MANUFACTURING AND DISTRIBUTION AGREEMENT

This Agreement is made as of 28 July 2009 by and between Universal Music Canada
Inc., 2450 Victoria Park Avenue, Suite 1, Toronto, Ontario M2J 5H3 (“Universal”)
and UOMO Productions Inc., 161 Bay Street, 27th Floor, Toronto, Ontario, M5J
2S1, G.S.T. [Number] (the “Company”).

ARTICLE I
TERM

1.1

The Term will consist of an initial contract period (the “First Contract
Period”) and each of the renewal contract periods for which Universal has
exercised the options pursuant to this Agreement (collectively, together with
the First Contract Period, referred to as “Contract Periods”), unless terminated
or extended pursuant to the provisions of this Agreement.

1.2

The Term will commence on the date hereof and continue for a First Contract
Period ending on 30 June 2012, unless extended pursuant to this ARTICLE I or
Section 12.2 hereof.

1.3

The Company hereby grants Universal 2 separate, successive and irrevocable
options to extend the Term for additional Contract Periods (each renewal
contract period referred to consecutively and in chronological order as the
“Second Contract Period”, and the “Third Contract Period”).  Universal may
exercise each option to extend the Term for an additional Contract Period by
giving the Company notice of Universal’s election to do so at any time prior to
the expiration of the particular Contract Period.  Each renewal Contract Period
will run consecutively, commencing upon the expiration of the immediately
preceding Contract Period (or, if Universal so advises, the then-current
Contract Period will end on the date of Universal’s exercise notice and the next
Contract Period will commence immediately thereafter) and will continue until
the date that is 12 months from the date of commencement of the particular
Contract Period.  

1.4

Notwithstanding the foregoing, in the event that, upon the date when the
particular Contract Period would otherwise have expired, Universal has neither
exercised Universal’s option to extend the Term for a further Contract Period,
nor notified the Company that Universal does not wish to exercise such option,
then the following provisions will apply:

(a)

The Company will forthwith notify Universal in writing that the option has not
yet been exercised (the “Option Warning”).

(b)

Universal will be entitled to exercise Universal’s option at any time within 30
days after receiving the Option Warning.

(c)

The then-current Contract Period will be deemed to have continued until the
earlier of:

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(i)

the date that Universal exercises the option, in which event the Term will be
extended for a further Contract Period;

(ii)

the date that Universal gives the Company notice that Universal does not wish to
exercise Universal’s option, in which event the Term will end on such applicable
date, without imposing any further liability or additional obligations upon
Universal in connection herewith; or

(iii)

the date 30 days after Universal receives the Option Warning.

ARTICLE II
RIGHTS

2.1

The Company hereby grants to Universal for the Term the following exclusive
rights in the Territory:

(a)

To Manufacture, and to authorize others to Manufacture the Records and the
containers therefor;

(b)

To Exploit, and to authorize others to Exploit, the Records in the Territory
through all channels and by all methods now or hereafter known, including,
without limitation: (i) Normal Retail Channels, including Exploitation of the
Masters on Compilation Records released by Universal either solely by Universal
or pursuant to a joint venture agreement; (ii) as Premium Records (subject to
the Company’s prior written consent); (iii) Electronic Transmission; and (iv)
Electronic Subscription; and

(c)

To license, through any method and by any means, including, without limitation,
by way of joint venture, the Masters to any third party on a flat fee or royalty
basis for the Manufacture and Exploitation of Compilation Records, provided that
not more than two (2) Masters from any Album will be embodied on a single
Compilation Record without the Company’s prior written consent.

2.2

In connection with Universal’s Exploitation of the Records, the Company hereby
grants to Universal for the Term the following additional non-exclusive rights
in the Territory:

(a)

To license, through any method and by any means, including, without limitation,
the Masters to any third party on a flat fee or royalty basis for use as
background music, synchronization in motion pictures and television soundtracks
and other similar purposes, including, without limitation, use on transportation
facilities;

(b)

To Market the Records in accordance with the terms hereof, and to cause or
authorize others to do so;

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(c)

To perform the Records publicly and to permit the public performances thereof in
any medium and by any means whatsoever, whether now known or hereafter developed
(it being understood that the Company will receive all applicable “neighbouring
rights” income); and

(d)

To use, and to authorize other Persons to use, solely in connection with
Universal’s Exploitation and Marketing of Records hereunder, without liability
to any Person: (i) the business names, and the trademarks or logos (“Marks”) of
the Company; (ii) to the extent that the Company has such right, the Names,
Likenesses, Marks and biographical material of each Artist; provided that no
such use will be or imply a merchandising tie-in with, or endorsement of, any
goods, wares, services or institutions, without the prior written approval of
the Company; and (iii) to the extent that the Company has such right, the names,
likenesses, Marks and biographical material of any producer and any other Person
performing services with respect to the Masters; provided that no such use will
be or imply a merchandising tie-in with, or endorsement of, any goods, wares,
services or institutions, without the prior written approval of the Company.
 With respect to any producer and any other Person performing services in
connection with the Masters, the Company will use reasonable efforts to provide
Universal with the rights set out in this Section.

2.3

Notwithstanding the foregoing rights granted to Universal, after the Commercial
Release by Universal and/or Universal’s affiliates or licensees, as applicable,
of each Album, the Company will have the following rights, during the Term in
the Territory:

(a)

To distribute a reasonable number of copies (not to exceed 250) of each Album in
compact disc form, for strictly promotional purposes, provided that such compact
discs will not be offered by the Company for resale.  The cost of each such
compact disc will be the Manufacturing cost therefor, as set forth in Schedule
“A” attached hereto, as such cost may change upon 30 days prior written notice
to the Company, plus the shipping costs therefor; and

(b)

To sell copies of each Album in compact disc form at the applicable Artist’s
public performances and from the Company’s website or applicable Artist’s
website.  The cost to the Company for compact discs to be sold at the applicable
Artist’s public performances or through the Company’s or Artist’s website will
be an amount per compact disc equal to the PPD therefor multiplied by the
Distribution Fee (for example, if the PPD for the compact disc is $11.98, the
cost to the Company per compact disc would be calculated as follows: $11.98
multiplied by the Distribution Fee of 20% equals $2.40), plus shipping costs
therefore and plus the Manufacturing Costs (as indicated in Schedule “A”),
provided, however, that Universal reserves the right to require that the Artist
and Company not offer such compact discs for sale at certain of the Artist's
performances or through the Company’s or Artist’s website if Universal
determines, acting reasonably, that such sales might negatively affect
Universal's ability to Exploit Records through Normal Retail Channels in the
Territory.    

