shall mean a
Phonograph Record of the same configuration, with the same packaging,
and in the same price category as the Phonograph Record in question;
and
34
(ii) With respect to Phonograph Records (other than
Audio-Visual Records) sold outside 'of the United States and Canada:
(A) If an SRLP is established or utilized by our
licensee (whether or not affiliated with us) in a particular country in
accounting to us, then that particular SRLP established or utilized by
our licensees shall apply to Phonograph Records hereunder;
(B) If an SRLP is not established or utilized by our
licensee (whether or not affiliated with us) in a particular country in
accounting to us on sales of Phonograph Records, then, at our election,
(1) the price upon which mechanical royalties are generally computed
and paid by major record companies (including, without limitation, our
then-current principal distributor) in the country in question pursuant
to the then-current agreement between major record companies and the
mechanical reproduction rights society in that country or (2) an amount
computed by multiplying the lesser of (aa) that percentage utilized by
our affiliate or licensee in computing a retail related price or
constructed price on which royalties are paid to us and (bb) one
hundred twenty-six percent (126%), by the lowest of (aa) the
so-called "published price to dealers," (bb) the lowest wholesale price
paid to our or our affiliate's or licensee's principal distributor in
the country in question by the largest category of customers during the
relevant semiannual accounting period and (cc) the wholesale price
which our licensee (whether or not affiliated with us) in a particular
country uses in accounting to us for royalties.
(iii) With respect to Audio-Visual Records sold in
any country of the world, an amount equal to the monies actually
received by us in the United States (or credited to us in final
reduction of an advance previously received by us in the United
States) from the sale of those Audio-Visual Records (rather than their
actual SRLP, wholesale price, published price to dealers or any other
price), after deduction of a distribution fee of twenty percent (20%)
of those monies; and
(iv) There shall be deducted from the Royalty Base Price
an amount equal to any excise, sales, value added or comparable or
similar taxes which are included therein;
(w) The term "Selection" shall mean a Musical Composition,
poem, dramatic work, comedy routine, or other verbal expression;
(x) The term "Single" shall mean a seven (7) inch vinyl-disc
Phonograph Record or its tape or other equivalent or substantial equivalent in
any form or configuration; and
(y) Except as otherwise herein provided, the term "SRLP" shall
mean those suggested retail list prices established by us or our affiliates or
licensees from time to time for Phonograph Records in a particular configuration
which shall be determined from
35
time to time with reference to the relevant wholesale price in a manner that
shall be applied consistently to a majority of our (or our licensees' or
affiliates') then-current recording artists. With respect to New Records that
are distributed by telephone, satellite, cable or other direct transmissions
over wire or through the air, the term "SRLP" shall mean either those suggested
retail list prices therefor, if any, established by us or our affiliates in
accordance with the terms of the preceding sentence or those retail list prices
charged to the ultimate consumer therefor, excluding any shipping and handling
charges in connection therewith.
19. Indemni1y. You hereby indemnify, save, and hold us harmless from
any and all damages, liabilities, costs, losses and expenses (including legal
costs and attorneys' fees) arising out of or connected with any claim, demand or
action by us or by a third party which is inconsistent with any of the
warranties, representations or covenants made by you in this Contract. You shall
reimburse us, on demand, for any payment made by us at any time with respect to
any damage, liability, cost, loss or expense to which the foregoing indemnity
applies. Pending the determination of any claim, demand or action, we may
withhold, at our election, payment of any monies otherwise payable to you
hereunder or under any other agreement between you and us or our affiliates in
an amount which does not exceed your potential liability to us pursuant to this
paragraph.
20. Assigment. We shall have the right, at our election to assign this
Contract or any of our rights hereunder, in whole or in part, or to delegate any
of our obligations hereunder, in whole or in part, to any person, firm or
corporation. You shall not have the right to assign this Contract or any of your
rights or to delegate any of your obligations hereunder.
