STOCKHOLDER AGREEMENT among RHAPSODY INTERNATIONAL INC., REALNETWORKS, INC., REALNETWORKS DIGITAL MUSIC OF CALIFORNIA, INC., VIACOM INTERNATIONAL INC. and DMS HOLDCO INC. Dated as of March 31, 2010
Exhibit 10.1
EXECUTION VERSION
among
RHAPSODY INTERNATIONAL INC.,
REALNETWORKS, INC.,
REALNETWORKS DIGITAL MUSIC OF CALIFORNIA, INC.,
VIACOM INTERNATIONAL INC.
and
DMS HOLDCO INC.
Dated as of March 31, 2010
TABLE OF CONTENTS
Page | ||||
ARTICLE I Definitions |
2 | |||
Section 1.01. Certain Defined Terms |
2 | |||
Section 1.02. Other Definitional Provisions |
5 | |||
ARTICLE II Corporate Governance |
5 | |||
Section 2.01. Board Composition |
5 | |||
Section 2.02. Composition of Committees of the Board |
7 | |||
ARTICLE III Transfer of Shares |
7 | |||
Section 3.01. Restrictions on Transfer |
7 | |||
Section 3.02. Permitted Transfers |
8 | |||
Section 3.03. Compliance with Transfer Provisions |
8 | |||
Section 3.04. Legend |
8 | |||
Section 3.05. Right of First Offer |
9 | |||
Section 3.06. Drag-Along Right |
10 | |||
Section 3.07. Preemptive Right |
11 | |||
ARTICLE IV Additional Covenants |
12 | |||
Section 4.01. Actions Requiring Consent |
12 | |||
Section 4.02. Registration Rights |
13 | |||
Section 4.03. Information Rights |
13 | |||
Section 4.04. Annual Audit |
14 | |||
Section 4.05. Access Rights |
14 | |||
ARTICLE V Term |
15 | |||
Section 5.01. Term |
15 | |||
ARTICLE VI General Provisions |
15 | |||
Section 6.01. Notices |
15 | |||
Section 6.02. Counterparts |
16 | |||
Section 6.03. Integration |
16 | |||
Section 6.04. No Third Party Beneficiaries |
16 | |||
Section 6.05. Applicable Law; Consent to Jurisdiction |
17 | |||
Section 6.06. Severability |
17 | |||
Section 6.07. Amendment |
17 |
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Page | ||||
Section 6.08. Headings |
17 | |||
Section 6.09. Waiver of a Jury Trial |
18 | |||
Section 6.10. Enforcement |
18 | |||
Section 6.11. Waiver |
18 | |||
Section 6.12. Confidentiality |
18 | |||
Section 6.13. Other Stockholders |
19 | |||
Section 6.14. Publicity |
19 | |||
Section 6.15. Absence of Presumption |
19 | |||
Section 6.16. Expenses |
19 |
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STOCKHOLDER AGREEMENT, dated as of March 31, 2010, among RHAPSODY
INTERNATIONAL INC., a Delaware corporation (the “Company”),
RealNetworks, Inc., a Washington corporation (“RN Parent”),
RealNetworks Digital Music of California, Inc., a California corporation
(“RN Sub”), Viacom International Inc., a Delaware corporation
(“MTVN Parent”), on behalf of its MTV Networks Division, and DMS
Holdco Inc., a Delaware corporation (“MTVN Sub” and together with RN
Sub, the “Stockholders”).
RECITALS
WHEREAS, the Company was first formed as a limited liability company under Delaware law on
August 16, 2007 under the name “Rhapsody America LLC” and was converted to a corporation under the
name “Rhapsody International Inc.” by the filing of its Certificate of Conversion and Certificate
of Incorporation with the Secretary of State of the State of Delaware on March 31, 2010 (the
“Conversion”);
WHEREAS, the Stockholders have entered into the Transaction, Contribution and Purchase
Agreement dated as of February 9, 2010 (the “Transaction Agreement”) to effect the transfer
and contribution of certain additional assets to the Company;
WHEREAS, immediately prior to the transactions contemplated by the Transaction Agreement, RN
Sub owned a 51% membership interest in the Company and MTVN Sub owned a 49% membership interest in
the Company;
WHEREAS, by virtue of the Conversion, all outstanding membership interests of the Company were
converted into equity interests in the Company;
WHEREAS, as of the date hereof, MTVN Sub owns the Company’s Class A common stock, par value
$0.01 per share (“Class A Stock”) and RN Sub owns the Company’s preferred stock, par value
$0.01 per share (“Preferred Stock” and together with Class A Stock, “Voting Stock”)
in the amounts set forth opposite its name on Schedule A attached hereto;
WHEREAS, pursuant to the Charter (as defined below), holders of Voting Stock shall be entitled
to one vote for each share of Voting Stock held by them on all matters properly presented to the
stockholders, the holders of Class A Stock and the holders of Preferred Stock voting together as
one class; and
WHEREAS, each of the parties desires to enter into this Agreement (as defined below) in order
to establish certain rights and obligations of RN Sub and MTVN Sub as holders of Voting Stock;
NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements
set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Certain Defined Terms. As used in this Agreement:
“Adoption Agreement” has the meaning assigned to such term in Section 3.02(a)(i).
“Affiliate” of any specified Person means any other Person directly or indirectly
Controlling, Controlled by or under direct or indirect common Control with such specified Person;
provided that the Company and its Subsidiaries shall not be deemed to be an Affiliate of
any Stockholder or Parent, and provided, further, that “Affiliate”, when used with
respect to MTVN Sub or MTVN Parent or any of their Affiliates, shall only mean Viacom Inc., a
Delaware corporation, and any direct or indirect Subsidiaries of Viacom Inc. and shall not include
any direct or indirect stockholder of Viacom Inc. or any of their Affiliates other than Viacom Inc.
and any direct or indirect Subsidiaries of Viacom Inc.
“Agreement” means this Stockholder Agreement, as it may be amended, supplemented,
restated or modified from time to time.
“Board” means the Board of Directors of the Company.
“Business Day” means any day that is not a Saturday, a Sunday or a U.S. Federal
holiday.
“By-laws” means the By-laws of the Company, as amended or restated from time to time.
“Charter” means the Certificate of Incorporation of the Company, as amended or
restated from time to time.
“Class A Stock” has the meaning set forth in the recitals of this Agreement.
