TIERED PRICING AMENDMENT TO DIGITAL MUSIC AND/OR VIDEO DOWNLOAD SALES AGREEMENTS
Exhibit
10.4
TIERED
PRICING AMENDMENT TO
Apple
Inc. f/k/a Apple Computer, Inc. and/or its worldwide affiliates responsible for
the operation of the Online Store (including iTunes S.a.r.l., Apple Pty Limited
and iTunes K.K.) (collectively, “ITUNES”) and
Digital
Rights Agency / DRA
("COMPANY,"
and collectively with ITUNES, the “Parties”) have entered into certain Digital
Music Download Sales Agreements and/or Digital Video Download Sales Agreements
pursuant to which ITUNES is authorized, among other things, to sell COMPANY’s
sound recordings and/or music videos as permanent downloads, which have the
following iTunes Contract Numbers:
|
[xxxxxx]
|
Music/Music Video |
United
States/Canada
|
||
|
[xxxxxx]
|
Music/Music Video | Japan | ||
|
[xxxxxx]
|
Music/Music
Video
|
Europe
|
||
|
[xxxxxx]
|
Music/Music
Video
|
Australia/New
Zealand
|
(collectively,
the “Agreements”). The Parties hereby agree to amend each of the
Agreements as follows and as set forth on the Schedule applicable to each
Agreement:
|
1.
|
Section
1. Section 1 of each Agreement shall be replaced in its
entirety by the following, except that the definition of “Territory” shall
remain as before and shall be re-numbered as Section
1(i):
|
“The
following terms shall have the following meanings for purposes of this
Agreement:
|
|
a.
|
“Artwork” means
album cover artwork, screen shots and/or any other artwork relating to
COMPANY Content that COMPANY has cleared for use by ITUNES pursuant to the
terms of this Agreement. COMPANY shall not provide to ITUNES
any artwork that has not been so
cleared.
|
|
|
b.
|
“COMPANY
Content” means sound recordings owned or controlled by COMPANY that
COMPANY has cleared for use by ITUNES pursuant to the terms of this
Agreement. COMPANY shall not provide to ITUNES any sound
recordings that have not been so
cleared.
|
|
|
c.
|
“Content File”
means each digital file containing COMPANY Content, applicable Artwork,
parental advisory notices, copyright notices, and associated metadata
(e.g., artist name, track or video title, track or video title version,
territories cleared for sale, copyright notice, ISRC, UPC and
corresponding album title and editorial content
data).
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
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d.
|
“eMaster” means
a copy of COMPANY Content in DRM-free digital format suitable for
exploitation on the Online Store (provided that the audio quality and
integrity attributable to such format shall at all times be commensurate
with the sound quality and integrity generally attributable to the format
of third party sound recordings available on the Online Store), which
ITUNES may sell on the Online Store pursuant to the terms and conditions
of this Agreement.
|
|
|
e.
|
“Fulfillment
Activities” means sales activities relating to the sale and
delivery of COMPANY’s eMasters pursuant to the terms and conditions of
this Agreement.
|
|
|
f.
|
“iTunes Connect”
means the proprietary iTunes Connect site, free access to which is
provided by ITUNES to COMPANY during the Term subject to acceptance of
applicable terms and conditions.
|
|
|
g.
|
“Online Store”
means an electronic store and its storefronts branded, and owned and/or
controlled by ITUNES or an affiliate of ITUNES, from which end users can
receive eMasters by any means for use as permitted
hereunder.
|
|
|
h.
|
“Term” means the
period beginning on the Effective Date and continuing until terminated (i)
under Section 14(a), or (ii)
[xxxxxx].”
|
|
2.
|
Section
2. Section 2 of each Agreement shall be amended as
follows:
|
|
|
·
|
The
words “for end users’ personal and non-commercial use” shall be added at
the end of the first sentence of Section
2(a).
|
|
|
·
|
The
reference to “Exhibit C-1” in Section 2(a)(ii) shall be replaced by a
reference to “this Agreement”.
|
|
|
·
|
The
following sentence shall be added at the end of Section
2(b): “For avoidance of doubt, ITUNES shall have no obligation
to exercise any of the rights granted to it
hereunder.”
|
|
|
·
|
Section
2(c) shall be re-numbered as Section 2(d), and a new Section 2(c) shall be
added as follows: “Clips may be no longer than
[xxxxxx]. Clips may be created by ITUNES from the applicable
COMPANY Content.”
|
|
3.
|
Section
3. Section 3 of each Agreement shall be amended as
follows:
|
|
|
·
|
The
last sentence of Section 3(a) shall be
deleted.
