exv10w3



 





EXHIBIT 10.3




EXECUTION VERSION




 





STOCKHOLDER AGREEMENT




by and between




VIACOM INTERNATIONAL INC.,

on behalf of its MTV NETWORKS Division,




and




REALNETWORKS, INC.




Dated as of August 20, 2007




 











 



 


TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE I	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Definitions	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Definitions
	 	 	4	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Registration Rights	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Registration
	 	 	9	 
	SECTION 2.02.

	 	Piggyback Registration
	 	 	11	 
	SECTION 2.03.

	 	Reduction of Offering
	 	 	11	 
	SECTION 2.04.

	 	Registration Procedures
	 	 	12	 
	SECTION 2.05.

	 	Information and Developments
	 	 	16	 
	SECTION 2.06.

	 	Black-out Period
	 	 	17	 
	SECTION 2.07.

	 	Registration Expenses
	 	 	17	 
	SECTION 2.08.

	 	Indemnification; Contribution
	 	 	17	 
	SECTION 2.09.

	 	Rule 144
	 	 	20	 
	SECTION 2.10.

	 	Lock-Up
	 	 	20	 
	SECTION 2.11.

	 	Other Registration Rights
	 	 	20	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Access to Information	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Access to Information
	 	 	21	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Standstill	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Standstill
	 	 	21	 
	SECTION 4.02.

	 	Exceptions to Standstill
	 	 	22	 
	SECTION 4.03.

	 	Fiduciary Duties
	 	 	23	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transfer Restrictions	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Restrictions on Transfer
	 	 	23	 






ii










 



 


	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Miscellaneous	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Effectiveness and Termination
	 	 	23	 
	SECTION 6.02.

	 	Interpretation
	 	 	24	 
	SECTION 6.03.

	 	Adjustments
	 	 	24	 
	SECTION 6.04.

	 	Commercially Reasonable Efforts; Further Actions
	 	 	24	 
	SECTION 6.05.

	 	Consents
	 	 	24	 
	SECTION 6.06.

	 	Notices
	 	 	24	 
	SECTION 6.07.

	 	No Third Party Beneficiaries
	 	 	26	 
	SECTION 6.08.

	 	Waiver
	 	 	26	 
	SECTION 6.09.

	 	Integration
	 	 	26	 
	SECTION 6.10.

	 	Headings
	 	 	26	 
	SECTION 6.11.

	 	Counterparts
	 	 	27	 
	SECTION 6.12.

	 	Severability
	 	 	27	 
	SECTION 6.13.

	 	Amendments and Modifications
	 	 	27	 
	SECTION 6.14.

	 	Applicable Law
	 	 	27	 
	SECTION 6.15.

	 	Dispute Resolution
	 	 	27	 
	SECTION 6.16.

	 	Waiver of Jury Trial
	 	 	27	 
	SECTION 6.17.

	 	Absence of Presumption
	 	 	27	 
	SECTION 6.18.

	 	Expenses
	 	 	27	 
	SECTION 6.19.

	 	Articles of Incorporation and By-Laws
	 	 	27	 
	SECTION 6.20.

	 	Change in Law
	 	 	28	 
	 
	 	 	 	 	 	 
	SCHEDULE I

	 	Dispute Resolution	 	 	 	 






iii










 



 



     STOCKHOLDER AGREEMENT dated as of August 20, 2007 (this
“Agreement”), between Viacom International Inc., a Delaware
corporation, (“MTVN Parent”), on behalf of its MTV Networks
Division (“MTVN”), and RealNetworks, Inc. (“RealNetworks”),
a Washington corporation.



     WHEREAS, MTVN Parent, DMS Holdco Inc., RealNetworks, RealNetworks Digital Music of California,
Inc. and Rhapsody America LLC have entered into a Limited Liability Company Agreement (the “LLC
Agreement”), dated as of the date of this Agreement, pursuant to which, on the Closing Date (as
defined in Section 1.01(a)), MTVN and RealNetworks will launch a joint venture;



     WHEREAS, the parties hereto desire to establish in this Agreement certain terms and conditions
concerning registration, access to information rights and standstill and transfer restrictions
relating to any Equity Securities of RealNetworks Beneficially Owned (as such terms are defined in
Section 1.01(a)) by MTVN and certain other matters;



     WHEREAS, this Agreement shall become effective upon the closing of a put/call pursuant to
Section 10.03 of the LLC Agreement in which Equity Securities of RealNetworks are issued to MTVN or
its Affiliates.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



ARTICLE I




Definitions




     SECTION 1.01. Definitions. (a) As used in this Agreement, the following terms will
have the following meanings:



     An “Affiliate” of any Person means another Person that directly or indirectly, through
one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first
Person; provided that “Affiliate”, when used with respect to MTVN or MTVN Parent or
any of their Affiliates, shall only mean Viacom Parent and any direct or indirect Subsidiaries of
Viacom Parent and shall not include any direct or indirect stockholder of Viacom Parent or any of
their Affiliates other than Viacom Parent and any direct or indirect Subsidiaries of Viacom Parent.



     “Articles of Incorporation” means the articles of incorporation of RealNetworks, as
amended from time to time in accordance with this Agreement.



     “Beneficial Owner” and “Beneficial Ownership” and words of similar import have
the meanings assigned to such terms in the LLC Agreement.









 



5


     “Board” means the Board of Directors of RealNetworks.



     “Business Combination” means any direct or indirect acquisition or purchase, in one
transaction or a series of transactions, of assets (including Equity Securities of any Subsidiary
of RealNetworks) or businesses that constitute 20% or more of the revenues, net income or assets of
RealNetworks and its Subsidiaries, taken as a whole, or 20% or more of the shares of any class of
Equity Securities of RealNetworks, or any acquisition, tender offer or exchange offer that if
consummated would result in any Person Beneficially Owning 20% or more of the shares of any class
of Equity Securities of RealNetworks, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution, joint venture, binding share exchange or similar
transaction involving RealNetworks or any of its Subsidiaries pursuant to which any Person or the
shareholders of any Person would own 20% or more of the shares of any class of Equity Securities of
RealNetworks or of any resulting parent company of RealNetworks.



     “Business Day” means any day other than a Saturday, a Sunday or a U.S. Federal
holiday.



     “By-laws” means the by-laws of RealNetworks, as amended from time to time in
accordance with this Agreement.



     “Closing” has the meaning assigned in the LLC Agreement.



     “Closing Date” means the date of the Closing.



     “Common Stock” means the Common Stock, par value $0.001 per share, of RealNetworks.



     “Control” means, with respect to any Person, the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of such Person, whether
through ownership of securities or partnership, membership, limited liability company, or other
ownership interests, by contract or otherwise and the terms “Controlling” and
“Controlled” have meanings correlative to the foregoing.



     “Director” means a member of the Board.



     “Equity Security” means (i) any common stock, preferred stock or other capital stock,
(ii) any securities convertible into or exchangeable for common stock, preferred stock or other
capital stock or (iii) any options, rights or warrants (or any similar securities) to acquire
common stock, preferred stock or other capital stock.



     “Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder, as amended.



     “GAAP” means U.S. generally accepted accounting principles, as in effect at the time
such term is relevant.









 



6


     “Governmental Entity” means any transnational, Federal, state, local or foreign
government, or any court of competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, or any national stock exchange or
national quotation system on which securities issued by RealNetworks or any of its Subsidiaries are
listed or quoted.



     “Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.



     “Issuer FWP” has the meaning assigned to “issuer free writing prospectus” in Rule 433
under the Securities Act.



     “Law” means any law, treaty, statute, ordinance, code, rule, regulation, judgment,
decree, order, writ, award, injunction, authorization or determination enacted, entered,
promulgated, enforced or issued by any Governmental Entity.



