Music Producer Agreement

MUSIC PRODUCER'S AGREEMENT





THIS MUSIC PRODUCER'S AGREEMENT (the "Agreement") is entered into as of October 15, 1996 (the "Effective Date") between N2K Inc. ("Company") and Phil Ramone, Inc. ("Employer") for the services of Phil Ramone ("Employee") in connection with the recording and production of master recordings ("Masters") embodying the performances of one or more of Company's recording artists (each, an "Artist" and, collectively, "Artists").



1. Engagement. Company hereby engages, and Employer hereby agrees to furnish, the personal services of Employee hereunder to produce and record Masters that embody the performances of one or more of Company's recording artists (each, an "Artist"), s ubject in each case to Company's prior written consent and the consent of the Artist concerned. Employer shall cause Employee not to engage in producing activities that might derogate from or materially interfere with Employee's performance of his duties as President of Company's Encoded Music division (the "Division") and shall cause Employee to conduct all producing activities in accordance with Employee's role as a fiduciary of Company.



2. Services.



(a) Employer shall c ause Employee to render producing services hereunder to the best of his ability and in accordance with Company's standard recording procedures (including those relating to compliance with U.S. immigration laws and regulations). Recording sessions shall be held at times and places mutually agreed between Employee and Company's CEO or other designee. Employer shall cause Employee to record and re-record each selection until a Digital Master, acceptable to Company's CEO or other designee as technically and co m mercially satisfactory for Company's manufacture and sale of Records, is made and delivered to Company. Employer shall further cause Employee to deliver to Company all material recorded during recording sessions hereunder, including rehearsal recordings, outtakes and other preliminary or alternate versions, all of which shall be the sole and exclusive property of Company.



(b) Employer shall cause Employee, prior to commencing any recording sessions or incurring any costs or expenses, to p repare and to submit to Company's CEO or his designee a written recording proposal and a proposed recording budget, in a form commonly utilized by the Division, that specifies the date by which Employee is obligated to produce and deliver the Masters. Emp l oyer shall cause Employee to refrain from commencing any recording sessions or incurring any costs or expenses where such budget exceeds or would cause the Division to exceed in any respect the approved budget of the Division or those amounts set forth in the relevant Artist's agreement, without Company's prior written approval.



(c) Employee shall be given credit in substantially the form specified below with respect to Albums manufactured solely from Masters produced and delivered by Emp loyee hereunder: "Produced by Phil Ramone." Such credit shall be given in liner notes (if any) and on the label of, and where space permits in paid advertisements issued by Company with respect to, such Albums. No casual or inadvertent failure of Company to comply with this provision, nor the failure of any third party to so comply with this provision, shall be a breach of this Agreement.



3. Term. The term of this Agreement shall be coextensive with the term of the employment agreement, dated as of October 15, 1996, between Company and Employee.



4. Royalties.



(a) Provided that Employer and Employee are not in material default hereunder, Company shall pay to Employer, in respect o f Net Sales of top-line LPs consisting entirely of Masters produced hereunder and sold by Company or its licensees for distribution through Normal Retail Channels in the United States, a basic royalty computed at four percent (4%) (the "Basic Rate") of th e applicable Royalty Base Price with respect to the Record concerned, it being agreed that such royalties will be computed and paid in accordance with all other provisions herein. With respect to each top-line LP consisting entirely of Masters produced her e under, the following escalations shall apply: should the Net Sales through Normal Retail Channels in the United States ("USNRC Net Sales") of such LP exceed 250,000 units, the Basic Rate shall be four and one-half percent (4-1/2%) for USNRC Net Sales betw e en 250,001 and 500,000 units of such LP; should the USNRC Net Sales of such LP exceed 500,000 units, the Basic Rate shall be five percent (5%) for USNRC Net Sales between 500,001 and 1,000,000 units of such LP; and should the USNRC Net Sales of such LP ex ceed 1,000,000 units, the Basic Rate shall be five and one-half percent (5-1/2%) for USNRC Net Sales in excess of 1,000,000 units of such LP.



(b) Royalty rates payable to Employer in respect of Net Sales of Records other than top-line LPs sold by Company or its licensees for distribution through Normal Retail Channels in the United States shall bear the same respective proportions to the Basic Rate (determined without regard to escalations) that the royalty rates payable to Artist with re spect to such sales bear to the royalty rate payable to Artist on the first Net Sale of a top-line LP pursuant to the recording agreement between Company and the Artist (the "Artist Agreement").



(c) All royalties hereunder shall be subjec t to the same proportionate reductions, deductions and configurational, territorial, category and other variations (but not escalations) contained in the applicable Artist Agreement. Royalties shall be computed and prorated, paid and not paid, in all resp ects in the same manner, upon the same bases, at the same times and (notwithstanding paragraph 8 below) subject to the same applicable definitions as Company computes the royalties payable to the Artist pursuant to the applicable Artist Agreement.