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
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·
|
Section
3(c) shall be replaced by the following: “COMPANY shall deliver
Content Files to ITUNES, at COMPANY's expense, in the delivery format and
via the delivery method reasonably specified by ITUNES on iTunes Connect
at the time of COMPANY’s delivery of the Content Files. COMPANY
acknowledges that the specified delivery methods may require certain
hardware and/or software.”
|
|
4.
|
Section
6. Section 6 of each Agreement shall be amended as
follows:
|
|
|
·
|
Section
6(a) shall be replaced by the following: “ITUNES shall
condition sale and delivery of eMasters upon an end user’s acknowledgement
of terms of use for such eMasters (“Terms of Use”), which Terms of Use
shall, at a minimum, provide that end users obtaining eMasters from ITUNES
pursuant to the terms of this Agreement may use such eMasters solely for
the end user’s personal and non-commercial use and that the sale of
eMasters does not transfer to the end user any commercial or promotional
use rights in the eMasters.”
|
|
|
·
|
Section
6(c) shall be replaced by the following: “If there is a change
of circumstance during the Term as a result of which COMPANY reasonably
believes that it does not have, or no longer has, the rights necessary to
authorize ITUNES to use any COMPANY Content or Artwork as provided for
herein, or COMPANY reasonably believes that ITUNES’ continued sale of any
COMPANY Content or Artwork will substantially harm COMPANY’s relations, or
violates the terms of any of COMPANY’S agreements, with any applicable
copyright owner, artist, producer, director (in the case of audio-visual
content) or distributor (each a “Clearance Issue”), then COMPANY shall
have the right to withdraw authorization for the distribution of such
COMPANY Content or Artwork to the extent of such Clearance Issue using
iTunes Connect or via other technical means provided by
ITUNES. ITUNES shall cease to offer such COMPANY Content or
Artwork for sale within [xxxxxx] of such withdrawal. COMPANY
shall promptly re-authorize ITUNES’ distribution of such COMPANY Content
or Artwork if it has been re-cleared for distribution by ITUNES
hereunder. COMPANY shall not withdraw any authorization with
respect to COMPANY Content or Artwork if COMPANY continues to provide such
authorization to any other on-line digital distributor of COMPANY Content
in the Territory.”
|
|
|
·
|
The
words “For avoidance of doubt, and without limiting ITUNES’ other rights
hereunder,” shall be added to the beginning of Section
6(d).
|
|
5.
|
Section
7. Section 7 of each Agreement shall be replaced by the
following: “COMPANY shall be responsible for determining
parental advisory warning status for all eMasters, and if such parental
advisory is required or otherwise deemed appropriate for a particular
eMaster, COMPANY shall provide an appropriate parental advisory warning
for such eMaster in the Content File, and ITUNES shall conspicuously
display such parental advisory when other information about such eMaster
is displayed.”
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
3 of
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6.
|
Section
8. The final sub-section of Section 8 of each Agreement
(whether Section 8(d) or 8(g), as applicable) shall be amended by adding
the words “(via iTunes Connect)” after the words “COMPANY shall provide
ITUNES” in the last sentence, and deleting the remainder of the
sub-section following the words “to effect
payment”.
|
|
7.
|
Section
10. Section 10 of each Agreement shall be amended by
adding the words “; provided, for avoidance of doubt, that COMPANY shall
not include any digital watermark or similar technologies in the audio (or
video) file itself“ at the end of Section 10(a), and deleting the words
“excluding the Security Solution” from Section
10(b).
|
|
8.
|
Section
12. Section 12(a) of each Agreement shall be deleted in
its entirety.
|
|
9.
|
Section
13. Section 13 of each Agreement shall be amended as
follows:
|
|
|
·
|
Section
13(a) shall be replaced by the following: “ITUNES shall maintain and keep
complete and accurate books and records concerning the amounts payable to
COMPANY arising from transactions relating to ITUNES’ sale of
[xxxxxx].”
|
|
|
·
|
The
first sentence of Section 13(b) shall be replaced by the
following: “Upon reasonable advance written notice [xxxxxx],
for up to [xxxxxx] (the “Audit Period”), COMPANY, at COMPANY’s sole
expense, may appoint an independent certified public accountant not then
engaged in any audit of ITUNES or COMPANY to audit applicable books and
records of ITUNES at ITUNES’ principal place of business in the Territory
for the sole purpose of verifying the amounts due from ITUNES to COMPANY
hereunder.”
|
|
|
·
|
The
first sentence of Section 13(c) shall be replaced by the
following: “COMPANY shall be deemed to have consented to all
Sales Reports rendered by ITUNES hereunder, and said Sales Reports shall
be binding upon COMPANY and shall not be subject to any objection by
COMPANY for any reason unless specific objections are provided to ITUNES
in writing within [xxxxxx] of the rendering of the Sales
Report.”
|
|
10.
|
Section
15. Section 15(d) of each Agreement shall be amended by
deleting the words “THE SECURITY SOLUTION”, and replacing the words “OF
THE FOREGOING” by the word
“THEREOF.”
|
|
11.
|
Exhibits. Exhibits
A, B-1, B-2, C-1, C-2, D and E of each Agreement shall be deleted in their
entirety, and replaced by Exhibits A, B, C, D and E attached to the
Schedules hereto, as applicable to the Territory of such
Agreement. All references in each Agreement to Exhibits B-1 and
B-2 shall be changed to Exhibits A and B,
respectively.
