Generated Fees of Phonogram Exploitation

In accordance to Art. 167 of the Act on Copyright and Related Rights (Official Gazette of the Republic of Serbia, no. 104/09, 99/11 and 119/12) and Art. 17 of the statute of the Organization of Phonogram Producers of Serbia – OFPS, Organization Assembly, at the meeting on 18.03.2010, at the meeting on 26.03.2011, at the meeting on 31.01.2013, at the meeting on 21.06.2014, at the meeting on 20.06.2015 , at the meeting on 13.12.2015 and at the meeting on 27.03.2016 has established a

DISTRIBUTION PLAN Generated Fees of phonogram exploitation (EDITED TEXT)

Distribution Plan consists of criteria based on which OFPS distributes revenues to right holders which has been generated as revenue from broadcast, re-broadcast, phonogram communication to the public, broadcast phonogram communicated to the public, as well as from separate fees, based on adopted Tariff, and the criteria are based on principles of proportionality, suitability and fairness.

The rights to distribution have the phonogram producers from the territory of the Republic of Serbia who have authorized OFPS to collect on their behalf revenues for the exploitation of phonograms.

The rights to distribution have the phonogram producers from the territory of the Republic of Serbia who have not authorized OFPS to collect on their behalf revenues for the exploitation of phonograms, in accordance with Art. 180 of the Act on Copyright and Related Rights.

The rights to distribution have the phonogram producers with head offices out of the territory of the Republic of Serbia who have authorized a domestic legal or physical entity to collect revenues for phonogram exploitation on their behalf or are members of foreign organizations of phonogram producers with which OFPS has concluded agreements, and based on those agreements. Phonogram producers from countries from territory of former Socialist Federative Republic of Yugoslavia (hereinafter: SFRY), except Republic of Serbia, acquire their right to distribution through collective societies protecting the rights of phonogram producers who are their members with whom OFPS has concluded bilateral agreements, except in cases where there is no collective society registered on the territory of that country, where they can authorize domestic legal or physical entity to collect remuneration on their behalf for phonogram exploitation. This regulation does not refer to phonogram producers from the territory of the Republic of Serbia who acquired their rights based on agreements with right holders of phonogram producers from the territory of former SFRY for phonograms published on the territory of the Republic of Serbia.

Distribution rules included in this Distribution Plan are equally implemented regarding all right holders who have embedded their rights with OFPS.

Art 3 Ceased.

Right holder registers the object of protection with the Organization in Excel Table which is an integral part of the Distribution Plan and which includes data entered in specified columns, as follows: 1. Correct name of interpreter of the published phonogram, 2. Correct title of published phonogram, 3. Phonogram duration in seconds, 4. Year of production, 5. Ownership of phonogram, 6. Producer (label), 7. Commencement of ownership duration, 8. Ending of ownership, 9. ISRC (owner among right holders), 10. Country of origin, 11. Year of first recording, 12. Phonogram producer.

Completed Excel Table is delivered to the Organization by mail, recorded on a CD and with printed list of phonograms for registration, where every page of the list must be signed, and for legal entities stamped by right holder (authorized person of the legal entity).

Right holder is under obligation to also deliver, beside the Excel Table (recorded on a CD and printed list of phonograms for registration) the following forms, which represent an integral part of the Distribution Plan:

- F1D form – for registration of domestic phonograms by legal entities, - F1S form – for registration of foreign phonograms by legal entities, - F2D form – for registration of domestic phonograms by physical entities, - F2S form – for registration of foreign phonograms by physical entities.

Above listed forms must include the following data:

1. Full business name of phonogram producer, name of legal representative and name of person who filled out the form, i.e. the authorized person 2. Office headquarters of legal entity and address of physical entity 3. Application ordinal number 4. Registration number of legal entity or PIN of physical entity 5. PIN of legal entity or ID card number of physical entity 6. Copy from SBRA (Serbian Business Registers Office), with data from registry valid on date of first application, for every subsequent application copy is submitted only in case of change in data 7. OP form (list of authorized signatories) for legal entities, valid on first application date, and for any subsequent application the form is submitted only if authorized representatives are changed or any other changes 8. Identification data (phone number, facsimile, e-mail address).

Right holder hereby guarantees, under full criminal accountability and material damage, that all data in application is correct and true and confirms authenticity of data by signature and seal.

To be eligible for distribution for any particular year, every right holder is under obligation to register phonograms with the Organization no later than 15th March of the following year.

Total fund for the distribution is determined by deducting from the total collected gross amount of remunerations the Organization expenses (total operating expenses), as well as the amount distributed to the organization for collective management of interpreter rights based on agreements. The outstanding amount after the deduction and after distribution of part of collected remunerations to the organization for collective management of interpreter rights represents the distribution fund of the Organization.

