ASSET PURCHASE AGREEMENT
Exhibit 2.2
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (Agreement) is dated as of January 11, 2007 (Effective Date), between Napster, LLC, a Delaware limited liability company with principal offices located at 9044 Melrose Avenue, Los Angeles, California 90069 (Buyer), AOL LLC (for certain limited purposes under Section 12.5, Article 14, Article 15, and Article 16 below), a Delaware limited liability company with principal offices located at 22000 AOL Way, Dulles, Virginia 20166 (AOL) and AOL Music Now LLC, a Delaware limited liability company with principal offices located at 550 West Washington Boulevard, Chicago, Illinois 60661 (Seller). Buyer and Seller are, from time to time, referred to individually as a party and jointly or collectively as the parties.
RECITALS
WHEREAS, Seller desires to sell the Assets (as herein defined) to Buyer and Buyer desires to purchase the Assets from Seller for the consideration, terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
AGREEMENT
1. | DEFINITIONS AND USAGE. |
The following definitions shall apply for purposes of this Agreement:
Advertising Agreement means an advertising agreement as executed by the parties in a form attached to this Agreement as Exhibit C.
Affiliate means a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, a specified Person.
Assets have the meaning set forth in Section 2.1.
Assignment and Assumption Agreement has the meaning set forth in Section 3.1.1.
Assumed Liabilities has the meaning set forth in Section 2.3.
Baseline Calculation Date has the meaning set forth in Section 2.2.2(b).
Buyer has the meaning set forth in the first paragraph of this Agreement.
Cash Purchase Price has the meaning set forth in Section 2.2.
Closing has the meaning set forth in Section 2.5.
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Closing Date means the date of the Closing.
Contemplated Transactions means all of the transactions contemplated by this Agreement.
Customer means an end user of the Music Now Service who has either made purchases from, or otherwise registered with, the Music Now Service, including users who as of the Effective Date are on a subscription plan (including Trial Subscribers).
Customer Database means the following information in a digital form, as prepared and delivered in accordance with the Transition Plan, relating to each Subscriber and Shopper to the extent collected by Seller: [***]. For purposes of clarity, the information described above include only information of those Subscribers and Shoppers who do not opt-out of transitioning to the Napster Service in accordance with the Subscriber Notification procedures set forth in the Transition Plan.
Deposit shall have the meaning set forth in Section 2.2.1 below.
Disclosure Schedules means the disclosure schedules attached to Exhibit F to this Agreement.
Final Cash Purchase Price shall have the meaning set forth in Section 2.2.2.
Final Payment Date shall have the meaning set forth in Section 2.2.2.
Laws mean any federal, state, local, municipal, foreign, international, multinational or other constitution, law, ordinance, principle of common law, code, regulation, statute or treaty.
Liability means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise, and whether or not the same is required to be accrued on the financial statements of such Person.
Lien means any claim, charge, easement, encumbrance, security interest, lien, option to acquire or dispose of, pledge, or restriction on voting, sale, transfer, or disposition, whether imposed by agreement, understanding, law, equity or otherwise.
Material Adverse Event means an event, circumstance or event that would (a) be materially adverse to the Music Now Service taken as a whole, (b) materially impair the validity or enforceability of this Agreement against Seller or Buyer, or (c) materially adversely affect either partys ability to perform its obligations under this Agreement or the other documents and agreements referenced herein.
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Music License Agreements means the license agreements for the distribution of musical content between Seller and the independent music labels identified in Exhibit D attached hereto.
Music Now Service means the music entertainment subscription service known as AOL Music Now provided and operated by Seller located at www.musicnow.com and www.aolmusicnow.com.
Napster Service means the music entertainment service that Buyer will provide to Subscribers and Shoppers as of the Transition Date in accordance with the terms of this Agreement.
New Subscriber shall have the meaning set forth in Section 5.3 of the Transition Plan.
Payment Information means the credit card or Visa/MasterCard branded credit/debit card numbers and related billing address information provided by the Subscribers and Shoppers to Seller for use with their purchases and subscriptions on the Music Now Service.
Person means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity or a governmental body.
Proceeding means any action, arbitration, hearing, formal investigation, litigation or suit commenced, brought, conducted or heard by or before, or otherwise involving, any governmental body or arbitrator.
Purchase Price Calculation shall have the meaning set forth in Section 2.2.3 below.
Representative means, with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor, accountant, financial advisor, legal counsel or other representative of that Person.
Retained Liabilities has the meaning set forth in Section 2.3.
Seller has the meaning set forth in the first paragraph of this Agreement.
Shopper means a Customer who has made one or more purchases for content from the Music Now Service between January 1, 2006 and the Closing Date and who has not opted-out of transitioning to the Napster Service as of the Closing Date in accordance with the terms of the Transition Plan.
Statement of Objections shall have the meaning set forth in Section 2.2.3 below.
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Subscriber means either (a) a Customer (i) who is on a subscription plan with Seller for access and use of the Music Now Service, including all Trial Subscribers and (ii) who has valid Payment Information on file with Seller as of the Sellers last billing attempt and (iii) who has not opted-out of transitioning to the Napster Service as of the Closing Date in accordance with the terms of the Transition Plan, or (b) a New Subscriber.
Subscriber Contracts means all contracts for the provision of the Music Now Service between Seller and Subscribers that are in effect as of the Closing Date.
Subscriber Notification means the notice that Seller will provide to Customers as set forth in Section 1 of the Transition Plan.
Tax means any income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, capital stock, franchise, employees income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative, and other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever and any interest, penalty, addition or additional amount thereon imposed, assessed or collected by or under the authority of any governmental body or payable under any tax-sharing agreement or any other contract.
Transition Plan has the meaning set forth in Section 2.4.
Transition Date means the date that the Napster Service is available for access and use by the Subscribers and Shoppers as set forth in the Transition Plan.
Trial Subscriber means an end user who has access to a fee-based subscription to the Music Now Service for free on a trial basis.
Trigger Date means the thirtieth (30th) day from the date that Seller completes sending the Subscriber Notification to Customers as required under Section 1 of the Transition Plan.
2. | SALE AND TRANSFER OF ASSETS; CLOSING. |
2.1 | Sale of Assets. On the Closing Date, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of all Liens, all of Sellers right, title and interest in and to (a) the Subscriber Contracts and (b) the Customer Database (collectively, the Assets). |
2.2 | Consideration. Subject to the terms set forth below, the consideration for the Assets (the Cash Purchase Price) will be [***] Dollars ($[***]) as adjusted below and the assumption of the Assumed Liabilities. The payment of the Cash Purchase Price shall be in accordance with the terms described in Section 2.2.1, 2.2.2 and 2.2.3 below. |
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2.2.1 | Earnest Money Deposit. Buyer shall pay to Seller an earnest money deposit of [***] Dollars ($[***]) by wire transfer of immediately available funds within two (2) business days of the Effective Date (Deposit). |
2.2.2 | Final Cash Purchase Price. The balance of the Cash Purchase Price shall be paid on the Final Payment Date in accordance with Section 2.2.3 below. The adjustments to the Cash Purchase Price shall be calculated as follows: |
a. The Cash Purchase Price is based upon an initial estimate that there is a baseline of 350,000 Subscribers (the Baseline).
b. The Cash Purchase Price will be (i) increased at an amount of [***] ($[***]) per Subscriber to the extent that the number of Subscribers exceeds the Baseline as of the earlier of (x) thirty days following the Trigger Date or (y) the Closing Date or (ii) decreased at an amount of [***] ($[***]) per Subscriber to the extent that the number of Subscribers is less than the Baseline as of the earlier of (x) thirty days following the Trigger Date or (y) the Closing Date (Baseline Calculation Date).
c. The Cash Purchase Price will be reduced at the Closing by the portion of any subscription fees paid by any Subscribers before the Closing attributable or redeemable for any period after the Closing.
d. The Cash Purchase Price will be reduced by the product of $[***] times the total number of permanent download credits purchased by Subscribers and Shoppers on and after January 1, 2006 and that remain unredeemed as of the Closing Date (estimated as of December 27, 2006 at 20,692 download credits or $[***]) (the Cash Purchase Price, as adjusted by subsections (a) through (d) of this Section 2.2.2, the Final Cash Purchase Price).
e. If the Final Cash Purchase Price is less than the Deposit, then Seller shall remit to Buyer the balance of such adjusted Final Cash Purchase Price within ten (10) days of the final determination of the Purchase Price Calculation as determined in Section 2.2.3 below (Final Payment Date) by wire transfer of immediately available funds; if the Final Cash Purchase Price is greater than the Deposit, then Buyer shall remit to Seller the balance of such adjusted Final Cash Purchase Price on the Final Payment Date by wire transfer of immediately available funds.
