AGREEMENT made and entered into as of this 13 day of August, 1997 by and between
PUSH RECORDS, INC. ("Company") and ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇, individually and collectively, p/k/a LUXX ("you" , "your" and or
"artist"), whose address is: c/o ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., Pryor, Cashman, ▇▇▇▇▇▇▇ &
▇▇▇▇▇, Esqs., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. EXCLUSIVE SERVICES
Company hereby engages your exclusive personal services as recording
artists in connection with the production of Records and you hereby accept such
engagement and agree to exclusively render such services for Company in the
Territory during the initial period of this agreement and all extensions and
renewals (the "Term"). (You are sometimes called the "Artist" below; all
references in this agreement to "you and Artist," "you or Artist," and the like,
shall be understood to refer to you alone.)
2. TERM
The Term shall commence on the date hereof and shall continue for an
initial period (the "Initial Period") ending on the date eight (8) months
following Delivery of all Recordings constituting the Recording Commitment for
such Initial Period. You hereby grant to Company two (2) consecutive separate
options to extend the Term for further periods (the "Option Periods"), each upon
the same terms and conditions applicable to the Initial Period, except as
otherwise set forth herein. Each Option Period for which Company has exercised
its option shall commence upon the expiration of the immediately preceding
Contract Period and shall continue until the date eight (8) months following
Delivery of all Recordings constituting the Recording Commitment for the
applicable Option Period. You shall be required to serve notice of expiration of
the term upon Company no more than forty five (45) days and no less than thirty
(30) days prior to the end of each respective period, including the initial
period and each option period, if any, and Company shall thereafter have thirty
(30) days within which to exercise, if at all, the option(s), if any, provided
for herein. Company may, at its sole discretion exercise each respective option,
if at all, by notice to you at any time prior to the date the Term would
otherwise expire. If, pursuant to this paragraph 2, a Contract Period is due to
expire in the months of November or December, such Contract Period shall be, and
hereby is, extended to January 15 of the following calendar year. As used
herein, the term "Contract Period" shall mean the Initial Period or any Option
Period of the Term, as such may be suspended or extended as provided herein.
3. RECORDING COMMITMENT; DELIVERY
(a) (i) During each Contract Period you will perform and record for
Company a sufficient number of Masters to constitute the required number of
Albums specified in the following schedule (the "Recording Commitment"):
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Contract Period Recording Commitment
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1
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Initial Period Two (2) Albums (the "First and "Second Albums")
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First Option Period One (1) Album (the "Third Album")
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Second Option Period Two (2) Albums (the "Fourth and Fifth Albums")
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(b) (i) You shall Deliver the First Album of the Recording Commitment to
Company within four (4) months following commencement of the Initial Contract
Period.
(ii) You shall Deliver the Second through Fifth Albums of the
Recording Commitment, if any, no earlier than ten (10) months and no later than
eighteen (18) months after Delivery of the immediately preceding Album of the
Recording Commitment, unless you and Company mutually agree in writing to an
earlier Delivery date.
(c) You shall not commence recording any Album earlier than seven (7)
months following the date of Delivery of the immediately preceding Album.
(d) (i) Upon your written request and as a courtesy, Company will notify
you of the date of Delivery in respect of any Album of the Recording Commitment,
provided, however, that Company's inadvertent failure to provide such
information shall not constitute a breach of this agreement and Company's
providing you with such information shall not constitute a waiver by Company of
your obligations with respect to Delivery of Masters hereunder. If you dispute
the date of Delivery in respect of any Album of the Recording Commitment as
provided in the notice from Company, you shall give notice of such objection in
writing to Company within thirty (30) days of Company's notice to you. Your
failure to so notify Company shall be deemed your acceptance of the date
contained in Company's notice to you.
(ii) If you have not received any notice from Company pursuant to
paragraph 3(d)(i) above within thirty (30) days after the date you deem to be
such applicable delivery date, then you shall notify Company within ten (10)
days after such thirty (30) day period of the date you deem the applicable
delivery date. Company shall have the right to object to such date within thirty
(30) days after receipt of your notice.
(iii) If either party objects to the date contained in the notice
given by the other party, Company and you shall mutually and in good faith agree
in writing on the date to be deemed the delivery date. If the parties do not
reach such agreement or if neither party gives notice of the delivery date of
any Album of the Recording commitment earlier than thirty (30) days prior to the
date of initial release in the United States of such Album, then the delivery
date of such Album shall be deemed to be thirty (30) days prior to such date of
initial release.
4. RECORDING PROCEDURE
(a) (i) Prior to the commencement of recording each Album, you and Company
shall mutually agree on each of the following before you proceed further: (A)
selection of producer and the financial terms of the agreement between you and
such producer; (B) selection of material, including the number of Compositions
to be recorded; and (C) the dates of recording and mixing and the studios
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where recording and mixing are to take place. Subject to Company's approval of
budget and financial terms, ▇▇▇ Saint ▇▇▇▇▇▇▇ is deemed approved and accepted as
the Producer, Mixer and Engineer of Album 1. With regard to Albums 1 through 5,
Company shall be deemed to have approved any first-class recording studio
subject to and consistent with an approved budget. In addition, at least
fourteen (14) days prior to the date of the first recording session for the
Album concerned, you shall submit to Company in writing a proposed recording
budget setting forth, in itemized detail, all anticipated Recording Costs for
the album concerned. Upon receipt of Company's written approval of such
recording budget, which shall not be unreasonably withheld, you shall commence
such sessions.
(ii) Nothing in this agreement shall obligate Company to continue or
permit the continuation of any recording sessions, even if previously approved
hereunder, if Company reasonably anticipates that the Recording Costs for the
applicable Masters will exceed one-hundred and ten percent (110%) of the amount
authorized by Company or that Masters constituting the applicable Recording
Commitment will not be Commercially Satisfactory.
(iii) It is of the essence of this agreement that you obtain prior
to each applicable recording session and deliver to Company within seventy-two
(72) hours following each such recording session, a duly completed and executed
Form I-9 (or such similar or other forms as may be prescribed by the United
States Immigration and Naturalization Service or other government agency
regarding citizenship, permanent residency or so-called "documented worker"
status which Company notifies you of in respect of each individual employed to
render recording services hereunder. You shall simultaneously obtain and deliver
to Company true and complete copies of all evidentiary documents relating to the
contents or subject matter of said forms. In the event you fail to comply with
any of the foregoing requirements, Company may deduct any resulting penalty
payments from all monies payable to you under this agreement or any other
agreement.
(b) No Recordings shall be made by or include unauthorized Sampling.
("Sampling," as used herein, refers to the use and reproduction of pre-existing
musical material, hereinafter "Sampled Material," which is owned or controlled
by any Person other than you, in a Recording hereunder , but is not intended to
refer to Artist's newly recorded performance hereunder of a musical composition
previously recorded by other recording artist(s) and heretofore released.)
Concurrently with your delivery to Company of a Recording, you shall notify
Company in writing of the names and addresses of all recording artists, record
companies, songwriters and publishers and/or any other Persons who have any
right, title or interest of any kind in any Sampled Material embodied in that
Recording. You shall be solely responsible for obtaining all consents and
licenses necessary or desirable in connection with the use, reproduction and
licensing by Company, of any Sampled Material in any Recording hereunder for
Records and Audiovisual Records and reproductions thereof, so that Company shall
enjoy the full and perpetual rights granted to Company pursuant to paragraph 5
with respect to Recordings hereunder; at Company's request, you shall supply
Company with fully executed copies of any such consents, licenses and other
related documentation. You shall be solely responsible for and shall account for
and pay to any and all Persons who own or control Sampled Material any monies or
other compensation to which such Persons are entitled as a result of any use
hereunder by Company of any Recording embodying such Sampled Material.
Notwithstanding anything to the contrary expressed or implied herein, no
royalties, Advances or other monies shall be earned by or payable to you
hereunder or under any other agreement in connection with any Record embodying
any Sampled Material, and no Recording
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embodying Sampled Material shall be deemed Delivered hereunder unless and until
you have obtained, on Company's behalf, all rights required hereunder with
respect to such Sampled Material, and, if Company requests, until Company
receives documentation satisfactory to Company with respect thereto.
(c) Each Album Delivered by you as part of the Recording Commitment shall
only contain newly-recorded studio Masters of previously unrecorded Compositions
(other than demonstration recordings) made specifically for the applicable
Album, unless an authorized signatory on behalf of Company consents otherwise in
writing, which consent Company may withhold in its unrestricted discretion.
5. GRANT OF RIGHTS
(a) All Recordings made or furnished to Company by you or Artist under
this agreement or during the Term from the inception of the recording thereof,
and all reproductions derived therefrom, together with the performances embodied
thereon, shall be the property of Company in perpetuity for the Territory free
from any claims whatsoever by you or Artist or any other Person. Company shall
have the exclusive right throughout the Territory to copyright those Recordings
in Company's name as the author and owner of them and to secure any and all
renewals and extensions of copyright throughout the Territory. Each such
Recording shall be considered a "work made for hire" for Company; if any such
Recording is determined not to be a "work made for hire," it will be deemed
transferred to Company by this agreement, together with all rights in it. You
and Artist hereby irrevocably and unconditionally waive any and all moral and
like rights that Artist has in the Recordings and in the performances embodied
therein and hereby agree not to make any claim against Company or any Person
authorized by Company to exploit the Recordings based on such moral or like
rights. Without limiting the generality of the foregoing, Company and any Person
authorized by Company shall have the exclusive and unlimited right to all the
results and proceeds of Artist's recording services rendered during the Term,
including, but not limited to, the exclusive, unlimited and perpetual rights
throughout the Territory:
(i) to manufacture, advertise, sell, lease, license, distribute or
otherwise use, exploit or dispose of, in any or all fields of use by any method
now or hereafter known, Records embodying Masters;
(ii) to release Records derived from Masters under any name,
trademark or label which Company or its subsidiaries, affiliates or licensees
may from time to time elect;
(iii) to perform such Masters publicly and to permit public
performances thereof by means of radio broadcast, television or any other method
now or hereafter known; and
(iv) to reproduce, adapt, transmit, communicate or otherwise use
Masters, all upon such terms and conditions as Company may elect, or at its
discretion, to refrain therefrom.
(b) In accordance with subparagraph 6(a) of this agreement, Company and
any Person authorized by Company, including Company's licensees and
institutional advertisers, shall have the exclusive right during the term and
the non exclusive and perpetual right after the term hereof, without any
liability to any Person, to use and to authorize other Persons to use the names
(including any
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professional names heretofore or hereafter adopted), and any likenesses, whether
or not current (including photographs, portraits, caricatures and stills from
any Videos made hereunder), autographs (including facsimile signatures) and
biographical material of or relating to Artist, to any producer and to any other
Person performing services in connection with Masters hereunder, on and in the
packaging of Records hereunder, and for purposes of advertising, promotion and
trade and in connection with the marketing and exploitation of Records hereunder
and general goodwill advertising (i.e., advertising designed to create goodwill
and prestige and not for the purpose of selling any specific product or
service), without payment of additional compensation to you or Artist or any
other Person. Notwithstanding the foregoing, Company shall comply with any
contractual limitations on the use of the name and likeness of any such producer
or other Person that exist prior to the execution of the Artist's agreement with
such producer or other Person, provided you have given Company prior written
notice of any such limitation: you agree to use your reasonable efforts to
obtain the fullest rights to use the name and likeness of any such producer or
other Person consistent with the custom and practice in the United States record
industry. No such names, likenesses, or biographical material shall be used in
connection with product (other than Records hereunder) or service endorsements
or merchandising: provided, however, that Company may use such names,
likenesses, and biographical material in connection with the promotion of
Records hereunder, including, without limitation, the distribution of
promotional merchandise solely on a gratis basis. You represent and warrant that
you own the exclusive right to so use such names, likenesses, autographs
(including facsimile signatures) and biographical materials and that the use of
same will not infringe upon the rights of any third party. If any Person
challenges Artist's right to use a professional name, Company may, at its
election and without limiting Company's rights, require Artist to adopt another
professional name approved by Company. Company shall have the right to do, but
shall not be required to do, a Trademark and or Service ▇▇▇▇ search of each and
every professional name and or ▇▇▇▇ which Artist uses or by which Artist is
known. Company may, but is not required to, spend up to $600 per search which
shall be deemed an advance. During the Term, Artist will not change the name by
which Artist is professionally known without Company's prior written approval
which shall not be unreasonably withheld
6. CREATIVE AND MARKETING MATTERS
(a) (i) During the Term, all photographs and biographical material
concerning Artist which Company uses for the purposes herein stated shall be
subject to your approval, which shall not be unreasonably withheld and which
approval (or disapproval) shall be given to Company within five (5) days after
such photographs or biographical material are submitted to you by Company. Your
failure to give such notice to Company shall be deemed to be approval as to the
material for which said approval is sought. Promptly following the execution of
this agreement, you shall furnish Company with a reasonable number of
photographs of Artist and biographical material concerning Artist. All
photographs and biographical material concerning Artist furnished by you to
Company, or approved by you, shall be deemed approved by you for the purposes
hereof unless you notify Company in writing to the contrary thereafter. Anything
to the contrary notwithstanding, approved photographs of Artist which Company
uses, for purposes other than for record packaging, shall be subject to your
re-approval, which shall not be unreasonably withheld and which approval (or
disapproval) shall be given to Company within five (5) days after such
photographs or biographical material are submitted to you by Company if such use
first occurs or is to occur more than two (2) years after initially approved.
Your failure to give such notice to Company shall be deemed to be approved as to
the material for which said approval is
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sought. An inadvertent failure by Company to obtain your approval pursuant to
this subparagraph 6(a) shall not constitute a breach of this agreement by
Company. Company will use reasonable efforts to cure such failure in any future
production runs following notice from you or Artist.
(ii) You shall cause Artist, subject to Artist's prior professional
commitments, and at Company's sole non-recoupable expense, to cooperate with
Company's efforts to promote any Albums released hereunder, including, but not
limited to, Artist's appearing for interviews with trade press, in-store
promotional events, and other promotional appearances, which appearances shall
be mutually selected by you and Company.
(iii) With respect to the initial release in the United States of
each Album of the Recording Commitment, Company shall consult with you in good
faith in a meaningful manner regarding marketing plans Company intends to
implement for the Album concerned, however, the inadvertent failure by Company
to consult with you shall not constitute a breach hereof.
(b) During the Term, you shall not record or Deliver a Multiple Record Set
without Company's prior approval, which approval may be withheld in Company's
sole discretion nor shall Company require Artist to record and you to Deliver a
Multiple Record Set without Artist's consent.
(c) (i) Company shall not, without your approval, which approval may be
withheld in your sole discretion:
(A) sell Records hereunder as Premium Records.
(B) license any Master hereunder in connection with any
political or commercial advertisements.
(C) license any Master hereunder for synchronization in any
theatrical motion picture, television motion picture, television soundtrack or
any home video devices which have received a rating of "X" or "NC-17" or its
equivalent from the Motion Picture Association of America (or it's counterpart
for television), where Company has a reasonable belief that such rating would be
given at the time of Company's licensing of the applicable Master.
(D) remix, re-edit or resequence any Masters delivered
hereunder for the commercial release of Singles, Maxi-Singles or EPS (Except to
the extent necessary with respect to tape configurations for timing purposes) or
otherwise; and
(E) release any demonstration recordings.
(ii) During the Term in respect of Records manufactured for sale in
the Territory, Company shall not, without your approval:
(A) license any Master for synchronization with theatrical
motion pictures, or television motion pictures, television programs, or any
other audiovisual productions;
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(B) license any Master for use in radio programs or radio
commercials (other than radio commercials advertising Records made hereunder).
(C) license any Master for synchronization with television
commercials (other than television commercials advertising Records made
hereunder).
