DISTRIBUTION AGREEMENT


BACKGROUND

1. Artiste/Label owns the intellectual property rights in the Master Content of various artists, and wishes to expand its distribution network through the supply of these Master Content items to the Distributor (CeFlix Tunes) for streaming and download on the CeFlix Tunes Music app.


2. The Distributor having an established business in streaming music content wishes to secure a distribution arrangement with the Artiste/Label to supply the Content to users of its mobile app within Nigeria, the African Continent and beyond.


The parties are prepared to enter an arrangement with each other pursuant to the terms and conditions of this Agreement.


The parties hereto hereby agree as follows:


  1. DEFINITIONS

In this Agreement the definitions set out below have the following meaning unless the context in which they appear requires otherwise:

  1. 1.1 “Agreement” means this Distribution Agreement;
  2. 1.2 “Customers” shall specifically mean users of the CeFlix Tunes platform web and mobile apps (Android and iOS);
  3. 1.3 “Effective Date” means the date the artist accepts this Agreement by signing up on the CeFlix Tunes platform;
  4. 1.4 “Content” includes all sound, video and or phonorecord Content that are owned or controlled by Artiste/Label, or which are acquired by Artiste/Label or with whom Artiste/Label may merge during the Term, and include associated metadata including the title of each master recording and the name(s) of the featured artist whose performance is embodied therein;
  5. 1.5 “Term” means as long as the platform shall exist from the Effective Date 
  6. 1.6 “Territory” means Nigeria, the African Continent and the world.


  1. TERM


  1. 2.1 Subject to clauses 2.2 and 2.3, this Agreement will commence on the Effective Date and continue for the Term unless terminated pursuant to the terms of this Agreement.
  2. 2.2 Subject to this Agreement continuing for the duration of the Term, Artiste/Label grants the Distributor with the right to continue distribution of the content uninterrupted based on the terms of this Agreement.
  3. 2.3 Artiste/Label may decide to withdraw the content from the Distributor’s platform only after 12 months from the Effective Date afterwhich Artiste/Label may wish to withdraw content via a formal notification in writing to the Distributor via email and Artiste/Label will give the Distributor a month’s notice to remove the Content from all it’s platforms and promotional materials. 



  1. DISTRIBUTION


  1. 3.1 During the Term throughout the Territory and subject to the terms and conditions prescribed herein, Artiste/Label grants The Distributor the nonexclusive right to distribute, sell or otherwise exploit all Artiste/Label’s Content as specified in the catalogue and future works via the Distributor’s platforms.
  2. 3. 2 The exercise of such right granted to The Distributor shall include, but not be limited to, the hosting, encoding, reproducing, displaying, exhibiting and transmitting of Content to Customers located in the Territory.
  3. 3. 3 Notwithstanding the foregoing, the right granted by Artiste/Label to The Distributor does not extend to the physical distribution of vinyl records, cassettes, CD's and DVD's through normal retail channels, which rights are reserved by Artiste/Label.
  4. 3. 4 The Distributor and its Customers shall have the right to use album artwork and artists' names, likenesses, biographical and other promotional material for advertising, promoting, marketing of the Content and other publicity purposes as regards to the mobile/web platform only.
  5. 3 .5 The right to distribute Content is subject to any artist-related, territorial or other contractual restrictions to which Artiste/Label is bound, but only as to which Artiste/Label gives Licensee prior notice hereunder.
  6. 3.6 Save as contained in sub-clause 3.4 above, Artiste/Label shall not have the right to withhold and/or to withdraw any Content from The Distributor and/or to restrict the distribution of the Content to any Customer
  7. 3.7 In consideration of each Recording streamed by Customers, The Distributor shall pay to Artiste/Label N1.00 for each stream of Content provided under the premium category, less VAT or other applicable sales tax, actually received by The Distributor from Customers relating to the distribution of the Content. The Distributor shall have the right to recoup from amounts payable to Artiste/Label all reasonable out-of-pocket encoding expenses incurred by The Distributor in the connection with each Recording. If Artiste/Label supply the right encoding as advised then no monies will be recouped for encoding of recording.


  1. OBLIGATIONS OF THE DISTRIBUTOR


  1. 4.1 The Distributor shall be responsible to:
    1. 4.1.1 Solicit and service the Customers,
    2. 4.1.2 Secure the encoding of each Recording in format(s) required by Customers of the platform;
    3. 4.1.3 Process the delivery of the Content to Customers, and
    4. 4.1.4 Collect amounts due from Customers.
  2. 4.2 The Distributor shall not edit or alter the master Content or artwork, other than is necessary for the encoding of the Recording into the required format for its Customers.
  3. 4.3 If Artiste/Label notifies The Distributor of a legal problem with a track or album that is being pulled from Artiste/Label's other customers, The Distributor shall pull same from it’s platform. There shall be no charge to Artiste/Label for pulling Content other than amounts actually charged by The Distributor to the Customers who have paid to stream that Content.