     “MTVN Music Group” shall have the meaning assigned in the Audio Music Service Brand
and Content License, Distribution and Advertising Agreement dated as of August 20, 2007, between
MTVN and Rhapsody America LLC.



     “NASDAQ” shall mean The NASDAQ Stock Market, Inc.



     “Non-Voting Equity” has the meaning assigned in the LLC Agreement.



     “Outstanding Percentage Interest” of any Person means, as of any date of
determination, the ratio expressed as a percentage of (x) the sum of the number of shares of Common
Stock and Non-Voting Equity Beneficially Owned by such Person and its Affiliates as of such date to
(y) the total number of shares of Common Stock and Non-Voting Equity outstanding as of such date.



     “Permitted Transferee” means Viacom Parent and any Subsidiary of Viacom Parent.



     “Person” means any individual, firm, corporation, partnership, company, limited
liability company, trust, joint venture, association, Governmental Entity, unincorporated
organization or other entity.



     “Registrable Securities” means (a) all shares of Common Stock and Non-Voting Equity
Beneficially Owned at any time by MTVN and its Affiliates, (b) any securities issued or issuable
with respect to any such shares of Common Stock and Non-Voting Equity by way of a stock dividend or
other similar distribution or stock split, or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and (c) shares of
Common Stock issuable pursuant to any option, warrant, right, put, call or other derivative
security of any of the foregoing; provided that such securities will cease to be
Registrable Securities when (i) a Registration Statement relating to such securities will have been
declared effective by the SEC (or become automatically effective) and such securities will have
been disposed of by MTVN pursuant to such Registration Statement or pursuant to a Takedown Offering









 



7



related to such Registration Statement; (ii) such securities have been disposed of by MTVN
pursuant to Rule 144 promulgated under the Securities Act or (iii) such securities may be disposed
of without registration under the Securities Act by MTVN pursuant to Rule 144(k) promulgated under
the Securities Act.



     “Representatives” means the directors, officers, employees, agents, investment
bankers, financing sources, attorneys, accountants and advisors of either MTVN, on the one hand, or
RealNetworks, on the other hand, as the context requires.



     “Sale Transaction” means (i) any merger, consolidation or binding share exchange to
which MTVN, MTVN Parent or Viacom Parent is a party, (ii) any sale of Equity Securities or sale of
all or substantially all of the assets of MTVN, MTVN Parent or Viacom Parent or (iii) any
transaction involving all or substantially all of the assets of the MTVN Music Group.



     “SEC” means the U.S. Securities and Exchange Commission.



     “Securities Act” means the Securities Act of 1933 and the rules and regulations
promulgated thereunder, as amended.



     A “Subsidiary” of any Person means another Person (a) an amount of the voting
securities, other voting ownership or voting partnership interest of which is sufficient to elect
at least a majority of its board or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which is Beneficially Owned directly or
indirectly by such first Person) or (b) which is required to be consolidated with such Person under
GAAP.



     “Takedown Offering” means an offering pursuant to a shelf registration statement.



     “Trading Day” means (i) for so long as any Equity Securities of RealNetworks are
quoted on NASDAQ or another national securities exchange, a day on which NASDAQ or such other
national securities exchange is open for business or (ii) if the Equity Securities of RealNetworks
cease to be so quoted, any day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by Law or executive order to
close.



     “Transfer” means, directly or indirectly, to sell, transfer, assign or similarly
dispose of, or to enter into any hedging or derivative transaction to indirectly accomplish any of
the foregoing, but shall not include (x) a bona fide pledge to a financial institution to secure a
bona fide recourse borrowing or any foreclosure thereof or (y) an indirect transfer incident to a
Sale Transaction. The terms “Transferred”, “Transferring”, “Transferor”
and “Transferee” have meanings correlative to the foregoing.



     “Underwriter” means a securities dealer who purchases any Registrable Securities as a
principal in connection with a distribution of such Registrable Securities and not as part of such
dealer’s market-making activities.









 



8


     “Voting Stock” has the meaning assigned to such term in the LLC Agreement.



     “Viacom Parent” means Viacom Inc., a Delaware corporation.



     (b) As used in this Agreement, the terms set forth below will have the meanings assigned in
the corresponding Section listed below:



	 	 	 
	Term	 	Section
	Agreement
	 	Preamble
	 
	Deferral Period
	 	2.06
	 
	Demand Registration
	 	2.01(a)
	 
	effective date
	 	2.04(a)(xi)
	 
	fraudulent misrepresentation
	 	2.08(e)
	 
	indemnified party
	 	2.08(c)
	 
	Indemnified Persons
	 	2.08(a)
	 
	indemnifying party
	 	2.08(c)
	 
	Inspectors
	 	2.04(a)(vii)
	 
	LLC Agreement
	 	Recitals
	 
	MTVN
	 	Preamble
	 
	Piggyback Registration
	 	2.02
	 
	RealNetworks
	 	Preamble
	 
	Records
	 	2.04(a)(vii)
	 
	Registration Statement
	 	2.01(a)
	 
	Takedown Request
	 	2.01(b)
	 
	MTVN Parent
	 	Preamble












 



9


ARTICLE II




Registration Rights




     SECTION 2.01. Registration. (a) RealNetworks agrees that, upon the written request
of MTVN from time to time (a “Demand Registration”), it will as promptly as reasonably
practical (but in any event within 30 days of receipt of such request) prepare and file a
registration statement under the Securities Act (a “Registration Statement”, which term
will include any amendments thereto and any documents incorporated by reference therein), which
registration statement, if MTVN so requests, will be a shelf registration statement on an
appropriate form under the Securities Act, relating to the offer and sale of the Registrable
Securities by MTVN or its Affiliates from time to time in accordance with the methods of
distribution set forth in such shelf registration statement and Rule 415 under the Securities Act
as to the number of shares of Registrable Securities specified in such request; provided
that (i) RealNetworks will not be obligated to effect (x) a Demand Registration if a Registration
Statement pursuant to this Section 2.01 or Section 2.02 in which MTVN had the right to include
Registrable Securities was declared effective within 12-months prior to the date of the request for
a Demand Registration, so long as the number of Registrable Securities which MTVN requested to
include in such Registration Statement was not reduced pursuant to Section 2.03 or (y) more than a
total of four Demand Registrations during the period commencing on the date hereof and ending on
the date on which MTVN and its Affiliates no longer own any Registrable Securities and (ii) the
Registrable Securities for which a Demand Registration has been requested will have a value (based
on the average closing price per share of the Common Stock (or any successor security) for the ten
Trading Days preceding the delivery of MTVN’s request for such Demand Registration) of not less
than $75,000,000 or such lesser remaining amount held by MTVN. Each such request for a Demand
Registration will specify the number of shares of Registrable Securities proposed to be offered for
sale and will also specify the intended method of distribution thereof; provided that MTVN
may change such number if such change (x) will not materially adversely affect the timing or
success of the offering and (y) does not result in less than $75,000,000 or such lesser amount
(determined as provided above) of Registrable Securities being included in the Registration
Statement.



     (b) RealNetworks agrees that, upon the written request of MTVN from time to time (a
“Takedown Request”) to assist it in effecting a Takedown Offering pursuant to a shelf
registration statement that has previously been filed and declared effective pursuant to a Demand
Registration, it will as promptly as reasonably practicable cooperate with MTVN and any
Underwriters to effect such Takedown Offering. The Takedown Request will specify the number of
Registrable Securities to be included by MTVN in such Takedown Offering and the intended method of
distribution.



