TETRA HOUSE PUBLISHING GROUP LLC
TERMS OF SERVICE
Last Updated: October 27, 2021
PLEASE READ THESE TERMS AND CONDITIONS (THE “AGREEMENT”) CAREFULLY AS THEY ARE A LEGAL AGREEMENT BETWEEN YOU (“CUSTOMER”) AND TETRA HOUSE PUBLISHING GROUP LLC, C/O MANATT, PHELPS & PHILLIPS, LLP, 2049 CENTURY PARK EAST, SUITE 1700, LOS ANGELES, CA 90067, ATTN: W. JOSEPH ANDERSON, ESQ. (“TETRA HOUSE”).
THIS AGREEMENT SETS FORTH THE LEGALLY BINDING TERMS AND CONDITIONS FOR THE PRODUCTS AND SERVICES AVAILABLE FROM TETRA HOUSE, AND, TOGETHER WITH ANY ORDER FORMS (AS DEFINED BELOW), SHALL APPLY TO ALL TETRA HOUSE SERVICES (AS DEFINED BELOW) PROVIDED BY TETRA HOUSE PURSUANT TO ANY SUCH ORDER FORMS, UNLESS CUSTOMER AND TETRA HOUSE HAVE ENTERED INTO A SEPARATE WRITTEN AGREEMENT. BY EXECUTING ANY ORDER FORM(S) YOU AGREE TO THE TERMS OF THIS AGREEMENT. IF YOU DO NOT AGREE TO THIS AGREEMENT, TETRA HOUSE SHALL HAVE NO OBLIGATION TO PERFORM ANY SERVICES.
IF YOU HAVE EXECUTED ANY ORDER FORM(S) WITH TETRA HOUSE ON BEHALF OF A COMPANY (SUCH AS YOUR EMPLOYER) OR OTHER LEGAL ENTITY, YOU REPRESENT AND WARRANT THAT YOU HAVE THE AUTHORITY TO BIND THAT COMPANY OR OTHER LEGAL ENTITY TO THIS AGREEMENT. IN THAT CASE, “CUSTOMER” WILL REFER TO THAT COMPANY OR OTHER LEGAL ENTITY.
1. TERM. The term of this Agreement in connection with any applicable Work(s) (as defined below) shall commence upon the Effective Date and shall continue for a period of twelve (12) months thereafter (the “Initial Term”) unless earlier terminated as specified herein. At the end of the Initial Term, the Term shall automatically renew for one (1) year periods (each a “Renewal Term(s)”), on a consecutive basis, unless either party terminates the Term by providing notice to the other party at least thirty (30) days prior to the expiry of the Initial Term or any Renewal Term. (The Initial Term, together with any Renewal Term(s) is referred to herein as the “Term”).
2. DEFINITIONS.
(a) “Confidential Information” means any information or documents regarding or contained in this Agreement that would reasonably indicate to the receiving party that such information or document is confidential, including, without limitation, with respect to Tetra House, Tetra House’s trade secrets, information concerning or derived from Tetra House’s proprietary databases and information systems, and information regarding Tetra House’s business operations that is learned by Customer in connection with the negotiation of this Agreement or the performance thereof. Confidential Information shall not include information or documents known generally to the public or the recorded music industry other than as a result of an unauthorized disclosure by Tetra House or by Customer.
(b) “Distribution Channel(s)” means any distribution channel(s), whether now known or hereafter developed, through which Tetra House (or its licensees or affiliates, as applicable), in its sole discretion, offers distribution for Physical and Digital Products, including, without limitation, as downloads. The Distribution Channel currently used is CoreSource provided by Ingram Publisher Services.
(c) “Digital Products” means the Work in electronic or other non-physical format, whether now known or which may hereafter become known.
(d) “Effective Date” means, for any applicable Work(s), the
(e) “Identification Materials” means the name(s) (including any professional names), image, likeness, voice (or simulation thereof) and biographical material of Customer and Author (as defined on the applicable Order Form(s)) in connection with the advertising, publicity and exploitation of the Work and all subsidiary, derivative, allied and ancillary rights therein as well as for intuitional trade purposes, by any means and all media, whether now known or hereafter developed.
(f) “Net Receipts” means Tetra House Net Sales less:
(i) an amount equal to any Administration Fee(s) (as defined below) retained by Tetra House;
(ii) an amount equal to the aggregate of A-La-Carte Fees (as defined below) retained by Tetra House, if any;
(iii) all amounts advanced in connection with any services performed by Tetra House hereunder and pursuant to any applicable Order Form(s), including, but not limited to, and as applicable: manufacturing and packaging costs paid and/or incurred by Tetra House (if any), all freight charges paid and/or incurred by or on behalf of Tetra House for shipping of units of Physical Products (if any), and any other customary charges incurred by Tetra House in rendering the services hereunder (e.g., printing fees, set-up fees, third party distribution fees, including any paid to the Distribution Channels, etc.), as those charges may be modified from time to time by Tetra House in Tetra House’s sole discretion;
(iv) all content preparation charges and all other amounts paid and/or incurred by Tetra House in connection with the preparation or sale of units of Digital Products hereunder;
(v) any of Customer’s financial obligations as set forth in section 7(e) to the extent that Tetra House has paid any such amounts on Customer’s behalf (which, for the avoidance of doubt, Tetra House has no obligation to do); and
(vi) any other costs and expenses paid and/or incurred by Tetra House in connection with the manufacture, sale, marketing, distribution and exploitation of any Work(s) and Products derived therefrom pursuant to this Agreement, any applicable Order Form(s), or as otherwise approved by Customer.
