FORM FOR ARTIST OWNED RECORD COMPANY
FORM FOR ARTIST OWNED RECORD COMPANY
This agreement (“Agreement”) is between Jill Munroe, Kelly Garrett, and Sabrina Duncan
p/k/a the “Angels” (“Artist”) 4225 Ventura Blvd. Sherman Oaks, CA 91403, on the one hand, and
Rock On Records, Inc (“Company”) c/o Townsend Agency 15100 Wilshire Blvd., Suite 6900 Los
Angeles, CA 90048 Attn: Charlie Townsend, Esq. on the other hand, and is being entered into in
consideration of the following mutual covenants and benefits:
1. SERVICES.
(b) Company agrees to consult with Artist with respect to the terms of each
prospective Distribution Agreement, and all decisions with respect to such terms or otherwise
with respect to such Distribution Agreement shall be mutually determined by Company;
provided, however, that in event of conflict, Company’s decision shall control.
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2. TERM.
(a) The term of this Agreement shall commence on the date hereof and shall
continue until nine (9) months following delivery by Artist to Company (or Distributor,
whichever applicable), of the first LP (as hereinafter defined) featuring the performances of
Artist (“Initial Period”) or as such other time as Artist and Company shall mutually agree.
(b) Notwithstanding the foregoing, Artist hereby grants to Company six (6)
separate and consecutive options to extend the term of this Agreement under the same terms and
conditions for additional periods (each an “Option Period”) commencing upon the expiration of
the Initial Period or the immediately preceding Option Period, if any, and expiring nine (9)
months after Artist's delivery to Company of the requisite LP for the respective Option Period.
Each such Option Period shall be deemed automatically exercised by Company, subject to
Paragraph 2 (d) below, unless Company sends Artist written notice to the contrary no later than
thirty (30) days prior to the end of the then current Option Period, if any, or the date the
Distributor is required to exercise its option to extend the term of the Distribution Agreement. If
Company does not send such written notice, then each Option Period shall be deemed to
commence automatically or upon the exercise of the applicable option by a Distributor, if any.
The Initial Period and any applicable Option Period shall be collectively referred to as the
“Term.”
(d) In no event shall the Term of this Agreement exceed the maximum time
allowable by law; provided, however, that if any provision of this Agreement is determined
invalid or unenforceable by a court or then-legally constituted body with jurisdiction to make
such determination, then the remainder hereof shall remain in full force and effect.
3. RECORDING COMMITMENT.
(a) Throughout the Term, and at Company's request, Artist shall perform for
the recording of Compositions (as hereinafter defined) selected by Artist and as approved
Company, and Company shall be responsible for paying any and all Recording Costs (as
hereinafter defined) in connection therewith, provided, however, that any actual out-of-pocket
costs expended by Company with respect thereto shall be deemed to be Recording Costs and
shall be deducted “off the top” before any “net royalties” (defined below) are allocated in the
percentages set forth in Paragraph 6 below, with the exception of mechanical royalties, which
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shall be payable from the first record sold. Without limiting the generality of the foregoing,
Artist shall not earn any monies (except for mechanical royalties) in respect of any exploitation
of any LP or Masters for which Company is not entitled to be credited with, or does not earn, a
royalty. Conversely, Artist will be entitled to royalties for all forms of exploitation of any LP or
Masters for which Company is entitled to a royalty based upon the recording services of Artist.
