Exhibit 10.30
[Sanctuary Records Group Logo]
Sanctuary Records Group
75 Ninth Avenue, 2nd Fl.
New York, NY 10011
Tel: 212 599 2757
Fax: 212 599 2747
www.sanctuaryrecordsgroup.com
September 1, 2004
AGU Entertainment Corp.
11077 Biscayne Boulevard
Miami, Florida 33161
c/o Gary Greenberg, Esq.
Law offices of Gary Greenberg
15260 Ventura Boulevard,
Suite 1030
Sherman Oaks, California 91403
Re:
Sanctuary
Records Group Inc. ("Sanctuary") -w- AGU Entertainment
Corp. ("Company") / Manufacturing and Sub-Distribution
Agreement
/ SUBJECT TO CONTRACT
Dear Sir/Madam:
The
following shall constitute the material terms of an exclusive
manufacturing and sub-distribution
agreement between Sanctuary and Company.
1. Territory - The United States and
Canada.
2. Term - The Term will commence as of the date hereof and extend
for a period
of 10 years following the initial commercial release of the first Album
Delivered hereunder.
3. Product -
(a) All records and artwork
as set forth on Schedule "1" attached hereto (all
Product defined in Schedule "1" and
incorporated herein by
this reference shall
sometimes be referred to as "Albums"), as the same may be amended from
time to
time.
(b) Delivery: The Chaka Khan Album will be
Delivered to Sanctuary
no later
than September 3, 2004. The Live DVD will be Delivered to Sanctuary no
later
than October 31, 2004. "Delivery" will consist of actual
receipt by
Sanctuary
<PAGE>
(at the address on the first page hereof)
of multi-tracks
master tapes (or
the
digital equivalent thereof) of all recordings hereunder and a completed,
fully-edited, mixed, mastered and equalized recordings, in the format
customarily used by Sanctuary in the
manufacture of Records (currently Digi Beta
[PAL and NTSC] audio synchronized to video for
audiovisual
records other than
DVDs, Digi Beta and DA 88 5.1 audio Master [PAL and NTSC] authored and
synchronized to video master for
audiovisual records in
the DVD format and PMCD
for audio-only records), which tapes shall be in the proper form for the
production of the parts necessary for the
manufacture and creation of Records in
each country of the Territory together with Artwork,
a track-by-track list,
identifying the performers on each
Recording (and the type of such performance)
and all other materials, consents, approvals, licenses, parts and
permissions
necessary for Sanctuary's exploitation and
release of the recordings hereunder.
4. Manufacturing and Distribution Rights
-
(a) Sanctuary will have exclusive right to manufacture and distribute the
Product through all channels of
distribution,
including,
but not limited
to,
so-called "brick and mortar" wholesale and retail channels but
excluding direct
mail, exploitation of individual masters, licenses, digital subscription
services, direct artist sales at concerts
and via fan clubs, premiums, ringtones
and electronic/digital transmission and distribution. Company may purchase
reasonable quantities of finished product
of Product hereunder,
for promotional
use or sale by Company or Artist
through direct mail, direct artist sales at
concerts and via fan clubs as set forth in
the preceding sentence, at prices to
be mutually agreed upon. Nothing in the
foregoing withstanding, Sanctuary shall
have a non-exclusive right, subject to Company's approval, to exploit the
Product through licensing of masters, including, but not limited to film and
television licenses and digital subscription services, and Sanctuary shall
retain 40% of the receipts of any such
exploitations that Sanctuary secures.
(b) Provided Company has
fulfilled its obligations hereunder, Sanctuary will
release the Chaka Khan Album, if Delivered no later than September 3, 2004,
hereunder, in the United States and Canada on October 5, 2004.
If Sanctuary
fails to do so, Company must give written
notice to Sanctuary
within 30 days of
such failure and Sanctuary shall have 90 days ("Cure
Period") to cure. If
Sanctuary fails to release the record concerned before the end of the Cure
Period, your sole remedy will be to terminate the Term hereof by giving
Sanctuary notice within 30 days after the
Cure Period. Each 120
day and 90 day
period shall be tolled between the periods
of November 15 and January 15.
5. Payments - Sanctuary shall account for and pay distribution proceeds
resulting from distribution in the United
States and Canada within 45 days after
the close of each calendar quarter (i.e. 45 days following December 31, March
31, September 30 and June 30). For the
purposes hereof,
"Proceeds" shall
mean
gross sales less returns and credits, reserves, discounts, Sanctuary's
Distribution Fee (as defined below), the distribution fees charged by
Distributor, and other charge-backs as set forth in Sanctuary's agreement
("Distribution Agreement") with Sanctuary's
distributor ("Distributor"). Without
limiting the generality of the foregoing,
all fees other than
the Distribution
Fee, such as reserves, credits, discounts and charge-backs shall
be charged by
Sanctuary on the same basis ("pass-through") as Distributor charges Sanctuary
therefore. You shall have the right to approve any non-standard discounts
(standard discounts include but are not
limited to discounts such as new release
and limited duration sales incentive
discounts) applied to
Product
distributed
hereunder, provided that in the event that
Sanctuary and Company
cannot agree
with respect to such discounts, after good-faith efforts to resolve any
differences, Sanctuary's decision shall be
final.
6. Distribution Fee - In the United States
Sanctuary will retain a manufacturing
and distribution
<PAGE>
fee of twenty-eight percent (28%). In Canada Sanctuary will retain a
manufacturing and distribution fee of
thirty percent (30%) ("Distribution Fee").
Without limiting the generality of the foregoing, Sanctuary shall also be
entitled to retain from Proceeds the
distribution
fee retained by
Distributor.
For the avoidance of doubt, the distribution fee r
