Recording Agreement PT 1: MMAPGX

Recording Agreement

THIS AGREEMENT is made as of this __________day of __________, __________, between __________d/b/a__________Records (hereinafter referred to as “Company”), __________, and __________ (hereinafter referred to as “you”), __________.

1. Term

1.1 The term of this agreement and the initial Contract Period hereunder will begin on the date hereof. Each Contract Period hereunder will end, unless extended as provided herein, on the later of (a) the last day of the twelfth (12th) month following the month of your Delivery to Company or (b) the last day of the ninth (9th) month following the month of Company’s United States initial retail street date, of the last Album Delivered by you in fulfillment of your Recording Commitment for the Contract Period concerned.

1.2

(a)

You hereby grant Company six (6) options to extend the term of this agreement for one additional Contract Period each (each an “Option Period”), on the same terms and conditions applicable to the initial Contract Period except as otherwise provided herein. Company may exercise each such option by giving you notice at any time before the expiration of the Contract Period then in effect. If Company exercises an option, the applicable Option Period will begin immediately after the end of the then current Contract Period (or, if Company so advises you in its exercise notice, such Contract Period will begin on the date of such exercise notice).

(b)

Notwithstanding anything to the contrary contained in this paragraph 1.2, if Company has not exercised its option to extend the term of this agreement for an additional Contract Period as of the date the then-current Contract Period would otherwise expire, the following will apply:

(i)

You will notify Company (the “Option Warning”) that the applicable option has not yet been exercised.

(ii)

Company will have the right to exercise such option at any time until the date ten (10) business days after its receipt of the Option Warning (the “Extension Period”).

(iii)

The then-current Contract Period will continue in effect until either the end of the Extension Period, or Company’s notice to you (“Termination Notice”) that Company does not wish to exercise such option, whichever is sooner.

(iv)

For the avoidance of doubt, nothing herein will 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 clause 1.2(b)(i) above.

1. Delivery Obligations

2.1 During each Contract Period you will Deliver to Company commercially and technically satisfactory Masters. Such Masters will embody your featured vocal performances of contemporary selections, not recorded “live” or “in concert,” and that have not been previously recorded by you, whether hereunder or otherwise. (Any Masters that were partially or completely recorded prior to the term of this agreement, and which are delivered by you to Company will be deemed to have been recorded during the initial Contract Period.) Neither Multiple Record Albums nor Joint Recordings may be recorded as part of your Recording Commitment hereunder without both your and Company’s written consent. Without limiting the foregoing, Company has the right to reject any Master that Company reasonably believes is either offensive to reasonable standards of public taste or in violation of the rights of others.

2.2 During each Contract Period, you will perform for the recording of Masters and you will Deliver to Company those Masters (the “Recording Commitment”) necessary to satisfy the following schedule (sometimes respectively, the “First Album,” “Second Album,” “Third Album,” “Fourth Album,” “Fifth Album” “Sixth Album” and “Seventh Album”):

Contract period

Recording commitment

Initial contract period

one (1) album

Option periods

one (1) album each

2.3 The Album in fulfillment of your Recording Commitment for the initial Contract Period will be Delivered to Company on or before __________, __________, and the Album in fulfillment of your Recording Commitment for each Option Period will be Delivered to Company within four (4) months after the commencement date of the Option Period concerned.

2.4 You will not deviate from the Delivery schedule specified in paragraph 2.3 without Company’s written consent; timely Delivery as provided therein is a material obligation hereunder. You agree not to commence the recording of any Record hereunder until nine (9) months after the date of Delivery to Company of the immediately preceding Record in fulfillment of your Recording Commitment hereunder. Each Record will consist entirely of Masters made in the course of that recording project.

2.5

(a)

Unless Company requests that you to deliver the Masters in additional and/or other form(s), which Company may do in its sole discretion, and you hereby agree to comply with any such requests:

(i)

you agree to Deliver to Company each Master hereunder in the form of a Digital Master. You will concurrently deliver all two inch and half inch tapes or Pro Tools Files and all multitrack tapes recorded in connection with the recording project, including, without limitation, all twenty-four (24) track master tapes;

(ii)

upon Company’s request, you agree to Deliver a 96Khz/24 bit 2 channel stereo version and a 5.1 channel surround sound version of each Recording embodied on a Master hereunder for use on DVD Audio discs (which such versions shall be created pursuant to a recording budget separate from the Authorized Budget applicable to such Master and shall not be payable from or reduce any Authorized Budget); and

(iii)

you agree to Deliver to Company any additional materials as may be required pursuant to the master delivery requirements of Company in effect at such time.