5. GRANT OF RIGHTS.
(a) Company shall be exclusively entitled to and shall own all right, title, and
interest throughout the universe in and to the results and proceeds of Artist's services hereunder
including, but not limited to, any and all Recordings (as hereinafter defined), all Masters, and
any audiovisual recordings embodying any Master (which, for the purposes hereof, shall be
deemed to include all of the tapes, derivatives, and reproductions thereof) (collectively,
“Materials”) whether or not completed, and any and all sound recording copyrights therein and
thereto, including all renewals and extensions thereof. The Materials shall be entirely and
exclusively Company’s property, free of any claims whatsoever by Artist or any other person,
firms, or corporation. Company shall, accordingly, have the sole and exclusive right to copyright
the Materials in Company’s name as the owner and author thereof, and to secure any and all
renewals and extensions of such copyrights (it being understood that for such purposes Artist and
all other persons rendering services in connection with the Materials shall be deemed to be
Company’s employees for hire and the Materials shall be considered a “work made for hire”
pursuant to the copyright laws of the United States). Company and Company’s designees,
successors, licensees, and assignees (including, but not limited to, any Distributor) shall have the
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exclusive rights, in perpetuity, to manufacture, sell, reproduce, adapt, distribute, transmit,
broadcast, cable cast, and/or otherwise exploit the Materials, throughout the universe, in any
manner, in any form, in any and all languages, in whole or in part, in any and all media, and by
any method now known or hereafter discovered or conceived as Company may approve, and
Company may accordingly permit any other person, firm, or corporation to do any or all of the
foregoing or may refrain from doing any and all of the foregoing. If, for any reason, it is
determined that any portion of the Materials are not considered a work made for hire, then Artist
shall be deemed to have hereby irrevocably assigned and otherwise transferred to Company an
irrevocable royalty-free license for all right, title and interest in and to such Materials and any
part thereof including, without limitation, all rights of every kind and nature (including all
copyrights therein and thereto) throughout the universe, for the life of copyright (including all
extensions and renewals thereof). Artist hereby irrevocably and unconditionally waives any and
all droit moral and moral rights of authors (and similar or analogous rights throughout the world)
that Artist may have in the Materials and/or Compositions embodied in the Materials, and Artist
hereby agrees not to make any claim against Company or any party authorized by Company to
exploit the Materials based on such moral or like rights. Artist shall, upon Company’s request
and at Company’s expense, execute and deliver to Company any assignments of copyright
(including renewals and extensions thereof) in and to the Materials as Company may deem
necessary to effectuate the terms of this Agreement, and Artist hereby irrevocably appoints
Company as Artist's attorney-in-fact for the purpose of executing such assignments in Artist’s
name.
(b) Company and its designees and licensees shall have the right throughout
the universe in perpetuity to use and to permit others to use Artist's name (including any group
name used by Artist, the names of individuals comprising Artist, and any and all professional
names used by Artist), photographs and other likenesses of Artist, and biographical material
concerning Artist in connection with the exploitation of any or all of the Materials, and for trade
or otherwise in connection with this Agreement and/or the Distribution Agreement, if any. Artist
shall be deemed to have approved any such likenesses, biographical material, and/or other
identification if Artist fails to submit to Company specific objections thereto within ten (10)
business days after Company and/or Distributor, whichever applicable, has notified Artist of
their availability for Artist’s inspection.
(c) Company shall be entitled to assign any or all of its rights and delegate
any or all of its obligations pursuant to this Agreement to a Distributor pursuant to a Distribution
Agreement or to any subsidiary, parent, or affiliated entity or any entity acquiring all or
substantially all of Company’s stock or assets. Artist shall be entitled to assign this Agreement
only to a wholly-owned “loan-out” company.
6. ROYALTIES.
(a) Artist shall be entitled to receive fifty percent (50%) of any "net royalties"
paid to Company by any third party (including any Distributor) in connection with the sales of
any Master or LP, and Company shall be entitled to retain the remaining fifty percent (50%) of
such net royalties for its own account. As used herein, the term “net royalties" shall mean the
gross royalty paid to Company by any third party, including, but not limited to, any Distributor,
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less Recording Costs, any royalty payable to owners or controllers of musical compositions, third
party producers, mixers, remixers, and any other third party royalty participants paid in respect
of the Masters concerned.
