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RMF/25‐90/3

Table of Exhibits

PageRefercnce

Artist Contracts Assigred to the Joint Venture ...................... 3Assignment of Bustin's interest in Artist Contracts................ 3Artist Inducement Letter Re: Bustin's Assigrrment. .. ..... ..... ... 3M.C. Harnrner's Personal Services Contract ......................... 4Louis Burrell's Personal Services Contract.......................,.... 5Manufacturing Agreement between Joint Venture and CRI.... 6Distribution Agreement between Joint Venture and CRI......... 6Foreign License Agreement.... .........................7Forn for Appointment of Management Committee Member.... 9Artist Contract Form . ... ... .. .. . ..... 15

Security Agreement in favor of Capitol ...... ....... 2LSchedule of Commitments under Bustin' Artist Contracts .. . . . 25Master Recordings of the Bustin' Artists Assigrred...... .......... %

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RMF/2590/3

JOII{T VEI\I'IURE AGREEMENT

Joint Venture Agreement ("Agreement") is made as of the -dav of

California Corporation1990 by and between Capitol BJV, Inc., a("Capitol") on the one hand, and Bustin'

Productions, Inc., a corporation ("Bustin"'), Louis(the "Principals"), jointly andeach of the Principals shall beas "the Bustin' Parties".

Burrell and Kirk Burrell, as individualsseverally, on the other hand. Bustin' andreferred to hereinafter jointly and severally

RECITALS

A. Capitol's affiliates are actively engaged in the music businessthroughout the world.

B. Bustin' owns certain contracts with recording artists (the"Bustin' Artist Contracts") and the exclusive rights to manufacture anddistribute sound recordings of said artists (the "Bustin' Artists")throughout the world, including their musical compositions, and audio-visual recordings.

C. Bustin' also owns and controls the exclusive rights to theservices of Kirk Burrell, pka M.C. Hammer ("M.C. Hammer"), as aproducer of sound recordings.

D. M.C. Hammer presently is a recording artist under exclusivecontract to furnish Capitol Records, Inc. ("CRI") with recordings of his ownperformances, and he has developed a strong public following, a uniqueaward winning sound, and a successful management team.

E. The parties hereto desire to form a joint venture betweenCapitol and Bustin' for the purpose of utilizing the unique talents of M.C.Hammer and the organization of CRI to acquire and commercially exploitadditional music properties (described hereinaf;ber) in all media throughoutthe world for frnancial gain.

NOW, THEREFORE, in consideration of these premises, the partieshereby agree as follows:

1. Formation. Ownership and Name of the Joint Venture

Capitol and Bustin' do hereby form a joint venture (the "JointVenture") and voluntarily associate themselves to carry on the purpose ofthe Joint Venture under the name of "Bustit Records." Subject to the otherterms and conditions of this Agreement, Capitol and Bustin' each shallown fifty per cent (507o) of the Joint Venture. Any and all property andassets of the Joint Venture as well as all intangible rights, copyrights,trademarks, trade names, licenses, contracts, inventory, master record-ings, and Videos (as defined in Paragraph 13(f) below), and all rights

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RMF/2-5-90l3

therein and all forms of exploitation thereof, and all ancillarymerchandising and publishing rights, shall be owned by, and the title heldin the name of, the Joint Venture. The Joint Venture initially shallmaintain its principal office at California.

2. The Joint Venture Business Purpose

(a) Subject to the terms and conditions of this Agreement, thepurpose and business of the Joint Venture shall be (i) contracting for theexclusive services of recording artists (including the Bustin' Artists) tomake master sound recordings, and related audio-visual recordings; and(ii) exploiting rights to such recordings throughout the world, including,without linitation, by the sale of audio and video records derived therefromand by means of master use and copyright licensing. Each artistcontracting to make master recordings for the Joint Venture (including theBustin'Artists) shall be considered a "Joint Venture Artist" with respect tosuch recordings.

(t) The relationship between the parties shall be limited to theperformance of the Joint Venture purpose and business according to theterms of this Agreement. The Joint Venture shall have no power to conductany other business; and, each party covenants to the other that such partyshall not engage in any other activity in the name of the Joint Venture.None of the parties to this Agreement shall be deemed or construed to be apartner or joint venturer of the other except for the specific purposes of thisJoint Venture. Nothing in this Agreement shall be construed to create ageneral partnership between the parties, or to authorize any party to bid foror to undertake any contracts for the other party.

(c) Notwithstanding the foregoing purpose and business of theJoint Venture, it is agreed that Capitol (and its afFrliates) may engage inany activity, be retained by or affiliated with any person or entity, or possessany interest, in the music industry aside from this Joint Venture, whetheror not such activity, person or interest: (i) is considered to be in competitionwith the Joint Venture or (ii) may deprive the Joint Venture of any businessopportunity; and, neither this Joint Venture nor any of the Bustin' Partiesshall have or acquire any right, interest, or control in such activities, or toincome or profits derived therefrom.

3. The Term

(a) Initial Term. The term of this Agreement shall commenceupon-(the"EffectiveDate"),anditshallcontinueforan initial term of three (3) years from tlle Effective Date (the "Initial Term").The Joint Venture shall terminate automatically upon the end the InitialTerm unless it is extended pursuant to the terms of Paragraph 3(b) below orterminated earlier pursuant to the terms of this Agreement.

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RMF/2-5-90/3

(b) Option Period. Capitol shall have the option, in its solediscretion, to extend the term of this Agreement for a period of two (2)additional years (the 'Option Period") by giving Bustin' notice of suchextension within sixty (60) days prior to the end of the Initial Term. If theoption is exercised, the Joint Venture shall terminate automatically uponthe end the Option Period unless it is terrninated earlier pursuant to theterms of this Agreement.

4. Assiarment of the Bustin' Artist Contracts

(a) Concurrently with the execution of this Agreement, theBustin'Parties shall assigrr to the Joint Venture all their right, title andinterest in the Bustin' Artist Contracts attached hereto as Exhibits 1Athrough lE. The Bustin' Parties shall cause the Joint Venture to receivegood and sufficient title to, and complete ownership of, the Bustin' ArtistContracts, including any and all master recordings made at any timepursuant thereto, and shall execute an assignment in the form of Exhibit 2hereto. In addition, the Bustin' Parties shall deliver to Capitol an artistinducement letter fully executed by each Bustin' Artist agreeing to theassigrrment of its Bustin' Artist Contract to the Joint Venture, whichinducement letters shall be in the form of Exhibit 3 hereto.

(b) The following constitute the professional names of all Bustin'Artists whose contracts and master recordings are being assigrred to theJoint Venture pursuant to Paragraph 4(a) above at the commencement ofthe Agreement: (i) Special Generation, (ii) Parole (iii) Ho Frat Ho (iv) TooBig MC, and (v) Angela Boyd Early pka B. Angie B. During the term of theJoint Venture, Bustin' shall not negotiate with or sign talent for recordexploitation by anyone other than the Joint Venture or Capitol, subject onlyto the provisions in Paragraph 11(e) hereof with respect to Dropped Artists.

(c) Subject to the full and complete performance by the Bustin'Parties of this Agreement and the truth and accuracy of therepresentations and warranties of the Bustin' Parties contained herein, theJoint Venture shall assume and agree to perform and discharge, whendue, all obligations and liabilities of Bustin' under the Bustin' ArtistContracts, but only to the extent that they arise after the Effective Date ofthis Agreement with respect to matters occurring after said Effective Date.

(d) At its own cost and expense, Bustin' shall perform andsatisfy all duties, obligations and liabilities under the Bustin' Contractswhich arose before the Effective Date (the "Pre-existing Obligations"), suchas for services rendered prior to the Effective Date or for any performance ofthe Bustin' Parties required to be performed prior to the Effective Date.Neither Capitol nor the Joint Venture is assuming hereby any of the Pre-existing Obligations of the Bustin' Parties nor their federal, state, local orforeign taxes of any kind or nature. The Bustin' Parties shall defend,indemnify and hold the Joint Venture, Capitol and Capitol's affrliates

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RMF/2-5_90n

ha_rmless - from and against the Pre-existing Obligations and any tax

liability of the Bustin' Parties.

5. Roster Limitations. Unless Capitol agrees to increase the limit,the Joint Venture shall sign only the frve Bustin' Artists listed inParagraph 4(b) above (the "Roster"). However, Bustin'shall be allowed toadd one Artist to the Joint Venture Roster, for each Joint Venture Artistthat (i) achieves net U.S. sales in excess of 500,000 "Full Price Units" for along playrlg album ("LP") released by the Joint Venture, or (ii) is droppedfrom the Joint Venture Roster. For this purpose, a "Full Priced Unitt ii arecord sold in the U.S. through Capitol's normal retail channels,excluding, for example, any records sold: (i) through record clubdistribution plans, (ii) for export outside the U.S., (iii) at budget line or mid-line prices, (iv) as premium records, (v) or to the military. Each LP shallcontain at least eight (8) master recordings of normal length, with at least30 minutes cumulative playing time. An artist shall be deemed to have beendropped from the Roster if Capitol notifies Bustin', in writing, that it willnot exercise its option to extend the term of said artist's contract, or if theManagement Committee (as defined in Paragraph 10 below) determines todrop an Artist from the Roster ("Dropped Artist"). The following acts arecurrently signed to CRI and are excluded from being added to the Roster:M.C. Hammer, Ace Juice, and Oaktown's 3*5*7. Each artist signed by theJoint Venture shall be required to enter into an exclusive contract with theJoint Venture as described in Paragraph 13(b) hereof.

6. Exclusive Producer Services of M.C. Hammer

(a) Except as otherwise provided herein, the Bustin' Partiesshall cause the Joint Venture to be furnished with the exclusive producerand A&R services of M.C. Hammer on a full time basis, to the best of hisability and skill, during the entire term of the Joint Venture and anyextension thereof. Accordingly, M.C. Hammer shall not furnish sucjnservices to any other person or entity during the term of this Joint Venture;and he shall be regarded as a key man ("Key Man") under this Agreement.As a material condition precedent to the commencemenf of thisAgreement, M.C. Hammer shall execute the inducement letter and apersonal seryices contract in the form set forth in Exhibit 4 hereto.

