SHAREHOLDER SUPPORT AGREEMENT
This
SHAREHOLDER SUPPORT AGREEMENT (this “Agreement”)
is
entered into as of September 14, 2008, by and among Best Buy Co., Inc., a
Minnesota corporation (“Parent”),
Puma
Cat Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of
Parent (“Merger
Sub”)
and
the holders of capital stock of Napster, Inc., a Delaware corporation
(“Company”)
identified on Exhibit
A
attached
hereto (each a “Shareholder,”
and
collectively the “Shareholders”).
RECITALS
In
order
to induce Parent and Merger Sub to enter into that certain Agreement and Plan
of
Merger, dated as of even date herewith, by and among Parent, Merger Sub and
Company (as amended from time to time, the “Merger
Agreement”),
Merger Sub has requested that the Shareholders, and the Shareholders have agreed
to, enter into this Agreement.
As
of the
date hereof, each Shareholder is the holder of the shares of Company capital
stock and/or options to purchase shares of Company capital stock listed opposite
such Shareholder’s name on Exhibit
A.
Capitalized
terms used but not separately defined herein shall have the meanings ascribed
to
them in the Merger Agreement.
AGREEMENT
NOW,
THEREFORE, the parties hereto agree as follows:
ARTICLE
1
Agreement
to Tender
Section
1.01 Agreement
to Tender.
Each
Shareholder agrees to validly tender or cause to be validly tendered pursuant
to
and in accordance with the terms of the Offer all of the shares of Company
capital stock that such Shareholder owns as of the date hereof, as well as
any
additional shares of Company capital stock that such Shareholder may own,
whether acquired by purchase, exercise of Options or otherwise, at any time
after the date hereof (collectively, the “Shareholder
Shares”).
Within ten (10) business days after the commencement of the Offer (or within
ten
(10) business days after any Shareholder Shares are acquired by Shareholder
during pendency of the Offer, if later), each Shareholder shall deliver to
the
depositary designated in the Offer all documents or instruments required to
be
delivered pursuant to the terms of the Offer. Each Shareholder agrees that,
once
its Shareholder Shares are tendered, such Shareholder will not withdraw any
of
such Shareholder Shares from the Offer, unless and until (i) the Offer shall
have been terminated by Merger Sub in accordance with the terms of the Merger
Agreement or (ii) this Agreement shall have been terminated in accordance with
Section 6.01.
ARTICLE
2
Voting
Agreement; Grant of Proxy
Section
2.01 Voting
Agreement.
(a) Until
the
Termination Date (as defined in Section 6.01 hereof), each Shareholder hereby
agrees to vote or cause to be voted all Shareholder Shares that such Shareholder
is entitled to vote at the time of any vote of the shareholders of Company
where
such matters arise (i) in favor of the approval and adoption of the Merger
Agreement and the Merger, (ii) against any proposal or transaction which could
prevent or delay the consummation of the Merger, and (iii) against any corporate
action which would frustrate the purposes of, or prevent or delay the
consummation of, the Merger.
(b) If
any
shareholder vote in respect of the Merger Agreement or the Merger is taken
by
written consent, the provisions of this Agreement imposing obligations in
respect of or in connection with any vote of shareholders shall apply
thereto.
(c) Each
Shareholder shall retain at all times the right to vote his or her Shareholder
Shares in such Shareholders’ sole discretion and without any other limitation on
those matters other than those set forth in this Section 2.01 that are at any
time or from time to time presented for consideration to the Company’s
shareholders generally.
