THIS IS A LEGAL AGREEMENT (THE “AGREEMENT”) BETWEEN LICENSEE, PURCHASER AND POWERHOUSE TRACKS. THIS AGREEMENT APPLIES TO LICENSES ISSUED VIA THE WEB AND VIA LOCAL SALES REPRESENTATIVES, AND IS APPLICABLE TO ONLINE, DIGITAL AND ANALOG (PHYSICAL) DELIVERY OF LICENSED MATERIAL. BY ORDERING A LICENSE, LICENSEE AND, IF APPLICABLE, PURCHASER, IS CONFIRMING THAT IT HAS CAPACITY TO FORM A CONTRACT UNDER ITS LOCAL LAWS.
1. Definitions. In this Agreement the following definitions apply
1.1 “Invoice” means the computer-generated or pre-printed standard form invoice provided by PowerHouse Tracks that shall include, without limitation, the PowerHouse Tracks licensing company, the Licensed Material selected and the corresponding price for the license of such Licensed Material (“License Fee”). The Invoice shall be incorporated into this Agreement and all references to the Agreement shall include the Invoice.
1.2 “Licensed Material” means any music (including musical compositions and sound recordings), sounds and sound effects, original digital files, or any copies thereof, or any other music product protected by copyright, trademark, patent or other intellectual property right, which is licensed to Licensee by PowerHouse Tracks under the terms of this Agreement. Any reference in this Agreement to the Licensed Material shall be to each individual item within the Licensed Material and also to the Licensed Material as a whole.
1.3 “Licensee” means the entity purchasing a license hereunder or, if there is a separate Purchaser, the entity specifically designated as Licensee during the purchase process and set forth as such in the Invoice.
1.4 “Licensee Work” means an end product, service, campaign or publication that has been created by or on behalf of Licensee using independent skill and effort and that incorporates a Reproduction of the Licensed Material as well as other material.
1.5 “Purchaser” means the entity purchasing the license hereunder on behalf of a third-party Licensee.
1.6 “Reproduction” and “Reproduce” mean any form of copying or publication of the whole or a part of any Licensed Material, via any medium and by whatever means, the distortion, alteration, cropping or manipulation of the whole or any part of the Licensed Material, and the creation of any derivative work from, or that incorporates, the Licensed Material.
1.7 “User” means any employee or subcontractor of Licensee who: (i) downloads, manipulates, edits, modifies or saves the digital file containing the Licensed Material; (ii) is otherwise directly involved in the creative process utilizing the Licensed Material; or (iii) incorporates the Licensed Material within any derivative work.
2. Grant of Rights. Subject to the terms of this Agreement
2.1 PowerHouse Tracks grants to Licensee a direct, perpetual, non-exclusive, non-transferable, non-sublicensable, worldwide right, inclusive of mechanical and performing rights (subject to Section 2.5 below), to use and Reproduce the Licensed Material an unlimited number of times in any and all media for all purposes other than those uses prohibited under Section 3 of this Agreement. All Licensed Material must be downloaded within one (1) year of the date of purchase.
2.2 Licensee may edit, modify or alter the Licensed Material as necessary for its intended use, provided that: (i) any such editing, modification or alteration does not give rise to any ownership rights or claims, including copyright, on the part of Licensee in or to the Licensed Material; and (ii) Licensee agrees that, if requested by PowerHouse Tracks, Licensee will, without any payment or other consideration, execute a written assignment of any such rights to PowerHouse Tracks.
2.3 Licensee may have the Licensed Material Reproduced by subcontractors of Licensee (including Purchaser) for preparation of the Licensee Work, provided that such subcontractors agree to abide by the provisions of this Agreement.
2.4 Licensee may store the Licensed Material in a digital library, network configuration or similar arrangement to allow the Licensed Material to be accessed by employees, partners and clients of Licensee, so long as there is no more than one (1) User.
