MUSIC DISTRIBUTION AGREEMENT
Music Distribution Agreement
Dated as of March 6, 2017
Please read the following distribution agreement (the “Agreement”) carefully. This is a legal agreement between you (“you” or “Owner”) and Verge Records International, Inc. dba “ONErpm” (“ONErpm”).
A. WHEREAS, ONErpm distributes music and audiovisual recordings via the Internet through its website(s) (the “Site(s)”), facilitates and manages the distribution and exploitation of music and audiovisual recordings through third party Internet retailers and platforms, including, without limitation, platforms and services which may come into existence or be developed after the Effective Date (as defined below) (“Third Party Platforms”), and provides other services regarding the use and exploitation of music and audiovisual recordings (the “Service(s)”) for the purposes of selling music and audiovisual recordings to consumers and otherwise exploiting music and audiovisual recordings for income;
B. WHEREAS, Owner owns or otherwise controls the rights to the master recordings (such master recordings shall be individually and collectively referred to herein as the "Masters"), audiovisual recordings (such audiovisual recordings shall be individually and collectively referred to herein as the “Videos”) intellectual property and other materials submitted by Owner to ONErpm during the Term (defined below).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
b. You can choose from two different packages of Services for each album (comprising three or more Masters) or singles (one or two Masters) that you distribute through ONErpm: the “Arena Package” or the “Premium Package,” as set forth on the Site (collectively, the “Plans”). Fees paid by you as part of your selected Plan are non-refundable. Once you choose your Plan for a particular album and/or single, you cannot change Plans, although you can add Third Party Platforms and Services to that Plan, if applicable and offered. If you choose the Arena Package and fail to make a future payment that becomes due, the applicable album and/or single will be automatically moved to the Premium Package and will not be removed from the Services until ONErpm receives written notice from you, in accordance with the terms of this Agreement, terminating this Agreement with regard to such album and/or single.
2. Term. - The term of this Agreement shall be three (3) years from the date that you create an account with ONErpm (the “Effective Date”) and will automatically renew for additional three (3) year periods (the “Term”), until terminated in writing by either party ninety (90) days prior to the end of the then current period.
3. Territory. - The territory of this Agreement will be the universe, unless otherwise agreed to in writing by the parties (the “Territory”).
4. Grant of Rights. - Owner hereby grants to ONErpm the following irrevocable, sub-licenseable rights throughout the Territory and during the Term:
a. The exclusive right and license to convert, digitize, encode, integrate, make, cause or otherwise reproduce the Masters and the Videos in any digital or electronic format now known or hereafter devised for the purposes of distributing the Masters and Videos as granted herein;
b. The exclusive right and license to digitally distribute, reproduce, transmit, license, sell (including without limitation via downloading, streaming, subscription services and burning), advertise, publish, publicly perform, broadcast, and otherwise use and exploit the Masters in any electronic or digital format now known or hereafter devised during the Term to consumers throughout the Territory through any platform or service, including, but not limited to, its Site(s) (“Direct Distribution”) or the sites, platforms or services of any Third Party Platforms;
c. The exclusive right and license to digitally distribute, reproduce, transmit, license, sell (including without limitation via downloading, streaming, subscription services and burning), advertise, publish, publicly perform, broadcast, and otherwise use and exploit the Videos in any electronic or digital format now known or hereafter devised during the Term to consumers throughout the Territory through any platforms or services of any Third Party Platforms. Such rights shall include the right to make, display, reproduce, and distribute separate images (e.g., thumbnails) of video stills from the Videos in connection with the promotion, advertising, and marketing of the Videos and the Services;
d. The right and license to stream or broadcast the Masters, whole or in part, on a gratis basis for purposes of inducing users to download the Masters ("Preview Clips"). Owner agrees that no royalties or payments (including, but not limited to, for the use of the underlying music compositions embodied in the Masters) shall accrue or be payable with respect to any such gratis Preview Clip stream. For the avoidance of doubt, the Preview Clip may be made available on the Site(s) or any Third Party Site in such a manner so as to allow consumers to listen to the Preview Clip but not download the Preview Clip;
