Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 1 of 14 08/13/2005 PRI 11:34 FAK Woos/ois Fast Pace, Inc. 3996 Pleasantdale Rd., Suite 1044. Doraville, GA 30340 As of February 1, 2004 Underworld Entertaioment ‘flo Dante Barton p/k/a “Destro” clo Serting Rooks & Ferrara, LLP 254 West 54” Street, 14 Floor New York, NY 10019-5516 Attn.: Wallace Collins, Esq. ‘Gentlepersons: This letter will constitute ox agreement regring your famishing the services of Dante Barton professionally known as “Destro” (hereinafter “Producer") to produce onc (1) master recording currently tentatively entitled “Bad Cir!” (the “Mastsr”) embodying the recorded performances of Usher Raymond professionally known as “Usher” (“Artist”), for possible inctusion on the upcoming album (the “Album”) to be delivered by Artist to LaFace Records (“Company”) for the manufacture and distribution of records and other uses of the Master Pursuant to the agreement between Artist and Company dated February 12, 1993, as same has been heretofore smended, modified or extended (the “Recording Agreement’), All references to ‘Masters hereunder shall be read and deemed to refer to one (1) Master. 1, Services: (8) _ From commencement of recording the Masters through our and Company's acceptance of the Masters (the “Term”), you will cause Producer (and any other persom engaged by you or Producer to tender services in connection with the Masters, including without limitation; Will Guice (cach, a “Co-Producet”)) to record, produce, mix, arrange and master the ‘Masters pursumt to a production schedule designated by you and us (and subject to Company's approval). Producer services hereunder are non-exclusive, but are on a firet priority basis. Hereinafter Producer and Co-Produces are individually and collectively referred to as “Producer”. (6) Bach Master shall, from the inception of its creation, be considered e “work made for hie! fru within th meaning of he Copyright Act of 1976 Tie 17, USC.) an enended. Ifitis determined that any Master does not so qualify, then such Master, seal ries tere (including the sound recording copyright, but excluding the copyright in the underly composition), shall be automatically assigned to us by this agroument. Without li foregoing, Company and we (and our respective designees) shall have the exclusive unrestricted, universe to usc, distribute, sell and exploit the Masters in any and perpetual right throughout the all media, by any and all methods and formats, SME 00001eestarx0es vax FESA2 HN O6BLL-PD Document 102-21 Filed 09/30/13 Page 2 of 14 Messe (©) You will cause the Producer to deliver the Masters to us on a date to be designated by Company and us. Producer will perform all services customarily performed by producers in the recording industry, inchding without limitation, engaging musicians, vocalists, conductors, contractors, arrangers and arranging for tbe use of recording studios est caae eceaary weineal nein pee ‘All job sheets, unien contract forms and session repost, forms for recording sessions hercundcr, all bills pertaining thereto, and all payroll forms (including, without limitation, all W-4, Form Bs und other withholding tax forms) pertaining thereto shall be submitted by Producer to Company within forty-cight (48) bours after ‘each recording session, and in accordance with all applicable union the rules and regulations so ‘that Company shall be able to make all peyroll payments without late penalties, You and ‘Producer shall be responsibic for such penalties unless such penalty was incurred solely by reason of our acts or omissions. The Masters shall be commercially and technically satisfactory to Company and us. Notwithstanding the foregoing, subject to your continuing representations and warranties hereunder, we hereby acknowledge that the Masters have been delivered by you snd accepted by us, provided, however, that such aclnowledgement shall not estop us or Company from seeking any t --sdies vr-‘lab! m, “7 atlaww er im eqn'ty fs che event of the breach by you or Producer of any of the warranties, representations, covenants or agreements made by you and/or Produszr herein. 2. Budget: Producer and we will mutually designate a recording budget for the Masters, subject to ‘the approval of Company. You and we acknowledge that a budget (inclusive of the Advance as ‘set forth in paragraph 3 below) bes beea epproved by Producer und us (the “Approved Budget”). All recording costs (defined below) shall be paid by Company or Artist. You end producer shall, ‘bowover, be respansible for recording costs incurred in excess of the Approved Budget (the “Excess Costs”). Subject to your complianc wih and the application of, the tems of pragrapt 12 below, we hereby acknowledge your delivery of the Masters in accordance with the Approved Budget and that a3 of the date hereof, there aro no Excess Costs; provided, however, that such acknowledgement shall not estop us or Company from secking any remedies available to us or Company at law or in equity in the event of the breach by you or Producer of any of the warranties, representations, covenants or agreersents made by you and/or Producer herein. 