(b)

You shall comply with Company’s policies with respect to samples, and you hereby warrant and represent that all information supplied by you to Company in that regard is and shall be complete and correct. As of the date hereof, Company’s policies with respect to all samples embodied in any Master Recording (including remixes of Master Recordings, regardless of whether such remixes will be commercially released) are as follows:

(i)

Prior to Company’s authorization of pre-mastering (e.g., equalization and the making of reference dubs or the equivalent thereof in the applicable configurations) for a particular set of Master Recordings hereunder, you shall deliver the following to Company for the applicable set of Master Recordings:

(A)

A detailed list of any and all samples embodied in each Master Recording.

(B)

A written clearance or license for the perpetual, non-restrictive use of each such sample interpolated in each Master Recording in any and all media from the copyright holder(s) of the Master Recording and the Composition sampled.

(C)

Any and all necessary information pertaining to credit copy required by the copyright holder(s) of each sample interpolated in each Master Recording.

(ii)

No Master Recording will be scheduled for release and no Master Recording shall be deemed to be Delivered to Company hereunder (and no Advances due on Delivery, if any, will be paid) until such written sample clearances (including credit copy, if any) have been obtained and approved by Company.

(iii)

If any such sample clearance provides for an advance, a flat-fee “rollover” payment and/or a royalty payment for Net Sales of the applicable Master Recording and your record royalty account hereunder is in an unrecouped position at the time such royalties are due, then, notwithstanding anything to the contrary contained herein, you shall be solely responsible for making, and shall make, such payment(s) to the applicable Person promptly upon receipt from Company of such Person’s accounting statement thereof. If Company makes any such payment(s), such payment(s) will constitute an Advance and will be recoupable from all monies becoming payable by Company to you or the Artist under this agreement.

(c)

Provided you have complied with your other material obligations hereunder and Company is in receipt of all items described in paragraph 14.13 below, the date of Delivery of a Record in fulfillment of your Recording Commitment will be the date of receipt of such Digital Master by Company at the address specified on page 1 hereof; concurrently therewith, you will send a written notice to Company that you have so delivered, however, failure to send such notice shall not be deemed to be a breach of this agreement.

2.6 Company’s election to make a payment to you which was to have been made upon Delivery of Masters or to release a Record derived from such Masters will not be deemed to be its acknowledgment that such “Delivery” was properly made, and Company will not be deemed to have waived either its right to require such complete and proper performance thereafter or its remedies for your failure to perform in accordance therewith. If Company chooses to release any Album in fulfillment of your Recording Commitment hereunder prior to the completion of all requirements of Delivery of such Album, Company will pay any Advance due upon the Delivery of such Album promptly after the United States release of such Album.

2.7 Company may release up to three (3) “Greatest Hits,” “Best of,” or other similar compilation albums during the term, subject only to consulting with you as to the repertoire to be included. If Company so requests, you shall deliver to Company within ninety (90) days following such request, up to three (3) Masters, consisting of newly recorded material, for inclusion on any such albums. Such Masters will be recorded in accordance with the procedures set forth in paragraph 3 below and all costs thereof shall constitute Advances. No “Greatest Hits,” “Best of,” or other similar compilation shall be deemed part of your Recording Commitment hereunder.

1. Recording Procedure

3.1 You will conduct recording sessions only after first obtaining Company’s written approval of the individual producer, the places of recording, the Compositions to be recorded and the Authorized Budget (defined below). You will request such approvals at least fourteen (14) days prior to the proposed first date of recording, and Company will not unreasonably withhold any such approval. If Company disapproves any of the foregoing, you will promptly submit alternative proposals, but in all instances you will allow Company a reasonable period of review prior to the proposed first date of recording.

