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Sony Music Entertainment

25 Madison Avenue

New York, New York 10010

Re: Spotify Equity/Sharing with Eligible Artist and Participants

Dear Participant:

On April 3, 2018 Spotify Technology S.A. was publicly listed for trading on the New York Stock Exchange.
Sony Music Entertainment (“SME”) owned 5.707% of Spotify equity (5.082% on a fully diluted basis) at
the time of the public listing. Since April 3rd, SME has sold a portion of the Spotify equity we owned.
Therefore we will share and pay such proceeds (“Spotify Net Proceeds”) with eligible artists and
participants as soon as possible, targeting to make payments before the end of August. Sharing will be
equally based upon each eligible artist’s or participant’s percentage of SME’s overall revenue and each
eligible artist’s and participant’s SME Spotify revenue during the period when the equity was held by SME.
Given the unprecedented value realized from this equity, payments will be made without recovery of
outstanding advances and recording costs, or other recoupable sums (i.e., without regard to recoupment)
and regardless of whether specifically required by contract. We hope that this is perceived as a gesture of
goodwill to our music creators.

Spotify Net Proceeds include all sums received by SME from the sale of its equity in Spotify less SME’s
actual costs related to the acquisition and sale of such equity, including acquisition costs and the cost of
disposition (e.g., advisor fees and legal fees).

SME obtained Spotify equity by, in part, balancing the strength of over one hundred years of SME’s history
and success, both the past and the present. Therefore we are going to use an allocation methodology
which equally weighs both SME’s overall revenue and SME’s Spotify revenue during the period SME held
the equity (“The Calculation Period”) to share Spotify Net Proceeds with eligible artists and participants.
We believe this allocation methodology gives proper recognition to those artists currently on roster and
in our catalog that were the foundation of SME when the Spotify equity was obtained. (Please see
Attachment A)

As SME has decided to make all payments regardless of recoupment and regardless of whether specifically
required by contract, each SME eligible artist and participant will receive a payment directly from SME as
soon as practicable following any future sales by SME of a portion of SME’s shares. The first such
payments is targeted to be going out to you before the end of August.
The benefit of the Spotify investment presented SME with a unique opportunity to pay additional
compensation to all of our eligible artists and participants. As we liquidate this holding in a disciplined
manner over time, we will continue to make payments to all of our eligible artists and participants in the
same way.

For questions on the above, you can reach out to your Label’s Business Affairs representative.

Best,

Sony Music Entertainment


ATTACHMENT A

The calculation will be as follows:

1. Fifty percent of the calculation will be based upon each eligible artist and participant’s percentage
of SME’s overall worldwide revenue during the Calculation Period (“The Overall Revenue
Percentage”). SME will determine The Overall Revenue Percentage for each eligible artist and
participant.

2. Fifty percent of the calculation will be based upon each eligible artist and participant’s percentage
of SME’s Spotify revenue during the Calculation Period (“The Spotify Revenue Percentage”). SME
will determine The Spotify Revenue Percentage for each eligible artist and participant.

3. SME will then apply The Overall Revenue Percentage to fifty percent of the Spotify Net Proceeds
and apply The Spotify Revenue Percentage to fifty percent of the Spotify Net Proceeds for each
eligible artist and participant. The sum of these two amounts will represent The Spotify Equity
Revenue Share for each eligible artist and participant.

4. SME will calculate each artist’s equity payment (hereinafter “The Spotify Equity Share”) by
applying The Spotify Equity Revenue Share with reference to the terms of each underlying eligible
artist’s and participant’s agreements.

5. The Spotify Equity Share will be paid directly without regard to recoupment and regardless of
whether specifically required by contract, to each eligible artist and participant.

6. The only deductions to The Spotify Equity Share will be for producer royalties and other payments
that each eligible artist and participant has directed SME to deduct. SME will pay those deducted
sums directly to producers and other participants.

7. Payments will be made as soon as practicable after SME has liquidated any of its Spotify shares.
These payments will not have to wait for the normal accounting period processing.
An example of how the above calculation will work is as follows:

The Overall Revenue Percentage = .50%

The Spotify Revenue Percentage = .33%

Spotify Net Proceeds = $750,000,000

Therefore The Spotify Equity Revenue Share is calculated as follows;

($750,000,000 x 50% x .50%) + ($750,000,000 x 50% x .33%) = $3,112,500

The Spotify Equity Revenue Share is then applied to the underlying agreements with the
eligible artists and eligible participants to arrive at The Spotify Equity Share.

If for example, an artist’s royalty rate is 16%, such artist’s Spotify Equity Share equals
$498,000 (less payments to producers and other royalty participants).

$3,112,500 x 16% = $498,000