PRO-ARTIST AGREEMENT
This investment agreement (“Agreement”) is entered into as of Ma y 1, 2014 2014 by and between: ________ (the “Artist”) a corporation corporation with an address at _____________ furnishing the the services of __________ (“Artist”) and ________ (“Investor”) with an address at ________________________. ote that the Artist is entering into this agreement, not as an individual, but via a “furnishing company.” See the discussion regarding regarding “Limited Liability” in the Introduction. Introduction.
WHEREAS the parties to this Agreement seek to advance the career of Artist, they agree as follows: 1. INVESTMENT: Investor agrees to to invest a minimum of Two Million Dollars Dollars ($2,000,000) (the “Investment”) and a maximum of Two Million Five Hundred Thousand Dollars ($2,500,000) pursuant to the terms of this Agreement. The Investment shall be paid directly to Company. The parties agree that the Company shall use the Investment to advance the career of the Artist in the Entertainment Industry (as defined below) and to satisfy the goals set forth in the marketing plan attached as Schedule A (the “Marketing Plan”), provided that Company reserves the right to change the Marketing Plan if Company reasonably believes that such changes would enhance the career of the Artist. marketing plan is a comprehensive blueprint that sets forth a company’s (or in this case an rtist’s) advertising and marketing effort s for a period of time. It includes a budget and specifications of what the Artist intends to do with the the money. For instance, it may include amounts for hiring a publicist, publicist, and/or an indie radio promoter. It will also include include detailed estimates of the Artist’s the Artist’s earnings. These projections may be key in an investor’s decision to support an artist. ote that in this pro-Artist agreement, the Artist reserves the right to use the Investment for other expenses than in the Market Plan presented to the Investor if the Artist feels that the money could be better spent on other activities as the circumstances of the Artist’s career change.
2.
PAYMENT DATES:
a. Five Hundred Thousand Dollars ($500,000) shall be payable to Company upon execution of this Agreement. Agreement. Said amount shall be paid to a bank account (“Account”) owned by Company as a check payable to Artist.
b. Company shall have the right to withdraw funds from the Account in accordance with the purposes of this Agreement. c. Investor shall replenish the Account Account at any time that there is less less than $20,000 in the Account. For the avoidance of doubt, if at any time there is less than Twenty Thousand Dollars in the Account Investor will place at least enough money in the Account so that it will equal Five Hundred Thousand Dollars ($500,000). d. It is understood and agreed that Investor shall not pay any Expenses directly but rather that Investor will make sufficient funds available for Company to p ay Expenses. e. The parties hereto agree that the purpose of Investor replenishing replenishing the Account is to allow Artist to pay Expenses to advance the Artist’s career, and the parties anticipate that at least Two Million Dollars ($2,000,000) will be required to invest in the Artist in order to generate Net Profits as defined below provided that if additional funds are required up to the amount of Two Million Five Hundred Thousand Dollars ($2,500,000), Investor shall make such additional funds available. lthough this is a pro-Artist agreement, the investment is so large that a limited number of installments is reasonable.
f. The Company shall have full discretion and the the right to exercise exercise independent judgment without approval form Investor with respect to paying any individual expense up to Seventy Five Thousand Dollars ($75,000). For any individual expense in in excess of Seventy-Five Thousand Dollars, Investor shall have the right to approve such expense, provided that approval shall not be unreasonably denied if the Expense is in the best interests interests of advancing Artist’s career. This is a reasonable control on spending.
3. INVESTMENT RETURN: As consideration for the Investment, Investment, Investor shall receive a total of forty per cent (40%) of “Net Profits” (as defined below) earned by Ar tist Ar tist from the Entertainment Industry. Such consideration shall be referred to herein as the “Investment Return.” This rate of return is on the high side but is in proportion to the large sum invested.
4. COMPANY: Company shall use best efforts to launch, launch, sustain, and advance the Artist’s in the Entertainment Industry. It is agreed at all times during the Term of this Agreement Agreement that the Artist shall be a shareholder and an officer in the Company. 5.
DEFINITIONS:
a. “Net Profits,” for the the purposes of this Agreement, shall mean Gross Earnings as defined below minus minus Expenses. “Gross Earnings,” for the purposes of this Agreement, shall mean all income actually received by Company or Artist from the Artist’s activities in the Entertainment Marketing including performance fees, sponsorship fees, endorsement fees,
advances, guaranties, recording royalties, salaries, bonuses, deferred compensation, union payments, equity or shares in corporations or partnerships, shares of profits, or any other o ther form of compensation or income. Notwithstanding anything to the contrary in the foregoing: (i) the Investment shall not be deemed to be Gross Earnings, and (ii) salaries, benefits including insurance and pensions, and/or any other fees paid to employees or agents of Company or Artist shall not be deemed to be Gross Earnings. b. “Expenses,” for the purposes of this Agreement, shall mean (i) an y actual recording or video production costs paid to unaffiliated and unrelated third parties in connection with Artist’s recording or video recording of the Artist, (ii) any actual tour support costs, including sound, lighting, equipment rental, transportation, accommodations and lodging paid in connection with Artist’s live performances, (iii) any actual bona fide documented fide documented payments to any third party in connection with advancing the Artist’s career in the Entertainment Industry such as monies paid in connection with marketing, public relations, publicity, branding and image consulting, website development, artist management, marketing management, booking agents, accounting and legal fees, photography, wardrobe and styling, radio promotion, manufacturing and packaging, digital distribution or any other out-of-pocket expenses incurred in connection with the Artist activities in the Entertainment Industry; (iv) any monies needed to maintain corporate offices and a recording studio including rent, furnishings, recording equipment, electricity, phone, any computers, etc., (v) up to Five Hundred Thousand Dollars ($500,000) for any salaries and/or benefits paid to employees or agents of the Artist, and (vi) all taxes payable by the Artist including federal, state and city income taxes, tax es, and sales taxes. c. “Entertainment Industry,” for the purposes of this Agreement, shall mean Artist’s Artist’s activities in the entertainment industry as follows: (i) live performance as a music performer or dancer; (ii) music recordings and records including sale, lease or rental of music recordings in any media throughout the world now know or hereafter developed; (iii) music videos and concert films; (iv) all aspects of motion pictures and the motion picture Marketing including performance, directing, writing and producing; (v) all aspects of television and the television Marketing including performance, directing, writing, and producing, (vi) licensing music recordings for television, movies, commercials, and electronic or video games; (vii) merchandise of any sort including clothes, posters, stationary, etc., or endorsements of any product or service; (viii) any project associated with digital entertainment content involving the Internet, mobile or any other technology now known or hereafter developed; (ix) all aspects of book publishing including writing; (x) all aspects of live theatre and the theatre Marketing including acting, performing, directing and producing. For the avoidance of doubt this Agreement does not pertain or apply to any income received on behalf of any other artists or individuals except the Company or Artist. 6. CAP ON INVESTMENT RETURN: Notwithstanding anything to the contrary herein there shall be a cap of ten ten (10) years (the “Term”) from the date of this Agreement. Agreement. For avoidance of doubt, the Investor’s right to collect monies from Artist shall terminate ten (10) years from the date of this Agreement so that there shall be no obligation to pay Investor any share of any monies received by Company or Artist after said date. The long term is in proportion to the large investment.