(iii) During the Term in respect of Records manufactured for sale in
the United States, Company shall not, without your approval:
(A) couple, or, license to a third party for coupling, more
than two (2) Masters on any particular Record offered for sale to the public,
which Record embodies Recordings that do not embody the performances of Artist,
except with respect to samplers, uses on transportation carriers, and Consumer
Compilations. The term "Consumer Compilation" means a Record embodying
Recordings (including one (1) or more Masters) that are sequenced and/or
selected by the consumer (e.g., the Personics system);
(B) release any Mid-Price Record comprised solely of Masters
Delivered hereunder prior to fifteen (15) months following Company's initial
United States release of a full-priced Record embodying such Masters. If Company
releases any such Mid-Price Record prior to the expiration of said fifteen (15)
month period without your approval, your sole remedy shall be that the royalty
to which you are otherwise entitled for any royalty-bearing units of such
Mid-Price Record sold prior to the expiration of said fifteen (15) month period
shall not be reduced pursuant to subparagraph 9 (c)(i);
(C) release any Budget Record comprised solely of Masters
Delivered hereunder prior to eighteen (18) months following Company's initial
United States release of a full-priced Record embodying such Masters. If Company
releases any such Budget Record prior to the expiration of said eighteen (18)
month period without your approval, your sole remedy shall be that the royalty
to which you are otherwise entitled for any royalty-bearing units of such Budget
Record sold prior to the expiration of said eighteen (18) month period shall not
be reduced pursuant to subparagraph 9 (c)(i); and/or
(D) release any so-called "out takes" (i.e., preliminary or
unfinished or alternate versions of Master recordings embodied on records which
have been released) recorded hereunder;
(E) commercially release any Single derived from Masters
delivered hereunder without engaging in a meaningful, good-faith consultation
with Artist regarding the selections to be embodied on the "A" side of any such
Single. With respect to the "B" side of any such Single, Company shall obtain
your prior consent as to the selection to be embodied thereon;
(F) release more than one (1) Album in the form of a "Greatest
Hits" compilation consisting entirely of Masters recorded hereunder until you
have Delivered the first three (3) Albums of the Recording Commitment. During
the Term in respect of Records manufactured for sale in the United States,
Company shall not, without your approval, release a Greatest Hits Album without
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Artist's prior approval of the Masters to be included thereon; provided,
however, that such approval right shall not delay the scheduled release date of
any such Greatest Hits Album. All Masters embodied on any Singles listed at any
time among the top fifty (50) Singles in the weekly chart of best-selling
popular Singles published in Billboard magazine, i.e., the chart titled "Hot 100
Singles", or the chart corresponding most closely to that chart if it is
retitled or discontinued, shall be deemed approved by Artist and Company for
inclusion on Greatest Hits Albums. In the event of a dispute, with respect to
Masters not subject to the preceding sentence, fifty percent (50%) of such
Masters shall be selected by Artist, and fifty percent (50%) of such Masters
shall be selected by Company; and
(iv) The failure of Company's licensees to obtain approval from Artist for
such use(s) shall not constitute a breach by Company. Artist shall provide
Company specific notice and Company shall request or direct the licensee to seek
Artist's approval for said use.
(d) (i) Notwithstanding anything to the contrary herein, provided you have
fulfilled all of your material obligations under this agreement, Company agrees
to commercially release each Album constituting the Recording Commitment in the
United States within one hundred twenty (120) days following Delivery of the
Album concerned (the "U.S. Release Deadline Period"). If Company shall have
failed to so release any such Album in the United States, you shall have the
right, within sixty (60) days following the expiration of the U.S. Release
Deadline Period to notify Company in writing of Company's failure and of your
desire that the Term be terminated if Company does not, within forty-five (45)
days after Company receives such notice from you ("U.S. Release Cure Period"),
commercially release the Album concerned in the United States. If Company then
fails to release the Album concerned in the United States during the U.S.
Release Cure Period, Company shall have no liability whatsoever to you, and your
only remedy shall be to terminate the Term by written notice to Company within
thirty (30) days following the expiration of the U.S. Release Cure Period. If
you terminate the Term of this Agreement pursuant to, and in accordance with,
the immediately preceding sentence of this subparagraph 6(d)(i), you shall have
the option to purchase all of the Masters , but no less than all constituting
such recorded and unreleased Album from Company (the "Unreleased Masters")
provided you notify Company of your election in the written notice specified in
the immediately preceding sentence.
(ii) If you exercise your right to purchase the Unreleased Masters,
Company will transfer to you the Unreleased Masters no later than fifteen (15)
days after the date of your notice of exercise of your option to acquire
Company's rights in the Unreleased Masters and Company will deliver them to you
at Company's offices. You shall reimburse Company for the Recording Costs and
all Advances paid to you in connection with the Unreleased Masters
simultaneously with your acquisition of the unreleased Masters, by certified or
bank check. The unreleased Masters will be delivered to you and accepted "as is"
at the time of delivery and no warranty or representation, express or implied,
is or will be made by Company in connection therewith; provided, however, that
Company shall not further impair or encumber the rights in or to the Unreleased
Masters prior to your purchase of them. Any use by you or any other Person of
the Unreleased Masters will be in accordance with subparagraph 13(d)(ii) of this
agreement.
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(e) (i) Provided you have fulfilled all of your material obligations under
this agreement and not withstanding subparagraph 5 (a)(iv), Company agrees to
commercially release each Album constituting the Recording Commitment in the
following periods after Company commercially releases such Album in the United
States: in Canada, within ninety (90) days; the United Kingdom, Germany, France,
Italy, Belgium, the Netherlands and Luxembourg within one hundred twenty (120)
days; Japan, Australia, and New Zealand within one hundred fifty (150) days.
(ii) If Company fails to comply with paragraph 6(e)(i) in any
Foreign Release Territory, you may notify Company, within forty-five (45) days
following the end of the respective release deadline concerned, that you intend
to invoke this section 6(e)(ii) if Company does not release that Album in that
Foreign Release Territory within seventy-five (75) days following Company's
receipt of your notice (the "Foreign Release Cure Period"). If Company then
fails to release the Album concerned in the Foreign Release Territory concerned
during the Foreign Release Cure Period, you shall have the right ("Outside
License Option") to require Company to enter into an agreement with a licensee
designated by you, who is actually engaged in the business of manufacturing and
distributing Records in the Foreign Release Territory, authorizing the licensee
to manufacture and distribute Records derived from that Album in that Foreign
Release Territory. You may exercise your Outside License Option by giving
Company notice within ninety (90) days after the end of the Foreign Release Cure
Period. Your only remedy for any failure by company to release a particular
Album in a particular Foreign Release Territory shall be to exercise your
Outside License Option in accordance with this subparagraph (6)(e)(ii). If you
fail to give Company any of the notices described in the foregoing provisions of
this subparagraph (6)(e)(ii) within the appropriate time period specified
herein, your rights under this subparagraph (6)(e)(ii) shall lapse. Fifty (50%)
of Company's Net Receipts from licenses entered into pursuant to this
subparagraph (6)(e)(ii) shall be credited to your royalty account under this
agreement and paid to you (if such account is fully recouped) for Records sold
under those licenses, in lieu of any other royalties set forth in paragraph 9.
Each license agreement shall provide for such compensation for Company as you
negotiate with the licensee, and shall contain other provisions as Company shall
reasonably require, including, but not limited to, the following:
(A) the licensee shall be required to obtain and deliver to
Company, in advance: (1) all consents by Artist or third parties which Company
may reasonably require (including but not limited to consents by recording
artists); and (2) all agreements arising in connection with the manufacture or
distribution of Records under the license (including such agreements, if any, by
unions and funds established under union agreements). The licensee shall also
become a first party to the Record Manufacturers' Special Payments Fund
Agreement dated October 1993 (or any successor agreement then in effect) entered
into by Company with the American Federation of Musicians of the United States
and Canada. The license shall not become effective until the licensee has
complied with all the provisions of this subparagraph 6(e)(ii)(A);
(B) the licensee shall make all payments required in
connection with the manufacture, sale and distribution in that Foreign Release
Territory of Records made from Masters after the effective date of the license,
including, without limitation, any royalties and other payments to other
performing artists, producers, owners of copyrights in Compositions, the Music
Performance Trust Fund and Special Payments Fund, and, if applicable, any other
unions and union funds. The licensee, if necessary, shall comply with the
applicable rules and regulations of the American Federation of
9
Musicians and any other union having jurisdiction and any other applicable laws,
rules and regulations covering any rights from the licensee, in the manufacture
and sale of Records or otherwise;
(C) Company shall make no warranty of merchantability or
fitness for a particular purpose or any other warranty or representation,
express or implied, in connection with the Masters, the license, or otherwise.
Company will deliver to the licensee a so-called "1630" (or other format in
Company's sole but reasonable discretion) embodying the Masters of a quality
sufficient for the manufacture of Records. You and licensee shall indemnify and
hold harmless Company and Company's licensees against all claims, damages,
liabilities, costs, and expenses, including, without limitation, reasonable
counsel fees and legal expenses, arising out of any use of the Masters in the
Foreign Release Territory or exercise of such rights by the licensee or any
third party deriving rights from the licensee in the Foreign Release Territory;
(D) Company shall instruct its licensees in the Foreign
Release Territory concerned in writing not to manufacture Records derived from
those Recordings for sale in that Release Territory, except as permitted under
subparagraph 6(e)(ii)(H) below. If you or the licensee notifies Company of any
such manufacture, Company shall instruct the Company's licensee concerned in
writing to discontinue it and Company shall use other reasonable efforts to
discontinue such manufacture, but neither Company nor the Company licensee shall
have any liability by reason of any manufacture occurring before Company's
receipt of such notice, and Company shall have no liability by reason of any
such manufacture at any time;
(E) each record released under the license shall bear a sound
recording copyright notice identical to the notice used by Company for Company's
initial United States release of the Master concerned and such other notice as
Company shall reasonably require, and any other notice as may be required by the
law of such country. Otherwise, those Records shall not be identified directly
or indirectly with Company;
(F) Upon reasonable notice, Company shall have the right to
examine the books and records of the licensee and all others authorized by the
licensee to manufacture or distribute Records under the license, for the purpose
of verifying the accuracy of the accountings rendered to Company by the
licensee:
(G) the licensee shall not have the right to authorize any
other person or entity to exercise any rights pursuant to the license without
Company's prior written consent, not to be unreasonably withheld; and
(H) Company and Company's licensees shall, as provided herein,
have the continuing right at all times to manufacture and sell Greatest Hits
Albums and Compilation Albums, which may embody those Masters subject to the
license, in that Foreign Release Territory. (A "Compilation Album" means an
Album containing Recordings hereunder coupled with other Recordings (e.g., "Best
of the 90's").
(f) The U.S. Release Deadline Period and the U.S. Release Cure Period
shall be suspended and the expiration date postponed for the period of any
suspension of the running of the Term under
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subparagraph 13(b). If the U.S. Release Deadline Period or the U.S. Release Cure
Period would otherwise expire on a date between November 15 and the following
January 16, the running of the U.S. Release Deadline Period or the U.S. Release
Cure Period, as the case may be, shall be suspended for the duration of the
period between November 15 and January 16 and the expiration date concerned
shall be postponed by the same number of days. An Album shall be deemed
released, for the purposes of subparagraph 6 (d) only, when Company has
announced its availability for sale in the United States.
7. ADVANCES AND RECORDING COSTS
Company shall pay to you the following sums which shall be Advances:
(a) (i) For any Album of the Recording Commitment which Company is paying
Recording Costs, Company shall, upon receipt of invoices therefor, pay directly
all such Recording Costs actually incurred in the production of Masters
comprising each such Album constituting the Recording Commitment, provided such
costs have been approved by Company in writing pursuant to subparagraph 4(a)(i).
Such Recording Costs shall be deducted from, and shall not exceed, the
applicable Advances for Recording Costs (the "Recording Advances") set forth
below.
(ii) With respect to the First Album, a Recording Advance shall be
payable to you in the amount of One Hundred Thousand Dollars ($100,000.00),
which amount shall be payable and administered by Company as follows: (1) 12.5%
of the applicable Recording Advance for the first Album shall be paid to you,
following your written notice to Company that recording of Masters to comprise
the applicable Album constituting the Recording Commitment has commenced, and is
scheduled to proceed, without interruption, to completion payment of which is
acknowledged as being paid by Company and received by Artist on April 18, 1997;
(2) the balance of the recording advance for the First Album is available, as
administered by Company, upon complete execution of this agreement including the
"AFFILIATION AGREEMENT" attached hereto; and (3) the balance thereof, if any, is
payable to Artist pursuant to subparagraphs 7(a)(iii)(B) and 7(a)(iii)(C) of
this agreement.
(iii) The Recording Advances for the Second and each subsequent
Album of the Recording Commitment, if any, shall be payable by Company as
follows:
(A) fifteen percent (15%) of the applicable Recording Advance
for each Album, shall be paid to you, following your written notice to Company
that recording of Masters to comprise the applicable Album constituting the
Recording Commitment has commenced, and is scheduled to proceed, without
interruption, to completion. Any payment pursuant to the preceding sentence
shall be reduced to the extent it would reduce the balance of the Recording
Advance for the applicable Album below one hundred ten percent (110%) of the
Recording Costs for the immediately preceding Album constituting the Recording
Commitment, but, in no event shall any such payment be less than the greater of
Twenty Five Thousand Dollars ($25,000.00) or ten percent (10%) of the Recording
Advance for the Album concerned.
(B) the balance, if any, of the applicable Recording Advance
shall be paid to you after deducting all Recording Costs and other Advances paid
or incurred by Company in connection
11
with the applicable Album, following Delivery to Company of the applicable Album
and receipt by Company of all invoices for all Recording Costs incurred in
connection therewith.
(C) With respect to payments to be made pursuant to
subparagraph 7(a)(iii)(B), Company shall have the right to withhold a reasonable
portion of such payments to provide for anticipated Recording Costs (e.g., union
payments in respect of recording sessions, mastering and sampling costs) in an
amount not to exceed Twenty-Five Thousand Dollars ($25,000), which Recording
Costs have not yet been paid by Company or billed to Company and which are
otherwise deductible from payments to be made to you. Provided that Company
shall have received all invoices relating to all such costs, Company shall not
withhold such sums for a period of more than thirty (30) days following
Delivery.
(b) With respect to the Second and each subsequent Album constituting the
Recording Commitment, if any, a Recording Advance shall be payable to you in an
amount equal to sixty-six and two-thirds percent (66-2/3%) of the amount of
royalties credited to your royalty account hereunder in respect of USNRC Net
Sales of the immediately preceding Album constituting the Recording Commitment,
subject to subparagraphs 7(c) and 7(d) of this agreement.
(c) For the purposes of making the computations pursuant to subparagraph
7(b), Company shall refer to accounting statements rendered to you and Company's
good faith estimate of royalties that have accrued, but have not yet been
credited to your record royalty account through the end of the accounting period
following the date twelve (12) months following Company's initial release in the
United States of the immediately preceding Album constituting the Recording
Commitment (the "Computation Date") and, solely for the purposes of making such
computation, reserves shall be limited to fifteen percent (15%) of shipments,
prior to the Computation Date, of the prior Album whose Net Sales form the basis
for such computation.
(d) (i) Notwithstanding the foregoing, the Recording Advance for each
Album, other than the First Album, constituting the Recording Commitment shall
be no less than the applicable minimum amount and no more than the applicable
maximum amount set forth below:
Album Minimum Maximum
----- ------- -------
Second Album $ 100,000 $ 200,000
Third Album $ 150,000 $ 300,000
Fourth Album $ 175,000 $ 350,000
Fifth Album $ 200,000 $ 400,000
(e) All monies paid to you or Artist or on behalf of you or Artist or to
or on behalf of any Person representing you or Artist, other than royalties
payable pursuant to paragraphs 9, 12 and 18, shall constitute Advances, unless
Company shall otherwise consent in writing.
12
(f) All Recording Advances paid by Company pursuant to the terms of
paragraph 7, and Advances paid by Company pursuant to subparagraph 18(a)(iv), as
applicable, shall specifically include the prepayment of session union scale, as
provided in the applicable union codes, and you agree to complete any
documentation required by the applicable union to effectuate the terms of this
sentence. All Recording Costs incurred in excess of the applicable approved
recording budget shall be your sole responsibility. You hereby agree to
forthwith pay and discharge all such excess Recording Costs. In the event that
Company elects to pay, on your behalf, any such Excess Recording Costs which
exceed the applicable Recording Advance, Company shall have the right to deduct
such excess Recording Costs from any monies otherwise due you under this
agreement or any other agreement; if such monies are insufficient, you shall
reimburse Company, upon notice, to the extent of such insufficiency.
