AVM Digital Distribution Agreement
This Agreement, for distribution services between Add-Ventures Music, Inc. (“Licensee”), PO Box 538, Glen Oaks, NY 11004 and: (insert the name of the contracting party)
This contract consists of these specific terms herein:
1. Term and Territory
a. The term of this Agreement shall be for two (2) years from the date of full execution of this Agreement (the “Term”).
b. The territory for this Agreement shall be the world (the “Territory”).
a. Sound Recordings.
Licensor owns and/or controls one hundred percent (100%) of the sound recordings as well as the copyrights in and to the sound recordings listed on Exhibit B, and, during the Term each and every sound recording and copyright owned or controlled by Licensor (the “Masters”).
(i) owns and/or controls the compositions embodied on the Masters (the “Compositions”) as well as the copyrights in and to the Compositions; or
(ii) has mechanical licenses and all other permissions required to use the Compositions as contemplated in this Agreement.
c. Licensor may have other works whether audiovisual, visual or otherwise which Licensor would like Licensee to include in this Agreement.
d. In this Agreement, the Masters and the Compositions and the Additional Works, if any, are collectively referred to as the “Content.”
3. Grant of Rights.
Licensor hereby licenses the Content to Licensee for the life of copyright for each Master hereunder for distribution and exploitation as follows:
a. The exclusive electronic, digital, and mobile rights in the Content to create digital and/or electronic copies and compilations, to distribute, to sell, and to publicly perform the Content via all electronic, digital, and mobile platforms owned and/or controlled by third parties with whom Licensee has or enters into agreements with during the Term (“Licensee Partners”).
b. The exclusive right to:
(i) perform the Content in streaming format on Licensee’s website or other websites owned and/or controlled by Licensee Partners;
(ii) publicly display and make available for download as part of the sale of the Masters, the lyrics of the Compositions;
(iii) collect monies for the playing of the Masters on non-interactive webcasts and streaming of the Masters (payable by Sound Exchange in the USA). This collection right is only for Licensor’s Masters. Any monies collected on behalf of Licensor for webcasts or streams are included in “Revenue” (defined below) and are subject to the payment provisions of this Agreement;
(iv) with prior written approval from Licensor, include the Content in audio and/or audiovisual compilation(s) for sale via physical distribution, and in such cases, to manufacture, make copies of, distribute, and sell physical embodiments of the Content;
(v) release, advertise, and sell electronic files or equivalent electronic form(s) of the Content and to permit others to do so under the trademark “Add-Ventures Music” or under any trademark used by Licensee;
(vi) sub-license the rights granted by Licensor to Licensee in this Agreement as necessary to Licensee Partners, solely to fulfill the purposes of this Agreement including but not limited to those rights necessary to promote, market, advertise, distribute and sell the Content to consumers. Licensee’s grant of rights to Licensee Partners for use of the Content shall always be subject to the terms and limitations of this Agreement and Licensee shall remain liable for any such sublicense subject to paragraph 13(a) and paragraph 6.
c. Post-Term Agreements
In the event that you enter into any agreement with a third party (“Third Party”) (“Third Party Agreement”) within three (3) years following the release of the first Master hereunder, you shall instruct and cause such third party to account and pay to Licensee a royalty (the “Override”) equal to ten percent (10%) of any and all monies paid or earned (including but not limited to advances, recording funds and royalties) by you pursuant to the Third Party Agreement as amended or extended. The Override shall be payable directly to Licensee by the Third Party on the same terms and conditions as monies payable to you under the Third Party Agreement.
4. Promotional & Other Rights
a. Unless otherwise instructed in writing by Licensor, Licensee shall have the exclusive right, in its sole discretion and in line with customary practices, to market the Masters and other Content as applicable, for promotional purposes and without compensation to Licensor.
