Unassociated Document


    
      [Napster
        Letterhead]

       
August
      2,
      2007

     

    Mr.
      Christopher Allen

    5230
      Ridgedale Drive

    Dallas,
      TX 75206

    


    Dear
      Christopher:

     

    On
      behalf
      of Napster, Inc. (the “Company”), I am pleased to offer you the position of
      Chief Operating Officer of the Company, effective as of August 6, 2007, pursuant
      to the terms of this agreement (the “Agreement”). The prior agreement (the
“Prior Agreement”) between the parties, dated June 21, 2007, is hereby amended
      and restated in its entirety, and the Prior Agreement is completely superseded
      by this Agreement and shall be of no force and effect. As part of this
      Agreement, you agree that you shall relocate your primary residence to the
      Los
      Angeles, CA area.

     

    1.
      Compensation

    


    Your
      base
      salary will be $315,000 per annum and will be reviewed annually by the Company.
      In addition, you will receive, within 30 days of your date of hire, a one-time
      sign-on bonus of $50,000, subject to applicable withholdings.

     

    2.
      Duties

    


    You
      will
      perform your services as Chief Operating Officer and agree to perform all duties
      reasonable and consistent with your position, and those reasonably requested
      by
      the Company or its duly authorized officers. 

    


    3.
      Other
      benefits

    


    The
      Company provides a full range of benefits for which you are currently eligible
      including vacation, medical, dental, vision, life insurance, a 401K plan, health
      club membership, and tuition reimbursement. You shall be entitled to participate
      in such benefit plans subject to their terms and conditions, which currently
      provide you with no less than 20 days paid time off each year. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    4.
      Relocation

    


    In
      connection with your relocation to Los Angeles, California, the Company will
      reimburse you for actual out of pocket moving, transportation, and storage
      costs, as well as reasonable temporary housing in the Los Angeles area for
      a
      maximum period of 120 days and at all times subject to prior approval by the
      Company. The Company will also pay you a special bonus to reimburse you for
      certain payments made to you by your prior employer that you have represented
      the prior employer has a right to recoup because of your voluntary termination
      of employment from your prior employer. The Company will reimburse you for
      the
      full amount of such payments that you are actually required to repay to your
      prior employer (the “Repaid Amount”) and will also “gross-up” such reimbursement
      for the estimated income and employment taxes on the reimbursement amount so
      that you will retain an after-tax amount equal to the Repaid Amount, provided
      that the maximum value of the Company’s reimbursement payment (including the
      gross-up) shall in no event exceed $180,000. The amount of the Company’s tax
      gross-up payment shall be calculated by the Company in its reasonable, good
      faith discretion, and shall be offset by any tax benefit that the Company
      estimates you are reasonably entitled to under applicable tax law by virtue
      of
      paying the Repaid Amount to your prior employer. You agree to cooperate with
      the
      Company in making its estimate of the gross-up payment, and to provide the
      Company with any information as it may reasonably request in order to prepare
      its estimate. On or before November 15, 2007, the Company shall reimburse you
      an
      amount equal to the Repaid Amount plus the related gross-up payment due on
      such
      amount. If you voluntarily terminate your employment with the Company for other
      than Good Reason (as defined below) within the twelve (12) month period
      following your date of hire, you will to the extent permitted by applicable
      law
      be required to repay to the Company all costs and reimbursements identified
      in
      this section 4. 

     

    5.
      Termination
      and Severance

     

    In
      the
      event that the Company terminates your employment without Cause (as defined
      below) or you terminate your employment for Good Reason (as defined below),
      you
      will be entitled to continued salary payments and company-paid COBRA premiums
      for a period of six (6) months from the date of your termination.
      Notwithstanding the foregoing, in the event that your employment is terminated
      by the Company without Cause or by you for Good Reason upon or at any time
      following a Change in Control (as defined below), the severance period will
      be
      extended to twelve (12) months. 

     

    In
      addition, if the Company terminates your employment without Cause or you
      terminate your employment for Good Reason within the twelve (12) month period
      following your hire date, 25% of your initial Restricted Stock Grant (outlined
      in section 8 below) will immediately fully vest on the date of termination.
      The
      remaining portion of your initial Restricted Stock Grant, to the extent not
      vested after giving effect to the preceding sentence, will be forfeited to
      the
      Company as of such date. 