Section
2.02 Proxy.
Except
with respect to any proxy delivered in connection with the Company’s 2008 annual
meeting of shareholders and then only to the extent such proxy is not
inconsistent with the
voting agreement set forth in Section 2.01 above,
each
Shareholder hereby revokes any and all previous proxies granted with respect
to
the Shareholder Shares. By entering into this Agreement, each Shareholder hereby
grants a limited irrevocable proxy, within the meaning of the DGCL, appointing
Merger Sub as such Shareholder’s attorney-in-fact and proxy, with full power of
substitution, for and in such Shareholder’s name, to vote, express consent or
dissent, or otherwise to utilize such voting power in such manner and upon
and
limited to only those matters described in Section 2.01 above, as Merger Sub
or
its proxy or substitute shall, in Merger Sub’s sole discretion, deem proper with
respect to the Shareholder Shares. The proxy granted by each Shareholder
pursuant to this Section 2.02 is irrevocable and is granted in consideration
of
Merger Sub’s entering into the Merger Agreement, and such irrevocable proxy
shall remain in effect until the Termination Date, notwithstanding the death
or
incapacity of such Shareholder. Such proxy shall be revoked on the Termination
Date. Each Shareholder intends this limited proxy to be irrevocable and will
take such further action and execute such other instruments as may be necessary
to effectuate the intent of such proxy, including, without limitation, filing
written notice thereof with the secretary of the Company or permitting Merger
Sub, as such Shareholder’s attorney-in-fact, to file a copy of this Agreement
with the secretary of the Company.
Section
2.03 Capacity.
Each
Shareholder is only obligating himself or herself in his or her capacity as
a
shareholder of the Company and not agreeing to take any action or forego taking
any action in his or her capacity as an officer or director of the Company.
Nothing contained in this Agreement shall be construed to prohibit any
Shareholder, solely in such Shareholder’s capacity as an officer or director of
the Company, from discharging such Shareholder’s obligations as an officer or
director, including, but not limited to, the exercise of fiduciary duties under
applicable law and all actions permitted under Section 5.10 of the Merger
Agreement.
Section
2.04 Shareholder
Obligations Several and Not Joint.
The
obligations of each Shareholder hereunder shall be several and not joint and
no
Shareholder shall be liable for any breach of the terms of this Agreement by
any
other Shareholder.
ARTICLE
3
Representations
and Warranties of Shareholders
Each
Shareholder represents and warrants to Merger Sub that:
Section
3.01 Valid
Title.
There
are no restrictions on Shareholder’s voting rights or rights of disposition with
respect to the Shareholder Shares, except securities Law requirements. None
of
the Shareholder Shares are subject to any voting trust or other agreement or
arrangement with respect to the voting of such Shareholder Shares (other than
this Agreement).
2
Section
3.02 Binding
Effect.
Assuming due and valid execution and delivery by Parent and Merger Sub, this
Agreement is the valid and binding agreement of Shareholder, enforceable against
Shareholder in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, moratorium or other similar laws relating to
creditors’ rights generally. The execution and delivery by Shareholder of this
Agreement does not, and the performance by Shareholder of Shareholder’s
obligations under this Agreement will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except where the failure to obtain such consent, approval,
authorization or permit would not materially interfere with Shareholder’s
ability to perform its obligations hereunder.
Section
3.03 Ownership
of Company Securities.
The
shares of Company capital stock and options to purchase shares of Company
capital stock set forth next to Shareholder’s name on Exhibit
A
hereto
are the only securities of Company beneficially owned by
Shareholder.
Section
3.04 Power
and Authority.
If
Shareholder is an individual, Shareholder has the full legal right and capacity
to execute and deliver this Agreement, perform Shareholder’s obligations
hereunder and consummate the transactions contemplated under this Agreement.
If
Shareholder is not an individual, Shareholder (i) is duly organized or formed,
validly existing and in good standing under the laws of its jurisdiction of
organization or formation, (ii) has the requisite power and authority to carry
on its business as it is now being conducted, and (iii) has all necessary power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated herein.
Section
3.05 Conflicting
Obligations.
The
execution and delivery of this Agreement and the performance of Shareholder’s
obligations hereunder do not, except to an extent that would not materially
interfere with Shareholder’s ability to perform its obligations hereunder, (i)
conflict with or violate any organizational or formation document of
Shareholder, (ii) conflict with or violate any law, rule, regulation, order,
judgment, writ, injunction, notice or decree applicable to Shareholder or by
which any property or asset of Shareholder is bound or affected, (iii) result
in
any breach of or constitute a default (or an event which, with notice or lapse
of time or both, would become a default) under, or give to others any right
of
termination, amendment, acceleration or cancellation under, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, loan or credit
agreement, franchise or other instrument or obligation, which may reasonably
be
expected to result in a transfer of ownership or voting control of any of such
Shareholder’s Shares, (iv) result in the creation of a lien or other encumbrance
on any of such Shareholder’s Shares, or (v) violate any applicable
Law.
