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EXCLUSIVE ARTIST RECORDING AGREEMENT
XXXXXX
XXXXXX
Nashville, Tennessee 37203
Dated as of July 22, 2014
Artist 1
Nashville TN, 37203
Artist2
Nashville TN, 37212
Dear MARK AND MIKE:
The following will constitute the agreement (the “Agreement”) between RECORDCO (the “Company”)
and MARK AND MIKE p/k/a M&M (“you”) pursuant to which you shall furnish to Company your
exclusive recording services and assign certain rights to Company.
1. Services:
(a) You shall render to Company your exclusive personal services as a recording artist
in connection with the production and exploitation of Records in the Territory during the Term.
(b) In addition, you hereby transfer your interests in those Masters featuring your
performances of the musical compositions listed on Schedule A (the “Existing Masters”)as well as all related
material to Company and, for all purposes, the Existing Masters shall be deemed to have been recorded
during the Term and subject to the terms and conditions of this Agreement including, without limitation, your
representations and warranties herein. For the avoidance of doubt,the parties intend for the Existing Masters
and related material to be treated in the same manner as Masters recorded during the Term. Accordingly,
as between you and Company, you transfer any and all ownership or other rights that you hold in the
Existing Masters. You agree to execute and deliver any additional instruments reasonably necessary to give
effect and/or evidence the transfer of such rights to Company upon Company’s request.
2. Term:
(a) The term of this Agreement (the “Term”) shall consist of an initial period (the
“Initial Period”) and five (5) option period(s) (each, an “Option Period”), if
exercised by Company. The Initial Period and each Option Period are each sometimes referred to herein as a
“Contract Period.” Company may exercise its option for a particularOption Period by written notice to you prior
to the expiration of the then current Contract Period (the “Current Period”).
(b) Notwithstanding paragraph 2(a) above, in the event that Company fails to exercise
a particular option prior to the expiration of the Current Period, (i) you shall send written notice to Company,
and Company shall have a period of thirty (30) days from Company’s receipt of such notice to exercise
the applicable option (the “Option Warning Period”); and (ii) the Current Period shall be extended until the
earlier of: (A) the date of Company’s exercise of the applicable option; or (B) the expiration of the Option
Warning Period. Nothing contained herein shall limit Company’s right to send a termination notice to
you at any time, nor limit Company’s right to exercise an option at any time if you fail to send Company
an Option Warning in accordance with this paragraph 2(b).
(c) The Initial Period will commence on the date hereof and continue until the last
day of the later of: (a) the fifteenth (15th) full month following the month in which the MRO set out in
paragraph 3 below is Delivered; or (b) the twelfth (12th) full month following the month in which the Product
LP for the Current Period is released.
(d) Each subsequent Contract Period, if exercised, will commence upon the
expiration of the immediately preceding Contract Period and will continue until the last day of the later of:
(a) the fifteenth (15th) full month following the Delivery of the MRO for the applicable Contract Period;
or (b) the twelfth (12th) full month following the month in which the Product LP for the Current Period
is released.
3. Delivery Commitment:
(a) During each Contract Period, You shall produce and Deliver to Company fifteen
(15) newly-recorded Masters solely embodying your performances (the “MRO”) and, if requested by
Company, up to three (3) additional Masters. Any Masters not embodied on an Album may be used for
promotional and/orcommercial purposes, including,without limitation, for so-called “B-sides,” bonus tracks,
exclusives, compilations, or other purposes. The Album containing the Masters delivered in fulfillment of
the Minimum Recording Obligation for a particular Contract Period may sometimes be referred to herein as
the “Product LP” for that particular Contract Period. Notwithstanding anything to the contrary herein,nothing
shall restrict Company’s right to release and/or exploit Masters delivered hereunder in any configuration,
compilation, or medium whatsoever whether or not Album based.
(b) During the Term, Company shall have one (1) option (“Greatest Hits Option and one
(1) Live album), to require you to record and Deliver up to three (3) Masters recorded after Company’s exercise
of the Greatest Hits Option (the “New Greatest Hits Masters”). Each such New Greatest Hits Masterand Live
albumshallembody a Composition not previously recorded by you and shall be intended for initial release on a
“Greatest Hits”,
Live or “Best Of” LP (the “Greatest Hits Album”) which may consist of Existing Masters,
Masters delivered during any applicable Option Period and/or New Greatest Hits and Live
albumMasters. You shall Deliver such New Greatest Hits and Live albumMasters no later
than thirty (30) days after Company's exercise of the Greatest Hits and Live album Sides Option orsuchother
laterdate as Company may request. New Greatest Hits and Live albumMasters shallnot be deemed to fulfill any
of your obligations hereunderwith respect to the MRO for any Contract Period. In the event that Company
exercises its option under this paragraph 3(b), the Contract Period of the Term in which Company may exercise
its option forthe next succeeding Contract Period shallbe extended untilthe earlier of the exercise of such option
or the earlier of the date six (6) months after initial commercial release in the United States ofthe applicable
Greatest Hits Album or twelve (12) months after your Delivery of the New Greatest Hits Masters. For the
avoidance of confusion, this provision does notrestrict Company,in any manner, from releasing other“Greatest
Hits” albums orcompilations—this provisionsimply providesCompany a one-time option to extend theapplicable
Contract Period as set forth herein.
(c) Neither Multiple Albums, “theme” Masters (e.g., Christmas Masters), nor
Masters consisting of “live,” instrumental, or joint recordings shall be delivered hereunder without
Company’s prior written consent,which may be withheld for any reason. If you deliver and Company accepts
Masters constituting a Multiple Album, such Masters shall be deemed to be one Album for the purposes of
your delivery obligations under this Agreement. If you deliver and Company accepts Masters
consisting of “live,” “theme,” instrumental or joint recordings, then such Masters shall not be deemed to
be in partial or complete fulfillment of any of your obligations hereunder. Notwithstanding the foregoing,
if Company commercially releases any such Masters on an Album delivered hereunder, such Masters shall
be deemed to be in partial satisfaction of your delivery obligations with respect to such Album.
4. Territory: The Universe.
5. Recoupable Recording Costs:
Company shall pay you the following sums which shall be fully recoupable
against any amounts otherwise due to you:
(a) In connection with the MRO for each Contract Period, Company will pay all Recording
Costs in an Approved Budget (defined below).
(b) If Company exercises its Greatest Hits and Live album Option pursuant to paragraph 3(b),
Company will pay all Recording Costs for the New Greatest Hits or Live album Masters pursuant to an
Approved Budget.
(c) Company shall administer the Recording Costs pursuant to a detailed budget that has
been authorized in writing by Company (“Approved Budget”) provided that if Company pays Recording
Costs and/or Advances in connection with any Album which exceeds the Approved Budget therefore,
then in addition to Company’s other
rights, it may require you to promptly reimburse such overages or deduct such Recording Costs and/or
Advances from any monies payable to you under this agreement or otherwise payable to you or on
yourbehalf. You acknowledge and understand that you shallnot incur Recording Costs without first obtained
written approval and an Approved Budget fromthe Company.
6. Delivery: The MRO for the Initial Period will be Delivered to Company no later than four
(4) months following the date hereof. The MRO for Option Periods, if any, will be Delivered to Company
within four (4) months after commencement of the Option Period concerned. Company’s election to pay
Recording Costs pursuant to paragraph 5 above shall not be deemed acknowledgement that Delivery was
properly made. “Delivery” will consist of actual receipt by Company of multi-tracks master tapes (or the
digital equivalent thereof) of all Recordings, completed, fully-edited, mixed, mastered and equalized, in the
format customarily used by Company in the manufacture of Records, which Recordings shall be in the proper
form for the production of the parts necessary for the manufacture and creation of Records in each country
of the Territory, together with Artwork, a track-by-track list identifying the performers on each Recording
(and the type of such performance) and all other materials, consents, approvals, licenses, parts and
permissions necessary for Company’s exploitation and release of the Recordings hereunderincluding
documentation of compliance with the Immigration Reform and Control Act and similar laws as well as any
applicable union rules and procedures. Each Recording shall be subject to Company’s reasonable approval
as commercially and technically satisfactory, and shall not be deemed Delivered unless and until such
approval is given; provided, however, that Company’s actual commercial release of an Album shall be
deemed acceptance ofthe Masters embodied on such Albumas commercially and technically satisfactory. At
Company’s request, you shall re-record Masters in order to obtain Masters satisfactory to Company. The
costs for such re- recordings, or any portion thereof, if paid by Company, shall be fully recoupable from
any payment otherwise due to you. However, nothing herein shall require Company to advance the costs
for such re-recording. If you fail to Deliver a Recording of your performance made during the Term, such
Recording shall nonetheless be subject to the terms of this Agreement notwithstanding your failure of
Delivery. Delivery shall be deemed to have occurred on the last day of the month which you meet all of the
requirements of this paragraph. Nothing herein shall limit Company’s ability, subject to mutual consultation
with you, to directly engage the producer(s) for recording sessions conducted herein. Costs associated
with such direct engagement and/or related Recording Costs shall be deemed recoupable amounts in
the same manner as if you had not directly engaged such producer(s). You shall be required to obtain
Company’s written approval of the material terms of any agreement with a producer or producers in which
you intend to enterincluding, but not limited to, terms relating to royalties, transfer of rights, and warranties
and representations. You specifically acknowledge and agree that Company shall not be bound to any
material terms for which Company has not approved in writing.
7. Royalties:
(a) Company will account to and pay you fifty percent (50%) of Net
Proceeds (defined below) derived from the Masters or other exploitations hereunder (the
“Royalty” or “Royalties”). “Net Proceeds” means Gross Receipts (defined below) less
the following:
(i) Company’s distribution fee, which is twenty five percent (25%) of Gross
Receipts. “Gross Receipts” means the amounts Company actually receives or that is credited to Company’s
account with respect to the exploitation of the Masters or other rights hereunder; and
(ii) Any and all costs incurred by Company with respect to the production or
exploitation of the Masters or other rights hereunder, including but not limited to:
(A) All discounts, customer rebates and returns, charge- backs,
refurbishment, scrapping, order processing, freight, shipping and surplus inventory;
(B) A reserve for returns, which will not exceed thirty percent (30%)
of physical albums shipped, such reserve to be ratably liquidated over the following four (4) accounting
periods after each particular reserve is established;
(C) All applicable taxes, levies, duties, and/or other government
charges and/or assessments;
costs;
(D) Any and all Recording Costs and/or re-recording
(E) Intentionally Deleted
(F) Marketing, promotion, and publicity costs; (G)
Co-op advertising;
Artwork;
(H) Manufacturing costs and costs associated with
(I) Royalties or payments payable to you (except for Royalties set
forth in this paragraph) or third parties including, but not limited to, producers, mixers, re-mixers, music
publishers and composers;
related productions;
(J) All costs association with Audiovisual Records or
(K) Union costs,fees,and/orassessments,if any;
(L) Reasonable and documented legal and
administration costs and expenses relating specifically to the production and exploitation
of any Masters produced or assigned hereunderbut specifically excluding any legal costs
associated with the preparation and/ornegotiation of this Agreement; and
(M) Any other reasonable and reasonably necessary verifiable outside
costs actually paid by Company specifically relating to the production or exploitation of any Masters
produced or assigned hereunder.