3. Advances: Provided you are not in material breach hereundcr, we shall cause Company to pay to you by way of the letter of direction attached hereto as Exhibit A (the “Letter of Direction”) a Tecoupable advance (the “Advance”) of Fifteen Thousand Dollars ($15,000) per Master for all of your and Producer's services hereunder in connection with the Masters. The Advance shall be pid as follows: (a) one-balf (4) promptly following commencement of recording the Masters, execution of this agreement, whichever is Iter. You hereby acknowledge the prior receipt of Seven Thousand Five Hundred Dollars ($7,500). Notwithstanding the foregoing, you hereby authorize and direct us to pay Wallace Collins, Eoq., 254 West 54” Street, 14° Floor, New York, ‘NY 10019, tocil security # MMMM One Ticasand Five Hundred Dollz (S1500) ont of your Advance, upon the complete execution of this agreement. Company’s payment pursuant to SME 00002vossaraven va S289 2aCY-08811-PD Document 102-21 Filed 09/30/13 Page 3 of 14 @eosseze the preceding sentence shall constitute payment to you and such amount shall be deducted fram the Recording Fund, and Company shall have no liability by reasoa of any erroneous payment or failure to comply with the authorization contained in the precoding sentence. Company's compliance with such authorization shall constitute an accommodation to you alone, and itis hereby acknowledged that Wallace Collins, Esq, is not a beneficiary hereof or a third-party + deneficlary of-thie agreement. You shall indemnify and hold Company harmless against any claims asserted against Company and any damages, losses or expenses Company incurs by reason of any such payment or otherwise in conection therewith. 4. Bayalties: (0) Provided you are not in material breach hereunder, you ahall be entitled to a producer royalty (the "Producer Royalty”) at a basic rate (the “Producer Basic Rate”) of three erent (3%), pro-rated as provided below, of the suggested retail list price (or if such record royale are regulary computed onthe basis of wholele pric, the basic record royally ae hereunder shall be adjusted so that the sarne sum in pernics shall be payable to} 24 purs-rint to the terms hereof) with respect to top-line, full priced net sales of the Album through normal retail channels in the United States ("USNRC Nel Sules). (b) The Producer Royalty shull be calculated, determined, adjusted and paid on the same basis (¢.g., container charges, definition of royalty base price, free goods, reserves, etc.) as our royaltics are calculated, determined, adjusted and paid pursuant to the Recording Agreement, but without regard to any royalty escslations for our basic rate for USNRC Net Sales of Albums. Your royalty for singles, foreign sales, maid-priced and budget sales, non-USNRC Net Sales of Albums and other exploitations of the Masters will be reduced and pro-rated in the same proportion, if any, as our royaltics are reduced and pro-rated under the Recording Agreeruent. With respect to records for which we are entitled to a percentage of Company's net receipts, net royaltics or the like, you shall be entitled to that proportion of such net recoipts, net royalties of aulti i ‘our “all-in” basic royalty rate for USNRC Net Sales of the Album ("Artist's Basic Rate"), provided that your share of video receipts, if any, shall be one-balf ('4) of the sum computed under the foregoing formula, and shall be payable on a prospective basis fbllowing recoupment of all video production costs in accordance with (he provisions of the Recording Agreement. (©) Norroyalty shall be payable to you hereunder until Company has recouped all recording costs (as such term is defined in the Recording Agreement), excluding any #0 called ““in-pocket” Artist advances, incurred in conection with the Album at the “net artist” rate (i.e, Aatist's Basic Rate fess the Producer Basic Rate and the royelty rate payable to all other Producers, engincers, mixers, and other royalty participants). After recoupment of such recording costs as aforesaid, royalties shall be payable to you hereunder for all records sold for which royalties are payable, retroactively from the first such record sold, subject to recoupment from such royalties of the Advance. (@ _Asto records not consisting entirely of the Masters, the royalty rate otherwise payable to you hereunder shall be pro-rated by multiplying such royalty rate by a fraction, the SME 00003Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 4 of 14 voraa/zuus RL ILE36 FAK Boos ois numerstor of which is the number of Masters embodied on such record and the denominator of ‘which is the total number of royalty-bearing masters (including thc Masters) cmbodied thereon. () _ The Producer Royalty shall be reduced by amounts payable to third party mixers, remixers, producers and any other royalty participants. $. Accounting: (2) We shall instruct Company to account for and pay directly to you royalties due you hereunder, if any, in accordance with the terms of the Letter of Direction and at the same times as Company is required to pay us pursuant to the Recording Agreement. If Company fails or refltses to $0 account to you, your sole remedy shall be that we shall send you royalty statements and any payments due hereunder within thirty (30) days following our receipt of each ‘statement applicable to the Masters from Cormpeny. In so accounting to you we shall have the right to rely on the statements rendered to us by Company. (b) All accountings rendered by us, or on our behalf, to