Time for a new Journal. Lets analyze a recent Sony recording contract.

RECORDING AGREEMENT

AGREEMENT made as of_________2000, between (hereinafter “you” or “Artist”), and ---------------------------- (hereinafter or “us”, provided that unless the context otherwise indicates all references to “us”, “we” and similar pronouns shall include Sony Music, a Group of Sony Music Entertainment, Inc. [“Sony”]).

1. TERM

1.01. (a) (1) The term (“Term”) of this agreement will begin on the date set forth above.

(2) (i) The first Contract Period of the Term shall end ninety (90) days after you give notice that you have completed the Delivery of four (4) Initial Sides (as defined in paragraph 3.01 below) (the “Initial Period”, below).

(ii) Unless notifies you within ninety (90) days after your Delivery of the Initial Sides, that the Term will terminate as of the end of the Initial Period, then Sony will be deemed to have extended the first Contract Period beyond the Initial Period (the "Extension Option"). If deemed to have exercised the Extension Option, the first Contract Period will continue in accordance with subparagraph 1.01 (b). If Sony is not deemed to have exercised the Extension Option, the Term of this agreement will expire at the end of the Initial Period. For purposes of this Agreement, the Initial Period shall not be deemed a Contract Period.

(iii) Subparagraph 1.01 (a)(2)(ii) shall not apply during any Option Period prescribed in paragraph 1.02.

(b) The first Contract Period of the Term (if deemed to have exercised the Extension Option under subsection 1.01 (a)(2)(ii), and each Contract Period after the first, shall end seven (7) months following the earlier of:

(1) the date of completion of the lacquer, copper, or equivalent masters to be used in manufacturing the compact disc Phonograph Record units to be made for distribution in the United States from the last Master Recordings made in fulfillment of your Recording Commitment for that Contract Period under paragraph 3.01 below; or

(2) the date 30 days after you give us notice that you have completed the Delivery of those Master Recordings;

1.02. You grant us three (3) separate options to extend the Term for additional Contract Periods (collectively, “Contract Periods” or “Option Periods”) on the same terms and conditions as the first Contract Period, except as otherwise expressly provided in this agreement. We may exercise each of those options by sending you a notice not later than the expiration date of the Contract Period which is then in effect (the “current Contract Period”). If we exercise such as option, the Option Period applicable will begin immediately after the end of the current Contract Period. Our right to hereof shall be conditioned on Sony or its assignees having the right to distribute Recordings made hereunder during the applicable Option Period.

2. SERVICES

2.01. During the term of this agreement you will render your services as a performing artist for the purpose of making Master Recordings for us, you will cause those Recordings to be produced, and you will Deliver the Recordings to us, as provided in this agreement. (You are sometimes called “the Artist” below; all references in this agreement to “you and the Artist”, and the like, will be understood to refer to you alone.)

2.02. (a) Your obligations will include furnishing the services of the producers and remixers of those Master Recordings, and you will be solely responsible for engaging and paying them. (Producers whom you engage are sometimes referred to in this agreement by the capitalized term “Producers”). We will comply with your written request (in form and content acceptable to Sony and us) that we render accounting statements and payments directly to such Producers, provided that such requests are sent in accordance with paragraph 17.01. For the purpose of this agreement, will not be deemed a Producer engaged by you and you will not be responsible for paying him. In the event that any Master Recording delivered by you hereunder, is produced by a Producer other than who is engaged by you, with respect to such Masters Recording(s)
(i) each of the royalty rates provided in paragraph 9.01(a) and 9.01(c) hereof shall be increased by the royalty rate payable to such Producer [not to exceed six percent (6%) under paragraph 9.01(a) and four percent (4%) under paragraph 9.01(c) without our written approval],
(ii) each of the royalty distribution outside the United States and the royalty rates contained in paragraph 9.02 hereof will be increased in the same proportion as the rates applicable to Albums and Singles sold for distribution in the United States are increased pursuant to subdivision (i) of this sentence

(iii) any royalty based upon a division of net receipts will be adjusted so that the sums payable to you and any such Producer will in the aggregate equal fifty percent (50%) of such net receipts and

(iv) there will be no increase in the royalty rates provided in paragraph 9.06(a). All such royalties will be subject to the reductions and adjustments otherwise applicable to your royalties generally as provided herein.

(b) If we, instead, engage producers (other than for any of those Master Recordings with your approval, or if the producers of any such Recordings are regularly employed on our staff or render their services under contract with us, we will be responsible for paying such producers and the production budget for the recording project concerned will be charged with a Recording Cost item of Forty Thousand Dollars ($40,000) for each Album or Four Thousand Dollars ($4,000) per Side for a project for the recording of less than an Album provided that any such payment will be an advance recoupable from royalties payable to such producer(s) with respect to such Recordings.

3. RECORDING COMMITMENT

3.01. During each Contract Period, you will perform for the recording of Master Recordings sufficient to constitute one Album, cause those Master Recordings to be produced, and Deliver them to us (the “Recording Commitment"). During the Initial Period, you will perform for the recording of four (4) Sides, which we may release, in our sole discretion, as so-ca1Ied “singles” (“Initial Sides”). If we exercise the Extension Option provided for in subparagraph 1.01 (a)(2)(ii), the Initial Sides sha11 be deemed a portion of the recordings you are required to perform to constitute the first Album hereunder.

3.02. With respect to each Contract Period, you will fulfill the applicable Recording Commitment under paragraph 3.01, within the first three (3) months of the Period. Fulfillment of your recording and delivery Commitment for the Initial Period is governed by Paragraph 1.01(a)(2) (A) hereinabove.

