EXHIBIT 10.1
EXECUTION
VERSION
TRANSACTION, CONTRIBUTION AND PURCHASE AGREEMENT
dated
as of August 20, 2007,
by and
among
Rhapsody America LLC,
RealNetworks, Inc.,
RealNetworks Digital Music of California, Inc.,
Viacom
International Inc.
and
DMS
Holdco Inc.
TABLE
OF CONTENTS
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ARTICLE I
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Definitions and Usage
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SECTION
1.01.
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Definitions |
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ARTICLE II
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Transactions
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SECTION
2.01.
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Contributions and Purchases |
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SECTION
2.02.
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Issuance of Membership Interests |
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SECTION
2.03.
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Transfer of Benefits and Burdens of
Rights |
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SECTION
2.04.
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Assignment of Benefits and Burdens of
Certain Contracts and Rights |
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SECTION
2.05.
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Closing |
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ARTICLE III
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Representations and
Warranties
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SECTION
3.01.
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Representations and Warranties of RN
Parent |
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SECTION
3.02.
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Representations and Warranties of
MTVN Parent |
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ARTICLE IV
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Covenants
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SECTION
4.01.
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Tax Treatment |
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SECTION
4.02.
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Employee Matters |
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SECTION
4.03.
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Expenses; Transfer Taxes |
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SECTION
4.04.
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Other Assets |
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SECTION
4.05.
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Further Assurances |
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- i -
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ARTICLE V
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Indemnification
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SECTION
5.01.
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RN Indemnification |
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SECTION
5.02.
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MTVN Indemnification |
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SECTION
5.03.
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Company Indemnification |
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SECTION
5.04.
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Calculation of Losses |
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SECTION
5.05.
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Termination of Indemnification |
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SECTION
5.06.
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Procedures; Exclusivity |
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SECTION
5.07.
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Mitigation |
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SECTION
5.08.
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Survival |
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ARTICLE VI
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Miscellaneous
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SECTION
6.01.
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Notices |
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SECTION
6.02.
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No Third Party Beneficiaries |
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SECTION
6.03.
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Waiver |
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SECTION
6.04.
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Integration |
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SECTION
6.05.
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Headings |
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SECTION
6.06.
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Counterparts |
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SECTION
6.07.
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Severability |
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SECTION
6.08.
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Amendments and Modifications |
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SECTION
6.09.
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Governing Law |
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SECTION
6.10.
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Dispute Resolution |
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SECTION
6.11.
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Waiver of Jury Trial |
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SECTION
6.12.
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Absence of Presumption |
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Schedules
Schedule 1 — Initial Cash Contributions
Schedule 2 — RN Contribution Assets
Schedule 3 — MTVN Contribution Assets
Schedule 4 — Contributed Employees
Schedule 5 — LLC Membership Interests and Participation
Percentages
Schedule 6 — Dispute Resolution
Schedule 7 — Notices
RN
Parent Disclosure Schedule
MTVN
Parent Disclosure Schedule
Exhibits
Exhibit A — MTVN Note
- ii -
TRANSACTION, CONTRIBUTION AND
PURCHASE AGREEMENT (this “ Agreement ”) dated as
of August 20, 2007, among Rhapsody America LLC, a Delaware
limited liability company (the “ Company ”),
RealNetworks, Inc., a Washington corporation (“ RN
Parent ”), RealNetworks Digital Music of California,
Inc., a California corporation (“ RN Sub ”),
Viacom International Inc., a Delaware corporation (“ MTVN
Parent ”), on behalf of its MTV Networks Division
(“ MTVN ”), and DMS Holdco Inc., a Delaware
corporation (“ MTVN Sub ”).
