EXCLUSIVE GRANT OF RIGHTS AND OPTION AGREEMENT FOR MERCHANDISE, SPONSORSHIP, ENDORSEMENT, MANAGEMENT, MUSIC PUBLISHING, RECORDING, AND TOURING RIGHTS

Transcription

1 EXCLUSIVE GRANT OF RIGHTS AND OPTION AGREEMENT FOR MERCHANDISE, SPONSORSHIP, ENDORSEMENT, MANAGEMENT, MUSIC PUBLISHING, RECORDING, AND TOURING RIGHTS [SAMPLE PROVISIONS] I understand and agree that as a condition to my participation in the Series, I may be required to enter into one or more of the following contracts in the event that PRODUCER or its assignee or designee exercises any of the "Options" defined herein (it is currently contemplated that PRODUCER s assignee for certain of the following contracts shall be [RECORD LABEL] or its designee or assignee [collectively, "Label"]; provided, however, that (i) in the event Label does not exercise any of the Options set forth herein, PRODUCER or another assignee or designee of PRODUCER shall have the right to exercise such Option; and (ii) in the event Label exercises the "Recording Contract" Option but does not exercise all of its options as set forth in the Recording Contract, PRODUCER or another assignee or designee of PRODUCER shall have the right to exercise the remaining option(s) in Label's stead): (A) (B) (C) (D) (E) (F) An agreement with Label for my exclusive services as a recording artist (as further set forth in Paragraph 1(a) herein) ("Recording Contract") An agreement pursuant to which Label will be the exclusive administrator and co-owner of the results of my songwriting activities (as further set forth in Paragraph 1(b) herein) ("Publishing Contract"); An agreement pursuant to which Label will be appointed as my sole and exclusive manager throughout the world in connection with my activities in the entertainment industry (as further set forth in Paragraph 1(c) herein) ("Management Contract"); An agreement with Label for the exclusive use of my name, likeness and biography in connection with merchandising (as further set forth in Paragraph 1(d) herein) ("Merchandising Contract"); An agreement with Label for my exclusive services as a live performer (which may include, without limitation, oneoff concert appearances, live tours, etc.) other than in connection with "Series tours and appearances (as further set forth in Paragraph 1(e) herein ("Label Touring Contract"); and An agreement with PRODUCER and/or its designee for my exclusive services as a live performer in connection with one of more concert tours arising out of the Series (as further set forth in Paragraph 1(f) herein) ( Series Touring Contract", and, individually and collectively with the Label Touring Contract, the "Touring Contracts"); and The Recording Contract, Publishing Contract, Management Contract, Merchandising Contract and Touring Contracts shall be referred to herein individually and collectively as the "Talent Contracts". I acknowledge and agree that if I am selected to participate in the Series, my fellow contestants and I will attend a presentation at which we will be introduced to a group of three (3) or more duly licensed entertainment attorneys from which group we shall choose one (1) attorney or firm to represent us collectively, at no cost to us, in connection with our review and execution of the Talent Contracts. I agree that the choice of attorney will be made by majority vote and I will accept and be bound by the result of such vote, including the terms of the Talent Contracts, as collectively negotiated and recommended on behalf of the contestants by the selected attorney. I agree not to (i) unreasonably withhold or delay my approval and execution of the Talent Contracts, nor (ii) seek terms under the Talent Contracts that are different from those applicable to the other contestants. For purposes of clarification, the terms of the Talent Contracts: (i) shall not exceed seven (7) years from their effective dates; (ii) will contain standard and customary audit and accounting provisions, taking into consideration my stature in the entertainment industry; and (iii) for those of the Talent Agreements that pertain to my personal services, will provide that I will be entitled to receive minimum annual payments of compensation sufficient to comply with the provisions of California Civil Code Section 3423 and California Civil Code Procedure Section 526 concerning the availability of injunctive relief to prevent a breach of a contract in writing for the rendition or furnishing of personal

