With respect to Records distributed or sold by MDS hereunder
which embody copyrighted material, MDS (on Label's behalf) shall pay or
cause to be paid directly to the proprietors of such copyrighted material,
or to their duly authorised agents,
all mechanical royalties which may be due or become due under
and in in accordance with the applicable licences or the applicable laws.
Such payments shall be treated as Applicable Fees and may be deducted from
monies due to Label hereunder.