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
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12.
|
Effective
Date. The “Effective Date” of each Agreement shall
remain the same as before.
|
IN
WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly
executed by their respective officers thereunto duly authorized.
|
APPLE
INC.
|
COMPANY
|
|||
|
By:
|
/s/ ▇▇▇▇ ▇▇▇
|
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇ ▇▇▇
|
Name: ▇▇▇▇
▇▇▇▇▇▇
|
|||
|
Title:
VP, iTunes
|
Title:
President &
CEO
|
|||
|
ITUNES
S.à.▇.▇.
|
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|
|
Title:
Business Manager
|
|
|
Place
of signature:
Luxembourg
|
|
|
APPLE
PTY LIMITED, ABN 46 002 510 054
|
|
|
By:
|
/s/ ▇▇▇▇ ▇▇▇
|
|
Name:
▇▇▇▇ ▇▇▇
|
|
|
Title:
VP, iTunes
|
|
|
ITUNES
K.K.
|
|
|
By:
|
/s/ ▇▇▇▇ ▇▇▇
|
|
Name:
▇▇▇▇ ▇▇▇
|
|
|
Title:
Representative Director
|
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Schedule 1 – United States
and Canada
The
following additional amendments shall be made with respect to the Agreement
whose territory is the United States and Canada (the “US-Canada
Agreement”):
|
1.
|
Section 3. The
following sentences shall be added at the end of Section 3(c): “All
COMPANY Content will be delivered to a server in California by means of
telecommunications or via “load & leave” per California regulation
1502. No tangible personal property will transfer to
ITUNES.”
|
|
2.
|
Section 4.
Section 4 of the US-Canada Agreement shall be amended as
follows:
|
|
|
·
|
The
words “, sound recording performance” shall be added after the word
“distribution” in Sections 4(a)(i) and
4(b)(i)(A).
|
|
|
·
|
Section
4(a)(iv) shall be replaced by the following: “(iv) any other royalties,
fees and/or sums payable with respect to the sound recordings (including
the musical compositions embodied therein), Artwork, metadata and other
materials provided by COMPANY and/or ITUNES’ authorized use thereof
hereunder, except that ITUNES shall be responsible solely for any payments
for the public performance rights in any musical compositions embodied in
COMPANY Content (to the extent such rights may be implicated, if at all,
by ITUNES’ exploitation or other use of COMPANY Content
hereunder).”
|
|
|
·
|
The
words “(currently estimated at eight percent (8%) of retail price)” shall
be deleted from Section 4(b)(ii).
|
|
3.
|
Section 5.
Section 5 of the US-Canada Agreement shall be amended by deleting the
second sentence thereof.
|
|
4.
|
Section 8.
Section 8 of the US-Canada Agreement shall be amended by adding the words
“and shall be paid in United States dollars (US$) for sales in the United
States and in Canadian dollars (CDN$) for sales in Canada“ at the end of
Section 8(b).
|
|
5.
|
Exhibits.
Exhibits A, B-1, B-2, C-1, C-2, D and E of the US-Canada Agreement shall
be deleted in their entirety, and replaced by Exhibits A, B, C, D and E
attached to this Schedule 1.
|
Schedule
1 – Page 1 of 9
EXHIBIT
A
Schedule of Wholesale Prices
- Audio
Single-Track Wholesale
Prices
|
Single Tier
|
US Wholesale Price
[xxxxxx]
|
Canada Wholesale Price
[xxxxxx]
|
||
|
1
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
2
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
3
|
|
US$[xxxxxx]
|
|
CDN$[xxxxxx]
|
Multi-Track Album Wholesale
Prices (excluding taxes)
|
Album Tier
|
US Wholesale Price
|
Canada Wholesale Price
|
||
|
Digital
45
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mini
EP
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
EP
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mini
Album
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Budget
One
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Budget
Two
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Back
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mid
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mid/Front
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Front
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Front
Plus
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Multi-CD
Set
|
|
[xxxxxx]
|
|
[xxxxxx]
|
Notwithstanding
anything to the contrary herein (including any album tier designation pursuant
hereto), the wholesale price for any multi-track album shall not exceed
[xxxxxx].
Subject to any limitations set forth herein regarding the use of a
particular tier, COMPANY shall have the right to designate the single or album
tier, as applicable, for each eMaster provided by COMPANY to ITUNES. In the
event COMPANY does not designate a tier for
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
1 – Page 2 of 9
a
particular eMaster, COMPANY shall be deemed to have designated Tier 2 for any
such single eMaster and the Mid/Front Tier for any such multi-track album
eMaster, until such time as COMPANY designates a different tier for such
eMaster. [xxxxxx] ITUNES shall implement any changed tier designation in
accordance with ITUNES' standard business practices. ITUNES may in its
discretion make available additional tiers during the Term.