5.  OBLIGATIONS OF ARTISTE/LABEL


  1. In the connection with exploitation of the Content contemplated hereunder, Artiste/Label shall be solely responsible for:
  2. All record royalties due to artists, producers and other persons who performed in the making of the Content and other royalty participants
  3. Artiste/Label shall furnish the Content to The Distributor in the form of WAV/MP3 files uploaded to the Artiste/Label’s account on the Distributor’s web portal.
  4. Artiste/Label shall furnish the Content to The Distributor without charge in the form of digital files together with accurate metadata at the highest resolution cover art available.
  5. If digital files are not available, Artiste/Label shall deliver to The Distributor CD's of the Content, without any charge.


  1. OTHER REPRESENTATIONS, WARRANTIES AND OBLIGATIONS
    1. Artiste/Label warrants and represents that:
  2. 6.1.1 It has the right and authority to enter into this Agreement and to grant to The Distributor all rights specified;
  3. 6.1.2 All of the Content, artwork, metadata, videos and any other materials furnished by Artiste/Label to The Distributor or relating to the Content are owned or controlled by Artiste/Label and shall not infringe on the copyrights or other rights of any person or entity;
  4. 6.1.3 The Distributor shall have the right to exploit all of the Content, artwork, metadata, videos and any other materials furnished by Artiste/Label in all manner restricted to other digital and mobile platform that are available to the distributor hereunder free from adverse claim and without any obligation to make any payment of any nature to any person or entity, other than the amounts due to Artiste/Label described in Clause 3.7 above;
  5. 6.1.4 It has and will maintain sufficient right and interest in the Content to grant the rights granted herein;
  6. 6.1.5 It is not aware of any pending, threatened or current claims, suits or actions in the connection with the Content being distributed by The Distributor to Customers pursuant to this Agreement;
  7. 6.1.6 The exercise by The Distributor of its right to distribute Content pursuant to the terms of this Agreement (and subject to The Distributor complying with the terms of this Agreement) will not infringe the intellectual property rights of any third party nor result in any tort, injury, damage or harm to any third party.


  1. The Distributor warrants and represents that it has the right and authority to enter into this Agreement and that the conduct of its distribution activities complies with all applicable laws.
  2. Each party shall defend and indemnify the other party (including its directors, members, officers, employees and other representatives) against any third party claims or expenses and losses resulting from breach, or a claim which if true would constitute a breach, of the respective warranty, or other breach of this agreement, including reasonable attorneys' fees and litigation expenses. The indemnified party shall give the indemnifying party prompt notice of any claim. The indemnifying party shall defend the other party at the indemnifying party's expense with counsel approved by such other party (which approval shall not be unreasonably withheld).


7 ACCOUNTING

  1. 7.1 The Distributor shall account to Artiste/Label on a monthly basis. When submitting monthly reports, The Distributor shall provide Artiste/Label with full details of any and all Content sold on a product-by-product, artist- by-artist and track-by-track basis.
  2. 7.2 Such accounting shall include the gross receipts received by The Distributor from all its Customers on an integrated basis, the distribution fee of The Distributor, and the net amount due to Artiste/Label, in terms of Clause 3.7 above.
  3. 7.3 The Distributor agrees to keep true and accurate records containing all the data required to fully calculate and verify the Content sold or otherwise supplied.
  4. 7.4 Artiste/Label shall have the right to audit the records of The Distributor to verify the accuracy of such statements, once with respect to any statement, once in each year, at Artiste/Label's expense, at the place where The Distributor maintains such records, during the normal business hours of The Distributor and on at least twenty (20) days' prior notice. Any objection relating to any accounting statement, or any lawsuit arising therefore, must be made (and any lawsuit commenced), no later than one year after the date the statement is rendered and Artiste/Label hereby waives any longer statute of limitations that may be permitted by law.
  5. 7.5 Artiste/Label may collect revenue accumulated over one thousand naira N1000. This is the thresh hold before royalties can be paid out.


8. TRADE MARKS


  1. All intellectual property rights in the Content are and shall remain the exclusive property of Artiste/Label, and where relevant, of the third party supplier to Artiste/Label. Unless otherwise agreed upon in writing The Distributor shall not have any right, title or interest therein except as expressly set forth in this Agreement.
  2. The Distributor acknowledges Artiste/Label’s valid title to each of the trademarks used by it in the connection with its Content.
  3. The Distributor undertakes not to take any action that might or would invalidate or put in dispute Artiste/Label’s title to the trademarks used by it.


