Velveteen.ai Distribution Agreement
As of July 12th, 2023
Welcome to the Velveteen.ai Distribution Agreement (the "Agreement"), between you and Velveteen.ai (referred to as "us," "we," or "Velveteen"). This Agreement, which includes and incorporates the Velveteen Terms of Service, contains the terms and conditions that govern the distribution services (the "Services") provided by Velveteen.ai to independent music artists and copyright owners.
THIS AGREEMENT, WHEN ACCEPTED BY YOU AFTER CLICKING 'I AGREE,' WILL CREATE A BINDING AND LEGALLY ENFORCEABLE CONTRACT BETWEEN YOU AND US, WHETHER YOU ARE ACTING IN YOUR INDIVIDUAL CAPACITY OR AS THE AUTHORIZED REPRESENTATIVE FOR AN ARTIST, BAND, GROUP, OR CORPORATION. IN SUCH CASES, THE TERM 'YOU' SHALL REFER TO THE ARTIST, BAND, GROUP, OR CORPORATION ON WHOSE BEHALF YOU ARE ACTING AND AUTHORIZED TO ACT. THEREFORE, PLEASE READ THIS AGREEMENT CAREFULLY AND CONSULT WITH YOUR OWN BUSINESS AND LEGAL ADVISORS BEFORE CLICKING 'I AGREE.'
BY ACCEPTING THIS AGREEMENT, YOU REPRESENT AND WARRANT THAT YOU OWN OR HAVE OBTAINED ALL NECESSARY RIGHTS, LICENSES, AND PERMISSIONS TO REPRODUCE AND DISTRIBUTE 100% OF THE RECORDINGS, MUSICAL COMPOSITIONS, LITERARY WORKS, DRAMATIC WORKS, SPOKEN WORD CONTENT, ARTWORK, AND ANY OTHER MATERIALS THAT YOU ADD TO OUR PLATFORM AND INTEND FOR DISTRIBUTION THROUGH OUR SERVICE, INCLUDING THE RIGHT TO MAKE AND DISTRIBUTE DIGITAL DOWNLOADS EMBODYING THE MUSICAL COMPOSITIONS AND ELECTRONIC TRANSMISSIONS OF SUCH MUSICAL COMPOSITIONS (INCLUDING, WITHOUT LIMITATION, VIA STREAMING SERVICES) AS NECESSARY.
We reserve the right to add, delete, and/or modify any of the terms and conditions contained in this Agreement pursuant to the provisions of Section 9 below. However, no modifications to this Agreement will apply to any dispute between you and Velveteen.ai that arose prior to the date of such modification. In the event of substantive changes to the terms of this Agreement, we will notify you by changing the date at the top of this Agreement and through notice on your account dashboard.
The effective date of this agreement is the date on which you click the "I agree" button.
1. Grant of Rights
In order for us to provide the Services and distribute your music content, including recordings, compositions, and related materials (collectively referred to as "Your Content"), to various digital platforms and services, our lawyers and the digital platforms require you to grant us the non-exclusive, sub-licensable right and license during the term of this Agreement and throughout the authorized territory to:
- Reproduce and distribute Your Content to digital platforms for sale or sublicensing to their customers in any and all applicable digital formats, configurations, technologies, and methods, including permanent downloads, streaming, interactive and non-interactive streaming, cloud services, and other audiovisual services, on capable devices such as personal computers, tablets, and smartphones. This includes the right to synchronize Your Content with visual images as required by the digital platforms for their operation.
- Create, reproduce, publicly perform, make available, and authorize digital platforms to reproduce and publicly perform free preview clips of Your Content via streaming format on our platform and associated services.
- Authorize third-party partners and licensees of Velveteen, including user generated content services, to use, create derivative works, synchronize, and otherwise exploit Your Content, including remixes and user-generated content, as permitted by the respective platforms' terms and conditions. This includes the right to synchronize Your Content with visual images, combine excerpts of Your Content with images, create mix content, store, host, reformat, and display Your Content as part of user videos, art tracks, audio-only tracks, and other content on user generated content services and platforms.