[xxxxxx]
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
1 – Page 3 of 9
EXHIBIT
B
Schedule of Wholesale Prices
– Videos
Single Video Wholesale
Prices
|
Single Video Tier
|
US Wholesale Price
|
Canada Wholesale Price
|
||
|
1
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
2
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
3
|
|
US$[xxxxxx]
|
|
CDN$[xxxxxx]
|
COMPANY
shall have the right to designate the tier for each eMaster provided by COMPANY
to ITUNES. In the event COMPANY does not designate a tier for a particular
eMaster, COMPANY shall be deemed to have designated Tier 2 for any such eMaster,
until such time as COMPANY designates a different tier for such eMaster.
[xxxxxx]. ITUNES shall implement any changed tier designation in accordance with
ITUNES' standard business practices. ITUNES may in its discretion make available
additional tiers during the Term.
Other
Products
If ITUNES
at any time during the Term exercises its discretion under Section 3(b) to
accept additional product configurations, then ITUNES will make available one or
more wholesale price tiers for such additional products. If multiple tiers are
made available, COMPANY shall have the right to designate any applicable tier
for each product of COMPANY Content delivered by COMPANY to ITUNES [xxxxxx].
ITUNES shall implement any changed tier designation in accordance with ITUNES'
standard business practices. Notwithstanding anything to the contrary herein
(including any wholesale price tier made available by ITUNES or tier designation
by COMPANY), the wholesale price for any product shall not exceed
[xxxxxx].
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
1 – Page 4 of 9
EXHIBIT
C
Upgrades
The term
“DRM eMaster” shall mean a sound recording previously sold via the Online Store
in a digital format including the proprietary Apple content protection system
marketed as Fairplay.
[xxxxxx]
|
Single / Album Tier
|
US Upgrade Wholesale Price
|
Canada Upgrade Wholesale
Price
|
||
|
Single
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Digital
45
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mini
EP
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
EP
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mini
Album
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Budget
One
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Budget
Two
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Back
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mid
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Mid/Front
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Front
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Front
Plus
|
US$[xxxxxx]
|
CDN$[xxxxxx]
|
||
|
Multi-CD
Set
|
|
[xxxxxx]
|
|
[xxxxxx]
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
1 – Page 5 of 9
EXHIBIT D: Music
Videos
The
following additional or modified terms and conditions shall apply to the sale of
permanent downloads of music videos under the Agreement. In all other respects
the terms and conditions of the Agreement shall apply equally to music videos.
Solely for purposes of this Exhibit D:
|
1.
|
Section
1(b) shall state: “COMPANY
Content” means music videos, including, without limitation, audio
and video files, owned or controlled by COMPANY that COMPANY has cleared
for use by ITUNES pursuant to the terms of this Agreement. COMPANY shall
not provide to ITUNES any music videos that have not been so
cleared.
|
|
2.
|
Section
1(d) shall state: “eMaster” means
a copy of COMPANY Content in DRM-free digital format suitable for
exploitation on the Online Store (provided that the audio and video
quality and integrity attributable to such format shall at all times be
commensurate with the audio and video quality and integrity generally
attributable to the format of third party short-form music videos
available on the Online Store), which ITUNES may sell on the Online Store
pursuant to the terms and conditions of this Agreement.
[xxxxxx]
|
|
3.
|
Section
3(b) shall state: COMPANY shall make all COMPANY Content that COMPANY
authorizes herein for sale on the Online Store available as single videos.
From time to time during the Term, ITUNES may in its discretion decide to
accept additional product configurations (e.g., multi-video albums) from
COMPANY, in which case COMPANY may, in its discretion, offer to make
particular COMPANY Content available for sale on the Online Store in such
product configurations.
|
|
4.
|
Section
4 shall state: COMPANY shall be responsible for: (i) obtaining all rights
of, and all waivers of any applicable moral or similar rights by, artists,
performers, writers, producers, directors, the composers, lyricists,
authors and/or publishers of any musical compositions embodied in COMPANY
Content (including their mechanical, i.e., reproduction and distribution,
rights), and any other third party rights holders necessary for ITUNES’
unencumbered sale, promotion, storage, distribution and other use as
authorized hereunder of COMPANY Content, Artwork, metadata and/or any
other materials provided to ITUNES by COMPANY; and (ii) making
corresponding full and timely payments of all royalties, residuals,
participation payments, repeat fees and/or other sums payable for such
rights and/or waivers, and all payments that may be required under any
collective bargaining, union or guild agreements related to the COMPANY
Content or its exploitation or other use hereunder, including any similar
payments which are not now but hereafter become payable, except that ITUNES
shall be responsible for obtaining or making payments solely for any
public performance
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
1 – Page 6 of 9
rights in the United States, and any communication to the public
rights in Canada, in any musical compositions embodied in COMPANY Content (to
the extent such rights may be implicated, if at all, by ITUNES’ exploitation or
other use of COMPANY Content hereunder).
|
5.
|
All
references to Exhibit A shall instead be to Exhibit
B.
|
|
6.
|
The
following Upgrade Wholesale Prices shall apply for Single video eMasters:
US$[xxxxxx] and CDN$[xxxxxx].
