Record Producer Agreement
When to Use This Document:
This is a full-fledged, long form producer's agreement, to be entered into by a producer who will be
creating a commercially released master recording(s) and an artist or a record label.
Why this can be a critical document:
Choosing a producer and negotiating their percentage points and future rights is an important decision for
an artist at any stage of the game. Generally, the artist is responsible for hiring the producer, even when a
record label is involved on behalf of the artist in terms of budgets and negotiations. Record labels may also
use this form for that reason.
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1A. PROVISION REGARDING ARTIST'S MINORITY STATUS
PRODUCER'S AGREEMENT
Agreement made as of this ____ day of _______ 20___ between
_______________________ ("you"), c/o ___________________________
_________________________ and _________________________________ (hereinafter
"COMPANY").
1. ENGAGEMENT
(a) COMPANY hereby engages you and you hereby accept such engagement to render
your exclusive services for COMPANY subject to subparagraph (f) below, as the
producer of Masters embodying the performances of artists (each artist whose Records
are produced by you hereunder is individually and collectively referred to as "Artist" and
each Artist's agreement with COMPANY is referred to as the "Artist Agreement"), which
Masters shall be commercially satisfactory for the production and manufacture of
Records.
(b) The term of this agreement shall expire ______ (__) year from the date hereof. You
hereby grant COMPANY ______ (__) separate options to extend the term of this
agreement for additional periods of one (1) year per each option on the same terms and
conditions applicable to the initial one (1) year term, except as provided herein.
COMPANY may exercise each of those options by notifying you in writing at any time
before the expiration of the then-current term. If COMPANY exercises such an option,
the additional period of one (1) year shall commence upon the expiration of the
immediately preceding period.
(c) The Masters shall embody performances by Artist of selections mutually designated
by you, COMPANY and Artist.
(d) COMPANY may reject any Master which is of unacceptable quality, or which
COMPANY reasonably deems to be offensive to reasonable standards of public taste or
morals or may infringe on the rights of others. If COMPANY rejects any such Master
you shall rerecord each such rejected Master until a Master acceptable to COMPANY has
been Delivered.
(e) You shall Deliver to COMPANY a monaural tape (if requested by COMPANY) and a
two-track stereo tape for each Master as well as reference discs which are representative
of such tape masters. You shall Deliver at the same time any mult-track master tapes
recorded in connection with the recording project. (As used herein, "Delivery" shall mean
the receipt by COMPANY of commercially satisfactory Master Recordings embodied on
master tapes fully edited, equalized, mixed and leadered for the production of parts
necessary for the manufacture of Records, all publishing and songwriter information
(including applicable music performance rights organizations), label copy information,
LP credits, the timings of each Composition contained on the Record, ancillary materials
prepared by or for you, necessary first-use mechanical licenses, information necessary for
side-artist permissions, all other necessary approvals or consents, and any information
required to be delivered to unions, guilds or other third parties. Delivery will also include
the approval of a reference disc from which metal parts can be prepared. Delivery shall
be made on or before the last date for timely Delivery of the applicable Masters pursuant
to the applicable Artist agreement.
(f) You shall not render services as a producer of Records for any Person other than
COMPANY during the term hereof. [Notwithstanding the foregoing, you shall have the
right to produce the following number of LPs for Persons other than COMPANY during
each applicable year of the term, provided such production work in no way interferes
with your obligations hereunder:]
[DRAFT NOTE: Delete or modify bracketed as portions necessary.]
2. RECORDS AND ARTISTS
(a) You shall render your services hereunder on such Recordings as COMPANY and you
shall mutually designate, provided such Masters are recorded by Artists under contract to
COMPANY.
(b) During each applicable year of the term hereof, you shall produce at least the
following number of Sides for COMPANY:
(1) Year One:
(2) Year Two (if any):
(3) Year Three (if any):
(c) Provided that you are not in material breach hereof and that you otherwise comply
with paragraph 2(a) hereof, COMPANY guarantees that you shall produce no less than
the number of Sides described in paragraph 2(b) above in each applicable year of this
agreement. In the event that COMPANY fails to comply with the previous sentence [and
provided you have so notified COMPANY in writing at least thirty (30) days prior to the
expiration of the then current year of the term], COMPANY's only obligation shall be to
pay you an amount equal to the guaranteed number of [Sides] [LPs] in that year, less the
number of [Sides] [LPs] actually produced by you in that year, times the advance per
[Side] [LPs] specified in paragraph ____. If COMPANY has offered you the opportunity
to produce Masters and you decline to produce such Masters, the number of Masters you
have so declined to produce shall reduce the guarantee described herein, and you shall
immediately return that portion of the Advance previously paid to you applicable to the
unrecorded Masters. If you do not immediately return such portion of Advance,
COMPANY may, in addition to other applicable remedies, deduct same from any monies
payable to you.
(d) Prior to your producing Recordings of any Artist, the Artist concerned shall agree, by
way of COMPANY's standard letter of direction, to pay you your compensation
(Advances and royalties) from monies otherwise payable by COMPANY to such Artist.