     

    The
      Company may terminate your employment and this Agreement at any time. You may
      terminate your employment and this agreement at any time. If the Company
      exercises its option to terminate your employment for Cause or if you terminate
      your employment other than for Good Reason, you shall be entitled only to the
      unpaid salary and unused vacation benefits which have been accrued on your
      behalf. You shall be entitled to no other compensation, benefits or severance
      payments of any kind in the event your employment is terminated for Cause or
      if
      you terminate your employment other than for Good Reason. Should your employment
      be terminated for Cause, the Company shall provide you with a written statement
      detailing such Cause. In no event will you be entitled to severance benefits
      if
      your employment terminates or is terminated due to your death or total
      disability. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    6.
      Business
      Expenses

    


    During
      your employment, the Company will reimburse you for such reasonable travel
      and
      other expenses incurred in the performance of your duties consistent with the
      Company’s then applicable expense reimbursement policies for Company executives.


    


    7.
      Definitions

     

    For
      purposes of this Agreement, the following terms will have the following
      meanings:

     

    “Cause”
      means that you have: (i) been grossly negligent in the performance of your
      duties for the Company; (ii) engaged in willful misconduct; or (iii) been
      convicted of a felony or any crime involving moral turpitude. 

     

    “Good
      Reason” means that you, without your consent, have: (i) incurred a material
      reduction in your title, status, authority or responsibility; (ii) incurred
      a
      reduction in your base compensation; or (iii) been notified that your principal
      place of work (defined as the greater Los Angeles area) will be relocated by
      a
      distance of fifty (50) miles or more.

     

    “Change
      in Control” means the occurrence of any of the following:

    


    
      	 	
              (i)
                

            	
              When
                any “person,” as such term is used in Sections 13(d) and 14(d) of the
                Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other
                than the Company, a subsidiary of the Company or a Company employee
                benefit plan, including any trustee of such plan acting as trustee)
                is or
                becomes the “beneficial owner” (as defined in Rule 13d-3 under the
                Exchange Act), directly or indirectly, of securities of the Company
                representing fifty percent (50%) or more of the combined voting power
                of
                the Company’s then outstanding
                securities;

            


    

     

    
      	 	
              (ii)

            	
              A
                change in the composition of the Company’s Board of Directors occurring
                within a two-year period, as a result of which fewer than a majority
                of
                the directors are Incumbent Directors. “Incumbent Directors” shall mean
                directors who either (1) are directors of the Company as of the date
                hereof, or (2) are appointed, elected, or nominated for election,
                to the
                Board with the affirmative votes of at least a majority of the Incumbent
                Directors at the time of such appointment election or nomination
                (but
                shall not include an individual whose election or nomination is in
                connection with an actual or threatened proxy contest relating to
                the
                election of directors of the
                Company);

            


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              The
                consummation of a merger or consolidation of the Company with any
                other
                corporation, other than a merger or consolidation which would result
                in
                the voting securities of the Company outstanding immediately prior
                thereto
                continuing to represent (either by remaining outstanding or by being
                converted into voting securities of the surviving entity) at least
                fifty
                percent (50%) of the total voting power represented by the voting
                securities of the Company or such surviving entity outstanding immediately
                after such merger or consolidation;
                or

            


    

     

    
      	 	
              (iv)

            	
              The
                consummation of the sale or disposition by the Company or all or
                substantially all of the Company’s
                assets.

            


    

     

    8.
      Restricted
      Stock 

     

    In
      connection with your commencing employment with the Company, management will
      recommend to the Compensation Committee of the Company's Board of Directors
      that
      you be granted an award of 200,000 shares of restricted stock, such shares
      to
      vest, subject to your continued employment with the Company, in substantially
      equal annual installments on each of the first four anniversaries of the date
      of
      grant except as noted herein. These shares of restricted stock will be granted
      under, and subject to the terms and conditions of, the Company's 2001 Stock
      Plan.

     

    9.
      Invention
      Disclosure

    


    The
      Company acknowledges that all rights and ownership of the ideas, processes,
      methods and inventions disclosed by you to the Company in writing prior to
      or on
      the date hereof (the “Invention”) belong to you, but that you agree to provide
      the Company a non-exclusive license to use it. 

     

    You
      should understand that this Agreement does not constitute a contract of
      employment for any specified period of time, but will create an “employment
      at-will” relationship. 

    
 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Please
      sign this letter, indicating acceptance of this Agreement, and return to
      me.

     

    Christopher,
      we are pleased to have you as a member of the team and are confident you will
      make a major contribution to our success.

     

    Sincerely,

     

    /s/
      Wm.
      Christopher Gorog   

     

    Wm.
      Christopher Gorog

    Chief
      Executive Officer and Chairman of the Board

     

     

     

    
      	 	
              Accepted:

            	
              /s/
                Christopher W. Allen

            	 
	 	 	
              Christopher
                W. Allen

            	 


    

    


     

    
      
        
        

      

      
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