(b) Pursuant thereto, the Bustin' Parties shall cause M.C.Hammer personally to produce, to the best of his ability and skill, everymaster recording on the first album released by each Joint Venture Artisl,and not less than one-half (1/2) of the master recordings on the second andeach. subsequent a,lhum of each Joint Venture Artisl. Additionally, theBustin'Parties shall cause him to perform as the "Executive producer,'forthe balance of each such album. In his capacity as Executive producer, M.C. Hammer shall oversee the production of the masters and furnish suchother assistance and advice as is customarily furnished by an executiveproducer. The Joint Venture shall have the right to use M. C. Hammer'sname and likeness on the album artwork or credits, and in any

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RMF/2-5-9013

promotional material concerning the album, or it may refrain from doingso, in its sole discretion.

(c) For each year of the term of this Agreement, not less than sixthousand dollars ($6,000) per annum shall be paid to M.C. Hammer out ofthe Profrt Advances set forth in Paragraph 8 below. It is furtheracknowledged and agreed that M.C. Hanmer's promised services underthis Agreement are special, unique, unusual, extraordinary and of anartistic and intellectual character which has a special value the loss ofwhich cannot be reasonably or adequately compensated in damages in anaction at law. Except for his share of the proceeds of this Agreement, whichit is acknowledged exceeds six thousand dollars ($6,000) per annum foreach year of the term, M.C. Hammer shall not be entitled to receive anycompensation whatsoever from Capitol or the Joint Venture for any of M.C.Hammer's services furnished pursuant to this Agreement. For example,and without limitation, M.C. Hammer shall not be entitled to draw anysalary or other payment from the Joint Venture, and he shall not be entitledto receive any producer royalty or fee from the Joint Venture or any JointVenture Artist.

(d) Notwithstanding the foregoing commitments, M.C. Hammershall devote sulficient time and energy to fulfill all his obligations under hisartist recording contract with CRI; and, nothing herein shall be construedor deemed to reduce, modify or change any of the requirements under thatcontract, including the schedules set forth therein for the delivery of masterrecordings.

7. Full Time Services of Louis Burrell. The Bustin' Parties shallcause the Joint Venture to be furnished with the exclusive services of LouisBurrell on a full time basis, to the best of his ability and skill, during theentire term of the Joint Venture and any extension thereof. Accordingly,Louis Burrell shall not furnish such services to any other person or entityduring the term of this Joint Venture, and shall be regarded as a Key Manunder this Agreement. As a material condition precedent to thecommencement of this Agreement, Louis Burrell shall execute theinducement letter and a personal services contract in the form set forth inExhibit 5 hereto. For each year of the term of this Agreement, not less thansix thousand dollars ($6,000) per annum shall be paid to Louis Burrell out ofthe Profit Advances set forth in Paragraph 8 below. It is furtheracknowledged and agreed that Louis Burrell's promised services underthis Agreement are special, unique, unusual, extraordinary and of anartistic and intellectual character which has a special value the loss ofwhich cannot be reasonably or adequately compensated in damages in anaction at law. Except for his share of the proceeds of this Agreement, whichit is acknowledged exceeds six thousand dollars ($6,000) per annum foreach year of the term, Louis Burrell shall not be entitled to receive anycompensation whatsoever from Capitol or the Joint Venture for any of hisservices furnished pursuant to this Agreement.

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RMFt2-s-9OB

8. Non-Returnable Advances

(a) Provided that the Bustin' Parties are not then in default inthe performance of any of their obligations under this Agreement, Capitolshall pay to Bustin' the sum of One Million Dollars (91,0b0,000.00) wi-thinten (10) working days after the Effective Date. In addition, if Capitolexercises its option to extend the term of this Joint Venture as allowed inParagraph 36), and provided the Bustin'Parties are not then in default inthe performance of any of their obligations under this Agreement, Capitolshall pay to Bustin' the sum of Two Million Dollars (92,000,000.00) withinten (10) working days after the commencement of the renewal term.

(b) Each of the payments set forth in Paragraph 8(a) above shallbe treated as non-returnable advances of Bustin's share of Profrts (the"Profit Advances") in consideration for the promises, representations, andwarranties of the Bustin' Parties contained in this Agreement, and inparticular (i) for assignment to the Joint Venture of the Bustin' ArtistContracts and (ii) for the full time services (as described herein) of the KeyMen throughout the term of this Agreement, each of which comrritmentsare unique, non-substitutable, and indispensable to the Joint Venture'spurpose. Notwithstanding anything to the contrary herein, each of thepayments set forth in Paragraph 8(a) above are subject to, and conditionedupon all the other terms and conditions of this Agreement, and the fullperformance of the Bustin' Parties hereunder, including without limitationCapitol's right of recoupment as set forth in Paragraph 18(d) below.

9. Manufacture and Distribution of Joint Venture Recordinss

(a) Within the United States. The Joint Venture will exploit itsrecorded music repertoire in the United States by way of the"Manufacturing Agreement" and "Distribution Agreement" attachedhereto as Exhibits 6 and 7. Capitol and Bustin' shall execute saidagreements concurrently herewith. The payment of manufacturing anddistribution charges and fees, set forth in Paragraph 14 hereof and theManufacturing and Distribution Agreements, shall be obligations of theJoint Venture, and shall be deducted from the distribution income payableto the Joint Venture. The Bustin'Parties acknowledge that manufacturingand distribution will be furnished to the Joint Venture on a non-exclusivebasis, similar to the manner in which such services are furnished directlyto CRI for its own artists. All day to day adrninistration of the distributioncontracts shall be handled by Capitol on behalf of the Joint Venture,including all financial, marketing, sales, manufacturing, merchandisingand promotional liaison issues. The administrative duties under saidcontracts shall be subject to change from time to time in accordance withCRI's requirements, and as Capitol deems necessary or appropriate in theinterest of the Joint Venture. CRI shall not be required to perform anythingmore onerous for the Joint Venture than it performs for comparable artistson the Capitol label of CRI, nor to treat the Joint Venture as a clientseparate from the Capitol label ofCRI. Capitol shall not be liable to the Joint

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RMF2-5-90/3

Venture or the Bustin' Parties for the failure to achieve any particular levelof sales or shipments, nor for any inaccuracies or other defects in theaccountings received by Capitol.

(b) Outside the United States. The Joint Venture will exploit itsrecorded music repertoire throughout the world, excluding the UnitedStates, by way of an exclusive license in the form attached as Exhibit 8hereto ("Foreign License Agreement"). Capitol and Bustin' shall executesaid license concurrently herewith. The terms and conditions of theForeign License Agreement shall be on substantially the same terms asapply to the CRI reciprocal licensing agreement with its EMI MusicWorldwide affiliates as the same may be revised or amended from time totime. Such terms shall include, without limitation, the following: (i) Noadvances; (ii) a net royalty of 2LGVo li.e., a 24Vo all-in rate, less 2.4Vo inconsideration of the services of EMI Music Worldwide's InternationalM-arketing Divisionl on l1OVo of the net sales, computed on the respectiveaffrliates dealer price with no packaging allowance; (iii) reduced rateroyalties will apply to midline and budget exploitation, consistent with thepolicies of EMI Music Worldwide then in effect; and, (iv) a term expiring noearlier than six (6) months following the termination of the Joint Venture.Neither Capitol nor its affiliates shall be liable to the Joint Venture or theBustin' Parties for any failure to achieve any particular level of sales orshipments, nor for any inaccuracies or other defects in the foreignaccountings received by Capitol. The Bustin'Parties acknovrledge that thelicense does not require the foreign associates to distribute any particularrecording; and, that such foreign distribution will be furnished tt the JointVenture on a non-exclusive basis. All contacts with Capitol's foreignassociates for the administration of the Joint Venture license shall behandled by Capitol on behalf of the Joint Venture, including all financial,marketing, sales, manufacturing, merchandising and promotional liaisonissues.

(c) The Joint Venture may grant such additional master use,cgpyright and other licenses of master recordings owned by the JointVenture as shall not be inconsistent with the exclusive rights providedhereinabove in Paragraphs 9(a) and 9(b).

10. The Manasement Committee

(a) Responsibilities. The Joint Venture shall be managed by acommittee (the "Management Committee") which shall be responsible forall matters relating to the management and control of the Joint Ventureand its business.The Bustin'Parties and Capitol shall report monthly to theManagement Committee in such detail and in such manner as anymember of the Management Committee reasonably may require. Th'eManagenent Committee shall have the power and the duty to review, andapprove or disapprove, all frnancial comrnitments of the Joint Venture inexcess of _ dollars, including any decision by the Joint Venture toborrow or loan funds. Capitol and the Bustin' Parties shall submit all

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p-roposed contracts to the Management Committee for approval prior totheir execution on behalf of the Joint Venture, including ali artistcontracts, -producer contracts, Joint Venture licenses or other grants ofrights to third parties by the Joint Venture, emplo5rment contracti, leaees,borrowings, agreements settling any dispute or litigation and similaritems. The Management Committee shall establish bne or more bankaccounts in the name of the Joint Venture to receive Joint Venture incomeald t9 p.ay Joint Venture expenses and liabilities pursuant to the provisionsof this Agreement. Any disbursement from a Joint Venture bani< accountin excess of

-, shall require the sigrrature of Capitol and Bustin' except

Capitol shall have the right to control disbursement of funds it advancespursuant to Paragraph 12(a) through 12(g) hereof in such manner as itmay determine to verify that such monies are used for the authorizedplrrpo-ses hereunder. The Management Committee shall appoint personswho shall be empowered to execute contracts on behalf of thj joint Venture,and only such persons shall sign contracts in the name of the JointVenture. No contract shall be executed and no Joint Venture funds shall bedisbursed in violation of the decisions of the Management Committee.

(b) Meetings. Meetings of the Management Committee shall beheld quarterly at a time and place mutually agreed by the members of thecommittee, and at such other times and places as the parties mutuallyshall d-etermine. A quorum for the transaction of businesi at any meetingof the Management Committee shall be not less than two (2) members of thbCommittee present in person or by proxy, one (1) of whom shall be arepresentative of Capitol and one (1) of Bustin'. If any member of theManagement Committee, is unable to attend any meeting of theManage-ment Committee, then the party hereto which he represJnts shallbe entitled to appoint another individual to attend such meeting in his placeor the absent committee member may appoint a proxy to vote on suchmember's behalf. If the other members in attendance consent, a membermay be represented at a meeting by telephone, and in that case shall beconsidered to be in attendance at that meeting. All decisions of theManagement Committee at such meetings shall require the unanimousvote of the Members present and shall be final and binding upon Bustin'and Capitol respectively. The Management Committee shall maintainminutes of its formal meetings which, when approved by the ManagementCommittee, shall constitute an o{ficial record olits decisions.