10% of the determined fund is allocated for cultural purposes. Fund amount for cultural purposes is distributed only for the broadcast of domestic phonograms for the purpose of enhancing domestic creativity, for the amount of 50% based on data supplied by right holders in regard to turnout of domestic phonograms on the market of reproduced phonogram copies on sound carriers and regarding digital distribution, and for the amount of 50% based on the new domestic phonograms registered which are exclusively published on sound carriers in the year to which the distribution relates and which are registered with the Organization. Funds for cultural purposes are distributed after final calculations. Managing Director and technical departments are under obligation to submit to substantiated calculation right holders, final calculation and the calculation of funds for cultural purposes regarding the domestic phonograms.

Domestic phonograms are phonograms produced in the territory of the Republic of Serbia.

Distribution Fund is determined by the Managing Director and the Accounting and Bookkeeping Department.

Funds acquired based on bilateral agreements with foreign organizations are distributed in accordance with reports on phonogram broadcasts submitted by foreign organizations. Unless reports on phonogram broadcasts are submitted, these funds are allocated in the fund for the following distribution and are distributed in accordance with criteria stipulated in this Distribution Plan.

The total distribution fund is further divided in four funds, as to amounts collected from certain categories of users:

- Fund I – amount equal to the amount received from users broadcasting the repertoire in relation to the total received remunerations for the year to which the distribution relates; - Fund II – amount equal to the amount received from users re-broadcasting in relation to the total received remunerations for the year to which the distribution relates; - Fund III – amount equal to the amount received from users communicating to the public in relation to total received remunerations for the year for which the distribution relates; - Fund IV – amount equal to the amount received from obligors of special fees and web radio and web TV in regard to total received remuneration for the year which the distribution relates.

Organization Managing Board decides on expenses at the beginning of the fiscal year. Decision can be changed in accordance with development policy and investment increase in certain business segments. Total expense amount for the protection of foreign phonograms is determined through agreements the Organization concludes with foreign organizations and is no subject to limitations of this Article.

INDIVIDUAL DISTRIBUTION

Distribution of acquired remuneration from phonogram use is carried out based on data collected from media service providers as lists of broadcast phonograms (hereinafter: Cue Sheets), as well as based on data submitted by right holders in regard to number of phonogram copies on sound carriers on the market and revenues on the territory of the Republic of Serbia as the result of phonogram sale and use on Internet platforms (download, streaming) (hereinafter: digital distribution).

Amounts from Fund I are distributed based on proper cue sheets delivered by media service providers.

Amounts from Fund II are distributed based on proper cue sheets delivered by media service providers re-broadcasting via cable, IPTV and satellite signals (DTH – direct to home).

Amounts from Fund III are distributed based on data delivered by right holders in regard to market share of reproduced phonograms on sound carriers and digital distribution and based on proper cue sheets delivered by radio media service providers in regard to the Broadcast Agreement Tariff and are within the category of musical and entertainment radio and providers of TV service broadcast via terrestrial or cable (IPTV and DTH) signals and which in regard to Broadcast Agreement Tariff are within the category of TV which have a repertoire presence over 75% (musical TV). These funds are divided to 50% to be distributed based on market share of reproduced phonogram copies on sound carriers and digital distribution and 50% based on proper cue sheets delivered by radio media service providers who in regard to Broadcast Agreement Tariff are within the category of musical and entertaining radios and TV media service providers broadcast via terrestrial or cable (IPTV and DTH) signals who in regard to Broadcast Agreement Tariff are within the category of TV which have a repertoire presence over 75% (music TV).

Amounts from Fund IV are distributed based on data delivered by right holders based on participation on the market of reproduced phonograms on sound carriers and digital distribution.

In the distribution process the organization is under obligation to treat right holders equally as they authorized the organization by agreement to execute collective realization of the related rights for phonogram producers and those right holders without such an agreement.

Art 7a

Calculation and distribution of remunerations realized by phonogram use is executed based on proper cue sheets submitted by media service providers, in accordance with Tariff Agreement with the representative user society for terrestrial/cable broadcasts, Act on Electronic Media and Law on Ratification of the European Convention of the over- border (foreign) television.

Proper cue sheet contains the following elements:

- Name of interpreter; - Phonogram title; - Broadcast date; - Duration of broadcast phonogram; - Note (if the phonogram is broadcast in movies, series, ads, sound screens, introductory music, background music, jingles, stage music, . . .).

Cue sheets are submitted only by electronic means, using Internet portal for cue sheets of OFPS, and based on instructions media service providers receive from OFPS in written form as well in accordance with general provision of the Organization regulating cue sheet submission.