COMPANY shall not be obligated to allow you to produce an Artist that does not comply
with the foregoing. The foregoing shall not apply if the Artist does not have a so-called
"all-in" recording fund and/or "all-in" royalties, in either of which events, your
compensation and royalties shall be paid by COMPANY in addition to monies paid to
Artist.
3. SERVICES
(a) Your services hereunder include, but are not limited to, the planning, preparation,
rehearsal, production and direction of recording sessions in accordance with the terms
and conditions of this agreement.
(b) In connection with each recording session hereunder, you agree:
(1) to engage on COMPANY's behalf conductors, vocalists, musicians, arrangers
(including "sketchers"), orchestrators and copyists;
(2) to arrange for the use of the recording studios approved in the proposal, and other
necessary technicians and technical facilities in connection with such recording sessions;
(3) to appear at each scheduled recording session;
(4) to render services hereunder, in connection with the production of Artist's Masters, to
the best of your ability; and
(5) to make proper preparations for such sessions and rehearse, record and rerecord the
selected musical Compositions and comply with such instructions under the general
direction of COMPANY, or its duly authorized agent, until acceptable Masters are
Delivered to COMPANY.
(c) You shall notify the appropriate Local of the American Federation of Musicians in
advance of each recording session.
(d) You shall timely supply COMPANY with all of the information it needs in order: (1)
to make payments due in connection with such Recordings; (2) to comply with any other
obligations COMPANY may have in connection with the making of such Master
Recordings; and (3) to prepare to release Records derived from such Master Recordings.
Without limiting the generality of clause (2) of the preceding sentence, you shall furnish
COMPANY with all information it requires to comply with its obligations under its union
agreements, including, without limitation, the following:
(A) If a session is held to record new tracks intended to be mixed with existing tracks
(and if such information is requested by the American Federation of Musicians), the dates
and places of the prior sessions at which such existing tracks were made, and the AFM
Recording Contract (Form "B") number(s) covering such sessions.
(B) Each change of title of any Composition listed in an AFM Recording Contract (Form
"B").
(C) A listing of all the musical selections contained in Recordings made under this
agreement.
(e) Nothing in this agreement will obligate COMPANY to continue or permit the
continuation of any recording session or project, even if previously approved; if
COMPANY reasonably anticipates that the Recording Costs will exceed those specified
in the approved budget or that the Recordings being produced will not be satisfactory.
(f) You will not directly or indirectly act or purport to act on behalf of COMPANY
without COMPANY's express prior written approval as to each such action.
(g) In connection with each recording session conducted hereunder, you will comply with
the following procedures required by the United States immigration law:
(1) 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):
(A) 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 years;
(B) You will complete and sign the EMPLOYER REVIEW AND VERIFICATION
("employer section") of each such certificate; and
(C) You will attach copies of the documents establishing identity and employment
eligibility that you examine in accordance with the instructions in the employer section.
(2) 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.
(3) 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.
(4) You will comply with any revised or additional verification and documentation
procedures required by the INS in the future of which COMPANY advises you.
4. BUDGET/ADVANCE
(a) You shall, promptly after COMPANY's request, submit a budget to COMPANY for
the recording of Masters embodying an Artist's performances ("Budget"). The Budget
shall be in writing and shall specify the suggested selections to be recorded (to be
mutually approved by COMPANY), the number of musicians to be employed, an
estimate of the recording and studio costs to be incurred in connection therewith, your
Advances (which shall be deemed recording costs), and the proposed time, dates and
places of recording.
(b) The Budget must be approved by COMPANY before you commence any recording
hereunder.
(c) If COMPANY has not approved the Budget within five (5) business days after its
submission, it shall be deemed disapproved; in each such case you and COMPANY shall
thereafter meet in order to arrive at a satisfactory Budget.
(d) For Masters produced by you hereunder, COMPANY shall pay you in connection
with the production of Records of Artists described in paragraph 2(a) hereof, an Advance
which shall be fully recoupable from any and all royalties otherwise earned in respect to
all Masters produced by you hereunder for the Artist concerned in the total amount of
________________________ ($_________) per [Side] [LP], which amount shall be
deducted from the recording budget or fund applicable with respect to the Artist
concerned. Each Advance shall be payable one-half (2 ) promptly after you notify
COMPANY of the commencement of recording of the applicable recording project and
one-half (2 ) within fourteen (14) days following Delivery to COMPANY of all Masters
in connection with the applicable project.
5. PRODUCTION COSTS
(a) You shall not directly or indirectly incur any liability for which COMPANY may be
responsible in connection with any recording session hereunder without obtaining
COMPANY's prior written approval as to the nature, extent and limit of such
expenditure.
(b) Within fourteen (14) days after the date of Delivery of the Masters, COMPANY will
pay the authorized recording costs incurred up to the amount agreed upon in the approved
Budget.