(b)
(i) For the avoidance of doubt, the royalty rate on any Record embodying
Masters Delivered hereunder coupled with other royalty-bearing Recordings (including, without limitation,
compilation albums)(a “Compilation Album”) shall be computed by multiplying the otherwise applicable
royalty by a fraction, the numerator of which is the number of Recordings Delivered hereunderembodied on
such Compilation Album and the denominator of which is the total number of royalty-bearing Recordings
embodied on such Compilation Album.
(ii) Notwithstanding the foregoing, for any such Compilation Album
commercially exploited by Company, Company shall have the option to elect to account to you on a
wholesale royalty basis, such election to occur, if at all, prior to the initial commercial release of the
Compilation Album. If Company makes such election, the applicable basic royalty rate shall be twelve
percent (12%) of the applicable Royalty Base Price or “RBP” or, in the case of a Recording that embodies
your performance together with the performances of other artists, twelve percent (12%) multiplied by a
fraction, the numerator of which shall be one (1) and the denominator of which shall be the total number of
artists whose performances are embodied on such Recording (the “Basic Compilation Rate”). For the
sole purpose of this provision, the term “Royalty Base Price” or “RBP” shall mean the net wholesale price
received by Company, or by Company’s applicable licensees or affiliates from its customers (i.e., net of any
allowances, rebates and/or other discounts) less all excise, sales, and similar taxes included in the
price. For album sales and all exploitations of the Compilation Album otherthan those otherwise expressly
addressed in this provision, the Basic Compilation Rate shall be reduced by multiplying the Basic
Compilation Rate by a fraction, the numerator of which is the number of Masters Delivered hereunder
embodied on such Compilation Album and the denominator of which is the total number of Recordings
embodied on such Compilation Album. With respect to individually purchased electronic transmissions of a
Recording Delivered hereunderthat is included on such Compilation Album (i.e., purchase ofsuch Recording
as a single “unbundled” from the Compilation Album but nonetheless as a single from such Compilation
Album), Company shall credit your royalty account hereunder with an amount equal to a percentage that is
the same as the Basic Compilation Rate of the net sums received by Company in the U.S. directly and
specifically allocated to such exploitation. For the avoidance of doubt,Company and you agree that this rate
for individual purchased electronic transmissions/singles purchases is
intended to apply only to such purchases tied to the Compilation Album and not to exploitations of
such Recording in othermanners hereunder.
(c) Royalties will be accrued semi-annually and paid to you within ninety (90) days
following the last day of December and June, or such other semi-annual periods as Company may adopt, in
accordance with Company’s regular accounting practices, provided that Company shall not have the
obligation to render statements for any period for which no Royalties are due unless you request such
statement in writing. Company shall not be required to account or pay Royalties based upon advances,
pre- payments, or similar payments received by Company but you shall be entitled to accounting and
Royalties (if otherwise applicable) relating to credits received by Company against such prior advances,
pre-payments, or similar payments based upon sales of Records on which Masters are embodied.
(d) All royalty statements rendered by Company shall be conclusively binding upon
you and not subject to any objections by you for any reason unless specific objections in writing, stating the
basis thereof, is given to Company within two (2) years from the date such statement is rendered (each
statement shall be deemed rendered when due unless you notify Company to the contrary within sixty (60)
days afterthe applicable due date). Failure to make specific objection within said time period shall be deemed
to be your approval of such statement, your waiver of such audit rights, and your waiver of the right to sue
Company for additional Royalties in connection with the applicable accounting period. You will not have
the right to sue Company in connection with any Royalty accountings, or to sue Company for payments
based upon the exploitation of Records sold or otherwise exploited during the period a royalty accounting
covers, unless you commence the suit within three (3) years from the date such statement was due.
(e) You may, at your own expense, audit Company’s books and records directly
relating to this agreement that report compensation payable to you hereunder. You may make such audit
only for the purpose ofverifying the accuracy of statements sent to you hereunderand only as provided herein.
You shall have the right to audit said books by notice to Company at least thirty (30) days prior to the
date you intend to commence your audit. Said audit shall be conducted by a reputable independent certified
public accountant experienced in recording industry audits,shall be conducted in such a manner so as not to
disrupt Company’s other functions and shall be completed promptly. You may make such an examination
for a particular statement only once and only within two (2) years after the date any such statement is
rendered. Any such audit shall be conducted only during Company’s usual business hours and at the place
where it keeps the books and records to be examined. Such examination shall be conditioned upon the
accountant’s written agreement to Company that the accountant will not voluntarily disclose any findings to
any person other than you or your attorney or other advisers (unless required by legal process or applicable
law), and that the accountant is not being compensated on a contingent fee basis.
(f) With respect to any claim by you that additional monies are payable by
Company to you pursuant to this agreement based upon an audit by you of
Company’s books and records,Company shall not be deemed in breach of this agreement
unless, within thirty (30) days after Company’s receipt of your written claim to be sent by
certified or registered mail, return receipt requested or by a recognized national courier
service (e.g., FedEx, UPS, etc.), that additional monies are due and payable togetherwith a copy of the audit
report prepared in connection with such audit, Company neither pays such additional monies so claimed by
you, nor contests such claim, in whole or in part, by notice to you. If Company, in Company’s good-faith
reasonable business judgment, so contests any such claim, then Company shall not be deemed in
breach of this agreement unless such claim is reduced to a final, non-appealable judgment and
Company fails to pay you the amount of such judgment within thirty (30) days afterCompany receives notice
of the entry of such judgment.
(g) You understand and acknowledge that, notwithstanding anything to the contrary
herein, Company may enter into an agreement with a third party label (“Third Party Label”) pursuant
to which Company may furnish and/orassign yourexclusive services and Company’s rights hereunderfor the
purposes of the exploitation of Records by such Third Party Label (“Third Party Label Agreement”). From
time to time, Company shall have the unrestricted right, at Company’s sole election, to conform any one
or more provisions of this Agreement to such Third Party Label Agreement. You hereby agree to duly
execute any letters of inducement and any other instruments reasonably necessary to effectuate the terms of
this Agreement or the Third Party Label Agreement and you shall comply with all of the terms of conditions
of this Agreement and any Third Party Label Agreement. In addition and notwithstanding anything to the
contrary herein, Company may elect, at its sole discretion, to convert your royalty from a net receipts basis
to a wholesale per-unit basis. Specifically, if Company exercises its right pursuant to this provision to
convert your royalty rate, the Company or the Third Party Label shall account and pay to you a royalty equal
to fourteen percent (14%) of the applicable royalty base price (“RBP”) per unit, such RBP based on the
applicable unit wholesale price or fourteen percent (14%) of net receipts with respect to digital
downloads or exploitations for which the Third Party Label receives a flat fee for such exploitation. Such
royalties shall be computed pursuant to the terms of the Third Party Label Agreement including, without
limitation, all applicable reductions and definitions. In addition, upon Company exercising the right to
convert your royalty rate and upon your execution of instrument(s) necessary to effectuate the terms of
this provision and this Agreement, Company or the Third Party Label shall pay you a one-time fully
recoupable advance of Twenty Thousand Dollars ($20,000.00)(the “Conversion Advance”). For the
avoidance of doubt,upon such conversion,other than the wholesale- based royalty and Conversion Advance
set forth herein, you shall not be entitled to receive, share, or participate in any compensation or other
consideration Company receives from the Third Party Label or pursuant to the Third Party Label Agreement.
8. Mechanical Royalties:
(a) You hereby grant Company an irrevocable license under copyright to reproduce each
Controlled Composition on Records and distribute such Records in the United States and Canada at a royalty
per Controlled Composition equal to seventy-five percent (75%) of the minimum statutory rate in the United
States or Canada, whichever is applicable, fixed on the date the Masters embodying such Controlled
Compositions are Delivered to Company hereunder (but in no event later than timely Delivery as provided
herein) (the “Controlled Mechanical Rate”); provided that the maximum aggregate mechanical royalty rate
payable with respect to Albums shall not exceed eleven (11) times the Controlled Mechanical Rate (the
“Mechanical Album Cap”). Notwithstanding anything to the contrary contained herein, mechanical
royalties payable in respect of Controlled Compositions for otherthan full-price “top-line” Records solely
embodying Masters hereundershall be fifty percent (50%) of the otherwise applicable Controlled
Mechanical Rate. All Controlled Compositions embodied on any promotional uses of AudiovisualRecords
(if any) shall be and are hereby licensed to Company on a gratis basis. All Controlled Compositions on any
commercial uses oflong-form Audiovisual Records (if any) shall be and are hereby licensed to Company at
a royalty per Controlled Composition equal to eight cents ($.08) per Controlled Composition, with an eleven
(11) times “cap” per full length top-line AudiovisualRecord (“Synch Cap”). No mechanical or
synchronization royalties are payable on “free goods.” “Controlled Composition” shall mean any
Composition which, in whole or in part, is written or composed,and/or owned or controlled, directly or
indirectly, by you and/orany producerof a Recording
hereunderand/oranyone associated oraffiliated with you and/orany such producer. You further grant to
Company (or any licensee thereof) the irrevocable right in perpetuity throughout the Territory to print,
reproduce the title and/orlyrics to each composition embodied on a Masterhereunderon Record Artwork,
on so-called “text mode” of any new technology configurations embodying Recordings hereunder
(collectively “Printing Rights”) without payment to you or any other person or entity unless Company
receives any payments therefor, in which event such payments shall be included in the calculation of Gross
Receipts hereunder. It is specifically understood that to the extent the aggregate mechanical or
synchronization royalty rate for any Record hereunderexceeds the Mechanical Album Cap, as applicable,
and/orif Company is required to pay any monies in connection with the Printing Rights provided in this
paragraph 8, then Company may deduct such amounts from any sums payable to you (including, without
limitation, Advances hereunderand/ormechanicalroyalty payments otherwise payable to you or on your
behalf hereunderor otherwise).
