U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
TO
FORM 10-KSB
(Mark One)
/X/ Annual report under Section 13 or 15(d) of the Securities Exchange Act of
1934 (Fee required)
For the fiscal year ended January 31, 1996
---------------------------------
/_/ Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 (No fee required)
For the transition period from to
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Commission file number 0-26120
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Imprint Records, Inc. (formerly Veritas Music Entertainment, Inc.)
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(Name of Small Business Issuer in Its Charter)
Tennessee 62-1587889
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Cummins Station
209 10th Avenue South, Suite 500
Nashville, Tennessee 37203
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(Address of Principal Executive Offices) (Zip Code)
(615) 244-9585
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
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N/A N/A
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- ------------------------------------- -------------------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, No Par Value
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(Title of Class)
Redeemable Common Stock Purchase Warrants
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(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB, or any amendment to
this Form 10-KSB. /X/
The issuer's revenues for its most recent fiscal year were $ -0-.
On April 19, 1996, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $7,176,000, based upon the average closing
bid and asked price of the Company's Common Stock on April 19, 1996, which was
$3.00.
As of April 19, 1996, there were 4,738,000 shares of the registrant's
Common Stock outstanding.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
IMPRINT RECORDS, INC. (FORMERLY
VERITAS MUSIC ENTERTAINMENT, INC.)
By:
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Roy W. Wunsch, Chairman of the Board
and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
- -------------------------- ----------------------------- -----------------
/S/Roy W. Wunsch Chairman of the Board and November 26, 1996
- -------------------------- Chief Executive Officer
Roy W. Wunsch (principal executive officer)
/S/Wayne R. Halper Vice President - Business November 26, 1996
- --------------------------- Affairs, and Chief Financial
Wayne R. Halper Officer (principal financial
officer; principal accounting
officer)
/S/Frank M. Bumstead Director; Treasurer and November 26, 1996
- -------------------------- Secretary
Frank M. Bumstead
/s/Charles M. Flood, Jr. Director November 26, 1996
- ---------------------------
Charles M. Flood, Jr.
/s/Stanley O. Schaetzle, Jr. Director; President November 26, 1996
- ----------------------------
Stanley O. Schaetzle, Jr.
/s/Donald A. Schlitz Director November 26, 1996
- ----------------------------
Donald A. Schlitz
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EXHIBIT INDEX
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EXHIBIT PAGE NUMBER
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10.34 -- Recording Contract between the Company and Gretchen
Peters.* 4
10.35 -- Recording Contract between the Company and Al
Anderson.* 35
10.36 -- Recording Contract between the Company and Jeff
Wood.* 76
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* The Company has requested confidential treatment for portions of this
Exhibit from the Securities and Exchange Commission, which confidential portions
have been filed separately.
Exhibit 10.34
-------------
Confidential portions omitted and filed separately with the Commission. Deleted
text (represented by "XXXX" in the text and an asterisk in the margin) indicates
such omissions.
VERITAS MUSIC ENTERTAINMENT
Suite 500, Cummins Station
209 10th Avenue South
Nashville, Tennessee 37203
Date: as of December 31, 1995
Ms. Gretchen Peters
1003 Hunts Lane
Hendersonville, Tennessee 37075
Dear Ms. Peters:
The following, when fully executed by both parties where indicated below,
shall constitute the agreement between Veritas Music Entertainment ("Company,"
"we," "us," etc.) and you with regard to your exclusive services as a recording
artist and musician:
1. Term.
A. The "Term" hereof shall consist of an "Initial Period" and so many
of the "Option Periods" below as may be exercised pursuant hereto.
B. The "Initial Period" shall commence on the date hereof and shall
end on the date eight (8) months after the commercial release of the LP
satisfying your recording commitment for the Initial Period or, at Company's
election, on the date during the Initial Period specified in Company's notice of
option exercise.
C. Subject to paragraph 5D below and conditioned upon the release of
the applicable LP in the Initial Period or prior Option Period as the case may
be, you grant us five (5) irrevocable options to extend the Initial Period for
additional contract periods (the "Option Periods") upon the same terms and
conditions applicable to the Initial Period, except as otherwise provided
herein. Notwithstanding the foregoing, Company's option at the end of the second
Option Period may only be exercised by Company if total sales units for the
third LP hereunder equal or exceed 250,000 USNRC units (excluding reserves of
twenty percent (20%) for purposes of this calculation only) unless you otherwise
waive such sales requirement. Each such Option Period shall run consecutively
beginning on the expiration of the Initial Period or the previous Option Period,
as the case may be. Each such Option Period shall end on the date eight (8)
months after the commercial release of the LP satisfying your recording
commitment for the Option Period in question or, at Company's election, on the
date during the Option Period specified in Company's notice of option
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exercise. The Initial Period and the Option Periods are sometimes referred to as
"Contract Period(s)."
Company shall exercise each such option by notice to you at any time prior to
the expiration of the then-current Contract Period.
2. Recording Services; Recording Commitment.
A. During the Term you will render your exclusive services to Company
as a recording artist and musician throughout the World.
B. During each Contract Period you shall perform for the recording of
and deliver a sufficient number of master recordings embodying your performances
(the "Masters") to comprise one LP (the "Recording Commitment"). On our
reasonable request and at our expense, which shall be recoupable under paragraph
8 below, you shall repeat your performances until, in our opinion, satisfactory
Masters have been produced. The Masters shall be deemed accepted if not rejected
by written notice from Company within fifteen (15) days after full delivery
hereunder.
C. Notwithstanding the provisions of paragraph 2A above, you may
perform as a background vocalist or instrumentalist accompanying a featured
artist for the purposes of making phonograph records for others, provided:
(1) You have fulfilled all of your obligations under this
agreement and such activity does not in any way interfere with the continuing
prompt performance of your obligations hereunder;
(2) You do not render a solo or "step-out" performance.
(3) The musical style of the recording shall not be substantially
similar to the characteristic musical style of recordings made by you hereunder;
(4) The compositions so recorded shall not have been recorded and
are not anticipated to be recorded by you hereunder.
(5) Your name may be used in connection with such records in the
form of a courtesy credit to Company on the Album liners used for such records,
in the same positions as the credits accorded to other sidemen and in type of
the same size and prominence; and,
(6) Except as expressly provided herein, neither your name nor
any name associated with you nor any picture, portrait or likeness of you shall
be used in connection with such recordings, including, without limitation, on
the front covers of Album containers, on sleeves or labels used for single
records, or
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in advertising, publicity or other form of promotion or exploitation
without Company's express written consent, which Company may withhold in its
unrestricted discretion.
3. Recording Guidelines.
A. You shall only schedule and conduct recording sessions after
requesting and receiving Company's written approval of the material to be
recorded, the studios for recording and mastering sessions, the musicians and
additional vocalists performing on the Masters, the individual producers and the
Authorized Budget. Such request shall be submitted to Company not less than
thirty (30) days prior to the proposed first date of recording. Green Daniel is
deemed approved as the producer of the first LP hereunder.
B. Neither "live" performances, Multiple Albums, instrumental Masters
nor spoken-word Masters shall be recorded without your and Company's prior
written consent.
C. You shall deliver the LP due within each Contract Period within one
hundred fifty (150) days of the commencement of the period in question.
4. Recording Costs. Company shall be responsible for those recording costs
incurred in connection with the Masters which you and Company have mutually
approved in writing (the "Approved Budget"). Any recording budget not in excess
of $125,000.00 is deemed approved. Company shall not be deemed unreasonable for
refusing to approve any costs which are not submitted to Company in writing at
least thirty (30) days prior to commencement of the recording session in
question. Any costs in excess of the Approved Budget which were incurred for
reasons within your control shall constitute advances to you and shall be
recoupable from any and all royalties otherwise payable to you hereunder
(including, without limitation, mechanical royalties) or require you to repay
such costs immediately.
5. Rights in Masters.
A. All Masters, all duplicates and derivatives thereof, all records
made from the Masters (including the copyright in such Masters for the full term
of copyright and any renewal and/or extension of such copyright), together with
the performances embodied therein, shall, from the inception of recording, be
exclusively and perpetually Company's property, free of any claim whatsoever by
you and/or any person deriving any rights from you. Editing, modification,
resequencing and/or remixing of any Masters or portions thereof shall be subject
to your approval, not to be unreasonably withheld, with the exception of
resequencing necessary to conform to manufacturing requirements (including the
restrictions of manufacturing new mediums). All Masters, from the inception of
recording, shall be deemed works made for hire within
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the meaning of the United States Copyright Act. If any Masters do not so qualify
or are determined not to be works made for hire, you hereby assign and agree to
assign to Company, its successors and assigns, absolutely and forever, all
right, title and interest in such Masters, and the copyright in each of them,
for the full term of copyright (including all extensions and renewals of such
copyright) in each country of the world and, wherever applicable, elsewhere in
the universe. Without limiting the generality of the foregoing, Company and its
subsidiaries, affiliates, licensees and assigns shall have the sole, exclusive
and unlimited right throughout the universe to manufacture records by any
method(s) now or hereafter known embodying any portion(s) or all of the
performances embodied in the Masters recorded hereunder (including, without
limitation, "Best of" and "Greatest Hits" records); to perform publicly and to
permit public performance of such records; to repackage, sell, transfer, deal
in, exploit or otherwise dispose of such Masters and records (as well as
duplicates and derivatives of such Masters) at such times and places, in any and
all media and manner, and under any trademarks, trade names or labels which are
identified as Company's top "country" label; or, subject to the provisions
hereof, Company and its subsidiaries, affiliates, licensees and assigns may, at
their election, delay or refrain from doing any one or more of the foregoing.
Without limiting the generality of the foregoing, Company may use or license the
use of the Masters for synchronization in motion picture, television and other
audiovisual soundtracks, background music and any other purposes, including,
without limitation, use on transportation facilities.
B. Promptly upon Company's request, you shall execute and deliver to
Company any documents necessary for Company to secure copyright protection in
the Masters as Company may reasonably request, and you hereby appoint Company as
your attorney-in-fact to sign in your name any such documents which you have not
signed and delivered to Company within ten (10) days following Company's request
therefor, provided they are consistent with the terms of this agreement.
C. Nothing herein contained shall require Company to record the number
of Masters constituting your Recording Commitment hereunder for any given Option
Period. Company may, at its sole election exercisable at any time by notice to
you, fulfill its entire obligation to you with respect to such unrecorded sides
by paying to you with respect thereto a sum equal to one hundred percent (100%)
of the Minimum Advance otherwise payable to you in connection with that
particular album. Notwithstanding the above, in the event Company elects not to
record the number of Masters constituting your Recording Commitment in any given
Contract Period, you shall be entitled to retain any monies paid to you as
Advances under paragraph 6B(1) prior to Company's election. All such union
payments or other monies paid to you shall constitute advances recoupable from
any and all royalties (other than mechanical royalties) accruing to your credit
hereunder. The Term
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of this agreement shall terminate automatically in the event Company exercises
its rights pursuant to this subparagraph.
D. (1) Provided you have fulfilled all your material obligations under
this agreement, Company will release in the United States and Canada each LP
recorded in fulfillment of your Recording Commitment in the Initial Period and
each Option Period within seven (7) months after delivery of the Masters
concerned ("Release Period"). If Company fails to do so, you may notify Company
(the "First Notice") within ninety (90) days after the end of the Release Period
concerned that you intend to terminate the term of this agreement unless Company
releases the LP within thirty (30) days after Company's receipt of your notice
(the "cure period"). If Company fails to release the Single or LP before the end
of the cure period, you may terminate the term of this agreement by giving
Company notice (the "Termination Notice") within ninety (90) days after the end
of the cure period. On receipt by Company of your Termination Notice, the term
of this agreement will end and all parties will be deemed to have fulfilled
their obligations under it except those obligations which survive the end of the
term (e.g., warranties, re-recording restrictions and obligations to pay
royalties). Your only remedy for failure by Company to release a Record will be
in accordance with this paragraph. If you fail to give Company the notices
within the periods specified, your right to terminate as to that LP will lapse.
(2) The running of each of the Release Periods and notice periods
referred to in subparagraph 5D(1) will be suspended (and the expiration date of
each of those periods will be postponed) for the period of any suspension of the
running of the term of this agreement. If any such Release Periods or notice
periods would otherwise expire on a date between November 1 and the next January
16, its running will be suspended for the duration of the period between
November 1 and January 16, and its expiration date will be postponed by the same
amount of time (i.e., 77 days).
6. Artist Royalties and Advances. Conditioned upon your full and faithful
performance of all of the terms and provisions hereof:
A. Royalties: Company shall pay to you, in respect of Company's net
sales of phonograph records embodying, or other exploitation of, the Masters,
royalties upon the terms set forth in Exhibit A attached hereto and incorporated
herein by this reference. Such royalties shall be inclusive of all royalties and
other sums payable to any individual producer, remix producer or any other
royalty participant, except as otherwise specifically set forth herein.
B. Album Advances: Company shall pay you the following sums which
shall be deemed nonreturnable advances to you, recoupable from any royalties
(other than mechanical royalties)
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otherwise payable to you hereunder, and which shall be deemed a prepayment of
any minimum union scale payments required to be paid to you pursuant to the
terms of any collective bargaining agreement to which Company may be party:
* LP 1 XXXXX
Minimum Maximum
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* LP 2 XXXXX XXXXX
* LP 3 XXXXX XXXXX
* LP 4 XXXXX XXXXX
* LP 5 XXXXX XXXXX
* LP 6 XXXXX XXXXX
The actual amount of each advance for LPs 2 through 6 shall be calculated
based on a sales formula equal to 66-2/3% of your net royalties (less reserves
which for purposes of this calculation only shall not exceed 20%) with respect
to net sales through normal retail channels in the United States of the
immediately preceding album as of the date twelve (12) months from the date of
the initial U.S. release (determined by reference to Company's monthly trial
balance), less the amount of the approved recording costs for the LP in
question, as described in paragraph 4 above. One-half of the Minimum Advance
shall be paid upon Company's exercise of its option in each period and the
balance (as it is calculated pursuant to the above formula) shall be paid upon
the satisfactory delivery of the Masters for the LP in each period and payment
of all outstanding recording costs; with the exception that Company shall pay
one-half of the advance for LP 1 upon execution of this agreement. 1
C. At your request and authorization, Company will make payments for
services of one or more producers on your behalf, as follows:
(1) A royalty (the "Producer Royalty") on the net sales of
phonograph records (in all configurations) derived from the Masters and
embodying those Masters produced by such producer, computed and paid upon the
same royalty base and in the same manner as the royalty payable to you
hereunder, at the same times and subject to the same conditions, not to exceed
three percent (3%) of the Suggested Retail List Price of such records without
Company's consent with proportionate reductions on all sales for which reduced
royalties are payable to you under this agreement and proportionate reductions
with respect to records embodying both Masters and other masters. With respect
to sales or exploitation of the Masters on which your royalty is determined on
a basis other than the Suggested Retail List Price, the Producer's Royalty
shall be proportionately allocated. The amount of the Producer Royalty will be
deducted dollar-for-dollar from all royalties (other than mechanical
royalties) payable or becoming payable to you under this Agreement.
* - Confidential portions omitted and filed separately with the Commission.
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(2) The Producer Royalty will not be payable until Company has
recouped all Recording Costs attributable to the Masters under the Agreement.
Such recoupment will be computed at your net royalty rate as reduced to reflect
the deduction of all royalties payable to the subject producer(s) of Masters
under this agreement. After such recoupment, the Producer Royalty will be
computed retroactively and paid on all such records from the first record sold.
7. Accountings.
A. Royalties payable to you hereunder will be accrued and calculated
semiannually and paid, less all advances and any other charges incurred during
the accounting period in question by September 30 for the semiannual period
ending June 30 and by March 31 for the semiannual period ending December 31.
Company shall have the right, however, to establish reasonable reserves for
returns and exchanges (said reserves not to exceed 35% of units shipped,
exclusive of free goods). Such reserves shall be fully and equally liquidated
over the four (4) accounting periods subsequent to that in which the reserve is
taken.
B. Royalty payments hereunder shall be accompanied by a statement in
accordance with Company's regular accounting practices. Each statement shall
become conclusively binding on you, unless you shall advise Company in writing
of the specific basis of your objection within three (3) years after the date
Company mails such statements. No action, suit or proceeding shall be against
Company unless commenced against Company in a court of competent jurisdiction
within one (1) year after Company disallows in writing your specific written
objection. Company shall have no obligation to furnish statements after the
expiration of Term except in connection with royalties payable hereunder or at
your specific requests. Royalties accruing to your credit hereunder shall be
less whatever taxes the laws of any applicable jurisdiction require be withheld
in connection with such royalties.
C. You may, not more than once during any calendar year, but only once
with respect to any statement rendered hereunder, audit Company's books and
records for the purpose of determining the accuracy of statements rendered to
you. You shall not be entitled to examine any manufacturing records or any other
records which do not specifically report sales or other distribution of records
or calculation of net receipts on which royalties are accruable to your credit
hereunder. All audits shall be made during regular business hours upon thirty
(30) days' prior notice and shall be conducted on your behalf by an independent
Certified Public Accountant or attorney. Each examination shall be made at your
own expense at Company's regular place of business in the United States where
the books and records are maintained. In the event that, at the time of your
notice to Company of your intention to examine Company's books and records, the
certified public accountant designated by you is engaged in an outstanding
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examination of Company's books and records on behalf of another person, only the
period of time for commencement of an examination of Company's books and records
with respect to the statement as specified in this paragraph shall be extended
by the number of days such certified public accountant is unavailable to you due
to such engagement, but in no event longer than six (6) months.
8. Mechanical Royalties.
A. As used herein:
(1) "Controlled Composition" means that portion of a work which
is written by you and/or a producer of Masters hereunder ("Producer") or a work
which is owned or controlled by you and/or Producer or a work in which you
and/or Producer have (has) a direct or indirect interest in the income to be
derived therefrom or from the copyright thereof, whichever is greatest.
(2) "Statutory Rate" means, with respect to each musical work
recorded and embodied in a Master hereunder, the minimum fixed (without regard
to playing time) mechanical royalty rate in effect pursuant to the United States
Copyright Act or the Canadian Copyright Act or the generally accepted rate
negotiated by record companies and music publishers in Canada (as the context so
requires) at the date of first release of the Master in question and with
respect to Masters embodied in Greatest Hits LPs ("Greatest Hits Master"), the
date of release of the Greatest Hits LP embodying the Greatest Hits Master in
question.
B. (1) Company shall be responsible for the payment of mechanical
royalties directly to the copyright proprietors of the musical works embodied on
the Master Recordings hereunder. You agree to assist Company in entering into
mechanical licenses with such copyright proprietors, which licenses shall be
consistent with the terms and conditions hereof but which shall otherwise be in
the general form utilized by the Harry Fox Agency, Inc., or in the form
otherwise acceptable to Company.
(2) You warrant, represent and agree that Company shall receive,
with respect to all works embodied in all Masters hereunder, "first use"
mechanical licenses, as such term is understood in the record industry, on terms
no less favorable than those contained in the then-current standard mechanical
license form issued by The Harry Fox Agency.
C. With respect to Controlled Compositions licensed hereunder for the
United States, Company shall render quarterly statements and payments therefor
of all mechanical copyright royalties payable as set forth herein, within sixty
(60) days after the end of the applicable calendar quarters ending in March,
June, September and December (in accordance with Company's regular accounting
practices), for each quarter for which such
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royalties accrue pursuant to the terms hereof. Company shall have the right to
withhold a portion of such royalties as a reasonable reserve for returns and
exchanges, not to exceed thirty-five percent (35%) of such royalties. Such
reserves shall be fully and equally liquidated over the four (4) accounting
periods subsequent to that in which the reserve is taken. The provisions of
subparagraphs 7B and C above shall be applicable to accountings rendered
pursuant to this subparagraph 8C.
D. You agree to cause each Controlled Composition recorded hereunder
to be licensed to Company, for the United States and Canada, at the following
rates:
(1) With respect to Records sold in the United States or Canada
* through normal retail channels on Company's "top price line": XXXXXX of the
Statutory Rate, increasing prospectively on an album-by-album basis if and
when the LP in question attains top-line net sales through normal retail
channels in excess of the following:
Sales Rate
----- ----
* XXXXX XXXXX
* XXXXX XXXXX
(2) With respect to all other Records: one- half (1/2) of the
Statutory Rate.
E. Without limiting the foregoing, it is agreed that the maximum
copyright royalty which Company shall be required to pay in respect of a
Record embodying Master Recordings recorded hereunder shall be the aggregate
of (1) the number of Controlled Compositions on such Record times the
applicable rate described in subparagraph 8D above, and (2) the number of
works on such Record which are not Controlled Compositions times the minimum
statutory rate as determined in accordance with then-current variance applied
by The Harry Fox Agency; provided, however, that unless Company solely of its
own accord and without your consent embodies more than ten (10) Masters on an
LP, two (2) Masters on a single, or five (5) Masters on an EP, in no event
shall the aforesaid maximum copyright royalty exceed an overall limit of (i)
ten (10) times the statutory rate as determined in accordance with the
then-current variance applied by The Harry Fox Agency for an LP, (ii) two (2)
times the statutory rate as determined in accordance with the then-current
variance applied by The Harry Fox Agency for a Singles Record, or (iii) five
(5) times the statutory rate as determined in accordance with the then-current
variance applied by The Harry Fox Agency for an EP. Notwithstanding the
foregoing, if any LP attains top-line net sales through normal retail channels
in excess of 250,000 units or 500,000 units, the following maximum copyright
royalty limits shall apply:
Sales Maximum
----- -------
* - Confidential portions omitted and filed separately with the Commission.
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250,000 units 11 times statutory rate
500,000 units 12 times statutory rate
F. No mechanical royalty whatsoever shall be payable with respect to
Controlled Compositions for (1) Records cut out of the Company catalog and sold
as discontinued merchandise or Records sold as "scrap," "overstock" or
"surplus"; (2) any work which is non-musical; (3) Records distributed by Company
which are not "records sold" as defined in paragraph 21 below; provided,
however, that Company shall pay mechanical royalties on fifty percent (50%) of
records distributed by Company pursuant to paragraph 1D(3) of Exhibit A
hereunder; (4) any work which consists of an arrangement of a work in the public
domain; or (5) any more than one use of any work on a particular Record, except
that if any such Controlled Composition referred to in this subparagraph has a
new title, substantially different lyrics or a substantial addition of melodic
material, then the mechanical royalty rate for such Controlled Composition shall
be determined by multiplying the applicable mechanical royalty with respect to
such Controlled Composition by that percentage which is used by the applicable
performing rights society (ASCAP or BMI) in determining the credits to be given
the publisher of such Controlled Composition for public performances thereof and
further provided that you shall furnish Company with a copy of a letter or other
satisfactory evidence from the appropriate performing rights society setting
forth the said percentage. In the event you shall fail to provide Company with
such letter or satisfactory evidence of the percentage as aforesaid, then
Company shall not be obligated to pay any mechanical royalty whatsoever with
respect to such arranged material.
G. Without limiting Company's rights, if for any reason Company is
required to pay any mechanical royalties in excess of the limits specified in
this paragraph 8, you shall promptly reimburse Company for the excess or Company
shall have the right, in addition to any other remedies available to it, to
deduct such excess from any sums otherwise payable to you hereunder (including,
without limitation, mechanical royalties).
H. Company is hereby granted the right to reprint the lyrics of
Controlled Compositions on the jackets, sleeves or other packaging of Records
derived from Masters hereunder. Company shall provide appropriate copyright
notices and writer and publisher credits with respect to such reprinted lyrics.
I. Any assignment or other disposition of the rights in any Controlled
Composition shall be specifically made subject to Company's rights hereunder.
9. Name, Voice, Likeness and Biography.
You hereby grant to Company the exclusive right during the Term, and the
nonexclusive right thereafter, to use and to
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authorize other persons to use your name (including any professional name),
facsimile signature, voice, approved likeness, and approved biographical
material for purposes of advertising, promotion and trade in connection with the
making and exploitation of the Masters and records hereunder and in connection
with Company's institutional advertising. You acknowledge that in connection
with the approval of likenesses and biographical materials, time is of the
essence and you will reply within ten (10) business days from your receipt of
each such request for approval. If you fail to reply within that time period,
Company shall have the right to select and use such likenesses and biographical
materials as it determines in its sole discretion. You acknowledge that any and
all album or packaging artwork, logos, designs, trademarks and photographs
created by Company shall be exclusively and perpetually Company's property, free
of any claim whatsoever by you and/or any person deriving any rights from you.
Company will secure your approval (which shall not be unreasonably withheld)
regarding the proposed artwork and cover layout for each LP released hereunder
and pay all costs of preparing such artwork up to a maximum of $9,000.00 per
album, provided that all artwork costs in excess thereof resulting from special
artwork requested by you shall be recoupable from monies (other than
mechanicals) otherwise payable to you under this agreement unless specifically
agreed to by Company.
10. Re-recording Restrictions.
For a period of five (5) years following the delivery of any musical
composition embodied in a Master hereunder or two (2) years following the
expiration of the Term (one [1] year following the expiration of the Term with
respect to musical compositions which are as yet unreleased), whichever shall
expire later (the "Restriction Period"), you shall not, for the purpose of
making and/or exploiting master recordings or records, perform for any person
other than Company such musical composition recorded hereunder.
11. Marketing Restrictions.
During the term of this agreement, with respect to audio records
manufactured for sale in the United States, Company will not, without your
consent:
A. couple during any 1-year period more than two (2) Masters made
hereunder on any disc record with recordings not embodying your performances,
except promotional records, consumer compilation records (e.g., personics),
sampler-type records, and programs for use on public transportation carriers and
facilities;
B. allow any album to be sold as "mid-line" product less than the
earlier of nine (9) months after its release or three (3) months after the album
is no longer in the Top 50 of any Billboard chart, provided if the album does
not appear in the
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Billboard chart for the first six (6) months after release, then thereafter it
may be sold at mid-line prices; allow any album to be sold as "budget" product
less than the earlier of twelve (12) months after its release or three (3)
months after said album no longer appears in the Top 50 of any Billboard chart,
provided if the album does not appear in the Billboard chart for the first nine
(9) months after release, then thereafter it may be sold at budget prices; allow
any album to be sold as "cutout" product less than the earlier of twelve (12)
months after its release or three (3) months after said album no longer appears
in the Top 50 of any Billboard chart, provided if the album does not appear in
the Billboard chart for the first nine (9) months after release, then it may be
sold at cutout prices;
C. during or after the term use Masters made under this agreement on
premium records to promote the sale of any product or service other than
records;
D. during and after the term, release out-takes, i.e., Masters
recorded in connection with an LP project but not included on the record or
other records derived therefrom;
E. during or after the term shall not license Masters for use in any
NC-17 or X-rated films, commercial advertisements or advertisements related to
any political or religious causes.
12. Your Relationship to Company.
A. In performing your services and obligations hereunder you shall be
deemed to be an independent contractor, and nothing herein contained shall in
any way constitute you Company's agent or employee.
B. You shall cooperate fully with Company in connection with any
controversy or litigation which involves Company's rights under this agreement
and with Company's promotional and publicity efforts involving you and your
recordings hereunder, including appearances for press interviews and
photographs. Subject to your prior approval, not to be unreasonably withheld,
Company shall also have the right to record your personal appearances visually
on film, tape or other devices, subject to the provisions of any applicable
collective bargaining agreement to which Company is a party, for use in
promoting records embodying your performances, but not in connection with any
commercial use thereof.
13. Company's Rights and Remedies.
A. Your services are of special, unique, unusual and extraordinary
character which gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated for by damages in an action at law.
Inasmuch as any breach of this agree-
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ment with respect to such services would cause Company irreparable damage,
Company shall be entitled to seek injunctive and other equitable relief, in
addition to whatever legal remedies are available to Company, to prevent or cure
any such breach or threatened breach.
B. If, for any reason other than Company's hindrance without cause,
you materially breach this agreement, including, without limitation, your
failure to perform any of your material obligations hereunder, then, without
limiting Company's rights, Company may, at its election, by written notice to
you, suspend its obligations to you during the duration of such failure if such
breach is not cured within thirty (30) days of its written notice.
Notwithstanding the foregoing, no cure period shall apply to breach of the
exclusivity and timely delivery terms and provisions of this agreement. During
any such suspension (or within thirty [30] days after the end thereof), Company
shall have the right to terminate the Term by written notice to you. In the
event Company exercises such right of termination, all of Company's obligations
to you under this agreement (with the exception of Company's obligation to pay
royalties with respect to Masters exploited hereunder) shall be extinguished
without affecting Company's rights which would have survived the Term and any
rights Company may have had by reason of your failure to perform. For the
purposes of this subparagraph, your failure to perform will include, but will
not be limited to, any incapacity preventing you from fully performing in
accordance with the terms of this agreement by reason of illness, accident,
disfigurement, impairment of voice or mental or physical disability or a
material change in your facial or physical appearance or voice from that which
existed on the date of execution of this agreement. Without limiting the
generality of the foregoing, if, through no fault of Company, and for a reason
other than force majeure, Company is prevented from or materially hampered in
its ability to release or exploit records hereunder, Company shall have the
right by written notice to you to extend the expiration of the then applicable
Contract Period for a period of time equal to the period during which Company is
so prevented or hampered, not to exceed six (6) months.
C. Except as otherwise specifically provided herein, the rights and
remedies of each party to this agreement are not to the exclusion of each other
or of any other rights or remedies of each respective party; each party may
exercise or decline to exercise any one or more of its rights and remedies as it
may deem fit, without jeopardizing any of its other rights and remedies; and all
of each party's rights and remedies in connection with this agreement shall
survive the expiration of the Term.
D. During the term hereof, Company shall have the right, at its sole
expense, to purchase one or more insurance policies covering your life and/or
any disability suffered by you due to accident or sickness. Company shall be the
named owner and beneficiary of such policy or policies. You agree to make
yourself
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reasonably available for any medical examinations required in connection with
the purchase of any such policies, and you will perform any other acts
reasonably necessary in order for Company to obtain such policies. You may, at
your discretion and expense, have your personal physician present at any such
medical examinations. If Company is unable to place such life and/or disability
insurance with an insurance company, then lack of insurability shall not
constitute a breach of this agreement hereunder.
14 Force Majeure. If by reason of act of God or force majeure, such as war,
fire, earthquake, strike, lockout, labor controversy, civil commotion, acts of
any government, its agencies or officers or any order, regulation or ruling
thereof, or action by any labor union or association of artists, musicians,
composers, employees or employers affecting Company or the record industry, or
the unavailability of or delays in the delivery of materials and supplies, or
similar or dissimilar matters beyond Company's control, Company is prevented
from or materially hampered in the recording, manufacture, distribution or sale
of records, Company shall have the right, by written notice to you and without
liability, to suspend Company's obligations hereunder and expiration of the
applicable Contract Period for the greater of six (6) months or such period of
time equal to the period of such suspension if such force majeure affects the
majority of the record industry. However, during any such suspension, Company
shall be obligated to continue to pay royalties to you pursuant to this
agreement unless the cause of such suspension shall affect Company's ability to
make such payments.
15. Audiovisual Works.
A. As used herein:
(1) "Video" means an audiovisual work embodying a recording of
one (1) or more musical works in synchronization with a visual rendition of your
performances and/or other performances and/or images.
(2) "Videogram" means a material object, including, without
limitation, tape, disc or film, embodying a Video or a compilation, collective
work or derivative work which embodies a Video together with other Video(s)
and/or other work(s) intended for home use, including, without limitation,
videocassettes and videodiscs.
(3) "Exhibition Copy" means a copy of a Video in any material
form including, without limitation, tape, disc or film, intended for non-home
use, including, without limitation, all video jukebox, television, theatrical
and non-theatrical distribution.