ARTICLE
4
Representations
and Warranties of Parent and Merger Sub
Parent
and Merger Sub jointly and severally represent and warrant to Shareholders
that:
Section
4.01 Corporate
Power and Authority.
Each of
Parent and Merger Sub has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution,
delivery and performance by each of Parent and Merger Sub of this Agreement
and
the performance hereof have been duly authorized by the board of directors
of
each of Parent and Merger Sub and no other corporate action on the part of
either Parent or Merger Sub is necessary to authorize the execution, delivery
or
performance by Parent or Merger Sub of this Agreement. This Agreement has been
duly executed and delivered by each of Parent and Merger Sub and is a valid
and
binding Agreement of each of Parent and Merger Sub, enforceable against each
of
them in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to creditors’
rights generally.
3
ARTICLE
5
Covenants
of Shareholders
Each
Shareholder hereby covenants and agrees that:
Section
5.01 No
Proxies for, Sale of or Encumbrances on Shareholder Shares.
Except
pursuant to the terms of this Agreement and except with respect to any proxy
delivered in connection with the Company’s 2008 annual meeting of shareholders
and then only to the extent such proxy is not inconsistent with the voting
agreement set forth in Section 2.01 above, prior to the Termination Date,
Shareholder shall not, without the prior written consent of Merger Sub, directly
or indirectly, (a) grant any proxies or enter into any voting trust or other
agreement or arrangement with respect to the voting of any Shareholder Shares,
or (b) sell, assign, transfer, encumber or otherwise dispose of, or enter into
any contract, option or other arrangement or understanding with respect to
the
sale, assignment, transfer, encumbrance or other disposition of, any Shareholder
Shares during the term of this Agreement. Notwithstanding the foregoing,
Shareholder may transfer the Shareholder Shares (A) to a family member or trust
for estate planning purposes, provided that, as a condition to any such transfer
to a family member or trust, the transferee has agreed with Parent in writing
to
be bound by the terms of this Agreement (including granting a proxy as
contemplated hereby) and to hold such Shareholder Shares subject to all the
terms and provisions of this Agreement, (B) to the Company in connection with
the vesting of any restricted stock award and in accordance with the terms
of
the applicable stock incentive plan. Shareholder shall not seek or solicit
any
such sale, assignment, transfer, encumbrance or other disposition or any such
contract, option or other arrangement or understanding.
ARTICLE
6
Miscellaneous
Section
6.01 Termination. This
Agreement shall terminate automatically, without any notice or other action
by
any party, upon the earliest to occur of (x) the Acceptance Date, (y) the
consummation of the Merger, or (z) the termination of the Merger Agreement.
Each
Shareholder shall also have the right to terminate this Agreement immediately
following (i) any change in the nature of the consideration payable in the
Offer
or the Merger, (ii) any decrease in consideration payable in the Offer or the
Merger or (iii) any increase in the consideration payable to holders of
Shareholder Shares that is not made equally available to holders of all shares
of Company capital stock of the same class or series. The date of any
termination of this Agreement in accordance with this Section 6.01 shall be
referred to herein as the “Termination Date”. Notwithstanding the foregoing,
nothing set forth in this Section 6.01 or elsewhere in this Agreement shall
relieve any party hereto from liability, or otherwise limits the liability
of
any party hereto, for any breach of this Agreement. In the event that this
Agreement is terminated in accordance with its terms, Parent and Merger Sub
will
cause the Shareholder Shares to be promptly returned to
Shareholder.
Section
6.02 Expenses.
All
costs and expenses incurred in connection with this Agreement shall be paid
by
the party incurring such cost or expense.
Section
6.03 Additional
Agreements.