3.03. (a) During each Contract Period, other than the Third Option Period, we will have the option to increase the Recording Commitment for that Period by Master Recordings constituting one additional Album (“Overcall Recordings”). We may exercise that option by sending you a notice at any time before the end of the Contract Period concerned.

(b) Each time we exercise such an option:

(1) you will Deliver the Overcall Recordings to us within six (6) months;
and
(2) the current Contract Period will continue for seven (7) months after whichever of the following dates is the earlier:

(i) The date of completion of the lacquer, copper, or equivalent masters to be used in manufacturing the compact disc Phonograph Record units of the Album comprising the Overcall Recordings; or

(ii) The date thirty (30) days after you give us notice that you have completed the Delivery of the Overcall Recordings.

3.03.1 Notwithstanding the provisions of paragraph 3.02 and section 3.03(b), you will not be required to Deliver an Album hereunder earlier than twelve (12) months after the date of Delivery of the preceding Album Delivered in fulfillment of your Recording Commitment and you will not be required to Deliver the first Album of the Recording Commitment for the first Contract Period until eight ( months following the commencement of such Contract Period.

3.04. Each Album (or other group of Master Recordings) Delivered to us in fulfillment of your Recording Commitment will consist entirely of Master Recordings made in the course of the same Album (or other) recording project, unless we consent otherwise. We may withhold that consent in our unrestricted discretion.

4. RECORDING PROCEDURE

4.01. The procedure set forth below will be followed in connection with Master Recordings made hereunder:

(a) Except as expressly noted otherwise in this agreement, prior to the commencement of recording in each instance you shall obtain our written approval of each of the following, in order, before proceeding further:

(1) Selection of Producer is approved by you and us for all Master Recordings to constitute the first two Albums, if any, made pursuant hereto. Any other producer shall be subject to your and our mutual approval. In the event that you and we cannot agree on the selection of a Producer, our decision alone shall be determinative.

(2) Selection of material, including the number of Compositions to be recorded. We shall not be deemed to be unreasonable in rejecting any request to record an Album consisting of more than one twelve-inch 33 1/3 rpm Record. You shall advise us of the content of each medley before it is recorded.

(3) Selection of dates of recording and studios where recording is to take place, including the cost of recording there. We will not be deemed to be unreasonable in rejecting any request to begin recording any Album which is a part of the Recording Commitment within three (3) months after the acceptance of a prior Album under this agreement. The scheduling and booking of all studio time will be done by us. The facilities and the services of Sony music engineers will be used to the extent required by any applicable union agreements.

(4) A proposed budget (which you will submit to us sufficiently in advance of the planned commencement of recording to give us a reasonable time to review and approve or disapprove it, but no less than fourteen (14) days before the planned commencement of recording). A budget not exceeding amount of the minimum Recording Fund fixed in paragraph 6 will not be disapproved by us by reason of its overall amount, but each of the items constituting the budget will be subject to our approval in all events.

(b) You shall notify the appropriate Local of the American Federation of Musicians in advance of each recording session.

(c) You will comply with the following procedures in connection with the requirements of the U.S. Immigration Law:

(1) Before each recording session:

(i) You will require each background instrumentalist, background vocalist, and other person to be employed in connection with the session to complete and sign the Employee Information And Verification (“employee”) section of a U.S. Immigration and Naturalization Service Employment Eligibility Certificate (Form I-9), unless you have already obtained such a Certificate from the person concerned within the past three years;

(ii) You will complete and sign the Employer Review And Verification (“employer”) section of each such Certificate; and

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

(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 to be made under this agreement.

(3) You will deliver those Certificates and documents to us promptly, and in no event later than the Delivery of the Recordings concerned.

(4) You will comply with any revised or additional verification and documentation requirements of which we advise you in the future.

(d) As and when required by us, you shall allow our representatives to attend any or all recording sessions hereunder. Any expenses incurred by us for such attendance (other than for a producer employed by us in connection with such recording sessions) will not be recoupable as Recording Costs or otherwise.

(e) You shall timely supply us with all of the information we need in order:

(1) to make payments due in connection with such Recordings;

(2) to comply with any other obligations we may have in connection with the making of such Master Recordings; and

(3) to prepare to release Phonograph Records delivered from such Master Recordings. Without limiting the generality of clause (2) of the preceding sentence:

(i) You shall furnish us with all information we require to comply with our obligations under our 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 Phonograph Recording Contract (Form “B”) number(s) covering such sessions;

b. Each change of title of any composition listed in an AFM Phonograph Recording Contract (Form “B”); and

c. A listing of all the musical selections contained in Recordings Delivered to us hereunder; and

(ii) You will furnish us with all of the immigration control documentation required by subparagraph 4.01(c) above, at the same time as the AFM or AFTRA sessions reports, tax withholding forms, and other documentation required by us in order to make the payments to the session musicians and other employees concerned, if any.

(f) You shall Deliver to us fully mixed, edited, and unequalized and equalized Master Recordings (including but not limited to a final two-track equalized tape copy), commercially satisfactory to us for our manufacture and sale of Phonograph Records, and all original and duplicate Master Recordings of the material recorded, together with all necessary licenses and appropriate permissions, and all materials required to be furnished by you to us for use in the packaging and marketing of the Records. Solely for the purpose of determining if and when the Delivery portion (if any) of an Advance to you shall become payable, you shall not be obligated to Deliver to us beforehand mechanical licenses for non-Controlled Compositions. Each Master Recording will be clearly marked to identify the Artist as the recording artist, and to show the title(s) of the composition(s) and recording date(s).

4.02. (a) No Composition previously recorded by the Artist will be recorded under this agreement. No “live” Recording, Joint Recording, or Recording not made in full compliance with this agreement will apply in fulfillment of your Recording Commitment, nor will we be required to make any payments in connection with any such Recording except any royalties which may become due under this agreement if the Recording is released by us.