“Class B Stock” means the Company’s Class B common stock, par value $0.01 per share
“Control” means, with respect to any Person, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of such Person, whether
through ownership of securities or partnership, membership, limited liability company, or other
ownership interests, by contract or otherwise, and the terms “Controlling” and
“Controlled” have meanings correlative to the foregoing.
“Conversion” has the meaning set forth in the recitals of this Agreement.
“Director” means any member of the Board.
“Drag-Along Notice” has the meaning assigned to such term in Section 3.06.
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“Drag-Along Party” has the meaning assigned to such term in Section 3.06.
“Drag-Along Price” has the meaning assigned to such term in Section 3.06.
“Drag-Along Purchaser” has the meaning assigned to such term in Section 3.06.
“Drag-Along Right” has the meaning assigned to such term in Section 3.06.
“Drag-Along Terms” has the meaning assigned to such term in Section 3.06.
“GAAP” means generally accepted accounting principles in the United States.
“Indebtedness” means, with respect to any Person, all obligations of such Person (i)
for borrowed money or funded indebtedness or issued in substitution for or exchange for borrowed
money or funded indebtedness (including obligations with respect to principal, accrued interest,
and any applicable prepayment charges or premiums and any unpaid fees, expenses or other monetary
obligations in respect thereof); (ii) evidenced by notes, bonds, debentures, mortgages or similar
instruments; and (iii) all obligations of the types described in clauses (i) and (ii) above of any
other individual or entity, the payment of which is guaranteed or is subject to contingent
guarantee, directly or indirectly, by such Person or is secured by a pledge, mortgage, encumbrance
or other Lien of any kind or character on any property or asset of such Person (whether or not such
obligation is assumed by such Person).
“Independent Director” means a Director who (i) qualifies as an “independent director”
of the Company under (a) NYSE Rule 303A(2), as such Rule may be amended, supplemented or replaced
from time to time or (b) any comparable rule or regulation of a primary securities exchange or
quotation system, (ii) is identified as independent upon the mutual agreement of RN Stockholder and
MTVN Stockholder or (iii) is the Chief Executive Officer or the highest-ranking officer of the
Company as set forth in the proviso to Section 2.01(a)(iii).
“Initiating Stockholder” has the meaning assigned to such term in Section 3.05(a).
“Initiator Notice” has the meaning assigned to such term in Section 3.05(a).
“Lien” means any pledge, encumbrance, security interest, purchase option, call or
similar right.
“MTVN Designees” has the meaning assigned to such term in Section 2.01(a)(ii).
“MTVN Music Group” has the meaning assigned to such term in the Audio Music Service
Brand and Content License, Distribution and Advertising Agreement dated as of August 20, 2007, by
and between MTVN Parent and the Company, as such agreement may be amended, supplemented, restated
or modified from time to time.
“MTVN Stockholder” means MTVN Sub and shall include any successor to MTVN Sub, or any
assignee of MTVN Sub pursuant to Section 3.02(a)(i).
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“New Securities” has the meaning assigned to such term in Section 3.07(b).
“Non-initiating Stockholder” has the meaning assigned to such term in Section 3.05(a).
“Offer Price” has the meaning assigned to such term in Section 3.05(b).
“Offered Stock” has the meaning assigned to such term in Section 3.05(a).
“Original Stockholder” has the meaning assigned to such term in Section 3.06.
“Other Stockholder” has the meaning assigned to such term in Section 6.13.
“Parent” means (i) in the case of RN Sub, RN Parent, (ii) in the case of MTVN Sub,
MTVN Parent, (iii) in the case of any other Stockholder, such Stockholder’s direct or indirect
ultimate Controlling Person at the time such Stockholder becomes a Stockholder (except to the
extent such Stockholder is an Affiliate of MTVN Parent, in which case the Parent of such
Stockholder shall continue to mean MTVN Parent).
“Participation Stockholder” has the meaning assigned to such term in Section 3.07(a).
“Person” means any individual, firm, corporation, partnership, limited liability
company, trust, joint venture, governmental authority or other entity.
“Preferred Stock” has the meaning set forth in the recitals of this Agreement.
“Public Offering” shall mean the completion of a sale of common stock pursuant to a
registration statement which has become effective under the Securities Act (excluding registration
statements on Form X-0, X-0 or similar limited purpose forms), in which some or all of the Common
Stock or the common stock of any Subsidiary of the Company shall be listed and traded on a national
exchange or on the NASDAQ National Market System.
“Requesting Stockholder” has the meaning assigned to such term in Section 4.04.
“Right of First Offer” has the meaning assigned to such term in Section 3.05(a).
“RN Designees” has the meaning assigned to such term in Section 2.01(a)(i).
“RN Stockholder” means RN Sub and shall include any successor to RN Sub, or assignee
of RN Sub pursuant to Section 3.02(a)(i).
“ROFO Notice” has the meaning assigned to such term in Section 3.05(b).
“ROFO Notice Period” has the meaning assigned to such term in Section 3.05(b).
“Sale Transaction” has the meaning assigned to such term in Section 3.02(b).
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“Securities Act” means the Securities Act of 1933 and the rules and regulations
promulgated thereunder, as amended.
“Stockholder” means MTVN Stockholder, RN Stockholder and any Other Stockholder.
“Subsidiary” means, with respect to any Person, any other Person of which such Person
(i) owns directly or indirectly more than fifty percent (50%) of the equity, membership interest or
beneficial interest, on a consolidated basis, or (ii) owns directly or controls with power to vote,
directly or indirectly through one or more Subsidiaries, shares of the equity, membership interest
or beneficial interest having the power to elect more than fifty percent (50%) of the directors,
trustees, managers or other officials having powers analogous to that of directors of a
corporation.
“Transaction Agreement” has the meaning set forth in the recitals of this Agreement.
“Transfer” means, directly or indirectly, (i) to sell, transfer, assign or similarly
dispose of, whether voluntarily, involuntarily or by operation of law, (ii) to enter into an
agreement to vote, consent, grant a proxy or power of attorney or deposit shares into a voting
trust, or the execution of a written consent, the grant of a proxy or power of attorney or the
deposit of shares into a voting trust or (iii) to enter into a contract, option or other
arrangement or understanding that upon consummation or foreclosure would effect a sale, transfer,
assignment or similar disposition.