(c) Emplqf'ees. lxcept as specifically provided in this Agreement,the number of employees, the selection of employees, the hours of labor, andcompensation to employees shall be determined by the ManagementCommittee. Or-rJv emnlovees selected or approved Uy ttre ManagementCommittee shall be the employees of the Joint Ventur-e. Except for thosepart^icular matters specifically reserved to the Bustin' Parties oi Capitol asset forth in this Agreement, the day-to-day operation of the Joint Ventureshall be the responsibility of the ManagemlnC Committee, and it shall havethe power to delegate any of its responsibilities to the Bustin' parties orCapitol, and to hire third persons to perform such activities, as it

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determines to be necessary or appropriate. Notwithstanding the foregoing,nothing herein shall be construed to give Bustin' or the Joint Venture anycontrol over the persons or entities Capitol or CRI engage to fulfrll theirresponsibilities hereunder

(d) Appointment of Members. The Management Committee shallconsist of

- individuals duly appointed by Capitol and _ individuals

duly appointed by Bustin'. Concurrently with the execution of thisAgreement, each party to the Joint Venture .shall furnish the other with awritten statement in the form attached hereto as Exhibit 9, signed by anauthorized officer of said party, setting forth the names of the individualspresently appointed to the Management Committee for that party. At anytime, by notice in writing to the other, sigrred by an authorized officer forsuch party, either party may remove any individual it appointed to theManagement Committee, and may replace the person so removed.

11. Resoonsibilities Reserved and Delesated to Canitol

The following responsibilities and duties are reserved and entrustedsolely to Capitol. Capitol shall perform all of these responsibilities, on behalfof the Joint Venture, for the fees set forth in Paragraph 14 below. Capitolmay delegate all or any part of the performance of any of its duties in thisParagraph 11(a) to 11(g) to CRI.

(a) Joint Venture Books and Records. Capitol shall maintainproper books of account and financial records of the Joint Venture. TheJoint Venture shall adopt a fiscal year starting and ending

(the "Fiscal Year"). Within a reasonable time following the endof each Fiscal Year of the term hereof, Capitol shall furnish Bustin' withan accounting of the affairs of the Joint Venture, including all Profits andLosses thereof, prepared in accordance with generally accepted accountingprinciples ("GAAP") and the provisions of this Agreement. Such books ofaccount and financial records of the Joint Venture shall be made availableto Bustin' to inspect, examine and copy at reasonable times and uponreasonable advance notice; and, Bustin' shall make any objections to theaccountings and perforrn any audits of said books as set forth in Paragraph31 hereto. Bustin' shall furnish Capitol with all documentation and otherinformation in its possession or control to enable Capitol to perform theduties set forth in this Paragraph 11(a). Capitol shall not be liable for anyerrors or omissions in the books and records, and Capitol may revise suchbooks and records from time to time to correct errors or make otherchanges deemed necessary or appropriate, without any liability arising outof such changes.

(b) Joint Venture Royalty Accountins. Capitol shall prepare andmail royalty statements to the Joint Venture Artists on a semi-annual basisin accordance with the Joint Venture Artists Contracts, and it shallfurnish Bustin' with a copy of each such statement. In addition, Capitol

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shall prepare and n■ all publisher statements quarterly in accOrdance mththe applicable mecha」 cal licenses.

(c)U.S.and Foreixl.Dist五 bution Accoundngs. Within sixty(60)days following the end of each mOnth ofthe te.Ш ofthis Agreement,Capitolshall submit a monthly statements to Bustin' shoЧ ttng all」 oint Ventureincome received and amOunts deducted there6Ю m (or otherwise charged tothe」oint Venture)during that month for se_ces furlllshed by Capitol andits attliates.In addidon,Capit01 shall make available to Bustin'copies ofreports it receives shoЧang shipments tO customers,returns and flnishedgoods inventottes of」oint Venture recordings.

(d)Inventorv Management. Capitol shall be responsible forinventory management and Obsolescence of 」oint Venture records,including any w五 te‐ off on」Oint Venture books fOr Obsolescence.Pursuantthereto,it shall dete面 ne the quanuty of records tO be manufactured in allconAgurations, and it shall decide when particular recOrdings may bedeleted from the current catalog, and s01d as OverstOck, cut― Outs, orothermse disposed of by scrapping Or silnilar means.The Bustin'Partiesacknowledge that the opumal quantities of records tO manufacture arediFlcult or impOssible to determine,and that neither Capitol nOr CRI shallbe liable to the」 oint Venture or the Bustin'Pardes,under any condition,for any oversupply or undersupply of records Or component parts,or w五 te―

。rs there。 l resulting from Capit01's exercise Of its responsibilides set forthin this Paragraph.

(e)Artist Ootions capitol,in its sOle discretiOn,shall decidewlich artist options are to be exercised by the」 oint Venture,and whichshall not be exercised.Upon request from Busun',the」 oint Venture shallassign to Bustin'(or its nominee)all its五 ghts and duties in the executorypo」tion ofthe contract of any Dropped Artist,pro宙ded Bustin'delivers a fullrelease of Capitol and the 」。int Venture from all executOry obligationsunder such Dropped Artist's cOntract,in a fo...ム SatiSfactory to Capitol andexecuted by Bustin'and the Dropped Artist. Such assignment shall be宙 thout warranty of any kind Or nature.In the event Of such assignment,Bustin'(and its nominee,if any)shall assume and be responsible for anmanufactu五 ng, distribution (including accepting all returns Of thatArtist's recordings), and a1l other duties with respect to such artist'srecordings released thereafter;and,Bustin'shall defend,indemnify andhold Capitol and the」oint Venture harmless frOm and against an cost,expense, liability and claims a■ sing Out Of the assignment and thecontinuation of the assigned ardst contract.

(O Business Attirs and Legal Services.In consideration of theAdnlinistrative Fee discussed below in Paragraph 14(c), Capitol shallfurnish the 」Oint Venture, on a non‐ exclusive basis, with in‐houseBusiness Arairs and Legal services tO draft」 oint Venture Artist contractsand amendments thereto,to exerdse artist options,to obtain mechanicallicenses on」oint Venture masters which Bustin'shall cause tO issue from

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the proper parties, to handle any artist audits (but any settlement or liabilityarising therefrom shall be an expense paid by and liability of the JointVenture), and for other routine Business Affairs and Legal functionswhich Capitol determines should be handled in-house. It is the intention ofthe parties that these activities will be handled by CRI employees with itsexisting staff; and, nothing herein shall be construed to require Capitol orCRI to hire additional staff for these functions. These services shall befurnished on a schedule determined by Capitol, and shall be subject to theavailability of personnel. In the event litigation is threatened or commencedagainst the Joint Venture, or if legal, tax or accounting expertise isrequired for the Joint Venture, Capitol may engage such law firms,accountants, tax advisors and other persons as it determines to benecessary or appropriate in the interests of the Joint Venture, and the costof doing so shall be an authorized expense of the Joint Venture. All moniesadvanced pursuant to this Paragraph shall be deemed to be Variable Costsas defined hereinafter in Paragraph 12(d). Capitol may recover all suchexpenses by deduction from Joint Venture income. Any liability orsettlement costs arising out of any claims, suits dr threatened suits againstthe Joint Venture shall be borne as set forth in Paragraph 2g hereof.Neither Capitol or CRI, nor any employee of either, shall be liable to theJoint Venture or the Bustin' Parties, on any theory, for any inadvertent oradministrative error, nor for consequential damages or loss resulting fromits performance or failure to perform Business Affairs, Legal orAccounting services.

(g) Co-oo Advertisine and Incentive Programs. CRI branch salesoffices shall distribute the Basic Co-op Advertising Fund (as set forth inParagraph 12(e) below) to customers in the branches' sole discretion, foradvertising of Joint Venture records. All such advertising costs shall be anexpense of the Joint Venture and deducted from income. In addition, whenauthorize4 by the Management Committee, CRI may utilize additionalarrounts from Joint Venture net sales revenue for use in co-op advertising,product discounts, free goods, dating and other sales incentive programs.

12. Joint Venture Fundins bv Canitol

Subject to and contingent upon the full, complete and timelyperformance by the Bustin' Parties of all their duties and obligations underthis Agreement, Capitol shall advance the following money as workingcapital of the Joint Venture to be used solely for the purposes specifiedherein. Such money shall not be used for, or applied to, any other purpose.All monies advanced by Capitol (except Profit Advances), including anymonies different from or in excess of the sums provided in this Paragraph,shall be deemed to be loans to the Joint Venture ("Loan Capital"), and shaUbe recoupable by deduction from income of the Joint Venture, as more fullyset forth in Paragraph 17(b) below, and the unrecouped portion (if any) shallbe repayable at the termination of this Agreement out of Joint Ventureassets, as more fully set forth in Paragraph 21 below.

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(a) Overhead Allowances. Capitol shall advance up to, but notmore than, the following maximum yearly sums (shown under "MaximumAmount" in the chart below) which may be expended by Bustin' for itsgeneral overhead purposes as more specifically set forth in Paragraph 13(a)through 13(j) hereof (the "Overhead Allowances"). The sums shown foryears 4 and 5 shall apply only in the event Capitol elects to extend the termof this Joint Venture as provided in Paragraph 3(b) above. Any generaloverhead expenditure by the Bustin' Parties in excess of the followingamounts shall be the sole responsibility of the Bustin' Parties, and theypromptly shall pay such expenses when due.

Year MqvimumAmount1 400,0002 450,0m3 Prior year allowance,

plus a 67o cost of livine increase4 Prior year allowance,

plus a 67o cost of livine increase5 Prior year allowance,

plus a 6Vo cost of livine increase

(b) Marketins Fund. Capitol shall advance up to, but not morethan, the following maximum aggtegate sums for marketing andpromotion of each Joint Venture album or single as described in Paragraph13(c) hereof, but strictly allocated for use as shown under "AuthorizedPurpose' in the chart below (the "Marketing Fund'). Such Marketing Fundshall not be used to pay salaries of in-house promotion staff or for generaloverhead expenses, as those items are to be covered out of availableOverhead Allowances.