WHEREAS,
RN Parent, RN Sub, MTVN Parent and MTVN Sub have entered into a
Limited Liability Company Agreement (the “ LLC
Agreement ”), dated as of the date hereof, for the
Company, pursuant to which, on the date hereof, RN Parent and MTVN
Parent shall launch a joint venture to be operated through the
Company;
WHEREAS,
RN Parent and the Company have entered into a Audio Music Service
Brand and Content License and Distribution Agreement (the “
RN Brand and Content Agreement ”), dated as of the
date hereof, pursuant to which, on the date hereof, RN Parent shall
license certain content, programming and branding to the Company in
support of the operation and promotion of the joint venture;
WHEREAS,
MTVN Parent and the Company have entered into a Audio Music Service
Brand and Content License, Distribution and Advertising Agreement
(the “ MTVN Brand and Content Agreement ”),
dated as of the date hereof, pursuant to which, on the date hereof,
MTVN Parent shall license certain content, programming and branding
and sell advertising and marketing to the Company in support of the
operation and promotion the joint venture;
WHEREAS,
MTVN Parent and the Company have entered into an URGE Brand and
Content License Agreement (the “ URGE Brand and Content
Agreement ”), dated as of the date hereof, pursuant to
which, on the date hereof, MTVN Parent shall license certain
content, programming and branding to the Company in support of the
operation and promotion the joint venture;
WHEREAS,
RN Parent and the Company have entered into a RN-Venture License
and Music Services Agreement (the “ RN License and
Services Agreement ”), dated as of the date hereof,
pursuant to which, on the date hereof, RN Parent shall provide
certain technology licenses and services to the Company in support
of the operation of the joint venture;
WHEREAS,
RN Parent, MTVN Parent and the Company have entered into a Rhapsody
Web Services Agreement (the “ Web Services Agreement
”), dated as of the date hereof, pursuant to which, on the
date hereof, RN Parent, MTVN Parent and the Company shall use
certain services to power certain digital audio music
services;
WHEREAS,
MTVN Parent and the Company have entered into a Viacom-Venture
Services Agreement (the “ Viacom Services Agreement
”), dated as of the date hereof, pursuant to which, on the
date hereof, MTVN Parent shall provide certain services to the
Company;
WHEREAS,
RN Parent and MTVN Parent have entered into a Stockholder Agreement
(the “ Stockholder Agreement ”), dated as of the
date hereof, pursuant to which, upon the occurrence of certain
conditions specified therein, certain terms and conditions
concerning registration, access to information rights and
standstill and transfer restrictions relating to equity securities
of RN Parent beneficially owned by MTVN Parent and certain other
matters shall become effective; and
WHEREAS,
RN Parent, MTVN Parent and the Company are entering into this
Agreement to effect the transfer and contribution of certain assets
to the Company and to establish certain other terms and conditions
of the launch of the joint venture;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
Definitions and Usage
SECTION
1.01. Definitions . (a) The following terms shall have
the meanings set forth below for purposes of this Agreement:
“
Affiliate ” of any specified Person means any other
Person directly or indirectly Controlling, Controlled by or under
direct or indirect common Control with such specified Person;
provided , that the Company and its subsidiaries shall not
be deemed to be an Affiliate of any of RN Parent, RN Sub, MTVN
Parent or MTVN Sub, and provided , further, that
“Affiliate”, when used with respect to MTVN or MTVN
Parent or any of their Affiliates, shall only mean Viacom Inc., a
Delaware corporation, and any direct or indirect subsidiaries of
Viacom Inc. and shall not include any direct or indirect
stockholder of Viacom Inc. or any of their Affiliates other than
Viacom Inc. and any direct or indirect subsidiaries of Viacom
Inc.
“
Applicable Law ” means any statute, law, ordinance,
rule or regulation.
“
Business Day ” means any day other than a Saturday, a
Sunday or a U.S. Federal holiday.
“
Code ” means the Internal Revenue Code of 1986, as
amended.
“
Contracts ” means all contracts, agreements,
commitments and other legally binding arrangements, whether oral or
written.
2
“
Contribute ” means to contribute, assign, transfer,
convey and deliver, and “ Contributing ” and
“ Contributed ” shall have correlative
meanings.
“
Consent ” means any consent, approval, license,
permit, order or authorization.