(a) In consideration of the full execution of this Agreement and the rights
granted by Artist to Company herein, Company shall pay Artist an advance of
_____________________($______) in connection with Artist’s services hereunder.
Notwithstanding the foregoing, in the event that Company receives a recording fund from any
Distributor in connection with the Recording Costs for any LP to be recorded hereunder (the
“Recording Fund”), then Company and Artist shall prepare a recording budget with respect to
any LP which shall specify all Recording Costs that are to be incurred in connection with the
production thereof including, without limitation, studio costs, video costs, producer advances,
legal fees, mixing costs, mastering costs, artwork, manufacturing costs, and any other costs that
Company shall be responsible for in connection with the production of LPs as set forth under the
applicable Distribution Agreement (the “Recording Budget”). Subsequent to preparation of any
Recording Budget by Company and Artist, Artist shall retain, for Artist’s own account, fifty
percent (50%) of the Recording Fund “left over” after the preparation of any Recording Budget,
and Company shall retain for its own account the remaining fifty percent (50%) of the same
Recording Fund “left over.” No royalties (excluding mechanical royalties) shall be paid to Artist
and/or Company until the Recording Fund for any LP to be recorded thereunder is recouped by
Company and/or Distributor, as applicable.
(b) In the event that Company enters into a Distribution Agreement with a
Distributor, then notwithstanding anything to the contrary contained in this Agreement,
Company shall be entitled to recoup its out-of-pocket costs only paid by Company in connection
with Company’s production, manufacturing, and promotion of any LP hereunder, if any.
(b) Company and Artist shall be responsible for obtaining any and all
necessary permissions from all copyright owners of the musical compositions embodied on any
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of the Masters and Company shall be and shall cause any Distributor to be responsible for all
payments required to be made to such copyright owners in respect of Company's and
Distributor’s, as applicable, exploitation of any musical composition embodied in any of the
Masters.
(d) The mechanical royalty rate shall be computed on a pro-rata basis with all
other musical compositions embodied on any LP, and the maximum aggregate mechanical royal-
ties payable by Company in the United States and Canada in respect of all of the musical compo-
sitions embodied on any LP shall be an amount equal to twelve (12) times the Controlled Com-
position Rate on LPs; five (5) times the Controlled Composition Rate on CD-5's and EPs; and
three (3) times the Controlled Composition Rate on 12" singles. No mechanical royalties shall
be payable with respect to any Records or LPs given away as “free goods” or for which no roy-
alties are payable to Company, and subject to the next sentence, arranged versions of a musical
composition in the public domain which are claimed by Artist to be subject to this paragraph 15
(d). If ASCAP, BMI, or SESAC accords regular performance credit for any public domain
work, then the copyright royalty rate on any such Composition will be apportioned according to
the same ratio used by ASCAP, BMI, or SESAC in determining the performance credit.
(b) Artist agrees to pay Company, within thirty (30) days following Artist’s
receipt of the applicable accountings, fifty percent (50%) of Artist’s net proceeds derived from
any endorsements and/or sponsorships (whether tour related or otherwise), commercials, and
advertising, whether each of the foregoing is secured by Artist or on Artist’s behalf by any third
party or by Company. Notwithstanding the foregoing, if Company is initially paid, credited, or
forwarded the proceeds in connection with the foregoing, then Company shall pay Artist a
royalty (“Endorsements Royalty”) equal to fifty percent (50%) of the net of said proceeds
representing Artist’s share in connection therewith.
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(c) The Merchandising Royalty and the Endorsements Royalty shall be
accounted by Company to Artist within thirty (30) days following Company’s receipt of
accountings from the respective party in connection therewith. For purposes of clarification,
neither of the foregoing royalties shall be cross-collateralized with Record advances or royalties
payable to Artist hereunder.
10. ARTIST APPROVALS. Subject to the limitations set for in any agreement
between Company and any Distributor, Company shall obtain verbal approval (not to be
unreasonably withheld) from Artist in connection with all third party licenses necessary for the
exploitation of any of the Masters hereunder. Notwithstanding the foregoing, Artist has sole
approval rights with respect to the third party licensing of any of the Masters to the extent such
licensing implicates the following topics and/or subjects: political campaigns, affiliations and/or
political issues, including but not limited to, gun control and abortion; the glorification of drugs
and/or alcohol; alcohol and tobacco based advertisements; animal rights and the glorification of
cruelty to animals; feminine hygiene, and birth control products.
