Recording Agreement

EXCLUSIVE RECORDING AGREEMENT This Exclusive Recording Agreement (“Agreement”) is effective as of the _____ day of ____________________, 200__ by and between ABC, LLC ("Company") and John Doe, p/k/a “XYZ” ("Artist"). WHEREAS, Artist wishes to perform as a recording artist, musician and vocalist exclusively for Company and Company wishes to have Artist so perform upon the terms and conditions set forth herein. NOW THEREFORE, in consideration of the representations and warranties and the mutual promises hereinafter set forth it is hereby agreed as follows: 1. Engagement. (a) Company hereby exclusively engages Artist as a recording artist, musician and vocalist for the purpose of making master recordings, from which Phonograph Records will be produced (“Records”), which embody the recorded performances of Artist and for such purposes as are normally incidental thereto. Artist accepts such engagement upon all of the terms and conditions of this Agreement. (b) The territory covered by this Agreement, and in which Company engages Artist as an exclusive recording artist and vocalist for Company, shall be the Universe (the “Territory”) 2. Term. The Term hereof ("the Term") shall consist of an initial period ("First Contract Period") commencing on the date hereof, and four (4) separate, irrevocable options, each to renew the Term of the Agreement for additional contract periods (the “Second Contract Period”, the “Third Contract Period”, the “Fourth Contract Period”, and the “Fifth Contract Period” respectively, together the “Contract Periods”) with each such Contract Period to run consecutively beginning at the expiration of the First Contract Period, all upon the same terms and conditions applicable to the First Contract Period except as otherwise specified herein. Company may exercise each such option by sending Artist a notice not later than the last day of the month during which the end of the Contract Period which is then in effect ("Current Contract Period") occurs. If Company exercises any such option, the next Contract Period will begin upon the expiration of the Current Contract Period. Company may exercise an option by sending Artist written notice at any time prior to the expiration of the Current Contract Period. If the Company fails to exercise any such option, and the Current Contract Period expires, Company shall not have any liability or additional obligations to Artist in connection with this Agreement (except for any of those obligations which survive the Term hereof, (i.e., to account and pay royalties, if any)). 3. Recordings. (a) Artist shall record for Company a sufficient number of master recordings embodying the performances of Artist (hereinafter sometimes referred to as the "Masters") to constitute one (1) LP, during the First Contract Period of this Agreement, and one (1) LP during each subsequent Contract Period, if any, not to exceed a total of five (5) LP's during the Term of this Agreement. (b) Artist shall render services at recording sessions scheduled at reasonable times and places chosen mutually by Artist and Company. Artist and Company shall further mutually choose: (i) the compositions or other material to be performed by Artist; (ii) the number and identity of the musicians, vocalists and other performers (if any) to be recorded at such sessions; (iii) the producer to be utilized in the production of the Masters hereunder; and (iv) the studio, remixers and edits of the Masters hereunder. Each recording shall be subject to Company's approval as technically satisfactory for the manufacture and sale of Phonograph Records. Should Artist fail or refuse to appear at any recording session solely through Artist's own fault and of which Artist has been given reasonable notice, for any reason, Company may elect to extend the Contract Period during which such refusal occurs until the required number of Masters are recorded hereunder. Written notice of Company's election to extend this Agreement shall be mailed to Artist by certified mail not more than thirty (30) days after the expiration of the Contract Period in which the basis for this extension occurred. (c) Artist agrees to be available for and to render Artist’s writing and recording services in connection with the production of a reasonable number of demonstration recordings (“Demos”) at Company’s request. Company shall pay any and all approved recording costs in connection with any such Demos provided that any such costs shall be deemed additional Advances to Artist and shall be recoupable from the “net advances” and royalties payable hereunder. 4. Recording Costs. Company shall be responsible for the payment of all recording costs pursuant to a budget approved by Company including producer and any other third party royalties and costs incurred with respect to Masters (including the recording costs of Demos as set forth above in Paragraph 3(c)) produced hereunder. All such costs shall be considered non-returnable Advances to Artist which shall be recouped from record royalties payable to Artist less any third party producer royalty payable under this Agreement. Any reasonable costs or expenses which are incurred by Company by reason of Artist's failure to appear or tardiness in appearing at a recording session shall be deducted from royalties payable to Artist hereunder. 