Cleary Gottlieb is representing Tower Records Japan, Inc. in the creation of a Japan-based joint venture with Napster LLC, a wholly owned subsidiary of Napster, Inc., to operate the Napster online music service across digital distribution channels in Japan. The parties executed a binding memorandum of understanding describing the principal terms of the joint venture and expect to sign definitive agreements by October 1.
Under the terms of the memorandum of understanding, Tower will contribute up to $7 million in cash and undertake additional funding obligations in exchange for an approximately 70% equity stake in the joint venture, and Napster will provide up to $3 million in cash in exchange for a 30% equity stake.
Tower is the leading retailer of recorded music in Japan.