(b) Any amounts payable by Company or an affiliated Person to you,your publishing
designee,or any Person affiliated with you or subject to your control for any publishing interests relating to
Controlled Compositions embodied on Masters or Recordings delivered hereunder shall be cross-
collateralized with your Royalty account hereunder. Accordingly, Company shall not be required to pay to
you, your publishing designee, or any Person affiliated with you or subject to your control such publishing-
related royalties or sums with respect to any Controlled Composition for any period (or past periods) during
which Company is or was unrecouped.
9. Licensing: Subject in all instances to the terms of paragraph 11 below,
Company shall have the exclusive, perpetual right to license Recordings under this
agreement to third parties throughout the Territory. You shall not be entitled to any share
of public performance income received by Company (i.e., PPL) and designated as the record label’s or
copyright owner’s share in connection with Recordings hereunder.
10. Creative Approval: You and Company shall mutually approve creative matters (e.g.,
selection of Compositions to be recorded, selection of producers, and selection of studios, likenesses and
concepts for Album Artwork); provided, Company shall have the sole right to approve and revise Artwork
for Albums in its discretion (and to the extent costs are incurred with respect thereto, such costs shall be
deducted deductions from Gross Receipts as addressed in paragraph 7 above) and, further provided,
in the event that you and Company cannot mutually agree after good faith efforts to resolve any differences,
Company’s good faith decision shall be final. Wheneverin this agreement your approval or consent is
required, such approval or consent shall be given in writing within five (5) business days of Company’s
request and yourfailure to give such notice to Company as aforesaid shall be deemed to be consent orapproval.
11. Marketing & Promotion/Marketing Restrictions:
(a) Subject to your prior professional commitments, you shall be available, at
Company’s reasonable request, to appear for interviews and other promotional activities in support of each
Album hereunder.
(b) During the Term (unless specified below), provided you are not in material breach
of this agreement, it is agreed that with respect to Records hereunderthat are distributed by Company for sale
in the United States:
(i) Photographs/Biographical Material: During the Term, all likenesses,
photographs, names, autographs and biographical material concerning you which Company desires to utilize
for the purposes herein stated shall be subject to your written approval, which approval (or disapproval)shall
not be unreasonably withheld and shall be given to Company within seven (7) business days after such
photographs or biographical material are made available by Company to you. Your failure to give
disapprovalby written notice to Company as aforesaid shall be deemed to be approval as to the material for
which approval is sought. Promptly following the execution of this agreement, you shall furnish
Company with a reasonable number of approved photographs and biographicalmaterial. All photos,
names, autographs and biographical material furnished by you to Company or previously approved by you
at any time shall be deemed approved by you for the purposes hereof. An inadvertent failure by Company
to obtain your approval pursuant to this paragraph shall not be a breach of this agreement by Company nor
shall it impair Company’s rights to exploit the applicable materials, provided that Company shall use
reasonable efforts to prospectively cure such failure following receipt of your notice thereof.
(ii) Premium Records: During the Term, Company shall not,without your
consent, sell Records hereunder as Premium Records (i.e., a physical Record produced for use in
promoting the sale of services and/or merchandise other than Records, and which bears the name of the
sponsor for whom the Record is provided) without your consent.
(iii) Outtakes: During the Term, Company shall not,without your
consent,commercially release any Records hereunderembodying “outtakes.” “Outtakes” are preliminary
versions of Masters with unfinished vocals and/oralternate takes of Masters hereunder.
(iv) Third Party Licensing: Company shall not without your prior consent
license any Masters to a third party for use in a political or religious endorsement or in an advertisement
relating to tobacco, personal hygiene, religious or political matters.
12. Recoupable Costs: Except as otherwise expressly herein provided, all monies paid to
you,or on your behalf (with yourapproval,at yourrequest,or as provided herein), or on behalf of any person,
firm or corporation representing you, other than Royalties payable hereunder, shall be recoupable by
Company from any and all monies payable to you under this agreement.
13. Rights: Company is the exclusive and perpetual owner of all Recordings embodying your
performances made, assigned, or Delivered to Company during the Term (togetherwith all reproductions
derived therefrom and performances embodied thereon) and artwork and website material created hereunder
in connection therewith (“Artwork”), which ownership entitles Company, among other things, the exclusive
right throughout the Territory to copyright such Artwork and Recordings (excluding the underlying
composition(s)) and to secure any and all renewals and extensions of its copyright. Each such Recording
and Artwork shall be considered a “work-made-for- hire” for Company (if it is not, such Recordings and
Artwork will be deemed transferred to Company by this agreement, togetherwith all rights therein) and you
shall execute and deliver all necessary paperwork in connection therewith within five (5) days after
Company’s request therefor. You hereby irrevocably and unconditionally waive any and all moral rights in
connection with the Recordings hereunder (or claims in connection therewith). Company and its
designee(s) shall have the exclusive, perpetual and unlimited right, in all manner of distribution,
exploitation, and commerce, to all the results and proceeds of your recording services rendered during the
Term, including (without limitation) the exclusive, unlimited and perpetualrights throughout the Territory to:
(i) use, reproduce, adapt, re-mix, transmit, manufacture, communicate, exploit or dispose of, in any or all
methods now or hereafter known, Records hereunder and/or the Recordings embodied thereon; (ii) release
Records hereunder underany name, trademark or label which Company may elect; and (iii) to perform
the Recordings hereunder publicly and permit public performances thereof by any method now or
hereinafter known. Notwithstanding the foregoing, in the event that Artwork is commercially exploited in
any manner separate and apart from the sale or other exploitation of Albums
or the Recordings hereunder, Company’s proceeds derived from such exploitation shall be included in
Gross Receipts set forth above.
14. Name and Likeness: Company and its licensees shall have the perpetual right, and may
grant to others the right, to reproduce, print, publish or disseminate in any medium the name (including,
without limitation, any professional names), autographs, approved portraits, approved pictures, approved
likenesses and approved biographical material of you, all in connection with the production, marketing, and
exploitation of Records hereunder (and the exploitation, advertising, trade, marketing, promotion and
distribution of such Records) and in general goodwill advertising for Company. Such rights shall be
exclusive for Records during the Term and non-exclusive thereafter. You warrant and represent that you
own the rights as provided in this subparagraph, and the use and exploitation of same will not infringe upon
the rights of any Person.
15. Release Commitment. Provided you have fulfilled your material obligations
hereunder, Company will release each Album of your MRO hereunderin the United States within nine (9)
months after Delivery of the Album concerned. If Company fails to do so, you must give written notice
to Company within 60 days of such failure and Company shall have 60 days (“Domestic Cure Period”) to
cure. If Company fails to release the Album concerned before the end of the Domestic Cure Period, your
sole remedy will be to terminate the Term hereof by giving Company written notice within 30 days
after the expiration of Domestic Cure Period. Each foregoing 120 day and
60 day periods shall be tolled between November 15 and January 15.
16. Website. During the Term, Company shall have the exclusive and perpetual right
throughout the Territory, and the obligation with respect to the United States, and may grant to others the
right:
(a) to create, control, host, and maintain the operation and content of one or more
Internet sites and/or other locations relating to you on any distribution platform, medium, or channel, now
known or hereafter developed,including social networking sites (e.g. MySpace, Facebook and Twitter) (the
“Artist Sites”) relating to you. Company shall meaningfully consult with you regarding the general “feel”
and type of content to be included on such Artist Sites. Notwithstanding the foregoing, with respect
to social networking sites currently maintained by you, you shall have the right to continue to maintain and
administer such sites for your personaluse consistent with your current use of such sites. However, during
the Term, you agree to provide Company access to such socialnetworking sites for the purpose ofproviding
updates and other content relating to your status as a recording artist for Company and the exploitation of
Recordings. Furthermore, after the Term, Company’s right to create, control, host, and maintain such Artist
Sites relating to you shall be non-exclusive. Furthermore, after the Term, Company shall ensure that any
Artist Sites operated by Company shall clearly indicate that such sites are not yourofficial sites and Company
shall not utilize any Artist Sites after the Term in such a manner as to imply to a reasonable user that you are
updating your status, sending messages, or are otherwise involved with such Artist Sites;
(b) to utilize any and all names (including, without limitation, all professional, stage,
group,or otherassumed or fictitious names) of or relating to you in connection with any Artist Sites including,
without limitation on any URL or other identifier having a similar purpose or function as a URL (the “Artist
Addresses”);
(c) to register any and all Artist Addresses in Company’s name. Company shall
be the sole and exclusive owner of the Artist Sites and Artist Addresses, including all elements thereof,
throughout the Territory. If you have registered any Artist Addresses or Artist Sites prior to the execution of
this Agreement, following Company’s request, you agree to promptly amend the registration in favor of
Company so that Company is the owner of the Artist Sites and Artist Addresses. After the expiration of
the Term, you shall have the right to send Company written notice that Company’s right to use the Artist
Addresses shall terminate sixty (60) days following Company’s receipt of such notice. Company’s
ownership and use of the content of the Artist Sites shall not transfer to you following expiration of the
Term. Without limiting any of Company’s rights hereunder, you hereby grant to Company the right to
register, own and use an alternative URL mutually approved by you and Company incorporating the name
of the Artist (the “Alternate URL”) in perpetuity solely for the promotion and exploitation of Records.
Company’s transfer of ownership and use of the Artist Addresses following the expiration of the Term and
your request shall not take place until you and Company have agreed to the Alternate URL as addressed
above. You further agree that you have not, to date, and will not, in the future, take any action or enter into
any agreement or covenant that would impinge or, in any way, limit Company’s rights under this paragraph.
(d) to exploit such Artist Sites to generate revenue relating to the sale of Records or
merchandise relating to the Records. Any revenue so generated shall be included within the Gross Receipts
addressed herein and subject to Royalties as set forth herein.