you shall be binding and not subject to any objection by you unless specific weicten objection by you stating the basis thereof, i furnished to us within eighteen (18) months from the date rendered. You shall be foreclosed from maintaining any action, claim or proceeding against us with respect to any statement or ‘sccounting due hereunder unless such action, claima or proceeding is commenced against us in a court of competent jurisdiction within two (2) years after the date such accounting is rendered. (©) You shall have the right to appoint a certified public accountant ("CPA") who is not then currently engaged in an outstanding audit of us, to examine our books and records relating to the sale of records embodying the Masters, provided that such examination shall take lace at our offices during normal business hours, on reasonable written notice, not more frequently than once in any calendar year, no more than once per statement, and at your sole cost and expense. ou sal famiah ue wit a py of heat repr within thirty (30) days aie the completion of the applicable audit. We will notify you in the event (hut we conduct an audit ‘Company’s books and records and/or bring a uit, and if as a result of any settlement or judgment additional monics are paid in respect of the Master, then you shall be credited with Your pro-rata hare thoreof after deduction of our directly related third party costs “off the top.” ‘The rights granted herein to you constitute your sole audit rights. Notwithstanding the forgoing, ‘if we notify you that your CPA is eagaged in an examination on behalf of another person (“Other Examination”), you may nevertheless have your examination conducted by your CPA, and the nianing of the time within which such examinetion may be made shall be suspended until your CPA has completed the Otber Examination, subject to the following conditions: ) _ You shall notify Company of your election to that effect within five (5) days after the date of my said notice to you; (i) Your CPA shall proceed in a reasonably continuous end ‘expeditious manner to complete the Other Examination and render the final report thereon to the client and me; and SME 00004Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 5 of 14 05/13/2005 FRI 11:34 FAK Boorsois (iii) Your examination shall not be commenced by your designee before the delivery to us of the final report on the Other Examination, shall be commenced ‘within fifteen (15) days thercafter, and shall be conducted in a reasonably continuous and expeditious manner. 6. —Paymants: Payments of the Advance, the Producer Royalty and accounting statements relating thereto shall be made payable and remitted as follows: ‘Underworld Entertainment 835 Pleasant Rd. Yeadon, PA 19050 Federal Tax LD#| Except that $1,500.00 from the Advance shall be paid to: =iniilial 7. Greait: We shall instruct Cocmpany o accord you an appropriate credit on the packaging and iner notes of records derived from the Masters produced hereunder in following form: runt by Des br Uniewend Messiaen Evaraianat™ ‘Any such credit shall be subject to Company's normal policies end restrictions. Our inadvertent failure or Company's failure to comply with the foregoing shall not be deemed a ‘breach of this agreement; provided that following notice frum you, we shall instruct Company to ‘cure any such failure, on & prospective basis with respect to future manufacturing runs. 8. Name and Likeness: You hereby grant to Company and us the right to use your name, spproved likeness and approved biographical material (the “ID Materials”) conceming you in connection with the sale, advertising and promotion all records derived from, and exploitations of, the Masters. You shall have the right to approve any ID Materials selected or commissioned by us provided that your consent to the ID Materials shall not be unreasonably withheld or delayed and shall be deemed given within five (5) business days after the date such materials are made available to you. Our inadvertent fiilure to obtain your approval of ID Materials shall not be deemed a material breach hereof, provided, however that upon receipt of written notice from you regarding any such failure, we shall use reasonable efforts to promptly correct of cause Company to prospectively correct any such failure to obtain your approval of ID Materials on future runs. 9. Representation and Warrantics: ‘You hereby represent and warrant that: SME 00005Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 6 of 14 05/13/2008 FRI 11:34 PAX (@)__ We shall not be required to make any payment of any nature for, or in connection with, the rendition of your services or the acquisition, cxercise or exploitation of rights by us pursuant to this agreement, except as specifically provided herein, (©) There shall be no liens, encumbrances or other charges against the Masters at the -- time afdeliyery, including, without limitation, any uncleared samples; (©) All'materials furnished by you in connection with the Masters shel! be original and not infringe upon or violate the rights of any third parties; and “== @___ Youwill not produce for any person or entity other than us a master recording embodying any musical composition embodied in any Master for atleast five (5) years from the date of delivery to us of such Master. 