2 services. 1. TALENT CONTRACTS. I hereby grant to PRODUCER, its licensees and assigns (including Label),sole, exclusive and irrevocable options (each, an "Option"), for a period commencing as of the date hereof and continuing up to and including the date that is three (3) months after the date of the first broadcast of the last episode of the cycle of the Series upon which I appear (hereinafter referred to as the "Option End Date"), to enter into one or more of the Talent Contracts with me subject to the terms set forth below and otherwise subject to good faith negotiations consistent with the standard agreements and practices of PRODUCER and/or its licensees and assigns (including Label): (a) RECORDING CONTRACT. If Label exercises its Option to enter into the Recording Contract with me (I agree and acknowledge that the Option shall be deemed exercised automatically in the event I am named one of the four [4] finalists of the Series), such Recording Contract shall include, without limitation, the following terms: (i) The right of Label to produce an initial product (which, at Label's election, may consist of a single, an EP or an album) and further options for up to five (5) subsequent albums; provided that, solely in the event that I am a finalist or the winner of the Series (in accordance with the terms of the Participation Agreement), the following terms shall apply (as applicable): (1) if I am one of the four (4) finalists (but not the winner) of the Series, Label shall produce, record, and release at least one single featuring me (which single may, at Label's election, be a single previously recorded during and/or utilized on or in connection with the Series); or (2) if I am the winner of the Series, Label shall produce, record and release at least two (2) singles (which singles may, at Label's election, be singles previously recorded during and/or utilized on or in connection with the Series) and one (1) album featuring me. (ii) My right to receive the following: (1) For the initial album, an advance in the amount of XX Thousand Dollars ($XX,000) if I am the winner of the Series, and, if I am not the winner of the Series, the following applicable amount: (A) if the initial product is an album, an advance of XX Thousand Dollars ($XX,000); (B) if the initial product is and EP, an advance in the amount of XX Thousand Dollars ($XX,000), or (C) if the initial product is a single, an advance of XX Thousand Dollars ($XX,000), plus recording costs pursuant to a budget to be approved by Label, which advances and recording costs shall be recoupable from royalties (other than mechanical royalties) earned by me for such album. Advances for subsequent albums, if any, will be subject to reasonable increases (in accordance with generally applied parameters of Label in the normal course of business); (2) For the initial album, a standard retail royalty of Twelve Percent (12%) "all-in" (i.e., inclusive of royalties to producers and other third parties), subject to all customary deductions and reductions, and subject to recoupment of all costs associated therewith (e.g., advances, recording, marketing, promotion, etc.) in the manner and to the extent such costs are customarily recoupable in accordance with Label's general practices in the normal course of business. The royalty for subsequent albums, if any, will be subject to reasonable increases (in accordance with generally applied parameters of Label in the normal course of business); (3) For singles (physical and digital), a standard retail royalty rate of Twelve Percent (12%) "all-in" (i.e., inclusive of royalties to producers and other third parties); subject to all customary deductions and reductions, and subject to recoupment of all costs associated therewith (e.g., advances, recording, marketing, promotion, etc.) in the manner and to the extent such costs are customarily recoupable in accordance with Label's general practices in the normal course of business; (4) A mechanical royalty of Seventy-Five Percent (75%) of the then-applicable minimum statutory rate for controlled compositions (i.e., for songs written 100% by me, and reduced proportionately for songs only partially written by me), provided that if PRODUCER or its assignee or designee or Label exercises its Option to enter into a Publishing Contract with me, said mechanical royalty shall be payable to the

3 "Designated Publisher" (as defined herein), subject to payment to me of my writer's share of Fifty Percent (50%) of "net receipts" (as customarily defined by the Designated Publisher), subject to a cap of ten (10) songs per album (other than deluxe albums which will be subject to a cap of twelve [12] songs per album); and (iii) Label shall be entitled to receive a passive participation with respect to net receipts arising from all of my entertainment activities related to the Recording Contract (e.g., sponsorship, endorsement, acting, merchandise, publishing, touring [excluding "Series touring], etc.). With respect to net receipts arising from endorsement or sponsorship deals, Label's passive participation shall be Sixty-Five Percent (65%) for the initial twelve (12)-month period of the Recording Contract; thereafter, Label's passive participation shall be reduced to Fifty Percent (50%). Notwithstanding the foregoing, in the event the Option is exercised hereunder for a Merchandising Contract, Publishing Contract and/or Label Touring Contract with me, Label's passive participation shall be reasonably reduced with respect to merchandise, publishing and/or touring, as applicable based on good faith negotiations (but Label's passive participation with respect to sponsorship and endorsement earnings shall remain