Legal Question in Entertainment Law in New York

What you need in this moderately complex transaction is a contract carefully drafted by an attorney. You should expect to spend no less than $3,000.00 (and that's on the low side) for something suitable. Preparing this sort of heavy-duty agreement on your own is not much different than performing a minor surgery on yourself. If even one word is wrong or one provision is illegal, you will find yourself in a hundred-thousand dollar litigation. As they say, "an ounce of prevention is worth a pound of cure."

First off, congratulations to you on your soon to be inked deal.

I. The answer to most of this question can be achieved theoretically through a taut and succinct music licensing agreement (Sync and Master Rights against all or enumerated media). Such a license is the primary agreement that need be put into place and it is your partnership that should control the drafting and issuing process, ideally. A brief overview of the structure and terms of license:

1) Media and Usage Rights: the license would specify the various "channels/media" that the chain would be able to use the music (e.g., they may be restricted to radio only, or in the alternative they may be granted all media, television, film, radio, internet, etc.);

2) Exclusivity/License: Likely this will be a so called "exclusive license" whereby the restaurant alone for the "Term" of one year (another key term) will have the rights set forth in the license and no one else;

3) Royalty/Accounting: Moreover, any agreed royalty fees (i.e. fees to be made based on number of uses or other contingent factors)

4) Ownership: The license will likely make clear that the copyright to the song will be held by the partnership (this may be impacted by the terms of the agreement below) and that the restaurant chain is only receiving a limited license, despite receiving masters for reproduction/editing purposes;

5) Payment Terms for Flat Fee: How is the 100K to be paid? All at once, in increments at certain intervals, etc.?

6) Arbitration/Dispute Resolution: IF there is a dispute, where and under what law should the dispute be held/governed?

7) Other terms Misc.: Of course, the above is only a summary of some of the key terms and there will be other terms that should be present in the license.

II. Collaboration, Work for Hire, and/or Co-Administration Agreement with the Second Party. A second agreement between the partnership and the Second party will need to be setup to assure that one party can administer the operative property right in the jingle (copyright) and to clarify ownership of that copyright. There are several paths that can be taken here, and each may speak to the particular "flavor" of the proposed arrangement. For example, does the partnership "own" the copyright, but shall remit 40% of revenues derived therefrom to the second party? Or, does the partnership and the second party co-own the copyright and one party is designated as the "administrator" to ink deals on behalf of the two sets of parties? There are other permutations that can be setup, depending on the needs of the parties.

I hope the above gives you some insight to work with and if you need counsel to help you with this deal, please feel free to contact my office to see if it can be of service.

Q. (1) What kind of contract(s) should we give to the restaurant chain or what kind of contract(s) should we be receiving from the restaurant chain?

A. Similar to the answers above, it would be a licensing agreement.

Q. Our partnership will receive 100% of all proceeds and will disperse 40% to the second party (which is inclusive of the payment from the restaurant chain and broadcast royalties). (2) What kind of contract(s) do we need to have between the partnership and the second party?

A. Either a joint venture agreement or a straight percentage agreement that would terminate on a specified date. You would probably want the straight percentage agreement. The difference is that with a joint venture agreement, payment would continue so long as music and lyrics are used.

Mike.