“Voting Stock” has the meaning set forth in the recitals of this Agreement.
Section 1.02. Other Definitional Provisions. (a) The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and Article and Section
references are to this Agreement unless otherwise specified. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”.
(b) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
ARTICLE II
Corporate Governance
Section 2.01. Board Composition. (a) The number of Directors constituting the Board
shall be fixed at the number that is the number of Directors that RN Stockholder and MTVN
Stockholder are entitled to designate in the aggregate, from time to time, pursuant to Sections
2.01(a)(i), (ii) and (iii) below which number shall initially be five (5). The Board shall be
composed as follows:
(i) (A) two (2) Directors designated for election to the Board by RN Stockholder for so
long as RN Stockholder continues to own shares of Voting Stock representing at
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least twenty-five percent (25%) of the then outstanding shares of Voting Stock; or (B)
if clause (A) is not applicable, one (1) director designated for election to the Board by RN
Stockholder for so long as RN Stockholder continues to own shares of Voting Stock
representing at least ten percent (10%) of the then outstanding shares of Voting Stock (in
each case, the “RN Designees”); the initial RN Designees are set forth on
Schedule B;
(ii) (A) two (2) Directors designated for election to the Board by MTVN Stockholder for
so long as MTVN Stockholder continues to own shares of Voting Stock representing at least
twenty-five percent (25%) of the then outstanding shares of Voting Stock; or (B) if clause
(A) is not applicable, one (1) director designated for election to the Board by MTVN
Stockholder for so long as MTVN Stockholder continues to own shares of Voting Stock
representing at least ten percent (10%) of the then outstanding shares of Voting Stock (in
each case, the “MTVN Designees”); the initial MTVN Designees are set forth on
Schedule C; and
(iii) one Independent Director jointly designated by RN Stockholder and MTVN
Stockholder (for so long as each of RN Stockholder and MTVN Stockholder is entitled to
designate at least one Director pursuant to Sections 2.01(a)(i) and (ii)) who shall
initially be the individual set forth on Schedule D hereto. If at any time RN
Stockholder and MTVN Stockholder cannot agree upon the designee for Independent Director,
the Independent Director shall be selected pursuant to the provision set forth in
Schedule E hereto; provided, however, in the event that the existing
Independent Director resigns or is removed from the Board or if the Independent Director
seat is otherwise vacant, the Company’s Chief Executive Officer (excluding any Person
serving as the Company’s interim Chief Executive Officer), or if the office of the Chief
Executive Officer is vacant or not permanently filled, then the Company’s highest ranking
officer, shall serve as the Independent Director during such interim period.
(b) Each Stockholder agrees to vote or act by written consent with respect to (or cause to be
voted or acted upon by written consent) all shares of Voting Stock then held of record by such
Stockholder (x) in favor of the election to the Board of those individuals designated or nominated
in accordance with Section 2.01(a) and (y) against the election to the Board of any individual not
designated or nominated in accordance with Section 2.01(a); provided, however,
that at the written request of either MTVN Stockholder or RN Stockholder with respect to a
Director designated by such Stockholder pursuant to Section 2.01(a), each other Stockholder hereby
agrees to vote or act by written consent with respect to (or cause to be voted or acted upon by
written consent) all shares of Voting Stock then held of record by such Stockholder in favor of
the removal from office of such Director at any meeting or upon any action by written consent
called or taken for the purpose of removing such Director from office (and except as set forth in
Section 2.01(d), otherwise shall not vote or act by written consent to cause the removal of such
Director without cause).
(c) In the event of any vacancy in the office of Director of an RN Designee or MTVN Designee,
each Stockholder agrees to vote or act by written consent with respect to (or cause to be voted or
acted upon by written consent) all shares of Voting Stock then held of record by such Stockholder
in favor of the election to the Board of an individual designated in writing by RN Stockholder or
MTVN Stockholder, as applicable, and against the election to the
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Board of any individual not designated by RN Stockholder or MTVN Stockholder, as applicable.
The Company and the Stockholders shall use their best efforts to fill any vacancies of the Board
as soon as practicable following the date such vacancy is created.
(d) If at any time there is a reduction in the number of Directors a Stockholder has a right
to designate pursuant to Sections 2.01(a)(i) and (ii), such Stockholder shall use its best efforts
to cause such number of its designees to resign from the Board. If a designee fails to resign in
accordance with the preceding sentence, each Stockholder agrees to vote or act by written consent
with respect to (or cause to be voted or acted upon by written consent) all shares of Voting Stock
then held of record by such Stockholder in favor of the removal of such Director without cause.
The Company and the Stockholder shall use their best efforts to cause such action to be taken as
soon as practicable following the date of decrease.
Section 2.02. Composition of Committees of the Board. The Board may from time to
time designate one or more committees, each committee to consist of two (2) or more members of the
Board; provided, however, that at least one RN Designee (for so long as RN
Stockholder has the right to designate a Director pursuant to Section 2.01(a)(i)) and at least one
MTVN Designee (for so long as MTVN Stockholder has the right to designate a Director pursuant to
Section 2.01(a)(ii)) shall be entitled to representation on each committee of the Board.
ARTICLE III
Transfer of Shares
Section 3.01. Restrictions on Transfer. (a) Each Stockholder agrees that, until
December 31, 2010, it will not Transfer any shares of Voting Stock now owned or hereafter acquired
by such party (or any interest therein) to any other Person, except as expressly permitted by
Section 3.02.
(b) It shall be a condition to any Transfer not prohibited by this Article III that (i) such
Transfer shall comply with the provisions of the Securities Act and applicable state securities
laws and (ii) no such Transfer shall require the Company to file any report or other disclosure
pursuant to the Securities Act or applicable state securities laws. Until the Transfer of any
Voting Stock has been registered under the Securities Act, such Voting Stock may not be offered or
sold except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities laws.
(c) It shall be a condition to any Transfer not prohibited by this Article III that no
applicable law or judgment issued by any governmental entity which would prohibit such Transfer
shall be in effect, and all consents of, or declarations or filings with, or expirations of waiting
periods imposed by, any governmental entity necessary for the consummation of such Transfer shall
have been obtained or filed or shall have occurred, and the Company and each Stockholder agree to
reasonably cooperate with the transferring Stockholder, at such transferring Stockholder’s expense,
to provide such information and make such filings as shall be necessary to satisfy as promptly as
practicable the foregoing conditions in connection with a proposed
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Transfer; provided, however, that the Company shall not be required to make
any filings pursuant to the Securities Act or any applicable state securities laws.