(4) "Production Costs" means all costs
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incurred or expended in connection with the production and delivery of the final
master tape or film of Videos, including, 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 (including, without limitation,
Exhibition Copies) for licensees; and all other costs and expenses (excluding
Company's overhead costs and services of Company employees) incurred with
respect to Videos.
B. From time to time during the Term, if Company shall so request and
subject to your reasonable prior professional commitments, you shall perform at
sessions for the purpose of embodying your performances on Videos. Your
performances under this subparagraph shall not fulfill any part of the Recording
Commitment for any Contract Period. Company will produce a minimum of one (1)
Video in connection with the release of each LP in fulfillment of your Recording
Commitment, provided that Videos continue to be a primary marketing tool in the
recording industry for the selling of country LPs.
C. If Company requests your performances pursuant hereto for the
production of Videos, the following shall be applicable:
(1) The material to be embodied in each Video; the concept for
each Video; the creative aspects of the production of each Video, including, but
not limited to, preparation of the script and "storyboard"; and the date(s) and
locations(s) for the shooting of each Video shall be mutually approved by
Company and you.
(2) The producer and director of each video shall be mutually
approved by you and Company. Company shall engage the producer, director and
other production personnel for each video and shall be responsible for the
production costs of each video in an amount not in excess of a budget to be
established in advance by mutual agreement of Company and you.
(3) You shall fully cooperate with the video producer, the
director and all other production personnel in the production of each Video. If,
for any reason other than Company's refusal without cause to allow you to
perform and other than a force majeure event or other reason beyond your
reasonable control, you shall fail to fulfill any obligations hereunder with
respect to any Video, then, without limitation of Company's rights, you shall be
responsible for the payment of all costs incurred in connection with such
failure. In the event that Company shall pay any costs for which you are
responsible pursuant to the foregoing, you shall promptly reimburse Company
therefore or Company shall have the right, without limiting its other rights, to
deduct same from any other sums otherwise payable to you hereunder (including,
without limitation, mechanical royalties).
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D. (1) You agree that each Controlled Composition embodied in Videos
will be licensed to Company, effective as of the commencement of production of
the Video embodying each such Controlled Composition, for synchronization and
other uses on a nonexclusive, worldwide and perpetual basis:
(a) free of charge or royalty, for the purpose of reproducing
such Controlled Composition in Videos and Exhibition Copies and exhibiting,
duplicating, manufacturing and distributing copies of such Videos and Exhibition
Copies for all purposes, except as set forth in subparagraph 15D(1)(b) below;
and
(b) with respect to Videograms manufactured by Company and sold
and not returned or leased or rented by Company, for a royalty in an amount
equal to that proportion of four percent (4%) of the published wholesale price
to subdistributors as of the commencement of the accounting period concerned of
each such Videogram sold, leased or rented by Company which the aggregate
playing time of Controlled Compositions embodied in any such Videogram bears to
the total playing time of such Videogram, but in no event more than the
Statutory Rate (as such term is hereinabove defined) with respect to each such
Controlled Composition; and
(c) with respect to Videograms licensed by Company to others
(including without limitation entities affiliated with Company), or the
exploitation of Exhibition Copies, that proportion of fifteen percent (15%) of
Company's net receipts with respect thereto that the aggregate playing time of
Controlled Compositions embodied in such Videogram or Exhibition Copy bears to
the playing time of such Videogram or Exhibition Copy. As used in the foregoing
sentence, "net receipts" shall mean Company's gross receipts less actual
shipping charges and sales or similar taxes and, in the case of Exhibition
Copies, less twelve and one-half percent (12-1/2%) of those monies as a
distribution fee.
(2) Without limiting Company's rights, if, for any reason,
Company is required to pay to the publishers of Controlled Compositions any sums
in excess of the limits set forth in subparagraph 15D above, you shall promptly
reimburse Company for the excess and Company shall have the right, without
limiting its other rights, to deduct such excess from any other royalties,
excluding mechanicals, otherwise payable to you hereunder.
E. Each Video, including, but not limited to, all copyrights of any
nature whatsoever in and to each Video and each element or component part
thereof, excepting only the copyrights in the underlying musical works, shall be
the sole, exclusive and perpetual property of Company, free of any claim by you,
or by any Person deriving any rights from you. Company, its affiliates,
subsidiaries, licensees and assigns shall have the sole, exclusive and perpetual
right to: (1) exhibit, duplicate, manufacture, distribute and exploit by sale,
lease, license rental or any other
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manner each Video (or any portion(s) thereof) and copies thereof for such
purposes, at such times and places, and in any and all media and manner,
including, but not limited to, "free," "pay," "public," "cable" and
"subscription" television, theatrical and non-theatrical distribution, as shall
be determined by Company, (2) manufacture and distribute Videograms and
Exhibition Copies, and (3) allow others to exercise any or all of the aforesaid
rights. Company shall have the right to cut and edit each Video (if necessary)
for the exploitation of such Video in different media.
F. You agree that during the Term, and (with respect to material
recorded hereunder) during the Restriction Period, you shall not render and
shall not have the right to render any performance (excluding solely non-musical
dramatic performances) for any Person other than Company in connection with the
creation and/or exploitation of Videos. You shall not have the right (and you
shall not have the right to authorize, permit or grant to any Person other than
Company the right) to manufacture and/or distribute Videograms embodying such
performances. During the term of this agreement, you may perform compositions
for televised broadcasts, provided that neither such performance nor any
recording thereof shall be used directly or indirectly for the purpose of making
phonorecords or any other device intended for home use, including, but not
limited to, audiovisual recordings.
16. Union Agreement. You warrant and represent that you are (or shall
become) and shall remain a member in good standing of any union with which
Company is party to a collective bargaining agreement so long as your services
hereunder are within the scope of such agreement.
17. Promotion of Records. Any promotional efforts or expenditures made by
you or any third party on your behalf in connection with any records hereunder
shall be in accordance with applicable legal standards, including Sections 317
and 507 of the Communications Act of 1934, as amended. In the event you are in
breach of the preceding sentence, Company may, without limiting its rights,
terminate the Term by notice to you.
* XXXXXX percent of all sums expended by Company in connection with
the independent promotion of records hereunder shall be deemed advances to
you, recoupable from any sums (other than mechanical royalties) otherwise
* payable to you hereunder up to a maximum amount of XXXXXX per "single" and
* XXXXXXX per LP.
18. Warranties and Representations; Indemnity.
A. You hereby warrant and represent that:
(1) You are possessed of the full right to enter into this
agreement, that you are and shall at all times remain possessed of all rights
necessary for you to completely fulfill all of your obligations hereunder, and
that your entering
* - Confidential portions omitted and filed separately with the Commission.
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into this agreement and fulfilling such obligations does not and shall not
infringe upon the rights of any Person whatsoever.
(2) None of the Masters hereunder nor the performances embodied
therein, nor any other Materials (for the purpose of this paragraph only, as
hereinafter defined) nor any authorized use thereof by Company or its affiliates
or licensees will violate or infringe upon the rights of any third party. As
used herein, "Materials" means your name, all Controlled Compositions, and all
other musical, dramatic, artistic and literary materials, ideas and other
intellectual properties furnished or selected by you or Producer and contained
in or used in connection with Masters hereunder or the packaging, sale,
distribution, advertising, publicity or other exploitation thereof, except
noncontrolled compositions.
B. You hereby indemnify Company and hold Company harmless against any and
all losses and damages (including reasonable attorneys' fees) arising out of or
connected with any breach or alleged breach by you of any of your warranties,
representations, or covenants herein which is reduced to final judgments or
settled with your consent, not to be unreasonably withheld. You shall pay
Company on demand any sums for which you are liable hereunder, and if you fail
to do so, Company shall have the right to charge such sums against and/or deduct
such sums from any and all sums accruing to your credit hereunder or becoming
payable hereunder. Without limiting the generality of the foregoing, if any
claim, action or proceeding is made or brought against Company which is
inconsistent with any of your warranties or representations then (1) Company
shall give you prompt notice thereof and you shall have the right to participate
in the defense thereof at your expense, and (2) Company shall have the right to
withhold and reserve, from any sums whatsoever otherwise payable to you
hereunder (including mechanical royalties if any claim, action or proceeding is
made or brought against Company which is inconsistent with any of your
warranties or representations solely with respect to controlled Compositions),
sums reasonably sufficient to secure Company for your liabilities hereunder. If
such amount so withheld by Company exceeds the sum of Five Thousand Dollars
($5,000.00), Company will place such amount in an interest-bearing account.
Notwithstanding the foregoing, Company shall not withhold any monies as
aforesaid if you post a bond which has been reasonably approved by Company in
all respects (i.e., form, amount, duration, surety, etc.). If an action or
proceeding is not commenced and, in the judgment of Company's attorneys, will
not be commenced within twelve (12) months after Company receives written notice
of a claim in respect of which Company has withheld monies in accordance with
the terms hereof, Company will release any such previously withheld monies to
you upon my written request.
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19. Miscellaneous.
A. This agreement sets forth the entire understanding between you and
Company with respect to its subject matter, and no modification of this
agreement shall be binding upon you or Company unless confirmed by a written
instrument signed by you and Company. No waiver of any provision of or default
under this agreement shall affect either party's right thereafter to enforce
such provision or to exercise any right or remedy in the event of any other
default, whether or not similar. This agreement shall be construed under the
internal laws of the state of Tennessee applicable to agreements to be performed
wholly therein and both parties agree that the state and federal courts located
in Davidson County, Tennessee shall have exclusive jurisdiction over any
controversies arising out of this agreement.
B. If any part of this agreement shall be determined to be invalid or
unenforceable by a court or other legally constituted body of competent
jurisdiction, the remainder of this agreement shall remain in full force and
effect, provided that the part of this agreement thus invalidated or declared
unenforceable is not essential to the intended operation of this agreement.
C. You shall not have the right to assign this agreement or any of
your rights hereunder, except the right to receive royalties or other sums.
Company may, at its election, assign this agreement, the Masters or any of its
rights hereunder to any parent company, subsidiary or affiliate of Company or
any person or entity acquiring all or a substantial portion of the assets of
Company.
D. The captions preceding the text of the various provisions of this
agreement are inserted solely for reference and shall not constitute a part of
this agreement nor affect its meaning, construction or effect.
20. Notices. All notices from one party to the other hereunder will, unless
herein indicated to the contrary, be addressed to the addresses of the parties
set forth on the first page hereof or to such other address as the addressee may
designate in writing. Courtesy copies of notices shall be sent as follows:
If to Company, to: Robin Mitchell Joyce, Esquire
Wyatt, Tarrant and Combs
29 Music Square East
Nashville, Tennessee 37203
If to you, to: Malcolm L. Mimms, Jr., Esquire
Loeb & Loeb
45 Music Square West
Nashville, Tennessee 37203
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Any notice shall be sent either by certified or registered mail, return receipt
requested, or by personal delivery, or by overnight express courier and shall be
deemed served when same is deposited in the United States Mail or with any
overnight express courier addressed as aforesaid or personally delivered,
charges prepaid, as the case may be. Notices of change of address, however,
shall be effective only upon the date of receipt.
21. Definitions.
A. "Master recording" means the original material object in which
sounds, with or without visual images, are fixed by any method now known or
later developed and from which sounds, with or without visual images, can be
perceived, reproduced or otherwise communicated, either directly or with the aid
of a machine, device or process.
B. "Record" and "recording" mean any reproduction of a master
recording in any form now known or later developed in which sounds, with or
without visual images, are fixed by any method now known or later developed, and
from which sounds, with or without visual images, can be perceived, reproduced,
or otherwise communicated, either directly or with the aid of a machine, device
or process, and include the object in which sounds, with or without visual
images, are fixed, including, but not limited to, disc records, soundtracks,
film, tape, tape cartridges and cassettes.
C. "Material" means any work or series of musical, instrumental,
spoken or other sounds, in combination or otherwise, capable of fixation on a
record, whether dramatic, literary, musical or otherwise, and whether performed
vocally, instrumentally or otherwise, or in combination thereof.
D. "Side" means one (1) continuous performance of material, not
exceeding six (6) minutes of playing time.
E. "Delivery" as used with respect to the Masters means the thorough
and complete performance by you of all of your obligations hereunder with
respect to such Masters; the thorough and complete performance by the Producer
of all of his/her obligations with respect to such Masters; and the approval by
Company of such Masters.
F. "Singles record" means one (1) 7-inch 45 r.p.m. record (or the tape
or other equivalent thereof) or one (1) 12-inch 33-1/3 r.p.m. record (or the
tape or other equivalent thereof) containing not more than four (4) sides
thereon.
G. "Mini-LP" means one (1) 12-inch 33-1/3 r.p.m. record (or the tape
or other equivalent thereof) containing not less than five (5) nor more than
seven (7) sides thereon and totalling not less than twenty-two (22) minutes of
playing time (unless Company, in its discretion, agrees in writing that fewer
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than twenty-two (22) minutes of playing time for a particular mini-LP is
acceptable).
H. "LP" or "album" means one (1) 12-inch 33-1/3 r.p.m. record (or
the tape or other equivalent thereof) containing not less than nine (9) nor
more than fourteen (14) sides thereon and totalling not less than thirty-five
(35) minutes of playing time (unless Company, in its discretion, agrees in
writing that fewer than thirty-five (35) minutes of playing time for a
particular LP is acceptable).
I. "Compact Disc" means a one hundred twenty millimeter (120mm)
diameter (or such other size) disc record primarily reproducing sound, the
signals of which are read from such disc by means of a laser beam.
J. "Multiple Album" means one (1) or more LPs packaged together by
Company for marketing as a single unit.
* K. "Records sold," "record sales" and "sales" mean XXXXXXXXX percent
of those records shipped by Company or under its authority hereunder for which
Company is paid and which are neither returned to nor exchanged by Company.
For the purpose of this subparagraph:
(1) If records are shipped subject to a discount or
merchandise plan, the number of such records deemed to have been shipped shall
be determined by reducing the number of records shipped by the percentage of
discount granted.
(3) If a discount is granted in the form of "free" or "bonus"
records, such "free" or "bonus" records shall not be deemed included in the
number of records sold.
L. If a discount is granted in the form of "free" or "bonus"
records, such "free" or "bonus" records shall not be deemed included in the
number of records sold.
M. "Person" and "party" mean any individual, corporation,
partnership, association or other organized group or combination of any or all
of the foregoing and their legal successors or representatives.
N. "Recording costs" shall refer to all direct costs incurred in the
production of Masters (with the exception of cutting the final lacquer
master), including, without limitation, all sums paid to the individual
producer(s), musicians, vocalists, conductor, arrangers, orchestrators,
copyists and engineers; transportation costs, hotel, living expenses and per
diems incurred in connection with the attendance of artists, the individual
producer(s), musicians and other essential personnel at recording sessions and
the preparation therefor; payments to a union or guild trustee or fund based
on services at recording sessions (and not
* - Confidential portions omitted and filed separately with the Commission.
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based on sales of records hereunder); payments for studio or rehearsal hall
rental; payments for tape, editing, mastering, mixing and other similar
functions; reference dubs; equalizing time; and all other costs and expenses
incurred hereunder, which are now or hereafter generally recognized as recording
and mastering costs in the phonograph record industry.
O. "Sales through normal retail channels" means all sales of records
referred to in paragraphs 1A and 1C(8) of Exhibit A attached hereto.
22. Merchandising. If, at any time during the term of this agreement (and
each time any third-party merchandising agreement that you may enter into or
have entered into expires), you desire to grant to a third party the right to
manufacture and sell products that embody your name and/or likeness (such rights
being herein referred to as "Merchandising Rights"), then prior to commencing
negotiations with such third party with respect to such Merchandising rights,
you shall notify Company thereof. In the event that Company or one of its
affiliates is actively engaged in the business of merchandising at such time and
has the ability to offer services and standards comparable with those of other
merchandising companies employed by artists of similar stature, Company and you
shall promptly begin good faith negotiations regarding the material terms and
conditions of an agreement relating to such Merchandising Rights (a
"Merchandising Agreement"). If, after such good faith negotiations, Company and
you are unable to agree on the material terms of such Merchandising Agreement,
then you shall have the right to enter into a Merchandising Agreement with any
other party with respect to such Merchandising Rights provided that such third
party Merchandising Agreement does not contain any material terms less favorable
than those offered by Company.
By mutual written approval of the parties hereto in each instance which may
be withheld for any reason), Company and its licensees shall have the exclusive
right and may grant others the right to reproduce album and packaging artwork
and adaptations thereof, graphic and photographic materials used for marketing
or publicity of LPs hereunder, and any and all other designs, logos, trademarks,
or other materials owned or controlled by Company on merchandise of any kind;
provided, however, if Company receives any payment for any use of your name or
likeness in connection with merchandise other than records ("Merchandise Uses"),
your royalty account will be credited with fifty percent (50%) of Company's net
receipts from those Merchandise Uses. As used hereunder, "net receipts" shall
mean gross receipts after deduction of any direct expenses actually incurred by
Company in connection with Merchandise Uses and a fifteen percent (15%)
distribution fee.
23. Unreleased Recordings. Upon expiration or termination of this
agreement, you may purchase any LP Masters delivered but unreleased by paying to
Company, within ninety (90)
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days of the effective expiration or termination date, a sum equal to one hundred
percent (100%) of the Recording Costs paid or payable by Company with respect
thereto, assuming all of Company's duties and obligations with respect to such
LP Masters and executing such documents as Company may reasonably request in
connection with such purchase.
24. Legal Counsel. YOU STIPULATE AND ACKNOWLEDGE THAT YOU HAVE BEEN
REPRESENTED BY AND HAVE RELIED UPON INDEPENDENT LEGAL COUNSEL OF YOUR OWN
CHOOSING IN THE NEGOTIATION OF THIS AGREEMENT OR THAT YOU HAVE KNOWINGLY AND
VOLUNTARILY WAIVED YOUR RIGHT TO DO SO.
If the foregoing accurately reflects your and our agreement as you
understand it, please indicate your acceptance where indicated below.
Sincerely yours,
VERITAS MUSIC ENTERTAINMENT
ACCEPTED AND AGREED TO:
By: /s/ Roy W. Wunsch
----------------------------------------
An Authorized Signatory
/s/ Gretchen Peters
- -----------------------------
GRETCHEN PETERS
Social Security #
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EXHIBIT A
Royalty Provisions
The following provisions constitute an integral part of the agreement
between VERITAS MUSIC ENTERTAINMENT ("Company") and GRETCHEN PETERS ("you,"
"your," etc.) dated as of December 31, 1995 (the "Agreement").
1. Company agrees to pay to you an all-in royalty (which shall be
inclusive of any and all royalties payable to any producers or remixers of
* Masters) based on XXXXXXXX percent of the net sales of phonograph records
embodying Masters, computed on the suggested retail list price ("SRLP") of
such records (except as otherwise provided herein) as follows:
A. (1) With respect to sales of the following LPs through normal
retail channels in the United States ("USNRC"), a royalty at the following
rates (the "Base Album Royalty Rate"):
---------------------Units------------------------
* LP XXXX XXXX XXXX XXXX XXXX
* 1-2 XX XX XX XX XX
* 3 XX XX XX XX XX
* 4 XX XX XX XX XX
* 5 XX XX XX XX XX
* 6 XX XX XX XX XX
(2) With respect to records sold through USNRC in the form
* of singles records and mini-LPs, for LP 1-3 a royalty at the rate of XXXXX
* percent and for LPs 4-6 a royalty at the rate of XXXXXX percent (the "Base
Singles Royalty Rate").
B. With respect to records sold outside of the United States, a
royalty at the following percentages of the applicable base rate set forth in
paragraph 1A above:
* Canada XXX
United Kingdom, Germany,
Australia, New Zealand
* and EEC territories XXX
* France and Japan XXX
* All other territories XXX
Such royalties shall, at Company's election, be based upon the
suggested retail price of such records in either the country of manufacture or
the country of sale (exclusive of all
* - Confidential portions omitted and filed separately with the Commission.
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taxes, duties, and amounts allocated by Company to containers or packaging)
and shall be computed in the national currency of such country. You shall be
paid at the same rate of exchange as Company is paid; provided, however, that
royalties on such sales shall not be due and payable until payment therefor
has been received by Company in the United States of America. Company may
elect to accept payment of royalties in a foreign currency, and, in such case,
Company may elect to deposit to your credit in a depository selected by
Company (and at your expense) any payments in such foreign currency received
as royalties applicable to this agreement and will notify you thereof
promptly. Deposit in accordance with the foregoing provisions shall fulfill
Company's obligations under this agreement as to record sales to which such
royalty payments are applicable. Except as otherwise specified, only records
for which payment is received by Company in the United States shall be deemed
sold. The royalties in this paragraph 1B shall be without regard to
escalations.
C. Notwithstanding any of the foregoing:
(1) the royalty rate on records sold in the United States
through any direct mail or mail order distribution method, including, without
limitation, record club distribution (Company shall use its best efforts in
* the negotiation of agreements with record club licenses to have at least XXXXX
percent of records distributed through record clubs deemed royalty bearing
* units), shall be at the rate of XXXXXX of the royalty provided for in
paragraph 1A above based upon the net price actually charged to the club
members or direct mail purchasers, and the royalty rate on records sold
outside the United States through any such direct mail distribution shall be
one-half (1/2) of the royalty rate provided for in paragraph 1B above based
upon the net price actually charged to the club members or direct mail
purchasers;
(2) the royalty rate in respect of records sold on a "price
line" or "list category" which is lower than Company's top "price line" or
* highest "list category" shall be XXXXX of the otherwise applicable royalty
rate as calculated in accordance with the foregoing provisions with respect to
* "Mid-Line Records" and XXXXXX of the otherwise applicable royalty rate as
calculated in accordance with the foregoing provisions with respect to
"Budget-Line Records". As used herein, Mid-Line Records shall mean a record
bearing a retail sales price in excess of sixty-five percent (65%) and equal
to or less than eighty percent (80%) of the highest retail sales price of
top-line records of the same type and in the same configuration in the
territory concerned. As used herein, Budget-Line Records shall mean a record
bearing a retail sales price in excess of fifty percent (50%) and equal to or
less than sixty-five percent (65%) of the highest retail sales price of
top-line records of the same type and in the same configuration in the
territory concerned.
* - Confidential portions omitted and filed separately with the Commission.
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(3) the royalty rate in respect of records sold for use as
premiums or in connection with the sale, advertising or promotion of any other
* product or service shall be XXXXX of the otherwise applicable royalty rate as
calculated in accordance with the foregoing provisions and shall be based upon
the price received by Company for such records as to those sold by Company,
and as to those sold by Company's licensees, upon the lesser of (a) the
average applicable selling price actually charged for such records from time
to time to distributors in each country which are selling such records or (b)
the price utilized by Company's licensees in accounting to Company;
(4) the royalty rate in respect of records sold to the
United States government, its subdivisions, departments or agencies,
(including records sold for re-sale through military facilities shall be
three-fourths [3/4]), and in respect of records sold to educational
* institutions or libraries, shall be XXXXXX of the otherwise applicable royalty
rate as calculated in accordance with the foregoing provisions, except that
royalties for each such category of records may be based on the average
applicable retail selling price of records in such category only;
(5) the royalty rate in respect of the sale of compilation
records embodying one (1) or more Masters licensed by Company or Company's
licensees to others and distributed and sold other than through Company or
Company's such licensee's normal distribution channels (such as, but not
limited to compilation records sold primarily by means of concentrated
* broadcast advertising) shall be an amount equal XXXXX percent of any net
royalty received by Company from such sales, less the amount accruable to the
credit of the individual producer involved.
(6) the royalty rate in respect of Masters licensed by
Company or Company's licensees for use in synchronization with motion picture
or television soundtracks or other nonphonorecord uses not specifically
mentioned or referred to elsewhere in this agreement shall be an amount equal
* to XXXXXX percent of the net sums received in respect of each such use, less
the amount accruable to the credit of the individual producer, and such amount
shall be the only royalty payable hereunder with respect to flat-fee use of
the Masters; for purposes of this subparagraph, "net sums received" shall mean
the gross amounts received by Company in connection with the subject matter
hereof, less duplication costs and less Company's out-of-pocket costs and any
amounts which Company is obligated to pay to third parties (such as, without
limitation, mechanical copyright payments, AFM and other union fund payments);
and
(7) the royalty rate in respect of records sold via
television and/or radio advertisements through mail order or special retail
outlets (such as "K-Tel" type packages), by licensees of Company, shall be
* XXXXXXX of the net receipts received
* - Confidential portions omitted and filed separately with the Commission.
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by the Company from its licensees, less the amount accruable to the credit of
the individual producer. Notwithstanding the foregoing, in the event that
Company shall sell records directly (and not through licensees) via television
and/or radio advertisements through mail or phone order in the United States,
* the royalty rate with respect to such records sold shall be XXXXXXX of the
otherwise applicable royalty rate as calculated in accordance with the
foregoing provisions, but based on the actual selling price of said records
less any taxes and shipping and handling charges included therein, and less
any amounts reasonably allocated by Company to the price of any merchandise or
other products not embodying Masters but which are included for said selling
price.
(8) With respect to net sales of records in the form of
Compact Discs, your royalty with respect to each such records shall be the
following percentages of the rate specified in paragraph 1A, including
escalations:
* LP 1 XXX
* LP 2 XXX
* LP 3 & 4 XXX
* LP 5 & 6 XXXX
With respect to new mediums (all configurations other than
cassette, CD and vinyl), your royalty with respect to each such record shall
* be XXXXXXXX percent of the otherwise applicable royalty rate; provided,
however, that Company shall renegotiate this royalty in good faith promptly
following the period three (3) years after the introduction of each such new
medium into the marketplace and shall continue to have the right to sell such
new medium LPs at the current rate throughout the renegotiation period. In the
event Company agrees to pay a majority of the other feature artists under
contract to Company a royalty rate on new mediums which is higher than the
royalty rate payable to you pursuant to this paragraph, your royalty rate for
new mediums will be deemed automatically increased to such higher royalty
rate, and all royalty calculations and payments to you hereunder for new
mediums will be paid at such higher rate.
D. Notwithstanding anything herein to the contrary, no royalties
shall be payable in respect of:
(1) a reasonable number of records furnished on a no-charge
basis or sold for less than fifty percent (50%) of Company's (or its
licensee's) posted wholesale list price to disc jockeys, publishers, employees
of Company (or its licensees), motion picture companies, radio and television
stations, and other customary recipients of free, discounted or promotional
records;
(2) records sold by Company (or its licensees) at close-out
or cut-out prices or for scrap (i.e., scrap shall mean
* - Confidential portions omitted and filed separately with the Commission.
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a sale to a third party for purposes of utilizing the raw material of which
the records are made), or at less than Company's (or its licensees') inventory
cost;
(3) records (or fractions thereof) given away or shipped on
a so-called "no-charge" or "freebie" basis or sold for fifty percent (50%) or
less of Company's posted wholesale list price to distributors,
subdistributors, dealers and others whether or not such records are intended
for sale to third parties; provided, however, that records under this
paragraph 1D(3) shall not exceed fifteen percent (15%) of the aggregate units
of each LP shipped.
E. Notwithstanding anything to the contrary contained herein, the
following shall be excluded from the base against which the applicable royalty
rate is to be applied:
(1) all sales, use, excise, transactional, V.A.T. and other
similar taxes included in the retail or other applicable price of records;
(2) in the case of records sold in or with jackets,
cartridges, cassettes, boxes, reels or other devices or containers, an amount
* equal to XXXXXXX percent of the SRLP for single-pocket albums, 7-inch single
* records in special sleeves, and 12-inch single records, XXXXXX percent thereof
for multi-fold albums or albums with cardboard sleeves or special inserts or
* attachments and analog tape cassettes; and XXXXXXX percent thereof for records
in the form of Compact Discs or new or any other configurations or Videos.
F. The royalty rate payable to you hereunder with respect to
phonograph records embodying Masters hereunder together with other master
recordings shall be computed by multiplying the otherwise applicable royalty
rate by a fraction, the numerator of which shall be the number of Masters
recorded by you hereunder which are embodied thereon, and the denominator of
which shall be the total number of royalty-bearing master recordings embodied
thereon;
G. Any monies payable to you hereunder with respect to any Master
recorded hereunder by you jointly with any other artist or musician to whom
Company is obligated to pay or credit a royalty in respect of such Master
shall be computed by multiplying the otherwise applicable sums by a fraction,
the numerator of which shall be one (1) and the denominator of which shall be
the sum of one (1) and the total number of such other artists (a group signed
as a single artist to a recording contract with Company or other record label
shall be deemed to be one artist for the purposes of this paragraph) or
musicians whose performances are embodied thereon, and Company will negotiate
with you in good
* - Confidential portions omitted and filed separately with the Commission.
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faith to determine the portion of recording costs which shall be attributable
to such Master hereunder and which thus shall be recoupable from royalties
otherwise payable to you;
H. The royalty rate applicable to a given Master shall be the net
rate specified for the Contract Period in which said Master was initially
required to be recorded hereunder pursuant to the terms and provisions hereof;
the royalty rate applicable to a "Greatest Hits" album shall be the highest
rate achieved as of the release of such "Greatest Hits" album on a
master-by-master basis;
* I. Company shall pay to you a royalty equal to XXXXXX of Company's
net receipts, if any, which are specifically referable (in reports to Company)
for United States public performances of Masters less any portion thereof
which is payable by Company to producers with respect to such public
performance; provided that if you receive payment in respect thereof from a
third party, Company shall pay you such amount as shall provide you with a
* total (including the share from third parties) equal to XXXXXXX of the
aggregate amount paid to Company, you and any individual producers.
2. A. (1) For purposes of this paragraph 2 only, the account created by
Company with respect to royalties accruing to your credit under paragraph 1
above shall be referred to as the "Audio Account."
(2) Company shall create a separate account with respect to
revenues derived from the exploitation of and costs incurred in connection
with the production of Videos (the "Video Account") and, except as provided in
subparagraph 2B(1) below, the Video Account shall not be cross-collateralized
with the Audio Account.
B. (1) Company shall charge the Production Costs to the Video Account
but, at its election, may at any time transfer and charge to the Audio Account
up to fifty percent (50%) of such Production Costs and may recoup the
transferred Production Costs from any and all royalties accruing to the Audio
Account. If any Production Costs are recouped from royalties accruing to the
Audio Account and are subsequently recouped from royalties accruing to the
Video Account, the amount of such Production Costs shall be recredited to the
Audio Account.
(2) With respect to sales of Videograms by Company, the
royalty accruing to the Video Account hereunder shall be computed in
accordance with the provisions of paragraph 1 above, except that with respect
* to sales of Videograms in the United States, the royalty rate shall be XXXXXXX
percent and with respect to sales of Videograms outside the United States, the
* royalty rate shall be XXXXXXX percent. For the purposes hereof, the royalty
* - Confidential portions omitted and filed separately with the Commission.
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base of such Videograms shall be Company's published wholesale price to
subdistributors of such Videograms as of the commencement of the accounting
periods concerned, less container deductions and any taxes. Said royalty shall
be inclusive of any third party payments required to be made by Company in
connection with the manufacture and exploitation of Videograms and Exhibition
Copies other than payments to music publishers.
C. (1) With respect to (a) Videos licensed by Company to others
(including, without limitation, entities affiliated with Company) on a flat fee
or royalty basis for the manufacture and sale of Videograms of (b) the
exploitation of Exhibition Copies, the royalty accruing to the Video Account
hereunder shall be an amount equal to fifty percent (50%) of the Net Royalty or
Net Flat Fee from the sale of such Videograms or exploitation of such Exhibition
Copies. Said royalty shall be inclusive of any third party payments required to
be made by Company in connection with the manufacture and sale of Videograms and
Exhibition Copies other than payments to music publishers.