(a) Artist agrees that all notices, statements, accountings and payments to be
rendered to Artist hereunder shall be forwarded to the address set forth as follows:
All payments to be made to Artist shall be made by way of a single check sent within thirty (30)
days after Company's receipt of the corresponding payment from any third party, including but
not limited to, any Distributor.
(b) Company agrees to furnish Artist with (i) accounting statements from
Company which shall include all payments paid to Company from the sales of any LP and/or the
licensing of any of the Masters hereunder; (ii) any and all accounting statements received by
Company from a Distributor, if any; and (iii) the relevant portions of the report of any audit
conducted by Company of any Distributor with respect to the sale of Records embodying
Masters hereunder; provided, however, that Artist shall pay Artist’s pro-rata share of the costs of
such audit and Company shall have the right to deduct such proportionate share of such costs
from Artist's share of the proceeds, if any, from such audit.
(c) Artist shall have the right to audit Company's books and records with
respect to each accounting statement provided to Artist by Company or received by Company
from any Distributor, to object to any such accounting statement, and/or to institute legal action
against Company in connection with any such accounting statement within one (1) year after
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receipt thereof or prior to the dates occurring three (3) months prior to the end of any applicable
period set forth in any particular Distribution Agreement during which Company shall have the
right to audit the books and records of the Distributor with respect to the applicable accounting
statement.
(a) Artist understands and agrees that any Distributor, if engaged, will require
Artist to execute an inducement agreement that will guarantee Artist’s recording services to said
Distributor regardless of a breach of this Agreement either by Company or by Artist’s loan-own
company, if applicable, and/or by Company's breach of the applicable Distribution Agreement.
Artist agrees that Artist shall promptly execute such inducement agreement and that Company
shall be entitled to enforce such inducement agreement directly against Artist for its own benefit
as a third party beneficiary of such inducement agreement. If Artist fails to promptly execute
such inducement agreement, then such failure shall be deemed a material breach of this
Agreement.
(b) Without limiting the generality of any of the other terms of this
Agreement, Artist agrees to be bound by all of the terms and restrictions set forth in any
Distribution Agreement, including, but not limited to, the terms therein related to the duration of
contract periods, exclusivity, re-recording restrictions, suspension and termination rights,
recording and delivery obligations, mechanical licenses, union membership, indemnities,
accounting time periods and limitations, notice provisions, and controlled compositions (i.e.,
compositions written, owned, or controlled by Artist, in whole or in part, individually or
collectively).
(a) Company shall have the right to suspend, by written notice to Artist, any
and/or all of Company's obligations hereunder as well as the Term and any and all other time
periods of this Agreement during any period that Artist is in material breach of any provision of
this Agreement. Further, any suspension applicable to Company and/or Artist pursuant to a
Distribution Agreement will correspondingly and automatically suspend the Term and any and
all other time periods of this Agreement.
(b) Notwithstanding any of the foregoing, Company shall have the right to
terminate this Agreement upon thirty (30) days written notice to Artist for any reason
whatsoever, with or without cause.
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not be deemed to commence until the Distributor has cured its breach, and (b) the Cure Period
shall not apply to a breach of Artist's exclusivity or delivery obligations hereunder or any
breaches by Artist which, pursuant to the terms of a Distribution Agreement, must be cured
within a shorter period of time.
(a) Artist hereby warrants, represents, and agrees that: (i) Artist has the right
to enter into and fully perform this Agreement; (ii) Artist shall perform Artist’s obligations
hereunder to the best of Artist’s ability and in a punctual and cost efficient manner; (iii) as
further described in Paragraph 15(b) below, none of the Masters or the Compositions embodied
thereon shall violate any law or infringe upon or violate the rights of any person. To the extent
that Company incurs costs because Artist does not perform pursuant to subsection 15(a)(i)
herein, Company shall have the right, without prejudice to any of Company’s other rights and
remedies, to recover such costs from any and all monies payable to Artist hereunder.