unaffected). (iv) I agree to perform all recording and promotional services as may be required by Label in connection with the above-referenced singles and album, as applicable. (v) Label will decide at its own discretion which label of which music company may release my Recording(s) of in conformity with the conditions of this Agreement. (b) PUBLISHING CONTRACT. If PRODUCER and/or Label (or their publishing designee, which shall be referred to herein as the "Designated Publisher") exercises its Option to enter into the Publishing Contract with me, such Publishing Contract shall include, without limitation, the following terms: (i) A conveyance by me to the Designated Publisher of 100% of the administration rights and 50% of all interests, including the copyrights, in and to all music compositions written, composed, owned, controlled and/or acquired by me, to the extent of my interest therein, prior to and/or during the term of the Publishing Contract (individually a "Composition" and collectively the "Compositions"), which term will consist of an initial contract period with no less than three (3) options to extend the term for additional periods exercisable in the Designated Publisher's discretion, excluding only those compositions that are subject to a bona fide, pre-existing music publishing agreement with a major national music publisher to which I am a party that was and is in full force and effect as of the date hereof ("Pre-Existing Publishing Contract"), but only to the extent and for so long as such compositions are subject to such Pre-Existing Publishing Contract (I hereby agree not to extend the term, retention period and/or collection period of any such Pre-Existing Publishing Contract or to expand the scope of the third-party publisher's rights thereunder). I will inform Label prior to entering into this Agreement if I have assigned any of my publishing rights to another company as aforesaid prior to the date hereof, including the identity of the publisher and material terms of the Pre-Existing Publishing Contract, and I agree and acknowledge that, promptly upon the termination or expiration of any and all such Pre-Existing Publishing Contract(s), I will promptly assign to the Designated Publisher all administration and publishing rights in and to all compositions and rights reverting to me pursuant to the Pre-Existing Publishing Contract(s) upon the material terms described herein, upon which such compositions and rights will be deemed Compositions subject to the Publishing Contract. (ii) I will be entitled to receive (A) an advance in the amount of XX Thousand Dollars ($X,000) per wholly written and wholly-owned Composition embodied on an album in physical format featuring my recorded performances that is commercially released in the U.S. by Label (or other "major" national U.S. record label) and that yields to the Designated Publisher no less than Three-Quarters (3/4) of the U.S. compulsory license rate in effect at the time of the initial commercial release of the album concerned (provided, however, if I am the writer of less than One Hundred percent (100%) of any qualifying Composition, I will be entitled to receive a pro-rata portion of such advance payment), and (B) subject to recoupment of the aforesaid advance, the following percentage of the Designated Publisher's "net receipts" (as customarily defined by the Designated Publisher) actually received in the U.S. and derived from Compositions: Seventy- Five Percent (75%) for all income types other than with respect to the following: (1) Fifty Percent (50%) for the publisher's share of performance income and (2) Seventy Percent (70%) of income derived from procured placements by the Designated Publisher. I will receive my songwriter royalties in accordance with the Designated Publisher's

4 standard accounting provisions, policies and procedures. If and in so far as Compositions were and are written by me with a co-writer, I will use good faith efforts, to the extent possible, to cause my co-writer to place those music publishing rights with the Designated Publisher. I agree and acknowledge that I will not use, and will not have any right to use, any sample or other portion of any copyrighted work owned by a third party in any of my Compositions or recordings that I may create pursuant to this Agreement or any of the Talent Contracts. THE FOLLOWING IS A LIST OF ALL RECORDINGS FEATURING ME THAT HAVE BEEN RELEASED AND SONGS WRITTEN BY ME (WHETHER RECORDED, RELEASED, OR NOT) UP TO AND INCLUDING THE DATE HEREOF: THE FOLLOWING IS A LIST OF ALL COMPOSITIONS WRITTEN OR CO-WRITTEN BY ME UP TO AND INCLUDING THE DATE HEREOF: THE FOLLOWING IS A LIST OF ANY AND ALL PUBLISHING AND/OR RECORDING AGREEMENTS TO WHICH I AM A PARTY AS OF THE DATE HEREOF, AND THE COMPOSITIONS COVERED BY SUCH AGREEMENTS: (c) MANAGEMENT CONTRACT. In the event Label (or its designee) exercises its Option to enter into a Management Contract with me, then, effective upon exercise of the Option, Label shall be appointed my sole and exclusive manager throughout the world in