(2) As used in subparagraph 2C(1) above, the terms "Net Royalty"
or "Net Flat Fee" shall mean an amount equal to the royalty or flat fee, as the
case may be, received by Company from a third party as a result of the
exploitation by that third party of those Videograms and Exhibition Copies (and
in the case of Exhibition Copies, less ten percent (10%) of those monies as a
distribution fee).
D. With respect to any Videogram or Exhibition Copy which embodies a
Video, in whole or in part, coupled with other Videos and/or other audiovisual
works, royalties accruing to the Video Account hereunder attributable to such
Video shall be at that proportion of the applicable royalty which the playing
time of such Video, as embodied in such Videogram or Exhibition Copy (as
applicable) bears to the aggregate playing time of such Videogram or Exhibition
Copy (as applicable).
E. Royalties with respect to Videos earned hereunder will be accrued,
in accordance with Company's regular accounting practices, semi-annually to the
Video Account in the manner set forth above, and such royalties shall be paid,
less all advances and any charges, in accordance with the provisions of
paragraph 7 of the Agreement and accompanied by royalty accounting statements in
accordance with the provisions of paragraph 7 of the Agreement; provided that
Company shall have no obligation to furnish statements with respect of any
semiannual period after the expiration of the term hereof in which no payments
are due pursuant to this subparagraph unless specifically requested by you.
Company shall have the right to establish reasonable reserves (upon same terms
as set forth in paragraph 7A above) for returns and exchanges which shall be
fully and equally liquidated over the four (4)
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accounting periods subsequent to that in which the account is taken.
3. No royalties shall be payable to you unless and until your Audio Account
or Video Account, as the case may be, is in a "recouped position" (i.e., Company
has recouped from royalties otherwise payable hereunder, in accordance with the
Agreement, all recoupable recording costs, video costs, independent promotion
and deficit tour support, advances, expenses, and other charges incurred or
borne by Company under the Agreement which are recoupable in accordance with the
terms and conditions thereof). If, at your request or with your approval or
consent, Company makes payment to you or any person or entity on your behalf or
for your benefit of amounts not provided for in the Agreement (which Company is
in no way obligated to do), such payments shall be deemed advances and shall
also be recoupable, as aforesaid, unless Company agrees otherwise in writing.
31
Exhibit 10.35
-------------
Confidential portions omitted and filed separately with the Commission. Deleted
text (represented by "XXXX" in the text and an asterisk in the margin) indicates
such omissions.
AGREEMENT made as of this 20th day of February, 1996, by and between
Imprint Records, Inc., 209 10th Avenue South, Suite 500, Nashville, Tennessee
37203 (hereinafter "Company"), and Al Anderson, 67 Hillcrest Road, Windsor,
Connecticut 06095 ("You").
1. SERVICES.
1.01 During the term of this Agreement (the "Term") You will render Your
exclusive services as a performing artist for the purpose of making Master
Recordings for Company, You will cause those Master Recordings to be produced,
and You will Deliver those Master Recordings to Company, as provided in this
Agreement.
1.02 Your obligations will include furnishing the services of the producers
of those Master Recordings and all other third parties rendering services in
connection with those Master Recordings, subject to the terms of this Agreement,
and You will be solely responsible for engaging and paying them.
2. TERM.
The Term shall be for an Initial Period, and each Option Period for which
Company exercises the option (each period, a "Contract Period"). The Initial
Period shall commence on the above date and continue until the later of twelve
(12) months after Delivery of the Committed Album or one (1) year after the date
of the Initial Period's commencement. You grant Company three (3) options to
extend the Term for additional Contract Periods ("Option Periods") on the same
terms and conditions as the Initial Period, unless otherwise provided herein.
Company may exercise each option by written notice to You sent before the end of
the Contract Period then in effect ("Current Contract Period"); provided,
however, that Company may only exercise its option to extend the Term into the
Second Option Period if the total cumulative worldwide sales of the Albums
released during the Initial Period and the First Option Period, if any, hereof,
exceed one hundred and fifty thousand (150,000) total units in all
configurations combined as of the date by which Company is required to exercise
its option to extend the Term into the Second Option Period and, furthermore,
that Company may only exercise its option to extend the Term into the Third
Option Period if the total cumulative worldwide sales of the Albums released
during the Initial Period and the First Option Period, if any, and the Second
Option Period, if any, exceed two hundred and fifty thousand (250,000) total
units in all configurations combined as of the date by which Company is required
to exercise its option to extend the Term into the Third Option Period.
3. RECORDING COMMITMENT.
During the Initial Period, You will record and You shall
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deliver to Company one (1) Album. During each Option Period, You shall record
and You shall deliver to Company one (1) Album. You shall deliver to Company the
Committed Album for a Contract Period within one hundred five (105) days after
such period's commencement.
4. RECORDING PROCEDURES.
4.01 Company and You shall mutually approve all recording personnel
(including producers), the Musical Compositions or other Selections (including
medleys), the studios, the recording dates and a detailed recording budget
(collectively, the Recording Elements"). Company may reject any request to
record a Committed Album within six (6) months of the Delivery of the prior
Album. You shall neither commence recording nor incur costs unless Company has
approved in writing each Recording Element and the budget. If Company
disapproves any budget item or Recording Element, Company's decision (including,
at Company's election, Company's designation of one (1) or more Recording
Elements) shall be final. Notwithstanding anything to the contrary contained
herein, the Approved Recording Budget for the First Album shall not exceed Forty
Thousand Dollars ($40,000.00).
4.02 (a) You shall notify the appropriate Local of the American Federation
of Musicians in advance of each recording session.
(b) You will assist Company in complying with the requirements of the
U.S. Immigration Law.
(c) As and when required by Company, You shall allow Company's
representatives to attend any or all recording sessions hereunder.
(d) You shall timely supply Company with all of the information
Company needs in order: (1) to make payments due in connection with such
Recordings; (2) to comply with any other obligations Company may have in
connection with the making of such Master Recordings; and (3) to prepare to
release Phonograph Records derived from such Master Recordings. Without limiting
the generality of clause (2) of the preceding sentence:
(1) You shall furnish Company with all information Company
requires to comply with its obligations under Company's union agreements,
including, without limitation, the following:
(i) If a session is held to record new tracks intended to be
mixed with existing tracks (and if such information is requested by the American
Federation of Musicians), the dates and places of the prior sessions at which
such existing tracks were made, and the AFM Phonograph Recording
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Contract (Form "B") number(s) covering such sessions;
(ii) Each change of title of any composition listed in an
AFM Phonograph Recording Contract (Form "B"); and
(iii) A listing of all the musical selections contained in
Recordings Delivered to Company hereunder; and
(2) You will furnish Company with all of the immigration control
documentation required by the United States Government, at the same time as the
AFM or AFTRA session reports, tax withholding forms, and other documentation
required by us in order to make the payments to the session musicians and other
employees concerned, if any.
(e) (i) All Master Recordings shall be recorded under Company's
current Phonograph Record Labor Contract with the AFM; all musicians who render
services in connection with the recording of such Master Recordings (including
instrumentalists, if any) will be paid by Company, on Your behalf, the scale set
forth in the said Labor Contract; and Company, on Your behalf, shall pay the
required contributions to the Pension Welfare Fund.
(ii) All AFTRA members whose performances are embodied in the
Master Recordings will be paid by Company, on Your behalf, the rates applicable
under the current AFTRA Code of Fair Practices for Phonograph Recordings.
Company shall, on Your behalf, if necessary, also pay to the AFTRA Pension and
Welfare Fund any contribution required to be made under the AFTRA Code based on
compensation to other performers whose performances are embodied on the
applicable Master Recordings recorded hereunder.
(iii) The foregoing representations and warranties are included
for the benefit, respectively, of the AFM, AFTRA, and the AFM and AFTRA members
whose performances are embodied in the applicable Master Recordings, and for the
benefit of Company, and may be enforced by AFM and/or AFTRA or their respective
designees, as the case may be, and by Company.
(iv) You shall furnish or shall cause the applicable Producer to
furnish Company with copies of all union contracts and/or union session reports
so that all payments may be made by Company, on Your behalf, in a timely fashion
to the proper parties thereunder; and if You fail to do so with the result that
Company is required to pay any penalty sum for making a late payment under the
applicable union agreements, such payments shall be a direct debt from You to
Company which, in addition to any other remedy Company may have, Company may
recover from any monies otherwise payable to You.
4.03 You shall deliver the Masters to Company, at the
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offices of Company and to the attention of the Vice President of A&R promptly
after their completion. All original session tapes and any
derivatives/reproductions thereof shall be delivered to Company concurrently
(or, if Company elects, maintained at a location designated by Company, in its
name and subject to its control). Each Master shall be subject to Company's
approval as for the manufacture and sale of Phonograph Records. Upon Company's
request, You shall re-record any Musical Composition or other Selection until
such delivery standard is met. You shall deliver to Company fully mixed,
leadered, edited, sequenced, equalized and unequalized Master Recordings
(including a final two-track equalized tape copy), satisfactory to Company for
the manufacture and sale of Phonograph Records, and all original and duplicate
Master Recordings of the material recorded, together with the multi-track tape
and three (3) safety copies thereof; all materials for use in the packaging and
marketing of the Records (including information for "label copy" and liner
notes, such as title, recording dates, timing, publisher, composer, lyricist,
producer and performer of each musical composition embodied on the Master
Recordings); all third party clearances and consents (including mechanical
licenses). No Master shall be deemed "delivered" or "Delivered" to Company until
You have fully complied with this paragraph. Company's election to pay You a
Delivery payment or to release a Record derived from a Master shall not be
deemed an acknowledgment that "Delivery" thereof was properly made; accordingly,
Company shall be deemed to have waived neither its right to require complete
performance thereafter nor its remedies for Your failure to perform.
4.04 Each Master shall embody Your performance as the sole featured artist
of a single Musical Composition previously unreleased by You and shall be
recorded in its entirety in a recording studio. No Masters shall be recorded in
whole or in part at live concerts or other live performances unless an
authorized officer of Company agrees to the contrary in writing. Each Committed
Album shall embody no fewer than thirty five (35) minutes in playing time and
containing at least ten (10) Musical Compositions unless Company otherwise
agrees to the contrary in writing. You shall not record or deliver hereunder,
nor shall Company be obligated to accept, Masters constituting a Multiple Album.
However, if You shall do so and Company shall accept those Masters hereunder,
then, at Company's election, for the purpose of calculating the number of
Masters recorded and delivered hereunder, those Masters shall be deemed to be
only one (1) Album. Masters delivered hereunder shall not contain selections
designed to appeal to specialized or limited markets including, but not limited
to gospel, Christmas and/or children's music.
4.05 You further agree to irrevocably direct in writing the person who has
possession of any and all tapes of masters or digital masters recorded hereunder
that all such tapes and
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masters are Company's property and that such person shall be obligated to
deliver such tapes and masters to Company upon its written request.
4.06 If You shall for any reason whatsoever except the act of Company or
for a verified medical reason (excluding any illness related to drugs, alcohol
or any self-induced or personally exacerbated cause, and otherwise subject to
the terms hereof, including without limitation paragraph 17) delay the
commencement of or be unavailable for any recording sessions for the Masters,
You shall, upon Company's demand, pay Company an amount equal to the expenses or
charges paid or incurred by Company by reason thereof. Company may, without
limiting Company's other rights and remedies, deduct that amount from any monies
(other than mechanical royalties) payable by Company hereunder.
5. RECORDING COSTS.
5.01 Company shall pay the Recording Costs of the Masters recorded at
recording sessions conducted in accordance with the terms hereof in an amount
not in excess of the Recording Budget approved by Company in writing. If the
Recording Costs of any Masters shall exceed the Recording Budget approved by
Company due solely to your acts or omissions, Company shall pay the excess and
Company may, without limiting Company's other rights and remedies, deduct that
amount from any monies payable by Company hereunder (other than mechanical
royalties). You shall be solely responsible for and shall pay any payments to
any individuals rendering services in connection with the recording of the
Masters which exceed union scale unless the excess and the recipient thereof
shall have been specified in the Recording Budget approved by Company. You shall
also be solely responsible for and shall pay any penalties incurred for late
payments caused by Your delay in submitting union contracts forms, report forms,
or invoices or other documents. If, however, Company shall pay any excess not
approved by Company or any penalties, Company may, without limiting Company's
other rights and remedies, deduct that amount from any monies payable by Company
hereunder (other than mechanical royalties). Nothing contained in this Paragraph
5.01 shall in any way limit Company's right to recoup all Recording Costs of the
Masters from royalties payable by Company hereunder (other than mechanical
royalties).
5.02 Recording Costs shall mean and include all union scale payments
(including "excess" scale payments) made to You, all payments made by Company to
any other individuals rendering services in connection with the recording of the
Masters, all other payments which are made by Company pursuant to any applicable
law or regulation or the provisions of any collective bargaining agreement
between Company and any union or guild, all amounts paid or incurred for studio
or hall rentals, tape,
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engineering, editing, instrument rentals and cartage, mastering, mixing,
re-mixing, "sweetening", transportation and accommodations, immigration
clearances, trademark and service mark searches and clearances, "sample"
clearances any so-called "per diems" for any individuals (including You)
rendering services in connection with recording of the Masters, together with
all other amounts paid or incurred by Company in connection with the recording
of the Masters. Recording Costs shall be recoupable from royalties payable by
Company hereunder (other than mechanical royalties). Notwithstanding the
foregoing, You agree that the Advances hereunder include the prepayment of
session union scale as provided in the applicable union codes, and You agree to
complete any documentation required by the applicable union to implement this
sentence.
6. RIGHTS.
6.01 All Master Recordings recorded during the Term which embody Your
performances, from the inception of the recording thereof, shall, for purposes
of copyright law, be deemed "works-made-for-hire" for Company by You and all
other persons rendering services in connection with those Master Recordings, as
Company's "employees-for-hire". Those Master Recordings, from the inception of
the recording thereof, and all Phonograph Records and other reproductions made
therefrom, together with the performances embodied therein and all copyrights
therein and thereto throughout the Territory, and all renewals and extensions
thereof, shall be entirely Company's property, free of any claims whatsoever by
You or any other person, firm, or corporation. Company shall, accordingly, have
the exclusive right to obtain registration of copyright (and all renewals and
extensions) in those Master Recordings, in Company's name, as the owner and
author thereof. If Company shall be deemed not to be the author of those Master
Recordings or those Master Recordings are deemed not to be
"works-made-for-hire", this agreement shall constitute an irrevocable transfer
to Company of ownership of copyright (and all renewals and extensions) in those
Master Recordings. You shall, upon Company's request, cause to be executed and
delivered to Company transfers of ownership of copyright (and all renewals and
extensions) in those Master Recordings and any other documents as Company may
deem necessary or appropriate to vest in Company the rights granted to Company
in this Agreement, and You hereby irrevocably appoint Company Your
attorney-in-fact for the purpose of executing those transfers of ownership and
other documents in Your name. Company shall give You five (5) days notice before
signing any document in Your name, provided Company may dispense with that
waiting period when necessary, in Company's judgment, to protect or enforce
Company's rights. As a non-material obligation, Company shall provide You with
copies of documents signed by Company in Your name. Without limiting the
generality of the foregoing, Company and any person, firm, or corporation
designated by Company shall have the exclusive,
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perpetual and worldwide right to manufacture, sell, distribute and advertise
Phonograph Records embodying those Master Recordings under any trademarks, trade
names or labels, and to lease, license, convey or otherwise use or dispose of
those Master Recordings by any method now or hereafter known in any field of use
and to perform publicly Phonograph Records and other reproductions embodying
those Master Recordings, all upon such terms as Company may approve, or Company
may refrain from doing any or all of the foregoing.
6A.01 The provisions of this Article 6A shall only apply provided You have
fully complied with all Your material obligations under this Agreement.
Company's inadvertent failure to comply with any provision of this Article 6A
shall not be a breach of this Agreement.
6A.02 During the Term, Company will not sell Records derived from Master
Recordings delivered in fulfillment of Your Recording Commitment as "cut-outs"
in the United States prior to the earlier of (i) thirteen (13) months from the
date of initial United States release of such Records or (ii) two (2) months
after such Record is no longer in any then-published Billboard Chart; however,
if Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
In this regard and prior to selling any Records as "cut-outs", Company will
offer You the opportunity to purchase all of such Records that Company intends
to sell as "cut-outs" for the same price that Company intends to sell same to a
third party. You further agree to exercise such right to purchase all of such
Records that Company intends to sell as "cut-outs" within five (5) business days
after Company gives You notice of its intention to sell same and You agree to
pay Company for such "cut-outs" as above-described no later than twenty one (21)
business days after the later of (i) Your exercising said option to purchase or
(ii) Your actual receipt of the "cut-out" Records.
6A.03 During the Term, Company will not, without Your consent, sell any
Committed Album as a Budget Record in the United States until the earlier of (i)
ten (10) months after the initial release of the Album concerned as a "top-line"
Record in the United States or (ii) two (2) months after the Committed Album no
longer appears in any Billboard Album Chart; however, if Company sells any
Records in contravention of the foregoing restriction, Your sole remedy shall be
that You shall be entitled to the otherwise applicable royalty rate hereunder on
all such sales during the period of such restriction.
6A.04 During the Term, Company will not, without Your consent, sell any
Committed Album as a Mid-Priced Record in the United States until the earlier of
(i) six (6) months after the
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initial release of the Album concerned as a "top-line" Record in the United
States or (ii) one (1) month after the Committed Album no longer appears in any
Billboard Album Chart; however, if Company sells any Records in contravention of
the foregoing restriction, Your sole remedy shall be that You shall be entitled
to the otherwise applicable royalty rate hereunder on all such sales during the
period of such restriction.
6A.05(a) Provided you have fulfilled all your material obligations under
this Agreement, Company will commercially release each Album recorded in
fulfillment of your Recording Commitment in the United States within one hundred
eighty (180) days after the date of completion of the lacquer, copper or
equivalent masters concerned. If Company fails to do so you may notify Company,
within thirty (30) days after the end of the one hundred eighty (180) day period
concerned, that you intend to terminate the Term of this Agreement unless
Company releases the Album within sixty (60) days after Company's receipt of
your notice (the "cure period"). If Company fails to commercially release the
Album in the United States before the end of the cure period you may terminate
the Term of this Agreement by giving Company notice within thirty (30) days
after the end of the cure period. On receipt by Company of your termination
notice the Term of this Agreement will end and all parties will be deemed to
have fulfilled all of their obligations under it except those obligations which
survive the end of the Term (e.g., warranties, re-recording restrictions and
obligation to pay royalties). Your only remedy for failure by Company to release
an Album will be termination in accordance with this paragraph. If you fail to
give Company either of those notices within the period specified, your right to
terminate will lapse. Notwithstanding anything to the contrary contained herein,
in the event that this Agreement is terminated on account of Company's failure
to commercially release an Album as above-described in the United States, You
will have the right to purchase such unrelesaed Album at an amount equal to
Company's actual costs in connection therewith (including, but not limited to
any Advances that may have been paid to You in connection with such Album).
(b) The running of the one hundred eighty (180) day and the sixty (60)
day period referred to in paragraph 6A.05(a) will be suspended (and the
expiration date of each of those periods will be postponed) for the period of
any suspension of the running of the Term of this Agreement under paragraph
17.01. If any such one hundred eighty (180) day or sixty (60) day period would
otherwise expire on a date between October 15th and the next February 16th its
running will be suspended for the duration of the period and between October
15th and February 16th and its expiration date will be postponed by the same
amount of time (i.e., one hundred twenty-four (124) days).
6A.06 Provided You are not in material breach of this
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Agreement, if Company does not release each Committed Album within one hundred
eighty (180) days following the initial United States release of such Committed
Album in the territories of Canada,the United Kingdom, Austrailia, Germany,
Spain, South Africa, France, Italy, Spain and Japan (the "Release Territories"),
then you may give Company notice, within thirty (30) days following the
expiration of such one hundred eighty (180) day period, of such failure to so
release such Records in a particular Release Territory, and Company shall have a
period of sixty (60) days following the date of such notice to cure such
failure. If Company does not cure such failure within said sixty (60) day
period, you will have the option, which may be exercised by giving Company
written notice within thirty (30) days following the end of such sixty (60) day
period, to require Company to enter into an agreement with a licensee designated
by you, which licensee is actually engaged in the business of manufacturing and
distributing Records in the particular Release Territory concerned, authorizing
such licensee to manufacture and distribute Records derived from the Master
Recordings not released in accordance with this paragraph 6A.06 in the
applicable Release Territory. Your sole remedy for Company's failure to release
an Album in the applicable Release Territory(ies) pursuant to this paragraph
6A.06 shall be the exercise of your option pursuant to this paragraph 6A.06. If
you fail to give Company either of the notices specified in this paragraph
6A.06, your rights under this paragraph 6A.06 will lapse. Fifty (50%) percent of
all revenues actually received by Company under such licenses will be credited
to your royalty account under this agreement. Each such license agreement will
provide for such compensation for the license as you negotiate with the
licensee, and will contain such other provisions as Company shall require,
including but not limited to the following:
(a) The licensee will be required to deliver to Company all consents
required by Company, and all agreements which Company may require for any third
party to look to the licensee, and not to Company, for the fulfillment of any
obligations arising in connection with the manufacture or distribution of
Records under the license. The licensee will also become a first party to the
Phonograph Record Manufacturers' Special Payments Fund Agreement with the
American Federation of Musicians, or any successor agreement then in effect. The
license agreement will not become effective until the licensee has complied with
all the provisions of this subsection 6A.06 (a).
(b) The licensee will make all payments required in connection with
the manufacture, sale or distribution, by parties other than Company, in the
applicable Release Territory of Records made from those Master Recordings after
the effective date of the license, including, without limitation, all royalties
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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, and will authorize the applicable
Fund Administrator's designated agent to audit the licensee's books and records
with respect to the sale and/or distribution of such Records. The licensee will
comply with all applicable rules and regulations covering any use of the Master
Recordings by the licensee.
(c) No warranty or representation will be made by Company in
connection with the applicable Master Recordings, the license, or otherwise. You
and the licensee will indemnify and hold harmless Company and its licensees
against all claims, damages, liabilities, costs and expenses, including
reasonable counsel fees, arising out of any use of the Master Recordings or
exercise of such rights by the licensee.
(d) Company will instruct its licensees in the applicable Release
Territory not to manufacture Records derived from the Master Recordings licensed
to the licensee. If the licensee notifies Company of such manufacture Company
will instruct its licensees to discontinue it, but neither Company nor its
licensees shall have any liability by reason of such manufacture occurring
before Company's receipt of such notice, and Company shall have no liability by
reason of such manufacture at any time.
(e) Each Record made under the license will bear a sound recording
copyright notice identical to the notice used by Company for initial United
States release of the Master Recordings concerned, or such other notice as
Company shall require, but those Records will not otherwise be identified
directly or indirectly with Company.
(f) Company shall have the right to examine the books and records of
the licensee and all others authorized by the license to manufacture or
distribute Records under the license, for the purpose of verifying the accuracy
of the accountings rendered to Company by the license.
(g) The licensee will not have the right to authorize any other party
to exercise any rights without Company's prior written consent.
(h) Company and its licensees will have the continuing right at all
times to manufacture and sell recompilation Albums in the Release Territory
concerned which may contain the Master Recordings. A recompilation Album is an
Album, such as a "Greatest Hits" or "Best Of" type Album, containing Master
Recordings previously released in different Album combinations.
For purposes of computing each of the one hundred twenty (120)
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and sixty (60) day periods described in this paragraph 6A.06, the period between
October 15 and January 15 shall not be counted.
7. NAME AND LIKENESS.
7.01 (a) (i) Company and any person, firm or corporation designated by
Company shall have the perpetual right throughout the Territory to use and to
permit others to use Your name (both legal and professional, and whether
presently or hereafter used by You), likeness, other identification and
biographical material concerning You, and the name and likeness of any producer
or other person rendering services in connection with Master Recordings recorded
by You during the Term for purposes of trade and advertising. Company shall have
the further right to refer to You during the Term as Company's exclusive
recording artist and You shall in all Your activities in the entertainment field
use reasonable efforts to cause Yourself to be billed and advertised during the
Term as Company's exclusive recording artist; provided, however, that Company
acknowledges that You have recorded and released Albums prior to the execution
of this Agreement and, thusly, You may participate in the promotion of said
previous recordings so long as said promotion does not conflict with Your duties
and obligations hereunder. The rights granted to Company pursuant to this
paragraph with respect to the Your name, likeness, other identification and
biographical material concerning You shall be exclusive during the Term and
nonexclusive thereafter. Accordingly, but without limiting the generality of the
foregoing, You shall not authorize or permit any person, firm, or corporation
other than Company to use during the Term Your name legal or professional name
or Your likeness in connection with the advertising or sale of Phonograph
Records.
(ii) Company will make available to You for Your approval any
pictures of You or biographical material about You which Company proposes to use
for packaging, advertising or publicity in the United States during the Term of
this Agreement. Company will not use any such material which You disapprove in
writing within five (5) days from the time such materials are made available to
You, provided You furnish substitute material, satisfactory to Company in its
sole and reasonable discretion, in time for use within Company's production and
release schedules. In any event, Company shall not be required to incur expenses
beyond those customary for one (1) photograph shooting for each Album hereunder.
This subparagraph will not apply to any material previously approved by You or
used by Company. No inadvertent failure to comply with this subparagraph will
constitute a breach of this Agreement, and You will not be entitled to
injunctive relief to restrain the continuing use of any material used in
contravention of this subparagraph. You shall have the right to submit
photographs, likenesses and biographical material of Yourself and Your
submission of same shall constitute Your approval thereof.
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(b) You shall not render any services or authorize or permit Your or
likeness or any biographical material concerning You to be used in any manner
by any person, firm or corporation in the advertising, promoting or marketing
of blank magnetic recording tape or any other product or device intended for
home use, whether now known or hereafter developed, which may be used for the
fixation of sound alone or sound together with visual images.
7.02 (a) It is hereby expressly agreed that, as between You and Company,
Company shall exclusively own and control all materials comprising the artwork
(including, without limitation, art, photographs, graphic designs, etc.) and
other items created or used in connection with the exploitation of Phonograph
Records hereunder (the "Art Materials"), including, without limitation, all
copyrights and the right to secure copyright throughout the world and in
perpetuity.
8. ADVANCES .
8.01 All monies paid to You or on Your behalf or to or on behalf of any
person, firm or corporation representing You, other than royalties payable
pursuant to this Agreement, shall constitute Advances hereunder. Each payment
made by Company to anyone else on behalf of You or to or on behalf of any
person, firm or corporation representing You will also constitute an Advance
if it is made under this Agreement, if it is made with Your consent, if it is
required by law, or if it is made by Company to satisfy an obligation incurred
by You in connection with the subject matter of this Agreement.
8.02 (a) Conditioned upon Your full performance of all Your obligations
hereunder, Company shall pay You the following amounts, which shall constitute
Advances hereunder. With respect to the Third Album and Fourth Albums, if any,
recorded and delivered hereunder in fulfillment of Your Recording Commitment,
the amount, if any, by which the sum designated below as the "Recording Fund"
exceeds the Recording Costs for that Album, payable within sixty (60) days
after the delivery to Company of that Album or, if later, promptly after
Company's determination of the Recording Costs for that Album:
(i) For the Album recorded during the Second Option Period, if
any, the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXX Dollars and no more than XXXXXXXXX Dollars.
(ii) For the Album recorded during the Third Option Period, if
* any, the Recording Fund shall be the Formula Amount, but no less than XXXXXXXX
* Dollars and no more than XXXXXXXXX Dollars.
* - Confidential portions omitted and filed separately with the Commission.
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The "Formula Amount" for a particular Album recorded and Delivered
hereunder in fulfillment of Your Recording Commitment shall mean an amount
equal to sixty-six and two-thirds percent (66 2/3%) of whichever of the
following amounts is less: (A) the amount of the royalties, after the
retention of reserves, earned by You hereunder from Net Sales through Normal
Retail Channels in the United States ("USNRC Net Sales") of the immediately
preceding Album delivered hereunder in fulfillment of Your Recording
Commitment; or (B) the average of the amounts of such royalties so earned by
You hereunder on the two (2) immediately preceding Albums delivered hereunder
in fulfillment of Your Recording Commitment. In either case, the amount of
royalties with respect to any preceding Album shall be computed as of the end
of the month in which occurs the date which is twelve (12) months following
the initial commercial release in the United States of the preceding Album
concerned. For the purpose of computing royalties with respect to the
calculation under this paragraph 8.02, and only for such purpose, a reserve
against anticipated returns and credits will not be established for any Album
during any semi-annual accounting period in excess of twenty percent (20%) of
the aggregate number of units of that Album shipped to Company's customers.
* (b) XXXXXXXX percent of all sums paid or incurred by Company in
connection with independent marketing and publicity, and the independent
promotion of Phonograph Records hereunder, if any, shall be deemed to
constitute Advances hereunder; provided, however, that such recoupable amounts
* shall not exceed XXXXXXXXXXX dollars in connection with any Single nor
* XXXXXXXXXXX in connection with any Album.
(c) Within thirty (30) business days following the full execution of
* this Agreement, Company shall pay to You XXXXXXXXXXXXXXX dollars, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties otherwise payable hereunder and, furthermore, which
payment shall specifically be deemed to be an Advance against and a prepayment
of any and all applicable union session payments due and owing to You in
connection with the recording of the Album required to be recorded and
delivered during the Initial Period.
(d) Within five (5) business days following the commencement of each
Option Period, if any, Company shall pay to You an additional
* XXXXXXXXXXXXXXXXXXXX Dollars, which payment shall be deemed an Advance
against, and shall be fully recoupable from, all royalties (other than
mechanical royalties) otherwise payable hereunder and, furthermore, which
payment shall specifically be deemed to be an Advance against and a prepayment
of any and all applicable union session payments due and owing to You in
connection with the recording of the Album required to be recorded and
delivered during such Option Period. Furthermore, upon the commencement of
recording of the Second Album, if any,
* - Confidential portions omitted and filed separately with the Commission.
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* hereunder, Comapny shall pay to You an additional XXXXXXXXXXXXXXXXXXXXX
Dollars, which payment shall be deemed an Advance against, and shall be fully
recoupable from, all royalties (other than mechanical royalties) otherwise
payable hereunder and, furthermore, which payment shall specifically be deemed
to be an Advance against and a prepayment of any and all applicable union
session payments due and owing to You in connection with the recording of the
Second Album. Additionally, upon the commencement of recording of the Third
Album, if any, hereunder, Comapny shall pay to You an additional
* XXXXXXXXXXXXXXXXXXXX dollars, which payment shall be deemed an Advance
against, and shall be fully recoupable from, all royalties (other than
mechanical royalties) otherwise payable hereunder and, furthermore, which
payment shall specifically be deemed to be an Advance against and a prepayment
of any and all applicable union session payments due and owing to You in
connection with the recording of the Third Album. And finally, upon the
commencement of recording of the Fourth Album, if any, hereunder, Comapny
* shall pay to You an additional XXXXXXXXXXXXXXXXXXXXXXX dollars, which payment
shall be deemed an Advance against, and shall be fully recoupable from, all
royalties (other than mechanical royalties) otherwise payable hereunder and,
furthermore, which payment shall specifically be deemed to be an Advance
against and a prepayment of any and all applicable union session payments due
and owing to You in connection with the recording of the Fourth Album.