3.2 You will engage all artists, producers, musicians, and other personnel for the recording sessions hereunder, but only after Company sets the budget for all Recording Costs to be incurred in connection therewith, to be determined by the Company, in its sole discretion, after meaningful consultation with you (the “Authorized Budget”). The Authorized Budget may provide for payment to you of no more than union scale for your services (subject to paragraph 4.1) and will not contain a charge for arrangements or orchestrations supplied by you. The Authorized Budget will constitute the maximum amount that you may expend for the applicable session or sessions. The granting of authorizations and the approval of Authorized Budgets are entirely within Company’s discretion. Company has the right to have a representative attend all recording sessions conducted pursuant to this agreement at Company’s cost on a non-recoupable basis. Without limiting Company’s other rights or remedies, if it reasonably appears to Company that the unpaid Recording Costs for any Masters will exceed the amount remaining in the Authorized Budget, Company has the right to immediately cease paying sums from the Authorized Budget unless you establish to Company’s reasonable satisfaction that you can and will pay or reimburse Company for any Recording Costs in excess of the Authorized Budget. Nothing contained in this agreement will be deemed to make you Company’s agent or authorize you to incur any costs on Company’s behalf under this agreement. Notwithstanding the foregoing, without your consent, the minimum Authorized Budgets for Records recorded pursuant to the Recording Commitment will not be less than the following:

Album

Minimum Budget

First

$__________

Second

$__________

Third

$__________

Fourth

$__________

Fifth

$__________

Sixth

$__________

Seventh

$__________

3.3 You will deliver to Company copies of substantiating invoices, receipts, Form Bs, vouchers and similar satisfactory documentary evidence of Recording Costs for the production of each particular Record of the Recording Commitment, and if you fail to do so, Company’s obligation to pay further sums from the Authorized Budget will be suspended until delivery thereof. You agree to deliver to Company (or cause the individual producer of the Masters to deliver) the Immigration and Naturalization Service certificates described in paragraph 3.5 below. Form Bs and W-4s to Company within seventy-two (72) hours after each session hereunder and you shall timely make all required union payments. You further agree to deliver all other invoices, receipts, vouchers and documents within one (1) week after your or the producer’s receipt thereof. If Company pays any late-payment penalties solely by reason of your failure to make timely delivery of any such materials, you will reimburse Company for same upon demand and, without limiting its other rights and remedies, Company may deduct an amount equal to all such penalties from monies (other than Mechanical Royalties) otherwise payable to you under this agreement. Company will be responsible for late-payment penalties only if caused solely by Company’s acts or omissions. You agree, represent and warrant that all Masters delivered by you to Company hereunder will be free and clear of any liens, encumbrances or claims by any Person (other than those, if any, resulting from Company’s acts or omissions), and all Recording Costs with respect thereto shall have been fully paid (other than those unpaid as a result of the acts or omissions of Company).

3.4

(a)

Without limiting the foregoing, your obligations include furnishing the services of the individual producers of Masters hereunder, and you are responsible for engaging and paying for such services.

(b)

In the event that Company agrees that Company shall engage and/or directly pay the producer of any Master on your behalf (provided that Company is under no obligation whatsoever to agree), the following will apply:

(i)

Your royalty account and the Authorized Budget for the recording project concerned will be charged with a Recording Cost item in the amount that Company is obligated to pay such producer in connection with that project.

(ii)

The royalties (excluding Mechanical Royalties) payable to you in respect of those Recordings pursuant to Article 6 will be reduced by all monies that Company is obligated to pay those producers in connection with that project.

(c)

