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DIGITAL DOWNLOAD AGREEMENT This DIGITAL DOWNLOAD AGREEMENT (“Agreement”)
is made and entered into effective
as of __________________ (the “Effective Date”) by and between
Tafari Records (“My Reggae”), a
Limited Liability corporation located at
9159B WHEREAS, My Reggae desires to sell eMasters to Customers (in each case, as defined below); and WHEREAS, Label agrees to such sale of eMasters, subject to the terms and conditions herein and in exchange for My Reggae’s obligations as set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereby agree as follows: 1. DEFINITIONS (a) “Allowed Expenses” shall mean: (i) Credit card transaction, electronic commerce processing, royalties and content transmission fees payable to or retained by unaffiliated third parties in connection with effecting a transaction or transmission, if any, including without limitation bandwidth and storage fees; (ii) Sales use or other tax, if any; (iii) Customer credits, including, but not limited to those on account of errors in billing and errors in transmission, if any; (iv) Public performance fees, if any; (v) Union, guild or other third party fees that may be required by contract or the Copyright Act, if any; (vi) Commissions payable to unaffiliated third parties for referrals not to exceed an amount equal to ten percent (10%) the retail price set by My Reggae in respect of the eMasters concerned and actually paid to and received by My Reggae in connection with the sale of the eMaster concerned as a result of such endorsement or recommendation of such eMaster. (b) “Artwork” means the front cover artwork associated with a Master and/or the Album containing such Master as provided to My Reggae by Label, for use in accordance herewith. (c) “Composition” means the respective musical composition(s) embodied in a particular Master. (d) “Customer” means an online visitor to Service in the Territory. (e) “eMaster” means a Master that has been digitally encoded for permanent sale to a Customer as specified herein. (f) “European Union” means the countries of Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Denmark, Ireland, United Kingdom, Greece, Portugal, Spain, Sweden, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia (g) “Fulfillment Services” means sales activities relating to the sale and delivery of eMasters, provided by Label, pursuant to the terms and conditions of this Agreement. (h) “Gross Revenue” shall mean the retail price set from time-to-time by My Reggae for the eMaster concerned, as paid directly by the Customer to and received by My Reggae or its affiliates and licensees in respect of such eMaster. (i) “Label Content” means all Masters, Artwork, Metadata, Other Materials and any and all other content delivered or approved by Label to My Reggae hereunder at Label’s sole discretion, and all copies thereof, in any format. (j) “Masters” means those sound recordings owned or controlled by the Label and record labels affiliated with the Label, or acquired by the Label, its affiliates, or any entity with whom Label may merge during the Term which Label makes available to My Reggae under the terms of this Agreement. (k) “Metadata” means the fields of information relating to Masters, which are included as part of the Masters and Other Materials delivered to My Reggae under this Agreement to be used in connection with the marketing, distribution and sale of the Masters, including without limitation the names and sobriquets of the artists performing on the Master, ISRC codes, length of the Masters, and the like, all in digital format and as delivered to My Reggae. (l) “Net Revenue” means Gross Revenue (as defined below) less My Reggae’s “Allowed Expenses” (as defined below). (m) “Other Materials” means illustrative and photographic images (in addition to Artwork), artists’ names, and other information or materials relating to eMasters that are provided by Label to My Reggae for use under this Agreement. (n) "Person" means a natural person, individual, a corporation, a limited liability company, a partnership, a trust, a joint venture, any governmental authority or any other entity or organization. (o) “Preview Clip” means an excerpted audio clip of a Master. (p) “Service” means an electronic store and its storefront branded and owned or controlled by My Reggae. (q) “Term” means the duration of this Agreement as set forth in Section 5 herein. (r) “Territory” means the World. 