- Display and otherwise use your artist(s) and/or label name, logo, artwork, song and album titles, trademarks, service marks, and trade names, and the names and likenesses of artists, songwriters, producers, and mixers involved in the creation of Your Content, in metadata within the Recordings or otherwise provided by you, on our platform, associated services, digital platforms, and in marketing, advertising, or promotional materials for our Services or the digital platforms. This includes editorial content, classification, and categorization of Your Content within genres.
- Collect income from digital platforms resulting from the exploitation of Your Content during the term of this Agreement, and after the termination of the Agreement for the exploitation of Your Content during the term. Digital platforms may have perpetual rights to use Your Content.
- Notify digital platforms and other third parties of our rights and relationship per this Agreement, and include your name, logo, and information in any listing of Velveteen licensors.
- Publicly perform Your Content on the Velveteen platform and associated services. If you are affiliated with a performing rights society or organization, you agree to notify them of your direct license to publicly perform Your Content on our platform.
- The term of this Agreement (the "Term") will begin on the Effective Date and will continue for one (1) year, unless renewed or terminated earlier.
- The Term will automatically renew at the end of each annual contract period, and your account will be billed accordingly, unless you cancel your account prior to the end of the then-current contract year through your account settings on the Velveteen website.
- Velveteen reserves the right to terminate the Term for any reason, including but not limited to the violation of this Agreement, infringement of intellectual property rights, non-acceptance of your content by digital platforms, abusive behavior towards our service or digital platforms, or engagement in fraudulent or illegal activities. We may also terminate the Term if the payment method provided by you becomes invalid or if we reasonably believe that charges were incurred fraudulently. In the event of any changes to your payment information, please promptly update your Velveteen account details. We may, at our sole discretion, choose to renew the Term and deduct the applicable renewal fee from any sums payable to you hereunder. We may also terminate the Term if our service is discontinued for any reason.
- Upon the expiration of the Term, we will notify the applicable digital platforms to remove your content, and we will have no further obligations to you except to account for and pay any earnings accrued during the Term. Customers who have downloaded or accessed your content may be able to retain and continue listening to it even after the Term of this Agreement is over.
3. Service and Content
- We will distribute your Recordings to your selected digital platforms on a worldwide basis. However, please note that we cannot guarantee that all platforms will accept all the content.
- By choosing a digital platform for distribution of your Recordings, you affirm to Velveteen that you have read, understand, and agree to be bound by all of the terms and conditions of that platform, and that your Recordings and other content will comply fully with those terms and conditions.
4. Digital Platforms
- Velveteen's Service enables you to upload digital files containing audio recordings for distribution to your choice of digital music platforms within our distribution network. The format of the files can be WAV, MP3, AIFF, CDDA, MP4 (m4a), Windows Media (WMA) and FLAC, up to a maximum size of 250 MB.
- When uploading each Recording, you must provide us with all necessary metadata (e.g., artist name, album title, each track title, genre), along with any cover art. We may also require that you indicate if the Recording contains explicit content.
- After you have uploaded a Recording to our platform for distribution, you can delete it at any time. However, you cannot remove a single track that was included within an album — if you wish to do that, you must delete the entire album and then re-upload the album with the song removed.
- Upon signing up for our Service, you will create a username and password which will grant you access to your personal dashboard on our website. You are expected to ensure the security of your username and password as you bear sole responsibility for all content uploads, financial transactions, and any other activities conducted through your account. Velveteen cannot be held accountable for any activities occurring via your account.
- During sign-up, you have the opportunity to select the tier of user account that suits your budget and service needs.
- The artist name(s) you register will persist for the entire duration of your Agreement with us and cannot be altered. If you wish to elevate your account level during the term to include additional artist names or services, this can be done online. For those who upgrade within the first 12 months as a paid Velveteen member, we will calculate your payment for the enhanced account level and reimburse you a prorated portion of your original account level fee (full reimbursement if upgraded within the initial fourteen (14) days of sign-up). Velveteen retains absolute discretion over any other refunds.