b. In order for Licensee to provide marketing and licensing services under this Agreement, Licensor grants Licensee the right to:
(i) publicly perform the Masters (and other Content as applicable) on Licensee’s websites and permit Licensee Partners to publicly perform (stream) the Masters on their website(s) on a gratis basis for the purposes of promoting the sale of the Content. Licensor hereby acknowledges that Licensee and Licensee Partners shall be exempt from any payments of performance royalties otherwise due to owners of sound recordings for digital performances of the same if the use is for promotional purposes. Licensee shall require Licensee Partners to pay any public performance royalties which may be due to publishers/writers of the Compositions for promotional uses of the Compositions;
(ii) include the Masters in one or more streaming electronic radio formats to promote and market the Masters;
(iii) print, publish, disseminate, and otherwise use and permit others to use the “NIL Materials” (defined below) for the purposes of trade, advertising, and other exploitations solely in connection with the marketing, sale, and exploitation of the Content. The “NIL Materials” are defined as the approved likeness, approved biography, approved photos, and other approved promotional material provided by Licensor, including the name, both legal and professional, whether presently or hereafter used by Licensor, and name(s) of others whose work is embodied on the Content including the “Performer” (as defined below). All NIL Materials provided by Licensor to Licensee shall be deemed approved. All material provided by Licensor to Licensee may be edited to fit the format of the specific use without further approval from Licensor. Licensee shall have the right to permit Licensee Partners, successors and designees the right to use the approved NIL Materials as outlined in this subparagraph. “Performer(s)” as used in this Agreement means any person whose musical, vocal or production services are embodied on the Content. Notwithstanding the foregoing, Licensee shall have the right to rescind approval over any NIL Materials upon written notice to Licensee. Licensee shall then remove any such NIL Materials, and/or use best efforts to cause any Licensee Partners to remove any such NIL Materials within five (5) business days of such notice.
a. Licensee shall pay Licensor the percentages of “Revenue” as outlined on Revenue Shares attached to this Agreement and forming a part of it.
b. “Revenue” means income actually received by or credited to Licensee that is derived from the exploitation of the Content less mechanical royalties, if any. Income received by Licensee may be subject to taxes, surcharges or fees imposed by government agencies or Licensee Partners before payment is sent to Licensee. Licensee shall have no obligation to pay Licensor Revenue which Licensee has not actually received until such time as Licensee receives such Revenue.
c. Revenue shall be paid monthly within 90 days of the end of each month, as applicable. Each payment will be accompanied by a detailed statement showing all sales and other Revenuegenerating exploitations of the Content. If Licensor has not received payment or a statement by such date, Licensor shall promptly advise Licensee that Licensor has not received payment or a statement. Licensee shall investigate the situation and assure that payment and/or a statement are sent to Licensor. In no event shall Licensee be deemed in breach of its payment obligations under this Agreement if Licensor has not received payment.
d. No payment shall be made to Licensor in any month when less than Five Hundred U.S. dollars ($500) is due and payable to Licensor via paper check. In the event payment is not made to Licensor for this reason, such amounts below Five Hundred U.S. dollars ($500) as applicable, will accrue to Licensor’s account and shall be paid in the first month in which Licensor’s account reflects a balance greater than Five Hundred U.S. dollars ($500) as applicable.
e. All payments to Licensor from Licensee under this Agreement shall be made via paper check.
f. Licensor hereby acknowledges that in the United States among the ways that mechanical royalties for digital sales are customarily paid include: (i) payment directly to the publishers/writers by the music services/retailers, and (ii) an all-in payment as part of the fee paid by the music services/retailers to Licensee and are not paid separately to the publishers/writers of compositions. In those instances when Licensee receives what is considered the mechanical royalty as part of the fee from Licensee Partners, the portion deemed the mechanical payment shall be included in Revenue paid to Licensor. Licensor shall be fully and solely responsible for paying the mechanical royalty to the appropriate publishers/writers for use of the Compositions under this Agreement, Licensee shall provide Licensor with a revenue breakdown in order to compute any such mechanical royalty in Licensor’s Label Access Console.
g. Notwithstanding anything to the contrary contained herein, Upon the full execution of this Agreement Licensor shall pay to Licensee a fee in the amount of Three Hundred Dollars (“Administration Fee”). The Administration Fee shall be non-recoupable.
All statements shall be binding upon Licensor and not subject to objection by Licensor unless specific objection in writing, stating the basis thereof, is given to Licensee within one (1) month from the date the statement is rendered, viewed, and/or downloaded.
Licensee and Licensor shall keep the terms and conditions of this Agreement confidential both during the Term and thereafter, and shall not disclose any information concerning the terms and conditions of this Agreement to any other person or entity. Each party may refer generally to the existence of this Agreement but shall not reveal the terms of this Agreement, including but not limited to the payment provisions, other confidential information, proprietary information, business plans, business models, customers, clients, technology, products, or any other information which either party identifies as confidential (collectively, the “Confidential Information”) without the prior written consent of the other party. Either party may disclose the Confidential Information on a “need to know” basis to its attorneys, financial, and other advisors who are under a duty of confidentiality to the disclosing party without the prior written consent of the other party so long as those agents are informed of this Confidentiality provision and agree to be bound by it and maintain the Confidential Information confidential. If required by law or governmental regulation, either party may disclose the Confidential Information only after it provides the other party with notice of the potential disclosure and the other party has the opportunity to narrow the information to be disclosed or dispute the disclosure. Nothing in this provision shall prohibit either party from disclosing that an agreement exists between Licensor and Licensee so long as the terms and conditions of this Agreement are not disclosed.
