This “Twenty-Second Amendment”) Dated As of April 5, 2013 (The “Amendment Effective Date”), Is by and Between Apple Inc
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TWENTY-SECOND AMENDMENT TO DIGITAL VIDEO DOWNLOAD DISTRIBUTION AGREEMENT This twenty-second amendment (this “Twenty-Second Amendment”) dated as of April 5, 2013 (the “Amendment Effective Date”), is by and between Apple Inc. (“Apple”) and Culver Digital Distribution Inc (as assignee of Sony Pictures Television Inc.) (“CDD”), and amends that certain Digital Video Download Distribution Agreement between Apple and CDD dated April 29, 2008 (Apple Contract No. 4622) (as amended, the “DHE Agreement”). Except as modified or defined herein, all capitalized terms in this Twenty-Second Amendment shall have the meanings set forth in the DHE Agreement. 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, notwithstanding anything to the contrary in the DHE Agreement, Apple and CDD (each, a “Party,” together, the “Parties”) hereby agree to amend the DHE Agreement as follows: A. HD. 1. Grant of Rights. In addition to the rights granted by CDD under the DHE Agreement and subject to the terms and conditions of the DHE Agreement and that certain Amended and Restated Seventeenth Amendment dated as of April 5, 2013 between the Parties (as amended, the “Seventeenth Amendment”), CDD grants a non-exclusive right to Apple during the Term to make Qualifying Movies (as defined herein) available in HD (as defined herein) in Latin America on a DHE basis via the Online Store. Unless otherwise mutually agreed upon by the parties, the grant of rights specified in this Section 1 shall in no event include the right to distribute any 3D version of a Qualifying Movie. A “Qualifying Movie” is any Movie made available by CDD to Apple for licensing under the DHE Agreement and this Twenty-Second Amendment; provided that, at a minimum CDD will make available to Apple for distribution in HD (i) each Movie classified as a “Tier 1” new release that is first released on Blu-ray disc during the Term from and after the Amendment Effective Date in such country so long as such title is cleared for delivery via the distribution means authorized pursuant to the DHE Agreement and (ii) the Movies specified on Exhibit A attached hereto. CDD agrees to make the Movies specified on Exhibit A available for no less than six (6) consecutive months and agrees that thereafter (i) the number of “library” titles provided hereunder shall be no lower than the number of Movies specified on Exhibit A and (ii) the Movies initially listed on Exhibit A may be replaced on a case-by-case basis and upon mutual agreement of the Parties. “HD” means any resolution that is (a) 1080 vertical lines of resolution or less (but at least 720 vertical lines of resolution) and (b) 1920 lines of horizontal resolution or less (but at least 1280 lines of horizontal resolution). In the case of a Qualifying Movie delivered to an end user in HD, CDD acknowledges that the Qualifying Movie also may include both an SD (as defined herein) and an HD version of the Qualifying Movie in order to accommodate efficient transfer and rendering of the Qualifying Movie on different devices. Additionally, for each Qualifying Movie available in HD format under the DHE Agreement, Apple may make the corresponding Clip available in HD format. “SD” means (a) for NTSC, any resolution equal to or less than 480 lines of vertical resolution (and equal to or less than 720 lines of horizontal resolution) and (b) for PAL, any resolution equal to or less than 576 lines of vertical resolution (and equal to or less than 720 lines of horizontal resolution). 1 2. Availability. The Availability Period for each Qualifying Movie shall start on the date determined by CDD in its sole discretion; provided that the start of the Availability Period for each Qualifying Movie first released on Blu-ray disc during the Term in Latin America that meets the criteria specified in Section 1 above shall be no later than the date on which CDD or its affiliate makes such Qualifying Movie available on a non-exclusive basis for sale to consumers on Blu-ray disc in Latin America. Notwithstanding the foregoing, CDD may elect, in its sole discretion, to make any Qualifying Movie, on a one-off basis, available for exclusive distribution through a single distributor in Latin America; provided that the foregoing shall not be used to frustrate the purposes of the DHE Agreement or the Seventeenth Amendment or this Twenty- Second Amendment. 