Section 3.02. Permitted Transfers. (a) The following Transfers shall be permitted
at any time and from time to time:
(i) any Transfer by a Stockholder of all (but not less than all) of its Voting Stock to
a wholly-owned Subsidiary of such Stockholder’s Parent so long as such transferee continues
to remain so owned and executes a counterpart of this Agreement agreeing to be bound hereby
to the same extent as the transferor (an “Adoption Agreement”); provided,
however, that if at any time such transferee ceases to be a wholly-owned Subsidiary
of such Stockholder’s Parent, then all Voting Stock held by such transferee shall be deemed
to be automatically Transferred to such Parent or to another wholly-owned Subsidiary of such
Parent designated by such Parent, which wholly-owned Subsidiary shall execute and deliver an
Adoption Agreement; and
(ii) any Transfer by a Stockholder with the prior written consent of each of MTVN
Stockholder and RN Stockholder.
(b) Notwithstanding anything to the contrary set forth herein, the restrictions on Transfer
set forth in Section 3.01(a) shall not prohibit (i) any merger, consolidation or binding share
exchange with a third party, (ii) sale or other disposition of all or substantially all of the
equity securities or sale or other disposition of all or substantially all of the assets of RN
Parent or MTVN Parent, or (iii) any transaction involving all or substantially all of the assets of
the MTVN Music Group (each, a “Sale Transaction”); provided that (x) in the case of
a Sale Transaction in which the Voting Stock of MTVN Stockholder is Transferred, the MTVN
Stockholder following such Sale Transaction shall be an entity belonging to the MTVN Music Group;
and (y) in the case of a Sale Transaction in which the Voting Stock of RN Stockholder is
Transferred, the RN Stockholder following such Sale Transaction shall be RN Parent.
Section 3.03. Compliance with Transfer Provisions. Any Transfer or deemed Transfer
or attempted Transfer or deemed Transfer of Voting Stock in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer or deemed Transfer on its
books or treat any purported transferee of such Voting Stock as the owner of such Voting Stock for
any purpose.
Section 3.04. Legend. (a) During the term of this Agreement, each certificate
evidencing Voting Stock held of record or owned by the Stockholders shall bear the following
legend:
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND TRANSFERABLE ONLY
UPON COMPLIANCE WITH THE PROVISIONS OF A STOCKHOLDER AGREEMENT, DATED AS OF MARCH
31, 2010, AMONG RHAPSODY INTERNATIONAL INC., REALNETWORKS, INC., REALNETWORKS
DIGITAL MUSIC OF CALIFORNIA, INC., VIACOM INTERNATIONAL INC. AND DMS HOLDCO
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INC. A COPY OF SUCH STOCKHOLDER AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF
RHAPSODY INTERNATIONAL INC.”
(b) Upon a Person ceasing to have rights and obligations under this Agreement pursuant to the
terms hereof or upon termination of this Agreement, such Person may surrender to the Company any
certificates held of record by such Person and bearing the legend set forth in Section 3.04(a), and
upon surrender of such certificates, the Company shall reissue such certificates without such
legend.
Section 3.05. Right of First Offer. (a) Each of RN Stockholder and MTVN Stockholder
and any Other Stockholder agrees that, until December 31, 2012, it will not Transfer its Voting
Stock to any Person (other than pursuant to Section 3.02) without first offering to Transfer such
Voting Stock to each of RN Stockholder or MTVN Stockholder, in each case so long as such RN
Stockholder or MTVN Stockholder owns at least twenty-five percent (25%) of the then outstanding
shares of Voting Stock (“Right of First Offer”) (such Stockholder desiring to make any
such Transfer, the “Initiating Stockholder,” the subject shares that the Initiating
Stockholder seeks to Transfer, the “Offered Stock,” and such Stockholder with the Right of
First Offer, the “Non-initiating Stockholder”). The Initiating Stockholder shall give
written notice (the “Initiator Notice”) to the Non-initiating Stockholder of its bona fide
intention to sell the Offered Stock, setting forth (i) the number of shares of Offered Stock and
(ii) the material terms and conditions (other than price) upon which the Initiating Stockholder
proposes to Transfer the Offered Stock.
(b) Upon receipt of the Initiator Notice, the Non-initiating Stockholder shall have a period
of forty-five (45) days (“ROFO Notice Period”) to offer to purchase the Offered Stock by
delivering a written notice (“ROFO Notice”) stating that it offers to purchase the Offered
Stock on the terms specified in the Initiator Notice and designating the price that it is offering
to pay, in cash, for the Offered Stock (“Offer Price”). A ROFO Notice shall be binding on
the Non-initiating Stockholder upon delivery and irrevocable without the consent of the Initiating
Stockholder. In the event that the Initiating Stockholder is an Other Stockholder, RN Stockholder
and MTVN Stockholder shall each be entitled to purchase their pro rata portion of the Offered
Stock; provided that, if either MTVN Stockholder or RN Stockholder elects not to exercise
its Right of First Offer, the other may, at its option, offer to purchase all (but not less than
all) of the Offered Stock. For purposes of this Section 3.05, “pro rata portion” is the product of
(i) a fraction, the numerator of which is the number of outstanding shares of Voting Stock which RN
Stockholder or MTVN Stockholder, as applicable, then owns and the denominator of which is the
number of outstanding shares of Voting Stock which RN Stockholder and MTVN Stockholder then own, in
the aggregate, multiplied by (ii) the number of shares of Offered Stock set forth in the Initiator
Notice.
(c) Within ten (10) Business Days after receipt of the ROFO Notice, the Initiating Stockholder
shall indicate to the Non-initiating Stockholder whether the Initiating Stockholder has accepted
the Non-initiating Stockholder’s offer. An acceptance shall be indicated by sending irrevocable
written notice of such acceptance to the Non-initiating Stockholder, and the Non-initiating
Stockholder shall then be obligated to purchase, and the Initiating Stockholder shall then be
obligated to sell, the Offered Stock on the terms and conditions set forth in the Initiator Notice
at the Offer Price.
