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Exhibit
10.1
EXECUTION
COPY
CONTRIBUTION
AGREEMENT
THIS CONTRIBUTION
AGREEMENT is made as of February 11, 2005 (this “
Agreement ”), by and among MYSPACE, INC., a Delaware
corporation (the “ Company ”), INTERMIX MEDIA,
INC., a Delaware corporation (“ Intermix ”),
SOCIAL LABS, LLC, a Delaware limited liability company (“
Social Labs ”) and MYSPACE VENTURES, LLC, a California
limited liability company (“ MSV ,” and together
with Social Labs, the “ Contributors
”).
RECITALS
WHEREAS , as of the
date hereof, Intermix is the sole shareholder of and owns 100% of
the outstanding limited liability company interests in Social
Labs;
WHEREAS , as of the
date hereof, Social Labs and MSV hold an interest in certain assets
used in the operation of the business known as myspace.com and the
associated website located at www.myspace.com (collectively, the
“ Business ”);
WHEREAS , the
Contributors desire to contribute all of their respective right,
title and interest in and to the Contributed Assets (as defined
below) to the Company upon the terms and conditions set forth
herein;
WHEREAS , the Company
desires to accept from the Contributors the all of the
Contributors’ right, title and interest in and to the
Contributed Assets on the terms and conditions set forth herein
and, in consideration therefor, (i) (a) to issue shares of common
stock of the Company (the “ Common Stock ”) and
pay cash to each Contributor and (b) to issue a promissory note in
the form of Exhibit A hereto to Social Labs (which shall be
immediately assigned by Social Labs to Intermix) (the “
Promissory Note ”) and (ii) to assume the Assumed
Liabilities (as defined below).
WHEREAS , the
transactions contemplated by this Agreement and the transactions
contemplated by that certain Series A Preferred and Common Stock
Purchase Agreement, dated of even date herewith, by and between the
Company and the Purchasers (as defined therein) are intended to
constitute a single transaction for purposes of Section 351 of the
Internal Revenue Code of 1986, as amended.
CONTRIBUTION AGREEMENT
NOW, THEREFORE , in
consideration of the mutual covenants and promises contained herein
and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
AGREEMENT
Section 1. Contribution
and Assumption .
(a) On and as of the date
hereof, each Contributor hereby sells, assigns, transfers, conveys
and delivers to the Company all of its right, title, and interest
in, to and under the assets of the Business identified on
Exhibit B (the “ Contributed Assets ”).
On and as of the date hereof, the Company hereby accepts the
foregoing assignment of each Contributed Asset.
(b) Notwithstanding anything
to the contrary contained herein (including on Exhibit B), the
Contributed Assets shall not include, and the Contributors shall
not contribute any of their rights, title or interest in and to any
asset identified on Exhibit C or any other asset that is not
used primarily in the Business (the “ Excluded Assets
”).
(c) Upon the terms and
subject to the conditions of this Agreement, the Company hereby
assumes, effective as of the date hereof, and agrees to pay,
perform and discharge when due, and indemnify, defend and hold
harmless from and after the Closing Date (as defined below)
Intermix, Social Labs, MSV and each of their respective affiliates,
and each of their respective officers, directors and employees,
from and against any and all obligations and liabilities, whether
known or unknown, arising out of, relating to or otherwise in
respect of the Contributed Assets, the Business or the operation or
conduct of the Business before, the date hereof (collectively, the
“ Assumed Liabilities ”), including without
limitation the liabilities listed on Exhibit D , but
excluding the liabilities listed on Exhibit E (the “
Retained Liabilities ”).
(d) (i) Notwithstanding
anything in this Agreement to the contrary, this Agreement shall
not constitute an agreement to assign any asset or any claim or
right or any benefit arising under or resulting from such asset if
an attempted assignment thereof, without the consent of a third
party, would constitute a breach, default, violation or other
contravention of the rights of such third party, would be
ineffective with respect to any party to an agreement concerning
such asset, claim or right, or would in any way adversely affect
the rights of either Contributor or, upon transfer, the Company
under such asset, claim or right. If any transfer or assignment by
the Contributors to the Company, or any assumption by the Company
of, any interest in, or liability, obligation or commitment under,
any asset, claim or right requires the consent of a third party,
then such transfer or assignment or assumption shall be made
subject to such consent being obtained. The Company agrees that
neither Contributor nor any of such Contributor’s affiliates
shall have any liability to the Company arising out of or relating
to the failure to obtain any such consent or because of any
circumstances resulting therefrom.