2. GRANT OF RIGHTS (a) Subject to the terms of this Agreement, Label hereby appoints My Reggae as a reseller of eMasters in the Territory and authorizes My Reggae on a non-exclusive basis in the Territory to: (i) reproduce and convert Label Content delivered by Label or by Label’s representative designated by Label in writing into eMasters; (ii) perform and make thirty (30) second clips of the Label Content available by streaming ("Clips") to promote the sale of applicable eMasters on the Service, which Clips, if not provided by Label, may be created by My Reggae by using the first thirty (30) seconds of the applicable Label Content; (iii) promote, sell, distribute, and electronically fulfill and deliver eMasters and associated metadata to Customers via the Service; (iv) display and electronically fulfill and deliver Artwork for personal use solely in conjunction with the applicable purchased eMaster; and (v) use Label Content as may be reasonably necessary or desirable for My Reggae to exercise My Reggae's rights under the terms of this Agreement. (b) Solely for the purpose of promoting the use of Masters hereunder, Label hereby grants to My Reggae, its licensees and assigns, the non-exclusive right during the Term, throughout the Territory, to use, reproduce, display, perform, distribute, transmit, publicly and privately, by any and all means and in any and all media now known or hereafter devised: (i) the names, approved likenesses and biographical information (including, professional, group, and other assumed or fictitious names), of any and all persons performing on or rendering services in connection with the creation of Masters (collectively, "Name and Likeness"); (ii) any artwork, drawings, photographs, liner notes and/or other graphical materials furnished or identified by Label for My Reggae's use hereunder (collectively, "Artwork"); and (iii) any trademarks, service marks or trade names embodied in the foregoing (collectively "Marks"). (d) Label reserves all rights in the Masters not expressly granted to My Reggae hereunder, including the copyrights therein. My Reggae shall have no right to modify the Masters, except that it may employ audio-compression technology to encode the Masters into digital audio files for purposes of facilitating the exercise of the rights granted hereunder. 3. Label Obligations (a) Within fourteen (14) days of the execution of this Agreement, Label shall deliver CD’s of the Masters and artwork, f.o.b. to My Reggae, without charge. If available, and the parties agree to such alternate delivery format, Label shall furnish at Label’s expense the Masters to My Reggae, also without charge, in the form of digital files in the MP3 format at 320 kbps variable bit rate, together with accurate Metadata and the highest resolution cover art available using a high quality encoder. (b) Label shall use commercially reasonable efforts to electronically deliver, at Label's expense, properly encoded Label Content to My Reggae using a secure FTP site address provided by My Reggae to Label from time to time, or other delivery means as may be reasonably requested by My Reggae. (c) My Reggae’s payment of any sums hereunder is conditioned upon Label’s fulfillment of all delivery obligations described above and receipt of Label’s completed U.S. Federal Tax form W-9 or W-8BEN, as applicable. (d) In the event a Label no longer has the necessary rights to any Masters made available to My Reggae (the “Deleted Work”) under this Agreement, Label, shall, in turn, promptly notify My Reggae in writing to remove the Deleted Work from any subsequent use in the Service. My Reggae then will use commercially reasonable efforts to promptly remove the Deleted Work(s) after the receipt of such written notice. (e) Label shall be responsible for: (i) timely paying all record royalties to artists, producers, and other record royalty participants from sales of eMasters, (ii) securing all mechanical licenses and timely paying all associated reproduction and distribution (i.e. mechanical) royalties due any owners, composers, lyricists, authors and publishers of compositions embodied in eMasters for the manufacture, storage, distribution and sale of eMasters in the United States, Canada and Mexico (iii) all payments that may be required under collective bargaining agreements applicable to Label or third parties, and (iv) any other royalties, fees and/or sums payable with respect to the sound recordings, Artwork, metadata and other materials provided by Label and/or My Reggae's use thereof hereunder. 