Before using the Portal, media service provider is under obligation to register by filling out a user form including the following data:

- Full name of media service provider, as registered with the Agency for Business Registers; - Name of related channel on application, noting whether it is terrestrial or cable broadcast; - Name of authorized representative; - Contact data of media service provider (address, phone, e-mail, facsimile); - Registration number, PIN; - Authorized personnel of the media service provider who fill out and submit cue sheets and their contact data (e-mail, phone); - Signature of authorized personnel/representative certified by seal of media service provider. Cue sheets are submitted every day, and no later than the 15th of the month for the previous month. Distribution is based on all proper cue sheets submitted no later than 31.01. for the previous year.

Irregular cue sheet is every cue sheet which does not contain elements from Paragraph 2 of this Article. Regularity and thoroughness of cue sheets is determined by the department for cue sheet processing, based on data from Paragraph 2 of this Article and submitted cue sheets by media service providers.

In case media service provider submits an irregular cue sheet, department for cue sheet processing shall first and foremost inform media service provider in writing of cue sheet irregularity, with explanation of the irregularity and suggestion for the determined irregularities to be eliminated and submit to the Organization the corrected cue sheet within 10 days from receiving the information.

If the media service provider does not act in accordance with the notification of the department for cue sheet processing, it shall be deemed that media service provider has not fulfilled its obligation as stated in Art 187 Paragraph 5 of the Law on Copyright and Related Rights.

Art 7b

Remuneration calculation in Fund I – total distribution fund is divided between collected remuneration from TV and radio media service providers, in the following manner:

- For TV media service providers the percentage of total distribution fund corresponding to the percentage of collected remunerations from TV media service providers in relation to the total collected remuneration from media service providers (TV Fund); - For radio media service providers the percentage of total distribution fund corresponding to the percentage of collected remunerations from radio media service providers in relation to the total collected remuneration from media service providers (Radio Fund);

In the case where the same legal entity is both TV and radio media service provider, funds are allocated based on data from financial reports of the media service provider, revenue of media service provider (legal entity) of TV broadcasts and revenue of media service provider (legal entity) of radio broadcasts.

Proportion of collected remuneration from TV media service providers and radio media service providers is determined by the Managing Director in coordination with professional departments, in regard to reports by the Department for public broadcast on collected remunerations from TV media service providers and radio media service providers. Managing Director Decision on determining the proportion of collected remuneration from TV media service providers and radio media service providers is delivered to the Managing Board within 15 days from the enforcement date.

Distribution is carried out based on submitted cue sheets by RTV media service providers in accordance with the general act of the Organization which regulates the submission process of cue sheets, as well as by the Tariff Agreement concluded with the relating society of media service providers published in the Official Gazette of the Republic of Serbia.

Cue sheets from the TV and radio fund are classified in regard to number of residents covered by the media service provider, in such a manner that for every citizen the media service provider covers allocates broadcast value of 0.000001 points.

Total number of broadcasts is summed up in points, based on which the total amount of points is obtained for every right holder in every fund. Point value is obtained by dividing the distribution amount belonging to a certain fund with total number of broadcasts in points within that fund.

Such resulting value is multiplied by number of broadcasts in points, thus acquiring the amount with which the right holder participates in every fund. Sum from every fund is the amount of total participation of right holder in the distribution. Based on the sum with which the right holder participates in the distribution, the percentage of his total participation in the distribution is determined.

For the media service provider who has a permit for terrestrial broadcast and a determined zone of coverage in the permit and at the same time is broadcast and re- broadcast via cable, IPTV and satellite providers broadcasting via DTH signal (direct at home) platform by which they have a larger zone of coverage than the one determined in the broadcast permit, number of residents they cover is calculated through a larger zone of coverage, and if they cover different zones, total coverage zone is calculated by adding up number of residents within the coverage zones.

Broadcast value up to 30 seconds is 10% of the value of broadcast phonogram, from 30-60 seconds it is 20% of the broadcast value, from 60-90 seconds it is 30%, and over 90 seconds it is 100% broadcast value.

Value of phonograms used as stage music, background music and the like is valued up to 20% of the value of broadcast phonogram.

Coverage of number of residents by terrestrial media service providers and coverage of households by media service providers broadcasting and re-broadcasting programs via cable, IPTV and satellite via DTH (direct to home) signal platform are determined by the organization professional departments in accordance with the latest official available data of the Regulatory Body for Electronic Media, Republic Agency for Electronic Communications (RATEL), Statistical Office of the Republic of Serbia, as well as in accordance with the available data from websites of cable, IPTV and satellite re- broadcasters broadcasting via DTH (direct to home) signal platform and whose headquarters are on the territory of the Republic of Serbia, as well as in accordance with data submitted to the organization by re-broadcasters.