(g) “Order Form” means an order form executed by Tetra House and Customer referencing this Agreement. Each Order Form shall be deemed incorporated by reference into this Agreement upon mutual execution, and these terms shall be incorporated into each Order Form.
(h) “Person” means any natural person, legal entity, or other organized group of persons or entities. (All pronouns, whether personal or impersonal, which refer to Persons include natural persons and other Persons.)
(i) “Physical Products” versions the Work (if applicable) other than Digital Products.
(j) “Products” means, individually and collectively, Digital Products and Physical Products.
(k) “Distribution Services” means the following publishing services as provided by Tetra House, its affiliates or licensees: (i) solicitation, acceptance and processing of orders from customers; (ii) physical distribution by means of any applicable print-on-demand system provided by a Distribution Channel; (iii) digital distribution via any Distribution Channels; (iv) invoicing and collection of customer accounts; and (vii) processing and issuance of credits to customers.
(l) “Territory” means the entire world and universe.
(m) “Tetra House Gross Sales” means amounts actually received by Tetra House in the US (after all rebates, adjustments, settlements, allowances, credits and discounts (other than cash discounts)) that are readily and directly attributable to sales, distributions and exploitations of Products hereunder throughout the Territory.
(n) “Tetra House Net Sales” means Tetra House Gross Sales, less returns.
(o) “Work” that certain literary work as set forth on the applicable Order Form(s) and delivered by Customer to Tetra House.
3. TETRA HOUSE SERVICES. Subject to the terms and conditions hereof, as well as any set forth on an applicable Order Form, and provided Customer is not in breach hereunder or in connection with any applicable Order Form(s), Tetra House shall provide the Distribution Services, or access thereto, and/or the certain a-la-carte services, as mutually agreed upon by Customer and Tetra House and set forth on the applicable Order Form(s) (the “A-La-Carte Services”) (the services specifically set out on each applicable Order Form to be performed for the applicable Work(s), the “Tetra House Services”), in order to assist Customer with the distribution and sale of Products through the Distribution Channels.
(a) Distribution Services Fee. Tetra House will provide the Distribution Services to Customer solely in connection with the Work(s) set forth on such Order Form(s), subject to Tetra House retaining a fee for the duration of the Term in the amount of fifteen percent (15%) of Tetra House Gross Sales fee (such fee, a “Administration Fee”).
(b) A-la-Carte Services Fee. Alternatively, for any A-La-Carte Services, Customer shall be charged the rates set forth on such Order Form(s) (which rates may be updated from time-to-time upon notice to Customer [e-mail notification shall be sufficient for this purpose])(the “A-La-Carte Fees”).
(c) Determination of Customer Prices. Tetra House shall determine the wholesale selling price of Products to customers and the terms of sale for Products, including, without limitation, cash discounts (i.e., discounts for timely or expedited payments from customers) and credit, dating and returns policies.
(d) Release Schedules. Customer and Tetra House shall mutually agree on a date for each specific Product from the release dates offered by Tetra House. Tetra House shall meet each established release schedule provided that within Tetra House’s production and release schedule Customer has delivered to Tetra House all required deliverables therefor. In connection therewith, Tetra House shall furnish Customer with new release book due dates and Tetra House’s requirements for product release schedules.
(e) Advertising, Marketing and Promotion. The advertising, marketing and promotion of Products hereunder shall be Customer’s sole responsibility and at Customer’s sole cost and expense, provided that, in the event that Customer requests Tetra House to cover any of the foregoing, Tetra House shall have the right (but not the obligation) to cover them for Customer, and to charge any applicable amounts marked up as set forth in the quote to be provided by Tetra House to Customer in connection with the same. For clarity, upon receipt of any such quote, Customer shall have the opportunity to rescind the applicable request. Without limiting anything in the immediately preceding sentence, during the Term and to the extent that Customer shall provide to Tetra House in a timely manner sufficient advertising and promotional materials for the Products hereunder, Tetra House shall (i) include the same (modified as necessary in Tetra House’s sole discretion) in any newsletters published by Tetra House and any affiliates of Tetra House as determined in the sole discretion of Tetra House, provided any failure to include any Products in any such newsletter(s) shall not be deemed a breach hereof; and (ii) purchase ad space on relevant publishing industry and trade platforms, as determined by Tetra House in its sole discretion.
(f) Physical Units. Packaging for Physical Products sold through the Distribution Channels shall have printed or stickered thereon “Produced by Tetra House Publishing Group LLC” (or such other identification of distributor or manufacturer, if applicable) as Tetra House may designate from time to time) together with such logo as Tetra House may designate. Tetra House shall not provide manufacturing, packaging, warehousing or any other services with respect to Physical Products hereunder, and all such services shall be provided by the Distribution Channels per the specific terms and conditions of each, if any. Customer may itself or through another distributor distribute such Physical Products in the Territory during the Term without further obligation to Tetra House provided that any such Physical Products are purchased by, or on behalf of Customer, through Tetra House at cost. Tetra House shall not accept any returns of units of Physical Products, and Customer agrees to indemnify Tetra House from any liability in connection with any such returns. Notwithstanding the foregoing, to the extent Tetra House does accept any return of any Physical Product(s), Customer shall promptly accept the return from Tetra House of all such Physical Product(s) that are returned to Tetra House, re-purchase such units of Physical Products from Tetra House for an amount equal to any amount paid by Tetra House for such return, and remove such units of Physical Products, at Customer’s sole expense, within thirty (30) days after written request by Tetra House, or Tetra House shall destroy, at Customer’s sole expense, all units of Physical Products returned and accepted by Tetra House.