2.4

For greater certainty: (i) the indemnity in ARTICLE IX hereof applies to any and
all claims, damages, liabilities, costs and expenses, including legal expenses
and fees, arising out of the sale or distribution pursuant to Section 2.3 of
compact discs by the Company; and (ii) the restriction on assignment in Section
13.7 applies to prevent the Company from assigning to any

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other Person any of the rights granted to the Company in Section 2.3 without
Universal's prior written approval (for example, the Company may not authorize
or permit any other Person to, directly or indirectly, by any means, distribute,
sell or fulfil orders for Records without Universal's prior written approval).

2.5

Universal will not be obligated to exercise any of the rights granted to
Universal pursuant to the provisions of this ARTICLE II if, in Universal’s sole
discretion, the exercise of such rights: (i) would violate any statute, law or
regulation or any rights of any Person; or (ii) would constitute a breach of
this Agreement or of any other agreements to which Universal or the Company is a
party.

2.6

Universal hereby acknowledges that the Company’s parent, Uomo Media Inc., has
entered an agreement with Colgate Palmolive Canada (the “Colgate Agreement”)
involving the promotional download of up to 30 seconds of the Master entitled
“Fresh” featuring the Artist “Shawn Desman”.  Universal hereby agrees that the
Colgate Agreement will not be deemed a breach of this Agreement.  

2.7

All rights not granted to Universal hereunder are reserved in their entirety by
the Company, including, without limitation, the right to export the Records
outside the Territory.

ARTICLE III
FEES; FUNDS; COSTS

3.1

Universal will retain a distribution fee (the “Distribution Fee”), quarterly,
equal to the following:

(a)

In the case of Records Exploited through Normal Retails Channels (other than
Compilation Records): 20% of Net Billing, reducing on a prospective basis to:
(i) 19% of Net Billing at $2,000,000 in Net Billing; (ii) 18% of Net Billing at
$4,000,000 in Net Billing; and (iii) 17% of Net Billing at $6,000,000 in Net
Billing.   

(b)

In the case of Records Exploited through Electronic Transmission and through
Electronic Subscription: 20% of Net Receipts.

(c)

In the case of Masters licensed by Universal to a third party on a flat fee or
royalty basis for the Manufacture and Exploitation of Compilation Records: 20%
of the Net Receipts therefrom; and

(d)

In the case of Masters licensed by Universal to any third party on a flat fee or
royalty basis for use as background music, synchronization in motion pictures
and television soundtracks and other similar purposes: 50% of the Net Receipts
therefrom.

3.2

In the case of Masters Exploited by Universal on Compilation Records and Premium
Records, Universal will pay the Company the following: 80% of the highest
royalty rate payable for any other master included on such Compilation Record or
Premium Record, as applicable.

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3.3

To the extent that the Company requests Universal to provide any services in
addition to those set forth herein, such as marketing and/or promotion, and
Universal agrees to provide such services, such services will be provided for an
amount which is to be mutually agreed and negotiated by the parties hereto.  Any
agreement to such effect will be detailed in writing and any charges relating
thereto will be invoiced by Universal to the Company and will, at Universal’s
election, be prepaid to Universal by the Company, or will be payable by way of
Universal deducting these amounts from any payments or amounts otherwise due to
the Company hereunder.  

ARTICLE IV
RESERVES

4.1

Reserves against anticipated customer returns and/or credits in respect of the
Records will be calculated, held and liquidated in the following manner and at
the following times:

(a)

Subject to the other provisions of this Section 4.1, Universal may hold in
reserve an amount of up to 20% of each applicable quarter’s Gross Billing.  At
the end of each calendar year during the Term, at the request of either party,
the amount of the reserve will be reviewed to determine if the amount held is
reasonable, considering among other factors, the returns history of the Records
and market conditions, and upon mutual good faith agreement, the reserve will be
adjusted accordingly.

(b)

Subject to the other provisions of this Section 4.1, the reserve established
with respect to each billing quarter to the extent not reduced by actual returns
and/or credits will be liquidated and paid over to the Company as follows:

(i)

50% at the end of the 6th month following the month in which such reserve was
originally established (such reserve to be established on the accounting
statement for the same billing quarter); and

(ii)

the balance at the end of the 12th month following the month in which such
reserve was originally established (such reserve to be established on the
accounting statement for the same billing quarter).

(c)

In the event that the amounts held in reserve are insufficient to cover amounts
for which Universal is obligated to credit Universal’s customers, the Company
will, upon Universal’s request, immediately reimburse Universal for the amount
of such credits to Universal’s customers or, at Universal's election, Universal
may deduct the applicable amounts from monies otherwise payable to the Company,
then or in the future.  Returns and/or credits will be first applied against the
reserve account on a FIFO basis (i.e. to the earliest reserve period first.)

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(d)

Notwithstanding anything to the contrary contained herein, in the event that the
Company is indebted to Universal hereunder when amounts held in reserve are to
be liquidated, the credit for such reserves will first be used to offset any
such indebtedness.

4.2

Notwithstanding anything to the contrary contained herein, in the event that the
Company is indebted to Universal hereunder 180 days prior to the expiration or
termination, for whatever reason, of the Term, then Universal will have the
right to withhold reserves up to a maximum of 50% of each applicable quarter’s
Gross Billing.

ARTICLE V
PAYMENTS AND ACCOUNTINGS

5.1

Within 60 days following the end of each fiscal quarter (as designated by
Universal) during the Term, Universal will render to the Company a statement
setting forth in detail all activities subject hereto, including an inventory
analysis.  Together with such statement, Universal will remit the Net Proceeds,
if any, shown to be payable to the Company on such statement.