17. Representations and Warranties: You warrant and represent that: (a) you have the right to
enter into this agreement and that neither your execution of this Agreement nor your performance of the
Agreement shall infringe upon or breach the rights of any third party or existing contract; (b) you have the
right to fully perform the terms and conditions hereof and to grant the rights granted to Company hereunder;
(c) you will not enter into any agreement which would interfere with the full and prompt performance
of your material obligations hereunder; (d) neither this agreement, the Recordings and all other materials,
ideas, other intellectual properties or elements furnished or selected by you or any producer of Masters
contained in or used in connection with the Masters or the packaging, sale, distribution, advertising,
publicizing or other exploitation thereof infringes on the right of any other person or entity; (e) you are the
sole owner of the professional name “M&M” and have the authority to grant Company the right to use
such professional name as set forth in this Agreement; and (f) during the Term, you will not exploit (or
authorize a third party to exploit) any Masters embodying your performances recorded prior to the date hereof
which are owned or controlled by you. You agree to and do hereby indemnify, save and hold Company
and its licensees harmless from any and all liability, loss, damage, cost and expense
(including, without limitation, reasonable third party legal expenses and reasonable attorney fees) arising out
of or connected with any breach or alleged breach of this agreement or any claim by a third party that is
inconsistent with any of the warranties or representations made by you in this agreement.
18. Assignment: Company shall have the right without yourconsent to assign this Agreement
in whole or in part to any subsidiary, parent company, affiliate, or to any third party acquiring a substantial
portion of Company's assets orstockor other
ownership interests,or to any person or entity which distributes any Album or Recordings hereunder.
Company shall also have the right without your consent to license, lease or otherwise grant any or all of its
rights hereunderin accordance with the terms hereof, in whole or in part, to any party(ies), whether or not
affiliated or otherwise associated with Company. Accordingly, the term “Company” as used in this
agreement (or any modifications or amendments thereto)shall include Company's licensees,lessees
and designees. You shall not have the right to assign this agreement or any of your rights
or obligations hereunder,provided that you shall have the right to assign your rights under this agreement
to a so-called “loan out” company, which is owned and controlled solely by you.
19. Ancillary Participation: In further consideration of Company’s commitment of financial
and other resources hereunder, you agree to account and pay over to Company an amount equal to
fifteen percent (15%) of all Touring Receipts ” above $2500.00 for any single show. “Touring Receipts
means your (and any entity created or controlled by you as furnishing company, touring company, or similar
entity) worldwide gross receipts (e.g. box office sales,advances,ancillary receipts such as video on demand,
etc.) arising from or relating to your concert appearances or personal appearances during the Term. In
addition, you agree to account and pay over to Company an amount equal to twenty percent (20%) of
all Merchandise Receipts and twenty five (25%) of all Sponsorship Receipts. “Merchandise Receipts”
and/or “Sponsorship Receipts” means your (and any entity created or controlled by you as furnishing
company, touring company, or similar entity) worldwide gross receipts arising from or relating to the
exploitation of merchandise relating to you and/or your career including, but not limited to, sales of
merchandise at concert or personal appearances,online, or advances and/or royalties received from third
parties performing merchandising services to you or on your behalf (e.g., merchandise company) or any
endorsement or “Sponsorship” income. However, in the event that Company performs merchandise
services on your behalf including, but not limited to, manufacturing or purchasing merchandise related to
you for exploitation, Company shall ben entitled to fifty percent (50%) of Net Income from such
exploitation. For the purpose of this provision, Net Income means gross monies directly arising from all net
sales of such merchandise actually received less any returns, and refunds (including without limitation rebates
etc.) and any applicable taxes and less design costs (including without limitation photograph,design, etc.),
manufacturing costs (including without limitation insurance coverage), distribution costs (including without
limitation shipping,collection costs,and third party commissions) and advertisement costs (including without
limitation advertise placement costs [e.g., selling and servicing costs]) of the merchandise. Amounts due
relating to Touring Receipts and Merchandise Receipts shall hereinafter be referred to as the “Ancillary
Participation Payments.” The Ancillary Participation Payments shall be accompanied by reasonably
detailed statements reflecting the calculation of such payments and Company shall have the right to audit
your books to verify the accuracy of any such payments. You agree to account to and pay Company
the Ancillary Participation Payments within thirty (30) days following the end of each calendar month. To
the extent Company directly engages in the exploitation of merchandise pursuant to this provision,yourshare
of Net Income shall be considered part of Gross Receipts hereinabove.
20. Definitions:
(a) Advance: A prepayment of potential payments subsequently due to you. Company
may recoup Advances from royalties to be paid to or on your behalf pursuant to this Agreement.
Mechanical Royalties will not be chargeable in recoupment of any Advances except those which are
expressly recoupable from all monies payable under this Agreement.
(b) Album: A sufficient number of Masters embodying yourperformances to comprise
one (1) or more compact disc Records, or the equivalent, of not less than forty-five minutes of playing time
and containing at least ten (10) different Compositions.
(c) Single: A vinyl-disc Record not more than seven (7”) inches in diameter, or the
equivalent in a non-vinyl-disc configuration, which contains Recordings of not more than two (2)
Compositions.
(d) Composition: A single musical composition, irrespective of length, including
all spoken words and bridging passages and including a medley. Recordings of more than one (1)
arrangement or version of the same Composition, reproduced on the same Record, will be considered,
collectively, a recording of one (1) Composition for all purposes under this Agreement.
(e) Master, Master Recording and Recording: Every recording of sound,whether
or not coupled with a visual image, by any method and on any substance ormaterial, whether now or hereafter
known, which is used or useful in the recording, production and/or manufacture of Records.
(f) Mechanical Royalties: Royalties payable to any Person for the right to reproduce
and distribute copyrighted Compositions on Phonograph Records other than AudiovisualRecords.
(g) Person: Any natural person, legal entity or other organized group of persons or
entities, or legal successors or representative of the foregoing. (All pronouns, whether personal or
impersonal, which refer to Persons include natural persons and other Persons).
(h) Records and Phonograph Records: All forms of reproductions (including sound
alone, audiovisual reproductions and Audiovisual Records), now or hereafter known, manufactured or
distributed primarily for home use, institutional use (e.g., library or school), jukebox use, or use in
means of transportation (including, without limitation, video games and any software media or transmission
of such reproductions via telephone, cable, satellite or other transmissions to consumers directly into the
home [e.g., CD-ROM, CD-I and similar disc systems, interactive cable and/or telephony]).
(i) AudiovisualRecord: A Phonograph Record including sound accompanied by visual
images (e.g., so-called “videos”) intended primarily for home consumer or institutional (e.g., library or
school) use, jukebox use or use in means of transportation, including, without limitation, videocassettes,
laser discs, videodiscs or other media or devices now or hereafter known that, among other things,
allow consumers to control the viewing of, or to interact with, the Audiovisual Record, including, without
limitation, transmissions to consumers directly into the home that enable consumers to view such Records at
any time.
(j) Recording Costs: All amounts representing costs and/or expenses paid or incurred
by Company in connection with the production of finished Recordings under this Agreement. Recording
Costs include, without limitation, travel, rehearsal and equipment rental and cartage expenses, advances to
producers, transportation costs, hotel and living expenses approved by Company, studio and engineering
charges in connection with Company’s facilities and personnel or otherwise, all costs and expenses of
obtaining rights to all samples of Recordings, selections and other materials embodied in Recordings
hereunder (including, without limitation, all advances, license fees, attorneys’fees and clearing house fees),
all costs of mastering, remastering, remixing and/or “sweetening” and all costs necessary to prepare
Recordings for release on digital media. Recording Costs shall also include all costs relating to the creation
and production of AudiovisualRecords.
21. Miscellaneous: (a) THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TENNESSEE APPLICABLE TO AGREEMENTS EXECUT ED
AND FULLY PERFORMED THEREIN. TENNESSEE STATE AND FEDERAL COURTS SHALL HAVE
EXCLUSIVE JURISDICTION OF ANY CLAIM ARISING FROM OR RELATED TO THIS
AGREEMENT.
(b) Your remedies for any breach of this Agreement will be limited to an action for
damages (but not punitive, special or consequential damages) and in no event will you be entitled to
rescind this agreement or to seek injunctive or any otherequitable relief, or to otherwise enjoin or interrupt
the production or distribution of the Masters or works embodying the Masters or Company’s exercise and
exploitation of its rights hereunder. You recognize that a breach by you of this agreement would cause
Company irreparable injury and damage that cannot be reasonably or adequately
compensated by damages in an action at law and, therefore, you hereby expressly agree that Company shall
be entitled to injunctive and other equitable relief, without posting any bond, to prevent and/or cure any
breach or threatened breach of this agreement by you.
(c) You shall not re-record during the Term or within three (3) years thereafter any
musical composition, or portion thereof, embodied on a Master hereunder.
(d) Any waiver of any term of this Agreement in a particular instance shall not be a
waiver of such term for the future. To the extent that any of the provisions of this agreement, or any portion
of any provision, shall be found to be illegal or unenforceable for any reason,that provision or portion of a
provision shall be modified or deleted in such a manner so as to make this agreement as modified legally
enforceable under applicable laws, and the balance of the agreement shall not be affected by that
modification or deletion, the balance being construed as severable and independent.
(e) This document constitutes the entire agreement and understanding between the
parties concerning the subject matter hereof, and supersedes and replaces all prior negotiations, proposed
agreements and agreements, written and oral, relating thereto, and cannot be changed or terminated
except by a written instrument signed by the parties hereto.
(f) You represent and warrant that you have reviewed this document with your own
legal counsel prior to signing (or, in the alternative, you represent and warrant that you have been afforded
the opportunity to review this document with your own legal counsel prior to signing, and have decided, in
your sole determination, not to do so).
(g) You acknowledge that no other party, nor any agent or attorney of any other party,
has made any promise, representation or warranty whatsoever, express or implied, not contained herein
concerning the subject matter hereof, to induce you to execute this agreement, and you acknowledge that you
have not executed this agreement in reliance on any such promise, representation, or warranty not contained
herein.
(h) Neither party hereto, shall be in default of any term, condition or provision of this
agreement unless and until the other party shall give the party allegedly in default written notice specifying
such default in detail and such default shall not have been cured within thirty (30) days after such party’s
receipt of such notice. The foregoing shall not apply to any default by you, which is not susceptible
to cure, including but not limited to a breach by you of any exclusivity obligations hereunder.