4. Wholesale price; reporting; other obligations; (a) (i) My Reggae shall pay to Label be an amount equal to fifty percent (50%) of any and all “Net Revenue” derived from sale of eMasters under this Agreement (“Label Income”). My Reggae reserves the right to determine the retail price in its discretion. (ii) No fees or royalty shall be payable hereunder to Label for: (A) An eMaster made available on a “free” or “no charge” basis in on-line stores owned, branded, controlled, or otherwise licensed by My Reggae for the purpose of promoting the applicable eMaster. My Reggae shall not make available any such full-length downloads without the prior written consent of Label; (B) Incomplete, aborted or non-functional deliveries of eMasters; and (C) More than one eMaster to the same purchaser/subscriber of the same eMaster as a replacement or for use on a different device. (b) My Reggae shall render to Label an accounting on a monthly basis, forty-five (45) days after the end of each monthly period during the Term, accompanied by payment of any amounts due. Every effort shall be made to provide instant access to accounting information as soon as practicable. For the avoidance of doubt, Label Income shall constitute Label’s full consideration hereunder. (c) My Reggae may withhold any taxes, duties, charges or levies on payments by My Reggae to Label pursuant to this Agreement, as may be required by applicable law, rule or regulation. My Reggae shall remit any such withheld taxes, duties, charges or levies to the appropriate tax authority. Despite the foregoing, provided LABEL has fully satisfied all requirements to document its eligibility for a lower or zero rate of withholding tax, including, without limitation, providing My Reggae with a valid certificate of residency, My Reggae shall withhold based on the lower withholding tax rate, or, if applicable, shall not withhold. (d) My Reggae shall maintain accurate books and records concerning all transactions hereunder relating to the Masters for a period of not less than two (2) years following the date of each respective statement. (e) Upon reasonable advance written notice (in no event less than thirty (30) days), during the Term and for up to eighteen (18) months thereafter (the “Audit Period”), Label, at Label’s sole expense, may appoint an independent certified public accountant not then engaged in any audit of My Reggae or Label to audit applicable books and records of My Reggae at My Reggae’s principal place of business for the sole purpose of verifying the amounts due from My Reggae to Label hereunder. Such audit shall take place during regular business hours, and shall not occur more than once during any twelve (12) month period. The certified public accountant shall not be engaged on a contingency-fee basis and must sign and deliver to My Reggae a confidentiality agreement in a form acceptable to My Reggae that protects My Reggae’s confidential information no less than the terms of this Agreement and no less than Label protects its own similar information. Label may audit information contained in a particular statement only once, and no audit shall be allowed or conducted for a period spanning less than six (6) months. (f) Label shall be deemed to have consented to all accountings rendered by My Reggae hereunder, and said accountings shall be binding upon Label and shall not be subject to any objection by Label for any reason unless specific objections are provided to My Reggae in writing during the Audit Period. Label agrees that My Reggae’s books and records contain “Confidential Information” (as defined below). (g) My Reggae reserves the right to pull-down, or not offer for sale, any Label Content and/or Artwork in the event a third party claims that My Reggae is not authorized to sell such Label Content and/or Artwork on the Service, in which case Label shall cooperate with My Reggae’s reasonable requests aimed towards handling such third party claims. (h) Solely for eMaster sales in the Europe Union, Japan, Canada, Australia and New Zealand My Reggae shall be responsible for (i) obtaining the reproduction (i.e., mechanical), public performance (if any) and communication to the public rights in the musical compositions embodied in Label Content as may be reasonably necessary for My Reggae’s sale, promotion, storage, distribution and other use as authorized hereunder of Label Content (“Composer’s Rights”); and (ii) making corresponding full and timely payments of all royalties and/or other sums payable for such rights, including any similar payments which are not now but hereafter become payable. Notwithstanding the foregoing, to the extent that Label owns or controls any part of such rights (whether directly or indirectly), Label shall not withhold such rights in any way that could frustrate the purpose of this Agreement. 