5.2

All statements rendered by Universal are conclusively binding upon the Company
and not subject to any objection by the Company for any reason unless specific
objection in writing, stating the basis thereof, is given to Universal within 2
years from the date such statement is rendered (each statement will be deemed
rendered when due unless the Company notifies Universal to the contrary within
120 days after the applicable due date specified in Section 5.1 above), and an
audit pursuant to Section 5.3 below for that statement is completed within a
reasonable time after such objection notice is given.  Failure to make specific
objection or conduct the audit within such time periods will be deemed to be the
Company’s approval of such statement, the Company’s waiver of such audit rights,
and the Company’s waiver of the right to commence an action, suit or proceeding
against Universal for additional amounts in connection with the applicable
accounting period.  The Company will not have the right to commence an action,
suit or proceeding against Universal in connection with any accounting for
amounts payable hereunder, unless the Company commences the action, suit or
proceeding within the applicable 2 year period referred to above. If the Company
commences such action, suit or proceeding concerning accountings rendered by
Universal under this Agreement, the scope of the proceeding will be limited to
determination of the amounts due for the accounting periods concerned, and the
court will have no authority to consider any other issues or award any relief
except recovery of any amounts found owing.  The Company’s recovery of any such
amounts will be the sole remedy available to the Company by reason of any claim
related to Universal's accountings.  Without limiting the generality of the
preceding sentence, the Company will not have any right to seek termination of
the Term or avoid the performance of the Company’s obligations hereunder by
reason of any such claim.

5.3

The Company may, at the Company’s own expense, audit Universal's books of
account directly relating to this Agreement and which report the Exploitation of
the Records for which amounts are payable hereunder.  The Company may make such
audit only for the purpose of

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verifying the accuracy of statements sent to the Company hereunder and only as
provided herein.  The Company will have the right to audit such books of account
by notice to Universal at least 60 days prior to the date the Company intends to
commence such audit.  Such audit will be conducted by either a reputable
independent Chartered Accountant, Certified Public Accountant, Certified
Management Accountant or Certified General Accountant, who is experienced in
recording industry audits, will be conducted in such a manner so as not to
disrupt Universal’s other functions, and will be completed promptly. The Company
may make such an examination for a particular statement only once and only
within 2 years after the date any such statement is rendered as provided in
Section 5.2 above.  Any such audit will be conducted only during Universal’s
usual business hours and at the place where Universal keeps the books of account
to be examined. The Company’s auditor will review his or her tentative written
findings with a member of Universal's finance staff designated by Universal
before rendering a report to the Company so as to remedy any factual errors and
clarify any issues that may have resulted from misunderstanding.

5.4

The Company acknowledges that Universal's books of account contain confidential
trade information.  Neither the Company nor the Company’s representatives will
at any time communicate to others or use on behalf of any other Person any facts
or information obtained as a result of their examination of Universal's books of
account; except pursuant to a court order, statute or government regulation,
provided that the Company gives prior written notice to Universal of such
required disclosure.

ARTICLE VI
THE COMPANY’S OBLIGATIONS

6.1

The Company will deliver the Masters to Universal, at the Company’s sole cost
and expense, and all other parts necessary to Manufacture the Records, at a
mutually agreed upon place and time.  Each Master will be delivered in the form
of 1 fully edited, mixed, mastered, equalized and leadered 8mm DDP Exabyte and
will be accompanied by PQ codes, and ISRC codes supplied by the Company.  Each
Master delivered hereunder will be of a quality reflecting the then “state of
the art” analogue and/or digital recording techniques as Universal may from time
to time require and will be technically satisfactory to Universal for the
Exploitation of the Records.  Each Master will be clearly marked to identify the
applicable Artist as the recording artist, and to show the title(s) of the
Composition(s) and recording date(s), and will be accompanied by a studio
mastering sheet and a studio mastering tape check.  In addition, the Company
will furnish Universal with all information, licenses, releases, assignments,
consents and clearances required by Universal for the Manufacture and
Exploitation of the Records and Universal’s Marketing, if any, in connection
therewith, including, without limitation, the label copy, names of all composers
and lyricists, the lyrics themselves, the publishing line, music performing
rights society affiliations, timings, credits to arrangers, accompanists,
musicians or others, names of the engineers and producer(s), lists of musicians
with instruments played, studios used, names of side artists, liner credits,
Mechanical Licenses, Synchronization Licenses and all rights clearances (for
example, publishing and master sample clearances).  

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6.2

Together with the delivery of each Master, the Company will deliver to
Universal, at the Company’s sole cost and expense, finished digital CDR artwork
in Macintosh format, to be used by Universal for each Record and the inserts
therefor.   The Company will deliver such artwork in compliance with the
requirements provided to the Company by Universal’s Art Department.

6.3

The Company will be solely responsible for and will directly pay all Recording
Costs incurred with respect to the Masters, and parties having contributed
thereto who, for any reason whatsoever, may be entitled to receive remuneration,
including, without limitation, royalties and other payments to the applicable
Artists, producers, musicians, and copyright proprietors, and payments to
applicable unions, including the American Federation of Musicians or the
American Federation of Television and Radio Artists.  

6.4

The Company will be solely responsible for and will pay all costs and expenses
incurred with respect to the Manufacture of the Records and the containers and
inserts therefor, such standard per-Record cost of Manufacture being as set
forth in Schedule “A” attached hereto, as same may change upon 30 days prior
written notice to the Company.  

6.5

The Company will be solely responsible for and will perform, on a reasonable
basis, all Marketing functions in connection with the Records, other than with
respect to the Marketing functions, if any, Universal specifically agrees, in
its sole discretion, to undertake at the

Company’s request. The Company will be solely responsible for and will pay all
costs and expenses with respect to the Marketing of the Records.  In the event
that Universal pays or incurs any costs or expenses with respect to the
Marketing of the Records with the Company’s prior written consent, Universal
will reimburse itself from monies otherwise payable to the Company; provided,
however, that if there are insufficient monies available pursuant to the
foregoing, the Company will reimburse Universal the applicable amounts within 10
days of Universal’s written demand therefor..