e. The exclusive right and license to exploit and administer the exploitation of audio, visual, and audiovisual recordings and other content (“UGC”) embodying the Masters on the Internet, via YouTube or otherwise including, without limitation, the management of YouTube’s Content ID with respect to the Masters and such UGC, and the tracking, monetizing, taking down or blocking of such UGC on the Internet (“Content ID”);
f. The non-exclusive right and license to use in the Territory the approved name, likeness, and biography of each artist whose performance is embodied in the Masters and Videos and the approved album artwork, lyrics and liner notes relating to the Masters and Videos (collectively the “Album Materials”) in connection with the exploitation, sale, and distribution of the Masters and Videos hereunder and the advertising, publicizing or promotion of the Masters and Videos in all configurations and by any and all media, provided that (i) all materials provided by Owner to ONErpm shall be deemed approved for purposes hereof, (ii) Owner understands that credit may not be provided in connection with all uses of the Masters and Videos hereunder and, (iii) Owner unconditionally waives, on behalf of itself and all third parties having an ownership interest in the Masters and Videos, any and all moral rights with respect to the right of attribution that Owner may have in respect of the Masters and Videos to the extent permitted by applicable law;
g. The right and license to exploit the musical compositions embodied in the Masters and Videos to the extent needed for ONErpm to exploit the rights granted to it hereunder. In the event that Owner does not own or control such musical compositions, Owner shall obtain licenses for such compositions pursuant to subparagraph 6(b) below; and
h. The non-exclusive right, subject to Owner’s prior written approval in each instance (email being sufficient), to license and cause others to license the use, exploitation, and performance of the Masters and, to the extent owned or controlled by Owner, the underlying musical compositions embodied therein, including, without limitation, the synchronization of the Masters and such musical compositions (if applicable) in connection with motion pictures, television programs, advertisements, video games and any other audiovisual works, and to collect all income related to any exploitation of the Masters and such musical compositions (excluding public performance royalties) licensed by ONErpm (the “Synchronization Rights”).
i. Unless otherwise specifically specified herein, the foregoing grant of rights are exclusive throughout the Territory during the Term such that Owner shall not grant the rights granted to ONErpm hereunder to any third party for any purpose or independently exploit the rights granted to ONErpm hereunder for any purpose throughout the Territory during the Term. Owner acknowledges and agrees that ONErpm may utilize third parties to exercise the rights granted to it hereunder.
5. Reservation of Rights. ONErpm shall not edit, remix, resequence or otherwise alter any Master delivered by Owner to ONErpm in any manner, except as otherwise set forth herein. All rights not specifically granted to ONErpm herein are expressly reserved for the Owner.
6. Owner Obligations.
a. Upon the execution of this Agreement and throughout the Term with respect to new Content distributed by ONErpm, Owner shall deliver to ONErpm (i) the Masters and Videos in a digital or electronic format approved by ONErpm or by any other format approved by ONErpm; and (ii) the Album Materials (including the credits for the Masters and Videos, including but not limited to, the names and contact information of the writer(s), and music publisher(s) of the musical compositions embodied in the Masters and Videos) (the Masters and Videos, Album Materials and any other content submitted by Owner to ONErpm shall collectively be referred to herein as “Content”).
b. Owner shall obtain and pay for any necessary clearances and licenses in the Territory for all of the Owner’s Content (including, but not limited to, the musical compositions embodied in the Masters and Videos, unless otherwise handled and paid directly by the Third Party Platforms, which shall be Owner’s responsibility to verify in writing). Accordingly, Owner shall be responsible for and pay any and all royalties and other income due to artists, side artists, producers, writers, publishers and other record royalty participants from sales or other uses of the Masters and Videos, including but not limited to, all mechanical royalties payable to writers and/or publishers of the copyrighted musical compositions embodied in the Masters and Videos from sales or other uses of the Masters and Videos, all payments that may be required under collective bargaining agreements applicable to the Masters and Videos, and any other royalties, fees, and or monies payable by the Owner with respect to the Content, unless Owner has verified in writing that the Third Party Platforms have paid such royalties.
c. Owner shall register for an account with ONErpm through its Site (as directed by ONErpm) in order to receive income payable to Owner pursuant to Section 7 herein.