2.5 PowerHouse Tracks has used reasonable efforts to ensure that it owns and holds all rights to all Licensed Material and that it may issue direct licenses, inclusive of all performing rights, mechanical rights or any other similar rights, without need of payment for further royalties to any performing, mechanical or other similar rights societies (such as ASCAP, BMI, SESAC, PRS, MCPS, JASRAC, GEMA, etc.). However, in certain jurisdictions outside of the United States (for example, France and Spain), Licensee may be required to pay royalties to performing rights or other rights societies due to the exploitation of the Licensed Material in that jurisdiction (regardless of whether any of the contributors of the Licensed Material is a member of the applicable societies and/or if a contributor later becomes a member of the applicable societies). You must determine if such requirements exist in the applicable jurisdiction
3.1 Licensee may not: (i) make the Licensed Material available (separate from the Licensee Work) in any medium accessible by persons other than a single User; (ii) make the Licensed Material available in a manner intended to allow or invite a third party to download, extract, redistribute or access the Licensed Material as a standalone file.
3.2 Licensee may not, without obtaining the prior written consent of PowerHouse Tracks and the payment of additional License Fees: (i) include the Licensed Material in an electronic template intended to be Reproduced by third parties including, without limitation, in a product or service that enables an end user to create soundtracks, in a system that resells products that include the Licensed Material, or in any “build-it-yourself” media tools; (ii) use or display the Licensed Material on websites or in any other medium designed to induce or involving the sale, license or other distribution of “on demand” products, including, without limitation, electronic greeting cards, voicemail greetings, ring tones, multi-media albums or presentations, or similar items; (iii) use or display the Licensed Material in an electronic format that enables it to be downloaded or distributed via mobile or wireless devices or shared in any peer-to-peer or similar file sharing arrangement; (iv) use the Licensed Material as a component of a larger musical composition, including but not limited to “sample-based” musical productions; (v) use the Licensed Material to manufacture, distribute or sell audio-only products, whether in the form of compact discs (CD’s), cassettes, phonographs, digital downloads or any other format or media now known or hereafter devised; (vi) sub-license, re-sell, rent, lend, assign, gift or otherwise transfer or distribute the Licensed Material or the rights granted under this Agreement; (vii) manufacture or distribute more than two thousand (2,000) units of the Licensee Work; or (viii) in the case of in-store, in-office or on-hold background music, use the Licensed Material in more than two (2) physical locations.
3.3 Licensee may not reverse engineer, decompile, or disassemble any part of the Licensed Material.
3.4 Licensee may not falsely represent, expressly or impliedly, that Licensee is the original creator of an audio or visual work that derives a substantial part of its artistic components from the Licensed Material, nor may it make the Licensed Material available in the form of fine art prints.
3.5 Licensed Material shall not be incorporated into a logo, corporate ID, trademark or service mark, nor used as the theme song for any film, television show, or other broadcast or program, without obtaining the prior written consent of PowerHouse Tracks.
3.6 Defamatory or otherwise unlawful use of Licensed Material is strictly prohibited, whether directly or in context or juxtaposition with specific subject matter. Licensee shall also comply with any applicable regulations and/or industry codes.
3.7 While efforts have been made to correctly caption the subject matter of, and to provide other information (including metadata) related to, the Licensed Material, PowerHouse Tracks does not warrant the accuracy of such information.
3.8 Where Purchaser is licensing Licensed Material on behalf of a Licensee, Purchaser hereby represents and warrants that: (i) Purchaser is authorized to act as an agent on behalf of Licensee and has full power and authority to bind Licensee to this Agreement; and (ii) if Licensee subsequently disputes such power or authority, Purchaser shall be bound and liable for any failure of Licensee to comply with the terms of this Agreement. Nothing in this Section 3.8 shall serve to excuse Purchaser’s obligation to make payment to PowerHouse Tracks of the License Fee.
3.9 If the Licensed Material is Reproduced on a website, Licensee shall post terms and conditions on the website that include restrictions on downloading the Licensed Material for other than personal use, and prohibit republication, retransmission, reproduction or other use of the Licensed Material.
3.10 If the Licensed Material is Reproduced on a social media platform or other third party website, (i) the rights granted herein shall automatically be revoked in the event that the platform or website seeks to exploit purported rights to the Licensed Material contrary to the terms of this Agreement, and (ii) in such event, upon PowerHouse Tracks’ request, Licensee shall remove any Licensed Material from such platform or website.
4. Credit and Intellectual Property
4.1 Copyright. No ownership or copyright in any Licensed Material shall pass to Licensee by the issuance of the license contained in this Agreement. Except as expressly stated in this Agreement, PowerHouse Tracks grants Licensee no right or license, express or implied, to the Licensed Material.
