Dear Will:

As we discussed, what follows is a preliminary proposal regarding  an exclusive recording contract for your client, James Brown.  Obviously, until incorporated in a formal agreement executed both your client and MCA, this proposal is non-binding.

        1. Territory: The World

        2. Product: Initial period – MCA would commit to a three LP deal provided that LPs 2 and 3 would become optional if the preceding album sold less than 500,00 units through normal retail channels in the United States.  We would discuss an option for additional albums.

        3. Advance: (the amounts below would be inclusive of recording costs, produce advances, advancees to Mr. Brown, etc.):

            Initial period = $1,000,000 as follows:

            LP 1 – $250,000
            LP 2 – $350,000
            LP 3 – $400,000

            Additionally, beginning with LP 2, we would agree to increase the recording fund advances based on MCA’s standard sales formula so that the commitment in the initial period could exceed $1,000,000 based on certain sales levels being achieved.

            Option period – advances to be discussed.

            4. Royalty Rate:    U.S. LPs – 14%
                                Singles  – 10%

            5. Videos: We would commit to doing a video based on an album achieving a certain sales level.

We will obviously have to work out the usual details as we get further into this, but this is meant as an attempt to map out what we have previusly discussed in order to determine whether or not a deal is possible.  Pleae telephone me if you have any questions concerning the aove.
 

Very truly yours,
 
 

Zach Horowitz
Senior Vice President
Business and Legal Affairs

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