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
1 – Page 7 of 9
EXHIBIT
E
Complete My
Album
Notwithstanding
any other provisions of this Agreement, the following terms shall apply to any
CMA Offers and CMA Transactions (as defined below):
|
1.
|
Definitions:
|
(a) “Purchased Track”
means a track or video previously acquired by a customer from the Online Store
by (i) purchase by any payment means or (ii) through a promotional download, so
long as ITUNES paid to COMPANY the appropriate wholesale price under this
Agreement for such download.
(b) “CMA Album” means an
album with which one or more Purchased Tracks are “associated” (as provided in
paragraph 3 below).
(c) “Remaining Tracks”
means all tracks or videos contained on a CMA Album, other than any Purchased
Tracks.
(d) “CMA Offer” means the
option by a particular customer to purchase the Remaining Tracks of a CMA Album
as a bundle – i.e., to “complete” that album – at a specified bundle
price.
(e) “CMA Transaction”
means the purchase by a customer of the Remaining Tracks of a particular CMA
Album as a bundle at a specified bundle price.
(f) “Advance Single” means
a single track released on the Online Store in advance of the release of the
corresponding album (e.g., a radio edit or pre-release single).
(g) “Subsequent Album”
means the album, released subsequent to an Advance Single’s release, on which
the Advance Single was included upon the album’s release.
|
2.
|
Authorization of CMA
Offers and Transactions. ITUNES is hereby authorized to make CMA
Offers and conclude CMA Transactions as provided in this
Exhibit.
|
|
3.
|
“Associated” Purchased
Tracks and CMA Albums.
|
(a) Except
as provided in paragraphs 3(b)-(e) below, a Purchased Track is only deemed
“associated” with the album on the Online Store off of which it was acquired by
the customer.
(b) For
Advance Singles, the Subsequent Album shall be deemed to be the “associated” CMA
Album. If only one (unmarked) version of the Advance Single was offered, and
both clean and explicit versions of the Subsequent Album are
Schedule
1 – Page 8 of 9
offered on the Online Store, then each such version of the
Subsequent Album shall be deemed to be a CMA Album “associated” with the Advance
Single.
(c) If
standard and deluxe versions of an album are offered on the Online Store, then
each such version of the album shall be deemed to be a CMA Album “associated”
with any Purchased Track acquired off of either version of the
album.
(d) A
redelivered album shall be deemed to be a CMA Album “associated” with any
Purchased Track that was acquired off of any version of that same album that was
previously available (but is no longer available) on the Online Store under the
authority of COMPANY. ITUNES will use commercially reasonable efforts to create
automated “matching” such that CMA Offers involving redelivered albums are made
available to customers consistent with this subparagraph.
(e) A
Purchased Track originally purchased in DRM eMaster (as defined in Exhibit C)
format off of the DRM eMaster version of a particular album, and then
subsequently upgraded to eMaster format, shall thereafter also be deemed
“associated” with the eMaster version of that album.
(f) To
the extent a customer is presented with more than one CMA Offer with respect to
the same Purchased Track (because more than one album is deemed a CMA Album
“associated” with such Purchased Track hereunder), the customer may only select
one such option. In no event may one Purchased Track be applied to more than one
CMA Transaction.
|
4.
|
Partial Albums.
Only full albums (including video albums) available for sale on the Online
Store are eligible to be CMA Albums. Partial albums are not
eligible.
|
|
5.
|
Wholesale
Price. ITUNES will pay COMPANY the CMA Wholesale Price (as defined
in this paragraph) for each CMA Transaction. The CMA Wholesale Price will
equal the wholesale price under this Agreement for the CMA Album in effect
at the time of the CMA Transaction (“Regular Wholesale Price”) less the sum of
the wholesale prices ITUNES previously paid for the Purchased Tracks to
COMPANY; provided, however, that the CMA Wholesale Price in no event shall
be less than the wholesale price under this Agreement for a single track
(a single music video in the event the CMA Album is a video-only album) in
effect at the time of the CMA Transaction. For avoidance of doubt, ITUNES
may determine retail prices on the Online Store, including retail prices
for CMA Transactions, entirely at its sole
discretion.
|
|
6.
|
Reporting. Each
CMA Transaction will be reflected on sales and royalty reports as follows:
(i) a new sale of the full CMA Album at the Regular Wholesale Price,
identified as a CMA sale; and (ii) a
return (i.e., negative royalty) for each Purchased Track contained on the
CMA Album in the amount ITUNES previously paid for the Purchased Track to
COMPANY, each identified as a CMA
return.
|
Schedule
1 – Page 9 of 9
Schedule 2 –
Europe
The
following additional amendments shall be made with respect to the Agreement
whose territory is Europe (the “Europe Agreement”):
|
1.
|
Section 5.