“
Control ” means, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through ownership of securities or partnership, membership, limited
liability company, or other ownership interests, by contract or
otherwise and the terms “ Controlling ” and
“ Controlled ” have meanings correlative to the
foregoing.
“
Existing Consumer Digital Music Business ” means
(i) with respect to RN Parent, the business, activities and
operations of RN Parent and its subsidiaries and divisions that
comprise the branded consumer digital music services of RN Parent,
including RN Parent’s “Rhapsody”, “Rhapsody
25 Service”, Rhapsody.com, “RealMusic”, and free
and premium radio services, in the United States and the
territories and possessions thereof, as well as free and premium
radio services in the United Kingdom, Germany and Japan and
(ii) with respect to MTVN Parent, the business, activities and
operations of MTVN Parent and its subsidiaries and divisions that
comprise the URGE branded consumer digital music service in the
United States and the territories and possessions thereof.
“
Governmental Entity ” means any Federal, state, local
or foreign government or any court of competent jurisdiction,
regulatory or administrative agency or commission or other
governmental authority or instrumentality, domestic or
foreign.
“
Initial Contributions ” means, (i) with respect
to RN Parent, the RN Initial Contributions and (ii) with
respect to MTVN Parent, the MTVN Initial Contributions.
“
Intellectual Property ” means all patents (including
all reissues, divisions, continuations and extensions thereof),
patent applications, patent rights, trademarks, trademark
registrations, trademark applications, servicemarks, trade names,
business names, brand names, copyrights, copyright registrations,
designs, design registrations, and all rights to any of the
foregoing.
“
Investments ” means all shares of capital stock,
partnership and limited liability company interests or any other
equity interest in any corporation, company, limited liability
company, partnership, joint venture, trust or other business
association and all other investments.
“
Judgments ” means any judgment, order or decree.
“
Lien ” means any pledge, encumbrance, security
interest, purchase option, call or similar right.
“
Material Adverse Effect ” means, with respect to a
Person, a material adverse effect on (i) (x) the business,
assets, financial condition or results of operations of
3
the
Existing Consumer Digital Music Business of such Person or
(y) the Company, in each case, taken as a whole or
(ii) such Person’s ability to perform its obligations
under any Transaction Document to which it is, or is specified to
be, a party.
“
MTVN Contributed Contracts ” means the Contracts
included as part of the MTVN Contribution Assets.
“
MTVN Contributed Intellectual Property ” means the
Intellectual Property included as part of the MTVN Contribution
Assets.
“
MTVN Contribution Assets ” means the right, title and
interest of MTVN Parent (and its subsidiaries and divisions) in, to
and under the assets, properties and agreements set forth in
Schedule 3 hereto.
“
MTVN Excluded Liability ” means any liability,
obligation or commitment of MTVN Parent (and its subsidiaries and
divisions) that is not an MTVN Included Liability.
“
MTVN Included Liabilities ” means (i) the
liabilities, obligations and commitments contained in or arising
out of the MTVN Contribution Assets, (ii) the liabilities,
obligations and commitments contained in or arising out of the MTVN
License Assets (other than, for the avoidance of doubt,
liabilities, obligations or commitments of MTVN Parent or MTVN Sub
to the Company under the MTVN Brand and Content Agreement, the URGE
Brand and Content Agreement or the Viacom Services Agreement),
(iii) the liabilities, obligations and commitments contained
in or arising out of the MTVN Service Assets (other than, for the
avoidance of doubt, liabilities, obligations or commitments of MTVN
Parent or MTVN Sub to the Company under the MTVN Brand and Content
Agreement, the URGE Brand and Content Agreement or the Viacom
Services Agreement), (iv) the liabilities, obligations and
commitments contained in or arising out of the MTVN Other Assets,
(v) the liabilities, obligations and commitments contained in
or arising out of the Contracts and Permits set forth on
Schedule 2.04C, and (vi) the liabilities, obligations and
commitments contained in or arising out of the Contracts and
Permits set forth on Schedule 2.04D but only with respect to
the portions of those Contracts and Permits that pertain to the
Existing Consumer Digital Music Business of MTVN Parent, in each
case, whether arising before, on or after the Closing.
