EXHIBIT 10.15
MODERN RECORDS
468 North Camden, 3/rd/ Floor
Beverly Hills, California 90210
Dated: As of February 9, 2000
Butterfly Productions, LLC
(A New York Limited Liability Company)
Route 183 - Box 369
Stockbridge, Massachusetts 01262
Attn: A. Michael DeSisto
Gentlemen:
The following sets forth the material terms of an agreement
("Agreement") concerning the manufacture, distribution, advertising and sale of
records made from certain recordings and concerning the co-publishing and co-
administration of certain musical compositions. As used in this Agreement, the
following terms shall have the following meanings: (1) The term "Play" shall
mean that certain live musical stage play produced by you entitled
"Inappropriate" which is currently being performed in New York, New York (off-
Broadway) as of the date of this Agreement; (2) the term "Existing Cast Album"
shall mean that certain existing album-length phonograph record derived from
live recordings of the featured performances of "Artists" defined below
appearing in the Play; (3) the term "New Cast Album" shall mean the newly
recorded album-length phonograph record delivered under this Agreement which is
derived from live recordings of the featured performances of Artists currently
appearing in the Play; (4) the term "Compositions" shall mean each musical
composition (including the music, lyrics and titles thereto) and other musical
material (including, without limitation, the score) which is utilized in the
Play during the Term and which is owned and/or controlled by you or any entity
related to you, directly or indirectly; and (5) the term "Artists" shall mean
the actors and actresses comprising the cast of the Play whose vocal and/or
instrumental performances are recorded in the "Masters" defined below.
In connection with the foregoing: (1) A complete and accurate list of
the titles of those master recordings which comprise the Existing Cast Album is
set forth on Exhibit A; (2) a complete and accurate list of the titles of the
Compositions as of the date of this Agreement is set forth on Exhibit B; (3) the
Existing Cast Album and New Cast Album are sometimes referred to below
individually as a "Cast
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Album" and collectively as the "Cast Albums"; (4) the master recordings which
comprise the Existing Album are sometimes referred to below individually as an
"Existing Master" and collectively as "Existing Masters"; (5) the master
recordings which comprise the New Cast Album are sometimes referred to below
individually as a "New Master" and collectively as the "New Masters"; (6) The
Existing Masters and New Masters are sometimes referred to below individually as
a Master and collectively as the "Masters"; and (7) a complete and accurate list
of the Artists whose performances are embodied in the Existing Masters and whose
performances are anticipated to be recorded in the New Masters is attached to
this Agreement as Exhibit C.
1. Territory; Term; and Sell-Off Period. The "Territory" of this
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Agreement shall be the world and universe. The "Term" of this Agreement shall
commence as of the date of this Agreement and continue until the date that is
fifteen (15) years after the initial commercial release throughout normal retail
distribution channels in the United States of the New Cast Album (subject to the
provisions of paragraph 10 below). The "Sell-Off Period" of this Agreement
shall commence as of the expiration or termination of the Term and shall
continue until the date that is six months after the end of the Term.
2. Delivery Commitment and Recording Procedure.
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You shall deliver the Existing Cast Album to us concurrently with your
execution of this Agreement. You shall deliver the New Cast Album to us within
90 days after the execution of this Agreement. You shall designate and submit
to us for your and our mutual approval the recording elements for the New Cast
Album (including the selections to be recorded, the producers, the studios for
and dates of recording sessions, and the recording budget therefor). In
connection with the foregoing, we designate Randy Jackson as the person to
exercise approvals on our behalf. Masters delivered hereunder shall be subject
to our approval as commercially and technically satisfactory for the manufacture
and sale of phonograph records. The New Cast Album shall be comprised of no
fewer than twelve (12) Masters and shall be no less than fifty-eight (58)
minutes in duration and no more than sixty-two (62) minutes in duration. You
and we hereby approve of Michael Sottile ("Sottile") as the producer of the New
Cast Album.
Concurrently with your delivery to us of the Cast Albums, you shall
deliver the following to us (the "Materials"): artwork and photographs used to
advertise and promote the Play; the credits for the cast and crew of the Play
(including, without limitation, Artists and
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the producers of the Masters) that must be reflected on the packaging of the
Cast Albums and other records embodying Masters; and any other information that
is reasonably necessary to reproduce and exploit the Masters or to enable us to
fulfill our obligations in connection with the advertising, marketing and
promotion of the Cast Albums and other records embodying Masters. You hereby
grant to us the right to use and reproduce the Materials (including, without
limitation, your name, Artists' names, and Sottile's name), in whole or in part,
on or in connection with our advertising, marketing, promotion, reproduction and
other exploitation of the Cast Albums and other records embodying Masters, at no
cost to us or our designees. Concurrently with your delivery to us of the
Materials, you shall inform us in writing of any other contractual restrictions
or obligations binding on us in connection with uses and reproductions of the
Materials delivered to us.