9. ROYALTIES.
9.01 Company will pay You an "all-in" royalty, during the term of
copyright in the country concerned of Masters embodied in Phonograph Records
delivered hereunder computed at the applicable percentage indicated in the
Royalty Schedule below, of the applicable Royalty Base Price in respect of Net
Sales of such Phonograph Records (other than Audiovisual Records) consisting
entirely of Master Recordings recorded under this Agreement during the
respective Contract Periods specified below and sold by Company or Company's
licensees through Normal Retail Channels:
ROYALTY SCHEDULE
------------------------------------------------------------------------------
UNITED STATES
-------------
Master Recordings Long-Play
made during the: Albums Singles Singles
------------------------------------------------------------------------------
* Initial Period XXX XXX XXX
* First Option Period, if any XXX XXX XXX
* Second Option Period, if any XXX XXX XXX
* - Confidential portions omitted and filed separately with the Commission.
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* Third Option Period, if any XXX XXX XXX
FOREIGN
-------
Territory All Records
------------------------------------------------------------------------------
* Canada, U.K. XXXX of the otherwise applicable rate
set forth in the United States Royalty
Schedule above in respect of USNRC Net
Sales of the particular record concerned
(i.e., Albums, Singles and Long Play
Singles), without regard to any
escalations.
* Germany, Italy, France, XXXX of the otherwise Japan, Australia,
Benelux applicable rate set forth
above in the United States Royalty
Schedule in respect of USNRC Net Sales
of the particular record concerned
(i.e., Albums, Singles and Long Play
Singles), without regard to any
escalations.
* Rest of World XXXX of the otherwise applicable rate
set forth above in the United States
Royalty Schedule in respect of USNRC Net
Sales of the particular record concerned
(i.e., Albums, Singles and Long Play
Singles), without regard to any
escalations.
The royalty rates set forth in this paragraph 9.01 are sometimes referred to
herein as Your "basic royalty rate(s)".
9.02 Notwithstanding anything to the contrary contained in the Royalty
Schedule hereinabove, and with respect to each Album Delivered in fulfillment
of Your Recording Commitment hereunder, the royalty rate applicable to USNRC
Net Sales of top-line Albums pursuant to the terms hereof shall be the
royalty rate specified in the Royalty Escalation Schedule below.
ROYALTY ESCALATION SCHEDULE
Album recorded in fulfillment of the Recording Commitment for the: Net Sales
in the United States of top-line Albums (determined in accordance with
Company's standard accounting procedures).
* - Confidential portions omitted and filed separately with the Commission.
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* Contract Period XXX XXX XXX
* Initial Period XXX XXX XXX
* First Option XXX XXX XXX
Period, if any
* Second Option XXX XXX XXX
Period, if any
* Third Option XXX XXX XXX
Period, if any
9.03 (a) The royalty on Phonograph Records sold through so-called "record
clubs" shall, if manufactured and sold by Company, be one-half (1/2) of the
otherwise applicable royalty; and if manufactured and sold by Licensees,
one-half (1/2) of the Net Royalty.
(b) No royalties will be payable on records furnished as free and/or
bonus to members or other participants in a record club ("Club Free Records"),
provided, however, that if on a cumulative basis the aggregate number of Club
Free Records distributed exceeds fifty percent (50%) of the total number of
records sold and Club Free Records distributed through such record club,
Company shall pay royalties on the number of Club Free Records distributed
which exceeds fifty percent (50%) of the total number of records sold and Club
Free Records distributed through such record club.
9.04 In respect of any Master Recording leased by Company to others for
their distribution of Phonograph Records in the United States, Company will
* pay You XXXXX percent of Company's net receipts from Company's licensee. ("Net
receipts", in the preceding sentence, means receipts as computed after
deduction of all copyright, AFM and other applicable third party payments.) If
another artist, a producer, or any other Person is entitled to royalties on
sales of such Records, that payment will be divided among You in the same
ratio as that among Your respective basic royalty percentage rates.
9.05 The royalty rate on any Budget Record, any Mid-Priced Record, any
Multiple Record Set, any Record sold for distribution through military
exchange channels, or any "picture disc" (i.e., a disc Record with artwork
* reproduced on the surface of the Record itself) will be XXXXX of the
applicable basic royalty rate prescribed in paragraph 9.01. The royalty rate
* on any Record which is not an Album, Single or a Long-Play Single will be XXXX
of the applicable basic Album royalty rate prescribed in paragraph 9.01. The
* royalty rate on any compact disc Record will XXXXX percent of the rate which
would otherwise be applicable under this Agreement. The royalty rate on any
digital compact
* - Confidential portions omitted and filed separately with the Commission.
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* cassette ("DCC") or any Mini-disc Record will be XXXXX percent of the rate
which would otherwise be applicable under this Agreement. The royalty rate for
* any Record in a New Configuration will be XXXXX the rate which would otherwise
be applicable hereunder. The provisions set forth in the immediately preceding
sentence shall apply until fifteen (15) months following the initial release
of any Master delivered hereunder as embodied on such New Configuration.
Thereafter, the royalty for Records sold in the form of New Configuration
shall be negotiated in good faith by the parties, taking into account, among
other things, the then-prevailing industry standards. Notwithstanding anything
to the contrary contained herein, Company shall have the right to release,
distribute and sell such Records prior to the completion of such negotiations,
and to accrue royalties to Your account hereunder at the royalty rate set
forth herein. Notwithstanding anything to the contrary in the immediately two
(2) preceding sentences, in the event Company adopts a general policy
applicable to the majority of new artists signed exclusively to Company which
provides for a royalty rate reduction with respect to records in compact disc
or DCC or Mini-disc configuration more favorable to such new artist than the
royalty rate reduction provided herein, You shall receive the benefit of such
general policy, on a prospective basis only.
9.06 Except as otherwise specifically set forth herein, on Masters
licensed by Company on a flat-fee or a royalty basis for the sale of
Phonograph Records or for any other uses, the royalty rate shall be an amount
equal to the lesser of fifty percent (50%) of the Net Flat Fee or Net Royalty,
as applicable, from such exploitation of the Masters.
9.07 Audiovisual Royalties shall be computed on the Audiovisual Records
Royalty Base Price; otherwise, in accordance with the provisions of this
Agreement applicable to Conventional Albums and: If manufactured and sold by
* Company, XXXXXX percent on U.S. sales XXXXXX percent ex-U.S. If manufactured
and sold by Licensees (in the U.S. or elsewhere), and on Audiovisual
Recordings licensed or otherwise furnished by Company for exploitation other
* than on Audiovisual Records, XXXXXX percent of Net Receipts. Audiovisual
royalties (and receipts payments) are "all-in" (inclusive of, without
limitation, fifty percent (50%) of payments to publishers).
9.08 Notwithstanding anything to the contrary contained in this Article
9:
(a) In respect of Joint Recordings, the royalty rate to be used in
determining the royalties payable to You shall be computed by multiplying the
royalty rate otherwise applicable by a fraction, the numerator of which shall
be one (1) and the denominator of which shall be the total number of royalty
artists whose performances are embodied on a Joint Recording. The term
* - Confidential portions omitted and filed separately with the Commission.
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"Joint Recording" shall mean any Master Recording embodying Your performances
and any performances by another artist with respect to which Company is
obligated to pay royalties.
(b) The royalty rate on a Phonograph Record embodying Master
Recordings made hereunder together with other Master Recordings will be computed
by multiplying the royalty rate otherwise applicable by a fraction, the
numerator of which is the number of Selections embodying Master Recordings made
hereunder and contained on the particular record concerned and the denominator
of which is the total number of Selections contained on such Record. The royalty
rate on an Audiovisual Record containing a Audiovisual Recordings made hereunder
and other audiovisual works will be determined by apportionment based upon
actual playing time on the Record concerned.
(c) No royalties shall be payable to You in respect of Phonograph
Records sold or distributed by Company or Company's licensees for promotional
purposes, as cut-outs, at close-out prices, for scrap, at less than inventory
cost or at fifty percent (50%) or less of the Record's highest posted wholesale
price (whether or not intended for resale), as "free", "no charge" or "bonus"
Records (whether or not intended for resale), to Company's employees or those of
Company's licensees and their relatives, or to radio stations.
(d) If records derived from the Masters are sold to distributors or
others for less than Company's highest posted wholesale price, or at a discount
therefrom, but for more than fifty percent (50%) of such wholesale price, then,
for purposes of this paragraph, a percentage of such records shall be deemed
non-royalty bearing records, which percentage shall be an amount equal to the
percentage of such lesser amount or the applicable discount.
(e) Company may elect from time to time to compute and pay You
royalties hereunder on a royalty base different than the Royalty Base Price
provided herein, as long as such computation does not affect the net amount of
royalties otherwise payable to You at that time hereunder.
(f) If legislation requiring the payment of copyright royalties for
the public performance of Phonograph Records is enacted or is currently in
existence in any country and Company or its affiliate in the country concerned
receives such royalties solely attributable to Master Recordings produced
hereunder, and performing artists are not entitled to receive similar royalties
in such country from a collection society or other Person other than Company or
its affiliates, then with respect to performances in the United States, Company
shall accrue to Your royalty account hereunder that portion of such royalties as
is required by Company's collective bargaining
18
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agreement with the American Federation of Musicians or the American Federation
of Television and Radio Artists, as applicable, and with respect to performances
outside the United States, as required by law. If no such agreement and/or law
applies, Company shall pay an amount equal to fifty percent (50%) of the net
amounts directly allocable to the Master Recordings produced hereunder so
received by Company less all payments to third parties (and You shall be
responsible in any event for all required payments to producers or other parties
engaged by You in connection with recording of the Master Recordings hereunder).
10. ROYALTY PAYMENTS AND ACCOUNTINGS.
10.01 Company shall send to You statements for royalties payable
hereunder on or before October 1st for the semi-annual period ending the
preceding June 30th and on or before April 1st for the semi-annual period ending
the preceding December 31st, together with payment of royalties, if any, earned
by You hereunder during the semi-annual period for which the statement is
rendered, less all Advances and other charges under this Agreement. Company
shall have the right to retain, as a reserve against charges, credits, or
returns, such portion of payable royalties as shall be reasonable in Company's
best business judgment. With respect to Albums sold hereunder, Company's reserve
shall not exceed thirty-five percent (35%) of the number of such records
shipped, unless Company reasonably believes a particular release justifies a
higher reserve. With respect to Singles sold hereunder, Company's reserve shall
not exceed fifty percent (50%) of the number of such records shipped, unless
Company reasonably believes a particular release justifies a higher reserve.
Reserves shall be fully liquidated no later than the end of the fourth full
accounting period following the period in which such reserve was initially
established. Records returned will be apportioned between royalty-free records
and records on which royalties are payable in the same proportion as such
records were shipped to customers. You shall reimburse Company on demand for any
overpayments, and Company may also deduct the amount thereof from any monies
payable to You hereunder (other than mechanical royalties). Royalties paid by
Company on Phonograph Records subsequently returned shall be deemed
overpayments.
10.02 No royalties shall be payable to You on sales of Phonograph Records
by any of Company's licensees or distributors until payment on those sales has
been received by Company in the United States or Company has received acredit
against a prior advance. Sales by a licensee or distributor shall be deemed to
have occurred in the semi-annual accounting period during which that licensee or
distributor shall have rendered to Company accounting statements and payments
for those sales.
10.03 (a) Royalties on Phonograph Record sales outside
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of the United States shall be computed in the national currency in which
Company's licensees pay to Company, shall be credited to Your royalty account
hereunder at the same rate of exchange at which Company's licensees pay to
Company, and shall be proportionately subject to any withholding or comparable
taxes which may be imposed upon Company's receipts.
(b) If Company shall not receive payment in United States dollars in
the United States for any sales of Phonograph Records outside of the United
States, royalties on those sales shall not be credited to Your royalty account
hereunder. Company shall, however, at Your written request and if Company is
reasonably able to do so, accept payment for those sales in foreign currency and
shall deposit in a foreign bank or other depository, at Your expense, in that
foreign currency, that portion thereof, if any, as shall equal the royalties
which would have been payable to You hereunder on those sales had payment for
those sales been made to Company in United States dollars in the United States.
Deposit as aforesaid shall fulfill Company's royalty obligations hereunder as to
those sales. If any law, ruling or other governmental restriction limits the
amount a licensee can remit to Company, Company may reduce Your royalties
hereunder by an amount proportionate to the reduction in Company's licensee's
remittance to Company.
10.04 (a) Company will maintain books and records which report the sales of
Phonograph Records, on which royalties are payable to You. You may, but not more
than once a year, at Your own expense, examine those books and records, as
provided in this paragraph 10.04 only. You may make those examinations only for
the purpose of verifying the accuracy of the statements sent to You under
paragraph 10.01. All such examinations shall be in accordance with GAAP
procedures and regulations. You may make such an examination for a particular
statement only once, and only within three (3) years after the date when Company
is required to send You that statement under paragraph 10.01. You may make such
an examination only during Company's usual business hours, and at the place
where Company keeps the books and records to be examined. If You wish to make an
examination You will be required to notify Company at least thirty (30) days
before the date when You plan to begin it. Company may postpone the commencement
of Your examination by notice given to You not later than five (5) days before
the commencement date specified in Your notice; if Company does so, the running
of the time within which the examination may be made will be suspended during
the postponement. If Your examination has not been completed within one (1)
month from the time You begin it, Company may require You to terminate it on
seven (7) days' notice to You at any time; Company will not be required to
permit You to continue the examination after the end of that seven (7) day
period. You will not be entitled to examine any manufacturing records or any
other records that do not specifically report sales or other
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distributions of Phonograph Records on which royalties are payable to You. You
may appoint a certified public accountant to make such an examination for You,
but not if (s)he or his/her firm has begun an examination of Company's books and
records for any Person except You unless the examination has been concluded and
any applicable audit issues have been resolved. Such certified public accountant
will act only under a Letter of Confidentiality which provides that any
information derived from such audit or examination will not be knowingly
released, divulged or published to any person, firm or corporation, other than
to You or to a judicial or administrative body in connection with any proceeding
relating to this Agreement.
(b) Notwithstanding the penultimate sentence of paragraph 10.04(a), if
Company notifies You that the representative designated by You to conduct an
examination of Company's books and records under paragraph 10.04(a) is engaged
in an examination on behalf of another Person ("Other Examination"), You may
nevertheless have Your examination conducted by Your designee, and the running
of the time within which such examination may be made shall be suspended until
Your designee has completed the Other Examination, subject to the following
conditions:
(i) You shall notify Company of Your election to that effect
within fifteen (15) days after the date of Company's said notice to You;
(ii) Your designee shall proceed in a reasonably continuous and
expeditious manner to complete the Other Examination and render the final report
thereon to the client and Company; and
(iii) Your examination shall not be commenced by Your designee
before the delivery to Company of the final report on the Other Examination,
shall be commenced within thirty (30) days thereafter, and shall be conducted in
a reasonably continuous manner.
(The preceding provisions of this paragraph 10.04(b) will not apply if Company
elects to waive the provisions of the penultimate sentence of paragraph 10.04(a)
which require that Your representative shall not be engaged in any Other
Examination.)
10.05 If You have any objections to a royalty statement, You will give
Company specific notice of that objection and Your reasons for it within three
(3) years year after the date when Company is required to send You that
statement under paragraph 10.01. Each royalty statement will become conclusively
binding on You at the end of that three (3) year period, and You will no longer
have any right to make any other objections to it. You
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will not have the right to sue Company in connection with any royalty
accounting, or to sue Company for royalties on Records sold during the period
a royalty accounting covers, unless You commence the suit within that three
(3) year period. If You commence suit on any controversy or claim concerning
royalty accountings rendered to You under this agreement in a court of
competent jurisdiction (as provided in paragraph 23.09 below), the scope of
the proceeding will be limited to determination of the amount of the royalties
due for the accounting periods concerned, and the court will have no authority
to consider any other issues or award any relief except recovery of any
royalties found owing. Your recovery of any such royalties will be the sole
remedy available to You by reason of any claim related to Company's royalty
accountings. Without limiting the generality of the preceding sentence, You
will not have any right to seek termination of this Agreement or avoid the
performance of Your obligations under it by reason of any such claim. The
preceding three (3) sentences will not apply to any item in a royalty
accounting if a court of competent jurisdiction determines that the item was
fraudulently misstated and such determination is not overruled or reversed.
10.06 Company shall have the right to deduct from any amounts payable to
You hereunder that portion thereof as may be required to be deducted under any
statute, regulation, treaty or other law, or under any union or guild
agreement, and You shall promptly execute and deliver to Company any forms or
other documents as may be required in connection therewith.
10.07 Each payment made by Company to You under this Agreement, other
than union scale payments under Article 5 hereof, shall, at Company's
election, be made by a single check payable to Al Anderson. All payments
herein are contingent upon Company receiving properly completed W-9 and/or
1001 IRS tax forms, as applicable.
11. MUSICAL COMPOSITION LICENSES.
11.01 You hereby grant to Company and Company's designees an irrevocable
non-exclusive license, under copyright, to reproduce each Controlled
Composition on Phonograph Records and to distribute those Phonograph Records
in the United States and Canada.
11.02 Mechanical royalties shall be payable for each Controlled
Composition on Net Sales of Phonograph Records as follows: On Phonograph
Records sold in the U.S., the rate ("Rate") for each Controlled Composition
* shall be XXXXXXXX percent of the minimum statutory rate (without regard to
playing time) provided for in the applicable Copyright Act as of delivery date
of the first Master embodying such Controlled Composition. In this regard, the
term "US RATE" shall mean
* - Confidential portions omitted and filed separately with the Commission.
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* XXXXXXXX percent of the minimum statutory rate (without regard to playing
time) provided for in the applicable Copyright Act as of the delivery date of
the first Master embodied on each Record. On Phonograph Records sold in
Canada, the rate (the "Canadian Rate") for each Controlled Composition shall
* be XXXXXXXX percent of the prevailing Canadian rate as of the delivery date of
the first Master embodying such Controlled Composition (but in no event
greater than the Rate). In this regard, the term "CANADIAN FULL RATE" shall
* mean XXXXXXXX percent of the prevailing Canadian rate as of the delivery date
of the first Master embodied on each Record. The mechanical royalty for a
* Controlled Composition on a Mid-Priced or Budget Record shall be XXXXXXXX of
the Rate or the Canadian Rate, as applicable; for a Controlled Composition
* which is a copyrighted arrangement of a public domain work, XXXXXXXX of the
Rate or the Canadian Rate, as applicable. No mechanical royalties are payable
on Phonograph Records on which no royalties are payable.
11.03 Notwithstanding the foregoing, the maximum aggregate mechanical
royalty rate (the "Aggregate") for all Selections (including Controlled
Compositions) contained on a Phonograph Record for sales in the U.S. or Canada
shall be the product of (1) the Rate or the Canadian Rate, as applicable, for
the first Master recorded for the particular project concerned, and (2) ten
(10) for Albums (containing one (1) or more discs or the equivalent), four (4)
for EPs, and two (2) for singles and long-play singles, regardless of the
number of Selections; provided, however, that the Aggregate for Albums (as
specifically described in section (2) immediately hereinabove) shall be the
product of that number reflected above in section (2) and the US RATE or the
CANADIAN FULL RATE (as the case may be) instead of the Rate or the Canadian
Rate. If the aggregate rate for all of the Selections embodied on any
Phonograph Record exceeds the Aggregate, then the royalty for Controlled
Compositions shall be reduced by such excess. If the aggregate rate still
exceeds the Aggregate, then Company may, in addition to all of Company's other
rights or remedies, deduct that amount from any monies payable by Company
under any agreement between You and Company Affiliate.
11.04 By each May 15, August 15, November 15, and February 15, Company
will send You a statement covering Mechanical Royalties for the prior quarter,
along with any royalties due, subject to reasonable reserves for a reasonable
time. Retention of a reserve for two (2) years from its establishment is
deemed reasonable. Paragraphs 10.01 and 10.02 apply to mechanical royalty
accountings.
11.05 You shall use Your best efforts to cause the issuance to Company
and Designees of mechanical licenses to reproduce on Phonograph Records
Selections which are not Controlled Compositions and to distribute those
Phonograph
* - Confidential portions omitted and filed separately with the Commission.
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Records in the U.S. and Canada. Such licenses shall be on terms no less
favorable to Company and Designees than the standard license of the Harry Fox
Agency or any successor with respect to Phonograph Records distributed in the
U.S. (and by CMRRA or any successor with respect to Phonograph Records
distributed in Canada); however, such rates shall not exceed one hundred (100%)
percent of the applicable minimum statutory rates set forth in paragraph 11.02
above. The obligation to account and pay mechanical royalties on sales of
Phonograph Records outside of the U.S. shall be that of Company's licensees
("Licensees").
11.06 If the copyright in any Controlled Composition is owned or controlled
by a Person besides You, You shall use reasonable efforts to cause that Person
to grant Company and Designees all the rights You have granted to Company and
Designees in this Agreement.
11.07 You hereby grant to Company and Designees, for no fee, royalty, or
other payment, the irrevocable, non-exclusive, worldwide right to reproduce and
publicly perform each Controlled Composition on Audiovisual Recordings, to
distribute Audiovisual Records embodying those Audiovisual Recordings, and to
exploit those Audiovisual Recordings in every manner and media for promotional
purposes only. You shall cause the grant to Company and Designees, for no fee,
royalty, or payment, the irrevocable, non-exclusive, worldwide right to
reproduce and publicly perform each Non-Controlled Composition on Audiovisual
Recordings and to otherwise exploit those Audiovisual Recordings in every manner
and media for promotional purposes only. Any assignment, license or other
agreement made with respect to Controlled Compositions shall be subject to the
terms hereof.
12. AUDIOVISUAL RECORDINGS.
12.01 (a) Upon Company's reasonable request, You shall cooperate with
Company and perform to the best of Your ability for the making of Audiovisual
Recordings, in accordance with all applicable labor unions and guilds. You and
Company shall mutually designate the following "Audiovisual Production
Elements": Musical Compositions, personnel (including producer and director),
storyboard, script, locations and production dates. Company shall pay all costs
incurred in connection with the production of Audiovisual Recordings within the
written budget approved by Company in writing. To the extent permissible, You
hereby waive any right to be paid union scale payments in connection with
Audiovisual Recordings. All costs incurred in connection with the production of
Audiovisual Recordings shall be recoupable from royalties payable to You from
the exploitation of Audiovisual Recordings; one-half (1/2) of such costs shall
be recoupable from royalties payable to You in connection with the exploitation
of audio-only Master Recordings.
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(b) Company shall be the sole owner of all worldwide rights in and to
each Audiovisual Recording, including the worldwide copyrights therein and
thereto. Without limiting the foregoing, it is agreed that Company's right to
use Your name and information in the Audiovisual Recordings is set forth in
Paragraphs 6 and 7, and the terms "Master Recordings" and "Phonograph Records"
shall include Audiovisual Recordings and Audiovisual Records, respectively.
13. WARRANTIES, REPRESENTATIONS AND COVENANTS.
You hereby warrant, represent and covenant that:
13.01 You have the right, power and capacity to enter into this Agreement,
to grant the rights granted by You to Company hereunder, and to perform all of
the terms hereof. You have not done nor shall You do anything to impair
Company's rights hereunder.
13.02 During the Term You shall be a member in good standing of any union
or guilds requiring such membership. All recording sessions shall be conducted
in all respects in accordance with the terms of the AFM Phonograph Record Labor
Agreement, the AFTRA Code for the Phonograph Industry and any other applicable
union or guild agreements.
13.03 (a) Your name, masters, Selections embodied on masters and/or
materials supplied to Company by You hereunder will not violate the legal rights
of any party, including, without limitation, any contractual rights, copyrights,
rights of publicity/privacy or trademark/tradenames.
(b) You are the sole owner of the professional name "Al Anderson".
Only Company will have the right to use such name in connection with Records
during the Term.
13.04 All existing recordings of Your performances have been commercially
released in the Territory on Phonograph Records.
13.05 Except as specifically provided herein, Company shall have no
obligation to pay any party in connection with the exercise of any of Company's
rights hereunder (including, without limitation, Company's rights with respect
to the recording or exploitation of Master Recordings).
14. RECORDING RESTRICTIONS.
14.01 During the Term You shall not make any commitment which would
interfere with Your performances hereof nor shall You render services in
connection with any master recordings for any Person besides Company.
Notwithstanding anything to the contrary
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contained herein, in the event of an "NRBQ" reunion tour (or the like), You
shall consult with Company in connection with Your participation therewith and,
so long as Your involvement with such "NRBQ" reunion does not interfere with
your commitments and obligations and duties hereunder, You shall not be in
breach of this Agreement. After the end of the Term, You shall not, prior to the
later ("Restriction Date") of the following dates, perform for any Person
besides Company, to make Phonograph Records or Master Recordings, any Selection
which was recorded under any agreement between You and Company or an Affiliate:
(a) the date four (4) years after the date such Selection was last delivered to
Company in a Master Recording, or (b) the date two (2) years after the end of
the Term.
14.02 You shall not at any time manufacture, distribute, sell or authorize
the manufacture, distribution, or sale by any Person besides Company of
Phonograph Records embodying a performance rendered by You during the Term. You
shall not record or permit the recording of any such performance without taking
reasonable measures to prevent the manufacture, distribution, or sale at any
time by any Person besides Company of Phonograph Records embodying that
performance.
14.03 (a) During the Term, You will not render any musical performances
(audiovisual or otherwise) for the purposes of making any motion picture or
other audiovisual work ("Picture", below) for any person, firm or corporation
other than us, and no other person, firm or corporation other than Company will
be authorized to produce, distribute, exhibit, or otherwise exploit any Picture
which contains any musical performance (audiovisual or otherwise) by You,
without an express written agreement providing that:
(i) the Picture concerned will not contain performances by You of
more than two (2) Musical Compositions, in whole or in part; and
(ii) not more than one-half (1/2) of any version of the Picture
may consist of featured musical performances (defined below) by You or anyone
else.
(b) "Featured musical performance", in this paragraph, means:
(i) any visual performance of a Musical Composition; and
(ii) any background performance of a Musical Composition which is
intended as a focus of audience attention, whether or not the visual matter is
related dramatically to the lyrics or concept of the Musical Composition.
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14.04 You may perform as a background musician ("sideman") accompanying a
featured artist for the purpose of making Phonograph Records for others,
provided:
(a) You have then fulfilled all of Your material obligations under
this Agreement, and the engagement does not interfere with the continuing prompt
performance of Your obligations to Company.
(b) (1) You will not render a solo or "step-out" performance which is
the primary focus of the Selection that You are recording, and
(2) The musical style of the recording will not be substantially
similar to the characteristic musical style of Recordings made by You for
Company.
(c) You will not record any material which You have then recorded for
Company, and will not agree to be restricted from recording the same material
for Company unless You obtain the prior approval of Company, which approval will
not be unreasonably withheld.
(d) You will not accept the sideman engagement unless the Person for
whom the recordings are being made agrees in writing, for Company's benefit,
that:
(1) Your name may be used in a courtesy credit to Imprint on the
Album liners used for such Records, in the same position as the credits accorded
to other sidemen and in type identical in size, prominence and all other
respects; and
(2) Except as expressly provided in section 14.04(d)(1) above,
neither Your name (or any similar name), nor any picture, portrait or likeness
of You will be used in connection with such Recordings, including, without
limitation, on the front covers of Album containers, on sleeves or labels used
for Singles, or in videos, advertising, publicity or any other form of promotion
or exploitation, without Company's express written consent, which Company may
withhold in its unrestricted discretion.
(e) Before You accept the sideman engagement You will notify Company
of the name of the Person for whom the recordings are being made and the record
company which will have the right to distribute the Records. Your notice will be
addressed to Company's Chief Financial Officer.
15. JINGLE SERVICES.
Notwithstanding anything to the contrary contained herein and provided that
such activities do not materially interfere
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with Artist's duties and obligations hereunder, Artist shall not be in breach of
this Agreement on account of any jingle activities (as that term and activity is
commonly understood in the music industry), including, but not limited to
writing and creating jingles, performing on jingles (as a singer, musician or
otherwise) or the like.
16. UNIQUE SERVICES.
You expressly acknowledge that Your services hereunder are of a special,
unique, intellectual, and extraordinary character which gives them peculiar
value, and that in the event of a breach by You of any term hereof, Company may
be caused irreparable injury which cannot adequately be compensated by money
damages. Accordingly, Company shall be entitled to seek injunctive relief,
subject to any defenes You may have against Company, in addition to any other
rights or remedies Company may have, to enforce the terms of this Agreement.
17. CERTAIN REMEDIES.
17.01 If You do not fulfill any portion of Your Recording Commitment within
the time prescribed in paragraph 3.02, Company will have the following options:
(a) to suspend Company's obligations to make payments to You under
this Agreement until You have cured the default;
(b) to terminate the term of this Agreement at any time, whether or
not You have commenced curing the default before such termination occurs; and
(c) to require You to repay to Company the amount, not then recouped,
of any Advance previously paid to You by Company and not specifically
attributable under Article 8 to an Album which has actually been fully
Delivered.
You will 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 parties not affiliated with
You and in which You do not have any interest, for recording costs incurred in
connection with the Album concerned before Company's demand for payment.
("Recording Costs", in the preceding sentence, means items which would
constitute Recording Costs if paid or incurred by Company.)
Company may exercise each of those options by sending You the appropriate
notice. If Company terminates the term under clause 17.01(b) all parties will be
deemed to have fulfilled all of their obligations under this agreement except
those obligations which survive the end of the term (such as indemnification
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obligations, re-recording restrictions, and Your obligations under clause
17.01(c)). No exercise of an option under this paragraph will limit Company's
rights to recover damages by reason of Your default, its rights to exercise any
other option under this paragraph, or any of its other rights.
17.02 If because of: act of God; inevitable accident; fire; lockout, strike
or other labor dispute; riot or civil commotion; act of public enemy; enactment,
rule, order or act of any government or governmental instrumentality (whether
federal, state, local or foreign); failure of technical facilities; illness or
incapacity of any performer or producer; or other cause of a similar or
different nature not reasonably within Company's control; Company is materially
hampered in the recording, manufacture, distribution or sale of records, then,
without limiting Company's rights, Company shall have the option by giving You
notice to suspend the running of the then-current Contract Period for the
duration of any such contingency plus such additional time as is necessary so
that Company shall have no less than thirty (30) days after the cessation of
such contingency in which to exercise its option, if any, to extend the term of
this agreement for the next following Option Period. If any suspension imposed
under this paragraph by reason of an event affecting no Record manufacturer or
distributor except Company continues for more than six (6) months, You may, by
notice, request Company to terminate the suspension by notice given to You
within sixty (60) days after its receipt of Your notice. If Company does not do
so, the term of this Agreement will terminate at the end of that sixty (60) day
period (or at such earlier time which Company may designate by notice to You),
and all parties will be deemed to have fulfilled all of their obligations under
this Agreement except those obligations which survive the end of the term (such
as warranties, re-recording restrictions and Company's obligation to pay
royalties).
17.03 If Company refuses, without cause, to permit You to fulfill Your
minimum Recording Commitment for any Contract Period, (irrespective of whether
or not You have commenced recording the particular Album for such Recording
Commitment), other than as a result of an event or contingency referred to in
paragraph 17.01 above, Company shall have no obligations or liabilities to You
in connection therewith unless You shall notify Company of Your desire to
fulfill Your minimum Recording Commitment for that Contract Period and within
thirty (30) days after Company's receipt of that notice Company shall fail to
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period. If Company shall fail to so
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period, the Term shall expire as of the
end of that thirty (30) day period and Company shall have no obligations or
liabilities to You whatsoever in connection with Company's
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failure to permit You to fulfill Your Recording Commitment for that Contract
Period. Company shall, however, pay You promptly after the expiration of that
thirty (30) day period, as an advance recoupable from royalties hereunder or
under any other agreement between You and Company or Company's affiliates, an
amount equal to the minimum union scale payments which would have been required
to have been paid to the You for each Album of Your Recording Commitment for
that Contract Period that Company did not permit You to record, less any
Advances already paid to You in connection with such Album(s). Solely for the
purposes of the foregoing: (i) an Album shall be deemed to be comprised of ten
(10) Masters; and (ii) You shall be deemed to be comprised of one (1) member.