“
MTVN Initial Cash Contributions ” means the cash
contributions of MTVN Sub as set forth opposite MTVN Sub in
Schedule 1 hereto.
“
MTVN Initial Contributions ” means, collectively, the
aggregate MTVN Initial Cash Contributions and the MTVN Contribution
Assets.
“
MTVN License Assets ” means the assets, properties and
rights of the Existing Consumer Digital Music Business of MTVN
Parent licensed to the Company pursuant to the (i) MTVN Brand
and Content Agreement, (ii) URGE Brand and Content Agreement
and (iii) Viacom Services Agreement.
4
“
MTVN Note ” means the promissory note of MTVN Parent
and MTVN Sub attached as Exhibit A hereto.
“
MTVN Other Assets ” means the assets, properties and
rights of MTVN Parent of whatever kind and nature, real or
personal, tangible or intangible, that are owned, leased or
licensed by MTVN Parent or its subsidiaries or divisions on the
date of the Closing and used, held for use or intended to be used
primarily in the operation or conduct of the Existing Consumer
Digital Music Business of MTVN Parent, other than the MTVN
Contribution Assets, MTVN License Assets and MTVN Service
Assets.
“
MTVN Service Assets ” means the assets, properties and
rights of the Existing Consumer Digital Music Business of MTVN
Parent provided in the form of services to the Company pursuant to
the (i) MTVN Brand and Content Agreement, (ii) URGE Brand
and Content Agreement and (iii) Viacom Services
Agreement.
“
Organizational Documents ” means, with respect to any
Person at any time, such Person’s certificate or articles of
incorporation, corporate statutes, by-laws, memorandum and articles
of association, certificate of formation of limited liability
company, limited liability company agreement and other similar
organizational or constituent documents, as applicable, in effect
at such time.
“
Permits ” means all licenses, permits, registrations,
and other authorizations issued by any Governmental Entity for use
in connection with the conduct of the business or operations of the
relevant business.
“
Permitted Lien ” means, collectively, (i) all
statutory or other liens for taxes or assessments which are not yet
due or the validity of which is being contested in good faith by
appropriate proceedings, (ii) all mechanics’, material
men’s, carriers’, workers’ and repairers’
liens, and other similar liens imposed by law, incurred in the
ordinary course of business, which allege unpaid amounts that are
less than 30 days delinquent or which are being contested in
good faith by appropriate proceedings and (iii) all other
Liens which do not materially detract from or materially interfere
with the marketability, value or present use of the asset subject
thereto or affected thereby.
“
Person ” means any individual, firm, corporation,
partnership, limited liability company, trust, joint venture,
governmental authority or other entity.
“
Personally Identifiable Information ” means data that
identifies a particular person, by name, age, address, telephone
number, electronic mail address, social security number or other
similar identification number issued by a Governmental Entity, bank
account number or credit card number.
“
Proceeding ” means any claim, action, suit,
proceeding, arbitration, investigation, or hearing or notice of
hearing.
“
RN Contributed Contracts ” means the Contracts
included as part of the RN Contribution Assets.
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“
RN Contributed Intellectual Property ” means the
Intellectual Property included as part of the RN Contribution
Assets.
“
RN Contribution Assets ” means the right, title and
interest of RN Parent (and its subsidiaries and divisions) in, to
and under the assets, properties and agreements set forth in
Schedule 2 hereto.
“
RN Excluded Liability ” means any liability,
obligation or commitment of RN Parent (and its subsidiaries and
divisions) that is not an RN Included Liability.