4.2 Trademarks. In connection with the use of “PowerHouse Tracks” or any other of PowerHouse Tracks’ or its partners’ trade names, trademarks, logos or service marks, including the names of all Licensed Material collections (“Marks”), Licensee acknowledges and agrees that (i) such Marks are and shall remain the sole property of PowerHouse Tracks or its partners; (ii) except as expressly required in order to satisfy credit obligations under this Agreement, nothing shall confer upon Licensee any right of use in or to the Marks; and (iii) Licensee shall not now or in the future contest the validity of PowerHouse Tracks’ Marks.
4.3 Audio/Visual Production Credit. If Licensed Material is used in an audio/visual production where credits are accorded to other providers of licensed material, credit shall be accorded, where technically feasible, in equal size and comparable placement to such other credit(s), substantially in the form “Music supplied by PowerHouse Tracks”.
4.4 Notice of Violations. Licensee will immediately notify PowerHouse Tracks if it becomes aware or suspects that any third party that has gained access to the Licensed Material through Licensee is wrongfully using the Licensed Material, in whole or in part, or is violating any of PowerHouse Tracks’ intellectual property rights, including, but not limited to, Marks and copyrights.
4.5 No Removal of Notices. Licensee shall not remove any copyright, trademark, watermark, or other legal notice from any place where it is on or embedded in the Licensed Material.
5. Warranty and Limitation of Liability
5.1 PowerHouse Tracks warrants that: (i) the Licensed Material will be free from defects in material and workmanship for thirty (30) days from delivery (Licensee’s sole and exclusive remedy for a breach of this warranty being the replacement of the Licensed Material); (ii) it has all necessary rights and authority to enter into and perform this Agreement; and (iii) Licensee’s use of the Licensed Material in accordance with this Agreement and in the form delivered by PowerHouse Tracks (i.e., excluding any modifications made by Licensee), will not infringe on any copyright, moral right, trademark or other intellectual property right and will not violate any right of privacy or right of publicity; provided, however, that Licensee shall be responsible for any payments required in jurisdictions outside of the United States per Section 2.5 above, as well as payment of any amounts that may be due, and compliance with any other terms of, any applicable collective bargaining agreement(s) or other agreements entered into by Licensee as a result of its use of the Licensed Material.
5.2 POWERHOUSE TRACKS DOES NOT MAKE ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE LICENSED MATERIAL OR ITS DELIVERY SYSTEMS, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. POWERHOUSE TRACKS SHALL NOT BE LIABLE TO LICENSEE OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR OTHER SIMILAR DAMAGES, COSTS OR LOSSES ARISING OUT OF THIS AGREEMENT, EVEN IF POWERHOUSE TRACKS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, COSTS OR LOSSES. SOME JURISDICTIONS DO NOT PERMIT THE EXCLUSION OR LIMITATION OF IMPLIED WARRANTIES OR LIABILITY FOR CERTAIN CATEGORIES OF DAMAGES. WITHOUT LIMITING ANY OTHER TERM HEREIN, POWERHOUSE TRACKS SHALL NOT BE LIABLE FOR ANY DAMAGES, COSTS OR LOSSES ARISING AS A RESULT OF MODIFICATIONS MADE TO THE LICENSED MATERIAL BY LICENSEE OR THE CONTEXT IN WHICH LICENSED MATERIAL IS USED IN A LICENSEE WORK.
6.1 Licensee shall defend, indemnify and hold harmless PowerHouse Tracks and its parent, subsidiaries and commonly owned or controlled affiliates and their respective officers, directors and employees from all damages, liabilities and expenses (including reasonable outside attorneys’ fees), arising out of or as a result of claims by third parties relating to Licensee’s use of any Licensed Material outside the scope of this Agreement or any other actual or alleged breach by Licensee of this Agreement.