(c) Recordine Funds. Capitol shall advance up to, but not morethan, the following agg"egate amounts per Joint Venture Artist to be usedfor actual recording costs, artist advances and producer advances, (the"Recording Funds"). The Recording Funds shall not be used, directly orindirectly, to compensate any of the Bustin' Parties, or any person or entityrelated to the Bustin'Parties, such as, for example, any person or entityaffrliated with any of the Bustin' Parties by common ownership or control,the Principals, their family members, the corporate parents or subsidiary

l3t415r6l'71819202t2223

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items to promote any Joint Venture album and

cross-over purposes as

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companies of Bustin', etc. The Recording Fund for the first LP (and anysingles released therefrom) of each Joint Venture Artist shall be the sum ofone hundred thousand dollars ($100,000). The amount of the RecordingFund for each successive album thereafter shall be equal to two-thirds(2/3rds) of the net royalties accrued on the sale of Full Priced Units of theartist's preceding studio album, computed using the chart below and theformula set forth in Paragraph 3d. of the Artist Contract Form attachedhereto as Exhibit 10. Notwithstanding the foregoing formula, the amount ofRecording Fund for any Joint Venture album shall not be less than theFloor, nor more than the Ceiling shown in the chart below:

(d) Variable Costs. Subject to the terms of the Manufacturingand Distribution Agreements attached hereto as Exhibits 6 and 7, Capitolshall arrange for CRI to advance costs of manufacturing and distribution ofJoint Venture recordings. In addition, Capitol shall advance monies for thepayment of artist royalties, producer royalties, mechanical license fees,AFM Recording and Pension Fund Payments and similar royalties andfees required to be paid on the net sales of Joint Venture recordings("Variable Costs").

(e) Co-op Advertisins Fund. Capitol shall arrange for CRI toadvance up to, but not more than, one and one-half per cent (1.57o) of JointVenture net sales revenue for co-op advertising (the "Basic Co-opAdvertising Fund") and such additional monies as may be authorized bythe Management Committee for co-op advertising,. discounts, free goods,dating and other sales incentive programs. Any costs of co-op advertising,discounts and other sales incentive programs are expenses of the JointVenture, which shall be deducted from monthly distribution income.

(f) Video Fund. Subject to Paragraph 13(f) hereof, Capitol shalladvance up to, but not more than, fifty thousand dollars ($50,000) to makethe First Video for each Joint Venture album; and, up to, but not morethan, fifty thousand dollars ($50,000) to make the Second Video for eachJoint Venture album (the "Video Fund").

(g) Artwork Fund. Capitol shall advance up to, but not morethan, seven thousand five hundred dollars ($7,500) for artwork design costfor each Joint Venture album (the "Artwork Fund").

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13. Responsibilities Reserved and Delesated to Bustin'

The following responsibilities and duties are reserved and entrustedsolely to the Bustin' Parties. The Bustin' Parties shall perform all of theseresponsibilities, on behalf of the Joint Venture, with respect to each JointVenture Artist and each Joint Venture recording. The Bustin' Partieshereby promise Capitol that they shall be carried out diligently, in goodfaith, in a lawful manner, within the authorized financial limits set forthin this Agreement and with the best efforts, energy and skill that theBustin' Parties possess. The full and complete performance of theseresponsibilities by the Bustin' Parties, within the authorized financiallimits set forth in this Agreement, and in a timely, effrcient, andbusinesslike manner, is a condition precedent to the formation andcontinuation of this Joint Venture Agreement.

(a) A&R Activities. The Bustin' Parties shall perform allcustomary artist and repertoire activities for the Joint Venture, including,without limitation, locating new recording artists and establishedrecording artists available to be signed by the Joint Venture; selectingwhich artists should be signed by the Joint Venture within the RosterLimitations described in Paragraph 5 hereof; negotiating with the selectedartists the principal terms of a proposed contractual engagement by theJoint Venture, including all the standard terms set forth in Paragraph13(b) below; selecting or otherwise obtaining the compositions and othermaterial for recordings by the artist and causing the requisite mechanicallicenses to be issued to the Joint Venture; developing or otherwise obtaininga complete recording budget for Management Committee approval, inadvance of the start of any recording project; limiting and controlling allfinancial commitments and expenditures to those authorized by theManagement Committee and this Agreement; causing M.C. Hammer toproduce each master as set forth in Paragraph 6 hereinabove; assisting theartist in all customary ways to produce high quality, commercial masterrecordings using the Recording Funds provided in Paragraph 12(c) hereof;insuring that the approved budget for each album is not exceeded withoutprior approval of the Management Committee; obtaining delivery of masterrecordings to the Joint Venture, free and clear of all claims, together withall customary documentation, information for mechanical licenses,credits, legal releases, artwork and licenses, all in a form approved byCapitol for compilation into records and manufacturing copies of saidrecordings; and perforrning all other aspects of A&R administration for theJoint Venture recordings.

(b) Standard Contract Provisions. The Bustin'Parties representand warrant that the assigned contracts of the Bustin' Artists referred to inParagraph 4 below, and each artist contract it negotiates pursuant toParagraph 13(a) above, shall contain standard provisions, normal in theindustry for artists of the stature signed by Bustin', and that each suchcontract shall include at least the following terms and conditions: (i) therights granted shall be exercisable by the Joint Venture on a worldwide

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basis; (ii) each artist shall be bound to furnish his recording servicesexclusively to the Joint Venture; (iii) the Joint Venture shall own allmaster recordings, free and clear of any claims; (iv) each contract shallrequire delivery to the Joint Venture of, at least, six (6) overcall albums inaddition to one album due during the initial term of the recordingagreement; (v) the contractual royalty rates payable by the Joint Ventureshall not exceed the basic "l,2Vo "all-in' royalty rate, computed, reduced,paid, and not paid, all on the quantity basis and by category, in accordancewith CRI's form artist agreement attached as Exhibit 10 hereto ("ArtistContract Form"); and, (vi) at least fifty per cent (50Vo) of video costsadvanced pursuant to Paragraph 12(f) shall be recoupable from royaltiespayable to artists and producers. Any improvements on these terms thatBustin' negotiates shall inure to the benefit of the Joint Venture. All artistscontracts shall be in the form of the Artist Contract Form, and shall becomebinding on the Joint Venture only after the terms of such contract areapproved and the contract is fully executed by an authorized signer of theJoint Venture pursuant to the terms of this Agreement.

(c) Marketing and Promotion. Bustin' shall oversee andsupervise, all marketing and promotion personal and activities for the JointVenture (but not including those responsibilities specifrcally delegated toCRI pursuant to the distribution and foreigrr associate agreements referredto in Paragraph t hereinabove, or those responsibilities reserved to Capitolin Paragraph 11 hereinabove, each of which Capitol shall oversee andsupervise), including, without limitation, arranging to obtain as muchradio airplay, press coverage and other media coverage of Joint VentureArtists and their recordings as is possible using authorized methods andexpenditures hereunder. It shall be Bustin's responsibility to work with theJoint Venture Artists to obtain Artist photos, biographical information,personal appearances and other information for press releases, and todevelop and shape their public image for the promotion of their records. Forthis purpose, Bustin' may negotiate reasonable rates and obtain customarypromotional work from independent promoters or other outside parties.Authorized expenses incurred by Bustin' for such marketing andpromotion activities, up to the limit set forth in Paragraph 12(b), shall bedeemed to be Joint Venture expenses chargeable to the Marketing Fund.Bustin' alone shall be responsible for, and shall pay when due, any suchexpenses in excess of the applicable Marketing Fund.

(d) Hiring In-House Promotional Staff. Using the OverheadAllowance funds to be furnished by Capitol as set forth in Paragraph 12(a)hereinafter, Bustin' also is authorized to hire national director(s) ofmarketing and promotion for the Joint Venture, and a promotion field staffofup to six (6) pg6pls in the first year of the term of the Joint Venture, andup to eight people during the remainder of the terrn ofthe Joint Venture, atan average starting salary of approximately $35,000 for the entiremarketing and promotion staff discussed in this Paragraph. Such personsshall furnish their full time services to the Joint Venture, solely forpromotion of the Joint Venture recordings. Bustin' alone shall be

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responsible for, and shall pay when due, any such expenses in excess of theapplicable Overhead Allowance.

(e) Use ofCross Over Funds. If any Joint Venture single achievestop five (5) in the Billboard Hot Black Singles chart and Bustin' determinesthat single has significant potential to cross over onto the pop charts,Busti!' may consult with Capitol about further advances. If Capitol agreesthat the single has such potential, and approves the expenditure in writing,Bustin' may commit additional promotional funds for that single, up to theamounts authorized in Paragraph 12(b) for "pop" cross over purposes.

(f) Video Production. Bustin' may atrange for the production anddelivery to the Joint Venture of one audio-visual recording (the "FirstVideo") based upon a single record released from each Joint Venturealbum, which single shall be selected by the Management Committee. TheFirst Video shall be completed and delivered to the Joint Venture in atimely manner for promotion of the single and the album. If the singlefeatured in the First Video achieves top ten (10) on Billboard's Hot BlackSingle chart, or if Capitol's net sales of Full Priced Albums exceeds 75,000records within three (3) months after release of such single in the U.S.,Bustin' may arrange for the production and delivery to the Joint Venture ofan additional video (the "Second Video") based upon another masterrecording contained within the album, which recording shall be selected bythe Management Committee. The Second Video shall be delivered in atimely manner so that it can be used effectively to promote continuingalb 'm sales. Bustin' shall obtain all videos, free and clear of all claims, andit shall furnish the Joint Venture with all customary documentation,information, credits, legal releases, consents, and licenses, all in a formsatisfactory to Capitol. All videos shall be owned by the Joint Venture,including all copyrights therein. It shall be Bustin's responsibility to causedistribution of the videos for promotional airplay, and Bustin' shall fullyexploit each Video to achieve the maximum positive sales impact on JointVenture recordings. Subject to the provisions of this Paragraph, Capitolshall advance the funds for production of videos up to, but not more than,the Video Fund set forth in Paragraph 12(f) hereof. Bustin' alone shall bereslonsible for, and shall pay when due, any such expenses in excess of theapplicable Video Fund.

(g) Album Artwork. Bustin' shall be responsible for obtaining,creating and furnishing all album artwork, including, without limitation,albun cover graphics and mechanical layouts, inserls, liner notes, labelcopy, film, color separations, credits, clearances, consents and legalreleases required by CRI to manufacture albums. Bustin' may utilize thecreative services of the Art Department of CRI, on a non-excluiive basis, toassist in preparing suitable album cover art work and point of purchasedisplays; provided, however, such Art Department services shall bescheduled by Capitol according to reasonable availabilities, Bustin' aloneshall be^ responsible for, and shall pay when due, any such expenses inexcess of the applicable Artwork Fund.