3. Rights in Masters. We shall have the exclusive right to obtain
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registration of copyright (and all renewals and extensions) throughout the
universe in the Masters, in our name, as the owner and author thereof. (Upon
the expiration of the Term, we shall not have any rights pursuant to the
preceding sentence.) This Agreement shall constitute an irrevocable transfer to
us of ownership of copyright (and all renewals and extensions) throughout the
universe in the Masters, and, accordingly, you hereby grant, transfer, convey
and assign directly to us the entire right, title and interest throughout the
universe, including, without limitation, the copyright, the right to secure
copyright registration and any and all copyright renewal rights, in and to the
Masters. If necessary, you shall execute and cause Artists, Sottile and other
persons rendering services in connection with the production and recording of
the Masters to execute any documentation, including transfers of copyright
ownership, necessary to vest in us all rights in the Masters.
Notwithstanding the foregoing provisions of this paragraph, all of our
right, title and interest, including, without limitation, the copyright (and
renewals and extensions thereof), in and to the Masters shall revert to you upon
the expiration of the Term, subject to the following: During the Sell-Off
Period, we shall have the non-exclusive right to distribute our existing
inventory of records embodying Masters. We shall not manufacture excessive
quantities of inventory in anticipation of the end of the Term. We shall
execute any documentation, including transfers of copyright ownership, necessary
to vest in you all rights in the Masters from and after the end of the Term.
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Notwithstanding anything to the contrary contained herein, we shall
not release EPs comprised only of Masters without your prior written approval.
4. Rights in Compositions. You shall enter into and execute (and
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cause each of your respective music publishing designees to enter into and
execute) the co-publishing and co-administration agreement attached hereto as
Exhibit D. In consideration for the foregoing, you shall be issued 40,000
shares of the common stock of Modern Records (ticker symbol MDNR) (the
"Shares"). All of the shares shall be issued promptly after the delivery and
acceptance of the New Cast Album and otherwise in accordance with the rules and
regulations established by our Board of Directors concerning the issuance of our
common stock. You agree to execute a subscription agreement containing such
investor representations and other terms and conditions as we may reasonably
request, and to take such other actions as we may determine necessary or
appropriate in order to assure compliance with applicable state and federal
securities laws. You acknowledge that the Shares will not be registered under
the Securities Act of 1933 or qualified under any applicable state securities
laws and regulations and will bear a legend restricting transfer and that the
Shares may not be distributed or sold except in accordance with such laws and
regulations or an applicable exemption therefrom. You also acknowledge that in
determining to obtain the Shares as consideration for the foregoing, you have
relied upon the advice of your own financial, tax and legal advisers and that
you are acquiring the Shares for investment only and not for distribution or
sale.
5. Modern's Share of Net Profits. You shall account for and pay to
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us 10% of the "Net Profits" derived throughout the Territory during the Term,
regardless of when such Net Profits are received by or credited to you. As used
herein, the term "Net Profits" shall mean the following: (a) the excess of the
aggregate gross receipts from the Play over the aggregate production expenses,
running expenses, other customary expenses, and, if applicable, shares of a
royalty pool paid to percentage royalty participants; and (b) net proceeds from
the sale or other disposition of each and all of the "Subsidiary Rights", after
deduction of third party participants (e.g., director and/or choreographer,
bookwriter, and composers). The term "Subsidiary Rights" shall mean worldwide
dramatico-musical stage production rights, including, without limitation,
foreign language performances, first-class performances, second-class
performances, amateur performances, stock performances (e.g., performances at
regional theaters, repertory theaters, non-profit theaters, resident
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theaters, university resident theaters and dinner theaters), condensed
performances, concert-form versions, revival performances, opera versions based
upon the Play, merchandising rights (e.g., wearing apparel, toys, games,
figures, dolls, novelties, greeting cards and other physical properties
representing a character in the Play or the use of the name, characters, or
title of the Play), publishing rights with respect to the book of the Play,
media production rights (e.g., motion pictures, television programs, video
cassette/disc productions, Internet productions, and all other audio and/or
visual productions related to or based upon the Play in any and all media,
whether now known or hereafter developed) and all other subsidiary rights with
respect to the Play in any and all media, whether now known or hereafter
developed. Subsidiary Rights shall only exclude those rights specifically
granted to us pursuant to this Agreement with respect to the Masters and
Compositions and only for so long as we retain those rights. Net Profits shall
be computed, defined, accounted for and paid on a basis which is no less
favorable than that applicable to any other investor in the Play (but no less
frequently than quarterly in any event). You shall maintain (and use reasonable
efforts to cause all applicable third parties to maintain) true and complete
books and records of account in connection with the Play (and you shall not
dispose of any such books or records until at least 3 years after the delivery
to us of each respective statement furnished to us). We shall have the right to
have a certified public accountant examine, inspect and audit such books and
records and other material pertaining to the Play and payments to us hereunder
(at the offices in the United States where you maintain those books and
records), and to make copies and extracts thereof, at any time during regular
business hours and upon 14 days prior notice to you, at our sole expense (but no
more frequently than once during each one-year period). Each accounting shall
constitute an account stated unless we give you notice stating the basis for our
objection within three (3) years after the date such accounting is rendered.