4. DELIVERABLES. Promptly following the complete execution of any Order Form(s), Tetra House shall provide a list of items required to be delivered in order for Tetra House to perform the Services as set forth on any such Order Form(s)(the “Deliverables”), and Customer shall promptly furnish to Tetra House the Deliverables by e-mail to Daniel Lisi at lisi@notacult.media. Without limiting the generality of the foregoing, the Deliverables shall include select photographs of Author and a written biography of Author.
5. GRANT OF RIGHTS. During the Term and throughout the Territory and in accordance with the terms hereof, Customer hereby engages Tetra House to render those Tetra House Services as set forth on the applicable Order Form(s), for the purpose of enabling Customer and/or Tetra House, as applicable, to publish, distribute, and sell Physical Products and Digital Products through the Distribution Channels, and Customer hereby grants to Tetra House all rights necessary to permit Tetra House to render such Tetra House Services, as well as to promote, market and publicize any Work(s) in accordance with the terms set forth herein, including without limitation the right to use and authorize others to use, without charge, excerpts from any Work(s). In addition, Customer hereby grants to Tetra House the non-exclusive right during the Term and throughout the Territory to use and to authorize other Persons to use the Identification Materials relating to Customer, Author, and any Work(s), on and in connection with any version of such Work(s), and for purposes of advertising, promotion and trade in connection with the marketing and exploitation of such Work(s) and such Products derived therefrom, without payment of additional compensation to Customer, Author or to any other Person. Tetra House shall have the right to sublicense the rights granted by Customer pursuant to this Agreement to its network of licensees, affiliates and other third party partners as necessary to fulfill the purposes of this Agreement, including without limitation, to promote, market, sell, exploit and distribute Products.
(a) Exclusivity. Customer hereby acknowledges and agrees that during Term, Customer shall have the exclusive right to license to Tetra House the rights set forth in Section 5, above, in connection with any Work(s), and that neither Customer, nor any Person on Customer’s behalf (including any applicable Author), shall release or authorize the release of any version of any Work(s) throughout the Territory. Customer shall immediately notify Tetra House in the event that at any time during the Term any applicable Work(s), in part or in whole, or any Deliverable is no longer available for licensing or are subject to any new restrictions not previously communicated to Tetra House by prior written notice from Customer.
(b) Reserved Rights. All rights not specifically granted to Tetra House herein are reserved by Customer (the “Reserved Rights”). During the term of this Agreement, Customer will not exercise or dispose of any Reserved Rights in such a way as to compete with any Work(s) or otherwise affect adversely the value of any of the rights granted to Tetra House hereunder.
6. PAYMENTS AND ACCOUNTINGS. In connection with the rights granted hereunder with regard to any Work(s), Tetra House shall have the exclusive right to collect all revenues generated from therefrom, which revenues will then be divided and paid out pursuant to the terms and conditions herein. Following the expiration or earlier termination of the Term and for an unlimited period of time thereafter, Tetra House shall continue to be entitled to collect (and to retain Tetra House’s applicable commission) all fees due for any Tetra House Services rendered or Products sold during the Term. Tetra House shall compute all Net Receipts derived from sales and exploitations of Products hereunder occurring during each calendar quarter-annual period, currently ending on or before March 31, June 30, September 30 and December 31 of each year, within sixty (60) days after the end of the subsequent quarterly accounting period. For clarity, in connection with any and all monies earned during the first and second quarter of any year, Publisher shall pay Author its share within sixty (60) days after December 31 of such year. For purposes of calculating Net Receipts otherwise payable to Customer hereunder, Tetra House may deduct from Tetra House Net Sales any costs paid and/or incurred by Tetra House in connection with performing the Tetra House Services pursuant to any applicable Order Form(s) as set forth herein. Tetra House shall send Customer a statement covering those Net Receipts, via electronic mail, and shall pay Customer any Net Receipts which are due after deducting all unpaid costs due to Tetra House. In lieu of sending a statement, Tetra House may, at Tetra House’s election, make such statement available to Customer on a website designated by Tetra House or a similar digital or electronic platform designated by Tetra House. In addition, from time to time during the Term, Tetra House may include on a portal designated by Tetra House raw (i.e., neither final nor confirmed) data pertaining to sales and exploitations of Products hereunder during each calendar month of the Term for Customer to access prior to receiving the statements described above. Any balance due that is less than One Hundred Dollars ($100) shall be rolled into the following month and paid only when the balance exceeds One Hundred Dollars ($100). Tetra House shall be deemed conclusively to have sent Customer each accounting statement on the date prescribed in this section 4(a) unless Customer notifies Tetra House otherwise, with respect to any particular statement, within sixty (60) days after that date.
