ACX Royalty Payment Terms and Procedures for Rights Holders Pay-for-Production Deals: Audible Non-Exclusive Distribution Rights

Version 2.7 (03/26/2020)

Payment Terms

These ACX Royalty Payment Terms and Procedures for Rights Holders, Pay-for-Production Deals (Audible Non-Exclusive Distribution Rights) ("Royalty Terms") set forth the terms by which Audible will calculate and pay royalty payments owed to Rights Holder in connection with Audible's distribution of any Audiobook based on Rights Holder's Book ("Royalties"), as set forth in the Book Posting Agreement that Rights Holder agreed to when posting the applicable Book on ACX. These Royalty Terms form a part of the ACX Book Posting Agreement. Capitalized terms used in these Royalty Terms but not defined have the meaning assigned to such terms in the ACX Book Posting Agreement.

Audible will pay Royalties to Rights Holder only on Audible Net Sales Receipts (as defined below) it receives from sales of the Audiobook.

Audible will calculate Royalties using the Royalty Rate below. Audible will calculate and report all Royalties based solely on sales of the Audiobook, without combining such sales with sales of other audiobooks produced through ACX.

Royalty Rates for Rights Holders under Pay-for-Production Deals (Audible Non-Exclusive Distribution Rights)

Audible will pay the Rights Holder 25% of all A La Carte Net Sales Receipts and 25% of all Member Net Sales Receipts from sales of the Audiobook.

Royalty Calculation

During the Distribution Period, Audible will pay the Rights Holder the Royalty set above. For purposes of this agreement, Audible Net Sales Receipts consist of: (i) A La Carte Net Sales Receipts (as defined below) for all a la carte sales of the Audiobook, and (ii) Membership Net Sales Receipts (as defined below) for all sales of the Audiobook to customers who are members of one of Audible's membership programs, in each case, during the immediately preceding monthly period. No Royalty will be paid on the transmission or distribution of downloads or other copies of the Audiobook distributed for free for purposes of review, sample, advertising, publicity or promotion.

"A La Carte Net Sales Receipts" means the monetary amount received by Audible from a la carte sales of each Unit, less any cash incentives, promotional discounts, sales or use taxes, excise taxes, value-added taxes, duties, and returns.
"Membership Net Sales Receipts" means, for each Unit, the monetary amount obtained by multiplying the AudibleListener Allocation Factor (as defined below) by Audible's a la carte price for the Unit at the time the AudibleListener Allocation Factor is calculated.
The "AudibleListener Allocation Factor" means the total of all membership sales receipts derived from sales of all content sold by Audible in the applicable accounting period, less any cash incentives, promotional discounts, device subsidies or rebates, sales or use taxes, excise taxes, value-added taxes, duties and returns, divided by the total a la carte value (as determined by Audible's applicable a la carte price for the Audiobook at the time the AudibleListener Allocation Factor is calculated) of the membership sales of all content sold by Audible in the applicable accounting period.

Royalty Statements and Payments.

For Rights Holders residing in the United States, Audible will provide Rights Holder a statement of Royalties, together with a check or direct deposit in the amount of any Royalty due, on a calendar monthly net 30 day basis, commencing with the first full month after the Audiobook is first offered for sale by Audible. For Rights Holders residing in the United Kingdom, Canada, or the Republic of Ireland, Audible will provide Rights Holder a statement of Royalties together with a direct deposit in the amount of any Royalty due, on a monthly net 30 day basis, commencing with the first full month after the Audiobook is first offered for sale by Audible; provided, however, that payments to Rights Holders residing in Canada or the Republic of Ireland with respect to Audiobooks first offered for sale by Audible in June of 2017 will commence not later than August 31, 2017. All payments made by Audible will be inclusive of any applicable VAT or equivalent applicable sales tax. Audible may deduct or withhold any taxes that Audible may be legally obligated to deduct or withhold from any amounts payable to you, and payments as reduced by such deductions or withholdings will constitute full payment and settlement to you. You will provide Audible with any forms, documents, or certifications as may be required for Audible to satisfy any information reporting or withholding tax obligations with respect to any payments. Rights Holders and Producers are solely responsible for their own compliance with all applicable tax laws, including but not limited to the Canadian Excise Tax Act, and the payment of any applicable taxes. If the Royalties owed to Rights Holder for any accounting period are less than $50, Audible will have the right to withhold making a payment and carry such payment forward to the next reporting period. Any ACX royalty statements Audible provides Rights Holder will be considered final and incontestable 3 months from the date the statements are provided by Audible if Rights Holder does not object to the statements within that period of time.