(g) Fifty percent (50%) of all expenses paid or incurred by Company in
connection with the independent promotion and/or marketing of Masters (i.e.,
promotion or marketing by Persons other than regular employees of Company) shall
constitute Advances; provided, however, that no more than Fifty Thousand Dollars
($50,000) paid or incurred for the promotion of any single Album (i.e. 50% of
$100,000) hereunder shall be recoupable against your royalties without your
consent, not to be unreasonably withheld. You and Company agree that Video
Production Costs and any payments in connection with Artist's Tour(s) pursuant
to paragraph 21A of this agreement shall not constitute independent promotion
or marketing expenses under this subparagraph 7(h).
(h) Any cost, not to exceed Six Hundred Dollars ($600.00) incurred by
Company in connection with a trademark and/or service ▇▇▇▇ search to confirm
Artist's right to use any professional name shall constitute an Advance
(i) Promptly following the initial release in the United States of each
Greatest Hits Album as provided in paragraph 6(c)(iii)(F) above, if any, during
the term, Company will pay to Artist an advance in an amount equal to the
difference between Fifty Thousand Dollars ($50,000.00) and the unearned balance
in Artist's royalty account hereunder, if any, determined as of the last day of
the month preceding the month of the initial United States release of such
Greatest hits Album. Each such Advance shall be inclusive of all Recording costs
for the applicable Greatest Hits Masters, but in no event shall the Advance paid
pursuant to this subparagraph 7(i) be less than Twenty Five Thousand Dollars
($25,000.00) with respect to any Greatest Hits Album released on or before the
scheduled release date established by Company or after the scheduled release
date established by Company if the delay in the release of the Greatest Hits
Album is not caused by Artist.
8. PRODUCER SERVICES
(a) Each Recording recorded hereunder shall be produced, subject to
paragraph 4, by a producer mutually approved by you and Company. You shall be
solely responsible for the engagement of such producer and for the payment of
all monies becoming payable to such producer, unless such producer is a Staff
Producer (as defined in subparagraph 8(b). In the event Company elects to pay
any such producer directly, Company may deduct or recoup such payment from all
monies payable to you under this agreement or any other agreement. Company
agrees to comply with Artist's reasonable
13
request to pay any producer directly, however, failure of Company to comply with
Artist's request shall not be deemed to be a breach hereof.
(b) With respect to Recordings produced by a mutually approved producer
rendering services pursuant to an agreement with Company (other than an
agreement relating solely and specifically to those particular Recordings)
("Staff Producer"), Company shall deduct from the applicable Recording Advance
for such Recordings a sum equal to Four Thousand Dollars ($4,000.00) times the
number of such Recordings, which sum shall constitute Recording Costs.
Additionally, you hereby direct Company to deduct from all monies payable to you
under this agreement or any other agreement a royalty computed at a Basic U.S.
Rate of four percent (4%) for Net Sales of Singles, Maxi-Singles, EPs and Albums
with royalties for all other uses (e.g., foreign sales, clubs, licensing, etc.)
calculated, reduced and paid in the same manner as your royalties are
calculated, reduced and paid for similar Net Sales under this agreement.
9. ROYALTIES
Company shall credit to your royalty account royalties as described below.
Royalties shall be computed by applying the applicable royalty rate specified
below to the applicable Royalty Base Price in respect of Net Sales of the Record
concerned:
(a) (i) The royalty rate (the "Basic U.S. Rate") on USNRC Net Sales of
Records consisting entirely of Masters recorded hereunder during the applicable
Contract Periods specified below shall be as follows:
TYPE OF RECORD CONTRACT PERIOD BASIC U.S. RATES
-------------- --------------- ----------------
Singles, Maxi-Singles All 14%
--------------------------------------------------------------------------
EPs All 14%
--------------------------------------------------------------------------
First and Second Initial 20%
Albums
--------------------------------------------------------------------------
Third and Fourth First Option and First Album 20.5%
Albums of Second Option
--------------------------------------------------------------------------
Fifth and Sixth Albums Second Album of Second 21%
Option and Third Option
--------------------------------------------------------------------------
(ii) The royalty rate (the "Escalated U.S. Album Rate") solely on
USNRC Net Sales of each Album constituting the Recording Commitment in excess of
the following number of units shall
14
be the applicable rate set forth below rather than the otherwise applicable
Basic U.S. Rate or any prior and otherwise applicable Escalated U.S. Album
Rate:
--------------------------------------------------------------------------
RECORDING COMMITMENT USNRC NET SALES ESCALATED U.S.
ALBUM RATES
--------------------------------------------------------------------------
First Album 500,000 units 20.5%
--------------------------------------------------------------------------
1,000,000 units 21%
--------------------------------------------------------------------------
Second Album 500,000 units 20.5%
--------------------------------------------------------------------------
1,000,000 units 21%
--------------------------------------------------------------------------
Third and Fourth Albums 500,000 units 21%
--------------------------------------------------------------------------
1,000,000 units 21.5%
--------------------------------------------------------------------------
Fifth and Sixth Albums 500,000 units 21.5%
--------------------------------------------------------------------------
1,000,000 units 22%
--------------------------------------------------------------------------
(b) The royalty rate (the "Foreign Rate") on Net Sales of Top-Line Records
(other than Audiovisual Records) sold for distribution through normal retail
channels in territories outside the United States by Company or its Principal
Licensee shall be fifty percent (50%) of the net amount received by Company or
credited to its account against an advance previously received after we shall
have first deducted all third party payments for which we are responsible.
(c) (i) The royalty rate on Net Sales of the following categories of sales
of Records by Company or its Principal Licensee shall be computed at the
applicable percentage of the Basic U.S. Rate (without regard to any applicable
Escalated U.S. Album Rate) or Foreign Rate that would otherwise apply to such
Net Sales:
--------------------------------------------------------------------------------
CATEGORY OF SALES PERCENTAGE OF APPLICABLE BASIC U.S.
RATE OR FOREIGN RATE
--------------------------------------------------------------------------------
Government, PX and Educational Institutions 50%
--------------------------------------------------------------------------------
15
--------------------------------------------------------------------------------
Premium Records 50%
--------------------------------------------------------------------------------
Mid-Price Record 66-2/3%
--------------------------------------------------------------------------------
Budget Record 50%
--------------------------------------------------------------------------------
(ii) The royalty rate on Net Sales of: (A) any Record sold by
Company or a Principal Licensee through any direct mail or mail order
distribution method other than a Club Operation; and (B) any Record sold
outside the United States in conjunction with a major television advertising
campaign, during the calendar quarter-annual period in which that campaign
begins and the next two (2) calendar quarter-annual such periods, shall be fifty
percent (50%) of the otherwise applicable Basic U.S. Rate or Foreign Rate.
Notwithstanding anything to the contrary contained herein, the aggregate amount
not accrued to your account as a result of the royalty reduction permitted in
this paragraph 9(c)(ii)(B) shall not exceed one-half(1/2) of the cost of any
such major television advertising campaign.
(iii) The royalty rate on Net Sales of any Multiple Record Set shall
be fifty percent (50%) of the otherwise applicable Basic U.S. Rate or Foreign
Rate set forth above if the Royalty Base Price of that particular Multiple
Record Set is the same as the Royalty Base Price applicable to Company's or a
Principal Licensee's single Top-Line Record in the same configuration in the
applicable country of the Territory where the particular Multiple Record Set is
sold. If a different Royalty Base Price applies to such Multiple Record Set, the
royalty rate shall be calculated by multiplying the applicable Basic U.S. Rate
or applicable Foreign Rate by a fraction, the numerator of which shall be the
Royalty Base Price for such Multiple Record Set and the denominator of which
shall be the Royalty Base Price applicable to Company's or its Principal
Licensee's single Top-Line Record in the same configuration multiplied by the
number of Records in the Multiple Record Set.
(d) (i) The royalty rate on Net Sales of Records derived from Masters,
which Records are licensed by Company or a Principal Licensee for sale through
any Club Operation shall be fifty percent (50%) of Net Receipts solely
attributable to such Masters. No royalties shall be payable with respect to
Records received by members of any Club Operation in an introductory offer in
connection with joining it or purchasing a required number of Records including,
without limitation, Records distributed as "bonus" or "free" Records, or Records
for which the Club Operation is not paid.
(ii) (A) The royalty rate for Masters licensed by Company or a
Principal Licensee to a Person for use in the distribution of Records shall be
fifty percent (50%) of Net Receipts solely attributable to such Masters;
provided that such credit to your royalty account shall not exceed the same
royalty amount that would otherwise be credited to your account hereunder for
such use if Company distributed the Records concerned.
(B) The royalty rate for Masters licensed by Company or a
Principal Licensee to a Person for use in synchronization with theatrical motion
pictures, television programs, or radio or television commercials, or on any
other "flat fee" basis, shall be fifty percent (50%) of Net Receipts solely
attributable to such Masters.
(e) Notwithstanding anything to the contrary contained herein and for
sales by Company or a Principal Licensee of Records in the following
configurations:
16
(i) With respect to audio-only Records in compact disc form, the
royalty rate shall be one hundred percent (100%) of the otherwise applicable
Basic U.S. Rate, Escalated U.S. Album Rate or Foreign Rate.
(ii) With respect to Records in any form, configuration, format or
technology not herein described, which is now known but not widely distributed
or which hereafter becomes known, including Enhanced CD, CD Extra, CD-ROM and
DVD ('New Technology Configurations"), the royalty rate shall be eighty percent
(80%) of the otherwise applicable Basic U.S. Rate, Escalated U.S. Album Rate or
Foreign Rate. At any time but no sooner than the later of (A) two (2) years
following the date of this agreement or (B) two (2) years following the first
release of a Record hereunder in the New Technology Configuration concerned,
upon your request, Company shall negotiate with you in good faith with respect
to the computation of royalties payable in respect of the New Technology
Configuration(s) concerned, which negotiations shall take into consideration
then current industry practices and Company's then current policies with respect
to recording artists of comparable sales stature for that particular form of
configuration or exploitation, however, the failure of the parties hereto to
agree to, or of Company to set, a different rate as to New Technology
Configurations, shall not be a breach and shall not prevent Company from
exploiting or continuing to exploit Records in New Technology Configurations.
(f) With respect to Records and other exploitations sold directly to
consumers (i) by Company in the United States, (ii) or by a Principal Licensee
outside the United States, or by their respective licensees throughout the
Territory (e.g., licensed web sites), other than by distribution of physical
Records to consumers, (e.g., without limitation, the downloading or other
conveyance of Artist's performances in Master(s) or Video(s) concerned via
telephone, satellite, cable, direct transmission over wire or through the air,
and on-line computer sales) (collectively, "Cybersales"), the royalty rate shall
be seventy-five percent (75%) of the otherwise applicable Basic U.S. Rate or
Foreign Rate. Such royalties shall be computed on the basis of eighty-five
percent (85%) of Net Sales of such Records in the United States, and one hundred
percent (100%) of Net Sales of such Records outside the United States. At any
time during the Term but no sooner than three (3) years after the date of this
agreement, you may request in writing that Company negotiate with you in good
faith with respect to the computation of royalties payable in respect of
Cybersales, and, provided such request is made, Company agrees to engage with
you in such negotiations. Those negotiations shall take into consideration then
current industry practices and Company's then current policies with respect to
artists of comparable sales stature to Artist for that particular form of
configuration or exploitation, however, the failure of the parties hereto to
agree to, or of Company to set, a different rate as to Cybersales, shall not be
a breach and shall not prevent Company from exploiting or continuing to exploit
Records in Cybersales.
(g) The royalty rate on any Record embodying Masters hereunder coupled
with other Recordings shall be computed by multiplying the otherwise applicable
royalty rate by a fraction, the numerator of which is the number of Masters
hereunder embodied on such Record and the denominator of which is the total
number of Recordings embodied on such Record.
17
(h) As to any Master embodying the performances of Artist together with
the performances of any other artist(s), the royalty rate otherwise payable
hereunder with respect to sales of any Record derived from such Master shall be
computed by multiplying such royalty rate by a fraction, the numerator of which
shall be one (1) and the denominator of which shall be the total number of
artists whose performances are embodied on such Master, including Artist;
provided, however, that members of the same group shall constitute one royalty
earning artist for purposes of such apportionment. The Recording Costs for any
such Master shall be pro-rated in accordance with the formula specified in the
preceding sentence. Company shall not require Artist to record with any other
artist(s), without Artist's consent.
(i) No royalties shall be payable to you in respect of: (A) Records given
away or furnished on a "no-charge" basis to "one-stops", rack jobbers,
distributors or dealers, whether or not affiliated with Company, which Records
do not exceed two hundred thirty (230) "no-charge" Singles out of every one
thousand (1,000) Singles distributed and One Hundred Fifty (150) "no-charge"
Albums out of every One Thousand (1,000) Albums distributed; (B) such additional
"no-charge" Records distributed during short term special promotions or
marketing campaigns, which such Records do not exceed the limits set forth in
subparagraph 9(i)(A) plus an additional ten percent (10%) of the total number of
Records distributed; (C) Records given away or sold at below fifty percent of
the stated wholesale prices for promotional purposes to disc jockeys, Record
reviewers, radio and television stations and networks, motion picture companies,
music publishers, Company's employees, Artist, or other customary recipients of
promotional Records or for use on transportation facilities; (D) Records sold as
scrap, salvage, overstock or "cut-outs"; (E) Records sold below cost; and (F)
"sampler" Records intended for free distribution to automobile purchasers and
containing not more than two (2) Masters hereunder. Company shall have the right
to include or to license others to include any one or more Masters hereunder in
promotional Records on which such Masters and other Recordings are included,
which promotional Records are sold at a more than fifty percent (50%) percent
below the regular price of Company's Albums. No royalties shall be payable on
sales of such promotional Records.
(j) As to Records sold at a discount to "one-stops", rack jobbers,
distributors or dealers, whether or not affiliated with Company, in lieu of the
Records given away or furnished on a "no-charge" basis as provided in sections
9(i)(A) and (B), the applicable royalty rate otherwise payable hereunder with
respect to such Records shall be reduced in the proportion that said discount
Wholesale Price bears to the usual stated Wholesale Price, provided that said
reduction in the applicable royalty rate does not exceed the percentage
limitations set forth in subparagraphs 9(i)(A) and (B).
(k) Notwithstanding anything to the contrary expressed or implied in this
paragraph 9, this paragraph 9 shall not be deemed to apply to (i) any payments
received by Company pursuant to any statute or other legislation (including,
without limitation, payments for the public performance of Recordings, or
royalties payable for the sale of blank cassettes or for the sale of recording
equipment) or (ii) any so-called "blanket licenses" (including, without
limitation, performance licenses) between Company and a licensee under which the
licensee is granted access to all or a significant portion of Company's
catalogue of master recordings unless it is possible to accurately calculate a
portion of such payment which is specifically and directly attributable to
royalty bearing master recordings of Artist.
10. ACCOUNTING
18
(a) Statements as to royalties payable hereunder shall be sent by Company
to you within sixty (60) days after the expiration of each semi annual for the
preceding semi annual period ending the last fiscal day of June or December.
Notwithstanding the foregoing, Company may, if Company elects, change the
aforesaid time and dates, provided, however, in the event of such change,
statements shall be rendered to you no less frequently than semi-annually.