Subject
to the terms and conditions of this Agreement, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action and
to
do, or cause to be done, all things necessary, proper or advisable to effectuate
the intent of this Agreement, provided that no such action shall expand or
otherwise alter the obligations of Shareholder hereunder.
4
Section
6.04 Specific
Performance.
The
parties hereto agree that Merger Sub would suffer irreparable damage if for
any
reason any Shareholder failed to perform any of such Shareholder’s obligations
under this Agreement, and that Merger Sub would not have an adequate remedy
at
law in such event. Accordingly, Merger Sub shall be entitled to specific
performance and injunctive and other equitable relief to enforce the performance
of this Agreement by any Shareholder. This provision is without prejudice to
any
other rights that Merger Sub may have against each Shareholder for any failure
to perform such Shareholder’s obligations under this Agreement.
Section
6.05 Notices.
All
notices, requests, claims, demands and other communications hereunder shall
be
deemed to have been duly given when delivered in person, by cable, telegram
or
telex, or by registered or certified mail (postage prepaid, return receipt
requested) to such party at its address set forth on the signature page
hereto.
Section
6.06 Amendments.
This
Agreement may not be modified, amended, altered or supplemented, except upon
the
execution and delivery of a written agreement executed by the parties
hereto.
Section
6.07 Successors
and Assigns.
The
provisions of this Agreement shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and assigns; provided,
however,
that no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other parties
hereto; provided,
further,
that
Merger Sub may assign its rights and obligations to any affiliate of Merger
Sub
without any such consent.
Section
6.08 Governing
Law.
This
Agreement shall be construed in accordance with and governed by the law of
the
State of Delaware without giving effect to the principles of conflicts of laws
thereof.
Section
6.09 Counterparts/Electronic
Transmission.
This
Agreement may be executed in one or more counterparts, any of which may be
executed and transmitted by facsimile or other electronic method, and each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Signature
pages to follow]
5
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
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PARENT:
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Best
Buy Co., Inc.
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By:
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/s/
Xxxxx X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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Executive
Vice President, Connected Digital
Solutions
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Notice
Address:
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Best
Buy Co., Inc.
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0000
Xxxx Xxxxxx Xxxxx
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Xxxxxxxxx,
XX 00000
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Attention:
Xxxx X. Xxxxxxx, Esq.
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Facsimile:
(000) 000-0000
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With
a copy to:
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Robins,
Kaplan, Xxxxxx & Xxxxxx L.L.P.
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0000
XxXxxxx Xxxxx
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000
XxXxxxx Xxxxxx
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Xxxxxxxxxxx,
XX 00000-0000
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Attention:
Xxxx X. Xxxxxxx, Esq.
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Facsimile:
(000) 000-0000
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S-1
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MERGER
SUB:
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Puma
Cat Acquisition Corp.
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By:
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/s/
Xxxxx X. Xxxxxxx
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Xxxxx
X. Xxxxxxx
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Chief
Executive Officer
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Notice
Address:
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Puma
Cat Acquisition Corp.
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c/o
Best Buy Co., Inc.
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0000
Xxxx Xxxxxx Xxxxx
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Xxxxxxxxx,
XX 00000
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Attention:
Xxxx X. Xxxxxxx, Esq.
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Facsimile:
(000) 000-0000
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With
a copy to:
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Robins,
Kaplan, Xxxxxx & Xxxxxx L.L.P.
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0000
XxXxxxx Xxxxx
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000
XxXxxxx Xxxxxx
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Xxxxxxxxxxx,
XX 00000-0000
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Attention:
Xxxx X. Xxxxxxx, Esq.