10. Indemnification: ‘You agree to indemnify and hold us and our suecewors, assigns, agents, Qoosoie , companies, Company, and our and Company's licensees harmless against any claim, liability, cost and expense (including reasonable attorneys’ fees and legal costs) in connection with any claim which is inconsistent with any agreement, covenant, representation, or warranty made by you herein which has resulted in a final judgment or has been settled with your written consent (it ‘being understood that your consent shall be deemed given to any settlement not in excess of Five ‘Thousand Dollars ($5,000). Notwithstanding the foregoing, if you withhold consent to any ‘settlement which we are willing to make, the foregoing indemnity shall apply and we may settle such claim in our sole discretion unless you promptly assume all costs attributable to the defense of such claim, demand ar action, including, without limitation, court costs, reasonable attomeys’ fees, and direct expenses theretofore incurred by us in connection with said claim, demand or action, or furnish us with an acceptable bond guaranteeing such payment; provided that ia the event you asrure said cons, we call nooetbeless have the right eee such claim, demand or action in our sole discretion without your conseat, provided that in such event, the foregoing indemnification shall not apply with respect thereto. You will reimburse us upon demand for any payment made by us at any time after the date hereof including after the Term in respect of any claim, Liability, damage or expense to which the foregoing indemnity relates. Upon the making or filing of any such claim, action or demand, we (and Company) shall be entitled to Ce ae a a eee a to the potential liability at issue. 11. Controlled Compositions: (2) The musical compositions and other materials embodied on the Master which are ‘written or controlled, in whole or in part, by you or any entity owned or controlled by, or affiliated with, you (“Controlled Compositions”) are hereby licensed to us and to Company in the United States at a rate equal to One Hundred (100%) percent of the statutory copyright royalty rate, determined as of the date the Master is initially recorded; and for Canada st a rate equal to One Hundred (100%) percent of the prevailing statutory rate in Canada (or if there is no such rate, then One Hundred (100%) percent of the prevailing rate in Canada on a general basis) SME 00006Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 7 of 14 08/13/2008 FRI 11:38 FAX Qoos/ois determined as of the date the applicable Master is initially recorded. Otherwise, mechanical royalties shall be paid, computed, reduced and accounted for upon the terms and conditions set forth in the Recording Agrvcment applicable to controlled compositions thereunder, including ‘without limitation, reduced mechanical royalty rates payable in rcspect of such Controlled ‘Compositians; aggregate mechanical royalty “caps”, records for which mechanical royalties are += payables reserves, synchronization and other uses, etc. You hereby grant us and Company a + royalty-free license to reproduce Controlled Corapositions that are embodied on Masters produced hereunder in synchronization with and in time relation to visual images featuring, Artist's performances in so-called promotional “video programs,” it being understood that you shall be entitled to a pro-rata share of any royaltics attributable to the exploitation of any “Controlled Compositions embodied on commercial “video programs.” Upon ot request you shall execute of cause your publishing designee to execute and deliver to us or Company, 23 applicable, all documents required by us or Company, as applicable, to effectuate the purposes of this paragraph 11. (©) You and Producer :ereby no" ledge that Prnducer controls the following percentages in and to the underlying composition (exclusive of any conveyance af copyright in connection with any Samples) en:l.ovied in the Sfasters as folisiws: Composition Writer Percentage “Bad Girl” Dante Barton 375% “Bad Girl” Will Guice 37.5% 12, Sampling: You Ce pe without limitation, so-called ‘‘samples”), and all arrangements, compositions, ideas, Srontuos ot you's comedicn vitae hemar ae whlbeogeal etl youeia he alc domain throughout the world or used with the consent of the original owner thereof, and shall ‘not infringe upon or violate any copyright, the right of privacy of or any other right of any perton or entity. You will not “sample” or otherwise incorporate into the Masters (“Sample” or "*Sampling” herein) or permit any other party, to Sample sny copyrighted or otherwise proprietary material (the “Proprietary Material”) belonging to any third party (such third party berein referred to as the “Ownet”) without first having (1) notified us of the Proprictary Material you intend to use and the identity of the Owners thereof; (2) obtained our and Company's written approval of such use prior to the mixing of the Master(s) cmbodying such Proprictary Matcril ; and (3) secured from Owner(s), at your sole expense, a written egreement, in a form satisfactory tous and Company, that we and Company, and each of our respective licensees shall have the ‘perpetual right to use such Proprietary Material in the Masters and to usc or otherwise distribute or exploit the Masters coniaining such Proprietary Material