21. Notices. All notices to be given to you hereunder and all
statements and payments to be sent to you hereunder shall be addressed to you at
the address set forth on page I hereof or at such other address as you shall
designate in writing from time to time. All notices to be given to us hereunder
shall be addressed to us at the address set forth on page I hereof or at such
other address as we shall designate in writing from time to time. All notices
shall be in writing and shall either be served by personal delivery, certified
mail, return receipt requested, or facsimile transmission (with a copy sent
concurrently by certified mail, return receipt requested), all charges prepaid,
except that statements and payments may be sent by regular mail. Notices to us
must be sent to the attention of our Senior Vice President, Business & Legal
Affairs. Except as otherwise provided herein, notices shall be deemed given when
personally delivered, mailed as aforesaid, or transmitted by facsimile (with a
concurrent copy mailed as aforesaid), all charges prepaid, except that notices
of change of address shall be effective only after actual receipt. A copy of
each notice to us shall be sent simultaneously to Law Office of Xxxx X. Xxxxxx,
LLC, 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000, Attention: Xxxx Xxxxxx.
22. Micellaneous.
(a) This Contract sets forth your and our entire understanding
relating to its subject matter. No modification, amendment, waiver, termination
or discharge of this Contract or of any its terms shall be binding upon either
of us unless confirmed by a
36
document signed by you and by a duly authorized officer of ours. No waiver by
you or us of any term of this Contract or of any default hereunder shall affect
your or our respective rights thereafter to enforce that term or to exercise any
right or remedy in the event of any other default, whether or not similar;
(b) We shall not be deemed to be in breach of any of our
obligations hereunder unless and until you shall have given us specific written
notice by certified or registered mail, return receipt requested, describing in
detail the breach and we shall have failed to cure that breach within a
reasonable period of time; and
(c) Our payment obligations under this Contract are
conditioned upon your full and faithful performance of the terms hereof,
(d) Wherever your approval or consent is required hereunder,
that approval or consent shall not be unreasonably withheld. We may require you
to formally give or withhold approval or consent by giving you notice of our
request that you do so and by furnishing you with the information or material in
respect of which the approval or consent is sought. You shall give us written
notice of your approval or disapproval or of your consent or non-consent within
five (5) days after our notice is sent and in the event of your disapproval or
non-consent your notice shall contain the specific reasons therefor. Your
failure to give us notice as aforesaid shall be deemed to be consent or
approval, as the case may be, with respect to the matter submitted;
(e) Nothing herein contained shall constitute a partnership,
joint venture, or fiduciary relationship between you or Artist and us. Except as
otherwise expressly provided herein, you and Artist are performing your
obligations hereunder as independent contractors. No party hereto shall hold
itself out contrary to the terms of this subparagraph 22(e) and neither you or
Artist nor we shall become liable for any representation, act or omission of
the other contrary to the provisions hereof,
(f) This Contract shall not be deemed to give any right or
remedy to any third party whatsoever unless that right or remedy is specifically
granted by us in writing to that third party;
(g) The provisions of any applicable collective bargaining
agreement between us and any labor union or guild which are required by the
terms of that agreement to be included in this Contract shall be deemed
incorporated herein as if those provisions were expressly set forth in this
Contract;
(h) In the event of any action, suit, or proceeding arising
from or based upon this Contract brought by either party hereto against the
other, the prevailing party shall be entitled to recover from the other its
attorneys' fees in connection therewith in addition to the costs of that action,
suit, or proceeding;
(i) Except as otherwise expressly provided herein all rights
and remedies herein or otherwise shall be cumulative and none of them shall be
in limitation of any other right or remedy;
37
(j) THIS CONTRACT HAS BEEN ENTERED INTO IN THE COMMONWEALTH OF
PENNSYLVANIA AND ITS VALIDITY, CONSTRUCTION, INTERPRETATION AND LEGAL EFFECT
SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO
CONTRACTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN THE COMMONWEALTH OF
PENNSYLVANIA (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLES UNDER
PENNSYLVANIA LAW). THE VENUE FOR ANY ACTION, SUIT OR PROCEEDING ARISING FROM OR
BASED UPON THIS CONTRACT SHALL BE THE APPROPRIATE STATE AND FEDERAL COURTS
LOCATED IN THE COUNTY OF PHILADELPHIA IN THE COMMONWEALTH OF PENNSYLVANIA.
