DRAFT 0DRAFT ARTIST BRAND PARTNERSHIP AGREEMENT PROPOSAL 1. business as the [ARTIST Structure: The Artist and Columbia would enter into a venture which would do business NAME] Venture. 2.
Territory: The territory would be worldwide.
3.
would be for 10 years. Term: The term would
4. Artist’s creative services in all entertainment Contributions: During the term, the Artist would contribute the Artist’s fields exclusively through the [ARTIST NAME] Venture and the [ARTIST NAME] Venture would exclusively administer and exploit exploit all such such services. “Entertainment fields” fields” would include include recording, touring, touring, merchandising, merchandising, sponsorships, sponsorships, endorsements, advertising, websites, music publishing, acting and other appearances, as well as name, likeness and trademark trademark rights. Columbia would contribute to the [ARTIST NAME] NAME] Venture Columbia’s creative direction, sales and marketing expertise, financial backing, worldwide distribution, and administrative support. 5. the term with third parties regarding regarding the exploitation exploitation of the Agreements: All agreements made during the foregoing rights would be entered into by the [ARTIST NAME] Venture on the behalf of the Artist and Columbia and would be subject to the mutual approval of the Artist and Columbia. 6. General Business Plan: At the beginning of each year of the term, and from time to time as mutually agreed, the Artist and Columbia would meet to discuss the business business plan for the upcoming year (the “Plan”). The Plan shall include: the Artist’s commitment to create and deliver content and to perform all appropriate touring, marketing and promotional functions to make the Artist a success, Columbia’s release commitments, a marketing plan, and a plan and review of all lines of business, artist development, and product development, as well as the necessary anticipated expenditures. 7. decisions on behalf of the [ARTIST NAME] NAME] Venture regarding Music Distribution: Columbia would make decisions the worldwide distribution distribution of music owned by the [ARTIST NAME] Venture. Such distribution would would be on a P&D basis or similar basis for U.S. exploitations with 100% of the net proceeds paid the [ARTIST NAME] Venture. Venture. If Sony BMG Music Entertainment is the distributor in the United States, the distribution fee would be 20% for U.S. sales. If Sony BMG Music Entertainment is the distributor outside the United States, States, the net proceeds pool would be credited with a top-line royalty of 22.5% of PPD, calculated without container charges or configuration deductions, and based on 100% of net sales less actual free goods/discounts only. only. If Sony BMG Music Entertainment is not the distributor, then the distribution distribution fee shall equal the fee charged by the distributor plus 7.5%. Other terms for such distribution would be in accordance with Sony BMG Music Entertainment’s standard terms and conditions but would be subject to good faith negotiation between the [ARTIST NAME] Venture and Distributor. 8. contribution to the [ARTIST NAME] NAME] Venture, Columbia Financial Commitments: As part of Columbia’s contribution would make a minimum of $[______] in capital contributions to the [ARTIST NAME] Venture, as set forth on Schedule “A”. 9.
Creative Approvals: Mutual.
10. Columbia would share revenue received by the [ARTIST NAME] Venture in Revenue Share: The Artist and Columbia accordance with the following percentages:
ID: 255589.7 (08/30/07)
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DRAFT
Activity Recorded content/content licensing Touring/live music performance engagements
Sponsorships, endorsements, advertising revenue
Music publishing Non-musical performances/appearances, acting and other revenue Merchandise
Artist Share 50% of net proceeds 100% of revenue, less applicable third party sales commissions /fees, Columbia’s share, and costs 50% of net revenue after applicable third party sales commissions/fees 50% of net revenue 75% of net revenue
Columbia Share 50% of net proceeds 15% of revenue less only applicable third party sales commissions/fees
50% of net revenue
50% of net revenue
50% of net revenue after applicable third party sales commissions/fees
50% of net revenue 25% of net revenue
"Net proceeds" from recorded content and content licensing means all revenue from the sales or exploitations of recorded content and content licensing ("gross billings"), less the applicable distribution fee, 120% of all direct costs paid or incurred by Columbia in connection with the [Artist Name] Venture (which shall be reimbursed to Columbia out of gross billings), and less returns, credits and reasonable reserves. All other revenue collected by the [ARTIST NAME] Venture would be uncrossed and would be paid to the Artist and Columbia regardless if Columbia has earned back its investment in the [ARTIST NAME] Venture. Revenue from touring/live music performance engagements would be distributed promptly following the receipt of such income. Revenue from all other sources would be distributed on a semi-annual basis in accordance with paragraph 12 below. 11. Bonus Revenue Share: Notwithstanding the foregoing, once Columbia’s share of revenue achieves Target ROI (as defined below), then the allocation of revenue would be modified as follows: Activity Touring/live music performance engagements
Sponsorships, endorsements, advertising revenue Music Publishing Merchandise
Artist Share 100% of gross, less applicable third party sales commissions/fees, Columbia’s share, and costs 75% after applicable third party sales commissions/fees 75% 75% of net revenue
Columbia Share 7.5% of gross after applicable third party sales commissions/fees
25% after applicable third party sales commissions/fees 25% 25% of net revenue
As used above, ”Target ROI" means when revenue distributed or credited to Columbia as Columbia’s share of revenue from the [ARTIST NAME] Venture equals or exceeds five (5) times all direct, out-of-pocket costs incurred and paid by Columbia in connection with the [ARTIST NAME] Venture. 12.