For the media service providers broadcasting and re-broadcasting programs via cable, IPTV and satellite via DTH (direct to home) signal platform, number of residents is determined by multiplying number of subscribers of the network operator providing media service of broadcasting/re-broadcasting with number of residents per household referring to the official data of Statistical Office of the Republic of Serbia and in accordance with Tariff Agreement for broadcasts of phonograms carrying interpretations for terrestrial/cable broadcasts.

Art 7c

If Managing Director and professional departments based on internal monitoring or independent monitoring have information and determine that media service provider has submitted cue sheets that are not credible, he shall call media service provider to make statement in that regard within 30 days from receiving the call and to verify credibility of submitted cue sheets in their statement.

If media service provider does not make a statement within the prescribed time limit or verifies credibility of submitted cue sheets, i.e. does not revise mistakes in cue sheets, data received regarding executed monitoring is filed for distribution in the next calculation.

Art 7d

Remunerations from Fund II is distributed based on proper cue sheets submitted within the time limit determined in this Distribution Plan by media service providers re- broadcasting via cable, IPTV and satellite via DTH (direct to home) signal.

Amount of 50% of collected remuneration from Fund III is distributed based on proper cue sheets delivered by radio media service providers who in regard to Broadcast Agreement Tariff are within the category of musical and entertainment radios and TV media service providers broadcast via terrestrial and cable (IPTV and DTH) signals who in regard to Broadcast Agreement Tariff are within the category of televisions represented repertoire of over 75% (music TV), delivered within the time limit regulated by this Distribution Plan. In Paragraphs 1 and 2 of this Article broadcasts from cue sheets for radio and TV media service providers are summed up and form a unique fund.

Provisions on cue sheet regularity and time limits for delivery of cue sheets from Art. 7a of this Distribution Plan are also implemented for cue sheets delivered by media service providers from Paragraphs 1 and 2 of this Article.

Cue sheets in TV and radio fund are assorted by the number of residents media service provider covers via cable, IPTV and satellite signals, and in the manner that for every resident media service provider covers allocated broadcast value is 0.000001 points. Total number of broadcasts is summed up in points, based on which the total amount of points is obtained for every right holder in every fund.

Broadcast value up to 30 seconds is 10% of the value of broadcast phonogram, from 30-60 seconds it is 20% of the broadcast value, from 60-90 seconds it is 30%, and over 90 seconds it is 100% broadcast value.

Value of phonograms used as stage music, background music and the like is valued up to 20% of the value of broadcast phonogram.

Coverage of number of residents by terrestrial media service providers and coverage of households by media service providers broadcasting and re-broadcasting programs via cable, IPTV and satellite via DTH (direct to home) signal platform are determined by the organization professional departments in accordance with the latest official available data of the Regulatory Body for Electronic Media, Republic Agency for Electronic Communications (RATEL), Statistical Office of the Republic of Serbia, as well as in accordance with the available data from websites of cable, IPTV and satellite re- broadcasters broadcasting via DTH (direct to home) signal platform and whose headquarters are on the territory of the Republic of Serbia, as well as in accordance with data submitted to the organization by re-broadcasters.

For the media service providers broadcasting and re-broadcasting programs via cable, IPTV and satellite via DTH (direct to home) signal platform, number of residents is determined by multiplying number of subscribers of the network operator providing media service of broadcasting/re-broadcasting with number of residents per household referring to the official data of Statistical Office of the Republic of Serbia and in accordance with Tariff Agreement for broadcasts of phonograms carrying interpretations for terrestrial/cable broadcasts.

Such resulting value is multiplied by number of broadcasts in points, thus acquiring the amount with which the right holder participates in the distribution.

Art 7e Amount of 50% from Fund III and Fund IV are distributed based on data submitted by right holders in accordance with participation on the market of reproduced copies of phonograms on sound carriers and digital distribution.

Implementation of criteria on the market of reproduced copies of phonograms on sound carriers and digital distribution on the territory of the Republic of Serbia (digital distribution) is determined based on precise indicators from documents submitted by each phonogram producer, namely: data of net wholesale value of all reproduced copies of phonograms on sound carriers and digital distribution exclusively for the year market share is registered, regardless of invoice date..

For the purpose of proving physical sale and digital distribution every phonogram producer is under obligation to submit data on net wholesale value of all sold reproduced phonograms on sound carriers, as well as net wholesale value acquired by sale and exploitation of phonograms via digital distribution, with specifying title of phonogram and interpreter, acquired from the entity providing the digital distribution service with which the phonogram producer has a concluded agreement and through which revenues are realized from digital distribution on the territory of the Republic of Serbia, i.e. provider. In the case where a third party which has not registered phonograms with the Organization is importing and distributing phonograms, physical or digital, market share is allocated to the right holder who registered the phonograms with the Organization, regardless of whether they are a legal orb physical entity.