Concurrently with the rendition of each statement, Company shall pay you all
royalties shown to be due by such statement, after deducting all Recording Costs
paid by Company, all payments made therefor and Artist, and all Advances made to
you and Artist prior to the closing date of such statement. Advances and any
payments which Company is permitted to deduct from royalties made by Company
subsequent to the last date of a particular accounting period shall not reduce
the accrued royalties, if any, payable to you hereunder in respect of such
accounting period. The preceding sentence shall not apply to any Advances
Company is not obligated to pay hereunder or any Advances where the reason for
payment of such Advance after the end of the applicable accounting period is
pursuant to your request, your late Delivery of an Album, or your delay in the
timely fulfillment of any of your other material obligations hereunder. No
statements need be rendered by Company for any such period after the expiration
of the Term for which there are no sales of Records derived from Masters
hereunder or liquidation of reserves hereunder or other exploitation of Masters
hereunder, however, following your written request, Company shall render a
statement for any other such period, if Company is reasonably able to do so. All
payments shall be made to the order of: LUXX and sent to (artist/business
manager). Company shall be entitled to maintain a single account with respect to
all Recordings subject to this agreement or any other agreement. Company may
maintain reasonable reserves; each such royalty reserve shall be liquidated
evenly and not later than the end of the fourth semi-annual accounting period
following the accounting period in which it is established. Company shall not
establish any royalty reserve during any particular accounting period: (i) with
respect to Albums in excess of twenty-five percent (25%), or (ii) with respect
to Singles, Maxi-Singles, and EPs in excess of thirty-five percent (35%), of the
aggregate number of Albums or Singles, or Maxi-Singles, or EPs, as the case may
be, shipped to Company's customers, unless Company anticipates in its good faith
judgment returns and credits which justify the establishment of a larger
reserve. You shall be deemed to have consented to all accountings rendered by
Company hereunder and said accountings shall be binding upon you and not subject
to any objection by you for any reason unless specific objection, in writing,
stating the basis thereof is given to Company within two (2) years after the
date Company is deemed to have rendered the applicable statement, and after such
written objection, unless suit is instituted within three (3) years after the
date Company is deemed to have rendered the applicable statement. Company shall
be deemed conclusively to have rendered you each statement on the date
prescribed in this subparagraph 10 (a) unless you notify Company otherwise with
respect to any particular statement within sixty (60) days after the date that
Company has failed to render that statement.
(b) (i) You shall have the right at your sole cost and expense to appoint
a Certified Public Accountant who is not then currently engaged in an
outstanding audit of Company to examine Books and Records as same pertain to
sales of Records subject hereto as to which royalties are payable hereunder,
provided that any such examination shall be for a reasonable duration, shall
take place at Company's offices during normal business hours on reasonable prior
written notice and shall not occur more than once in any calendar year. You may
examine Books and Records with respect to a particular statement only once.
19
(ii) Notwithstanding anything to the contrary contained in
subparagraph 10(b)(i), if Company notifies you that the Certified Public
Accountant designated by you to conduct an audit under subparagraph l0(b)(i) is
engaged in an outstanding audit of Company on behalf of another person ("Other
Audit"), you may nevertheless have your audit conducted by such accountant, and
the running of the time within which such audit may be made shall be suspended
until such accountant has completed the Other Audit, subject to the following
conditions:
(A) You shall notify Company of its election to that effect
within fifteen (15) days after the date of Company's said notice to you;
(B) You shall use your reasonable efforts to cause your
accountant to proceed in a reasonably continuous and expeditious manner to
complete the Other Audit and render the final report thereon to the client and
Company; and
(C) Your audit shall not be commenced by your accountant
before the delivery to Company of the final report on the Other Audit, shall be
commenced within thirty (30) days thereafter, and shall be conducted in a
reasonably continuous manner.
It shall not be a material breach if Company shall under account to Artist.
(iii) The provisions of subparagraph 10(b)(ii) will not apply if
Company elects to waive the provisions of subparagraph 10(b)(i) which require
that your accountant shall not be engaged in any Other Audit.
(c) Company shall compute your royalties in the same national currency in
which Company's licensee pays Company for that sale, and Company shall credit
those royalties to your account at the same rate of exchange at which the
licensee pays Company. For purposes of accounting to you, Company shall treat
any sale outside of the United States as a sale made during the same semi annual
period in which Company receives Company's licensee's accounting and payment for
that sale. If any licensee deducts any taxes from its payments to Company,
Company may deduct a proportionate amount of those taxes from your royalties. If
any law, any government ruling, or any other restriction affects the amount of
the payments which a Company licensee can remit to Company, Company may deduct
from your royalties an amount proportionate to the reduction in the licensee's
remittances to Company. If Company cannot collect payment in the United States
in U.S. Dollars, Company shall not be required to account to you for that sale,
except as provided in the next sentence. Company shall, at your request and at
your expense, deduct from the monies so blocked, and deposit in a foreign
depository, the equivalent in local currency of the royalties which would be
payable to you on the foreign sales concerned, to the extent such monies are
available for that purpose, and only to the extent to which your royalty account
is then in a fully recouped position. All such deposits shall constitute royalty
payments to you for accounting purposes. To the extent possible, Company will
allow you to select the foreign depository referred to in this subparagraph 10
(c).
11. NOTICES.
20
Except as otherwise specifically provided herein, all notices under this
agreement shall be in writing and shall be given by courier or other personal
delivery requiring the signature of the recipient, by overnight delivery by an
established overnight delivery service (e.g., Federal Express or United Parcel
Service), or by registered or certified mail return receipt requested at the
appropriate address below, or at a substitute address designated in a written
notice sent by the party concerned to the other party hereto.
TO YOU: The address shown above
TO COMPANY: PUSH RECORDS, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Each notice to Company shall be addressed to the attention of Company's
Executive Vice President -Administration, and a copy of each notice to Company
shall be sent simultaneously to the attention of Company's General Counsel.
Notices shall be deemed given when mailed or deposited into the custody of an
overnight delivery service for overnight. delivery, or, if personally delivered,
when so delivered, except that a notice of change of address shall be effective
only from the date of its receipt.
12. LICENSES FOR MUSICAL COMPOSITIONS
(a) For the purposes of this paragraph 12, the following definitions shall
apply:
(i) "Controlled Compositions": Any Composition, or material recorded
pursuant to this agreement, which, in whole or in part, is written or composed,
and/or owned or controlled, directly or indirectly, by you and/or any individual
member of Artist and/or any producer of a Master.
(ii) "Effective Date": The date on which Artist delivers the
Recording which embodies a Controlled Composition provided that such delivery is
no later than provided for in paragraph 3 (b)(i) and 3(b)(ii) and if such
delivery is later than as provided therein the date on which Artist commences
recording the Recording which embodies a Controlled Composition.
(iii) "U.S. 75% Rate": A royalty per Controlled Composition equal to
seventy-five percent (75%) of the United States minimum compulsory license rate
applicable to the use of Compositions on phonorecords under the United States
Copyright Law (without regard to playing time) in effect on the Effective Date,
or, if there is no statutory rate in the United States on the Effective Date,
seventy-five percent (75%) of the per Composition rate (without regard to
playing time) generally utilized by major record companies in the United States
on the Effective Date.
(iv) "Canadian 75% Rate": A royalty per Controlled Composition equal
to seventy-five (75%) percent of the Canadian statutory per Composition rate
(without regard to playing time) in effect on the Effective Date, or, if there
is no statutory rate in Canada on the Effective Date, seventy-five (75%) percent
of the per Composition rate (without regard to playing time) generally utilized
by major record companies in Canada on the Effective Date.
21
(v) "U.S. 87-1/2% Rate": A royalty per Controlled Composition equal
to eighty-seven and one-half percent (87-1/2%) of the United States minimum
compulsory license rate applicable to the use of Compositions on phonorecords
under the United States Copyright Law (without regard to playing time) in effect
on the Effective Date, or, if there is no statutory rate in the United States on
the Effective Date, eighty-seven and one-half percent (87-1/2%) of the per
Composition rate (without regard to playing time) generally utilized by major
record companies in the United States on the Effective Date.
(vi) "U.S. 100% Rate": A royalty per Controlled Composition equal to
one hundred percent (100%) of the United States minimum compulsory license rate
applicable to the use of Compositions on phonorecords under the United States
Copyright Law (without regard to playing time) in effect on the Effective Date,
or, if there is no statutory rate in the United States on the Effective Date,
one hundred percent (100%) of the per Composition rate (without regard to
playing time) generally utilized by major record companies in the United States
on the Effective Date.
(b) (i) Controlled Compositions shall be and are hereby licensed to
Company and its licensees:
(A) For the United States, at a royalty per Controlled
Composition equal to the U.S. 75% Rate;
(1) if any Album of the Recording Commitment
individually achieves USNRC Net Sales in excess of Five Hundred Thousand
(500,000) units, Controlled Compositions embodied thereon and on all Records
derived therefrom shall be and are hereby licensed to Company for USNRC Net
Sales at a royalty per Controlled Composition equal to the U.S. 87-1/2% Rate,
but only with respect to those Net Sales of such Records in excess of Five
Hundred Thousand (500,000) units; and/or
(2) if any Album of the Recording Commitment
individually achieves USNRC Net Sales in excess of One Million (1,000,000)
units, Controlled Compositions embodied thereon and on all Records derived
therefrom shall be and are hereby licensed to Company for USNRC Net Sales at a
royalty per Controlled Composition equal to the U.S. 100% Rate, but only with
respect to those Net Sales of such Records in excess of One Million (1,000,000)
units; and/or
(3) furthermore, if any Album individually achieves
USNRC Net Sales as specified in either subparagraph 12(b)(i)(A)(1) and/or
12(b)(i)(A)(2), Controlled Compositions embodied on the next immediately
succeeding Album of the Recording Commitment and on all Records derived
therefrom shall be licensed to Company at the highest such rate achieved by such
immediately preceding Album, which rate shall be applied to all USNRC Net Sales
of the next immediately succeeding Album and Records derived therefrom subject
to further escalation in accordance with subparagraph 12 (b)(i)(A)(2).
(B) For Canada, at a royalty per Controlled Composition equal
to the Canadian 75% Rate.
22
(ii) Notwithstanding the foregoing, the maximum aggregate mechanical
royalty rate which Company shall be required to pay in respect of:
(A) any Single hereunder, regardless of the total number of
Compositions embodied thereon, shall not exceed two (2) times the U.S. 75% Rate,
the Canadian 75% Rate, the U.S. 87-1/2% Rate or the U.S. 100% Rate, as the case
may be;
(B) any Maxi-Single hereunder, regardless of the total number
of Compositions embodied thereon, shall not exceed three (3) times the U.S. 75%
Rate, the Canadian 75% Rate, the U.S. 87-1/2% Rate or the U.S. 100% Rate, as the
case may be;
(C) any EP hereunder, regardless of the total number of
Compositions embodied thereon. shall not exceed five (5) times the U.S. 75%
Rate, the Canadian 75% Rate, the U.S. 87-1/2% Rate or the U.S. 100% Rate, as the
case may be;
(D) any Album in any form other than compact disc, regardless
of the total number of Compositions embodied thereon, shall not exceed ten (10)
times the U.S. 75% Rate, the Canadian 75% Rate, the U.S. 87-1/2% Rate or the
U.S. 100% Rate, as the case may be;
(E) any Album in compact disc form, regardless of the total
number of Compositions embodied thereon, shall not exceed eleven (11) times the
U.S. 75% Rate, the Canadian 75% Rate, the U.S. 87-1/2% Rate or the U.S. 100%
Rate, as the case may be. Notwithstanding the foregoing, in the event that any
Album of the Recording Commitment contains non-Controlled Compositions, then the
maximums set forth in subparagraphs 12(b)(ii)(D) and (E) shall be increased by
the difference, if any, between (a) the mechanical royalty required to be paid
with respect to up to two (2) such non-Controlled Compositions (but in no event
more than the U.S. 100% Rate or the Canadian statutory per Composition rate
(without regard to playing time) in effect on the Effective Date, as the case
may be, for two (2) Compositions, and (b) the mechanical royalty that would be
payable if such non-Controlled Compositions were Controlled Compositions.
(c) (i) In the event that any Single, Maxi-Single, EP or Album contains
other Compositions in addition to Controlled Compositions and the aggregate
mechanical royalty rate for said Single, Maxi-Single, EP or Album exceeds the
applicable maximum aggregate mechanical royalty rate provided in subparagraph
12(b)(ii), the aggregate mechanical royalty rate for the Controlled Compositions
contained thereon shall be reduced by the aforesaid excess over said applicable
rate. Additionally, Company shall have the right with respect to any Single,
Maxi-Single, EP or Album, the aggregate mechanical royalty rate for which
exceeds the applicable maximum aggregate mechanical royalty rate provided in
subparagraph 12(b)(ii), to deduct the excess payable thereon from all monies
payable to you pursuant to this agreement or any other agreement.
(ii) All mechanical royalties payable hereunder shall be paid on the
basis of Net Sales of Records for which royalties are payable to you pursuant to
this agreement, except that mechanical royalties shall be payable, for
Controlled Compositions embodied on any Album of the Recording Commitment with
respect to fifty percent (50%) of such Albums which are for all other purposes
non-royalty bearing pursuant to the terms of subparagraph 9(i)(A) herein.
Company may maintain reasonable
23
reserves with respect to the payment of mechanical royalties which reserves
shall be liquidated after the fourth accounting period following the accounting
period in which such reserve(s) are established. If Company makes an overpayment
of mechanical royalties in respect of Compositions recorded under this
agreement, you will reimburse Company for same, failing which Company may recoup
any such overpayment from all monies becoming payable to you pursuant to this
agreement or any other agreement. Mechanical royalty payments on Records
subsequently returned are considered overpayments.
(iii) Notwithstanding anything to the contrary contained herein,
mechanical royalties payable in respect of Controlled Compositions for Net Sales
of Records for any use other than as described in subparagraphs 9 (a), (b),
(c)(iii), (e), (g) and (h) shall be seventy-five (75%) percent of the otherwise
applicable U.S. 75% Rate or Canadian 75% Rate, as the case may be. Mechanical
royalties for Controlled Compositions which are arranged versions of any
Compositions in the public domain shall be paid in the same proportion as the
appropriate performing rights society grants performing credits to the publisher
of such Controlled Composition, provided you have furnished Company with a copy
of the letter from such performing rights society setting forth the percentage
of the otherwise applicable credit which the publisher will receive.
(iv) Any assignment of the ownership or administration of copyright
in any Controlled Composition shall be made subject to the provisions hereof and
any inconsistencies between the terms of this agreement and mechanical licenses
issued to and accepted by Company shall be determined by the terms of this
agreement.
(v) If any Single, Maxi-Single, EP or Album contains other
Compositions in addition to the Controlled Compositions, you will use your
reasonable efforts to obtain for Company's benefit mechanical licenses covering
such Compositions on the same terms and conditions applicable to Controlled
Compositions pursuant to this paragraph 12.
(d) You hereby agree that all Controlled Compositions shall be available
for licensing by Company and Company's licensees, for reproduction and
distribution in each country of the Territory outside of the United States and
Canada through the author's society or other licensing and collecting body
generally responsible for such activities in the country concerned. You shall
cause the issuance of effective licenses, under copyright and otherwise, to
reproduce each Controlled Composition on Records and distribute those Records
outside the United States and Canada, on terms not less favorable to Company or
Company's licensees than the standard provisions contained in mechanical
licenses issued by the ▇▇▇▇▇ ▇▇▇ Agency, Inc. or CMRRA and such terms shall be
no less favorable to Company or Company's licensee than the terms prevailing on
a general basis in the country concerned with respect to the use of Compositions
on comparable Records.
(e) (i) In respect of all Controlled Compositions, Company and its
licensees are hereby granted the irrevocable perpetual worldwide right to
reprint the lyrics on the jackets, sleeves and other packaging of Records
derived from Masters hereunder, and to reproduce such lyrics on, or cause the
reproduction of lyrics by, any New Technology Configurations. Company shall
provide appropriate copyright notices and writer and publisher credits with
respect to such reprinted lyrics; provided that
24
Company's inadvertent and isolated failure to do so in any instance shall not
constitute a breach of this agreement.
(ii) You also grant to Company and Company's licensees an
irrevocable license under copyright to reproduce each Controlled Composition in
Videos, to reproduce, distribute and perform those Videos in any manner
(including, without limitation, publicly and for profit), to manufacture and
distribute Audiovisual Records and other copies of those Videos, and to exploit
them otherwise, by any method and in any form known now or in the future,
throughout the Territory, and to authorize others to do so. Company and
Company's licensees shall not be required to make any payment in connection with
those uses, and that license shall apply whether or not Company receives any
payment in connection with any use of any Video. If any exhibition of a Video is
also authorized under another license (such as a public performance license
granted by ASCAP or BMI), that exhibition shall be deemed authorized by that
license instead of this agreement. (In all events, Company and Company's
licensees shall have no liability by reason of any such exhibition.)