6.2 Provided Licensed Material is used only in accordance with this Agreement and Licensee is not otherwise in breach of this Agreement or any payment obligations to PowerHouse Tracks, and as Licensee’s sole and exclusive remedy for any breach of the representations and warranties set forth in Section 5.1(ii) and (iii) above, PowerHouse Tracks shall, subject to the terms of Section 5.2 above, defend, indemnify and hold harmless Licensee and its parent, subsidiaries and commonly owned or controlled affiliates and their respective officers, directors and employees from damages, liabilities and expenses (including reasonable outside attorney’s fees), arising out of or connected with any actual lawsuit or legal proceeding alleging that PowerHouse Tracks is in breach of its warranties set forth in Section 5.1(ii) and (iii) above. The total maximum aggregate liability of PowerHouse Tracks under this Agreement and any other agreement with PowerHouse Tracks pursuant to which Licensee has licensed the same content (regardless of the file size, or the use or exploitation of any or all of the content in any manner whatsoever), and the obligation of PowerHouse Tracks under this Section, shall be limited to an aggregate of one thousand ($1,000) US dollars per item of Licensed Material. For greater clarity, PowerHouse Tracks’ liability to Licensee in respect of the content shall not exceed one thousand ($1,000) US dollars per item of Licensed Material regardless of the number of times that Licensee has licensed the same content from PowerHouse Tracks. The foregoing states PowerHouse Tracks’ entire indemnification obligation under this Agreement.
6.3 The party seeking indemnification pursuant to this Section 6 shall promptly notify the other party of such claim. At indemnifying party’s option, indemnifying party may assume the handling, settlement or defense of any claim or litigation, in which event indemnified party shall cooperate in the defense of any such claim or litigation as may be reasonably requested by indemnifying party. Indemnified party shall have the right to participate in such litigation, at its expense, through counsel selected by indemnified party. Indemnifying party will not be liable for legal fees and other costs incurred prior to the other party giving notice of the claim for which indemnity is sought, and PowerHouse Tracks shall not be liable for any losses arising from Licensee’s failure to discontinue use pursuant to Section 10.3 below.
7. Condition of Licensed Material. Licensee should examine all Licensed Material for possible defects (whether digital or otherwise) before sending any Licensed Material for Reproduction. Without prejudice to Section 5.1(i) above, PowerHouse Tracks shall not be liable for any loss or damage suffered by Licensee or any third party, whether directly or indirectly, arising from any alleged or actual defect in any Licensed Material or its caption or in any way from its Reproduction.
8. Electronic Invoicing; Interest on Overdue Invoices. Licensee and Purchaser agree to receive invoices from PowerHouse Tracks electronically via the email address associated with Licensee’s and/or Purchaser’s PowerHouse Tracks account. If Licensee fails to pay the Invoice in full within the time specified in the Invoice, PowerHouse Tracks may add a service charge of one-and-one-half percent (1.5%) per month, or such lesser amount as is allowed by law, on any unpaid balance until payment is received.
9. Unauthorized Use and Termination. Any use of Licensed Material in a manner not expressly authorized by this Agreement (including, without limitation, use of Licensed Material by more than one (1) User without purchase of additional seat licenses) constitutes copyright infringement, entitling PowerHouse Tracks to exercise all rights and remedies available to it under copyright laws around the world. Licensee shall be responsible for any damages resulting from any such copyright infringement, including any claims by a third party. In addition and without prejudice to PowerHouse Tracks’ other remedies under this Agreement, PowerHouse Tracks reserves the right to charge and Licensee agrees to pay a fee equal to seven (7) times PowerHouse Tracks’ single-track list price for each unauthorized use of the Licensed Material. PowerHouse Tracks reserves the right to terminate this Agreement in the event Licensee: (i) enters the Agreement after having received notice of unauthorized use from PowerHouse Tracks relating to the Licensed Material; (ii) fails to pay the License Fee in full within the time specified in the Invoice; or (iii) otherwise breaches the terms of this Agreement. Upon termination, Licensee must immediately (I) stop using the Licensed Material; and (II) destroy or, upon the request of PowerHouse Tracks, return to PowerHouse Tracks the Licensed Material and, in the case of termination by PowerHouse Tracks for cause, the Licensee Work in the possession or control of Licensee.
10. Miscellaneous Terms
10.1 Audit/Certificate of Compliance. Upon reasonable notice, Licensee shall provide sample copies of Reproductions containing any Licensed Material to PowerHouse Tracks. In addition, upon reasonable notice, PowerHouse Tracks may, at its discretion, either through its own employees or through a third party, audit Licensee’s records directly related to this Agreement and use of Licensed Material in order to verify compliance with the terms of this Agreement. If any such audit reveals an underpayment by Licensee to PowerHouse Tracks of ten percent (10%) or more of the amount Licensee should have paid for the time period that is the subject of the audit, in addition to paying PowerHouse Tracks the amount of such underpayment, Licensee shall also reimburse PowerHouse Tracks for the costs of conducting such audit. Where PowerHouse Tracks reasonably believes that Licensed Material is being used by more than a single User, or that Licensed Material is being used outside of the scope of the license granted under this Agreement, Licensee shall, at PowerHouse Tracks’ request, provide a certificate of compliance signed by an officer of Licensee, in a form to be approved by PowerHouse Tracks.