(b) No Recordings shall be made by or include unauthorized Sampling. (“Sampling”, as used herein, refers to the use and reproduction of pre-existing musical material, hereinafter “Sampled Material”, which is owned or controlled by any Person other than you or would not otherwise be subject to rights under Article 7 below, in a Recording hereunder.) Concurrently with your delivery of a Recording, you shall notify in writing of the names and addresses of all recording artists, record companies, songwriters and publishers and/or any other Persons who have any right, title or interest of any kind in any Sampled Material embodied in that Recording. You shall be solely responsible for obtaining all consents and licenses necessary or desirable in connection with the use and reproduction, and in connection with the licensing of the use and reproduction, of any Sampled Material in any Recording hereunder, so that shall enjoy the full and perpetual rights otherwise granted to pursuant to Article 7 hereunder with respect to
Recordings hereunder; at request, you shall supply with fully executed copies of any such consents, licenses and other related documentation. You shall be solely responsible for and shall account for and pay to any and all Persons who own or control Sampled Material any monies or other compensation to which such Persons are entitled as a result of any use hereunder of any Recording embodying such Sampled Material. Notwithstanding anything to the contrary expressed or implied herein, no royalties, Advances or other monies shall be earned by or payable to you hereunder or otherwise in connection with any Record embodying any Sampled Material, and no Recording embodying Sampled Material shall be deemed Delivered hereunder unless and until you have obtained all rights required hereunder with respect to such Sampled Material, and, receives documentation satisfactory with respect thereto.

4.03. Nothing in this agreement shall obligate us to continue or permit the continuation of any recording session or project, even if previously approved hereunder, if we reasonably anticipate that the Recording Costs plus all other Advances attribute to the recording session or project concerned will exceed those specified in the approved budget or that the Master Recordings being produced will not be commercially satisfactory, in our sole discretion.

4.04. The Artist will not be required to perform together with any other royalty artist without the Artist’s consent. We shall not be deemed to be unreasonable in rejecting any request for the Artist to record with another royalty artist.

4.05. If another producer regularly employed by us produces any Master Recording(s) required to be delivered by you under this agreement, with respect only to those Masters, we will be responsible for performing those duties hereunder customarily performed by independent record producers in Nashville, Tennessee, provided that you will be responsible for performing all other duties required to be performed hereunder with respect to such Masters.


5. RECOUPABLE AND REIMBURSABLE COSTS

5.01. Subject to the terms and conditions of this agreement, we will pay all Recording Costs incurred in connection with the production of Master Recordings under this agreement. We will pay all union scale payments required to be made to Artist in connection with Recordings made hereunder, all costs of instrumental, vocal and other personnel specifically approved by us for the recording of such Master Recordings, and all other amounts required to be paid by us pursuant to any applicable law or any collective bargaining agreement between us and any union representing Persons who render services in connection with such Master Recordings.
5.02 (a) All Recording Costs will constitute Advances. Any Recording Costs in excess of the Recording Fund fixed in paragraph 6.02(a) or other amount approved in writing by us (to the extend those excess costs result from your acts or omissions or acts or omissions of Producers employed by you), and all Special Packaging Costs, will be your sole responsibility and will be paid by you promptly (or reimbursed by you promptly, if paid by us). Those amounts will also be recoupable from all monies (including Advances) becoming payable to you by us under this agreement or otherwise to extent to which they have not actually been pain or reimbursed as provided in the preceding sentence. Fifty percent (50%) of all costs incurred by us [up to a maximum of Seventy Five Thousand Dollars] in connection with the production of so-called “videos” or motion pictures containing the Artist’s performances (audiovisual or otherwise) or the acquisition rights in such so-called “videos” or motion pictures will constitute Advances. One hundred percent (100%) of costs over the above-noted Seventy-Five Thousand Dollar ($75,000) limit incurred by us in connection with the production of so-called videos shall be recoupable. Artist will mutually approve budgets for Videos and independent promotion. However, in the event that Artist and disagree about said budget, decision shall be final.

(b) The amounts applicable to any Joint Recording which are payable by you or chargeable against your royalties under this paragraph 5.02 will be computed by apportionment as provided in paragraph 10.01.

(c) Payments to the AFM Special Payments Fund and the Music Performance Trust Fund based upon record sales (so-called “pre-record royalties”), will not be recoupable from your royalties or reimbursable by you.

(d) Fifty percent (50%) of all direct expenses paid or incurred in connection with independent radio promotion of Recordings of the Artist’s performances (i.e., promotion by Persons other than regular employees not in excess of $50,000 shall also constitute Advances.

6. ADDITIONAL ADVANCES; MINIMUM ANNUAL COMPENSATION

6.01. All monies paid to your request on behalf of you or Artist during the Term of this agreement, other than royalties paid pursuant to Article 9 and 12, shall constitute Advances unless otherwise expressly agreed in writing by our authorizes officer.

6.01.I Promptly following the later of

(a) your execution of this agreement or

(b) your Delivery of the Initial Sides, we will pay you an advance of $5,000.00. Promptly following your Delivery of the first Album in fulfillment of your Recording Commitment, we will pay you an additional Advance in the amount of $15,000.00. The Advances referred to in this paragraph 6.01.I will apply in reduction of the Recording Fund for the first Album in fulfillment of your Recording Commitment.


6.02. (a) In connection with each Album recorded pursuant to your Recording Commitment, we will pay you an Advance in the amount by which the applicable sum indicated below (“Recording Fund”) exceeds the Recording Costs for the Album.

(1) The first Album recorded during the first Contract Period: 150,000.