(d) The royalty with respect to any Master produced hereunder for which Company utilizes the services of other producers shall be multiplied by a fraction, the numerator of which is one (1) and the denominator of which is the total number of pro ducers (including Employee) utilized on such Master. Company will utilize the services of other producers with respect to Masters produced by Employee only with Employer's prior consent.



(e) The royalty with respect to Records that embody Masters other





than Masters produced by Employee hereunder shall be multiplied by a fraction, the numerator of which is the number of Masters produced by Employee hereunder embodied in such Record and the denominator of which is the total number of Mast ers (including Masters produced by Employee hereunder) embodied in such Record.



(f) Employer shall receive an advance of $10,000 with respect to each LP produced entirely by Employee (prorated if Employee produces less than all the Maste rs embodied in such LP) and an advance of $1,000 with respect to each Single produced entirely by Employee (other than a Single which is produced for inclusion in an Album to be produced in whole or in part by Employee). Each such advance shall be fully r ecoupable by Company from royalties otherwise payable to Producer pursuant to this Agreement.



(g) No royalties shall be payable to Employer for producing services hereunder until Company has recouped, at the Artist's net royalty rate, all recording costs of the Masters produced hereunder and all recording costs of the Album on which such Masters are embodied, from royalties otherwise payable to the Artist in connection with such Masters. Subject to the recoupment of any Advances of Employ e r, commencing with Company's accounting for the period during which such recoupment occurs, Company shall pay to Employer all royalties earned by Employer hereunder retroactive to the first Net Sale of such Record, less any excess costs charged to or incu r red by Company. Employer further agrees, as a material part of the consideration for the duties and obligations of Company hereunder, to pay over to Company all advances and royalties otherwise payable to Employer hereunder until such time as Employee has repaid to Company the entire principal under that certain Promissory Note made by Employee in favor of Company dated September 26, 1997.



5. Rights.



(a) Exclusive of songs written by Employee in collaboration with others, Employer does hereby acknowledge, certify and agree, and shall cause Employee to acknowledge, certify and agree, that all materials of whatever kind created, produced, furnished or delivered by Employer and/or Employee hereunder and all results and procee d s of whatever kind of the services rendered by Employer and/or Employee hereunder, including all Masters produced or delivered in whole or in part by Employer or Employee during the Term, all products derived from such Masters, all music videos embodying s uch Masters or otherwise produced during the Term ("Videos") and all rehearsal recordings, outtakes and other preliminary or alternate versions of sound recordings which are created during the production of the Masters hereunder ("Elements") (all such mat e rials and all such results and proceeds being collectively referred to herein as the "Works"), are and shall be considered, from the inception of their creation, "works made for hire" specially ordered or commissioned by Company for use as a contribution t o a collective work or as a part of a motion picture or other audiovisual work. Accordingly, Company is and shall be considered to be the author of the Works and, at all stages of creation or completion, the sole and exclusive owner throughout the univers e in perpetuity of the Works and all right, title and interest therein, including all copyrights therein, all renewals and extensions of such copyrights and all other ownership and exploitation rights of any kind, nature or description in, to and with resp ect to the Works that may be secured under the laws now or hereinafter in effect in the United States or any other jurisdiction (collectively, the "Rights").







The Rights shall include the right to authorize, prohibit and/or control the production, reprod uction, fixation, adaptation, distribution, rental, lending, performance, broadcasting, communication to the public and other exploitation of the Works in any and all media and by any and all means now known or hereafter devised and the right to make such changes therein and such uses thereof as Company may deem necessary or desirable. The Rights shall further include any and all so-called rental rights, lending rights, fixation rights, reproduction rights, distribution rights and neighboring rights pursua n t to any international treaties or conventions, any directives or other measures of the European Economic Community or its successors and/or any enabling or implementing legislation, laws or regulations relating to the foregoing (collectively, the "EEC Ri g hts"). If and to the extent that under any applicable law the Works are not deemed works made for hire for Company or Company is not deemed to be the author of the Works and the sole and exclusive owner of the Works and all right, title and interest there i n (including all of the Rights), then to the fullest extent allowable and for the full term of protection otherwise accorded Employer and/or Employee under such applicable law, Employer hereby irrevocably assigns, grants and transfers, and shall cause Emp l oyee to assign, grant and transfer, to Company throughout the universe in perpetuity the Rights and, in connection therewith, all right, title and interest of Employer or Employee in, to and with respect to all Masters produced by Employee hereunder, all Records derived therefrom, all Videos and Elements and all other works now o ...