Notwithstanding the foregoing, with respect to Net Sales of Audiovisual Records
hereunder which are sold, paid for and not returned, and only with respect to
such net units sold following Company's full recoupment of all Video Production
Costs for such units, Company shall pay a synchronization fee for Controlled
Compositions equal to four percent (4%) of the Royalty Base Price for
Audiovisual Records (defined in subparagraph 24(z)(iii)) below therefor,
prorated on the basis that the playing time of Controlled Compositions bears to
the total playing time of such Audiovisual Record.
(f) Notwithstanding anything to the foregoing provisions of this paragraph
12 to the contrary, if a particular Controlled Composition recorded hereunder is
embodied more than once on a particular Record, Company shall pay mechanical
royalties in connection therewith at the applicable rate for such Controlled
Composition as if the Controlled Composition concerned were embodied thereon
only once.
13. EVENTS OF DEFAULT
(a) If you do not fulfill timely any portion of the Recording Commitment
hereunder or any of your other material obligations hereunder in accordance with
all of the terms and conditions of this agreement, then, in addition to any
other rights or remedies which Company may have, Company shall have the right,
upon written notice to you at any time prior to the expiration of the
then-current Contract Period, (i) to terminate the Term; and (ii) to require you
to repay to Company the unrecouped amount of any Advance previously paid to you
and not specifically attributable under paragraph 7 to an Album which has
actually been Delivered, except as expressly provided in the next sentence,
unless your default is due solely to your death or disability. You shall not be
required to repay any such Advance to the extent to which you furnish Company
with documentation satisfactory to Company establishing that you have actually
used the Advance to make payments to Persons not affiliated with you and in
which you do not have an interest, for Recording Costs incurred in connection
with the Album concerned prior to Company's demand for repayment. Company may
exercise any or all of its rights pursuant to subparagraph 13(a), by sending you
the appropriate notice. Notwithstanding anything to the contrary in this
agreement, if you Deliver Masters for any Album hereunder at any time within
sixty (60) days from the date such Delivery was required pursuant to
subparagraph 3(b)(i), Company shall not exercise its rights under this
subparagraph 13(a) on the basis of such delayed Delivery. No exercise by Company
of
25
its rights under this paragraph shall limit Company's rights to recover damages
by reason of your default or to exercise any of its other rights and remedies.
(b) Company reserves the right, at its election, to suspend the operation
of this agreement for the duration of any of the following contingencies, if by
reason of any such contingency, it is materially hampered in the performance of
its obligations under this agreement or its normal business operations are
delayed or become impossible or commercially impracticable: Act of God, fire,
catastrophe, labor disagreement, acts of government, its agencies or officers,
any order, regulation, ruling or action of any labor union or association of
artists, musicians, composers or employees affecting Company or the industry in
which it is engaged, delays in the delivery of materials and supplies, or any
other cause beyond Company's control. Any such suspension due to a labor
controversy which involves only Company shall be limited to a period of six (6)
months. Notwithstanding such suspension, Company shall continue to account and
pay royalties to you as and when due unless the contingency resulting in such
suspension materially hampers Company in carrying out such obligation.
(c) If Artist's voice or Artist's ability to perform as an instrumentalist
should be materially or permanently impaired for a period in excess of seven (7)
consecutive months, then, in addition to any other rights or remedies which
Company may have, Company shall have the right, upon written notice to you, to
terminate the Term.
(d) (i) If Company exercises any of its termination rights pursuant to
this paragraph 13, you shall have the option to purchase any recorded but
undelivered or unreleased Masters from Company. Company will transfer to you
such Masters as you wish to purchase (the "Subject Masters") no later than
fifteen (15) days after the date of your notice of exercise of your option to
acquire Company's rights in the Subject Masters and upon receipt by Company of
certified funds fully reimbursing Company for the Recording Costs of the Subject
Masters, Company will deliver the Subject Masters to you at Company's offices.
You shall reimburse Company for the Recording Costs of the Subject Masters
simultaneously with your acquisition of the Subject Masters, by certified or
bank check. The Subject Masters will be delivered to you and accepted "as is" at
the time of delivery and no warranty or representation, express or implied, is
or will be made by Company in connection therewith; provided, however, that
Company shall not further impair or encumber the rights in or to the Subject
Masters prior to your purchase of them.
(ii) You shall be solely responsible for paying for, discharging and
performing, as and when due, all obligations and liabilities relating to the
Subject Masters and the Unreleased Masters. Without limiting the foregoing, you
shall make all payments required in connection with manufacture, sale or
distribution of Records derived from the Subject Masters and/or the Unreleased
Masters and all other payments required by reason of your use of the Subject
Masters and/or the Unreleased Masters, including, without limitation, all
royalties and other payments to performing artists, producers, owners of
copyrights in musical compositions, the Music Performance Trust Fund and Special
Payments Fund, and any other unions and union funds. You shall comply with the
applicable rules and regulations of the American Federation of Musicians and any
other union having jurisdiction and any other applicable laws, rules and
regulations covering any use of the Subject Masters and/or the Unreleased
Masters by you, or any Person deriving rights from you, in the manufacture and
sale of Records or otherwise. You warrant and represent that you have obtained
or will obtain all necessary rights, licenses, permissions,
26
clearances, consents and approvals which you are required to obtain from other
Persons relating to the exploitation of the Subject Masters and/or the
Unreleased Masters. You will indemnify and hold harmless Company and its
licensees from and against any and all claims, damages, liabilities, costs and
expenses, including legal expenses and reasonable counsel fees, arising out of
any use of the Subject Masters and/or the Unreleased Masters by you or your
successors, assigns or licensees.
14. INJUNCTIVE RELEIF
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 or threatened breach of any term, condition,
representation, warranty, agreement or covenant hereof Company will be caused
immediate irreparable injury, including loss of goodwill and harm to reputation,
which cannot be adequately compensated in monetary damages. Accordingly, in the
event of any such breach, actual or threatened, Company shall have, in addition
to any other legal remedies, the right to injunctive or other equitable relief.
The preceding sentence shall not be construed to preclude you from opposing
Company's application for injunctive relief based upon a challenge of the
factual basis alleged by Company in support of its application.
15. WARRANTIES AND REPRESENTATIONS; INDEMNITIES
(a) You warrant and represent that:
(i) You are each over the age of eighteen (18) and have the right
and legal capacity to enter into this agreement, and you are not subject to any
prior obligations or agreements, whether as a party or otherwise, which would
restrict or interfere in any way with the full and prompt performance of your
obligations hereunder, and you shall fully and promptly perform your obligations
to Artist.
(ii) There exist no prior unreleased Recordings embodying Artist's
performances collectively as Luxx, except as set forth on Schedule A attached to
this agreement.
(iii) Company shall not be required to make any payments of any
nature for or in connection with the acquisition, exercise or exploitation of
any of Company's rights hereunder, except as specifically provided in this
agreement. You shall be solely responsible for: (A) all royalties (except
mechanical royalties) payable to producers, mixers, remixers and others
contributing to the recording of Masters engaged by you or with your consent
(subject to subparagraph 8 (b) above); (B) all Recording Costs in excess of the
Recording Advances set forth in paragraph 7; (C) all mechanical royalties in
excess of the applicable rates and/or the applicable maximum aggregate
mechanical royalty rates set forth in subparagraph 12 (b)(ii); (D) video shoot
cancellation costs pursuant to the terms of subparagraph 18 (b) (iii); (E) all
Special Packaging Costs which you have requested, submitted or otherwise
approved in writing or consented to; (F) all other costs, if any, which are in
excess of the fixed amounts provided herein which Company has agreed to pay
which have not been incurred solely as a result of Company's acts or omissions;
and (G) all other amounts which you agree to pay herein. You
27
shall promptly pay all of the amounts set forth in this subparagraph 15 (a)
(iii), or reimburse Company if Company pays them. Such amounts may also be
deducted from all monies becoming payable to you by Company under this agreement
or any other agreement to the extent to which they have not been paid by you or
you have not reimbursed Company.
(iv) The Materials or any use thereof, shall not violate any law and
shall not infringe upon or violate the rights of any Person (including, without
limitation, contractual rights, copyrights, rights of publicity and rights or
privacy); and that each track-by-track list identifying the performers on each
Master and describing their performances which you furnish to Company is and
shall be true, accurate and complete. "Materials," as used in this subparagraph
15 (a) (iv), means: Masters hereunder (including any Sampled Material embodied
therein); all Controlled Compositions; each name used by Artist, individually or
as a group, in connection with Masters hereunder; all photographs and likenesses
of Artist; and all other musical, dramatic, artistic and literary materials,
ideas, and other intellectual properties furnished by you or artist, contained
in or used in connection with any Masters hereunder or their packaging, sale,
distribution, advertising, publicizing or other exploitation supplied by or
approved by your or Artist. Company's acceptance and/or utilization of Masters,
Materials, or track-by-track lists hereunder shall not constitute a waiver of
your representations, warranties or agreements in respect thereof, or a waiver
of any of Company's rights or remedies.
(v) You will make no changes in the personnel comprising Artist
without Company's prior written consent which shall not be unreasonably
withheld. You shall not, during the Term, assign Artist's professional name set
forth on Page 1 hereof, or any other names utilized by Artist in connection with
Masters, or permit the use of said names by any other individual or group of
individuals in respect of the Masters without Company's prior written consent,
and any attempt to do so shall be null and void and shall convey no right or
title. You hereby warrant and represent that you are and shall be the sole owner
of all such professional names, and that no other Person has the right to use
said names or to permit said names to be used in connection with Records, and
that you have the authority to grant Company the exclusive right to use said
names in the Territory in accordance with all of the terms and conditions of
this agreement and Company shall have the exclusive right to use said
professional name as set forth herein.
(vi) Artist shall not perform, and neither you nor Artist shall
authorize or knowingly permit Artist's performances to be recorded for any
purpose, without an express written agreement with the Person for whom the
Recording is to be made for Company's benefit, prohibiting the use of such
Recording for making, promoting, or marketing Recordings or Records, or for
digital broadcasts or other transmissions, distributions or other communications
now or hereafter known, in violation of the applicable restrictions set forth in
subparagraphs 15 (a) (i), (vii) and (viii). You shall furnish Company with a
fully executed copy of each such agreement promptly after the execution thereof.
Without limiting the generality of this subparagraph 15(a)(vi), Artist shall
have the right to (A) perform as an actor in motion picture or other visual or
audio-visual media, the contents of which are dramatic and substantially
non-musical, and (B) appear on musical shows on television provided that
neither you nor Artist permit the replication of such television show(s) to be
released as Audiovisual Records.
(vii) Artist shall not perform or render any services and Artist
shall not authorize the use of Artist's name, likeness, or other identificati6n
for the purpose of distributing, selling, advertising
28
or exploiting Records for any Person other than Company during the Term in the
Territory. Notwithstanding the preceding sentence,
(A) Artist shall have the right to perform as a so-called
non-featured "back-up musician", "background vocalist" or "sideman" with
featured artists for the purpose of making Records for any Person other than
Company only upon the following conditions:
(1) Artist's activities in this regard shall not
materially interfere with the prompt and timely performance of your Delivery
obligations hereunder;
(2) You shall undertake to provide Company with advance
written notice thereof and the Compositions to be performed and recorded shall
not be Compositions recorded pursuant to this agreement; provided, however, your
isolated failure to do so shall not constitute a breach of this agreement;
(3) If any such Record is released in a Record, Artist's
name may only be used on the liner of such Record in a size, prominence and type
style as is customary in the recording industry for the names of such
non-featured "back-up musicians", "background vocalists" and "sidemen" whose
performances are embodied, and who are given credit on such Record, and in the
same place on the liner where all other such non-featured performers are listed,
and, Company shall be given appropriate courtesy credit in conjunction with any
use of Artist's name on the liner of such Record; provided, however, Artist's
failure to procure such credit for Company shall not be deemed a breach of this
agreement; and
(4) Artist shall not perform any step-outs, solos or
duets in excess of fifteen (15) seconds in connection with such Recordings; and
(5) Except as otherwise provided above, Artist's name,
likeness, or photograph shall not be used in any manner by any third party in
connection with the performances of any member of Artist or in any advertising
thereof. No visual reproduction of Artist's performance shall appear in any
Video, New Technology Configurations, Cybersales or Audiovisual Record without
Company's prior written consent.
(B) The individual members of Artist shall have the right to
produce Recordings by other recording artists, but only upon the following
conditions:
(1) Such individual's activities as a producer shall not
materially interfere with the prompt and timely performance of your Delivery
obligations or material obligations pursuant to subparagraph 6 (a) (ii) herein;
(2) You shall undertake to provide Company with advance
notice of any such activity; provided, however, your isolated failure to do so
shall not constitute a breach of this agreement;
29
(3) If any such Recordings are released in a Record, the
name of the individual member of Artist who produced such Recording may only be
used on the liner notes, packaging and advertising of such Record in a size,
prominence and type style as is customary in the recording industry for the
names of producers who have produced Recordings embodied, and who are given
credit, on such Record, and in the same place on the liner where all other
producers are listed, and Company shall be given appropriate courtesy credit in
connection with any use of the name of any individual member of Artist on the
liner of such Record; provided, however, Artist's failure to procure such credit
for Company shall not be deemed a breach of this agreement; and
(4) Artist's professional name, likeness, or photograph
shall not be used in any manner by any third party in connection with Artist's
production of Recordings or in any advertising for such Record; provided,
however, that the name of the individual member of Artist concerned may be used
as set forth above.
(viii) Artist shall not perform for the purpose of recording any
Composition, or any adaptation of a Composition, recorded hereunder for any
Person other than Company for use in the Territory on Records, or in radio or
television commercials except as provided in subparagraph 15(a)(vi) of this
agreement, or otherwise for synchronization with visual images, for a period of
(A) five (5) years after the date of Delivery to Company of all Recordings made
in the course of the same Album (or other recording project) as the Recording of
the restricted Composition concerned, or (B) two (2) years after the expiration
or other termination of the Term, whichever is later (the "Re-recording
Restriction"). In the event that a Composition recorded hereunder is not
embodied on any Record which is released hereunder prior to one (1) year after
the expiration or other termination of this agreement, there shall be no
Re-recording restriction with respect to such Composition.
(ix) All Persons rendering services in connection with Masters or
Videos shall fully comply with the provisions of the Immigration Reform Control
Act of 1986.
(x) The Recordings to be recorded will be subject to the AFM and
AFTRA collective bargaining agreements and/or any other applicable collective
bargaining agreements and an entity owned or controlled by you will be a party
to all such agreements.
(xi) You and Artist will comply with all union rules, regulations
and agreements applicable to the Recordings.
(xii) Before the Delivery of Recordings to Company hereunder; (1)
you will make all payments to all Persons rendering services for the Recordings
concerned; (2) you will insure that there will be delivered to Company all
licenses required under copyright for the recording of the musical compositions
and any other copyrighted material reproduced in the Recordings, and you will
make all payments (except mechanical royalties) required under those licenses;
(3) you will pay or furnish Company with waivers of all other payments (except
"per-record" royalties) to which any Person may become entitled and all other
costs in connection with those Recordings or their use in the manufacture and
sale of Records; (4) you will furnish Company with the name of each vocalist who
may be a "covered artist" under Appendix A to the AFTRA 1993-1996 National Code
of Fair Practice for Phonograph Recordings (or any applicable successor
agreement), it being agreed that your failure to
30
notify Company of such vocalists will constitute your warranty and
representation that no such "covered artist" rendered services in connection
with the Recordings; and (5) you will furnish Company with all required AFTRA
and AFM forms, duly completed and executed.