(2) The amount of the Recording Fund for each Album recorded pursuant to an Artist’s Recording Commitment, other than the first such Album embodying the performances of Artist will be two-thirds (2/3) of whichever of the following amounts is less (subject to section 6.02(a)(3):

(i) the amount of the royalties credited to your account on Net Sales. Through Normal Retail Channels in the United States of the Album made under this agreement, embodying that Artist’s performances released most recently before the Delivery of the Album concerned, as determined by Sony from its most recent monthly trial balance accounting statement before the date on which the Album concerned is Delivered or required to be Delivered under Article 3 (whichever date is earlier), after deduction of reserves for returns and credits not exceeding 20% of the aggregate number of units of that Album shipped to Sony’s customers; or

(ii) the average of the amounts of such royalties on the two such Albums embodying the performances of Artist released most recently before the Delivery of the Album concerned.

(3) No such Recording Fund will be more than the applicable maximum or less than the applicable minimum prescribed below:

Minimum Maximum

(i) The second Album of
Artist’s Recording Commitment: $160,000 $300,000

(ii) Each of the third and fourth
Albums of Artist’s Recording
Commitment: $175,000 $350,000

(iii) Each of the fifth and sixth
Albums of Artist’s
Recording Commitment: $200,000 $400,000

(iv) The seventh Album of
Artist’s Recording
Commitment: $250,000 $500,000

(b) The portion of each such Advance payable on Delivery of the applicable Album will be reduced by the amount of any anticipated costs of mastering, remastering or remixing; any such anticipated costs which are deducted but not incurred will be remitted to you. If any Album is not Delivered within ninty (90) days after the end of the time prescribed in Article 3, the Recording Fund for that Album will be reduced by ten percent (10%) of the otherwise applicable Recording Fund for each month (including any partial month) until that Album is Delivered. The preceding sentence shall not apply:

(1) If the delay in Delivery is due entirely to the acts or omissions of an individual producer engaged by us or on our staff and if neither you, the Artist nor a Producer employed by you or the Artist has in any way contributed to such delay or


(2) If we consent in writing to extend the time prescribed for Delivery in Article 3 with respect to a particular Album and you Deliver such Album on or before the date as extended. Notwithstanding the foregoing, the Recording Fund for each Album will not be reduced to less than $150,000.

(c) Each Advance payable pursuant to paragraph 6.02(a) will be made by payment to you of:

(1) the amount equal to five percent (5%) of the applicable Recording Fund (but not more than one-half of the amount by which that Recording Fund exceeds 115% of the amount of the Recording Costs incurred in connection with the last Album which has been recorded under this agreement), following receipt by us of your written notice of the commencement of recording of the Album concerned; and

(2) the balance of the Advance within 30 days after the Delivery of the Album. Notwithstanding the preceding sentence, the Advance payable to you with respect to the second Album of Artist’s Recording Commitment shall be a minimum of $20,000, one-half (1/2) of which shall be payable following our receipt of your written notice of the commencement of recording of such Album and balance of which shall be payable within thirty (30) days after Delivery of such Album.

6.03. The aggregate amount of the compensation paid to you under this agreement will not be less than the “Designated Dollar Amount” (defined below) per Fiscal Year. “Fiscal Year”, in this paragraph, means the annual period beginning on the date of commencement of the term of this agreement, and each subsequent annual period during the continuance of that term beginning on the anniversary of that commencement date. The “Designated Dollar Amount” for a particular Fiscal Year shall be as follows:

(a) Nine Thousand Dollars ($9,000) in respect of the first Fiscal Year;

(b) Twelve Thousand Dollars ($12,000) in respect of the second Fiscal Year;

(c) Fifteen Thousand Dollars ($15,000) for each of the third and all subsequent Fiscal Years.

If you have not received compensation of at least the “Designated Dollar Amount” under this agreement for a Fiscal Year, we will pay or cause Sony to pay you the amount of the deficiency before the end of that Fiscal Year; at least forty (40) days before the end of each Fiscal Year you will notify us if you have not received compensation of at least the “Designated Dollar Amount” under this agreement for that year, and of the amount of the deficiency. Each such payment will constitute an Advance and will be applied in reduction of any and all monies subsequently becoming due to you under this agreement. We may not withhold or require you to repay under any other provision of this agreement. If the term of this agreement end s before the last day of a Fiscal Year, the “Designated Dollar Amount” will be reduced proportionately for the purpose of computing the payment(s) to be made under this paragraph for that Fiscal Year. If in any Fiscal Year the aggregate amount of the compensation paid to you exceeds the “Designated Dollar Amount”, such excess compensation shall apply to reduce the “Designated Dollar Amount” for any subsequent Fiscal Years. You acknowledge that this paragraph is included to avoid compromise of our rights (including our entitlement to injunctive relief) by reason of finding of applicability of California law, but does not constitute a concession by us that California law is actually applicable.

7. RIGHTS IN RECORDINGS

7.01. Each Master Recording made or furnished to us by you or the Artist under this agreement or during its term, from the Inception of Recording, will be considered a work made for hire for us; if any such Master Recording is determined not to be a work made for hire it will be deemed transferred to us by this agreement, together with all rights in it. All Master Recordings made or furnished to us by you or the Artist under this agreement or during its term, from the Inception of Recording, and all Matrices and Phonograph Records manufactured from them, together with the performances embodied on them, shall be our sole property, free from any claims by you or any other Person; and we shall have the exclusive right to copyright those Master Recordings in our name as the author and owner of them and to secure any and all renewals and extensions or such copyright throughout the universe. You will execute and deliver to us such instruments of transfer and other documents regarding our rights in the Master Recordings subject to this agreement as we may reasonably request to carry out the purposes of this agreement, and we may sign such documents in your name or the name of the Mist and make appropriate disposition of them. The foregoing grant of rights shall not be construed as granting rights in. the Compositions recorded on those Master Recordings.

