EXECUTION COPY
SOUNDCLOUD OPERATIONS, INC.
MUSIC PUBLISHING RIGHTS AGREEMENT
This Agreement (“
Agreement
”) is made as of
[DATE]
, 2015 (the “
Effective Date
”), by and between
SoundCloud Operations, Inc., a Delaware corporation with offices located at 101 5
th
Avenue, New York,NY 10003
(“
SoundCloud
”), and
[PUBLISHER NAME]
, a
[corporation/general partnership/limited partnership/limited liability company/limited liability partnership/joint venture/individual]
, with offices at
[ADDRESS]
(“
Publisher
”).
WHEREAS, SoundCloud wishes to develop and make available to certain preferred content-owner business partners
(“
Creator Partners
”) through the Creator Partner Program (as defined below)
certain new features of the Platform (as defined below), which will enable Creator Partners to generate revenue through their presence on the Platform in the Territory, including in particular any audio content that Creator Partners (or other persons on their behalf) upload to their account(s) together with a
corresponding International Standard Recording Code (“
ISRC
”) and approve for monetization on the Platform in the Territory (“
Creator Partner Uploads
”);
WHEREAS, in connection with the foregoing, SoundCloud desires to obtain a license from Publisher for the use of Musical Works (as defined below) embodied in Creator Partner Uploads in connection with the Service (as defined below) in accordance with this Agreement, and Publisher is willing to grant such license in connection with the Service in accordance with this Agreement; WHEREAS, SoundCloud desires to obtain from Publisher a covenant not to sue for any other uses of Musical Works via the Platform, and Publisher is willing to grant such covenant not to sue in accordance with the terms set forth herein;
WHEREAS, SoundCloud and National Music Publishers’ Association (“NMPA”) are parties to an
Administration Agreement dated as of May 1, 2015, which governs, inter alia, the process for entering into and executing this Agreeme
nt and determining and computing Publisher’s NMPA Market Share, Publisher’s 2013 Music Publishing Revenues in the Territory and the amount of the Advance payable to Publisher under this Agreement based on Publisher’s NMPA Market Share of the NMPA Advance P
ool
(the “NMPA Administration Agreement”)
; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1.Definitions. As used in this Agreement:(a)
“
Accounting Period
” means, after the date on which Musical Works are made available
for exploitation via the Service pursuant to this Agreement, each of the quarter-annual calendar periods during the Term (and after the Term, as permitted under paragraph 2(b) below) ending March 31, June 30, September 30, and December 31. (b)
“
Additional Subscription Features
” means a Subscription Service that is operated by or
on behalf of SoundCloud, is made available in the Territory, and offers end users access to additional features not available via the SoundCloud Free-to-the-User Service in return for a monthly payment. Initially, it is anticipated that such additional features will include (i) the ability for subscribers to listen to content as Limited Downloads, and (ii) the removal of audio and display advertising. The particular sound recordings available to Subscribers will be substantially limited relative to services in the marketplace providing access to a comprehensive catalog of recordings and the SoundCloud Full Catalog Subscription Service. (c)
“
Applicable Consideration
” has the meaning set forth in 37 CFR § 385.11, or 37 CFR
§385.21, as applicable.
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(d)
“
Claims
” means any causes of action, suits, c
ontroversies or demands, however characterized, in law, equity or otherwise, of any kind or nature whatsoever, whether known or unknown, fixed or contingent, which any applicable person or entity ever had, now has, or may hereafter acquire, by reason of any matter, cause or thing whatsoever. (e)
“
Content ID System
” means the content fingerprinting and identification technology(ies)
utilized by SoundCloud. (f)
“
Creator
” means an end user, who is not a Creator Partner, who uploads content to the
Platform. (g)
“
Creator Partner
” has the meaning set forth in the preamble.
(h)
“
Creator Partner Program
” means the program in which Publisher and other Creator
Partners participate to enable monetization of their respective content (solely with respect to their respective rights in such content) on the Platform, and the sharing of revenue with respect thereto. (i)
“
Creator Partner Uploads
” has the meaning set forth in the preamble.
(j)
“
Deck
” has the meaning set forth in paragraph 6(a) below.
(k)
“
Free Nonsubscription/Ad Supported Service
” means a service that offers Interactive
Streams and/or Limited Downloads free of any charge to the end user. (l)
“
Identified
” means a Creator Partner Upload embodying a musical work.
(m)
“
Interactive Stream
” has the meaning set forth in 37 CFR §
385.11. (n)
“
Limited Download
” has the meaning set forth in 37 CFR § 385.11.
(o)
“
Limited Offering
” has the meaning set forth in 37 CFR § 385.21.