(xiii) If any claim is asserted against Company for payment of any
obligation required to be discharged by you pursuant to subparagraphs 15(a)(x)
through 15(a)(xv), Company will have the right to make any such payment and any
late penalties incurred due to your untimely delivery of or failure to deliver,
necessary paperwork required to make such payments, and shall deduct the amount
of such payment, including late payments, from any and all monies accruing or
becoming payable to you hereunder. No payments shall be made pursuant to
subparagraph 7 (f)(iii) until Company receives the documentation required to be
furnished to Company pursuant to subparagraphs 15(a)(xii) and/or 15(a)(xvi).
(xiv) All unions concerned and the owners of recording studios to be
used, if any, have agreed not to look to Company for payment of any scale
compensation or other obligations arising in connection with Masters recorded
hereunder, except for "per-record" royalties.
(xv) All union scale payments due all Persons who render or perform
services in connection with Masters recorded hereunder, as well as payroll taxes
and any other taxes required to be paid thereon, if any, shall be promptly paid
by you when due.
(xvi) You will furnish Company with all information and all
instruments and documents which Company may reasonably require in connection
with Masters to confirm your compliance with the terms of subparagraphs 15(a)(x)
through 15(a)(xv) and 24(k) of this agreement.
(b) You agree to and do hereby indemnify, save and hold Company harmless
from any and all loss and damage (including court costs and reasonable
attorneys' fees) arising out of; connected with or as a result of any
inconsistency with, failure of, or breach or threatened breach by you of any
warranty, representation, agreement, undertaking or covenant contained in this
agreement including, without limitation, any claim by any third party in
connection with the foregoing, which has resulted in a judgment against Company
or which has been settled with your consent, which consent shall not be
unreasonably withheld, it being agreed that such consent shall only be required
for settlements in excess of Five Thousand Dollars ($5,000.00). In addition to
any other rights or remedies Company may have by reason of any such
inconsistency, failure, breach, threatened breach or claim, Company may obtain
reimbursement from you, on demand, for any payment made by Company at any time
after the date hereof with respect to any loss, damage or liability (including
anticipated and actual court costs and reasonable attorneys' fees) resulting
therefrom. Such amounts may also be deducted from all monies becoming payable to
you by Company under this agreement or any other agreement to the extent to
which they have not been reimbursed to Company by you. If the amount of any such
claim or loss has not been determined, Company may withhold sums due you in an
amount consistent with such claim or loss pending such determination unless you
post a bond in a form and from a bonding company acceptable to Company in an
amount equal to Company's estimate of the amount of the claim. Such withheld
sums shall be released if suit is not filed within twelve (12) months after
Company is notified of or receives a communication with respect to such claim;
provided, however, that if such claim is thereafter asserted, Company shall
maintain the right to begin once again to withhold monies. Company
31
shall give you notice of any third party claim to which the foregoing indemnity
applies and you shall have the right to participate in the defense of any such
claim through counsel of your own choice and at your expense; provided that
Company shall have the right at all times, in Company's sole discretion, to
retain or resume control of the conduct thereof.
16. APPROVALS
(a) Except as otherwise expressly provided in this agreement, as to all
matters treated herein to be determined by mutual agreement, or as to which any
approval or consent is required, such agreement, approval or consent shall not
be unreasonably withheld.
(b) Your agreement, approval or consent, whenever required (including,
without limitation, written agreement, approval or consent), shall be deemed to
have been given unless you notify Company otherwise within ten (10) business
days following the date of Company's written request to you. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.,
of Pryor, Cashman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, Esqs, is hereby deemed an authorized agent
to give approval on behalf of you.
17. COLLECTIVE BARGAINING AGREEMENTS
You hereby warrant and represent that, during the Term, Artist shall become and
remain a member in good standing of any labor unions with which Company may at
any time have agreements lawfully requiring such union membership, including,
but not limited to, the American Federation of Musicians and the American
Federation of Television and Radio Artists. All Masters hereunder shall be
produced in accordance with the rules and regulations of all unions having
jurisdiction. Those provisions of any collective bargaining agreement between
Company and any labor organization which are required, by the terms of such
agreement, to be included in this agreement shall be deemed incorporated herein.
18. VIDEOS
(a) Company agrees to cause to be produced at least one (1) promotional
Video in connection with each Album constituting the Recording Commitment,
provided that promotional Videos continue to be a meaningful marketing tool for
artists similar in style to Artist, pursuant to the prevailing custom and
practice in the record industry in the United States at the time of Company's
release of the applicable Album.
(b) With respect to any Videos requested by Company:
(i) The Master to be embodied in such Videos, the concept for such
Videos, the creative aspects of the production of such Videos (including,
without limitation, preparation of the script and storyboard), and the dates and
locations for the shooting of such Videos, shall be mutually selected by you and
Company; provided that, each Master released as the "A" side of a Single shall
be deemed mutually selected by you and Company for inclusion in a Video.
32
(ii) The director of such Videos shall be mutually selected by you
and Company and Company shall engage the other production personnel for such
Videos. Artist shall fully cooperate with the director and all other production
personnel in the production of such Videos. Company shall determine the budget
for each Video, in consultation with Artist, subject to the preceding sentence
and the terms of subparagraph 18 (a).
(iii) Company shall pay all Video Production Costs incurred in
connection with such Videos consistent with a production budget approved by
Company in good faith consultation with Artist. All Video Production Costs in
excess of the approved budget that have been incurred due solely as a result of
your acts or omissions shall be your sole responsibility and you hereby agree to
forthwith pay and discharge all such excess costs. In the event that Company
agrees to pay any such excess costs on your behalf, you shall, upon demand
reimburse Company for such excess costs or, in lieu of requesting reimbursement,
Company may deduct such excess costs from all monies payable to you under this
agreement or any other agreement. In the event that Artist fails to appear at
locations and/or on dates which have been mutually approved by you and Company,
without reasonable excuse, the costs of cancellation of the shoot shall be fully
deductible from all monies payable to you under this agreement or any other
agreement to the extent such costs exceed the budget.
(iv) All Video Production Costs paid or incurred by Company shall
constitute Advances, fifty percent (50%) of which shall be recoupable from
royalties credited to your account pursuant to paragraph 9, and one hundred
percent (100%) of which shall be recoupable from royalties derived from the
commercial exploitation of Videos credited to your account pursuant to paragraph
18. Company shall not be entitled to recoup more than one hundred percent (100%)
of the Video Production Costs for any Video. This subparagraph is subject to
subparagraph 18(b)(iii).
(v) Company shall not, without your consent, require Artist to
perform for the making of a so-called "long-form" Video consisting of Videos of
various musical Compositions and Company shall not commercially release such
"long-form" Video in the United States during the Term. The term "long-form"
Video shall mean a full-length audio-visual program, as such term is generally
understood in the recording industry, but specifically excludes any compilation
of so-called "short form" or promotional Video. During the Term hereof Company
shall not commercially release audiovisual material embodying Videos or portions
thereof made hereunder together with other audiovisual materials without your
consent.
(c) With respect to Net Sales by Company of Audiovisual Records which
embody Videos, the royalty credited to your account hereunder shall be computed
in accordance with the provisions of paragraph 9, except that: (i) with respect
to Net Sales of Top Line Audiovisual Records in the United States through normal
retail channels, the Basic U.S. Rate shall be eighteen percent (18%); and (ii)
with respect to Net Sales of Top Line Audiovisual Records outside the United
States through normal retail channels, the Foreign Rate shall be thirteen
percent (13%). The Escalated U.S. Album Rate shall not apply.
(d) (i) The royalty rate for Videos licensed by Company or a Principal
Licensee to a Person for use in the manufacture and distribution of Audiovisual
Records shall be fifty percent (50%) of Video Net Receipts solely attributable
to such Videos; provided that such credit to your royalty
33
account shall not exceed the same royalty amount that would otherwise be
credited to your account hereunder for such use if Company manufactured or
distributed the Audiovisual Record concerned.
(ii) The royalty rate for Videos licensed by Company or a Principal
Licensee to a Person for use in synchronization with theatrical motion pictures,
television programs, or radio or television commercials shall be fifty percent
(50%) of Video Net Receipts solely attributable to such Videos.
(e) Notwithstanding anything to the contrary in subparagraph 9 (g), the
royalty rate on a Video which is coupled with videos by other artists on
Audiovisual Records shall in no event exceed the royalty rate that would apply
if such royalty were computed by apportionment based on the actual playing time
of each Recording embodied in the Audiovisual Record concerned.
(f) The terms of the following paragraphs of this agreement are
specifically incorporated by reference into this paragraph 18, and shall apply
to the exploitation of Videos as if fully set forth herein: paragraph 5,
subparagraph 6(c), paragraph 10, paragraph 15, paragraph 16, and paragraph 24.
(g) Notwithstanding anything to the contrary in this agreement, Company
may reproduce on any New Technology Configuration any Video without payment of a
separate or additional royalty for such use; the royalty to be credited to your
Record royalty account for Net Sales of such New Technology Configurations
pursuant to paragraph 9 shall cover the use of such Video.
19. [INTENTIONALLY OMITTED]
20. GROUP PROVISIONS
(a) (i) You warrant, represent and agree that, for the Term, Artist will
perform together as a group (the "Group") for Company. If any individual
comprising Artist refuses, neglects or fails to perform together with the other
individuals comprising Artist in fulfillment of the obligations under this
agreement or leaves the Group, you shall give Company prompt written notice
thereof. Said individual shall remain bound by this agreement, including, but
not limited to, the provisions of subparagraph 20(b) herein or Company may, by
notice in writing, (A) terminate this agreement with respect to such individual
or (B) terminate this agreement in its entirety without any obligation as to
unrecorded or undelivered Masters.
(ii) The individual whose engagement is so terminated or who
refuses, neglects or fails to perform with the Group or who leaves the Group,
may not perform for others for the purpose of recording any Composition as to
which the applicable Re-recording Restriction has not yet expired. Any member of
the Group who refuses, neglects or fails to perform with the Group or who leaves
the Group shall not thereafter use the professional name of the Group in any
commercial or artistic endeavor; said
34
professional name shall remain for all purposes the property of those members of
the Group who continue to perform their obligations hereunder and whose
engagements are not terminated.
(iii) Each person permanently added to Artist, as a replacement or
otherwise, shall become bound by the terms and conditions of this agreement and
shall execute this agreement and any other documents required by Company as a
condition precedent to being so added.
(iv) In the event that an individual engagement is terminated by
notice from Company, or by mutual consent, (A) each party shall be relieved and
discharged from liability for Masters unrecorded at the time of such notice or
mutual consent and (B) you will be solely responsible for and shall pay all
monies required to be paid to such individual whose engagement is so terminated
in connection with any Masters theretofore or thereafter Delivered under this
agreement for which royalties are payable to such individual and you will
indemnify and hold harmless Company against any claims relating thereto,
pursuant to the terms of subparagraph 15 (b).
(b) In addition to the rights provided in the preceding subparagraph
20(a), Company shall have, and each individual member of the Group hereby grants
to Company, an irrevocable option for the individual and exclusive services of
each of the individuals comprising Artist for the purpose of making Records.
Said option with respect to such individuals may be exercised by Company giving
such individuals notice in writing within sixty (60) days after Company receives
the notice provided for in subparagraph 20(a) to the effect that each such
individual has refused, neglected or failed to perform with the other
individuals comprising Artist or that each such individual has left the Group or
that the Group has disbanded. Company shall be deemed to have exercised said
option with respect to such individual(s) unless Artist serves written notice to
Company that the time for exercising said option has run. In the event that
Artist serves notice that the time to exercise the option(s) for the individual
and exclusive services has run then Company shall have thirty (30) days within
which Company shall provide written notice of the exercise of the option set
forth herein. In the event of Company's exercise of such option, you and each
such individual shall be deemed to have entered into a new and separate
agreement with Company with respect to each such individual's exclusive
recording services upon all the terms and conditions of this agreement except
that:
(i) each such individual shall, at Company's option (A) record and
deliver to Company three (3) demonstration recordings ("Demos") at Company's
non-recoupable expense pursuant to a recording budget approved by Company
therefor or (B) arrange for a personal audition (the "Audition") at such place
and time as Company may approve;
(ii) within forty five (45) days following Company's receipt of said
notice as provided in subparagraph 20(b) of this agreement, but not sooner than
forty five (45) days following Company's receipt of the Demos or the date of the
Audition, as the case may be, Company shall have the option by written notice to
require such individual to record and Deliver to Company Masters sufficient to
comprise one (1) Album ("Commitment") and Company shall thereafter have the
right to increase the Commitment and the right to extend the term for option
periods so that Company shall have the right under such agreement to the same
number of Albums as Company then has rights or options for under this agreement,
provided that, notwithstanding anything to the contrary herein, Company shall
have the right to request not less than three (3) Albums under such agreement;
35
(iii) [intentionally omitted]
(iv) Company shall pay a Recording Advance in respect of Masters to
be recorded by each such individual up to the amount of seventy-five percent
(75%) of the Recording Advance set forth in paragraph 7 for the immediately
preceding Album Delivered by Artist constituting the Recording Commitment, or if
Artist has not yet Delivered the First Album, of the Recording Advance for the
First Album. Each succeeding Recording Advance shall be at least seventy-five
percent (75%) of the minimum Recording Advance set forth in this agreement which
follows the Recording Advance on which the first Recording Advance to each such
individual concerned is computed;
(v) Company's royalty obligation to each such individual in respect
of Recordings by each such individual shall be the payment to them of the same
Basic U.S. Rate, Escalated U.S. Album Rate, and Foreign Rate as set forth in
this agreement, with royalties for all other uses (foreign sales, clubs,
licensing, etc.), calculated and reduced in the same manner as otherwise
provided in paragraph 9;
(vi) If your royalty account is in an unrecouped position at the
date of Company's exercise of its option for the individual concerned pursuant
to subparagraph 20 (b) (ii), then the portion of such unrecouped balance
chargeable to such individual's royalty account shall be determined by
multiplying such unrecouped balance by a fraction, the numerator of which shall
be one (1) and the denominator of which shall be the total number of royalty
artists constituting Artist as of the date of Company's exercise of its option.
(vii) Recordings by such individual shall not be applied in
diminution of the Recording Commitment and Delivery obligations as set forth in
paragraph 3.
21. ARTWORK
(a) You and/or Artist may prepare and deliver to Company, subject to
approval by Company, the artwork for the album cover used in connection with the
release, during the Term, of each Album constituting the Recording Commitment
(hereinafter, the "Artwork") and any Greatest Hits Albums during the Term,
provided that:
(i) You deliver all such Artwork prepared by you and/or Artist,
together with all licenses and consents (if any) required in connection
therewith, to Company in New York City not less than sixty (60) days prior to
Company's projected release date for the Album. Time is of the essence of this
delivery obligation. Company shall advise you reasonably in advance of Company's
projected release date for each Album. If any of such material has not been
delivered to Company within the time prescribed herein (or if you have otherwise
advised Company that you and/or Artist do not intend to prepare and deliver
Artwork in respect of any specific Album), Company shall have the right to
prepare and use Company's own Artwork in good faith consultation with Artist.
Company shall not be obligated to make any such payments to you or any other
Person in connection with any Artwork produced by Company for the Album
concerned.
36
(ii) You will deliver to Company, together with all such Artwork
produced by you and/or Artist, an itemized statement of your actual costs in
connection therewith. Following such delivery to Company and its acceptance of
such Artwork in accordance with this paragraph 21, Company shall reimburse you
in the amount of said costs, up to but not in excess of Ten Thousand Dollars
($10,000) with respect to each Album constituting the Recording Commitment,
excluding the cost of separations, which costs Company shall bear as a
non-recoupable expense. Unless Company specifically agrees in writing otherwise,
any costs incurred by you in excess of such said Ten Thousand Dollars ($10,000)
per Album and reimbursed by Company shall be recoupable against all royalties,
except mechanical royalties, payable hereunder or under any other agreement.
(iii) The Artwork and all other related material delivered to
Company will be subject to mutual approval by Company and Artist. If Company
rejects any Artwork, Company shall notify you of the reason for such rejection,
and, if possible, recommend changes to the Artwork which might make it
acceptable, and Artist shall have the right to revise and resubmit it for
Company's approval, subject to all of the conditions above (including, without
limitation, the delivery deadline fixed in subparagraph 21(a)(i)), except that
Company shall have no obligation to make any payments in connection with the
revising of the Artwork in excess of the amount set forth in subparagraph 21
(a)(ii) hereof.
