|
Exhibit
10.22
DIGITAL MUSIC DOWNLOAD SALES
AGREEMENT
This Agreement is by and between APPLE
and COMPANY, as identified in the Cover Sheet attached hereto and
is entered into as of the date this Agreement is signed by both
APPLE and COMPANY (the “Effective Date”).
WHEREAS, APPLE desires to
sell permanent downloads of COMPANY’S sound
recordings;
WHEREAS, COMPANY is willing
to allow the sale of permanent downloads of certain COMPANY sound
recordings in exchange for APPLE’S obligations
herein;
NOW, THEREFORE, in
consideration of the mutual promises and agreements set forth
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, APPLE and COMPANY
(“Parties”) hereby agree as follows:
The following terms shall
have the following meanings for purposes of this
Agreement:
| |
(a) |
“ Content File ” means each digital file
containing a single-track sound recording or multi-track album of
COMPANY Content, applicable Artwork (if any), parental advisory
notices (if any), copyright notices (if any), videos (if any,
provided by COMPANY and used by APPLE at COMPANY’S
discretion), and associated metadata, e.g., core track data and
editorial content data (if any). |
| |
(b) |
“ Content Usage Rules ” means the usage
rules applicable to sound recordings in the form of eMasters
available on the Online Store that specify the terms under which an
eMaster may be used, as set forth in Exhibit A attached hereto, and
which may be modified by APPLE from time to time, subject to prior
written approval by COMPANY (such approval or disapproval not to be
unreasonably delayed) in the event of a material change to such
usage rules. |
| |
(c) |
“ Security Solution ” means the APPLE
proprietary content protection system in effect as of the Effective
Date used to protect eMasters sold on the Online Store pursuant to
this Agreement, which content protection system shall be no less
protective than, and the same as, the protection system used to
protect any third party sound recording sold on the Online Store,
and which may be modified by APPLE from time to time, subject to
prior written approval by COMPANY (such approval not to be
unreasonably withheld, delayed or conditioned) in the event of a
material change to such content protection system such that
eMasters are being protected less than before. |
| |
(d) |
“ eMaster” or “eMasters ” means
copies of COMPANY Content in digital form and having the Security
Solution, which APPLE may sell on the Online Store pursuant to the
terms and conditions of this Agreement. |
| |
(e) |
“ Device ” means any digital player device
or cellular phone having the Security Solution that can receive
music files from another device or network connection, by any
means, for playback of such music files. |
1
| |
(f) |
“ Fulfillment Activities ” means sales
activities relating to the sale and delivery of eMasters, provided
by COMPANY, pursuant to the terms and conditions of this
Agreement. |
| |
(g) |
“ Term ” means the period beginning on the
Effective Date of this Agreement and ending on the first day of the
calendar quarter following the third anniversary of the Effective
Date. |
| |
(h) |
“ Territory ” means the United States, its
territories and possessions, and Canada, its territories and
possessions; and any other country or territory where COMPANY
authorizes APPLE in writing hereunder, as the case may
be. |
| |
(i) |
“ Online Store ” means an electronic store
and its storefronts branded, and owned and/or controlled by
APPLE. |
| |
(j) |
“ COMPANY Conten t” means sound recordings
owned or controlled by COMPANY that are provided by or on behalf of
COMPANY, and in which COMPANY has cleared the necessary rights to
authorize electronic sales and sound recording performances by
APPLE pursuant to the terms of this Agreement, including but not
limited to sound recordings in the form of (i) single-track sound
recordings, and (ii) multi-track albums. Any sound recordings that
are provided by or on behalf of COMPANY to APPLE are owned or
controlled by COMPANY and have been cleared by COMPANY as described
in the prior sentence. |
| |
(k) |
“ Artwork ” means album cover artwork and
any other artwork relating to COMPANY Content that COMPANY has
cleared for use by APPLE in accordance with Section 2 below. Any
artwork that is provided by or on behalf of COMPANY to APPLE will