7.02. Without limiting the generality of the foregoing, we and any Person authorized by us shall have the unlimited~ exclusive rights, throughout the universe:

(a) to manufacture Phonograph Records in any form and by any method now or hereafter known, derived from the Master Recordings made under this agreement or during its term;

(b) to sell, transfer or otherwise deal in the same under any trademarks, trade names and labels, or to refrain from such manufacture, sale and dealing; and

(c) to reproduce, adapt, and otherwise use those Master Recordings in any medium and in any manner, including but not limited to use in audiovisual works, without payment of any compensation to you or the Artist except the royalties, if any, which may be expressly prescribed for the use concerned under Article 9.

7.02.I We agree that during the Term the initial release in the United States of an Album Delivered in fulfillment of your Minimum Recording Commitment shall be on Sony’s Columbia, Epic or other label (except Sony Classics) then used by Sony for initial release of Recordings of performances by artists then under exclusive term contract to Sony.

7.03. You hereby irrevocably authorize, empower, and appoint us your true and lawful attorney

(a) to initialize and compromise any claim or action with respect to Master Recordings made under this agreement or otherwise furnished to us by the Artist or you, including any claim or action against infringers of our or your rights in the Master Recordings; and

(b) to execute in the Artist’s name and your name any and all documents and/or instruments necessary or desirable to accomplish the foregoing provided that you have failed to execute and Deliver all such documents or instruments within ten (10) days of our request thereof. We may dispense with that waiting period when necessary, in our judgment, to protect or enforce our rights, but we will notify you in each instance where we have done so. We will not be required to notify you before signing short form assignments of rights granted in this agreement for recordation in the Copyright Office. The power of attorney granted under this paragraph 7.03 is coupled with an interest and is irrevocable.

7.04. We will have the right to conduct a trademark search with respect to the name and to register such trademark in your name with each applicable trademark authority. You will

execute and deliver to us those documents regarding such name as we may reasonably request to carry out any trademark search and registration. Notwithstanding the foregoing, we may sign those documents in your name or the Artist’s name and make appropriate disposition of them. All costs paid or incurred by us in connection with any trademark search or registration under this agreement will not constitute Advance without your written consent¬.


8. NAMES AND LIKENESSES; PUBLICITY

8.01. (a) (1) and Licensees shall have the perpetual right, without any liability to any Person, to use and to authorize other Persons to use the same names (including, without limitation, all professional, group and other assumed or fictitious names or sobriquets), likenesses and biographical material of or relating to any producer and any other Person performing services in connection with the Master Recordings, on and in connection with the exploitation of Records hereunder, on Internet websites and for purposes of advertising, promotion and trade and in connection with the marketing and exploitation of Records hereunder and general goodwill advertising (advertising designed to create goodwill and prestige and not for the purpose of selling any specific product or service), without payment of additional compensation to the Artist or any other Person. If the Artist has not already done so, the Artist shall, within thirty (30) days after the date of Artist’s execution of this agreement (or, if the Artist so requests within such time period, on the Artist’s behalf, shall), register or amend the registration of “bobbie-eakes.com” or a variation thereof mutually determined in good faith by Artist which determination shall not be unreasonable delayed by Artist) which embodies the Artist’s name as a Uniform Resource Locator (or “URL”) (the “Artist URL”) with Network Solutions or such other agency or entity authorized to grant rights in Internet domain names, so that the Artist is the registrant of the Artist URL and the registered domain server of the Artist URL. (If the Artist unreasonably delays the determination of the Artist URL or fails to complete such registration or re-registration within the time specified in the preceding sentence, shall have the right to determine the Artist URL in its sole discretion, and, by authority of the power of attorney granted in paragraph 7.03 hereof, to make the registration or re-registration in the Artist’s name). Artist also hereby grants its Licensees the exclusive right to couple the Artist URL with any such other appropriate suffixes which determines in its reasonable judgment are necessary or desirable (e.g., if URL’s for the World Wide Web are subsequently divided into subcategories with different suffixes may couple the Artist URL with such suffixes). Artist hereby grants to and its Licensees the exclusive and perpetual right, throughout the world, and the exclusive right to authorize other Persons to create, maintain and host any and all music-related websites relating to the Artist and to use the Artist URL (alone or as so coupled as addresses or domain names for each website created in respect of the Artist (each, an “Artist Site”). All such websites and all rights thereto and derived therefrom shall be property throughout the Territory and in perpetuity. Artist warrants and represents that the use of such names, likenesses, and biographical materials as described above in this section 8.01(a)(1) shall not infringe upon the rights of any Person. If any Person challenges the Artist’s right to use a professional name, may, at election and without limiting any of other rights and remedies, require Artist to cause the Artist to adopt another professional name to be selected by Artist and approved by reasonable discretion

without awaiting the determination of the validity of such challenge. Furthermore, during the Term, the Artist shall not challenge the name by which the Artist is professionally known without the prior written approval of The Artist will actively promote and support the Artist Sites during the Term.

(2) Notwithstanding anything to the contrary in section 8.01(a)(1) above, after the expiration of the Term, but in no event earlier than twelve (12) months following the Delivery of the Album Delivered in complete satisfaction of Artist’s Recording Commitment for the last Contract Period of the Term, rights under such section to create, maintain and host the Artist Sites shall be non-exclusive.

