Neomusicstore, 42-44 rue de la Motte Brulon, 35700 Rennes, France represented by Sylvain Corvaisier, managing director
hereinafter “SERVICE”
And
Label
hereinafter “LABEL”
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
Introduction
LABEL uses on a non-exclusive basis SERVICE infrastructure, to sell material of its available Repertoire using Digital Transmission Networks by wire or wireless means only through all methods hereinafter defined, at the request and for the private use of the public in the Territory defined in the Metadata provided by the LABEL, according to the terms and conditions stipulated below.Definitions
ClipsCompressed from Contractual Content Files for streaming or webcasting usage
Content
Contractual Content Files, Clips, Master, Images, , and all other associated data necessary for digital distribution now and hereafter used by the SERVICE which are controlled by LABEL as well as notes (i.e. copyright notes) and associated metadata
Contractual Content Files or “Files”
Encoded, converted, digitized and formatted Master Recordings
Currency Unit
In respect of the United Kingdom £0.01, in respect of continental Europe €0.01, in respect of the United States of America $0.01
Download
Process of communicating content to the public by non-physical means enabling user to copy content to a recipient's device.
Effective Date
day of signing the agreement by the LABEL
Master Recordings
audio and audiovisual material that LABEL makes available to SERVICE set out in - Schedule 2 for exploitation under this Agreement during the Term.
Metadata
Necessary information relating to content
Net Retail Price
Price to consumer or user less VAT
Online Rights
shall have the meaning as defined in Section 1.1. of the Service Agreement (Schedule 1)
Repertoire
means the catalogue of Master Recording which is controlled by a VUT Label
Streaming
Process of communicating to the public Content with software by non-physical means that allows user to view or play contemporaneous with the performance of the Master Recordings but not to copy Content and which is protected from digital duplication
Webcasting
Content is being distributed on-demand or broadcasted live with a short time lag via special Streaming software
Direct Selling
Content is being paid directly from the buyer to the LABEL using the LABEL means of payment
I. Grant of Rights
I.1. During the Term LABEL authorises SERVICE non - exclusively,I.1.1. to encode, convert, digitize and format LABEL Master Recordings or other material to produce Content, to store and host so produced Content on the servers of the SERVICE or on servers controlled by the SERVICE,
I.1.2. to reproduce and distribute the Content provided in the form of intangible copies, made in the process of online distribution of Content (permanent downloads) on behalf of LABEL.
I.1.3. to communicate Content to the public, which includes Webcasting, Streaming or near-on-demand services received either on a personal computer, set-top box or on a mobile telephone;
I.1.4. to make Content available, which includes on-demand and synch licensing services,
I.1.5. to stream Clips for promotional purposes,
I.1.6. to use album artwork and artists' names, likenesses and biographical material provided to SERVICE by LABEL to promote the digital exploitation of the Files subject to any artist-related restrictions as to which LABEL gives SERVICE notice.
I.2. All rights given herein are non-exclusive conditional on the timely accounting and payment of sums due to LABEL from SERVICE under this agreement. Any other use and/or any use for purposes other than those expressly stipulated in this contract are excluded from the contract. LABEL shall have the right to exclude and/or withdraw any right granted to SERVICE hereunder at any time at LABEL sole discretion. SERVICE may not sub-license or assign this agreement without the prior written approval of LABEL.
II. Third Party Rights
II.1. LABEL will remain responsible for all necessary licenses and mechanical rights for the use of the musical compositions and lyrics of the Content and will separately apply and pay for such licenses with respect to the exploitation of the Content in the Territory.II.2. LABEL shall be responsible for all record royalties due to artists and other persons who performed on the Master Recording and/or were involved in the production of the Master Recording.
III. Term and Termination
III.1. This Agreement shall have full force and effect for a period of 1 year from the Effective Date (Initial Term), and shall be automatically renewed for additional periods of one 1 year each from the expiration of the Initial Term (each such period a Subsequent Term) and from the expiration of each such Subsequent Term, unless terminated by either Party at least 30 days' written notice to the other Party before the end of the current Initial Term or any Subsequent Term. Upon the expiry or earlier termination of the Term all rights granted herein shall immediately cease. Sections 7 and 9 hereof shall survive the end of the Term.III.2. Either party shall have the right to terminate forthwith this agreement and the rights granted herein prior to the expiration of the Term in the event that the other party becomes insolvent, files a petition in bankruptcy, makes an assignment for the benefit of creditors, or breaches any representation, obligation or covenant contained herein, unless such breach is cured prospectively, no later than thirty (30) days from the date of receipt of notice of such breach. Notwithstanding anything to the contrary set forth herein, absent the written consent of the LABEL, the LABEL shall be entitled to terminate this agreement and the rights granted herein forthwith in the event that a third party purchases and/or acquires a majority shareholding and/or controlling interest in SERVICE and/or SERVICE's holding company and/or any entity controlling SERVICE (whether de jure or de facto).
IV. Territory
Shall be the World, but subject to territorial restrictions as notified by LABEL within the Metadata.V. Master Recordings
V.1. LABEL shall procure the digital delivery of the Master Recordings to SERVICE in the form of digital files together with metadata and available cover art. SERVICE agrees to accept the digital delivery of Master Recordings from LABEL digital services provider (“DSP”), or such other party designated by LABEL.V.2. LABEL Content used by SERVICE pursuant to this agreement shall reside solely on a network server controlled by SERVICE and shall be secured with restricted access.It is a further condition of this agreement that SERVICE makes available for download sale all Master Recordings supplied by LABEL to SERVICE, with the intention and effect that SERVICE shall not under any circumstances “cherry-pick” LABELS catalogue of Master Recordings. SERVICE further agrees to confirm to LABEL which Master Recordings have been made available, within 2 days of such Master Recordings first being made available.
VI. Usage Rules and Security
In the event of a security breach in SERVICE' systems, SERVICE shall promptly alert LABEL and make all reasonable efforts to cure same as soon as practicable and LABEL may terminate this agreement and the rights granted herein forthwith. SERVICE will use its best endeavours to protect Content included in the servers of the SERVICE against illegal usages using up-to-date security technology.VII. Commission Fees
For each Download, LABEL shall pay SERVICE a commission fee in respect of the rights granted by LABEL to SERVICE under this Service Agreement which shall be according to the method of exploitation and the business model of the SERVICE. Percentage shares are always calculated price to consumer or user. Every payment effected by SERVICE shall be subject to the respective value added tax (if any). Commission fees will be substracted from payments to LABEL.VII.1. Permanent Download
VII.1.1. LABEL shall grant the SERVICE 30% of the net retail price paid by the consumer for any download of a single File of a LABELS Master Recording through the SERVICE payment system.
VII.1.2. LABEL shall grant the SERVICE 15% of the net retail price paid by the consumer for any download of a single File of a LABELS Master Recording through direct selling.
VII.2. Synch Licensing
VII.2.1. LABEL shall grant the SERVICE 15% of the negotiated fee with the synch licensor for each negotiation being handled through the SERVICE
VIII. Content Delivery Fee
VIII.1. LABEL shall pay SERVICE a Content Delivery Fee of €0.50 per Master Record where LABEL doesn't either supplies digital master itself or through a third party or makes available to SERVICE any deep-link for direct access to licensed Master Recordings on any Server controlled by Label or any third party as chosen by LABEL.VIII.2. No Content Delivery Fee shall be paid where LABEL delivers Master directly to SERVICE through SERVICE online back office.
IX. Accounting and Auditing
IX.1. SERVICE shall make available electronically in Excel format (.xml or .csv) to LABEL an accounting on a monthly basis. Payment of any amounts due should be done on a quarterly basis SERVICE and LABEL sharing possible bank charges. Such accounting shall include each download sold hereunder by customer price, net price, net royalty pay-out, ISRC (if any), UPC (if any), track title, catalogue number, country of sale and quantity. Any credit note provided by SERVICE superior to €50 shall be considered as sufficient for payments. If Credit note doesn't exceed €50, LABEL may request payment on a yearly basis. SERVICE will provide an invoice for due commissions on sales.IX.2. SERVICE shall maintain and keep complete and accurate books and records concerning the amounts payable to LABEL arising from transactions relating to the sale of downloads. LABEL shall have the right to audit SERVICES books and records to verify the accuracy of such statements, once in each year and once within one (1) year of the termination and/or expiry of the Term, at LABELS expense, at the place where SERVICE maintains such records, during SERVICES normal business hours and on at least 30 days' prior notice. In the event that any such audit reveals an underpayment of 5% or more of the amounts paid to LABEL, SERVICE shall pay the costs of such audit together with any underpayment forthwith.
X. Taxes at Source
If the laws of any country require taxes on royalties to be withheld, then the royalties that accrue to the LABEL in respect thereof shall be reduced proportionally unless LABEL has obtained from the competent authorities a certificate of exemption from such taxes under pertinent Double Taxation Convention. SERVICE shall supply LABEL, if required, with all necessary forms and information which shall assist LABEL to obtain such certificate of exemption.XI. Warranties and Representations
XI.1. LABEL warrants and represents that it has the right and authority to enter into this agreement and that all of the Master Recordings furnished by LABEL to SERVICE are owned or controlled by LABEL and shall not infringe on the copyrights or other rights of any person or entity. Nothwithstanding the foregoing SERVICE is responsible for licensing third party rights as agreed in section 2.1..XI.2. SERVICE warrants and represents that it has the right and authority to enter into this agreement, that the conduct of the SERVICE Shop complies with all applicable laws and that it has and will use the necessary technical capabilities to adhere to the restrictions set out in this agreement and to accurately monitor the delivery, sale or rent of downloads of Master Recordings.
XI.3. Each party agrees to and does hereby indemnify save and holds harmless the other party from any and all loss and damage (including reasonable legal fees) arising out of or connected with any claim by a third party adjudicated by a court of competent jurisdiction or settled with the indemnifying party's prior written approval (such approval not to be unreasonably withheld or delayed) which is inconsistent with any of the obligations or warranties or representations made by the indemnifying party in this agreement.
XII. Other Important Provisions
XII.1. This agreement supersedes any prior discussions or agreements regarding the subject matter hereof. No change to this agreement shall be binding unless in writing signed by both parties.XII.2. This agreement shall be exclusively governed by French law and subject to the exclusive jurisdiction of the courts of France.
XII.3. Upon the expiration or earlier termination of this agreement, all LABEL Content, all delivered Master Recordings, Files and artwork shall be promptly deleted or destroyed by SERVICE. Should a provision of the present License Agreement be invalid for any compelling legal reason, this shall not affect the validity of the remainder of the contract. Any such invalid provision must be replaced by a legally-admissible provision, corresponding to the economic purpose of the invalid provision.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the Effective Date from the signature by the LABEL