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(h) Bustin' Accountins Resoonsibilities. Within fourteen (14) daysfollowing the end of each month of the terrr of this Agreement, the Bustin'Parties shall submit detailed and complete monthly statements to theManagement Qernrnittss, prepared in accordance with GAAP, showing allJoint Venture expenditures and any expenditure commitments made bythe Bustin' Parties during that month.

(i) Use of Overhead Allowances. The parties hereto plan that theamount of Overhead Allowances to be advanced by Capitol (as provided inParagraph 12(a)) shall be su{ficient to cover Bustin's general overheadexpenses for its Joint Venture activities described in Paragraphs 13(a)through 13(h), inclusive, during the entire term of this Agreement,including all Bustin's expenses for (i) rent and related office expenses, (ii)the salaries, fringe benefrts and related costs of employing nationaldirector(s) of marketing and/or prornotion, and (iii) the salaries, fringebenefits and related costs of employing a promotion field staff as referred toin Paragraph 13(d) above. Any shortfall in such allowance shall be made upby Bustin', out of its own funds. Bustin' shall use its best efforts to insurethat each of its general overhead expenses actually incurred on behalf of theJoint Venture are reasonable in amount and kind, consistent with theaforesaid plan, and that its yearly total does not exceed the maximumOverhead Allowances for that year of the term. Subject to the foregoing,Bustin' shall be entitled to utilize up to, but not more than, the maximumamount of the Overhead Allowance for each year of the term (set forth inParagraph 12(a) above), without limitation, for its general overhead costsincurred to perform its duties set forth in Paragraphs 13(a) through 13(h),inclusive. Notwithstanding the foregoing, it is agreed that OverheadAllowances may not be used to pay, directly or indirectly, any salary orfringe benefits to either of the Principals, which shall be the soleresponsibility of Bustin'; and, any such salary or fringe benefits Bustin'pays either of the Principals shall g-Sl be considered a Joint Ventureexpense.

6) Billines Submitted to Capitol. To utilize such OverheadAllowance, Marketing Fund, Recording Funds, Video Fund, ArtworkFund, and any other cost or expense to be advanced by Capitol hereunder,Bustin' must submit billings for all covered items for direct payment byCapitol and otherwise comply strictly with the terms of this Agreement.Pursuant thereto, Bustin' shall carefully review all billings to verify theyare for authorized services; and, an authorized officer of Bustin' shallapprove each of such bills in writing to show the correct amounts to be paidand the particular furrd or funds under Paragraph 12 hereof to which eachbill applies. Provided Bustin' furnishes such approved billings to Capitol ina timely manner, together with all required artwork, graphics, credits,consents, clearances, legal releases, licenses and other detail to explain thecharges to Capitol's reasonable satisfaction, Bustin' may direct Capitol topay such approved bills, and Capitol shall advance the funds to comply withsuch direction, up to the maximum amounts set forth in Paragraph 12

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RMF/2_5_906

above. In the case of recurring expenses or for the convenience of theparties, such as rent and authorized salaries, Bustin' nay arrange forautomatic paJrments, or such other reasonable procedures for the advanceof funds hereunder as the Management Committee shall deterrnine.

14. Fees Payable to Capitol

The following fees are Joint Venture expenses due and payable out ofproceeds of the Joint Venture; and, they may be deducted monthly fromcurrent cash receipts, income, revenue, or other monies in CRI'spossession or control which are owed or payable to the Joint Venture. Suchfees shall be payable monthly by the Joint Venture before any Loan Capitalis recouped or repaid; and the assets of the Joint Venture shall be allocatedfor the payment of these fees ahead of all other Joint Venture Expenses.

(a) Pist4bution-Eees, The Joint Venture shall pay CRI a monthlydistribution fee, based on a percentage of annual net sales ("Annual NetSales') of Joint Venture records, which Annual Net Sales shall becalculated in accordance with the Distribution Agreement attached heretoas Exhibit 7. The following chart shows the applicable percentage of annualnet sales to be charged as a distribution fee for each salis tier:

AnnualNetSalesFirst S10 Million lSVo

10 Million to 120 Million \6Vo;20 Million to 130 Minion l44o

Over$30 Milhon 12%

Annual Net Sales FeFirst S5 Million l2%o

15 Million tO 10 Million lOVo10Ⅳ巨lhon to 15 LIlillion 8Vo

S15 Mlllion to 120 Minion 6%Over S20 Million 5%

Fee

242526272829303132JJ3435

(b) Manufacturing Fees. The Joint Venture shall pay CRI allmanufacturing fees and charges for manufacture of Joint Venture records,at the prices and calculated in accordance with the ManufacturingAgreement attached hereto as Exhibit 6.

(c) Administrative Fees. The Joint Venture shall pay CRI amonthly administrative fee (the "Administrative Fee") based on apercentage of Annual Net Sales of Joint Venture records. The followingchart shows the applicable percentage of Annual Net Sales to be charged aithe Administrative Fee for each sales tier:

363',t383940

15. Royaltv Payable to Bustin'.

For net sales in the U.S. of each Joint Venture album produced byBustin', Capitol shall pay to Bustin' a royalty (the "Bustin' Royalty") at the

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RMFt2-5_908

rate of 2Vo of t}re same royalty base applicable to artist royalties under theArtist Contract Form attached as Exhibit 10 hereto. The Bustin'Royaltyshall be included within the artist's "all-in" rate, and shall be computed inthe manner set forth in the Artist Contract Form. Total royalties payable tothe artists, producers, Bustin', and all other parties combined, shall notexceed the applicable "all-in" royalty. Notwithstanding the foregoing, theBustin' Royalty shall not be earned or payable until after full recoupment byCapitol of all Recording Funds and any other costs advanced for suchalbum. For this purpose, such recoupable "Recording Funds" for anyparticular album shall be deemed to include, without limitation, (i) allartist, producer and other advances, whether or not directly related to thatparticular album, (ii) all fees, union scale payments and other sums paidor payable to the artist (and any third party furnishing services of theartist), (iii) all recording costs advanced by Capitol for the applicablemasters (as the term "recording costs" is used in the Artist Contrac[ Form),and (iv) all other sums, advanced, paid or incurred by Capitol or CRI withrespect to the applicable Artist. Payment of the Bustin' Royalty shallcommence with Capitol's first semi-annual accounting to the artistfollowing recoupment of all such "Recording Funds", and shall beretroactive to the first record of the applicable album sold atter Capitol'srecoupment of all producer advances for that particular album.

16. Oblisations of Bustin' Parties

The Bustin' Parties shall be responsible for and pay out of their ownfunds: (i) all costs or expenses required for activities covered hereunder inParagraphs 13(a) through 13(j), inclusive, in excess of advances due fromCapitol under Paragraphs 12(a) through 12(g) hereof (Excess Expenses"),and (ii) any and all expenses and commitments that any Bustin' Partyincurs or makes which are not authorized pursuant to this Agreement("Unauthorized Expenses"). Excess Expenses shall be considered to be JointVenture expenses to the extent they actually are paid by Bustin' on behalf ofthe Joint Venture, and shall be added to Bustin's Loan Capital accountpursuant to Paragraph 17 below. Bustin' shall furnish Capitol a monthlystatement setting forth any Excess Expense incurred in the prior month,together with reasonable documentation thereof requested by Capitol.Unauthorized Expenses shall be Bustin's sole obligation and shall not beconsidered to be Joint Venture expenses; and, they shall not be recoupableby Bustin' as loans or otherwise. The Bustin' Parties shall defend,indemnify and hold Capitol harmless from and against all liability, costand expenses for Excess Expenses and Unauthorized Expenses.

17. Working Caoital Loans.

(a) Loan Capital Accounts. Subject to the provisions of Paragraph16 above concerning Unauthorized Expenses and the provisions ofParagraph 29 below concerning settlement costs and liability, any moniesprovided to the Joint Venture by Capitol or Bustin' shall be treated as LoanCapital, including all advances by Capitol pursuant to Paragraphs 12(a)

P/I5 10-19-

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RMFI2-5-9OB

through 12(g) hereof. Capitol shall maintain Loan Capital accountsshowing all increases and decreases therein, and the unrecouped balancesof Capitol's and Bustin's Loan Capital as of the end of each month of theterm of this Agreement, including therein any Excess Expense for whichCapitol has received documentation pursuant to Paragraph 16 hereof.Following the end of the month, Capitol shall furnish the Joint Venturewith a monthly statement showing the Loan Capital account balances atthe end of the month, and a report showing activity in such accounts forsuch month.

(b) Recouoment of Loan Caoital. At the end of each month, if theJoint Venture has paid all'its current expenses (including, withoutlimitation, all fees payable pursuant to Paragraphs 14(a) through 14(c) toCapitol and CRI hereunder, and the Bustin' Royalty), and it has takenappropriate reseryes for accrued expenses (including, without limitation,all record royalties and mechanical license fees) it shall distribute anyremaining cash on hand ("Net Receipts") to repay Capitol and Bustin' LoanCapital in proportion to the unrecouped balance of their Loan Capitalaccounts as of the end of the month, up to the balance of their thenoutstanding Loan Capital account. For example, as of the end of a monthlyaccounting, if Capitol's Loan Capital balance is $190,000 and Bustin's LoanCapital balance is $10,000, and the Joint Venture's cash on hand (afterappropriate reserves have been taken and all current expenses have beenpaid) is $100,000, the Joint Venture shall apply such casbon hand to repay$95,000 to Capitol and $5000 to Bustin', and reduce their Loan Capitalaccounts accordingly. Net Receipts remaining after the Loan Capitalaccounts are fully repaid shall be applied as set forth in Paragraphs 18(a)through 18(d) below.

(c) Workine Canital Deficiencv. As used in this Agreement,"working capital" shall mean the excess of current assets over currentliabilities. For purposes of this Agreement, the aggregate balance ofunrecouped Loan Capital plus all other loans to the Joint Ventureoutstanding at any time, whether or not then due or payable, shall beincluded in current liabilities. The "Working Capital Deficiency' of theJoint Venture, at any time, shall mean the excess of current liabilities overcurrent assets, determined in accordance with GAAP and this Agreement.The Profrt Advances provided for in Paragraph 6 hereof shall not beincluded in any computation of Working Capital Deficiency.

18. Profits and Losses.

(a) lPeriodicl Profrt Determination. Within a reasonable timefollowing the end of each _ of the term of this Agreement, Capitolshall furnish the Joint Venture with a statement of profit and loss, showingnet profits or losses for that _ and cumulative profits or losses for theJoint Venture from inception. For this purpose, the Joint Venture shall notbook any income until actually received, and appropriate reserves forreturns and Joint Venture expenses shall be maintained. Joint Venture

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RMF/2-5-9013

"Profrts" and "Losses" shall be determined, before income tax, inaccordance with GAAP, except as provided herein.