8. Warranties and Representations
A - Licensor’s warranties and representations.
a. Licensor warrants, represents, and agrees that:
(i) unless otherwise noted, Licensor possesses all rights in and to the Content to enable Licensee to use the Content as contemplated in this Agreement. In the event Licensor does not possess all of the full and exclusive rights to the Content, Licensor shall inform Licensee upon delivery of the Content, which right(s) Licensor does not own or control. Licensor shall provide Licensee with any documentation requested by Licensee evidencing rights to use the Content intended under this Agreement;
(ii) Licensor has the full right, power, and authority to enter into and fully perform this Agreement and all of Licensor’s obligations under this Agreement and to grant Licensee the rights granted in this Agreement. Licensor has not granted and will not grant or attempt to grant to any other person, firm, corporation or entity, rights of any kind which are inconsistent with the grant of rights to Licensee or which would in any way impair the rights granted to Licensee under this Agreement during the Term.
b. Licensor explicitly warrants and represents that:
(i) the Content contains NO unauthorized “Samples.” “Samples” as used herein means any portion(s) or interpolation(s) of third party master recording(s) and/or composition(s), video(s) and/or other material(s), or portions thereof whether musical, lyrical or otherwise, not owned and/or controlled by Licensor. Licensor explicitly warrants and represents that the Content, the sale, distribution, and exploitation of the Content, or any uses of the Content contemplated herein shall not violate any law or infringe upon any common law or statutory rights of any person, corporation, or entity, including without limitation contractual rights, copyrights, trademarks, and rights of privacy or publicity;
(ii) as required for use of the Compositions contemplated under this Agreement, except for those Compositions subject to 5 above, Licensor has obtained mechanical licenses for all Compositions and that Licensor shall administer and pay all mechanical royalty payments to the publishers/writers of the Compositions.
c. Licensor shall make any and all payments, which may be due to artists, producers, musicians, Performers, writers and publishers when not otherwise addressed in this Agreement and all others whose work and/or performances are embodied on the Content and/or all artwork submitted by Licensor.
B - Licensee warranties and representations.
Licensee warrants, represents, and agrees that Licensee has the right, power, and authority to enter into and fully perform this Agreement and all of its obligations under this Agreement;
9. Actions; Indemnity
a. Licensee shall have the right, but not the obligation, to prosecute, defend, settle and compromise all suits and actions respecting the Content, and generally to do and perform all things necessary concerning such activities and the copyrights therein, and to prevent and restrain the infringement of copyrights or other rights with respect to the Content. In the event of the recovery by Licensee of any monies, such monies shall be divided between Licensee and Licensor in the same shares as provided in Revenue Share, below, after first deducting all outside costs and expenses, if any, of obtaining such monies.
b. Each party (the “Indemnifying Party”) will indemnify, defend, and hold harmless the other party and its affiliates, their respective officers, directors, employees, and agents (“Indemnified Party”) from and against any and all losses, liabilities, claims, obligations, costs, and expenses (including reasonable attorney’s fees) which result from or arise in connection with or are related in any way to a breach by the Indemnifying Party of any of its representations and warranties in this Agreement. If a third party asserts a claim or allegation which, if proven, would constitute a breach by the Indemnifying Party of any of its representations, warranties, covenants and or obligations under this Agreement, the Indemnified Party shall promptly notify the Indemnifying Party in writing. The Indemnifying Party shall have the right at its own expense to participate in the defense thereof with counsel of its own choosing, provided however that the Indemnified Party’s decision in connection with the defense or settlement of any such claim or demand shall be final. No Indemnified Party shall effect any settlement of any pending or threatened proceeding with respect to which indemnity could have been sought under this Agreement by the Indemnified Party without the prior written consent of the Indemnifying Party.