In consideration for the foregoing participation in Net Profits, we
shall pay you $225,000 as follows: $100,000 promptly after the execution of this
Agreement; and $125,000 on or before the date that is two months after the
execution of this Agreement.
6. Recording Fund and Recording Costs.
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(a) We shall pay you, as an advance recoupable from royalties, an
"all-in" recording fund for the production, recording and delivery of the
Cast Albums (inclusive of any and all recording costs for the New Cast
Album) of $75,000, payable
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50% promptly after the commencement of recording sessions for the
New Cast Album and the balance promptly after the delivery and acceptance
of the New Cast Album. You shall use all or substantially all of the
$75,000 recording fund to pay for recording costs for the Cast Albums,
unless we consent to the contrary in writing. In connection with the
foregoing, prior to the commencement of recording sessions for the New Cast
Album, you shall submit to us for your and our mutual approval a reasonably
detailed recording budget for the New Cast Album (together with a cost
summary for the Existing Cast Album). You shall be responsible for and
shall pay all recording costs for the Cast Albums which are in excess of
the $75,000 recording fund. If we elect to pay any of those excess costs,
you shall repay us on demand or, to the extent not so repaid, we may deduct
those excess costs from any monies payable hereunder. The recording fund
shall be inclusive of any and all monies (e.g., session fees, pension,
health and welfare contributions, and reuse fees, if applicable) due to any
union or guild having jurisdiction over the recording of the Masters
comprising the Cast Albums, excluding only "per-record" royalties based
upon sales of records by Modern or its licensees under this Agreement; and
(b) All other monies (including, without limitation, recording
costs, but excluding royalties payable pursuant hereto) paid by us to you,
on your behalf (with your consent or at your request) or on behalf of any
person or entity representing you (with your consent or at your request)
shall be deemed to be advances recoupable from all sums payable by us
hereunder. Only 50% of all monies paid or incurred by us for independent
third party marketing and promotion services shall be recoupable from
royalties earned by you hereunder. Only 50% of the unrecouped audio-visual
production costs for each music video produced hereunder shall be
recoupable from sound-only record royalties (100% of the unrecouped audio-
visual production costs for each music video produced hereunder shall be
recoupable from audio-visual record royalties). In connection with the
foregoing, you shall have the right to approve of the budget for any music
video which is in excess of $100,000; and
(c) Until we receive your written instruction to the contrary,
all monies payable hereunder shall be paid by a single check made payable
to "Butterfly Productions, LLC".
7. "All-In" Royalty Rates. For full-priced, top-line net sales
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through normal retail distribution channels of records
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embodying solely masters, we shall credit to your account a royalty computed by
multiplying our applicable royalty base price by the applicable royalty rate set
forth below:
(a) United States:
(i) Albums:
(1) 0-500,000 units: 13%;
(2) 500,001-1,000,000 units: 14%;
(3) 1,000,001-2,000,000 units: 15%; and
(4) Over 2,000,000 units: 16%.
(ii) Singles: 10%;
(b) Rest of World: 50% of our net receipts;
(c) Digital Records (other than compact discs): 80% of the
otherwise-applicable royalty rate for records in the black vinyl and analog
tape formats; Compact Discs: 100% of the otherwise-applicable royalty rate
for records in the black vinyl and analog tape format, except that the
royalty rate shall be proportionately reduced to the extent that the
royalty base price of a particular album in the compact disc format is less
than a top-line, full-priced album in the compact disc format; Direct
transmissions to consumers: the lesser of 75% of the otherwise-applicable
royalty rate for records in the black vinyl and analog tape formats or 50%
of our net receipts;
(g) For purposes of computing royalties, there shall be deducted
from our royalty base price a packaging deduction in an amount equal to 15%
thereof for single records in the vinyl configuration packaged in color or
other special printed sleeves and for all other records in the vinyl
configuration packaged in our standard singlefold jackets without any
special elements; 17.5% thereof for all other records in the vinyl
configuration; 20% thereof for all records in the analog cassette tape
configuration; and 25% thereof for records in any digital configuration
(e.g., compact discs, digital compact cassettes, digital analog tapes, and
mini-discs), for downloads via satellite, cable and/or the Internet (and
the equivalent), for audio-visual records and for all other recorded
devices, whether now known or hereafter devised. (For clarity, there shall
be no packaging deduction for seven-inch single records in the vinyl
configuration
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packaged in plain sleeves.) There also shall be deducted from our royalty
base price an amount equal to any excise, sales, value added or comparable
or similar taxes which are included therein; and
(h) Our royalty base price shall mean the suggested retail list
price ("SRLP"). If an SRLP does not exist, our applicable royalty base
price shall be a constructed retail price for the territory concerned. Our
royalty base price for audio-visual records and records sold as premiums is
based on monies actually received by us.