Market share principle is based on data submitted by right holders, and relate to charged value of domestic and foreign reproduced copies of phonograms on sound carriers and on digital distribution of domestic and foreign phonograms, and consists of simple adding of all single regular right holder registrations, and such a number is divided by the total fund determined for Fund III (50% Fund III amount is distributed based on proper cue sheets of radio media service providers who in regard to Broadcast Agreement Tariff are within the category of musical and entertainment radios and TV media service providers broadcast via terrestrial and cable (IPTV and DTH) signals who in regard to Broadcast Agreement Tariff are within the category of TV which haave repertoire representation of over 75% (musical TV) and 50% based on participation on the market of reproduced copies of phonograms on sound carriers and digital distribution) and Fund IV (100% from Fund IV is distributed based on the market of reproduced copies of phonograms on sound carriers and digital distribution).

Right holder distribution participant as per Funds III and IV, by applying the principle of market share participation is under obligation to submit to the organization a regular application on a CD no later than March 31st of the current year for the previous year. Regular application implies submission of following documents: - Closing list relating to sale of reproduced copies of phonograms on sound carriers and digital distribution on 31.12., for the relative distribution year, signed by authorized person and stamped, - Specification by phonograms on CDs which were an integral part of published albums or singles sold by physical sale on sound carriers or digital distribution. Specification implies data on phonogram title and name of interpreter/performer.

Managing Director is under obligation to post on the website of the Organization no later than January 15th the application form for market share, with the invitation to right holders to submit a proper application for the previous year no later than March 31st of the current year. Applications submitted after this time limit shall not be taken into consideration.

If a participant in the distribution as a unique legal entity also has a retail store and sells sound carriers, and besides has a wholesale of sound carriers whose owners are other right holders, he is obligated in the registration process to state market share only for his own phonograms he registered with the Organization and which were located on the published sound carriers. If the participant in the distribution, as a unique legal entity, is also a provider for digital distribution, he is obligated to state market share only for digital distribution of his own phonograms he registered with the Organization.

Managing Director forms a Commission from representatives of professional departments, employees from the financial and legal departments, three members, and determining the Presiding of the Commission.

The Commission shall inspect relevant documents relating to market share before determining the final calculation for the previous year.

The Commission can suggest to the Managing Director of the Organization to engage an independent auditor.

After inspecting documents of right holders who submitted market share, Commission prepares a report which it submits to the Supervisory Board, which shall, if after inspecting the report determines certain irregularities, instruct the Commission to correct the same within 30 days from receipt of the decision. If the Supervisory Board after receiving additional report from the Commission makes a reasoned decision that the Commission has not adequately determined the situation that reasoned decision it shall deliver to the Managing Board for further deciding. Decision of the Managing Board must be reasoned and delivered to the Managing Director. Managing Director is obligated to deliver the Decision to the right holder it relates to within 8 days from the date of the Decision by the Managing Board. Right holder to which the Decision relates to have the right to file a complaint against the Managing Board Decision to the Managing Board within 15 days from date of receipt. Managing Board is obligated to make a final reasoned decision on the next session in regard to the right holder complaint, provided that before the final decision it can request an opinion from the Supervisory Board, informing them of the submitted complaint by the right holder to which the final Decision shall relate to. Final Decision of the Managing Board is delivered to the right holder within 8 days from the date of adoption.

Applications for charged funds are not accepted for market share if the funds are paid based on advance invoices where there is no proof of phonogram sale on sound carriers or digital distribution service. Market share applications are also not accepted if they relate to reproduced copies of phonograms on sound carriers which are donated with another product based on a sponsorship agreement where the final seller donates a sound carrier with his product (this does not relate to combined sale of the product and sound carrier sold as a combined sale regarding sale cooperation agreement) or regarding digital distribution where phonograms are assigned to a provider by right holder through sponsorship agreement and where provider based on that agreement does not submit a statement to the right holder.

Managing Board shall regulate issues regarding distribution of market share based on principles determined in this Distribution Plan by a special Rulebook.

Right holder who is a physical entity and has reported market share is obligated to enable document inspection with legal entities on the territory of the Republic of Serbia who execute physical sale of sound carriers and digital distribution for the repertoire he registered with the Organization. This provision also relates to legal entities which registered market share, and other legal entities sell their phonograms on sound carriers through physical sales on published albums or singles and execute digital distribution.

Right holder, who registered market share, during the inspection by the Commission, is obligated to, at the request of the Commission; submit for inspection all relevant documents which proves regularity of its market share registration.

Right holder, who registered market share, at the Organization request that the Commission makes an inspection, obstructs the inspection of the market share registration, i.e. does not provide relevant proof relating to the market share registration for inspection by the Commission, the relevant registration shall not be taken into consideration when determining participation in the distribution of that right holder.

Ceased.

