September 25, 2001 – American songwriters and music publishers have reached preliminary agreement with the on-line file sharing service Napster to settle the class-action lawsuit currently pending in federal court in California. The agreement includes terms under which the songwriters and music publishers will license their music to Napster's new membership-based service. The deal is now subject to the approval of Chief Judge Marilyn Hall Patel of the United States District Court for the Northern District of California, by the plaintiffs in the class action, and by the NMPA Board of Directors.

"You can mark this date on your calendar," said SGA's George David Weiss, composer of such classic musical standards as "Can't Help Falling in Love," "What A Wonderful World," and "The Lion Sleeps Tonight." "Today, the American music community and the on-line community together took a giant leap forward. This settlement, which only a few weeks ago seemed a near-impossibility, will hopefully lead to immediate and unprecedented growth in the licensed use of music on the Internet."

"Today I am extremely pleased to celebrate the beginning of a new Napster," announced Martin Bandier, Chairman and Chief Executive of EMI Music Publishing Company. "A Napster that, like its predecessor, will empower millions of people to share their passion for music. A Napster that, quite unlike its predecessor, will respect the rights of those who create that music. In partnership we will be able to tap the immense potential that the Internet offers in bringing music, legitimately, to a new and expanding audience."

The terms agreed to by the parties include the payment by Napster to music creators and copyright owners of $26 million in settlement of damages for past, unauthorized uses of music. Napster will also render an advance against future licensing royalties of $10 million, under a payment structure based on the Audio Home Recording Act. That legislation allocates to songwriters and music publishers royalties in a one-third to two-thirds ratio with copyright owners of sound recordings.

The Harry Fox Agency, Inc. the licensing subsidiary of NMPA, will license rights, collect and distribute royalties, and monitor compliance under the Agreement, on behalf of the copyright owners of musical compositions.

"Today's announcement with Napster sets an important precedent for licensing music used on the Internet," stated HFA's CEO Gary Churgin. "It recognizes the exceptional value of the musical compositions owned and controlled by American songwriters and music publishers. The Harry Fox Agency is pleased to provide the new Napster with access to our electronic licensing system on behalf of our publisher principals."

Napster intends to launch its new membership-based file sharing service later this year with recordings from hundreds of independent record labels. Napster will also separately offer music from the BMG, EMI and AOL/Time Warner labels through MusicNet.

Legendary songwriters Jerry Leiber and Mike Stoller, who wrote "Stand By Me," "You Ain't Nothin' But A Hound Dog," "On Broadway," and "Poison Ivy," as well as Frank Music Corp., are the representative plaintiffs in the action. The songwriters and publishers were represented in negotiations by Edward P. Murphy and Gary L. Churgin as well as trial counsel Carey R. Ramos of the law firm Paul Weiss Rifkind Wharton & Garrison, and NMPA/HFA counsel Charles J. Sanders. Napster was represented by Konrad Hilbers, COO Milton Olin, counsel Jonathan Schwartz, and VP for Corporate and Policy Development Manus Cooney.