(c) If the actual recording costs incurred by COMPANY exceed the approved Budget you
shall be solely responsible for such excess recording costs; provided that if COMPANY
elects to pay such excess recording costs, COMPANY shall be entitled to deduct any
such excess payments from any and all royalties or other sums due and payable to you. In
the event you and the Artist each claim that the other is responsible for all or a part of any
such excess, COMPANY shall, in its reasonable business judgment, decide what portion
of the excess is attributable to you, and such amount shall be your responsibility
hereunder. COMPANY's decision in any such dispute shall be final.
(d) In the event that you should delay the commencement of, delay the completion of, or
be unavailable for any scheduled recording session hereunder of which you have been
given prior notice, or tardily submit information to COMPANY which results in a late
payment fine levied against COMPANY, COMPANY shall have the right at its election
to demand reimbursement or to deduct any such expenses incurred by COMPANY from
any and all royalties or other monies otherwise due and payable to you from any project
hereunder.
(e) All recording costs as that term is defined in the applicable Artist Agreement, incurred
by you in connection with the production and recording of the Masters, up to the amount
of the approved Budget set forth in paragraph 4 above, shall be promptly paid by
COMPANY.
6. COMPANY'S RIGHTS
You acknowledge that, as between you and COMPANY, COMPANY is the sole,
exclusive and perpetual owner of all of the Masters from inception of recording, which
ownership entitles COMPANY, among other things to:
(a) The exclusive and perpetual ownership of all Masters (and any and all duplicates,
derivatives thereof including, without limitation, any and all incomplete Master, any and
all outtakes, etc.) and Records manufactured therefrom and the unlimited right to use and
control the same and the performances embodied thereon. COMPANY's ownership and
rights with respect to the Masters shall extend to all tapes, mothers, stampers, derivatives,
and other physical devices embodying performances of Artist made at recording sessions
pursuant to the terms of this agreement.
(b) The exclusive ownership of all rights of copyright in Records embodying the results
and proceeds of your and Artist's services, including the exclusive right to copyright the
"sound recordings" in the name of COMPANY, to renew and extend such copyrights (it
being agreed that for this purpose you are deemed COMPANY's employee for hire and
the sound recordings "works for hire" as defined by the United States Copyright Laws),
and to exercise all rights of the copyright proprietor there under. You agree that to the
extent, if any, that you may be deemed an "author" of "sound recordings" manufactured
from Masters, you grant to COMPANY a power of attorney, irrevocable and coupled
with an interest, for you and in your name to apply for and obtain, and on obtaining same
to assign to COMPANY, all copyrights and renewal copyrights in and to such "sound
recordings".
(c) The exclusive and perpetual right throughout the world to manufacture, advertise,
publicize, sell, lease, license, or otherwise use or dispose of and exploit Records and/or
derivatives manufactured from or embodying all or any part of the contents of the
Masters, and to permit others to do so, in any and all fields of use throughout the world
upon such terms and conditions as COMPANY may approve, or in its sole discretion to
refrain therefrom.
(d) The nonexclusive and perpetual right to use, publish and permit others to use and
publish your name (including any professional names heretofore or hereafter adopted by
you), likeness, voice and sound effects, and biographical material, or any reproduction or
simulation thereof in connection with the sale, advertising, distribution and exploitation,
production and manufacture of Records and for any other purpose related to the business
of COMPANY, or to refrain therefrom.
(e) The right to release Records and/or derivatives manufactured from the Masters under
the name of "COMPANY" or such other trade name or mark as COMPANY may from
time to time elect.
(f) The right to manufacture sell and exploit Records manufactured from the Masters and
other masters not produced by you.
(g) The right to perform the Records and/or derivatives made from the Masters publicly
and to permit the public performance thereof in any medium and by any means
whatsoever, whether now or hereafter known, including but not limited to motion
pictures and television.
(h) The right to assign this agreement and to license and otherwise transfer any of
COMPANY's rights, powers, privileges and property under this agreement.
7. ROYALTY RATES
(a) Provided you are not in material breach hereof, COMPANY will pay you with respect
to Records of Artists described in paragraph 2(a) hereof, a basic royalty computed at the
applicable percentage, indicated below, of the Suggested Retail List Price in respect of
Net Sales of Records consisting entirely of Master Recordings on which you render your
services under this agreement and sold by COMPANY or its licensees through Normal
Retail Channels:
(1) On LPs sold for distribution in the United States ("USNRC Net Sales"):
____________
(2) On all other sales: A royalty reduced in the same proportion that the basic United
States royalty rate for LPs in the applicable Artist Agreement is reduced for all other
Record sales, including Singles, foreign sales, non-retail sales, etc.
(3) All royalties hereunder shall be computed and calculated in the same manner and by
the same method used in calculating the applicable Artist's royalties in the applicable
Artist Agreement including, without limitation, free goods, reserves, packaging
deductions, etc.