(iv) All Artwork and related material delivered hereunder and all
rights therein shall be Company's property throughout the Territory in
perpetuity. All matters relating to Company's trademarks or any elements of the
album cover other than the Artwork shall be determined in Company's sole
discretion. Company shall have the right to affix to each record or container
hereunder an anti-counterfeiting or similar device which shall be determined in
Company's sole discretion. Company shall have the right to include or affix on
each record or container hereunder UPC bar coding.
(v) No Artwork will be deemed delivered until accepted by Company
and all requirements hereof have been fulfilled; provided, however, the Artwork
should be deemed delivered and accepted by Company if the Artwork has been
utilized by Company on the applicable Album.
(b) You and/or Artist will not use or authorize the use of the Album cover
artwork or any other materials created by or furnished by Company or the
expenses of which are reimbursed to you by Company in connection with
merchandise of any sort, including, without limitation, in connection with
printed sheet music, unless you receive Company's prior written approval.
(c) In the event that:
(i) Company manufactures Album jackets (including any inserts or
other special elements or materials) for which the production costs (e.g.,
artwork production or origination costs, excluding costs of separations) exceed
Twelve Thousand Five Hundred Dollars ($12,500) solely as a result of materials
supplied by you, you shall pay Company, upon Company's request, an amount equal
to the amount of any such excess production costs;
37
(ii) the tape inlay card for any Album hereunder shall consist of
more than five (5) panels, printed in four colors on one side with the other
side printed in one color ("Four Over One"), you shall pay Company, upon
Company's request, an amount equal to the difference between the standard
manufacturing costs for a tape inlay card of five (5) panels printed Four Over
One and the manufacturing costs for such tape inlay card, times the number of
such tape inlay cards manufactured; and/or
(iii) the compact-disc liner notes booklet shall consist of more
than eight (8) pages, printed in four colors on the outside cover of the booklet
with the remaining pages printed in one color ("Four Over One"), you shall pay
Company, upon Company's request, an amount equal to the difference between the
standard manufacturing costs for a compact-disc liner note booklet of eight (8)
pages printed Four Over One and the manufacturing costs for such compact-disc
liner note booklet, times the number of such compact-disc liner note booklets
manufactured.
(iv) All sums for Album jackets. tape inlay cards and compact disc
liner notes booklets, which you are required to pay Company pursuant to
subparagraphs (i), (ii) and (iii) above are herein referred to as "Special
Packaging Costs".
(b) If you shall not promptly pay all Special Packaging Costs to Company.
Company shall have the right to deduct from all monies payable to you under this
agreement or any other agreement an amount equal to such Special Packaging
Costs,
21A. TOUR SUPPORT
(a) In the event that Artist desires to make a series of personal
appearances "Tour(s)") intended to be consecutive for the purpose of conducting
public performances in at least fifteen (15) major record markets in the United
States in connection with the release by Company of either or both of the First
and Second Albums, you shall notify Company within a reasonable time before
plans for the Tour(s) are finalized of the proposed itinerary and other
pertinent details of each such tour.
(b) Company will provide you with financial support for the Tours in
accordance with the terms set forth below:
(i) each Tour is undertaken by Artist in the United States only in
connection with the release of the First and/or Second Albums;
(ii) Company and you shall mutually agree, in writing, upon the
material details of each Tour (including, without limitation, venues, timing,
routing, duration, billing, budget, etc.) and the Tour shall not have materially
deviated from such details:
(iii) Company shall provide up to Fifty Thousand Dollars ($50,000)
to you in connection with each Tour undertaken by Artist in the United States in
connection with the release of the
38
First and/or Second Albums, which shall be allocated between such Tours as
mutually agreed between you and Company, and
(iv) all payments made by Company to you or on your behalf in
connection with the Tour(s) shall constitute Advances.
(v) any changes to the details of the tour must be approved by
Company and the amount of the financial support for any tour can be decreased
if, in Company's sole opinion, an unapproved change materially deviates from the
details of an agreed tour.
22. INSURANCE
Company shall have the right to secure insurance with respect to Artist for
Company's own benefit. In this connection, Artist agrees to be available for one
(1) physical examination by a physician of your choice (who is acceptable to the
insurance carrier concerned) as and when reasonably requested to do so and to
complete such questionnaires and other documents which Company or any insurance
carrier may from time to time require in connection with securing and
maintaining such insurance. Company shall keep such information confidential,
except that Company may disclose such information solely to the applicable
insurance carrier(s). The failure by or inability of Artist to be insurable
shall not constitute a breach of this agreement. If Artist shall so request, in
writing, within sixty (60) days after the expiration of the Term of this
agreement, Company shall cancel any then existing insurance policy with respect
to Artist secured pursuant to this paragraph for Company's benefit.
23. ASSIGNMENT
Company shall have the right without your consent to assign this agreement in
whole or in part to any subsidiary, parent company, affiliate, or to any third
party acquiring a substantial portion of Company's assets or stock; provided,
however, that Company shall remain liable for all payments required to be made
to you hereunder. Neither you nor Artist shall have the right to assign this
agreement or any of your rights or obligations hereunder, except that you may
assign your right to receive royalties hereunder to an entity owned or
controlled by all members of Artist.
24. DEFINITIONS
For the purposes of this agreement, the following definitions shall apply:
(a) "Advance": A prepayment of royalties. Company may recoup Advances from
royalties to be paid or accrued to or on behalf of you or Artist pursuant to
this agreement or any other agreement. Advances paid under paragraph 7 shall not
be returnable to Company except as provided in this agreement or in other
circumstances in which Company is entitled to their return by reason of your
failure to fulfill your material obligations. Mechanical royalties shall not be
chargeable in recoupment of any Advances except those Advances which are
expressly recoupable from all monies payable under this agreement or any other
agreement.
39
(b) "Album": A Record or a Multiple Record Set having no less than thirty
five (35) minutes of playing time, and which embodies at least ten (10) Masters
of different Compositions sold in a single package.
(c) "Any other agreement": Any other agreement with Company relating to
Artist's Recordings or relating to Artist as a recording Artist or as a producer
of Recordings of Artist's own performances.
(d) "Audiovisual Record": A Record which embodies, reproduces, transmits
or communicates visual images, including, without limitation, any Video, but
excluding New Technology Configurations and Cybersales.
(e) "Books and Records": That portion of Company's books and records which
specifically reports: (i) sales and other distributions of Records embodying
Masters recorded hereunder; (ii) net royalty receipts or the net amount received
from any other exploitation of Masters hereunder; and (iii) Recording Costs
incurred in connection with Masters hereunder and any sums specifically charged
against royalties hereunder; provided that such defined term shall not be deemed
to include any manufacturing records (e.g., inventory and/or production records)
or any other of Company's records.
(f) "Budget Record": A Record which is sold by Company or its Principal
Licensee(s) at a price which is below Company's or the applicable Principal
Licensee's then-prevailing suggested retail list price for Top Line Records,
which price is consistently applied by Company to such Records and which Records
are sold by Company or its Principal Licensee(s) as budget Records.
(g) "Club Operation": A business which is primarily engaged in the direct
marketing to consumers on a membership basis of audio and video products (for
example, Columbia House in the United States or Bertelsmann in Europe).
(h) "Commercially Satisfactory": Any Recording(s) required to be Delivered
hereunder shall not be considered satisfactory unless in Company's reasonably
applied business judgment: (i) it is technically satisfactory for Company's
requirements for the manufacture and sale of records; (ii) it embodies
performances by Artist that are "first class" (as the term is generally
understood in the record industry); and (iii) it is at least of the same
quality, and of the same style of music, as Artist's prior recorded performances
previously released pursuant to the terms of this agreement; provided, however,
for the purpose of this subparagraph (iii) only, in the case of the First Album,
such Recording(s) shall be of at least the same quality, and of the same style
of music, as Artist's demonstration recordings submitted to, and reviewed by,
Company.
(i) "Composition": A musical composition or medley consisting of words
and/or music, or any dramatic material and bridging passages, whether in the
form of instrumental and/or vocal music, prose or otherwise, irrespective of
length.
(j) "Container Charge": The applicable percentage, specified below, of the
Gross Royalty Base (net of all taxes included in such Gross Royalty Base Price)
applicable to the Records concerned:
40
(i) Analog cassette tape embodying less than sixty (60) minutes of
recorded music and vinyl LP configurations - twenty percent (20%) of the Gross
Royalty Base.
(ii) Analog cassette tape embodying more than sixty (60) minutes of
recorded music-twenty-five percent (25%) of the Gross Royalty Base.
(iii) Records in the following configurations: compact disc,
Audiovisual Record, New Technology Configurations, Cybersales, and Records in
all other configurations - twenty percent (25%) of the Gross Royalty Base. There
shall be no Container Charge for Records packaged in Company's stock paper
sleeves without inserts or special elements.
(k) "Delivery," "Deliver," and "Delivered": The actual receipt by Company of a
completed, fully-edited, mixed, and equalized two-track stereo tape, in the
format customarily used by Company for the manufacture of Records (currently
1630 tape), for each configuration (e.g., compact disc, analog cassette tape) of
each Master comprising the applicable Recording Commitment, approved by Company
as Commercially Satisfactory, which tapes shall in all respects be in the proper
form for the production of the parts necessary for the manufacture or creation
of Records, together with Company's receipt of all materials, consents,
approvals, licenses and permissions in respect of each such Master. Your
Delivery obligation shall include all union session reports and the delivery of
a track-by-track list identifying the performers on each Master and describing
their performances and a fully completed "AFFILIATION EXHIBIT" in the form
annexed hereto. Each Master shall be subject to Company's approval as
Commercially Satisfactory, and shall not be deemed Delivered unless and until
such approval is given. Upon the request of Company, Artist shall re-record any
Composition until a Commercially Satisfactory Master shall have been obtained.
Only Masters Delivered in full compliance with the material provisions of this
agreement shall be applied in fulfillment of the Recording Commitment and no
payments shall be made to you in connection with any Masters which are not in
full compliance. Each Master shall be delivered to Company at [INSERT OUR
DELIVERY ADDRESS/POINT OF MANUFACTURING], or such other place as Company may
notify you in writing. For the purposes of calculating the Term and any other
time periods computed on the basis of the date of Delivery of the applicable
Recording Commitment (other than for purposes of any payments under
subparagraphs 7(a)(ii)(A)(2), 7(a)(iii)(B), 7(a)(iii)(C), 7(b)(iii), 79(f)(iii)
and 7(g), Delivery shall be deemed to have occurred upon the last day of the
month in which Company has accepted and approved as Commercially Satisfactory
hereunder all of the Masters constituting such Recording Commitment. All
Recordings of Artist's performances made during the Term, including, without
limitation, multi-tracks, session tapes, and outtakes, but excluding Masters
Delivered hereunder, shall be maintained in good condition at a location
selected or approved by Company and Company shall own such Recordings as
provided in paragraph 5 whether or not such Recordings are Delivered to Company.
Any payments made by Company following the physical delivery of Masters herein
but prior to Delivery shall not constitute a waiver of your Delivery obligations
hereunder or of Company's right to approve Masters as Commercially Satisfactory.
If you administer Recording Advances pursuant to subparagraph 7(a)(i) and thus
you are responsible for paying Recording Costs, then Delivery shall not be
deemed complete until: (1) you make all of the payments referred to in
subparagraph 7(a)(i); (2) furnish Company with all licenses required under
copyright for the recording of the musical Compositions and any other
copyrighted material reproduced in the Masters, and you make all payments
(except mechanical royalties) required under those licenses; (3) you pay or
furnish Company with waivers of all other
41
payments (except "per-record royalties") to which any third party may become
entitled and all other costs in connection with those Recordings or their use in
the manufacture and sale of Records; and (4) you furnish Company with the name
of each vocalist who may be a "covered artist" under Appendix A to the American
Federation of Television and Radio Artists 1993-1996 National Code of Fair
Practice for Phonograph Recordings (or any applicable successor agreement) and
all required American Federation of Television and Radio Artists forms, duly
completed and executed. Your failure to notify Company of those vocalists shall
constitute your warranty and representation that no such "covered artist"
rendered services in connection with the Recordings.
(l) "EP": A Record embodying thereon four (4) to six (6) Masters,
provided, however, that in the event that more than one (1) of such Masters
embody the same Composition, such Record shall be deemed to be a Maxi-Single for
the purposes of this agreement.
(m) "Gross Receipts": All monies (including Advances other than returnable
Advances) actually received by Company in the United States, directly from the
applicable exploitation of Masters and/or Videos concerned. (For the purposes of
determining Gross Receipts, any royalties credited to Company's account but
charged in recoupment of a prior Advance made to Company and retained by the
payor by reason of that charge shall be deemed paid to Company and received by
Company when Company receives the accounting reflecting the credit and charge
concerned.) If any monies included in Gross Receipts is attributable to a Master
and/or Video hereunder and to other Recordings, the amount of that item to be
included in Gross Receipts hereunder shall be reasonably apportioned. If a use
of a Master and/or a Video on which a Net Receipts royalty or a Video Net
Receipts royalty is payable hereunder is made by an affiliate of Company or by a
joint venture as to which Company is a party, Company's discretion in
negotiating the amount of the compensation (if any) to be paid or credited to
Company for that use and included in Gross Receipts shall be conclusive,
provided that amount is fair and reasonable under the circumstances. (The
preceding sentence shall apply whether or not the user derives revenues from the
use, and the user's revenues shall not be deemed Gross Receipts.) Any such
amount shall be deemed fair and reasonable if it is comparable to compensation
then being negotiated by Company with unaffiliated users for comparable uses, or
if Company notifies you that it proposes to agree to the amount concerned and
you do not notify Company of your objection within five (5) business days. If
you make any such objection you shall also notify Company of your reasons
therefor and shall negotiate with Company in good faith to resolve the
difference underlying such objection if Company so requests. Notwithstanding the
foregoing or anything to the contrary expressed or implied elsewhere herein,
with respect to receipts payable for sales through a Club Operation, Gross
Receipts shall specifically not include any profits received by Company or any
Principal Licensee as a joint venturer in such Club Operation (e.g., The
Columbia House Company).
(n) "Master": A Recording embodying a performance by Artist of a single
Composition, or a medley of Compositions, which consists of sound only and is
used or useful in the recording, production, manufacture, and/or exploitation of
Records.
(o) "Maxi-Single": A Record embodying thereon three (3) Masters.
(p) "Mid-Price Record": A Record which is sold by Company or its Principal
Licensee(s) at a price which is below Company's or the applicable Principal
Licensee's then-prevailing suggested retail
42
list price for Top Line Records, which price is consistently applied by Company
to such Records and which Records are sold by Company or its Principal
Licensee(s) as mid-priced Records.
(q) "Multiple Record Set": Two or more Records packaged and/or marketed as
a single unit.
(r) "Net Receipts": Gross Receipts from the exploitation of Masters after
deduction by Company of all direct out-of-pocket expenses, taxes, included
therein and adjustments incurred in the applicable exploitation of Masters
concerned, and/or in connection with the collection and receipt of those Gross
Receipts in the United States (including, without limitation, all copyright
payments, all reuse payments, all Trust Fund payments, and any other third party
payments and any legal fees incurred in collecting such monies). If any item
deducted from Gross Receipts in determining Net Receipts is attributable to a
Master hereunder and to other Recordings, the amount of that item to be deducted
in determining Net Receipts hereunder shall be determined by reasonable
apportionment.
(s) "Net Sales": One hundred percent (100%) of gross sales, less returns,
credits, and reserves against anticipated returns and credits.
(t) "Person": Any natural person, legal entity or other organized group of
persons or entities. (All pronouns, whether personal or impersonal, which refer
to Persons include natural persons and other Persons.)
(u) "Premium Record": A Record produced for use in promoting the sale of
merchandise other than Records, and which bears the name of the sponsor for whom
the Record is produced.
(v) "Principal Licensee": Company's licensee for the majority of Records
sold on behalf of Company in the territory concerned.