18. PRODUCER AND OTHER ROYALTIES.
18.01 You shall be solely responsible for and shall pay all royalties and
other Compensation which may be payable to any producers of the Masters or to
any others rendering services in connection with the recording of the Masters.
18.02 Notwithstanding the foregoing, Company may (but shall not be
obligated to) enter into an agreement with any producer (or other royalty
participant) of the Masters which provides for the payment by Company, rather
than You, of royalties or other compensation payable to that producer. In that
event (or in the event Company pays any such party pursuant to a letter of
direction) Company may deduct any amounts payable by Company to that producer
from any royalties or other sums payable by Company hereunder (other than
mechanical royalties). Furthermore, for the purposes of the recoupment of any
Advances or charges under this Agreement, the royalty rates contained in Article
9 with respect to those Masters shall be deemed reduced by the amount of the
applicable royalty rates with respect to Masters which are contained in
Company's agreement with any producer (or such party). Any Advances payable by
Company to a producer (or such party) which are not recouped by Company from
royalties payable to that producer may be recouped by Company from any royalties
or other sums payable by Company hereunder (other than mechanical royalties).
19. DEFINITIONS.
19.01 The term "Advance" shall mean prepayment of royalties. Company may
recoup Advances from royalties to be paid to You or on Your behalf pursuant to
this Agreement (other than mechanical royalties). Except as otherwise set forth
herein, Advances shall be non-refundable.
19.02 The term "Album" shall mean an audio only long-playing Phonograph
Record which is not an EP, Single, or Long-Play Single, and where the context
requires, Master
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Recordings sufficient to constitute a long-playing audio only Phonograph
Record.
19.03 The term "Audiovisual Record" shall mean a Record embodying an
Audiovisual Recording.
19.04 The term "Audiovisual Recording" shall mean every form of Master
Recording embodying visual images.
19.05 The term "Container Charge" shall mean the applicable percentage,
specified as follows, of the Gross Royalty Base applicable to the particular
* Record concerned: XXXXXXXXXXXXXXX percent for Singles packaged in color or
other special printed sleeves, and for Albums, EPs, and Long-Playing Singles
in disc form packaged in Company's standard singlefold jackets without any
special elements (such as, but not limited to, plastic, cardboard, or printed
* inner sleeves, inserts, or attachments); XXXXXXXXXXXXXXXXXX percent thereof
for all other Albums, EPs or Long-Playing Singles in disc form, and for all
* other sound-only Phonograph Records in disc form; and XXXXXXXXXXXXXXXXX
percent thereof for Audiovisual Records, all Phonograph Records in tape form,
such as reel-to-reel tapes, cartridges, cassettes (whether audio or video) and
* for all other recorded devices, but XXXXXXXXXXXXXXXXXX percent for compact
disc Records, digital audio tape, DCC, Mini-disc and all Records in New
Configurations.
19.06 The term "Contract Period" shall mean the Initial Period or any
Option Period of the Term (as they may be suspended or extended).
19.07 The term "Controlled Composition" shall mean that portion of a
Musical Composition or other Selection, written or composed by You alone or in
collaboration with others, or which is owned or controlled, in whole or in
part, directly or indirectly, by You or any person firm or corporation in
which You have a direct or indirect interest.
19.08 The terms "Conventional Phonograph Record", "Conventional discs and
tapes" and "Conventional Album" shall refer to discs or tapes of the quality
used for the majority of units of a particular Phonograph Record released. If,
at any particular time, Company has ceased to regularly manufacture plain,
black "vinyl" disc records and only manufactures tapes, compact discs and/or
"premium vinyl" (e.g., so-called "half-speed mastered") discs, then the terms
"Conventional discs" or "Conventional Album in disc form", and the like, shall
refer to conventional tapes.
19.09 Intentionally deleted.
19.10 The term "EP" shall mean an audio only Phonograph
* - Confidential portions omitted and filed separately with the Commission.
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Record embodying no fewer than five (5) different Musical Compositions and no
more than seven (7) different Musical Compositions.
19.11 The term "Long-Play Single" shall mean an audio only Phonograph
Record embodying no more than four (4) different Musical Compositions.
19.12 The term "Master Recording" shall mean every form of recording,
whether now known or unknown, embodying sound, or sound accompanied by visual
images, which may be used in the recording, production, or manufacture of
Phonograph Records.
19.13 The term "Masters" shall mean Master Recordings embodying the
performances of the You recorded hereunder.
19.14 (a) The term "Mid-Priced Record" shall mean a Phonograph Record
which bears a Gross Royalty Base at least twenty percent (20%) lower, but not
more than thirty-five percent (35%) lower than the Gross Royalty Base
applicable to Company's then-current highest prevailing "top-line" record of
comparable repertoire and in the same configuration (e.g., Album, Multiple
Record Set, Long Play Single, tape cassette, compact disc, etc.) released by
Company or Company's licensees in the territory concerned.
(b) The term "Budget Record" shall mean a Phonograph Record which
bears a Gross Royalty Base greater than thirty-five percent (35%) lower than
the Gross Royalty Base applicable to Company's then-current highest prevailing
"top line" record of comparable repertoire and in the same configuration
(e.g., Album, Multiple Record Set, Long Play Single, tape cassette, compact
disc, etc.) released by Company or Company's licensees in the territory
concerned.
19.15 The term "Multiple Album" shall mean an Album which contains two
(2) or more units of a particular configuration of Record, which is sold as a
single unit.
19.16 The terms "Musical Composition" and "Composition" shall mean a
single musical composition and, for the purposes of computing mechanical
royalties hereunder, shall include medleys and spoken word pieces. Different
versions of a Composition embodied on the same Phonograph Record will be
considered one (1) Composition (and one(1) Selection) for all purposes
hereunder.
19.17 The term "Net Receipts" shall mean an amount equal to the gross
monies received by Company in the United States from a person, firm or
corporation from the exploitation by that person, firm or corporation of
rights in Audiovisual Recordings (including any monies received by Company for
the use of Audiovisual Recordings in Audiovisual Records) less
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* XXXXXXXXXXXXXXXXXXX percent of those gross monies as a distribution fee, and
less all costs paid or incurred by Company in connection with the exploitation
of those rights and the collection of those monies (such costs not to exceed
ten percent (10%)).
19.18 The term "Net Royalty" or "Net Flat Fee" shall mean the gross
royalty or gross flat fee received by Company in the United States from a
person, firm or corporation from the exploitation by that person, firm or
corporation of rights in Masters (other than Audiovisual Recordings), less all
costs paid or incurred by Company in connection with the exploitation of those
rights and the collection of those monies, and less all royalties or other
sums payable by Company to any person, firm or corporation in connection with
the exploitation of those rights, except for royalties or other sums payable
to producers of those Masters, which shall be borne solely by You.
* 19.19 The term "Net Sales" shall mean XXXXXXXXXXXXXXXXX percent of gross
sales to wholesale and retail customers, less returns, credits and reserves
against anticipated returns and credits.
19.20 The term "Net Sales through Normal Retail Channels" shall refer to
Net Sales of Phonograph Records hereunder through Company's principal
distributor in the country in question for resale through record or other
retail stores for which a royalty is paid hereunder (and, without limiting the
generality of the foregoing, shall exclude sales or distributions referred to
in paragraph 9.03, 9.04 and 9.05 above);
19.21 The terms "Phonograph Record" and "Record" shall mean every form of
reproduction, whether now known or unknown, embodying sound alone, or sound
accompanied by visual images, distributed primarily for home use, school use,
jukebox use, and use in means of transportation, including, without
limitation, discs of any speed or size, reel-to-reel tapes, cartridges,
cassettes, or other pre-recorded tapes.
19.22 The term "New Configuration" shall mean any configuration of record
not specifically referred to herein.
19.23 The term "Royalty Base Price" shall mean the amount specified below
("Gross Royalty Base") applicable to the Phonograph Records concerned, less
all excise, purchase, value added, or similar taxes (included in the Royalty
Base Price) and less the applicable Container Charge.
(a) WITH RESPECT TO RECORDS SOLD FOR DISTRIBUTION IN THE UNITED
STATES: The Gross Royalty Base for an Audiovisual Record is the amount
computed under section (1) below. The Gross Royalty Base for a Record
reproducing sound only is the amount
* - Confidential portions omitted and filed separately with the Commission.
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* computed under section (1) or section (2) below, whichever is XXXXXXXX:
(1) Company's published subdistributor price applicable to the
price series of the unit concerned at the commencement of the accounting
* period in which the sale occurs, less XXXXXXXX percent; or
* (2) XXXXXXXX of the prevailing industry suggested retail list
price applicable to Records in the same configuration and the same wholesale
price category as the unit concerned. In this section (2):
(i) A "similar U.S. Record company" means one which does
not distribute its own Records directly to wholesalers and retailers on a
nation-wide basis throughout the United States but does so through a third
party distribution company.
(ii) The "wholesale price" of a Record distributed by
another similar U.S. record company means its published price corresponding
most closely in amount to a subdistributor price for a Record in the same
configuration published by Company.
(iii) The "wholesale price category" of a Record
distributed by Company includes: (A) that Record; and (B) Records in the same
configuration sold by other similar U.S. record companies whose wholesale
prices for those Records correspond most closely in amount to our published
subdistributor price for the Company-distributed Record concerned.
(iv) "Prevailing industry suggested retail list price"
means the average of the suggested retail list prices assigned to Records in
the wholesale price category concerned by the similar U.S. Record company(ies)
which publish suggested retail list prices or, if there are no such suggested
retail list prices, the prevailing retail equivalent prices generally accepted
in the record industry applicable to the Records in the wholesale price
category concerned.
Royalties will be calculated separately with respect to each price series
in which units of a particular Record release are sold during the semiannual
accounting period concerned. References to published prices in this section
refer to those in effect at the commencement of the accounting period
concerned.
(b) WITH RESPECT TO RECORDS (INCLUDING AUDIOVISUAL RECORDS) SOLD FOR
DISTRIBUTION OUTSIDE OF THE UNITED STATES AND CANADA: The Gross Royalty Base
* is XXXXXXXX of the following: XXXXXXXXX percent of Company's or Company's
licensee's published price to dealers ("p.p.d.") applicable to the price
series of the
* - Confidential portions omitted and filed separately with the Commission.
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unit concerned in the country of sale.
19.24 The term "Selection" shall mean a Musical Composition, poem, dramatic
work, comedy routine, or other verbal expression.
19.25 The term "Single" shall mean an audio-only seven (7") inch disc
Phonograph Record or its tape or other equivalent, embodying no more than two
(2) Compositions.
19.26 The term "Territory" shall mean the universe.
19.27 The term "other agreement between You and Company or Company's
affiliates" and like words shall mean any other agreement between You or any
entity furnishing Your services and Company or Company's affiliates which
relates to recordings embodying Your performances.
19.28 The term "Person" "person" or "Party" shall mean any individual,
corporation, partnership, association or other organized group of persons or the
legal successors or representatives of the foregoing.
20. INDEMNITY.
20.01 You hereby indemnify, save, and hold Company harmless from any and
all damages, liabilities, costs, losses and expenses (including legal costs and
reasonable attorneys' fees) arising out of or connected with any claim, demand
or action which is inconsistent with any of the warranties, representations,
covenants or agreements made by You in this Agreement, which has resulted in a
final adverse judgment or has been settled with Your written consent (it being
understood that Your consent shall be deemed given to any settlement not in
excess of Five Thousand ($5,000) Dollars). Notwithstanding the foregoing, if You
withhold consent to any settlement which Company is willing to make, the
foregoing indemnity shall apply and Company may settle such claim in its sole
discretion unless You promptly assume all costs of defending against such claim,
demand or action including, without limitation, court costs, reasonable
attorneys' fees, and direct expenses theretofore incurred by Company in
connection with said claim, demand or action; provided that in the event You
assume said costs, Company shall nonetheless have the right to settle such
claim, demand or action in its sole discretion without Your consent, provided
that, in such event, the foregoing indemnification shall not apply with respect
thereto. You shall reimburse Company, on demand, for any payment made by Company
at any time with respect to any damage, liability, cost, loss or expense to
which the foregoing indemnity applies. Pending the determination of any claim,
demand or action, Company may, at its election, withhold payment of any monies
otherwise payable to You hereunder in an
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amount which does not exceed Your potential liability to Company pursuant to
this paragraph; provided, however, that if You shall deliver to Company an
indemnity or surety bond, in a form and with a company acceptable to Company,
which in respect of such claim, demand or action shall cover the amount of such
claim, demand or action and Company's estimated attorneys' fees and legal costs
in connection therewith, then Company shall not withhold payment of monies
otherwise payable to You hereunder in respect of such claim, demand or action;
and provided further that Company shall liquidate any such withheld amounts if
within twelve (12) months no lawsuit has been commenced and active settlement
discussions are not then taking place. You may participate in the defense of any
claim referred to in this paragraph 20 through counsel of Your selection at Your
own expense, but Company will have the right at all times, in its sole
discretion, to retain or resume control of the conduct of the defense of such
claim.
21. ASSIGNMENT.
21.01 (a) Company shall have the right, at its election, to assign any of
Company's rights hereunder, in whole or in part, to any subsidiary, affiliated,
controlling or other related company, and to any Person, firm or corporation
owning or acquiring a substantial portion of Company's stock or assets, and any
rights so assigned may also be assigned by the assignee. Company shall also have
the right to assign any of its rights hereunder to any of its licensees in order
to effectuate the purposes hereof. You shall not have the right to assign any of
Your rights hereunder.
(b) You may assign Your rights under this Agreement to a corporation,
all of whose capital stock is owned solely by You, subject to the following
conditions:
(i) The assignee will be subject to Company's approval in
Company's sole discretion;
(ii) The assignment will not be effective until You have
delivered to Company an instrument satisfactory to Company in Company's sole
discretion effecting the assignment and the assignee's assumption of Your
obligations, and Company has executed that instrument to evidence Company's
approval of it;
(iii) No such assignment will relieve You of Your obligations
under this Agreement; and
(iv) If such an assignment takes place, any further transfer of
the rights assigned will be subject to the same conditions.
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22. NOTICES.
22.01 All notices to be given to You hereunder and all statements and
payments to be sent to You hereunder shall be addressed to You at the address
set forth on page 1 hereof or at such other address as You shall designate in
writing from time to time. All notices to be given to Company hereunder shall be
addressed to Company to the attention of the Chief Financial Officer at the
address set forth on page 1 hereof or at such other address as Company shall
designate in writing from time to time. All notices shall be in writing and
shall either be served by personal delivery, mail, or telegraph, all charges
prepaid. Except as otherwise provided herein, notices shall be deemed given when
personally delivered, mailed, or delivered to a telegraph office, all charges
prepaid, except that notices of change of address shall be effective only after
actual receipt. A copy of all notices to You shall be sent to Trip Aldredge,
1018 17th Avenue South, Number 3, Nashville, Tennessee 37212 provided, however,
the inadvertent failure to send any such copy shall neither impair the
effectiveness of the notice sent nor constitute a breach of this Agreement.
23. MISCELLANEOUS.
23.01 (a) This Agreement sets forth Your and Company's entire understanding
relating to its subject matter and all prior and contemporaneous understandings
relating to the same have been merged herein. No modification, amendment,
waiver, termination or discharge of this Agreement or any of its terms shall be
binding upon Company unless confirmed by a document signed by a duly authorized
officer of Company. No waiver by You or Company of any term of this Agreement or
of any default hereunder shall affect Your or Company's respective rights
thereafter to enforce that term or to exercise any right or remedy in the event
of any other default, whether or not similar.
(b) If any part of this Agreement is determined to be void, invalid,
inoperative or unenforceable by a court of competent jurisdiction or by any
other legally constituted body having jurisdiction to make such determination,
such decision shall not affect any other provisions hereof, and the remainder of
this Agreement shall be effective as though such void, invalid, inoperative or
unenforceable provision had not been contained herein.
23.02 (a) Company shall not be deemed to be in breach of any of Company's
obligations hereunder unless and until You shall have given Company specific
written notice by certified or registered mail, return receipt requested,
describing in detail the breach and Company shall have failed to cure that
breach within thirty (30) days after Company's receipt of that written notice.
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(b) Except with respect to: (i) Your obligation to timely Deliver any
Album hereunder, (ii) Your warranties hereunder (including, but not limited to
Your warranty of exclusivity to Company), (iii) where a specific cure provision
is provided herein, (iv) breaches incapable of being cured, or (v) an
application for injunctive relief, the failure by You to perform any of Your
obligations hereunder shall not be deemed a breach of this Agreement unless
Company gives You written notice of such failure to perform and such failure is
not corrected within thirty (30) days from the date You receive such notice.
23.03 Company's payment obligations under this Agreement are conditioned
upon Your full and faithful performance of the terms hereof.
23.04 Wherever Your approval or consent is required hereunder, that
approval or consent shall not be unreasonably withheld. Company may require You
to formally give or withhold approval or consent by giving You notice of
Company's request that You do so and by furnishing You with the information or
material in respect of which the approval or consent is sought. You shall give
Company written notice of Your approval or disapproval or of Your consent or
non-consent within five (5) days after Company's notice is sent and, in the
event of Your disapproval or non-consent, Your notice shall contain the specific
reasons therefor. Your failure to give Company notice as aforesaid shall be
deemed to be consent or approval, as the case may be, with respect to the matter
submitted.
23.05 Nothing herein contained shall constitute a partnership, joint
venture or other agency relationship between You and Company. Except as
otherwise expressly provided herein, You are performing Your obligations
hereunder as independent contractors. Neither party hereto shall hold itself out
contrary to the terms of this paragraph, and neither You nor Company shall
become liable for any representation, act or omission of the other contrary to
the provisions hereof. You do not have the right to execute any agreement or
incur any obligation for which Company may be liable or otherwise bound.
23.06 This Agreement shall not be deemed to give any right or remedy to any
third party whatsoever unless that right or remedy is specifically granted by
Company in writing to that third party.
23.07 The provisions of any applicable collective bargaining agreement
between Company and any labor union or guild which are required by the terms of
that agreement to be included in this Agreement shall be deemed incorporated
herein as if those provisions were expressly set forth in this Agreement.
23.08 Except as otherwise expressly provided herein, all
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rights and remedies herein or otherwise shall be cumulative and none of them
shall be in limitation of any other right or remedy.
23.09 (a) This Agreement shall be deemed to have been made in the State of
Tennessee and its validity, construction, breach, performance and operation
shall be governed by the law of the State of Tennessee applicable to contracts
made and to be performed in the State of Tennessee. The laws of the State of
Tennessee are of the essence of this Agreement.
(b) The parties hereto intend to and hereby confer exclusive
jurisdiction upon the courts of the State of Tennessee or of the United States
located in the State of Tennessee for any action, suit or proceeding relating to
this Agreement and each of the parties irrevocably consents to the jurisdiction
of each such court in respect of any such action, suit or proceeding. Each of
the parties irrevocably waives any objection that such party now has or
hereafter may have to the laying of venue of any such action, suit or proceeding
brought or maintained in any such court and further irrevocably waives any claim
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. To the extent permitted by applicable Law, any
judgment obtained in any such court may be enforced in any court in any other
jurisdiction anywhere in the world.
(c) Company hereby appoints Wayne Halper at his office located at
Imprint Records, Inc., 209 10th Avenue South, Nashville, Tennessee as Company's
authorized agent to accept and acknowledge on Company's behalf service of any
and all process that may be served in any such action, suit or proceeding.
Company may at any time upon notice to You appoint any other Person as its
authorized agent. If no other Person is so appointed, the Secretary of State of
the State of Tennessee will be deemed to be the authorized agent of Company.
(d) You hereby appoint Trip Aldredge, Esquire at his office located at
1018 17th Avenue South, Number 3, Nashville, Tennessee 37212 or his office at
such other address in Tennessee, as You hereafter furnish to Company, as Your
authorized agent to accept and acknowledge on Your behalf service of any and all
process that may be served in any such action, suit or proceeding. You may at
any time upon notice to Company appoint any other Person as its authorized
agent. If no other Person is so appointed, the Secretary of State of the State
of Tennessee will be deemed to be the authorized agent of You.
(e) Any and all service of process and any other notice in any such
action, suit or proceeding shall be effective against any party if given
personally or by registered mail or certified mail, return receipt requested, or
by any other means of mail that requires a signed receipt, postage prepaid.
Nothing
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herein contained shall be deemed to affect the right of a party to serve
process in any manner permitted by law.
23.10 This Agreement shall not become effective until signed by You and
countersigned by a duly authorized officer of Company.
23.11 (a) The paragraph headings herein are solely for the purpose of
convenience and shall be disregarded completely in the interpretation of this
Agreement or any of its terms.
(b) No deletion, addition, revision, change or other alteration in
drafts of this Agreement prepared prior to the execution of this Agreement shall
be used for the purpose of construction or interpretation of any term, provision
or language of this Agreement.
23.12 Company may at any time during the Term obtain, at Company's cost,
insurance on the life of You. Company or its designees shall be the sole
beneficiary of that insurance and neither You nor any person, firm or
corporation claiming rights through or from You shall have any rights in that
insurance. You shall submit to such physical examinations and to complete and
deliver such forms as Company may reasonably require and otherwise to cooperate
with Company fully for the purpose of enabling Company to secure that insurance.
You shall not be deemed in breach of this Agreement by reason of Your failure of
said physical examination.
23.13 From time to time at Company's reasonable request, You shall appear
for photography, artwork and similar sessions under the direction of Company or
Company's duly authorized agent, appear for interviews with such representatives
of newspapers, magazines and other publications, and of publicity and public
relations firms as Company may arrange, and confer and consult with Company
regarding Your performances hereunder and other matters which may concern the
parties hereto. You shall also, if reasonably requested by Company, be available
for personal appearances so long as such appearances do not unreasonably
interfere with Your professional obligations as a songwriter (including
performances) on radio, television, record stores and elsewhere, and to record
taped interviews, spot announcements, trailers and electrical transcriptions,
all for the purpose of advertising, promoting, publicizing and exploiting
records released or to be released hereunder and for other general public
relations and promotional purposes related to the record business of Company or
Company's subsidiary and related companies provided that Company has a valid
business purpose for asking You to engage in such activities. You shall not be
entitled to any compensation from Company for such services, other than minimum
union scale to You if such payment is required by applicable agreements.
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IN WITNESS WHEREOF, the parties hereto have this day signed in the spaces
provided below.
IMPRINT RECORDS, INC.
By: /s/ Al Anderson By: /s/ Roy W. Wunsch
- ---------------------------------- -------------------------------------
Al Anderson Roy Wunsch, Chief Executive Officer
###-##-#### AN AUTHORIZED SIGNATORY
Social Security Number
41
Exhibit 10.36
-------------
Contract No.: IMPREC 004
Confidential portions omitted and filed separately with the Commission. Deleted
text (represented by "XXXX" in the text and an asterisk in the margin) indicates
such omissions.
AGREEMENT made as of this 30th of March, 1996, by and between Imprint
Records, Inc. 209 10th Avenue South, Suite 500, Nashville, Tennessee 37203
(hereinafter "Company"), and Jeff Wood, 4487 Post Place, #151, Nashville,
Tennessee (hereinafter "You" or "Artist").
1. SERVICES.
1.01 During the term of this Agreement (the "Term") You will render Your
exclusive services as a performing artist for the purpose of making Master
Recordings for Company, You will cause those Master Recordings to be produced,
and You will Deliver those Master Recordings to Company, as provided in this
Agreement.
1.02 Your obligations will include furnishing the services of the producers
of those aster Recordings and all other third parties rendering services in
connection with those Master Recordings, subject to the terms of this Agreement,
and You will be solely responsible for engaging and paying them. Without
limitation of the foregoing, Company will not unreasonably refuse to account and
pay advances and royalties, if any, to a producer, approved in advance by
Company, so long as you have forwarded an executed letter of direction in
Company's standard form (together with an executed copy of Company's standard
producer's declaration), with no such producer being in a "pay" position prior
to Company having recouped the applicable Recording Costs for the Album project
concerned at the so-called "net artist rate" and provided further, that Company
has pre-approved in writing the material terms and conditions of such producer's
engagement (including, without limitation, the producer's advance and royalty
rate).
2. TERM.
2.01 The Term shall consist of an Initial Period and of the Option Periods
(defined below) for which Company shall have exercised the options hereafter
provided. The Initial Period and each Option Period are each hereafter sometimes
referred to as a "Contract Period". The Initial Period shall commence on the
date hereof and shall continue until thirty days after the Delivery to Company
of Your Recording Commitment for the Initial Period.
2.02 You grant Company seven (7) separate options to extend that Term for
additional Contract Periods ("Option Periods"). Each Option Period shall begin
immediately after the end of the Current Contract Period and shall continue
until the earlier of the dates referred to in paragraphs (a) and (b) immediately
below:
(a) the date fifteen (15) months after the Delivery to Company of the
Committed Album made in fulfillment of Your
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Recording Commitment for the Contract Period concerned under Article 3 below; or
(b) the date twelve (12) months after the initial commercial release
in the United States of the Album required to be delivered in fulfillment of
Your Recording Commitment for the Contract Period concerned; but will not end
earlier than twelve (12) months after the date of the commencement of the
Contract Period concerned.
Company may exercise each of those options by sending You a written notice not
later than the expiration date of the Contract Period which is then in effect
(the "Current Contract Period"). If Company exercises such an option, the Option
Period concerned will begin immediately after the end of the Current Contract
Period and shall continue until the earlier of the dates referred to in
paragraphs 2.02 (a) and (b) above.
3. RECORDING COMMITMENT.
3.01 Your Recording Commitment hereunder is as follows. During each Option
Period (as distinguished from the Initial Period), You shall record for and You
shall deliver to Company one (1) Album. The Albums delivered hereunder in
fulfillment of Your Recording Commitment are sometimes referred to collectively
herein as the "Committed Albums" and individually as a "Committed Album". You
shall deliver to Company the Album constituting Your Recording Commitment for a
Contract Period (other than the Initial Period) no later than one hundred twenty
(120) days after the commencement of that Contract Period. During the Initial
Period, You shall record for and You shall deliver to Company no less than four
(4) "master demos", as that term is generally understood in the recording
industry. You shall deliver to Company the "master demos" constituting Your
Recording Commitment for the Initial Period no later than one hundred twenty
(120) days following the full execution of this Agreement and the budget for
such "master demos" shall be approved by Company prior to the commencement of
recording. Notwithstanding anything to the contrary contained herein, whenever
the word Master Recordings is used in this Agreement, they shall apply to the
master demos that You are required to record and deliver in the Initial Period.
Furthermore, Company agrees that the "all-in" budget for the "master demos" to
be recorded and delivered during the Initial Period shall be no less than forty
thousand ($40,000.00) dollars.
4. RECORDING PROCEDURES.
4.01 Company and You shall mutually approve all recording personnel
(including producers), the Musical Compositions or other Selections (including
medleys), the studios, the recording dates and a detailed recording budget
(collectively, the Recording
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Elements"). Notwithstanding the foregoing, a studio will be deemed approved by
Company if Company determines that it is a first-class recording studio and that
its use would neither cause labor difficulties for any other reason nor cause
expenditures inconsistent with the approved Recording Budget (as defined
hereinbelow) or delays inconsistent with the anticipated delivery or release
schedule. Company may reject any request to record a Committed Album within six
(6) months of the Delivery of the prior Album. You shall neither commence
recording nor incur costs unless Company has approved in writing each Recording
Element and the budget. If Company disapproves any budget item or Recording
Element, Company's decision (including, at Company's election, Company's
designation of one (1) or more Recording Elements) shall be final subject to
consultation with You. Company agrees that the recording budget for the Album to
be recorded during the First Option Period, if any, shall not be less than one
hundred thirty five thousand dollars ($135,000.00) and that the recording budget
for the Album to be recorded during the Second Option Period, if any, shall not
be less than one hundred fifty thousand dollars ($150,000.00).
4.02 (a) You shall notify the appropriate Local of the American Federation
of Musicians in advance of each recording session.
(b) You will comply with the following procedures in connection with
the requirements of the U.S. Immigration Law:
(1) Before each recording session:
(i) You will require each background instrumentalist,
background vocalist, and other person to be employed in connection with the
session to complete and sign the EMPLOYEE INFORMATION AND VERIFICATION
("employee") section of a U.S. Immigration and Naturalization Service Employment
Eligibility Certificate (Form I-9), unless You have already obtained such a
Certificate from the person concerned within the past three (3) years;
(ii) You will complete and sign the EMPLOYER REVIEW AND
VERIFICATION ("employer") section of each such Certificate; and
(iii) You will attach copies of the documents establishing
identity and employment eligibility which You examine in accordance with the
instructions in the employer section. If any such person is engaged during a
session You will comply with subsections (i) through (iii) above, with respect
to that person, before (s)he renders any services.
(2) You will not permit any such person who fails
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to complete the employee section, or to furnish You with the required
documentation, to render any services in connection with Recordings to be made
under this agreement.
(3) You will deliver those Certificates and documents to Company
promptly, and in no event later than the Delivery of the Recordings concerned.
(4) You will comply with any revised or additional verification
and documentation requirements of which Company advises You in the future.
(c) As and when required by Company, You shall allow Company's
representatives to attend any or all recording sessions hereunder.
(d) You shall timely supply Company with all of the information
Company needs in order: (1) to make payments due in connection with such
Recordings; (2) to comply with any other obligations Company may have in
connection with the making of such Master Recordings; and (3) to prepare to
release Phonograph Records derived from such Master Recordings. Without limiting
the generality of clause (2) of the preceding sentence:
(1) You shall furnish Company with all information Company
requires to comply with its obligations under Company's union agreements,
including, without limitation, the following:
(i) If a session is held to record new tracks intended to be
mixed with existing tracks (and if such information is requested by the American
Federation of Musicians), the dates and places of the prior sessions at which
such existing tracks were made, and the AFM Phonograph Recording Contract (Form
"B") number(s) covering such sessions;
(ii) Each change of title of any composition listed in an
AFM Phonograph Recording Contract (Form "B"); and
(iii) A listing of all the musical selections contained in
Recordings Delivered to Company hereunder; and
(2) You will furnish Company with all of the immigration control
documentation required by subparagraph 4.01(b) above, at the same time as the
AFM or AFTRA session reports, tax withholding forms, and other documentation
required by us in order to make the payments to the session musicians and other
employees concerned, if any.
(e) (i) All Master Recordings shall be recorded under Company's
current Phonograph Record Labor Contract with the AFM;
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all musicians who render services in connection with the recording of such
Master Recordings (including instrumentalists, if any) will be paid by Company,
on Your behalf, the scale set forth in the said Labor Contract; and Company, on
Your behalf, shall pay the required contributions to the Pension Welfare Fund.
(ii) All AFTRA members whose performances are embodied in the
Master Recordings will be paid by Company, on Your behalf, the rates applicable
under the current AFTRA Code of Fair Practices for Phonograph Recordings.
Company shall, on Your behalf, if necessary, also pay to the AFTRA Pension and
Welfare Fund any contribution required to be made under the AFTRA Code based on
compensation to other performers whose performances are embodied on the
applicable Master Recordings recorded hereunder.
(iii) The foregoing representations and warranties are included
for the benefit, respectively, of the AFM, AFTRA, and the AFM and AFTRA members
whose performances are embodied in the applicable Master Recordings, and for the
benefit of Company, and may be enforced by AFM and/or AFTRA or their respective
designees, as the case may be, and by Company.