5. Rights in Recordings. Notwithstanding anything herein to the contrary, including termination of this Agreement, Artist shall cause all Masters produced pursuant to this Agreement to be recorded by Artist on Company's behalf and all records and reproductions made therefrom together with the performances embodied therein, shall, from the inception of their 2 creation, be a "work for hire" and entirely the property of Company in perpetuity free of any claim whatsoever by Artist, or by any persons deriving any rights or interest therefrom including without limitation, all rights of copyright therein now or in the future granted or permitted by law. Any master recordings accepted hereunder by Company that were partially or completely recorded prior to the Term of this Agreement shall be deemed to have been recorded during the First Contract Period and shall be subject to all the terms and conditions of this Agreement. Any recording costs incurred by Company associated with the recording and/or production of any such Masters shall be recoupable as recording costs hereunder. Company shall have the right in its sole discretion to use the Masters in any manner including, without limitation: (a) The right to manufacture, advertise for the sale of, sell, license and distribute the Masters and Phonograph Records (in any speed, size or format whatsoever) embodying any of the performances delivered hereunder; and all such rights may be transferred to, and exercised by firms owned or controlled by or affiliated with Company; (b) The sole and exclusive right in perpetuity in and to all performances recorded hereunder, all masters, records and other reproductions of the performances embodied in any manner and by any method now or hereafter known, whether electronic, magnetic, mechanical, or other, and obtained from the performances made hereunder; (c) The sole and exclusive right, if Company shall so desire, publicly to perform the Masters and to permit the public performance thereof by means of radio and television broadcast or otherwise; (d) The right to use the names, both legal and professional, likenesses or other identifications and biographical material concerning Artist, for purposes of trade and in connection with the Master Recordings hereunder, the Phonograph Records derived therefrom and Company's record business and products; (e) The right to release derivatives or any one or more of the Masters on any medium or device now or hereafter known, under any name, trademark, trade name or label which Company, its distributor and/or their respective subsidiaries, affiliates and licensees may from time to time elect. 6. Royalties. (a) On Records sold for distribution within the United States, Company shall pay to Artist a royalty at a rate equal to twelve (12%) percent (the “US Rate”) of the suggested retail list price (less applicable deductions as set forth herein) in respect of net sales (gross sales less returns, credits, reserves and applicable reductions) through normal retail channels of recordings embodying the Masters in the Territory in the form of discs, digital tapes, pre-recorded tapes (including reel-to-reel tapes, cartridges and cassettes) or any other recorded devices no known or hereinafter to become known. Royalties payable to third parties such as producers shall be deducted from royalties due to Artist hereunder. 3 (b) On Records sold for distribution outside the United States, royalties shall be paid as follows: (i) (ii) Canada: 85% of the US Rate United Kingdom, Japan, Australia, Germany, Spain, Italy, Holland and France: 75% of the US Rate Rest of the World: 50% of the US Rate (iii) (c) Company and its designees shall have the right to include or to license others to include any one or more of the Masters in promotional Records on which such Masters and other recordings are included, which promotional Records are designed for sale at a substantially lower price than the regular price of Company’s Albums. No royalties shall be payable on sales of such promotional Records. 7. Advances. (a) All monies paid to or on behalf of Artist during the Term of this Agreement, other than royalties paid pursuant to Articles 6 and 9 shall constitute “Advances” unless otherwise expressly agreed in writing by Company's authorized officer and shall be recoupable from Artist's royalties payable hereunder. (b) Company shall have the right to deduct from Artist's royalties payable to Artist hereunder any Advances made to Artist, or on Artist's behalf. (c) Artist will make a good faith effort to, during the Term hereof, become and remain a member in good standing of any labor unions with which Company or its affiliates or licensees may at any time have agreements lawfully requiring such union membership. 