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Facsimile:
(000) 000-0000
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S-2
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SHAREHOLDER:
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/s/
Xxxxxxxxxxx Xxxxx
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Xxxxxxxxxxx
Xxxxx
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Notice
Address:
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Xxxxxxxxxxx
Xxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-3
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SHAREHOLDER:
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/s/
Xxxxxx X. Xxxxxx
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Xxxxxx
X. Xxxxxx
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Notice
Address:
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Xxxxxx
X. Xxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-4
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SHAREHOLDER:
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/s/
Xxxxxx Xxxxxx
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Xxxxxx
Xxxxxx
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Notice
Address:
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Xxxxxx
Xxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-5
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SHAREHOLDER:
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/s/
Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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Notice
Address:
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Xxxxxxx
X. Xxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-6
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SHAREHOLDER:
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/s/
Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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Notice
Address:
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Xxxxxxx
X. Xxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-7
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SHAREHOLDER:
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/s/
Xxxxxxxx X. Xxxx
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Xxxxxxxx
X. Xxxx
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Notice
Address:
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Xxxxxxxx
X. Xxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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S-8
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SHAREHOLDER:
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/s/
Wm. Xxxxxxxxxxx Xxxxx
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Wm.
Xxxxxxxxxxx Xxxxx
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Notice
Address:
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Wm.
Xxxxxxxxxxx Xxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-9
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SHAREHOLDER:
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/s/
Xxxxxx X. Xxxxxxxxx
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Xxxxxx
X. Xxxxxxxxx
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Notice
Address:
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Xxxxxx
X. Xxxxxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-10
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SHAREHOLDER:
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/s/
Xxxxxx X. Xxxxxxxxxxx
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Xxxxxx
X. Xxxxxxxxxxx
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Notice
Address:
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Xxxxxx
X. Xxxxxxxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-11
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SHAREHOLDER:
|
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/s/
Xxxx Xxxxxxxxx
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Xxxx
Xxxxxxxxx
|
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Notice
Address:
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Xxxx
Xxxxxxxxx
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c/o
Napster, Inc.
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-12
|
SHAREHOLDER:
|
||
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/s/
Xxxxx X. Xxxxxxxx
|
||
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Xxxxx
X. Xxxxxxxx
|
||
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Notice
Address:
|
Xxxxx
X. Xxxxxxxx
|
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c/o
Napster, Inc.
|
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0000
Xxxxxxx Xxxxxx,
|
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Xxx
Xxxxxxx, XX 00000
|
||
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-13
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SHAREHOLDER:
|
||
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/s/
Xxxxxx Xxxxx
|
||
|
Xxxxxx
Xxxxx
|
||
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Notice
Address:
|
Xxxxxx
Xxxxx
|
|
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c/o
Napster, Inc.
|
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0000
Xxxxxxx Xxxxxx,
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Xxx
Xxxxxxx, XX 00000
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Facsimile:
(000) 000-0000
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Shareholder
Support Agreement
S-14
EXHIBIT
A
|
Shareholder
|
Stock Options
|
Unvested Restricted
Stock Awards
|
Common Stock
|
|||||||
|
Xxxxxxxxxxx Xxxxx
|
0
|
400,000
|
33,775
|
|||||||
|
Xxxxxx
X. Xxxxxx
|
43,750
|
5,859
|
3,516
|
|||||||
|
Xxxxxx
Xxxxxx
|
75,000
|
261,250
|
28,245
|
|||||||
|
Xxxxxxx
X. Xxxxx
|
50,000
|
5,859
|
5,516
|
|||||||
|
Xxxxxxx
X. Xxxxxx
|
0
|
235,355
|
29,218
|
|||||||
|
Xxxxxxxx
X. Xxxx
|
257,394
|
288,697
|
77,223
|
|||||||
|
Wm.
Xxxxxxxxxxx Xxxxx
|
1,755,267
|
957,858
|
381,149
|
|||||||
|
Xxxxxx
X. Xxxxxxxxx
|
31,250
|
5,859
|
13,516
|
|||||||
|
Xxxxxx
X. Xxxxxxxxxxx
|
60,000
|
7,031
|
11,719
|
|||||||
|
Xxxx
Xxxxxxxxx
|
0
|
10,546
|
5,079
|
|||||||
|
Xxxxx
X. Xxxxxxxx
|
38,750
|
7,031
|
11,719
|
|||||||
|
Xxxxxx
Xxxxx
|
60,000
|
7,031
|
28,622
|
A-1
