AMENDMENT NO. 1 TO PREFERRED STOCK RIGHTS AGREEMENT
AMENDMENT
NO. 1
TO
This
AMENDMENT NO. 1 TO PREFERRED STOCK RIGHTS AGREEMENT (this “Amendment”)
is
entered into as of September 14, 2008, by and between Napster, Inc., a Delaware
corporation (formerly known as Roxio, Inc.) (the “Company”),
and
Mellon Investor Services LLC (the “Rights
Agent”).
RECITALS
A. The
Company is a party to that certain Preferred Stock Rights Agreement dated as
of
May 18, 2001 (the “Rights
Agreement”)
with
the Rights Agent. All capitalized terms used herein and not otherwise defined
shall have the meaning ascribed to them in the Rights Agreement;
B. The
Company is entering into an Agreement and Plan of Merger (the “Merger
Agreement”),
among
the Company, Best Buy Co., Inc., a Minnesota corporation (“Parent”)
and
Puma Cat Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Parent (“Purchaser”),
pursuant to which Purchaser will: (1) make a tender offer to acquire all of
the
issued and outstanding shares of common stock, par value $0.001 per share,
of
the Company, and all Rights associated with such shares, on the terms and
subject to the conditions set forth in the Merger Agreement (such tender offer,
as it may be amended and/or extended from time to time, is referred to in this
Amendment as the “Offer”);
and
(ii) after acquiring shares of the Company pursuant to the Offer, Purchaser
will
merge with and into the Company upon the terms and subject to the conditions
set
forth in the Merger Agreement (such merger is referred to in this Amendment
as
the “Merger”);
C. Concurrently
with the execution and delivery of the Merger Agreement, Parent, Purchaser
and
certain stockholders of the Company are entering into a shareholder support
agreement (the “Shareholder
Support Agreement”)
pursuant to which such stockholders will agree to take the actions specified
therein in furtherance of the Offer and the Merger;
D. The
Company desires to amend the Rights Agreement in connection with the execution
and delivery of each of the Merger Agreement and the Shareholder Support
Agreement and the consummation of the transactions contemplated
thereby;
E. Pursuant
to Section 27 of the Rights Agreement, prior to the occurrence of a Distribution
Date, the Company and the Rights Agent shall, if the Board of Directors of
the
Company so directs, but subject to the other provisions of Section 27,
supplement or amend any provision of the Rights Agreement without the approval
of any holders of Rights; and
F. The
Board
of Directors of the Company hereby directs that the Rights Agreement should
be
amended as set forth in this Amendment.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereby agree as follows:
Section
1. Amendments
to Section 1.
(a) Section
1
of the Rights Agreement is hereby amended by adding the following definitions,
which shall be inserted into Section 1 in alphabetical order:
(i) “Merger
Agreement” shall mean the Agreement and Plan of Merger, dated as of September
14, 2008, by and among Parent, Purchaser, and the Company.
(ii) “Merger”
shall have the meaning set forth in the Merger Agreement.
(iii) “Offer”
shall have the meaning set forth in the Merger Agreement.
(iv) “Parent”
shall mean Best Buy Co., Inc., a Minnesota corporation.
(v) “Purchaser”
shall mean Puma Cat Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Parent.
(vi) “Shareholder
Support Agreement” shall mean the Shareholder Support Agreement, dated as of
September 14, 2008, by and among Parent, Purchaser, and the holders of capital
stock of the Company identified on Exhibit A attached thereto.
(b) The
definition of “Acquiring Person” in Section 1(a) of the Rights Agreement is
hereby amended by inserting the following sentence at the end
thereof:
“Notwithstanding
the foregoing or any other provision of this Agreement to the contrary, none
of
(i)
the
approval, execution and/or delivery of the Merger Agreement or the approval,
execution and/or delivery of any amendment thereto, (ii) the approval, execution
and/or delivery of the Shareholder Support Agreement or the approval, execution
and/or delivery of any amendment thereto, (iii) the consummation of the Offer,
(iv) the consummation of the Merger, (v) the consummation of the other
transactions contemplated in the Merger Agreement, or (vi) the announcement
of
the Merger, the Offer, or any other transactions contemplated
thereby
shall be
deemed to result in Parent or Purchaser becoming an Acquiring
Person.”
(c) The
definition of “Distribution Date” in Section 1(l) of the Rights Agreement is
hereby amended by inserting the following sentence at the end
thereof:
“Notwithstanding
anything in this Agreement to the contrary, none of (i) the approval, execution
and/or delivery of the Merger Agreement or the approval, execution and/or
delivery of any amendment thereto, (ii) the approval, execution and/or delivery
of the Shareholder Support Agreement or the approval, execution and/or delivery
of any amendment thereto, (iii) the consummation of the Offer, (iv) the
consummation of the Merger, (v) the consummation of the other transactions
contemplated in the Merger Agreement, or (vi) the announcement of the Merger,
the Offer, or any other transactions contemplated thereby shall be deemed to
result in a Distribution Date.”
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(d) The
definition of “Expiration Date” in Section 1(a) of the Rights Agreement is
hereby amended and restated in its entirety to read as follows:
“Expiration
Date” shall mean the earliest to occur of: (i) the Close of Business on the
Final Expiration Date, (ii) the Redemption Date, (iii) the time at which the
Board of Directors orders the exchange of the Rights as provided in Section
24
hereof, or (iv) the Effective Time (as such term is defined in the Merger
Agreement). The
Company shall promptly notify the Rights Agent in writing upon the occurrence
of
the Effective Time and, if such notification is given orally, the Company shall
confirm same in writing on or prior to the Business Day next following. Until
such notice is received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Effective Time has not
occurred.
(e) The
definition of “Shares Acquisition Date” in Section 1(hh) of the Rights Agreement
is hereby amended by inserting the following sentence at the end
thereof:
“Notwithstanding
the foregoing or any other provision of this Agreement to the contrary, none
of
(i) the approval, execution and/or delivery of the Merger Agreement or the
approval, execution and/or delivery of any amendment thereto, (ii) the approval,
execution and/or delivery of the Shareholder Support Agreement or the approval,
execution and/or delivery of any amendment thereto, (iii) the consummation
of
the Offer, (iv) the consummation of the Merger, (v) the consummation of the
other transactions contemplated in the Merger Agreement, or (vi) the
announcement of the Merger, the Offer, or any other transactions contemplated
thereby shall be deemed to result in a Shares Acquisition Date.”
Section
2. Amendment
to Section 7(a).
Section
7(a) of the Rights Agreement is hereby amended and restated in its entirety
to
read as follows:
“Subject
to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
by
surrender of the Rights Certificate, with the form of election to purchase
on
the reverse side thereof duly executed, to the Rights Agent at the office of
the
Rights Agent designated for such purpose, together with payment of the Exercise
Price for each one-thousandth of a Preferred Share (or, following a Triggering
Event, other securities, cash or other assets as the case may be) as to which
the Rights are exercised, and prior to the earliest of (i) the Close of Business
on the Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, (iii) the time at which such Rights are exchanged
as provided in Section 24 hereof, and (iv) the moment in time immediately prior
to the Effective Time (as such term is defined in the Merger
Agreement).”
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Section
3. Amendment
to Section 11.
Section
11 of the Rights Agreement is hereby amended by renumbering such section as
follows:
(a) Section
11(a) is renumbered to section 11(a)(i).
(b) Section
11(a)(i) is renumbered to section 11(a)(ii).
(c) Section
11(a)(ii) is renumbered to section 11(a)(iii).
Section
4. Amendment
to Section 13.
Section
13 of the Rights Agreement is hereby amended by adding the following new section
13(g):
“(g)
Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, (i) the approval, execution and/or delivery of the Merger Agreement
or
the approval, execution and/or delivery of any amendment thereto, (ii) the
approval, execution and/or delivery of the Shareholder Support Agreement or
the
approval, execution and/or delivery of any amendment thereto, (iii) the
consummation of the Offer, (iv) the consummation of the Merger, (v) the
consummation of the other transactions contemplated in the Merger Agreement,
or
(vi) the announcement of the Merger, the Offer, or any other transactions
contemplated thereby shall not be deemed to be a Section 13 Event and shall
not
cause the Rights to be adjusted or exercisable in accordance with, or any other
action to be taken or obligation to arise pursuant to, this Section
13.”
Section
5. Amendment
to Section 30.
Section
30 of the Rights Agreement is hereby amended by inserting the following sentence
at the end thereof:
“Further,
nothing in this Agreement shall be construed to give any holder of Rights or
any
other Person any legal or equitable rights, remedies or claims under this
Agreement by virtue of (i) the approval, execution and/or delivery of the Merger
Agreement or the approval, execution and/or delivery of any amendment thereto,
(ii) the approval, execution and/or delivery of the Shareholder Support
Agreement or the approval, execution and/or delivery of any amendment thereto,
(iii) the consummation of the Offer, (iv) the consummation of the Merger, (v)
the consummation of the other transactions contemplated in the Merger Agreement,
or (vi) the announcement of the Merger, the Offer, or any other transactions
contemplated thereby.”
Section
6. The
Rights Agreement, as amended by this Amendment, shall remain in full force
and
effect in accordance with its terms. In the event of any conflict, inconsistency
or incongruity between any provision of this Amendment and any provision of
the
Rights Agreement, the provisions of this Amendment shall govern and
control.
Section
7. Nothing
in this Amendment shall be construed to give to any Person other than the
Company, Parent, Purchaser, the Rights Agent and the registered holders of
the
Right Certificates (and, prior to the Distribution Date, the Common Shares)
any
legal or equitable right, remedy or claim under this Amendment; but this
Amendment shall be for the sole and exclusive benefit of the Company, Parent,
Purchaser, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
4
Section
8. If
any
term, provision, covenant or restriction of this Amendment is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Amendment shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section
9. All
the
covenants and provisions of this Amendment by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section
10. This
Amendment shall be deemed to be a contract made under the laws of the State
of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such state applicable to contracts to be made and performed
entirely within such state; provided, however, that all provisions regarding
the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state.
Section
11. This
Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts together shall constitute but one and the same instrument.
[Signatures
on the Following Page.]
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IN
WITNESS WHEREOF, the
parties have caused this Amendment to be duly executed as of the day and year
first written above.
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By:
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/s/
Wm. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Wm.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Chairman
and Chief Executive Officer
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MELLON
INVESTOR SERVICES LLC
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By:
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/s/
▇▇▇ ▇▇▇▇
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▇▇▇
▇▇▇▇
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Senior
Relationship Manager
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Amendment
No. 1 to Rights Agreement
S-1