8. Royalty Payments and Accountings.
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We shall send to you statements for royalties payable hereunder on or
before the date ninety (90) days after the end of each of our semi-annual
accounting periods (currently ending on June 30 and December 31), together with
payment of royalties, if any, earned by you hereunder during that semi-annual
period (based on our receipts in the United States, or credits to our account in
final reduction of advances previously received by us in the United States,
during the accounting period for which the statement is rendered), less all
advances and charges hereunder which are paid or incurred prior to the end of
the semi-annual accounting period for which the statement is rendered, unless
paid or incurred later than the end of that accounting period for any reason
within your control or which you could have reasonably avoided. Accountings
shall be rendered to you in accordance with our customary policy applicable
thereto. Royalties shall be paid on 100% of gross sales, after deducting from
gross sales returns, credits, and reserves and otherwise calculated in
accordance with our customary policies applicable thereto. We shall have the
right to retain, as a reserve against charges, credits, or returns, such portion
of payable royalties as shall be reasonable in our best business judgment
exercised reasonably and in good faith. Our best business judgment in
connection with the liquidation of each reserve retained by us shall include,
without limitation, our reasonable, good-faith analysis of actual sales,
reorders and returns of phonograph records hereunder to the extent that
information is available to us as of the end of any particular semi-annual
accounting period and our actual sales, reorders and returns patterns for our
records generally other than records hereunder.
You shall be solely responsible for and shall pay all royalties and
other monies required to be paid to Artists, to the producers of the Masters
(including, without limitation, to Sottile) and
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to any other persons, firms or corporations for and in connection with the
production and recording of Masters and of our and our designee's exploitation
of Masters hereunder in records or otherwise. If you furnish us with appropriate
letters of direction, we shall prepare and deliver to you accounting statements
(at the same time we render accounting statements to you hereunder) which
reflect the royalties that you are required to account for and pay to third-
party payees based on our exploitation of the Masters hereunder ("Third-Party
Royalty Payees"). Promptly after your receipt of those accounting statements,
but in no event later than 30 days thereafter, you shall pay all royalties
reflected on those accounting statements to Third-Party Royalty Payees. If you
do not intend to or shall fail to so pay royalties to any Third-Party Royalty
Payee, then you promptly shall notify us thereof so that we may pay those
royalties. Upon our demand, however, you shall pay to us an amount equal to
those royalties paid by us to any Third-Party Royalty Payee. Commencing with the
accounting period in which we shall have recouped any and all advances and other
charges against royalties hereunder, you hereby irrevocably authorize and direct
us to pay and we shall have the right to pay, at our sole election, directly to
Third-Party Royalty Payees any or all of the royalties reflected on accounting
statements prepared by us. Payments made by us to Third-Party Royalty Payees
shall be made solely as an accommodation to you such that no Third-Party Royalty
Payee shall be a third-party beneficiary of this Agreement.
9. Musical Composition Licenses. You hereby grant to us, and shall
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cause any applicable third party to grant to us, the right to reproduce and
exploit the Compositions in phonograph records and otherwise on the terms set
forth below. Mechanical royalties shall be payable in the United States and
Canada at the "United States Controlled Composition Mechanical Rate" or
"Canadian Controlled Composition Mechanical Rate", as applicable, and shall
otherwise be computed in accordance with our customary policies applicable
thereto. The term "United States Controlled Composition Mechanical Rate" shall
mean an amount equal to three-fourths (3/4) of the minimum statutory royalty
rate (without regard to playing time) provided in the United States Copyright
Act for the reproduction of musical compositions as of the date of delivery of
the first (1st) master embodying the controlled composition in question. The
term "Canadian Controlled Composition Mechanical Rate" shall mean an amount
equal to three-fourths (3/4) of the minimum, standard mechanical royalty rate
provided in mechanical licenses between record companies and unrelated
publishers in Canada which are issued by CMRRA (or any successor) as of the date
of the delivery of the first (1st) master embodying the controlled composition
in question. Notwithstanding the foregoing, the maximum aggregate
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mechanical royalty rate for all selections, including Compositions, contained on
a record shall be the product of (a) the applicable United States Controlled
Composition Mechanical Rate or Canadian Controlled Composition Mechanical Rate,
as applicable, and (b) ten (10) for an album other than an album in compact disc
form, eleven (11) for an album in compact disc form, five (5) for an EP, three
(3) for a long-play single and two (2) for a single record. We shall account for
and pay mechanical royalties in accordance with our customary policy applicable
to record royalties, except that we shall send to you statements for mechanical
royalties payable hereunder on or before the date sixty (60) days after the end
of each quarter-annual calendar period. We shall not recoup recording costs
within the recording fund for the Cast Albums or advances specifically set forth
herein or the costs of audio-visual recordings (if any) pursuant to the approved
budget therefor from mechanical royalties. To the extent that the provisions of
this paragraph conflict with the terms of the co-publishing and co-
administration agreement concerning the Compositions attached to this Agreement
as an exhibit, the terms of this paragraph shall govern.
10. Release Commitment. We shall cause the initial release in the
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United States of the New Cast Album not later than 120 days after its delivery
and acceptance ("Release Period"). No days between November 1 and January 1 of
the next calendar year shall be considered in the calculation of the Release
Period. Our obligations pursuant to the foregoing provisions of this paragraph
shall be subject to notice and a sixty-day cure period. Your sole remedy in the
event of any failure to comply with the foregoing obligation shall be your right
to terminate the Term with respect to our rights in the Masters by written
notice to us within 45 days of the end of the cure period described above.