     (c) RealNetworks agrees to use its commercially reasonable efforts (i) to cause any
Registration Statement to be declared effective (unless it becomes effective automatically upon
filing) as promptly as reasonably practicable after the filing thereof and (ii) to keep such
Registration Statement effective for a period of not less than 90 days (or, in the case of a shelf
registration statement, two years) or, if earlier, the period









 



10



sufficient to complete the distribution of the Registrable Securities pursuant to a Takedown
Offering related to, or otherwise pursuant to, such Registration Statement. RealNetworks shall be
deemed not to have used its commercially reasonable efforts to keep a Registration Statement
effective during the requisite period if it voluntarily takes any action that would result in MTVN
not being able to offer and sell the Registrable Securities during that period (including in
connection with a Takedown Offering), unless such action is required by applicable Law or is
pursuant to Section 2.06. RealNetworks further agrees to supplement or make amendments to the
Registration Statement as may be necessary to keep such Registration Statement effective for the
period set forth in clause (ii) above, including (A) to respond to the comments of the SEC, if any,
(B) as may be required by the registration form utilized by RealNetworks for such Registration
Statement or by the instructions applicable to such registration form, (C) as may be required by
the Securities Act or the rules and regulations thereunder, (D) as may be required in connection
with a Takedown Offering or (E) as may be reasonably requested in writing by MTVN or any
Underwriter for MTVN. RealNetworks agrees, at least ten days before filing with the SEC a
Registration Statement or prospectus and at least two days before filing with the SEC any
amendments or supplements thereto, to furnish to the Underwriters, if any, to MTVN, and to one
counsel selected by MTVN, copies of all such documents proposed to be filed, which documents shall
be subject to the review and reasonable comments of such Persons.



     (d) In the event an offering of shares of Registrable Securities (including in connection with
any Takedown Offering) involves one or more Underwriters, MTVN will select the lead bookrunning
Underwriter and any additional Underwriters in connection with the offering, subject to the
reasonable approval of RealNetworks.



     (e) Notwithstanding the foregoing provisions of this Section 2.01, MTVN may not request a
Demand Registration or deliver a Takedown Request during a period commencing upon filing (or
earlier, but not more than 30 days prior to such filing upon notice by RealNetworks to MTVN that it
so intends to file) a Registration Statement for Equity Securities of RealNetworks (for its own
account or for any other security holder) and ending (i) 90 days after such Registration Statement
is declared effective by the SEC (or becomes automatically effective) or up to 180 days in the case
of an underwriting if and to the extent requested by the lead underwriter, (ii) upon the withdrawal
of such Registration Statement or (iii) 30 days after such notice if no such Registration Statement
has been filed within such 30-day period, whichever occurs first; provided the foregoing
limitation will not apply if MTVN was not given the opportunity, in violation of Section 2.01(a) or
2.02, to include its Registrable Securities in the Registration Statement described in this
Section 2.01(e); and, provided, further, that in no event will MTVN be restricted
hereunder for more than 180 days in any 12-month period (including, for purposes hereof,
restrictions under Section 2.10).



     (f) MTVN will be permitted to rescind a Demand Registration or Takedown Request or remove any
Registrable Securities held by it from any Demand Registration or Takedown Request (so long as, in
the case of a Demand Registration, after such removal it would still constitute a Demand
Registration) at any time; provided that if MTVN rescinds a Demand Registration, such
Demand Registration will









 



11



nonetheless count as a Demand Registration for purposes of determining when future Demand
Registrations can be requested by MTVN pursuant to this Section 2.01, unless MTVN reimburses
RealNetworks for all expenses incurred by RealNetworks in connection with such Demand Registration.



     SECTION 2.02. Piggyback Registration. If RealNetworks proposes to file a Registration
Statement under the Securities Act, or consummate a Takedown Offering, with respect to an offering
of Equity Securities of RealNetworks for (a) RealNetworks’ own account (other than a Registration
Statement on Form S-4 or S-8 (or any substitute form that may be adopted by the SEC)) or (b) the
account of any holders of Equity Securities of RealNetworks (other than MTVN) pursuant to a demand
registration request or takedown request delivered by such holders, then RealNetworks will give
written notice of such proposed filing or Takedown Offering to MTVN as soon as practicable (but in
no event less than 20 days before the anticipated filing date), and upon the written request, given
within 15 days after delivery of any such notice by RealNetworks, of MTVN to include in such
registration or Takedown Offering, as applicable, Registrable Securities (which request shall
specify the number of Registrable Securities proposed to be included in such registration or
Takedown Offering, as applicable), RealNetworks will cause all such Registrable Securities to be
included in such registration or Takedown Offering, as applicable, on the same terms and conditions
as RealNetworks’ or such holder’s Equity Securities of RealNetworks (a “Piggyback
Registration”); provided, however, that if at any time after giving written
notice of such proposed filing or Takedown Offering, as applicable, and prior to the effective date
of the Registration Statement filed in connection with such registration, or the consummation of
such Takedown Offering, as applicable, RealNetworks shall determine for any reason not to proceed
with the proposed registration or disposition, as applicable, of the securities, RealNetworks may,
at its election, give written notice of such determination to MTVN and, thereupon, will be relieved
of its obligation to register any Registrable Securities in connection with such registration, or
dispose of any Registrable Securities in connection with such Takedown Offering, as applicable.
RealNetworks will control the determination of the form of any offering contemplated by this
Section 2.02, including whether any such offering will be in the form of an underwritten offering
and, if any such offering is in the form of an underwritten offering, RealNetworks will select the
lead Underwriter and any additional Underwriters in connection with such offering. RealNetworks
will use its commercially reasonable efforts to cause any such Registration Statement to be
effective for at least 90 days.



     SECTION 2.03. Reduction of Offering. Notwithstanding anything contained herein, if
the lead Underwriter of an underwritten offering described in Section 2.01 or Section 2.02 advises
RealNetworks in writing that the number of Equity Securities of RealNetworks (including any
Registrable Securities) that RealNetworks, MTVN and any other Persons intend to include in any
Registration Statement or dispose of pursuant to any Takedown Offering is such that the success of
any such offering would be materially and adversely affected, including the price at which the
securities can be sold, then the number of Equity Securities of RealNetworks to be included in the
Registration Statement, or disposed of pursuant to such Takedown Offering, as applicable, for the
account of RealNetworks, MTVN and any other Persons will be









 



12



reduced pro rata to the extent necessary to reduce the total amount of securities to be
included in any such Registration Statement, or disposed of pursuant to such Takedown Offering, as
applicable, to the amount recommended by such lead Underwriter; provided that (a) priority
in the case of a Demand Registration or Takedown Offering pursuant to Section 2.01 will be
(i) first, the Registrable Securities requested to be included in the Registration
Statement, or disposed of pursuant to the Takedown Offering, as applicable, for the account of MTVN
and its Affiliates, (ii) second, securities initially proposed to be offered by
RealNetworks for its own account and (iii) third, pro rata among any other securities of
RealNetworks requested to be registered, or disposed of, as applicable, by the holders thereof
pursuant to a contractual right so that the total number of registrable securities to be included
in any such offering for the account of all such Persons will not exceed the number recommended by
such lead Underwriter; (b) priority in the case of a Piggyback Registration initiated by
RealNetworks for its own account pursuant to Section 2.02 will be (i) first, securities
initially proposed to be offered by RealNetworks for its own account, and (ii) second, pro
rata among the Registrable Securities requested to be included in the Registration Statement, or
disposed of pursuant to the Takedown Offering, as applicable, for the account of MTVN and its
Affiliates, and any other securities of RealNetworks requested to be registered, or disposed of, as
applicable, pursuant to a contractual right so that the total number of registrable securities to
be included in any such offering for the account of all such Persons will not exceed the number
recommended by such lead Underwriter; and (c) priority with respect to inclusion of securities in a
Registration Statement or Takedown Offering, as applicable, initiated by RealNetworks for the
account of holders other than MTVN pursuant to registration rights afforded such holders will be
(i) first, pro rata among securities offered for the account of such holders so that the
total number of registrable securities to be included in any such offering for the account of all
such Persons will not exceed the number recommended by such lead Underwriter, (ii) second,
securities offered by RealNetworks for its own account, and (iii) third, pro rata among the
Registrable Securities requested to be included in the Registration Statement, or disposed of
pursuant to the Takedown Offering, for the account of MTVN, and any other securities of
RealNetworks requested to be registered pursuant to a contractual right so that the total number of
registrable securities to be included in any such offering for the account of all such Persons will
not exceed the number recommended by such lead Underwriter.