(b) No royalty will be payable to you on any Record until COMPANY has recouped all
recording costs (less your Advance hereunder) incurred in connection with all Masters
produced by you and recorded for COMPANY by that Artist from royalties payable to
the applicable Artist in connection with Records derived from those Masters. After such
recoupment, royalties will be computed retroactively on the applicable Record(s) and
paid to you on such Record, from the first Record sold. For purposes of this paragraph,
COMPANY shall recoup recording costs at the "net artist" rate (i.e. net of royalties
payable to you).
8. ROYALTY TERMS
With respect to royalties:
(a) Foreign royalties shall be computed in the currency in which COMPANY's licensees
pay COMPANY for the sale concerned and shall be paid only after receipt by
COMPANY of United States currency (less cost of conversion) at the same rate of
exchange as COMPANY was paid after the deduction of all applicable foreign sales, use,
excise, remittance and similar taxes actually paid by COMPANY or its licensees.
COMPANY will treat any foreign sale as a sale made during the six (6) month period in
which COMPANY receives its licensees' accountings and payments for the sale
concerned. If COMPANY does not receive payment in United States currency because
the currency of the relevant country is "blocked" and all Recording Costs of the
applicable artist are recouped hereunder as described in paragraph 7(b) hereof,
COMPANY may elect to accept payment of royalties in the currency of such country, in
which case, at your written request and expense, COMPANY shall deposit to your credit
sums payable to you hereunder with respect to such sales in such currency in a depository
selected by you and will promptly notify you thereof. Deposit in accordance with the
foregoing provisions shall fulfill COMPANY's obligations hereunder as to such foreign
record sales.
(b) As to Records not consisting entirely of Sides embodying Masters produced
hereunder, the royalty rates otherwise payable to you hereunder shall be prorated on the
basis of the number of Sides embodying Masters produced hereunder which are
embodied on such Records compared to the total number of Sides contained on each such
Record. In respect of a jointly produced Record, the royalty rate to be used in
determining the royalties payable to you will be computed by multiplying the royalty rate
otherwise applicable by a fraction, the numerator of which shall be one (1) and the
denominator of which shall be the total number of producers entitled to receive royalties
with respect to their services in connection with the Record concerned.
(c) If COMPANY licenses Masters on a cent rate or flat fee basis to third parties, or on
the basis of net receipts, the royalty payable by COMPANY to you shall be one-half (2 )
of the net royalty actually received by COMPANY from each such licensee (less any
third party payments) multiplied by a fraction, the numerator of which is your basic
United States royalty rate, and the denominator of which is the total basic United States
royalty payable to you and the Artist.
(d) In respect to Home Video Devices: (i) if COMPANY licenses same to a third party,
the royalty payable by COMPANY to you shall be one-quarter (1/4) of the net royalty
actually received by COMPANY from each such licensee (less any third party payments)
multiplied by a fraction, the numerator of which is your basic United States royalty rate,
and the denominator of which is the total basic United States royalty payable to you and
the Artist; and (ii) if COMPANY itself distributes such devices and pays Artist a royalty
therefore, your account shall be credited with one-half (2 ) a pro rata share of the
royalties (after all applicable deductions as contained in the Artist Agreement) paid to
Artist in the same proportion that your basic United States royalty rate bears to the total
United States royalty rate payable to you and to Artist.
9. ACCOUNTINGS
(a) COMPANY will compute your royalties as of each June 30 and December 31 for the
prior six (6) months, in respect of each such six (6) month period in which there are sales
or returns of Records or other exploitations of Masters on which royalties are payable to
you. On or before the next September 30 with respect to the period ending June 30, and
on or before March 31 with respect to the period ending December 31, COMPANY will
send you a statement covering those royalties and will remit to you the net amount of
such royalties, if any, after deducting any and all unrecouped Advances and chargeable
costs under this agreement and such amount, if any, which COMPANY may be required
to withhold pursuant to the California Revenue and Taxation Code, the U.S. Tax
Regulations or any other applicable statute, regulations, treaty or law. No royalty
statements shall be required for periods during which no additional royalties accrue. In
computing the number of Records sold, only Records for which COMPANY has been
paid or received credit shall be deemed sold, and COMPANY shall have the right
(subject to paragraph 7(a) (3) above) to deduct returns and credits of any nature and
(subject to paragraph 7(a)(3) above) to withhold reasonable reserves therefore from
payments otherwise due you. Returns will be treated as units sold or Free Goods in the
same manner as in COMPANY's customer account. If COMPANY makes any
overpayment to you (e.g., by reason of an accounting error or by paying royalties on
Records returned later), you shall reimburse COMPANY for it but only to the extent
COMPANY does not deduct such sums from monies due you hereunder. COMPANY
may at any time elect to utilize a different method of computing royalties so long as such
method does not decrease the net monies received by or credited to you hereunder.
(b) All royalty statements rendered by COMPANY shall be conclusively binding upon
you and not subject to any objection by you for any reason unless specific objection in
writing, stating the basis thereof, is given to COMPANY 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 one hundred twenty (120) days after the
applicable due date specified in paragraph 9(a) above), and an audit pursuant to clause (c)
below for that statement is completed within a reasonable time after such objection notice
is given. Failure to make specific objection or conduct the audit within said time periods
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 accounting, or to sue COMPANY for royalties on Records
sold during the period a royalty accounting covers, unless you commence the suit within
one (1) year after the end of the applicable two (2) year period.