(i) All notices to you shall be sent to you at the following address first listed above. All
notices to Company shall be sent to Company at the following address: address first listed above to the
attention of: XXXXXX with a courtesy copy to XXXX. Either party may
change the address to which notices should be sent by advising the other, in writing, of such party’s new
address.
(j) This Agreement may be executed in separate, duly-executed, counterparts with the
same force and effect as if the signatures were upon the same instrument. For enforcement purposes, a
facsimile signature shall have the same force and effect as an original.
If the above is acceptable, please sign where indicated below. This Agreement shall not become effective
until signed by all parties hereto.
RECORDCO
By:
An Authorized Signatory
ACCEPTED AND AGREED TO:
Schedule A
Existing Masters

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Sample multiple rights deal

  • 1. EXCLUSIVE ARTIST RECORDING AGREEMENT XXXXXX XXXXXX Nashville, Tennessee 37203 Dated as of July 22, 2014 Artist 1 Nashville TN, 37203 Artist2 Nashville TN, 37212 Dear MARK AND MIKE: The following will constitute the agreement (the “Agreement”) between RECORDCO (the “Company”) and MARK AND MIKE p/k/a M&M (“you”) pursuant to which you shall furnish to Company your exclusive recording services and assign certain rights to Company. 1. Services: (a) You shall render to Company your exclusive personal services as a recording artist in connection with the production and exploitation of Records in the Territory during the Term. (b) In addition, you hereby transfer your interests in those Masters featuring your performances of the musical compositions listed on Schedule A (the “Existing Masters”)as well as all related material to Company and, for all purposes, the Existing Masters shall be deemed to have been recorded during the Term and subject to the terms and conditions of this Agreement including, without limitation, your representations and warranties herein. For the avoidance of doubt,the parties intend for the Existing Masters and related material to be treated in the same manner as Masters recorded during the Term. Accordingly, as between you and Company, you transfer any and all ownership or other rights that you hold in the Existing Masters. You agree to execute and deliver any additional instruments reasonably necessary to give effect and/or evidence the transfer of such rights to Company upon Company’s request. 2. Term: (a) The term of this Agreement (the “Term”) shall consist of an initial period (the “Initial Period”) and five (5) option period(s) (each, an “Option Period”), if
  • 2. exercised by Company. The Initial Period and each Option Period are each sometimes referred to herein as a “Contract Period.” Company may exercise its option for a particularOption Period by written notice to you prior to the expiration of the then current Contract Period (the “Current Period”). (b) Notwithstanding paragraph 2(a) above, in the event that Company fails to exercise a particular option prior to the expiration of the Current Period, (i) you shall send written notice to Company, and Company shall have a period of thirty (30) days from Company’s receipt of such notice to exercise the applicable option (the “Option Warning Period”); and (ii) the Current Period shall be extended until the earlier of: (A) the date of Company’s exercise of the applicable option; or (B) the expiration of the Option Warning Period. Nothing contained herein shall limit Company’s right to send a termination notice to you at any time, nor limit Company’s right to exercise an option at any time if you fail to send Company an Option Warning in accordance with this paragraph 2(b). (c) The Initial Period will commence on the date hereof and continue until the last day of the later of: (a) the fifteenth (15th) full month following the month in which the MRO set out in paragraph 3 below is Delivered; or (b) the twelfth (12th) full month following the month in which the Product LP for the Current Period is released. (d) Each subsequent Contract Period, if exercised, will commence upon the expiration of the immediately preceding Contract Period and will continue until the last day of the later of: (a) the fifteenth (15th) full month following the Delivery of the MRO for the applicable Contract Period; or (b) the twelfth (12th) full month following the month in which the Product LP for the Current Period is released. 3. Delivery Commitment: (a) During each Contract Period, You shall produce and Deliver to Company fifteen (15) newly-recorded Masters solely embodying your performances (the “MRO”) and, if requested by Company, up to three (3) additional Masters. Any Masters not embodied on an Album may be used for promotional and/orcommercial purposes, including,without limitation, for so-called “B-sides,” bonus tracks, exclusives, compilations, or other purposes. The Album containing the Masters delivered in fulfillment of the Minimum Recording Obligation for a particular Contract Period may sometimes be referred to herein as the “Product LP” for that particular Contract Period. Notwithstanding anything to the contrary herein,nothing shall restrict Company’s right to release and/or exploit Masters delivered hereunder in any configuration, compilation, or medium whatsoever whether or not Album based. (b) During the Term, Company shall have one (1) option (“Greatest Hits Option and one (1) Live album), to require you to record and Deliver up to three (3) Masters recorded after Company’s exercise of the Greatest Hits Option (the “New Greatest Hits Masters”). Each such New Greatest Hits Masterand Live albumshallembody a Composition not previously recorded by you and shall be intended for initial release on a “Greatest Hits”,
  • 3. Live or “Best Of” LP (the “Greatest Hits Album”) which may consist of Existing Masters, Masters delivered during any applicable Option Period and/or New Greatest Hits and Live albumMasters. You shall Deliver such New Greatest Hits and Live albumMasters no later than thirty (30) days after Company's exercise of the Greatest Hits and Live album Sides Option orsuchother laterdate as Company may request. New Greatest Hits and Live albumMasters shallnot be deemed to fulfill any of your obligations hereunderwith respect to the MRO for any Contract Period. In the event that Company exercises its option under this paragraph 3(b), the Contract Period of the Term in which Company may exercise its option forthe next succeeding Contract Period shallbe extended untilthe earlier of the exercise of such option or the earlier of the date six (6) months after initial commercial release in the United States ofthe applicable Greatest Hits Album or twelve (12) months after your Delivery of the New Greatest Hits Masters. For the avoidance of confusion, this provision does notrestrict Company,in any manner, from releasing other“Greatest Hits” albums orcompilations—this provisionsimply providesCompany a one-time option to extend theapplicable Contract Period as set forth herein. (c) Neither Multiple Albums, “theme” Masters (e.g., Christmas Masters), nor Masters consisting of “live,” instrumental, or joint recordings shall be delivered hereunder without Company’s prior written consent,which may be withheld for any reason. If you deliver and Company accepts Masters constituting a Multiple Album, such Masters shall be deemed to be one Album for the purposes of your delivery obligations under this Agreement. If you deliver and Company accepts Masters consisting of “live,” “theme,” instrumental or joint recordings, then such Masters shall not be deemed to be in partial or complete fulfillment of any of your obligations hereunder. Notwithstanding the foregoing, if Company commercially releases any such Masters on an Album delivered hereunder, such Masters shall be deemed to be in partial satisfaction of your delivery obligations with respect to such Album. 4. Territory: The Universe. 5. Recoupable Recording Costs: Company shall pay you the following sums which shall be fully recoupable against any amounts otherwise due to you: (a) In connection with the MRO for each Contract Period, Company will pay all Recording Costs in an Approved Budget (defined below). (b) If Company exercises its Greatest Hits and Live album Option pursuant to paragraph 3(b), Company will pay all Recording Costs for the New Greatest Hits or Live album Masters pursuant to an Approved Budget. (c) Company shall administer the Recording Costs pursuant to a detailed budget that has been authorized in writing by Company (“Approved Budget”) provided that if Company pays Recording Costs and/or Advances in connection with any Album which exceeds the Approved Budget therefore, then in addition to Company’s other
  • 4. rights, it may require you to promptly reimburse such overages or deduct such Recording Costs and/or Advances from any monies payable to you under this agreement or otherwise payable to you or on yourbehalf. You acknowledge and understand that you shallnot incur Recording Costs without first obtained written approval and an Approved Budget fromthe Company. 6. Delivery: The MRO for the Initial Period will be Delivered to Company no later than four (4) months following the date hereof. The MRO for Option Periods, if any, will be Delivered to Company within four (4) months after commencement of the Option Period concerned. Company’s election to pay Recording Costs pursuant to paragraph 5 above shall not be deemed acknowledgement that Delivery was properly made. “Delivery” will consist of actual receipt by Company of multi-tracks master tapes (or the digital equivalent thereof) of all Recordings, completed, fully-edited, mixed, mastered and equalized, in the format customarily used by Company in the manufacture of Records, which Recordings shall be in the proper form for the production of the parts necessary for the manufacture and creation of Records in each country of the Territory, together with Artwork, a track-by-track list identifying the performers on each Recording (and the type of such performance) and all other materials, consents, approvals, licenses, parts and permissions necessary for Company’s exploitation and release of the Recordings hereunderincluding documentation of compliance with the Immigration Reform and Control Act and similar laws as well as any applicable union rules and procedures. Each Recording shall be subject to Company’s reasonable approval as commercially and technically satisfactory, and shall not be deemed Delivered unless and until such approval is given; provided, however, that Company’s actual commercial release of an Album shall be deemed acceptance ofthe Masters embodied on such Albumas commercially and technically satisfactory. At Company’s request, you shall re-record Masters in order to obtain Masters satisfactory to Company. The costs for such re- recordings, or any portion thereof, if paid by Company, shall be fully recoupable from any payment otherwise due to you. However, nothing herein shall require Company to advance the costs for such re-recording. If you fail to Deliver a Recording of your performance made during the Term, such Recording shall nonetheless be subject to the terms of this Agreement notwithstanding your failure of Delivery. Delivery shall be deemed to have occurred on the last day of the month which you meet all of the requirements of this paragraph. Nothing herein shall limit Company’s ability, subject to mutual consultation with you, to directly engage the producer(s) for recording sessions conducted herein. Costs associated with such direct engagement and/or related Recording Costs shall be deemed recoupable amounts in the same manner as if you had not directly engaged such producer(s). You shall be required to obtain Company’s written approval of the material terms of any agreement with a producer or producers in which you intend to enterincluding, but not limited to, terms relating to royalties, transfer of rights, and warranties and representations. You specifically acknowledge and agree that Company shall not be bound to any material terms for which Company has not approved in writing. 7. Royalties:
  • 5. (a) Company will account to and pay you fifty percent (50%) of Net Proceeds (defined below) derived from the Masters or other exploitations hereunder (the “Royalty” or “Royalties”). “Net Proceeds” means Gross Receipts (defined below) less the following: (i) Company’s distribution fee, which is twenty five percent (25%) of Gross Receipts. “Gross Receipts” means the amounts Company actually receives or that is credited to Company’s account with respect to the exploitation of the Masters or other rights hereunder; and (ii) Any and all costs incurred by Company with respect to the production or exploitation of the Masters or other rights hereunder, including but not limited to: (A) All discounts, customer rebates and returns, charge- backs, refurbishment, scrapping, order processing, freight, shipping and surplus inventory; (B) A reserve for returns, which will not exceed thirty percent (30%) of physical albums shipped, such reserve to be ratably liquidated over the following four (4) accounting periods after each particular reserve is established; (C) All applicable taxes, levies, duties, and/or other government charges and/or assessments; costs; (D) Any and all Recording Costs and/or re-recording (E) Intentionally Deleted (F) Marketing, promotion, and publicity costs; (G) Co-op advertising; Artwork; (H) Manufacturing costs and costs associated with (I) Royalties or payments payable to you (except for Royalties set forth in this paragraph) or third parties including, but not limited to, producers, mixers, re-mixers, music publishers and composers; related productions; (J) All costs association with Audiovisual Records or (K) Union costs,fees,and/orassessments,if any;