5. Term and Termination (a) The “Term” of this Agreement shall start on the Effective Date and continue for five (5) years. Thereafter, the Term shall automatically continue without interruption unless and until one party, in its discretion, gives the other party ninety (90) days' prior notice of termination in which event the Term shall end at the expiration of such ninety (90) day period. (b) Each party may terminate this Agreement, effective upon written notice to the other party, if the other party materially breaches any of the provisions of this Agreement and fails to cure same within thirty (30) days after receipt of written notice, or is unable to pay its debts when due, makes any assignment for the benefit of creditors, files any petition under the bankruptcy or insolvency laws, has a receiver or trustee to be appointed for its business or property, or is adjudicated bankrupt or insolvent. (c) Upon any expiration or termination of this Agreement, My Reggae shall cease selling eMasters and using Artwork, Metadata and Other Materials within five (5) business days. Notwithstanding the foregoing, expiration or termination of this Agreement shall not affect the right of: (i) Customers to continue to use such eMasters theretofore purchased; and (ii) My Reggae to fulfill any unfulfilled purchases made prior to the date of termination or expiration. (d) The provisions of Sections 1, 3(e), 4, 5, 6, 7, 8 and 9 of this Agreement will survive the expiration of earlier termination of this Agreement. 6. WARRANTIES AND REPRESENTATIONS (a) Label warrants and represents that (i) it has the right and authority to enter into this agreement and to grant to My Reggae all rights specified, (ii) it has finalized all clearances and licenses specified in Section 3e above and, without limitation, they have obtained signed mechanical licenses from all copyright owners, (iii) all of the Masters, Name and Likeness, Artwork, Marks, metadata, videos and any other materials furnished by Label to My Reggae or relating to the Masters are owned or controlled by said Label and shall not infringe on the copyrights or other rights of any person or entity, and (iv) My Reggae shall have the right to exploit all of the foregoing hereunder, but only as specifically provided in this Agreement, free from adverse claim and without any obligation to make any payment of any nature to any Label, or to any other Person, other than the fees due to Label in Section 4. (b) My Reggae represents and warrants that it has the right and authority to enter into this Agreement and that the conduct of its digital distribution activities complies with all applicable laws. 7. Indemnification (b) My Reggae will indemnify, defend, and hold harmless the Label, its parents, subsidiaries, affiliates, and their respective directors, officers, employees, and agents, with respect to any claim, demand, cause of action, or debt or liability brought by or claimed by any third party, including reasonable outside attorneys’ fees, to the extent that any such claim is based upon or arises out of a breach of any of My Reggae’s representations, warranties, covenants, or obligations hereunder. (c) If any claim shall be lodged with My Reggae or any action commenced having as its basis a claim which, if proved, would constitute a breach by Label of any of Label’s representations, warranties, or agreements contained herein, My Reggae, in addition to any other right or remedy, shall have the right to withhold from any payments otherwise due to Label attributed only to the Label that is the owner/provider of the Master that is the subject of the claim an amount equivalent to that claimed or sued for plus reasonably anticipated attorney’s fees and costs relating thereto. Any amount so withheld shall be credited to Label’s account (after deduction of any amounts My Reggae may retain under this section 7) when My Reggae shall have received reasonable assurances that the claim or action has been finally settled or fully adjudicated and the judgment satisfied, or that the statute of limitations on such claim has run, or when reasonable and adequate security for the claim has been provided by Label to My Reggae. (d) EXCEPT PURSUANT TO AN EXPRESS INDEMNITY OBLIGATION, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING LOSS OF PROFITS OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THEIR POSSIBILITY.