be deemed to have been cleared by COMPANY as described in the prior
sentence. |
| |
(a) |
Subject to the terms of this Agreement, COMPANY hereby appoints
APPLE as a reseller of eMasters. Accordingly, COMPANY hereby grants
a non-exclusive right to APPLE, during the Term, to: |
| |
i. |
reproduce and convert COMPANY Content delivered by COMPANY or
by COMPANY’S representative designated by COMPANY in writing
into eMasters; |
| |
ii. |
perform and make thirty (30) second clips of the COMPANY
Content available by streaming (“Clips”) to promote the
sale of applicable eMasters on the Online Store, which Clips, if
not provided by COMPANY, may be created by APPLE by using the first
thirty (30) seconds of the applicable COMPANY Content; |
| |
iii. |
promote, sell, distribute, and electronically fulfill and
deliver eMasters and associated metadata to purchasers via the
Online Store; |
| |
iv. |
display and electronically fulfill and deliver Artwork for
personal use solely in conjunction with the applicable purchased
eMaster; and |
2
| |
v. |
use COMPANY Content, Artwork and metadata as may be reasonably
necessary or desirable for APPLE to exercise APPLE’S lights
under the terms of this Agreement. |
| |
(b) |
APPLE shall not be authorized to exploit COMPANY Content or
Artwork in any manner or form not expressly authorized herein.
Nothing in this Agreement shall be construed to prevent COMPANY
from marketing or selling COMPANY Content or Artwork by any means.
Nothing herein shall obligate APPLE to actually exercise its rights
under this Agreement. |
| |
(c) |
Except for a special circumstance, such as an exclusive,
limited-time, one-off promotion for a particular COMPANY sound
recording, or for a reason beyond COMPANY’S control, COMPANY
shall otherwise make all eMasters available to APPLE hereunder for
sale on the Online Store in both a so-called “single”
format and in a multi-track “album” format. APPLE may
sell eMasters on the Online Store in the format that APPLE believes
most favorably furthers the commercial purpose of this Agreement
and otherwise in accordance with APPLE’S then-current Online
Store business practices. |
| |
(d) |
Except as set forth in Section 2(a)(ii) or elsewhere herein,
APPLE will not edit, change or alter any of the COMPANY Content or
Artwork without COMPANY’S prior written consent (such consent
not to be unreasonably withheld, delayed or conditioned), provided
that APPLE may modify metadata as reasonably necessary to correct
errors or to append sub-genres or like information for artist and
track categories. |
| |
(e) |
APPLE shall not pledge, mortgage or otherwise encumber any part
of the COMPANY Content, eMasters, or Artwork. |
| |
(a) |
COMPANY shall use commercially reasonable efforts to promptly
obtain clearances in the Territory for all sound recordings under
its control, and related artwork, in order to enable sales of
eMasters by APPLE hereunder. |
| |
(b) |
Content Files must be [*]. |
| |
(c) |
COMPANY shall use commercially reasonable efforts to
electronically deliver, at COMPANY’S expense, properly
encoded Content Files to APPLE using a secure FTP site address
provided by APPLE to COMPANY from time to time, or other delivery
means as may be reasonably requested by APPLE. |
| |
(d) |
COMPANY, or a third party designated by COMPANY in writing and
approved by APPLE, shall commence delivery of Content Files as soon
as reasonably possible after the Effective Date, and for just
cleared COMPANY Content or new releases, no later than when COMPANY
first makes such COMPANY Content publicly available by any means
(e.g., radio play, “street date,” etc). |
3
| * |
Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions. |
COMPANY shall be responsible
for and timely pay: (i) all record royalties to artists, producers,
and other record royalty participants from sales of eMasters, (ii)
all mechanical royalties payable to publishers of copyrighted
musical compositions embodied in eMasters from sales of eMasters,
(iii) all payments that may be required under collective bargaining
agreements applicable to COMPANY or third parties other than APPLE,
and (iv) any other royalties, fees and/or sums payable with respect
to the sound recordings, Artwork, metadata and other materials
provided by COMPANY and/or APPLE’s use thereof
hereunder.