8. Royalties Statements. (a) Company shall compute royalties payable to you hereunder and will render a statement and pay such royalties, less any unrecouped Advances and any other permissible offsets within sixty (60) days after 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. No royalty statements will 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 will be deemed sold, and Company will have the right to deduct returns and credits of any nature and to withhold reasonable reserves therefor from payments otherwise due you. If Company makes any overpayment to you (e.g., by 4 reason of an accounting error or by paying royalties on Records returned later), Company shall deduct such sums from monies due you hereunder. (b) Royalties for Records sold for distribution outside of the United States ("Foreign Sales") shall be computed in the national currency in which Company is paid by its licensees and shall be paid to you at the same rate of exchange at which Company is paid. No Royalties shall be paid until payment therefor has been received by Company in the United States in United States Dollars. For accounting purposes, sales of Records hereunder by any person or entity other than Company or Company’s licensees shall be deemed to occur not earlier than the same semi-annual accounting period in which such person or entity accounts to and pays Company therefor. If Company does not receive payment for Foreign Sales in the United States in United States Dollars and is required to accept payment in foreign currency or in a foreign country, Company will convert such payment into United States Dollars and render payment to Artist accordingly. If any law, government ruling or other restriction affects the amount that a Company licensee can remit to Company, Company may deduct from Artist’s royalties an amount proportionate to the reduction in such licensee's remittances. (c) All royalty statements rendered by Company will 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 within two (2) years from the date such statement is rendered and an audit for that statement is completed within twelve (12) months after such objection notice is given. Failure to make such written objection or conduct the audit within said time periods will be deemed to be Artist’s approval of such statement, Artist’s waiver of such audit rights, and Artist’s waiver of the right to sue Company for additional royalties in connection with the applicable accounting period. Each statement will be deemed rendered when due unless you notify Company that the applicable statement was not received by you and such notice is given within six (6) months after the applicable due date specified herein, in which event the statement will be deemed rendered on the date actually sent by Company. Artist will not have the right to sue Company in connection with any royalty accounting, or to sue Company for monies due on account of the exploitation of Masters hereunder during the period a royalty accounting covers, whether from the sale of Records or otherwise, unless you commence the suit within twelve (12) months after commencement of Artist’s audit for the applicable period. (d) Artist may, at Artist’s 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. Artist may initiate such audit only by giving notice to Company at least thirty (30) days prior to the date you intend to commence Artist’s audit. Artist’s audit will be conducted by a reputable independent certified public accountant experienced in recording industry audits in such a manner so as not to disrupt Company's other functions and will be completed promptly. Artist may audit a particular statement only once and only within two (2) years after the date such statement is rendered as provided in sub-paragraph (c) above. Artist’s audit may be conducted only 5 during Company's usual business hours and at the place where it keeps the books and records to be examined. Artist will not be entitled to examine any records that do not pertain to Records on which royalties are payable hereunder. Artist’s auditor will review his or her 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. 9. Controlled Compositions. (a) All musical compositions contained on any Masters recorded pursuant to this Agreement, which are written or composed by Artist or Artist, in whole or in part, alone or in collaboration with others, or which are owned or controlled, in whole or in part, directly or indirectly, by Artist (hereinafter referred to as "Controlled Compositions") are hereby licensed to Company, its distributors or its licensees for the Territory under the terms and conditions and at the applicable royalty rates set forth below per selection on the basis of records sold, less returns and credits, except that no mechanical royalties shall be payable in respect of any records for which no royalties are payable pursuant to paragraph 6 hereof: (i) Seventy-five (75%) Percent of the minimum statutory rate for each Controlled Composition. (ii) Any assignment made of the ownership of copyrights in, or the rights to license or administer the use of any Controlled Compositions, shall be subject to the terms and provisions hereof. (iii) No mechanical royalties shall be payable in respect of Controlled Compositions which are arrangements of selections in the public domain. (iv) The "statutory rate" referred to in this paragraph 9 and any subparagraph hereof shall be the standard statutory mechanical royalty rate as reported by the National Music Publishers’ Association (http://www.nmpa.org/hfa/ratecurrent.html) on the date of the commercial release of the applicable Record. (v) The total mechanical royalty for all compositions on any Album including Controlled Compositions will be limited to ten times the amount which would be payable under this Article 9(a). (vi) Company is hereby granted a royalty-free license to reproduce the composition recorded hereunder in synchronization with and in time relation to visual images featuring Artist's performances in so-called "video programs". 