(iv) You shall furnish or shall cause the applicable Producer to
furnish Company with copies of all union contracts and/or union session reports
so that all payments may be made by Company, on Your behalf, in a timely fashion
to the proper parties thereunder; and if You fail to do so with the result that
Company is required to pay any penalty sum for making a late payment under the
applicable union agreements, such payments shall be a direct debt from You to
Company which, in addition to any other remedy Company may have, Company may
recover from any monies otherwise payable to You.
4.03 You shall deliver the Masters to Company, at the offices of Company
and to the attention of the Vice President of A&R promptly after their
completion. All original session tapes and any derivatives/reproductions thereof
shall be delivered to Company concurrently (or, if Company elects, maintained at
a location designated by Company, in its name and subject to its control) and at
Company's sole expense. Each Master shall be subject to Company's approval as
for the manufacture and sale of Phonograph Records. Upon Company's request, You
shall re-record any Musical Composition or other Selection until such delivery
standard is met. You shall deliver to Company fully mixed, leadered, edited,
sequenced, equalized and unequalized Master Recordings (including a final
two-track equalized tape copy), satisfactory to Company for the manufacture and
sale of Phonograph Records, and all original and duplicate Master Recordings of
the material recorded, together with the multi-track tape and three (3) safety
copies thereof; all materials for use in the packaging and marketing of the
Records (including information for "label copy" and liner notes, such as
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title, recording dates, timing, publisher, composer, lyricist, producer and
performer of each musical composition embodied on the Master Recordings); all
third party clearances and consents (including mechanical licenses) (it being
understood that: (A) as between Company and you, Company shall be responsible
for preparing the actual paperwork in connection therewith; and (B)
notwithstanding anything to the contrary contained in this paragraph 4.03, You
shall obtain and deliver all first-use licenses and licenses for any so-called
"samples" for non-Controlled Compositions recorded hereunder). No Master shall
be deemed "delivered" or "Delivered" to Company until You have fully complied
with this paragraph. Company's election to pay You a Delivery payment or to
release a Record derived from a Master shall not be deemed an acknowledgment
that "Delivery" thereof was properly made; accordingly, Company shall be deemed
to have waived neither its right to require complete performance thereafter nor
its remedies for Your failure to perform.
4.04 Each Master shall embody the Artist's performance as the sole featured
artist of a single Musical Composition previously unrecorded by the Artist and
shall be recorded in its entirety in a recording studio. No Masters shall be
recorded in whole or in part at live concerts or other live performances unless
an authorized officer of Company agrees to the contrary in writing. Each
Committed Album shall embody no fewer than thirty five (35) minutes in playing
time and containing no fewer than ten (10) Musical Compositions unless Company
otherwise agrees to the contrary in writing. You shall not record or deliver
hereunder, nor shall Company be obligated to accept, Masters constituting a
Multiple Album. However, if You shall do so and Company shall accept those
Masters hereunder, then, at Company's election, for the purpose of calculating
the number of Masters recorded and delivered hereunder, those Masters shall be
deemed to be only one (1) Album. Masters delivered hereunder shall not contain
selections designed to appeal to specialized or limited markets including, but
not limited to gospel, Christmas and/or children's music, unless otherwise
approved prior the recording thereof by Company.
4.05 You further agree to irrevocably direct in writing the person who has
possession of any and all tapes of masters or digital masters recorded hereunder
that all such tapes and masters are Company's property and that such person
shall be obligated to deliver such tapes and masters
to Company upon its written request.
4.06 If You shall for any reason whatsoever except for a verified medical
reason (excluding any illness related to drugs, alcohol or any self-induced or
personally exacerbated cause, and otherwise subject to the terms hereof,
including without limitation paragraph 17) materially and/or unreasonably delay
the commencement of or be unavailable for any recording sessions for the
Masters, You shall, upon Company's demand, pay Company an amount equal to
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the expenses or charges paid or incurred by Company by reason thereof. Company
may, without limiting Company's other rights and remedies, deduct that amount
from any monies payable (excluding mechanical royalties) by Company hereunder or
under any other agreement between You and Company or Company's affiliates.
4.07 Company may, at its election, discontinue any recording sessions for
the Masters if in Company's judgment the Recording Costs incurred or to be
incurred will exceed the approved Recording Budget or if the Masters being
produced will not be satisfactory.
5. RECORDING COSTS.
5.01 Company shall pay the Recording Costs of the Masters recorded at
recording sessions conducted in accordance with the terms hereof in an amount
not in excess of the Recording Budget approved by Company in writing. If the
Recording Costs of any Masters shall exceed the Recording Budget approved by
Company solely and directly due to Your acts or omissions, You shall be solely
responsible for and shall promptly pay the excess. If, however, Company shall
pay the excess, You shall, upon Company's demand, pay to Company the amount
thereof and Company may, without limiting Company's other rights and remedies,
deduct that amount from any monies (other than mechanical royalties) payable by
Company hereunder or under any other agreement between You and Company or
Company's affiliates. You shall be solely responsible for and shall pay any
payments to any individuals rendering services in connection with the recording
of the Masters which exceed union scale unless the excess and the recipient
thereof shall have been specified in the Recording Budget approved by Company.
You shall also be solely responsible for and shall pay any penalties incurred
for late payments caused by Your delay in submitting union contracts forms,
report forms, or invoices or other documents. If, however, Company shall pay any
excess not approved by Company or any penalties, You shall, upon Company's
demand, pay Company the amount thereof, and Company may, without limiting
Company's other rights and remedies, deduct that amount from any monies payable
(other than mechanical royalties) by Company hereunder or under any other
agreement between You and Company or Company's affiliates.
5.02 Recording Costs shall mean and include all union scale payments
(including "excess" scale payments) made to the Artist, all payments made by
Company to any other individuals rendering services in connection with the
recording of the Masters, all other payments which are made by Company pursuant
to any applicable law or regulation or the provisions of any collective
bargaining agreement between Company and any union or guild, all amounts paid or
incurred for studio or hall rentals, tape, engineering, editing, instrument
rentals and cartage, mastering, mixing, re-mixing, "sweetening", transportation
and accommodations, immigration
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clearances, trademark and service mark searches and clearances, "sample"
clearances any so-called "per diems" for any individuals (including the Artist)
rendering services in connection with recording of the Masters, together with
all other amounts paid or incurred by Company in connection with the recording
of the Masters. Recording Costs shall be recoupable from royalties (other than
mechanical royalties) payable by Company hereunder or under any other agreement
between You and Company or Company's affiliates. The costs of metal parts other
than lacquer, copper or equivalent masters, and payments to the AFM Special
Payments Fund and the Music Performance Trust Fund based upon record sales
(so-called "per-record royalties"), will not be recoupable from Your royalties
or reimbursable by You. Notwithstanding the foregoing, You agree that the
Advances hereunder include the prepayment of session union scale as provided in
the applicable union codes, and You agree to complete any documentation required
by the applicable union to implement this sentence. Notwithstanding anything to
the contrary contained herein, after the initial release of any Master,
additional Recording Costs with respect to each such Master incurred by Company
and which may be recoupable hereunder will not exceed five thousand dollars
($5,000.00) per Master without the express prior written consent of Artist.
Notwithstanding the foregoing, You agree that the Advances hereunder include the
prepayment of session union scale as provided in the applicable union codes, and
You agree to complete any documentation required by the applicable union to
implement this sentence.
6. RIGHTS.
6.01 Subject to the terms, conditions and restrictions expressly set forth
in this Agreement, all Master Recordings (as distinguished from the underlying
musical composition) recorded during the Term which embody the performances of
the Artist, from the inception of the recording thereof, shall, for purposes of
copyright law, be deemed "works-made-for-hire" for Company by You, the Artist,
and all other persons rendering services in connection with those Master
Recordings, as Company's "employees-for-hire". Those Master Recordings (as
distinguished from the underlying musical composition), from the inception of
the recording thereof, and all Phonograph Records and other reproductions made
therefrom, together with the performances embodied therein and all copyrights
therein and thereto throughout the Territory, and all renewals and extensions
thereof, shall be entirely Company's property, free of any claims whatsoever by
You or any other person, firm, or corporation. Company shall, accordingly, have
the exclusive right to obtain registration of copyright (and all renewals and
extensions) in those Master Recordings (as distinguished from the underlying
musical composition), in Company's name, as the owner and author thereof. If
Company shall be deemed not to be the author of those Master Recordings or those
Master Recordings are deemed not to be "works-made-for-hire", this agreement
shall
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<PAGE>
constitute an irrevocable transfer to Company of ownership of copyright (and all
renewals and extensions) in those Master Recordings (as distinguished from the
underlying musical composition). You shall, upon Company's request, cause to be
executed and delivered to Company transfers of ownership of copyright (and all
renewals and extensions) in those Master Recordings (as distinguished from the
underlying musical composition) and any other documents as Company may deem
necessary or appropriate to vest in Company the rights granted to Company in
this Agreement, and You hereby irrevocably appoint Company Your attorney-in-fact
for the purpose of executing those transfers of ownership and other documents in
Your names. Company shall give You seven (7) business days notice before signing
any document in Your name, provided Company may dispense with that waiting
period when necessary, in Company's judgment, to protect or enforce Company's
rights. As a non-material obligation, Company shall provide You with copies of
documents signed by Company in Your or Artist's name. Without limiting the
generality of the foregoing, Company and any person, firm, or corporation
designated by Company shall have the exclusive, perpetual and worldwide right to
manufacture, sell, distribute and advertise Phonograph Records embodying those
Master Recordings under any trademarks, trade names or labels, and to lease,
license, convey or otherwise use or dispose of those Master Recordings by any
method now or hereafter known in any field of use and to perform publicly
Phonograph Records and other reproductions embodying those Master Recordings,
all upon such terms as Company may approve, or Company may refrain from doing
any or all of the foregoing.
6A.01 The provisions of this Article 6A shall only apply provided You have
fully complied with all Your material obligations under this Agreement.
Company's inadvertent failure to comply with any provision of this Article 6A
shall not be a breach of this Agreement.
6A.02 Company will not, without Your consent, commercially release
"outtakes" on Phonograph Records or otherwise exploit such outtakes in the
United States during the Term hereof. "Outtakes" shall mean preliminary,
unfinished Master Recordings made under this Agreement.
6A.03 Company shall consult with You in connection with Company's selection
of the so-called "A" sides and "B" sides of Singles released in the United
States; provided that Company's inadvertent failure to do so shall not be deemed
a breach hereof and, furthermore, provided that in the event of a disagreement,
Company's decision will be final.
6A.04 During the Term, Company will not sell Records derived from Master
Recordings delivered in fulfillment of Your Recording Commitment as "cut-outs"
in the United States until the earlier of
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(i) twelve (12) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.05 In the event Company elects to sell Records hereunder as cut-outs
following the period twelve (12) months from the date of initial United States
release of such Records, Company shall so notify You, and shall offer You the
opportunity to purchase such inventory (provided that no failure by Company to
give such notice and/or offer said opportunity to You shall constitute a breach
hereof) at a price equal to the price at which Company elected to sell such
Records to third parties. You may notify Company of Your desire to purchase
Company's inventory in the United States of such Records, provided that You
tender payment-in-full therefor within five (5) business days following the date
of Your notice. You shall be deemed to have rejected such opportunity if You do
not respond in writing within five (5) business days following Company's offer
to You of the opportunity to purchase such Records.
6A.06 During the Term, Company will not, without Your consent, sell any
Committed Album as a Budget Record in the United States until the earlier of (i)
twelve (12) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.07 During the Term, Company will not, without Your consent, sell any
Committed Album as a Mid-Priced Record in the United States until the earlier of
(i) nine (9) months after the initial release of the Album concerned as a
"top-line" Record in the United States or (ii) three (3) months after the
Committed Album no longer appears in any Billboard Album Chart; however, if
Company sells any Records in contravention of the foregoing restriction, Your
sole remedy shall be that You shall be entitled to the otherwise applicable
royalty rate hereunder on all such sales during the period of such restriction.
6A.08 (a) (i) If, during the Term, Company releases in the United States a
"Greatest Hits" or "Best Of" type Album consisting of Master Recordings recorded
hereunder, Company shall consult with You regarding the selections to be
included on such "Greatest Hits" or "Best Of" type Album.
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(ii) With respect to any "Greatest Hits" or "Best Of" type
Album to be released in the United States during the Term, if Company shall so
request, You shall Deliver to Company within ninety (90) days following such
request up to two (2) sides (the "New Side(s)"), consisting of newly recorded
material, for (without limitation) inclusion in said "Greatest Hits" or "Best
Of" type Album.
(b) Provided You are in compliance with Your material obligations
hereunder, if Company releases any such "Greatest Hits" or "Best Of" type
Album during the Term hereof in the United States in accordance with
subparagraph 6A.08 (a) above, then Company shall pay to You an Advance (the
"Greatest Hits Advance") equal to the amount by which
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX exceeds the unrecouped
balance of Your royalty account hereunder, provided, however, in no event
shall the Greatest Hits Advance be less than the actual Recording Costs
approved by Company in connection with the New Sides, if any plus
* XXXXXXXXXXXXXXXXXXXXXXXXX. Any Greatest Hits Advance payable to You pursuant
to this paragraph 6A.08 (b) shall be made as follows:
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX upon the delivery of the New Sides,
if any, and the balance promptly after the initial United States release of
the "Greatest Hits" or "Best Of" type Album concerned. Notwithstanding the
foregoing, if Company requests the New Sides and You fail or refuse to deliver
the New Sides, then no Greatest Hits Advance shall be payable to You in
connection with Company's release of any such "Greatest Hits" or "Best Of"
type Album.
(c) Company shall pay any and all costs (the "New Side(s) Costs")
incurred in connection with such "Greatest Hits" or "Best Of" type Album and
the same shall be deducted from the Greatest Hits Advance otherwise payable to
You hereunder. The applicable Greatest Hits Advance payable and the New
Side(s) Costs shall be charged against and recoupable at any time from any and
all royalties (other than mechanical royalties) accruing to Your credit
hereunder. Neither any "Greatest Hits" or "Best Of" type Album(s) nor any New
Side(s) shall be deemed part of Your Recording Commitment hereunder.
(d) The royalty rate applicable to a given Master Recording embodied
on a "Greatest Hits" or "Best Of" type Album shall be the highest royalty rate
actually attained hereunder for the Contract Period in which such Master
Recording was recorded. The royalty rate applicable to the New Sides shall be
equal to the highest royalty rate attributable to any of the other Master
Recordings embodied on such "Greatest Hits" or "Best of" type Album.
6A.09 During the Term, with respect to audio Records manufactured for
sale in the United States, Company shall not
* - Confidential portions omitted and filed separately with the Commission.
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during any one (1) year without Your consent, such consent not to be
unreasonably withheld, initially couple more than three (3) Masters made
hereunder with recordings not embodying Artist's performances. The immediately
preceding sentence shall only apply provided that Your royalty account hereunder
is in a "recouped position" (as such term is commonly understood in the
recording industry) as of the semi-annual accounting period immediately prior to
the semi-annual accounting period when Company initially couples a Master made
hereunder with recordings not embodying Artist's performances. Notwithstanding
the first sentence of this paragraph 6A.09, no such consent shall be required
for "sampler" Records.
6A.10(a) Provided you have fulfilled all Your material obligations under
this Agreement, Company will commercially release each Album recorded in
fulfillment of Your Recording Commitment in the United States within one hundred
thirty (130) days after the delivery of the masters concerned. If Company fails
to do so You may notify Company, within thirty (30) days after the end of the
one hundred eighty (180) day period concerned, that You intend to terminate the
Term of this Agreement unless Company releases the Album within sixty (60) days
after Company's receipt of Your notice (the "cure period"). If Company fails to
commercially release the Album in the United States before the end of the cure
period You may terminate the Term of this Agreement by giving Company notice
within thirty (30) days after the end of the cure period. On receipt by Company
of Your termination notice the Term of this Agreement will end and all parties
will be deemed to have fulfilled all of their obligations under it except those
obligations which survive the end of the Term (e.g., warranties, re-recording
restrictions and obligation to pay royalties). Your only remedy for failure by
Company to release an Album will be termination in accordance with this
paragraph. If You fail to give Company either of those notices within the period
specified, Your right to terminate will lapse.
(b) The running of the one hundred thirty (130) day and the sixty (60)
day cure period referred to in paragraph 6A.10(a) will be suspended (and the
expiration date of each of those periods will be postponed) for the period of
any suspension of the running of the Term of this Agreement under paragraph
17.01. If any such one hundred thirty (130) day or sixty (60) day cure period
would otherwise expire on a date between October 15th and the next February 16th
its running will be suspended for the duration of the period and between October
15th and February 16th and its expiration date will be postponed by the same
amount of time (i.e., one hundred twenty-four (124) days).
7. NAME AND LIKENESS.
7.01 (a) (1) Company and any person, firm or corporation designated by
Company shall have the perpetual right throughout the
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Territory to use and to permit others to use the Artist's name (both legal and
professional, and whether presently or hereafter used by the Artist), likeness,
other identification and biographical material concerning the Artist, and You
shall assist Company in securing such rights with respect to the name and
likeness of any producer or other person rendering services in connection with
Master Recordings recorded by the Artist during the Term for purposes of trade
and advertising. Company shall have the further right to refer to the Artist
during the Term as Company's exclusive recording artist and You shall in all
Your activities in the entertainment field use reasonable efforts to cause the
Artist to be billed and advertised during the Term as Company's exclusive
recording artist. The rights granted to Company pursuant to this paragraph with
respect to the Artist's name, likeness, other identification and biographical
material concerning the Artist shall be exclusive during the Term and
nonexclusive thereafter. Accordingly, but without limiting the generality of the
foregoing, neither You nor the Artist shall authorize or permit any person,
firm, or corporation other than Company to use during the Term the Artist's
legal or professional name or the Artist's likeness in connection with the
advertising or sale of Phonograph Records.
(2) Company will make available to You for Your approval any
pictures of the Artist or biographical material about the Artist which Company
proposes to use for packaging, advertising or publicity in the United States
during the Term of this Agreement. Company will not use any such material which
You disapprove in writing within five (5) business days from the time such
materials are made available to You, provided You furnish substitute material,
satisfactory to Company in its sole and reasonable discretion, in time for use
within Company's production and release schedules. In any event, Company shall
not be required to incur expenses beyond those customary for one (1) photograph
shooting for each Album hereunder. This subparagraph will not apply to any
material previously approved by You or used by Company. No inadvertent failure
to comply with this subparagraph will constitute a breach of this Agreement, and
You will not be entitled to injunctive relief to restrain the continuing use of
any material used in contravention of this subparagraph. You shall have the
right to submit photographs, likenesses and biographical material of Artist and
Your submission of same shall constitute Your approval thereof.
(b) You shall not render any services or authorize or permit Your name
or likeness or any biographical material concerning You or the Artist to be used
in any manner by any person, firm or corporation in the advertising, promoting
or marketing of blank magnetic recording tape or any other product or device
primarily intended for home use, whether now known or hereafter developed, which
may be used for the fixation of sound alone or sound together with visual
images.
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7.02 It is hereby expressly agreed that, as between You, Artist and
Company, Company shall exclusively own and control all materials comprising the
artwork (including, without limitation, art, photographs, graphic designs, etc.)
and other items created or used in connection with the exploitation of
Phonograph Records hereunder (the "Art Materials"), including, without
limitation, all copyrights and the right to secure copyright throughout the
world and in perpetuity. You hereby grant to Company the perpetual, exclusive,
and worldwide right to use and/or sublicense others to use, Your name, logo, and
likeness, and, to the extent that You are able to assist Company in obtaining
same, the names, logos and likenesses of all other persons embodied in the Art
Materials, for the manufacture, sale and distribution of merchandise in non-Tour
situations ("Merchandising Uses"), including, without limitation, in connection
with t-shirts and other clothing, posters, stickers and novelties.
Notwithstanding anything to the contrary contained herein, Company agrees to
obtain Your approval (not to be unreasonably withheld) each time on a
merchandise-by-merchandise basis prior to engaging in any such Merchandising
Uses and, furthermore, agrees to use its reasonable efforts not to engage in any
exactly similar Merchandising Uses which actually conflict with the then-current
merchandising programs taking place by You or a third party authorized by You.
Furthermore, Company agrees to pay to You fifty percent (50%) of its net
receipts (as that term is currently understood in the merchandising industry) in
connection with the Merchandising Uses specifically referred to in this
paragraph 7.02, which payment will not be cross-collateralized against any other
account of Yours on the books of Company.
7.02.1 Notwithstanding the foregoing, in the event that neither Company nor
its merchandising designee has exploited the Art Materials or any other
materials for Merchandising Uses and has no current arrangement or anticipated
arrangement to do so, if You receive a bonafide third party offer with respect
to the commercial exploitation of Artist's names, logos and/or likenesses in
connection with the manufacture, sale and distribution of merchandise other than
Phonograph Records ("Merchandising Uses"), including, without limitation, in
connection with T-shirts and/or other clothing, posters, stickers and novelties,
then the following will apply:
(a) You agree that neither You nor any person or entity affiliated
with You, directly or indirectly, will enter into any agreement with any third
party with respect to such commercial exploitation unless You first:
(i) notify Company in writing ("Your Notice") of the proposed
agreement with such third party;
(ii) furnish Company with complete copies of all the instruments
constituting the proposed agreement (the "Outside
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Proposal"); and
(iii) offer to enter into an agreement with Company on the same
terms and conditions as contained in the Outside Proposal.
(b) If Company does not accept Your offer within five (5) business
days after receipt of Your Notice ("Offer Period") You may then enter into the
agreement set forth in the Outside Proposal provided that agreement is
consummated within forty-five (45) business days after the end of the Offer
Period upon the same terms and conditions and in the same form as set forth in
the Outside Proposal. If that agreement is not so consummated within the
forty-five (45) business day period set forth above, the right of preemption
granted to Company in this paragraph 7.02.1 will be revived. Artist may not
enter into any agreement for said "Merchandising Use" (i.e., non-tour situation)
for a one year period following the expiration of the forty-five (45) day
business period.
(d) No failure by Company to accept an Outside Proposal will be deemed
to waive or otherwise affect any of Company's rights. Without limiting the
generality of the preceding sentence, Company will not be deemed bound by any
proposed waiver, consent, or other agreement required or contemplated to be made
by Company by an Outside Proposal which Company does not preempt.
8. ADVANCES.
8.01 All monies paid to You or on Your behalf or to or on behalf of any
person, firm or corporation representing You, other than royalties payable
pursuant to this Agreement, shall constitute Advances hereunder. Each payment
made by Company to anyone else on behalf of You or to or on behalf of any
person, firm or corporation representing You will also constitute an Advance if
it is made under this Agreement, if it is made with the consent of You, if it is
required by law, or if it is made by Company to satisfy an obligation incurred
by You or the Artist in connection with the subject matter of this Agreement.
8.02 (a) Conditioned upon Your full performance of all Your obligations
hereunder, Company shall pay You the following amounts, which shall constitute
Advances hereunder. With respect to each Album recorded and delivered hereunder
in fulfillment of Your Recording Commitment, the amount, if any, by which the
sum designated below as the "Recording Fund" exceeds the Recording Costs for
that Album, payable promptly after the delivery to Company of that Album or, if
later, promptly after Company's determination of the Recording Costs for that
Album:
(i) For the Album recorded during the third Option
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Period, the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
(ii) For the Album recorded during the fourth Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
(iii) For the Album recorded during the fifth Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXXX.
(iv) For the Album recorded during the sixth Option Period, the
Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX and no more than
* XXXXXXXXXXXXXXXXXXXXX.
(v) For the Album recorded during the seventh Option Period,
the Recording Fund shall be the Formula Amount, but no less than
* XXXXXXXXXXXXXXXXXXXXXXXX and no more than XXXXXXXXXXXXXXXXXXXXX.
The "Formula Amount" for a particular Album recorded and Delivered hereunder
in fulfillment of Your Recording Commitment shall mean an amount equal to
sixty-six and two-thirds percent (66 2/3%) of whichever of the following
amounts is less: (A) the amount of the royalties, after the retention of
reserves, earned by You hereunder from Net Sales through Normal Retail
Channels in the United States ("USNRC Net Sales") of the immediately preceding
Album delivered hereunder in fulfillment of Your Recording Commitment; or (B)
the average of the amounts of such royalties so earned by You hereunder on the
two (2) immediately preceding Albums delivered hereunder in fulfillment of
Your Recording Commitment. In either case, the amount of royalties with
respect to any preceding Album shall be computed as of the end of the month in
which occurs the date which is twelve (12) months following the initial
commercial release in the United States of the preceding Album concerned.
Notwithstanding the foregoing, with respect to any applicable Album which is
not delivered to Company within thirty (30) days after the applicable period
provided for in paragraph 3.01 above, the Recording Fund for that Album shall
be reduced by ten percent (10%) of the otherwise applicable Recording Fund for
each month (or portion thereof) until that Album is delivered; provided,
however, that such delay is solely and directly caused by Artist's acts or
omissions. For the purpose of computing royalties with respect to the
calculation under this paragraph 8.02, and only for such purpose, a reserve
against anticipated returns and credits will not be established for any Album
during any semi-annual accounting period in excess of twenty percent (20%) of
the aggregate number of
* - Confidential portions omitted and filed separately with the Commission.
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units of that Album shipped to Company's customers.
* (b) XXXXXXXXXXXX percent of all sums paid or incurred by Company in
connection with independent marketing and publicity, and the independent
promotion of Phonograph Records hereunder, if any, shall be deemed to
constitute Advances hereunder, provided Company shall not recoup from Your
royalties hereunder (excluding mechanical royalties) more than
* XXXXXXXXXXXXXXXXXXXX with respect to each particular Single nor more than
* XXXXXXXXXXXXXXXXXXXXXXX with respect to each particular Album.
(c) Within five (5) business days following the full execution of
* this Agreement, Company shall pay to You XXXXXXXXXXXXXXXXXXXX which payment
shall be deemed an Advance against, and shall be fully recoupable from, all
royalties (other than mechanical royalties) otherwise payable hereunder.
(d) Within five (5) days following the commencement of the First
* Option Period, if any, Company shall pay to You XXXXXXXXXXXXXXX, which payment
shall be deemed an Advance against, and shall be fully recoupable from, all
royalties (other than mechanical royalties) otherwise payable hereunder and,
furthermore, which payment shall specifically be deemed to be an Advance
against and a prepayment of any and all applicable union session payments due
and owing to Artist in connection with the recording of the Album required to
be recorded and delivered during such First Option Period.
(e) Within five (5) days following the commencement of the Second
* Option Period, if any, Company shall pay to You XXXXXXXXXXXXXXXX, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Second Option Period.
(f) Within five (5) days following the commencement of the Third
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXX of the difference between the
Approved Recording Fund for the Album required to be recorded and delivered
* during such Third Option Period and XXXXXXXXXXXXXXX of the actual Recording
Costs for the Album which was recorded and delivered during the Second Option
Period, which payment shall be deemed an Advance against, and shall be fully
recoupable from, all royalties (other than mechanical royalties) otherwise
payable hereunder and, furthermore, which payment shall specifically be deemed
to be an Advance against and a prepayment of any and all applicable union
session payments due and
* - Confidential portions omitted and filed separately with the Commission.
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owing to Artist in connection with the recording of the Album required to be
recorded and delivered during such Third Option Period.
(g) Within five (5) days following the commencement of the Fourth
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXXX percent of the
difference between the Approved Recording Fund for the Album required to be
recorded and delivered during such Fourth Option Period and
* XXXXXXXXXXXXXXXXXXXXXXXXXXXX percent of the actual Recording Costs for the
Album which was recorded and delivered during the Third Option Period, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Fourth Option Period.
(h) Within five (5) days following the commencement of the Fifth
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXX percent of the
difference between the Approved Recording Fund for the Album required to be
recorded and delivered during such Fifth Option Period and
* XXXXXXXXXXXXXXXXXXXXXXXXXX percent of the actual Recording Costs for the Album
which was recorded and delivered during the Fourth Option Period, which
payment shall be deemed an Advance against, and shall be fully recoupable
from, all royalties (other than mechanical royalties) otherwise payable
hereunder and, furthermore, which payment shall specifically be deemed to be
an Advance against and a prepayment of any and all applicable union session
payments due and owing to Artist in connection with the recording of the Album
required to be recorded and delivered during such Fifth Option Period.
(i) Within five (5) days following the commencement of the Sixth
Option Period, if any, Company shall pay to You the greater of
* (i)XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX or (ii) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
percent of the difference between the Approved Recording Fund for the Album
required to be recorded and delivered during such Sixth Option Period
* XXXXXXXXXXXXXXX percent of the actual Recording Costs for the Album which was
recorded and delivered during the Fifth Option Period, which payment shall be
deemed an Advance against, and shall be fully recoupable from, all royalties
(other than mechanical royalties) otherwise payable hereunder and,
furthermore, which payment shall specifically be deemed to be an Advance
against and a prepayment of any and all applicable union session payments due
and owing to Artist in connection with the recording of the Album required to
be recorded and delivered during such Sixth Option Period.
* - Confidential portions omitted and filed separately with the Commission.
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(j) Within five (5) days following the commencement of the Seventh
Option Period, if any, Company shall pay to You the greater of (i)
* XXXXXXXXXXXXXXX or (ii) XXXXXXXXXXX percent of the difference between the
Approved Recording Fund for the Album required to be recorded and delivered
* during such Seventh Option Period and XXXXXXXXXXXXXXXX percent of the actual
Recording Costs for the Album which was recorded and delivered during the
Sixth Option Period, which payment shall be deemed an Advance against, and
shall be fully recoupable from, all royalties (other than mechanical
royalties) otherwise payable hereunder and, furthermore, which payment shall
specifically be deemed to be an Advance against and a prepayment of any and
all applicable union session payments due and owing to Artist in connection
with the recording of the Album required to be recorded and delivered during
such Seventh Option Period.
9. ROYALTIES.
9.01 Company will pay You an "all-in" royalty, during the term of
copyright in the country concerned of Masters embodied in Phonograph Records
delivered hereunder computed at the applicable percentage indicated in the
Royalty Schedule below, of the applicable Royalty Base Price in respect of Net
Sales of such Phonograph Records (other than Audiovisual Records) consisting
entirely of Master Recordings recorded under this Agreement during the
respective Contract Periods specified below and sold by Company or Company's
licensees through Normal Retail Channels:
ROYALTY SCHEDULE
------------------------------------------------------------------------------
UNITED STATES
-------------
Master Recordings Long-Play
made during the: Albums Singles Singles
------------------------------------------------------------------------------
* Initial Period XXX XXX XXX
First Option
* Period, if any XXX XXX XXX
Second Option
* Period, if any XXX XXX XXX
Third Option
* Period, if any XXX XXX XXX
Fourth Option
* Period, if any XXX XXX XXX
Fifth Option
* Period, if any XXX XXX XXX
* - Confidential portions omitted and filed separately with the Commission.
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Sixth Option
* Period, if any XXX XXX XXX
Seventh Option
* Period, if any XXX XXX XXX
FOREIGN
-------
Territory All Records
------------------------------------------------------------------------------
* Canada, U.K. XXXX percent of the otherwise applicable
rate set forth in the United States
Royalty Schedule above in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
* Germany, Italy, France, Japan XXXX percent of the otherwise applicable
rate set forth above in the United
States Royalty Schedule in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
* Rest of World XXXX percent of the otherwise applicable
rate set forth above in the United
States Royalty Schedule in respect of
USNRC Net Sales of the particular record
concerned (i.e., Albums, Singles and
Long Play Singles), without regard to
any escalations.