Section 5 of the Europe Agreement shall be amended by deleting the second
and third sentences thereof.
|
|
2.
|
Section 8.
Section 8(b) of the Europe Agreement shall be replaced by the following:
“ITUNES shall pay eMaster Proceeds to COMPANY in the amount set forth in a
[xxxxxx] sales report reflecting all sales of eMasters and corresponding
eMaster Proceeds for the particular [xxxxxx] period ("Sales Report") and
in accordance with ITUNES standard business practices after the end of
each [xxxxxx] period during the Term. Notwithstanding the foregoing,
only if COMPANY resides in Luxembourg, then COMPANY [xxxxxx] shall provide
to ITUNES a valid VAT (if applicable) eMaster Proceeds invoice ("Invoice")
accurately based on such Sales Report; and ITUNES will send payment to
COMPANY in the amount set forth in such Invoice [xxxxxx] after
Invoice receipt. ITUNES will make each Sales Report available to
COMPANY via iTunes Connect and will notify COMPANY via email when each
Sales Report is available. ITUNES may modify the foregoing process in its
reasonable discretion [xxxxxx]. For avoidance of doubt, eMaster Proceeds
shall constitute COMPANY’s full consideration hereunder and shall be paid
in Euros.”
|
|
3.
|
Exhibits.
Exhibits A, B-1, B-2, C-1, C-2, D and E of the Europe Agreement shall be
deleted in their entirety, and replaced by Exhibits A, B, C, D and E
attached to this Schedule 2.
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
2 - Page 1 of 9
EXHIBIT
A
Schedule of Wholesale Prices
- Audio
Single-Track Wholesale
Prices
[xxxxxx]
|
Single Tier
|
Wholesale Price
|
|
|
1
|
€[xxxxxx]
|
|
|
2
|
€[xxxxxx]
|
|
|
3
|
|
€[xxxxxx]
|
Multi-Track Album Wholesale
Prices
|
Album Tier
|
Wholesale Price
|
|
|
Digital
45
|
€[xxxxxx]
|
|
|
Mini-EP
|
€[xxxxxx]
|
|
|
EP
|
€[xxxxxx]
|
|
|
Mini
Album
|
€[xxxxxx]
|
|
|
Budget
One
|
€[xxxxxx]
|
|
|
Budget
Two
|
€[xxxxxx]
|
|
|
Back
|
€[xxxxxx]
|
|
|
Mid
|
€[xxxxxx]
|
|
|
Mid/Front
|
€[xxxxxx]
|
|
|
Front
|
€[xxxxxx]
|
|
|
Front
Plus
|
€[xxxxxx]
|
|
|
Multi-CD
Set
|
|
[xxxxxx]
|
Notwithstanding
anything to the contrary herein (including any album tier designation pursuant
hereto), the wholesale price for any multi-track album shall not exceed
[xxxxxx].
Subject
to any limitations set forth herein regarding the use of a particular tier,
COMPANY shall have the right to designate the single or album tier, as
applicable, for each eMaster provided by COMPANY to ITUNES. In the event COMPANY
does not designate a tier for a particular eMaster, COMPANY shall be deemed to
have designated Tier 2 for any such single eMaster and the Mid/Front Tier for
any such multi-track album eMaster, until such
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
2 - Page 2 of 9
time as COMPANY designates a different tier for such eMaster.
[xxxxxx] ITUNES shall implement any changed tier designation in accordance with
ITUNES' standard business practices. ITUNES may in its discretion make available
additional tiers during the Term.
[xxxxxx]
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
2 - Page 3 of 9
EXHIBIT
B
Schedule of Wholesale Prices
- Videos
Single Video Wholesale
Prices
|
Single Video Tier
|
Wholesale Price
|
|
|
1
|
€
[xxxxxx]
|
|
|
2
|
€[xxxxxx]
|
|
|
3
|
|
€[xxxxxx]
|
COMPANY
shall have the right to designate the tier for each eMaster provided by COMPANY
to ITUNES. In the event COMPANY does not designate a tier for a particular
eMaster, COMPANY shall be deemed to have designated Tier 2 for any such eMaster,
until such time as COMPANY designates a different tier for such eMaster.
[xxxxxx] ITUNES shall implement any changed tier designation in accordance with
ITUNES' standard business practices. ITUNES may in its discretion make available
additional tiers during the Term.
Other
Products
If ITUNES
at any time during the Term exercises its discretion under Section 3(b) to
accept additional product configurations, then ITUNES will make available one or
more wholesale price tiers for such additional products. If multiple tiers are
made available, COMPANY shall have the right to designate any applicable tier
for each product of COMPANY Content delivered by COMPANY to ITUNES [xxxxxx].