ACCORDINGLY, YOU AND WE AGREE THAT ANY ACTION, SUIT OR PROCEEDING ARISING FROM
OR BASED UPON THIS CONTRACT SHALL BE COMMENCED IN AND DETERMINED BY THOSE
APPROPRIATE STATES AND FEDERAL COURTS LOCATED IN THE COUNTY OF PHILADELPHIA 1N
THE COMMONWEALTH OF PENNSYLVANIA. IN CONNECTION WITH THE FOREGOING, YOU AND WE
EACH AGREE TO SUBMIT TO AND BE BOUND BY THE JURISDICTION OF THE APPROPRIATE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF PHILADELPHIA IN THE
COMMONWEALTH OF PENNSYLVANIA;
(k) This Contract shall not become effective until signed by
all parties hereto (including being countersigned by a duly authorized officer
of ours);
(1) The paragraph headings herein are solely for the purpose
of convenience and shall be disregarded completely in the interpretation of this
Contract or any of its terms;
(m) We may at any time during the Term obtain, at our cost,
insurance on you and/or Artist. We or our designees shall be the sole
beneficiary of that insurance and neither you, Artist, nor any person, firm or
corporation claiming rights through or from you or Artist shall have any rights
in that insurance. You and/or Artist shall submit to such physical examinations
and to complete and deliver such forms as we may reasonably require and
otherwise to cooperate with us fully for the purpose of enabling us to secure
that insurance;
(n) Upon our request, you and/or shall render your services at
such times and places as we may reasonably designate for the purpose of
assisting us in the marketing, advertising and promotion of Phonograph Records
hereunder. Among those services are engaging in interviews, participating in
press conferences, posing at photography sessions and appearing on television
and radio shows. Promptly after your submission to us of invoices or other
suitable documentation therefor, we shall pay to you or reimburse you for the
reasonable costs of travel and accommodations which are actually
38
paid or incurred by you in connection with such services under this subparagraph
22(n), but you shall not pay or incur any costs or expenses in connection with
such services under this subparagraph 22(n) which are to be paid or reimbursed
by us unless you and we mutually agree in writing on the nature and extent of
those costs and expenses. If we pay or incur any costs in connection with such
services pursuant to this subparagraph 22(n) ("Promotional Services Costs"),
those Promotional Services Costs shall not be recoupable from royalties earned
by you and Artist hereunder. If, however, any third party pays to you or Artist
any fee or other consideration for or in connection with your services pursuant
to this subparagraph 22(n) (such as, but not limited to, a television appearance
fee) and we pay or incur any Promotional Services Costs in connection therewith,
then you shall pay to us all such fees and other consideration to the extent of
our Promotional Services Costs in connection therewith. If you fail for any
reason to pay to us those fees to the extent of our Promotional Services Costs,
then, at our election, the amount of all such fees received by you and/or Artist
from third parties in connection with rendering services pursuant to this
subparagraph 22(n) in an amount equal to our Promotional Services Costs shall be
deemed to be advances recoupable from any and all monies payable pursuant to
this Contract,
(o) Neither you nor Artist shall render any services to or
authorize or permit your or Artist's name or likeness or any biographical
material concerning you or Artist to be used in any manner by any person, firm
or corporation in the advertising, promoting or marketing of blank magnetic
recording tape, digital audio tape or any other product or device intended to be
sold, whether now known or hereafter developed, which may be used for the
fixation of sound alone or sound together with visual images;
(p) You acknowledge and agree that you have been represented
by independent legal counsel or have had the unrestricted opportunity to be
represented by independent legal counsel of your own choice for purposes of
advising you in connection with the negotiation and execution of this Contract.
