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Residuals Service Addendum

THIS RESIDUALS SERVICE ADDENDUM (the “Addendum”), is entered into by and between Extreme Reach, Inc. and its Affiliates, a Delaware corporation (“XR” or “Party”), located at 66 Hudson Boulevard East, Suite 2110, New York, New York 10001, and the Customer listed in the applicable Order Form ("Customer" or "Party") and explicitly modifies the Platform Terms & Conditions (the “Terms”) entered into between the Parties. If there is any inconsistency between the terms of this Addendum and the Terms with respect to the services hereunder, the terms of this Addendum shall prevail. If there is any inconsistency between the terms of this Addendum and the Order Form with respect to the services hereunder, the terms of the Order Form shall prevail.

  1. Services. XR shall act as the Employer of Record, solely for the limited purpose of providing payroll and certain administrative functions as detailed herein, for designated residuals recipients covered under this Addendum (hereinafter “Payee”). XR will calculate, process and pay, from funds provided or advanced by Customer (as assigned herein), periodic residual payments, all federal, state and local taxes, FICA and Medicare payments, Pension and Health Plans contributions, and union withholdings, as required by law or an applicable collective bargaining agreement. XR shall hold the Customer harmless from liability or expense to Customer which may result from XR’s failure to withhold and pay income or payroll taxes or other benefits required by any government agency, provided such failure is not the result of the receipt of untimely, incomplete or inaccurate information from Customer. The parties expressly agree that XR is not a "Common Law Employer" with respect to Payees. The parties understand and agree that XR maintains no control whatsoever over hiring, firing, workplace conditions, or supervision over the manner and means by which Payees perform services.
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  2. Customer Obligations. Customer agrees to timely and accurately deliver to XR all funds, materials and documentation required to complete payments to or on behalf of Payee, including, but not limited to, Payee contracts, W-4 and/or W-9 and/or other forms or documentation legally necessary to issue payment including wiring instructions/information, and the documentation necessary to calculate residuals, as applicable. Information necessary to calculate and process residuals vary among the different union and production agreements but generally include (for SAG-AFTRA jobs) performer wages and work schedule if XR did not process the payroll, the distribution agreements, actual commencement dates for exhibition in each foreign territory, distributors’ gross receipts by quarter, territory and market, information concerning any negotiated market allocation with any of the Guilds or any other special agreement, and, for television productions, the information must include date and times for each run on pay cable, basic cable, or free television respectively. Subject to timely receiving all such applicable materials, documentation and funds, XR shall be solely responsible for and agrees to timely generate the required Payee payments.
  1. Payment Terms. Rates are detailed on the Rate Card attached as Attachment A to the Order Form. These rates shall remain in effect as noted on the Rate Card. Any applicable shipping charges are Customer’s responsibility. Payments are to be as follows:
    1. Residuals Invoice Payment Terms: as detailed in the Order Form
    2. Failure to pay the XR invoice prior to payment being due to Payee under the law or the applicable collective bargaining agreement shall be an event of default under this Addendum, and XR shall have the right, but not obligation, to terminate this Addendum immediately. In the event of such default, any obligations, in law or otherwise, XR may have had with respect to payments under this Addendum shall be void as of the date of default. Customer agrees that it will indemnify XR, in accordance with Section 5 below, for all amounts directly or indirectly associated with payments due Payee under this Addendum.
    3. If payment is delinquent by more than five (5) business days, payments will not be released to Payees until the account becomes current. Any amounts remaining past due more than fifteen (15) days will bear interest at the rate of one and a half percent (1.5%) per month, compounded on a monthly basis.
    4. Checks returned unpaid from Customer’s bank will be subject to a one-time late payment charge of three percent (3%), which the Parties agree is a fair estimation of the costs to offset additional work required by XR.
    5. In the event that Customer requires Purchase Orders or other documentation in order to process payment, it is Customer's responsibility to ensure that such documentation is submitted to XR with sufficient time for XR to provide such documentation back to Customer in a timely manner. If Customer fails to submit such documentation in a timely manner, it waives any requirement that such documentation be processed prior to payment of invoices and/or will be liable for associated late wage penalties.
  2. Taxes. Rates for taxes are published by XR at the end of each calendar year. These rates are subject to adjustment in accordance with XR’s published rate.
  3. Indemnification. In addition to the indemnification obligations set forth in Section 10 of the Terms:
    1. Customer shall indemnify, defend, and hold harmless XR and its respective parent(s), subsidiary and affiliated entities and each of their respective officers, directors, shareholders, employees, agents and assigns, from and against any and all claims, actions, demands, awards of damages, administrative complaints or charges, fines, penalties, taxes, assessments, amounts paid in settlement or other loss or expense, including reasonable outside attorneys' fees and costs of defense, incurred by XR as a result of: (i) Customer’s breach or violation of any clause, condition, representation, warranty or provision of this Addendum, (ii) Customer’s engagement of Payees, (iii) Customer’s gross negligence and/or willful misconduct, (iv) inaccurate or fraudulent information provided to XR, or (iv) Customer’s designation of XR as Employer of Record with respect to all Payees, except to the extent that any such claim shall relate to XR’s default hereunder or negligence or willful misconduct with respect thereto. Customer’s indemnification obligation pursuant to this paragraph shall survive termination of this Addendum and/or the Order Form.
    2. XR agrees to indemnify, defend and hold harmless Customer, and its parent, subsidiary and affiliated entities and each of their respective officers, directors, shareholders, employees, agents and assigns, from and against any and all claims, actions, demands, awards of damages, administrative complaints or charges, fines, penalties, taxes, assessments, amounts paid in settlement or other loss or expense, including reasonable attorneys' fees and costs of defense, incurred by Customer as a result of (i) any breach or violation by XR of any clause, condition, representation, warranty, or provision of this Addendum, (ii) XR’s failure to perform its obligations under this Addendum, (iii) any failure to comply with all applicable federal, state and local laws and regulations (provided such failure was not a result of Customer's wrongful act or omission), or (iv) XR’s gross negligence and/or willful misconduct with respect to this Addendum. XR’s indemnification obligation pursuant to this paragraph shall survive termination of this Addendum and/or the Order Form.