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(d) If the Initiating Stockholder does not accept any offer made by the Non-initiating
Stockholder or if the Non-initiating Stockholder does not deliver a ROFO Notice in accordance with
this Section 3.05, the Initiating Stockholder may, during the ninety (90)-day period following the
expiration of the ROFO Notice Period and subject to the restrictions on Transfer contained in this
Article III, enter into an agreement for the Transfer of all (but not less than all) Offered Stock
with any Person (i) for a price, in cash, that is greater than the Offer Price and (ii) otherwise,
on terms not more favorable in any material respect to the purchaser than those specified in the
Initiator Notice.
(e) If the Initiating Stockholder does not enter into an agreement for the Transfer of the
Offered Stock within such ninety (90)-day period, the Right of First Offer provided hereunder shall
be deemed to be revived and such Offered Stock shall not be Transferred unless first reoffered to
the Non-initiating Stockholder in accordance with this Section 3.05. Notwithstanding the
foregoing, the Initiating Stockholder shall not propose to Transfer the Offered Stock more than
once in any twelve-month period.
(f) The closing of the purchase and sale of any Offered Stock to be acquired by the original
transferee named in the ROFO Notice shall be held at the offices of the Company on such date and
time as the parties may agree but in all events within thirty (30) days following termination of
the ROFO Notice Period (which thirty (30)-day period shall be extended solely to the extent needed
to obtain any required governmental approvals). At the closing of such purchase and sale, the
Initiating Stockholder shall deliver an assignment agreement transferring such Offered Stock, duly
executed, free and clear of any Liens, against delivery of the purchase price therefor. Each party
shall bear its own expenses in connection with a purchase and sale pursuant to this Section 3.05.
Section 3.06. Drag-Along Right. In the event that RN Stockholder (for so long as
such Stockholder owns at least twenty-five percent (25%) of the then outstanding shares of Voting
Stock) and MTVN Stockholder (for so long as such Stockholder owns at least twenty-five percent
(25%) of the then outstanding shares of Voting Stock) (for purposes of this Section 3.06, each, an
“Original Stockholder”) shall have jointly entered into an agreement with any Person (such
Person, a “Drag-Along Purchaser”) regarding the Transfer of all of their Voting Stock, an
Original Stockholder shall be entitled, at its option, to require each Stockholder holding less
than ten percent (10%) of the then outstanding shares of Voting Stock (the “Drag-Along
Party”) to include all of its Voting Stock in such sale (the “Drag-Along Right”). The
Drag-Along Right shall be exercised by written notice (the “Drag-Along Notice”) to the
Drag-Along Party, at least thirty (30) days prior to closing of the proposed Transfer, of the
identity of the Drag-Along Purchaser, the consideration offered for the transferring Stockholder’s
Voting Stock (the “Drag-Along Price”), the terms of the Drag-Along Purchaser’s financing
(if any and if known), the anticipated date of closing of the proposed Transfer and any other
material terms and conditions of the proposed Transfer (the “Drag-Along Terms”). The
Drag-Along Party shall be obligated to sell all of its Voting Stock to the Drag-Along Purchaser on
the Drag-Along Terms at a price equal to the product of (x) the ratio of the percentage of
ownership of Voting Stock then outstanding of the Drag-Along Party over the percentage of
ownership of Voting Stock then outstanding of the transferring Stockholder and (y) the Drag-Along
Price; provided, however, that the holders of shares of Preferred Stock shall be
entitled to be paid the amount determined pursuant to Section 3(c) of Article IV of the
10
Charter to the extent applicable. At the closing of such Transfer (which anticipated date,
place and time shall be designated in the Drag-Along Terms), the Drag-Along Party shall deliver an
assignment agreement transferring all of its Voting Stock, duly executed, free and clear of any
Liens, against delivery of the purchase price therefor. Each party shall bear its own expenses in
connection with a Transfer pursuant to this Section 3.06.
Section 3.07. Preemptive Right. (a) The Company hereby grants to each of RN
Stockholder and MTVN Stockholder (for purposes of this Section 3.07, each a “Participation
Stockholder”), so long as it shall own at least ten percent (10%) of the then outstanding
shares of Voting Stock, the right to purchase up to a pro rata portion of New Securities (as
defined in paragraph (b) below) which the Company, from time to time, proposes to sell or issue
following the date hereof. A Participation Stockholder’s pro rata portion, for purposes of this
Section 3.07, is equal to the product of (i) a fraction, the numerator of which is the number of
outstanding shares of Voting Stock which such Participation Stockholder then owns and the
denominator of which is the total number of outstanding shares of Voting Stock then held by the
Participation Stockholders, in the aggregate, multiplied by (ii) the number of New Securities the
Company proposes to sell or issue.
(b) “New Securities” shall mean any common stock or other equity securities of the
Company whether now authorized or not, any rights, options or warrants to purchase common stock or
other equity securities and any Indebtedness or preferred stock of the Company which is convertible
into common stock or other equity securities (or which is convertible into a security which is, in
turn, convertible into common stock or other equity securities); provided that the term
“New Securities” does not include (i) Indebtedness of the Company which is not by its terms
convertible into common stock; (ii) common stock issued as a stock dividend to all holders of
Voting Stock and Class B Stock pro rata or upon any subdivision or combination of shares of common
stock; (iii) common stock, or other equity capital exchangeable for or convertible into shares of
common stock, issued to any employee or director and approved by the Board and any employee or
director stock options approved by the Board; (iv) common stock issued for the acquisition of
another corporation or other entity by the Company by stock purchase, merger, purchase of
substantially all assets or other reorganization approved by the Board; (v) the issuance of common
stock upon the exercise or conversion of any rights, options or warrants to purchase common stock
outstanding prior to the issuance of New Securities; and (vi) common stock issuable in a Public
Offering; and provided, further, that if any “New Securities” include common stock
and other equity securities coupled as a package, “New Securities” shall mean the package of
securities and not each class of securities individually.