(w) "Record": any form of reproduction, distribution, transmission or
communication of Recordings now or hereafter known (including reproductions of
sound alone, or together with visual images) which is manufactured, distributed,
transmitted or communicated primarily for home use, institutional (e.g., library
or school) use, jukebox use, or use in means of transportation, including,
without limitation, any computer-assisted media (e.g., CD-ROM, DVD, CD Extra,
Enhanced CD) and Cybersales.
(x) "Recording": Any recording of sound, whether or not coupled with a
visual image, by any method and on any substance or material, whether now or
hereafter known, which is used or useful in the recording, production, and/or
manufacture of Records or for any other commercial exploitation of sound.
(y) "Recording Costs" Wages, fees, advances and payments of any nature to
or in respect of all musicians, vocalists, conductors, arrangers, orchestrators,
engineers, producers, copyists, etc.; payments to a trustee or fluid based on
wages to the extent required by any agreement between Company and any labor
organization or trustee; union session scale payable to Artist; all studio,
tape, editing, mixing, re-mixing, mastering and engineering costs; authoring
costs; all costs of travel by persons other than Company employees, per diems,
rehearsal halls, non-studio facilities and equipment, dubdown,
43
rental and transportation of instruments; all costs occasioned by the
cancellation of any scheduled recording session; and all other costs and
expenses incurred in the production, but not the manufacture, of Masters and
Records hereunder, and any Demos hereunder, which are then customarily
recognized as recording costs in the recording industry. Notwithstanding
anything to the contrary contained herein, any Recording Costs for all remixes
from any particular Album which are paid, incurred or reimbursed by Company
after Delivery of the Masters constituting the Album concerned shall be
recoupable solely from royalties (other than mechanical copyright royalties)
payable to Artist hereunder and shall not be recoupable from Advances. If
Company furnishes any of its own facilities, materials, services or equipment
for which Company has a standard rate, the amount of such standard rate or if
there is no standard rate, the market value for the services or thing furnished
shall be deemed Recording Costs. Payments to the AFM Special Payments Fund and
the Music Performance Trust Fund based upon record sales (so-called "per-record
royalties") shall not be recoupable from your royalties or reimbursable by you.
(z) "Royalty Base Price": The amount specified below ("Gross Royalty
Base") applicable to the Record concerned, less the applicable Container Charge,
excise taxes, duties and other applicable taxes included within the Gross
Royalty Base:
(i) With respect to Records sold for distribution in United States,
the manufacturer's suggested retail price in the United States. Company may
elect, in Company's sole discretion, as of the date of commencement of any
accounting period hereunder (the 'New Base Effective Date") to compute royalties
for Net Sales of Records (other than Audiovisual Records) in the United States
occurring on or after the New Base Effective Date (the "New Base Net Sales")
utilizing a Royalty Base Price derived from the Wholesale Price of such Records
rather than the manufacturer's suggested retail price of such Records. Should
Company elect to do so, the following shall apply in computing royalties for New
Base Net Sales:
(A) The Gross Royalty Base shall be the Wholesale Price (as
defined in subparagraph 24 (hh)) rather than the manufacturer's suggested retail
price in the United States.
(B) New Basic U.S. Rates shall be determined for Singles,
Maxi-Singles. EPs and Albums in each form of Record other than New Technology
Configurations not previously released by Company and methods of Cybersales not
previously exploited by Company. The new Basic U.S. Rate for Singles,
Maxi-Singles, EPs and Albums in a particular form shall be determined by
multiplying the existing Basic U.S. Rate for such Records in such form by a
fraction, the numerator of which is the manufacturer's suggested retail price in
the United States for the majority of such Top Line Records in such form as of
the New Base Effective Date, and the denominator of which is the Wholesale Price
for the majority of such Top Line Records in such form as of the New Base
Effective Date. The New Basic U.S. Rates shall be utilized in lieu of the Basic
U.S. Rates to compute royalties for the New Base Net Sales and for no other
purpose. Notwithstanding the foregoing, on the date of the New Base Effective
Date only, the New Basic U.S. Rates when applied to the New Royalty Base Price
shall yield the same dollars-and-cents royalty amounts payable with respect to
Records immediately prior to the New Base Effective Date.
44
(C) In computing royalties for New Base Net Sales of New
Technology Configurations released prior to the New Base Effective Date, the
applicable New Basic U.S. Rate shall be reduced as set forth in subparagraph 9
(e) (ii).
(D) In computing royalties for New Base Net Sales through
Cybersales, the applicable New Basic U.S. Rate shall be reduced as set forth in
subparagraph 9 (f).
(ii) With respect to Records sold for distribution outside the
United States, the manufacturer's suggested retail price (or its equivalent
constructed price) in the country of manufacture or sale, as Company is paid,
provided that if a retail related base cannot be established in a particular
country, then the base shall be that amount equal to the lowest wholesale price
payable by the largest category of Company's customers in the normal course of
business with respect to such Records sold for distribution during the
applicable semi-annual accounting period, multiplied by one hundred twenty-six
percent (126%), provided, however, if a published price to dealers ("ppd")
exists in the applicable country of sale then Company may apply the ppd in lieu
of the lowest wholesale price.
(iii) With respect to Audiovisual Records, the amount which Company
receives for each Audiovisual Record from Company's distributor, whether or not
affiliated with Company.
(iv) Notwithstanding anything to the contrary expressed or implied
elsewhere herein, the Gross Royalty Base for any Record sold by Cybersales shall
be the price paid by the consumer to Company or its Principal Licensee(s), as
applicable, for the Record concerned.
(aa) "Single": A Record embodying thereon one (1) or two (2) Masters.
(bb) "Top Line Record" A Record bearing the same Gross Royalty Base as the
majority (or plurality) of the new Record releases in the same configuration of
Company's best selling artists.
(cc) "Territory": The world.
(dd) "USNRC Net Sales" - Net Sales of Top Line Records (other than
Audiovisual Records), on which royalties are payable, consisting entirely of
Masters recorded hereunder and sold by Company through normal retail channels in
the United States.
(ee) "Video": An audiovisual work featuring, primarily, the audio
soundtrack of one (1) or more Masters hereunder.
(ff) "Video Net Receipts": Gross Receipts from the exploitation of Videos,
after deduction by Company of all direct expenses, taxes included therein, and
adjustments incurred in connection with the Video Production Costs, the
acquisition of rights in the Video concerned, the applicable exploitation of the
Video concerned, and/or in connection with the collection and receipt of those
Gross Receipts in the United States (including, without limitation, all
copyright payments, all re-use payments under Company's agreements with the
American Federation of Musicians and any other third party payments and any
legal fees incurred in collecting such monies). If any item deducted from Gross
Receipts in determining Video Net Receipts is attributable to a Video hereunder
and to other Recordings or Videos,
45
the amount of that item to be deducted in determining Video Net Receipts
hereunder shall be determined by reasonable apportionment. Video Net Receipts
shall be determined after deducting the foregoing as well as after deducting a
marketing and distribution fee equal to fifteen percent (15%) of the applicable
Gross Receipts in respect of any broadcast, telecast, cablecast or other
exploitation (excluding the sale of Audiovisual Records).
(gg) "Video Production Costs": All amounts paid or incurred in connection
with the production, conversion and delivery of Videos. Video Production Costs
include, without limitation, flat fee payments to the publishers of musical
works, unreimbursed costs and expenses incurred in the duplication and delivery
of copies of Videos to licensees, and all direct out-of-pocket costs (such as
for rights, artists (including Artist), producers and other personnel, travel
costs for persons other than Company employees, per-diems, facilities,
materials, services and use of equipment). If Company furnishes any of its own
facilities, materials, services or equipment for which Company has a standard
rate, the amount of such standard rate or if there is no standard rate, the
market value for the services or thing furnished shall be deemed Video
Production Costs. Notwithstanding the foregoing, mechanical royalties paid by
Company in respect of Videos shall not be included in Video Production Costs.
(hh) "Wholesale Price" - The amount which Company receives for each Record
from Company's distributor in the United States, whether or not affiliated with
Company.
The following terms are defined elsewhere in this agreement as follows:
(A) "Audition"- subparagraph 20(b)(i).
(B) "Basic U.S. Rate"- subparagraph 9(a).
(C) "Canadian 75% Rate" - subparagraph 12(a).
(F)) "Consumer Compilation" - subparagraph 6(c)(iii)(A).
(E) "Contract Period" - paragraph 2.
(F) "Controlled Composition" - subparagraph 12(a)(i).
(G) "Cybersales" - subparagraph 9(f).
(H) "Demos" - subparagraph 2O(b)(i)
(I) "Escalated U.S. Album Rate" - subparagraph 9(a)(ii).
(J) "Foreign Rate"- subparagraph 9(b).
(K) "Four Over One"- subparagraph 21 (a)(ii).
(L) "Group" - subparagraph 20(a)(i).
46
(M) "Materials"- subparagraph 15 (a)(iv).
(N) "New Technology Configurations" - subparagraph 9(e)(ii).
(0) "Option Period"- paragraph 2.
(P) "Recording Advances" - subparagraph 7(b).
(Q) "Recording Commitment" - paragraph 3.
(R) "Re-recording Restriction" - subparagraph 15(a)(viii).
(S) "Sampled Material" - subparagraph 4 (b).
(T) "Sampling" - subparagraph 4 (b).
(U) "Special Packaging Costs" - subparagraph 21(c)(iv).
(V) "Staff Producer" - subparagraph 8(b).
(W) "Subject Masters" - subparagraph 13(d)(i).
(X) "Term" paragraph 2.
(Y) "U.S. 75% Rate" - subparagraph 12(a).
(Z) "U.S. Release Cure Period" - subparagraph 6(d).
(AA) "U.S. Release Deadline Period" - subparagraph 6(d).
47
25. MISCELLANEOUS
(a) This agreement sets forth the entire agreement between the parties
with respect to the subject matter hereof. No modification, amendment, waiver,
termination or discharge of this agreement shall be binding upon Company unless
confirmed by a written instrument signed by an authorized officer of Company, or
binding upon you unless confirmed by a written instrument signed by you. A
waiver by either you or Company of any term or condition of this agreement in
any instance shall not be deemed or construed as a waiver of such term or
condition for the future, or of any subsequent breach thereof. All rights,
options and remedies in this agreement shall be cumulative and none of them
shall be in limitation of any other remedy, option or right available to Company
or to you. Should any provision of this agreement be adjudicated by a court of
competent jurisdiction as void, invalid or inoperative, such decision shall not
affect any other provision hereof; and the remainder of this agreement shall be
effective as though such void, invalid or inoperative provision had not been
contained herein. The headings of the paragraphs hereof are for convenience only
and shall not be deemed to limit or in any way affect the scope, meaning or
intent of this agreement or any portion thereof. All accountings and royalties
required herein, and all grants made herein, shall survive and continue beyond
the expiration or earlier termination of this agreement. Neither party shall be
entitled to recover damages or to terminate the Term by reason of any breach by
the other party of its material obligations, unless the latter party has failed
to remedy the breach within a reasonable time following receipt of notice
thereof. (The preceding sentence shall not apply to any recovery to which
Company may be entitled by reason of your failure to fulfill the Recording
Commitment hereunder.) If you claim that additional monies are payable to you
hereunder, Company shall not be deemed in material breach of this agreement
unless such claim is reduced to a final judgment by a court of competent
jurisdiction and Company fails to pay you the amount thereof within thirty (30)
days after Company receives notice of the entry of such judgment. In entering
into this agreement, and in providing services pursuant hereto, you and Artist
have and shall have the status of independent contractors. Nothing herein
contained shall contemplate or constitute you or the Artist as Company's agents
or employees, and nothing herein shall constitute a partnership, joint venture
or fiduciary relationship between you and Company.
(b) THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW
YORK AND ITS VALDITY, CONSTRUCTION, PERFORMANCE AND BREACH SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY
PERFORMED THEREIN. YOU AGREE TO SUBMIT YOURSELF TO THE JURISDICTION OF THE
FEDERAL OR STATE COURTS LOCATED IN NEW YORK CITY IN ANY ACTION WHICH MAY ARISE
OUT OF THIS AGREEMENT AND SAID COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER
ALL DISPUTES BETWEEN COMPANY AND YOU OR LUXX PERTAINING TO THIS AGREEMENT AND
ALL MATTERS RELATED THERETO. IN THIS REGARD, ANY PROCESS IN ANY ACTION OR
PROCEEDING COMMENCED IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ARISING OUT OF ANY
CLAIM, DISPUTE OR DISAGREEMENT UNDER THIS AGREEMENT MAY, AMONG OTHER METHODS, BE
SERVED UPON YOU BY DELIVERING OR MAILING THE SAME, VIA REGISTERED OR CERTIFIED
MAIL, ADDRESSED TO YOU AT THE
48
ADDRESS PROVIDED HEREIN FOR NOTICES TO YOU; ANY SUCH DELIVERY OR MAIL SERVICE
SHALL BE DEEMED TO HAVE THE SAME FORCE AND EFFECT AS PERSONAL SERVICE WITHIN THE
STATE OF NEW YORK. NOTHING CONTAINED IN THIS SUBPARAGRAPH 25(b) SHALL PRECLUDE
COMPANY FROM JOINING YOU OR LUXX IN AN ACTION BROUGHT BY A THIRD PARTY AGAINST
COMPANY IN ANY JURISDICTION, ALTHOUGH COMPANY'S FAILURE TO JOIN YOU OR LUXX IN
ANY SUCH ACTION IN ONE INSTANCE SHALL NOT CONSTITUTE A WAIVER OF ANY OF
COMPANY'S RIGHTS WITH RESPECT THERETO, OR WITH RESPECT TO ANY SUBSEQUENT ACTION
BROUGHT BY A THIRD PARTY AGAINST COMPANY. NOTHING CONTAINED HEREIN SHALL
CONSTITUTE A WAIVER OF ANY OTHER REMEDIES AVAILABLE TO COMPANY.
(c) This agreement shall not become effective until executed by all
parties.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day
and year first above written.
PUSH RECORDS, INC.
By: /s/ [Illegible]
------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Social Security Number: ###-##-####
/s/ ▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇ ▇▇▇▇▇▇
Social Security Number:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Social Security Number: ###-##-####
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
Social Security Number: ###-##-####
p/k/a "LUXX"
------
49
AFFILIATION EXHIBIT
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Yes |_| Yes |X| Yes |X| ▇▇▇▇▇▇▇ MUSIC
----------- ----------- -------------
----------- No |X| No |_| No |_| ASCAP |X|
----------- BMI |_|
-----------
-----------
-----------
--------------------------------------------------------------------------------
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
▇▇▇ ▇▇▇▇▇▇ GUITAR Yes |_| Yes |_| Yes |_| ▇▇▇▇▇▇ MUSIC
----------- ----------- ------------
----------- No |X| No |_| No |X| ASCAP |X|
----------- BMI |_|
-----------
-----------
-----------
--------------------------------------------------------------------------------
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
▇▇▇▇ ▇▇▇▇▇▇▇ BASS Yes |_| Yes |_| Yes |_| FENNEL MUSIC
----------- ----------- ------------
----------- No |X| No |_| No |X| ASCAP |X|
----------- BMI |_|
-----------
-----------
-----------
--------------------------------------------------------------------------------
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
▇▇▇▇ ▇▇▇▇▇▇ DRUMS Yes |_| Yes |_| Yes |_| SILVERADO MUSIC
----------- ----------- ---------------
----------- No |X| No |_| No |X| ASCAP |X|
----------- BMI |_|
-----------
-----------
-----------
--------------------------------------------------------------------------------
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
Yes |_| Yes |_| Yes |_| ------------
----------- ----------- No |_| No |_| No |_| ASCAP |_|
----------- BMI |_|
-----------
-----------
-----------
-----------
--------------------------------------------------------------------------------
Group Instruments AFofM Vocalist Lead Singer Publishing Co.
Member Played Member AFTRA Member
Yes |_| Yes |_| Yes |_| ------------
----------- ----------- No |_| No |_| No |_| ASCAP |_|
----------- BMI |_|
-----------
-----------
-----------
-----------
--------------------------------------------------------------------------------