6.6

Upon Universal’s request, the Company will promptly supply Universal, at the
Company’s sole cost and expense, with photographs and biographical material of
the Artist and each producer, copies of all applicable Marks, all existing
Marketing material (including, without limitation, point-of-sale display
material) and copies of existing Videos for use by Universal in the Exploitation
of Records, and Universal’s Marketing, if any, with respect thereto.  The
Company’s submission of any material which includes the foregoing will be deemed
to be instructions to Universal to use the foregoing, as submitted.

6.7

Universal will accept and process any and all returns of the Records which were
distributed by the Company or a third party prior to the date of this Agreement,
on the Company’s behalf and will deduct the costs of same from monies otherwise
payable to the Company under this Agreement.

6.8

Promptly after Universal's written request, the Company will, at the Company’s
sole expense, remove from Universal's warehouse, or order the destruction of,
Surplus Product.  The Company will be deemed to have ordered the destruction of
such Surplus Product within twenty-one (21) days after the date of Universal's
written request to remove such Surplus Product (and

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will promptly pay such destruction costs), unless Universal receives from the
Company within said twenty-one (21) days, written instructions for the immediate
delivery of such Surplus Product to a public warehouse or other non-Universal
location at the Company’s sole expense.  

6.9

If Universal, in its sole discretion, pays on the Company’s behalf any of the
costs or expenses referred to in this ARTICLE VI, Universal will deduct such
payments from amounts otherwise payable to the Company, or the Company will, at
Universal’s sole discretion, reimburse Universal for such payments within 30
days of Universal’s written demand therefor.  Universal hereby agrees that it
will pay Manufacturing costs (in accordance with Section 6.4) on the Company’s
behalf, subject to the foregoing sentence.   

ARTICLE VII
UNIVERSAL’S OBLIGATIONS

7.1

Universal will be responsible for the Manufacture and Exploitation of the
Records, in accordance with the terms hereof, and the storage of inventory of
the Records at Universal’s warehouse c/o Cinram Canada located at 400 Nugget
Avenue, Scarborough, Ontario, M1S 4A4 (or such other location as Universal may
specify) (“the “Warehouse”).

7.2

Universal will meaningfully consult with the Company with respect to the date of
Commercial Release of each Album (or other Record, as applicable).  Universal
will release each Album delivered hereunder within 4 months of Universal’s
receipt thereof.  If Universal fails to release an Album within such 4 month
period, the Company will send Universal written notice of such failure.
 Universal will either cause the release within 30 days of its receipt of the
notice, or all rights granted to Universal hereunder to such Album will revert
to the Company.

7.3

With respect to the Commercial Release of each Album (or other Record, as
applicable), Universal will consult with the Company on the quantity of each
such Record to be Manufactured, but Universal’s decision regarding same will
prevail.  Thereafter, the quantities of the Records, including Records intended
for Exploitation by Universal as promotional, will be determined by Universal,
in Universal’s sole discretion, based on Universal’s weekly meetings with
Universal’s sales and promotional personnel.

7.4

Universal will Exploit the Records at prices that are not more than, and on
terms and conditions that are not less favourable than, comparable Universal
records.  The Records may be Exploited by Universal pursuant to special sales
and/or merchandising plans, or the like, solely at the discretion of Universal.

7.5

During the Term, Universal will provide the following services to the Company,
in accordance with Universal’s standard policies and procedures then in effect:

(i)

customer solicitation, order fulfilment and delivery of the Records;

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(ii)

inclusion of the Records in Universal's price lists, catalogues, release sheets
and other print materials (based on facts and information supplied by the
Company);

(iii)

billing and debt collection with respect to the Records; and

(iv)

acceptance and processing of returns of the Records Exploited hereunder.

7.6

Universal will Exploit the Records subject to Universal's confidential general
terms and conditions of sale with Universal’s customers.

7.7

Except as otherwise set forth herein, Universal will be solely responsible for
all costs directly related to the Exploitation of the Records in accordance with
the terms hereof.

7.8

Universal will insure the quantity of the Records stored in the Warehouse and in
transit from the Warehouse to Universal’s customers and will be responsible for
all risk of loss with respect thereto until same are delivered to Universal’s
customers.

ARTICLE VIII
THE COMPANY’S REPRESENTATIONS AND WARRANTIES

8.1

The Company hereby represents and warrants as follows to Universal, and
acknowledges that Universal is relying on such representations and warranties
without independent inquiry in entering into this Agreement:

(a)

The Company is a corporation duly incorporated under the laws of its
jurisdiction of incorporation, is in good standing under such laws, and has the
full right, power and authority to enter into this Agreement, to grant the
rights granted by the Company hereunder, and to fully perform all of the terms
hereof.

(b)

The Company owns and controls, without any limitations, restrictions or
encumbrances whatsoever, and will continue to own and control for the duration
of the Term and throughout the Territory, all rights granted or purported to be
granted to Universal hereunder and the Company has obtained all necessary
licenses and permissions as may be required for the full and unlimited exercise
and enjoyment by Universal of all of the rights granted and purported to be
granted to Universal hereunder.  Universal will own, possess and enjoy such
rights without impairment by any Person.  The Company has no knowledge of any
claim or purported claim which would interfere with Universal’s rights hereunder
or create any liability on the part of Universal.  Without limiting the
generality of the foregoing, the Company has entered, or will enter, into an
exclusive written recording or license contract with each Artist, which contract
is, and will remain for the duration of the Term, valid and enforceable and
provides the Company with the rights granted by the Company to Universal with
respect to each Artist as herein provided.

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(c)

Universal will not be required to make any payments of any nature to any Person
for, or in connection with, the acquisition, exercise or exploitation of rights
by Universal hereunder, except as specifically provided in this Agreement.

(d)

As applicable, the Masters and the performances embodied thereon were or will be
produced in accordance with the rules and regulations of the American Federation
of Musicians, the American Federation of Television and Radio Artists and the
Association of Canadian Television and Radio Artists, and in accordance with the
rules and regulations of all other unions or guilds having jurisdiction over the
recording of the Masters.  Each Artist is, or will promptly become, and during
the Term will remain, a member in good standing of any applicable union or guild
to the extent that the Company or Universal may require such membership.