“
RN Included Liabilities ” means (i) the
liabilities, obligations and commitments contained in or arising
out of the RN Contribution Assets, (ii) the liabilities,
obligations and commitments contained in or arising out of the RN
License Assets (other than, for the avoidance of doubt,
liabilities, obligations or commitments of RN Parent or RN Sub to
the Company under the RN Brand and Content Agreement, the RN
License and Services Agreement or the Web Services Agreement),
(iii) the liabilities, obligations and commitments contained
in or arising out of the RN Service Assets (other than, for the
avoidance of doubt, liabilities, obligations or commitments of RN
Parent or RN Sub to the Company under the RN Brand and Content
Agreement, the RN License and Services Agreement or the Web
Services Agreement), (iv) the liabilities, obligations and
commitments contained in or arising out of the RN Other Assets,
(v) the liabilities, obligations and commitments contained in
or arising out of the Contracts and Permits set forth on Schedule
2.04A, and (vi) the liabilities, obligations and commitments
contained in or arising out of the Contracts and Permits set forth
on Schedule 2.04B but only with respect to the portions of
those Contracts and Permits that pertain to the Existing Consumer
Digital Music Business of RN Parent, in each case, whether arising
before, on or after the Closing.
“
RN Initial Cash Contributions ” means the cash
contributions of RN Sub as set forth opposite RN Sub in
Schedule 1 hereto.
“
RN Initial Contributions ” means, collectively, the
aggregate RN Initial Cash Contributions and the RN Contribution
Assets.
“
RN License Assets ” means the assets, properties and
rights of the Existing Consumer Digital Music Business of RN Parent
licensed to the Company pursuant to the (i) RN Brand and
Content Agreement, (ii) RN License and Services Agreement and
(iii) Web Services Agreement.
“
RN Other Assets ” means the assets, properties and
rights of RN Parent of whatever kind and nature, real or personal,
tangible or intangible, that are owned, leased or licensed by RN
Parent or its subsidiaries or divisions on the date of the Closing
and used, held for use or intended to be used primarily in the
operation or conduct of the Existing Consumer Digital Music
Business of RN Parent, other than the RN Contribution Assets, RN
License Assets and RN Service Assets.
“
RN Service Assets ” means the assets, properties and
rights of the Existing Consumer Digital Music Business of RN Parent
provided in the form of services
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to the
Company pursuant to the (i) RN Brand and Content Agreement,
(ii) RN License and Services Agreement and (iii) Web
Services Agreement.
“
Transaction Documents ” means, collectively,
(i) this Agreement, (ii) the LLC Agreement,
(iii) the RN Brand and Content Agreement, (iv) the MTVN
Brand and Content Agreement, (v) the URGE Brand and Content
Agreement, (vi) the RN License and Services Agreement,
(vi) the Web Services Agreement, (vii) the Viacom
Services Agreement and (viii) the Stockholder Agreement.
“
Transactions ” means the transactions contemplated by
the Transaction Documents.
“
Transfer Tax ” means any liabilities, obligations or
commitments for transfer, documentary, sales, use, registration,
value-added and other similar taxes, governmental fees or other
like assessments or charges of any kind whatsoever and related
amounts (including any penalties, interest and additions
thereto).
(b) The
following terms are defined in the Section of this Agreement set
forth below.