(c) In the event the Company proposes to issue New Securities, the Company shall give each
Participation Stockholder written notice of such proposal, describing the type of New Securities
and the price and the terms upon which the Company proposes to issue the same. For a period of
fifteen (15) Business Days following the delivery of such notice by the Company, the Company shall
be deemed to have irrevocably offered to sell to each Participation Stockholder its pro rata share
of such New Securities for the price and upon the terms specified in the notice. Each
Participation Stockholder may exercise its rights of participation hereunder by giving written
notice to the Company and stating therein the quantity of New Securities to be purchased. Each
Participation Stockholder shall also be entitled to indicate a desire to purchase all or a portion
of any New Securities remaining after such pro rata allocation. If, as a result of
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such oversubscription right, such oversubscriptions exceed the total number of New Securities
available in respect of such oversubscription right, the oversubscribing Participation Stockholders
shall be cut back with respect to their oversubscriptions on a pro rata basis (based on the number
of outstanding shares of Voting Stock held by them at such time) or as they may otherwise agree
among themselves.
(d) In the event that the Participation Stockholders fail to commit to purchase all of such
New Securities within said fifteen (15)-Business Day period, the Company shall have ninety (90)
days thereafter to sell the New Securities with respect to which the right of participation was not
exercised, at a price and otherwise upon terms no more favorable to the purchasers thereof than
specified in the Company’s notice given pursuant to Section 3.07(c).
(e) The closing for any such issuance shall take place as proposed by the Company with respect
to the New Securities to be issued (but in no event sooner than fifteen (15) Business Days after
notice is given to each Participation Stockholder), at which closing the Company shall deliver
certificates for the New Securities in the respective names of the purchasing Stockholders against
receipt of payment therefor. Each party shall bear its own expenses in connection with any such
issuance pursuant to this Section 3.07.
ARTICLE IV
Additional Covenants
Section 4.01. Actions Requiring Consent. For so long as RN Stockholder owns shares
of Voting Stock of the Company representing at least twenty-five percent (25%) of the then
outstanding shares of Voting Stock, without the approval of RN Stockholder, and for so long as
MTVN Stockholder owns shares of Voting Stock of the Company representing at least twenty-five
percent (25%) of the then outstanding shares of Voting Stock, without the approval of the MTVN
Stockholder, no action shall be taken by the Company or any Subsidiary thereof, or any director,
officer, agent or employee of the Company or its Subsidiaries, which would cause or permit any:
(a) amendment, modification, termination or waiver of any provision the Charter or By-laws,
including any increase or decrease in the number of authorized shares of any class of the Company’s
stock;
(b) issuance, sale, repurchase or retirement of any equity security or options or rights to
acquire any equity security of the Company or any Subsidiary of the Company, including all terms
and conditions in respect thereof; provided that this provision shall not apply with
respect to issuances pursuant to the Company’s equity compensation plan of up to 34,000,000 shares
of Class B Stock;
(c) incurrence or material modification of any Indebtedness of the Company or any Subsidiary
of the Company, in the aggregate, in excess of $10 million in any fiscal year;
(d) (i) merger, consolidation, share exchange or sale (in one or a related series of
transactions) of all or substantially all of the assets of the Company and any Subsidiary of the
Company or (ii) sale or acquisition (in one or a related series of transactions) by the Company or
12
any Subsidiary of the Company of any businesses with a sale or acquisition price in excess of
$10 million;
(e) dissolution, liquidation, bankruptcy or reorganization of the Company or any Subsidiary
of the Company;
(f) change in the terms, designations, powers, classification, preferences or other special
rights, or the qualifications, limitations or restrictions, of equity securities of the Company;
(g) entrance into any transaction with (i) any Director or officer of the Company, (ii) RN
Stockholder or any of its Affiliates, employees, directors or officers or (iii) MTVN Stockholder or
any of its Affiliates, employees, directors or officers;
(h) a Public Offering of the Company or any Subsidiary thereof or any successor entity
thereof; or
(i) entrance into any contract or taking of any action for the purpose of effecting any of
the foregoing.
Section 4.02. Registration Rights. In the event of a proposed initial Public
Offering of the securities of the Company or any of its Subsidiaries or successors thereof, the
parties agree to negotiate in good faith a customary registration rights agreement.
Section 4.03. Information Rights. From and after the date hereof, for so long as
MTVN Stockholder or RN Stockholder holds at least seven and one half percent (7.5%) of the then
outstanding shares of Voting Stock, such Stockholder shall be entitled to receive from the Company
the following information:
(a) as soon as available after the end of each fiscal year of the Company, and in any event
within fifty (50) days after the end of each fiscal year of the Company, an audited consolidated
balance sheet of the Company and its Subsidiaries as at the end of such year and audited
consolidated statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such year, certified by certified public accountants of established national
reputation selected by the Company, which shall initially be KPMG LLP, and prepared in accordance
with GAAP;
(b) as soon as available after the end of each fiscal quarter of the Company (other than the
fourth quarter), and in any event within thirty (30) days after the end of each fiscal quarter of
the Company (other than the fourth quarter), an unaudited consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and unaudited consolidated statements of
income, retained earnings and cash flows of the Company and its Subsidiaries for such fiscal
quarter and for the current fiscal year to the end of such fiscal quarter, prepared in accordance
with GAAP (subject to normal year-end audit adjustments and the absence of notes thereto); and
(c) as soon as available after the end of each calendar month and in any event (i) within
five (5) Business Days thereafter, a preliminary unaudited consolidated balance sheet
13
of the Company and its Subsidiaries as at the end of such month, and preliminary unaudited
consolidated statement of income of the Company and its Subsidiaries for such month, prepared in
accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes
thereto), (ii) within ten (10) Business Days thereafter, a final unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of such month, and final unaudited
consolidated statement of income of the Company and its Subsidiaries for such month, prepared in
accordance with GAAP (subject to normal year-end audit adjustments and the absence of notes
thereto) and (iii) within twenty (20) days thereafter, a summary of the Company’s financial
performance not to exceed one page in length in a form to be mutually agreed upon by the Company
and the recipients promptly following execution of this Agreement.
Section 4.04. Annual Audit. For so long as either MTVN Parent or RN Parent are
required to include the Company’s audited financial statements in its filings or other reports
with the U.S. Securities and Exchange Commission, each of MTVN Stockholder and RN Stockholder (the
“Requesting Stockholder”) may, in the event that such Requesting Stockholder reasonably
believes that the Company will not provide an audited consolidated balance sheet of the Company
and its Subsidiaries within fifty (50) days of the end of any fiscal year of the Company as
required by Section 4.03(a), at its sole option, elect to engage on behalf of the Company an
auditor to perform an audit on the Company’s financial statements for such fiscal year, a copy of
which shall be delivered to each of MTVN Stockholder and RN Stockholder. The Requesting
Stockholder shall pay for the fees and expenses of such audit; provided, that if both MTVN
Stockholder and RN Stockholder are required to include the Company’s audited financial statements
in its filings with the U.S. Securities and Exchange Commission, each shall pay for one-half of
the total fees and expenses of the audit. The Company shall, and shall cause its officers,
directors, employees and other agents to, cooperate with the auditor engaged by the Requesting
Stockholder in connection with the preparation of such audit, including by affording such auditor
access at all reasonable times to the Company’s officers, employees, legal counsel, properties,
offices, plants and other facilities and to all books and records of the Company.