(p)
“
Losses
” means any and all liabilities, damages, awards, settlements, losses, and
expenses including, without limitation, court costs, reasonable third party legal fees and third party costs of investigation. (q)
“
Major Music Publishers
” means BMG Rights Management (US), EMI Music Publishing,
Kobalt Music Publishing America, Inc., Sony/ATV Music Publishing, Universal Music Publishing Group and Warner/Chappell Music Publishing. (r)
“Major Record Labels” means Warner Music Group, Universal Music Group and Sony
Music Entertainment. (s)
“
Monetized Content
” means all content available on the applicable offering of the Service
(including musical works and non-musical works) against which SoundCloud has designated advertising inventory as available to be sold. Monetized Content includes all Monetized Musical Works. (t)
“
Monetized Musical Works
” means the musical works made available on the applicable
offering of the Service (including musical works licensable via 17 U.S.C. § 115 and Non-115 Works) against which SoundCloud has designated advertising inventory as available to be sold. The concept of Monetized Musical Works specifically excludes all non-musical works. (u)
“
Musical Work
” means a musical work owned, controlled and/or administered by Publisher, in whole or in part, to the full extent of Publisher’s owner
ship, control or administration interest
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in and to such musical work as designated by Publisher. With respect to any Musical Work in which the rights that are the subject of this Agreement are owned, controlled, and/or administered by Publisher only in pa
rt, the term “Musical Work” shall refer to the entirety of the musical work (i.e., 100% of all interests in and to the musical work), regardless of the extent of Publisher’s ownership or control or administration
interest in and to such musical work. The portion of any Musical Work that is owned, controlled and/or
administered by Publisher is sometimes referred to herein as the “
Publisher Portion
” of the Musical Work, and the remainder of such Musical Work is sometimes referred to herein as the “
Non-Publisher Portion
” of
the Musical Work. (v)
“Musical Work Metadata Database”
means the database used by SoundCloud to identify the musical works embodied in Content Partner Uploads, which may be owned and operated by SoundCloud or a third party service provider. (w)
“
Non-115 Work
” means a musical work that is not licensable via 17 U.S.C. § 115,
including, but not limited to, musical works embodied in unreleased original recordings, mashups and certain other derivative musical works. (x)
“
NMPA Advance Pool
” means Three
Hundred and Fifty Thousand US Dollars (USD $350,000). (y)
“
NMPA Independent Music Publishers
” means each of the individual music publisher members of the National Music Publishers’ Association, Inc. (the “NMPA”) that are not (i) Major Music
Publishers, or (ii) any music publisher or other musical work copyright proprietor whose works are licensed to SoundCloud through an administration agreement with a Major Music Publisher or whose rights do not cover the uses to be made by SoundCloud (i.e., print music publishers). (z)
“Publisher’s NMPA Market Share” means the market share percentage provided to
SoundCloud by NMPA pursuant to the NMPA Administration Agreement. Publisher acknowledges and agrees that NMPA and its retained independent accounting firm, Tate & Tryon, shall determine and
calculate Publisher’s NMPA Market Share by dividing Publisher’s 2013 Reported Revenue by Total NMPA Independent Publishers’ 2013 Reported Revenue. Publisher hereby irrevocably appoints NMPA to determine and calculate, on Publisher’s behalf, Publisher’s NMPA Market Share and Total NMPA Independent Publishers’ 2013 Reported Revenue. Publisher acknowledges and agrees, and shall never dispute at all times during and after the Term, that NMPA’s determination and calculation of Publisher’s NMPA Market Share and Total NMPA Independent Publishers’ 2013 Reported Revenue, shall be final,
conclusive and binding upon Publisher. (aa)
“
Permitted Reasons
” has the meaning set forth in paragraph 3(c).
(bb)
“
Platform
” means SoundCloud’s audio hosting pl
atform, operated by or on behalf of SoundCloud, via which,
inter alia
, users of the platform may upload audio content for others to hear. (cc)
“
Promotional Excerpt
” means a Creator Partner Upload consisting of an excerpt of a
sound recording embodying a Musical Work with a playing time that does not exceed ninety (90) seconds. (dd)
“
Publisher Interactive Stream
” means an Interactive Stream embodying a Musical Work.
(ee)
“
Publisher Limited Download
” means a Limited Download embodying a Musical Work.
(ff)
“
Publisher Metadata
” means all applicable metadata possessed by Publisher, including
the following identification data for each Musical Work: ISWC, song title, songwriter(s), publisher(s), Publisher ownership shares, and performing rights organization affiliation to the extent such identification data is maintained in the normal course and is in a format transmittable by Publisher. (gg)
“
Publisher Parties
” has the meaning set forth in paragraph 12(a).