(b) Division of Profits and Losses. Subject to recoupment rightsand the other terms of this Agreement, the net Profits and Losses from theJoint Venture shall be split fifty per cent (50Vo) to Capitol ("Capitol's Share")and fifty per cent (SOVo) tn Bustin' ("Bustin's Share"). Notwithstanding theforegoing, and conditioned upon Bustin's firll and complete performance ofits duties and obligations under this Agreenent, Capitol will bear theburden of costs and liability to third parties for Bustin's Share of Losses, butonly to the extent such Losses exceed Bustin's Share of previouslydistributed Profits. For example, if Bustin' fully performs its duties andobligations hereunder and the Joint Venture suffers a Loss after someProfits have been distributed to Bustin', then the parties shall be obligatedequally for such Loss up to'the aggregate amount of Profrts previouslydistributed to Bustin' (from inception of this Agreement), with Capitol aloneliable for the balance of such loss, if any. In the event of Losses after aprevious distribution of Profrts, Bustin' promptly shall repay to the JointVenture the portion of such previously distributed Profits required to coverits share of the Losses. Capitol shall not be responsible for reimbursing theBustin' Parties for Losses, if any, of Bustin's Loan Capital, nor for anyLosses resulting from or arising out of any breach by the Bustin' Parties ofthe term and conditions of this Agreement.

(c) Distributions. From time to time, but no less than, Profits shall be distributed out of retained earnings of

the Joint Venture, if any, in an amount determined by the ManagementCommittee. Profits distributed shall not exhaust the reasonable needs of theJoint Venture for working capital and reserves as determined by theManagement Co'nrnittee. No Profit distributions shall occur until suchtime as cumulative Profits exceed cumulative losses (measured frominception of this Agreement), all current liabilities are satisfied (includingall Loan Capital has been repaid), and there is remaining cash on hand todistribute.

(d) Capitol's Profit Recouoment. Notwithstanding anything to thecontrary in this Agteement, Bustin's Share of Profits shall be paid toCapitol until Capitol has fully recouped its Profit Advances paid pursuantto Paragraph 8 hereof, it being agreed that Bustin' shall have no right toreceive any Profit distribution prior to Capitol's recoupment of all its LoanCapital balances and Profit Advances.

(e) Bank Account. All funds of the Joint Venture shall bedeposited in an account or accounts in the name of the Joint Venture atBank of America. Any withdrawals from any such account or accountsshall be made by check or other written instrument which shall be sigaedby the party or parties as are authorized pursuant to this Agreement andParagraph 10 hereof.

P/1510

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RMF/2-5-9013

19. Earlv Termination Option. Without constituting an election ofremedies or otherwise limiting any other rights or remedies of Capitol atlaw, in equity, or under this Agreement, which rights and remedies shallbe cumulative, Capitol shall have the option, exercisable by notice toBustin', to terminate this Agreement at any time if one or more of thefollowing events occurs: (i) cumulative Joint Venture Losses (measuredfrom inception of the Agreement) exceed one million dollars ($1,000,000), or(ii) The Joint Venture Working Capital Deficiency (as defined in Paragraph17(c) above) exceeds two million dollars ($2,000,000), or (iii) Louis Burrellworks less than full-time for Bustin' or in a job capacity less than hiscurrent job capacity for Bustin', or (iv) M.C. Ham.mer fails to perform hisobligations hereunder, or (v) a petition or proceeding in bankruptcy is filedor instituted by or against Bustin' or for its reorganization or liquidation, orBustin' becomes insolvent, or makes any assigrrment of its assets for thebenefit of its creditors, or (vi) the Bustin' Parties fail or refuse to performtheir duties under Paragraphs 13(a) through 136) hereoi or otherwisematerially breach any provision of this Agreement, or (vii) Bustin'transfers or assigrrs, or attempts to transfer or assigrr any of its rights orduties hereunder without Capitol's consent, which consent may bewithheld for any reason, or (viii) the present owners of the stock of Bustin'transfer or assigrr any part of their stock in Bustin' without Capitol'sconsent, which consent may be withheld for any reason. The unrecoupedportion of Loan Capital shall be due and payable immediately upon theexercise of Capitol's early tennination option.

20. Right of Susoension. If, for any reason, the Bustin' Parties orany one of them are in default under this Agreement at the time a paymentis due hereunder from Capitol, without limiting any other rights orremedies of Capitol at law, in equity, or under this Agreement, whichrights and remedies shall be cumulative, Capitol shall have the option,exercisable by notice to Bustin', to suspend all or any part of Capitol'sobligations to make pa5rments to Bustin' and the Joint Venture under thisAgreement until the Bustin'Parties have cured the default.

21. Windine Uo and Dissolution. Upon termination of theAgreement for any reason, the business of the Joint Venture shall bewound up and the assets and properties of the Joint Venture shall beIiquidated and distributed as follows. Capitol no longer will fund the JointVenture from and after such termination. The Joint Venture shall engagein no further business, other than that necessary to protect the assets of theJoint Venture, wind-up its business and distribute its assets as providedherein. Any expenses of winding up and liquidating assets of the JointVenture (other than those expenses Capitol has agreed to advancepursuant to Paragraphs 12(a) through 12(g) hereof) shall be borne equallyby Capitol and Bustin'. Any debts of the Joint Venture shall be paid as setforth in this Agreement.

(a) If Loan Capital not Recovered. In the event Bustin' andCapitol have not both recovered their respective Loan Capital, then the

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RMF2-5-90/3

following procedures for the liquidation of the Joint Venture assets,including Joint Venture Artist contracts, shall be followed:

1. Bustin' and Capitol shall collectively determine whichJoint Venture assets they desire to purchase ("AvailableAssets").

2. The Joint Venture party purchasing a particularAvailable Asset may fund. the purchase either by payrngcash to the Joint Venture or by reducing such party'sLoan Capital balaace in the Joint Venture.

3. Bustin and Capitol, on an alternate basis, shall each setthe purchase price to those Available Assets they elect topurchase.

4. The Joint Venture party who does not set the price of aparticular Available Asset shall have the firstopportunity to purchase same. If such party does notpurchase such Available Asset, then the party settingthe price must purchase the Available Asset at the setprice.

5. Those Joint Venture assets which neither party heretohas chosen to purchase shall be sold to outside thirdparties at the best price.

6. At the conclusion of the liquidation procedure set forthin items 1 through 5 above, all monies in the JointVenture will be distributed to Capitol and Bustin' inproportion to their respective Loan Capitol accountbalances at the start of the liquidation procedure untiltheir Loan Capital accounts have been repaid.Thereafter, all monies shall be split in accordance withthe Joint Venture Agreement.

(b) If Loan Capital Recovered. If Capitol and Bustin' have bothrecovered their respective Loan Capital, then the following procedures forthe liquidation of the Joint Venture assets, including Joint Venture Artistcontracts, shall be followed:

1. Capitol shall set a price for Bustin's share of the JointVenture and Bustin', at its election, shall eitherpurchase Capitol's share of the Joint Venture at thatprice, or sell Bustin's share of the Joint Venture toCapitol for the same price.

2. If neither Capitol nor Bustin' purchase the othersinterest, the Joint Venture will be liquidated under

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California Partnership law. However, Capitol andBustin' shall frrst have the right to purchase the JointVenture assets pursuant to the procedures set forth inParagraph 21(a) above.

(c) In the Event of Default. Notwithstanding anything to thecontrary in the foregoing procedure for winding up the Joint Venture, ifany, party is in breach of this Agreement at its termination, then the partysuffering such breach or default shall be entitled to exercise all such party'srights arrd remedies, at law, in equity, or under this Agreement, to recoverany damages, losses, cost, expenses and attorney's fees arising out of suchbreach or default. Such recovery shall take priority over and displace theprocedure set forth in Paragraphs 21(a) and 21(b) above to the extent electedby the party suffering such breach, and in that event the procedure inParagraph 21(a) and 21(b) shall apply only to the remainder of the JointVenture Assets, if any.

22. Securitv Agreement. Capitol shall have a first security interestin the Joint Venture assets to the extent of its Loan Capital and to securethe performance of the Bustin' Parties hereunder. Pursuant thereto, theBustin' Parties and Capitol shall execute the Security Agreement andfinancing statements attached hereto as Exhibit 11 (the "securityAgreement"). The happening of any event of default under the SecurityAgreement shall constitute a material breach of this Agreement.

23. Tax Liabilities. Any and all tax credits or deductions to whichthe Joint Venture shall be entitled shall be allocated equally between Capitoland Bustin' in shares of fifby percent (50Vo) each. Except for Capitol's shareof taxes incurred after the Effective Date arising out of the conduct of JointVenture business, neither Capitol nor the Joint Venture is assuming, byvirtue of this Agreement or otherwise, any liability or obligation, direct orindirect, absolute or contingent, of the Bustin' Parties for federal, state,local or foreigrr taxes of any kind, and the Bustin' Parties shall holdharmless and indemnify Capitol and the Joint Venture from such taxes.Similarly, except for the Bustin' Parties' share of taxes incurred after theEffective Date arising out of the conduct of Joint Venture business, neitherthe Bustin' Parties nor the Joint Venture is assuming, by virtue of thisAgreement or otherwise, any liability or obligation, direct or indirect,absolute or contingent, ofthe Capitol for federal, state, local or foreigrr taxesof any kin4, and the Capitol shall hold harrnless and indemnify Bustin'Parties and the Joint Venture from such taxes.

4Z43 24. Bustin' Parties' Representations and Warranties. The Bustin'4 4 Parties jointly and severally represent, warrant and covenant to Capitol as4 5 follows:4647 (a) Bustin' now is, and at all times during the term of thislq Agreement it shall continue to be, a corporation duly organized, validly49 existing and in good standing under the lawj of the State of

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RMF/2-5-90/3

power and authority to entercarry out the transactionsinto this Agreement; and otherwise to

contemplated herein. The officer executing and delivering this Agreementon behalf of Bustin' is authorized to do so. The consummation of thetransactions contemplated hereby will not violate any provisions of Bustin'sCertificate of Incorporation or By-Laws; and to the best of the Bustin'Parties knowledge the execution and delivery of this Agreement andperformance hereunder do not require any approval or authorization by anygovernment authority. When fully executed,. this Agreement will be a validand binding obligation of Bustin' Parties, enforceable in accordance with itsterms.