(e)

None of the following will violate or infringe upon the rights of any third
party: (i) the Masters; (ii) the performances embodied on the Masters; (iii) the
Names and Likenesses; (iv) the Marks of or relating to the Company, each Artist
or any other Person in connection with the Masters; or (v) any other musical,
dramatic, artistic, and literary materials, or other ideas or other intellectual
properties, furnished or selected by the Company, the applicable Artist or any
producer and which are contained in or used in connection with the Masters, or
the Manufacture, Exploitation or any Marketing thereof, by Universal or
Universal’s affiliates and/or licensees.

(f)

Except as otherwise permitted hereunder, during the Term the Company will not,
directly or indirectly, Exploit, or authorize any Person to Exploit, the Records
in the Territory in violation of the rights granted to Universal hereunder.
 Without limiting the generality of the foregoing, the Company will use best
efforts, both commercially and technically, to ensure that neither the Company,
nor any Person authorized by the Company, will Exploit the Records through
Electronic Transmission to consumers in the Territory.

(g)

The Company has not sold, assigned, transferred, pledged, conveyed or granted a
security interest in, or otherwise disposed of or encumbered, and, until the
later of (i) the end of the Term; or (ii) the date upon which the Company has
paid Universal all amounts owing to Universal, the Company will not sell,
assign, transfer, pledge, convey or grant a security interest in, or otherwise
dispose of or encumber, any of the Masters, the inventory of the Records in
Universal’s possession from time to time, the intellectual property rights with
respect thereto, or any amounts payable to the Company hereunder, except as
permitted hereby, or pursuant to Universal’s prior written approval.

(h)

The Company will not, and will cause the applicable Artists and any Person
deriving any rights from such Artists not to, do, or authorize any Person to do,
anything inconsistent with, or which might diminish or impair, any of
Universal's rights hereunder.

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ARTICLE IX
INDEMNITY

9.1

The Company agrees to indemnify and save harmless, and to cause each Artist to
indemnify and save harmless, Universal, and Universal’s affiliates and licensees
from and against any and all claims, losses, liabilities and expenses,
(including, without limitation, reasonable legal expenses and fees) which
Universal, or Universal’s affiliates and/or licensees may suffer or become
liable for as a result of, or in connection with, any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement.  The Company hereby agrees to reimburse Universal, on demand, for any
payments made by Universal at any time with respect to the foregoing, provided
that in respect of a claim, the claim has been settled or has been reduced to
the status of a non-appealable judgement of a court of competent jurisdiction.
 Pending the determination of any claim in respect of which Universal is
entitled to be indemnified, Universal will not withhold monies which would
otherwise be payable to the Company hereunder in an amount exceeding the
Company’s reasonably anticipated liability to Universal pursuant to this Section
9.1. Universal will not settle any claim that has not been reduced to the status
of a non-appealable judgment of a court of competent jurisdiction for an amount
exceeding $5,000 without first obtaining the Company’s written consent to the
settlement.  If the Company does not consent to any settlement proposed by
Universal for an amount exceeding $5,000, Universal will not enter into such
settlement provided that the Company makes arrangements satisfactory to
Universal in Universal’s sole discretion to assure Universal of reimbursement
for all damages, liabilities, costs and expenses (including, without limitation,
legal expenses and fees) which Universal or Universal’s affiliates and/or
licensees may incur as a result of that claim.  If the Company does not make
such satisfactory arrangements and continues to withhold its consent to any
settlement proposed by Universal, Universal may settle such claim in Universal’s
reasonable discretion and the Company will immediately pay the full amount of
such settled claim, including reasonable legal expenses and fees, to Universal
or Universal may, at Universal’s option, deduct the amount of same from monies
otherwise payable to the Company.  Universal will notify the Company of any
action commenced on such a claim.  The Company may participate in the defense of
any such claim through counsel of the Company’s selection at the Company’s own
expense, but Universal will have the right at all times, in Universal’s sole
discretion, to retain or resume control of the defense of such claim.

ARTICLE X
EVENTS OF DEFAULT; REMEDIES

10.1

Each of the following will constitute an event of default (“Event of Default”)
under this Agreement:

(a)

For any reason whatsoever: (i) the Company attempts to assign this Agreement
without Universal’s prior written consent, except as set out under Section 13.7
below; or (ii) the Company refuses, neglects, fails, breaches, is unable to, or
otherwise does not comply with, any

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11168.1

of the Company’s obligations, covenants, agreements, undertakings,
representations and warranties hereunder;

(b)

The Company: (i) commences a voluntary proceeding, including without limitation,
an assignment for the benefit of creditors, under any applicable bankruptcy,
insolvency, reorganization, arrangement, compromise, winding up or other similar
law now or hereafter in effect; (ii) consents to the entering of an order for
relief in an involuntary proceeding under such law; (iii) consents to the
appointment of or the taking possession of by a receiver,

receiver and manager, liquidator, assignee, custodian, trustee, or sequestrator
(or similar appointee) in respect of the Company or any substantial part of the
Company’s property; or (iv) takes any act in furtherance of any of the
foregoing.

(c)

A court having jurisdiction over the Company’s affairs or property: (i) enters a
decree or order for relief in respect of the Company or any of the Company’s
property under any applicable bankruptcy, insolvency, reorganization,
arrangement, compromise, winding up or other similar law nor or hereafter in
effect; (ii) appoints a receiver, receiver and manager, liquidator, assignee,
custodian, trustee, or sequestrator (or similar appointee) in respect of the
Company or of any substantial part of the Company’s property or if such
receiver, receiver and manager, liquidator, assignee, custodian, trustee, or
sequestrator (or similar appointee) is appointed by any Person; (iii) orders the
winding up or liquidation of the Company’s affairs, and such decree, order or
appointment is not stayed and remains in effect for a period of 15 consecutive
days;

(d)

The Company is an insolvent Person within the meaning of the Bankruptcy and
Insolvency Act (Canada) or the Company commits or threatens to commit an act of
bankruptcy.

10.2

The Company will notify Universal immediately upon the occurrence of an Event of
Default.

