Appendix 5

Production, Manufacture and Distribution Agreement

This Agreement is made and entered into as of ______________, by and between _____________________ (“Group”), of _______________________________________ and LABEL of ________________________ with reference to the following

Witnesseth

• 2. (a) Group hereby engages LABEL as its (non-exclusive) distributor in the Territory for the CD, indicated in this Agreement hereinafter called (“Records”) made a part of this Agreement. (b) The rights herein granted to LABEL and the obligations of Group shall be for the United States and their territories and possessions, including all U.S. Armed Forces Military Post Exchanges throughout the world (“Territory”). (c) Further, LABEL will be responsible for recording/production of said album master, post-production, artwork and manufacturing.
• 2. (a) The Term of this Agreement shall be for two (2) years, subject to the acceptance and approval of LABEL and Group; (b) Group hereby grants LABEL one (1) option: to renew this Agreement for a period of one (1) year. Option period shall run consecutively beginning at the expiration of the immediately preceding term of this Agreement. The renewal term option hereunder is non-automatic and mutually exercisable, in which LABEL or Group gives written notice not to exercise such option at least ten (10) days prior to the commencement of the renewal term.
• 3. (a) For consideration and placement: LABEL will be required to manufacture retail-ready packaged CDs for resale as well as a reasonable amount of promotional CDs (150 units minimum up to 1,500 units maximum) for the purposes of promotion in the areas of: in-store listening CDs, retail incentives, free goods, product placement, promotions by LABEL, as well as shipping and print advertising. LABEL is required to provide Master Recording (CDR) for this purpose as well as Master Recording including applicable artwork and graphic materials. Group will be required to deliver to LABEL a synopsis or bio of artists(s) listing accomplishments, promotion or marketing efforts with regard to their release, radio airplay, etc. in order that LABEL can prepare a one-sheet for retail to enter the accepted product into the system. (b) All projects released through LABEL will be distributed regionally and nationally based on promoted and targeted areas through Group’s and LABEL’s promotion efforts, which will require the LABEL bar code. (c) LABEL logo, address and website address will be applied to Group’s manufactured products during the course of the Agreement. Shipping product to Distribution warehouse is the responsibility of LABEL. (d) Any Record that shows minimal sales activity after a period of eight (8) months may be deemed and returned to Group inactive and subject to being pulled from all LABEL retail accounts. Minimal sales activity would be considered record sales of fewer than 100 CDs in the eight (8)-month period. In this instance, Group will have the option to buy back/purchase the existing inventory of units from LABEL at a rate of $1.00 each for retail-ready or packaged units and $.80 each for promotional units. If Group fails to exercise this option within 30 days, LABEL is granted full right to discount or dispose of inventory in any means without obligation to Group.
• 4. (a) No payment shall be made to Group on promotional use of CDs manufactured by LABEL per release. Payment will only begin once the first retail-ready unit past 500 units is sold, verifiable through SoundScan (in conjunction with section 4(b) below). LABEL shall be entitled to thirty-five percent (35%) of the “Net Profits” on all orders shipped for service fee. The service fee includes [promotional services provided in this capacity] LABEL’s website, Internet promotions, college networks throughout the US, targeted [posters, flyers, record pools, reasonable radio advertising in targeted areas and music video promotion, calling buyers and sales reps on titles] promoting sales activity throughout distribution system. This agreement is deemed to be “Production, Manufacture and Distribution” in that LABEL and Group will jointly promote, market and advertise the project for the mutual benefit of both. In this regard it is understood that LABEL will incur costs and expense, which will be non-recoupable. Group agrees to aggressively maintain a performance schedule as well as incur costs related to such activity all in support of the project. Group further understands and agrees that it may be called upon by LABEL to travel to markets foreign and domestic to perform in support of the project with relative costs to be incurred by Group. “Net Profits” are herein defined as gross monies received from the sale of records at retail outlets and received by LABEL from (Distributor). Monies will be held in the LABEL [credit] account with reference to Group, bar code assigned to Group and reference accounting number to be accounted for and disbursed to Group quarterly. (b) Providing Group has sold 500 units, verifiable through SoundScan, payment by LABEL to Group shall be made at sixty-five percent (65%) of payments received by LABEL, and only on invoices paid by (Distributor), to be liquidated every calendar quarter until fully liquidated in respect to (each) project (album/single/CD) being mastered and distributed. All notices hereunder shall be in writing and shall be sent by certified mail, return receipt requested to Group at its address first above written and to LABEL at its address first above written.
• 6. LABEL and Group warrant, represent and agree that: (a) LABEL and Group have the full right and power to enter into and fully perform all of its obligations under this Agreement; (b) LABEL and Group are not under any disability restriction or prohibition, whether contractual or otherwise, with respect to LABEL and Group’s right to execute this Agreement or LABEL and Group’s right to perform its term and conditions; (c) No prior obligations, contracts or agreements of any kind undertaken or entered into by LABEL and Group will interfere in any manner with the complete performance of this Agreement by LABEL and Group.
• 7. Wherever in this Agreement Group’s approval or consent is required, Group shall give LABEL written notice of approval or disapproval within ten (10) business days after such notice is received by Group. In the event of disapproval or no consent, the reasons therefore shall be stated. Failure to give such notice to LABEL as aforesaid shall be deemed to be consent or approval.
• 8. Disclosure of relationship: LABEL and Group agrees to disclose below any business or personal relationships which it, or any of its entities, may have. Failure to disclose, or any fraudulent disclosure, will result in immediate cancellation of this Agreement and monies due to Group will be paid in full within 60 days or sooner of cancellation of Agreement, along with remaining Group units.

  NAME	RELATIONSHIP
  _____________________	_____________________
  _____________________	_____________________

• 9. For the purposes of this Agreement, the following definitions shall apply: (a) “LABEL”—refers to its principals or assigns; (b) “Group”—refers to any recording company, management, artist or group that is a party to this Agreement; (c)”Record”—The equivalent of a compact disc or cassette tape of at least 30 minutes in length intended for use in retail.
• 10. 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 upon either party unless confirmed by a written instrument signed by an officer of the party to be charged.
• 11. This Agreement shall be deemed to have been made in the State of _____________ and its validity, construction, performance and breach shall be governed by the laws of the State of _______________, applicable to agreements made and to be wholly performed therein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

Label

By _________________________

(an authorized signatory)

Title ______________________ Date __________________

Group

By _________________________

(an authorized signatory)

Title _______________________ Date _________________