NPREX® Rules of the Exchange

As a Participant in NPREX’s electronic marketplace for direct licensing transactions in the music licensing industry (the “Exchange”), and as agreed upon by your execution of the NPREX® End User License Agreement, you acknowledge and agree to adhere to the following Rules of the Exchange as a condition of your use of the Exchange:

  • 1.Definitions

    • (a) Agreeable Price Range - the range of prices determined by processes used by NPREX® to compute the price of a license based in part on some combination of one or more non-null Price Parameter(s), a Price Floor, and a Price Cap.
    • (b) Ask Price - the amount of money a licensor is willing to accept for a music license.
    • (c) Bid Price - the amount of money a licensee is willing to pay for a music license.
    • (d) Buyer - a Participant, or an agent thereof, seeking to purchase one or more licenses on the Exchange, having the full right, power and authority to enter into and perform its obligations under this Agreement and promising that it shall at all times provide all cooperation and assistance as may reasonably be requested by NPREX to enable the parties to exercise their rights and perform their obligations under and in connection with an agreement executed through NPREX.
    • (e) Cancellation Period - the period of time during which a Participant may cancel a License.
    • (f) Catalogue - a collection of works that the seller has at least a fraction of the right to license.
    • (g) Final Agreed Upon Price - the license fee agreed upon by the Buyer and Seller.
    • (h) License - the right to use works in a catalogue for a given time-period.
    • (i) License Period - the duration of the license as measured by the beginning of the time period and the end of the time period.
    • (j) Music Performance Data - an electronic record of music performances that contains detailed information on each music performance, including but not limited to the name of the artist, the name of the recording, the identity of the music user, and the surrounding circumstances, including the time and date.
    • (k) Participant - a Buyer or Seller that is registered on the Exchange.
    • (l) Price Bounds - A range of prices containing a Price Floor, which may be zero, and a Price Cap, if one.
    • (m) Price Cap - the maximum price for a license.
    • (n) Price Floor - the minimum price for a license.
    • (o) Price Parameter - the measure on a scale of 0 to 10 of bargaining power exercised by a Seller on the Exchange, with 10 being the highest.
    • (p) Seller - a Participant, or an agent thereof, seeking to sell a license on the Exchange, having the full right, power and authority to enter into and perform its obligations and grant the rights, licenses, consents and authorizations required under an agreement on NPREX, stipulating that the execution of an agreement by its Representative whose signature is set forth in any agreements through NPREX has been duly authorized by all necessary corporate or organizational action of such party, and promising that it shall at all times provide all cooperation and assistance as may reasonably be requested by NPREX to enable the parties to exercise their rights and perform their obligations under and in connection with an agreement executed through NPREX.
    • (q) Settlement - the reconciliation by the party to an NPREX® music license of its duty under the terms of the license.
    • (r) Work - A song or recording thereof.
  • 2. Accuracy of Data

    • (a) Any data or catalogues that the Seller posts on the Exchange must be true and accurate.
    • (b) Seller warrants that it has a fractional right to license the works in the catalogues posted on the Exchange.
      • (1) The seller on NPREX® of a performance license must have the right to license the performance of each work within the catalogue in the license period.
      • (2) The seller on NPREX® of a synchronization license must have the right to license the synchronization of each work within the catalogue in the license period.
      • (3) The seller on NPREX® of a mechanical license must have the right to license the reproduction or distribution of the each work within the catalogue in the license period.
    • (c) Any data that the Buyer submits to NPREX must be true and accurate.
  • 3. Licensing

    • 3.1 Eligibility for Creating an Offer

      • (a) Only a Participant may create an offer to enter into a License on the Exchange.
      • (b) A Participant must establish the Essential Elements of an Offer in order to create an offer to enter into a License.
    • 3.2 Essential Elements of an Offer to Enter into a License