2.2.3 | Procedure for Calculation of Final Cash Purchase Price. No later than ten (10) days after the Closing, Seller shall provide to Buyer a list of the Subscribers in effect as of the Baseline Calculation Date and a calculation of the Final Cash Purchase Price determined in accordance with Section |
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2.2.2 above, including any information as reasonably necessary to support the basis of Sellers calculation (Purchase Price Calculation). At any time during the ten (10) days following delivery to Buyer of the Purchase Price Calculation, Buyer shall either (a) inform Seller in writing that the Purchase Price Calculation is acceptable or (b) deliver to Seller a written statement setting forth a description of Sellers objections to the Purchase Price Calculation (the Statement of Objections). If no acceptance or Statement of Objections is received by Seller within such ten (10) days period, the Purchase Price Calculation shall be conclusively deemed correct and binding on both Seller and Buyer. If Buyer timely submits a Statement of Objections, Seller and Buyer shall use their best efforts to agree upon a Final Cash Purchase Price. If, after ten (10) days, Seller and Buyer are unable to agree upon a Final Cash Purchase Price, then the parties shall try to settle their differences amicably between themselves by referring the disputed matter to the appropriate executives at the senior vice president level or higher for discussion and resolution. Either party may initiate such informal dispute resolution by sending written notice of the dispute to the other party, and within ten (10) days after such notice such representatives of the parties shall meet for attempted resolution by good faith negotiations. If such representatives are unable to resolve such dispute within thirty (30) days of initiating such negotiations, either party may seek the remedies available to such party under law.
2.3 | Liabilities. Subject to the terms and conditions of this Agreement and effective as of the Closing, Buyer shall assume, discharge, perform and otherwise be solely responsible for, any Liability to the Subscribers (related to the Subscriber Contracts) or Shoppers (including permanent download credits acquired prior to the Closing Date) in the ordinary course of business outstanding as of or subsequent to the Closing Date and all other Liabilities related to the Assets on matters occurring subsequent to the Closing (collectively, the Assumed Liabilities). For purposes of clarity, any Liabilities related to the Music License Agreements assigned to Buyer under Section 7.9 arising subsequent to the Closing Date shall be Assumed Liabilities. Other than the Assumed Liabilities, Buyer shall not assume any other Liability of Seller (collectively, the Retained Liabilities). Without limitation, the Retained Liabilities shall include all royalties owed by Seller to third parties (including music companies) and any Proceeding pending or arising before the Closing Date related to the Music Now Service. |
2.4 | Migration and Transition. The parties shall implement the transfer of Assets from Seller to Buyer in accordance with the Transition Plan (Transition Plan) attached hereto as Exhibit A. |
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2.5 | Closing. Unless Seller and Buyer otherwise agree in writing, the closing of the Contemplated Transactions (the Closing) will take place at Dulles, Virginia commencing at 10:00 a.m. (local time) on the Transition Date. |
3. | CLOSING OBLIGATIONS. |
3.1 | Seller Obligations. Seller shall deliver to Buyer at the Closing: |
3.1.1 | an Assignment and Assumption Agreement in the form of Exhibit B (the Assignment and Assumption Agreement ) executed by Seller; |
3.1.2 | such other instruments of transfer and conveyance as may reasonably be requested by Buyer, each in form and substance mutually satisfactory to the parties; |
3.1.3 | a certificate executed by an authorized representative of Seller to the effect that each of the conditions specified in Section 9.1 and 9.2 and 9.5 are satisfied in all respects; and |
3.1.4 | the Advertising Agreement. |
3.2 | Buyer Obligations. Buyer shall deliver to Seller at the Closing: |
3.2.1 | the Deposit by wire transfer thereof into an account designated in writing by Seller in accordance with the terms of Section 2.2; |
3.2.2 | the Assignment and Assumption Agreement executed by Buyer; |
3.2.3 | a certificate executed by Buyer to the effect that each of the conditions specified in Section 10.1, 10.2 and 10.5 are satisfied in all respects; and |
3.2.4 | the Advertising Agreement. |
4. | REPRESENTATIONS AND WARRANTIES OF SELLER. |
Seller represents and warrants to Buyer as follows:
4.1 | Organization and Good Standing. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is the sole beneficiary of the Subscriber Contracts. Seller has the power and authority to own all of its property and assets and is qualified to carry on its business as it is now being conducted. |
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4.2 | Enforceability; Authority; No Conflict. The execution and delivery of this Agreement (and the other documents and agreements referenced herein) and the consummation of the Contemplated Transactions have been duly authorized by the Seller, and all actions by the Seller necessary for the authorization and consummation of the Contemplated Transactions have been taken. This Agreement, and the other documents and agreements referenced herein, when executed and delivered by the Seller will constitute its legal, valid and binding obligations enforceable against the Seller in accordance with the terms of this Agreement and such other agreements and documents described herein. The execution and delivery by Seller of this Agreement and the other documents and agreements referenced herein, and the performance by it of, and compliance with, its obligations hereunder and thereunder will not (a) conflict with or violate or result in a default under its operating agreement, certificate of formation, or any of its other charter documents, (b) violate any order or Laws applicable to it, the Assets or the Music Now Service, (c) result in the imposition of any Lien against any of the Assets, or (d) require any filing with, or any permit, approval or consent from, any Person, except that the consent of the independent music labels will be required to assign any Music License Agreements to Buyer under Section 7.9. |
4.3 | Title to and Condition of the Assets. Except as otherwise provided below, the Seller warrants and represents (a) that it has equitable interest in, and the right to possess and use the Payment Information subject to the rights of all applicable credit card issuers and associations, (b) that it has good title to all other Assets, free and clear of all Liens and (c) that the Subscriber Contracts are valid, binding and in full force and effect, enforceable in accordance with their terms against the Subscribers, subject to applicable bankruptcy, insolvency, and similar Laws affecting creditors rights generally and general principles of equity; provided, however, the Seller makes no representation or warranty with respect to the Music Label Agreements except as otherwise provided in Section 7.9 below. |
4.4 | Subscriber Contracts. The Subscriber Contracts are each in substantially the same form as Exhibit E-1. Each Subscriber Contract was entered into in a bona fide transaction, is a valid and binding agreement of Seller, the performance of which by Seller does not violate any applicable Law. Seller has duly performed all of its obligations under each Subscriber Contract to the extent that such obligations to perform have accrued. To Sellers knowledge, no material breach or material default, alleged material breach or alleged material default, or event which would (with the passage of time, notice or both) constitute a material breach or material default thereunder by Seller or, to the knowledge of Seller, any other party or obligor with respect thereto, has occurred, or as a result of this Agreement or performance hereof will occur. To Sellers knowledge, Seller neither has received written notice nor is there a pending claim that it has breached, violated or defaulted under any Subscriber Contract, and to the knowledge of Seller there is no valid basis for any of the foregoing. Seller has not |
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given written notice to any other Person that such Person has breached, violated or defaulted under any Subscriber Contract, and to the knowledge of Seller there is no valid basis for any of the foregoing. Other than the Subscriber Contracts, Seller has no Liabilities with respect to the Subscribers with respect to the Music Now Service.
4.5 | Music Now Service. The Music Now Service is and has been conducted in material compliance with all applicable Laws. Except as otherwise provided in Schedule 4.5 of Exhibit F, to Sellers knowledge, Seller has not received any written notice of any actual, alleged, possible or potential violation of any applicable Law related to the Music Now Service or of any obligation to bear all or any portion of the cost of any Liability of any nature related to the Music Now Service. Sellers privacy policy which is related to the Assets, Subscribers or Music Now Service, is set forth in Exhibit E-2, and Seller is and has been in material compliance with such policy. |
4.6 | No Closing Liability. To Sellers knowledge, there is no threatened or pending (in writing) Proceeding by or against Seller that may adversely and materially affect the Assets or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions. |
4.7 | Limitation on Warranty; Knowledge of Buyer. EXCEPT AS EXPRESSLY PROVIDED HEREIN TO THE CONTRARY, THE ASSETS ARE SOLD AS IS. SELLER MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY WHATSOEVER WITH RESPECT TO THE ASSETS (OTHER THAN THOSE SET FORTH IN THIS SECTION 4 OR IN ANY CERTIFICATE DELIVERED HEREUNDER) AND SPECIFICALLY EXCLUDES THE IMPLIED WARRANTIES OF MERCHANTIBILITY, ACCURACY AND FITNESS FOR A PARTICULAR PURPOSE. Without limiting the generality of this Section 4.7, Seller specifically makes no representation or warranty as to the future prospects or profitability of the Assets to be used by Buyer. |
5. | REPRESENTATIONS AND WARRANTIES OF BUYER. |
Buyer represents and warrants to Seller as follows:
5.1 | Organization and Good Standing. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware with full corporate power and authority to conduct its business as it is now conducted. |
5.2 | Enforceability; Authority; No Conflict. The execution and delivery of this Agreement (and the other documents and agreements referenced herein) and the consummation of the Contemplated Transactions have been duly authorized by the Seller, and all actions by the Seller necessary for the authorization and consummation of the Contemplated Transactions have been taken. This |
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Agreement, and the other documents and agreements referenced herein, when executed and delivered by the Buyer, will constitute its legal, valid and binding obligations enforceable against the Buyer in accordance with the terms of this Agreement and such other agreements and documents described herein. The execution and delivery by Buyer of this Agreement and the other documents and agreements referenced herein, and the performance by it of, and compliance with, its obligations hereunder and thereunder will not (a) conflict with or violate or result in a default under its operating agreement, certificate of formation, or any of its other charter documents, (b) violate any order or Laws applicable to it, or (c) require any filing with, or any permit, approval or consent from, any Person.