10.3

Upon the occurrence of an Event of Default, Universal will, at Universal’s
election by notice to the Company, have the following rights and remedies, such
rights and remedies to be exercised from time to time separately or in
combination, without prejudice to any other rights or remedies to which
Universal may be entitled under this Agreement or otherwise at law or in equity,
are in addition to, and not in substitution for, any other rights and remedies
of Universal, however created, and will survive the expiration or termination of
the Term:

(a)

To suspend the running of the Term and the payment of amounts due under this
Agreement for all or part of the duration of such Event of Default.  Unless
Universal notifies the Company otherwise, the Contract Period in which such
Event of Default commenced will be automatically extended by a number of days
equal to the total number of days of the suspension plus an additional 60 days
or such fewer number of days as Universal will advise the Company in writing.
 No suspension will suspend or otherwise impair in any manner Universal’s rights
or the Company’s obligations under this Agreement; and

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11168.1

(b)

To terminate this Agreement (whether or not the Company has commenced curing the
Event of Default before such termination), in which event Universal will have no
obligations or liabilities to the Company under this Agreement except
Universal’s obligation, if any, in respect of the Records Exploited prior to
such termination.  If Universal so terminates this Agreement, the Company will
pay Universal, on demand, any and all amounts due and owing to Universal by the
Company, or Universal may deduct such amounts due and owing to Universal from
amounts otherwise payable to the Company hereunder.

ARTICLE XI
ADDITIONAL REMEDIES

11.1

Universal reserves the right (without prejudice to any other right or remedy
which Universal may have under this Agreement or otherwise) to suspend the
operation of this Agreement and Universal’s obligations hereunder (except
Universal’s obligation to make payments to the Company if due and payable) if by
reason of fire, earthquake, strike, act of government or any order or action of
any labour union or association of performers, shortage of materials, failure of
technical facilities, failure or delay of transportation facilities or causes of
any other nature not reasonably within Universal’s control and affecting the
Company, any Artist, Universal, or the recording industry in general, Universal
is materially hampered in the Manufacture or Exploitation of the Records or
Universal’s normal business operations become commercially impracticable.  Any
suspension will commence upon Universal giving the Company notice, or if such
contingency renders Universal unable to give the Company notice, upon 30 days
after the commencement of such contingency.  Such suspension will last for the
duration of such contingency.  Universal may elect (without limitation of or
prejudice to any other rights or remedies which Universal may have under this
Agreement or otherwise) by giving written notice to the Company at any time
prior to the end of such suspension, to extend the Contract Period in which the
contingency occurs by the number of days equal to the total of all such days of
suspension, in which case, the dates for the exercise by Universal of
Universal’s options, the dates of commencement of subsequent Contract Periods
and the Term will be deemed extended accordingly.

ARTICLE XII
POST-EXPIRATION/TERMINATION/RETURNS AND INVENTORY

12.1

Upon the expiration or termination, for whatever reason, of the Term, the
Company will be solely responsible for any and all returns of the Records. The
Company will, within 150 days after expiration or termination, for whatever
reason, of the Term, reimburse Universal for Universal’s costs in crediting
Universal’s customers for returns of the Records.  In the event of non-payment
by the Company for any amounts owing in respect of such returns, Universal will
be entitled to deduct such amounts from amounts otherwise payable by Universal
to the Company hereunder.  The Company will honour Universal's return policy
with all of Universal's customers for a period of 120 days following expiration
or termination of the Term with respect to return authorizations issued by
Universal to its customers prior to expiration or termination of

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11168.1

the Term.  Universal agrees that it will not issue return authorizations to its
customers after expiration or termination of the Term.

12.2

Upon the expiration of the Term, all amounts owing to Universal by the Company
will become immediately due and payable.  The Company will reimburse Universal
the applicable amounts within 10 days of Universal's written demand therefor, or
Universal will deduct such amounts from monies otherwise payable to the Company.
 In the event that the Company does not so reimburse Universal within 10 days of
Universal's written demand, and in the event that there are insufficient monies
otherwise payable to the Company from which to deduct the applicable amounts,
the Term will be automatically extended and Universal may continue to
Manufacture and Exploit the Records pursuant to this Agreement until such time
as all amounts owing to Universal by the Company have been reimbursed.

12.3

Upon the expiration or termination, for whatever reason, of the Term, but
subject to payment of all outstanding debts to Universal by the Company
hereunder, the Company will have a period of 30 days following such expiration
or termination to order Universal either to destroy, at the Company’s sole cost
and expense, all inventory of the Records, and all parts, labels and other
materials with respect to the Records, then in Universal’s possession, or to
deliver to the Company, at the Company’s sole cost and expense, all of
Universal’s inventory of the Records then in Universal’s possession (and
subsequent returns).  If within 30 days after the date of such expiration or
termination the Company has not given Universal delivery instructions for such
inventory, Universal will have the right to destroy such inventory on the
Company’s behalf and at the Company’s sole cost and expense, or charge the
Company with the cost of storing such inventory at Universal’s Warehouse until
the Company accepts delivery of same.

ARTICLE XIII
MISCELLANEOUS

13.1

In entering into this Agreement, and in providing services pursuant hereto, the
Company has the status of an independent contractor.  Nothing herein contained
contemplates or constitutes any Artist as Universal’s employee, or the Company
or any Artist as Universal’s agent or partner.  Neither the Company nor any
Artist will, without the prior written consent of Universal, enter into any
contract or commitment in the name of or on behalf of Universal in any respect
whatsoever.

13.2

The Company agrees that the Company enters this Agreement voluntarily and
knowingly understands the terms and intent of this Agreement, has considered the
Company’s obligations fully, and has had an opportunity to seek independent
legal counsel in relation to the application and interpretation of this
Agreement.

13.3

Each of Universal and the Company will from time to time execute and deliver all
such further documents and instruments and do all acts and things as may
reasonably be required by the parties to effectively carry out the intent of
this Agreement.

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11168.1

13.4

This Agreement will inure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
parties hereto.

13.5

This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes any prior understandings and
agreements between the parties hereto with respect thereto.  There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements, express or implied, between the parties other than as expressly set
out in this Agreement.