(a) Customer Financial Obligations. Customer shall be solely responsible for and shall account for and pay: (i) any and all sales and use taxes levied on any of the amounts payable to Customer hereunder or on the sale of units of Products or any other taxes relating to units of Products which are in the possession or control of Tetra House; (ii) all costs incurred in the creation of Products; (iii) all costs incurred in the manufacturing and packaging of units of Physical Products; (iv) all third party payment obligations, including, without limitation, Author or other third party royalties; and (v) bad debt settlements. In addition, Customer shall be subject to Tetra House’s agreements with third party digital and physical service providers for the distribution of Products hereunder and Customer shall obtain all consents and permissions required for the release of Products hereunder and Tetra House shall have no obligations with regard thereto.
(b) Reserves. During each month of the Term, with respect to returnable formats of Physical Products, Tetra House will hold a reserve against returns and credits equal to twenty-five percent (25%) of Tetra House Gross Sales. Tetra House shall fully liquidate the returns-related portion of each base reserve as initially established, less any credits issued therefrom, within six (6) months from the date of rendition of the statement on which such base reserve was established. [A2]
(c) Audits. During the Term, Customer shall have the right, at Customer’s sole expense, to examine that portion of Tetra House’s books and records which specifically report sales and exploitations of Products hereunder for which Net Receipts are payable to Customer hereunder. Customer may make such an examination only once during each twelve (12) month period of the Term, only once for a particular accounting period, and only within one (1) year after the date on which Tetra House is deemed to have sent Customer an accounting statement for such accounting period under section 4(a) above. Customer may make those examinations only during Tetra House’s usual business hours, on reasonable written notice for a reasonably convenient time, and at the place in the United States where Tetra House keeps the books and records to be examined. Customer may appoint a certified public accountant or chartered accountant who is not then-currently engaged in an outstanding audit of Tetra House to make such an examination for Customer. The rights hereinabove granted to Customer shall constitute Customer’s sole and exclusive rights to examine Tetra House’s books and records.
(d) Objections to Statements. If Customer has any objections to an accounting statement, Customer shall give Tetra House specific notice of that objection and Customer’s reasons therefor within one (1) year after the date on which Tetra House is deemed to have sent Customer such statement under this Section 6. Each accounting statement shall become conclusively binding on Customer at the end of that one (1) year period, and Customer shall no longer have any right to make any other objections to the statement. Customer shall not have the right to sue Tetra House in connection with any accounting, unless Customer commences the suit within six (6) months after the end of that one (1) year period. If Customer commences suit on any controversy or claim concerning accountings rendered to Customer under this Agreement, (i) any recovery thereon shall be limited to money damages only, and (ii) Customer shall not have any right to seek termination of the Term or avoid the performance of Customer’s obligations hereunder by reason, in whole or in part, of any such claim.
7. POST-TERM PROCEDURES.
(a) Upon the expiration of the Term, Tetra House shall have no further rights or obligations with respect to Products except as otherwise provided herein and all unshipped orders for Physical Products shall be canceled.
(b) Customer acknowledges that, despite Tetra House’s takedown notices to digital resellers at the end of the Term, that (i) not all digital resellers timely act upon such takedown notices; and (ii) digital resellers may continue to pay Tetra House despite such takedown notices. Tetra House will continue to account to Customer for all income received by Tetra House from digital resellers after the end of the Term pursuant to the terms hereof; provided that Tetra House shall have no obligation to account to Customer until Customer’s balance exceeds One Thousand Dollars ($1,000).
(c) The termination of the Term shall not discharge Customer or Tetra House from their respective obligations to pay any amounts owing hereunder. As long as any amount so owing to Tetra House by Customer has not been paid in full, in addition to Tetra House’s other rights and remedies, Tetra House shall have the right to reimburse itself from amounts owed to Customer hereunder.