The royalty rates set forth in this paragraph 9.01 are sometimes referred
to herein as Your "basic royalty rate(s)".
9.02 Notwithstanding anything to the contrary contained in the Royalty
Schedule hereinabove, and with respect to each Album Delivered in fulfillment
of Your Recording Commitment hereunder, the royalty rate applicable to USNRC
Net Sales of top-line Albums pursuant to the terms hereof shall be the royalty
rate specified in the Royalty Escalation Schedule below.
* - Confidential portions omitted and filed separately with the Commission.
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ROYALTY ESCALATION SCHEDULE
Album Net Sales in the United States of top-line
recorded: Albums (determined in accordance with Company's
standard accounting procedures).
* LPs XXX XXX XXX XXX XXX
------
* 1 XXX XXX XXX XXX XXX
* 2 XXX XXX XXX XXX XXX
* 3 XXX XXX XXX XXX XXX
* 4 XXX XXX XXX XXX XXX
* 5 XXX XXX XXX XXX XXX
* 6 XXX XXX XXX XXX XXX
* 7 XXX XXX XXX XXX XXX
The Contract Period royalty increase provisions applicable to Master
Recordings made after the Initial Period and the royalty escalations set forth
in paragraph 9.02 above will not apply to any Recording not Delivered within
the time prescribed for its Delivery in paragraph 3.01 above.
9.03 (a) The royalty rate on Phonograph Records sold through so-called
* "record clubs" shall be XXXXXX of the otherwise applicable royalty rate if
* manufactured and sold by Company, and an amount equal to XXXXXX of the Net
Royalty from the sale of those Phonograph Records if manufactured and sold by
Company's licensees.
(b) If, pursuant to Company's agreement with any record club
licensee distributing Records hereunder through a direct mail or mail order
operation ("Club Agreement") (1) the aggregate number of our Records
(including Records hereunder) distributed thereunder during any particular
period of time as "free" or "bonus" records shall exceed the aggregate number
of our Records (including Records hereunder) sold thereunder during that
period (hereinafter such excess Records are referred to as "Excess Club
Records"); and (2) the number of Records hereunder distributed thereunder
during that time period by such licensee as "free" or "bonus" Records shall
exceed the number of records hereunder sold during that time period by such
licensee (hereinafter such excess Records are referred to as "Excess Club
Artist Records") then Company shall credit Your royalty account hereunder with
a portion of the adjusting royalty payment, if any, made by such licensee to
Company in respect of the Excess Club Records distributed by that licensee
during that time period, which portion shall be determined by multiplying
fifty percent (50%) which shall be the aggregate number of Excess Club Artist
Records distributed by that licensee during that time period and the
denominator of which shall be the Aggregate Qualifying Excess Club Records (as
defined in the following sentence), including Excess
* - Confidential portions omitted and filed separately with the Commission.
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Club Artist Records, distributed by that licensee during that time period. As
used in the preceding sentence, "Aggregate Qualifying Excess Club Records"
shall mean the aggregate number of "free" or "bonus" records in the excess of
records sold with respect to each artist signed to Company (or other royalty
participant) whose "free" or "bonus" records distributed pursuant to a Club
Agreement exceed the number of their records which are sold thereunder during
the applicable time period.
9.04 In respect of any Master Recording leased by Company to others
for their distribution of Phonograph Records in the United States, Company
* will pay You XXXXX of Company's net receipts from Company's licensee. ("Net
receipts", in the preceding sentence, means receipts as computed after
deduction of all copyright, AFM and other applicable third party payments.) If
another artist, a producer, or any other Person is entitled to royalties on
sales of such Records, that payment will be divided among You in the same
ratio as that among Your respective basic royalty percentage rates.
9.05 (a) The royalty rate on any Budget Record, soundtrack Record,
any Multiple Record Set or any "picture disc" (i.e., a disc Record with
* artwork reproduced on the surface of the Record itself) will be XXXXXXXXXXX of
the applicable basic royalty rate prescribed in paragraph 9.01. The royalty
rate on any Mid-Priced Record and any Record sold for distribution through
* military exchange channels will be XXXXXXXXXXXXXXXXXXXXX of the applicable
basic royalty rate prescribed in paragraph 9.01. The royalty rate on any
Record which is not an Album, Single or a Long-Play Single will be
* XXXXXXXXXXXXXXXXX of the applicable basic Album royalty rate prescribed in
paragraph 9.01. The royalty rate on any compact disc Record will be
* XXXXXXXXXXXXXXXXXXXXXX of the rate which would otherwise be applicable under
this Agreement. The royalty rate on any digital compact cassette ("DCC") or
* any Mini-disc Record will be XXXXXXXXXXX percent of the rate which would
otherwise be applicable under this Agreement. The royalty rate for any Record
* in a New Configuration will be XXXXXXXXXX the rate which would otherwise be
applicable hereunder. The provisions set forth in the immediately preceding
sentence shall apply until fifteen (15) months following the initial release
of any Master delivered hereunder as embodied on such New Configuration.
Thereafter, the royalty for Records sold in the form of New Configuration
shall be negotiated in good faith by the parties, taking into account, among
other things, the then-prevailing industry standards. Notwithstanding anything
to the contrary contained herein, Company shall have the right to release,
distribute and sell such Records prior to the completion of such negotiations,
and to accrue royalties to Your account hereunder at the royalty rate set
forth herein. Notwithstanding anything to the contrary in the immediately two
(2) preceding sentences, in the event Company adopts a general policy
applicable to the majority of new artists signed exclusively to Company which
provides for a royalty rate reduction with respect to records in compact disc
or
* - Confidential portions omitted and filed separately with the Commission.
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DCC or Mini-disc configuration more favorable to such new artist than the
royalty rate reduction provided herein, You shall receive the benefit of such
general policy, on a prospective basis only.
* (b) The royalty rate on a Multiple Album will be XXXXXXXXXXX of the
applicable basic Album royalty rate prescribed in paragraph 9.01, if the
Royalty Base Price of that Album is the same as the Royalty Base Price
applicable to the top-line single-disc Conventional Albums marketed by Company
or its Licensee in the territory where the Album is sold at the beginning of
the royalty accounting period concerned. If a different Royalty Base Price
applies to a Multiple Album, the royalty rate prescribed in the preceding
sentence will be adjusted in proportion to the variance in the Royalty Base
Price (but will not be more than the applicable Album royalty rate prescribed
in paragraph 9.01). That adjustment of the royalty rate will be made by using
the following formula:
(X divided by Y) multiplied by Z = adjusted royalty rate.
(Subject to the parenthetical limit in the second
sentence of this subparagraph.)
("X" represents the Royalty Base Price for the Multiple Album concerned; "Y"
represents the Royalty Base Price for such top-line single-disc Records in the
Multiple Album multiplied by the number of disc Records in the Multiple Album
concerned; and "Z" equals the otherwise applicable basic royalty rate.)
9.06 (a) Except as otherwise specifically set forth herein, on Masters
licensed by Company on a flat-fee or a royalty basis for the sale of
Phonograph Records or for any other uses, the royalty rate shall be an amount
* equal to XXXXXXXXXXXX of the Net Flat Fee or Net Royalty, as applicable, from
such exploitation of the Masters.
(b) To the extent permissible at law, You hereby assign to Company
all right, title and interest in and to any and all royalties or other
payments to which You are or may become entitled to receive (herein "Your
Share") under the Audio Home Recording Act of 1992, as it may be amended (the
"Act"), or any implementing or similar legislation requiring the payment of
copyright royalties in connection with the sale of recording devices or blank
tapes or any other recordable device (e.g., digital audio tape, DCC). Upon
receipt by Company of such royalties or payments, Company shall credit Your
royalty account with one hundred percent (100%) of Your Share of such
royalties or payments received. In order to effectuate the foregoing, You
shall execute and deliver to Company a letter of direction address to the
Register of Copyrights of the U.S. Copyright Office and You agree to execute
and deliver to Company any other document or documents as may be reasonably
necessary to cause the payment to Company of Your Share of such royalties or
payments. It is expressly understood and agreed that
* - Confidential portions omitted and filed separately with the Commission.
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except as provided above in this paragraph 9.06(b), Company shall be entitled
to retain for its own use and benefit any royalties or payments received by
Company pursuant to the Act.
9.07 Audiovisual Royalties shall be computed on the Audiovisual Records
Royalty Base Price; otherwise, in accordance with the provisions of this
Agreement applicable to Conventional Albums and: If manufactured and sold by
* Company, XXXXXXXXXXXX on U.S. sales, XXXXXXXX ex-U.S. If manufactured and sold
by Licensees (in the U.S. or elsewhere), and on Audiovisual Recordings
licensed or otherwise furnished by Company for exploitation other than on
* Audiovisual Records, XXXXXXXXXXXX of Net Receipts. Audiovisual royalties (and
receipts payments) are "all-in" (inclusive of, without limitation, payments to
publishers).
9.08 Notwithstanding anything to the contrary contained in this
Article 9:
(a) In respect of Joint Recordings, the royalty rate to be used in
determining the royalties payable to You shall be computed by multiplying the
royalty rate otherwise applicable by a fraction, the numerator of which shall
be one (1) and the denominator of which shall be the total number of royalty
artists whose performances are embodied on a Joint Recording. The term "Joint
Recording" shall mean any Master Recording embodying the Artist's performances
and any performances by another artist with respect to which Company is
obligated to pay royalties. There shall not be any Joint Recordings without
Your approval.
(b) The royalty rate on a Phonograph Record embodying Master
Recordings made hereunder together with other Master Recordings will be
computed by multiplying the royalty rate otherwise applicable by a fraction,
the numerator of which is the number of Selections embodying Master Recordings
made hereunder and contained on the particular record concerned and the
denominator of which is the total number of Selections contained on such
Record. The royalty rate on an Audiovisual Record containing Audiovisual
Recordings made hereunder and other audiovisual works will be determined by
apportionment based upon actual playing time on the Record concerned.
(c) No royalties shall be payable to You in respect of Phonograph
Records sold or distributed (with the intention that such recipient will not
resell same) by Company or Company's licensees for promotional purposes, as
cut-outs, at close-out prices, for scrap, at less than inventory cost or at
fifty percent (50%) or less of the Record's highest posted wholesale price
(whether or not intended for resale), as "free", "no charge" or "bonus"
Records (whether or not intended for resale), to Company's employees or
* - Confidential portions omitted and filed separately with the Commission.
24
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those of Company's licensees and their relatives, or to radio stations.
(d) If records derived from the Masters are sold to distributors or
others (with the intention that such recipient will resell same) for less than
Company's highest posted wholesale price, or at a discount therefrom, but for
more than fifty percent (50%) of such wholesale price, then, for purposes of
this paragraph, a percentage of such records shall be deemed non-royalty bearing
records, which percentage shall be an amount equal to the percentage of such
lesser amount or the applicable discount.
(e) Company may elect from time to time to compute and pay You
royalties hereunder on a royalty base different than the Royalty Base Price
provided herein, as long as such computation does not materially affect the net
amount of royalties otherwise payable to You at that time hereunder.
(f) If legislation requiring the payment of copyright royalties for
the public performance of Phonograph Records is enacted or is currently in
existence in any country and Company or its affiliate in the country concerned
receives such royalties solely attributable to Master Recordings produced
hereunder, and performing artists are not entitled to receive similar royalties
in such country from a collection society or other Person other than Company or
its affiliates, then with respect to performances in the United States, Company
shall accrue to Artist's royalty account hereunder that portion of such
royalties as is required by Company's collective bargaining agreement with the
American Federation of Musicians or the American Federation of Television and
Radio Artists, as applicable, and with respect to performances outside the
United States, as required by law. If no such agreement and/or law applies,
Company shall pay an amount equal to fifty percent (50%) of the net amounts
directly allocable to the Master Recordings produced hereunder so received by
Company less all payments to third parties (and Artist shall be responsible in
any event for all required payments to producers or other parties engaged by
Artist in connection with recording of the Master Recordings hereunder).
10. ROYALTY PAYMENTS AND ACCOUNTINGS.
10.01 Company shall send to You statements for royalties payable hereunder
on or before October 1st for the semi-annual period ending the preceding June
30th and on or before April 1st for the semi-annual period ending the preceding
December 31st, together with payment of royalties, if any, earned by You
hereunder during the semi-annual period for which the statement is rendered,
less all Advances and other charges under this Agreement. Company shall have the
right to retain, as a reserve against charges, credits, or returns, such portion
of payable royalties as shall be reasonable in Company's best business judgment.
With respect to Albums sold
25
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hereunder, Company's reserve shall not exceed thirty-five percent (35%) of the
number of such records shipped. With respect to Singles sold hereunder,
Company's reserve shall not exceed fifty percent (50%) of the number of such
records shipped, unless Company reasonably believes a particular release
justifies a higher reserve. Reserves shall be fully liquidated no later than the
end of the fourth full accounting period following the period in which such
reserve was initially established. Records returned will be apportioned between
royalty-free records and records on which royalties are payable in the same
proportion as such records were shipped to customers. You shall reimburse
Company on demand for any overpayments, and Company may also deduct the amount
thereof from any monies payable (other than mechanical royalties) to You
hereunder or under any other agreement between You and Company or Company's
affiliates. Royalties paid by Company on Phonograph Records subsequently
returned shall be deemed overpayments.
10.02 No royalties shall be payable to You on sales of Phonograph Records
by any of Company's licensees or distributors until payment on those sales has
been received by Company in the United States. Sales by a licensee or
distributor shall be deemed to have occurred in the semi-annual accounting
period during which that licensee or distributor shall have rendered to Company
accounting statements and payments for those sales.
10.03 (a) Royalties on Phonograph Record sales outside of the United States
shall be computed in the national currency in which Company's licensees pay to
Company, shall be credited to Your royalty account hereunder at the same rate of
exchange at which Company's licensees pay to Company, and shall be
proportionately subject to any withholding or comparable taxes which may be
imposed upon Company's receipts.
(b) If Company shall not receive payment in United States dollars in
the United States for any sales of Phonograph Records outside of the United
States, royalties on those sales shall not be credited to Your royalty account
hereunder. Company shall, however, at Your written request and if Company is
reasonably able to do so, accept payment for those sales in foreign currency and
shall deposit in a foreign bank or other depository, at Your expense, in that
foreign currency, that portion thereof, if any, as shall equal the royalties
which would have been payable to You hereunder on those sales had payment for
those sales been made to Company in United States dollars in the United States.
Deposit as aforesaid shall fulfill Company's royalty obligations hereunder as to
those sales. If any law, ruling or other governmental restriction limits the
amount a licensee can remit to Company, Company may reduce Your royalties
hereunder by an amount proportionate to the reduction in Company's licensee's
remittance to Company.
10.04 (a) Company will maintain books and records which
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report the sales of Phonograph Records, on which royalties are payable to You.
You may, but not more than once a year, at Your own expense, examine those books
and records, as provided in this paragraph 10.04 only. You may make those
examinations only for the purpose of verifying the accuracy of the statements
sent to You under paragraph 10.01. All such examinations shall be in accordance
with GAAP procedures and regulations. You may make such an examination for a
particular statement only once, and only within three (3) years after the date
when Company sends You that statement under paragraph 10.01. You may make such
an examination only during Company's usual business hours, and at the place
where Company keeps the books and records to be examined. If You wish to make an
examination You will be required to notify Company at least thirty (30) days
before the date when You plan to begin it. Company may postpone the commencement
of Your examination by notice given to You not later than five (5) business days
before the commencement date specified in Your notice; if Company does so, the
running of the time within which the examination may be made (and any action
brought thereon) will be suspended during the postponement. If Your examination
has not been completed within six (6) weeks from the time You begin it (unless
such delay is primarily due to the acts or omissions of Company), Company may
require You to terminate it on seven (7) business days notice to You at any
time; Company will not be required to permit You to continue the examination
after the end of that seven (7) business day period. You will not be entitled to
examine any manufacturing records or any other records that do not specifically
report sales or other distributions of Phonograph Records on which royalties are
payable to You. You may appoint a certified public accountant to make such an
examination for You, but not if (s)he or his/her firm has begun an examination
of Company's books and records for any Person except You unless the examination
has been concluded and any applicable audit issues have been resolved. Such
certified public accountant will act only under a Letter of Confidentiality
which provides that any information derived from such audit or examination will
not be knowingly released, divulged or published to any person, firm or
corporation, other than to You or to a judicial or administrative body in
connection with any proceeding relating to this Agreement.
(b) Notwithstanding the penultimate sentence of paragraph 10.04(a), if
Company notifies You that the representative designated by You to conduct an
examination of Company's books and records under paragraph 10.04(a) is engaged
in an examination on behalf of another Person ("Other Examination"), You may
nevertheless have Your examination conducted by Your designee, and the running
of the time within which such examination may be made shall be suspended until
Your designee has completed the Other Examination, subject to the following
conditions:
(1) You shall notify Company of Your election to that effect
within fifteen (15) days after the date of Company's
27
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said notice to You;
(2) Your designee shall proceed in a reasonably continuous and
expeditious manner to complete the Other Examination and render the final report
thereon to the client and Company; and
(3) Your examination shall not be commenced by Your designee
before the delivery to Company of the final report on the Other Examination,
shall be commenced within thirty (30) days thereafter, and shall be conducted in
a reasonably continuous manner.
(The preceding provisions of this paragraph 10.04(b) will not apply if Company
elects to waive the provisions of the penultimate sentence of paragraph 10.04(a)
which require that Your representative shall not be engaged in any Other
Examination.)
10.05 If You have any objections to a royalty statement, You will give
Company specific notice of that objection and Your reasons for it within three
(3) years after the date when Company sends You that statement under paragraph
10.01. Each royalty statement will become conclusively binding on You at the end
of that three (3) year period, and You will no longer have any right to make any
other objections to it. You will not have the right to sue Company in connection
with any royalty accounting, or to sue Company for royalties on Records sold
during the period a royalty accounting covers, unless You commence the suit
within that three (3) years period. If You commence suit on any controversy or
claim concerning royalty accountings rendered to You under this agreement in a
court of competent jurisdiction (as provided in paragraph 23.09 below), the
scope of the proceeding will be limited to determination of the amount of the
royalties due for the accounting periods concerned, and the court will have no
authority to consider any other issues or award any relief except recovery of
any royalties found owing. Your recovery of any such royalties will be the sole
remedy available to You or the Artist by reason of any claim related to
Company's royalty accountings. Without limiting the generality of the preceding
sentence, neither You nor the Artist will have any right to seek termination of
this Agreement or avoid the performance of Your obligations under it by reason
of any such claim.
10.06 Company shall have the right to deduct from any amounts (other than
mechanical royalties) payable to You hereunder that portion thereof as may be
required to be deducted under any statute, regulation, treaty or other law, or
under any union or guild agreement, and You shall promptly execute and deliver
to Company any forms or other documents as may be required in connection
therewith.
10.07 Each payment made by Company to You or the Artist under this
Agreement, other than union scale payments under Article
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5 hereof, shall, at Company's election, be made by a single check payable to
Jeff Wood. All payments herein are contingent upon Company receiving properly
completed W-9 and/or 1001 IRS tax forms, as applicable.
11. MUSICAL COMPOSITION LICENSES.
11.01 You hereby grant to Company and Company's designees an irrevocable
non-exclusive license, under copyright, to reproduce each Controlled
Composition on Phonograph Records and to distribute those Phonograph Records
in the United States and Canada.
11.02 Mechanical royalties shall be payable for each Controlled
Composition on Net Sales of Phonograph Records and at the following rates:
(a) On Phonograph Records sold in the United States, the rate (the
"United States Mechanical Rate") for each Controlled Composition embodied
* thereon shall be equal to XXXXXXXXXXX percent of the minimum statutory royalty
rate (without regard to playing time) provided for in the United States
Copyright Act which is applicable to the reproduction of Musical Compositions
as of the date of the United States release of the first Master hereunder
embodying the Controlled Composition in question, or, if earlier, as of the
date that is sixty (60) days prior to the date upon which that first Master
was required to be delivered hereunder.
(b) On Phonograph Records sold in Canada, the rate (the "Canadian
Mechanical Rate") for each Controlled Composition embodied thereon shall be
* equal to XXXXXXXXXXX percent of the prevailing rate agreed upon by the
Canadian recording industry and the Canadian music publishing industry or its
mechanical collection representative which is applicable to the reproduction
of Musical Compositions as of the date of the Canadian release of the first
Master hereunder embodying the Controlled Composition in question or, if
earlier, as of the date that is sixty (60) days prior to the date upon which
that first Master was required to be delivered hereunder; provided, however,
in no event shall the Canadian Mechanical Rate be greater than the applicable
United States Mechanical Rate.
11.03 Notwithstanding the foregoing:
(a) The mechanical royalty rate for a Controlled Composition
* contained on a Mid-Priced Record or a Budget Record shall be XXXXXXXXXXXXXX of
the United States Mechanical Rate or the Canadian Mechanical Rate, as
applicable. The mechanical royalty rate on a Controlled Composition which is a
* copyrighted arrangement of a public domain work shall be XXXXXXXXXX of the
United States Mechanical Rate or the Canadian Mechanical Rate, as applicable.
No mechanical royalties shall be payable on any Phonograph Records for
* - Confidential portions omitted and filed separately with the Commission.
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which no royalties are payable pursuant to Article 9 above. No mechanical
royalties shall be payable on any Controlled Composition having a playing time
of less than ninety (90) seconds.
(b) The maximum aggregate mechanical royalty rate for all Selections,
including Controlled Compositions, contained on a Phonograph Record for sales in
the United States or Canada shall be the product of (1): the United States
Mechanical Rate or the Canadian Mechanical Rate, as applicable, for the first
Master recorded in connection with the particular Album or EP project concerned
and (2): ten (10) for Albums (containing one (1) or more discs or the tape
equivalent), four (4) for EPs, and two (2) for Singles and Long-Play Singles,
regardless of the number of Selections contained thereon, unless that above
referenced 'limitations' are exceeded solely on account of Company's request. If
the aggregate mechanical royalty rate applicable to all of the Selections
embodied on any Phonograph Record hereunder shall exceed the applicable maximum
aggregate royalty rate set forth above for that Phonograph Record, then the
aggregate mechanical royalty rate for the Controlled Compositions, if any,
contained thereon shall be reduced by an amount equal to such excess. If the
aggregate mechanical royalty rate applicable to all of the Selections embodied
on that Phonograph Record shall, even as reduced in accordance with the
immediately preceding sentence, still exceed the applicable maximum aggregate
mechanical royalty rate for that Phonograph Record, then You shall, upon
Company's demand, pay Company an amount equal to the additional mechanical
royalties payable as a result of that excess and Company may, in addition to all
of Company's other rights or remedies, deduct that amount from any monies
payable (other than mechanical royalties) by Company hereunder or under any
other agreement between You and Company or Company's affiliates.
11.04 Company will compute Mechanical Royalties on Controlled Compositions
as of the end of each calendar quarter-annual period in which there are sales or
returns of Records on which mechanical royalties are payable to You. On the next
May 15th, August 15th, November 15th, or February 15th, Company will send a
statement covering those royalties and will pay any net royalties which are due.
Mechanical Royalty reserves maintained against anticipated returns and credits
will not be held for an unreasonable period of time; retention of a reserve for
two (2) years after it is established will not be considered unreasonable in any
case; provided, if the reserve policy with respect to mechanicals changes in
connection with a majority of our similarly situated artists, then You will be
similarly treated. If any overpayment of mechanical royalties is made to any
Person You will reimburse Company for it; Company may also recoup it from any
payments due or becoming due to You. If Company pays any mechanical royalties on
Records which are returned later, those royalties will be considered
overpayments. If the total amount of the mechanical royalties which Company pays
on any Record consisting of Master
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Recordings made under this agreement (including mechanical royalties for
Compositions which are not Controlled Compositions) is higher than the limit
fixed for that Record under subparagraph 11.03(b), that excess amount will be
considered an overpayment also. Paragraphs 10.04 and 10.05 will apply to
mechanical royalty accountings.
11.05 You shall, upon Company's request, use Your best efforts to cause the
issuance to Company and Company's designees of mechanical licenses to reproduce
on Phonograph Records Selections which are not Controlled Compositions and to
distribute those Phonograph Records in the United States and Canada. Those
mechanical licenses shall be at rates and on terms no less favorable to Company
and Company's designees than those contained in the standard mechanical license
issued by the Harry Fox Agency, Inc. or any successor with respect to Phonograph
Records distributed in the United States and by CMRRA or any successor with
respect to Phonograph Records distributed in Canada; provided, however, in no
event shall those rates exceed one hundred percent (100%) of the applicable
minimum statutory rates set forth in paragraph 11.02 above. You shall also, upon
Company's request, use Your best efforts to cause the issuance to Company and
Company's designees of mechanical licenses to reproduce Selections on Phonograph
Records hereunder and to distribute those Phonograph Records outside the United
States and Canada on terms no less favorable to Company and Company's designees
than those generally applicable to Phonograph Record manufacturers in each
country in question. The obligation to account and pay mechanical royalties on
sales of Phonograph Records outside of the United States shall be that of
Company's licensees.
11.06 If the copyright in any Controlled Composition is owned or controlled
by a person, firm or corporation other than You, You shall use Your best efforts
to cause that person, firm or corporation to grant to Company and Company's
designees the same rights as You are required to grant to Company and Company's
designees pursuant to this paragraph.
11.07 You hereby grant to Company and Company's designees at no fee,
royalty, or other cost to Company or Company's designees, the irrevocable,
non-exclusive, worldwide right to reproduce and publicly perform each Controlled
Composition on Audiovisual Recordings, to distribute Audiovisual Records
embodying those Audiovisual Recordings, and to otherwise exploit in any manner
and through any media those Audiovisual Recordings. You shall, upon Company's
request, cause the issuance to Company and Company's designees, at no fee,
royalty, or other cost to Company or Company's designees, the irrevocable,
non-exclusive, worldwide right to reproduce and publicly perform each Selection
which is not a Controlled Composition on Audiovisual Recordings and to
distribute Audiovisual Records embodying those Audiovisual Recordings, and to
otherwise exploit in any manner or media those Audiovisual
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Recordings. If Company or Company's designees shall pay any such fee, royalty,
or other cost, You shall, upon Company's demand, pay Company the amount thereof,
and Company may, in addition to all of Company's other rights and remedies,
deduct that amount from any monies payable (other than mechanical royalties) by
Company hereunder or under any other agreement between You and Company or
Company's affiliates. Without limiting the generality of the foregoing, it is
understood and agreed that Company's rights under this paragraph 11.07 include
the right to reproduce and publicly perform, at no fee, royalty or other cost to
Company or Company's designees, Controlled Compositions and Non-Controlled
Compositions in television and/or radio commercials advertising Phonograph
Records made hereunder.
11.08 Any assignment, license or other agreement made with respect to
Controlled Compositions shall be subject to the terms hereof.
12. AUDIOVISUAL RECORDINGS.
12.01 (a) Upon Company's reasonable request, You shall cooperate with
Company and perform to the best of Your ability for the making of Audiovisual
Recordings, in accordance with all applicable labor unions and guilds. You and
Company shall mutually designate the following "Audiovisual Production
Elements": Musical Compositions, personnel (including producer and director),
storyboard, script, locations and production dates. Company shall pay all costs
incurred in connection with the production of Audiovisual Recordings within the
written budget approved by Company in writing. To the extent permissible, You
hereby waive any right to be paid union scale payments in connection with
Audiovisual Recordings. All costs incurred in connection with the production of
Audiovisual Recordings shall be recoupable from royalties payable to You from
the exploitation of Audiovisual Recordings; one-half (1/2) of such costs (not to
exceed sixty thousand dollars ($60,000.00 for each audiovisual recording) shall
be recoupable from royalties payable (other than mechanical royalties) to You in
connection with the exploitation of audio-only Master Recordings.
(b) Company shall be the sole owner of all worldwide rights in and to
each Audiovisual Recording, including the worldwide copyrights therein and
thereto. Without limiting the foregoing, it is agreed that Company's right to
use Your name and information in the Audiovisual Recordings is set forth in
Paragraphs 6 and 7, and the terms "Master Recordings" and "Phonograph Records"
shall include Audiovisual Recordings and Audiovisual Records, respectively.
13. WARRANTIES, REPRESENTATIONS AND COVENANTS.
You hereby warrant, represent and covenant that:
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13.01 You have the right, power and capacity to enter into this Agreement,
to grant the rights granted by You to Company hereunder, and to perform all of
the terms hereof. You have not done nor shall You do anything to impair
Company's rights hereunder.
13.02 During the Term You shall be a member in good standing of any union
or guilds requiring such membership. All recording sessions shall be conducted
in all respects in accordance with the terms of the AFM Phonograph Record Labor
Agreement, the AFTRA Code for the Phonograph Industry and any other applicable
union or guild agreements.
13.03 (a) Your name, masters, Selections embodied on masters and/or
materials supplied to Company by You hereunder will not violate the legal rights
of any party, including, without limitation, any contractual rights, copyrights,
rights of publicity/privacy or trademark/tradenames.
(b) You are the sole owner of the professional name "Jeff Wood". Only
Company will have the right to use such name in connection with Records during
the Term.
13.04 All existing recordings of Your performances have been commercially
released in the Territory on Phonograph Records.
13.05 Except as specifically provided herein, Company shall have no
obligation to pay any party in connection with the exercise of any of Company's
rights hereunder (including, without limitation, Company's rights with respect
to the recording or exploitation of Master Recordings).
14. RECORDING RESTRICTIONS.
14.01 During the Term, You shall not enter into any agreement or make any
commitment which would interfere with Your performance of any of the terms
hereof nor shall the Artist perform for or render services in connection with
the recording of any Master Recordings for any person, firm, or corporation
other than Company. After the expiration or termination of the Term, You shall
not, prior to the later of the following dates, perform for any person, firm or
corporation other than us, for the purpose of making Phonograph Records or
Master Recordings, any Selection which shall have been recorded hereunder or
under any other agreement between You and Company or Company's affiliates: (a)
the date five (5) years subsequent to the date on which that Selection shall
have been last delivered to Company in a Master Recording recorded hereunder, or
(b) the date three (3) years subsequent to the expiration or termination of the
Term (the later date in respect of any Selection being hereinafter sometimes
referred to as the "Restriction Date").
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14.02 You shall not at any time manufacture, distribute, sell or authorize
the manufacture, distribution, or sale by any Person besides Company of
Phonograph Records embodying a performance rendered by You during the Term. You
shall not record or permit the recording of any such performance without taking
reasonable measures to prevent the manufacture, distribution, or sale at any
time by any Person besides Company of Phonograph Records embodying that
performance.
14.03 (a) During the Term, the Artist will not render any musical
performances (audiovisual or otherwise) for the purposes of making any motion
picture or other audiovisual work ("Picture", below) for any person, firm or
corporation other than us, and no other person, firm or corporation other than
Company will be authorized to produce, distribute, exhibit, or otherwise exploit
any Picture which contains any musical performance (audiovisual or otherwise) by
the Artist, without an express written agreement providing that:
(1) the Picture concerned will not contain performances by the
Artist of more than four (4) Musical Compositions, in whole or in part; and
(2) not more than one-half (1/2) of any version of the Picture
may consist of featured musical performances (defined below) by the Artist or
anyone else.
(b) "Featured musical performance", in this paragraph, means:
(1) any visual performance of a Musical Composition; and
(2) any background performance of a Musical Composition which is
intended as a focus of audience attention, whether or not the visual matter is
related dramatically to the lyrics or concept of the Musical Composition.
14.04 Artist may perform as a background musician ("sideman") accompanying
a featured artist for the purpose of making Phonograph Records for others,
provided:
(a) You have then fulfilled all of Your material obligations under
this Agreement, and the engagement does not interfere with the continuing prompt
performance of Your obligations to Company.