Section 4.05. Access Rights. The Company shall, and shall cause its officers,
directors, employees, auditors and other agents to, in the case of RN Stockholder, until such time
as RN Stockholder shall cease to each own at least seven and one half percent (7.5%) of the then
outstanding shares of Voting Stock and, in the case of MTVN Stockholder, until such time as MTVN
Stockholder shall cease to each own at least seven and one half percent (7.5%) of the then
outstanding shares of Voting Stock, (a) afford the officers, employees, auditors and other agents
of RN Stockholder and/or MTVN Stockholder, as applicable, during normal business hours and upon
notice, access at all reasonable times to the Company’s officers, employees, auditors, legal
counsel, properties, offices, plants and other facilities and to all books and records of the
Company, and (b) afford RN Stockholder and/or MTVN Stockholder, as applicable, the opportunity to
discuss the Company’s affairs, finances and accounts with the Company’s officers from time to time
as each such Stockholder may reasonably request.
14
ARTICLE V
Term
Section 5.01. Term. This Agreement shall become effective on the date hereof and
shall continue in effect until the earlier to occur of (a) an initial Public Offering of the
Company and (b) such time as, pursuant to Transfers of Voting Stock permitted herein, there are
not at least two Stockholders subject to the terms and conditions hereof; provided,
however, that the rights and obligations of each Stockholder under this Agreement shall
terminate as to such Stockholder upon the Transfer of all (but not less than all) Voting Stock
owned by such Stockholder (so long as such Transfer is in accordance with the provisions of this
Agreement).
ARTICLE VI
General Provisions
Section 6.01. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including a facsimile or similar writing) and shall be given to
such party at the address or facsimile number set forth below or as such party shall hereafter
specify for the purpose by notice to the other parties. Each such notice, request or other
communication shall be effective (i) if given by facsimile, at the time such facsimile is
transmitted and the appropriate confirmation is received (or, if such time is not during a
Business Day, at the beginning of the next such Business Day), (ii) if given by mail, five (5)
Business Days (or (x) if by overnight courier, one (1) Business Day, or (y) if to an address
outside the United States, seven (7) Business Days) after such communication is deposited in the
mails with first-class postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered at the address specified pursuant to this Section 6.01.
(i) if to the Company, to:
Rhapsody International Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Phone: 000-000-0000
Email: xxxxxx@xxxx.xxx
Attention: Chief Operating Officer
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Phone: 000-000-0000
Email: xxxxxx@xxxx.xxx
Attention: Chief Operating Officer
(ii) if to RN Sub or RN Parent, to:
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Email: xxxxxxxx@xxxx.xxx
Attention: Xxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Phone: 000-000-0000
Email: xxxxxxxx@xxxx.xxx
Attention: Xxxxxx Xxxxxxx
15
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxx.xxxxxxx@xxxx.xxx and xxxxxx.xxxx@xxxx.xxx
Attention: Xxx X. Xxxxxxx and Xxxxxx X. Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxx.xxxxxxx@xxxx.xxx and xxxxxx.xxxx@xxxx.xxx
Attention: Xxx X. Xxxxxxx and Xxxxxx X. Xxxx
(iii) if to MTVN Sub or MTVN Parent, to:
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxxx.xxxxxxxx@xxxxxx.xxx
Attention: Xxxxxxx X. Xxxxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxxx.xxxxxxxx@xxxxxx.xxx
Attention: Xxxxxxx X. Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxx@xxxxxxx.xxx
Attention: Xxxxx X. Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxx@xxxxxxx.xxx
Attention: Xxxxx X. Xxxxx
(iv) if to any Other Stockholder, to such address as set forth on Schedule F.
Section 6.02. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.
Section 6.03. Integration. This Agreement, the Transaction Agreement, the
Transaction Documents (as defined in the Transaction Agreement) and all other written agreements
contemporaneously entered into herewith by the parties constitute the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersede all prior agreements and
understandings of the parties in connection herewith, and no covenant, representation or condition
not expressed in this Agreement shall affect, or be effective to interpret, change or restrict,
the express provisions of this Agreement.
Section 6.04. No Third Party Beneficiaries. This Agreement shall be binding upon
and inure to the benefit of all the parties hereto and their successors and assigns, and their
legal representatives. No Stockholder may assign this Agreement or any of its rights, interests
16
or obligations in connection with a Transfer of Voting Stock hereunder except to the extent
such rights, interests and obligations relate to Voting Stock and the Transfer of such Voting
Stock is in accordance with this Agreement and is provided for or contemplated herein.
Section 6.05. Applicable Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles thereof. The Company and each of the Stockholders, by
its, his or her execution hereof, (i) hereby irrevocably submit to the exclusive jurisdiction of
the state and Federal courts located within the borough of Manhattan of the City, County and State
of New York for the purposes of any claim or action arising out of or based upon this Agreement or
relating to the subject matter hereof, (ii) hereby waive, to the extent not prohibited by
applicable law, and agree not to assert by way of motion, as a defense or otherwise, in any such
claim or action, any claim that it, he or she is not subject personally to the jurisdiction of the
above-named courts, that its, his or her property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named courts is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such courts and (iii) hereby
agree not to commence any claim or action arising out of or based upon this Agreement or relating
to the subject matter hereof other than before the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of any such claim or
action to any court other than the above-named courts whether on the grounds of inconvenient forum
or otherwise. The Company and each of the Stockholders hereby consent to service of process in
any such proceeding, and agree that service of process by registered or certified mail, return
receipt requested, at its address specified pursuant to Section 6.01, is reasonably calculated to
give actual notice.