     SECTION 2.04. Registration Procedures. (a)  Subject to the provisions of Section 2.01
hereof, in connection with the registration of the sale of Registrable Securities or any Takedown
Offering hereunder, RealNetworks will as promptly as reasonably practicable:




     (i) furnish to MTVN without charge, if requested, prior to the filing of a
Registration Statement, copies of such Registration Statement as it is proposed to
be filed, and thereafter such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), copies of any and
all transmittal letters or other correspondence with the SEC relating to such
Registration









 



13



Statement and such other documents in such quantities as MTVN may reasonably
request from time to time in order to facilitate the disposition of such
Registrable Securities (including in connection with any Takedown Offering);




     (ii) use its commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as MTVN reasonably requests and do any and all other acts and things
as may be reasonably necessary or advisable to enable MTVN to consummate the
disposition of such Registrable Securities in such jurisdictions (including in
connection with any Takedown Offering); provided that RealNetworks will not
be required to (x) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 2.04(a)(ii),
(y) subject itself to taxation in any such jurisdiction or (z) consent to general
service of process in any such jurisdiction;




     (iii) notify MTVN at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in a Registration
Statement or amendment or supplement relating to such Registrable Securities
contains an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
RealNetworks will promptly prepare and file with the SEC a supplement or amendment
to such prospectus and Registration Statement (and comply with the applicable
provisions of Rules 424, 430A and 430B under the Securities Act) in a timely manner
so that, as thereafter delivered to the purchasers of the Registrable Securities,
such prospectus and Registration Statement will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading;




     (iv) advise the Underwriter, if any, and MTVN promptly and, if requested by
such Persons, confirm such advice in writing, of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of the
qualification of the Registrable Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes. If at any time the SEC shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities commission or
other regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Registrable Securities under state securities
or blue sky laws, RealNetworks shall use its commercially reasonable efforts to
obtain the withdrawal or lifting of such order at the earliest possible time;









 



14



     (v) use its commercially reasonable efforts to cause such Registrable
Securities to be registered with or approved by such other Governmental Entities as
may be necessary by virtue of the business and operations of RealNetworks to enable
MTVN to consummate the disposition of such Registrable Securities (including in
connection with any Takedown Offering); provided that RealNetworks will not
be required to (x) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 2.04(a)(v),
(y) subject itself to taxation in any such jurisdiction or (z) consent to general
service of process in any such jurisdiction;




     (vi) enter into agreements and use commercially reasonable efforts to take
such other actions as are reasonably requested by MTVN in order to expedite or
facilitate the disposition of such Registrable Securities (including in connection
with any Takedown Offering), including preparing for and participating in, such
number of road shows and all such other customary selling efforts as the
Underwriters reasonably request in order to expedite or facilitate such
disposition;




     (vii) make available for inspection by MTVN, any Underwriter participating in
any disposition of such Registrable Securities (including in any Takedown
Offering), and any attorney for MTVN and the Underwriter and any accountant or
other agent retained by MTVN or any such Underwriter (collectively, the
“Inspectors”), all financial and other records, pertinent corporate
documents and properties of RealNetworks (collectively, the “Records”) as
will be reasonably necessary to enable them to conduct customary due diligence with
respect to RealNetworks and the related Registration Statement and prospectus, and
cause the Representatives of RealNetworks and its Subsidiaries to supply all
information reasonably requested by any such Inspector in connection with such
disposition; provided that (x) Records and information obtained hereunder
will be used by such Inspector only to conduct such due diligence, and (y) Records
or information that RealNetworks determines, in good faith, to be confidential will
not be disclosed by such Inspector unless (A) the disclosure of such Records or
information is necessary to avoid or correct a material misstatement or omission in
a Registration Statement or related prospectus or (B) the release of such Records
or information is ordered pursuant to a subpoena or other order from a court or
Governmental Entity with competent jurisdiction;




     (viii) (1) cause RealNetworks’ Representatives to supply all information
reasonably requested by MTVN, or any Underwriter, attorney, accountant or agent in
connection with the Registration Statement or Takedown Offering pursuant to the
Registration Statement and (2) provide MTVN and its counsel with the opportunity to
participate in the preparation of such Registration Statement and the related
prospectus;









 



15



     (ix) use its commercially reasonable efforts to obtain and deliver to each
Underwriter and, if consented to by the accountants referred to below, MTVN, a
comfort letter from the independent public accountants for RealNetworks (and
additional comfort letters from independent public accountants for any company
acquired by RealNetworks whose financial statements are included or incorporated by
reference in the Registration Statement) in customary form and covering such
matters of the type customarily covered by comfort letters as such Underwriter and
MTVN may reasonably request, including (x) that the financial statements included
or incorporated by reference in the Registration Statement or the prospectus, or
any amendment or supplement thereof, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and (y) as to
certain other financial information for the period ending no more than five
Business Days prior to the date of such letter; provided, however,
that if RealNetworks fails to obtain such comfort letter for any Underwriter and
the proposed offering is terminated, then such Demand Registration will not count
as a Demand Registration for purposes of determining when future Demand
Registrations can be requested by MTVN pursuant to Section 2.01;




     (x) use its commercially reasonable efforts to obtain and deliver to each
Underwriter a 10b-5 statement and legal opinion from RealNetworks’ counsel in
customary form and covering such matters as are customarily covered by 10b-5
statements and legal opinions as such Underwriter may reasonably request, including
(1) that the Registration Statement relating to such Registrable Securities has
been declared effective (or become automatically effective) under the Securities
Act, (2) to the knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act,
(3) RealNetworks is not an ineligible issuer within the meaning of Rule 405 under
the Securities Act, (4) such Registration Statement, the related prospectus and
each amendment or supplement thereto comply as to form in all material respects
with the requirements of the Securities Act (except that such counsel need not
express any opinion as to financial information contained therein) and (5) as of an
applicable time identified by MTVN, the Registration Statement, any related
prospectus and the disclosure package (as identified by MTVN or such Underwriter),
do not contain any untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that if RealNetworks fails to obtain
such statement or opinion and the proposed offering is terminated, then such Demand
Registration will not count as a Demand Registration for purposes of determining
when future Demand Registrations can be requested by MTVN pursuant to Section 2.01;









 



16



     (xi) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to its
security holders, within the required time period, an earnings statement covering a
period of 12 months, beginning with the first fiscal quarter after the effective
date of the Registration Statement relating to such Registrable Securities (as the
term “effective date” is defined in Rule 158(c) under the Securities Act),
which earnings statement will satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder or any successor provisions thereto; and




     (xii) use its commercially reasonable efforts to cause such Registrable
Securities to be listed or quoted on NASDAQ and each other securities exchange or
national quotation system on which similar securities issued by RealNetworks are
listed or quoted.