connection with my activities in the entertainment industry, pursuant to a Management Contract, which will include, without limitation, the following terms: (i) Label shall be fully authorized by me to negotiate with third parties and to conclude with third parties all appropriate agreements with respect to my professional activities, including, without limitation, musical performances, composing of musical works and lyrics and exploitation thereof, my performances in film, television or other audio-visual media, production, engineering and mixing of sound recordings, personal appearances and touring ("Entertainment Activities"). (ii) the Option is exercised. The term of the Management Contract will be seven (7) years commencing as of the date (iii) Label shall be entitled to a fee equal to Twenty Percent (20%) of: (A) all gross monies earned or received by me or any third party on my behalf for any Entertainment Activities during the term of the Management Contract, and (B) all gross monies earned or received by me or any third party on my behalf after the term of the Management Contract that arise from agreements entered into during the term of the Management Contract or Entertainment Activities performed during the term of the Management Contract, no matter when received; provided, however, that, if as of the date hereof, I am party to a bona fide written pre-existing exclusive personal management agreement, then Label shall be entitled to Twenty-Five percent (25%) of the gross management commissions that I pay to the pre-existing manager during the term of the Management Contract and after the term thereof with respect to Entertainment Activities performed during the term of the Management Contract, no matter when received, provided further that, in the event such preexisting management agreement terminates or expires during the term of the Management Contract, I shall automatically be exclusively subject to the Management Contract with Label under which Label shall be entitled to the full commissions described in clauses (A) and (B) above in this subparagraph. (d) MERCHANDISING CONTRACT. If Label (or its designee) exercises its Option to enter into an agreement with me for the exclusive use of my name, voice and likeness in connection with merchandising rights, such Merchandising Contract will contain, without limitation, the following terms:

5 (i) The term of the Merchandising Contract will be twenty-four (24) months commencing as of the date the Option is exercised, with two (2) options for Label to extend the term for additional twenty-four (24) month periods, at Label's sole election. (ii) I will be entitled to receive (A) an advance of XX Thousand Dollars ($XX,000), and (B) subject to recoupment of the advance, participation in connection with the following forms of merchandise, which merchandise descriptions and "net profits" and "net receipts" definitions shall be more specifically set forth in the Merchandising Contract, in accordance with Label's standard terms, as follows: (1) Tour Merchandise - 70% of net profits, after deduction of a 3% administration fee "off the top" for standard merchandise, and 65% of net receipts, after deduction of a 3% administration fee "off the top" for specialty/ancillary merchandise; (2) Retail - 20% of wholesale for the United States, 19% of wholesale for the United Kingdom, and 18% of wholesale for the rest of the world, subject to customary reductions for nonu.s. territories, non-standard and specialty items and mass market channels; (3) E-Commerce - 25% of e-commerce receipts for the United States and the United Kingdom, 20% of e-commerce receipts for the rest of the world and 20% of e-commerce receipts for paper goods throughout the world; (4) Direct to Consumer / Mail Order / Digital - 20% of net receipts; (6) Licensing - 70% of net receipts; (7) Sponsorship/Endorsement - 80% of receipts; and (8) Clothing/Brand Line - 8% of net receipts. (e) TOURING CONTRACTS. (i) Label Touring Contract. In the event Label (or its designee) exercises its Option to enter into an agreement with me for the exclusive right to all of my live performing services (other than my live performing services in connection with the "Series Touring Contract), such Label Touring Contract will contain Label's standard fees, terms and conditions for touring agreements, taking into consideration the budget of each applicable tour. (ii) "Series Touring Contract. In the event PRODUCER (or its designee) exercises its Option to enter into an agreement with me for my live performance services in connection with individual concerts or one or more tours featuring Series contestants, such "Series Touring Contract will contain PRODUCER's (or its designee's) standard fees, terms and conditions for touring agreements, taking into consideration the budget of each applicable tour. (iii) Live Performance Availability. Regardless as to whether PRODUCER, its licensee or designee enters into the "Series Touring Contract with me, and in addition to my obligations pursuant to the Label Touring Contract obligations (if applicable), I agree that, for a period of twenty-four (24) months after the initial broadcast of the last episode of the cycle of the Series upon which I appear, I will remain reasonably available to perform and I grant PRODUCER (or its licensee or designee) the exclusive right to engage me to perform in live concert events (which may include, without limitation, a live concert tour) featuring Series contestants and to be produced by PRODUCER, its licensee or designee. 