8. REPRESENTATIONS & WARRANTIES; INDEMNITIES.
(a) Customer’s Representations. Customer represents, warrants, and agrees that:
(i) Customer has the right and power to enter into and fully perform this Agreement;
(ii) Customer has not sold, assigned, transferred, leased, conveyed or granted a security interest in, or otherwise disposed of, and will not sell, assign, transfer, lease, convey or grant a security interest in and to the Work or any of the Products, adverse to or derogatory to the rights of Tetra House herein, nor is there any lien or encumbrance upon the Work or any of the Products;
(iii) There is no claim or legal proceeding in respect of the Work;
(iv) Customer will continue to be the owner or exclusive licensee of all rights relating to the Work throughout the Term;
(v) No other Person whatsoever has the right to perform the services required of Tetra House hereunder, unless Customer has disclosed of the same in writing to Tetra House and Tetra House has provided written approval thereof;
(vi) Customer owns or possesses all rights necessary to grant to Tetra House the rights during the Term and throughout the Territory to use and to authorize other Persons to use the Identification Materials relating to Customer and Author in connection with the Work and Products in accordance with the further provisions of this Agreement;
(vii) Customer shall not, nor shall any other Person nor any Person deriving rights from Customer or any such other Person, at any time during the Term, do or authorize any Person to do anything inconsistent with, or which might diminish or impair, any of Tetra House’s rights hereunder or violate the rights of any third parties;
(viii) With respect to the production, manufacture, distribution and sale of the Work hereunder and the Products derived therefrom, Customer shall pay all taxes and all third party obligations including, but not limited to, the Author and all Federal and state sales and use taxes and all other applicable taxes of any nature;
(ix) No agreement of any kind entered into by Customer, Author or any other Person prior to the Effective Date or thereafter will interfere in any manner with Customer’s complete performance of this Agreement;
(x) The Materials (as hereinafter defined) or any use thereof, shall not violate any law and shall not infringe upon or violate the rights of any Person (including, without limitation, contractual rights, copyrights, rights of publicity and rights of privacy). “Materials” as used herein means the Work; the Products; all musical compositions; all Identification Materials of Customer and Author (or any other Person) in connection with Work or the exploitation of Tetra House’s rights hereunder; and all other artistic, literary materials, ideas or other intellectual properties (including, without limitation, packaging and artwork materials) contained in or used in connection with any of the foregoing or their packaging, sale, distribution, marketing, promotion, publicizing or other exploitation or the marketing or promotion of the Work, Customer, Author or of Tetra House’s rights hereunder;
(xi) Tetra House will not be required to make any payments of any nature (including, without limitation, royalties to Author and/or any other third parties) for, or in connection with, the acquisition, exercise or exploitation of any and all rights granted to Tetra House hereunder, except as specifically provided in this Agreement; and
(xii) Customer has a valid and enforceable agreement with each applicable Author pursuant to which each such Author has granted to Customer all rights necessary for Customer to comply with the terms and conditions of this Agreement, which agreement shall continue in full force and effect during the Term and Customer shall cause each such Author to execute and deliver to Tetra House at the time of execution of this Agreement, Tetra House’s standard artist inducement letter attached hereto as Exhibit A.
(b) Author Representations. Further, Customer represents on behalf of each applicable Author, and shall cause each such Author to represents to Tetra House, that Author has been provided a copy of these Terms of Service, assents to the execution of each applicable Order Form, and agrees to be bound by all grants, restrictions, obligations and other provisions of this Agreement relating to Author, acknowledges that Tetra House shall have no obligation to make any payments to Author in connection with the services rendered by Author or the fulfillment of Author’s other obligations under this Agreement and any applicable Order Form(s), and that Author will look solely to Customer for any and all monies, royalties or other consideration payable to Author in connection with the exploitation of the Products or otherwise
(c) Customer’s Indemnities. Customer shall at all times indemnify and hold harmless Tetra House and Tetra House’s affiliates and licensees, and each of their respective officers, directors, employees, representatives, agents, licensees and distributors (the “Other Indemnitees”) from and against any and all claims, losses, damages, liabilities, costs and expenses, including without limitation, outside legal expenses and counsel fees arising out of or in connection with any breach or alleged breach by Customer of any agreement, warranty or representation made by Customer in this Agreement or any other act or omission by Customer. Tetra House shall notify Customer of any action commenced on such a claim. Customer may participate in the defense of any such claim through counsel of Customer’s choice and at Customer’s sole expense, but Tetra House shall have the right at all times, in Tetra House’s sole discretion, to retain or resume control of the conduct of the defense, provided that Tetra House shall consult with Customer during the pendency of the proceeding in relation to such claim. Pending the resolution of any such claim, in addition to any other rights or remedies that Tetra House may have, Tetra House may withhold monies which would otherwise be payable to Customer under this Agreement in an amount consistent with such claim. Tetra House shall release such monies if Customer makes bonding arrangements, satisfactory to Tetra House in Tetra House’s sole discretion, to assure Tetra House of reimbursement of the amount of Customer’s potential liability to Tetra House under this section 8(b). If no action or other proceeding for recovery on such a claim has been commenced within twelve (12) months after its assertion Tetra House shall not continue to withhold monies in connection with that particular claim under this section 8(b)(i) unless Tetra House anticipates that such a proceeding may be instituted notwithstanding the passage of that time. Notwithstanding the foregoing, if after such release by Tetra House of sums withheld in connection with a particular claim, such claim is reasserted, Tetra House’s rights under this section 8(b) will apply in full force and effect. This indemnity will in no way limit Tetra House’s other rights or remedies against Customer, whether under this Agreement or at law or equity in general. Customer agrees to reimburse Tetra House on demand for any payment made or incurred by Tetra House with respect to any liability or claim to which the foregoing indemnity applies.