Additionally, you acknowledge and agree that either you or your independent
legal counsel have had the opportunity to investigate and inquire about all of
the relevant facts and circumstances in connection with your entering into and
executing this Contract. If you have not been represented by independent legal
counsel of your own choice for purposes of advising you in connection with the
negotiation and execution of this Contract, you acknowledge and agree that your
failure to be represented by independent legal counsel in connection with your
negotiation and execution of this Contract was determined solely by you, without
any interference by us or any person, firm or corporation related to us;
(q) The provisions of the Immigration Reform and Control Act
("IRCA") are mandatory. You agree to complete the Immigration and Naturalization
Service Form 1-9 ("Employment Eligibility Verification Form") no later than
concurrently with your execution of this Contract. You expressly acknowledge and
agree that any and all payments to or on behalf of you under this Contract are
conditioned upon your delivery to us of a completed Employment Eligibility
Verification Form. This provision shall not in any way modify or alter the fact
that you are performing your obligations hereunder as an independent contractor,
except as otherwise expressly provided in this Contract;
39
(r) Nothing contained in the Contract or otherwise shall be
deemed to authorize or permit you or Artist to pay or incur (and you and Artist
shall not pay or incur) any cost or expenses without our prior written consent,
which consent we may withhold in our sole discretion; and
(s) Unless otherwise specified herein or unless the context
otherwise clearly requires, the masculine gender used herein includes the
feminine and neuter genders, and the grammatically plural form of any term
defined in the singular form hereunder shall also be the plural form of such
defined term, and the grammatically singular form of any term defined in the
plural form hereunder shall also be the singular form of such defined term.
23. Sampling and Sampled Master. The following terms have the following
meanings: The term "Sampling" refers to the use and reproduction of preexisting
music material in a Master Recording intended to be a "Master"; the term "Other
Material" refers to the pre-existing musical material which is used or embodied
in a Master Recording intended to be a "Master"; and the term "Sampled Master"
refers to a Master Recording which is delivered to us as a "Master" subject to
this Contract embodying Other Material. You warrant, represent, covenant and
agree as follows: concurrently with your delivery to us of any Master Recording
as a "Master" subject to this Contract, you shall notify us in writing of any
Sampling of Other Material in that Master Recording, and you shall notify us in
writing of the names and addresses of the recording artist(s), recording
companies, songwriters and publishers who have any right, title or interest in
and to the Other Material embodied in that Master Recording intended to be
delivered to us as a "Master" subject to this Contract as a result of that
Sampling; no Sampled Master shall violate or infringe on the fights of any other
person, firm or corporation, including, without limitation, the copyrights owned
or controlled by any other person, firm or corporation; as between you, on the
one part, and us, on the other part, you shall be solely responsible for and
shall account for and pay to the persons, firms or corporations that own or
control Other Material all monies to which those other person, firms or
corporations are entitled to as a result of the Sampling of any Other Material
in Sampled Masters subject to this Contract; and, as between you and us, you
shall be solely responsible for obtaining all consents and licenses necessary or
desirable in connection with the use and reproduction and licensing the use and
reproduction of Other Material in Sampled Masters. No royalties, advances or
other money shall be earned by or payable to you hereunder in connection with
any Sampled Master and no Sampled Masters shall be deemed to be delivered to us
in fulfillment of your Recording Commitment unless and until we obtain
documentation reasonably satisfactory to us of the foregoing.
If the foregoing correctly reflects your agreement with us, please so
indicate by signing below.
Very truly yours,
ANTRA RECORDS GROUP, INC.
By: /s/ Xxxxxx X. Maxxxx CEO
------------------------
AGREED AND ACCEPTED:
LEGAL GRIND ENTERTAINMENT, INC.
By: /s/ xxxxxxxxxxxxxxxxxxxxxx
--------------------------
EIN:
-------------------------
40
EXHIBIT "A"
Date: __________________, 199_
Antra Music Group, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Gentlemen:
Pursuant to an exclusive recording agreement between Legal Grind Entertainment,
Inc. ("Company") and Artist (the "Artist Agreement"), Company is entitled to
Artist's exclusive recording services. Artist has been advised that concurrently
herewith ANTRA is entering into an agreement with Company pursuant to which
Company agrees to furnish Artist's exclusive services to perform at recording
sessions for ANTRA (the "Furnishing Agreement"). Artist is familiar with each
provision of the Furnishing Agreement relating to Artist's obligations, assents
to the execution thereof, and agrees to be bound by all the restrictions and
other provisions therein relating to Artist.