Section 6.06. Severability. Each provision of this Agreement shall be considered
separable and if for any reason any provision or provisions hereof are determined to be invalid
and contrary to any existing or future law, such invalidity shall not impair the operation of or
affect those portions of this Agreement which are valid; provided, however, that
in such case the Stockholders shall endeavor to amend or modify this Agreement to achieve to the
extent reasonably practicable the purpose of the invalid provision or provisions.
Section 6.07. Amendment. Any amendments, modifications, supplements, restatements
to or waivers of, or the termination of, this Agreement shall require the consent of (i) RN
Stockholder, for so long as RN Stockholder has a right to designate at least one Director pursuant
to Section 2.01(a)(i); (ii) MTVN Stockholder, for so long as MTVN Stockholder has a right to
designate at least one Director pursuant to Section 2.01(a)(ii); and (iii) the Company;
provided that no such amendment, modification, supplement, restatement, waiver or
termination shall have a disproportionate and materially adverse effect on the interests of a
party hereunder or thereunder without the written consent of such party so affected.
Section 6.08. Headings. The titles of the sections and subsections of this
Agreement are for convenience of reference only and shall not be interpreted to limit or amplify
the provisions of this Agreement.
17
Section 6.09. Waiver of a Jury Trial. Each of the parties to this Agreement
irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement.
Section 6.10. Enforcement. (a) Each party hereto acknowledges that the other
parties would not have an adequate remedy at law for money damages in the event that any of the
covenants or agreements of any of the other parties in this Agreement were not performed in
accordance with its terms, and it is therefore agreed that each party hereto, in addition to and
without limiting any other remedy or right it may have, will have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any such actual or
potential breach and enforcing specifically the terms and provisions hereof, and each party hereto
hereby waives (i) any and all defenses they may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief and (ii) the need to
post any bond that may be required in connection with the granting of such an injunction or other
equitable relief.
(b) All rights, powers and remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or
beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
Section 6.11. Waiver. No failure by any party to insist upon the strict performance
of any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy
consequent upon a breach of such or any other covenant, agreement, term or condition shall operate
as a waiver of such or any other covenant, agreement, term or condition of this Agreement. Any
party by notice given in accordance with Section 6.01 may, but shall not be under any obligation
to, waive any of its rights or conditions to its obligations hereunder, or any duty, obligation or
covenant of any other party. No waiver shall affect or alter the remainder of this Agreement but
each and every covenant, agreement, term and condition hereof shall continue in full force and
effect with respect to any other then existing or subsequent breach.
Section 6.12. Confidentiality. Each Stockholder expressly acknowledges that such
Stockholder may receive confidential and proprietary information relating to the Company,
including information relating to the Company’s financial condition and business plans, and that
the disclosure of such confidential information to a third party would cause irreparable injury to
the Company. Except with the prior written consent of the Company, no Stockholder shall disclose
any such information to a third party (other than on a “need to know” basis to any Affiliate or
any employee, agent, representative or contractor of such Stockholder or its Affiliates), and each
Stockholder shall use reasonable efforts to preserve the confidentiality of such information. The
obligations of each Stockholder under this Section 6.12 shall survive the termination of this
Agreement for a period of two years. Information exchanged between Stockholders shall be
non-confidential unless exchanged pursuant to a separate confidentiality agreement executed
between such Stockholders. Notwithstanding the foregoing, a Stockholder shall not be bound by the
confidentiality obligations in this Section 6.12 with respect to any information that is currently
or becomes (a) required to be disclosed by such Stockholder pursuant to applicable law (but only
to the
18
extent of such requirement), (b) publicly known or available without unlawful action or improper disclosure on the part of
such Stockholder or (c) known or available to such Stockholder via legitimate means other than
through or on behalf of the Company or the other Stockholders.
Section 6.13. Other Stockholders. Subject to the restrictions on Transfers of
Voting Stock contained herein and as otherwise provided on Schedule D, any Person who is
not RN Stockholder or MTVN Stockholder acquiring Voting Stock (“Other Stockholder”),
shall, on or before the transfer or issuance to it of Voting Stock and as a condition precedent
thereto, sign an Adoption Agreement. Upon the Transfer of all (but not less than all) of the
Voting Stock owned by RN Stockholder or MTVN Stockholder to an Other Stockholder, such Stockholder
shall be assigned the rights, interests and obligations hereunder of RN Stockholder or MTVN
Stockholder, as applicable, to the extent that RN Stockholder or MTVN Stockholder, as applicable,
has rights, interests and obligations immediately prior to such Transfer. The name and address of
each Other Stockholder shall be listed on Schedule F, as amended from time to time.
Section 6.14. Publicity. Neither the Company nor any Stockholder shall issue any
public release or make any press statement about the Company, its business or the transactions
contemplated hereby without the consent of each Stockholder, except as otherwise required by
applicable law.
Section 6.15. Absence of Presumption. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and, in the event of ambiguity or in the event
that any question of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by such parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
Section 6.16. Expenses. Each Stockholder shall be responsible for its own expenses
incurred in connection with this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each party has duly executed this Agreement as of the date first
written above.
RHAPSODY INTERNATIONAL INC. |
||||
By | /s/ Xxx Xxxxx | |||
Name: | Xxx Xxxxx | |||
Title: | President | |||
[Signatures continue on the following page.]
Signature Page to the Stockholder Agreement
20
REALNETWORKS, INC. |
||||
By | /s/ Xxxxxx Xxxxxxx | |||
Name: | Xxxxxx Xxxxxxx | |||
Title: | President and Acting Chief Executive Officer | |||
REALNETWORKS DIGITAL MUSIC OF CALIFORNIA, INC. |
||||
By | /s/ Xxxxxx Xxxxxxx | |||
Name: | Xxxxxx Xxxxxxx | |||
Title: | Vice President | |||
[Signatures continue on the following page.]
Signature Page to the Stockholder Agreement
21
VIACOM INTERNATIONAL INC. |
||||
By | /s/ X. Xxxxx Xxxx-Xxxxx | |||
Name: | X. Xxxxx Xxxx-Xxxxx | |||
Title: | Senior Vice President & Assistant Secretary | |||
DMS HOLDCO INC. |
||||
By | /s/ X. Xxxxx Xxxx Xxxxx | |||
Name: | X. Xxxxx Xxxx-Xxxxx | |||
Title: | Senior Vice President & Assistant Secretary | |||
Signature Page to the Stockholder Agreement
22