DIGITAL DISTRIBUTION AGREEMENT
This Distribution Agreement (“Agreement”) is made and entered into as of
November 17, 2021 by and between (“Licensor”) and Sending You Creative Entertainment (“Licensee”).
Licensee and Licensor may be referred to as “Party or collectively as “Parties.”
1. CONTENT:
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
(the “Masters”) delivered through any means to Sending You Creative
Entertainment.
b. Compositions: Licensor either:
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
(“Additional Works”) which Licensor would like Sending You Creative
Entertainment to include in this Agreement.
d. In this Agreement, the Masters, the Compositions, and the Additional Works, if
any, are collectively referred to as the “Content.”
2. TERRITORY: The territory for this Agreement shall be the universe (the “Territory”).
3. GRANT OF RIGHTS: Subject to the terms and conditions of this Agreement, Licensor
hereby grants Sending You Creative Entertainment the non-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 (“Sending You
Creative Entertainment Partners”) with whom Sending You Creative Entertainment has
or enters into agreements with during the Term. These rights include, but are not limited
to, the right to:
a. perform the Content in streaming format on Sending You Creative
Entertainment’s and/or Sending You Creative Entertainment Partners’ websites,
services, and platforms;
b. publicly display and make available for download as part of the sale of the
Masters the lyrics of the Compositions;
c. collect monies payable by SoundExchange to the owner of the Masters and other
organizations for neighboring rights. To be clear, where applicable, this collection
right is only for Licensor’s Masters and not the so-called “performers’ side.” Any
monies collected on Licensor’s behalf from SoundExchange are included in
“Revenue” (defined below) and are subject to the payment provisions of this
Agreement;
d. 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;
e. release, advertise, and sell electronic files or equivalent electronic form(s) of the
Content and to permit others to do so under the Sending You Creative
Entertainment brand.
f. sub-license the rights granted by Licensor to Sending You Creative Entertainment
in this Agreement as necessary to Sending You Creative Entertainment 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. Sending You Creative Entertainment’s grant of rights to Sending You
Creative Entertainment Partners for use of the Content shall always be subject to
the terms and limitations of this Agreement; and
g. subject to Licensor’s prior approval in each instance, enter into a master use
license for the synchronization of the Masters with moving pictures, including but
not limited to film, television, video games, etc. (“Synchs”) and to collect the
master license fee for all such Synchs. Sending You Creative Entertainment shall
have the right to grant Synchs that extend past the Term.
4. PROMOTIONAL AND OTHER RIGHTS:
a. Unless otherwise instructed in writing by Licensor, Sending You Creative
Entertainment shall have the non-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 Sending You Creative Entertainment to provide marketing and
licensing services under this Agreement, Licensor grants Sending You Creative
Entertainment the right to:
i. publicly perform the Masters (and other Content as applicable) on Sending
You Creative Entertainment’s websites, services, or platforms and permit
Sending You Creative Entertainment Partners to publicly perform the
Masters on their websites, services, or platforms on a gratis basis for the
purposes of promoting the sale of the Content. Licensor hereby
acknowledges that Sending You Creative Entertainment and Sending You
Creative Entertainment 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;
ii. print, publish, disseminate, and otherwise use and permit others to
use the “Name, Image, and Likeness (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 works is embodied on the Content including the “Performer” (as
defined below). All NIL Materials provided by Licensor to Sending You
Creative Entertainment shall be deemed approved. All material provided
by Licensor to Sending You Creative Entertainment may be edited to fit
the format of the specific use without further approval from Licensor.
Sending You Creative Entertainment shall have the right to permit
Sending You Creative Entertainment Partners, successors and designees
the right to use the approved NIL Material 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,
iii. grant gratis licenses to synchronize the Masters with user-
generated moving images solely for the purposes of promoting the
Content.
5. TERM AND TERMINATION:
a. This Agreement shall commence on the Effective Date for a period of one (1)
year from the Effective Date (the “Initial Term”). This Agreement shall
automatically renew for successive one (1) year terms, if not terminated in writing
thirty (30) days or more prior to the expiration of the term (the “Initial Term” and
any period thereafter, if any, collectively are referred to as the “Term”).
b. Upon termination or expiration of this Agreement, the rights granted to Sending
You Creative Entertainment hereunder shall automatically revert to Licensor.