In consideration of ANTRA's executing the Furnishing Agreement and as a further
inducement for ANTRA to do so (it being to Artist's benefit as a recording
artist that ANTRA execute the same), Artist hereby agrees as follows:
1. Company, at all times during the term of the Furnishing Agreement
(as it may be extended), will be authorized to furnish Artist's recording
services to ANTRA as provided in the Furnishing Agreement. Artist acknowledges
that ANTRA will have no obligations to make any payments to Artist in connection
with the services rendered by Artist or the fulfillment of Artist's other
obligations under the Furnishing Agreement, except as provided in the Furnishing
Agreement.
2. If, during the term of the Furnishing Agreement or any extensions
or renewals thereof, Company ceases to be entitled to Artist's recording
services in accordance with the terms of the Artist Agreement, or if Company
fails or refuses to furnish master recordings embodying Artist's performance to
ANTRA, Artist, at ANTRA's request, will do all such acts and things so as to
give ANTRA the same rights, privileges, and benefits as ANTRA would have had
under the Furnishing Agreement if Company had continued to be entitled to
Artist's recording services and if Company had continued to furnish master
recordings to ANTRA; such rights, privileges, and benefits will be enforceable
in ANTRA's behalf against Artist; and notwithstanding any breach by Company, all
the terms and conditions contained in the Artist Agreement will be effective as
if Company has assigned the Artist Agreement to ANTRA with Artist's consent. No
termination or modification of the Artist Agreement will operate to diminish
Artist's liability or obligations to ANTRA hereunder, and no breach of the
Artist Agreement by Company will be sufficient cause for Artist to fail to fully
perform for ANTRA pursuant to the Furnishing Agreement and this agreement.
3. All of the terms, conditions and restrictions relating to Artist in
the Furnishing Agreement will be binding upon Artist (whether performing alone
or as part of a group) and regardless of the name(s) by which Artist may be
identified in Artist's artistic endeavors. Company's rights, obligations,
liabilities, prohibitions and restrictions contained in the Furnishing Agreement
are applicable hereto and incorporated herein by reference. The substitution of,
addition to, or subtraction from any of the present members of Artist may be
done only upon the prior written approval of ANTRA, provided that any
substituted or added individual will be deemed a party to this agreement and
must agree in writing to be bound by all of the terms and conditions of this
agreement. Artist will promptly deliver to ANTRA documents executed by that
substituted or added member necessary or advisable in ANTRA's judgment to
confirm that the new member has agreed to be so bound.
4. Artist hereby confirms and joins in the granting to ANTRA of the
rights specified in the Furnishing Agreement, including but not limited to, all
rights in and to the results and proceeds of Artist's recording services and the
right to use and publish Artist's names (legal, group and professional) and
likenesses and to write and publish, and permit others to write and publish,
articles concerning Artist for advertising and trade purposes in connection with
records, the promotion of Artist and general goodwill or institutional
advertising. Artist agrees that Artist will not, during the term of the
Furnishing Agreement (or any extension or renewal thereof), perform for anyone
other than ANTRA for the purpose of making Records, and Artist will not record
any Compositions which are recorded or acquired under the Furnishing Agreement
for anyone other than ANTRA except as provided in the Furnishing Agreement.
5. Artist acknowledges that ANTRA is the exclusive owner of all rights
of copyright in Masters and Records embodying the results and proceeds of
Artist's recording services made pursuant to the Furnishing Agreement or during
its term, including the exclusive right to copyright same as "sound recordings"
in the name of ANTRA, to renew and extend such copyrights (and all rights in and
thereto are hereby assigned to ANTRA), and to exercise all rights of the
copyright proprietor thereunder as provided in the Furnishing Agreement.
6. Artist is entitled to use the professional name ___________________
and to xxxxx XXXXX the right to use said name as provided in the Furnishing
Agreement, and no other person or entity will have the right to use said name or
to permit it to be used in connection with the manufacture, distribution and
commercial exploitation of records.