Art 9 In regard to registered phonograms by right holders and list of broadcast phonograms from media service providers, as well as reported phonogram copies on sound carriers and digital distribution, Managing Director of the Organization, based on reports from professional departments, determines participation of every participant in the distribution providing a substantiated calculation, with instructions to legal remedy, of the right to complain on calculations to the Commission for the resolution of complaints of calculations, within 60 days from receiving the substantiated calculation, as well as the right to inspect documents within 60 days from receiving the substantiated calculation. Commission for the resolution of complaints of calculations is established by the Managing Director within 8 days from the amendments of the Distribution Plan entering into force, and shall consist of three members, one from the Legal Department, one from Department for cue sheet and phonogram processing and one from the Accounting Department.

If a participant in the distribution does not submit a complaint within the time limit, it shall be deemed that the calculation is accepted.

Commission for the resolution of complaints of calculations decides on the complaint to the substantiated calculation and delivers a written substantiated decision to the claimant within 15 days from the receipt of complainant. Participant in the distribution has the right to file a complaint against the decision of the Commission for the resolution of complaints to the Managing Board within 15 days from receiving the Commission decision. Managing board decides on the complaint to the Commission at the first session from the date of receiving the complaint to the decision of the Commission. Managing Director and professional departments shall deliver the Managing Board Decision to the complainant within 15 days from the date of the decision.

As per decision of the Managing Board on claims, substantiated calculations are considered final. After resolving claims to substantiated calculations by right holders, i.e. the decision by the Commission for resolving claims to calculations, and identification of phonograms from the phonogram list whose right holders were not identifier within 60 days from receiving the list, Managing Director delivers the final calculation to all distribution participants. Time limit for delivery of final calculation for the previous year is no later than 31.12. of the current year. After conclusion of the final calculation procedure, Managing Director of the Organization informs foreign organizations which have concluded bilateral agreements with OFPS of their participation in the distribution, and in accordance with provisions of the concluded bilateral agreements.

In the case the complaint was filed by a member of the Managing Board, that member is not entitled to vote on the decision of his complaint.

Distribution participants are presented with calculation sheets, which are not substantiated and upon which the distribution participants have no right to complaints. Time limit to submit the final calculation for the previous year can be extended for objective and technical reasons for no more than 90 days.

Art 10

Every distribution participant has the right to inspect the documents, in accordance with the Regulative on inspection of documents regarding the distribution of remunerations realized from phonogram use.

Documents regarding remuneration distribution are kept in the OFPS archive at least 3 years.

During the inspection of the documents Managing Director and professional departments are under obligation to present information to distribution participants on media service providers which submitted cue sheets, which cue sheets are proper, which ones are not accepted due to irregularities, cue sheets submitted out of the prescribed time limits, as well as which media service providers did not submit cue sheets.

During the inspection of the documents Managing Director and professional departments are under obligation to make available to the distribution participant to inspect cue sheets as they were delivered, as well as all other documentation regarding the distribution procedure.

Distribution participants who filed complaints against substantiated calculations, as well as those who did not file one but recognized phonograms whose right owners were not determined only in part regarding phonograms whose right owner was not determined, have the right to inspect the documents within 30 days from the date of receiving the final calculation, as well as the right to file a complaint against the final calculation to the Commission for resolving complaints to calculations within 30 days from the date of receiving the final calculation.

Commission for resolving complaints to calculations decides on the complaint to calculations and sends the written substantiated decision to the complainant within 15 days from receiving the complaint. Distribution participant has the right to file a complaint against the Commission Decision to the Managing Board within 15 days from receiving the Commission Decision. Managing Board decides on the complaint to the Commission Decision at the first Board session after receiving the complaint on the Commission Decision. Managing Director and professional departments shall send the Managing Board Decision to the complainant within 15 days from the decision. In the case the right holder's complaint to the final calculation was accepted by the Commission for resolving complaints to calculations or by the Managing Board, calculation and refunds are made through a substantiated account at the next distribution.

Art 11

Distribution is based on documentation presented to the right holder by the Organization in accordance with the Distribution Plan and data on the use of protected material, submitted by media service providers, in accordance with the Tariff Agreement concluded with relative organization of terrestrial/cable broadcast users, the Law on Electronic Media and the Law on Ratification of the European convention for Trans frontier Television.

Art 12

All data regarding realized remunerations are a trade secret for everyone, and can only be disclosed at request to the relevant right owner or at request of the competent state authority.

Art 13

In accordance with the Agreement on business cooperation for collection of integral fee (Official Gazette of the Republic of Serbia, no. 45/10, 1/11 and 1/13), the Organization collects the integral fee (remuneration) for phonogram producers and interpreters and distributes the remuneration to the Organization for Collective Administration of Performers’ Rights – PI. Payment fees of the integral remuneration are determined by the Agreement on business cooperation for collection of integral fee.