- Your subscription fee, whether annual or monthly, must be paid using a valid credit card and, as outlined under “Term,” will automatically renew until you opt to terminate the Term of this Agreement. It is your responsibility to keep a valid credit card on file with us for the duration of the Term. We presently accept Visa, MasterCard, and American Express, but we reserve the right to modify our accepted payment methods during the Term. You provide explicit authorization to Velveteen to charge the relevant amount, inclusive of any applicable taxes, to the credit card you have on file, or, at our discretion, to subtract this amount from funds payable by us to you. Velveteen holds sole discretion over any refunds. Moreover, if you have any outstanding dues to Velveteen, we have the right to offset such amounts from any present or future payments to you, in addition to our other rights and remedies.
6. Payment Terms
- Royalty Payments: In consideration of the rights and licenses granted hereunder, we will make available to you 95% of the net royalties earned from the exploitation of your Content on the Platform. "Net royalties" means all gross sums actually earned and received by us from the sale, streaming, or other exploitation of your Content on the Platform, after deducting applicable taxes, transaction fees, payment processing fees, and net distribution costs. Net distribution costs refer to the costs directly associated with the distribution and delivery of your Content to digital stores and streaming platforms.
- Digital Store Deductions: You acknowledge that digital stores may retain a portion of the income they receive from customers and may deduct or withhold sums from the amounts paid to us. These deductions may include taxes, tariffs, administration fees, royalties or fees paid to third parties, wire transfer fees, credit card processing fees, and chargebacks. We will rely on the payments and accountings received from digital stores and are not obligated to inspect or audit their books and records.
- Payment Method: We offer PayPal as the sole payment method for remitting royalties to you. Please ensure that you have a functional PayPal account to receive payments. It is your responsibility to keep your PayPal account information up to date.
- Withdrawal of Royalties: Once the earned royalties are credited to your account, you will have the option to withdraw the funds via PayPal. You may incur additional fees or charges imposed by PayPal for the withdrawal process.
- Advance Payments: At our discretion and subject to meeting certain streaming and/or sales metric qualifications, we may offer you the option to receive advance payments of royalties. The terms and conditions of such advance payments will be communicated to you separately.
- Tax Withholding and Reporting: We may be required by applicable law to withhold payments to you, in whole or in part, pending receipt of correctly completed tax-related forms, such as Form W-9 (for US residents) or Form W-8 (for non-US residents), or other relevant tax documents. It is your responsibility to provide accurate and updated tax information. If withholding is required, we reserve the right to deduct the necessary amounts from the payments due to you. Any incorrect, inaccurate, or misrepresented tax or financial information provided by you may result in liability for any costs, expenses, and liabilities we incur.
- Disputes and Account Suspension: In the event of any claim, notice, or suspected breach of agreement, infringement, or inappropriate conduct related to your Content or use of the Platform, we may suspend or terminate the distribution of your Content and withhold payments reasonably attributable to such issues. We may deduct related attorneys' fees and legal costs from your payments. Any amounts attributable to fraud, infringement, or other illegal activity will be forfeited.
7. Your Responsibilities
- You are solely responsible for obtaining all necessary rights, licenses, waivers, clearances, and permissions, including music publishing rights and licenses, to distribute, reproduce, display, publicly perform, synchronize with audiovisual works, or otherwise exploit the compositions (including lyrics) throughout the authorized territory for all recordings and other materials. By uploading your recordings and delivering any other materials, you warrant and represent to Velveteen that you have obtained all the necessary rights required for Velveteen and the digital platforms to sell, distribute, publicly perform, promote, and exploit your recordings and materials as contemplated under this Agreement. This includes waiving any moral rights on your behalf and on behalf of all contributors involved in the creation and delivery of your recordings.