Without limiting the foregoing, you understand that if you terminate the Term
pursuant to the immediately preceding sentence, the Term shall continue with
respect to our rights to Net Profits and the Compositions until the date that is
15 years after the end of Release Period described in the first sentence of this
paragraph.
11. Exclusivity; and Soundtrack Albums.
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During the Term, our rights with respect to records derived from or
associated with the Play are exclusive. No other person or entity shall be
entitled to exploit records and/or recordings derived from or associated with
the Play, other than records comprised solely of score pieces from the Play,
subject to the following: We shall have a 30-day "right of first negotiation"
and a 15-day "matching right" with
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respect to any agreement covering records comprised of score pieces from the
Play.
As used herein, the term "Soundtrack Agreement" shall refer to an
agreement pursuant to which you or an entity on your behalf ("Grantor") dispose
of any right to reproduce and/or exploit soundtrack album rights associated with
a motion picture or television program which is derivative of the Play. Prior
to the commencement of negotiations between Grantor and any third party, you
shall notify us of Grantor's desire to enter into a Soundtrack Agreement. We
shall have the right, at our election, at any time within ten business days
after our receipt of that notice from you, to cause Grantor immediately to enter
into a Soundtrack Agreement on all of the relevant material terms and conditions
contained in this Agreement (e.g., royalty and accounting obligations relating
to the Masters), except that you shall receive a one-time additional advance
against royalties of $350,000 (from which you shall pay or cause to be paid
recording costs for the soundtrack album concerned). If for any reason we elect
not to enter into a particular Soundtrack Agreement, then Grantor shall have the
right to enter into negotiations for a Soundtrack Agreement with any third
party, subject to the provisions below. Prior to Grantor entering into any
Soundtrack Agreement, you shall cause Grantor to first offer to us the right to
enter into a Soundtrack Agreement with Grantor for the same bona fide advance
and pursuant to the same bona fide terms as may be offered by Grantor to a
responsible, unrelated third party. You shall give us written notice of any
such bona fide and acceptable offer which sets forth the name of the prospective
record company, the advance and all other terms and conditions of the offer. If
we fail to notify you that we are exercising our option to enter into a
Soundtrack Agreement with Grantor within ten business days after our actual
receipt of your written notice to us, then Grantor shall have the right to enter
into a Soundtrack Agreement with the prospective record company, provided that
the terms of that Soundtrack Agreement are the same as the terms set forth in
your written notice to us.
12. Videos. Upon our request, you shall cause the Artists appear for
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the production of audiovisual recordings embodying the Artists' audiovisual
performances of the Masters ("Videos"). You and we shall mutually designate
the musical compositions which shall be embodied in the Videos, the producer and
director of the Videos, all other individuals rendering services in connection
with the production of the Videos, the storyboard and script for the production
of the Videos and the locations at and the dates on which the Videos shall be
produced. Our rights in the Videos and our rights to use the Artists' names,
likenesses, other identifications, and biographical materials are and shall be
the same and no less favorable to us than our rights with respect to the
Masters. Without
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limiting the generality of the foregoing, you hereby irrevocably transfer,
convey, grant and assign to us and our assignees or successor-in-interest the
entirety of your right, title and interest in perpetuity and throughout the
universe, including, without limitation, the copyright and all renewals and
extensions of copyright, in and to the Videos.
13. More Formal Documentation. At our request, each party hereto
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shall execute more formal documentation of this Agreement containing additional
terms and provisions customarily required by us. Each party hereto agrees to
negotiate in good faith with respect to any reasonable changes that either party
may request in connection with those provisions. Each party reserves the right,
however, to reject, in whole or in part, any such requests if such party
determines in its best business judgment exercised in good faith that such
change is significantly inconsistent with its general policies. Unless and
until that more formal document is executed, this document constitutes a valid
agreement binding upon you and us as governed by the laws of the State of New
York applicable to contracts entered into and intended to be
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performed entirely in that state. Any disputes between the parties hereto shall
be subject exclusively to the jurisdiction of the state and federal courts
sitting in New York City in the State of New York.
If the foregoing correctly reflects your agreement with us, please so
indicate by signing below.