Additionally, Licensor may, upon thirty (30) days written notice to Sending You
Creative Entertainment, terminate this Agreement with respect to any particular
Master, Composition, or Additional Work without effecting this Agreement for
the remaining Masters, Compositions, and/or Additional Works.
c. After the Initial Term, Sending You Creative Entertainment has the right to
terminate this Agreement upon thirty (30) days written notice to Licensor. If
Sending You Creative Entertainment should file for chapter 7 or chapter 11
bankruptcy proceeding, termination of this Agreement is immediate and all
Content shall be returned to Licensor.
d. Upon termination or expiration of this Agreement for any reason, Sending You
Creative Entertainment shall cease all use and distribution of the Content and
shall demand that Sending You Creative Entertainment Partners cease all use and
distribution of the Content. Sending You Creative Entertainment shall promptly
delete all forms of Content from its websites, services, and platforms and demand
that Sending You Creative Entertainment Partners delete all forms of Content
from their websites, services, and platforms within sixty (60) days of termination
of this Agreement.
e. Survival of Revenues: Upon termination or expiration of this Agreement, all
Revenues received by Sending You Creative Entertainment for the Content shall
continue to be subject to the payment provisions outlined in section 6 below for so
long as Sending You Creative Entertainment receives such Revenues.
6. PAYMENT:
a. Sending You Creative Entertainment shall pay Licensor the percentages of
“Revenue” as outlined on Revenue Shares attached to this Agreement.
b. “Revenue” means income actually received by or credited to Sending You
Creative Entertainment that is derived solely from the exploitation of the Content.
Income received by Sending You Creative Entertainment may be subject to taxes,
surcharges, or fees imposed by government agencies or Sending You Creative
Entertainment Partners before payment is sent to Sending You Creative
Entertainment. Sending You Creative Entertainment shall have no obligation to
pay Licensor Revenue which Sending You Creative Entertainment has not
actually received until such time Sending You Creative Entertainment receives
such Revenue.
c. Subject to receipt of accurate and complete payment and tax information,
Revenue shall be paid monthly on the 15 th of each month or the following
business day if such date occurs on a weekend or holiday. Each payment will be
accompanied by a detailed statement showing all sales and other Revenue-
generating exploitations of the Content. If Licensor has not received payment or a
statement indicating that no payment is due by the 20 th day of the month, Licensor
shall promptly advise Sending You Creative Entertainment that Licensor has not
received payment or a statement. Sending You Creative Entertainment shall
investigate the situation and assure that payment and/or a statement is sent to
Licensor.
d. No payment shall be made to Licensor in any month when less than
Fifty U.S. dollars ($50) is due and payable to Licensor. In
the event payment is not made to Licensor for this reason, such amounts below
Fifty U.S. dollars ($50) will accrue to Licensor’s account
and shall be paid in the first month in which Licensor’s account reflects a balance
greater than Fifty U.S. dollars ($50) as applicable.
e. All payments to Licensor from Sending You Creative Entertainment under this
Agreement shall be made via check or direct deposit.
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 Sending You
Creative Entertainment and are not paid separately to the publishers/writers of
compositions. In those instances, when Sending You Creative Entertainment
receives what is considered the mechanical royalty as part of the fee from Sending
You Creative Entertainment 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.
g. Licensor hereby consents, and shall obtain the consent of all payees, to receive
electronic 1099s.
7. ACCOUNTINGS AND AUDITS: All statements shall be binding upon Licensor and
not subject to objection by Licensor unless Licensor provides Sending You Creative
Entertainment with a specific objection in writing, stating the basis thereof within three
(3) years from the date the statement is rendered, viewed, and/or downloaded. Licensor
shall have three (3) years from the date the statement is rendered, viewed, and/or
downloaded to conduct an inspection of Sending You Creative Entertainment’s books
and records specifically relating to Licensor’s sales and payment activity. Such
inspection shall take place at the location where Sending You Creative Entertainment
normally keeps such books and records and shall be conducted during normal business
hours. All such inspections shall be made upon prior written notice to Sending You
Creative Entertainment at least thirty (30) days prior to the date Licensor intends to
conduct such inspection. Licensor may only inspect records relating to each statement
once and may only conduct such an inspection once a year. Sending You Creative
Entertainment shall have the absolute right in accounting to Licensor to rely upon the
statements received by Sending You Creative Entertainment from third parties and shall
not be liable in any manner whatsoever for any error, omission, or other inaccuracy of
any such statement(s) or information received by Sending You Creative Entertainment.
However, if Sending You Creative Entertainment knows or has a reliable business reason
to know of an error, omission, or other inaccuracy in such third party statement or
information, Sending You Creative Entertainment shall promptly act to correct it and
when corrected, Sending You Creative Entertainment shall appropriately correct
Licensor’s statement and Revenue.
8. CONFIDENTIALITY: The Parties 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 confidentiality. 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 Sending You Creative Entertainment so long as the terms
and conditions of this Agreement are not disclosed.
