Appendix 4

Distribution Agreement

This Distribution Agreement is made and entered into as of ___________, by and between _________________________________(“Firm”), of ____________________________________ ____________ and _______________________________________ LABEL of _______________ ____________________________________________ with reference to the following:

Witnesseth

1. (a) Firm hereby engages LABEL as its (non-exclusive) distributor in the Territory for CDs presented to LABEL per this Agreement hereinafter called (“Records”) made a part of this Agreement. (b) The rights herein granted to LABEL and the obligations of Firm shall be for the United States and their territories and possessions, including all U.S. Armed Forces Military Post Exchanges throughout the world (“Territory”).
2. (a) The Term of this Agreement shall be for one (1) year of this Agreement, subject to the acceptance and approval of LABEL and Firm. (b) Firm 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 Firm 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. Firm or its Affiliates will be required to deliver a reasonable amount of promotional CDs (50 units minimum up to 300 units maximum) per title to LABEL of each title to be considered, for the purposes of and as a means of offsetting costs in the areas of: in-store listening CDs, retail incentives, free goods, product placement, promotions by LABEL, as well as shipping and print advertising. In addition to the reasonable amount of promotional CDs, Firm or its Affiliates will also 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 each accepted product into the system. (b) All projects released through LABEL will be distributed regionally, nationally and internationally based on promoted and targeted areas through Firm’s and LABEL’s promotional efforts, which may require a LABEL bar code. In the event a title does have already a bar code, the LABEL bar code will not be necessary. Adjustments in price will be applied if CDs have no shrink wrap (subject to reasonable manufacturing re-shrink wrap fees with approval from LABEL and Firm). Any future reorders of product to fill orders must be manufactured by LABEL whereby the LABEL bar code will be stripped in at a cost of $75.00. (c) LABEL Logo, address and website address will be applied to Firm’s manufactured products during subsequent product runs throughout the course of this agreement. Shipping product to Distribution warehouse is the responsibility of Firm. (d) Any Record that shows minimal sales activity after a period of eight (8) months may be deemed and returned to Firm 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.
4. (a) No payment shall be made to Firm on the initial promotional CDs given to LABEL per release of each title. Payment will only begin once the first unit past 500 units is sold, verifiable through SoundScan (in conjunction with section 4(b) below). LABEL shall be entitled to twenty-five percent (25%) of the “Net Profits” on all orders shipped for service fee. The service 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. “Net Profits” are herein defined as gross monies received from the sale of records and received by LABEL from Distributor. Monies will be held in the LABEL’s [credit] account with reference to Firm, bar code assigned to Firm per each specific title and reference accounting number. (b) Providing Firm has sold 500 units, verifiable through SoundScan, payment by LABEL to Firm shall be made on fifty percent (50%) of payments received by LABEL, and only on invoices paid by Distributor, with a reserve of fifty percent (50%) to be liquidated every calendar quarter until fully liquidated in respect to (each) project [album/single/CD] being distributed.
5. All notices hereunder shall be in writing and shall be sent by certified mail, return receipt requested to Firm at its address first above written and to LABEL at its address first above written.
6. LABEL and Firm warrants, represents and agrees that: (a) LABEL and Firm have the full right and power to enter into and fully perform all of its obligations under this Agreement; (b) LABEL and Firm are not under any disability restriction or prohibition, whether contractual or otherwise, with respect to LABEL and Firm’s right to execute this Agreement or LABEL and Firm’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 Firm will interfere in any manner with the complete performance of this Agreement by LABEL and Firm.
7. Wherever in this Agreement Firm’s approval or consent is required, Firm shall give LABEL written notice of approval or disapproval within ten (10) business days after such notice is received by Firm. 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 Firm agree to disclose below any business or personal relationships 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 Firm will be paid in full within 60 days or sooner of cancellation of Agreement, along with remaining Firm units.

   NAME	RELATIONSHIP
   _____________________	_____________________
   _____________________	_____________________
   _____________________	_____________________

9. For the purposes of this Agreement, the following definitions shall apply: (a) “LABEL”—refers to its principals or assigns; (b) “Firm”—refers to any promotional company, 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.

Firm

By ________________________

(an authorized signatory)

Title _______________________

Date _________________________

Label

By ________________________

(an authorized signatory)

Title _______________________

Date _________________________