APPLE shall pay COMPANY the
wholesale price for eMasters sold by APPLE hereunder, as set forth
in Exhibit B attached hereto. COMPANY shall not increase the
wholesale price of any particular eMaster during the Term. Apple
reserves the right to determine the retail price in its
discretion.
| |
(a) |
APPLE 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 be no less
restrictive than the Content Usage Rules, and shall state that the
sale of eMasters does not transfer to purchaser any commercial or
promotional use rights in the eMasters. |
| |
(b) |
Subject to Section 4, APPLE shall be responsible for all costs
associated with APPLE’s Fulfillment Activities. |
| |
(c) |
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 APPLE to use
any COMPANY Content or Artwork as provided for herein, or COMPANY
reasonably believes that APPLE’s 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
or distributor, then COMPANY shall have the right to withdraw, upon
written notice to APPLE’s designated representative,
authorization for the sale of such COMPANY Content or Artwork.
Following such withdrawal, APPLE shall cease to offer such COMPANY
Content or Artwork for sale within three (3) business days after
APPLE’S receipt of such notice of withdrawal, and COMPANY
shall use commercially reasonable efforts to clear such withdrawn
COMPANY Content or Artwork and shall promptly notify APPLE if and
when such COMPANY Content has been cleared and is again authorized
for sale by APPLE through the Online Store. COMPANY shall not
withdraw COMPANY Content if such COMPANY Content is still being
made available by COMPANY to any other provider of digital
downloads. |
If COMPANY provides a
parental advisory warning about a particular sound recording in the
Content File, APPLE shall conspicuously display such parental
advisory when other information about such recording is displayed.
COMPANY shall be responsible for determining parental advisory
warning status.
4
| |
(a) |
APPLE shall remit payment to COMPANY for the sale of eMasters
in accordance with the following: (i) the “sale” of
each eMaster shall occur when such eMaster is successfully
delivered by APPLE to an end user; (ii) payments shall accrue at
the time that such eMaster is sold; and (iii) for each eMaster
sold, APPLE shall pay to COMPANY an amount equal to the wholesale
price for the applicable eMaster (collectively “eMaster
Proceeds”). |
| |
(b) |
APPLE will compute eMaster Proceeds payable to COMPANY after
the end of [*], and will send COMPANY a [*] eMaster Proceeds
statement in accordance with Apple’s standard business
practices. The eMaster Proceeds statement shall be accompanied with
payment in the amount of eMaster Proceeds due within [*] after the
end of each such calendar month. Such payment shall constitute full
consideration for all rights granted and obligations undertaken by
COMPANY hereunder. |
| |
9. |
Names and Likenesses; Promotional Use and Opportunities
. |
| |
(a) |
APPLE may use the names and likenesses of, and biographical
material concerning, any eMaster artists, bands, producers and/or
songwriters, as well as track and/or album name, and Artwork, in
any APPLE marketing materials for the sale, promotion and
advertising of the applicable eMaster which is offered for sale on
the Online Store under the terms of this Agreement (e.g., an artist
or band name and likeness may be used in an informational fashion,
such as textual displays or other informational passages, to
identify and represent authorship, production credits, and
performances of the applicable artist or band in connection with
the authorized exploitation of applicable eMasters). Further
written approval of COMPANY shall be required if any artist’s
name is otherwise used as an endorsement of APPLE, the Online
Store, or APPLE’S products. |
| |
(b) |
APPLE shall have the unrestricted right to market, promote and
advertise the Online Store and sound recordings available for
purchase on the Online Store as it determines in its discretion.
Without limiting the foregoing, APPLE shall have the right to
determine which sound recordings, irrespective of any particular
record company or label affiliation, would best further the
commercial purpose of the Online Store, and to promote such sound
recordings more than others. |
| |
10. |
Copyright Notices; Ownership . |
|