     (b) In connection with the Registration Statement relating to such Registrable Securities
covering an underwritten offering (including any Takedown Offering), RealNetworks and MTVN agree to
enter into a written agreement with each Underwriter selected in the manner herein provided in such
form and containing such provisions (including as to indemnification and contribution) as are
customary in the securities business for such an arrangement between such Underwriter and companies
of RealNetworks’ size and investment stature at the time of the offering (it being understood that
RealNetworks will not require MTVN to make any representation, warranty or agreement in such
agreement other than with respect to MTVN, the ownership of MTVN’s securities being registered and
MTVN’s intended method of disposition). The representations and warranties by, and the other
agreements on the part of, RealNetworks to and for the benefit of such Underwriter in such written
agreement with such Underwriter will also be made to and for the benefit of MTVN. In the event
that any condition to the obligations under any such written agreement with such Underwriter are
not met or waived in connection with a Demand Registration, and such failure to be met or waived is
not attributable to the fault of MTVN but is attributable to the failure of any condition relating
to RealNetworks, the delivery of documents, certificates, lock-up agreements, opinions or comfort
letters on behalf of RealNetworks, “market out” conditions, listing or quotation of the Registrable
Securities, regulatory approvals, legal or regulatory restraints or tax matters, and the proposed
offering is terminated as a result thereof, such Demand Registration will not be deemed to have
been utilized.



     SECTION 2.05. Information and Developments. (a) RealNetworks may require MTVN to
furnish to RealNetworks such information regarding MTVN or the distribution of such Registrable
Securities as RealNetworks may from time to time reasonably request in writing, in each case only
as required by the Securities Act or the rules and regulations thereunder or under state securities
or blue sky laws.



     (b) MTVN agrees that, upon receipt of any notice from RealNetworks of the happening of any
event of the kind described in Section 2.04(a)(iii) hereof or a condition described in Section 2.06
hereof, MTVN will forthwith discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering the sale of









 



17



such Registrable Securities, or Takedown Offering, until MTVN’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 2.04(a)(iii) hereof or notice from
RealNetworks of the termination of the Deferral Period.



     SECTION 2.06. Black-out Period. RealNetworks’ obligations to file or maintain the
effectiveness of a Registration Statement pursuant to Section 2.01 and Section 2.02 hereof will be
suspended if compliance with such obligations would require RealNetworks to disclose a material
financing, acquisition, disposition or other similar corporate development or other materially
adverse nonpublic information concerning RealNetworks, in each case which RealNetworks is not
otherwise required to disclose at such time, and the Board has reasonably determined that such
disclosure would be significantly disadvantageous to RealNetworks, in which case RealNetworks shall
furnish to MTVN a resolution of the Board stating that RealNetworks is delaying compliance with
such obligations pursuant to this Section 2.06 and setting forth in reasonable detail the reasons,
subject to any confidentiality obligations; provided that any such suspension will not
exceed 120 days and all such suspensions will not exceed 180 days in any 12-month period (the
“Deferral Period”). RealNetworks will promptly give MTVN written notice of any such
suspension containing the approximate length of the anticipated delay, and RealNetworks will notify
MTVN upon the termination of the Deferral Period.



     SECTION 2.07. Registration Expenses. All fees and expenses incident to RealNetworks’
performance of or compliance with the obligations of this Article II, including all fees and
expenses of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel for any Underwriters in connection with blue sky qualifications of
Registrable Securities), printing expenses, messenger and delivery expenses of RealNetworks, any
registration or filing fees payable under any Federal or state securities or blue sky laws, the
fees and expenses incurred in connection with any listing or quoting of the securities to be
registered on any national securities exchange or automated quotation system, fees of the National
Association of Securities Dealers, Inc., fees and disbursements of counsel for RealNetworks, fees
of its independent certified public accountants and any other public accountants who are required
to deliver comfort letters (including the expenses required by or incident to such performance),
transfer taxes, fees of transfer agents and registrars, costs of insurance, reasonable fees and
expenses of one counsel (in addition to any local counsel) for MTVN and the fees and expenses of
other Persons retained by RealNetworks, and any fees and expenses incurred in connection with a
Takedown Offering, will be borne by RealNetworks. MTVN will bear and pay any underwriting
discounts and commissions applicable to Registrable Securities offered for its account pursuant to
any Registration Statement (including in connection with any Takedown Offering).



     SECTION 2.08. Indemnification; Contribution. (a) In connection with any registration
of Registrable Securities or Takedown Offering pursuant to Section 2.01 or Section 2.02 hereof,
RealNetworks agrees to indemnify and hold harmless, to the fullest extent permitted by Law, MTVN,
its Affiliates, directors, officers and stockholders and each Person who controls MTVN within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively,
the “Indemnified Persons”) against any and all losses, claims, damages, liabilities and









 



18



expenses, joint or several (including reasonable attorneys’ fees) caused by any untrue or
alleged untrue statement of material fact contained in any part of any Registration Statement, any
preliminary or final prospectus used in connection with the Registrable Securities or any Issuer
FWP, or any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a prospectus, in the light of
the circumstances under which they were made) not misleading; provided that RealNetworks
will not be required to indemnify any Indemnified Persons for any losses, claims, damages,
liabilities or expenses resulting from any such untrue statement or omission if such untrue
statement or omission was made in reliance on and in conformity with any information with respect
to any Indemnified Person furnished to RealNetworks in writing by MTVN expressly for use therein.
In connection with an underwritten offering (including any Takedown Offering), RealNetworks will
indemnify each Underwriter, the officers and directors of such Underwriter, and each Person who
controls such Underwriter (within the meaning of either the Securities Act or the Exchange Act) to
the same extent as provided above with respect to the indemnification of MTVN; provided
that such Underwriter agrees to indemnify RealNetworks to the same extent as provided below with
respect to the indemnification of RealNetworks by MTVN.



     (b) In connection with any Registration Statement, preliminary or final prospectus or Issuer
FWP, MTVN agrees to indemnify RealNetworks, the Directors, its officers who sign such Registration
Statement and each Person, if any, who controls RealNetworks (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as the
foregoing indemnity from RealNetworks to MTVN, but only with respect to information with respect to
any Indemnified Person furnished to RealNetworks in writing by MTVN expressly for use in such
Registration Statement, preliminary or final prospectus, or Issuer FWP.



     (c) In case any proceeding (including any governmental investigation) will be instituted
involving any Person in respect of which indemnity may be sought pursuant to Section 2.08(a) or
(b), such Person (hereinafter called the “indemnified party”) will promptly notify the
Person against whom such indemnity may be sought (hereinafter called the “indemnifying
party”) in writing and the indemnifying party, upon request of the indemnified party, will
retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party
and will pay the fees and disbursements of such counsel related to such proceeding;
provided that failure to so notify an indemnifying party shall not relieve it from any
liability which it may have hereunder, except to the extent that the indemnifying party is
materially prejudiced by such failure to give notice. In any such proceeding, any indemnified
party will have the right to retain its own counsel, but the fees and expenses of such counsel will
be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified
party will have mutually agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying party and the
indemnified party and the indemnified party will have been advised in writing by counsel that
representation of both parties by the same counsel would be inappropriate due to actual or
potential conflicting interests between them. It is understood that the indemnifying party will
not, in connection with any proceeding or









 



19



related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel) at any time for all
such indemnified parties, and that all such reasonable fees and expenses will be reimbursed as they
are incurred. In the case of the retention of any such separate firm for the indemnified parties,
such firm will be designated in writing by the indemnified parties. The indemnifying party will
not be liable for any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there has been a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or liability by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party will have requested an indemnifying party to reimburse the indemnified party for reasonable
fees and expenses of counsel as contemplated by the third sentence of this Section 2.08(c), the
indemnifying party agrees that it will be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 15 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying party will not have
reimbursed the indemnified party in accordance with such request or reasonably objected in writing,
on the basis of the standards set forth herein, to the propriety of such reimbursement prior to the
date of such settlement. No indemnifying party will, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement is of a claim for monetary damages
only, such claim has been settled by the payment of money only and such settlement includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such proceeding.