c. Licensee shall pay Licensor the percentages of “Revenue” as outlined on Revenueeffect any settlement of any pending or threatened proceeding with respect to which indemnity could have been sought under this Agreement by the Indemnified Party without the prior written consent of the Indemnifying Party. Shares attached to this Agreement and forming a part of it.Licensor shall indemnify Licensee, its officers, directors, employees, and agents from and against all third party claims, actions or demands against Licensee for use of the Content as granted in this Agreement which may constitute infringement of copyright and/or trademark, and violate rights of privacy and/or publicity. Licensor explicitly indemnifies Licensee from and against any and all actions, demands, or claims brought against Licensee for non-payment or insufficient payment of mechanical royalties.
a. Upon termination or expiration of this Agreement, the rights granted to Licensee hereunder shall automatically revert to Licensor.
a. Upon termination or expiration of this Agreement for any reason, Licensee shall cease all use and distribution of the Content and shall demand that Licensee Partners cease all use and distribution of the Content. Licensee shall promptly delete all forms of the Content from its website and demand (within five (5) days of termination of this Agreement) that Licensee Partners delete all forms of Content from their websites.
11. Survival of Revenues
Upon expiration or termination of this Agreement, all Revenues received by Licensee for the Content shall continue to be subject to the payment provisions outlined in paragraph 5 above for so long as Licensee receives such Revenues. After termination or expiration of this Agreement, the minimum payment threshold referenced in paragraph 5 shall not apply and Licensee shall pay Licensor its percentage of all Revenues received regardless of the amount payable.
12. Mediation & Arbitration
If a dispute arises out of or relates to this Agreement, or if there is a breach of this Agreement, and the dispute cannot be settled or resolved, then the dispute or breach shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The controversy or claim shall be settled by three (3) arbitrators, and all hearings shall be held in San Francisco, California. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction. In rendering the award, the arbitrators shall interpret this Agreement in accordance with the substantive laws of California without regard to its conflict of laws rule. Notwithstanding the foregoing, if a third party claim is brought against Licensee for copyright infringement, violation of rights of publicity, rights of privacy, or other unauthorized use of Content which is contrary to the rights granted by Licensor to Licensee in this Agreement, Licensee shall not be bound by this Arbitration provision and may defend itself and make a claim against Licensor in the appropriate court of law and/or equity.
a. Under no situation or circumstance shall Licensee be required to accept any or all Content submitted by Licensor. Licensor has none of the rights granted under this Agreement unless Licensee officially accepts Content in writing (including via e-mail). Licensee will use reasonable efforts to make the Content available for sale on third party services, carriers, websites, and/or other platforms but makes no guarantee as to the timeliness of such availability or the manner in which it is presented by Licensee Partners to the public. Licensor understands and agrees that Licensee shall not be liable for any actual or potential lost revenue due to a delay or failure to have the Content available via third party services, carriers, websites, and/or other platforms. However, Licensee will work with Licensor and Licensee Partners to facilitate as many of Licensor’s preferences as possible
b. If any part of this Agreement is deemed invalid or unenforceable, it shall not affect the validity or enforceability of the remainder of this Agreement, which shall remain in full force and effect as if such invalid or unenforceable provision(s) were not a part hereof.
c. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, executors, successors in interest, and assigns.
d. In entering into and performing this Agreement, Licensor and Licensee each have the status of independent contractors. This Agreement shall not be deemed to create a partnership or joint venture between the parties and neither is the other’s partner or employee.
e. This Agreement, the attached Exhibits and any Addendums contain the entire understanding between the parties with respect to the subject matter hereof and may only be modified, altered, or amended by a written agreement signed by all parties. For purposes of this provision, a written modification, alteration, or amendment shall include e-mail transmission with proof of receipt and acceptance by the receiving party.
f. Licensor agrees that it enters into this Agreement with all knowledge of its terms, freely and voluntarily, and with a complete understanding of all the consequences of entering into this Agreement. Licensor acknowledges that it has been represented in the negotiation and execution of this Agreement by an independent attorney of Licensor’s choice who is familiar with the practices of the entertainment industry or Licensor has willingly refrained from so doing.
g. Subject to and in accordance with paragraph 12 above, this Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to any choice of law principles.
h. All notices and communication desired or required between the parties may be made via e-mail transmission, provided however that the sending party obtain proof of receipt of such communication by the recipient either by return e-mail, follow up telephone call, or facsimile. Notices that pertain to any claim referenced in paragraph 9 shall be given in writing and delivered in any of the following ways: personally, via a commercial carrier which provides proof of delivery whether or not such delivery is made overnight with the postage prepaid.