9. EVENTS OF DEFAULT. Each of the following by Customer shall constitute an event of default hereunder: (i) if Customer commences a case or proceeding under any bankruptcy, insolvency, restructuring assignment, winding-up, or other similar law now or hereafter in effect in the United States or in any foreign jurisdiction, or consents to an order for relief in any involuntary case or proceeding, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, trustee or sequestrator (or similar appointee) of Customer or any substantial part of Customer’s property or Customer makes an assignment for the benefit of creditors or takes any act (whether corporate or otherwise) in furtherance of any of the foregoing; (ii) if Customer becomes the subject of a case or proceeding under any bankruptcy, insolvency, restructuring assignment, winding-up, or other similar law now or hereafter in effect in the United States or in any foreign jurisdiction or a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar appointee is appointed with respect to the affairs of Customer or a substantial portion of the property of Customer and such case, proceeding, decree, order or process continues for a period of fifteen (15) days; (iii) in the event of a material breach or default by Customer of any representation, warranty, covenant or obligation of or under this Agreement which, in Tetra House’s good faith judgment, would interfere with the exercise of Tetra House’s rights hereunder; (iv) breach of any of Customer’s exclusivity provisions set forth herein; or (v) if Author is alleged to have committed or is otherwise involved in, an act or an offense under federal, state or local laws or which, in the sole and reasonable discretion of Tetra House (or its assigns or licensees), brings Author, Customer and/or Tetra House into public disrepute, contempt, scandal or ridicule, or which reflects or would reflect unfavorably upon Tetra House (or its assigns or licensees), or otherwise injures or would injure the success of the Work, or following conviction of a felony violation by Author of the criminal laws of the United States or any state thereof or any similar foreign law. Upon the occurrence of any of the events described in this paragraph 9, in addition to any other rights or remedies which Tetra House may have, time being of the essence hereof, (A) any and all amounts owed by Customer to Tetra House then unrecouped or unpaid, if any, shall become immediately due and payable to Tetra House without notice or demand; (B) Tetra House shall have the right to suspend the running of the Term and/or Tetra House’s obligations to Customer hereunder; and/or (C) Tetra House shall have the right to terminate the Term and this Agreement without further notice or cure rights (whether or not during a period of suspension based on such event or based upon any other event), and thereby be relieved of all liability (except in connection with Products, if any, distributed prior to such termination).
10. SECURITY INTEREST.
(a) To induce Tetra House to enter into this Agreement, Customer hereby irrevocably assigns and transfers to Tetra House as collateral security for payments of all amounts which Tetra House is entitled to charge against Customer pursuant to this Agreement or which is otherwise due to Tetra House, all of Customer’s right, title and interest in and to each applicable Work (including without limitation, the inventory of Products, all raw materials, work in process and finished products) and any additions, substitutions and replacements of such inventory, and all of the proceeds and products of the foregoing (individually and collectively, the “Collateral”).
(b) Customer represents and warrants that (i) Customer has not granted any prior security interest in the Collateral; (ii) the security interest in the Collateral granted to Tetra House herein shall be a first priority security interest and is and shall not be subordinated to any other security interest; (iii) Customer will not default under any loan agreement and the Collateral will not be foreclosed upon during the Term; and (iv) Customer will not grant any rights that would be superior to Tetra House’s rights hereunder in the Collateral to any Person other than Tetra House, by way of assignment, security interest or otherwise, and that any grant of rights with respect to the Collateral will be subject to Tetra House's rights. In the event of any breach by Customer of any of the representations and warranties contained in the immediately preceding sentence, Tetra House will have the right to foreclose on the Collateral upon notice to Customer.
(c) Customer shall take all action necessary or as Tetra House shall request to create, confirm or preserve the security interest granted herein, to perfect a first priority lien in the Collateral and to enable Tetra House to exercise and enforce the rights, remedies and powers provided to Tetra House hereunder, including without limitation, the execution and delivery to Tetra House of UCC-1 financing statements and agreements and documents evidencing the security interest in Customer’s intellectual property, in each case, in appropriate form for filing in all appropriate filing jurisdictions. Customer hereby irrevocably grants to Tetra House a limited power-of-attorney to execute any and all financing statements or other documents (including, without limitation, UCC‑1 forms, a copyright mortgage and a security agreement) which Tetra House deems, in its sole discretion, necessary to protect its interest in such Collateral (provided Customer fails to execute any such documents within ten (10) business days following Tetra House's request therefor), and Tetra House shall have the right to file such statements, in Tetra House's and/or Customer's name, in any jurisdiction(s) where Tetra House deems appropriate. Without limiting any of Tetra House’s rights hereunder, Tetra House shall have all rights and remedies of a secured party under the Uniform Commercial Code.
12. LIMITATION ON TETRA HOUSE’S OBLIGATIONS. Tetra House shall not be required to accept every Work submitted by Customer, and Tetra House shall have the right to decline to manufacture or distribute and sell any Work(s) or any version thereof for any reason including, but not limited to: (i) on the grounds of advocacy of illegal activity, patent offensiveness, invasion of rights of privacy and publicity and/or defamation or other violation of law or infringement of any rights of other persons or entities, including without limitation, rights of copyright and trademark; or (ii) if Tetra House believes that the manufacture or distribution and sale of such Work(s) would constitute a material breach by Customer of any of Customer’s warranties and representations contained herein.
13. CONFIDENTIALITY. Neither Tetra House nor Customer shall disclose or reveal to any Person any Confidential Information of the other party, except as required by law or court order. Notwithstanding the foregoing, either party hereto may disclose Confidential Information to its attorneys under privilege, to its accountants and to any other third parties on a “need to know” basis, provided that the recipients of such Confidential Information (other than attorneys or accountants) are bound in writing by a confidentiality agreement in a form acceptable to the other party hereto, and Tetra House may disclose Confidential Information to entities that Tetra House controls, is controlled by or with which Tetra House is under common control. No party hereto shall make a press release or public announcement concerning this Agreement without the written consent of the other party hereto.
