Term Sheet for 360 Music Deal

This is a Term Sheet to create a "360 Deal" between a band and manager/investor/label. It's the first in a set of documents. I worked with an entertainment attorney to create these documents three years ago when a few friends and myself backed a band from Massachusetts called Jediah. You can find more information and original files here: http://www.musicthinktank.com/blog/download-mus...

The goals of the legal structure were:

- Create a structu
... show more

Jediah

Term Sheet

2/10/06

Bruce Warila

115 Winsor Road

Lancaster, MA 01523

Jediah Jarvais

____________________________________

____________________________________

____________________________________

In consideration of the covenants and premises herein, we are pleased to set forth the terms of the agreement between Bruce Warila, an individual with an address at 115 Winsor Road, Lancaster, MA (“Warila”) and Jediah Jarvais, an individual with an address at _______________________________________________________(“Jarvais”), and a member of the music band “Jediah” which operates as a Massachusetts general partnership (“Jediah Band”) with regard to the development, growth, and promotion of the business of the Jediah Band and all of the assets and intellectual property in connection therewith, including but not limited to the trademarks, together with the good will of the business symbolized by the trademarks, the songs written, created, recorded, and performed by Jediah, Jediah Band, and each of the other members of Jediah Band. Warila, Jediah, the Jediah Band, and each and every member of the Jediah Band are at times collectively referred to herein as the “Parties”.

The Parties agree to form a Massachusetts corporation or limited liability company (“Company”) within 45 days of the date hereof. The Parties shall contribute and/or transfer certain assets to the Company as set forth herein (the “Assets”) within 45 days of the date hereof, in exchange for which the Parties shall receive their respective equity interests in the Company, and the Parties shall execute any and all documents necessary to effectuate such contributions and/or transfers to the Company. The purpose of Company shall be to own and exploit the Assets in all media throughout the universe in perpetuity, and to own, create conceive, develop, promote, exploit further intellectual property, including but not limited to music, songs, videos, motions pictures, web-sites, and recordings (“Future Assets”), and operate the business that will support and manage all of the Assets and Future Assets. Jediah and each member of the Jediah Band agree that in order to conduct the business of the Company, they shall enter into service agreements (“Service Agreements”) with the Company, the terms of which shall be negotiated in good faith within 45 days of the date hereof, whereby each of the Parties shall agree to render exclusive services to the Company on a work for hire basis and further agree that all Future Assets shall be owned solely by the Company. The Parties agree to contribute and or transfer to the Company the Assets, which are more particularly described according to the terms specified herein, in order that the Company shall also be the sole and exclusive owner of the Assets:

Assets to be contributed by Warila:

• Rights and interests of Warila in the URL www.jediah.com

• Rights and interests of Warila in the live music recordings of Jediah Band recorded at The Mill on December 17th, 2005.

• Rights and interests of Warila in the studio recordings done by Jediah Band at Longview Recording Studios in 2005 and 2006.

• Rights and interests of Warila in the photos taken by Richard Roberts in 2006

• Rights and interests of Warila in the video recordings of Jediah Band done in 2005 and 2006 at both The Mill and at Longview Recording Studios.


Assets to be contributed by Jarvais, the Jediah Band, and each and every member of the Jediah Band:

• All rights and interests in all assets of the Jediah Band of whatever kind or nature

• Rights and interests in the URL www.jediah.com

• Rights and interests in the URL www.jediahband.com

• Rights and interests in the URL www.myspace.com/jediahband

• Rights and interests in all intellectual property owned by Jediah, Jediah Band, or any of the member of Jediah Band, including but not limited to name, identity, likeness, artwork, copyrights, trademarks and the brand that is know as the music band Jediah

• Rights and interests in all recordings of Jediah or Jediah Band, including, but not limited to the following: the live recordings of Jediah Band recorded at The Mill on December 17th, 2005;

1. and the studio recordings by Jediah Band at Longview Recording Studios in 2005 and 2006;

2. rights and interests in the video recordings, including the images, sound, music, and

3. synchronization rights, of Jediah and Jediah Band done in 2005 and 2006 at both The Mill and Longview Recording Studios; and

4. all other rights and interests in any and all other recordings previously recorded by Jediah and/or Jediah Band

• The non-writers share of the royalties and publishing revenue in the songs listed below:

1. Flight

2. Unfaithful

3. Come Around

4. Save the World

5. Butterfly

6. Waiting Will

7. Underneath New England Sky

8. The Day the Fears Came True

9. Fate Craze

10. Night's A Puppy

11. New For You

12. Little Man With A Black Hat

13. Butterfly

14. As We Were

15. Jazz Song

16. 11:05 - Don't Die

17. Cruisen

18. Time

19. Cry Don't Cry

20. Whoever Will Love

21. Women

22. Dance With Me

23. Just Go On


The Parties agree that the equity, the profits, and the voting in the Company shall be as follows:

Profit

Voting

Ownership

Sharing

Rights

Investor Group*

30%

40%

50%

Jediah Jarvais

15%

12.86%

pro-rata

Joel Rines

11%

9.43%

pro-rata

Ian Rines

11%

9.43%

pro-rata

Brian Kearsley

11%

9.43%

pro-rata

Adam Caravalho

9%

7.71%

pro-rata

Bruce Warila**

8%

6.86%

pro-rata

Employee Sharing Pool

5%

4.29%

none

TOTAL

100%

100%

*The “Investor Group” shall receive ownership and profit sharing in the Company at a pro-rata rate of $100,000 for 30% ownership of the Company; included in this $100,000 is the capital Bruce Warila has invested to date in the production and development of the Assets. Warila shall comprise 100% of the Investor Group for capital invested to date and shall be afforded the voting rights for such investment, but Warila shall have the option to solicit other investors as part of the Investor Group (up to $100,000 total) which shall dilute only Warila’s interest in the Investor Group, and not the interests of the other stockholders of the Company. The Investor Group shall have 50% of the voting rights in the Company. A separate Investor Subscription Agreement shall cover the terms of a Convertible Debt note that will be signed by stockholders or members, as the case may be, and/or by the Manager of the Company; the Investor Subscription Agreement shall close on the last day of 2006; the Investor Subscription Agreement shall be offered to others at the sole discretion of Bruce Warila. The stockholders and/or members of the Company agree to a combined salary cap of $60,000 a month unless voted otherwise by a majority of the stockholders and/or members of the Company.

**Warila's non-investor group shares of 8% (noted above) cannot be diluted. Bruce Warila shall manage the Company for a minimum of three years at a salary rate per year that is equal to the highest paid employee of the Company. Such term shall be renewable for additional terms by majority vote of the Company, upon such additional terms and conditions as shall be negotiated in good faith.

It is the intention of the parties to cooperate in good faith to complete and execute all of the other necessary documents to formalize the formation of the Company, the creation of the Operating Agreement or Stockholder Agreement as the case may be that governs the affairs of the Company, the contribution and/or transfer of the Assets into the Company, the preparation of the Service Agreements, Investor Subscription Agreement, and the acceptance of the terms and conditions of the convertible debt instrument.

Bruce Warila Jediah Jarvais

Individually and as Partner of Jediah Band

________________________________ ________________________________

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