7. ANTRA may, in its own name, institute any action or proceeding
against Artist to enforce its rights under the Artist Agreement, the Furnishing
Agreement and/or this agreement, and ANTRA will be entitled to equitable relief,
including injunctive relief, to enforce the provisions of said agreements.
8. Artist hereby acknowledges that the Artist Agreement provides that,
as of the end of each of the first seven Contract Years of the Artist Agreement
(or, if later, the first seven Contract Years of this agreement), each member of
Artist will have received Compensation (as defined below) of not less than the
following amounts:
First Contract Year: Nine Thousand Dollars ($9,000.00);
Second Contract Year: Twelve Thousand Dollars ($12,000.00);
Third Contract Year: Fifteen Thousand Dollars ($15,000.00);
Fourth Contract Year: Fifteen Thousand Dollars ($15,000.00);
Fifth Contract Year: Fifteen Thousand Dollars ($15,000.00);
Sixth Contract Year. Fifteen Thousand Dollars ($15,000.00); and
Seventh (and any applicable succeeding) Contract Year: Fifteen
Thousand Dollars ($15,000.00).
Compensation paid in any Contract Year in excess of the minimums specified above
shall apply to reduce the Compensation otherwise required above to be paid in
any subsequent Contract Year. Artist warrants and represents that the term of
the Artist Agreement commenced on _______, 19__, and Artist has been paid all
minimum Compensation required above for that portion of the term of the Artist
Agreement prior to the commencement of the term hereof. In the event the
Compensation paid to any member of Artist is below the amount described above as
of thirty (30) days prior to the end of the applicable Contract Year, such
member of Artist will give ANTRA written notice containing specific reference to
this paragraph 8 and specifying such deficiency. Such notice may be given no
earlier than thirty (30) days nor later than fifteen (15) days prior to the
expiration of the Contract Year concerned. Promptly after its receipt of such
notice, during the term of the Furnishing Agreement, ANTRA will pay the actual
amount of any such deficiency on Company's behalf, which payment shall be a
pre-payment of any monies due under the Artist Agreement (other than Mechanical
Royalties). Any failure by ANTRA to make such payment will not constitute a
material breach of this agreement. As used in this paragraph 8 (a) Contract Year
means the annual period beginning on the first day of the term of the Artist
Agreement or this agreement, as applicable, and each subsequent annual period
during the continuance of the term hereof; and (b) Compensation means all monies
paid by ANTRA or Company to the member of Artist (including, but not limited to,
Advances and Record royalties, but not including Mechanical Royalties). Artist
hereby warrants and represents that all Compensation paid to Artist under the
Artist Agreement has been and will be divided in such a way so as to ensure
payment of the minimum Compensation, as required in this paragraph 8.
9. Artist agrees to indemnify, save and hold ANTRA harmless from and
against any liability, loss, damage, cost or expense (including reasonable
counsel fees) paid or incurred by ANTRA by reason of any breach by Artist of the
covenants, warranties, or representations contained herein or in the Artist
Agreement or Furnishing Agreement, and agree to reimburse ANTRA on demand for
any payment made by ANTRA after the date hereof with respect to any of the
foregoing.
10. This agreement is entered into in the Commonwealth of Pennsylvania
and the validity, interpretation and legal effect of this agreement will be
governed by the laws of such Commonwealth applicable to contracts entered into
and performed entirely within such Commonwealth. The Pennsylvania courts only
will have jurisdiction of any controversies regarding this agreement. Any
process or any action, suit or proceeding arising out of or relating to this
agreement may, among other
methods, be served upon Artist by delivering it or mailing it in accordance with
the Furnishing Agreement.
Very truly yours,
/s/ Xxxxxxx X Xxxxxx )
------------------------------------- )
[_____________] )
)
)
/s/ Xxxxx Xxxxxx )
------------------------------------- )
[_____________] ) p/k/a "Xxxxxx Xxxxx"
) --------------
) (collectively and individually
) referred to in this Agreement as
/s/ Lolechia Xxxxxx ) "Artist")
------------------------------------- )
[_____________] )
)
)
------------------------------------- )
[_____________] )
Social Security No.____________ )
AGREED AND ACCEPTED:
ANTRA MUSIC GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx, CEO
-------------------------
LEGAL GRIND ENTERTAINMENT, INC.