a. In full consideration of the rights granted to ONErpm hereunder, and conditioned upon Owner's full and faithful performance of all the terms and conditions hereof, Owner shall be paid:
For Content distributed via the Arena Package:
A. One Hundred (100%) percent of Net Receipts (as defined below) resulting from the exploitations of the Masters via Direct Distribution and all basic, premium, and mobile store offerings, as listed on the Site (including iTunes ringtones, and excluding, for the avoidance of doubt, YouTube and exploitations of the Videos via Third Party Platforms); and
For Content distributed via the Premium Package:
A. Eighty-Five (85%) percent of Net Receipts resulting from the exploitations of the Masters via all so-called “Essential Stores,” as listed on the Site (including iTunes ringtones, and excluding, for the avoidance of doubt, YouTube, mobile stores, video stores, and premium stores); and
B. Seventy (70%) percent of Net Receipts resulting from the administration and exploitation of all rights to the Masters, underlying musical compositions, the Videos and other audio-visual materials provided by Owner to ONErpm (including but limited to videos, text, and images) via YouTube, premium stores, and mobile stores (excluding iTunes ringtones), as listed on the Site.
For Content distributed via any Plan:
A. Seventy (70%) percent of Net Receipts resulting from the administration and exploitation of the Content ID;
B. Fifty (50%) percent of Net Receipts resulting from exploitations of the Videos via Third Party Platforms, excluding YouTube (e.g. Apple Music, Tidal, and Vevo).
C. Fifty (50%) percent of license fees (e.g., synchronization fees) received by ONErpm directly in connection with and solely attributable to ONErpm’s exploitation of the Synchronization Rights.
b. Net Receipts shall be understood to mean all monies actually received by or credited to ONErpm directly attributable to the sale, license, exploitation or use of the Masters or Videos hereunder ("Gross Receipts"), less any and all publishing income payable to third parties and public performance rights organizations, money transfer transaction processing fees, applicable sales taxes and required tax withholding in applicable territories, third party marketing costs directly attributable to the marketing of the Masters, and union scale fees (where applicable).
c. Owner's Share of Net Receipts shall be inclusive of, and Owner shall be solely responsible for the payment of, all publishing, mechanical royalties, and other payments due to all royalty participants associated with the Masters and Videos and the musical compositions embodied therein unless otherwise paid directly by the Third Party Platforms.
d. Owner shall be responsible for the payment of all taxes assessed to Owner with respect to the all income received by Owner pursuant to this Agreement.
e. ONErpm shall have the right to rely on accounting, usage, and other statements received from ONErpm’s sublicensees (including, but not limited to, YouTube Analytics) for all purposes hereunder.
a. ONErpm shall account to and pay Owner's share of Net Receipts on an approximately monthly basis. Such accounting shall include the Net Receipts received by ONErpm from exploitation of the Masters and Videos from all sources (including Direct and Third Party Distribution) specified herein and the amount due to the Owner. Payments will be made to Owner via Paypal, wire transfer, or any other method used by ONErpm. Payments shall be subject to the terms and conditions of the third party service or financial institution used to render payment to Owner hereunder, and Licensor shall be responsible for any fees charged by any such third parties. All payments are made in the original currencies where the sales occurred. Any objection relating to any accounting statement, or any lawsuit arising therefrom, must be made (and any lawsuit commenced), no later than one (1) year after the date the statement is to be rendered, and Owner hereby waives any longer statute of limitations that may be permitted by law.
b. Owner agrees that ONErpm may freeze and withhold any and all revenues in Owner’s account that are received by ONErpm in connection with the Content that ONErpm believes, in its sole and reasonable discretion, violates this Agreement or the Site Agreements (defined below). If ONErpm has a good faith belief that such revenues are the result of fraud or infringement by Owner, then such revenues shall be forfeited by Owner. To the extent any fraudulent and/or infringing activities are determined to be caused by Owner or Owner’s affiliates’ actions or omissions, any costs incurred by ONErpm (including legal fees and expenses) in connection therewith may, in addition to other remedies, be deducted by ONErpm from any monies otherwise payable to Owner hereunder. Certain Third Party Platforms may also have policies related to fraud and suspected fraudulent activities, and Owner agrees that it is Owner’s responsibility to investigate such policies, if any, and that such policies shall be binding upon Owner.