(E) NO WARRANTY OR TERM, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO THE CONDITION, QUALITY, DURABILITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE SERVICE, ANY SECURITY SOLUTION, OR ANY ELEMENTS OF THE FOREGOING IS GIVEN TO, OR SHOULD BE ASSUMED BY, Label, AND ANY SUCH WARRANTIES AND TERMS ARE HEREBY EXCLUDED. 8. CONFIDENTIALITY Each of the parties to this Agreement shall not directly nor through an agent disclose, disseminate, or cause to be disclosed the specific terms of this Agreement, except: (a) insofar as disclosure is reasonably necessary to carry out and effectuate the terms of this Agreement; (b) insofar as a party hereto is required by law to respond to any demand for information from any court, governmental entity, or governmental agency; (c) insofar as disclosure is necessary to be made to a party’s independent accountants for tax or audit purposes; and (d) insofar as the parties may mutually agree in writing upon language to be contained in one or more press releases. Neither party shall issue a press release concerning this Agreement or the subject matter hereof without the prior written consent of the other party. 9. OTHER PROVISIONS (a) My Reggae and Label understand and acknowledge that (i) each shall perform its duties hereunder as the other’s independent contractor, and (ii) this Agreement does not create a joint venture, partnership, employment or agency relationship between My Reggae and Label (b) Customer data collected by My Reggae directly or through its third party relationships in regard to the Masters shall belong exclusively to My Reggae. My Reggae shall have the right to exploit same in any manner without any obligation to Label or its Labels. My Reggae shall have no obligation to disclose such data to Label except as required for accounting purposes hereunder. My Reggae shall comply with all applicable laws, including privacy laws, regarding the collection, maintenance and use of such data. (c) Each of the parties hereto represents that this Agreement has been carefully read and that they know and understand the contents hereof. Each of the parties has had the opportunity to receive independent legal advice from attorneys of their choice with respect to the preparation, review and advisability of executing this Agreement. (d) Neither party may assign this Agreement or its rights and responsibilities under this Agreement, without the prior written consent of the other party, except that, either party may assign its respective rights and responsibilities under this Agreement to an entity that acquires substantially all of its assets or to a subsidiary or other entity controlled or under the common control of such assigning party. (e) If any provision of this Agreement is deemed unenforceable or void, the balance of this Agreement shall remain in full force and effect. (f) Label warrants that Label has not been induced to execute this Agreement by any agreements or statements made by My Reggae or its representatives as to the nature or extent of My Reggae’s proposed exercise of any of the rights, licenses, or privileges granted to My Reggae by this Agreement. (g) A waiver by either party of any term or condition of this Agreement in any instance will not be deemed or construed as a waiver of such term or condition for the future or any subsequent breach thereof. (h) This Agreement shall be binding on the assigns, heirs, executors, personal representatives, administrators, and successors (whether through merger, operation of law, or otherwise) of the parties. (i) All remedies, rights, undertakings, obligations or agreements contained in this Agreement will be cumulative and none of them will limit any other remedy, right, undertaking, obligation or agreement of either party. (j) My Reggae may contract with third parties to provide Fulfillment Services on behalf of My Reggae, provided such third parties are subject to terms no less restrictive than the terms My Reggae is subject to under this Agreement. My Reggae shall be responsible for the performance of such third parties while under My Reggae’s control and supervision. (k) This Agreement and the exhibits and schedules attached hereto and incorporated herein constitutes the entire agreement between Label and My Reggae relating to its subject matter, and supersedes all prior agreements between Label and My Reggae, whether oral or written, relating to its subject matter, and may not be modified except in writing signed by both parties.
(l) All notices required hereunder shall be given by hand, overnight delivery service or by certified mail, return receipt request to the address first specified above to the attention of the person indicated below. Either party may amend its address set forth above at any time by written notice to the other party.
(m) This Agreement will be construed in accordance with the laws of the State of New York as applied to contracts performed in that state and the parties hereby grant to the U.S. District Court for the Southern District of New York, or the Supreme Court of the State of New York, New York County, exclusive jurisdiction to hear any disputes arising herefrom. (n) The prevailing party in any legal proceeding between the parties, including arbitration, shall be entitled to an award of reasonable attorneys’ fees and costs. (0) This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective offices thereunto duly authorized.
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