     (d) If the indemnification provided for in this Section 2.08 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to in this Section 2.08, then the indemnifying party, in lieu of
indemnifying such indemnified party, will contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party will be determined by reference to, among
other things, whether any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above will be deemed to include, subject to the limitations
set forth in Section 2.08(c), any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.



     (e) The parties agree that it would not be just and equitable if contribution pursuant to
Section 2.08(d) were determined by pro rata allocation or by any other









 



20



method of allocation that does not take into account the equitable considerations referred to
in Section 2.08(d). No Person guilty of “fraudulent misrepresentation” (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.



     (f) Notwithstanding the provisions of this Section 2.08, MTVN shall not be required to make
any indemnification or contribution payment, in the aggregate, in any amount in excess of the
amount of the net proceeds received by MTVN with respect to the Registrable Securities.



     (g) If indemnification is available under this Section 2.08, the indemnifying party will
indemnify each indemnified party to the full extent provided in Sections 2.08(a) and (b) without
regard to the relative fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in Section 2.08(d) or (e).



     SECTION 2.09. Rule 144. For so long as RealNetworks is subject to the requirements of
Section 13, 14 or 15(d) of the Securities Act, RealNetworks agrees that it will timely file the
reports required to be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder and it will take such further action as MTVN reasonably
may request, all to the extent required from time to time to enable MTVN to sell Registrable
Securities within the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such rule may be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of MTVN, RealNetworks will deliver to MTVN a written
statement as to whether it has complied with such requirements.



     SECTION 2.10. Lock-Up. If and to the extent requested by the lead Underwriter of an
underwritten offering of Registrable Securities (including any Takedown Offering), RealNetworks and
MTVN agree not to effect, and to cause their respective Affiliates not to effect, except as part of
such registration, any offer, sale, pledge, transfer or other distribution or disposition or any
agreement with respect to the foregoing, of the issue being registered or offered, as applicable,
or of a similar security of RealNetworks, or any securities into which such Registrable Securities
are convertible, or any securities convertible into, or exchangeable or exercisable for, such
Registrable Securities, including a sale pursuant to Rule 144 under the Securities Act, during a
period of up to seven days prior to, and during a period of up to 120 days after, the effective
date of such registration, or the date of consummation of such Takedown Offering, as applicable, as
reasonably requested by the lead Underwriter; provided that in no event will MTVN be
restricted hereunder for more than 180 days in any 12-month period (including, for purposes hereof,
restrictions under Section 2.01(e)). The lead Underwriter shall give RealNetworks and MTVN prior
notice of any such request.



     SECTION 2.11. Other Registration Rights. RealNetworks has not granted and will not
grant to any third party any registration rights more favorable than or inconsistent with any of
those contained herein, so long as any of the registration rights under this Agreement remain in
effect.

















 





21




ARTICLE III




Access to Information




     SECTION 3.01. Access to Information. So long as MTVN’s Outstanding Percentage
Interest is at least 10%, upon reasonable prior written notice (i) RealNetworks shall provide MTVN
with reasonable access to the senior executive team of RealNetworks; provided that such
senior executives shall not be required to provide MTVN with any material non-public information in
any such meeting, (ii) RealNetworks shall furnish MTVN with financial, operating and other data and
information of RealNetworks and its Subsidiaries as MTVN may from time to time reasonably request
in writing consistent with its duty to provide such information to shareholders in general and
(iii) RealNetworks will, and will cause its Subsidiaries and the Representatives of RealNetworks
and its Subsidiaries to, afford MTVN and its Representatives reasonable access, consistent with
applicable Law, to its and its Subsidiaries’ Representatives, and to the books and records of
RealNetworks and its Subsidiaries. Neither RealNetworks nor its Subsidiaries shall be required to
provide access to or to disclose information where such access or disclosure would jeopardize the
attorney-client privilege of RealNetworks or its Subsidiaries or contravene any Law (including
antitrust laws). MTVN agrees, and will cause its Representatives to agree, to keep all such
information confidential, except to the extent required by law or to the extent such information
otherwise is or becomes publicly available. To the extent that MTVN is provided with material
non-public information by any such member of the senior executive team of RealNetworks in any such
meeting referenced in clause (i) above, MTVN acknowledges (A) that MTVN has received a copy of
RealNetworks’ Policy on Avoidance of Insider Trading that is in effect as of the date hereof and
(B) that applicable securities laws restrict trading on the basis of material non-public
information.



ARTICLE IV




Standstill




     SECTION 4.01. Standstill. MTVN covenants and agrees with RealNetworks that, for a
period of three years or for such period as MTVN’s Outstanding Percentage Interest is at least 5%,
whichever is shorter, from the effectiveness of this Agreement, MTVN shall not, and it will cause
its Affiliates not to, directly or indirectly, alone or in concert with others, unless authorized
by the chief executive officer of RealNetworks or by a resolution of a majority of the Directors,



     (a) publicly propose, or participate in a Group with any other Person who has publicly
proposed, any Business Combination;



     (b) acquire, offer or propose to acquire, solicit an offer to sell or agree to acquire, by
purchase or otherwise, any Beneficial Ownership of any voting securities of RealNetworks or rights,
warrants or options to acquire, or securities convertible into or exchangeable for, any voting
securities of RealNetworks, except as contemplated by this Agreement, the LLC Agreement or any
transaction to which RealNetworks is a party;









 



22


     (c) make, or in any way participate in, any “solicitation” of “proxies” to vote (as such
terms are used in the proxy rules of the SEC promulgated pursuant to Section 14 of the Exchange
Act) any voting securities of RealNetworks;



     (d) form, join or any way participate in a “group” within the meaning of Section 13(d)(3) of
the Exchange Act with respect to any voting securities of RealNetworks;



     (e) arrange, or in any way participate, directly or indirectly, in any financing for the
purchase of any voting securities of RealNetworks or any securities convertible into or
exchangeable or exercisable for any voting securities or assets of RealNetworks, except for such
assets as are then being offered for sale by RealNetworks or any of its Affiliates;



     (f) otherwise seek to propose to the RealNetworks or any of its stockholders any Business
Combination or otherwise seek to control or change the management or board of directors of
RealNetworks or nominate any person as a director who is not nominated by the then incumbent
directors, or propose any matter to be voted upon by the stockholders of RealNetworks, except as
contemplated by this Agreement;



     (g) make any request or proposal to amend, waive or terminate any provision of this Section
4.01; or



     (h) take any action that might result in RealNetworks having to make a public announcement
regarding any of the matters referred to in clauses (a) through (g) of this Section 4.01, or
announce an intention to do, or enter into any arrangement or understanding or discussions with
others to do, any of the actions restricted or prohibited under such clauses (a) through (g) of
this Section 4.01.