for all record purposes and for use in auutic videos, in perpetuity, all either without any payment whalsoever to Owner(s) or upon ‘payment to Owner(s) of a payment epproved in writing by us and Company (the “Clearance Efforts"). Neither we nor Company shall have any obligation to approve or to make any such ‘payment, and our and/or Company's approval of any such payment shall not constitute a waiver of any of our or Company's right or remedies. In the event that the Masters contain Proprietary SME 00007Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 8 of 14 06/13/2008 FRI 11:35 Fax Qoro/ois Material other than that disclosed (“Undisclosed Samples”), and if you have not obtained and delivered to us und Company all licenses, permissions or other authorizations required hereunder, then the Masters will not be deemed to be Delivered, regardless of the date thal we (or Company) become aware of the existence of such Proprietary Material, and we and Company reserve the right to reject Delivery of the Masters notwithstanding the distribution or previous -- acceptance of such Masters. You warrant and represent that the Masters shall not contain any Propritary Mate which he at boas sensed 20a to all tn, Company, and each of our +— ++» hereunder, You acknowledge and agree that any payments made by us (or Company) in connection with the Clearance Efforts shall, without limitation of our or Company's other rights and remedies, at our election, be deemed recording costs hereunder and shall be subject to the Approved Budget. If the Owner(s) secks a share of the so-called “sound recording rights” and/or “publishing rights” forthe use of Proprietary Material furnished by you in connection withthe Masters, as between you w=" «. six ing costs shal! 2 “Sal. | Recesding Costs hereunder. To the extent that any Proprietary Material embodied in a Master results in the conveyance of a copyright iniercst or way other continuing payment, such inmsfer and/or payment in the relevant composition, shall only reducs your interest in the applicable composition. To the extent any such conveyance and/or assignment exceeds your share of the copyright in such composition, you shall be responsible to reimburse any monics paid in connection with such excess conveyance and/or all such monics shal! be recoupable from any and all monies due to you hereunder. Producer warrants that there are no Undisclosed Samples embodied in the Masters. 13. Definitions: For purposes of this agreement, unless otherwise specified herein, the definitions contained in the Recording Agreement shall apply. 14. Miscellaneous: (@) _ All notices to be given by either party hereunder shall be in writing and shall be delivered by hand or by United States certified mail, postage prepaid, return receipt requested, to the address of cach party as first set forth above until notice of a new address shall be duly given, except that royalty statements and any payments due hereunder, shall be sent to you at such address by regular mail. Copics of any notices Company, Artist, or us shall simultaneously be sent to Davis Shapiro Lewit Montone & Hayes, LLP, 689 Fifth Avenue, 5* Floor, New York, New ‘York 10022, Amm.: Steven G. Shapiro, Esq. Copies of any notices to you shall be sent to Sesting Rooks & Ferrara, LLP, 254 West 54 Street, 14 Floor, New York, NY 10019-5516, Atm: ‘Wallace Collins, Bsq., provided however that failure to do so shall not be deemed a breach hereof nor impair the effectiveness of the notice concemed. (b) You shall have the status of an independent contractor hereunder, and except for the purpaes of abparagaph (0) above, nothing herein contined shal consti or ‘contemplate you as our or Company's agent or employee. SME 00008Case 2:11-cv-06811-PD Document 102-21 Filed 09/30/13 Page 9 of 14 08/13/2008 FRI 11:38 PAX (©) This agreement embodies the entire understanding of the parties with respect to the subject matter hereof, cannot be modified without an instrument in writing signed by both parties, and shell be governed by and interpreted in accordance with the laws of the State of New ‘York applicabic to agreements entered into end wholly performed in said State, without regard to any conflict af laws principles. You and we hereby agree that the exclusive jurisdiction and venue for any action, suit or proceeding based upon any matter, claim or controversy arising hereunder or relating hereto shall be in the state or federal courts located in the State and County of New York. (4) We may assign our rights under this agreement in whole or in part. You shall not be entitled to assign any ofits rights or obligations bereundet. The invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of any other provision hereof. A waiver by either party hereto of any provision of this agreement in any instance shell ‘not be deemed to be a waiver for the future. All remedics, rights, undertakings and obligations contained in this agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking or obligation of either party. In the event of any legal proceeding brought by eter part hereto to efoce rine hi promt or ay of he terms contained herein, bath parties shall be deemed to have jointly drafted this agreement and noither side shall enjoy the benefit of any evidentiary presumptions based upon the identity of the drafter hereof. ‘SME 00009