(c) You may, at your own expense, audit COMPANY's books and records directly
relating to this agreement that report the sales of Records for which royalties or other
monies are payable hereunder. You may make such audit only for the purpose of
verifying the accuracy of statements sent to you hereunder and 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 and three (3) months after
the date any such statement is rendered as provided above. 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. You will not be entitled to examined any
manufacturing records or any other records that do not specifically report sales of
Records or free distribution of Records on which royalties are payable hereunder. Your
auditor shall review his tentative written findings with a member of COMPANY's
finance staff designated by COMPANY before rendering a report to you so as to remedy
any factual errors and clarify any issues that may have resulted from misunderstanding.
10. MECHANICAL LICENSES
(a) (1) You hereby grant to COMPANY an irrevocable license, under copyright, to
reproduce each Controlled Composition recorded hereunder on Phonograph Records and
distribute them in the United States and Canada.
(2) For that license, COMPANY will pay Mechanical Royalties, on the basis of Net
Sales, at the following rates:
(A) On Records manufactured for distribution in the United States: The rate equal to
seventy-five percent (75%) of the minimum compulsory license rate applicable to the use
of musical compositions on audio Records under the United States copyright law at the
earlier of the date of the commencement of recording of the Master concerned or the last
date for timely Delivery of such Master. [That minimum statutory rate is currently $.0525
per Composition.]
(B) On audio Records manufactured for distribution in Canada:
(i) If the copyright law of Canada provides for a minimum compulsory rate: The rate
equal to seventy-five percent (75%) of the minimum compulsory license rate applicable
to the use of musical works on audio Records under the copyright law of Canada at the
time of the commencement of recording of the Master pursuant to Article 3 hereof but in
no event later than the last date for timely Delivery of such Master pursuant to Article 3.
(ii) If the copyright law of Canada does not provide for a minimum compulsory rate, but
the major record companies and major music publishers in Canada (collectively the
"Canadian Record Industry") have agreed to a mechanical license rate: The rate equal to
seventy-five percent (75%) of the minimum license rate agreed to as of the time of the
commencement of the recording of the Master concerned pursuant to Article 3 hereof but
in no event later than the last date for timely Delivery of such Master pursuant to Article
3.
(iii) If the copyright law of Canada does not provide for a minimum compulsory license
rate, and the Canadian Record Industry has not agreed to a rate, the rate applicable under
this clause (B) will be two cents ($0.02) (Canadian) per Composition.
(iv) The rate applicable under this clause (B) will not be more than the rate which would
be applicable to the Records concerned under clause 11.01(a) (2) (A) above (Canadian) if
they were manufactured for distribution in the United States.
(3) If you cannot grant such licenses on the terms described above because a third party
publisher controls such Compositions, then COMPANY may deduct any excess amounts
COMPANY must pay to such publisher from monies due you hereunder.
(b) You shall be paid on only one (1) use of a Composition per LP, and on no more than
three (3) uses of a Composition on a Single or Long Play Single regardless of how many
uses are actually made on the applicable Record. With respect to all non-retail sales (e.g.,
record clubs, budget), with respect to multiple record sets, and with respect to all reduced
price Records, you shall license Controlled Compositions to COMPANY at the same
Controlled Composition rate as contained in the Controlled Composition provisions of
the applicable Artist's Agreement for such sales. No copyright royalties shall be payable
in any instance where you do not receive record royalties hereunder.
(c) COMPANY may keep reasonable reserves for anticipated returns and credits with
respect to mechanical royalties payable hereunder. Each such reserve shall be liquidated
no later than eight full accounting periods after the period in which it was established.
(d) You will cause the issuance of effective licenses, under copyright and otherwise, to
reproduce each Controlled Composition recorded hereunder on Phonograph Records and
distribute those Records outside the United States and Canada, on terms not less
favorable to COMPANY or its Licensees than the terms generally applicable to
Phonograph Record manufacturers in the country concerned.
(e) You shall issue (or shall cause the music publishing companies having the right to do
so to issue) (i) worldwide, perpetual synchronization licenses, and (ii) perpetual licenses
for public performance in the United States (to the extent that ASCAP and BMI are
unable to issue same), to COMPANY at no cost for the use of all Controlled
Compositions recorded hereunder in any Videos (i.e., sight and sound records designed to
reproduce the audio performances of recording artists together with a visual image)
effective as of the commencement of production of the applicable Video (and your
execution of this agreement shall constitute the issuance of such licenses by any music
publishing company which is owned or controlled by you or by any Person owned or
controlled by you). In the event that you shall fail to cause any such music publishing
company to issue any such license to COMPANY, or if COMPANY shall be required to
pay any fee to such music publishing company in order to obtain any such license, then
COMPANY shall have the right to deduct the amount of such license fee from any and
all sums otherwise payable to you hereunder.