(b) (1) Artist will not render a solo or "step-out" performance, and
(2) The musical style of the recording will not be
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substantially similar to the characteristic musical style of Recordings made by
Artist for Company.
(c) Artist will not record any material which Artist has then recorded
for Company, and will not agree to be restricted from recording the same
material for Company.
(d) Artist will not accept the sideman engagement unless the Person
for whom the recordings are being made agrees in writing, for Company's benefit,
that:
(1) Artist's name may be used in a courtesy credit
to Imprint Records on the Album liners used for such Records, in the same
position as the credits accorded to other sidemen and in type identical in size,
prominence and all other respects; and
(2) Except as expressly provided in section =14.04(d)(1) above,
neither Artist's name (or any similar name), nor any picture, portrait or
likeness of Artist will be used in connection with such Recordings, including,
without limitation, on the front covers of Album containers, on sleeves or
labels used for Singles, or in videos, advertising, publicity or any other form
of promotion or exploitation, without Company's express written consent, which
Company may withhold in its unrestricted discretion.
(e) Before Artist accepts the sideman engagement You will notify
Company of the name of the Person for whom the recordings are being made and the
record company which will have the right to distribute the Records. Your notice
will be addressed to Company's Vice President, Business Affairs.
14.05 Artist may serve as a producer for the purpose of making Phonograph
Records for others, provided:
(a) You have then fulfilled all of Your material obligations under
this Agreement, and the engagement does not interfere with the continuing prompt
performance of Your obligations to Company; and
(b) Artist will not produce recordings of any material which Artist
has then recorded for Company, and will not agree to be restricted from
recording the same material for Company if Artist is a writer or co-writer of
such material; and
(c) Artist will not accept the producing engagement unless the Person
for whom the recordings are being produced agrees in writing, for Company's
benefit, that:
(1) Artist's name may be used in advertising, label and packaging
credits comparable in size, prominence and placement to the credits generally
accorded to record producers; and
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(2) Except as expressly provided in section 14.05(c)(1) above,
neither Artist's name (or any similar name), nor any picture, portrait or
likeness of Artist, will be used in connection with such Recordings, including,
without limitation, on the front of any Record package or in any advertising,
publicity or any other form of promotion or exploitation without Company's
express written consent, which Company may withhold in its unrestricted
discretion.
(d) Before Artist accepts the producing engagement You will notify
Company of the name of the Person for whom the recordings are being made and the
record company which will have the right to distribute the Records; provided
Your inadvertent failure to so notify Company shall not be deemed a breach of
this agreement. Upon notice from Company, You shall cure such failure on a
prospective basis.
15. Intentionally Deleted.
16. UNIQUE SERVICES.
16.01 You expressly acknowledge that Your and the Artist's services
hereunder are of a special, unique, intellectual, and extraordinary character
which gives them peculiar value, and that in the event of a breach by You or the
Artist of any term hereof, Company will be caused irreparable injury which
cannot adequately be compensated by money damages. Accordingly, Company shall be
entitled to injunctive relief, in addition to any other rights or remedies which
Company may have, to enforce the terms of this Agreement.
16.02 You acknowledge that Your failure to timely complete Your Delivery
obligation will jeopardize Company's investment in the Artist in that it may
adversely affect Artist's career and appearance in the public eye and will have
an adverse impact upon Company's ability to properly market and promote records
embodying Artist's performances and to build Artist's career. You further
acknowledge that Company relies upon timely Delivery in order to establish its
release schedule and marketing and promotional policies; that failure to timely
Deliver adversely affects Company's ability to support its overhead costs,
promotional costs and other expenditures necessary to properly record, promote
and market phonograph records; and that such failure to timely Deliver will
cause Company substantial damages in an amount not readily susceptible of
computation.
17. CERTAIN REMEDIES.
17.01 If You do not fulfill any portion of Your Recording Commitment within
the time prescribed in paragraph 3.02, Company will have the following options:
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(a) to suspend Company's obligations to make payments to You under
this Agreement until You have cured the default;
(b) to terminate the term of this Agreement at any time, whether or
not You have commenced curing the default before such termination occurs; and
(c) to require You to repay to Company the amount, not then recouped,
of any Advance previously paid to You by Company and not specifically
attributable under Article 8 to an Album which has actually been fully
Delivered.
Company may exercise each of those options by sending You the appropriate
notice. If Company terminates the term under clause 17.01(b) all parties will be
deemed to have fulfilled all of their obligations under this agreement except
those obligations which survive the end of the term (such as indemnification
obligations, re-recording restrictions, and Your obligations under clause
17.01(c)). No exercise of an option under this paragraph will limit Company's
rights to recover damages by reason of Your default, its rights to exercise any
other option under this paragraph, or any of its other rights.
17.02 If because of: act of God; inevitable accident; fire; lockout, strike
or other labor dispute; riot or civil commotion; act of public enemy; enactment,
rule, order or act of any government or governmental instrumentality (whether
federal, state, local or foreign); failure of technical facilities; illness or
incapacity of any performer or producer; or other cause of a similar or
different nature not reasonably within Company's control; Company is materially
hampered in the recording, manufacture, distribution or sale of records, then,
without limiting Company's rights, Company shall have the option by giving You
notice to suspend the running of the then-current Contract Period for the
duration of any such contingency plus such additional time as is necessary so
that Company shall have no less than thirty (30) days after the cessation of
such contingency in which to exercise its option, if any, to extend the term of
this agreement for the next following Option Period. If any suspension imposed
under this paragraph by reason of an event affecting no Record manufacturer or
distributor except Company continues for more than six (6) months, You may, by
notice, request Company to terminate the suspension by notice given to You
within sixty (60) days after its receipt of Your notice. If Company does not do
so, the term of this Agreement will terminate at the end of that sixty (60) day
period (or at such earlier time which Company may designate by notice to You),
And all parties will be deemed to have fulfilled all of their obligations under
this Agreement except those obligations which survive the end of the term (such
as warranties, re-recording restrictions and Company's obligation to pay
royalties).
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17.03 If Company refuses, without cause, to permit You to fulfill Your
minimum Recording Commitment for any Contract Period, (irrespective of whether
or not You have commenced recording the particular Album for such Recording
Commitment), other than as a result of an event or contingency referred to in
paragraph 17.01 above, Company shall have no obligations or liabilities to You
in connection therewith unless You shall notify Company of Your desire to
fulfill Your minimum Recording Commitment for that Contract Period and within
thirty (30) days after Company's receipt of that notice Company shall fail to
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period. If Company shall fail to so
advise You in writing that Company shall permit You to fulfill Your minimum
Recording Commitment for that Contract Period, the Term shall expire as of the
end of that thirty (30) day period and Company shall have no obligations or
liabilities to You whatsoever in connection with Company's failure to permit You
to fulfill Your Recording Commitment for that Contract Period. Company shall,
however, pay You promptly after the expiration of that thirty (30) day period,
as an advance recoupable from royalties (other than mechanical royalties)
hereunder or under any other agreement between You and Company or Company's
affiliates, an amount equal to the minimum union scale payments which would have
been required to have been paid to the Artist for each Album of Your Recording
Commitment for that Contract Period that Company did not permit You to record,
less any Advances already paid to You in connection with such Album(s) but in no
event less than twenty thousand dollars ($20,000.00). Solely for the purposes of
the foregoing: (i) an Album shall be deemed to be comprised of eight (8)
Masters; and (ii) Artist shall be deemed to be comprised of one (1) member.
18. PRODUCER AND OTHER ROYALTIES.
18.01 You shall be solely responsible for and shall pay all royalties and
other Compensation which may be payable to any producers of the Masters or to
any others rendering services in connection with the recording of the Masters.
18.02 Notwithstanding the foregoing, Company may (but shall not be
obligated to) enter into an agreement with any producer (or other royalty
participant) of the Masters which provides for the payment by Company, rather
than You, of royalties or other compensation payable to that producer. In that
event (or in the event Company pays any such party pursuant to a letter of
direction) Company may deduct any amounts payable by Company to that producer or
director from any royalties or other sums payable by Company hereunder or under
any other agreement between You and Company or Company's affiliates.
Furthermore, for the purposes of the recoupment of any Advances or charges under
this Agreement, the royalty rates contained in Article 9 with respect to those
Masters shall be deemed reduced by the amount of the applicable royalty
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rates with respect to Masters which are contained in Company's agreement with
any producer (or such party). Any Advances payable by Company to a producer
(or such party) which are not recouped by Company from royalties payable to
that producer may be recouped by Company from any royalties or other sums
payable by Company hereunder or under any other agreement between You and
Company or Company's affiliates.
19. DEFINITIONS.
19.01 The term "Advance" shall mean prepayment of royalties. Company may
recoup Advances from royalties to be paid to You or on Your behalf pursuant to
this Agreement. Except as otherwise set forth herein, Advances shall be
non-refundable.
19.02 The term "Album" shall mean an audio only long-playing Phonograph
Record which is not an EP, Single, or Long- Play Single, and where the context
requires, Master Recordings sufficient to constitute a long-playing audio only
Phonograph Record.
19.03 The term "Audiovisual Record" shall mean a Record embodying an
Audiovisual Recording.
19.04 The term "Audiovisual Recording" shall mean every form of Master
Recording embodying visual images.
19.05 The term "Container Charge" shall mean the applicable percentage,
specified as follows, of the Gross Royalty Base applicable to the particular
* Record concerned: XXXXXXXXXXXXXXX percent for Singles packaged in color or
other special printed sleeves, and for Albums, EPs, and Long-Playing Singles
in disc form packaged in Company's standard singlefold jackets without any
special elements (such as, but not limited to, plastic, cardboard, or printed
* inner sleeves, inserts, or attachments); XXXXXXXXXX percent thereof for all
other Albums, EPs or Long-Playing Singles in disc form, and for all other
* sound-only Phonograph Records in disc form; and XXXXXXXXXX percent thereof for
Audiovisual Records, all Phonograph Records in tape form, such as reel-to-reel
tapes, cartridges, cassettes (whether audio or video) and for all other
* recorded devices, but XXXXXXXXXXX percent for compact disc Records, digital
audio tape, DCC, Mini-disc and all Records in New Configurations.
Notwithstanding anything to the contrary contained herein, in the event that
the majority of the agreements by and between Company and the majority of
other recording artists signed to exclusive recording agreements with Company
contain provisions for Container Charges less than those provided for herein,
then this agreement shall be deemed automatically amended to contain such more
favorable terms.
19.06 The term "Contract Period" shall mean the Initial
* - Confidential portions omitted and filed separately with the Commission.
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Period or any Option Period of the Term (as they may be suspended or extended).
19.07 The term "Controlled Composition" shall mean that portion of a
Musical Composition or other Selection, written or composed by You alone or in
collaboration with others, or which is owned or controlled, in whole or in part,
directly or indirectly, by You or any person firm or corporation in which You
have a direct or indirect interest.
19.08 The terms "Conventional Phonograph Record", "Conventional discs and
tapes" and "Conventional Album" shall refer to discs or tapes of the quality
used for the majority of units of a particular Phonograph Record released. If,
at any particular time, Company has ceased to regularly manufacture plain, black
"vinyl" disc records and only manufactures tapes, compact discs and/or "premium
vinyl" (e.g., so-called "half-speed mastered") discs, then the terms
"Conventional discs" or "Conventional Album in disc form", and the like, shall
refer to conventional tapes.
19.09 Intentionally deleted.
19.10 The term "EP" shall mean an audio only Phonograph Record embodying no
fewer than five (5) different Musical Compositions and no more than seven (7)
different Musical Compositions.
19.11 The term "Long-Play Single" shall mean an audio only Phonograph
Record embodying no more than four (4) different Musical Compositions.
19.12 The term "Master Recording" shall mean every form of recording,
whether now known or unknown, embodying sound, or sound accompanied by visual
images, which may be used in the recording, production, or manufacture of
Phonograph Records.
19.13 The term "Masters" shall mean Master Recordings embodying the
performances of the You recorded hereunder.
19.14 (a) The term "Mid-Priced Record" shall mean a Phonograph Record which
bears a Gross Royalty Base at least twenty percent (20%) lower, but not more
than thirty-five percent (35%) lower than the Gross Royalty Base applicable to
Company's then-current highest prevailing "top-line" record of comparable
repertoire and in the same configuration (e.g., Album, Multiple Record Set, Long
Play Single, tape cassette, compact disc, etc.) released by Company or Company's
licensees in the territory concerned.
(b) The term "Budget Record" shall mean a Phonograph Record which
bears a Gross Royalty Base greater than thirty-five
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percent (35%) lower than the Gross Royalty Base applicable to Company's
then-current highest prevailing "top line" record of comparable repertoire and
in the same configuration (e.g., Album, Multiple Record Set, Long Play Single,
tape cassette, compact disc, etc.) released by Company or Company's licensees
in the territory concerned.
19.15 The term "Multiple Album" shall mean an Album which contains two
(2) or more units of a particular configuration of Record, which is sold as a
single unit.
19.16 The terms "Musical Composition" and "Composition" shall mean a
single musical composition and, for the purposes of computing mechanical
royalties hereunder, shall include medleys and spoken word pieces. Different
versions of a Composition embodied on the same Phonograph Record will be
considered one (1) Composition (and one(1) Selection) for all purposes
hereunder.
19.17 The term "Net Receipts" shall mean an amount equal to the gross
monies received by Company in the United States from a person, firm or
corporation from the exploitation by that person, firm or corporation of
rights in Audiovisual Recordings (including any monies received by Company for
* the use of Audiovisual Recordings in Audiovisual Records) less XXXXXXXX
percent of those gross monies as a distribution fee, and less all costs paid
or incurred by Company in connection with the exploitation of those rights and
* the collection of those monies (such costs not to exceed percent XXXXXXXXXXXX.
19.18 The term "Net Royalty" or "Net Flat Fee" shall mean the gross
royalty or gross flat fee received by Company in the United States from a
person, firm or corporation from the exploitation by that person, firm or
corporation of rights in Masters (other than Audiovisual Recordings), less all
costs paid or incurred by Company in connection with the exploitation of those
rights and the collection of those monies, and less all royalties or other
sums payable by Company to any person, firm or corporation in connection with
the exploitation of those rights, except for royalties or other sums payable
to producers of those Masters, which shall be borne solely by You.
* 19.19 The term "Net Sales" shall mean XXXXXXXXXXX percent of gross sales
to wholesale and retail customers, less returns, credits and reserves against
anticipated returns and credits. Notwithstanding anything to the contrary
contained herein, in the event that the majority of the agreements by and
between Company and the majority of other recording artists signed to
exclusive recording agreements with Company contain provisions for Net Sales
greater than those provided for herein, then this agreement shall be deemed
automatically amended to contain such more favorable terms.
* - Confidential portions omitted and filed separately with the Commission.
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19.20 The term "Net Sales through Normal Retail Channels" shall refer to
Net Sales of Phonograph Records hereunder through Company's principal
distributor in the country in question for resale through record or other
retail stores for which a royalty is paid hereunder (and, without limiting the
generality of the foregoing, shall exclude sales or distributions referred to
in paragraph 9.03, 9.04 and 9.05 above);
19.21 The terms "Phonograph Record" and "Record" shall mean every form of
reproduction, whether now known or unknown, embodying sound alone, or sound
accompanied by visual images, distributed primarily for home use, school use,
jukebox use, and use in means of transportation, including, without
limitation, discs of any speed or size, reel-to-reel tapes, cartridges,
cassettes, or other pre-recorded tapes.
19.22 The term "New Configuration" shall mean any configuration of record
not specifically referred to herein.
19.23 The term "Royalty Base Price" shall mean the amount specified below
("Gross Royalty Base") applicable to the Phonograph Records concerned, less
all excise, purchase, value added, or similar taxes (included in the Royalty
Base Price) and less the applicable Container Charge.
(a) WITH RESPECT TO RECORDS SOLD FOR DISTRIBUTION IN THE UNITED
STATES and CANADA: The Gross Royalty Base for an Audiovisual Record is the
amount computed under section (1) below. The Gross Royalty Base for a Record
reproducing sound only is the amount computed under section (1) or section (2)
* below, whichever is XXXXX:
(1) Company's published subdistributor price applicable to the
price series of the unit concerned at the commencement of the accounting
* period in which the sale occurs, less XXXXXXXXXXXX percent; or
* (2) XXXXXXXX of the prevailing industry suggested retail list
price applicable to Records in the same configuration and the same wholesale
price category as the unit concerned. In this section (2):
(i) A "similar U.S. Record company" means one which does
not distribute its own Records directly to wholesalers and retailers on a
nation-wide basis throughout the United States but does so through a third
party distribution company.
(ii) The "wholesale price" of a Record distributed by
another similar U.S. record company means its published price corresponding
most closely in amount to a subdistributor price for a Record in the same
configuration published by Company.
* - Confidential portions omitted and filed separately with the Commission.
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(iii) The "wholesale price category" of a Record
distributed by Company includes: (A) that Record; and (B) Records in the same
configuration sold by other similar U.S. record companies whose wholesale
prices for those Records correspond most closely in amount to our published
subdistributor price for the Company-distributed Record concerned.
(iv) "Prevailing industry suggested retail list price"
means the average of the suggested retail list prices assigned to Records in
the wholesale price category concerned by the similar U.S. Record company(ies)
which publish suggested retail list prices or, if there are no such suggested
retail list prices, the prevailing retail equivalent prices generally accepted
in the record industry applicable to the Records in the wholesale price
category concerned.
Royalties will be calculated separately with respect to each price series
in which units of a particular Record release are sold during the semiannual
accounting period concerned. References to published prices in this section
refer to those in effect at the commencement of the accounting period
concerned.
(b) WITH RESPECT TO RECORDS (INCLUDING AUDIOVISUAL RECORDS) SOLD FOR
DISTRIBUTION OUTSIDE OF THE UNITED STATES AND CANADA: The Gross Royalty Base
* is XXXXXX of the following: XXXXXXXXXXXX percent of Company's or Company's
licensee's published price to dealers ("p.p.d.") applicable to the price
series of the unit concerned in the country of sale.
19.24 The term "Selection" shall mean a Musical Composition, poem,
dramatic work, comedy routine, or other verbal expression.
19.25 The term "Single" shall mean an audio-only seven (7") inch disc
Phonograph Record or its tape or other equivalent, embodying no more than two
(2) Compositions.
19.26 The term "Territory" shall mean the universe.
19.27 The term "other agreement between You and Company or Company's
affiliates" and like words shall mean any other agreement between You or any
entity furnishing Your services and Company or Company's affiliates which
relates to recordings embodying Your performances.
19.28 The term "Person" "person" or "Party" shall mean any individual,
corporation, partnership, association or other organized group of persons or
the legal successors or representatives of the foregoing.
20. INDEMNITY.
* - Confidential portions omitted and filed separately with the Commission.
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20.01 You hereby indemnify, save, and hold Company harmless from any and
all damages, liabilities, costs, losses and expenses (including legal costs and
reasonable attorneys' fees) arising out of or connected with any claim, demand
or action which is inconsistent with any of the warranties, representations,
covenants or agreements made by You in this Agreement, which has resulted in a
final non-appealable judgment or has been settled with Your written consent (it
being understood that Your consent shall be deemed given to any settlement not
in excess of Five Thousand ($5,000) Dollars). Notwithstanding the foregoing, if
You withhold consent to any settlement which Company is willing to make, the
foregoing indemnity shall apply and Company may settle such claim in its sole
discretion unless You promptly assume all costs of defending against such claim,
demand or action including, without limitation, court costs, reasonable
attorneys' fees, and direct expenses theretofore incurred by Company in
connection with said claim, demand or action; provided that in the event You
assume said costs, Company shall nonetheless have the right to settle such
claim, demand or action in its sole discretion without Your consent, provided
that, in such event, the foregoing indemnification shall not apply with respect
thereto. You shall reimburse Company, on demand, for any payment made by Company
at any time with respect to any damage, liability, cost, loss or expense to
which the foregoing indemnity applies. Pending the determination of any claim,
demand or action, Company may, at its election, withhold payment of any monies
(other than mechanical royalties) otherwise payable to You hereunder in an
amount which does not exceed Your potential liability to Company pursuant to
this paragraph; provided, however, that if You shall deliver to Company an
indemnity or surety bond, in a form and with a company acceptable to Company,
which in respect of such claim, demand or action shall cover the amount of such
claim, demand or action and Company's estimated attorneys' fees and legal costs
in connection therewith, then Company shall not withhold payment of monies
otherwise payable to You hereunder in respect of such claim, demand or action;
and provided further that Company shall liquidate any such withheld amounts if
within twelve (12) months no lawsuit has been commenced and active settlement
discussions are not then taking place. You may participate in the defense of any
claim referred to in this paragraph 20 through counsel of Your selection at Your
own expense, but Company will have the right at all times, in its sole
discretion, to retain or resume control of the conduct of the defense of such
claim.
21. ASSIGNMENT.
21.01 (a) Company shall have the right, at its election, to assign any of
Company's rights hereunder, in whole or in part, to any subsidiary, affiliated,
controlling or other related company, and to any Person, firm or corporation
owning or acquiring a substantial portion of Company's stock or assets, and any
rights
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so assigned may also be assigned by the assignee. Company shall also have the
right to assign any of its rights hereunder to any of its licensees in order to
effectuate the purposes hereof. You shall not have the right to assign any of
Your rights hereunder.
(b) You may assign Your rights under this Agreement to a corporation,
all of whose capital stock is owned solely by You, subject to the following
conditions:
(1) The assignee will be subject to Company's approval in
Company's sole discretion;
(2) The assignment will not be effective until You =have
delivered to Company an instrument satisfactory to Company in Company's sole
discretion effecting the assignment and the assignee's assumption of Your
obligations, and Company has executed that instrument to evidence Company's
approval of it;
(3) No such assignment will relieve You of Your obligations under
this Agreement; and
(4) If such an assignment takes place, any further transfer of
the rights assigned will be subject to the same conditions.
22. NOTICES.
22.01 All notices to be given to You hereunder and all statements and
payments to be sent to You hereunder shall be addressed to You at the address
set forth on page 1 hereof or at such other address as You shall designate in
writing from time to time. All notices to be given to Company hereunder shall be
addressed to Company to the attention of the Vice President of Business Affairs
at the address set forth on page 1 hereof or at such other address as Company
shall designate in writing from time to time. All notices shall be in writing
and shall either be served by personal delivery, mail, or telegraph, all charges
prepaid. Except as otherwise provided herein, notices shall be deemed given when
personally delivered, mailed, or delivered to a telegraph office, all charges
prepaid, except that notices of change of address shall be effective only after
actual receipt. A copy of all notices to You shall be sent to Ed Hall, Esquire,
Hawkins & Parnell, 4000 SunTrust Plaza, 303 Peachtree Street, N.E., Atlanta,
Georgia 30308-3243 provided, however, the inadvertent failure to send any such
copy shall neither impair the effectiveness of the notice sent nor constitute a
breach of this Agreement.
23. MISCELLANEOUS.
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23.01 (a) This Agreement sets forth Your and Company's entire understanding
relating to its subject matter and all prior and contemporaneous understandings
relating to the same have been merged herein. No modification, amendment,
waiver, termination or discharge of this Agreement or any of its terms shall be
binding upon Company unless confirmed by a document signed by a duly authorized
officer of Company. No waiver by You or Company of any term of this Agreement or
of any default hereunder shall affect Your or Company's respective rights
thereafter to enforce that term or to exercise any right or remedy in the event
of any other default, whether or not similar.
(b) If any part of this Agreement is determined to be void, invalid,
inoperative or unenforceable by a court of competent jurisdiction or by any
other legally constituted body having jurisdiction to make such determination,
such decision shall not affect any other provisions hereof, and the remainder of
this Agreement shall be effective as though such void, invalid, inoperative or
unenforceable provision had not been contained herein. If the payments provided
by this Agreement shall exceed the amount permitted by any present or future law
or governmental order or regulation, such stated payments shall be reduced while
such limitation is in effect to the amount which is so permitted; and the
payment of such amount shall be deemed to constitute full performance by Company
of its obligations to You hereunder with respect to compensation during the term
when such limitation is in effect.
23.02(a) Company shall not be deemed to be in breach of any of Company's
obligations hereunder unless and until you shall have given Company specific
written notice by certified or registered mail, return receipt requested,
describing in detail the breach and Company shall have failed to cure that
breach within thirty (30) days after Company's receipt of that written notice.
(b) Except with respect to: (i) your obligation to timely Deliver any
Album hereunder, (ii) your warranties hereunder, (iii) where a specific cure
provision is provided herein, (iv) breaches incapable of being cured, or (v) an
application for injunctive relief, the failure by you to perform any of your
obligations hereunder shall not be deemed a breach of this Agreement unless
Company gives you written notice of such failure to perform and such failure is
not corrected within thirty (30) days from the date you receive such notice.
23.03 Company's payment obligations under this Agreement are conditioned
upon Your full and faithful performance of the terms hereof.
23.04 Wherever Your approval or consent is required hereunder, that
approval or consent shall not be unreasonably
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withheld. Company may require You to formally give or withhold approval or
consent by giving You notice of Company's request that You do so and by
furnishing You with the information or material in respect of which the approval
or consent is sought. You shall give Company written notice of Your approval or
disapproval or of Your consent or non-consent within five (5) business days
after Company's notice is sent and, in the event of Your disapproval or
non-consent, Your notice shall contain the specific reasons therefor. Your
failure to give Company notice as aforesaid shall be deemed to be consent or
approval, as the case may be, with respect to the matter submitted.
23.05 Nothing herein contained shall constitute a partnership, joint
venture or other agency relationship between You and Company. Except as
otherwise expressly provided herein, You are performing Your obligations
hereunder as an independent contractor. Neither party hereto shall hold itself
out contrary to the terms of this paragraph, and neither You nor Company shall
become liable for any representation, act or omission of the other contrary to
the provisions hereof. You do not have the right to execute any agreement or
incur any obligation for which Company may be liable or otherwise bound.
23.06 This Agreement shall not be deemed to give any right or remedy to any
third party whatsoever unless that right or remedy is specifically granted by
Company in writing to that third party.
23.07 The provisions of any applicable collective bargaining agreement
between Company and any labor union or guild which are required by the terms of
that agreement to be included in this Agreement shall be deemed incorporated
herein as if those provisions were expressly set forth in this Agreement.
23.08 Except as otherwise expressly provided herein, all rights and
remedies herein or otherwise shall be cumulative and none of them shall be in
limitation of any other right or remedy.
23.09 (a) This Agreement shall be deemed to have been made in the State of
Tennessee and its validity, construction, breach, performance and operation
shall be governed by the law of the State of Tennessee applicable to contracts
made and to be performed in the State of Tennessee. The laws of the State of
Tennessee are of the essence of this Agreement.
(b) The parties hereto intend to and hereby confer exclusive
jurisdiction upon the courts of the State of Tennessee or of the United States
located in the State of Tennessee for any action, suit or proceeding relating to
this Agreement and each of the parties irrevocably consents to the jurisdiction
of each such court in respect of any such action, suit or proceeding. Each of
the parties irrevocably waives any objection that such party now
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has or hereafter may have to the laying of venue of any such action, suit or
proceeding brought or maintained in any such court and further irrevocably
waives any claim that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum. To the extent permitted by
applicable Law, any judgment obtained in any such court may be enforced in any
court in any other jurisdiction anywhere in the world.
(c) Company hereby appoints Wayne Halper at his office located at
Imprint Records, 209 10th Avenue South, Suite 500, Nashville, Tennessee 37203 as
Imprint's authorized agent to accept and acknowledge on Imprint's behalf service
of any and all process that may be served in any such action, suit or
proceeding. Imprint may at any time upon notice to Artist appoint any other
Person as its authorized agent. If no other Person is so appointed, the
Secretary of State of the State of Tennessee will be deemed to be the authorized
agent of Imprint.
(d) Artist hereby appoints Jeff Wood, 4487 Post Place, Apartment 151,
Nashville, Tennessee 37203, or his office at such other address in Tennessee, as
Artist hereafter furnishes to Imprint, as Artist's authorized agent to accept
and acknowledge on Artist's behalf service of any and all process that may be
served in any such action, suit or proceeding. Artist may at any time upon
notice to Imprint appoint any other Person as its authorized agent. If no other
Person is so appointed, the Secretary of State of the State of Tennessee will be
deemed to be the authorized agent of Artist.
(e) Any and all service of process and any other notice in any such
action, suit or proceeding shall be effective against any party if given
personally or by registered mail or certified mail, return receipt requested, or
by any other means of mail that requires a signed receipt, postage prepaid.
Nothing herein contained shall be deemed to affect the right of a party to serve
process in any manner permitted by law.
23.10 This Agreement shall not become effective until signed by You and
countersigned by a duly authorized officer of Company.
23.11 (a) The paragraph headings herein are solely for the purpose of
convenience and shall be disregarded completely in the interpretation of this
Agreement or any of its terms.
(b) No deletion, addition, revision, change or other alteration in
drafts of this Agreement prepared prior to the execution of this Agreement shall
be used for the purpose of construction or interpretation of any term, provision
or language of this Agreement.
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23.12 Company may at any time during the Term obtain, at Company's cost,
insurance on the lives of one (1) or more members of the Artist. Company or its
designees shall be the sole beneficiary of that insurance and neither You, nor
any member of the Artist, nor any person, firm or corporation claiming rights
through or from You or the Artist shall have any rights in that insurance. You
shall cause those members of the Artist as Company may designate to submit to
such physical examinations and to complete and deliver such forms as Company may
reasonably require and otherwise to cooperate with Company fully for the purpose
of enabling Company to secure that insurance. You shall not be deemed in breach
of this Agreement by reason of Artist's failure of his physical examination.
23.13 From time to time at Company's reasonable request and subject to Your
prior commitments, You shall appear for photography, artwork and similar
sessions under the direction of Company or Company's duly authorized agent,
appear for interviews with such representatives of newspapers, magazines and
other publications, and of publicity and public relations firms as Company may
arrange, and confer and consult with Company regarding Artist's performances
hereunder and other matters which may concern the parties hereto. Artist shall
also, if requested by Company, be available for personal appearances (including
performances) on radio, television, record stores and elsewhere, and to record
taped interviews, spot announcements, trailers and electrical transcriptions,
all for the purpose of advertising, promoting, publicizing and exploiting
records released or to be released hereunder and for other general public
relations and promotional purposes related to the record business of Company or
Company's subsidiary and related companies. Neither You nor Artist shall be
entitled to any compensation from Company for such services, other than minimum
union scale to Artist if such payment is required by applicable agreements.
23.14 You acknowledge that there exists no formal or informal fiduciary
relationship between You and Company and that there exists no special
relationship of trust and confidence between You and Company independent of the
contractual rights, duties and obligations set forth in this Agreement, and that
the future course of dealing between You and Company shall neither explicitly
nor implicitly indicate such a relationship or the undertaking of any such
extra-contractual duties or obligations by Company.
23.15 If Artist's voice should be or become materially and permanently
impaired or if Artist should otherwise become physically or mentally disabled in
performing, recording and/or personal appearances and/or if Artist should cease
to pursue a
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career as an entertainer, Company may elect to terminate this agreement, by
notice to You at any time during the period in which such contingency arose or
continues and thereby be relieved of any liability for the executory provisions
of this agreement.
IN WITNESS WHEREOF, the parties hereto have this day signed in the spaces
provided below.
IMPRINT RECORDS
By: /s/ Jeff Wood By: /s/ Roy W. Wunsch
----------------------------------- ------------------------------
JEFF WOOD ROY WUNSCH, CEO
###-##-####
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Social Security Number
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Budget
Exhibit "A"
51