Art 14

In case the same phonograms are registered by a foreign organization which has concluded an agreement with OFPS and by a representative of a foreign right holder, remuneration based on use of those phonograms is paid to the representative of the foreign right holder based on registered repertoire, except when determined otherwise by a bilateral agreement.

30 days from verifying the signed bilateral agreements by the Assembly, Managing Director and professional departments are under obligation to deliver the Organization repertoire to relating organizations with which the agreements are concluded and verified by post and on a CD. At written request from a foreign organization with which OFPS does not have a signed bilateral agreement, Managing Director and professional departments are under obligation to deliver the Organization repertoire within 15 days from receiving the request. Art 15

After closure of processing procedure of cue sheets, accompanied with substantiated calculation, phonograms for which right holders were not determined during the processing procedure are sent within 15 days from the procedure by post on a CD to all Organization members, license representatives, foreign organizations having a concluded bilateral agreement with the Organization, and are at the same time summoned, within 60 days from receiving phonogram lists whose right holders have not been determined, to declare and submit to the Organization list of phonograms for which they claim to be right holders. List of phonograms whose right holders were not determined is posted on the website of the Organization, and remains on the site for minimum 60 days from posting date.

Phonograms where right holders are determined based on right holder declaration are included in the distribution of the final calculation or shall be calculated in the next subsequent distribution if the declarations were submitted after the time limit for their identification, and no later than 60 days before the time limit for submission of the substantiated calculation for the first subsequent distribution.

After expiration of the time limit for identification of phonograms whose right holders were not determined, and no later than forming the substantiated calculation, professional departments shall strive to determine right holders for the remaining phonograms from the list of phonograms whose right holders were not determined. All phonograms from the phonograms whose right holders were not determined which are recognized until the forming of the substantiated calculation for the next distribution, as well as disputable phonograms that are resolved until the forming of the substantiated calculation, are included in that substantiated calculation. Data on phonograms from the list of phonograms whose right owners are not determined that are not identified, i.e. right holder is not determined within 1 year from determining the phonogram list whose right holders are not identified, after delivery of the substantiated calculation, shall be destroyed by the Commission established by Managing Director of the Organization.

In the case a right holder files a request regarding a phonogram whose right holder is not determined who is not a member of the organization and has registered their repertoire after expiration of the time limit for determining phonograms whose right holder is not determined and no later than 15.04. of the next year and for the purpose of forming a substantiated calculation for the following distribution, Managing Director shall, in the coordination with professional departments, within 15 days from receiving the request, send to that right holder the phonogram list whose right holders were not determined downloaded on a CD. Right holder is under obligation, within 30 days from receiving the list, to submit to the organization its identified phonograms, which shall be calculated in the next subsequent substantiated calculation. Substantiated calculation and its audit is formed within 6 month from expiration of year to which the distribution relates. Audit report is submitted to all distribution participants and posted on the website of the organization.

Art 16

All distribution participants (legal entities) are under obligation, upon receipt of the calculation list for a specific period, to submit invoices to the Organization regarding remunerations from phonogram exploitation, based on which the Accounting Department makes payments of remunerations realized from phonogram exploitation.

Right holders who are physical entities are presented with calculations based on which they are reimbursed in gross amount.

In the case that the distribution participant does not deliver an invoice to the Organization based on the received calculation list, monies presented in this calculation list are kept on the account of the Organization until the end of the ongoing distribution and until the date of the next regular or emergency session of the Assembly taking place after the ongoing distribution is finalized, and where it shall be decided on distribution of these monies.

Provisions of this Article also relate to right holders who are not members of the Organization.

Managing Board can make a decision on advance payments to distribution participants. Advance payments are made based on participation in the distribution determined in the previous final calculation.

Right holder may file a request to the Managing Board for advance payment approval in accordance with distribution participation of the claimant determined in the previous final calculation. Managing Board is under obligation to make the decision within 30 days from receiving the request. The payment in the next subsequent calculation is reduced for the previous advance payments. If the right holder filing the advance payment request has overpaid regarding the distribution based on the last final calculation, he may be granted an advance payment up to the difference between the advance payment and the final calculation for the previous year.

In the case that a right holder files a request for an advance payment, having acquired rights for domestic or foreign catalogue by a licensing agreement, but in which duration of license is not clearly defined, it is necessary to submit consent of licensor stipulating his having the right to remuneration regarding the distribution for which the advance payment applies. The Consent is submitted in the original form with letterhead of the licensor, and if the consent is in a foreign language it is necessary to submit a translation from a certified court interpreter.

Art 17

In the event of a dispute where two or more right holders register one and the same phonogram, based on which distribution monies shall not be paid, until the dispute resolution in accordance with the General Act of the Organization regulating the resolution of disputed phonograms.