10.2 Electronic Storage. For all Licensed Material that is delivered to Licensee in electronic form, Licensee must retain the copyright symbol, the name of PowerHouse Tracks, the Licensed Material’s identification number and any other information as may be embedded in the electronic file containing the original Licensed Material. Licensee shall maintain a robust firewall to safeguard against unauthorized third-party access to the Licensed Material.
10.3 Withdrawal. Upon notice from PowerHouse Tracks, or upon Licensee’s knowledge that any Licensed Material may be subject to a claim of infringement of another’s right for which PowerHouse Tracks may be liable, PowerHouse Tracks may require Licensee to immediately and at its own expense (i) stop using the Licensed Material; (ii) delete or remove the Licensed Material from its premises, computer systems and storage (electronic or physical); and (iii) ensure that its clients do likewise. PowerHouse Tracks shall provide Licensee with comparable Licensed Material (which comparability will be determined by PowerHouse Tracks in its reasonable commercial judgment) free of charge, but subject to the other terms and conditions of this Agreement.
10.4 Governing Law. This Agreement will be governed in all respects by the laws of the State of New York, U.S.A., without reference to its laws relating to conflicts of law. Any disputes arising from or related to this Agreement or its enforceability, or the business relationship between the parties, shall be finally settled by binding, confidential arbitration by a single arbitrator selected using the rules and procedures for arbitrator selection under the Commercial Rules of the American Arbitration Association (“AAA”) or of the International Centre for Dispute Resolution (“ICDR”) in effect on the date of commencement of the arbitration (the applicable rules to be at Licensee’s discretion) to be held in one of the following jurisdictions (whichever is closest to Licensee): Seattle, Washington; New Jersey, New York, New York; Los Angeles, California; London, England; Paris, France; Frankfurt, Germany; Tokyo, Japan; or Singapore. The arbitration proceedings shall be conducted in English and all documentation shall be presented and filed in English. The decision of the arbitrator shall be final and binding on the parties, and judgment may be entered on the arbitration award and enforced by any court of competent jurisdiction. The prevailing party shall be entitled to recover its reasonable legal costs relating to that aspect of its claim or defense on which it prevails, and any opposing costs awards shall be offset. The United Nations Convention on Contracts for the International Sale of Goods does not govern this Agreement. Notwithstanding the foregoing, PowerHouse Tracks shall have the right to commence and prosecute any legal or equitable action or proceeding before any court of competent jurisdiction to obtain injunctive or other relief against Licensee in the event that, in the opinion of PowerHouse Tracks, such action is necessary or desirable. The parties agree that, notwithstanding any otherwise applicable statute(s) of limitations, any arbitration proceeding shall be commenced within two years of the acts, events, or occurrences giving rise to the claim.
10.5 Severability. If one or more of the provisions contained in the Agreement is found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected. Such provisions shall be revised only to the extent necessary to make them enforceable.
10.6 Waiver. No action of either party, other than express written waiver, may be construed as a waiver of any provision of this Agreement. A delay on the part of either party in the exercise of its rights or remedies will not operate as a waiver of such rights or remedies, and a single or partial exercise by either party of any such rights or remedies will not preclude other or further exercise of that right or remedy. A waiver of a right or remedy on any one occasion will not be construed as a bar to or waiver of rights or remedies on any other occasion.
10.7 Entire Agreement. This Agreement is intended for business customers of PowerHouse Tracks and contains all the terms of the license agreement. No terms or conditions may be added or deleted unless made in writing and either signed by an authorized representative of PowerHouse Tracks or issued electronically by PowerHouse Tracks and signed by an authorized representative of Licensee. In the event of any inconsistency between the terms contained herein and the terms contained on any purchase order sent by Licensee, the terms of this Agreement shall govern.
10.8 Taxes. All License Fees are exclusive of any applicable sales, use, withholding or other transactional taxes, which are the sole responsibility of Licensee or Purchaser (if any).