Accounting. Columbia would be responsible for administering, collecting, and disbursing all revenue on
ID: 255589.7 (08/30/07)
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DRAFT behalf of the [ARTIST NAME] Venture. The [ARTIST NAME] Venture would account to the Artist and Columbia semiannually. With respect to any income collected by the Artist on behalf of the [ARTIST NAME] Venture, the Artist would account to the [ARTIST NAME] Venture and Columbia would conduct a reconciliation of the [ARTIST NAME] Venture’s accounts on a semi-annual basis. The Artist and Columbia would each have standard audit rights. 13.
End of Term: The following would apply at the end of the term:
a. licensing.
The Artist would continue to receive 50% of the net revenue from recorded content /content
b. Columbia would continue to administer, collect, and disburse all revenue derived from the other services described in paragraph 10 above rendered during the term and all agreements entered into during the term, and such revenues would continue to be allocated in accordance with the terms of paragraphs 10 and 11 above; c. [NOTE - LIKELY TO BE REMOVED] In the event Columbia’s investment in the [ARTIST NAME] Venture has not reached “Break-even” (as defined below) at the end of the term, Columbia would also be entitled to collect revenue from touring, live music performance engagements, sponsorships, endorsements, music publishing, non-musical performances and appearances, acting, and merchandise rendered by or related to the Artist after the term of the [ARTIST NAME] Venture, and such revenues would be allocated in accordance with the terms of paragraph 10 above, until such time as Columbia’s investment in the [ARTIST NAME] Venture reaches Break-even (this subparagraph 13(c) would not apply in the event the term ends under paragraph 15 below); and d. At the end of the term (or the date on which Columbia’s investment in the [ARTIST NAME] Venture reaches Break-even in the event subparagraph 13(c) above applies), Columbia would be entitled to receive 5% of the Artist’s net revenue from touring, live music performance engagements, sponsorships, endorsements, music publishing, non-musical performances and appearances, acting, and merchandise rendered by or related to the Artist after the term of the [ARTIST NAME] Venture for a period ending on the earlier of (i) five (5) years or (ii) the date on which Columbia’s investment in the [ARTIST NAME] Venture reaches Target ROI (this subparagraph 13(d) would not apply in the event the term ends under paragraph 15 below). As used above, “Break-even” means when all revenue paid or credited to Columbia from the [ARTIST NAME] Venture as Columbia’s share of revenue from all revenue sources equals 120% of all direct, out-of-pocket costs paid and incurred by Columbia in connection with the [ARTIST NAME] Venture. 14. Remedies: The Artist would have the right to end the term at the end of each year of the term in the event Columbia does not fulfill its committed funding obligations. The Artist would also have the right to terminate the term if Columbia fails to cause the distributor to fulfill the release commitments made pursuant to the Plan. Columbia would have the right to suspend or terminate the term if the Artist fails to fulfill any delivery, or touring/publicity commitments made pursuant to the Plan, or if Artist fails to fulfill the Artist’s obligations under any agreement entered into by the [ARTIST NAME] Venture with the mutual approval of the Artist and Columbia, in each case after reasonable notice and cure. 15. Dissolution: Columbia would have the option to end the term upon 30 days notice anytime after the second year of the term. If Columbia exercises such option, Columbia would pay the Artist $25k. 16. Miscellaneous: The agreement would contain standard terms and conditions for agreements of this nature, including without limitations, representations and warranties, and leaving member provisions.
ID: 255589.7 (08/30/07)
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DRAFT SCHEDULE A (Financial Commitments)
a. Artist in-pocket payments: Columbia would make a capital contribution to the [ARTIST NAME] Venture sufficient to allow the [ARTIST NAME] Venture to pay the Artist $[____]k, payable quarterly over the f irst year. b.
Funding Obligations:
i. Recording Costs: Columbia would contribute all recording costs to the [ARTIST NAME] Venture pursuant to a mutually approved budget. The Artist and Columbia would pre-approve a budget not exceeding $ [____]k per year by reason of the overall amount, provided that the individual elements of such budget would be subject to mutual approval. ii. Marketing Costs: Columbia would contribute capital contributions to the [ARTIST NAME] Venture to fund marketing expenses. iii. Deficit Tour Support: Columbia would contribute a minimum of $[____]k per [# OF YEARS] year to the [ARTIST NAME] Venture to fund tour shortfall pursuant to a mutually approved itinerary. c.
ID: 255589.7 (08/30/07)
Legal Fees: Columbia would pay $__________ of the Artist’s legal fees on signing.
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