3. Distributor Price. For each Customer Transaction involving a Qualifying Movie in HD, Apple shall pay to CDD the Distributor Price based on the tier selected for such Qualifying Movie in HD by CDD, as set forth below. (a) Distributor Price Tiers for DHE Distribution of Qualifying Movies in HD. Tier Distributor Price 1 (Available on Online Store US$19.50 for 0-6 months) 2 (Available on Online Store US$15.50 for 6-12 months) 3 (Available on Online Store US$10.50 for 12+ months) Subject to the terms of this Section 3(a), the Distributor Price for each Qualifying Movie in HD shall be determined by CDD in its sole discretion by categorizing such wholesale price within one of the wholesale price tiers set forth above. CDD agrees that no Qualifying Movie provided for delivery in HD through the Online Store will be categorized in a higher tier than that Qualifying Movie is categorized (and wholesale priced) in Blu-ray format anywhere in Latin America. Subject to the foregoing CDD may elect to hold pricing on any Tier for any such Qualifying Movie beyond the timelines set out above; provided further that Apple shall have the right to cease making available on the Online Store the HD version of such Qualifying Movie in the event CDD holds pricing on any such Tier for more than ninety (90) days beyond the applicable timeline for such Tier. Apple may in its discretion make available additional tiers (e.g., via iTunes Connect), which CDD thereafter may choose to select for particular Qualifying Movies (subject to any applicable rules set forth by Apple). If market forces (e.g., declining consumer spending, challenging economic environment) or a change in business strategy lead CDD to adjust its pricing for Movies sold in other HD formats (e.g., Blu-ray), CDD will in good faith explore possible adjustments to the Distributor Price Tiers for DHE Distribution of Qualifying Movies in HD. 4. Output Protection. For playback of Qualifying Movies in HD over an output on a Permitted Device, an HDCP connection must be established; provided that if an HDCP connection cannot be established, the playback of Qualifying Movies over an output on a Permitted Device must be 2 limited to a resolution no greater than SD. Notwithstanding the foregoing, an HDCP connection does not need to be established in order to playback Qualifying Movies in HD over a DVI output on any Permitted Device that is a personal computer manufactured on or before the later of: (i) 12/31/2011 and (ii) the DVI output sunset date established by the AACS LA. In addition, with respect to the playback of Qualifying Movies in HD over analog outputs on Permitted Devices that are manufactured after 12/31/2011, Apple shall either (i) prohibit the playback of such HD content over analog outputs on all such Permitted Devices or (ii) ensure that the playback of such content over analog outputs on all such Permitted Devices is limited to a resolution no greater than SD. Notwithstanding anything in the DHE Agreement, if Apple is not in compliance with this Section, then, upon CDD’s written request, Apple will temporarily disable the availability of Qualifying Movies in HD via the Online Store within thirty (30) days following Apple becoming aware of such non-compliance or Apple’s receipt of written notice of such non-compliance from CDD until such time as Apple is in compliance with this Section; provided that (i) if Apple is not in compliance with this Section solely in relation to non-Apple-branded Permitted Devices, then Apple may only disable the availability of Qualifying Movies in HD via the Online Store for such Permitted Devices and (ii) if the basis for non-compliance under this Section is a third party hack to HDCP, CDD may only require Apple to temporarily disable the availability of Qualifying Movies in HD via the Online Store if CDD requires all other DHE Providers that are distributing such titles in HD on a DHE basis to suspend such distribution. In the event that Apple becomes aware of non-compliance with this Section, Apple shall promptly notify CDD thereof; provided that Apple shall not be required to provide CDD notice of any third party hacks to HDCP. The foregoing shall constitute Apple’s sole obligation and CDD’s sole remedy from Apple in the event that Apple is not in compliance with this Section. 5. Security Robustness. With respect to the playback of Qualifying Movies in HD, Apple shall employ Licensor-approved technology designed to resist hacks such as a clock rollback, spoofing, use of common debugging tools, and intercepting unencrypted content in memory buffers. By way of example in order to qualify the level of desired protection, techniques may include, without limitation, code and data obfuscation, integrity detection, anti-debugging, and red herring code. CDD agrees that the level of security robustness, and the technology related thereto that is used by Apple, as of the Amendment Effective Date satisfies the foregoing requirements, is “Licensor-approved,” and that, provided the level of protection during the Term of the DHE Agreement is not less than the level of protection afforded on the Amendment Effective Date, any modifications to the security solution and other technology related to security robustness used by Apple shall also satisfy the foregoing requirements and be deemed “Licensor- approved.” 6.