(b) True and accurate copies of Bustin's Certificate ofIncorporation, and all amendments thereto, as filed with the Secretary ofState of a certificate of good standing of Bustin' from thesecretary of the State of --, and true and accurate copies ofBustin's By-Laws as amended to date, will be delivered to Capitolconcurrently with the execution of this Agreement.

(c) True and accurate copies of resolutions adopted by the Boardof Directors of Bustin' evidencing the authorization referred to inParagraph 24(a) hereof, as certified by the Secretary or Assistant Secretaryof Bustin', shall be delivered to Capitol concurrently with the execution ofthis Agreement, and such resolutions shall be in full force and effect.Neither the execution and delivery of this Agreement nor the performanceof the duties and obligations contemplated hereby will constitute a breach,violation or a default of the Bustin' Parties, or any one of them, under anycontract, license, or other agreement, arrangement or understanding.

(d) Bustin'shall cause the payment ofnot less than six thousanddollars ($6,000) per annum to M.C. Hammer and Louis Burrell out of theProfit Advances, as set forth in Paragraphs 6(c) and 7 hereof. In the eventthat California Civil Code $ 3423 is amended, with retroactive effectapplicable to this Agreement in a manner that would require payment of alarger sum, Bustin' shall cause the pa5rment of such larger sum to M.C.Hammer and Louis Burrell out of the Profit Advances so that the terms ofsuch statute or any amendment thereto shall be satisfied at all timesduring the term of this Agreement. If, for any reason, Bustin' fails toperform the provisions of this Paragraph, Capitol shall do so to theminimum extent necessary to maintain the rights of the Joint Venture toinjunctive relief, and Bustin' immediately shall repay Capitol the costthereof.

(e) True and accurate copies of the Bustin' Artists Contracts(including all amendments and additions thereto) are attached hereto asExhibits 1A through lE and each of said contracts will be in full force andeffect as of the Effective Date. The Bustin' Parties have performed allobligations on their part to be performed under each of the Bustin' ArtistContracts. There is no default, by any party, in the performance of any of

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the obligations under said contracts. No advance, royalty, fee or othermoney_is presently due and payable, or hereafber required to be paid to anyBustin'Artist, except as set forth in the Schedule of Commitments attachedhereto as Exhibit 12 hereof. The Bustin'Artist Contracts are assignable tothe Joint Venture and the Joint Venture will enjoy all the righls underthose contracts. There presently are no duties, obligations, liabilities,claims, or disputes arising out of those contracts (except as expressly setforth in said contracts). Exhibit 13 attached hereto contains a complete andaccurate listing of all master recordings of the Bustin' Artists in existence,or in the pro-ce-ss of being recorded, each of which are owned or controlled byBustin' as of the date of this Agreement, and each of which has been dulyassigned to the Joint Venture.

(0 All tax returns and reports required by law to be filed by theBustin' Parties, or any one of them, have been duly and timely hled,including, without limiting the generality of the foregoing, all income,unemployment compensation, social security, sales, use, exiise, privilegeand franchise returns and reports required by the laws of the United Statesor any state, territory or municipal or political subdivision thereof. Alltaxes, assessments, contributions, fees and other governmental charges orimpositio_n-s upon the Bustin' Parties, or any one of them, or upon ormeasured by the properties or assets or income of the Bustin'Partiei, havebeen paid and none is past due. None of the Bustin' Parties has receivedany notice of o.*sessment or proposed assessment of any United States,state, municipal or other tax upon or measured by Bustin's income or theincome of any one of the Bustin' Parties, and neither Bustin' nor theBustin' Parties have any knowledge of any basis for any additionalassessment of any such tax, nor have Bustin' or the Buitin' partiesknowingly waived any law or regulation frxing, or consented to theextension of any period of time for the assessment bf any such tax or othergovernmental imposition or become committed so to do.

_(g) There -presently is not outstanding against Bustin' or anyBustin'Party, and during the term of this Agreement there shall not be,any judgment, order, writ, injunction, garnishment, lien or decree of anycourt or of any federal, state, territorial, municipal or other commission,board or other adrninistrative or goverrrmental agency or authority. TheBustin' Parties are not aware of any violationi ol any federal, state,territorial, municipal or other statue, rule or regulation, applicable to themor by which they may be bound.

4l42 (h) On the date hereof, and during the term of this Agreement,43 Bustin'will not be subject to any claims, suits or threatened suiti, or have!t any material liabilities, whether accrued, absolute, contingent or otherwise45 except (i) those obligations to be performed under thi Bustin' Artist46 contracts assigned to the Joint venture; and (ii) those liabilitiest7 ryecifigaly set forth in the Schedules attached hereto and fully disclosed to4 8 Capitol. The Bustin' Parties presently are not, and during the term of this

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Agreement shall not be, infringing upon, any valid patents, trademarks,trade names or copyrights of others.

(i) During the term of this Agreement, the Bustin' Parties willnot take any action or make any commitment in the name of Capitol or theJoint Venture beyond the authority granted herein; and they will not spendor authorize the expenditure of any monies of Capitol or the Joint Venturein violation of this Agreement; and they will not loan any funds or extendthe credit of the Joint Venture to any person or entity; and they will notencumber or sell any property, assets or intangible rights of the JointVenture.

0) During the term of this Agreement, the Bustin' Partiespromptly will advise Capitol, in writing, of any claim, litigation orproceeding against or affecting the Bustin' Parties or the Joint Venture.

(k) All Joint Venture Artists will be the sole and exclusive ownerthroughout the world of the professional name used by that Artist; andduring the term of this Agreement, no other person w"ill have the right touse the name or to permit such name to be used in connection with records.Each such Joint Venture Artist has the authority to grant to the JointVenture the right to use the name and neither Artist's use of the name northe Joint Venture's use of the name in connection with the sale,advertisement and promotion of Artist's recordings will infringe upon thelegal rights of any third parties.

0) All Joint Venture Artists signed during the term of thisAgreement shall be free to enter into artist contracts with the JointVenture; and, no such artist shall be a party to any contract which preventssuch artist from fulfrlling any of the artist's obligations to t[e JointVenture. Neither the execution and delivery ofan artist contract of the typespecified herein, nor the performance thereof by the artist will constitute aviolation or breach of, or a default under, any contract, license, commit-ment, indenture, lease or other agreement, arrangement or under-standing, or any other restriction of any kind, to which the artist is a partyor by which the artist is bound.

(m) No Joint Venture Artist shall be under any disability,restriction or prohibition respecting musical works at the time such artistis sigrred to the Joint Venture.

(n) During the entire term of this Agreement, the Bustin' Partiesshall cause the Joint Venture to receive, free and clear of any adverseclaims, all mechanical licenses, copyrights, consents and other rightsrequi,red to manufacture, distribute, advertise and promote, throughout theworld, the sale of recordings of the Joint Venture Artists and all artworkdelivered to Capitol or CRI in connection therewith.

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RMF/2-5-90l3

I (o) The Joint Venture shall own all copyrights in the master2 recordings and Videos delivered to the Joint Venture, free and clear of any3 adverse claims.45 (p) Neither Bustin' nor the Bustin' Parties shall assign,6 mortgage, hypothecate or encumber his or its interest in the Joint Venture.78 (q) Bustin' shall obtain and maintain in effect all required union9 recording licenses necessary for the Joint Venture to carry on its business,

10 including an AFM license.ll| 2 25. Capitol's Representations and Warranties. Capitol represents,13 warrants and covenants that:14l5 (a) Capitol is a corporation duly organized, validly existing, and1 6 in good standing under the laws of the State of California.I718 (b) Capitol has the power and authority, corporate or otherwise,I 9 to execute and deliver this Agreement. The ofEcer executing and delivering20 this Agreement on behalf of Capitol is authorized to do so. The2 1 consummation of the transaction contemplated hereby will not violate any22 provisions of Capitol's Certifrcate of Incorporation or By-Laws or any23 applicable law or regulation, or any agleement to which Capitol is a party;24 and the Board of Directors of Capitol has taken all action required by law,25 its Certificate of Incorporation and By-Laws to authorize the execution and2 6 delivery of this Agreement.2728 (c) To the best of Capitol's knowledge, there is no action, suit,29 claim, charge, complaint, proceeding or investigation now pending or3 0 threatened which would have a material adverse affect on the operation of3 I the Joint Venture.323 3 26. Kev Man Insurance. At its own cost and expense, Bustin' shall3 4 purchase "keyman" life insurance, from a duly licensed and validly3 5 existing insurance company, in the amount of _______3 6 insuring the lives of Kirk Burrell and Louis Burrell for the duration of this3 7 Agreement, with Capitol as the named beneficiary of such insurance.3 8 Such insurance shall be in effect from the Effective Date of this Agreement,39 and a certifrcate of insurance duly verifying such insurance shall be40 delivered to Capitol on or before the Effective Date. Kirk Burrell and Louis4l Burrell shall submit, if required, to any physical examination required by42 the insurance carrier and provide the personal data necessary to obtain43 such policy. The cost of such insurance shall not constitute a Joint Venture44 expense.454 6 27. Assignment. Neither party hereto may sell, transfer, assign,47 encumber, grant a security interest in (other than the security interest4 q granted pursuant to Paragraph 22 hercof') or otherwise dispose of all or any49 part of its interest in the Joint Venture, or any right or duty hereunder with

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respect to the Joint Venture, to any person without the written consent ofthe otler party (which consent may be withheld for any reason) exceptCapitol may, without such consent, assign its interest in the Joint Ventuie,and any right or duty hereunder, to any parent, subsidiary, affiliated orsuccessor company and to any one or more wholly-owned companies ofThorn-EMI plc; but no such assignment shall release Capitol from any ofits duties, obligations or liabilities hereunder.

28. General Indemnifications. Each party hereby agrees toindemnify, defend and hold each other party and the Joint Ventureharmless from and against all demands, claims, actions or causes ofaction, assessments, losses, damages, liabilities, costs and expenses,including, without limitation, interest, penalties and attorneys' fees,arising out of or related to (i) claims against or liabilities of theindemnifying party which are not expressly assumed by the Joint Ventureor otherwise provided for pursuant to this Agreement, and (ii) any breach ofany promise or warranty made by the indemnifying party contained in thisAgreement, or any falsity of any representation made by the indemnifyingparty herein. The cost of furnishing such indemnifications shall be the soleresponsibility of the indemnifying party and shall not be considered JointVenture expenses.