(3) Notwithstanding anything to the contrary in section 8.01(a)(1) above, the Artist may continue to maintain and host Artist’s existing independent Internet Website currently located at the URL com”, for the purpose of promoting the Artist’s television, film and other dramatic, non-music-related activities and for the purposes of posting Artist’s touring itineraries; provided, however, that:

(i) such website shall not be operated or hosted in conjunction with, affiliated with, or licensed to, a network of websites unless such website(s) are specifically concerned with and targeted for audiences/viewers of soap operas and/or other non-musical forms of entertainment; and

(ii) Artist shall not have the right to use on and/or in connection with such website(s) any musical, dramatic, artistic and literary materials, ideas, and other intellectual properties owned and/or controlled by any of its Licensees, in whole or in part, directly or indirectly, including for the avoidance of doubt and without limitation, any Master Recordings and/or artwork. Such website shall include on its homepage a prominent link to the Artist URL (the visual elements and placement of such links to be mutually approved by Artist. After expiration of the Term hereof, and/or Sony will not add any additional material concerning Artist to its internet websites that is not material specifically related to the marketing and promotion of Artist’s sound recordings.

(b) During the Term Artist shall not authorize any Person other than to use the name or likeness of Artist (or any professional, group or other assumed or fictitious name or sobriquet used by Artist) in connection with the advertising or sale of:

(1) Records; or

(2) Blank recording media (whether tape, disc or otherwise) or recording equipment.

8.02. “Merchandise Uses” is hereby defined as the exploitation (which shall include, without limitation, the sale or distribution in any fashion) of merchandise of any kind (other than Phonograph Records, which are subject to the provisions hereof) which bears the Artist’s name, likeness, logo, symbol, emblem, design, visual representations, service marks, copyrights in graphic design and/or trademarks, or the images or titles of any Albums or other Records hereunder (including, without limitation, such sale or other distribution of such merchandise at concerts or through retail channels, or by the methods of mail order, direct marketing, licensing or premiums) shall have the unrestricted right to create and distribute merchandise for the purpose of promoting Artist and Artist’s Records recorded hereunder.

(a) You and Artist will cooperate with us, as we reasonably request, in making photographs and preparing other materials for use in promoting and publicizing the Artist and the Recordings made under this agreement, at our expense (which shall not be an Advance) and subject to the Artist’s prior professional commitments.

(b) We will cause Sony to make available to you for your approval, at its offices, any pictures of the Artist or biographical material about the Artist, which we propose to use for packaging, advertising or publicity in the United States during the term of this agreement. We will not use any such material which you disapprove in writing, provided you furnish substitute material, satisfactory to us in our sole discretion, in time for use within our production and release schedules. This paragraph will not apply to any material previously approved by you or used by Sony or us. No inadvertent failure to comply with this paragraph will constitute a breach of this agreement, and you will not be entitled to injunctive relief to restrain the continuing use of any material used in contravention of this paragraph. If we fail to comply with the provisions of this paragraph 8.02(b), our sole obligation to you by reason of such failure shall be to rectify the error in all such materials prepared after we receive your written notice of that failure.

8.03. During the term of this agreement, in respect of Records manufactured for sale in the United States, we will not, without your consent and notwithstanding anything in Article 9 couple Master Recordings made under this agreement with recordings not embodying the Artist’s performances on Singles; or so couple more than two Master Recordings on any other Record, except promotional Records, Records described in the last sentence of paragraph 10.03, or Records created by Sony’s special products operations for sale to educational institutions.

8.04. We will not use Master Recordings made under this agreement on “Premium Records” without your consent and notwithstanding anything in Article 9. (A “Premium Record” is a Record produced for use in promoting the sale of merchandise other than Phonograph Records, which bears the same name of the sponsor for whom the Record is produced.)

8.05. We will not release “outtakes” on Phonograph Records without your consent. (“Outtakes” are preliminary, unfinished, or alternate version of Master Recordings made under this agreement and released on Phonograph Records.)

8.06. (a) Provided you have fulfilled all your obligations under this agreement, we will release each Album recorded in fulfillment of your Recording Commitment in the United States within three months after the date of completion of the lacquer, copper, or equivalent masters used in manufacturing the disc units of the Album concerned and in Canada within four (4) months of such Album’ Initial U.S. commercial release. If we fail to do so you may notify us, within thirty (30) days after the end of the three-month or four-month period concerned, that you intend to terminate the term of this agreement unless we release the Album within sixty (60) days after our receipt of your notice (the “cure period”). If we fail to release the Album before the end of the cure period you may terminate the term of this agreement by giving us notice within thirty (30) days after the end of the cure period. On receipt by us of your termination notice the term of

this agreement will end and all parties will be deemed to have fulfilled all of their obligations under it except those obligations which survive the end of the term (e.g., warranties, re-recording restrictions and obligations to pay royalties). Your only remedy for our failure to release an Album will be termination in accordance with this paragraph. If you fail to give us either of those notices within the period specified, your right to terminate will lapse.

(b) (1) If any such Album is listed among the first one hundred (100) Albums in the principal weekly chart of best-selling Albums in the United States published in BILLBOARD (i.e., the chart entitled “The Billboard 200 Top Albums” or the chart corresponding most closely to that chart if it is re-titled or discontinued), and if you notify us of that listing within thirty (30) days after the date of the issue of BILLBOARD in which it first appears and you will have the right (“Outside License Option”) to require us to enter into an agreement with a licensee designated by you, who is actually engaged in the business of manufacturing and distributing Phonograph Records in Australia, Germany, South Africa, Italy, and the United Kingdom and Eire (collectively, the “Release Territories”) authorizing the licensee to manufacture and distribute Records derived from the Recordings comprised in that Album in that Release Territory. If you fail to give us either of those notices within the period specified, your rights under this subparagraph will lapse. Fifty percent (50%) of all revenues actually received by us under such licenses will be credited to your royalty account under this agreement, in lieu of any royalties under Article 9 on Records sold under those licenses. Each such license agreement will provide for such compensation for the licenses as you negotiate with the licensee, and will contain such other provisions as we shall require, including but not limited to the following:

(i) The licensee will be required to obtain and deliver to us, in advance:
a. all consent by other Persons which we may require (including but not limited to consent by recording artists); and

b. all agreements by other Persons which we may require to look to the licensee, and not to us, for the fulfillment of any obligations arising in connection with the manufacture or distribution of Records under the license (including such agreement by unions and funds established under union agreements). The licensee will also become a first party to the Phonograph Record Manufacturers’ Special Payments Fund Agreement dated November 1993, entered into by Sony with the American Federation of Musicians of the United States and Canada, or the successor agreement then in effect. The license will not become effective until the licensee has complied with all the provisions of this subsection (i).