(b) Artist (or any of Artist’s producers) shall not use or furnish any samples or
interpolated compositions on any of the Masters unless such sample or interpolation has first
been approved by Company. If Artist fails to comply with the terms of the preceding sentence,
then, without limiting the rights and remedies available to Company, Artist shall be: (i) solely
liable for all royalties or other monies which shall be due any person or entity whose master
recordings or compositions are sampled or interpolated on said Master(s); and (ii) solely
responsible for any copyright interests and rights that are required to be transferred, conveyed, or
assigned to the owner or licensor of any sample or interpolated composition embodied on said
Master(s). In the event that both Company and Artist mutually agree to use or furnish a sample
or an interpolated composition on any Master(s) or mutually approve the use of any sample or
interpolated composition furnished by Artist or Artist’s producer on any Master(s), then Artist
and/or Artist’s producer shall use best efforts to “re-play” said sample so that master use fees
shall not be payable and third party record company approvals shall not be required. In the
event that Artist and/or Artist’s producer cannot “re-play” said sample and Company nonetheless
approves use of said sample, then all master use fees or other monies which shall be due any
person or entity whose master recordings are sampled shall be deemed a Recording Cost
hereunder and shall be deducted “off the top” before any “net royalties” are allocated in the
percentages set forth in Paragraph 6 above. Notwithstanding the foregoing, Artist (and/or
Artist’s producer) shall be solely responsible for any copyright interests and rights that are
required to be transferred, conveyed, or assigned to the owner or licensor of any interpolated
composition embodied on any of the Masters so that any mechanical royalties or other payment
to any owner or controller of the musical composition(s) interpolated shall be paid solely from
Artist’s share (or Artist’s producer’s share, if applicable) of mechanical royalties as more fully
described in Paragraph 8 above. In connection therewith, Artist hereby indemnifies Company in
connection with any and all third party copyright claims with respect thereto.
(c) Artist will at all times indemnify and hold Company and/or any
Distributor harmless from and against any and all claims, damages, liabilities, costs and
expenses, including legal expenses and reasonable out of pocket attorneys’ fees, arising out of
any alleged breach or breach by Artist of any warranty, representation, or agreement made by
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Artist herein. In connection therewith, Company will notify Artist of any action commenced on
such a claim. Artist may participate in the defense of any such claim through counsel of Artist's
selection at Artist's sole expense, but Company shall have the right at all times, in Company's
discretion, to retain or resume control of the conduct of such defense. Artist shall reimburse
Company on demand for any payment made at any time after the date hereof in respect of any
liability or claim in respect of which Company is entitled to be indemnified hereunder. Upon the
making or filing of any such claim, action, or demand, Company shall be entitled to withhold
from any amounts payable to Artist under this Agreement such amounts as are reasonably related
to the potential liability in issue. Company will, within thirty (30) days after receipt of Artist's
written request, liquidate any sums held pursuant to the foregoing sentence in the event that such
claim has not resulted in the commencement of litigation within one (l) year after Company
receives notice of such claim; provided, however, that such payment shall not limit Company's
right to thereafter withhold sums if Company reasonably believes that litigation based on such
claim is imminent.
(b) Artist acknowledges and confirms that the guaranteed payments set forth
in Paragraph 17 (a) above are intended to preserve Company's right to injunctive relief to prevent
the breach of this Agreement by Artist and, accordingly, it is the parties' mutual intention that
said guaranteed payments be intended and construed in such a manner as to comply with the
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provisions of California Code of Civil Procedure Section 3423(5th) and California Code of Civil
Procedure Section 526 (confirming the availability of injunctive relief to prevent the breach of a
contract in writing for the rendition or furnishing of personal services). It is hereby
acknowledged that the guaranteed payments set forth in Paragraph 17(a) are not to be construed
as a contractual guarantee but are intended solely to preserve Company's right to seek injunctive
relief and shall only be payable to Artist in the event that Company seeks such relief.
18. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings set forth
below:
(a) "LP" - one (1) or more audio-only Records, at least forty (40) minutes in
playing time, and embodying at least twelve (12) Recordings of different Compositions sold in a
single package.