Very truly yours,
MODERN RECORDS
By: /s/ Russ Regan
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An Authorized Signatory
AGREED AND ACCEPTED:
BUTTERFLY PRODUCTIONS, LLC
By: /s/ A. Michael DeSisto,
----------------------------
A. Michael DeSisto,
An Authorized Signatory
Print position:
Tax Identification No.:
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EXHIBIT A
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EXISTING CAST ALBUM
TITLES OF EXISTING MASTERS:
OUR WORLD WITHIN (PART ONE)
OUR WORLD WITHIN (PART TWO)
LET ME BE THE ONE
DEAR DAD
REAL
A GOOD BOY
I WONDER
THE DREAM
MEXICO
LOST
FOUND - THE DISCOVERY
EVERYTHING THAT YOU ARE
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EXHIBIT B
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COMPOSITIONS
TITLES OF COMPOSITIONS SONGWRITERS/% PUBLISHERS/%
Our World Within (Part One) Michael Sottile/100% Sottile Publishing/100%
Our World Within (Part Two) Michael Sottile/100% Sottile Publishing/100%
Let Me Be the One Michael Sottile/100% Sottile Publishing/100%
Dear Dad Michael Sottile/100% Sottile Publishing/100%
Real Michael Sottile/100% Sottile Publishing/100%
A Good Boy Michael Sottile/100% Sottile Publishing/100%
I Wonder Michael Sottile/100% Sottile Publishing/100%
The Dream Michael Sottile/100% Sottile Publishing/100%
Mexico Michael Sottile/100% Sottile Publishing/100%
Lost Michael Sottile/100% Sottile Publishing/100%
Found - the Discovery Michael Sottile/100% Sottile Publishing/100%
Everything That You Are Michael Sottile/100% Sottile Publishing/100%
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EXHIBIT C
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ARTISTS FOR EXISTING MASTERS
NAME OF ARTIST MASTER(S) EMBODYING ARTIST'S FEATURED
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PERFORMANCE
ADAM SCHIFFMAN Our World Within (Part One), Our World Within
(Part Two), The Dream
SARAH SECKINGER Our World Within (Part One), Our World Within
(Part Two), Dear Dad, I Wonder, The Dream
JOSH GEYER Our World Within (Part One), Our World Within
(Part Two), A Good Boy, The Dream
DIANE SCHWARTZ Our World Within (Part One), Our World Within
(Part Two), Dear Dad, Real, The Dream, Mexico
LIZ IRWIN Our World Within (Part One), Our World Within
(Part Two), Let Me Be The One, Dear Dad,
I Wonder, The Dream, Lost, Everything That You Are
JAMIE OURISMAN Our World Within (Part One), Our World Within
(Part Two), The Dream, Mexico
AVERIE BOYER Our World Within (Part One), Our World Within
(Part Two), Let Me Be The One, I Wonder,
The Dream, Lost
AMANDA BAYLESS Dear Dad, The Dream
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EXHIBIT D TO CAST ALBUM AGREEMENT
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CO-PUBLISHING AND CO-ADMINISTRATION AGREEMENT
---------------------------------------------
This Agreement is entered into and executed as of February 9, 2000 by
and between Modern Music Publishing ("Modern") and Sottile Publishing (BMI)
(referred to herein as "Sottile").
Reference is sometimes made in this Agreement to that certain cast
album agreement between Modern Records and Butterfly Productions, LLC to which
this Agreement is attached as an exhibit ("Cast Album Agreement"). As used
herein, the term "Compositions" shall have the same meaning attributed to the
term "Compositions" in the Cast Album Agreement. No later than the execution
hereof, Sottile shall furnish Modern with a fully executed copy of any existing
agreements concerning the Compositions, including, without limitation, the
agreement between Sottile and Butterfly Productions, LLC concerning the use of
the Compositions in and in connection with the live musical stage play produced
by Butterfly Productions, LLC entitled "Inappropriate" which is currently being
performed in New York, New York (off-Broadway).
Sottile warrants and represents that Sottile owns and controls an
undivided one hundred percent (100%) of all right, title and interest throughout
the world and universe ("Territory") in and to the Compositions, including,
without limitation, the copyright, the right to secure copyright registration
and any and all copyright renewal/extension rights in and to the Compositions.
For good and valuable consideration, Sottile hereby grants, transfers, conveys
and assigns to Modern an undivided twenty percent (20%) of all right, title and
interest throughout Territory in and to the Compositions, including, without
limitation, the copyright, the right to secure copyright registration and any
and all copyright renewal/extension rights in and to the Compositions (whether
presently available or subsequently available as the result of intervening
legislation) in the United States of America and elsewhere throughout the
Territory.
With reference to the foregoing, the parties hereto agree as follows:
1. (a) The term "Gross Income" refers to any and all monies or other
consideration derived throughout the Territory at any time (whether accrued
and unpaid or hereafter accruing) from the reproduction or other
exploitation of the Compositions in phonograph records which reproduce
sound alone and in any other audio and/or visual manner or media now known
or unknown. The "Respective Ownership Share" of each of Modern and Sottile
referred to in this subparagraph result from the implementation
17
of the provisions above. The "Respective Ownership Share" of Sottile in and
to the Compositions is as follows: An undivided eighty percent (80%) of the
right, title and interest throughout the Territory, including, without
limitation, the copyright, the right to secure copyright registration and
any and all copyright renewal rights, in and to the Compositions; ninety
percent (90%) of Gross Income derived from the Compositions in all forms
other than the so-called "publisher's share" of royalties and fees from
public performances of the Compositions; and eighty percent (80%) of Gross
Income in the form of the so-called "publisher's share" of royalties and
fees from public performances of the Compositions. The "Respective
Ownership Share" of Modern in and to the Compositions is as follows: An
undivided twenty percent (20%) of the right, title and interest throughout
the Territory, including, without limitation, the copyright, the right to
secure copyright registration and any and all copyright renewal rights, in
and to the Compositions; ten percent (10%) of Gross Income derived from the
Compositions in all forms other than the so-called "publisher's share" of
royalties and fees from public performances of the Compositions; and twenty
percent (20%) of Gross Income in the form of the so-called "publisher's
share" of royalties and fees from public performances of the Compositions.