At your written request pursuant to Company’s standard letter of direction executed by you and actually received by Company within sixty (60) days after the initial United States release of the Album concerned, Company will pay a royalty to any mutually approved independent third party producer engaged by you (or by Company, on your behalf) and to whom you are obligated to pay a royalty (the “Producing Royalty”) in respect of Net Sales of Records (and other exploitations of the applicable Masters) released hereunder. The Producing Royalty will be computed, adjusted and paid in the same manner, at the same time and subject to the same conditions as the royalty payable to you, but at a basic rate of no more than three percent (3%), with escalations in such basic rate at certain sales levels, without your prior written consent, with proportionate reductions on all sales (and other exploitations of the applicable Masters) for which reduced royalties are payable under this agreement. The Producing Royalty will not be payable to the producer concerned until Company has recouped (pursuant to the terms hereof) all Recording Costs attributable to the Recordings concerned. Such recoupment will be computed at your net royalty rate (as reduced to reflect the deduction of the Producing Royalty and royalties payable to all other third party royalty participants). After such recoupment, the Producing Royalty will be computed retroactively and paid (as provided above) on the Net Sales of the Record concerned from the first such Record sold (after recoupment of the applicable producer advance). The amount of the Producing Royalty will be recoupable by Company from all monies (excluding Mechanical Royalties) payable or becoming payable to you hereunder. Company’s compliance with your request to pay any such Producing Royalty will not constitute the producer, or any payee on behalf of the producer, a beneficiary of or a party to this agreement. All Producing Royalty payments hereunder will constitute payments to you, and Company will have no liability by reason of any such payment, or failure to make same. You hereby indemnify and hold Company harmless (pursuant to the terms of paragraph 13.5 below) against any claims asserted against Company in connection with any such Producing Royalty.

3.5 In connection with each recording session conducted hereunder, you will comply with the following procedures required by United States immigration law:

(a)

Before any individual renders services in connection with the recording of any Master hereunder (including, without limitation, each background instrumentalist, background vocalist, producer and engineer):

(i)

You will require each such individual to complete and sign the EMPLOYEE INFORMATION AND VERIFICATION (“employee section”) of a U.S. Immigration and Naturalization Service (“INS”) Employment Eligibility Certificate (“Form I-9”), unless you have already obtained (and retained) such certificate from that individual within the past three (3) years;

(ii)

You will complete and sign the EMPLOYER REVIEW AND VERIFICATION (“employer section”) of each such certificate; and

(iii)

You will attach copies of the documents establishing identity and employment eligibility that you examine in accordance with the instructions in the employer section.

(b)

You will not permit any such Person who fails to complete the employee section (or to furnish you with the required documentation) to render any services in connection with Recordings made under this agreement.

(c)

You will deliver the employee and employer certificates (with copies of the necessary documents attached) to Company within seventy-two (72) hours after the conclusion of the session concerned.

(d)

You will comply with any revised or additional verification and documentation procedures required by the INS in the future.

1. Recoupable Costs

4.1 Company may pay from the applicable Authorized Budget all union scale payments required to be paid to Artist in connection with Masters made hereunder, all costs of instrumental, vocal and other personnel specifically approved by Company for the recording of such Masters, and all other amounts required to be paid by Company pursuant to any applicable law or any collective bargaining agreement between Company and any union representing persons who render services in connection with such Masters. Notwithstanding the foregoing, you agree that the Advances hereunder include the prepayment of session union scale as provided in the applicable union codes, and you agree to complete any documentation required by the applicable union to implement this sentence. At Company’s request, union contracts will be filed by you and supplied to Company and pension benefits will be paid on your behalf from the Authorized Budget, which payments will be an Advance.

4.2 All Recording Costs hereunder and all costs associated with the creation of Artwork (including, without limitation, art, photos, graphic design, etc.) constitute Advances. In addition, all packaging costs in excess of Company’s then standard design, engraving or manufacturing costs with respect to a standard Record package are your responsibility and may, at Company’s election, be recovered as provided in paragraph 5.3 below. Company will notify you if Company anticipates incurring any such excess design, engraving or manufacturing costs in connection with any Album package hereunder. Provided that changing the Album package would not unreasonably delay the scheduled release of the Record concerned, if you object to such excess design, engraving or manufacturing costs in connection with an Album package not prepared by you or not prepared at your request, and such written objection is received by Company within five (5) days after Company’s notice, and Company nevertheless uses such package, Company will not charge you for the excess. No failure to so notify you will be deemed a breach hereof; provided that, if Company fails to so notify you, Company will not charge you for any such excess. One half (1/2) of all Video Costs will be recoupable from audio Record royalties. To the extent that any Video Costs are not recoupable or recouped from audio Record royalties, such costs will be recoupable from monies (other than Mechanical Royalties) otherwise payable to you from the exploitation of Videos hereunder. Fifty percent (50%) of all costs paid by Company in connection with any television campaign in the United States in conjunction with Records featuring your performance will constitute Advances. All costs or expenses paid by Company to third parties in connection with independent publicity will constitute Advances. Fifty percent (50%) of all costs incurred by Company in connection with independent marketing and/or independent promotion of Records featuring your performance will constitute Advances. All costs paid by Company in connection with “live” public performances by you and/or to purchase articles of dress and styling such as clothing, shoes, jewelry, makeup, hair and body styling will constitute Advances. All costs specifically with respect to you incurred in connection with creating the so-called “enhanced” or multimedia portion of an enhanced CD, CD Plus, CD ROM, DVD, or any other similar configuration (whether now known or hereafter created) embodying Masters hereunder (the “Enhanced Costs”) including, without limitation, ECD Material, will constitute Advances. All costs paid or incurred by Company in connection with the creation, development and maintenance of any website featuring the promotion of you and Records embodying Masters will constitute Advances.