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All other terms shall be defined as set forth in any Distribution Agreement and, in
the event of any inconsistency between the definitions contained herein and such Distribution
Agreement, the definitions set forth in the Distribution Agreement shall control.
19. MISCELLANEOUS.
(a) This Agreement and the rights and obligations of the parties hereunder
shall be governed by and construed in accordance with the internal laws of the State of
California, and its validity, construction, and performance shall be governed by the laws of the
State of California applicable to agreements made and to be wholly performed therein. Should
any dispute or controversy arise between the parties hereto with reference to this Agreement or
the employment herein provided for, the parties shall first attempt to settle such dispute or
controversy by voluntary mediation for a period of thirty (30) days, and if settlement is not
reached, then by conciliation and arbitration in accordance with the conciliation and arbitration
provisions of the American Arbitration Association. Accordingly, in such event, any action or
proceeding brought by any party hereto shall be submitted to arbitration to the American
Arbitration Association in Los Angeles, and the rules promulgated by said Association and the
California Code of Civil Procedure and Civil Code relating to taking depositions, obtaining
discovery (including, but not limited to, C.C.P. Section 1283.05), and enforcing judgments, shall
be applicable thereto. This arbitration provision shall remain in full force and effect
notwithstanding the nature of any claim or defense hereunder.
(b) This Agreement may be executed in any number of copies by the parties
hereto in several counterparts and, when each party hereto has signed and delivered at least one
such counterpart to the other party hereto, each counterpart will be deemed an original and taken
together will constitute one and the same Agreement which will be binding and effective as to all
parties hereto.
(c) This Agreement sets forth the entire agreement between the parties with
respect to the subject matter hereof. No modification, amendment, waiver, termination or
discharge of this Agreement shall be binding on either party hereto unless confirmed by a written
instrument signed by authorized representatives of both parties. Should any provision of this
Agreement be adjudicated by a court of competent jurisdiction as void, invalid, or inoperative,
such decision shall not affect any other provision hereof, and the remainder of this Agreement
shall be effective as though such void, invalid, or inoperative provision had not been contained
herein. If any provision of this Agreement shall be determined, under applicable law, to be
overly broad in duration, geographical coverage, or substantive scope, such provision shall be
deemed narrowed to the broadest term permitted by applicable law.
(d) The section headings and captions contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
(e) The waiver by either party hereto of a breach of any provision of this
Agreement by the other shall not operate or be construed as a waiver of any subsequent breach of
the same provision or any other provision of this Agreement.
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(f) Artist hereby agrees to keep confidential the terms of this Agreement, to
refrain from revealing said terms to any third party (other than the authorized agents and other
authorized representatives of Artist, and in this regard, Artist agrees to bind such third parties to
this confidentiality provision) unless compelled by government laws or regulations or court
order, and/or to refrain from issuing, authorizing or permitting the issuance of a press release or
other disclosure in any media revealing such terms.
THIS AGREEMENT HAS BINDING LEGAL EFFECT AND GRANTS CERTAIN RIGHTS
TO COMPANY FOR, AMONG OTHER THINGS, ARTIST’S EXCLUSIVE RECORDING
SERVICES. ARTIST ACKNOWLEDGES THAT COMPANY HAS REQUESTED ARTIST
TO CONSULT WITH AND BE REPRESENTED BY AN ATTORNEY OF ARTIST’S OWN
CHOOSING WHO IS KNOWLEDGEABLE ABOUT THE SUBJECT OF THIS AGREEMENT
AND THE RECORD, MUSIC, AND ENTERTAINMENT INDUSTRIES, TO BE ADVISED
ABOUT THE CONTENT AND EFFECT OF THE PROVISIONS OF THIS AGREEMENT,
AND TO FOLLOW SAID ATTORNEY’S ADVICE ABOUT ENTERING INTO THIS
AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
By:_______________________________
An Authorized Signatory
Its:______________________________
_________________________________
Jill Munroe
_________________________________
Kelly Garrett
_________________________________
Sabrina Duncan
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