5.3 | No Closing Liability. There is no pending Proceeding that has been commenced against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions. To the best of Buyers knowledge, no such Proceeding has been threatened. |
5.4 | Availability of Funds. Buyer has available sufficient funds to enable it to consummate the Contemplated Transactions on the terms provided herein. |
6. | NO BROKERS. |
Each party represents to the other party that no Person is entitled to any brokers commission, finders fee or similar compensation in connection with the transactions contemplated by this Agreement. Each party shall be responsible for the payment of its own expenses arising out of the transaction contemplated by this Agreement.
7. | COVENANTS OF SELLER PRIOR TO CLOSING |
7.1 | Access and Investigation. Between the Effective Date and the Closing, Seller shall upon reasonable prior notice afford Buyer and its Representatives reasonable access, during regular business hours, to Sellers personnel, the Subscriber Contracts, and books and records specifically pertaining to the Assets, such rights of access to be exercised in a manner that does not unreasonably interfere with the operations of Seller. |
7.2 | Operation of the Business of the Music Now Service. Except as otherwise agreed by Buyer and Seller, and except as otherwise provided in the Transition Plan, between the Effective Date and the Closing, Seller shall use commercially reasonable efforts to conduct the business of the Music Now Service for the benefit of its existing Customers in its ordinary course of business, including without limitation, offering and delivering content to the Customers and processing of payables and invoices to and collecting subscription fees from Subscribers. Seller shall confer with Buyer concerning any operational matters of a material nature. Nothing shall be construed in this Section 7.2 as requiring |
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Seller to employ additional personnel or to apply additional resources to its business. The parties understand and agree that beginning on the Effective Date, Seller may take reasonable steps to prepare for the wind down of the Music Now Service.
7.3 | Required Approvals. As promptly as practicable after the Effective Date, Seller shall make, or cause to be made, all filings, if any, required by Law to be made by it, and obtain all third party approvals and consents, if any, required to be obtained by it, in each case to consummate the Contemplated Transactions. Seller also shall reasonably cooperate with Buyer at Buyers expense with respect to all filings, if any, Buyer shall be required to make under this Section 7.3. |
7.4 | Notification. Between the Effective Date and the Closing, Seller shall promptly notify Buyer in writing if Seller becomes aware of (a) any fact or condition that causes or constitutes a breach of any of Sellers representations and warranties made as of the date of this Agreement or (b) the occurrence after the date of this Agreement of any fact or condition that (except as expressly contemplated by this Agreement) causes or constitutes a breach of any such representation or warranty had that representation or warranty been made as of the time of the occurrence of, or Sellers discovery of, such fact or condition. Should any such fact or condition require any change to the Disclosure Schedules, Seller shall promptly deliver to Buyer a supplement to the Disclosure Schedule specifying such change; provided that all such updates shall be excluded for purposes of Sections 9 - 14. During the same period, Seller also shall promptly notify Buyer of the occurrence of any breach of any covenant of Seller in this Section 7 or of the occurrence of any event that may make the satisfaction of the conditions in Section 9 impossible or unlikely. |
7.5 | Commercially Reasonable Efforts. Seller shall use commercially reasonable efforts to cause the conditions in Section 9 to be satisfied. |
7.6 | Cooperation. Between the Effective Date and the Closing, Seller will reasonably cooperate with Buyer and its Representatives in the preparation of any documents or other materials required in connection with the Contemplated Transactions. |
7.7 | Disclosure. Seller hereby agrees to the terms set forth in Section 8.6 below. |
7.8 | Customer Service Records. Seller shall use commercially reasonable efforts to compile and deliver to Buyer certain customer service records for all Subscribers and Shoppers in a form and media as mutually agreed to by the parties; provided, however, that the compilation and delivery of such records are technically feasible for both parties and will not require Seller to employ resources in addition to the resources currently allocated for the operation of its business. |
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7.9 | Music Label Agreements. Upon request of Buyer, Seller shall use commercially reasonable efforts to request and facilitate consent from the applicable licensors the right to assign and transfer at Closing the Music Licensing Agreements to Buyer; provided that any Liabilities of Seller relating to such agreements and existing prior to Closing shall remain Liabilities of Seller. Any Music Licensing Agreement in which Seller obtains consent to transfer to Buyer will be assigned and delivered to Buyer as part of the Assignment and Assumption Agreement. Notwithstanding anything contrary herein, any Music Licensing Agreement assigned under this Section 7.9 will be provided AS IS without representations or warranties of any kind, including any implied warranties. |
8. | COVENANTS OF BUYER PRIOR TO CLOSING. |
8.1 | Required Approvals. As promptly as practicable after the date of this Agreement, Buyer shall make, or cause to be made, all filings, if any, required by Law to be made by it and obtain all third party approvals and consents, if any, required to be obtained by it, in each case to consummate the Contemplated Transactions. Buyer also shall reasonably cooperate with Seller at Sellers expense with respect to all filings, if any, Seller shall be required to make under any applicable Law. |
8.2 | Commercially Reasonable Efforts. Buyer shall use commercially reasonable efforts to cause the conditions in Section 10 to be satisfied. |
8.3 | Transition. Buyer shall use its best efforts to make the Napster Service available to the Subscribers and Shoppers and to achieve a Transition Date as soon as practicable after the Trigger Date but in no event later than thirty (30) calendar days after the Trigger Date. Notwithstanding the foregoing, Buyer may, upon request to Seller, elect to take an extension of time to transition the Subscribers and Shoppers to the Napster Service for a period of up through and including March 31, 2007. Buyers request for an extension shall be made no later than fourteen (14) calendar days following the Trigger Date. In the event Buyer elects to take such an extension of time or in the event that Seller has failed to perform any of its obligations under this Agreement in any material respect, Seller will use commercially reasonable efforts to use its then existing resources to continue operation of the Music Now Service until the earlier of (i) the Transition Date or (ii) March 31, 2007. |
8.4 | Notification. Between the Effective Date and the Closing, Buyer shall promptly notify Seller in writing if Buyer becomes aware of (a) any fact or condition that causes or constitutes a breach of any of Buyers representations and warranties made as of the date of this Agreement, or (b) the occurrence after the date of this Agreement of any fact or condition that (except as expressly contemplated by this Agreement) causes or constitutes a breach of any such representation or warranty had that representation or warranty been made as of the time of the occurrence of, |
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or Buyers discovery of, such fact or condition. During the same period, Buyer also shall promptly notify Seller of the occurrence of any breach of any covenant of Buyer in this Section 8 or of the occurrence of any event that may make the satisfaction of the conditions in Section 10 impossible or unlikely.