11. WARRANTIES; REPRESENTATIONS; RESTRICTIONS; INDEMNITIES:
(a) You warrant and represent:
(1) You have the right and power to enter into and fully perform this agreement.
(2) COMPANY shall not be required to make any payments of any nature for, or in
connection with, the rendition of your or services or the acquisition, exercise or
exploitation of rights by COMPANY pursuant to this agreement except as specifically
provided in this agreement.
(3) No Materials, as hereinafter defined, or any use thereof, will violate any law or
infringe upon or violate the rights of any Person. "Materials," as used in this Article,
means all Controlled Compositions and all other musical, dramatic, artistic and literary
materials, ideas, and other intellectual properties, furnished or selected by you and
contained in or used in packaging, sale, distribution, advertising, publicizing or other
exploitation of Masters.
(4) You are not and shall not be under any disability, restriction or prohibition with
respect to your right to fully perform your services in accordance with the terms and
conditions of this agreement, including without limiting the generality of the foregoing,
your right to record any and all compositions hereunder.
(5) You will not, using the endeavors of an artist or any other artist, produce any selection
recorded hereunder or any similar selection for the purpose of making records for anyone
other than COMPANY for a period of two (2) years following the termination or
expiration of the term of the Agreement.
(6) Should you violate the restriction set forth in paragraph 11(a)(5) above, COMPANY
may, in addition to its other remedies, terminate its obligations to thereafter pay you any
royalties which would otherwise be earned or payable hereunder in respect of Masters
embodying the selections recorded or rerecorded in violation of this paragraph.
12. LEGAL AND EQUITABLE RELIEF:
You acknowledge that your services hereunder and the rights and privileges granted to
COMPANY under the terms hereof are of a special, unique, unusual, extraordinary and
intellectual character which gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated in damages in an action at law and that a breach
by you of any of the provisions of this agreement will cause COMPANY great and
irreparable injury and damage. You expressly agree that COMPANY shall be entitled to
the remedies of injunction and other equitable relief to prevent or remedy a breach by you
of this agreement or any portions thereof, which relief shall be in addition to any other
rights or remedies, for damages or otherwise, which COMPANY may from time to time
be entitled thereto.
13. CURE PERIOD
No failure by either COMPANY or you to perform any obligations under this agreement
shall be deemed a breach of this agreement until you or COMPANY has given the other
party written notice of its failure to perform and such failure has not been remedied
within thirty (30) days from receipt of such notice. In the event such failure is a material
breach and has not been corrected within said thirty (30) days, you or COMPANY may,
during the continuance of such failure, terminate this agreement by notice in writing
within sixty (60) days from the date of service of your original notice. Notwithstanding
the foregoing, there shall be no cure period if your breach is a result of a breach of your
warranties and representations hereunder and/or your failure to timely deliver Masters (as
timely delivery is defined in the applicable Artist Agreement), or if not capable of being
cured.
14. DEFINITIONS
(a) "Record" means all forms of reproductions, now or hereafter known, manufactured or
distributed primarily for home use, school use, juke box use or use in means of
transportation, including records of sound alone and audiovisual Recordings.
(b) "Master," "Master Recording" or "Recording" means any recording of sound, whether
or not coupled with a visual image, by any method and on any substance or material,
whether now or hereafter known, which is intended for use in the recording, production
and/or manufacture of Records and which embodies the performance of an Artist signed
to COMPANY.
(c) "Performance" means singing, speaking, conducting or playing an instrument, alone
or with others.
(d) The words "single Record" or "Single" means a Record containing not more than
three (3) different Compositions.
(e) "Long Play Single" means a 12-inch vinyl disc Record embodying not more than
three (3) different Compositions, or the equivalent in a non-vinyl configuration.
(f) "Mini LP" or "EP" means any Record, other than an LP, containing more than three
(3) different Compositions.
(g) The term "Multiple Record LP" means an LP containing two or more vinyl discs,
cassettes, compact discs, or the equivalent, or more than fourteen (14) Compositions
packaged as a single unit. For purposes of the Recording Commitment hereunder and for
computing the applicable Recording Fund or Advance, a Multiple Record LP accepted by
COMPANY shall be deemed only one (1) LP.
(h) "Person" means any individual, corporation, partnership, association or other
organized group of persons or legal successors or representatives of the foregoing.
(i) "Side" means a Recording of sufficient playing time to constitute one side of a 45-rpm
record, but not less than three (3) minutes of continuous sound embodying performances
by Artist.
(j) (a) "Suggested Retail List Price" or "SRLP" means (other than with respect to compact
discs) (1) with respect to Records sold for distribution in the United States, COMPANY's
suggested retail list price in the United States during the applicable accounting period for
the computation of royalties to be made hereunder, it being understood that a separate
calculation of the suggested retail list price shall be made for each price configuration of
Records manufactured and sold by COMPANY; and (2) with respect to Records sold
hereunder for distribution outside the United States, COMPANY's or its licensees'
suggested or applicable retail price in the country of manufacture or sale, as COMPANY
is paid, provided that in any country where there is an absence of such suggested or
applicable retail list price and where COMPANY's licensee is wholly-owned by
COMPANY or COMPANY's parent, the price as may be established by COMPANY or
its licensee(s) in conformity with the general practice of the recording industry in such
country.