14. MISCELLANEOUS.
(a) Entire Agreement; Modification; Waiver; Headings. This Agreement, along with any applicable Order Form(s), contains the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all previous agreements or arrangements between the parties hereto relating to the subject matter hereof. This Agreement cannot be changed or terminated except by an instrument signed by the authorized signatories of the parties. A waiver by either party of any term or condition of this Agreement in any instance shall not be deemed or construed as a waiver of such term or condition for the future, or of any subsequent breach thereof. All remedies, rights, undertakings, obligations, and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. In the event of any legal proceeding brought by any party hereto to enforce or interpret this Agreement or any of the terms contained herein, all parties shall be deemed to have jointly drafted this Agreement and neither side shall enjoy the benefit of any evidentiary presumptions based upon the identity of the drafter hereof. Should any provision of this Agreement be adjudicated by a court of competent jurisdiction as void, invalid or inoperative, such decision shall not affect any other provision hereof, and the remainder of this Agreement shall be effective as though such void, invalid or inoperative provision had not been contained herein. The headings of the sections used in this Agreement are included for reference only and are not to be used in construing or interpreting this Agreement.
(b) Lawful Purposes. The Tetra House Services may be used solely for lawful purposes. Customer agrees to abide by all applicable local, state, national and foreign laws, treatises and regulations in connection with its use of the Tetra House Services, including, without limitation, applicable common law, all relevant statutes, and the rules and regulations of the Office of Foreign Assets Control of the U.S. Department of the Treasury. In addition, without limitation, Customer agrees that it will not do any of the following:
(i) Upload, submit, post, email or otherwise transmit any unsolicited or unauthorized advertising, promotional materials, junk mail, spam, chain letters, so-called pyramid schemes or any other form of solicitation;
(ii) Upload, submit, post, email, or otherwise transmit to Tetra House, any Work(s) or other Material(s) that are, in the sole opinion of Tetra house, unlawful, harmful, threatening, obscene, harassing, defamatory or hateful or that contain objects or symbols of hate, or that invade the privacy of any third party, contain nudity (including, without limitation, any pornography, erotica, child pornography or child erotica), are deceptive, threatening, abusive, inciting of unlawful action, defamatory, libelous, vulgar or violent or constitute hate speech or are otherwise objectionable;
(iii) Misrepresent or impersonate Customer’s affiliation with any Person or entity, including but not limited to any applicable Author(s), through pretext or some other form of social engineering or otherwise commit fraud;
(c) Disclaimer. Except as otherwise expressly provided in this Agreement, Tetra House does not make, and hereby disclaims, any and all warranties, whether express, implied, or statutory, related to the subject matter of this Agreement, including any implied warranty of merchantability or fitness for a particular purpose. Customer understands and agrees that in no event will Tetra House be liable to Customer for lost profits or lost revenue for any reason, including, but not limited to a delay or failure to have any Work(s) available via any Distribution Channel(s), or for any indirect, incidental, special, statutory, punitive, exemplary or consequential damages arising out of or in connection with this Agreement, even if Customer has been advised of the possibility of such damages and regardless of the form of action giving rise to such liability, whether in contract, tort or otherwise. In no event will Tetra House’s aggregate liability arising out of or relating to this Agreement exceed the amounts paid or payable by Customer to Tetra House (which shall be deemed to include any Administration Fees taken by Tetra House in accordance with this Agreement) in the prior twelve (12)-month period preceding the incident giving rise to the claim, regardless of the form of action giving rise to such liability, whether in contract, tort, or otherwise, provided that such limitation shall not apply with respect to any willful, intentional, or grossly negligent breaches of this Agreement.
(d) No Guarantee. Tetra House does not guarantee exploitation of, or revenue generation in connection with any Work(s), which will depend on consumer preference, nor on the inclusion or participation of any given consumer outlet. Tetra House reserves the right in its sole discretion to decline to engage in business with any given consumer outlet. Except as specifically set forth in the Terms of Service or any applicable Order Form(s), Tetra House shall have no obligations to Customer.
(e) Release. By availing itself of the Tetra House Services, Customer agrees to release and hold Tetra House and the employees, officers, directors, shareholders, agents, representatives of Tetra House, its affiliates, subsidiaries, advertising, promotion and fulfillment agencies, any entity controlling, controlled by or under common control with Tetra House, any third-party providers or sources of information or data and legal advisers (collectively, "Company Affiliates") harmless from any and all losses, damages, rights, claims and actions of any kind arising from or related to the Tetra House Services including but not limited to: (a) telephone, electronic, hardware or software, network, Internet or computer malfunctions, failures or difficulties of any kind; (b) failed, incomplete, garbled or delayed computer transmissions; (c) any condition caused by events beyond the control of Tetra House that may cause the Tetra House Services to be disrupted or corrupted; (d) any injuries, losses or damages of any kind arising in connection with or as a result of Customer’s use of the Tetra House Services; or (e) any printing or typographical errors in any materials associated with the Services. In no event will Tetra House, its officers, directors, employees or agents be liable to Customer for any damages whatsoever, including, without limitation, indirect, incidental, special, punitive, consequential, or loss of revenue damages arising out of or in connection with Customer’s use of the Services, the Products or any results and proceeds of the Tetra House Services, no matter whether the damages are foreseeable and whether or not Customer has been advised of the possibility of such damages. The foregoing limitation of liability will apply to the fullest extent permitted by law in the applicable jurisdiction and in no event will Tetra House’s aggregate liability to you exceed the amount of Net Receipts retained by Tetra House hereunder.