8.5 | Cooperation. Between the date of this Agreement and the Closing, Buyer will reasonably cooperate with Seller, AOL and their Representatives in the preparation of any documents or other materials required in connection with the Contemplated Transactions. |
8.6 | Disclosure. Except as otherwise agreed by Buyer and Seller, between the date of this Agreement and the Closing, each party shall discuss with third parties and Representatives the potential sale of the Assets only on a need to know basis and only after receiving from such third parties and Representatives confidentiality agreements in form and substance satisfactory to the other party and for the benefit of such other party as a third party beneficiary, pursuant to which such third parties and Representatives agree not to disclose such potential sale. |
9. | CONDITIONS PRECEDENT TO BUYERS OBLIGATION TO CLOSE. |
All obligations of Buyer under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions:
9.1 | Accuracy of Representations. Subject to the qualifiers set forth in this Section 9.1, all of Sellers representations and warranties in this Agreement shall have been accurate in all material respects as of the date of this Agreement, and shall be accurate in all material respects as of the time of the Closing as if then made (except for those representations and warranties that contain any materiality qualification, which representations and warranties, to the extent so qualified, shall instead be true and correct in all respects as of such respective dates). |
9.2 | Sellers Performance. Seller shall have performed and complied with in all material respects all of its covenants and obligations set forth in this Agreement. |
9.3 | Additional Documents. Seller shall have caused to be delivered to Buyer the documents and instruments required by Section 3.1 or otherwise facilitated the consummation or performance of any of the Contemplated Transactions. |
9.4 | No Proceedings. Since the date of this Agreement, there shall not have been commenced or threatened in writing against Buyer or Seller any material Proceeding (a) involving any material challenge to, or seeking material damages or other material relief in connection with, any of the Contemplated Transactions or (b) that may have the effect of preventing, materially delaying, making illegal, imposing limitations or conditions on or otherwise materially interfering with any of the Contemplated Transactions. |
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9.5 | No Material Adverse Event. There shall have been no Material Adverse Event since the date hereof. |
10. | CONDITIONS PRECEDENT TO SELLERS OBLIGATION TO CLOSE. |
All obligations of Seller under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions:
10.1 | Accuracy of Representations. All of Buyers representations and warranties in this Agreement shall have been accurate in all material respects as of the date of this Agreement and shall be accurate in all material respects as of the time of the Closing as if then made. |
10.2 | Buyers Performance. All of the covenants and obligations that Buyer is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), shall have been performed and complied with in all material respects. |
10.3 | Additional Documents. Buyer shall have caused to be delivered to Buyer the documents and instruments required by Section 3.2 or otherwise facilitated the consummation or performance of any of the Contemplated Transactions. |
10.4 | No Proceedings. Since the date of this Agreement, there shall not have been commenced or threatened in writing against Seller or Buyer any material Proceeding (a) involving any material challenge to, or seeking material damages or other material relief in connection with, any of the Contemplated Transactions or (b) that may have the effect of preventing, materially delaying, making illegal, imposing limitations or conditions on or otherwise materially interfering with any of the Contemplated Transactions. |
10.5 | No Material Adverse Event. There shall have been no Material Adverse Event since the date hereof. |
11. | TERMINATION. |
11.1 | Termination Events. By notice given prior to or at the Closing, this Agreement may be terminated as follows: (a) by mutual consent in writing of Buyer and Seller; (b) by Seller if Buyer fails to deliver the Deposit to Seller within two (2) business days of the Effective Date; (c) by Seller or Buyer if a material breach of any provision of this Agreement has been committed by the other party and such breach has not been cured within ten (10) days of notice to such breaching party by such non-breaching party (if such breach can be cured); or (d) by Seller or |
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Buyer if the Closing has not occurred on or before 5:00 p.m. Eastern Standard Time on March 31, 2007, provided, however, that the party seeking to terminate this Agreement pursuant to this Section 11.1(d) may do so only if the failure to close shall not have resulted from the failure of such party to comply with any of the terms of this Agreement or from the inaccuracy of any representation or warranty of such party. Termination of this Agreement by a party shall not preclude the terminating party from seeking all remedies otherwise available to it for breach of a representation, warranty, or covenant hereunder by the other party.
11.2 | Effect of Termination. Each partys right of termination under Section 11.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of such right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 11.1, all obligations of the parties under this Agreement will terminate and the Deposit will be refunded to Buyer, except that the obligations of the parties in this Section 11.2 and Sections 15 and 16 will survive, provided, however, that, if this Agreement is terminated because of a breach of this Agreement by the non-terminating party or because one or more of the conditions to the terminating partys obligations under this Agreement is not satisfied as a result of the non-terminating partys failure to comply with its obligations under this Agreement, the terminating partys right to pursue all legal remedies will survive such termination unimpaired. |
12. | ADDITIONAL COVENANTS. |
12.1 | Taxes and Expenses. The parties shall each bear their respective direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby, whether consummated or not; provided, however, that all transfer, sales, use, excise, recording and similar Taxes, if any, arising in connection with the transactions contemplated hereunder, shall be borne one half by Seller and one half by Buyer, whether such Taxes are imposed on Seller or Buyer. |
12.2 | Retention of and Access to Records. After the Closing Date, Buyer shall retain for a period of six (6) years or such longer period required by applicable Law those records of Seller delivered to Buyer hereunder. Buyer also shall provide Seller and its Representatives reasonable access thereto, during normal business hours and on at least three days prior written notice, to enable them to prepare financial statements or tax returns or with respect to any tax audits. |
12.3 | Sellers Employees. Buyer is not obligated to hire any employee of Seller but may interview any employee of Seller at any time following the Effective Date. Buyer will in good faith give Sellers employees priority in consideration (to the extent permitted by applicable Law) in the event Buyer has positions available for employment on or about the Closing Date. Employment of Sellers personnel by |
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Buyer, if any, shall be in the sole discretion of Buyer in the exercise of its business judgment and on terms and conditions solely determined by Buyer. This Section 12.3 should not be construed as making, and no provision of this Agreement shall make, Sellers employees third party beneficiaries to this Agreement. Buyer is not assuming any of Sellers employment Liabilities that have accrued.
12.4 | Further Assurances. The parties shall cooperate reasonably with each other and with their respective Representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement, and shall (a) furnish upon request to each other such further information; (b) execute and deliver to each other such other documents; and (c) do such other acts and things, in each case as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the Contemplated Transactions. |
12.5 | Non Competition. In consideration for the purchase of the Assets, for a period of twelve (12) months following the Effective Date, neither AOL nor any subsidiary directly owned by AOL (including Seller) shall, directly or indirectly, anywhere in the United States, create or acquire an online, interactive subscription based music service substantially similar to the service currently provided to Subscribers by Seller (a Competitive Service). AOLs performance under the Advertising Agreement, video offerings and AOLs current music offerings, including without limitation AOLs Internet radio services but excluding specifically Sellers business, shall not constitute a breach of this Section 12.5. Notwithstanding anything to the contrary in this Section 12.5, (i) the acquisition by AOL and/or one or more of its subsidiaries of a business that provides a Competitive Service shall not be deemed to violate this Section 12.5 if the principal purpose of such acquisition is not to circumvent the provisions of this Section 12.5 and if the revenues of such Competitive Service constitute less than Forty Percent (40%) of the revenues of the business acquired and (ii) upon a change of control (as hereinafter defined) of AOL the provisions of this Section 12.5 shall be of no further force or effect. For purposes of this Section 12.5, change of control shall mean the sale or other disposition of more than Forty Percent (40%) of the voting power of the applicable entity in a transaction or series of related transactions or the sale of all or substantially all of the assets of that entity, the principal purpose of which is not to circumvent the provisions of this Section 12.5. The parties agree that a breach or threatened breach of any covenant set forth in this Section 12.5 could cause irreparable harm to Buyer, that such other partys remedies at Law upon any such breach would be inadequate, and that, accordingly, upon any such breach or threatened breach Buyer may seek a restraining order or injunction or both against the breaching party without the necessity of posting a bond, in addition to any other rights and remedies which are available to the other parties. The parties agree that the restrictions set forth in this Section are reasonable and appropriate and were determined in good faith through arms length negotiation by the parties but that if a court of competent |
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jurisdiction finds this Section more restrictive than permitted by applicable law of any jurisdiction in which Buyer seeks enforcement hereof, this Section will be limited to the extent required to permit enforcement under such laws. For purposes of clarity, this Section 12.5 shall not apply to AOLs ultimate parent or such parents other subsidiaries. Notwithstanding any provision herein to the contrary, for a period of twelve (12) months following the Effective Date, neither AOL nor its successor in interest shall knowingly solicit via out-bound marketing, directly or indirectly, any Customer for a Competitive Service; provided however, that general advertising of a Competitive Service shall not constitute solicitation.
13. | SURVIVAL. |
All representations and warranties in this Agreement shall survive the Closing for a period of [***] following the Closing Date (Survival Period), except that the representations and warranties contained or made in Sections 4.1, 4.2, 4.3, 5.1 and 5.2 will instead continue until [***] as the same may be waived or extended; provided that if a claim has been asserted prior to the expiration of the applicable Survival Period, such claim will not be extinguished by the occurrence of the end of the applicable Survival Period and will survive until final resolution thereof. The covenants made in this Agreement shall survive indefinitely, other than those covenants to be performed between the Effective Date and Closing and except as otherwise provided in this Agreement.