4.3 The portion of the Recording Costs incurred in the making of a Joint Recording to be charged as an Advance will be computed by multiplying the aggregate amount of total Recording Costs incurred in making that Joint Recording by the same fraction used in determining the royalties payable to you in respect of that Joint Recording.

1. Additional Advances

5.1 All monies paid to you during the term of this agreement, as well as all monies paid on your behalf at your request, or as otherwise contemplated herein, other than royalties paid pursuant to this agreement, constitute Advances unless otherwise expressly agreed to in writing by Company, or except as otherwise set forth in this agreement.

5.2

(a)

In connection with your Delivery to Company of the Masters constituting each Album Delivered in fulfillment of your Recording Commitment, Company will pay you an Advance in the amounts indicated below:

(i)

With respect to the First Album, $__________.

(ii)

With respect to each subsequent Album, recorded and delivered hereunder in fulfillment of your Recording Commitment, the Formula Amount, but not less than the minimum nor more than the maximum amount set forth below:

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(iii)

The “Formula Amount” for a particular Album recorded and delivered hereunder in fulfillment of your Recording Commitment will mean an amount equal to twenty percent (20%) of whichever of the following amounts is less: (A) the amount of the royalties, after the retention of reserves (which, for purposes of this calculation, will be fifteen percent (15%)), earned by you hereunder from Net Sales (defined below) of the immediately preceding Album delivered hereunder in fulfillment of your Recording Commitment; or (B) the average of the amounts of such royalties so earned by you hereunder on the two (2) immediately preceding Albums delivered hereunder in fulfillment of your Recording Commitment. In either case, the amount of royalties with respect to any preceding Album will be computed as of the end of the month in which occurs the date which is twelve (12) months following the initial commercial release in the United States of the preceding Album concerned.

(b)

The Advances referred to in this paragraph 5.2 will be paid one-half (1/2) upon commencement of recording of the Album concerned (or, in the case of the First Album, upon execution of this agreement) and the balance upon Delivery of such Album.

5.3 If the Recording Costs and other Advances paid or reimbursed by Company for any Recording in fulfillment of your Recording Commitment exceed the Authorized Budget therefore, you will be solely responsible for such excess, it being agreed that if Company elects to pay such excess, such payment will be a direct debt from you to Company which, in addition to any other available remedies, Company may recover from any sums payable to you or your designees. Notwithstanding the foregoing, if the excess was caused solely by Company, Company shall be responsible for such excess, however, Company may recover the amount of such excess from royalties (other than Mechanical Royalties) payable to you or your designees.

1. Royalties

6.1 In consideration of the copyright ownership provided below, Company’s rights to use your name and likeness as provided herein, and the other agreements, representations and warranties contained herein, Company agrees to pay you in connection with the Net Sale of Records consisting entirely of Masters hereunder and sold by Company or its licensees and in connection with other commercial exploitations of the Masters by Company or its licensees, a royalty computed at the applicable percentage indicated below, of the applicable Royalty Base Price with respect to the Record concerned, it being agreed that such royalties will be computed and paid in accordance with Article 7 below and the other provisions set forth herein.