(ii) The licensee will make all payments required in connection with the manufacture, sale or distribution in that Release Territory of Phonograph Records made from those Master Recordings after the effective date of the license, including, without limitation, any royalties and other payments to other performing artists, producers, owners of copyrights in musical compositions, the Music Performance Trust Fund and Special Payments Fund, and any other unions and union funds. The licensee will comply with the applicable rules and regulations of the American Federation of Musicians and any other union having jurisdiction and any other applicable laws, rules and regulations covering any use of the

Recordings by the licensee or any Person deriving rights from the licensee, in the manufacture and sale of Phonograph Records or otherwise.

(iii) No warranty of merchantability or fitness for a particular purpose or any other warranty or representation, express or implied, will be made by us in connection with the Recordings, the license, or otherwise. You and the licensee will indemnify and hold us, Sony, and its Licensees harmless against all claims, damages, liabilities, costs, and expenses, including reasonable counsel fees, arising out of any use of the Recordings or exercise of such rights by the licensee or any Person deriving rights from the licensee.

(iv) We will cause Sony to instruct its Licensees in that Release Territory not to manufacture Records derived from those Master Recordings for sale there, except as permitted under subsection 8.06(b)(2)(viii) below. If the licensee notifies Sony of such manufacture Sony will instruct the Sony Licensee concerned to discontinue it, but neither we, Sony nor the Sony Licensee shall have any liability by reason of such manufacture occurring before our receipt of such notice and Sony shall have no liability by reason of such manufacture at any time.

(v) Each Record made under the license will bear a sound recording copyright notice identical to the notice used by us for our initial United States release of the Recording concerned, or such other notice as we or Sony require. Otherwise, those Records will not be identified directly or indirectly with us or Sony.

(vi) We shall have the right to examine the books and records of the licensee and all other authorized by the license to manufacture or distribute Records under the license, for the purpose of verifying the accuracy of the accounting rendered to us or Sony by the licensee.

(vii) The licensee will not have the right to authorize any other Person to exercise any rights without our or Sony’s prior written consent.

(viii) We, Sony and Sony’s Licensees will have the continuing right at all times to manufacture and sell recompilation Albums (defined below) which may contain those Master Recordings in that Release Territory. (A “recompilation Album” is an Album containing Master Recordings previously released in different Album combinations, such as a “Greatest Hits” or “Best of” Album.)

This section (1) will not apply in any Release Territory for which you have not fully complied with your obligations to grant or obtain licenses for the use of the Compositions concerned (Controlled or otherwise) in accordance with Article 12, or if you have failed to furnish us with any other authorization or documentation required for release there without additional expense or liability.

(c) The running of the three-month and sixty-day periods referred to in subparagraph 8.06(a) and 8.06(b) will be suspended (and the expiration date of each of those periods will be postponed) for the period of any suspension of the running of the term of this

agreement under paragraph 15.03. If any such three-month or sixty-day period would otherwise expire on a date between November 15 and the next January 16, its running will be suspended for the duration of the period between November 15 and the January 16 and its expiration date will be postponed by the same amount of time (i.e., 61 days). An Album will be deemed released, for the purposes of this paragraph 8.06, when Sony has announced its availability for sale in the territory concerned.

8.07. In preparation for the initial release in the United States of each Album comprised in the Recording Commitment, we will undertake to consult with you or the Artist regarding the proposed Album cover layout and the picture or art to be used on the cover. Our decision on all packaging elements shall be final. This paragraph will apply only to Albums Delivered and initially released in the United States during the term of this agreement.

8.08. In preparation for the initial release in the United States of any Single from any Album Delivered in fulfillment of your Recording Commitment, we will undertake to consult with you regarding the proposed selection of a Master Recording from the Album to be used as the “A” side of any such Single, but our failure to consult with you as set forth above shall not be deemed a breach of this agreement. Our decision on the selection of Master Recordings for use on any Single shall be final.

8.09. No Master Recording Delivered hereunder will be licensed for synchronization in political endorsements, in motion pictures which receive an “X” or “NC17” or equivalent rating (which rating we knew or reasonably should have known such motion picture would receive, at the time of the licensing) or for use in nationally broadcast commercials (other than commercials advertising Phonograph Records made hereunder) without your prior approval. Additionally, during the term hereof, except with respect to our use of Covered Videos hereunder, we will undertake to consult with you before granting any so-called “master use” licenses authorizing synchronization of Master Recordings recorded hereunder in feature-length theatrical or television motion pictures, but our failure to consult with you shall not be deemed a breach of this agreement.

8.10. If we determine during the term of this agreement to edit or remix any Master Recording, or resequence any Album produced under this agreement for release on Phonograph Records in the United States, we will accord you a period of seven (7) days in which to do that work at your own expense unless that delay interfere with a scheduled Release. The preceding sentence will not apply to editing or remixing for release on specific configurations (for example,[so-called “twelve-inch”] Singles) or to resequencing for the purpose of equalizing the running time of tracks on Phonograph Records in nondisc configurations. This paragraph will apply only to the initial release of the Master Recording or Album concerned, and will not apply to any Recording or Album not delivered within the time prescribed in Article 3.