13.6

No amendment of this Agreement will be valid or binding unless set out in
writing and duly executed by all of the parties hereto.  No waiver of any
provision of this Agreement will be effective or binding unless made in writing
and signed by the party purporting to give the same.

13.7

Universal will have the right to assign this Agreement and Universal’s rights
and obligations hereunder, at any time and from time to time, in whole or in
part.  The Company may not assign this Agreement or any of the Company’s rights
or obligations hereunder without the prior written consent of Universal.

13.8

If any provision of this Agreement is determined to be invalid or unenforceable
in whole or in part, such invalidity or unenforceability will attach only to
such provision or part thereof and the remaining part of such provision and all
other provisions hereof will continue in full force and effect.

13.9

All remedies, rights, undertakings, and obligations contained in this Agreement
will be cumulative and none of them will be in limitation of any other remedy,
right, undertaking, or obligation of either party.

13.10

Any demand, notice or other communication (“Communication”) to be given in
connection with this Agreement will be given in writing and may be given by
personal delivery, by facsimile transmission or by registered mail.  Any
Communication given to Universal must be sent to the address for Universal first
mentioned herein, to the attention of the Senior Vice President, Business
Affairs, or to such new address if changed as described below.  Any
Communication given to the Company must be sent to the Company at the address
first mentioned herein or to such new address if changed as described below.
 Each party may change its respective address hereunder by notice in writing to
the other.  Any Communication given by personal delivery or facsimile
transmission will be conclusively deemed to have been given on the day of actual
delivery thereof and, if given by registered mail, on the fifth business day
following the deposit thereof in the mail.

13.11

This Agreement will be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein.  For
the purposes of all legal proceedings, this Agreement will be deemed to have
been performed in the Province of Ontario and the courts of the Province of
Ontario will have jurisdiction to entertain any action arising hereunder.  The
Company and Universal each hereby attorns to the jurisdiction of the courts of
the Province of Ontario.

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11168.1

13.12

All references to “dollars” or “$” herein, unless otherwise specified, are
expressed in Canadian currency.

13.13

Any reference in this Agreement to gender includes all genders, and words
importing the singular number only, include the plural.

13.14

The schedules attached to this Agreement, for all purposes of this Agreement,
form an integral part of it.

13.15

The parties hereto shall not disclose to any third party (other than employees,
legal or financial counsel) any information with respect to the terms and
provisions of this Agreement or any financial information concerning this
Agreement.

ARTICLE XIV
DEFINITIONS

14.1

“affiliate” has the meaning given thereto in the Business Corporations Act
(Ontario).

14.2

“album” means a record (other than a Video) embodying thereon the equivalent of
not fewer than 10 Sides and not more than 16 Sides, having not less than 35
minutes playing time, and sold as a single unit; and “Album” means an album
derived entirely from Masters.

14.3

“Artist” means an artist whose performances are embodied on the Masters.

14.4

“Commercial Release” means the first release in the Territory of the Record
concerned for retail sale to consumers.

14.5

“Compilation Record” means a Record coupling one or more Masters hereunder with
masters embodying the performances of artists not subject to this Agreement.

14.6

“Composition” means a musical composition or work (including, without
limitation, a medley), irrespective of length, whether in the form of
instrumental and/or vocal music, prose, poetry or otherwise and whether
protected by copyright or in the public domain.

14.7

“Electronic Subscription” means the ability of a consumer to access masters on
demand through the internet in exchange for a fee pursuant to terms and
conditions set by Universal or Universal’s designee (such as for example the
ability to access a limited number of masters during a limited period of time
for a given pre-paid subscription fee).

14.8

“Electronic Transmission” means any distribution, transmission, communication,
or making available, whether sound alone, sound coupled with an image, or sound
coupled with data, in any form, now known or hereafter developed, and delivered
through any means now known or hereafter developed (including without
limitation, direct broadcast satellite, point-to-

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11168.1

multipoint satellite, multipoint distribution service, point-to-point
distribution service, cable system, telephone system, wireless service, and
broadcast station) from one location to a remote location and to a Person who
pays to receive the distribution, transmission or communication, in such a
manner that the distribution, transmission or communication when received at the
remote location is sufficiently permanent or stable to permit it to be
perceived, reproduced or otherwise communicated for a period of more than
transitory duration at such remote location, without regard to whether the sound
recording or audio-visual work embodied in the distribution, transmission or
communication is simultaneously performed in an audible fashion during such
transmission or communication.

14.9

“Exploit” means to distribute, communicate, transmit, sell and/or otherwise make
available; and “Exploitation” means the distribution, communication,
transmission, sale and/or otherwise making available; in each case, in and
through any medium and by any means whatsoever, whether now known or hereafter
developed.

14.10

“Gross Billing” means the gross amounts invoiced to Universal’s customers in
respect of the Records Exploited through Normal Retail Channels without regard
to any returns, discounts, or allowances, and excluding applicable taxes.

14.11

“Likeness” means the likeness and other identification of or relating to the
applicable Artist.

14.12

“Manufacture” means to manufacture, make, fabricate and reproduce in and through
any medium and by any means whatsoever, whether now known or hereafter
developed.

14.13

“Market” as a verb means to publicize, advertise, promote and market; and
“Marketing” means publicizing, advertising, promoting and marketing; in each
case in and through any medium and by any means whatsoever, whether now known or
hereafter developed.

14.14

“master” means any recording or reproduction by any method and by any means now
or hereafter known embodying sound alone or sound coupled with visual images;
and “Master” means each and every master owned or controlled, now or in the
future, in whole or in part, directly or indirectly by the Company.

14.15

“Mechanical License” means a license to Exploit, produce, and otherwise use
Records embodying the performance of a Composition.

14.16

“Name” means without limitation, all legal, professional, group, and other
assumed or fictitious names or sobriquets, whether presently or hereafter used,
and other identification of or relating to the applicable Artist.

14.17

“Net Billing” means Gross Billing less applicable discounts and credits to
customers for actual returns.