9. Representations and Warranties; Indemnification.
a. Owner represents and warrants that: (i) Owner is over 13 years of age, of legal age to form a binding contract, and, if Owner is under 18 years of age, has had a parent or guardian review this Agreement and give its consent for Owner to enter and be bound by this Agreement; (ii) Owner is, and can demonstrate to ONErpm’s full satisfaction that Owner is, the owner of or otherwise controls or has obtained the rights and licenses to the Masters and Videos, the underlying musical compositions embodied therein, and the Album Materials in order for ONErpm to exploit the rights granted to it hereunder; (iii) Owner has the right to enter into this Agreement and to perform all of its obligations hereunder and grant the rights set forth herein; (iv) Owner shall not grant and has not granted to any third party any rights that are inconsistent with the rights granted to ONErpm hereunder; (v) Owner shall be solely responsible for the payment of any royalties or other payments to any third parties that may become due as a result of ONErpm’s exercise of its rights hereunder, including, without limitation, to any performing rights organizations, writers, co-writers, producers, performers, and third party royalty participants; (v) the Content (including, without limitation, the Masters Videos, Album Materials and any underlying musical compositions embodied therein) or any other materials furnished by Owner to ONErpm and ONErpm’s exercise of the rights granted hereunder, shall not infringe upon any other material, or violate or infringe upon any common law or statutory rights, including but not limited to copyright, trademark rights, and rights of privacy and publicity, of any third party; and (vi) Licensor knows of no material claims, nor basis for such claims, which may affect the ownership or validity of the Content.
b. Owner agrees to indemnify, defend, and hold ONErpm, its affiliates, assigns, sub-distributors and licensees and their directors, officers, shareholders, agents, employees harmless from and against all third party claims and resulting damages, liabilities, losses, costs and expenses, including, without limitation, reasonable attorneys’ fees and court costs, arising out of or connected with any breach or alleged breach by Owner of any warranty, representation or agreement made herein or pertaining to any act, error, or omission committed by Owner or any person or entity acting on Owner’s behalf or under Owner’s direction or control. In the event that a claim is made or an action is commenced, ONErpm shall have the right to withhold payment of any and all monies due to Owner hereunder in reasonable amounts related to such claim or action pending the disposition thereof.
c. ONERPM'S AGGREGATE LIABILITY FOR ANY AND ALL CAUSES OF ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT SHALL NOT EXCEED THE AMOUNT OF MONEY PAID BY ONERPM TO OWNER IN THE DURING THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE DATE OF THE BREACH OR ALLEGED BREACH BY ONERPM OF THIS AGREEMENT GIVING RISE TO SUCH LIABILITY. THE LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION 9(C) WILL APPLY REGARDLESS OF THE CAUSE OF ACTION UNDER WHICH SUCH DAMAGES ARE SOUGHT, WHETHER FOR BREACH OF CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER TORT, WHETHER OR NOT THE PARTIES WERE OR SHOULD HAVE BEEN AWARE OR ADVISED OF THE POSSIBILITY OF SUCH DAMAGE, AND REGARDLESS OF WHETHER ANY REMEDY FAILS OF ITS ESSENTIAL PURPOSE. THE PARTIES AGREE THAT THE AGREEMENTS MADE IN THIS SECTION REFLECT A REASONABLE ALLOCATION OF RISK, AND THAT EACH PARTY WOULD NOT ENTER INTO THIS AGREEMENT WITHOUT THESE LIMITATIONS ON LIABILITY.
a. ONErpm shall have the right, at any time, to terminate this Agreement, remove any of Owner’s Content from the Site(s), cease providing Services to Owner, and/or cease the exploitation and distribution of any Content, which ONErpm may elect to do as a result of ONErpm’s determination that Owner’s Content (i) infringes or may infringe upon any third party rights, (ii) violates the Site Agreements or the terms and conditions of this Agreement or the Third Party Platform Agreements (as defined below), (iii) may be offensive or obscene, (iv) may harm ONErpm or bring ONErpm into disrepute by association, or (v) for any other reason, or no reason, that ONErpm may determine in its sole discretion.