10. Artist Availability. Artist shall be available from time to time, at Company's request, whenever the same will not unreasonably interfere with Artist's other professional 6 activities, to appear for photography, poster and cover art, etc., under the direction of Company or its nominees and to appear for interviews with representatives of the communications media and Company's publicity personnel and to perform other reasonable promotional services. 11. Warranties and Representations. Artist warrants and represents the following: (a) Artist is not now and shall not be a party to or bound by any contract or agreement which will interfere in any manner with complete performance of this Agreement by Artist. Artist warrants and represents that Artist is under no disability, restriction or prohibition with respect to Artist’s right or ability to completely perform all of the terms and conditions of this Agreement. (b) Artist has the right to use Artist’s professional name, and to grant to Company the right to use and allow others to use said name in connection with Records subject hereto. Company's use of such name in accordance with the terms hereof will not infringe upon the rights of any third party. (c) No Controlled Compositions nor any other selections, materials, ideas, or other properties embodied or contained on or used in connection with the Masters or the packaging or advertising for Phonograph Records hereunder which have been furnished or approved by Artist (or which Artist knows to have been embodied on the Controlled Composition) violate or infringe upon any common law or statutory right of any person, firm or corporation, including without limitation, contractual rights, copyrights, and rights of privacy. The performances embodied in the Masters do not and will not infringe upon the rights of any person or business entity. (f) If a claim, demand, or action is made against Company by a third party which is inconsistent with any of the warranties, representations, or covenants made by Artist in this contract, Company shall notify Artist of such promptly after Company has been formally advised thereof, and Artist shall have the right to participate in the defense thereof by counsel of Artist’s own choice, at Artist’s sole cost and expense. Pending the determination of any such claim, demand, or action, Company shall have the right, at Company's election, to withhold payment of any monies otherwise payable to Artist hereunder, in an amount reasonably related thereto; provided, that Company shall not do so if and to the extent that Artist provides Company with a commercial surety bond satisfactory to Company. (g) Artist agrees and understands that Artist shall perform the services to be required by Company pursuant to this Agreement either alone or along with other musicians. 12. Artist Exclusivity. Artist agrees that in all of Artist's endeavors in the entertainment field, Artist will exert his best efforts to be billed, advertised and described as the "Exclusive Recording Artist of ABC” or of such other entity as Company shall designate. 7 13. Licensing of Masters to Third Parties – Company shall have the right to license the Masters to third parties for use in conjunctions with movies, television shows, compilation albums, soundtracks, and other similar uses. In the event the Masters are licensed to a third party for such use, the proceeds of such license shall be split evenly (i.e., 50/50) between Artist and Company, with the understanding that the Artist’s portion of such proceeds are to be applied to the recoupment of unrecouped Advances, Recording Costs or any other charges or expenses. 14. Merchandising. All merchandising rights in Artist's name, professional name, group name (if any), or identification, photograph, likeness, biography and/or other identification are hereby granted to Company for the Territory for the Term of this Agreement, and any renewals or extensions thereof. Company agrees to use its best efforts to exploit commercially the merchandising rights herein granted and further agrees to consult with Artist, when requested by Artist, requesting the commercial exploitation of said merchandising rights. Company agrees to credit Artist’s royalty account an amount equal to twelve (12%) percent of the net income actually received by Company attributable to the exploitation of such merchandising rights. 15. Live Performances. Company shall act as an advisor and consultant during the Term hereof with respect to live personal appearances and performances at concerts, clubs and various other similar engagements throughout the world, and shall endeavor to assist Artist in procuring such engagements. Artist hereby assigns to Company all of its income from such appearances, performances and engagements, and Company agrees to credit Artist’s royalty account an amount equal to twelve (12%) percent of such income. 