      • The necessary elements of a music license on the Exchange consist of:
      • (a) License Period,
      • (b) Music Usage Type,
      • (c) Catalogue Identifier (An offer from a Buyer who is a participant on the Exchange need not include a Catalogue Identifier),
      • (d) Rights Types, and
      • (e) Pricing Terms.
        • (1) Pricing Terms must consist, at a minimum, of either a Price Parameter or a combination of a Price Floor and a Price Cap.
          • (a) If no Price Floor is entered, the Price Floor is zero.
          • (b) If no Price Cap is entered, there is no Price Cap.
        • (2) Price Parameters consist of a Price Parameter floor and a Price Parameter cap.
          • (a) A single Price Parameter is sufficient to satisfy this requirement even if no Price Cap or Price Floor is included by the Participant.
          • (b) A Price Parameter Cap equal to 9.9999999 indicates that the party wishes to quote a price equal to some multiple of the benchmark price.
          • (c) Where Parameter Cap equals 9.9999999, the Parameter Floor serves as a multiple (“Factor”) of the price of the licenses sold by the performance rights organizations in the United States (hereinafter referred to as “PROs”) to the Music User.  Hereafter, the price of the licenses sold by the PROs will be referred to as the “Total PRO Fees”. 
          • (d) Example:  For instance, assume that the amount of the Total PRO Fees equals $1.00.  Also assume that the share of total performances made by the Music User accounted for by the works in the Catalogue (“Share”) is 10 percent.  If the parties agree that the Factor equals 0.95, then the Music User and Copyright Holder agree that the Final Agreed Upon Price will be given by: Factor x Share x Total PRO Fee = 0.95 x 0.10 x $1.00 = $0.095.
      • (f) Activation,
        • (1) Only an active offer can be accepted by a counter-party.
        • (2) An offer by a Seller is not active upon submission. It must be activated by the Seller before it can be accepted by a Buyer.
        • (3) An offer by a Buyer is active upon submission.
      • (g) Signatures
        • (1) A License must be signed by the Buyer and Seller. Unless a Participant cancels the License within the Cancellation Period, approval of the License is implied, and a signature is not required.
    • 3.3 License transferability

      • Licenses entered into on the Exchange are non-transferable.
    • 3.4 Execution of a License

      • (a) A License is fully executed on the Exchange if
        • (1) Both Participants sign the License, or
        • (2) Neither Participant cancels the License during the Cancellation Period.
      • (b) The Cancellation Period is the shorter of midnight Coordinated Universal Time (Greenwich Mean Time) on the start date of the License Period or
        • (1) Ten (10) calendar days following the match of two offers.
      • 3.5 Buyer Rights

        • The Buyer of a fully executed License is owed the right to use the Catalogue that is the subject of the License according to the terms of the License.
      • 3.6 Seller Rights

        • The Seller of a License has the right to receive payment pursuant to the terms of the License.
      • 3.7 Buyer Obligations

        • The Buyer of a License must pay the license fee in accordance with the terms of the License.
      • 3.8 Seller Obligations

        • The Seller must convey to the Buyer the right to use the Catalogue in accordance with the terms of the License.
  • 4.Settlement

    • 4.1 Eligibility to Settle a License

      • Only a Participant may settle a License on the Exchange.
    • 4.2 Essential Elements of a Settlement of a License

      • Settlement requires the approval by both the Buyer and Seller of the Final Agreed Upon Price of the license.  Approval requires assent to the Final Agreed Upon Price by both Buyer and Seller.
        • (a) The Buyer assents when it either enters or agrees to the entry of a Bid Price that equals the related Ask Price.
        • (b) The Seller assents when it either enters or agrees to the entry of an Ask Price that equals the related Bid Price.
        • (c) The Buyer and Seller assent to the Final Price when they agree to a license with either a single Price Parameter or a combination of Price Parameters that describes a willingness for the Final Price to be a multiple of a benchmark price.
    • 4.3 Time-Period for Challenging the Final Agreed Upon Price

      • Subject to the rules within this section, a Participant may request NPREX recalculate (“Challenge”) the Final Agreed Upon Price for which assent was given in accordance with section 4.2.
        • (a) Variable Price with Single Price Parameter. The parties have ten (10) calendar days following notice from NPREX to Challenge the Final Agreed Upon Price where the License includes one Price Parameter, with or without Price Bounds.
        • (b) Fixed Price with Price Bounds. The parties cannot Challenge the Final Agreed Upon Price where the License includes Price Bounds but does not include at least one Price Parameter.
        • (c) Fixed Price. The parties cannot Challenge the Final Agreed Upon Price where the License includes a non-zero Price Cap and a non-zero Price Floor that share the same value.
    • 4.4 Disputed Settlement