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Defined in |
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Term |
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Section |
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“Agreement”
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Preamble |
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“Closing”
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2.05 |
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“Company”
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Preamble |
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“Disclosure
Schedule”
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3.01 |
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“indemnified
party”
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5.06(a) |
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“LLC
Agreement”
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Recitals |
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“Losses”
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5.01(a) |
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“MTVN”
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Preamble |
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“MTVN
Sub”
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Preamble |
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“MTVN Brand
and Content Agreement”
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Recitals |
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“MTVN
Parent”
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Preamble |
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“MTVN
Transferred Employees”
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4.02(d) |
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“RN Brand and
Content Agreement”
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Recitals |
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“RN License
and Services Agreement”
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Recitals |
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“RN
Parent”
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Preamble |
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“RN
Sub”
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Preamble |
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“RN
Transferred Employees”
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4.02(d) |
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“Stockholder
Agreement”
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Recitals |
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“Third Party
Claim”
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5.06(a) |
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“Transferred
Employees”
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4.02(a) |
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“URGE Brand
and Content Agreement”
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Recitals |
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“Viacom
Services Agreement”
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Recitals |
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“Web Services
Agreement”
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Recitals |
7
(c)
Terms and Usage Generally . The definitions in
Section 1.01 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. All references herein to Articles,
Sections, Annexes, Exhibits and Schedules shall be deemed to be
references to Articles and Sections of, Annexes and Exhibits and
Schedules to, this Agreement unless the context shall otherwise
require. All Annexes, Exhibits and Schedules attached hereto shall
be deemed incorporated herein as if set forth in full herein. The
words “include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”. The words
“hereof”, “herein” and
“hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. The word
“or” shall not be exclusive. The word
“extent” in the phrase “to the extent”
shall mean the degree to which a subject or other thing extends,
and such phrase shall not mean simply “if”. References
to a Person are also to its permitted successors and permitted
assigns. Unless otherwise expressly provided herein, any agreement,
instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by
succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein.
8
ARTICLE II
Transactions
SECTION
2.01. Contributions and Purchases . (a) In accordance
with Section 4.01 of the LLC Agreement, (i) on the date
hereof, RN Sub shall and hereby does unconditionally and
irrevocably Contribute (or cause to be Contributed) to the Company,
and the Company shall and hereby does unconditionally and
irrevocably accept from RN Parent, the RN Contribution Assets,
(ii) on each date set forth opposite each RN Initial Cash
Contribution, RN Sub shall unconditionally and irrevocably
Contribute (or cause to be Contributed) to the Company, and the
Company shall unconditionally and irrevocably accept from
RN Sub, such RN Initial Cash Contribution and
(iii) the parties shall execute such appropriate bills of sale
and assignments to reflect the foregoing.
(b) In
accordance with Section 4.01 of the LLC Agreement, (i) on
the date hereof, MTVN Sub shall and hereby does
unconditionally and irrevocably Contribute (or cause to be
Contributed) to the Company, and the Company shall and hereby does
unconditionally and irrevocably accept from MTVN Sub, the MTVN
Contribution Assets, (ii) on each date set forth opposite each
MTVN Initial Cash Contribution, MTVN Sub shall unconditionally and
irrevocably Contribute (or cause to be Contributed) to the Company,
and the Company shall unconditionally and irrevocably accept from
MTVN Sub, such MTVN Initial Cash Contribution and
(iii) the parties shall execute such appropriate bills of sale
and assignments to reflect the foregoing.
(c) On
the date hereof, in accordance with Section 4.01 of the LLC
Agreement, MTVN Sub shall purchase a portion of its membership
interests in the Company for the MTVN Note.
(d) On
the date hereof, the Company shall and hereby does assume
(i) the RN Included Liabilities and (ii) the
MTVN Included Liabilities.
SECTION
2.02. Issuance of Membership Interests . On the date hereof
immediately following the Contributions of the MTVN Contribution
Assets and RN Contribution Assets and purchases under
Section 2.01:
(a) the
Company shall issue to RN Sub the membership interests of the
Company corresponding to the participation percentages set forth
next to RN Sub in Schedule 5 hereto; and
(b) the
Company shall issue to MTVN Sub the membership interests of the
Company corresponding (i) to the participation percentages
that are being exchanged for the MTVN Initial Contributions and
(ii) to the participation percentages that are being purchased
with the MTVN Note, in each case, as set forth next to MTVN
Sub in Schedule 5 hereto.