14. | INDEMNIFICATION. |
14.1 | Indemnification by the Seller. AOL and the Seller each agrees to indemnify, defend and hold harmless the Buyer and its directors, officers, agents, employees, representatives, attorneys, Affiliates and successors and assigns from and against any loss, liability, damage, cost or expense (including, without limitation, reasonable attorneys and accountants fees and expenses) arising out of or resulting from (a) each breach of the representations and warranties made by the Seller pursuant to this Agreement; (b) each breach of the covenants or agreements made by the Seller and AOL pursuant to this Agreement, (c) the operation of, or any action or failure to act by the Seller with respect to, the Assets or the Music Now Service prior to the Closing Date and (d) any and all Retained Liabilities. Neither AOL nor the Seller will have liability (indemnification or otherwise) with respect to claims under this Section 14.1 until the total of all damages with respect to such matters exceeds [***] Dollars ($[***]) and then only for the amount by which such damages exceeds [***] Dollars ($[***]) in the aggregate. The total amount of damages AOL and the Seller will be obligated to pay under Section 14.1(a) shall not exceed the Cash Purchase Price. However, in the event of any breach of any representation or warranty made by Seller, each materiality qualifier contained in such representation or warranty shall be deemed excluded solely for purposes of calculating the extent of losses subject to indemnity under this Section 14.1. |
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14.2 | Indemnification by the Buyer. The Buyer agrees to indemnify, defend and hold harmless the Seller, AOL and their respective directors, officers, agents, employees, representatives, attorneys, Affiliates and successors and assigns, from and against any loss, liability, damage, cost or expense (including, without limitation, reasonable attorneys and accountants fees) arising out of or resulting from (a) each breach of the representations and warranties made by the Buyer pursuant to this Agreement, (b) each breach of the covenants or agreements made by the Buyer pursuant to this Agreement, (c) the operation of, or any action or failure to act by the Buyer with respect to the Assets after the Closing Date, or (d) any Assumed Liabilities. Seller shall have no liability (for indemnification or otherwise) with respect to claims under Section 14.2 until the total of all Damages with respect to such matters exceeds [***] dollars ($[***]) and then only for the amount by which such Damages exceed [***] dollars ($[***]). The total amount of damages the Seller will be obligated to pay under Section 14.2(a) shall not exceed the Cash Purchase Price. |
14.3 | Process. A party seeking indemnification under this Agreement shall give the party from whom indemnification is sought reasonably prompt notice of the relevant claim. With respect to any such claims that are third party claims, (a) the indemnifying party will have Fourteen (14) days after receipt of such notice to notify the indemnifying party whether or not it desires to defend the indemnified party (with counsel reasonably acceptable to the indemnified party), (b) if the indemnifying party does not promptly commence and maintain the defense of such claims, the indemnified party will have the right to control any defense or settlement, at the expense of the indemnifying party, subject to the limitations hereunder, (c) if the indemnifying party does promptly commence and maintain the defense of such claims, the indemnifying party shall control the defense of such claim and the indemnified party shall have the right to participate in the proceeding at its own expense, and (d) no claim will be settled or compromised without the prior written consent of each party to be affected by such settlement or compromise, which consent will not be unreasonably withheld or delayed. |
14.4 | Exclusive Remedy. The indemnification provided in this section shall be the sole and exclusive remedy from and after the Closing for damages for any indemnity claim, except as provided in Section 16.13. |
15. | CONFIDENTIALITY. |
15.1 | Confidential Information. Confidential Information shall mean any information or compilation of information that is proprietary to the parties and which relates to their existing or reasonably foreseeable business, including, but not limited to, trade secrets and information contained in or relating to product designs, processes, techniques, software, tooling, sales techniques, marketing plans or proposals existing or potential customer lists and all other customer information. Confidential Information also shall include the terms of this Agreement and the Advertising Agreement. Confidential Information shall not |
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include information which (a) is or becomes publicly available other than as a result of any breach of a confidentiality obligation, (b) is rightfully received from a third party and not derived directly or indirectly from any breach of a confidentiality obligation, or (c) is independently developed by the parties without any reference to any such Confidential Information. All information that either party hereto identifies as being confidential or a trade secret shall be presumed to be Confidential Information.
15.2 | Duty to Maintain Confidentiality. Each party acknowledges that Confidential Information may be disclosed to the other party during the course of this Agreement. Each party agrees that, during the term of this Agreement and the Advertising Agreement and for a period of two years following expiration or termination of this Agreement, it will take reasonable steps, at least substantially equivalent to the steps it takes to protect its own proprietary information, to (a) prevent use of the other partys Confidential Information for any purpose other than to carry out its rights and obligations hereunder, and (b) prevent the disclosure of the other partys Confidential Information, other than to its employees or Representatives who must have access to such Confidential Information for such party to exercise its rights and perform its obligations hereunder and who each agree to be bound by agreements with a duty of confidentiality no less protective of confidential information than provided herein. |
15.3 | Post-Closing. From and after the Closing, (a) this Article 15 shall not in any way limit Buyer with respect to the Assets or any Confidential Information included therein, and (b) for a period of two years, Seller shall keep strictly confidential all Confidential Information relating to or included in the Assets. |
16. | GENERAL PROVISIONS. |
16.1 | Expenses. Each party hereto shall pay its respective expenses and costs incident to the preparation, negotiation, execution and performance of this Agreement. |
16.2 | Public Announcements. Neither party will make any public statements regarding the existence of this Agreement nor the relationship described herein, without the prior written consent of the other party, which consent shall not be unreasonably withheld, except as required by Law or as otherwise provided for herein. To the extent required by Law to make any such public statements, the party required to make such statements will use commercially reasonable efforts to provide such statement to the other party for prior review and comment. |
16.3 | Notices. All notices, consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); or (b) received or refused by the addressee, if sent by certified mail, return receipt requested, in each case to the |
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following addresses and marked to the attention of the person (by name or title) designated below (or to such other address, facsimile number, e-mail address or person as a party may designate by notice to the other parties):
If to Buyer:
Napster, LLC
9044 Melrose Ave.
Los Angeles, CA 90069
Attn: General Counsel
If to Seller:
AOL Music Now LLC
22000AOL Way
Dulles, Virginia 20166
Attn: Deputy General Counsel
With a copy to:
AOL LLC
22000AOL Way
Dulles, Virginia 20166
Attn: Deputy General Counsel
16.4 | Governing Law; Jurisdiction; Service of Process. This Agreement and all exhibits, schedules and documents delivered pursuant to this Agreement will be governed by and construed under the laws of the Commonwealth of Virginia without regard to conflicts-of-laws principles that would require the application of any other law. Any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction may be brought in the courts of the Commonwealth of Virginia, Fairfax County or, if it has or can acquire jurisdiction, in the United States District Court for the Eastern District of Virginia, and each of the parties irrevocably submits to the jurisdiction of each such court in any such Proceeding, and waives any objection it may now or hereafter have to venue or to convenience of forum. THE PARTIES AGREE THAT EITHER OR BOTH OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE ANY OBJECTIONS TO VENUE OR TO CONVENIENCE OF FORUM. Process in any Proceeding referred to in the first sentence of this section may be served on any party anywhere in the world. |
16.5 | Waiver; Remedies Cumulative. No waiver by either party hereto of any condition or of any breach of any term, covenant, representation or warranty |
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contained in this Agreement shall be deemed or construed as a further or continuing waiver of such condition or breach or waiver of any other or subsequent condition or the breach of any other term, covenant, representation or warranty contained in this Agreement.
16.6 | Entire Agreement and Modification. This Agreement and all exhibits, schedules and documents delivered pursuant to this Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral and written, between the parties with respect to the subject matter of this Agreement. This Agreement may only be amended, supplemented or modified by written instrument executed by the parties to this Agreement. |
16.7 | Assignments, Successors and No Third-Party Rights. No party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other parties; provided, Buyer may assign this Agreement to an Affiliate of Buyer or to a third party prior to Closing with Sellers prior written consent, which will not be unreasonably withheld. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon and inure to the benefit of the successors and permitted assigns of the parties. Except as provided in Section 14.1 or 14.2, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement, except such rights as shall inure to a successor or permitted assignee pursuant to this Section 16.7. |
16.8 | Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective successors, heirs and permitted assigns. |
16.9 | Severability. If any provision of this Agreement is determined to be illegal or unenforceable, such provision will be deemed amended to the extent necessary to conform to applicable law or, if it cannot be so amended without materially altering the intention of the parties, it will be deemed stricken and the remainder of the Agreement will remain in full force and effect. |
16.10 | Construction. The section and article headings contained in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement. Any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation hereof. |
16.11 | Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence. |
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16.12 | Execution of Agreement. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute the same Agreement. Signatures of the parties transmitted by facsimile shall be deemed to be their original signatures for all purposes. |
16.13 | Remedies. Each party hereto acknowledges that irreparable damage would result if this Agreement is not specifically enforced. Therefore, the rights and obligations of the parties under the Agreement, including, without limitation, their respective rights and obligations to sell and purchase the Assets and comply with the covenants set forth in this Agreement, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief may be applied for and granted in connection therewith. Each party hereto agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement relating to the Closing and hereby agrees to waive the defense that a remedy at law would be adequate in any action for specific performance or injunctive relief hereunder. |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
NAPSTER, LLC | AOL MUSIC NOW LLC: | |
By: /s/ Laura B. Goldberg | By: /s/ Gary Cohen | |
Print Name: Laura B. Goldberg | Print Name: Gary Cohen | |
Title: Chief Operating Officer | Title: GM/Vice President | |
Date: 1/11/07 | Date: 1/11/07 | |
AOL LLC: (for purposes of Section 12.5, 14.1 and 14.3 only) | ||
By: /s/ Stephen Swad | ||
Print Name: Stephen Swad | ||
Title: CFO | ||
Date: January 11, 2007 |
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EXHIBITS:
EXHIBIT A - TRANSITION PLAN*
EXHIBIT B - SAMPLE ASSIGNMENT AND ASSUMPTION AGREEMENT*
EXHIBIT C - ADVERTISING AGREEMENT
EXHIBIT D - MUSIC LICENSE AGREEMENTS*
EXHIBIT E-1 - SUBSCRIBER CONTRACT*
EXHIBIT E-2 - AOL MUSIC NOW PRIVACY POLICY*
EXHIBIT F - DISCLOSURE STATEMENTS*
* EXHIBIT INTENTIONALLY OMITTED FROM THIS FILING. NAPSTER, INC. AGREES TO FURNISH SUPPLEMENTALLY TO THE SEC, UPON REQUEST, A COPY OF THIS OMITTED EXHIBIT.