ITUNES shall implement any changed tier designation in accordance with ITUNES'
standard business practices. Notwithstanding anything to the contrary herein
(including any wholesale price tier made available by ITUNES or tier designation
by COMPANY), the wholesale price for any product shall not exceed
[xxxxxx].
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
2 - Page 4 of 9
EXHIBIT
C
Upgrades
The term
“DRM eMaster” shall mean a sound recording previously sold via the Online Store
in a digital format including the proprietary Apple content protection system
marketed as Fairplay.
[xxxxxx]
|
Single / Album Tier
|
Upgrade Wholesale Price
|
|
|
Single
|
€[xxxxxx]
|
|
|
Digital
45
|
€[xxxxxx]
|
|
|
Mini
EP
|
€[xxxxxx]
|
|
|
EP
|
€[xxxxxx]
|
|
|
Mini
Album
|
€[xxxxxx]
|
|
|
Budget
One
|
€[xxxxxx]
|
|
|
Budget
Two
|
€[xxxxxx]
|
|
|
Back
|
€[xxxxxx]
|
|
|
Mid
|
€[xxxxxx]
|
|
|
Mid/Front
|
€[xxxxxx]
|
|
|
Front
|
€[xxxxxx]
|
|
|
Front
Plus
|
€[xxxxxx]
|
|
|
Multi-CD
Set
|
|
[xxxxxx]
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
2 - Page 5 of 9
EXHIBIT
D
Music
Videos
The
following additional or modified terms and conditions shall apply to the sale of
permanent downloads of music videos under the Agreement. In all other respects
the terms and conditions of the Agreement shall apply equally to music videos.
Solely for purposes of this Exhibit D:
|
1.
|
Section
1(b) shall state: “COMPANY
Content” means music videos, including, without limitation, audio
and video files, owned or controlled by COMPANY that COMPANY has cleared
for use by ITUNES pursuant to the terms of this Agreement. COMPANY shall
not provide to ITUNES any music videos that have not been so
cleared.
|
|
2.
|
Section
1(d) shall state: “eMaster” means
a copy of COMPANY Content in DRM-free digital format suitable for
exploitation on the Online Store (provided that the audio and video
quality and integrity attributable to such format shall at all times be
commensurate with the audio and video quality and integrity generally
attributable to the format of third party short-form music videos
available on the Online Store), which ITUNES may sell on the Online Store
pursuant to the terms and conditions of this Agreement.
[xxxxxx]
|
|
3.
|
Section
3(b) shall state: COMPANY shall make all COMPANY Content that COMPANY
authorizes herein for sale on the Online Store available as single videos.
From time to time during the Term, ITUNES may in its discretion decide to
accept additional product configurations (e.g., multi-video albums) from
COMPANY, in which case COMPANY may, in its discretion, offer to make
particular COMPANY Content available for sale on the Online Store in such
product configurations.
|
|
4.
|
Section
4 shall state:
|
|
(a)
|
Except
as provided in Section 4(b) below, COMPANY shall be responsible for: (i)
obtaining all rights of, and all waivers of any applicable moral or
similar rights by, artists, performers, writers, producers, directors and
any other third party rights holders necessary for ITUNES’ unencumbered
sale, promotion, storage, distribution and other use as authorized
hereunder of COMPANY Content, Artwork, metadata and/or any other materials
provided to ITUNES by COMPANY; and (ii) making corresponding full and
timely payments of all royalties, residuals, participation payments,
repeat fees and/or other sums payable for such rights and/or waivers, and
all payments that may be required under any collective bargaining, union
or guild agreements related to the COMPANY Content or its exploitation or
other use
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2.
Schedule
2 - Page 6 of 9
hereunder, including any similar payments which are not now but
hereafter become payable.
|
(b)
|
ITUNES
shall be responsible for: (i) obtaining the reproduction (i.e.,
mechanical), public performance and communication to the public rights in
the musical compositions embodied in COMPANY Content as may be reasonably
necessary for ITUNES’ sale, promotion, storage, distribution and other use
as authorized hereunder of COMPANY Content (“Author’s Rights”); and (ii)
making corresponding full and timely payments of all royalties and/or
other sums payable for such rights, including any similar payments which
are not now but hereafter become payable. Notwithstanding the foregoing,
to the extent that COMPANY owns or controls any part of such rights
(whether directly or indirectly), COMPANY shall not withhold such rights
in any way that could frustrate the purpose of this Agreement. The Parties
acknowledge that the wholesale prices set forth in Exhibit B reflect a
deduction for Author’s Rights at the prevailing industry-wide royalty
rates (currently estimated at eight percent (8%) of retail price) and
that, in the event that higher or lower prevailing industry-wide royalty
rates are established (whether by a court or tribunal within the Territory
or through negotiations), then the wholesale prices set forth in Exhibit B
shall be prospectively reduced or increased (as the case may be) using
such established industry-wide royalty
rates.
|
|
5.
|
All
references to Exhibit A shall instead be to Exhibit
B.
|
|
6.
|
The
following Upgrade Wholesale Price shall apply for Single video eMasters:
€[xxxxxx].
|
***
Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted provisions under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.