  • 6. (L) Reasonable and documented legal and administration costs and expenses relating specifically to the production and exploitation of any Masters produced or assigned hereunderbut specifically excluding any legal costs associated with the preparation and/ornegotiation of this Agreement; and (M) Any other reasonable and reasonably necessary verifiable outside costs actually paid by Company specifically relating to the production or exploitation of any Masters produced or assigned hereunder. (b) (i) For the avoidance of doubt, the royalty rate on any Record embodying Masters Delivered hereunder coupled with other royalty-bearing Recordings (including, without limitation, compilation albums)(a “Compilation Album”) shall be computed by multiplying the otherwise applicable royalty by a fraction, the numerator of which is the number of Recordings Delivered hereunderembodied on such Compilation Album and the denominator of which is the total number of royalty-bearing Recordings embodied on such Compilation Album. (ii) Notwithstanding the foregoing, for any such Compilation Album commercially exploited by Company, Company shall have the option to elect to account to you on a wholesale royalty basis, such election to occur, if at all, prior to the initial commercial release of the Compilation Album. If Company makes such election, the applicable basic royalty rate shall be twelve percent (12%) of the applicable Royalty Base Price or “RBP” or, in the case of a Recording that embodies your performance together with the performances of other artists, twelve percent (12%) multiplied by a fraction, the numerator of which shall be one (1) and the denominator of which shall be the total number of artists whose performances are embodied on such Recording (the “Basic Compilation Rate”). For the sole purpose of this provision, the term “Royalty Base Price” or “RBP” shall mean the net wholesale price received by Company, or by Company’s applicable licensees or affiliates from its customers (i.e., net of any allowances, rebates and/or other discounts) less all excise, sales, and similar taxes included in the price. For album sales and all exploitations of the Compilation Album otherthan those otherwise expressly addressed in this provision, the Basic Compilation Rate shall be reduced by multiplying the Basic Compilation Rate by a fraction, the numerator of which is the number of Masters Delivered hereunder embodied on such Compilation Album and the denominator of which is the total number of Recordings embodied on such Compilation Album. With respect to individually purchased electronic transmissions of a Recording Delivered hereunderthat is included on such Compilation Album (i.e., purchase ofsuch Recording as a single “unbundled” from the Compilation Album but nonetheless as a single from such Compilation Album), Company shall credit your royalty account hereunder with an amount equal to a percentage that is the same as the Basic Compilation Rate of the net sums received by Company in the U.S. directly and specifically allocated to such exploitation. For the avoidance of doubt,Company and you agree that this rate for individual purchased electronic transmissions/singles purchases is
  • 7. intended to apply only to such purchases tied to the Compilation Album and not to exploitations of such Recording in othermanners hereunder. (c) Royalties will be accrued semi-annually and paid to you within ninety (90) days following the last day of December and June, or such other semi-annual periods as Company may adopt, in accordance with Company’s regular accounting practices, provided that Company shall not have the obligation to render statements for any period for which no Royalties are due unless you request such statement in writing. Company shall not be required to account or pay Royalties based upon advances, pre- payments, or similar payments received by Company but you shall be entitled to accounting and Royalties (if otherwise applicable) relating to credits received by Company against such prior advances, pre-payments, or similar payments based upon sales of Records on which Masters are embodied. (d) All royalty statements rendered by Company shall be conclusively binding upon you and not subject to any objections by you for any reason unless specific objections in writing, stating the basis thereof, is given to Company within two (2) years from the date such statement is rendered (each statement shall be deemed rendered when due unless you notify Company to the contrary within sixty (60) days afterthe applicable due date). Failure to make specific objection within said time period shall be deemed to be your approval of such statement, your waiver of such audit rights, and your waiver of the right to sue Company for additional Royalties in connection with the applicable accounting period. You will not have the right to sue Company in connection with any Royalty accountings, or to sue Company for payments based upon the exploitation of Records sold or otherwise exploited during the period a royalty accounting covers, unless you commence the suit within three (3) years from the date such statement was due. (e) You may, at your own expense, audit Company’s books and records directly relating to this agreement that report compensation payable to you hereunder. You may make such audit only for the purpose ofverifying the accuracy of statements sent to you hereunderand only as provided herein. You shall have the right to audit said books by notice to Company at least thirty (30) days prior to the date you intend to commence your audit. Said audit shall be conducted by a reputable independent certified public accountant experienced in recording industry audits,shall be conducted in such a manner so as not to disrupt Company’s other functions and shall be completed promptly. You may make such an examination for a particular statement only once and only within two (2) years after the date any such statement is rendered. Any such audit shall be conducted only during Company’s usual business hours and at the place where it keeps the books and records to be examined. Such examination shall be conditioned upon the accountant’s written agreement to Company that the accountant will not voluntarily disclose any findings to any person other than you or your attorney or other advisers (unless required by legal process or applicable law), and that the accountant is not being compensated on a contingent fee basis. (f) With respect to any claim by you that additional monies are payable by Company to you pursuant to this agreement based upon an audit by you of
  • 8. Company’s books and records,Company shall not be deemed in breach of this agreement unless, within thirty (30) days after Company’s receipt of your written claim to be sent by certified or registered mail, return receipt requested or by a recognized national courier service (e.g., FedEx, UPS, etc.), that additional monies are due and payable togetherwith a copy of the audit report prepared in connection with such audit, Company neither pays such additional monies so claimed by you, nor contests such claim, in whole or in part, by notice to you. If Company, in Company’s good-faith reasonable business judgment, so contests any such claim, then Company shall not be deemed in breach of this agreement unless such claim is reduced to a final, non-appealable judgment and Company fails to pay you the amount of such judgment within thirty (30) days afterCompany receives notice of the entry of such judgment. (g) You understand and acknowledge that, notwithstanding anything to the contrary herein, Company may enter into an agreement with a third party label (“Third Party Label”) pursuant to which Company may furnish and/orassign yourexclusive services and Company’s rights hereunderfor the purposes of the exploitation of Records by such Third Party Label (“Third Party Label Agreement”). From time to time, Company shall have the unrestricted right, at Company’s sole election, to conform any one or more provisions of this Agreement to such Third Party Label Agreement. You hereby agree to duly execute any letters of inducement and any other instruments reasonably necessary to effectuate the terms of this Agreement or the Third Party Label Agreement and you shall comply with all of the terms of conditions of this Agreement and any Third Party Label Agreement. In addition and notwithstanding anything to the contrary herein, Company may elect, at its sole discretion, to convert your royalty from a net receipts basis to a wholesale per-unit basis. Specifically, if Company exercises its right pursuant to this provision to convert your royalty rate, the Company or the Third Party Label shall account and pay to you a royalty equal to fourteen percent (14%) of the applicable royalty base price (“RBP”) per unit, such RBP based on the applicable unit wholesale price or fourteen percent (14%) of net receipts with respect to digital downloads or exploitations for which the Third Party Label receives a flat fee for such exploitation. Such royalties shall be computed pursuant to the terms of the Third Party Label Agreement including, without limitation, all applicable reductions and definitions. In addition, upon Company exercising the right to convert your royalty rate and upon your execution of instrument(s) necessary to effectuate the terms of this provision and this Agreement, Company or the Third Party Label shall pay you a one-time fully recoupable advance of Twenty Thousand Dollars ($20,000.00)(the “Conversion Advance”). For the avoidance of doubt,upon such conversion,other than the wholesale- based royalty and Conversion Advance set forth herein, you shall not be entitled to receive, share, or participate in any compensation or other consideration Company receives from the Third Party Label or pursuant to the Third Party Label Agreement. 8. Mechanical Royalties:
  • 9. (a) You hereby grant Company an irrevocable license under copyright to reproduce each Controlled Composition on Records and distribute such Records in the United States and Canada at a royalty per Controlled Composition equal to seventy-five percent (75%) of the minimum statutory rate in the United States or Canada, whichever is applicable, fixed on the date the Masters embodying such Controlled Compositions are Delivered to Company hereunder (but in no event later than timely Delivery as provided herein) (the “Controlled Mechanical Rate”); provided that the maximum aggregate mechanical royalty rate payable with respect to Albums shall not exceed eleven (11) times the Controlled Mechanical Rate (the “Mechanical Album Cap”). Notwithstanding anything to the contrary contained herein, mechanical royalties payable in respect of Controlled Compositions for otherthan full-price “top-line” Records solely embodying Masters hereundershall be fifty percent (50%) of the otherwise applicable Controlled Mechanical Rate. All Controlled Compositions embodied on any promotional uses of AudiovisualRecords (if any) shall be and are hereby licensed to Company on a gratis basis. All Controlled Compositions on any commercial uses oflong-form Audiovisual Records (if any) shall be and are hereby licensed to Company at a royalty per Controlled Composition equal to eight cents ($.08) per Controlled Composition, with an eleven (11) times “cap” per full length top-line AudiovisualRecord (“Synch Cap”). No mechanical or synchronization royalties are payable on “free goods.” “Controlled Composition” shall mean any Composition which, in whole or in part, is written or composed,and/or owned or controlled, directly or indirectly, by you and/orany producerof a Recording hereunderand/oranyone associated oraffiliated with you and/orany such producer. You further grant to Company (or any licensee thereof) the irrevocable right in perpetuity throughout the Territory to print, reproduce the title and/orlyrics to each composition embodied on a Masterhereunderon Record Artwork, on so-called “text mode” of any new technology configurations embodying Recordings hereunder (collectively “Printing Rights”) without payment to you or any other person or entity unless Company receives any payments therefor, in which event such payments shall be included in the calculation of Gross Receipts hereunder. It is specifically understood that to the extent the aggregate mechanical or synchronization royalty rate for any Record hereunderexceeds the Mechanical Album Cap, as applicable, and/orif Company is required to pay any monies in connection with the Printing Rights provided in this paragraph 8, then Company may deduct such amounts from any sums payable to you (including, without limitation, Advances hereunderand/ormechanicalroyalty payments otherwise payable to you or on your behalf hereunderor otherwise). (b) Any amounts payable by Company or an affiliated Person to you,your publishing designee,or any Person affiliated with you or subject to your control for any publishing interests relating to Controlled Compositions embodied on Masters or Recordings delivered hereunder shall be cross- collateralized with your Royalty account hereunder. Accordingly, Company shall not be required to pay to you, your publishing designee, or any Person affiliated with you or subject to your control such publishing- related royalties or sums with respect to any Controlled Composition for any period (or past periods) during which Company is or was unrecouped.