2. PROGRAM-RELATED RECORDING RIGHTS. I agree and acknowledge that any and all sound recordings of my performances that are made as part of or during the Series (whether or not actually broadcast), including studio versions of sound recordings that I may record at the request of Producer,

6 PRODUCER, Label and/or their designees (collectively, "Series-Related Recordings") shall be included in the definition of "Materials" owned and controlled by PRODUCER as set forth in Paragraph 4 hereof, and that Label, as PRODUCER's designee, shall be entitled to release such Series-Related Recordings by means of any media whether now known or hereafter devised, throughout the universe, in perpetuity (including, without limitation, as singles or as part of an album), and that such Series-Related Recordings do not fall under the exclusive Recording Contract Option. Except as otherwise specifically set forth herein, I will be entitled to receive a standard retail royalty from Label of Twelve Percent (12%) "all-in" (i.e., inclusive of royalties to producers and other third parties) with respect to Label's retail sale of any such Series-Related Recordings that embody solely my vocal performances (or my vocal performances together with other contestants on the Series, in which event my royalty shall be prorated by the number of contestants whose performances are so embodied on the applicable Series-Related Recording), subject to all customary deductions and reductions, and subject to recoupment of all costs associated with Series-Related Recordings upon which I appear (e.g., recording, manufacturing, marketing, promotion, pro-rated A&R consultant fees, etc.), and such recoupment with respect to marketing and promotion costs shall be in the manner and to the extent such costs are customarily recoupable in accordance with Label's general practices in the normal course of business. For clarity and without limitation, I acknowledge and agree that I shall not be entitled to any royalty or other remuneration or compensation with respect to any sale, exploitation or use of any SeriesRelated Recordings that embody the performance(s) of any person(s) other than contestants on the Series. In addition, if my own composition is featured in a Series-Related Recording, I will be entitled to receive 75% of the then-applicable minimum statutory rate for controlled compositions in connection therewith. Notwithstanding anything to the contrary set forth herein, I hereby agree and acknowledge that Producer shall have the right to use such Series-Related Recordings in and in connection with the Series, including in advertisements and promotional materials for the Series, and that no royalties or other monies will be payable to me in connection with such non-retail uses. In the event that Label exercises its Option to enter into a Recording Agreement with me, then the Series-Related Recordings shall be deemed recordings delivered under and governed by all of terms and conditions of the Recording Agreement, except as specifically modified by the terms set forth in this Paragraph. 3. GENERAL TERMS (a) For the Term hereof, I agree and acknowledge that all rights granted to PRODUCER hereunder are done so on an exclusive basis, and, therefore, that I shall not engage in any negotiations or make arrangements with third parties that are in conflict with the content of this Agreement, save with the express prior approval of PRODUCER (for purposes of clarification, in the event any of the Options set for the herein are exercised while I am still engaged in activities related to production for the cycle of the Series upon which I first appear, PRODUCER acknowledges and agrees that such production-related activities shall be in first position to any services required by PRODUCER, Label and/or their licensee or designee pursuant to the Talent Contracts during such production period). (b) I have the following obligations to third parties that may be in conflict with the exclusive Options or rights I am granting to PRODUCER hereunder: PROVIDE LIST: (c) PRODUCER will determine in its sole discretion whether the above conflicting obligations can be cleared. PRODUCER will then on the basis of the outcome of this examination decide at its own discretion whether my obligations towards third parties permanently bar me from granting the exclusive Option(s) and rights set forth herein. Should PRODUCER determine in its sole discretion that I am so barred, PRODUCER shall communicate this information to Producer and Network and I may as a result be excluded from further participation in the Series.