16. Suspension and Extension of Term. (a) Company shall have the right, at its election, to suspend the running of the Term of this contract and its obligations hereunder upon written notice to Artist if for any reason whatsoever the ability of Artist to perform shall become substantially impaired or if Artist shall refuse, neglect, or be unable to comply with any of its material obligations hereunder, or if as a result of an Act of God, accident, fire, labor controversy, riot, civil commotion, act of public enemy, law, enactment, rule, order, or act of any government or government instrumentality, failure or technical facilities, failure or delay of transportation facilities, illness or incapacity, or other cause of a similar or dissimilar nature not reasonably within the control of Company or which Company could not by reasonable diligence have avoided, Company (or its distributors and/or licensees) is/are hampered in the recording, manufacture, distribution, or sale of Phonograph Records or their normal business operations become commercially impractical. Such suspension shall be for the duration of any such event or contingency (except for a maximum of six (6) months for each such an event of "force majeure" applicable only to Company individually and not other record companies or record production companies), and, unless Company notifies Artist to the contrary in writing, the Term hereof, including any renewal terms and any time periods provided for by the exercise of options as set forth herein shall be automatically extended by such number of days as equal the total number of days of any such suspension. 8 (b) In the event the Artist's ability to perform as a recording Artist shall become impaired for more than six (6) months or Artist shall refuse, neglect, or be unable to comply with any of Artist’s obligations hereunder, then Company shall have the right, at its selection, and in addition to any other rights or remedies which Company may have in such event, to terminate this contract upon written notice to Artist and shall thereby be relieved of any and all obligations hereunder except Company's obligations to account and pay royalties with respect to Masters produced and released hereunder embodying Artist's performances prior to such termination. 17. Definitions. As used in this contract the term: (a) "Record" or "Phonograph Record" shall mean any device, whether now know or unknown, on or by which sound may be recorded for later transmission to listeners, whether embodying sound alone, or sound synchronize with or accompanied by visual images, including without limitation, discs of any speed or size (including, but not limited to compact discs, video discs, or laser discs), reel-to-reel tapes, digital, cartridges, cassettes, or other prerecorded tapes; (b) "Master Recording" or "Master(s)" shall mean any original recording of sound, whether embodying sound alone or sound synchronize with or accompanied by visual images, which may be used in the recording, production, and/or manufacture of Phonograph Records, together with any derivatives thereof (other than phonographs records); (e) "Album" shall mean a record embodying no less than ten (10) master recordings of not less than a total of 40 minutes of playing time; (f) "Selection" shall mean a single musical composition, medley, poem, story, or similar work; (g) "Recording Costs" shall mean all union scale or other payments required to be made to the Artist in connection with the Masters, as well as all payments made to any individuals rendering services in connection with the recording of the Masters, all other payments which are made pursuant to any applicable collective bargaining agreement between Company, its licensees or its distributor(s) and any union or guild (including, without limitation, payroll taxes and payments to union pension an welfare funds), all amounts paid or incurred for studio or hall rentals, tape, engineering, editing, instrument rental and cartage, mastering, transportation, accommodations, immigration clearances, so-called "per diems" in respect of any individuals (including Artist) rendering services in connection with the recording of the Masters, together with any and all other amounts paid or incurred in connection with the recording of the Masters including (mastering costs but specifically excluding plating costs); (h) "Delivery to Company", or words of similar connotation used in connection with master recordings or Masters shall mean delivery for mastering, to a 9 studio or other facility designated or approved by Company, of fully mixed, leadered, sequenced and equalized master tapes comprising the recording commitment for the production of the parts necessary to manufacture Phonograph Records therefrom technically satisfactory to Company and Distribution Company for the manufacture and sale of records, and delivery to Company and its offices of all consents, approvals, copy information, credits and other material required by Company, its licensees or its Distribution Company to release Phonograph Records embodying such master recordings and to manufacture album covers or other packaging therefor; (i) "Advance" shall mean a prepayment of royalties recoupable by Company from royalties to be paid to or on behalf of you pursuant to the Agreement. Mechanical royalties will not be chargeable in recoupment of any Advances hereunder; 18. Assignment. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and representatives of Company. Company may, at its election, and without notice to or approval by Artist, assign this Agreement or any of its rights hereunder, without liability, to any subsidiary, affiliated or controlling corporation, to any person owning or acquiring a substantial portion of the stock and assets of Company, or to any partnership or other venture in which Company is a controlling participant and Company may also assign its rights to any of its licensees if advisable in Company's sole discretion solely to implement the license granted. Without limiting the foregoing, you acknowledge and agree that this agreement may be subject to assignment to Company's distributor or to any joint venture, partnership or corporation between Company (or any affiliate) and its distributor, or to Company's partner or coshareholder. Artist shall not have the right to assign this Agreement except to a loan-out company in which Artist is sole shareholder and under circumstances where such assignment is approved by Company. 19. Waiver. If any clause, sentence, paragraph or part of this Agreement or the application thereof to any person, firm, or corporation shall for any reason be adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect the remainder of this Agreement, which shall continue in full force and effect but such judgment shall be limited and confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy in which such judgment shall have been rendered and to the person, firm, or corporation involved. 20. Notices. All notices hereunder required to be given to Company shall he sent to Company at its address first mentioned herein and all royalties, statements and payments and any and all statements of costs to Artist shall be sent to Artist at Artist’s address first mentioned herein, or such other address as each party respectively may hereafter designate by notice in writing to the other. All such notices shall be in writing and, except for royalty statements, shall be sent by registered or certified mail, return receipt requested, and the day of mailing of any such notice shall be deemed the date of the giving thereof. Copies of all notices to Company shall be sent to: _______________________________________________. 10 21. Governing Law. This Agreement has been entered into in the State of North Carolina, and the validity, interpretation and legal effect of this Agreement shall be governed by the laws of the State of North Carolina applicable to contracts entered into and performed entirely within the State of North Carolina. The North Carolina 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, in Mecklenburg county, and not elsewhere. Any process in any such 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 Artist may designate. Pursuant to this Agreement, any such process may, among methods, be served upon Artist by delivering the process or mailing it by registered or Certified Mail, directed to the address first above written or such other address as Artist may designate in the manner prescribed in this Agreement. Any such delivery or mail service shall be deemed to have the same force and effect as personal service within the State of North Carolina. 22. Default. No default or breach hereunder shall be deemed material unless the Party claiming such default or breach shall given written notice of such claim to the Party charged, by certified mail, return receipt requested, and unless the Party charged shall fail to cure the said default or breach within thirty (30) days after receipt of such notice. 23. Legal Representation. Artist hereby acknowledges and agrees that Artist has read this Agreement, and that Artist fully understands and agrees to be bound by all of the terms hereof (including, without limitation, any and all provisions, obligations, representations, warranties and/or restrictions which relate to Artist in any way). Artist hereby acknowledges that Artist has been advised to obtain independent legal counsel familiar with the music entertainment industry in connection with the execution of the Agreement. Artist further acknowledges that, with respect to the agreement, Artist has either obtained independent legal counsel or have voluntarily waived Artist’s right to do so. 24. Entire Agreement. With the exception of an Exclusive Music Publishing Agreement between Artist and ABC Music Publishing, LLC, entered into concurrently with this Agreement, this writing sets forth the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof. No change, modification, amendment, waiver, termination or discharge of this Agreement shall be binding upon Company or Artist unless confirmed by a written instrument signed by an authorized representative of Company and by Artist. No waiver of any provision of or default under this Agreement shall constitute a waiver by Company of compliance thereafter with the same or any other provision or of its right to enforce the same or any other provision thereafter. SIGNATURES APPEAR ON NEXT PAGE 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year hereinabove first written. ABC, LLC JOHN DOE By: ______________________________ President ______________________________ John Doe 12