- You are solely responsible for timely payment of royalties, mechanical royalties, synchronization fees, and any other amounts due to artists, producers, mixers, engineers, licensors, and any other royalty participants from the sales, licensing, performance, and other exploitation of your recordings and materials. You are also responsible for any royalties, mechanical royalties, synchronization fees payable to owners or administrators of copyrighted recordings or musical compositions embodied in your recordings. Furthermore, you are responsible for payments required under union, guild, or other collective bargaining agreements applicable to you or third parties, as well as any other royalties, fees, and sums payable with respect to the recordings or materials. It is your obligation to notify any performance rights organizations (PROs) if your recordings are administered by them in any territory. Please note that Velveteen does not make any such payments on your behalf, and it is recommended to consult with a qualified lawyer for legal advice regarding your obligations to third parties before entering into this Agreement and uploading any recordings to our service.
8. NO WARRANTIES; LIMITATION OF LIABILITY
- THE VELVETEEN WEBSITE AND SERVICES, INCLUDING ANY ADDITIONAL FEATURES, ARE PROVIDED ON AN "AS-IS" BASIS. VELVETEEN MAKES NO GUARANTEES, REPRESENTATIONS, OR WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION REGARDING THE AMOUNT OF INCOME THAT MAY BE EARNED BY OR PAYABLE TO YOU, OR THE CONDITION, QUALITY, CONTINUITY OF OPERATION, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE VELVETEEN WEBSITE OR SERVICES. VELVETEEN DOES NOT GUARANTEE CONTINUOUS, UNINTERRUPTED, ERROR-FREE, OR SECURE ACCESS TO OR USE OF THE WEBSITE OR SERVICES. ANY AND ALL WARRANTIES ARE EXPRESSLY DISCLAIMED AND EXCLUDED.
- TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER VELVETEEN NOR ANY OF ITS AFFILIATES, EMPLOYEES, OWNERS, EMPLOYEES, REPRESENTATIVES, OR AGENTS SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, LOST SALES, LOSS OF DATA, OR LOSS OF GOODWILL, ARISING FROM DIGITAL PLATFORMS' ACTS OR OMISSIONS, YOUR USE OF OR ACCESS TO THE VELVETEEN WEBSITE OR SERVICES, OR ANY OTHER LEGAL THEORY, WHETHER OR NOT VELVETEEN HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL VELVETEEN'S AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE AMOUNTS PAID TO YOU IN ACCORDANCE WITH PARAGRAPH [RELEVANT PARAGRAPH NUMBER] ABOVE. THE LIMITATIONS OF DAMAGES SET FORTH ABOVE ARE FUNDAMENTAL ELEMENTS OF THE BASIS OF THE AGREEMENT BETWEEN VELVETEEN AND YOU.
- Indemnification. You agree to indemnify, defend, and hold harmless Velveteen, its affiliates, and their respective owners, directors, officers, employees, representatives, and agents from and against any and all claims, damages, liabilities, costs, losses, and expenses (including but not limited to legal costs and attorneys' fees) arising out of any breach or alleged breach of any warranties, representations, covenants, or agreements made by you in this Agreement, including claims related to public performances or communications to the public of any musical works embodied in Your Content, claims from contributors to any sound recording included within Your Content, claims arising from the use or misuse of intellectual property or proprietary rights in Your Content, and any act, error, or omission committed by you or any person or entity acting on your behalf. You agree to reimburse Velveteen for any payments made by Velveteen at any time with respect to any claims covered by this indemnity.
- Indemnification Request. If Velveteen makes an indemnification request under this section, Velveteen may allow you to control the defense, settlement, or disposition of the matter at your own expense, provided that you shall not, without Velveteen's prior written consent, enter into any settlement or agreement that requires any admission of liability by Velveteen or imposes any conditions or obligations on Velveteen. If Velveteen, in its reasonable and good faith judgment, determines that you are not capable of defending the interests of Velveteen against any claims, Velveteen shall have the option to control the defense through its own chosen counsel. The costs of such counsel, as well as any court costs, shall be at your expense.
10. Modification, Termination, and Effect of Termination
- Velveteen.ai reserves the right to change, modify, add to, or remove all or part of this Agreement, in our sole discretion, at any time and from time to time. We may communicate these modifications through notice on your account dashboard or via any reasonable manner we may choose in our sole discretion. If there are substantive changes to the terms of this Agreement, we will notify you by changing the date at the top of this Agreement and through notice on your account dashboard. The most recent date of this Agreement will be identified on the first page hereof. If any modification is unacceptable to you, your only recourse is to discontinue use of the Services by sending us a termination notice. Your continued use of the Services after any modification will constitute your binding acceptance of the changes.