Schedule
2 - Page 7 of 9
EXHIBIT
E
Complete My
Album
Notwithstanding
any other provisions of this Agreement, the following terms shall apply to any
CMA Offers and CMA Transactions (as defined below):
|
1.
|
Definitions:
|
(a) “Purchased Track”
means a track or video previously acquired by a customer from the Online Store
by (i) purchase by any payment means or (ii) through a promotional download, so
long as ITUNES paid to COMPANY the appropriate wholesale price under this
Agreement for such download.
(b) “CMA Album” means an
album with which one or more Purchased Tracks are “associated” (as provided in
paragraph 3 below).
(c) “Remaining Tracks”
means all tracks or videos contained on a CMA Album, other than any Purchased
Tracks.
(d) “CMA Offer” means the
option by a particular customer to purchase the Remaining Tracks of a CMA Album
as a bundle – i.e., to “complete” that album – at a specified bundle
price.
(e) “CMA Transaction”
means the purchase by a customer of the Remaining Tracks of a particular CMA
Album as a bundle at a specified bundle price.
(f) “Advance Single” means
a single track released on the Online Store in advance of the release of the
corresponding album (e.g., a radio edit or pre-release single).
(g) “Subsequent Album”
means the album, released subsequent to an Advance Single’s release, on which
the Advance Single was included upon the album’s release.
|
2.
|
Authorization of CMA
Offers and Transactions. ITUNES is hereby authorized to make CMA
Offers and conclude CMA Transactions as provided in this
Exhibit.
|
|
3.
|
“Associated” Purchased
Tracks and CMA Albums.
|
(a) Except
as provided in paragraphs 3(b)-(e) below, a Purchased Track is only deemed
“associated” with the album on the Online Store off of which it was acquired by
the customer.
(b) For
Advance Singles, the Subsequent Album shall be deemed to be the “associated” CMA
Album. If only one (unmarked) version of the Advance Single was offered, and
both clean and explicit versions of the Subsequent Album are
Schedule
2 - Page 8 of 9
offered on the Online Store, then each such version of the
Subsequent Album shall be deemed to be a CMA Album “associated” with the Advance
Single.
(c) If
standard and deluxe versions of an album are offered on the Online Store, then
each such version of the album shall be deemed to be a CMA Album “associated”
with any Purchased Track acquired off of either version of the
album.
(d) A
redelivered album shall be deemed to be a CMA Album “associated” with any
Purchased Track that was acquired off of any version of that same album that was
previously available (but is no longer available) on the Online Store under the
authority of COMPANY. ITUNES will use commercially reasonable efforts to create
automated “matching” such that CMA Offers involving redelivered albums are made
available to customers consistent with this subparagraph.
(e) A
Purchased Track originally purchased in DRM eMaster (as defined in Exhibit C)
format off of the DRM eMaster version of a particular album, and then
subsequently upgraded to eMaster format, shall thereafter also be deemed
“associated” with the eMaster version of that album.
(f) To
the extent a customer is presented with more than one CMA Offer with respect to
the same Purchased Track (because more than one album is deemed a CMA Album
“associated” with such Purchased Track hereunder), the customer may only select
one such option. In no event may one Purchased Track be applied to more than one
CMA Transaction.
|
4.
|
Partial Albums.
Only full albums (including video albums) available for sale on the Online
Store are eligible to be CMA Albums. Partial albums are not
eligible.
|
|
5.
|
Wholesale
Price. ITUNES will pay COMPANY the CMA Wholesale Price (as defined
in this paragraph) for each CMA Transaction. The CMA Wholesale Price will
equal the wholesale price under this Agreement for the CMA Album in effect
at the time of the CMA Transaction (“Regular Wholesale Price”) less the sum of
the wholesale prices ITUNES previously paid for the Purchased Tracks to
COMPANY; provided, however, that the CMA Wholesale Price in no event shall
be less than the wholesale price under this Agreement for a single track
(a single music video in the event the CMA Album is a video-only album) in
effect at the time of the CMA Transaction. For avoidance of doubt, ITUNES
may determine retail prices on the Online Store, including retail prices
for CMA Transactions, entirely at its sole
discretion.
|
|
6.
|
Reporting. Each CMA Transaction will be
reflected on sales and royalty reports as follows: (i) a new sale of the
full CMA Album at the Regular Wholesale Price, identified as a CMA sale;
and (ii) a return (i.e., negative
royalty) for each Purchased Track contained on the CMA Album in the amount
ITUNES previously paid for the Purchased Track to COMPANY, each identified
as a CMA return.
|
Schedule
2 - Page 9 of 9