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EXHIBIT C
ADVERTISING AGREEMENT
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AOL ADVERTISING INSERTION ORDER
|
Contract #: AOL Salesperson: Sales Coordinator: Sales Planner: Effective Date: Credit Approval Received: |
|
Advertiser | Advertising Agency | |||
Contact Person | General Counsel | |||
Company Name | Napster, LLC | |||
Address Line 1 | 9044 Melrose Avenue | |||
Address Line 2 | West Hollywood, CA | |||
Phone # | 310 ###-###-#### | |||
Fax # | 310 ###-###-#### | |||
| ||||
SIC Code | ||||
Advertiser IAB Category |
Billing Information | ||||
Send Invoices to (choose one): | x Advertiser | ¨ Agency | ||
Advertiser or Agency Billing Contact Person | Napster, LLC | |||
Company Name | Napster, LLC | |||
Billing Address Line 1 | 9044 Melrose Avenue | |||
Billing Address Line 2 | West Hollywood, CA | |||
Billing Phone # | 310 ###-###-#### | |||
Billing Fax # | ||||
Billing Email Address | ***@*** | |||
P.O. #, if applicable | ||||
WHEREAS, Advertiser and AOL have entered into an Asset Purchase Agreement dated __, 2006; and
WHEREAS, Advertiser wishes to purchase certain Advertising placements from AOL and pay AOL for certain subscribers to advertisers online music subscription service;
NOW, THEREFORE, for good and valuable consideration Advertiser and AOL hereby agree to the following:
Payment Schedule:
Pursuant to this Insertion Order Advertiser shall pay AOL a total payment of [***] Dollars ($[***]) (the Purchase Price), payable as follows: [***] Dollars ($[***]) payable to AOL within one (1) business day of the date of execution of this Insertion Order and [***] Dollars ($[***]) on June 1, 2007.
All amounts not paid when due and payable will bear interest from the due date at the prime rate in effect at such time. All payments required hereunder shall be paid in immediately available, non-refundable U.S. funds wired to the America Online account, Account Number [***]. In the event of any questions regarding a payment made (or expected to be made) by Advertiser to AOL. AOL may contact William Growney, General Counsel at ###-###-####, 9044 Melrose Ave, Los Angeles, CA 90069. In the event of nonpayment, AOL reserves the right to immediately terminate this AOL Advertising Insertion Order Agreement (the Insertion Order) with written notice to Advertiser, provided that such termination shall not excuse AOL from providing impressions that have already been paid for by Advertiser.
|
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Advertising Purchase Summary (See Detailed Carriage Plan on Exhibit A) | ||||
Total Price | Total Impressions | |||
AOL Integrated Placements | $[***] | [***] | ||
Additional Placements | $[***] | SEE EXHIBIT F |
1. Site and Products. The HTTP/URL address to be connected to the Advertisement shall be: http://www.napster.com/aol (the Advertiser Site). The products and/or services to be offered or promoted by Advertiser in the Advertisements are as follows: Paid music subscription services designed to provide consumers in the United States with unlimited, high fidelity, access to over 3,000,000 tracks. Subscribers receive unlimited access to CD-quality music on multiple computers and have access to over 50 interactive radio stations, extensive community features, message boards, historical Billboard chart information and enhanced programming. In addition, subscribers can transfer an unlimited amount of music from Napster to their choice of compatible MP3 players for the entire term of their subscription without having to purchase individual tracks and albums. In addition, all subscribers have access to community features, such as the ability to send song links to friends and subscribers can browse other subscribers published collections. In addition customers can purchase individual tracks or albums. These tracks can be burned to a CD or transferred to an MP3 player. Napsters United States catalogue of available music covers all of the major music companies, including EMI Recorded Music, Sony BMG, Universal Music Group and Warner Music Group, as well as numerous independent labels. (the Advertiser Products). The Carriage Plan for the agreed upon placements is attached hereto on Exhibit A. The Launch Date will be the first business day following the Notice Period as such term is defined under the Asset Purchase Agreement or such earlier date as the co-branded landing page described in Section 4 below is first commercially available to potential subscribers.
2. | Impressions Commitment. Any guarantees are to impressions (as measured by AOL in accordance with its standard methodologies and protocols), not click-throughs or conversions. In the event there is (or will be in AOLs reasonable judgment) a shortfall in impressions less than [***] percent ([***] %) of the Total Guaranteed Impressions as of the end of the display period as set forth in Exhibit A (a Shortfall), such Shortfall shall not be considered a breach of this Insertion Order by AOL; instead, AOL will provide Advertiser, as its sole remedy, with additional or comparable (in value) makegood impressions across the AOL Network up to [***] percent ([***] %) of the Total Guaranteed Impressions within three months of the end of the term. To the extent impressions commitments are identified without regard to specific placements, such placements will be as mutually agreed upon by AOL and Advertiser during the course of the display period. AOL reserves the right to alter Advertiser flight dates to accommodate trafficking needs or other operational needs. In such cases, AOL will make available to Advertiser reasonably equivalent flight(s). In the event that no makegood impressions are available, Advertiser shall be entitled to a pro rata refund of its fees for any underdelivery. |
3. | Integration Assistance. Advertiser agrees to work in good faith with AOL to evaluate opportunities to integrate AIM and other AOL products and services that the parties believe will improve the product experience for users of Advertisers service. The Parties agree to evaluate the screenname service within reason periodically after the execution date. If Advertiser decides to add third party instant messaging functionality into the Advertiser Products, then Advertiser will provide AOL with the first opportunity to include AIM in the Advertiser Product. From time to time, AOL may elect in its reasonable discretion to provide additional placements for Advertiser in prominent locations across the AOL Network. In addition, the parties will discuss additional co-marketing opportunities throughout the term of the Agreement that would mutually benefit both Parties. |
4. | Advertiser Artwork and URL. In the event that all necessary artwork and active URLs are not provided to AOL in the manner specified at www.advisor.aol.com at least three (3) business days prior to the display start date (as set forth in Exhibit A), all Impressions to the relevant advertising inventory from and after the display start date shall count toward the Total Impressions and Advertiser shall remain liable for all payments hereunder notwithstanding AOLs inability to display the Advertisement. Advertiser agrees to design a co-branded landing page similar to Advertisers standard, generally available landing page. Advertiser agrees to use such page unless Advertiser can demonstrate that such co-branded page is having a negative impact on the rate at which users are registering for a free trial of the Advertisers Product. The parties shall enter into a Trademark License Agreement in the form attached to the Asset Purchase Agreement. |
5. | Subscriber Bounty. Advertiser shall pay AOL, on a monthly basis (following the close of the month in which a trial subscription occurs), a fee of [***] Dollars ($[***]) (the Subscription Bounty) per every individual trial subscription (including any free trial subscriptions) over [***] ([***]) (the Subscription Bounty Threshold) received by Advertiser from AOL for Advertisers online music subscription service during the Initial Term. The same Subscription Bounty Threshold would apply in the Renewal Term. For purposes of clarification, a subscription would be satisfied when a user signs up for a free trial. Bounties acquired through the AOL Performance Network will count toward the Subscription Bounty Threshold as well as the renewal threshold of [***] per Section 7 below. |
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
6. | Latency Conversion. Advertiser will also pay to AOL a Bounty for all Latency Conversions. A Latency Conversion shall mean the serving of a tracking mechanism to an AOL User during a visit to the Advertiser Landing Page not initiated by clicking through an AOL Integrated Placement or Additional Placement (each a Promotion), where such visit occurred within a certain number of days (the Latency Window) after such AOL User was exposed to a Promotion. Advertiser shall pay AOL a Bounty for One Hundred percent (100%) of the number of New Subscribers arising from Latency Conversions that occur within (i) seven (7) days of initial clicking through an AOL Integrated Placement or (ii) thirty (30) days of initial clicking through an Additional Placement. Subject to AOLs review and approval, the Parties shall agree on a tracking mechanism sufficient to track the AOL Users who enter the Advertiser Landing Page to determine which have become New Subscribers. In the event that such tracking involves the use of cookies, Advertiser agrees to comply with the following requirements. Advertiser will serve cookies on a non-personally identifiable basis on the Advertiser Landing Page (but not on the AOL Network, such as in any Promotion) to all visitors to the Advertiser Landing Page for the purpose of compliance with this Agreement; provided that Advertiser and the Advertiser Landing Page shall at all times (i) comply with all applicable privacy and use of data laws, rules and regulations, and any applicable privacy policies, (ii) use the data collected via the cookie to perform its obligations herein, for assigning customer-IDs in support of the Advertiser normal website operation, and for no other reason, (iii) not disclose such data to any third party, and (iv) prominently post a privacy policy on the Advertiser Site providing adequate notice to visitors that such a cookie may be served and how such data may be used. Upon request from AOL, Advertiser shall cease to serve cookies; or, AOL shall be entitled to immediately terminate this Insertion Order without penalty. Notwithstanding the foregoing, such use of cookie technology in the Promotions or the Advertiser Landing Page shall not include the following activities: (i) the collection of AOL User navigational data, or the aggregation, co-mingling or any other combination of data for or about AOL Users with data from other sites for the purpose of building profiles of AOL Users (regardless of whether such profiles were created outside of the AOL Network), or for use in online preference marketing to AOL Users; (ii) aggregation, use or disclosure of navigational data obtained through the use of such technology; (iii) disclosure of or association with any personally identifiable information of an AOL User; (iv) use or conducting of survey-based research without the prior written approval of AOL; and (v) redirection of data or other information. |
