NEAL REED WORLDWIDE, INC.

INTELLECTUAL PROPERTIES HOLDING COMPANY

Publishing. Finance. Administration. Production. Distribution. Sales.

nealreed.us | Office of The Publisher | 1-415-879-1791

INTERNAL CONFIDENTIAL PROPRIETARY MEMORANDUM – Distribution prohibited without written consent.

Date: February 8, 2019, Friday

To: Godfrey Marcell Dion (BMI) pka Santorio Hector
Black Heart Productions Management Publishing (BMI)
From: Cheryle Neal Reed, Publisher
Neal Reed Music Publishing Group (BMI)
Cc: NRW Board of Directors, A&Rs, Managers, OCIAs
NRW File 4914-Correspondence et al

Reference: Finance & Control

Subject: PRODUCTION COVER ARTWORK

Dear Santorio:

Today we discussed the release of the single [BLACK POWER DREAMS, Santorio Hector
feat. JFK (Bill Wadell)], the draft cover artwork and your text message regarding your
desire to retain full creative control over your projects and your artists down to the cover
artwork, to choose who you wish to produce the cover artwork and your authority to
determine the amount that Neal Reed should be willing to pay for that artwork. You
texted….
…“BLACK POWER IS ABOUT BRINGING MY TEAM WITH ME.
YOUR NOT WILLING TO SPEND $100 ON A COVER FOR ME.
Ms. Reed we talking about BILLION DOLLAR INDUSTRY.” …

While that digital conversation was shortened, I want to take the time here to explain to
you why $100 for cover art is beyond our budget for artwork for a single or album release.

The Neal Reed Worldwide capacity via the Orchard-Sony platform is 100,000 tracks per
year. We are on course to achieve capacity according to scheduled long-range plans. The
following table compares your request (Price A) with our budget (Price B) for 4000x4000-
300dpi images used as single or album cover artwork:

Neal Reed Worldwide, Incorporated

Cost Comparison for Single/Album Graphic Cover Artwork

Unit Cost per Cover Covers per Year Aggregate Cost per Year
Price A 100.00 100,000 $ 10,000,000.00
Price B 4.25 100,000 $ 425,000.00
 NEAL REED WORLDWIDE, INC.
INTELLECTUAL PROPERTIES HOLDING COMPANY
Publishing. Finance. Administration. Production. Distribution. Sales.
nealreed.us | Office of The Publisher | 1-415-879-1791

INTERNAL CONFIDENTIAL PROPRIETARY MEMORANDUM – Distribution prohibited without written consent.

Page 2. PRODUCTION COVER ARTWORK MEMORANDUM

As you can see by the dollar amounts illustrated in the graph above, unsustainable costs
at the “unit” level become unbearable at the “aggregate” level. The history of the
entertainment industry (for that matter, of all failed enterprises regardless of the
industry) is littered with thousands of now defunct companies, firms, brands, labels and
operations whose owners made unsustainable decisions which, when aggregated, led to
their demise.

Second, Neal Reed Worldwide creates, administrates, licenses, finances, produces,

controls and releases intellectual property (content) including artwork and promotional
materials, in 243 countries and more than 30 languages via the Orchard-Sony platform,
among others. It is imperative that Neal Reed Worldwide control that intellectual
property from start to finish, its translation into all languages, colors, treatments,
graphics, media, sizes and formats, suitable and acceptable for use in every country on
more than 15 billion devices. The speed with which requests are made by retailers and
must be responded to does not allow for the accommodation of outsourced third-party
relationships. Delays rapidly turn into missed opportunities which turn into missed sales.

Third, the images you indicated you desire to place on the cover, (Malcolm X, Martin, and
others) are actually the copyrighted intellectual property of their respective estates,
and/or the creators of those works, and would require licenses that are costly, and time
consuming to acquire. None of the images requested are in the public domain. Use of
those images without licensing would constitute multiple instances of criminal copyright
infringement, all felonies, each bearing a minimum fine of $250,000, and 4x that amount
in damages for an accidental infringement ($1,250,000 per instance); and a $500,000 fine
for intentional infringement by a corporation (NRW, Orchard-Sony, your publishing
company and label) and, again 4x the damages, or $2.5 million dollars per instance; also
punishable by a criminal sentence; the complete loss of future royalties, and the list goes
on.

Fourth, Neal Reed Worldwide, Inc. is required to provide certificates of authenticity to

our distributors (Orchard-Sony); to indemnify all parties against infringement suites and
claims. NRW can do so with all certainty because we control the in-house creation of all
artwork to meet the standards required.
 NEAL REED WORLDWIDE, INC.
INTELLECTUAL PROPERTIES HOLDING COMPANY
Publishing. Finance. Administration. Production. Distribution. Sales.
nealreed.us | Office of The Publisher | 1-415-879-1791

INTERNAL CONFIDENTIAL PROPRIETARY MEMORANDUM – Distribution prohibited without written consent.

Page 3. PRODUCTION COVER ARTWORK MEMORANDUM

Neal Reed Worldwide retains control over the creation and production of artwork for all
the reasons stated above.

Finally, I think that the song in question has great market potential. Yet, many people do
not grasp the magnitude of publishing on a global scale, and thus miss out on the rare
opportunity to achieve the level of success their talents so rightfully deserve. I hope we
can resolve this issue soon.

Please feel free to share this document with your artists, legal counsel, staff and partners.
If you have any questions or comments, I look forward to receiving them, or your final
decision regarding the matter, in writing at your earliest convenience.

My best regards to you and your Family.

Sincerely,

//CHERYLE NEAL REED//

Cheryle Neal Reed, Publisher

Neal Reed Worldwide, Incorporated