(f) Transfers, Sales, Assignment or Encumbrances. Tetra House shall have the right to assign this Agreement and any of Tetra House’s rights or obligations hereunder. Customer shall not have the right to assign this Agreement or any of Customer’s rights or obligations hereunder without Tetra House’s prior written consent, which consent Tetra House may withhold in its sole, unrestricted discretion.
(g) Force Majeure. If due to an act of God, inevitable accident, epidemic, pandemic, fire, lockout, strike or other labor dispute, riot or civil commotion, act of public enemy, enactment, rule, order or act of any government or governmental instrumentality (whether federal, state, local or foreign), failure of technical facilities, failure or delay of transportation facilities, shortage of raw materials, or other cause of a similar or different nature not reasonably within Tetra House’s control, Tetra House is materially hampered in the performance of its obligations under this Agreement or its normal business operations are delayed or become impossible or commercially impracticable, then, without limiting Tetra House’s rights, Tetra House may, upon notice to Customer, suspend its obligations hereunder for the duration of any such contingency.
(h) Breach, Notice and Cure. No breach of this Agreement by Tetra House shall be deemed material unless Customer provides written notice to Tetra House specifying the nature thereof and Tetra House fails to cure such breach, if any, within thirty (30) days after Tetra House’s receipt of such notice. In no event shall any breach entitle you to rescind the rights granted hereunder.
(i) Further Assurances. Customer agrees to execute and deliver to Tetra House all such other and additional instruments and documents and to do such other acts and things as may be necessary to more fully effectuate this Agreement.
(j) Speculative Nature. Customer recognizes that the sale of literary works is speculative and agrees that Tetra House’s judgment (and the judgment of Tetra House’s affiliates and licensees) with respect to any matter affecting the sale, distribution and exploitation of Products shall be binding and conclusive upon Customer. Without limiting the preceding sentence, Customer acknowledges and agrees that Tetra House has not made, and does not hereby make, any representation or warranty with respect to the quantity (if any) of sales of Products hereunder. Customer represents, warrants and agrees that Customer shall not make any claim, nor shall any liability be imposed upon Tetra House, its affiliates or licensees based upon any claim that more sales could have been made or better business could have been done than was actually made or done by Tetra House, its affiliates and licensees. Notwithstanding anything to the contrary contained herein, Tetra House shall not be required to make any expenditures hereunder on Customer’s behalf, if, in Tetra House’s opinion, Customer does not have the financial ability to reimburse Tetra House therefor.
(k) Equitable Relief. Customer recognizes that its obligations hereunder with respect to the performance of non-monetary obligations are unique and that damages at law will be an inadequate remedy for breach or threatened breach of such provisions of this Agreement, and agrees that such non-monetary obligations of Customer hereunder, shall be enforceable by specific performance, injunction or other equitable remedy. Nothing contained herein shall prevent Customer from offering any fact-based defenses which it may have to a claim made by Tetra House for equitable relief hereunder. Customer agrees that in any claim against Tetra House arising from or in any way related to this Agreement, it shall not be entitled to bring any claims for equitably relief or under copyright or trademark laws.
(l) Notices. Except as otherwise specifically provided herein, all notices under this Agreement shall be in writing and shall be given by courier or other personal delivery or by registered or certified mail at the appropriate address listed above or at a substitute address designated by notice by the party concerned. Notices shall be deemed given when mailed or, if personally delivered, when so delivered, except that a notice of change of address shall be effective only from the date of its receipt.
(m) No Agency. Customer and Tetra House each shall have the status of an independent contractor and nothing herein contained shall contemplate or constitute Customer as Tetra House’s agent or employee or Tetra House as Customer’s agent or employee. This Agreement does not constitute or acknowledge any partnership or joint venture between Customer and Tetra House.
(n) Construction, Jurisdiction, Venue. This Agreement has been entered into in the State of California, and the validity, interpretation and legal effect of this Agreement shall be governed by the laws of the State of California applicable to contracts entered into and performed entirely within the State of California, with respect to the determination of any claim, dispute or disagreement which may arise out of the interpretation, performance or breach of this Agreement. Customer and Tetra House each agree to submit to the jurisdiction of the Federal or State courts located in Los Angeles County in the State of California in any action which may arise out of this Agreement and said courts shall have exclusive jurisdiction over all disputes between Tetra House and Customer pertaining to this Agreement and all matters related thereto.
(o) Captions. The captions herein contained are inserted solely for reference and shall not constitute a part of this Agreement nor affect its construction, meaning or effect.
(p) Approvals. As to all matters with respect to which Customer’s approval or consent is required under this Agreement, such approval or consent shall be deemed to have been given (without any further formality) unless Customer notifies Tetra House otherwise within five (5) days following the date of Tetra House’s request to Customer therefor sent to such e-mail address that Customer provides in writing to Tetra House, and such approval or consent shall not be unreasonably withheld or delayed by Customer. Customer shall not be entitled to withhold Customer’s approval or consent in connection with the requested use for financial reasons (e.g., in order to obtain payment of a designated amount under this Agreement). Tetra House’s inadvertent failure to obtain Customer’s approval or consent or to consult with Customer in respect of any matter requiring Customer’s approval, consent or consultation shall not be deemed a breach of this Agreement.