(b) With respect to sales of Compact Discs only, "Suggested Retail List Price" shall
mean:
(1) In the United States: one hundred thirty percent (130%) of COMPANY's lowest
published wholesale price, in the category of sale concerned. In the event such wholesale
price changes during an accounting period, the applicable wholesale price for the entire
accounting period shall be deemed to be the lowest average daily wholesale price during
the period.
(2) In all other territories: The suggested retail list price or other price utilized by
COMPANY's licensee in computing monies to be paid to COMPANY for the Record
concerned.
(c) COMPANY may at some time change the method by which it computes royalties in
the United States from a retail basis to some other basis (the "New Basis"), such as,
without limitation, a wholesale basis. The New Basis will replace the then-current
Royalty Base Price and the royalty rates shall be adjusted to the appropriate royalty
which would be applied to the New Basis so that the dollars-and-cents royalty amounts
payable with respect to the Record concerned would be the same as that which was
payable immediately prior to such New Basis. If a Record was not theretofore sold in a
particular configuration or at a particular price (e.g., a Budget Record), the adjusted
royalty rate for any such configuration shall be the adjusted royalty rate on top-line LPs
multiplied by a fraction, the numerator of which is the royalty rate for sales in the
configuration concerned prior to the New Basis and the denominator of which is the
royalty rate for sales of top-line LPs prior to the New Basis. If there are other adjustments
made by COMPANY that would otherwise make the New Basis more favorable (a
particular example of which might be the distribution of smaller quantities of free goods
than theretofore distributed) then the benefits of such other adjustments will be taken into
consideration in adjusting the royalty rate.
(d) Notwithstanding anything to the contrary contained herein, the Suggested Retail List
Price for premium Records shall be COMPANY's actual sales price of such Records.
(e) Notwithstanding anything to the contrary herein, the Suggested Retail List Price with
respect to so-called home video devices manufactured and distributed by COMPANY
Records shall be COMPANY's published wholesale price as of the commencement of the
accounting period concerned.
(k) "Container Charge" shall mean ten percent (10%) of the Suggested Retail List Price
for a single-fold disc Record (other than compact discs) in a standard sleeve with no
inserts or for any other Record other than as hereinafter provided; fifteen percent (15%)
of the Suggested Retail List Price for a disc Record (other than compact discs) in a
double-fold or gatefold jacket, in a nonstandard sleeve or jacket, or with inserts; twenty
percent (20%) of the Suggested Retail List Price for Records in non-disc form or
audiovisual Records; and twenty-five percent (25%) of the Suggested Retail List Price for
compact discs, audiophile Records, or Records sold in the form of new Record
configurations.
(l) "Royalty Base Price" means the Suggested Retail List Price less all excise, sales and
similar taxes and less the applicable Container Charge.
(m) "LP" or "Album" means a sufficient number of Masters embodying Artist's
performances to comprise one (1) or more 12-inch, 33-1/3, long-playing vinyl disc
Record album, or the equivalent, of not less than thirty-eight (38) minutes of playing time
and containing at least ten (10) different Compositions.
(n) "United States" mean the United States of America, its territories, possessions and
military exchanges.
(o) "Composition" means a single musical composition, irrespective of length, including
all spoken words and bridging passages and including a medley.
(p) "Controlled Composition" means a Composition wholly or partly written, owned or
controlled by you, or any Person in which you have a direct or indirect interest.
(q) "Net Sales" means sales of Records paid for and not returned, less returns and credits,
after deduction of reserves against anticipated returns and credits.
(r) "Advance" means a prepayment of royalties and shall be chargeable against and
recoupable from any royalties otherwise payable hereunder. [There shall be no crosscollateralization between royalties earned by you in respect to your production of Masters
by different Artists. Each Artist, however, shall be treated as a single accounting unit.]
DRAFT NOTE: INCLUDE IF APPROPRIATE.
(s) "Territory" shall mean the Universe.
(t) "Mechanical Royalties" means royalties payable to any Person for the right to
reproduce and distribute copyrighted musical compositions on Records.
(u) "Joint Recordings" means Masters embodying the Artist's performance and any
performance by another artist with respect to whom COMPANY is obligated to pay
royalties.
(v) "Sales through Normal Retail Channels" shall include all records sold at top-line
prices by COMPANY but shall exclude, without limitation: (1) record clubs; (2) PX
sales; (3) budget and midline; (4) third-party licenses; (5) compact discs and audiophile
records and sales through any other so-called non-retail channels. All such sales shall be
computed in accordance with the applicable Artist Agreement.
(w) "Video" means a sight and sound Record designed to reproduce the audio
performance of a recording artist together with a visual image.