9. WARRANTIES AND REPRESENTATIONS:
a. Licensor explicitly warrants, represents, and agrees that:
i. unless otherwise noted, Licensor possesses all rights in and to the Content
to enable Sending You Creative Entertainment 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
Sending You Creative Entertainment upon delivery of the Content which
right(s) Licensor does not own or control. Licensor shall provide Sending
You Creative Entertainment with any documentation requested by
Sending You Creative Entertainment 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 Sending You Creative Entertainment the rights
granted in this Agreement. Licensor has not granted and will 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 Sending You
Creative Entertainment or which would in any way impair the rights
granted to Sending You Creative Entertainment under this Agreement
during the Term;
iii. 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;
iv. as required for use of the Compositions contemplated under this
Agreement, except for those Compositions subject to 6(f)(i) 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; and
v. Licensor shall make any and all payments, which may be due to
artists, producers, musicians, Performers, writers, 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 warrants, represents, and agrees that:
i. Sending You Creative Entertainment has the right, power, and authority to
enter into and fully perform this Agreement and all of its obligations under
this Agreement;
ii. Sending You Creative Entertainment shall, at its sole cost and
expense, deliver the Content to Sending You Creative Entertainment
Partners.
10. ACTIONS AND INDEMNITY:
a. Sending You Creative Entertainment 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 Sending You Creative Entertainment of any monies, such monies
shall be divided between Sending You Creative Entertainment 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 (the “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. Upon receipt of a claim which, if true, would represent a breach of any of
Licensor’s warranties or representations in this Agreement, Sending You Creative
Entertainment shall have the right to withhold Licensor’s Revenue payments until
such claim has been resolved.
11. DISPUTE RESOLUTION: Any dispute, claim or controversy arising out of or relating
to this Agreement or the breach, termination, enforcement, interpretation or validity
thereof, including the determination of the scope or applicability of this agreement to
arbitrate, (except as set forth in Subparagraph (b) below) shall be resolved according to
the procedures set forth in Subparagraph (a) below:
a. Arbitration: The arbitration shall be administered by JAMS pursuant to its
Comprehensive Arbitration Rules and Procedures [and in accordance with the
Expedited Procedures in those Rules] [or pursuant to JAMS’ Streamlined
Arbitration Rules and Procedures]. Judgment on the Award may be entered in
any court having jurisdiction. This clause shall not preclude parties from seeking
provisional remedies in aid of arbitration from a court of appropriate jurisdiction.
b. Notwithstanding the foregoing, if a third party claim is brought against Sending
You Creative Entertainment 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 Sending You Creative Entertainment
in this Agreement, Sending You Creative Entertainment shall not be bound by
this Arbitration provision and may defend itself and make a claim against
Licensor in the appropriate court of law or equity.
12. GOVERNING LAW: This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Maryland,
exclusive of conflict or choice of law rules. The Parties hereby consent to the jurisdiction
of the courts of the State of Maryland.
13. DISCLAIMER: Sending You Creative Entertainment will use reasonable efforts to
make the Content available for sale on third party services, carriers, websites, services,
and other platforms but makes no guarantee as to the timeliness of such availability or the
manner in which it is presented by Sending You Creative Entertainment Partners to the
public. Licensor understands and agrees that Sending You Creative Entertainment 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, or other platforms.
However, Sending You Creative Entertainment will work with Licensor and Sending
You Creative Entertainment Partners to facilitate as many of Licensor’s preferences as
possible.
14. SEVERABILITY IN EVENT OF PARTIAL INVALIDITY: If any provision of this
Agreement is held in whole or in part to be unenforceable for any reason, the remainder
of that provision and the entire Agreement will be severable and remain in effect.
15. ENTIRE AGREEMENT/MODIFICATION BY SUBSEQUENT AGREEMENT:
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.
16. MISCELLANEOUS:
a. Under no situation or circumstance shall Sending You Creative Entertainment be
required to accept any or all Content submitted by Licensor. Licensor has none of
the rights granted under this Agreement unless Sending You Creative
Entertainment officially accepts Content in writing (including via e-mail) or
otherwise exploits or distributes such Content.
b. 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.
c. 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.
d. Licensor agrees that Licensor 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
Licensor has had the opportunity to consult with an independent attorney of
Licensor’s choice who is familiar with the entertainment industry in the
negotiation and execution of this agreement or has willingly refrained from doing
so.
e. This Agreement shall not be construed more strictly against one Party than the
other merely by virtue of the fact that it has been prepared initially by counsel for
one of the Parties, it being recognized that both Parties and their respective
counsel, as applicable, have had a full and fair opportunity to negotiate and
review the terms and provisions of this Agreement and to contribute to its
substance and form.
f. 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-email,
follow up telephone call, or facsimile. Notices that pertain to any claim
referenced in paragraph 10 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.
g. This Agreement may be executed in counterparts, each of which shall be deemed
an original, and said counterparts shall constitute one and the same instrument. In
addition, a signed copy of this Agreement transmitted by facsimile or scanned
into an image file and transmitted via e-mail shall, for all purposes, be treated as if
it were delivered containing an original manual signature of the Party whose
signature appears thereon and shall be binding upon such Party as though an
originally signed document had been delivered.