     SECTION 4.02. Exceptions to Standstill. MTVN shall not be subject to any of the
restrictions set forth in Section 4.01 if (a) the Board determines to solicit bids for the
acquisition of RealNetworks, (b) the Board shall have recommended in favor of or shall have entered
into a definitive agreement providing for any Business Combination except that references to 20% of
any class of Equity Securities of RealNetworks or any resulting parent company of RealNetworks in
the definition thereof shall be changed to the greater of (A) 35% of the Voting Stock of
RealNetworks or any resulting parent company of RealNetworks and (B) one share more than the number
of shares of Voting Stock of RealNetworks or any resulting parent company of RealNetworks then
Beneficially Owned by Robert Glaser, for purposes hereof, (c) any Person or Group (other than MTVN
or any Group that includes MTVN), at any point in time, acquires, has acquired or otherwise has
Beneficial Ownership of the greater of (A) 35% of the Voting Stock of RealNetworks or any resulting
parent company of RealNetworks and (B) one share more than the number of shares of Voting Stock of
RealNetworks or any resulting parent company of RealNetworks then Beneficially Owned by Robert
Glaser or (d) any Person (other than MTVN or its Affiliates) commences a “going private”
transaction subject to Rule 13e-3 under Section 13(e) of the Exchange Act involving RealNetworks.









 



23

For purposes of this Article IV, neither RealNetworks nor Robert Glaser shall be deemed to be
an Affiliate of MTVN or part of a Group with MTVN or any of its Affiliates.




     SECTION 4.03. Fiduciary Duties. Notwithstanding anything herein to the contrary,
nothing in this Article IV shall in any way restrict a designee of MTVN, should such a designee
ever ascend to the Board, in his or her capacity as a Director or Board committee member from
complying with his or her fiduciary duties in such capacity (including voting as a Director or
Board committee member) as he or she may determine.



ARTICLE V




Transfer Restrictions




     SECTION 5.01. Restrictions on Transfer. Without the consent of RealNetworks, MTVN
agrees that (i) in any 10 consecutive Trading Day period it shall not Transfer an amount of Common
Stock and/or Non-Voting Equity in excess of one percent of the aggregate number of shares of Common
Stock and Non-Voting Equity outstanding on the first day of such 10 consecutive Trading Day period
and (ii) in any three-month period it shall not Transfer an amount of Common Stock and/or
Non-Voting Equity in excess of the greater of (x) one percent of the aggregate number of shares of
Common Stock and Non-Voting Equity outstanding on the first day of such three-month period and (y)
the average weekly trading volume of the Common Stock during the four weeks preceding the first day
of such three-month period; provided that the foregoing shall not apply to any Transfer:



     (a) to RealNetworks or any of its Affiliates;



     (b) to any Permitted Transferee, so long as such Permitted Transferee agrees to be
bound by the terms of this Agreement (if not already bound hereby);



     (c) in connection with an underwritten offering pursuant to the registration rights
provisions of Article II;



     (d) pursuant to a bona fide third party tender offer or exchange offer; or



     (e) arising as a result of a merger, consolidation, binding share exchange or similar
transaction involving RealNetworks.



ARTICLE VI




Miscellaneous




     SECTION 6.01. Effectiveness and Termination. (a) This Agreement will become
effective upon the closing of a put/call pursuant to Section 10.03 of the LLC Agreement in which
Common Stock or Non-Voting Equity is issued or delivered to MTVN or its Affiliates.









 



24


     (b) This Agreement shall terminate at such time as MTVN’s Outstanding Percentage Interest is
less than 5%.



     SECTION 6.02. Interpretation. When a reference is made in this Agreement to an
Article, a Section, a Subsection or a Schedule, such reference will be to an Article, a Section, a
Subsection or a Schedule of this Agreement unless otherwise indicated. 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. Whenever the words “include”, “includes” or “including” are used
in this Agreement, they will be deemed to be followed by the words “without limitation”. The words
“hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement will
refer to this Agreement as a whole and not to any particular provision of this Agreement. The
words “date hereof” will refer to the date of this Agreement. The term “or” is not exclusive. The
word “extent” in the phrase “to the extent” will mean the degree to which a subject or other thing
extends, and such phrase will not mean simply “if”. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms. Any agreement or
instrument defined or referred to herein or in any agreement or instrument that is referred to
herein means such agreement or instrument as from time to time amended, modified or supplemented.
References to a Person are also to its permitted successors and assigns.



     SECTION 6.03. Adjustments. References to numbers of shares and to sums of money
contained herein will be adjusted to account for any reclassification, exchange, substitution,
combination, stock split or reverse stock split of the shares.



     SECTION 6.04. Commercially Reasonable Efforts; Further Actions. The parties hereto
each will use all commercially reasonable efforts to take or cause to be taken all action and to do
or cause to be done all things necessary, proper or advisable under applicable Laws and regulations
to consummate and make effective the transactions contemplated by this Agreement as promptly as
practicable.



     SECTION 6.05. Consents. The parties hereto will cooperate with each other in filing
any necessary applications, reports or other documents with, giving any notices to, and seeking any
consents from, all regulatory bodies, Governmental Entities and all third parties as may be
required in connection with the consummation of the transactions contemplated by this Agreement.



     SECTION 6.06. Notices. Except as otherwise expressly provided in this Agreement, all
notices, requests and other communications to any party hereunder shall be in writing (including a
facsimile or similar writing) and shall be given to such party at the address or facsimile number
set forth for such party below or as such party shall hereafter specify for the purpose by notice
to the other parties. Each such notice, request or other communication shall be effective (i) if
given by facsimile, at the time such facsimile is transmitted and the appropriate confirmation is
received (or, if such time is not during a Business Day, at the beginning of the next such Business
Day), (ii) if given by mail, five Business Days (or, (x) if by overnight courier, one Business Day,
or (y) if to an address outside the United States, seven Business Days) after such communication is









 



25



deposited in the mails with first-class postage prepaid, addressed as aforesaid, or (iii) if
given by any other means, when delivered at the address specified pursuant to this Section 6.06.



     (a) if to RealNetworks:


2601 Elliott Avenue

Suite 1000

Seattle, WA 98121

Phone: 206-674-2700

Attention: Robert Kimball, Senior Vice President, Legal and 
Business
Affairs, and General Counsel




     with copies to:


Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Fax: 212-310-8677

Phone: 212-310-8362

Email: ted.waksman@weil.com

Attention: Ted S. Waksman, Esq.



RealNetworks, Inc.

519 Eighth Avenue

New York, New York 10018

Fax: 212 391-9566

Phone: 212 710-0211

Email: dnemo@real.com

Attention: Dan Nemo, Vice President




     (b) if to MTVN:


1515 Broadway

New York, NY 10036

Fax: 212-258-6099

Phone: 212-258-6070

Email: michael.fricklas@viacom.com

Attention: Michael D. Fricklas, Esq.










 



26




     with a copy to:


Cravath, Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

Fax: 212-474-3700



Phone: 212-474-1000



Email: fsaeed@cravath.com

Attention: Faiza J. Saeed, Esq.




     SECTION 6.07. No Third Party Beneficiaries. This Agreement shall be binding upon and
inure to the benefit of all the parties hereto and their successors and assigns, and their legal
representatives. No party may assign this Agreement or any of its rights, interests or
obligations. Except for the provisions of Article II, this Agreement is not intended to confer any
rights or remedies hereunder upon, and shall not be enforceable by, any Person other than the
parties hereto.



     SECTION 6.08. Waiver. No failure by any party to insist upon the strict performance
of any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy
consequent upon a breach of such or any other covenant, agreement, term or condition shall operate
as a waiver of such or any other covenant, agreement, term or condition of this Agreement. Any
party by notice given in accordance with Section 6.06 may, but shall not be under any obligation
to, waive any of its rights or conditions to its obligations hereunder, or any duty, obligation or
covenant of any other party. No waiver shall affect or alter the remainder of this Agreement but
each and every covenant, agreement, term and condition hereof shall continue in full force and
effect with respect to any other then existing or subsequent breach. The rights and remedies
provided by this Agreement are cumulative and the exercise of any one right or remedy by any party
shall not preclude or waive its right to exercise any or all other rights or remedies.