2. (a) Sottile shall have the following sole and exclusive rights in
connection with the Compositions from and after the date of this Agreement
(subject to the terms and conditions of paragraph 9 of the Cast Album
Agreement):
(I) To administer and exploit Sottile's Respective
Ownership Share of the Compositions in any manner or media now known
or unknown throughout the Territory (including defending and/or
prosecuting any and all causes of action for infringement of the
Compositions, past, present and future);
(II) To reproduce and exploit and to authorize the repro
duction and other exploitation of Sottile's Respective Ownership Share
of the Compositions in any manner or media now known or unknown
throughout the Territory; and
(III) To execute any and all licenses and agreements
regarding the reproduction and other exploitation of Sottile's
Respective Ownership Share of the Compositions in any manner or media
now known or unknown throughout the Territory;
18
(B) Modern shall have the following sole and exclusive rights in
connection with the Compositions from and after the date of this Agreement:
(I) To administer and exploit Modern's Respective
Ownership Share of the Compositions in any manner or media now known
or unknown throughout the Territory (including defending and/or
prosecuting any and all causes of action for infringement of the
Compositions, past, present and future);
(II) To reproduce and exploit and to authorize the repro
duction and other exploitation of Modern's Respective Ownership Share
of the Compositions in any manner or media now known or unknown
throughout the Territory; and
(III) To execute any and all licenses and agreements
regarding the reproduction and other exploitation of Modern's
Respective Ownership Share of the Compositions in any manner or media
now known or unknown throughout the Territory;
(C) Subject to the provisions of paragraph 9 of the Cast Album
Agreement, each of Sottile and Modern shall administer and exploit only its
Respective Ownership Share of the Compositions. Neither Sottile nor Modern
shall enter into any license or agreement regarding the reproduction or
exploitation of the Respective Ownership Share of the other party to this
Agreement in and to the Compositions anywhere throughout the Territory at
any time; and
(D) Each party shall advise third parties of the terms of
subparagraph (c) immediately above and shall provide the other party with a
copy of all correspondence and notices in connection with the co-
publishing, exploitation or collection or disbursement of any Gross Income
derived from the Compositions.
3. (A) Sottile shall have the sole and exclusive right to collect
and receive directly Sottile's Respective Ownership Share of Gross Income
derived at any time from the Compositions. Sottile's Respective Ownership
Share of Gross Income from the Compositions is intended to include and
shall include the so-called "songwriter's share" of the Gross Income and
Sottile's share of the so-called "publisher's share" of the Gross Income.
Sottile shall be solely responsible for and shall account for and pay to
the songwriters of the Compositions any monies to which those songwriters
are entitled from Sottile's Respective
19
Ownership Share of the Gross Income. Accordingly, Modern shall not have any
obligation to account for or pay to the songwriters of the Compositions or
Sottile any monies from its Respective Ownership Shares of Gross Income
derived from the Compositions; and
(B) Modern shall have the sole and exclusive right to collect and
receive directly Modern's Respective Ownership Share of Gross Income
derived at any time from the Compositions. Modern's Respective Ownership
Share of Gross Income from the Compositions is intended to include and
shall include only Modern's share of the so-called "publisher's share" of
the Gross Income.
4. If either Sottile or Modern receives the other party's Respective
Ownership Share of Gross Income from the Compositions, the receiving party
("Payor Publisher") shall account for and pay to the other party ("Payee
Publisher") the Payee Publisher's Respective Ownership Share of that Gross
Income on or before the end of the thirty (30) day period after the calendar
month during which the Payor Publisher receives the Payee Publisher's Respective
Ownership Share of Gross Income. The Payor Publisher shall provide the Payee
Publisher with a copy of each accounting statement received by the Payor
Publisher for the Payee Publisher's Respective Ownership Share of Gross Income
from the Compositions. The Payor Publisher shall maintain books and records
concerning the Payor Publisher's receipt in the United States of any of the
Payee Publisher's Respective Ownership Share of Gross Income from the
Compositions. The Payee Publisher or an independent certified public accountant
on the Payee Publisher's behalf may, at the Payee Publisher's expense, examine
those of the Payor Publisher's books and records solely for purposes of
verifying the accuracy of statements and other accountings from the Payor
Publisher to the Payee Publisher for the Payee Publisher's Respective Ownership
Share of Gross Income received by the Payor Publisher in the United States, but
only during the Payor Publisher's normal business hours and only upon reasonable
written notice to the Payor Publisher. The Payor Publisher's accounting for and
payment to the Payee Publisher of the Payee Publisher's Respective Ownership
Share of Gross Income shall be based upon the Payor Publisher's actual receipt
of an accounting for and payment of the Payee Publisher's Respective Ownership
Share of that Gross Income.