  • 10. 9. Licensing: Subject in all instances to the terms of paragraph 11 below, Company shall have the exclusive, perpetual right to license Recordings under this agreement to third parties throughout the Territory. You shall not be entitled to any share of public performance income received by Company (i.e., PPL) and designated as the record label’s or copyright owner’s share in connection with Recordings hereunder. 10. Creative Approval: You and Company shall mutually approve creative matters (e.g., selection of Compositions to be recorded, selection of producers, and selection of studios, likenesses and concepts for Album Artwork); provided, Company shall have the sole right to approve and revise Artwork for Albums in its discretion (and to the extent costs are incurred with respect thereto, such costs shall be deducted deductions from Gross Receipts as addressed in paragraph 7 above) and, further provided, in the event that you and Company cannot mutually agree after good faith efforts to resolve any differences, Company’s good faith decision shall be final. Wheneverin this agreement your approval or consent is required, such approval or consent shall be given in writing within five (5) business days of Company’s request and yourfailure to give such notice to Company as aforesaid shall be deemed to be consent orapproval. 11. Marketing & Promotion/Marketing Restrictions: (a) Subject to your prior professional commitments, you shall be available, at Company’s reasonable request, to appear for interviews and other promotional activities in support of each Album hereunder. (b) During the Term (unless specified below), provided you are not in material breach of this agreement, it is agreed that with respect to Records hereunderthat are distributed by Company for sale in the United States: (i) Photographs/Biographical Material: During the Term, all likenesses, photographs, names, autographs and biographical material concerning you which Company desires to utilize for the purposes herein stated shall be subject to your written approval, which approval (or disapproval)shall not be unreasonably withheld and shall be given to Company within seven (7) business days after such photographs or biographical material are made available by Company to you. Your failure to give disapprovalby written notice to Company as aforesaid shall be deemed to be approval as to the material for which approval is sought. Promptly following the execution of this agreement, you shall furnish Company with a reasonable number of approved photographs and biographicalmaterial. All photos, names, autographs and biographical material furnished by you to Company or previously approved by you at any time shall be deemed approved by you for the purposes hereof. An inadvertent failure by Company to obtain your approval pursuant to this paragraph shall not be a breach of this agreement by Company nor shall it impair Company’s rights to exploit the applicable materials, provided that Company shall use reasonable efforts to prospectively cure such failure following receipt of your notice thereof.
  • 11. (ii) Premium Records: During the Term, Company shall not,without your consent, sell Records hereunder as Premium Records (i.e., a physical Record produced for use in promoting the sale of services and/or merchandise other than Records, and which bears the name of the sponsor for whom the Record is provided) without your consent. (iii) Outtakes: During the Term, Company shall not,without your consent,commercially release any Records hereunderembodying “outtakes.” “Outtakes” are preliminary versions of Masters with unfinished vocals and/oralternate takes of Masters hereunder. (iv) Third Party Licensing: Company shall not without your prior consent license any Masters to a third party for use in a political or religious endorsement or in an advertisement relating to tobacco, personal hygiene, religious or political matters. 12. Recoupable Costs: Except as otherwise expressly herein provided, all monies paid to you,or on your behalf (with yourapproval,at yourrequest,or as provided herein), or on behalf of any person, firm or corporation representing you, other than Royalties payable hereunder, shall be recoupable by Company from any and all monies payable to you under this agreement. 13. Rights: Company is the exclusive and perpetual owner of all Recordings embodying your performances made, assigned, or Delivered to Company during the Term (togetherwith all reproductions derived therefrom and performances embodied thereon) and artwork and website material created hereunder in connection therewith (“Artwork”), which ownership entitles Company, among other things, the exclusive right throughout the Territory to copyright such Artwork and Recordings (excluding the underlying composition(s)) and to secure any and all renewals and extensions of its copyright. Each such Recording and Artwork shall be considered a “work-made-for- hire” for Company (if it is not, such Recordings and Artwork will be deemed transferred to Company by this agreement, togetherwith all rights therein) and you shall execute and deliver all necessary paperwork in connection therewith within five (5) days after Company’s request therefor. You hereby irrevocably and unconditionally waive any and all moral rights in connection with the Recordings hereunder (or claims in connection therewith). Company and its designee(s) shall have the exclusive, perpetual and unlimited right, in all manner of distribution, exploitation, and commerce, to all the results and proceeds of your recording services rendered during the Term, including (without limitation) the exclusive, unlimited and perpetualrights throughout the Territory to: (i) use, reproduce, adapt, re-mix, transmit, manufacture, communicate, exploit or dispose of, in any or all methods now or hereafter known, Records hereunder and/or the Recordings embodied thereon; (ii) release Records hereunder underany name, trademark or label which Company may elect; and (iii) to perform the Recordings hereunder publicly and permit public performances thereof by any method now or hereinafter known. Notwithstanding the foregoing, in the event that Artwork is commercially exploited in any manner separate and apart from the sale or other exploitation of Albums
  • 12. or the Recordings hereunder, Company’s proceeds derived from such exploitation shall be included in Gross Receipts set forth above. 14. Name and Likeness: Company and its licensees shall have the perpetual right, and may grant to others the right, to reproduce, print, publish or disseminate in any medium the name (including, without limitation, any professional names), autographs, approved portraits, approved pictures, approved likenesses and approved biographical material of you, all in connection with the production, marketing, and exploitation of Records hereunder (and the exploitation, advertising, trade, marketing, promotion and distribution of such Records) and in general goodwill advertising for Company. Such rights shall be exclusive for Records during the Term and non-exclusive thereafter. You warrant and represent that you own the rights as provided in this subparagraph, and the use and exploitation of same will not infringe upon the rights of any Person. 15. Release Commitment. Provided you have fulfilled your material obligations hereunder, Company will release each Album of your MRO hereunderin the United States within nine (9) months after Delivery of the Album concerned. If Company fails to do so, you must give written notice to Company within 60 days of such failure and Company shall have 60 days (“Domestic Cure Period”) to cure. If Company fails to release the Album concerned before the end of the Domestic Cure Period, your sole remedy will be to terminate the Term hereof by giving Company written notice within 30 days after the expiration of Domestic Cure Period. Each foregoing 120 day and 60 day periods shall be tolled between November 15 and January 15. 16. Website. During the Term, Company shall have the exclusive and perpetual right throughout the Territory, and the obligation with respect to the United States, and may grant to others the right: (a) to create, control, host, and maintain the operation and content of one or more Internet sites and/or other locations relating to you on any distribution platform, medium, or channel, now known or hereafter developed,including social networking sites (e.g. MySpace, Facebook and Twitter) (the “Artist Sites”) relating to you. Company shall meaningfully consult with you regarding the general “feel” and type of content to be included on such Artist Sites. Notwithstanding the foregoing, with respect to social networking sites currently maintained by you, you shall have the right to continue to maintain and administer such sites for your personaluse consistent with your current use of such sites. However, during the Term, you agree to provide Company access to such socialnetworking sites for the purpose ofproviding updates and other content relating to your status as a recording artist for Company and the exploitation of Recordings. Furthermore, after the Term, Company’s right to create, control, host, and maintain such Artist Sites relating to you shall be non-exclusive. Furthermore, after the Term, Company shall ensure that any Artist Sites operated by Company shall clearly indicate that such sites are not yourofficial sites and Company shall not utilize any Artist Sites after the Term in such a manner as to imply to a reasonable user that you are updating your status, sending messages, or are otherwise involved with such Artist Sites;
  • 13. (b) to utilize any and all names (including, without limitation, all professional, stage, group,or otherassumed or fictitious names) of or relating to you in connection with any Artist Sites including, without limitation on any URL or other identifier having a similar purpose or function as a URL (the “Artist Addresses”); (c) to register any and all Artist Addresses in Company’s name. Company shall be the sole and exclusive owner of the Artist Sites and Artist Addresses, including all elements thereof, throughout the Territory. If you have registered any Artist Addresses or Artist Sites prior to the execution of this Agreement, following Company’s request, you agree to promptly amend the registration in favor of Company so that Company is the owner of the Artist Sites and Artist Addresses. After the expiration of the Term, you shall have the right to send Company written notice that Company’s right to use the Artist Addresses shall terminate sixty (60) days following Company’s receipt of such notice. Company’s ownership and use of the content of the Artist Sites shall not transfer to you following expiration of the Term. Without limiting any of Company’s rights hereunder, you hereby grant to Company the right to register, own and use an alternative URL mutually approved by you and Company incorporating the name of the Artist (the “Alternate URL”) in perpetuity solely for the promotion and exploitation of Records. Company’s transfer of ownership and use of the Artist Addresses following the expiration of the Term and your request shall not take place until you and Company have agreed to the Alternate URL as addressed above. You further agree that you have not, to date, and will not, in the future, take any action or enter into any agreement or covenant that would impinge or, in any way, limit Company’s rights under this paragraph. (d) to exploit such Artist Sites to generate revenue relating to the sale of Records or merchandise relating to the Records. Any revenue so generated shall be included within the Gross Receipts addressed herein and subject to Royalties as set forth herein. 17. Representations and Warranties: You warrant and represent that: (a) you have the right to enter into this agreement and that neither your execution of this Agreement nor your performance of the Agreement shall infringe upon or breach the rights of any third party or existing contract; (b) you have the right to fully perform the terms and conditions hereof and to grant the rights granted to Company hereunder; (c) you will not enter into any agreement which would interfere with the full and prompt performance of your material obligations hereunder; (d) neither this agreement, the Recordings and all other materials, ideas, other intellectual properties or elements furnished or selected by you or any producer of Masters contained in or used in connection with the Masters or the packaging, sale, distribution, advertising, publicizing or other exploitation thereof infringes on the right of any other person or entity; (e) you are the sole owner of the professional name “M&M” and have the authority to grant Company the right to use such professional name as set forth in this Agreement; and (f) during the Term, you will not exploit (or authorize a third party to exploit) any Masters embodying your performances recorded prior to the date hereof which are owned or controlled by you. You agree to and do hereby indemnify, save and hold Company and its licensees harmless from any and all liability, loss, damage, cost and expense