     SECTION 6.09. Integration. This Agreement and the Transaction Documents (as defined
in the Transaction, Contribution and Purchase Agreement dated as of August 20, 2007, among MTVN
Parent, DMS Holdco Inc., RealNetworks, RealNetworks Digital Music of California, Inc. and Rhapsody
America LLC) and all other written agreements contemporaneously entered into herewith by the
parties constitute the entire agreement among the parties hereto pertaining to the subject matter
hereof and supersede all prior agreements and understandings of the parties in connection herewith,
and no covenant, representation or condition not expressed in this Agreement shall affect, or be
effective to interpret, change or restrict, the express provisions of this Agreement.



     SECTION 6.10. Headings. The titles of Articles and Sections of this Agreement are for
convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement.









 



27


     SECTION 6.11. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which, taken together, shall constitute one
and the same instrument and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.



     SECTION 6.12. Severability. Each provision of this Agreement shall be considered
separable and if for any reason any provision or provisions hereof are determined to be invalid and
contrary to any existing or future Law, such invalidity shall not impair the operation of or affect
those portions of this Agreement which are valid; provided, however, that in such
case the parties hereto shall endeavor to amend or modify this Agreement to achieve to the extent
reasonably practicable the purpose of the invalid provision.



     SECTION 6.13. Amendments and Modifications. This Agreement may be amended or modified
at any time and from time to time with the written consent of each party hereto.



     SECTION 6.14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of New York without giving effect to the conflicts of law
principles thereof.



     SECTION 6.15. Dispute Resolution. Any and all disputes arising out of or relating to
any aspect of this Agreement shall be resolved pursuant to the provisions set forth in Schedule I.



     SECTION 6.16. Waiver of Jury Trial. Each of the parties to this Agreement irrevocably
waives any and all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated by this Agreement.



     SECTION 6.17. Absence of Presumption. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement and, in the event of ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted jointed by such parties
and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement.



     SECTION 6.18. Expenses. Except as otherwise provided in Article II, each of MTVN and
RealNetworks shall be responsible for its own expenses incurred in connection with this Agreement.



     SECTION 6.19. Articles of Incorporation and By-Laws. RealNetworks shall take or cause
to be taken all lawful action necessary to ensure at all times that the Articles of Incorporation,
By-Laws and corporate governance policies and guidelines of RealNetworks are not at any time
inconsistent in any material respect with the provisions of this Agreement.









 



28


     SECTION 6.20. Change in Law. In the event any Law comes into force or effect
(including by amendment) which conflicts with the terms and conditions of this Agreement, the
parties will negotiate in good faith to revise this Agreement to achieve the parties’ intention set
forth herein to the greatest extent possible.









 



29


     IN WITNESS WHEREOF, the parties hereto have executed this Stockholder Agreement as of the day
and year first above written.



	 	 	 	 	 
	 

	VIACOM INTERNATIONAL INC.,
	 
	 	 	 	 
	 

	 	by
	 	/s/ MICHAEL D. FRICKLAS
	 

	 	 	 	 
	 

	 	 	 	Name: Michael D. Fricklas
	 

	 	 	 	Title: Executive Vice President,
	 

	 	 	 	          General Counsel and Secretary












 



30


	 	 	 	 	 
	 

	REALNETWORKS, INC.
	 
	 	 	 	 
	  

	 	by
	 	/s/ ROBERT GLASER
	 

	 	 	 	 
	 

	 	 	 	Name: Robert Glaser
	 

	 	 	 	Title: Chief Executive Officer












 



 


SCHEDULE I




DISPUTE RESOLUTION




Article I



Dispute Resolution. (a) Any and all disputes arising out of or relating to any provision
of this Agreement, except as set forth in paragraph (g), shall be resolved exclusively pursuant to
arbitration conducted in Seattle, Washington and administered by JAMS or any successor entity
thereto (“JAMS”), in accordance with its Comprehensive Rules and Procedures (“JAMS Rules”) as
modified by the provisions herein. The arbitration shall be conducted by a panel of three (3)
arbitrators (the “panel”). Each party shall select one arbitrator (a “party arbitrator”) and the
two party arbitrators shall select a third arbitrator, who will be the Chairperson. The persons
considered for selection as arbitrators hereunder shall not be limited to persons identified by
JAMS. All three arbitrators shall be neutral and independent of the appointing party. There shall
be no ex parte communications with the party arbitrators after the first organizational meeting.
The confidentiality of all proceedings related to any arbitration shall be strictly maintained, as
shall the confidentiality of any documents, deposition testimony, or other information exchanged in
relation to the arbitration proceedings (except as information may be required in any judicial
proceeding brought to enforce these arbitration provisions or any award rendered hereunder).



(b) Without limiting the generality of paragraph (a), it is understood that this Article does not
apply to any disputes concerning intellectual property rights, other than to disputes arising out
of any express grant or license of any intellectual property rights owned or controlled by any of
the parties to this Agreement and made or allegedly made to one another or to the Company pursuant
to any of the transaction documents entered into in connection with the creation of the Company,
including but not limited to disputes relating to the scope, nature or duration of such grant or
license, whether there has been a grant or license of certain intellectual property rights, and/or
the applicable terms, conditions, limitations, representations and warranties and indemnities
relating to or arising from any such grant or license, all of which disputes, for the avoidance of
doubt, shall be subject to arbitration pursuant to the terms hereof.



(c) Prior to commencing arbitration, a party shall deliver notice of the applicable dispute to the
other parties and the parties shall meet and discuss possible resolution of such dispute. Within
thirty (30) days of delivery of notice of a dispute, senior executives of the MTVN Music Group (as
defined in the LLC Agreement) and RealNetworks shall meet and attempt to negotiate a resolution.
After notice and the expiration of such thirty (30) day period either party may commence
arbitration.



(d) The panel shall be requested to use reasonable efforts to render its decision and award within
six (6) months of the first organizational meeting. The panel shall allow reasonable discovery,
relevant to the issues before it, subject to the goal of completing the proceedings within the
specified time frame. Except with respect to custodial depositions, depositions shall be limited
to a maximum total number of fifty hours for each party, except in extraordinary cases. The
decision of the panel shall be final.










 



 



(e) The panel shall render findings of fact and conclusions of law and a written opinion setting
forth the basis and reasons for any decision reached. In rendering an award, the panel shall
determine the rights and obligations of the parties according to the substantive laws of the State
of Delaware and of the United States.



(f) The panel shall have the authority to grant any equitable or legal relief that would be
available in any judicial proceeding instituted to resolve the disputed matter, including interim
relief, but the panel shall not have the authority to grant any remedies the parties have waived in
the Agreement or to award punitive or exemplary damages. The panel shall have the authority to
award costs, including reasonable attorneys fees, of any arbitration.



(g) Each of the parties agrees that it will not bring any action relating to the interpretation,
application or enforcement of the provisions of this Article or seeking emergency or temporary
relief prior to appointment of the panel in any court other than a Federal or state court sitting
in the State of Delaware, and the laws of the State of Delaware shall apply to any such action.
With respect to any such action, each of the parties hereby consents to and submits itself and its
property to the personal jurisdiction of any Federal or state court located in the State of
Delaware. Each of the parties hereby waives any rights such party may have to personal service of
a summons, complaint or other process in connection with such an action and agrees that service may
be made by registered or certified mail addressed to such party and sent in accordance with the
provisions of this Agreement. The parties acknowledge and agree that upon appointment of the
panel, it shall have the exclusive authority to grant relief.



(h) The parties hereby also consent to the personal jurisdiction of any Federal or state court in
the County of New York or in Seattle, Washington, for the purpose of confirming any award and
entering judgment thereon. The parties hereby waive any and all objections that they may have as
to jurisdiction or venue in any of such courts.