5. Sottile and Modern shall each have the right but not the
obligation to prosecute, settle or compromise all claims, demands or actions
related to only its Respective Ownership Shares of the Compositions, and
generally to do and perform all things necessary concerning its Respective
Ownership Shares therein, to prevent and restrain the infringement of copyrights
or other rights with respect to
20
only its Respective Ownership Shares of the Compositions. In the event of the
recovery by Sottile and/or Modern of any monies as a result of a judgment or
settlement, those monies (after deduction of the costs and reasonable attorneys'
fees paid or incurred to recover those monies) shall be divided between Sottile
and Modern in the Respective Ownership Shares of Gross Income of Sottile and
Modern.
6. (A) Sottile warrants, represents, covenants and agrees as
follows: Sottile has the right, power and authority to enter into, execute
and implement this Agreement fully; Sottile shall fully and faithfully
fulfill all of Sottile's obligations under this Agreement in a timely
manner; except as provided in this Agreement, the Compositions are free and
clear of any adverse claims, demands or other encumbrances; and Sottile
shall be solely responsible for and shall account for and pay to the
songwriters of the Compositions all monies to which those songwriters are
entitled for any reproductions or other exploitations of the Compositions;
and
(B) Modern warrants, represents, covenants and agrees as follows:
Modern has the right, power and authority to enter into, execute and
implement this Agreement fully; and Modern shall fully and faithfully
fulfill all of Modern's obligations under this Agreement in a timely
manner.
7. Each party hereby indemnifies, saves and holds each other party,
its successors and assigns and its parents, subsidiaries and affiliated
companies and its officers, employees and agents, harmless from any and all
liability, claims, demands, loss and damage (including actual attorneys' fees
reasonably incurred and court costs) resulting from any claim, demand or action
which is inconsistent with any of the warranties, representations or agreements
made by the indemnitor(s) in this Agreement. The indemnitee(s) shall give the
indemnitor(s) prompt written notice of any claim or action covered by said
indemnity, and the indemnitor(s) shall have the right to furnish, at its
expense, counsel to help defend against such claim, demand or action, if and to
the extent that counsel acts promptly with respect thereto, all subject to the
control and disposition by the indemnitee(s) and counsel for the indemnitee(s),
however.
8. The respective addresses of each of Sottile and Modern for all
purposes herein shall be as set forth below, until written notice of a different
address is received by the party notified of that different address:
Modern Music Publishing Sottile Publishing
468 North Camden, 3/rd/ Floor 728 Sackett Street, #1L
Beverly Hills, California 90210 Brooklyn, New York 11217
21
Attn: President Attn: Michael Sottile
All notices shall be in writing and shall either be sent by registered or
certified mail (return receipt requested) or by facsimile transmission (or the
equivalent), all charges prepaid. The date of mailing or facsimile
transmission, whichever shall be first, shall be deemed the date of service.
9. This Agreement sets forth the entire agreement between Sottile
and Modern with respect to the subject matter hereof and may not be modified
except by a written instrument signed by the party sought to be bound. THE
VALIDITY, CONSTRUCTION, INTERPRETATION AND LEGAL EFFECT OF THIS AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE VENUE FOR ANY ACTION,
SUIT OR PROCEEDING ARISING FROM OR BASED UPON THIS AGREEMENT SHALL BE THE
APPROPRIATE STATE AND FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK IN THE
STATE OF NEW YORK. ACCORDINGLY, EACH OF SOTTILE AND MODERN AGREE THAT ANY
ACTION, SUIT OR PROCEEDING ARISING FROM OR BASED ON THIS AGREEMENT SHALL BE
COMMENCED IN AND DETERMINED BY THOSE APPROPRIATE STATE AND FEDERAL COURTS
LOCATED IN THE CITY OF NEW YORK IN THE STATE OF NEW YORK.
10. Each of Sottile and Modern shall have the right to use each
other's names for advertising and purposes of trade solely in connection with
the reproduction and exploitation of the Compositions. Neither Sottile nor
Modern shall use or reproduce or authorize the use or reproduction of the
likenesses of or biographical materials concerning the songwriters of the
Compositions without the prior written consent of the songwriter(s) in question.
11. If any action, suit or proceeding arising from or based on this
Agreement is commenced by any party hereto against any other party or parties
hereto, the prevailing party shall be entitled to recover from the other party
its actual attorneys' fees and all other costs incurred by the prevailing party
in connection with that action, suit or proceeding and in connection with the
enforcement of any judgment in that
22
action, suit or other proceeding.
14. This Agreement represents the entire understanding of Sottile and
Modern with respect to the subject matter hereof. This Agreement supersedes any
and all prior written or oral negotiations, understandings and agreements
between the parties hereto with respect to the subject matter hereof.
If the foregoing sets forth the understanding and agreement of each of
Sottile and Modern, each party shall so indicate by signing below.
SOTTILE PUBLISHING (BMI) MODERN MUSIC PUBLISHING
By:
---------------------
By:
---------------------
Michael Sottile, An Authorized
Signatory
An Authorized Signatory
23