9. ROYALTIES

9.01. We will pay or cause you to be paid a royalty computed at the applicable percentage, indicated below, of the applicable Royalty Base Price in respect of Net Sales of Phonograph Records (other than audiovisual Records) consisting entirely of Master Recordings recorded under this agreement during the respective Contract Periods specified below and sold by

us or our licensees Trough Normal Retail Channels (“NRC Net Sales”):

(a) ON ALBUMS SOLD FOR DISTRIBUTION IN THE UNITED STATES:

(1) (i) Master Recordings made during the initial Contract Period: 18%.

(ii) The royalty rate pursuant to subsection 9.01(a)(1)(i) will apply to the first 500,000 units of NRC Net Sales in the United States (“USNRC Net Sales”) of each Album consisting of Master Recordings made during the initial Contract Period. The royalty rate will be:

a. 19% rather than 18%, on the next 500,000 ubits of USNRC Net Sales of any such Album, and

b. 20% on USNRC Net Sales of any such Album in excess of 1,000,000 units.

(2) (i) Master Recordings made during the first Option Period: 19%.

(ii) The royalty rate pursuant to subsection 9.01(a)(2)(i) will apply to the first 500,000 units of USNRC Net Sales of each Album consisting of Master Recordings made during the first Option Period. The royalty rate will be:

a. 20% rather than 19%, on the next 500,000 units of USNRC Net Sales of any such Album, and

b. 21% on USNRC Net Sales of any such Album in excess of 1,000,000 units.

(3) (i) Master Recordings made during the second Option Period: 20%.

(ii) The royalty rate pursuant to subsection 9.01(a)(3)(i) will apply to the first 500,000 units of USNRC Net Sales of each Album consisting of Master Recordings made during the second Option Period. The royalty rate will be:

a. 21% rather than 19%, on the next 500,000 units of USNRC Net Sales of any such Album, and

b. 22% on USNRC Net Sales of any such Album in excess of 1,000,000 units.

(4) (i) Master Recordings made during the third Option Period: 21%.


(ii) The royalty rate pursuant to subsection 9.01(a)(4)(i) will apply to the first 500,000 units of USNRC Net Sales of each Album consisting of Master Recordings made during the third Option Period. The royalty rate will be:

a. 22% rather than 21%, on the next 500,000 units of USNRC Net Sales of any such Album, and

b. 23% on USNRC Net Sales of any such Album in excess of 1,000,000 units.

(b) ON ALBUM SOLD FOR DISTRIBUTION OUTSIDE THE UNITED STATES:

(1) Master Recordings made during the initial Contract Period:

(i) 15% on Albums sold for distribution in Canada;

(ii) 14.4% on Albums sold for distribution in the United Kingdom, Germany and the Netherlands;

(iii) 13.5% on Albums sold for distribution in Australia, new Zealand, Japan, Mexico, the Republic of Ireland, Norway and Sweden;

(iv) 12% on Albums sold for distribution in Belgium, France, Luxembourg, Italy, Greece, Spain, Portugal, Denmark and Taiwan; and

(v) 9% on Albums sold for distribution elsewhere.

(2) Master Recordings made during the first Option Period:

(i) 15.9% on Albums sold for distribution in Canada;

(ii) 15% on Albums sold for distribution in the United Kingdom, Germany and the Netherlands;

(iii) 14% on Albums sold for distribution in Australia, new Zealand, Japan, Mexico, the Republic of Ireland, Norway and Sweden;

(iv) 12.5% on Albums sold for distribution in Belgium, France, Luxembourg, Italy, Greece, Spain, Portugal, Denmark and Taiwan; and

(v) 9.4% on Albums sold for distribution elsewhere.

(3) Master Recordings made during the second Option Period:

(i) 16.6% on Albums sold for distribution in Canada;

(ii) 15.6% on Albums sold for distribution in the United Kingdom, Germany and the Netherlands;

(iii) 14.6% on Albums sold for distribution in Australia, new Zealand, Japan, Mexico, the Republic of Ireland, Norway and Sweden;


(iv) 13% on Albums sold for distribution in Belgium, France, Luxembourg, Italy, Greece, Spain, Portugal, Denmark and Taiwan; and

(v) 9.7% on Albums sold for distribution elsewhere.

(4) Master Recordings made during the third Option Period:

(i) 17.2% on Albums sold for distribution in Canada;

(ii) 16.2% on Albums sold for distribution in the United Kingdom, Germany and the Netherlands;

(iii) 15.2% on Albums sold for distribution in Australia, new Zealand, Japan, Mexico, the Republic of Ireland, Norway and Sweden;

(iv) 13.5% on Albums sold for distribution in Belgium, France, Luxembourg, Italy, Greece, Spain, Portugal, Denmark and Taiwan; and

(v) 10.1% on Albums sold for distribution elsewhere.

(c) ON SINGLES SOLD FOR DISTRIBUTION IN THE UNITED STATES: 12%.

(d) ON SINGLES SOLD FOR DISTRIBUTION OUTSIDE THE UNITED UNITED STATES:

(1) 10.2% on Singles sold for distribution in Canada;

(2) 9.6% on Singles sold for distribution in the United Kingdom, Germany and the Netherlands; and

(3) 9% on Singles sold for distribution in Australia, New Zealand, Japan, Mexico, the Republic of Ireland, Norway and Sweden;

(4) 8% on Singles sold for distribution in Belgium, France, Luxembourg, Italy, Greece, Spain, Portugal, Denmark and Taiwan; and

(5) 6.0% on Singles sold for distribution elsewhere.