Press Release

FAI Announces Agreement on Regional MOU with Six Multinational Record Companies.

FOX AGENCY INTERNATIONAL ANNOUNCES AGREEMENT ON REGIONAL MEMORANDUM OF UNDERSTANDING WITH SIX MULTINATIONAL RECORD COMPANIES

The Fox Agency International, Inc. (FAI) announced today that it has reached an agreement with six multinational record companies for the payment of mechanical royalties to FAI's publisher principal clients for the use of their repertoires in nine Southeast Asian countries.

The agreement, reached during meetings at MIDEM-Asia in Hong Kong, constitutes an Addendum to a Regional Memorandum of Understanding (MOU) into which the record companies had previously entered with their affiliate music publishing divisions. The MOU established a mechanical royalty rate in several Pacific Rim countries where statutory rates were not provided in their respective copyright laws, or already negotiated by industry agreement.

The nine territories covered by the MOU - China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand -- represent one of the world's fastest growing markets for the sale of recorded music, with estimated sales of almost $2 billion in 1996. Anglo-American repertoire accounts for approximately 30-40% of the total market and is administered almost entirely by FAI and the multinational music publishing companies who are also signatories to the MOU.

FAI, which began operations in Southeast Asia in 1994 with the establishment of its regional headquarters in Singapore, represents the interests of more than 4000 American music publishers, as well as several European mechanical rights societies. FAI launched a second branch office in Taiwan in 1996, and is represented locally through affiliates in five other Pacific Rim territories.

Invited by the multinationals to join onto the MOU in August, last week's Hong Kong accord marked the conclusion of several months' negotiation of additional terms and conditions necessary for FAI' accession to the agreement. Under the new arrangement, FAI will receive both release information from the six multinational record companies for all the product they distribute throughout the nine MOU territories, as well as royalty suspense lists for unidentified works accruing from previous activity. Accountings and payments will be rendered in accordance with a prescribed schedule, with late payments subject to an interest penalty. FAI shall be entitled to undertake royalty audits of the signatory record companies to ensure the accuracy of payments. Finally, FAI representatives will now participate in periodic negotiations for the future adjustment of the MOU's royalty rate structure.

FAI President and Chief Executive Officer Edward P. Murphy commented that he was "pleased and encouraged by the cooperation which has developed and led to this momentous occurrence. The MOU has heightened the awareness of music publisher issues throughout the region and has laid a foundation for mechanical royalty payments in several territories which historically were ignored. With the assurances we've received as a result of our negotiations, I'm confident that FAI's participation in the process will benefit the composers and publishers whose interests have been entrusted to us."

FAI is a special purpose subsidiary of The Harry Fox Agency, Inc., that was established in New York in 1993. The Harry Fox Agency, founded in 1927, represents more than 17,000 music publishers and serves as an information source, clearing house and monitoring service for licensing music copyrights; and is the licensing subsidiary of the National Music Publishers' Association, Inc.