b. In the event of any termination of this Agreement, (i) sections 8(b), 9, and 11 of this Agreement shall survive, (ii) within 60 days of such termination, ONErpm will, as a final payment to Owner, pay any monies payable to Owner that have been earned but not already paid prior to such termination (subject to ONErpm’s rights to withhold, retain and/or use any such amounts pursuant to this Agreement); and (iii) ONErpm will have no further obligations to render any payments or accountings to Owner hereunder.
a. The parties agree and acknowledge that the relationship between the parties is that of independent contractors. This Agreement shall not be deemed to create a partnership or joint venture, and neither party is the other's agent, partner, employee, or representative.
c. This Agreement will be binding on the assigns, heirs, executors, affiliates, agents, administrators, and successors of each of the parties. ONErpm will have the right to freely assign this Agreement at any time to any party. Owner acknowledges and agrees that neither this Agreement nor any right or interest hereunder may be assigned or transferred by Owner without the express, prior, written consent of ONErpm.
d. All notices required or permitted to be given hereunder shall be in writing and shall be deemed to delivered to the other party by any of the following methods: (i) U.S. mail, (ii) overnight courier, or (iii) electronic mail. If you give notice to ONErpm, you must use the following address: Verge Records International, Inc., 2005 Russell Street, Nashville, TN 37206 or support@ONErpm.com. If ONErpm provides notice to you, ONErpm will use the contact information provided by you upon registration with ONErpm, or as properly updated, or, in the absence of a valid electronic email address, via any other method ONErpm may elect in its sole discretion, including, but not limited to, via posting on the Site. All notices will be deemed received as follows: (i) if by delivery by U.S. mail, seven (7) business days after dispatch, (ii) if by overnight courier, on the date receipt is confirmed by such courier service, (iii) if by electronic mail, 24 hours after the message was sent, if no “system error” or other notice of non-delivery is generated; or (iv) upon posting if by other electronic means, if permitted. If applicable law requires that a given communication be “in writing,” you agree that email communication will satisfy this requirement.
e. If any provision of this Agreement or the application thereof shall for any reason be declared by a court of competent or arbitration proceeding under this Agreement to be invalid or unenforceable, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal, and enforceable while preserving its intent or, if such modification is not possible, by substituting therefore another provision that is valid, legal, and enforceable so as to materially effectuate the parties’ intent.
f. As a condition precedent to any assertion by Owner that ONErpm is in default in performing any obligation contained herein or otherwise in breach of this Agreement, Owner shall give ONErpm detailed written notice of such default or breach, and ONErpm shall be allowed a period of thirty (30) days after receipt of such written notice within which to cure such alleged default or breach. No default or breach by ONErpm will be deemed to be incurable. The failure of either party to act in the event of a breach of this Agreement by the other will not be deemed a waiver of such breach or a waiver of future breaches.
g. This Agreement shall be deemed to have been made in the State of New York, without regard to its conflict of laws provisions, and its validity, construction, performance and breach shall be governed by the laws of the State of the New York.
h. All actions or proceedings seeking the interpretation or enforcement of this Agreement shall be submitted for final binding arbitration under the commercial rules then pertaining of the American Arbitration Association in New York City. Any such action or proceeding shall be arbitrated on an individual basis and shall not be consolidated in any arbitration with any claim, controversy, action or proceeding of any other party. In the event of a claim or dispute, Owner’s sole remedy shall be limited to an action at law for money damages, if any, and Owner shall not have the right to in any way enjoin or restrain ONErpm’s Site, Services or other activities.
Owner acknowledges that it has been advised to seek independent legal and business counsel with respect to this Agreement and that Owner has either sought and obtained such counsel or deliberately refrained from doing so.
BY CLICKING “CREATE ACCOUNT,” YOU AGREE TO ENTER INTO THIS DIGITAL DISTRIBUTION AGREEMENT WITH ONERPM UNDER THE TERMS AND CONDITIONS SPECIFIED ABOVE. IF YOU DON’T AGREE WITH THE TERMS AND CONDITIONS OR DON’T WANT TO ENGAGE ONERPM TO DISTRIBUTE YOUR CONTENT, DO NOT CLICK “CREATE ACCOUNT.”