      • A settlement is disputed when the Buyer and Seller have agreed upon an Agreeable Price Range but cannot agree upon a price within the Agreeable Price Range. The Buyer will pay to NPREX the upper bound of the Agreeable Price Range and the Seller will receive from NPREX the lower bound of the Agreeable Price Range where:
        • (a) the License includes a blank, or null, Price Parameter Cap and a blank, or null, Price Parameter Floor,
        • (b) the Pricing Terms within the license include a positive Price Floor, and the Price Floor is not equal to the Price Cap, and
        • (c) fifteen (15) calendar days have passed since notice by NPREX.
  • 5. Royalty Distribution

    • 5.1 Duty to Pay

      • NPREX will distribute to entitled parties the proceeds of licensing transactions on a timely basis.
        • (a) An entitled party is a rights holder or its designee, a writer, or an artist whose collection or ownership share is payable through NPREX.
          • (1) A collection or ownership share is payable on NPREX if the Seller of the license affirmatively informs NPREX, prior to the beginning of the License Period, of the ownership or collection share for inclusion in the licensing transaction.
        • (b) For a performance license, NPREX will make reasonable efforts to distribute on a quarterly basis. For a synchronization license, NPREX will make reasonable efforts to distribute on a periodic basis, as a synch license is executed. For a mechanical license, NPREX will make reasonable efforts to distribute on a quarterly basis.
    • 5.2 Payment Methodology

      • NPREX will employ a royalty payment distribution methodology for the payment of licensing proceeds, less the NPREX transaction fee, hereafter referred to as the “NPREX Payment”. The methodology for creating the NPREX Payment depends on the availability of a record of music usage that NPREX, in its discretion, deems reliable, which hereafter is regarded as a “Qualified Record of Music Usage.”
        • (a) Where a Qualified Record of Music Usage is available such that the data cover the licensee or, if no license was executed, the music user for the entire license period, NPREX will render the NPREX Payment to each work according to the share of music usage accounted for by each work, whether in terms of duration or count, and in light of the amount of ownership of or the right to collect for the work represented by the Seller of the license.
        • (b) Where a Qualified Record of Music Usage is available such that the data cover a portion of the license period, NPREX will use best efforts to render the NPREX Payment to each work according to the share of music usage accounted for by each work, whether in terms of duration or count, and in light of the amount of ownership of each work represented by the Seller of the license.
        • (c) Where a Qualified Record of Music Usage is unavailable, NPREX will pay each work in a catalogue equally in light of the amount of ownership of each work represented by the Seller of the license.
        • (d) An entitled participant who is payable through NPREX receives its pro-rata share, according to ownership or collection percentage, of the payment to a work.
  • 6. Delivery of Music Performance Data

    • 6.1 Radio

      • Where the Buyer is a radio station or parent company of a radio station, the Buyer must, on a timely basis, deliver to NPREX Music Performance Data that pertains to the license period.
    • 6.2 TV

      • Where the Buyer is a TV station, a TV network or a parent company thereof, the Buyer has no obligation to deliver to NPREX Music Performance Data showing music performances by the TV station or TV network.
    • 6.3 Digital and Other Streaming Services

      • Where the Buyer is a digital music user, including a streaming service, pod-caster or digital music user, the Buyer must, on a timely basis, deliver to NPREX Music Performance Data that pertains to the license period.
    • 6.4 General Licensing

      • Where the Buyer is an establishment such as a bar, restaurant, office building, hotel, hospital, concert venue or any business establishment that performs music for its clientele, the Buyer has no obligation to deliver to NPREX Music Performance Data, unless readily available.
    • 6.5 Timely Basis of Delivery

      • Music Performance Data are timely delivered to NPREX if NPREX receives data on music performances by the Buyer within fifteen (15) days of the end of the month during which such music was performed by the Buyer.
  • 7. Regulation of the Exchange

    • 7.1 NPREX Right to Cancel Licenses

      • NPREX reserves the right to cancel a License that, in the discretion of NPREX, clearly reflects a mistake by a Participant.

Last modified: April 5, 2019