29. Settlement Costs and Liabilitv. Notwithstanding anything to thecontrary in this Agreement, any liability of the Joint Venture for damagesto any third party, and the cost of settling any such claims, suits orthreatened suits against the Joint Venture, shall be borne (i) if such liabilityor cost arise out of the breach of this Agreement or the falsity of anyrepresentation contained herein, one hundred per cent (LOOVo) by the partyin breach or that made such misrepresentation, including all the defensecosts and attorneys' fees, and such expenses shall not be tonsidered to beJoint Venture expenses (ii) otherwise such liability or cost of the JointVentule shall be payable fifty per cent (50Vo) by Capitol and fifty per cent(SOVo) by the Bustin' Parties, in which case they shall be considered JointVenture expenses. In the latter case, paJrments for liability or settlementcosts shall be added to the respective party's Loan Capital account, but onlyto the- extent they are considered Joint Venture expenses hereunder. Exceptas otherwise expressly provided in this Agreement, all other costi,e_xpenses, liability, damages and settlement payments arising out of anyclaim or-suit qgainst the the parties hereto, shall be borne by the partyagaint which the claim, suit or threatened suit is lodged.

30. Survival of Representations and Warranties. Each and everyrepresentation and warranty contained herein or made pursuant heretoshall be true and correct in all material respects when made and shallcontinue in full force and effect throughout the entire term of thisAgreement and shall survive its termination.

31. Examination of Accounting Records.

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RMF/2-5-9013

(a) Provided that Bustin' previously shall have notified Capitol inwriting of its objections to such statement or accounting, specifuing withparticularity each element of such statement or accounting to whichobjection is made, Bustin' may, at any mutually agteed upon time withinsix (6) months after any statement or accounting is rendered to Bustin'hereunder, examine the books and records of Capitol described below withrespect to such objections. Bustin' shall not be entitled to withhold paymentof any sums shown on Capitol's statements to be due to Capitol during thependency of any such examination.

(b) Such examination shall be conducted at Bustin's sole costand expense by an independent Certified Public Accountant designated byBustin' who is not then engaged in an outstanding examination of Capitol'sor CRI's books and records on behalf of a any person or entity other thanBustin' and who certifres: (i) He shall conduct such examination inaccordance with the then current rules and regulations of the applicablesociety of Certifred public Accountants; (ii) such examination shall beconducted in accordance with GAAP; and (iii) the results of any suchexamination, including any written report resulting therefrom, and thecontents thereof, shall not be disclosed to any Person (other than Capitol,Bustin' and Bustin's authorized agents, who themselves must agree toconfrdentiality as a condition precedent to their receipt of confrdentialmaterial) without Capitol's prior written consent. As a condition precedentto any such inspection, Capitol may require any such Certified PublicAccountant to execute a Letter of Engagement pledging his compliancewith the terms of this Paragraph.

(c) Such examination shall be made during Capitol's usualbusiness hours at the place where Capitol maintains the books and recordsdescribed below, and Bustin's examination shall be limited to the same.Bustin's sole right to inspect Capitol's books and records shall be as setforth in this Paragraph 31, and Capitol shall have no obligation to producesuch books and records more than once with respect to each statementrendered to Bustin'nor more than once in any calendar year.

(d) Without limiting the generality of the foregoing, Bustin'acknowledges that Capitol's statements of account and inventoryslT-aries are based upon compilations generated in the ordinary courseof Capitol's business by Capitol's computer system, and that said computer-generated compilations shall constitute the sole source documents in, andbe dispositive of, any dispute between the parties as to the accuracy orcompleteness of statements and inventories furnished by Capitolhereunder. Capitol shall have no obligation to furnish Bustin' with anyadditional books or records.

(e) Except with respect to objections made by Bustin' inaccordance with the first sentence of Paragraph 31(a), each statementrendered to Bustin' shall be final, conclusive and binding on Bustin' andshall constitute an account stated. Bustin' shall be foreclosed from

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maintainin_g any action, claim or proceeding against Capitol in any forumor,tribunal with respect to any statement or accounting due heieunderunless: (i) s-uch action, claim or proceeding is commenced against Capitolin- a courtof competent jurisdiction within Two (2) years afterlhe date uponwhich such statement or accounting is rendered, and (ii) Bustin' previouslyshall have submitt€d to Capitol for inspection and review a copy of a writtenr_eport resllting from any such examination at least Six (6) months prior tothe institution of any such action, claim or proceeding

32. Nq Third Party Benefrts. This Agreement will be binding upon,inure to the benefrt of and be enforceable by the parties hereto and theirrespective successors and permitted assigns. This Agreement is notintended, and shall not be deemed or construed, to confer any rights,power-s or privileges on any person, firm, corporation or other entity not aparty hereto, or to create any third party beneficiary liability.

- 33. Countero.arts. This Agreement may be executed in any nunberof counterparts, each of which shall be deemed an original but ali of whichtogether shall constitute one and the same instrument; and in makingproof hereof it shall not be necessary to produce or account for more thanone such counterpart.

3a. Aftornevg-Eces, If either party hereto commences a legal actionor proceeding agains,t the other to enforce rights or obligations arising outof this A-gr-eement, the prevailing party in such action oi proceeding ihallbe awarded its reasonable attorneys' fees in addition to alI other cos-ts andexpenses of the legal action.

35. Notices. All notices, claims, requests, demands and othercommunications hereunder or in connection with transactionscontemplated hereby ("Notices") will be in writing and will be deemed tohave_been duly given if delivered in person or mailed (by registered orcertified mail, postage prepaid, return ieceipt requested) as-follows:

(a) If to the Bustin'Parties:

Bustin' Productions, Inc.

with a courtesy copy ofnotices to:Manatt, Phelps, Rothenberg & Phillips11355 West Olympic Blvd.Los Angeles, CA 90064

(b) If to Capitol:

Capitol BJV, Inc.C/O Capitol Records, Inc.

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RMF/2-5 -90/3

I 1750 North Vine Street2 Hollywood, CA 900283 Attention: Secretary45 w'ith a courtesy copy of notices to:6'l Capitol BJV, Inc.8 C/O Capitol Records, Inc.9 7750 North Vine Street

1 0 Hollywood, CA 900281 I Attention: Legal Department121 3 or to such other address as the person to whom the Notice is to be given mayl4 have furnished to the others in writing in accordance herewith. All NoticesI 5 will be deemed received on the date of delivery or, if mailed, on the datel6 appearing on the return receipt therefor.l7I 8 36. Severabilit]'. If any part of this Agreement is determined to be19 void, invalid, inoperative or unenforceable by a court of competent20 jurisdiction or by any other legally constituted body having jurisdiction to2l make such determination, such decision shall not effect any other22 provisions hereof, and the rernainder ofthis Agreement shall be effective as23 though such void, invalid, inoperative or unenforceable provision had not24 been contained herein.252 6 37. Force Maj eure. If at any time during the term of this27 Agreement, by reason of any act of God, fire, earthquake, flood, explosion,ZB strike, labor disturbance, civil commotion, act of Government, its agencies29 or offrcers, any order, regulation, ruling or action of any labor union3 0 affecting Capitol or CRI, or any shortage of or failure or delays in the3l delivery of materials, supplies, labor or equipment, or any other cause or32 causes beyond Capitol's control, the performance of any of Capitol's or33 CRI's obligations hereunder is delayed, intermpted or prevented, then the3 4 performance of such obligation shall be excused to the extent so delayed,3 5 interrupted or prevented. If any such period of suspension exceeds six (6)3 6 months, Bustin' may terminate this Agreement upon giving an additional37 thirty (30) days notice to Capitol, unless the conditions precipitating the3 8 event of force majeure are prevalent generally throughout the U.S. record3 9 industry, in which case this Agreement shall remain in full force and40 effect, subject only to such period of suspension.4t42 38. Waiver. The waiver by Capitol of any term or condition of this43 Agreement, or any part hereof, shall not be deemed a waiver of any other4 4 term or condition of this Agreement, or of any later breach of this45 Agreement, or of any part thereof.4647 39. Entire Agreement. This Agreement, including the exhibits,4 8 schedules and other writings referred to herein or delivered pursuant49 hereto, which form a part hereof, contains the entire understanding of the

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RMF2-5-90/3

parties with respect to its subject matter. There are no restrictions,agreements, promises, warranties, covenants or undertakings other thanthose expressly set forth herein or therein. This Agreement supersedes allprior agreements and understandings between the parties with respect toits subject matter. This Agreement may be amended only by a writteninstrument signed by all the parties.

40. Governing Law. This Agreement shall become binding onlywhen executed by an authorized sigrrer for.Bustin', and by Louis Burrelland Kirk Burrell, pka M.C. Harnrner, and by an authorized signer onbehalf of Capitol. It shall be deemed to have been made in the State ofCalifornia and its validity, construction, breach, performance andoperation shall be governed by the law ofthe State of California applicable tocontracts made and to be performed in the State of California.

IN WITNESS HEREOF, the parties have executed this Agteement asofthe date and year first written above.

CAPITOL BJV, INC. BUSTIN' PRODUCTIONS, INC.

By:-------An authorized si.gler

By:An authorized sigrrer

Title: Title:

Louis Burrell

Kirk Burrell, pka M.C. Hammer

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RMF/2‐ 5‐90/2

:ndex of Defined Terrns

Administrat市 e Fee 18 Roster 4Agreement l second Video 16Annual Net Saies 18 Secunty Agreement 24Artist Contract Form 1 5 the Bustin'Parties lArtwork Fund 13 Unauthorlzed Expenses 1 9Ava‖ able Assets 23 Variable Costs 1 3Basic Co‐op Advertising Fund l o VideO Fund 13Bustin'l working capita1 20Busln'Artist Contracts l working Capital Dcficicncy 20Buslnt Artists l

Bustln'Royaky 19Bustin's Share 21BusJt Records lCaplo1 1Capitors share 21CR!1Dist‖ bulon Agreement 6Dropped Artist 4Effedive Date 2Excess Expenses 19Executive Producer 4First Video 1 6

Foreign License Agreement 7Fu‖ Pnced un1 4GAAP 91ntial Term 2

」oint Venture l」oint Venture Artist 2Key Man 4Loan Capita!11Losses 21LP 4M.C.HammerlManagement Committee 7Manufactunng Agreement 6Marketing Fund 1 2Net Receipts 20Notices 310ption Period 30verhead Allowances 12Pre‐ existing obligations 3Principals l

Profit Advances 6PЮlts 21

Recording Funds 12

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