SECTION
2.03. Transfer of Benefits and Burdens of Rights . With
respect to any RN Contribution Asset or MTVN Contribution
Asset that is Contributed to the Company pursuant to
Section 2.01 (excluding items set forth in
Schedule 2.04A,
9
Schedule 2.04B, Schedule 2.04C or Schedule 2.04D),
any claim or right or any benefit arising thereunder or resulting
therefrom and any liability thereunder shall be assigned to and
assumed by the Company unless such attempted assignment or
assumption thereof, without the approval of a party thereto, would
be ineffective or would constitute a breach or other contravention
thereof or give rise to any right of termination thereof, as a
direct result of such transfer, assignment or assumption. Each of
RN Parent, RN Sub, MTVN Parent and MTVN Sub shall use its
commercially reasonable efforts to obtain the approval of the other
parties to any such RN Contribution Asset or MTVN Contribution
Asset, or any claim or right or any benefit arising thereunder, for
the assignment thereof to, and the assumption by, the Company. If,
as of the date hereof, an attempted transfer, assignment or
assumption thereof would be ineffective or would give rise to any
right of termination thereof, each party shall transfer the
benefits and assume the obligations under such RN Contribution
Asset or MTVN Contribution Asset in accordance with this
Agreement as of the date hereof or as soon as practicable
thereafter (including through a sub-contracting, sub-licensing, or
sub-leasing arrangement, or an arrangement under which such party
would enforce its claims, rights or benefits arising under such RN
Contribution Asset or MTVN Contribution Asset for the benefit
of the Company, with the Company assuming such party’s
obligations and any and all rights of such party against the other
party thereto). If the approval of the other party is obtained,
such approval shall constitute a confirmation (automatically and
without further action of the parties hereto) that such RN
Contribution Asset or MTVN Contribution Asset is transferred
or assigned to the Company as of the date hereof, and
(automatically and without further action of the parties hereto)
that the liabilities with respect to such RN Contribution Asset or
MTVN Contribution Asset are assumed by the Company as of the
date hereof.
SECTION
2.04. Assignment of Benefits and Burdens of Certain Contracts
and Rights . (a) With respect to the Contracts and Permits set
forth in Schedule 2.04A of the Disclosure Schedule, RN Parent
shall transfer the benefits and the obligations associated with
such benefits of such Contracts and Permits, and such Contracts and
Permits shall not be assigned to nor assumed by the Company.
(b) In
addition, with respect to only those portions of the Contracts and
Permits set forth in Schedule 2.04B of the Disclosure Schedule
that pertain to the Existing Consumer Digital Music Business of RN
Parent, RN Parent shall transfer the benefits and the obligations
associated with such benefits of such Contracts and Permits, and
such Contracts and Permits shall not be assigned to nor assumed by
the Company.
(c) With
respect to the Contracts and Permits set forth in
Schedule 2.04C of the Disclosure Schedule, MTVN Parent
shall transfer the benefits and the obligations associated with
such benefits of such Contracts and Permits, and such Contracts and
Permits shall not be assigned to nor assumed by the Company.
(d) In
addition, with respect to only those portions of the Contracts and
Permits set forth in Schedule 2.04D of the Disclosure Schedule
that pertain to the Existing Consumer Digital Music Business of
MTVN Parent, MTVN Parent shall transfer the benefits and
the obligations associated with such benefits of such
Contracts
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and
Permits, and such Contracts and Permits shall not be assigned to
nor assumed by the Company.
SECTION
2.05. Closing . The closing of the transactions set forth in
this Article II shall take place on the date hereof at the
offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New
York, New York 10019, at 10:00 a.m. or at such other place and
time as the parties hereto shall agree (the “ Closing
”). For the avoidance of doubt, as a result of the Closing,
the acceptance of the RN Initial Asset Contributions and MTVN
Initial Asset Contributions by the Company and the assumption of
the RN Included Liabilities and the MTVN Included Liabilities
by the Company shall have been consummated.