  • 14. (including, without limitation, reasonable third party legal expenses and reasonable attorney fees) arising out of or connected with any breach or alleged breach of this agreement or any claim by a third party that is inconsistent with any of the warranties or representations made by you in this agreement. 18. Assignment: Company shall have the right without yourconsent to assign this Agreement in whole or in part to any subsidiary, parent company, affiliate, or to any third party acquiring a substantial portion of Company's assets orstockor other ownership interests,or to any person or entity which distributes any Album or Recordings hereunder. Company shall also have the right without your consent to license, lease or otherwise grant any or all of its rights hereunderin accordance with the terms hereof, in whole or in part, to any party(ies), whether or not affiliated or otherwise associated with Company. Accordingly, the term “Company” as used in this agreement (or any modifications or amendments thereto)shall include Company's licensees,lessees and designees. You shall not have the right to assign this agreement or any of your rights or obligations hereunder,provided that you shall have the right to assign your rights under this agreement to a so-called “loan out” company, which is owned and controlled solely by you. 19. Ancillary Participation: In further consideration of Company’s commitment of financial and other resources hereunder, you agree to account and pay over to Company an amount equal to fifteen percent (15%) of all Touring Receipts ” above $2500.00 for any single show. “Touring Receipts means your (and any entity created or controlled by you as furnishing company, touring company, or similar entity) worldwide gross receipts (e.g. box office sales,advances,ancillary receipts such as video on demand, etc.) arising from or relating to your concert appearances or personal appearances during the Term. In addition, you agree to account and pay over to Company an amount equal to twenty percent (20%) of all Merchandise Receipts and twenty five (25%) of all Sponsorship Receipts. “Merchandise Receipts” and/or “Sponsorship Receipts” means your (and any entity created or controlled by you as furnishing company, touring company, or similar entity) worldwide gross receipts arising from or relating to the exploitation of merchandise relating to you and/or your career including, but not limited to, sales of merchandise at concert or personal appearances,online, or advances and/or royalties received from third parties performing merchandising services to you or on your behalf (e.g., merchandise company) or any endorsement or “Sponsorship” income. However, in the event that Company performs merchandise services on your behalf including, but not limited to, manufacturing or purchasing merchandise related to you for exploitation, Company shall ben entitled to fifty percent (50%) of Net Income from such exploitation. For the purpose of this provision, Net Income means gross monies directly arising from all net sales of such merchandise actually received less any returns, and refunds (including without limitation rebates etc.) and any applicable taxes and less design costs (including without limitation photograph,design, etc.), manufacturing costs (including without limitation insurance coverage), distribution costs (including without limitation shipping,collection costs,and third party commissions) and advertisement costs (including without limitation advertise placement costs [e.g., selling and servicing costs]) of the merchandise. Amounts due
  • 15. relating to Touring Receipts and Merchandise Receipts shall hereinafter be referred to as the “Ancillary Participation Payments.” The Ancillary Participation Payments shall be accompanied by reasonably detailed statements reflecting the calculation of such payments and Company shall have the right to audit your books to verify the accuracy of any such payments. You agree to account to and pay Company the Ancillary Participation Payments within thirty (30) days following the end of each calendar month. To the extent Company directly engages in the exploitation of merchandise pursuant to this provision,yourshare of Net Income shall be considered part of Gross Receipts hereinabove. 20. Definitions: (a) Advance: A prepayment of potential payments subsequently due to you. Company may recoup Advances from royalties to be paid to or on your behalf pursuant to this Agreement. Mechanical Royalties will not be chargeable in recoupment of any Advances except those which are expressly recoupable from all monies payable under this Agreement. (b) Album: A sufficient number of Masters embodying yourperformances to comprise one (1) or more compact disc Records, or the equivalent, of not less than forty-five minutes of playing time and containing at least ten (10) different Compositions. (c) Single: A vinyl-disc Record not more than seven (7”) inches in diameter, or the equivalent in a non-vinyl-disc configuration, which contains Recordings of not more than two (2) Compositions. (d) Composition: A single musical composition, irrespective of length, including all spoken words and bridging passages and including a medley. Recordings of more than one (1) arrangement or version of the same Composition, reproduced on the same Record, will be considered, collectively, a recording of one (1) Composition for all purposes under this Agreement. (e) Master, Master Recording and Recording: Every recording of sound,whether or not coupled with a visual image, by any method and on any substance ormaterial, whether now or hereafter known, which is used or useful in the recording, production and/or manufacture of Records. (f) Mechanical Royalties: Royalties payable to any Person for the right to reproduce and distribute copyrighted Compositions on Phonograph Records other than AudiovisualRecords. (g) Person: Any natural person, legal entity or other organized group of persons or entities, or legal successors or representative of the foregoing. (All pronouns, whether personal or impersonal, which refer to Persons include natural persons and other Persons).
  • 16. (h) Records and Phonograph Records: All forms of reproductions (including sound alone, audiovisual reproductions and Audiovisual Records), now or hereafter known, manufactured or distributed primarily for home use, institutional use (e.g., library or school), jukebox use, or use in means of transportation (including, without limitation, video games and any software media or transmission of such reproductions via telephone, cable, satellite or other transmissions to consumers directly into the home [e.g., CD-ROM, CD-I and similar disc systems, interactive cable and/or telephony]). (i) AudiovisualRecord: A Phonograph Record including sound accompanied by visual images (e.g., so-called “videos”) intended primarily for home consumer or institutional (e.g., library or school) use, jukebox use or use in means of transportation, including, without limitation, videocassettes, laser discs, videodiscs or other media or devices now or hereafter known that, among other things, allow consumers to control the viewing of, or to interact with, the Audiovisual Record, including, without limitation, transmissions to consumers directly into the home that enable consumers to view such Records at any time. (j) Recording Costs: All amounts representing costs and/or expenses paid or incurred by Company in connection with the production of finished Recordings under this Agreement. Recording Costs include, without limitation, travel, rehearsal and equipment rental and cartage expenses, advances to producers, transportation costs, hotel and living expenses approved by Company, studio and engineering charges in connection with Company’s facilities and personnel or otherwise, all costs and expenses of obtaining rights to all samples of Recordings, selections and other materials embodied in Recordings hereunder (including, without limitation, all advances, license fees, attorneys’fees and clearing house fees), all costs of mastering, remastering, remixing and/or “sweetening” and all costs necessary to prepare Recordings for release on digital media. Recording Costs shall also include all costs relating to the creation and production of AudiovisualRecords. 21. Miscellaneous: (a) THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE APPLICABLE TO AGREEMENTS EXECUT ED AND FULLY PERFORMED THEREIN. TENNESSEE STATE AND FEDERAL COURTS SHALL HAVE EXCLUSIVE JURISDICTION OF ANY CLAIM ARISING FROM OR RELATED TO THIS AGREEMENT. (b) Your remedies for any breach of this Agreement will be limited to an action for damages (but not punitive, special or consequential damages) and in no event will you be entitled to rescind this agreement or to seek injunctive or any otherequitable relief, or to otherwise enjoin or interrupt the production or distribution of the Masters or works embodying the Masters or Company’s exercise and exploitation of its rights hereunder. You recognize that a breach by you of this agreement would cause Company irreparable injury and damage that cannot be reasonably or adequately
  • 17. compensated by damages in an action at law and, therefore, you hereby expressly agree that Company shall be entitled to injunctive and other equitable relief, without posting any bond, to prevent and/or cure any breach or threatened breach of this agreement by you. (c) You shall not re-record during the Term or within three (3) years thereafter any musical composition, or portion thereof, embodied on a Master hereunder. (d) Any waiver of any term of this Agreement in a particular instance shall not be a waiver of such term for the future. To the extent that any of the provisions of this agreement, or any portion of any provision, shall be found to be illegal or unenforceable for any reason,that provision or portion of a provision shall be modified or deleted in such a manner so as to make this agreement as modified legally enforceable under applicable laws, and the balance of the agreement shall not be affected by that modification or deletion, the balance being construed as severable and independent. (e) This document constitutes the entire agreement and understanding between the parties concerning the subject matter hereof, and supersedes and replaces all prior negotiations, proposed agreements and agreements, written and oral, relating thereto, and cannot be changed or terminated except by a written instrument signed by the parties hereto. (f) You represent and warrant that you have reviewed this document with your own legal counsel prior to signing (or, in the alternative, you represent and warrant that you have been afforded the opportunity to review this document with your own legal counsel prior to signing, and have decided, in your sole determination, not to do so). (g) You acknowledge that no other party, nor any agent or attorney of any other party, has made any promise, representation or warranty whatsoever, express or implied, not contained herein concerning the subject matter hereof, to induce you to execute this agreement, and you acknowledge that you have not executed this agreement in reliance on any such promise, representation, or warranty not contained herein. (h) Neither party hereto, shall be in default of any term, condition or provision of this agreement unless and until the other party shall give the party allegedly in default written notice specifying such default in detail and such default shall not have been cured within thirty (30) days after such party’s receipt of such notice. The foregoing shall not apply to any default by you, which is not susceptible to cure, including but not limited to a breach by you of any exclusivity obligations hereunder. (i) All notices to you shall be sent to you at the following address first listed above. All notices to Company shall be sent to Company at the following address: address first listed above to the attention of: XXXXXX with a courtesy copy to XXXX. Either party may
  • 18. change the address to which notices should be sent by advising the other, in writing, of such party’s new address. (j) This Agreement may be executed in separate, duly-executed, counterparts with the same force and effect as if the signatures were upon the same instrument. For enforcement purposes, a facsimile signature shall have the same force and effect as an original. If the above is acceptable, please sign where indicated below. This Agreement shall not become effective until signed by all parties hereto. RECORDCO By: An Authorized Signatory ACCEPTED AND AGREED TO: