Exhibit 10.1

 

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ASSET PURCHASE AGREEMENT

 

RELATING TO THE GOBACK PRODUCT LINE

 

BY AND AMONG

 

SYMANTEC CORPORATION,

 

SYMANTEC LIMITED,

 

ROXIO, INC.,

 

WILD FILE, INC.

 

AND

 

ROXIO CI, LTD.

 

April 17, 2003

 

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ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
April 17, 2003 by and among Symantec Corporation, a Delaware corporation
(“Buyer”), Symantec Limited, an entity organized under the laws of Ireland
(which is a party hereto for purposes of Section 5.1 hereof only), Roxio, Inc.,
a Delaware corporation (“Roxio”), Wild File, Inc., a Delaware corporation (“Wild
File”), and Roxio CI, Ltd., a Cayman Islands limited company (“RCI”, together
with Roxio and Wild File, collectively, “Seller”).

 

RECITALS

 

A. Roxio is engaged in the business of developing media software. Among its
various products is the “GoBack” system recovery software, which enables users
to revert their hard drives to a former condition at a previous point in time
and is designed to allow users to recover from system crashes, virus attacks or
user errors. The GoBack product and all products and versions thereof (including
enterprise and consumer versions), including those currently under development
by Seller, and all software code primarily related to or otherwise necessary for
such products, are referred to herein as the “Products”, and the business,
activities and operations of Seller with respect to the Products, including the
development, design, manufacturing, sale and distribution thereof (but excluding
general functions such as human resources, accounting, legal or other general
and administrative services), are referred to herein as the “Business”. Wild
File and RCI also hold certain assets related to the Business.

 

B. Seller desires to sell and assign to Buyer, and Buyer desires to purchase and
acquire from Seller, certain assets related to the Business on the terms and
conditions set forth in this Agreement.

 

C. Concurrently herewith, Buyer and Seller are entering into an escrow agreement
(the “Escrow Agreement”) pursuant to which a portion of the purchase price to be
paid by Buyer hereunder will be held as collateral for Seller’s indemnification
obligations hereunder.

 

D. Concurrently herewith, Buyer and Seller are also entering into a transition
services agreement (the “Transition Services Agreement”) pursuant to which Roxio
shall continue to provide certain services to Buyer as specified therein for the
period of time specified therein in order for Buyer to conduct the Business in
an uninterrupted fashion after the date hereof.

 

NOW, THEREFORE, in consideration of the facts recited above and the mutual
agreements set forth herein, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Certain Defined Terms. As used in this Agreement, the following terms will
have the following meanings:

 

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“Accounts Receivable” means all trade accounts receivable and any other
evidences of indebtedness of and rights to receive payment and the full benefit
of all security for such accounts or rights to payment, in each case that would
be characterized as accounts receivable in accordance with GAAP (as defined
below).

 

“affiliate” means, with respect to any specified person, any other person that
directly or indirectly controls, is controlled by, or is under common control
with, such specified person (where, for purposes of this definition, “control”
(including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of stock, as an officer, director, trustee or executor, by contract or
otherwise).

 

“Buyer Ancillary Agreements” means the Transition Services Agreement, Assignment
and Assumption Agreement and all other documents that Buyer is to execute and
deliver pursuant hereto.

 

“Change of Control” means, with respect to either of Buyer or Seller, any of the
following: (i) any sale or transfer of all or substantially all of the assets of
such party; (ii) any merger, consolidation or other business reorganization in
which the holders of such party’s outstanding voting securities immediately
prior to such transaction do not hold, immediately following such transaction,
securities representing 50% or more of the combined voting power of the
outstanding securities of the surviving entity; or (iii) the acquisition by any
person (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), of beneficial
ownership (within the meaning of Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing 50% or more of
the combined voting power of the then-outstanding securities of such party.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the rulings and
regulations promulgated thereunder.

 

“Contract” means any written, oral or other agreement, contract, subcontract,
lease, binding understanding, promise, instrument, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan, commitment
or undertaking of any nature, as of the date hereof or as may hereafter be in
effect.

 

“Documentation” means, collectively, programmers’ notes or logs, source code
annotations, user guides, manuals, instructions, software architecture designs,
layouts, any know-how, and any other designs, plans, drawings, documentation,
materials, supplier lists, software source code and object code, net lists,
photographs, development tools, blueprints, media, memoranda and records that
are primarily related to or otherwise necessary for the use and exploitation of
any Seller Technology Assets, whether in tangible or intangible form, whether
owned by Seller or held by Seller under any licenses or sublicenses (or similar
grants of rights).

 

“Employee Plan” means each employment and consulting Contract, pension,
retirement, disability, medical, dental or other health plan, life insurance or
other death benefit plan, profit sharing, deferred compensation agreement,
stock, option, bonus or other incentive plan, vacation,

 

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sick, holiday or other paid leave plan, severance plan or other similar employee
benefit plan maintained by Seller or any of its affiliates which covers any
Employee, including all “employee benefit plans” as defined in Section 3(3) of
ERISA.

 

“Employees” are those officers and employees of Seller who dedicate a
substantial portion of their working hours or who have made substantial
contributions towards the Business, and consultants and independent contractors
who perform services in connection with the Business.

 

“Encumbrance” means any pledge, lien, collateral assignment, security interest,
deed of trust, mortgage, title retention device, collateral assignment, claim,
license or other contractual restriction (including any restriction on the
transfer of any asset, the receipt of income derived from any asset or on the
possession, exercise or transfer of any other attribute of ownership of any
asset), conditional sale or other security arrangement, or any charge, adverse
claim of title, ownership or right to use or any other encumbrance of any kind
whatsoever.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Escrow Agent” shall have the meaning ascribed to such term in the Escrow
Agreement.

 

“GAAP” means generally accepted accounting principles at the time of any
determination, which are applied on a consistent basis. All accounting terms
used in this Agreement shall have the meanings given to those terms by GAAP,
unless the context of this Agreement otherwise requires.

 

“Governmental Authority” means any (a) nation, province, state, county, city,
town, district or other jurisdiction of any nature; (b) federal, provincial,
state, local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal); (d)
multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.

 

“Intellectual Property Rights” means, collectively, all intellectual property
rights enforceable anywhere in the world, including patents, patent
applications, patent rights, trademarks, trademark registrations and
applications therefor, trade dress rights, trade names, service marks, service
mark registrations and applications therefor, Internet domain names, Internet
and world wide web URLs or addresses, copyrights, copyright registrations and
applications therefor, mask work rights, mask work registrations and
applications therefor, franchises, licenses, inventions, trade secrets,
know-how, customer lists, supplier lists, proprietary processes and formulae,
software source code and object code, algorithms, net lists, architectures,
structures, screen displays, photographs, images, layouts, development tools,
designs, blueprints, specifications, technical drawings (or similar information
in electronic format) and all documentation and media constituting, describing
or relating to the foregoing, including manuals, programmers’ notes, memoranda
and records.

 

“Key Employees” means those persons identified on Schedule 1.1 hereto.

 

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“knowledge” – an individual will be deemed to have “knowledge” of a particular
fact, circumstance, event or other matter if (a) such individual is actually
aware of such fact or other matter, including, with respect to Seller only, (b)
a reasonably prudent individual in such individual’s position could reasonably
be expected to discover or otherwise become aware of such fact or other matter
in the course of conducting his or her duties (including review of documents and
records, whether written or electronic, including e-mails sent to or by such
individual). Buyer will be deemed to have “knowledge” of a particular fact or
other matter if an officer or director of Buyer has “knowledge” (as defined
above) of such fact or other matter. Roxio will be deemed to have “knowledge” of
a particular fact or other matter if an officer, director, or any of the
following employees has “knowledge” (as defined above) of such fact or other
matter: Kamal Arafeh, Elliot Carpenter, Philippe Cassereau, Chris Gorog, William
Growney, Tom Shea, Stephen Stange and each of the Key Employees.

 

“Legal Requirement” means any law, statute, constitution, principle of common
law, resolution, ordinance, code, edict, order, judgment, decree, injunction,
rule, regulation, ruling or requirement issued, enacted, adopted, promulgated,
implemented or otherwise put into effect by or under the authority of any
Governmental Authority.

 

“Liabilities” means debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured, determined or determinable,
known or unknown, including those arising under any law (under law or equity and
under any theory of liability), action or governmental order and those arising
under any Contract.

 

“Licensed IP” means those Seller IP Rights (as defined in Section 3.11(a)) that
are identified on Schedule 2.9.

 

“person” means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity.

 

“Seller Ancillary Agreements” means the Escrow Agreement, Transition Services
Agreement, Bill of Sale, the Assignment and Assumption Agreement and all other
assignments, certificates and documents that Seller is required to execute and
deliver pursuant to this Agreement.

 

“Seller Technology Assets” means, collectively, all computer software (including
software programs, objects, modules, routines, algorithms and any other software
code) in both source code and object code form, copyrightable works, inventions
(whether or not patentable), trade secrets (including Seller’s customer list),
know-how, processes, designs, techniques, confidential business information
(including Seller’s customer list), and other proprietary information and
technologies used primarily in, or which are otherwise necessary for, conducting
the Business, including without limitation any of the above related to software
programs and updates, upgrades, new versions and new releases of such software
programs currently under development by or for Seller, whether owned by Seller
or held by Seller under any licenses or sublicenses (or similar grants of
rights) excluding the Licensed IP and the Excluded Assets (as defined in Section
2.2). The Seller Technology Assets include, but are not limited to, the assets
described on Exhibit A attached hereto.

 

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“Tax” or “Taxes” means foreign, federal, state and local taxes of any kind
whatsoever (whether payable directly or by withholding), including alternative
or add-on minimum income, gains, employment, license, documentary, stamp,
occupation, recording, transfer, sales, use, excise, franchise, ad valorem,
property, property transfer, inventory, value added, withholding and payroll
taxes (including all taxes or other payments required to be withheld by an
employer and paid over to any Governmental Authority), or other similar
governmental charges, fees, customs, duties, levies or assessments, together
with any estimated tax, interest, fines and penalties or additions to tax and
interest on such fines, penalties and additions to tax.

 

ARTICLE II

 

PURCHASE AND SALE OF PURCHASED ASSETS

 

2.1 Sale and Purchase. Subject to the terms and conditions of this Agreement and
in reliance on the representations, warranties and covenants set forth in this
Agreement, Seller hereby sells, assigns, transfers, conveys and delivers to
Buyer, and Buyer hereby purchases and acquires, all right, title and interest in
and to the Purchased Assets (as defined in Section 2.2), free and clear of all
Encumbrances whatsoever, except for Encumbrances upon portions of the Purchased
Assets that are specifically identified in Schedule 3.11(h) or Schedule 3.11(m).

 

2.2 Purchased Assets and Excluded Assets Defined. As used in this Agreement, the
term “Purchased Assets” will mean all of the assets and properties (excepting
only the Excluded Assets) of every kind and description, wherever located,
personal or mixed, tangible or intangible, primarily related to or otherwise
necessary for the conduct of the Business by Seller as of the date of this
Agreement, including without limitation the following:

 

(a) all of the Seller Technology Assets;

 

(b) all of the Documentation;

 

(c) any and all copies in a tangible medium and any and all other tangible
embodiments of all of the Seller Technology Assets and all of the Documentation;

 

(d) all Seller IP Rights (as defined in Section 3.11(a)) in and to the Seller
Technology Assets and the Documentation, including all patents, rights in patent
applications and invention rights listed in the Patent Assignment (as defined in
Section 2.7(f)) and all marks, copyrights and domain names listed in the Other
IP Assignments (as defined in Section 2.7(g)), but excluding the Licensed IP,
and;

 

(e) all Accounts Receivable of Seller arising out of or in connection with the
Business (including, without limitation and for purposes of clarity, Accounts
Receivable from “enterprise” and any other customers under Assigned Agreements);

 

(f) those agreements listed on Exhibit B attached hereto (collectively, the
“Assigned Agreements”); and

 

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(g) copies of Seller’s marketing and sales information, pricing, marketing
plans, business plans, financial and business projections and other files and
records (or applicable portions thereof) pertaining to the Purchased Assets and
the Business.

 

As used in this Agreement, the term “Excluded Assets” means any asset of Seller
not included as a Purchased Asset hereunder. All Excluded Assets will be
retained by Seller or its licensors and will not be sold, assigned, transferred
or conveyed to Buyer.

 

2.3 Assumption of Specified Liabilities; Exclusion of Liabilities. Subject to
the terms and conditions of this Agreement, Buyer hereby assumes and agrees to
pay, perform and discharge when due only (i) those Liabilities of Seller under
any Assigned Agreements, but only to the extent that such Liabilities accrued or
arose after the date of this Agreement for reasons other than any breach,
violation or default by Seller of the terms of the Assigned Agreements, (ii) any
Liabilities to the extent that they relate to or arise out of Products shipped
or services performed by Buyer on or after the date hereof (provided, however,
Buyer Indemnified Persons, as defined in Section 8.1, shall not be precluded
from making claims for indemnification by Seller with respect to such Products
shipped or services performed to the extent a Buyer Indemnified Person is so
entitled pursuant to Article VIII hereof) and (iii) Liabilities arising from (A)
returns by distributors or other third parties of Products shipped by Seller
(other than with respect to Products shipped to distributors on a consignment
basis) solely in connection with the Business as of or prior to the date of this
Agreement, and (B) express return, guaranty and warranty obligations for
Products shipped and services performed by Seller solely in connection with the
Business as of or prior to the date of this Agreement (clauses (A) and (B)
collectively, “Return and Warranty Obligations”), not to exceed, in the
aggregate, $75,000 of cancelled accounts receivable, refunds or costs to Buyer
for materials and labor (clauses (i), (ii) and (iii) collectively, the “Assumed
Liabilities”).

 

2.4 No Other Liabilities Assumed. As a material consideration and inducement to
Buyer to enter into this Agreement, Seller hereby retains, and is solely
responsible for paying, performing and discharging when due, and Buyer does not
assume or otherwise have or acquire any responsibility or Liability for, any and
all Liabilities of Seller, whether now existing or hereafter arising (other than
the Assumed Liabilities), including, by way of example and not by way of
limitation, the following:

 

(a) any and all Taxes now or hereafter due and payable by Seller or any
affiliate of Seller, including any Taxes on, or arising from, the Business prior
to the date of this Agreement, and any related Liabilities of Seller and its
affiliates;

 

(b) any and all Taxes attributable to any of the Purchased Assets that relate in
any manner to, or first arose during, any time period or portion thereof ending
on or before the date of this Agreement, and any related Liabilities of Seller
and its affiliates;

 

(c) any and all trade payables and other accounts payable incurred or accrued by
Seller or any of Seller’s affiliates, whether or not relating to the Business,
and any related Liabilities of Seller and its affiliates;

 

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(d) any and all Liabilities of Seller or any of its affiliates arising under or
related to any lease, agreement, promissory note or credit facility, (other than
Assigned Agreements);

 

(e) any and all Liabilities now or hereafter arising from or with respect to the
sale, license, provision, performance or delivery of any products or services
of, by or for Seller or any of its affiliates, except as set forth in Section
2.3;

 

(f) any and all Liabilities arising from any breach or default by Seller or any
of its affiliates of any Contract or other commitment of Seller or any of its
affiliates;

 

(g) any and all Liabilities arising under the Employee Plans (as defined in
Section 3.17) and any and all Liabilities to current or former employees of
Seller related to or arising from or with respect to any act or omission of
Seller, including any Liabilities to such employees for the payment of any and
all wages or accrued and unused vacation time or for the reimbursement of any
expenses incurred by such employees;

 

(h) any and all Liabilities arising from the termination by Seller or any of its
affiliates of the employment of any current, former or future employees of
Seller, any other claims brought against Seller arising from the employment by
Seller or any of its affiliates of any person, or arising from any duties or
obligations under any employee benefit plans of Seller or any of its affiliates;

 

(i) any and all present or future Liabilities of Seller or any of its affiliates
to employees of Seller under ERISA, and the rulings and regulations promulgated
thereunder, the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, or any severance pay obligations of Seller; and

 

(l) any and all Liabilities relating to or arising out of any of the Excluded
Assets.

 

2.5 Purchase Price and Escrow. The aggregate purchase price for the Purchased
Assets being paid by Buyer concurrently with the delivery of this Agreement is
$13,000,000 (the “Purchase Price”), of which (a) $10,250,000 has been delivered
in cash to Roxio pursuant to Section 2.8 hereof, and (b) $2,750,000 (the “Escrow
Fund”) has been deposited in an account with the Escrow Agent. The Escrow Agent
will hold the Escrow Fund as collateral to secure Seller’s indemnification
obligations for a period of one year from the date hereof (the “Escrow Period”)
and will release amounts to satisfy valid claims, all pursuant to the Escrow
Agreement and Article VIII hereof.

 

2.6 Closing. Subject to the terms and conditions of this Agreement, the sale and
purchase of the Purchased Assets contemplated hereby will be deemed to have
occurred concurrently with the execution and delivery of this Agreement at the
offices of Fenwick & West LLP, 801 California Street, Mountain View, California.

 

2.7 Deliveries by Seller. Concurrently with the execution and delivery of this
Agreement, Seller has delivered or caused to be delivered to Buyer the following
items,

 

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documents and certificates, against delivery to Seller of the items, payments,
documents and certificates delivered to Seller by Buyer pursuant to Section 2.8:

 

(a) the Escrow Agreement, which is attached as Exhibit C hereto, executed on (i)
Roxio’s behalf by an authorized officer of Roxio, (ii) Wild File’s behalf by an
authorized officer of Wild File, and (iii) RCI’s behalf by an authorized officer
of RCI;

 

(b) the Transition Services Agreement, which is attached as Exhibit D hereto,
executed on Roxio’s behalf by an authorized officer of Roxio;

 

(c) the Bill of Sale attached hereto as Exhibit E attached hereto (the “Bill of
Sale”) executed on (i) Roxio’s behalf by an authorized officer of Roxio, (ii)
Wild File’s behalf by an authorized officer of Wild File, and (iii) RCI’s behalf
by an authorized officer of RCI;

 

(d) the Assignment and Assumption Agreement attached hereto as Exhibit F (the
“Assignment and Assumption Agreement”) executed on (i) Roxio’s behalf by an
authorized officer of Roxio, (ii) Wild File’s behalf by an authorized officer of
Wild File, and (iii) RCI’s behalf by an authorized officer of RCI;

 

(e) a receipt for the payment of the Purchase Price, executed by an authorized
officer of Roxio;

 

(f) the Purchased Assets and copies of any Licensed IP, which have been
delivered to Buyer in the form and to the location to be determined by Buyer in
its reasonable discretion at Seller’s cost and expense; provided, that Seller
has delivered and Buyer has accepted delivery of the Purchased Assets through
electronic delivery (except with respect to tangible assets) or in another
manner reasonably calculated and legally permitted to minimize or avoid the
incurrence of transfer and sales Taxes so long as Seller retains no copies of
any Purchased Assets (except a reasonable number of copies for archival purposes
only) following the date of this Agreement and such method of delivery does not
adversely affect the condition, operability or usefulness of any Purchased
Asset;

 

(g) the assignments attached hereto as Exhibit G from Seller to Buyer of any and
all patent rights, rights in patent applications and invention rights included
in the Purchased Assets (the “Patent Assignment”), executed on (i) Roxio’s
behalf by an authorized officer of Roxio with his execution notarized, (ii) Wild
File’s behalf by an authorized officer of Wild File with his execution
notarized, and (iii) RCI’s behalf by an authorized officer of RCI with his
execution notarized;

 

(h) the assignments attached hereto as Exhibits H-J from Seller to Buyer of all
registered and unregistered trademarks, service marks, copyrights and domain
names included in the Purchased Assets and all pending applications for
registration or recordation of any copyrights, trademarks, service marks and
domain names included in the Purchased Assets (the “Other IP Assignments”), duly
executed on (i) Roxio’s behalf by an authorized officer of Roxio with his
execution notarized, (ii) Wild File’s behalf by an authorized officer of Wild
File with his execution notarized, and (iii) RCI’s behalf by an authorized
officer of RCI with his execution notarized;

 

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(i) copies of resolutions of the Board of Directors of Seller authorizing the
execution, delivery and performance by Seller of this Agreement, each of the
Seller Ancillary Agreements, and the consummation of the sale, assignment and
delivery of the Purchased Assets hereunder and all other transactions
contemplated hereby and thereby, certified as true and correct as of the date
hereof by the Secretary of Seller;

 

(j) a certificate from the Delaware Secretary of State, California Secretary of
State, California Franchise Tax Board and Minnesota Secretary of State dated no
earlier than April 10, 2003 regarding the good standing of Roxio with those
agencies as of such date, a certificate from the Delaware Secretary of State
dated no earlier than April 10, 2003 regarding the good standing of Wild File
with such agency as of such date, and a certificate from the Registrar of
Companies in the Cayman Islands dated as of March 26, 2003 regarding the good
standing of RCI with such agency as of such date, in each case with good
standing to be confirmed verbally with each such agency (other than the
Registrar of Companies in the Cayman Islands) on the date of this Agreement;

 

(k) counterparts of the offer letters by Buyer to each of the Key Employees,
executed by each such Key Employee; and

 

(l) evidence of Seller’s receipt of all consents, waivers and approvals from
third parties and Governmental Authorities, if any, that are necessary to effect
the assignment and transfer to Buyer of good and marketable title to all the
Purchased Assets, and the assignment to Buyer of all Assigned Agreements, in
each case free and clear of all Encumbrances.

 

2.8 Deliveries by Buyer. Concurrently with the execution and delivery of this
Agreement, Buyer has, against delivery to Buyer of the items, documents and
certificates delivered to Buyer by Seller pursuant to Section 2.7, (i) delivered
counterparts of the Escrow Agreement, Transition Services Agreement, Bill of
Sale and Assignment and Assumption Agreement, executed on Buyer’s behalf by an
authorized officer of Buyer, (ii) delivered offer letters from Buyer to each Key
Employee, each executed by a duly authorized representative of Buyer, (iii)
delivered and paid to Seller $10,250,000 in cash by wire transfer in immediately
available funds to an account of Seller previously designated in writing by
Seller to Buyer, and deposited with the Escrow Agent $2,750,000 in cash by wire
transfer in immediately available funds, (iv) copies of resolutions of the Board
of Directors of Buyer authorizing the execution, delivery and performance by
Buyer of this Agreement, each of the Buyer Ancillary Agreements, and the
consummation of the sale, assignment and delivery of the Purchased Assets
hereunder and all other transactions contemplated hereby and thereby, certified
as true and correct as of the date hereof by the Secretary of Buyer, and (v) a
certificate from the Delaware Secretary of State, California Secretary of State
and California Franchise Tax Board dated no earlier than April 10, 2003,
regarding the good standing of Buyer with those agencies as of such date, with
good standing to be confirmed verbally with each such agency on the date of this
Agreement.

 

2.9 License to Buyer. Subject to the terms and conditions of this Agreement and
effective as of the closing of the transactions contemplate herein, Seller
hereby grants Buyer a nonexclusive, worldwide, royalty-free, fully paid up,
perpetual, irrevocable, non-transferable (except subject to Section 9.8, and
provided, however, that this license may be transferred and

 

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assigned in connection with the sale or transfer of all or substantially all of
the Purchased Assets or in connection with a Change of Control of Buyer) and
sublicensable license to use, reproduce, distribute, display, perform, disclose,
prepare derivative works based upon, make, have made, sell, offer for sale and
import the Licensed IP and any related products or services in the conduct of
the Business.

 

2.10 Overlapping Code. Seller represents and warrants to Buyer that it has used
diligent efforts to ensure that no software code (including software programs,
objects, modules, routines, algorithms and any other software code, in source or
object form), other copyrightable works, or inventions (whether or not
patentable) that are included within the Purchased Assets are utilized by Seller
in or internally in conjunction with any Seller software products or services
that are not within the Purchased Assets (i.e., that are not being sold to
Buyer). If, despite those efforts, Seller discovers after the date of this
Agreement that Seller utilizes some portion of such software code, other
copyrightable works or inventions in or internally in conjunction with one or
more Seller software products or services that are in production and
distribution by Seller, then Seller will notify Buyer immediately upon making
that discovery and of the specific overlapping software code, works, or
inventions (“Overlapping Code”). Upon reasonable verification, Buyer will grant
to Seller a royalty-free, perpetual, non-exclusive, worldwide license to use,
reproduce, distribute (directly or indirectly), display, perform, make, have
made, sell, offer for sale and import the Overlapping Code, but only to the
extent that such Overlapping Code does not constitute a material part of the
Purchased Assets, and solely as then utilized in or internally in conjunction
with the versions and editions of such Seller software products or services that
are then in production and distribution by Seller. Buyer will also grant to
Seller a license to modify the Overlapping Code and distribute such modified
Overlapping Code, but solely for purposes of bug fixing. Seller shall have no
right or license to use such Overlapping Code in any other Seller products or
services. Provided that Seller has complied with the requirement of diligent
efforts set forth above, Buyer agrees that Seller shall have no liability to
Buyer (or its successors and assigns): (i) for any use or distribution (or other
commercial exploitation) of the Overlapping Code between the date hereof and the
date any license granted in accordance with this Section 2.10 comes into effect;
or (ii) if Buyer declines to grant a license because the Overlapping Code is a
material part of the Purchased Assets, then, for any use or distribution (or
other commercial exploitation) of the Overlapping Code between the date hereof
and a reasonable period after Seller notifies Buyer of the Overlapping Code to
enable Seller to cease using and remove the Overlapping Code from Seller’s
software products or services.

 

2.11 License to Seller. Subject to the term and conditions of this Agreement and
effective as of the closing of the transactions contemplated herein, Buyer
hereby grants Seller a nonexclusive, worldwide, royalty-free, fully paid up,
perpetual, irrevocable, non-transferable (except in connection with the sale or
transfer of all or substantially all of Seller’s product line(s) to which the
Current Overlapping Code relates or in connection with a Change of Control of
Seller) and sublicensable license to use, reproduce, distribute, display,
perform, disclose, prepare derivative works based upon, make, have made, sell,
offer for sale and import the Current Overlapping Code and any related products
or services in the conduct of Seller’s business. “Current Overlapping Code”
means the following two components, $/dev/lib/DiskImageCreate and
$/dev/lib/DiskImageRead, each of which is currently identified as being used in
the Purchased Assets as well as in other products and services of Seller.

 

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ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Buyer that, except as specifically set forth
in a disclosure in the letter addressed to Buyer from Seller (including all
schedules thereto) that has been delivered by Seller to Buyer concurrently with
the parties’ execution of this Agreement and dated as of the date hereof (the
“Seller Disclosure Letter”), each of the representations, warranties and
statements contained in the following sections of this Article III is true and
correct as of the date hereof. Except as otherwise provided herein, each
representation and warranty made by Seller hereunder and the statements
contained in the Seller Disclosure Letter and its schedules are limited in scope
to the Purchased Assets and the Business and shall in no way be deemed to relate
to any Excluded Asset or any part of Seller’s business that is not the Business.

 

3.1 Organization and Good Standing. Roxio and Wild File are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware. RCI is a corporation duly organized, validly existing and in good
standing under the laws of the Cayman Islands. Seller has the corporate power
and authority to own, operate and lease its properties and to carry on its
business as now conducted. Roxio is qualified to transact business, and is in
good standing, in the states of California and Minnesota. Seller is qualified to
transact business, and is in good standing, in each other jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities make such qualification necessary, except where such failure would
not individually or in the aggregate have a material adverse effect on the
Business, the Purchased Assets or the transactions contemplated by this
Agreement.

 

3.2 Power, Authorization and Validity.

 

(a) Power and Authority. Seller has all requisite corporate power and authority
to enter into, execute, deliver and perform its obligations under this Agreement
and each of the Seller Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Seller of this Agreement and each of the Seller Ancillary Agreements and all
other agreements, transactions and actions contemplated hereby or thereby, and
the sale of the Purchased Assets to Buyer, have been duly and validly approved
and authorized by Seller’s Board of Directors, and do not require the approval
of Seller’s stockholders nor any other corporate action on the part of Seller.

 

(b) No Consents. No consent, approval, order or authorization of, notification
to, action by or registration, declaration or filing with, any Governmental
Authority, or any other person, governmental or otherwise, is necessary or
required to be made or obtained by Seller to enable Seller to lawfully enter
into, execute, deliver and perform its obligations under this Agreement and each
of the Seller Ancillary Agreements, or to consummate the transactions
contemplated hereby or thereby, including Seller’s sale, assignment, transfer,
conveyance and delivery of the Purchased Assets and Seller’s assignment of any
Assigned Agreements to Buyer.

 

(c) Enforceability. This Agreement and each of the Seller Ancillary Agreements
have been duly executed and delivered by Seller. Assuming due authorization,
execution and delivery by Buyer, this Agreement and each of the Seller Ancillary
Agreements are

 

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valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, subject to the effect of (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or limiting rights of creditors generally and
(ii) rules of law and equity governing specific performance, injunctive relief
and other equitable remedies.

 

3.3 No Conflict. Neither the execution and delivery of this Agreement or any of
the Seller Ancillary Agreements by Seller, nor the consummation of the
transactions contemplated hereby or thereby, will conflict with, or (with or
without notice or lapse of time, or both) result in a termination, breach,
impairment or violation of, give any rights of acceleration or cancellation
under, or constitute a default under: (i) any provision of the Certificate of
Incorporation or Bylaws of Seller (or, in the case of RCI, its applicable
organizational documents), each as currently in effect; (ii) any Legal
Requirement applicable to Seller or any of the Purchased Assets; (iii) any
material Contract, bond, mortgage, indenture, permit, franchise, letter of
intent or memorandum of understanding to which Seller is a party or by which
Seller is bound, or any Contract by which any of the Purchased Assets are bound,
including any Assigned Agreements; or (iv) any privacy policy of Seller. Neither
Seller’s entering into this Agreement or any of the Seller Ancillary Agreements
nor the consummation of the transactions contemplated hereby or thereby will
result in the creation of any Encumbrance on any of the Purchased Assets or give
rise to, or trigger the application of, any rights of any third party that would
come into effect upon the consummation of the transactions contemplated hereby.

 

3.4 Litigation. There is no action, suit, arbitration, mediation, proceeding or
claim of any nature in progress or pending or, to Seller’s knowledge,
investigation of any nature in progress, pending or threatened or, to Seller’s
knowledge, action, suit, arbitration, mediation or proceeding of any nature
threatened, before any Governmental Authority, arbitrator or mediator, against
or relating to Seller in connection with the Purchased Assets or the Business or
relating to the transactions contemplated hereby. There is no judgment, decree,
injunction, rule or order of any Governmental Authority or arbitrator pending or
binding against Seller in connection with the Purchased Assets or the Business
or relating to the transactions contemplated hereby. To Seller’s knowledge,
there is no reasonable basis for any person to assert a claim against Buyer or
Seller based upon: (i) Seller’s entering into this Agreement or any of the
Seller Ancillary Agreements or consummating the transactions contemplated hereby
or thereby; or (ii) a claim of ownership of or rights in or to any of the
Purchased Assets.

 

3.5 Taxes. Seller has withheld and paid all material Taxes related to the
Business and required to be withheld with respect to amounts owing to any
employee, creditor, independent contractor or other third party. None of the
Purchased Assets is subject to any liens for Taxes (other than for Taxes not yet
due and payable). In the hands of Seller, none of the Purchased Assets (i) is
property that is required to be treated as being owned by any other Person
pursuant to the provisions of former Section 168(f)(8) of the Code; (ii) is
“tax-exempt use property” within the meaning of Section 168(h) of the Code; or
(iii) directly or indirectly secures any debt the interest on which is tax
exempt under Section 103(a) of the Code which debt Purchaser is assuming.

 

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3.6 Seller Financial Statements. Seller has delivered to Buyer as an attachment
to Schedule 3.6 an unaudited statement of gross revenue for the fiscal years
ended March 31, 2002 and 2001 and the nine months ended December 31, 2002
(collectively, the “Seller Financial Statements”). The Seller Financial
Statements: (i) are derived from and are in accordance with the books and
records of Seller; (ii) fairly present in all material respects the gross
revenues for the periods therein specified; and (iii) are complete and correct
in all material respects. Seller has delivered to Buyer projections for the
Business for the fiscal year ended March 31, 2004. Such projections were made or
given in good faith and Seller had a reasonable basis for making or giving them.

 

3.7 Absence of Certain Changes. Since December 31, 2002, Seller has operated its
Business in the ordinary course consistent with its past custom and practice,
and since such date there has not been with respect to Seller any:

 

(a) any change, event, violation, inaccuracy, circumstance or effect that is
materially adverse to the business, assets, liabilities, financial condition,
results of operations or prospects of the Business or the Purchased Assets,
other than a change or effect that has resulted from changes in economic or
capital market conditions generally;

 

(b) incurrence, creation or assumption by Seller of any Encumbrance on any of
the Purchased Assets;

 

(c) purchase, license, sale, assignment or other disposition or transfer, or any
Contract or other arrangement for the purchase, license, sale, assignment or
other disposition or transfer, of any of the Purchased Assets, except as set
forth in Schedule 3.11(h);

 

(d) damage, destruction or loss of any Purchased Asset, whether or not covered
by insurance, in excess of $10,000;

 

(e) amendment of, relinquishment, termination or non-renewal by Seller of any
Assigned Agreement or a right or obligation set forth in any Assigned Agreement,
or any written or oral indication or assertion by the other party thereto of any
material problems with Seller’s services or performance under any Assigned
Agreement or its desire to so amend, relinquish, terminate or not renew any
Assigned Agreement (or a right or obligation set forth therein);

 

(f) license, transfer or grant of a right under any Seller IP Rights (as defined
in Section 3.11), except as otherwise set forth in Schedule 3.11(h);

 

(g) increase, or agreement to increase, the salaries, bonuses or other
compensation of any Key Employee

 

3.8 Title to and Condition of Purchased Assets; Sufficiency of Assets.

 

(a) Seller has good and marketable title to all of the Purchased Assets free and
clear of all Encumbrances, except as specifically set forth in Schedule 3.11(h)
or Schedule 3.11(m). All tangible personal property included in the Purchased
Assets is in good operating

 

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condition and repair, normal wear and tear excepted. Title to all of the
Purchased Assets is freely transferable from Seller to Buyer free and clear of
all Encumbrances without obtaining the consent or approval of any person.

 

(b) The Purchased Assets and the Licensed IP constitute all tangible and
intangible assets, computer software (including software programs, objects,
modules, routines, algorithms and any other software code) in both source code
and object code form, copyrightable works, inventions (whether or not
patentable), trade secrets (including Seller’s customer list), know-how,
processes, designs, techniques, confidential business information (including
Seller’s customer list), and other proprietary information and technologies that
are necessary to enable Buyer, following the date of this Agreement, to continue
to conduct the Business as currently conducted by Seller. Except as specifically
set forth on Schedule 3.11(h) and Schedule 3.11(m), none of the Purchased Assets
is licensed or leased from any third party, and no lease payments, royalties,
license fees or similar payments are due or payable (or may become due or
payable) to any third party under any Contract affecting the Purchased Assets.
None of the Purchased Assets is licensed to any third party, except as otherwise
set forth in Schedule 3.11(h).

 

3.9 Contracts and Commitments/Licenses and Permits. Schedules 3.9(a) through (i)
set forth a list of each of the following Contracts to which Seller is a party
and which relates to any of the Purchased Assets or the Business:

 

(a) any Contract providing for payments (whether fixed, contingent or otherwise)
by or to Seller in an aggregate amount of $10,000 or more;

 

(b) any dealer, distributor, OEM (original equipment manufacturer), VAR (value
added reseller), sales representative or similar Contract under which any third
party is authorized to sell, sublicense, lease, distribute, market or take
orders for, any Product, service or technology of Seller which is included in
the Purchased Assets or which relates to the Business (the “Distribution
Agreements”);

 

(c) any Contract providing for the development of any software, content,
technology or intellectual property for (or for the benefit or use of) Seller,
or providing for the purchase or license of any software, content, technology or
intellectual property to (or for the benefit or use of) Seller, which software,
content, technology or intellectual property is in any manner used or
incorporated (or is presently contemplated by Seller to be used or incorporated)
in connection with any aspect or element of any Product, service or technology
of Seller which is included in the Purchased Assets or which relates to the
Business (other than software generally available to the public at a per copy
license fee of less than $500 per copy);

 

(d) any joint venture or partnership Contract that has involved, or is
reasonably expected to involve, a sharing of profits, expenses or losses with
any other party;

 

(e) any Contract, arrangement or understanding for or relating to the employment
of any Employee or any other type of Contract, arrangement or understanding with
any Employee;

 

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(f) any Contract under which Seller is lessee of or holds or operates any items
of tangible personal property or real property owned by any third party;

 

(g) any Contract that would restrict Buyer from freely setting prices for the
Products or Buyer’s services or technologies (including most favored customer
pricing provisions) relating to the Business or that grants any exclusive rights
relating to the Business to any party;

 

(h) any Seller IP Rights Agreement (as defined in Section 3.11); and

 

(i) any Governmental Permit (as defined in Section 3.16).

 

Except for the Distribution Agreements, of which redacted copies have been
provided to Buyer or Buyer’s legal counsel, a true and complete copy of each
agreement or document required by these subsections (a) through (h) of this
Section 3.9 to be listed on Schedule 3.9 (the “Seller Agreements”) and a copy of
each Governmental Permit required by subsection (i) of this Section 3.9 to be
listed on Schedule 3.9 has been delivered to Buyer’s legal counsel.

 

3.10 No Default; No Restrictions.

 

(a) Each Seller Agreement is in full force and effect. Seller is not, nor to
Seller’s knowledge is any other party, in material breach or default under any
Seller Agreement. No event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time, or both) will, or to
Seller’s knowledge, would reasonably be expected to, (i) result in a material
violation or breach by Seller or, to Seller’s knowledge, any other party of any
of the provisions of any Seller Agreement, or (ii) to Seller’s knowledge, give
any third party (A) the right to declare a default or exercise any remedy under
any Seller Agreement, (B) the right to a rebate, chargeback, penalty or change
in delivery schedule under any Seller Agreement, (C) the right to accelerate the
maturity or performance of any obligation of Seller under any Seller Agreement,
or (D) the right to cancel, terminate or modify any Seller Agreement. Seller has
not received any written or oral notice or other communication regarding any
actual or possible material violation or breach of, or default under, any Seller
Agreement.

 

(b) None of the Seller Agreements and none of the Purchased Assets is bound or
affected by any Legal Requirement, settlement, Contract or covenant (noncompete
or otherwise) that restricts or prohibits, purports to restrict or prohibit, or
which could reasonably be expected to have the effect of restricting or
prohibiting, Seller or, following the date hereof, Buyer, from freely engaging
in the Business as currently conducted, or which includes any grants by Seller
of exclusive rights or licenses. Without limiting the foregoing, Seller has not
entered into or made any Contract or covenant under which Seller is restricted,
or following the date hereof under which Buyer will be restricted, in any
material respect from selling, licensing or otherwise distributing any of the
Products or related services to any class of customers, in any geographic area,
during any period of time or in any segment of the market that will negatively
impact the Business as currently conducted.

 

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3.11 Intellectual Property.

 

(a) Except as otherwise set forth in Schedule 3.11(h) and Schedule 3.11(m),
Seller (i) owns and has independently developed, or (ii) has the valid right or
license to use, possess, develop, sell, license, copy, distribute, market,
advertise and/or dispose of, all Seller Technology Assets, all Licensed IP, and
all other Intellectual Property Rights used in the conduct of the Business as
currently conducted (all of the foregoing being hereinafter collectively
referred to as the “Seller IP Rights”). As used herein, the term “Seller-Owned
IP Rights” means Seller IP Rights that are owned or exclusively licensed to
Seller; and “Seller-Licensed IP Rights” means Seller IP Rights that are not
Seller-Owned IP Rights.

 

(b) Neither the execution, delivery and performance of this Agreement and the
Seller Ancillary Agreements, nor the consummation of the transactions
contemplated by this Agreement and/or by the Seller Ancillary Agreements will,
in accordance with their terms: (i) constitute a material breach of or default
under any Contract governing any Seller IP Right (collectively, the “Seller IP
Rights Agreements”); (ii) cause the forfeiture or termination of, or give rise
to a right of forfeiture or termination of, any Seller IP Right; or (iii)
materially impair the right of Seller, and following the date of this Agreement,
Buyer, to use, possess, sell or license any Seller IP Right or portion thereof.
There are no royalties, honoraria, fees or other payments payable by Seller in
excess of $5,000 to any particular third person (other than salaries payable to
employees and independent contractors not contingent on or related to use of
their work product), nor in excess of $20,000 in the aggregate, under all
Contracts to which Seller is a party and which relate to the Business, as a
result of the ownership, use, possession, license-in, sale, marketing,
advertising or disposition of any Seller IP Rights by Seller to the extent
necessary for the conduct of the Business, and none will become payable as a
result of the consummation of the transactions contemplated hereby.

 

(c) Neither the use, development, manufacture, marketing, license, sale,
furnishing or intended use of any Product or related service currently licensed,
utilized, sold, provided or furnished by Seller (i) violates any license or
Contract between Seller and any third party, or (ii) infringes or
misappropriates, or will infringe or misappropriate, any Intellectual Property
Right of any other party. Neither the use, development, manufacture, marketing,
license, sale or furnishing of any Product or related service currently under
development by Seller, as the Business is currently conducted by Seller, (i)
violates any license or Contract between Seller and any third party, or (ii)
infringes or misappropriates, or will infringe or misappropriate, any copyrights
or trade secrets of any other party. There is no pending or, to Seller’s
knowledge, threatened claim or litigation contesting the validity, ownership or
right of Seller to exercise any Seller IP Right or to make, use, market, sell,
copy, or distribute any of the Seller Technology Assets or Seller IP Rights, nor
to Seller’s knowledge is there any legitimate basis for any such claim, nor has
Seller received any notice asserting that any Seller IP Right or the exercise,
manufacture, marketing, use, sale, license, distribution or disposition of any
Seller IP Right or Seller Technology Asset conflicts, infringes, or will
conflict with or infringe, the rights of any other party, nor, to Seller’s
knowledge, is there any legitimate basis for any such assertion.

 

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(d) To Seller’s knowledge, no current or former Employee: (i) is in material
violation of any term or covenant of any employment Contract, patent disclosure
agreement, invention assignment agreement, nondisclosure agreement,
noncompetition agreement or any other Contract with any other party by virtue of
such Employee’s being employed by, or performing services for, Seller or using
trade secrets or proprietary information of others without permission; or (ii)
has developed any technology, software or other copyrightable, patentable, or
otherwise proprietary work for Seller that is subject to any Contract under
which such Employee has assigned or otherwise granted to any third party any
rights (including Intellectual Property Rights) in or to such technology,
software or other copyrightable, patentable or otherwise proprietary work.
Neither the employment of any employee by Seller, nor the use by Seller of the
services of any consultant or independent contractor, in each case in connection
with the Business, subjects Seller to any Liability to any third party for
improperly soliciting such employee, consultant or independent contractor to
work for Seller, whether such Liability is based on contractual or other legal
obligations to such third party.

 

(e) Seller has taken all reasonable steps to protect, preserve and maintain the
secrecy and confidentiality of Seller IP Rights and to preserve and maintain all
Seller’s trade secret rights in the Seller IP Rights. All current and former
officers, employees and consultants of Seller having access to proprietary
information of Seller, its customers or business partners and inventions owned
by Seller, have executed and delivered to Seller an agreement regarding the
protection of such proprietary information and the assignment of inventions to
Seller (in the case of proprietary information of Seller’s customers and
business partners, to the extent required by such customers and business
partners); and copies of all such agreements with all current employees and
former employees have been delivered to Buyer’s counsel. Seller has secured
valid written assignments from all of Seller’s current and former consultants,
contractors and employees who were involved in, or who contributed to, the
creation or development of any Seller-Owned IP Rights, of the rights to such
contributions that may be owned by such persons or that Seller does not already
own by operation of law. No current or former employee, officer, director,
consultant or independent contractor of Seller has any right, license, claim or
interest whatsoever in or with respect to any Seller IP Rights.

 

(f) Schedule 3.11(f) contains a true and complete list of: (i) all
registrations, made by or on behalf of Seller with any governmental or
quasi-governmental authority anywhere in the world, of any patents, copyrights,
mask works, trademarks, service marks, Internet domain names or Internet or
world wide web URLs or addresses; and (ii) all applications for any such
registrations; in each case that relate to the Business.

 

(g) Seller owns all right, title and interest in and to all Seller-Owned IP
Rights (subject to the right, title and interest of the third party that has
granted an exclusive license to Seller in any such Seller-Owned IP Rights) free
and clear of all Encumbrances (other than licenses and rights listed in Schedule
3.11(h)). Seller’s right, license and interest in and to all Seller-Licensed IP
Rights are free and clear of all Encumbrances (other than licenses and rights
listed in Schedule 3.11(h)).

 

(h) Schedule 3.11(h) contains a true and complete list of: (i) all licenses,
sublicenses and other Contracts as to which Seller is a party and pursuant to
which any person is

 

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authorized to use any Seller IP Rights; and (ii) all licenses, sublicenses and
other Contracts as to which Seller is a party that relate to the Business and
pursuant to which Seller is authorized to use any Seller-Licensed IP Rights.

 

(i) Schedule 3.11(i) identifies each Contract pursuant to which Seller has
deposited, or is or may be required to deposit, with an escrow holder or any
other party, any Seller Source Code (as defined below) and further describes
whether the execution of this Agreement or the consummation of the other
transactions contemplated hereby, in and of themselves, would reasonably be
expected to result in the release from escrow of any Seller Source Code. Neither
Seller, nor any other party acting on its behalf, has disclosed or delivered to
any party, or permitted the disclosure or delivery to any escrow agent or other
party of, any Seller Source Code. No event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time, or both) will,
or would reasonably be expected to, result in the disclosure or delivery by
Seller or any other party acting on Seller’s behalf to any party of any Seller
Source Code. “Seller Source Code” means, collectively, any human-readable
software source code, or any material portion or aspect of such source code,
that constitutes Seller-Owned IP Rights.

 

(j) To Seller’s knowledge, there is no unauthorized use, disclosure,
infringement or misappropriation of any Seller IP Rights by any third party,
including any employee or former employee of Seller. Seller has not agreed to
indemnify any person for any infringement of any Intellectual Property Right of
any third party by any Product or related service that has been sold, licensed
to third parties, leased to third parties, supplied, marketed, distributed or
provided by Seller.

 

(k) All software developed by Seller and licensed by Seller to customers and all
services provided by or through Seller to customers in connection with the
Business on or before the date hereof conform in all material respects (to the
extent required in Contracts with such customers) to applicable contractual
commitments, express and implied warranties, Product specifications and Product
Documentation and to any representations provided to customers and Seller has no
material Liability (and, to Seller’s knowledge, there is no legitimate basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against Seller giving rise to any material Liability
relating to the foregoing Contracts) for replacement or repair thereof or other
damages in connection therewith in excess of any reserves therefor reflected on
the Balance Sheet. Seller has made available to Buyer all Documentation relating
to the testing of the Products and plans and specifications for Products
currently under development by Seller.

 

(l) No government funding, nor any facilities of a university, college, other
educational institution or research center, was used in the development of the
computer software programs or applications owned by Seller in connection with
the Business. No current or former employee, and to Seller’s knowledge no
consultant or independent contractor of Seller, who was involved in, or who
contributed to, the creation or development of any Seller IP Rights, has
performed services for the government, or any university, college, or other
educational institution or research center during a period of time during which
such employee, consultant or independent contractor was also performing services
for Seller.

 

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(m) No software covered by any Seller IP Right has been distributed, in whole or
in part, in conjunction with any Public Software. “Public Software” means any
software that (i) contains, or is derived in whole or in part from, software
that is distributed as free software or open-source software, however
denominated (e.g., Linux); or (ii) requires as a condition of its use,
modification or distribution that it be disclosed or distributed in source code
form or made available at no charge. Public Software includes software licensed
under the GNU General Public License, the Mozilla Public License, the Netscape
Public License, the Sun Community Source License and the Sun Industry Standards
License.

 

3.12 Inventories. All inventory developed, manufactured and shipped in
connection with the Business (“Inventory”) is of good, usable and merchantable
quality in all material respects. The value of the Inventory (as determined in
accordance with applicable provisions of GAAP) that had been shipped by Seller
to its distributors on a consignment basis and not yet sold as of March 29, 2003
was $50,694 (including the value of consignment units in inventory for Office
Depot). Since March 29, 2003, Seller has shipped Inventory to distributors only
in the ordinary course of business in amounts that are consistent with past
practice. As of such date, Seller had not shipped any other Inventory to
distributors with respect to which Seller retained title (through an agency
sales model or otherwise). Seller is not in possession of any Inventory not
owned by Seller, including goods already sold.

 

3.13 Customers/Distributors. Schedule 3.13 sets forth (a) the names of all
customers and distributors of Seller that ordered Products and related services
from Seller with an aggregate value for each such customer or distributor of
$10,000 or more during calendar year 2002, and (b) the amount for which each
such distributor was invoiced during such period. Seller has not received any
notice and does not have any reason to believe that any such customer or
distributor that ordered Products and related services from Seller with an
aggregate value of $100,000 or more during calendar year 2002 (a “$100,000
Customer”) (i) has ceased or will cease to use the Products or related services,
(ii) has substantially reduced or will substantially reduce the use of Products
or related services, or (iii) has sought, or is seeking, to reduce the price it
will pay for Products or related services, including in each case after
consummation of the transactions contemplated hereby. To Seller’s knowledge, no
such $100,000 Customer has threatened to take any action described in the
preceding sentence as a result of the consummation of the transactions
contemplated hereby.

 

3.14 Accounts Receivable. Schedule 3.14 sets forth a list of all Accounts
Receivable of Seller arising out of or in connection with the Business as of
March 28, 2003. Seller hereby undertakes to deliver to Buyer, within five days
of the date hereof, an updated list of Accounts Receivable of Seller arising out
of or in connection with the Business as of the date hereof. All such Accounts
Receivable arose in bona fide, arm’s length completed transactions in the
ordinary course of business consistent with past practices, and constitutes only
valid, undisputed claims.

 

3.15 Products and Returns.

 

(a) Warranties. Each of the Products is subject to a limited 30-day warranty, on
such other terms and conditions as provided in the agreements previously
provided to Buyer, and except as required by applicable Legal Requirements, no
Product or related service rendered by or on behalf of Seller in connection with
the Business is subject to any guaranty, warranty or

 

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other indemnity, express or implied, beyond such terms and conditions. As of the
date hereof, there is no demand, claim, debt, suit, cause of action, arbitration
or other proceeding pursuant to any Seller guaranty, warranty or other indemnity
made or asserted or, to Seller’s knowledge, pending by any third party that
relates to the Purchased Assets.

 

(b) Product Liability. Seller does not have any Liability (excluding any
liabilities or obligations relating to infringement or misappropriation of
Intellectual Property Rights), whether based on strict liability, negligence,
breach of warranty (express or implied), breach of contract or otherwise, in
respect of any product, component or other item manufactured, sold, designed or
produced as of or prior to the date of this Agreement by, or related service
rendered as of or prior to the date of this Agreement by or on behalf of Seller
or any predecessor thereto, that is not fully and adequately covered by policies
of insurance or by indemnity, contribution, cost sharing or similar agreements
or arrangements by or with other third parties, and is not otherwise fully and
adequately reserved against in the Balance Sheet.

 

(c) Rebates and Return Obligations. Seller has not entered into, or offered to
enter into, any Contract, arrangement or understanding (whether written or oral)
in connection with the Business pursuant to which Seller is or will be obligated
to make any rebates, discounts, promotional allowances or similar payments or
arrangements to any customer or distributor. Other than with respect to Products
shipped on a consignment basis as set forth in Section 3.12 hereof, Seller is
not currently obligated, and following the date hereof Buyer will not be
obligated, to accept returns with respect to any customer or distributor of
products sold by Seller prior to the date hereof, or to incur any costs for
materials and labor pursuant to any guaranty, warranty or indemnity obligations
of Seller, in excess of $75,000. Seller has provided Buyer with all agreements
pursuant to which any distributor (in redacted forms), purchaser or other third
party may return to Seller any Products.

 

3.16 Compliance with Laws.

 

(a) Seller has materially complied, and is now in material compliance with, all
Legal Requirements applicable to any of the Purchased Assets or the Business,
the violation of which might have an adverse effect on the Purchased Assets or
the Business. Seller holds all material permits, licenses and approvals from,
and has made all material filings with, government (and quasi-governmental)
agencies and authorities, that are necessary for Seller to conduct the Business
as currently conducted without any violation by Seller of any material Legal
Requirement (“Governmental Permits”), and all such Governmental Permits are in
full force and effect. Seller has not received any notice or other communication
from any Governmental Authority regarding (i) any actual or possible violation
by Seller of any Legal Requirement or any Governmental Permit or any failure by
Seller to comply with any term or requirement of any Governmental Permit, or
(ii) any actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental Permit.

 

(b) No bulk sales laws apply to the transactions contemplated by this Agreement.

 

3.17 Employee Matters.

 

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(a) General. Seller is not a party to any Contracts, arrangements or
understandings with Employees that are currently in effect and that are not
terminable at will (other than agreements with the sole purpose of providing for
the confidentiality of proprietary information or assignment of inventions).
Each Employee is legally permitted to be employed by Seller in the jurisdiction
in which such employee is employed. No Employee holds any visa from the United
States government, and Seller is not sponsoring any Employees with respect to
any visa or other authorization. All Employees were hired in compliance with all
laws, statutes, regulations and requirements for the lawful hiring of employees
who are not citizens of the United States of America.

 

(b) Employee Plans. Neither Seller nor any of its affiliates has incurred any
Liability under Title IV of ERISA arising in connection with the termination of
any plan covered or previously covered by Title IV of ERISA that could become,
after the date of this Agreement, an obligation of Buyer or any of its
affiliates. Seller’s Code Section 401(k) (the “401(k) Plan”) plan is qualified
under Section 401(a) of the Code and has been so qualified during the period
from its adoption to date. Other than the 401(k) Plan, Seller does not have or
maintain any Employee Plan qualified or intended to be qualified under Section
401(a) of the Code. The 401(k) Plan is not maintained pursuant to any collective
bargaining agreement or arrangement, is not a “multiple employer plan” as
defined in Section 413(c) of the Code, and has been amended to reflect the
repeal of the “same desk rule” by the Economic Growth and Tax Relief
Reconciliation Act of 2001 (and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code). No Employee will become entitled to
any retirement, severance or similar benefit or enhanced benefit solely as a
result of the transactions contemplated hereby. In addition, within the past
five years, Seller has never been a participant in any “prohibited transaction,”
within the meaning of Section 406 of ERISA with respect to any employee pension
benefit plan (as defined in Section 3(2) of ERISA) which it sponsors as employer
or in which it participates as an employer, which was not otherwise exempt
pursuant to Section 408 of ERISA (including any individual exemption granted
under Section 408(a) of ERISA), or which could result in an excise tax under the
Code.

 

(c) Change of Control/Severance Agreements. The execution of this Agreement and
the consummation of the transactions contemplated hereby, including the
termination of employment of Employees by Seller, will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event under
any Employee Plan or any other Contract, arrangement or understanding that will
or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any Employee, or result
in any benefit the value of which will be calculated on the basis of the
transactions contemplated hereby (each, a “Change of Control Benefit”). No
benefit payable or that may become payable by Seller to any Employee pursuant to
any Employee Plan or as a result of or arising under this Agreement will
constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of
the Code) that is subject to the imposition of an excise tax under Section 4999
of the Code or which would not be deductible by reason of Section 280G of the
Code.

 

(d) Key Employees. To Seller’s knowledge, each Key Employee intends to continue
employment with Buyer following the date hereof.

 

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3.18 No Brokers. Neither Seller nor any affiliate of Seller is obligated for the
payment of any fees or expenses of any investment banker, broker, finder or
similar party in connection with the origin, negotiation or execution of this
Agreement and the Seller Ancillary Agreements or in connection with the
transactions contemplated hereby and thereby. Buyer will not incur any
Liability, either directly or indirectly, to any such investment banker, broker,
finder or similar party as a result of, this Agreement, any of the Seller
Ancillary Agreements, the transactions contemplated hereby and thereby or any
act or omission of Seller, any of its employees, officers, directors,
stockholders, agents or affiliates.

 

3.19 No Other Negotiations. Since January 1, 2003, neither Seller nor any of its
officers, directors, stockholders, employees, affiliates, attorneys, financial
advisors or other agents or representatives has, directly or indirectly,
solicited, initiated, sought, entertained, encouraged, facilitated or supported
any inquiry, proposal or offer from, furnished any information to, or
participated in any discussions or negotiations with, any party (other than
Buyer) regarding any acquisition of the Business and/or the Purchased Assets.
Seller is not a party to any agreement (other than with Buyer) that restricts
Seller’s ability to solicit, initiate, seek, entertain, encourage, facilitate or
support any inquiry, proposal or offer from, furnish any information to, or
participate in any discussions or negotiations with, any party regarding any
acquisition of the Business and/or the Purchased Assets.

 

3.20 Solvency. After due inquiry and negotiation, Seller believes in good faith
that the Purchase Price represents fair and reasonably equivalent consideration
for the Purchased Assets and title thereto transferred to Buyer under this
Agreement. Seller is not now insolvent, and Seller will not be rendered
insolvent by the sale, transfer and assignment of the Purchased Assets pursuant
to this Agreement (where “insolvent” means that the sum of Seller’s debts and
other probable Liabilities exceeds the present fair saleable value of Seller’s
assets). Immediately after giving effect to the transactions contemplated
hereby, (i) Seller will be able to pay its Liabilities as they become due in the
usual course of its business, (ii) Seller will not have unreasonably small
capital with which to conduct its present or proposed business, (iii) Seller
will have assets (calculated at fair market value) that exceed its Liabilities,
and (iv) taking into account all pending and threatened litigation, final
judgments against Seller in actions for money damages are not reasonably
anticipated to be rendered at a time when, or in amounts such that, Seller will
be unable to satisfy any such judgments promptly in accordance with their terms
(taking into account the maximum probable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered) as well as all other obligations of Seller. The cash available to
Seller, after taking into account all other anticipated uses of the cash, will
be sufficient to pay all debts and judgments promptly in accordance with their
terms. Seller is not entering into this Agreement or any of the Seller Ancillary
Agreements with the intent to defraud, delay or hinder any of its creditors, and
Seller intends to use the Purchase Price to satisfy its existing obligations.
None of the transactions contemplated by this Agreement or any Seller Ancillary
Agreement will give rise to any right of any creditor of Seller whatsoever to
lodge any claim against Buyer or any of the Purchased Assets in the hands of
Buyer.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller that each of the representations,
warranties and statements contained in the following sections of this Article IV
is true and correct as of the date hereof.

 

4.1 Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.

 

4.2 Power; Authorization and Validity.

 

(a) Buyer has all requisite corporate power and authority to (i) enter into,
execute, deliver and perform its obligations under this Agreement and each of
the Buyer Ancillary Agreements and to consummate the transactions contemplated
hereby and thereby, and (ii) acquire, own and operate the Purchase Assets and to
conduct the Business. The execution, delivery and performance by Buyer of this
Agreement and each of the Buyer Ancillary Agreements, and the purchase of the
Purchased Assets by Buyer, have been duly and validly authorized by all
necessary corporate action on the part of Buyer.

 

(b) No consent, approval, order or authorization of, notification to, action by
or registration, declaration or filing with, any Governmental Authority, or any
other person, governmental or otherwise, is necessary or required to be made or
obtained by Buyer to enable Buyer to lawfully enter into, execute, deliver and
perform its obligations under this Agreement and each of the Buyer Ancillary
Agreements, or to consummate the transactions contemplated hereby or thereby.

 

(c) This Agreement and each of the Buyer Ancillary Agreements have been duly
executed and delivered by Buyer. Assuming due authorization, execution and
delivery by Seller, this Agreement and each of the Buyer Ancillary Agreements
are valid and binding obligations of Buyer enforceable against Buyer in
accordance with their respective terms, subject to the effect of (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to rights of creditors generally and (ii) rules of
law and equity governing specific performance, injunctive relief and other
equitable remedies.

 

4.3 No Conflict. Neither the execution and delivery of this Agreement or any of
the Buyer Ancillary Agreements by Buyer, nor the consummation of the
transactions contemplated hereby or thereby, will conflict with, or (with or
without notice or lapse of time, or both) result in a breach or violation of, or
constitute a default under: (i) any provision of the Certificate of
Incorporation or Bylaws of Buyer, each as currently in effect; or (ii) any law,
statute, rule, regulation, order, writ, judgment, injunction or decree of any
court, administrative agency or government body applicable to Buyer.

 

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4.4 No Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer.

 

4.5 Litigation. There is no action, suit, proceeding or investigation pending,
or to the knowledge of Buyer, currently threatened against Buyer that questions
the validity of this Agreement, the Buyer Ancillary Agreements or the right of
Buyer to enter into this Agreement or the Buyer Ancillary Agreements or to
consummate the transactions contemplated hereby or thereby.

 

4.6 Solvency. Buyer is not now insolvent, and Buyer will not be rendered
insolvent by the sale, transfer and assignment of the Purchased Assets pursuant
to this Agreement (where “insolvent” means that the sum of Buyer’s debts and
other probable Liabilities exceeds the present fair saleable value of Buyer’s
assets). Immediately after giving effect to the transactions contemplated
hereby, (i) Buyer will be able to pay its Liabilities as they become due in the
usual course of its business, (ii) Buyer will not have unreasonably small
capital with which to conduct its present or proposed business, (iii) Buyer will
have assets (calculated at fair market value) that exceed its Liabilities, and
(iv) taking into account all pending and threatened litigation, final judgments
against Buyer in actions for money damages are not reasonably anticipated to be
rendered at a time when, or in amounts such that, Buyer will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum probable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered) as well
as all other obligations of Buyer. The cash available to Buyer, after taking
into account all other anticipated uses of the cash, will be sufficient to pay
all debts and judgments promptly in accordance with their terms. Buyer is not
entering into this Agreement or any of the Buyer Ancillary Agreements with the
intent to defraud, delay or hinder any of its creditors, and Buyer intends to
use the Purchase Price to satisfy its existing obligations. None of the
transactions contemplated by this Agreement or any Buyer Ancillary Agreement
will give rise to any right of any creditor of Buyer whatsoever to lodge any
claim against Seller.

 

ARTICLE V

 

OTHER COVENANTS AND AGREEMENTS

 

5.1 Termination of Symantec Agreement. Roxio, Buyer and Symantec Limited each
hereby agrees that the Software License Agreement, dated as of July 6, 2001 and
amended on August 31, 2002, among such parties (the “Symantec Agreement”) shall
terminate and have no further force or effect, and Roxio, Buyer and Symantec
Limited each hereby waives any notice period for such termination that may be
provided for in such agreement. The parties to the Symantec Agreement agree
that, notwithstanding the above, (i) to the extent Symantec owes any royalties
to Roxio under the Symantec Agreement as of the date hereof, such royalties will
be paid by Buyer in accordance with the terms of the Symantec Agreement and will
not be included in the Purchased Assets, and (ii) to the extent that Buyer’s
minimum quarterly payment to Roxio under such agreement exceeds the royalties
realized to date in the current quarter, Roxio shall be obligated to provide a
refund to Buyer within five (5) business days of the date hereof.

 

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5.2 Payments to Key Employees. Roxio agrees to pay to each Key Employee the full
amount of any and all Change of Control Benefits or other similar payments to
which such Key Employee is entitled as a result of the transactions contemplated
hereby (including without limitation the termination of such Key Employee’s
employment with Roxio) within five (5) business days of the date hereof.

 

5.3 Sublease of Roxio Minnesota Facility. Roxio hereby agrees that Buyer shall
have the option to request Roxio, at Buyer’s sole discretion, at any time during
the “Term” (as defined in the Transition Services Agreement), to sublease an
amount of rentable working space at Roxio’s current facility in Maple Grove,
Minnesota sufficient to house up to five employees pursuant to a sublease (the
“Sublease”) to be entered into between Buyer and Roxio. Upon the receipt of such
request, Roxio hereby agrees to use commercially reasonable efforts to enter
into such a Sublease within fifteen (15) days; provided, however, that Buyer
acknowledges and agrees that the execution of such a Sublease is subject to the
consent of Landlord (as defined below) and that failure by Landlord to consent
to the Sublease shall not constitute a breach by Roxio of this Section 5.3. The
Sublease shall be made on commercially reasonable terms as mutually agreed
between the parties, including monthly rent per rentable square foot of no more
than Roxio’s then applicable monthly rent per rentable square foot and with a
term ending on the date no earlier than the first to occur of (a) twenty-four
(24) months after the effective date of the Sublease, or (b) the date that
certain Multi-Tenant Office Building Lease, dated as of September 20, 2000 by
and between the Teachers’ Retirement System of the State of Illinois
(“Landlord”) and Adaptec, Inc., a Delaware corporation, which was assigned to
Roxio pursuant to an Assignment of Lease dated as of May 5, 2001, is terminated.

 

ARTICLE VI

 

TAX MATTERS

 

6.1 Taxes Relating to Sale of Purchased Assets. Any transfer, documentary,
sales, use, registration, value-added and other similar taxes applicable to the
conveyance and transfer from Seller to Buyer of the Purchased Assets and related
fees (including any penalties, interest and additions to any such tax) shall be
paid by Seller.

 

6.2 Other Taxes. Seller will be responsible for and will pay any and all Taxes
of Seller that do not constitute Assumed Liabilities, and Buyer will be
responsible for and will pay any and all Taxes with respect to the Purchased
Assets relating to all periods (or portions thereof) beginning on and after the
date of this Agreement.

 

6.3 Purchase Price Allocation. Buyer and Seller agree to allocate the Purchase
Price among the Purchased Assets as follows: (i) $12,642,625 to intangibles,
(ii) $68,297 to inventory, (iii) $285,578 to accounts receivable, (iv) $2,500 to
fixed assets and (v) $1,000 to tangibles related to intangibles. Any subsequent
adjustments to the Purchase Price will be reflected in the allocation referred
to above in a manner consistent with Section 1060 of the Code and the
regulations promulgated thereunder. For internal accounting and all Tax
purposes, Buyer and Seller agree to treat, account for and report the
transactions contemplated hereby in a manner consistent with the

 

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allocation referred to above, and will not take any position inconsistent
therewith in any Tax return, in any refund claim, in any litigation or in any
matter relating to Taxes.

 

6.4 Treatment of Indemnity Payments. All payments made by Seller to or for the
benefit of Buyer pursuant to any indemnification obligations under this
Agreement, will be treated as adjustments to the Purchase Price for Tax purposes
and such agreed treatment will govern for purposes of this Agreement, unless
otherwise required by law.

 

6.5 Cooperation. To the extent relevant to the Purchased Assets, each party
shall (i) provide the other assistance as may be reasonably requested in
connection with the preparation of any Tax return or the conduct of any audit or
examination or other proceeding and (ii) retain and provide the other with
information that may be relevant to the preparation of a Tax return, or the
conduct of an audit, examination or other proceeding relating to Taxes.

 

ARTICLE VII

 

CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION

 

7.1 Covenants of Seller.

 

(a) Confidentiality. From and after the date hereof, Seller shall hold in
confidence, and shall use its best efforts to have each of its affiliates hold
in confidence, all knowledge, information and documents of a confidential nature
or not generally known to the public with respect to the Business and the
Purchased Assets (including without limitation all information related to Seller
IP Rights and other technical and financial data and information related to the
Business) and shall not disclose or make use of the same without the written
consent of Buyer, except to the extent that such knowledge, information or
documents shall have become public knowledge other than through a breach of this
Agreement by Seller.

 

(b) Non-Competition. Seller hereby covenants and agrees with Buyer that, at all
times during the three (3) years following the date hereof, neither Seller nor
any of its affiliates shall engage in any Competing Business (i) in any state of
the United States or (ii) in any country in which Seller has conducted business
(including, without limitation, any county, state, territory, possession or
country in which any customer of Seller is located or in which Seller has
solicited business); provided, however, that in the event of a Change of Control
of Roxio, this Section 7.1(b) shall not preclude the party obtaining control of
Roxio from engaging in a Competing Business so long as no employees of Seller
contribute time or know-how towards the Competing Business, and provided that
the Competing Business either existed as of such Change of Control or is
independently developed by such party wholly separate and independent from Roxio
after such Change of Control. Seller acknowledges and agrees with Buyer that
Seller shall be deemed for the purpose of this Section 7.1(b) to have engaged in
business at a national level in each state of the United States of America. For
purposes of this section, “Competing Business” shall mean any business, activity
or enterprise that is competitive with or is substantially similar to the
Business, and “engaging in” shall mean actively investing in (and shall not
include passively investing in any company that makes bona-fide investments),
soliciting customers for, owning stock or any other equity interest in, lending
money to, guaranteeing the debts or obligations of, permitting one’s name to be
used in connection with, or

 

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otherwise engaging in, either individually or in partnership or conjunction with
any other person or entity. Notwithstanding the above, nothing contained in this
Section 7.1(b) shall prohibit Seller or its affiliates from holding and making
investments in securities of any corporation or limited partnership whose
securities are traded on a national securities exchange or are quoted on NASDAQ
or an over-the-counter market, provided that Roxio’s or such affiliates’ equity
interest therein does not exceed five percent (5%) of the outstanding shares or
interests in such corporation or partnership.

 

(c) Non-Solicitation of Business Partners. In addition to, and not in limitation
of, Section 7.1(b) above, Seller agrees with Buyer that, at all times during the
three (3) years following the date hereof, Seller will not, either for Seller or
for or on behalf of any other person or entity, directly or indirectly (i)
induce or influence any customer, supplier, distributor, broker, consultant or
any other person or entity that had a business relationship with the Seller
prior to the date hereof, to terminate such relationship or to discontinue or
reduce the extent of its relationship with Buyer to the extent such relationship
relates to the Business, or (ii) attempt to sell, license or provide the same or
similar products or services as are now, or have previously been provided by the
Business, to current or past customers of the Business; provided, however, that
in the event of a Change of Control of Roxio, the agreement in this Section
7.1(c) shall not apply to the party obtaining control of Roxio so long as no
employees of Seller contribute time or know-how towards the Competing Business,
and provided that the Competing Business either existed as of such Change of
Control or is independently developed by such party wholly separate and
independent from Roxio after such Change of Control.

 

(d) Non-Solicitation of Employees and Consultants.

 

(i) In addition to, and not in limitation of, Sections 7.1(b) and 7.1(c) above,
Seller covenants and agrees with Buyer that, at all times during the three years
following the date hereof, Seller shall not for its or any of its affiliate’s
benefit directly or indirectly solicit, induce or attempt to induce any Key
Employee, or any Replacement Employee hired by Buyer in accordance with Section
8.4(b) hereof, to terminate his or her employment with Buyer or any affiliate of
Buyer or to take or accept employment with any other party.

 

(ii) Buyer covenants and agrees with Roxio that, at all times during the three
years following the date hereof, Buyer shall not for such Buyer’s or any of its
affiliate’s benefit directly or indirectly solicit, induce or attempt to induce
any Replacement Employee (except to the extent that such Replacement Employee is
hired by Buyer in accordance with Section 8.4(b) hereof) to terminate his or her
employment with Roxio or any affiliate of Roxio or to take or accept employment
with any other party.

 

7.2 Remedies. The parties hereto acknowledge that the breach or attempted or
threatened breach of any of the provisions of Section 7.1 hereof will result in
immediate and irreparable injury to the other party for which party will not
have an adequate remedy at law and for which monetary damages are not readily
calculable. Therefore, such party shall be entitled to obtain injunctive and
other equitable relief restraining and prohibiting such breach or threatened
breach, including, without limitation, obtaining a temporary and permanent
injunction, enjoining any such breach or attempted or threatened breach (without
being required to post a bond or other

 

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security or to show any actual damages). The right to an injunction and other
equitable relief shall be in addition to, and cumulative with, all other rights
and remedies available to the parties at law, in equity or otherwise. The
parties agree that nothing in this Agreement shall be construed to limit or
negate the common law of torts or trade secrets where it provides Seller with
any broader, further or other remedy or protection than those provided in this
Article VII.

 

7.3 Independence of Agreements. The provisions of this Article VII are in
addition to and independent of any agreements or covenants contained in any
employment, consulting or other agreement between Buyer and any Key Employee or
other Employee.

 

7.4 Enforceability. Seller acknowledges that, without the provisions of this
Article VII hereof, Buyer would not enter into this Agreement or consummate the
transactions contemplated hereby. Accordingly, Seller shall be bound by the
provisions hereof to the maximum extent permitted by law, it being the intent
and spirit of the parties that such provisions shall be enforced to the fullest
extent permitted by law. Without limiting the generality of the foregoing, if
any provision of this Article VII hereof shall be held by any court of competent
jurisdiction or another competent authority to be illegal, invalid or
unenforceable, such provision shall be reformed so that it will be construed and
enforced as if it had been more narrowly drawn so as not to be illegal, invalid
or unenforceable, and such illegality, invalidity or unenforceability shall have
no effect upon and shall not impair the enforceability of any other provision of
this Agreement.

 

ARTICLE VIII

 

INDEMNIFICATION

 

8.1 Survival of Representations and Warranties and Indemnification Obligations.
All representations and warranties of each party contained in this Agreement and
the indemnification obligations of each party pursuant to this Article VIII will
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any of the parties to this Agreement, throughout the
duration of the Escrow Period; provided, however, that (i) any Buyer Indemnified
Person (as defined below) shall be entitled to seek recovery, until the
expiration of the applicable statute of limitations, for any claim for recovery
of Damages (as defined below) for fraud, willful misrepresentation or willful
misconduct on the part of Seller, for any breach of the representations and
warranties of Seller contained in Sections 3.1, 3.2 and 3.5 hereof and for
indemnification pursuant to Section 8.2(b) hereof (collectively, the “Extended
Indemnification Obligations”) and (ii) any Seller Indemnified Person (as defined
below) shall be entitled to seek recovery, until the expiration of the
applicable statute of limitations, for any claim for recovery of Damages (as
defined below) for fraud, willful misrepresentation or willful misconduct on the
part of Buyer, for any breach of the representations and warranties of Buyer
contained in Sections 4.1 and 4.2 hereof and for indemnification pursuant to
Section 8.3(b) hereof (collectively, the “Buyer Extended Indemnification
Obligations”). “Damages” means any and all claims, demands, suits, actions,
causes of actions, losses, costs, damages, Liabilities and expenses, including
reasonable attorneys’ fees, other professionals’ and experts’ reasonable fees,
court or arbitration costs and expenses of investigation and defense relating to
such claim. Buyer and its officers, directors, agents, representatives,
stockholders, employees and affiliates are referred to

 

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herein, individually, as a “Buyer Indemnified Person” and, collectively, as
“Buyer Indemnified Persons”. Seller and its respective officers, directors,
agents, representatives, stockholders, employees and affiliates are referred to
herein, individually, as a “Seller Indemnified Person” and, collectively, as
“Seller Indemnified Persons”.

 

8.2 Indemnification Obligations of Seller. Subject to the limitations set forth
in Section 8.1 and Section 8.6, Seller will indemnify and hold harmless the
Buyer Indemnified Persons from and against Damages directly or indirectly
incurred, resulting from or arising out of:

 

(a) any breach (or failure to be true and correct as of the date hereof) of any
of the representations or warranties (as such representations and warranties are
modified by the Seller Disclosure Letter; provided that any disclosures
thereunder shall not expand the scope and effect of such representations and
warranties), or any breach of any of the covenants or agreements, given or made
by Seller in this Agreement or any of the Seller Ancillary Agreements;

 

(b) any of the Excluded Assets or any of the Liabilities not assumed by Buyer;

 

(c) any Liability arising from any noncompliance with any bulk sales, bulk
transfer or similar laws applicable to the transactions contemplated hereby or
any claims asserting that any transaction contemplated hereby constitutes a
fraudulent conveyance or any claim of a similar nature;

 

(d) any demand, claim, debt, suit, cause of action, arbitration or other
proceeding (including a warranty claim, a product liability claim or any other
claim) that is made or asserted by any third party that relates to the Purchased
Assets and arises from any act or omission of Seller prior to the date of this
Agreement, other than Return and Warranty Obligations less than $75,000;

 

(e) any Return and Warranty Obligations in excess of $75,000, and any other any
Liability arising from any return, guaranty and warranty obligations for
Products shipped or services rendered by or on behalf of Seller or any Contract,
arrangement or understanding (whether written or oral) pursuant to which Seller
is or will be obligated to make any rebates, discounts, promotional allowances
or similar payments or arrangements to any customer; and

 

(f) any Liability (excluding any liabilities or obligations relating to
infringement or misappropriation of Intellectual Property Rights, provided that
Buyer Indemnified Persons may make claims for infringement or misappropriation
to the extent entitled pursuant to Sections 8.2(a)-(e)), whether based on strict
liability, negligence, breach of warranty (express or implied), breach of
contract or otherwise, in respect of any product, component or other item
manufactured, sold, designed or produced prior to the date of this Agreement by,
or service rendered prior to the date of this Agreement by or on behalf of
Seller or any predecessor thereto.

 

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8.3 Indemnification Obligations of Buyer. Buyer will indemnify and hold harmless
the Seller Indemnified Persons from and against Damages directly or indirectly
incurred, resulting from or arising out of:

 

(a) any breach (or failure to be true and correct as of the date hereof) of any
of the representations or warranties, or any breach of any of the covenants or
agreements, given or made by Buyer in this Agreement or any of the Buyer
Ancillary Agreements; and

 

(b) any of the Assumed Liabilities.

 

8.4. Indemnification for Departure of Key Employees.

 

(a) In addition to the indemnification obligations of Seller pursuant to Section
8.2 above, and subject to Roxio’s right to appoint one or more Replacement
Employees as set forth in Section 8.4(b) below, Seller hereby agrees in the
event of two Key Employee Resignations, then Buyer shall be entitled to
indemnification by Seller hereunder in the amount of $812,500, and in the event
of three Key Employee Resignations, then Buyer shall be entitled to
indemnification by Seller hereunder in the amount of $1,625,000.

 

(b) Upon any Key Employee Resignation that triggers Roxio’s indemnification
obligations under Section 8.4(a), Roxio shall have the right, in lieu of
indemnifying Buyer in accordance with Section 8.4(a) above, to replace such
applicable Key Employee (or any Replacement Employee appointed by Roxio and
consented to and employed by Buyer pursuant to this Section 8.4(b)) with a
Replacement Employee. Buyer shall notify Roxio in writing in the event of any
Key Employee Resignation and if Roxio elects to name a Replacement Employee,
then it shall arrange for a meeting with Buyer, to occur within ten (10) days of
receipt of such notice at a time and on a date mutually acceptable to both
parties, to discuss and agree upon a Replacement Employee to be hired by Buyer.
Buyer may, for any good faith reason, refuse its consent to any Replacement
Employee appointed by Roxio (and shall continue to be entitled to make a claim
for Damages pursuant to Section 8.4(a) above), provided, however, that Buyer
must consent to at least one of the available Replacement Employees unless Buyer
presents a good-faith objective reason that all such Replacement Employees are
not qualified. For purposes of this Section 8.4, each reference to a “Key
Employee” shall include a Replacement Employee appointed in accordance with this
Section 8.4(b) and consented to and employed by Buyer.

 

(c) Definitions. For purposes of this Section 8.4:

 

(i) “Key Employee Resignation” means failure by a Key Employee to accept
employment with Buyer or to remain continuously employed with Buyer throughout
the duration of the Escrow Period; provided, however, that termination of a Key
Employee by Buyer without Cause or resignation by a Key Employee for Good Reason
or due to death or Disability shall not be deemed a “Key Employee Resignation”.

 

(ii) “Cause” means (A) Key Employee’s material and repeated noncompliance with
employee policies of Buyer applicable to employees of Buyer generally, (B) Key
Employee’s material breach of the invention assignment and proprietary
information

 

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agreement entered into between Key Employee and Buyer, in each case where Key
Employee is given written notice of such noncompliance or breach and, if such
noncompliance or breach is susceptible to cure, it is not cured within thirty
(30) days of Key Employee’s receipt of such notice; (C) Key Employee’s willful
participation in acts of fraud or material dishonesty, in either case against
Buyer, or any of its customers or business partners; (D) Key Employee’s
commission of any willful act of gross misconduct in the performance of his
duties as an employee of Buyer; or (E) Key Employee’s conviction of, or plea of
nolo contendre with respect to, a felony involving moral turpitude.

 

(iii) “Good Reason” shall mean the occurrence of any of the following events:
(A) Buyer materially reduces Key Employee’s salary or benefits (other than
reductions in non-salary benefits applicable to employees generally) offered by
Buyer as in effect immediately following the date hereof (unless Key Employee
agrees in writing to such reduction); (B) Buyer materially reduces Key
Employee’s responsibilities from those held by Key Employee immediately
following the date hereof (unless Key Employee agrees in writing to such
reduction); (C) the failure by Seller to comply in any material respect with any
material term of any written agreement between Key Employee and Seller), in each
case where Seller is given written notice of such noncompliance and, if such
noncompliance is susceptible to cure, it is not cured within thirty (30) days of
receipt of such notice; (D) Buyer requests Key Employee to relocate to a
location more than fifty (50) miles away from Maple Grove or Minneapolist/St.
Paul, and Key Employee refuses to so relocate (provided that if Key Employee
does agree to relocate, then subsequent resignation shall not be deemed to have
been made for “Good Reason” under this section 8.4(c)(iii)(D)); or (E) Key
Employee resigns in direct and prompt response to material unlawful conduct by
Buyer materially affecting such Key Employee.

 

(iv) A Key Employee shall be deemed to have suffered a “Disability” if, in the
opinion of a qualified physician agreed to by both Buyer and Seller, he is
unable to perform the major duties of his position because of sickness or injury
for a period of at least one hundred and twenty (120) days.

 

(v) A “Replacement Employee” shall mean one of the Employees listed on Schedule
8.4 hereto.

 

8.5 Indemnification Procedures. For purposes of this Section 8.5, “Indemnified
Party” shall mean the person that is entitled to indemnification hereunder, and
“Indemnifying Party” shall mean the person that is obligated to indemnify the
Indemnified Party pursuant to the terms hereunder.

 

(a) Subject to Section 8.1, promptly after the receipt by an Indemnified Party
of notice or discovery of any claim, damage, legal action or proceeding for
which it may seek indemnification for Damages hereunder (a “Claim”), such
Indemnified Party will give the Indemnifying Party written notice of such Claim
in accordance with this Section 8.5(a). No delay on the part of the Indemnified
Party in giving the Indemnifying Party a notice of Claim will relieve the
Indemnifying Party from any of its obligations under this Article VIII unless
(and then only to the extent that) the Indemnifying Party is materially
prejudiced thereby. Within thirty days of delivery of such written notice of
Claim (or shorter period, if required by applicable

 

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Legal Requirement), the Indemnifying Party shall, (i) in the case of any Claim
that is not a Third-Party Claim (as defined below), elect in writing to (A)
contest such Claim at the Indemnifying Party’s sole cost and expense or (B) not
contest such Claim and (ii) in the case of any Third-Party Claim, elect in
writing to (A) at the Indemnifying Party’s sole cost and expense, defend such
Third-Party Claim (subject to Section 8.5(d)) using counsel reasonably
acceptable to the Indemnified Party or (B) not defend such Third-Party Claim;
provided, that the Indemnifying Party may not elect to defend or settle any such
Third-Party Claim, and the Indemnified Party shall instead be entitled to defend
and settle such Third Party Claim, if (x) such Third-Party Claim includes, in
the reasonable judgment of the Indemnified Party’s outside counsel, a credible
claim for injunctive relief against the Indemnified Party, (y) Damages sought
under such Third-Party Claim, together with Damages sought under any other
Claims then in dispute or pending, can reasonably be expected (in the reasonable
judgment of the Indemnified Party’s outside counsel) to exceed 200% of the
amount remaining in the Escrow Fund, or (z) in the reasonable opinion of the
Indemnified Party’s outside counsel, a conflict of interest exists between Buyer
and Seller in respect of such Third-Party Claim; provided further, that Buyer
agrees that Seller may intervene in such pending Third-Party Claim, in a
confidential arbitration in Santa Clara County in accordance with the commercial
arbitration rules of the American Arbitration Association or its successor then
in effect (or such other confidential proceeding as mutually agreed upon between
the parties), for the sole purpose of challenging the legitimacy of the Damages
alleged and/or the credibility of a claim for injunctive relief, and that upon a
showing by clear and convincing evidence that the determination by the
Indemnified Party’s outside counsel as to the measure of potential damages
reasonably being expected to exceed 200% of the amount remaining in the Escrow
Fund and/or the credibility of the claim for injunctive relief, as applicable,
was not reasonable, the Indemnifying Party shall be entitled to defend or settle
such Third-Party Claim. In the event that Buyer is the Indemnified Party and
shall defend any Third Party Claim as permitted under this Section 8.5(a), then
the reasonable costs and expenses incurred by Buyer in connection with such
defense (including but not limited to reasonable attorneys’ fees, other
professionals’ and experts’ fees, court or arbitration costs and expenses of
investigation and defense relating to such Claim) shall be included in the
Damages for which Buyer may seek indemnity hereunder; provided, however, that
with respect to any such Third-Party Claim that falls within clause (x) but does
not fall within clause (y) in the preceding sentence, Buyer’s choice of outside
counsel with respect to the defense of such Third-Party Claim (but not with
respect to Buyer’s choice of outside counsel for purposes of evaluating the
credibility of such claim) must be consented to by Seller, which consent shall
not be unreasonably withheld. For purposes of the preceding sentence,
withholding of consent by Seller shall only be deemed “reasonable” if Seller
objects on the basis of the amount of attorneys’ fees reasonably expected to
result from such choice of counsel, and Seller hereby consents to Buyer’s
retention of either Fenwick & West LLP, Heller, Ehrman White & McAuliffe LLP and
Morrison & Foerster LLP as Buyer’s outside counsel with respect to any such
Third-Party Claims. “Third-Party Claim” means (i) in the event that Buyer is the
Indemnified Party, any assertion, whether orally or in writing, against any
Buyer Indemnified Person of any claim, Damages, legal action or proceeding
brought by a third party against such Buyer Indemnified Person that is based
upon any of the items listed in Section 8.2, and (ii) in the event that Seller
is the indemnified Party, any assertion, whether orally or in writing, against
any Seller Indemnified Person of any claim, Damages, legal action or proceeding
brought by a third party against such Seller Indemnified Person that is based
upon any of the items listed in Section 8.3.

 

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(b) If, with respect to any Claim that is not a Third Party Claim, within the
thirty-day period specified in Section 8.5(a), the Indemnifying Party elects in
writing not to contest such Claim or fails to make any election in accordance
with Section 8.5(a), then the Indemnifying Party will be conclusively deemed to
have consented to the recovery by the Indemnified Party of the full amount of
Damages (subject to Section 8.6) specified in the written notice of such Claim
(the “Full Amount”); provided, however, that if the Damages actually incurred by
such Indemnified Party in connection with the notice of Claim relating to such
Damages (the “Actual Amount”) are less than the Full Amount, then the
Indemnified Party shall promptly return to the Indemnifying Party the difference
between the Full Amount and the Actual Amount. If, within the thirty-day period
specified in Section 8.5(a), the Indemnifying Party elects in writing to contest
a Claim that is not a Third-Party Claim, then such Claim will be resolved by
either (i) a written settlement agreement executed by the Indemnifying Party and
the Indemnified Party, or (ii) in the absence of such a written settlement
agreement, litigation in accordance with Section 9.1.

 

(c) If, within the thirty-day period specified in Section 8.5(a), the
Indemnifying Party elects in writing, at the Indemnifying Party’s sole cost and
expense, to defend a Third-Party Claim, then (x) the Indemnifying Party will be
deemed to have admitted that such Third-Party Claim is an indemnifiable Claim
hereunder, (y) the Indemnified Party will have the right to participate, at its
own expense, through counsel of its own selection in all proceedings and (z)
upon the conclusion or settlement of such Third-Party Claim, the Indemnified
Party shall be entitled to recover Damages related to such Third-Party Claim
from the Indemnifying Party. If the Indemnifying Party defends a Third-Party
Claim, it shall not, without the written consent of the Indemnified Party, which
consent shall not be unreasonably withheld, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, such Third-Party
Claim unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability arising out of
such action or claim, (ii) does not include an admission of fault, culpability
or a failure to act, by or on behalf of any Indemnified Party and (iii) does not
include any injunctive or other non-monetary relief.

 

(d) If, within the thirty-day period specified in Section 8.5(a), the
Indemnifying Party elects in writing to not defend a Third-Party Claim or fails
to make any election in accordance with Section 8.5(a), then the Indemnified
Party will (i) be free to handle the defense of any such Third-Party Claim, (ii)
take, in good faith, all necessary steps to contest such Third-Party Claim to
conclusion or settlement without requiring the consent of the Indemnifying
Party, (iii) notify the Indemnifying Party of the progress of any such
Third-Party Claim, (iv) permit the Indemnifying Party, at the Indemnifying
Party’s sole cost and expense, to participate in such defense, and (v) provide
the Indemnifying Party with reasonable access to all relevant information and
documentation relating to such Third-Party Claim and the Indemnified Party’s
defense thereof. Upon the conclusion or settlement of a Third-Party Claim, which
Third-Party Claim the Indemnifying Party has elected to not defend, the
Indemnified Party will provide the Indemnifying Party with written notice of
such conclusion or settlement (“Notice of Conclusion”). Within thirty days of
delivery of such Notice of Conclusion, the Indemnifying Party shall elect in
writing to (A) admit that such Third-Party Claim is an indemnifiable Claim
hereunder, in which case the Indemnified Party shall be entitled to recover
Damages related to such Third-Party Claim or (B) dispute, in accordance with the
provisions of Section 9.1, whether

 

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such Third-Party Claim is an indemnifiable Claim hereunder. If the Indemnifying
Party fails to make an election in accordance with the preceding sentence, then
the Indemnifying Party will be conclusively deemed to have admitted that such
Third-Party Claim is an indemnifiable Claim hereunder and the Indemnified Party
shall be entitled to recover Damages related to such Third-Party Claim from the
Indemnifying Party. In any case, the party not in control of a Third-Party Claim
will cooperate with the other party in the conduct of the defense of such
Third-Party Claim.

 

8.6 Limitations on Liability.

 

(a) Except for claims for equitable relief and the Extended Indemnification
Obligations, claims against the Escrow Fund shall be the sole recourse of Buyer
Indemnified Persons under this Agreement. Notwithstanding anything herein to the
contrary, (i) in seeking indemnification for Damages under this Article VIII, no
Buyer Indemnified Person shall make any claim for Damages unless and until the
aggregate of all Damages equals or exceeds $65,000, inclusive of legal fees (the
“Basket”), in which event such Buyer Indemnified Person may make claims for all
Damages (including the first $65,000 thereof); and (ii) the maximum cumulative
aggregate total liability (including without limitation any liability for claims
under Section 8.4 hereof) of Seller will not exceed the amount of the Escrow
Fund (provided that of this amount, Buyer Indemnified Persons shall only be
entitled to recover up to $1,625,000 of the Escrow Fund for indemnification
claims pursuant to Section 8.4 hereof); provided, however, that the foregoing
limitations under (i) and (ii) above will not apply to any indemnification claim
by any Buyer Indemnified Person that arises from or as a result of the Extended
Indemnification Obligations or for indemnification pursuant to Section 8.2(b).

 

(b) Notwithstanding anything herein to the contrary, (i) in seeking
indemnification for Damages under this Article VIII, no Seller Indemnified
Person shall make any claim for Damages unless and until the aggregate of all
Damages equals or exceeds $65,000, inclusive of legal fees (the “Basket”), in
which event such Seller Indemnified Person may make claims for all Damages
(including the first $65,000 thereof); and (ii) the maximum cumulative aggregate
total liability of Buyer will not exceed $2,750,000; provided, however, that the
foregoing limitations under (i) and (ii) above will not apply to any
indemnification claim by any Seller Indemnified Person that arises from or as a
result of the Buyer Extended Indemnification Obligations.

 

8.7 Survival of Claims. Notwithstanding anything contained herein to the
contrary, if, before the expiration of the Escrow Period (or the applicable
statute of limitations with respect to the Extended Indemnification Obligations)
as provided in Section 8.1, a Buyer Indemnified Person sustains Damages and
issues a notice of Claim pursuant to Section 8.5(a) with respect to any Claim
hereunder, then the Buyer Indemnified Person’s rights hereunder shall survive
any expiration of such representation or warranty or indemnification obligation
with respect to the matter claimed. In the event a Seller Indemnified Person
sustains Damages and issues a notice of Claim pursuant to Section 8.4(a) with
respect to any Claim hereunder, then the Seller Indemnified Person’s rights
hereunder shall survive any expiration of such representation or warranty or
indemnification obligation with respect to the matter claimed.

 

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ARTICLE IX

 

GENERAL PROVISIONS

 

9.1 Governing Law; Dispute Resolution. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California applicable to
contracts executed in and to be performed in that state and without regard to
any applicable conflicts of law. Any dispute directly or indirectly based upon,
arising out of, connected to or relating to this Agreement, the transactions
contemplated hereby or any right or obligation created by this Agreement,
irrespective of the legal theory or claims underlying any such dispute
(including any tort and statutory claims), shall be resolved in any court of
competent jurisdiction located in Santa Clara County, California. Each of the
parties in this Agreement hereby irrevocably (a) consents to submit itself to
the personal jurisdiction of any California state or federal court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
including but not limited to a motion for forum of non conveniens or other
actions or other motions asserting the aforementioned forum is inconvenient, and
(c) agrees that it will not bring any action in relation of this Agreement or
any of the other transactions contemplated hereby in any court other than a
California state or federal court. Each party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY ISSUE WITHIN ANY ACTION AT LAW OR SUIT IN EQUITY
DIRECTLY OR INDIRECTLY BASED UPON, ARISING OUT OF, CONNECTED TO OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY RIGHT OR
OBLIGATION CREATED HEREBY.

 

9.2 Expenses. Each party hereto will bear, pay and be responsible for all costs
and expenses, including fees and disbursements of counsel, financial advisors
and accountants, incurred by it in connection with this Agreement and the
transactions contemplated hereby.

 

9.3 Notices. All notices and other communications required or permitted under
this Agreement will be in writing and will be either hand delivered in person,
sent by facsimile, sent by certified or registered first-class mail, postage
pre-paid, or sent by nationally recognized express courier service. Such notices
and other communications will be effective upon receipt if hand delivered or
sent by facsimile, five days after mailing if sent by mail, and one day after
dispatch if sent by express courier, to the following addresses, or such other
addresses as any party may notify the other parties in writing in accordance
with this Section 9.3.

 

(a) if to Seller:

 

(b) if to Buyer:

c/o Roxio, Inc.

 

Symantec Corporation

455 El Camino Real

 

20330 Stevens Creek Blvd.

Santa Clara, California 95050

 

Cupertino, California 95014

Attention: General Counsel

 

Attention: Chief Financial Officer

Facsimile: (650) 367-2913

 

Facsimile: (408) 517-8121

 

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with a copy to:

 

with a copy to:

O’Melveny & Myers LLP

 

Fenwick & West LLP

610 Newport Center Drive, 17th Floor

 

801 California Street

Newport Beach, CA 92660

 

Mountain View, California 94041

Attention: David Krinsky

 

Attention: Dan Winnike

Facsimile: (949) 823-6994

 

Facsimile: (650) 938-5200

 

9.4 Public Announcements. Seller and Buyer will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to this Agreement and the
transactions contemplated hereby, and shall not issue any such press release or
make any such public statement prior to such consultation, in each case (other
than the initial public announcement) except as may be required by any Legal
Requirement, the rules of The Nasdaq Stock Market or the order or decree of any
court of competent jurisdiction or governmental authority (in which case Seller
or Buyer shall attempt to consult with the other if reasonably practicable). No
further consultation shall be required with respect to public announcements or
disclosures that are substantially similar in content to the initial public
announcement of this Agreement and the transactions contemplated hereby. Seller
and Buyer shall cause their employees, officers and directors to comply with
this Section 9.4.

 

9.5 Construction of Agreement. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. When a reference is made in this Agreement to
an Exhibit, such reference shall be to an exhibit to this Agreement unless
otherwise indicated. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. When a reference is made in this Agreement to an Article, such
reference shall be to an Article of this Agreement. This Agreement has been
negotiated by Buyer and Seller and their attorneys and the language hereof will
not be construed for or against either party. Unless otherwise indicated, the
words “include,” “includes” and “including” when used herein will be deemed in
each case to be followed by the words “without limitation.” Each reference
herein to a law, statute, regulation, document or agreement will be deemed in
each case to include all amendments thereto.

 

9.6 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement will nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

 

9.7 Entire Agreement. This Agreement, the Seller Ancillary Agreements, the Buyer
Ancillary Agreements, the exhibits hereto and the Seller Disclosure Letter
(including all

 

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schedules thereto) constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings with respect to the subject matter hereof, both written and oral,
including without limitation the Mutual Non-Disclosure Agreement and the letter
agreement between Buyer and Seller, each dated March 13, 2003. The express terms
of this Agreement control and supersede any course of performance or usage of
the trade inconsistent with any of the terms hereof.

 

9.8 Assignment. This Agreement may not be assigned by Buyer, on the one hand,
without the prior written consent of Roxio, nor by Seller on the other hand,
without the prior written consent of Buyer, and any purported assignment without
such consent will be void; except that any party hereto may, without the other’s
consent, assign this Agreement (and any Buyer Ancillary Agreement or Seller
Ancillary Agreement, as applicable) (i) with respect to Buyer only, to any of
its majority-owned subsidiaries, (ii) by operation of law, (iii) in connection
with any merger, consolidation or sale of all or substantially all of its assets
used in the business, or (iv) with respect to Buyer only, in connection with the
sale of the Business or all or substantially all of the Purchase Assets;
provided, however, that no such assignment by any party hereto shall relieve
such party of any of its obligations under this Agreement.

 

9.9 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein, express or
implied, is intended to or will confer upon any other person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, except for the indemnification rights of the Buyer
Indemnified Persons under Article VIII.

 

9.10 Amendment; Waiver. This Agreement may not be amended or modified except by
an instrument in writing signed by Seller and Buyer. Waiver of any term or
condition of this Agreement will only be effective if and to the extent
documented in a writing signed by the party making or granting such waiver and
will not be construed as a waiver of any subsequent breach or waiver of the same
term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to enforce any provision hereof will not be
construed to be a waiver of the right of such party thereafter to enforce such
provisions.

 

9.11 Attorneys’ Fees. Should suit be brought to enforce or interpret any part of
this Agreement, the prevailing party will be entitled to recover, as an element
of the costs of suit and not as damages, reasonable attorneys’ fees to be fixed
by the court (including costs, expenses and fees on any appeal).

 

9.12 Specific Performance. Buyer and Seller each acknowledge that, in view of
the uniqueness of the Purchased Assets, the Business and the transactions
contemplated by this Agreement and the Seller Ancillary Agreements, a party
would not have an adequate remedy at law for money damages if this Agreement or
any Seller Ancillary Agreement is not performed in accordance with its
respective terms. Each party to this Agreement therefore agrees that the other
party hereto shall be entitled to specific enforcement of the terms of this
Agreement and any Seller Ancillary Agreement in addition to any other remedy to
which it may be entitled, at law or in equity.

 

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9.13 Remedies Not Limited by Information and Investigation. The representations,
warranties, covenants and obligations of Seller, and the rights and remedies
that may be exercised by the Buyer and the Buyer Indemnified Persons, shall not
be limited or otherwise affected by or as a result of any information furnished
to, or any investigation made by or knowledge of, Buyer or any of the other
Buyer Indemnified Persons other than as provided in the Seller Disclosure
Letter.

 

9.14 Seller Disclosure Letter. The Seller Disclosure Letter shall be arranged in
separate parts corresponding to the numbered and lettered sections contained in
this Agreement, and the information disclosed in any numbered or lettered part
shall be deemed to relate to and to qualify only the particular provision set
forth in the corresponding numbered or lettered section in this Agreement, as
applicable, and any other provision to which the relevance of such information
is readily apparent from the text of such disclosure.

 

9.15 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
This Agreement may be executed and delivered by facsimile and upon such delivery
the facsimile signature will be deemed to have the same effect as if the
original signature had been delivered to the other party.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have caused this Asset Purchase Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

SYMANTEC CORPORATION

     

ROXIO, INC.

By:

 

--------------------------------------------------------------------------------

     

By:

 

--------------------------------------------------------------------------------

   

Greg Myers

Chief Financial Officer and

Senior Vice President of Finance

         

R. Elliot Carpenter

Vice President and

Chief Financial Officer

SYMANTEC LIMITED

(for purposes of Section 5.1 hereof only)

     

WILD FILE, INC.

By:

 

--------------------------------------------------------------------------------

     

By:

 

--------------------------------------------------------------------------------

   

Greg Myers

Director

         

Wm. Christopher Gorog

President and Chief Executive Officer

       

ROXIO CI LTD.

           

By:

 

--------------------------------------------------------------------------------

               

Wm. Christopher Gorog

President and Chief Executive Officer

 

[Signature Page to Asset Purchase Agreement]

 

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