9.  TERMINATION


9.1 Without prejudice to any right or remedy of Artiste/Label for a breach of this Agreement, Artiste/Label shall have the right to terminate this Agreement by sending The Distributor written notice, in the event that:


  1. 9.1.1 A liquidator obtains control of the assets of The Distributor;
  2. 9.1.2 The Distributor goes into liquidation other than for the purpose of amalgamation or reconstruction;
  3. 9.1.3 The Distributor breaches any material provision of this Agreement and does not remedy this breach (assuming it is capable of being remedied) within a period of twenty (20) days after receiving written notice from Artiste/Label specifying the nature of the default; 


9.2 Upon termination of the Agreement:

  1. 9.2.1 The Distributor will have thirty (30) days from the date this Agreement is terminated to continue to supply the Content to Customers, after which time The Distributor must cease to promote, market, distribute or sell the Content;
  2. 9.2.2 The Distributor shall inform Customers that they have six months from the date of termination of this Agreement to cease exploitation of the Content already supplied by The Distributor.


9.3 Provisions contained in this Agreement, that are expressed or by their sense and context are intended to survive the expiration or termination of this Agreement such as but not limited to Clauses 3.7 and 10 shall so survive the expiration or termination of this Agreement.


10.   GOVERNING LAW AND ARBITRATION

  1. This Agreement shall be governed by and construed in accordance with the substantive laws of Nigeria
  2. All disputes arising in connection with this Agreement shall be finally settled in an English court in Nigeria.
  3. The above paragraphs shall not hinder the Parties to initiate a legal procedure to get a preliminary injunction or similar titles.


11. GENERAL PROVISIONS

  1. 11.1 The parties shall cooperate in implementing any applicable parental advisory Artiste/Labeling. It is understood that Artiste/Label shall furnish to The Distributor both Artiste/Labeled and "edited" versions of all Content.
  2. 11.2 Neither party shall be deemed in breach of this agreement unless the other party has given the breaching party notice, and the breaching party has failed to remedy such breach within thirty (30) days after receipt of such notice.
  3. 11.3 In the event that the breaching party does not remedy such breach within thirty (30) days after receipt of such notice, the aggrieved party shall only be entitled to damages reasonably related to the breach concerned and no penalty shall be awarded to either party.
  4. In no event shall either Party be liable to the other for any indirect, incidental, special, consequential, punitive or tort damages of any nature or kind whatsoever, including but not limited to lost profits, in The Distribution with or arising out of the use of the Content, even if the other Party has been advised of the possibility of such damages.
  5. 11.4 This Agreement supersedes any prior discussions or agreements regarding the subject matter hereof.
  6. 11.5 This Agreement does not create a partnership or joint venture.
  7. 11.6 This Agreement shall not be binding, nor any variation valid or enforceable unless reduced to writing and signed by duly authorised officers of each of the parties.
  8. 11.7 Each party agrees to do all things necessary or desirable to give full effect to any part of this Agreement including if necessary the execution of any notice or document if reasonably required to do so by the other party.
  9. 11.8 Neither party is liable for any delay or failure to perform their respective obligations under this Agreement to the extent that the delay or failure is due to a cause beyond that party's reasonable control (including but not limited to industrial strikes, severance of internet cables, fire or flooding) providing the party effected advises the other party of the basis of its inability to perform its obligations within 7 days of the commencement of the act effecting its ability to perform its obligations pursuant to this Agreement.


12 NOTICES

12.1 Except as otherwise specifically provided herein, all notices under this Agreement shall be in writing and shall be given by registered or certified email to the appropriate address specified by the Artiste/Label during the registration on the platform and by the Distributor on the app or website.

  1. 12.1.1 To Artiste/Label:
  2. 12.1.2 To The Distributor:

At the address specified below:

[email protected]



13. COPYRIGHT WAIVER

13.1 OBLIGATIONS OF THE ARTISTE

13.2 The Artiste hereby grants CeFlix Tunes the right to copy and place its work via whatever platform in accordance to the earlier agreement entered between parties.

13.3 The Artiste also grants all Rights, Title and interest in the work of the Artiste but ownership however remains with the Owner.

13.4 Artiste grants in full, the exclusive benefit of all the Intellectual Property Right, including all forms of protection and all rights including but not limited to lyrics right and publishing rights.

13.5 The Artiste affirms that it is the true and current owner of the said works, which are subject matter of this agreement.



13.6 The Artiste further affirms that it is registered with the Copyright Society of Nigeria (COSON) and has the right to enter into any contract for the distribution of its work.

13.7 The Artiste therefore agrees to indemnify and hold harmless CeFlix Tunes from and against all claims or damages arising out of any breach of these representations or third party claims relating thereof.


13.8 OBLIGATIONS OF DISTRIBUTOR/CeFlix Tunes

13.9 To act in good faith in the distribution of the work of the Artiste in accordance with its contractual obligations.

13.10 To use only the work given to it by the Artiste and not to obtain the aforesaid through any other illegal means.


14. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized.




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