7. ACCOUNTING AND PAYMENT: Company shall account to Investor on a semi-annual basis starting July 1, 2014 and continue so long as Net Profits are earned, by furnishing statements and any payments due to Investor after deduction of permissible Expenses. Each such accounting statement shall include a description of any transaction subject to this Agreement including identification of any third party, the amount paid and the nature of the products and/or services for which payment was made. Each such accounting statement shall cover all relevant transactions for the immediately preceding semi-annual period. 8.
AUDIT:
a. Investor shall have the right, right, at any time, to give Company written notice of Investor’s Investor’s intention to examine Company's books and records with respect to each royalty statement. statement. Such examination shall occur no more than once each year and be commenced no sooner than one (1) month and no later than three (3) months after the date of such notice, at Investor’s sole cost and expense, by any certified public accountant or attorney designated by Investor, provided that he or she is not then engaged in an outstanding examination of Company's books and records on behalf of a person other than Investor. Such examination shall be made during Company's usual business hours at the place where Company maintains the books and records which relate to Investor, and which are necessary to verify the accuracy of the statement or statements specified in Investor’s notice to Company. Company shall have no obligation obligation to produce such books and records more than once. b. Unless Investor provides a notice to examine Company’s books and records within six (6) months of receipt by Investor of any royalty statement, each such statement rendered to Investor shall be final, conclusive and binding on Investor and shall constitute an account stated. Investor shall be foreclosed from maintaining any action, claim or proceeding against Company in any forum or tribunal with respect to any statement or accounting rendered hereunder unless such action, claim or proceeding is commenced against Company in a court of competent jurisdiction within one (1) year after the date that such statement or accounting is received by Investor. c. Investor acknowledges that Company books and records contain confidential trade information. Neither Investor nor Investor’s Investor’s representatives will communicate to others, or use on behalf of any other person, any facts or information obtained as a result of such examination of Company's books and records, except as may be required by law or judicial decree. 9. LEGAL COUNSEL: Investor hereby acknowledges that he has sought and received legal advice from independent counsel or that he has voluntarily waived his right to independent counsel with respect to the terms and provision contained in this Agreement. Investor acknowledges that the Entertainment Industry is a highly risky business and that he may not be re-paid or earn any Net Profits. ote that the contact makes clear that the Investor may never recoup his investment.
10. INDEPENDENT CONTRACTOR: Investor and Company shall have the relationship of independent contractors. Nothing herein shall be construed construed to place Investor and Company in the relationship of principal and agent, employer and employee, master and servant, partners, or joint venturers, and neither party shall have expressly or by implications, represented themselves as having any authority to make contracts in the name of, or binding on, each other, or to obligate the other in any manner. 11. NOTICES: Notices, reports, accountings or other communication which the Investor or Company may be required or desires to send to the other, must be delivered EITHER by a. certified mail, return return receipt requested to the parties at the the addresses first first written above or other address to be designated by Investor or Company. b. electronic mail at the following addresses: (i) for Company: ___________@___ (ii) for Investor: ___________@___ 12. ASSIGNMENT: Investor may assign this Agreement or any of his rights hereunder to any person, firm, or corporation including a corporation in which the Investor is a principal, provided that (i) Investor shall remain responsible for any payments required to be made under this Agreement, and (ii) the assignee has the necessary cash on hand to make any payments required under this Agreement. Notwithstanding the foregoing, foregoing, Company may not assign this agreement or any of its obligations herein. 13. ENTIRE UNDERSTANDING: This Agreement constitutes the entire understanding between the parties with reference to this matter, and supersedes all prior agreements, written or oral. This Agreement cannot be modified except by written instrument signed by the parties. 14. GOVERNING LAW: This Agreement is made, and is to be construed under the laws of the State of New York with respect to contracts to be executed and performed in this State. 15. ENFORCEMENT: If any provision of this Agreement shall be found invalid or unenforceable, then such provision shall not invalidate or in any way affect the enforceability of the remainder of this Agreement.
AGREED TO AND ACCEPTED: INVESTOR
COMPANY f/s/o ARTIST
By:
By: Name: __________________
Authorized Signatory