ARTICLE III
Representations and Warranties
SECTION
3.01. Representations and Warranties of RN Parent . Except
as set forth in a schedule dated the date of this Agreement (the
“ Disclosure Schedule ”) (with specific
reference to the Section or subsection of this Agreement to
which the information stated in such schedule relates;
provided , however , that information set forth in
one Section of the Disclosure Schedule shall be deemed to
apply to each other Section or subsection to which its
relevance is readily apparent), RN Parent represents and warrants
to MTVN Parent as follows:
(a)
Organization, Standing and Power . Each of RN Parent and RN
Sub (i) is duly organized or formed, validly existing and in
good standing (with respect to jurisdictions which recognize such
concept) under the laws of the jurisdiction in which it is so
organized or formed and (ii) has full corporate power and
authority to perform and comply with all the terms and conditions
of each Transaction Document to which it is, or is specified to be,
a party. Each of RN Parent and RN Sub is duly qualified to do
business as a foreign corporation and is in good standing (with
respect to jurisdictions which recognize such concept) in all
material respects in each jurisdiction in which the nature of the
business transacted by it or the character or location of the
properties owned or leased by it requires such qualification.
(b)
Authority; Execution and Delivery; Enforceability . Each of
RN Parent and RN Sub has full power and authority to execute and
deliver the Transaction Documents to which it is, or is specified
to be, a party, and to consummate the Transactions to which it is,
or is specified to be, a party. The execution, delivery and
performance by each of RN Parent and RN Sub of the Transaction
Documents to which it is, or is specified to be, a party and the
consummation by each of RN Parent and RN Sub of the Transactions to
which it is, or is specified to be, a party have been duly
authorized by all necessary corporate action and no other corporate
proceedings on the part of RN Parent or RN Sub are necessary to
authorize this Agreement or the consummation of the Transactions.
Each of RN Parent and RN Sub has duly executed and delivered this
Agreement and each other Transaction Document to which it is, or is
specified to be, a party, and this Agreement constitutes, and each
other Transaction Document to which it
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is, or
is specified to be, a party will (assuming the execution and
delivery by each other party thereto) constitute its legal, valid
and binding obligations, enforceable against it in accordance with
its terms.
(c)
No Conflicts; Consents . The execution and delivery by RN
Parent and RN Sub of this Agreement do not, the execution and
delivery by RN Parent and RN Sub of each other Transaction Document
to which it is, or is specified to be, a party will not, and the
consummation of the Transactions and compliance by RN Parent and RN
Sub with the terms of the Transaction Documents will not conflict
with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or to increased, additional,
accelerated or guaranteed rights or entitlements of any Person
under, or result in the creation of any Lien upon any of the RN
Contribution Assets under, any provision of (i) the
Organizational Documents of RN Parent or its subsidiaries,
(ii) any RN Contributed Contract or any Contract by which any
of the RN Contribution Assets is bound or (iii) any Judgment
or Applicable Law applicable to RN Parent or its subsidiaries or
their respective properties or assets, other than, in the case of
clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect with
respect to RN Parent. No Consent of, or registration, declaration
or filing with any Governmental Entity is required to be obtained
or made by or with respect to RN Parent or its subsidiaries in
connection with the (A) execution, delivery and performance of
this Agreement or any other Transaction Document or the
consummation of the Transactions or (B) the conduct by the
Company of the Existing Consumer Digital Music Business of RN
Parent following the Closing as conducted on the date hereof.
(d)
Title to Assets . RN Parent owns, directly or indirectly,
and has good and valid title to all of the RN Contribution Assets,
free and clear of all Liens, except Permitted Liens. This
Section 3.01(d) does not relate to RN Contributed Intellectual
Property, such items being the subject of
Section 3.01(i).
(e)
Profit/Loss Statements . Schedule 3.01(e) sets forth
the profit/loss statements of the Existing Consumer Digital Music
Business of RN Parent from January 1, 2006 to June 30,
2007. Such profit/loss statements have been prepared from the books
and records of RN Parent relating to its Existing Consumer Digital
Music Business and present fairly in all material respects the
results of operations of its Existing Consumer Digital Music
Business for the periods indicated.
(f)
No Undisclosed Material Extraordinary Liabilities .
Schedule 3.01(f) sets forth, (A) to the best of RN Sub
and RN Parent’s knowledge and belief after rea
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