7. | Term and Territory. Unless earlier terminated as set forth herein, the term of this agreement will be one year from the Launch Date (the Initial Term). Subject to Section 15 below, the Initial Term will automatically extend for a period of one year (the Renewal Term, and together with the Initial Term, the Term) if Subscriber Bounty of [***] is reached within the Initial Term. The Renewal Term, as applicable, shall be upon the same terms and conditions as set forth in this Insertion Order. Territory is the United States of America. |
8. | Exclusivity. Excluding Apples iTunes , throughout the Term, Advertiser will be the exclusive integrated Advertiser providing an online music subscription service within the AOL Music Channel located at www.music.aol.com (e.g. this does not include non-integrated banner advertisements). |
9. | AOL Reporting. AOL will track impressions in accordance with its standard methodologies. Notwithstanding any other provision on reporting in this Insertion Order, AOL shall deliver to Advertiser a report on a monthly basis showing the number of Impressions (by Placement) delivered and the number of click-throughs achieved on a daily or weekly basis (within thirty (30) days following the end of the month showing for such month the number of impressions by Placement) based on AOLs standard methodologies. . |
10. | Advertiser Reporting. Advertiser will provide AOL with a monthly written report within thirty (30) days following the end of the month showing for such month the number of registrations of subscribers for Advertisers online music subscription service by specific Placement. Upon AOLs request, Advertiser will provide AOL with reporting broken out on a daily or weekly basis with the above mentioned details. |
11. | Behavioral Targeting. Advertiser will assist AOL with Behavioral Targeting efforts on its landing page under the specifications outlined in Exhibit D herein. |
12. | Audit Rights. AOL will have the right, not more than once per 12-month period, upon at least ten (10) days prior written notice to Advertiser, to have a nationally recognized independent accounting firm reasonably acceptable to Advertiser inspect Advertisers applicable records to confirm that the payments made pursuant to this Agreement are accurate, provided that such inspection will not unreasonably interfere with the business operations of Partner, shall be at the physical offices of Advertiser or its agents, and shall be during normal business hours and subject to customary confidentiality obligations. Advertiser shall receive a copy of such accounting firms report concurrently with AOL. AOL will bear the expense of any audit conducted pursuant to this Section 9 unless such audit shows an error in AOLs favor amounting to a deficiency to AOL in excess of [***] percent ([***]%) of the actual amounts paid and/or payable to AOL hereunder, in which event Advertiser will bear the reasonable expenses of the audit. Advertiser or AOL, as applicable, will pay the other the amount of any underpayment or overpayment, as applicable, within fourteen (14) days following completion of any such audit. |
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
13. | AOL Right to Redesign. AOL will be solely responsible for the design, organization, structure, specifications, look and feel, navigation and maintenance of the AOL Network. AOL reserves the right, at anytime, to redesign or modify the organization, structure, specifications, look and feel, navigation, guidelines and other elements of the AOL Network. In the event such modifications materially and adversely affect any specific Placement, or if AOL is unable to deliver any particular Placement for any other reason, AOL will provide Partner promotional placements comparable in value to that of the placement in the screenshots in Exhibit E, and will work with Partner to determine such comparable placements. In the event that no promotional placements of comparable value are available, Advertiser shall be entitled to a pro rata refund of its fees for any underdelivery. |
14. | Change of Control. AOL, in its sole discretion, may terminate this Agreement within 30 days after Advertiser delivers notice of a change of control of Advertiser involving any of the following AOL competitors: [***] (or any of their affiliates and/or subsidiaries). In the event that AOL exercises this termination right, AOL will be entitled to retain a pro rata portion of the fees for the placements for three (3) months following AOLs delivery of a termination notice, provided, however, that AOL will maintain the promotional links and placements until the earlier of (i) the end of the 90 day period following AOLs delivery of the termination notice or (ii) the date on which such change of control transaction closes. Further, if Napster is acquired by an entity not specifically named above, AOL will have the right to terminate this agreement at the end of the Initial Term regardless of whether the Term would otherwise automatically renew. Lastly, if AOL is subject to a change of control, either party will have the right to terminate this agreement at the end of the Initial Term regardless of whether the Term would otherwise automatically renew. |
15. | Quality of Service/Best of Breed. Advertiser will continue to operate its online music distribution service in the ordinary course and consistent with Advertisers past practices. Advertiser will not materially degrade the quality of such service, provided that the removal of any tier of service, the combination of multiple existing tiers or the removal or addition of one or more particular features or functions will not constitute a degradation of service unless the overall service is materially degraded. In the event that this is not the case after the applicable period, AOL and Advertiser will meet and discuss remedies. If after 30 days from such meeting the issues have not been addressed to AOLs satisfaction in AOLs sole discretion, then AOL will have a right to terminate the Agreement. In the event of any such termination AOL will refund to Advertiser the pro-rata portion of payments attributable to the impressions not delivered. |
16. | Miscellaneous. By entering into this agreement, the parties are not in any manner precluded from entering into any separate advertising agreements not related to this Insertion Order. |
17. | Standard Terms and Conditions. This Insertion Order incorporates by reference the additional terms and conditions set forth on any and all Exhibits attached hereto (the Additional Terms). To the extent that there exist any inconsistencies between the terms in the IO and the terms and conditions in Exhibit C, the terms of the IO shall govern. |
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
AUTHORIZED SIGNATURES
In order to bind the parties to this Insertion Order, their duly authorized representatives have signed their names below on the dates indicated. This Insertion Order (including the Additional Terms) shall be binding on both parties when signed on behalf of each party and delivered to the other party (which delivery may be accomplished by facsimile transmission of the signature pages hereto).
AOL LLC | ADVERTISER | |||||||
By: | By: |
Print Name: | Print Name: |
Title: | Title: |
Date: | Date: |
ADDITIONAL TERMS:
Exhibit A | | Carriage Plan | ||||
Exhibit B | | Additional Operational Terms | ||||
Exhibit C | | Standard Terms and Conditions | ||||
Exhibit D | | Behavioral Targeting |
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
EXHIBIT A
Carriage Plan
CONTRACT INFORMATION | SUMMARY | |||||||||||
Proposal Name: | Napster Integrated Music Campaign 2007 | Total CPM Amount: | $[***] | Imps Purchased: | [***] | |||||||
Advertiser: | NAPSTER | Flat Fee Amount: | $[***] | Imps Based Blended CPM: | $[***] | |||||||
Proposal ID: | 62651 | Other/Offline Amount: | $[***] | All Prices Shown Are | [***] | |||||||
Version #: | 3 | SubTotal: | $[***] | Agency Commission %: | [***]% | |||||||
Total Amount: | $[***] | Agency Commission: | $[***] |
ID | Product/Package | Art Size | Start Date | End Date | Value Type | Cost Type | Rate | Quantity | Total Cost | |||||||||
22864 | NAS-ENTERTAINMENT-Music- Custom-Napster - Music Main(Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23082 | NAS-ENTERTAINMENT-Music- Custom-Napster - Video Player (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23084 | NAS-ENTERTAINMENT-Music- Custom-Napster - Artist Main (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23085 | NAS-ENTERTAINMENT-Music- Custom-Napster -Ã, Album Detail Page(Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23086 | NAS-ENTERTAINMENT-Music- Custom-Napster -Commerce Drawer (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23087 | NAS-ENTERTAINMENT-Music- Custom-Napster - CD Listening Party Page (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23088 | NAS-ENTERTAINMENT-Franchise Top 11 Show -Custom- Napster (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
23089 | NAS-ENTERTAINMENT-Radio & Podcasting -Custom-Napster (Text)
| Interstitial | 01/01/07 | 12/31/07 | Paid Media | CPM | $[***] | [***] | $[***] | |||||||||
Totals: | [***] | $[***] |
In addition to the above, the parties agree that Exhibit F shall be incorporated herein by reference.