In the case of a mistaken identified right to remuneration for phonograms and wrong remuneration payment, right holder who incorrectly registered a phonogram and based on that received remuneration is under obligation to directly return the disputed amount to the correct right holder to remuneration within 60 days from receiving the decision of the managing Director which stipulates the incorrect remuneration payment. After determining the incorrect payment, Managing Director can within 15 days from determining the mistake suggest to the Managing Board to make a different decision, namely that this right holder be restricted payment of the paid remuneration from the next subsequent distribution, and that the incorrect payment be treated as advance payment paid to the right holder. Managing Board is under obligation to make a decision upon suggestion by the Managing Director within 30 days from receiving the same.

In the case that a right holder receives an incorrect remuneration payment, and meanwhile transferred rights to phonograms for which remuneration was paid to another legal or physical entity with which it is a related party, or the connection can be unambiguously determined, this other person is under obligation to return the disputed amount to the correct right holder within 60 days from receiving the decision of the Managing Director which stipulates that the remuneration paid was incorrect.

In the case this other person does not return the disputed amount to the correct right holder within 60 days from receiving the decision, Managing Director of the Organization is under obligation to suspend this amount from the next subsequent distribution for the right holder to which the phonograms were transferred and for which incorrect remuneration was paid.

In the case the phonograms that are subject to litigation are transferred from right holder who legally loses the case, to another right holder which is a related party to the transferee, the right holder which has acquired rights to these phonograms is obligated to pay remuneration to the right holder who won the dispute in regard to the above paragraphs of this Article.

Art 18 Amounts invoiced in 2007, 2008 and 2009, and which were written off after 01.01.2010 as result of removal of user from the register of business entities or closed court proceedings to the detriment of the organization, as well as the amounts paid based on these invoices starting with 01.01.2010, as well as the difference of paid and unpaid interests starting with 2010, can, by the decision of the Managing Board, be reduced for those right holders participating in distributions if the Managing Board determines there is a necessity for reduction of the distribution funds, for the amount which was in the distribution before 2010 and starting with 2010 and is determined by the Managing Director and professional departments, as well as for the interest amount determined by the Managing Director and professional departments.

Managing Director and Accounting Department are under obligation to determine the correct amounts from the previous paragraph of this Article until 31.05.2016 and inform the Managing Board of the Organization.

Amounts invoiced in 2007, 2008 and 2009, and which were written off after 01.01.2010 as a result of erasing of users from the Registry of Business Entities or finalized disputes at the detriment of the organization, the amounts that were charged regarding those invoices starting with 01.01.2010, as well as the difference between paid and unpaid interests starting with 2010, can be reduced in the distribution to right holders based on the decision of the Managing Board if the Managing Board determines that it is necessary to reduce the distribution funds, for the amount which was in the distribution before 2010 and starting with 2010 and be determined by the Managing Director and professional departments, as well as for the interest amounts determined by the Managing Director and professional departments.

INDEPENDENT ARTICLES OF AMENDMENTTS TO THE DISTRIBUTION PLAN DATED 27.03.2016

Deadline to register market share from Art. 7e, Paragraph 5 of the Distribution Plan for the distribution for 2015 is prolonged until 30.04.2016. Within three days from the passing of the Amendments of the Distribution Plan from 27.03.2016, Managing Director shall inform all right holders to register market share for 2015 in accordance with the Amendments to the Distribution Plan dated 27.03.2016.

Phonograms for which the organization did not receive data on publication year from the right holders or did not find data on publication date shall not participate in the distribution, but if right holders submit this data within three years or the organization determines the year, these phonograms if they are in the protection time limit shall be calculated in the next following calculation. This provision is in force starting from the distribution for 2014.

Amendments to the Distribution Plan for remunerations acquired from phonogram exploitation are passed at the Organization Assembly sessions during 2015 are implemented starting with the distribution for 2015.

Art 10

Article 1 of the Amendments to the Distribution Plan from 27.03.2016 is implemented starting with the distribution for 2016.

Within a year the Organization shall coordinate concluded bilateral agreements with Art. 1 of the Amendments to the Distribution Plan form 27.03.2016.

CHAIRMAN OF THE ASSENBLY

______Branislav Stojanovic

NAPOMENA: Distribution Plan for remunerations collected for the use of phonograms adopted on 18.03.2010 ref. 459/10, is amended on 26.03.2011 ref. 826/11, 31.01.2013 ref. 262/13, on 21.06.2014 ref. 3786/14, on 20.06.2015 ref. 3719/15, on 13.12.2015 ref. 6993/15, and on 27.03.2016. ref. 1241/16 and the amendments were posted on the noticeboard of the Organization on the date of the adoption and entered into force on the eight day from the posting on the noticeboard, except Amendments from 27.03.2016 which entered into force on the date of passing.