14.18

“Net Proceeds” means Gross Billing and Net Receipts less the following (as
applicable):

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11168.1

(i)

the Distribution Fee, calculated in accordance with Section 3.1;

(ii)

the Reserve calculated in accordance with ARTICLE IV;

(iii)

any and all charges for the Manufacturing of the Records and the containers
therefor, including, without limitation, in respect of those Records intended
for Exploitation as promotional copies;

(iv)

credits to Universal’s customers for actual returns, errors in billing and other
proper credits of any kind whatsoever during each billing quarter;

(v)

any and all applicable discounts and allowances;

(vi)

any and all applicable taxes and adjustments; and

(vii)

any and all amounts due and owing to Universal hereunder by the Company, if the
Company has failed to remedy any delinquent payment therefor.

14.19

“Net Receipts” means an amount equal to the gross royalties or gross flat fee
monies received by Universal in the Territory from a Person in connection with
the Exploitation of the Records or the Masters, less (i) any and all applicable
discounts and allowances and (ii) any and all applicable taxes and adjustments.

14.20

 “Normal Retail Channels” means normal retail distribution channels, including,
without limitation, the Exploitation of the Records through one-stops, rack
jobbers and directly to retail outlets which make records available for purchase
by the general public, but specifically excluding the Exploitation of the
Records through Electronic Transmission, Electronic Subscription and as Premium
Records.

14.21

“Person” means a natural person, partnership, corporation, joint stock company,
trust, unincorporated association, joint venture, or other entity.

14.22

“PPD” means Universal’s published price to dealers in the Territory, or the
published price of Universal’s affiliates and/or licensees to dealers in the
Territory for the Record concerned in the configuration concerned from time to
time during the accounting period in which the sale of such Record concerned
occurs.

14.23

“Premium Records” means a Record sold via non-traditional distribution channels
in the promotion or sale of goods other than pre-recorded music.

14.24

“record”, as a noun, means any form of reproduction, transmission or
communication, now or hereafter known, embodying sound alone or sound coupled
with visual images, other sensory data, or other information or material; and
“Record” means a record (including, without limitation, a Video) that is derived
from a Master.

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11168.1

14.25

“Recording Costs” means any and all costs and expenses, whatsoever or howsoever
arising, paid or incurred in connection with the making of the Masters
including, without limitation, all minimum union scale payments and other
payments made to any individuals rendering services in connection with the
recording of the Masters (including, without limitation, any advance, fee or
other charge to any producer), all other payments which are made pursuant to any
applicable law or regulation or the provisions of any collective bargaining
agreement between the Company and any union or guild (including, without
limitation, payroll taxes and payments to union pension and welfare funds), all
amounts paid or incurred for studio and hall rentals, vocal and choreography
training, and tape, engineering, editing, and instrument rentals and cartage,
all mixing, re-mixing, mastering, and re-mastering costs, and all costs of
travel and accommodations, immigration clearances, trademark and service mark
searches and clearances, and living expenses (including, without limitation,
so-called “per-diems” for any individuals rendering services in connection with
recording of the Masters) and any and all other costs or expenses commonly
recognized as recording costs in the music industry.

14.26

“Side” means a Master containing a continuous performance of a particular
arrangement or version of a Composition, not less than 3 minutes in playing
time.

14.27

“Surplus Product” means more than a six (6) month supply of Records in a
particular configuration.

14.28

“Synchronization License” means a license to Exploit, perform and Market a
Composition contained on a Master in synchronization or timed relation with
visual images.

14.29

“Term” means the First Contract Period together with each of the renewal
Contract Periods for which Universal will have exercised the options pursuant to
this Agreement.

14.30

“Territory” means Canada.

14.31

“Video” means a Record embodying sound coupled with visual images which is used
in connection with the promotion of Records, and/or for commercial Exploitation
according to the terms of this Agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first above mentioned.

 

 

UNIVERSAL MUSIC CANADA INC.

 

By:

/s/ Sarah Scott

 

 

Sarah Scott

Senior Vice President, Business Affairs

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11168.1

 

 

UOMO PRODUCTIONS INC.

 

By:

/s/ Jueane Thiessen

 

 

Jueane Thiessen

An Authorized Signatory

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11168.1

SCHEDULE “A”
MANUFACTURING COSTS

Record Format

Charge per Unit

Coverage

Compact Disc

$0.78

Standard compact disc with up to 3 colour label in a jewel box, shrink wrap,
machine insertion of booklet and tray card, machine application of 1 sticker,
additional charges apply if machine insertion of booklet or machine application
of 1 sticker is not possible.  Additional charges apply for all graphics and
security tagging.  Items in excess of the standard are available upon quotation.

DVD

(A)

$0.90

(B)

 $1.00

(C)

 $1.32

(A)

Standard single DVD-5 disc with a 4-colour label in a standard Amaray-type case
and machine application of 1 sticker.

(B)

Standard single DVD-9 disc with a 4-colour label in a standard Amaray-type case
and machine application of 1 sticker.

(C)

Standard single DVD-10 disc with a 4-colour label in a standard Amaray-type case
and machine application of 1 sticker.

Additional charges apply if machine insertion of booklet or machine application
of 1 sticker is not possible. Additional charges apply for all graphics and
security tagging.  Items in excess of the standard are available upon quotation.

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11168.1

TABLE OF CONTENTS

ARTICLE I TERM

1

ARTICLE II RIGHTS

2

ARTICLE III FEES; FUNDS; COSTS

4

ARTICLE IV RESERVES

6

ARTICLE V PAYMENTS AND ACCOUNTINGS

7

ARTICLE VI THE COMPANY’S OBLIGATIONS

8

ARTICLE VII UNIVERSAL’S OBLIGATIONS

10

ARTICLE VIII THE COMPANY’S REPRESENTATIONS AND WARRANTIES

11

ARTICLE IX INDEMNITY

13

ARTICLE X EVENTS OF DEFAULT; REMEDIES

14

ARTICLE XI ADDITIONAL REMEDIES

15

ARTICLE XII POST-EXPIRATION/TERMINATION/RETURNS AND INVENTORY

16

ARTICLE XIII MISCELLANEOUS

17

ARTICLE XIV DEFINITIONS

18

SCHEDULE “A” MANUFACTURING COSTS

24

SCHEDULE “B” FORM OF INDUCEMENT LETTER

25

TABLE OF CONTENTS

1