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
EXHIBIT D
Behavioral Targeting Specifications
(a) Tracking. Advertiser shall accurately track user registrations generated within thirty (30) days of distribution of an applicable promotion on the AOL Network. Advertiser shall ensure that such tracking also accurately generates the following information about each new registrant: registration, and conversion to trial subscriptions. Advertiser shall deliver to AOL all information generated by such tracking on a monthly basis in an aggregated form.
(b) Web Beacons. Advertiser understands and agrees that AOL may use cookies, web beacons, pixels, and/or other technologies (collectively, the Web Beacons) on the Advertiser sites to collect non-personally identifiable information in connection with this Agreement (the Non-PII) including but not limited to (i) for general reporting purposes, including the compilation of statistics, such as the total number of ads delivered, that may be provided to existing and potential customers; (ii) for scheduling and optimization of programming, promotions, and other activities associated with this Agreement, (iii) for tracking of user registration, geographic, behavioral, demographic, transactional, and other derived data, and (iv) if required by court order, law, or governmental agency. The Non-PII may include, without limitation, information such as web pages viewed by a user, date and time, domain type, and responses by a user to an advertisement, and any other data that Advertiser may pass to AOL (i.e., transaction identification information, transaction revenue estimates and information, and other reasonable information available to Advertiser.
(c) Data Rights & Ownership. AOL owns all right, title, and interest in and to any data collected from the Web Beacons and all proprietary rights therein. Advertiser agrees that AOL will have the right to use and segment such data in its sole discretion for all purposes relating to its business including, without limitation, for purposes of providing general client and industry reporting and advertisement scheduling, targeting, and delivery optimization across the AOL Network and any other advertising inventory available to AOL. In addition, AOL will have the right to use and disclose non-PII for purposes including but not limited to: (i) for general reporting purposes, including the compilation of statistics, such as the total number of ads delivered, that may be provided to existing and potential customers; (ii) for scheduling and optimization of programming, promotions, and other activities associated with this Agreement, (iii) for tracking of user registration, geographic, behavioral, demographic, transactional, and other derived data, and (iv) if required by court order, law, or governmental agency.
(d) Web Beacon Placement. Advertiser will place one or more Web Beacons on the landing page of the Advertiser Site in accordance with the specifications provided by AOL. Advertiser agrees that it will be solely responsible for insuring proper functioning and placement of such Web Beacons.
(e) Privacy. Advertiser represents and warrants that it will provide notice for, and fully disclose, its privacy policies and practices to users of its website(s), and any other policies and practices with respect to the collection of information on users of its website(s).
(f) Omniture. Advertiser shall integrate Omniture tracking for the Customized Site in accordance with AOLs reasonable specifications.
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
EXHIBIT E
SCREENSHOTS
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Channel Level Promotions
Contextual Music AOL Music Main PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Music CD Listening Party Link will be added next to Buy the CD PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Video Player PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Artist Main PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Album Detail Page PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Top 11 Countdown Show PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music Commerce Drawer on AOL Artist Main PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music Commerce Drawer on AOL Discography PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music Commerce Drawer on AOL Song Search PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music Commerce Drawer on Songs & Samples PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music Commerce Drawer on Songs/ Videos PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
Contextual Music AOL Radio PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
EXHIBIT F
AOL PERFORMANCE NETWORK PROMOTIONS
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1. | Site and Products. The HTTP/URL address to be connected to the promotions provided in connection with this Insertion Order (Performance Promotions) shall be a version of the site located at www.napster.com and any related web pages or pages linked thereto (e.g., splash pages or ordering/registration pages), customized if and to the extent necessary to comply with the applicable requirements herein (the Advertiser Site). The only products and/or services that may be offered or promoted by Advertiser in the Performance Promotions or on the Advertiser Site are the Advertiser Products. The Advertiser Site shall not promote the products or services of any third party (or any products or services other than the Advertiser Products) without AOLs written consent (including indirectly via any pop-up, pop-under, etc.). For the purposes of this Agreement Performance Promotions shall be considered Advertisements. |
2. | Optimization Technology. AOL may, through its affiliate, Advertising.com, or designated third party vendor, serve the Performance Promotions, and track related click-through and conversion metrics (where applicable), utilizing certain inventory optimization technology (the Optimization Technology). Prior to launch of any Performance Promotions, Advertiser will take all actions necessary to enable AOL, Advertising.com, or AOLs designated third party vendor, to track click-throughs, including delivering unique Advertiser Site URLs as requested by AOL. |
a. | Tracking Tags. During the Term, Advertiser agrees to place on mutually agreed upon page(s) of the Advertiser Site a pixel tracking tag as necessary for tracking and reporting through the Optimization Technology (the Tracking Tag). Unless otherwise approved by AOL, the page(s) containing the Tracking Tag shall be accessible to any visitor to the Advertiser Site (regardless of whether such visitor linked to the Advertiser Site from the AOL Network). Advertiser agrees to disclose within its standard privacy policy (in a clear and conspicuous manner) the data use and collection practices related to the Tracking Tag on the Advertiser Site. |
b. | Web Beacon Placement. Advertiser agrees that Advertiser shall be solely responsible for insuring proper placement of the Web Beacons on Advertisers web site, including making sure that the Web Beacons only track the Actions to which Advertisers campaign relates. In the event that Advertiser improperly places the Web Beacons on Advertisers web site, resulting in, among other things, AOL or its affiliate, Ad.com trafficking Advertisers campaign based on misleading campaign performance results, the parties agree that Advertiser shall pay AOL based on AOLs reasonable estimation of Actions delivered, as determined in AOLs sole discretion. Advertiser further understands that maintaining Advertisers web site on which the Web Beacons are placed in good working order during the term of the Agreement is critical to the success of Advertisers campaign. Accordingly, in the event that Advertisers web site on which the Web Beacons are placed fails to operate in good working order (i.e., goes down) at any time during the term of the Agreement, Advertiser shall notify AOL that Advertisers web site has gone down within three (3) hours of Advertisers web site going down. If Advertiser fails to provide AOL with notification as required above, the parties agree that AOL may bill Advertiser based on AOLs reasonable estimation of Actions, as determined in AOLs sole discretion, that would have been delivered during the period that Advertisers web site was not functioning. |
c. | Conversion Criteria. In addition, in the event that Advertiser is paying AOL a Bounty for any conversion metrics other than click-throughs, then the following shall apply: A Conversion shall equal all View-Based Conversions subject to the Conversion Criteria, and all Click-Based Conversions subject to the Conversion Criteria. |
| A View-Based Conversion shall mean the serving of a Tracking Tag to an AOL User during a visit to the Advertiser Site not initiated by clicking through an Advertisement, where such visit occurred within a certain number of days (the View-Based Latency Window) after such AOL User was exposed to an Advertisement. |
| A Click-Based Conversion shall mean the serving of a Tracking Tag to an AOL User during a visit to the Advertiser Site, where such visit occurred within a certain number of days (the Click-Based Latency Window) after such AOL User had clicked on an Advertisement (but had not triggered an Instant Conversion). Advertiser shall pay AOL a Bounty for One Hundred percent (100%) of the number of Leads arising from Click-based Conversions that occur with thirty (30) days of initial |
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PORTIONS DENOTED WITH [***] HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. |
exposure to an Advertisement. Such percentage and number of days may be adjusted pursuant to the terms of this agreement.
| Subsequent changes to the Conversion Criteria may be made pursuant to Section 3(b) below. |
3. | Economics. |
a. | Bounty. Advertiser shall pay to AOL a $[***] CPA bounty (Bounty) for Advertisements in the AOL Performance Network up to a maximum aggregate of [***] dollars ($[***]) (Performance Cap). CPA shall mean when a user clicks through the Performance Promotions served by AOL and downloads the Napster software for a free trial. Bounties acquired through the AOL Performance Network will count toward both the [***] threshold in Section 5 of the Agreement and the [***] threshold in Section 7 of the Agreement. |
b. | Guarantee. The spend commitment of [***] Dollars ($[***]) hereunder is a guaranteed, non-refundable amount. In the event that the Performance Promotions are terminated by either party or either Party reasonably believes that the Performance Cap will not be met during the Initial Term of the Agreement, then the balance of the Performance Cap that is not used will be reapplied toward the following AOL Network Advertisements and shall not be refunded: |
High Reach Social Network AOL 728x90 (RM) $[***] CPM or
Such other advertisements as are mutually agreed to by the parties.
4. | Promotions. Notwithstanding anything to the contrary, any Performance Promotions shall be at AOLs sole discretion; AOL does not guarantee any specific minimum level (e.g., number or location) of placements, impressions, click-throughs, or any other promotions or metrics; and AOL may cease the serving of Performance Promotions at any time. In the event of a conflict between the Insertion Order and this Exhibit then the terms of this Exhibit shall govern. |
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