- The expiration or termination of this Agreement will not relieve either party from their respective obligations incurred prior to the effective date of termination. Furthermore, provisions of this Agreement intended to survive termination, including but not limited to the Indemnification, Disclaimers, Limitation of Liability; Basis of the Bargain, and General Provisions, shall continue to apply even after termination.
11. Dispute Resolution
- Mandatory Arbitration: Please read this carefully. It affects your rights. YOU AND VELVETEEN AND EACH OF OUR RESPECTIVE SUBSIDIARIES, AFFILIATES, PREDECESSORS IN INTEREST, SUCCESSORS, AND PERMITTED ASSIGNS AGREE TO ARBITRATION (EXCEPT FOR MATTERS THAT MAY BE TAKEN TO SMALL CLAIMS COURT), AS THE EXCLUSIVE FORM OF DISPUTE RESOLUTION EXCEPT AS PROVIDED FOR BELOW, FOR ALL DISPUTES AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR YOUR USE OF THE SERVICES. Arbitration is more informal than a lawsuit in court. Arbitration uses a neutral arbitrator instead of a judge or jury, allows for more limited discovery than in court, and is subject to very limited review by courts. Arbitrators can award the same damages and relief that a court can award. Please visit www.adr.org for more information about arbitration.
- Commencing Arbitration: A party who intends to seek arbitration must first send to the other, by certified mail, a written notice of intent to arbitrate (a “Notice”), or, in the absence of a mailing address provided by you to Velveteen, to you via any other method available to Velveteen, including via email. The Notice to Velveteen should be addressed to: [Velveteen / ATTN: Legal / 10534 115 St NW, Edmonton, Alberta, Canada] (the “Arbitration Notice Address”). The Notice must (i) describe the nature and basis of the claim or dispute; and (ii) set forth the specific relief sought (the “Demand”). If you and Velveteen do not reach an agreement to resolve the claim within 30 days after the Notice is received, you or Velveteen may commence an arbitration proceeding as set forth below or file a claim in small claims court.
- A party's waiver of a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach of the same provision or any other provision of this Agreement. If any provision hereof is found invalid or unenforceable pursuant to judicial decree or decision, the remainder of this Agreement shall remain valid and enforceable according to its terms, such determination shall not affect any other provision hereof, and the unenforceable provision shall be limited solely as necessary or replaced by an enforceable provision that most closely meets the commercial intent of the parties.
- Velveteen.ai will not be liable for a curable breach of this Agreement unless you provide us with written notice specifying the alleged breach that we confirm receipt of, and we fail to cure such breach within ninety (90) days thereafter.
- We may direct all notices and communications to you via the email address or street address associated with your account and/or via your account dashboard on the Site. All notices to Velveteen.ai Ltd. shall be sent to us at firstname.lastname@example.org.
- You may not assign, transfer, or delegate any of your rights or obligations hereunder without our prior written consent, and any purported attempt otherwise will be null and void. We may assign, delegate, pledge, encumber, sublicense, and otherwise transfer this Agreement and/or any or all of our rights and obligations in order to operate the Service and Site. This Agreement will be binding on and inure to the benefit of the parties and their respective assigns and successors in interest.
- We reserve the right to modify, discontinue, or terminate the Service at any time and without prior notice. We are under no obligation to provide the Service continuously or at all.
- 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.
- This Agreement shall be construed and enforced exclusively in accordance with the laws of the Province of Alberta, without regard to its conflict of laws principles. Any action or proceeding brought by either party against the other arising out of or related to this Agreement shall be brought only in a state or federal court of competent jurisdiction located in Edmonton, Alberta, and the parties irrevocably consent to the in-personam jurisdiction and venue of said courts. You agree that service of process by us to you by one of the methods designated above for the giving of notices will be deemed effective as personal service within Edmonton, and hereby consent to service of process by such methods.