By: /s/ xxxxxxxxxxxxxxxxx
-------------------------
An Authorized Signatory
EXHIBIT B
PRODUCER DECLARATION
I, the undersigned, declare that I have read and understand
those relevant portions of the agreement between Legal Grind Entertainment, Inc.
("Company") and _________________________________________ (professionally known
as "__________________________" and referred to below as "Artist") dated
_____________________ ("Artist Agreement") that pertain to my record production
endeavors.
I hereby certify that I have produced or will have produced
certain master recordings embodying Artist's featured performance ("Masters")
pursuant to an agreement between Company and me ("Producer Agreement") which
provides for valuable consideration to be paid to me. As part of my material
obligations pursuant to the Producer Agreement and for the express and direct
benefit of Company and Antra Music Group ("Antra"), I hereby:
X. Xxxxx to Company and Antra the perpetual right to use
and publish and to permit others to use and publish my
name, signature, approved likeness, and approved
biographical material concerning me for advertising and
trade purposes in connection with the sale and
exploitation of masters and records manufactured from
masters recorded pursuant to the Artist Agreement, or
to refrain therefrom.
B. Agree to look solely to Company for the payment of any
advances, fees and/or royalties, as the case may be,
and will not assert any claim in this regard against
Antra or attempt to prevent the manufacture, sale or
distribution of phonograph records manufactured from
Masters produced under the terms and conditions of the
Artist Agreement and the Producer Agreement. Any
payments that I may receive from Antra in connection
with the exploitation of Masters or my services
pursuant to Producer Agreement shall have been made
solely as an accommodation to Company and nothing
contained herein, in the Producer Agreement or in the
Artist Agreement shall constitute me a beneficiary of
or party to the Artist Agreement or any agreement
between Antra and Company or Artist.
C. Acknowledge and agree that each Master recorded under
the Producer Agreement embodying the results and
proceeds of my services (i) is prepared within the
scope of the Company's engagement of my personal
services and is a "work made for hire" or (ii) is
prepared as part of a long-playing phonograph record
(or its substantial equivalent) which constitutes a
work specially ordered by Company or Antra for use as a
contribution to a collective work and shall be
considered a "work made for hire." I further
acknowledge that Antra is the exclusive owner of
copyright with respect to each such Master and any
"sound recording" or "phonorecord" or "copy"
manufactured therefrom (individually and collectively
called the "Work"), and that Antra has the right to
exercise all rights of the copyright proprietor with
respect thereto, including, but not limited to, all
exclusive right specified in 17 U.S.C. ss. 106 and the
exclusive right to register copyright in the name of
Antra.
D. Notwithstanding the provisions of paragraph C above, I
agree that to the extent, if any, that I may be deemed
an "author" of any Work, I hereby irrevocably transfer,
grant, convey and assign to Antra, exclusively,
perpetually and throughout the universe, all exclusive
right, title and interest in and to such Work,
including, but not limited to, all exclusive right of
the copyright owner as specified in 17 U.S.C. ss. 106.
I hereby grant to Antra a power of attorney,
irrevocable and coupled with an interest, to execute
for me and in my name, all documents and instruments
necessary or appropriate to effectuate the intents and
purposes of this paragraph D and to accomplish,
evidence and perfect the rights granted to Antra
pursuant to this paragraph D including but not limited
to documents to apply for and obtain all registration
of copyrights in and to any such Work, and documents to
assign such copyrights to Antra.
E. Agree that I shall not produce or co-produce, prior to
the date three (3) years after the Master shall have
been delivered to Antra in accordance with the
provisions of the Artist Agreement, any recording for
any person, firm or corporation other than Antra which
embodies, in whole or in part, any of the selections
recorded in the Masters.
/s/ XXXXXXXXXXXXX
------------------------