(x) "Home Video Device" means video cassettes, video discs, or any other means of
reproduction intended primarily for home use.
15. CREDIT PROVISIONS
COMPANY shall afford you credit on the back cover of album jackets or the inner
sleeves of albums in disc form (if it contains other credits) and in full page national trade
ads placed by COMPANY solely featuring Records recorded hereunder in substantially
the following form:
"Produced by ______________________"
Notwithstanding the foregoing, an inadvertent failure to satisfy the credit provisions set
forth herein shall not be deemed a breach of this agreement, provided that COMPANY
shall use reasonable efforts to correct same in future pressings or ads placed after receipt
from you of written notice of such failure.
16. INDEMNITY
You agree to and do hereby indemnify, save and hold COMPANY and its licensees
harmless of and from any and all liability, loss, damage, cost or expense (including legal
expenses and attorney fees) arising out of or connected with any breach or alleged breach
of this agreement or any claim which is inconsistent with any of the warranties or
representations made by you in this agreement, and you agree to reimburse COMPANY
on demand for any payment made or incurred by COMPANY with respect to the
foregoing provided the claim concerned has been settled or has resulted in a judgment
against COMPANY or its licensees. Pending the determination of any claim in respect of
which COMPANY is entitled to be indemnified, COMPANY shall not withhold monies
which would otherwise be payable to you hereunder in an amount exceeding your
potential liability to COMPANY pursuant to this paragraph. If COMPANY pays more
than Seven Thousand, Five Hundred Dollars ($7,500.00) in settlement of any claim not
reduced to judgment, you will not be obligated to reimburse COMPANY for the excess
unless you have consented to the settlement. If you do not consent to any settlement
proposed by COMPANY for an amount exceeding Seven Thousand, Five Hundred
Dollars ($7,500.00) you will nevertheless be required to reimburse COMPANY for the
full amount unless you make bonding arrangements, satisfactory to COMPANY in its
sole discretion, to assure COMPANY of reimbursement for all damages, liabilities, costs
and expenses (including legal expenses and counsel fees) which COMPANY or its
licensees may incur as a result of that claim. COMPANY will notify you of any action
commenced on such a claim. You may participate in the defense of any such claim
through counsel of your selection at your own expense, but COMPANY will have the
right at all times, in its sole discretion, to retain or resume control of the defense of such
claim.
17. NOTICES
Except as otherwise specifically provided in this agreement all notices under it or related
to it will be in writing and will be given by personal delivery, registered or certified mail
or telegraph (prepaid), at the addresses shown above, or such other address or addresses
as may be designated by either Party. Notices will be deemed given when mailed or when
transmitted by telegraph, except that notice of change of address will be effective only
from the date of its receipt
18. MISCELLANEOUS
(a) This agreement contains the entire understanding of the Parties relating to its subject
matter. No change or termination of this agreement will be binding upon COMPANY
unless it is made by an instrument signed by an officer of COMPANY. A waiver by
either party of any provision of this agreement in any instance shall not be deemed to
waive it for the future. All remedies, rights, undertakings, and obligations contained in
this agreement shall be cumulative and none of them shall be in limitation of any other
remedy, right, undertaking, or obligation of either party.
(b) Those provisions of any applicable collective bargaining agreement between
COMPANY and any labor organization which are required, by the terms of such
agreement, to be included in this agreement shall be deemed incorporated herein.
(c) This agreement has been entered into in the State of California, and the validity,
interpretation and legal effect of this agreement shall be governed by the laws of the State
of California applicable to contracts entered into and performed entirely within the State
of California. The California courts (state and federal), only, will have jurisdiction of any
controversies regarding this agreement; any action or other proceeding which involves
such a controversy will be brought in those courts, and not elsewhere. Any process in any
action or proceeding may, among other methods, be served upon you by delivering it or
mailing it, by registered or certified mail, directed to the address first above written or
such other address as you may designate pursuant to paragraph 17. Any such process
may, among other methods, be served upon you by delivering the process or mailing it by
registered or certified mail, directed to the address first above written or such other
address as you may designate in the manner prescribed in paragraph 17. Any such
delivery or mail service shall be deemed to have the same force and effect as personal
service within the State of California.
(d) Where the terms of an Artist contract are incorporated herein, upon your written
request, COMPANY shall provide you with a copy of the applicable terms.
(e) In entering into this agreement, and in providing services pursuant hereto, you shall
have the status of an independent contractor and nothing herein contained shall
contemplate or constitute you as COMPANY's employee.
(f) This agreement shall not become effective until executed by all proposed Parties
hereto.
Very truly yours,
COMPANY
By:___________________________
AGREED AND ACCEPTED:
______________________________
[NAME]
Social Security No.___________
NOTHING IN THIS DOCUMENT SHALL BE CONSTRUED AS LEGAL ADVICE:
ALWAYS CONSULT WITH A REPUTABLE ATTORNEY PRIOR TO SIGNING
ANY AGREEMENT