(ii) If any such consent has
not been obtained prior to the consummation of this Agreement, the
parties shall use commercially reasonable efforts to secure such
consent as promptly as practicable and Contributors shall cooperate
with the Company (at the Company’s expense) to structure a
lawful and commercially reasonable arrangement under which (i) the
Company shall obtain (without infringing upon the legal rights of
such third party or violating any applicable law) the economic
claims, rights and benefits (net of the amount of any related tax
costs imposed on either Contributor or any of their respective
affiliates) under the asset, claim or right with respect to which
the consent has not been obtained and (ii) the Company shall assume
any related economic burden (including the amount of any related
tax
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CONTRIBUTION AGREEMENT
costs imposed on either
Contributor or any of their respective affiliates) with respect to
the asset, claim or right with respect to which the consent has not
been obtained.
(e) The Company hereby
acknowledges and agrees that neither Contributor makes any
representations or warranties whatsoever, express or implied, with
respect to any matter relating to this Agreement, the Contributed
Assets or the Assumed Liabilities, except that each Contributor,
severally and not jointly, hereby represents and warrants that (i)
such Contributor has all necessary power and authority to execute
and deliver this Agreement and to carry out its provisions; (ii)
all action on Contributor’s part required for the lawful
execution and delivery of this Agreement has been taken; (iii) upon
such Contributor’s execution and delivery, this Agreement
will be a valid and binding obligation of such Contributor,
enforceable in accordance with their terms, except (x) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of
creditors’ rights, and (y) as limited by general principles
of equity that restrict the availability of equitable
remedies.
Without limiting the foregoing (but
subject to Section 1(e)), each Contributor hereby disclaims any
warranty (express or implied) of merchantability or fitness for any
particular purpose as to any portion of the Contributed Assets.
Accordingly (but subject to Section 1(e)), the Company accepts the
Contributed Assets and the Assumed Liabilities “AS IS,”
“WHERE IS,” and “WITH ALL
FAULTS.”
Section 2.
Consideration
(a) In consideration of the
contribution and assignment to the Company of the Contributed
Assets hereunder, on the date hereof, in addition to the
Company’s assumption of the Assumed Liabilities, the Company
shall (i) issue the Promissory Note to Social Labs (which shall be
immediately assigned to Intermix and restated to reflect that
Intermix shall be the Payee thereunder), (ii) pay $3,764,950 in
cash by wire transfer of immediately available funds to MSV, (iii)
pay $2,776,387 in cash by wire transfer of immediately available
funds to Intermix, (iv) issue 1,598,747 shares of Common Stock of
the Company to MSV and (v) issue 4,024,192 shares of Common Stock
of the Company to Social Labs (which shares shall be distributed
immediately to Intermix).
(b) In the event the amount
of the Intermix Advance (as defined below) exceeds $1.5 million
(the amount of such excess, the “ Excess Intermix
Advance” ), then the principal amount of the Promissory
Note shall be increased by the amount of the Excess Intermix
Advance (and the Company shall deliver to Intermix an amended and
restated Promissory Note reflecting such increased principal amount
in exchange for cancellation of the original Promissory Note). In
the event the amount of the Intermix Advance is less than $1.5
million (the amount by which the Intermix Advance is less than $1.5
million, the “ Intermix Advance Shortfall ”),
then the principal amount of the Promissory Note shall be reduced
by the amount of the Intermix Advance Shortfall (and the Company
shall deliver to Intermix an amended and restated Promissory Note
reflecting such decreased principal amount in exchange for
cancellation of the original Promissory Note). The completion of
the adjustment contemplated by this Section 2(b) shall in no way
affect the enforceability of or Intermix’s rights under the
Promissory Note unless and until the Promissory Note is exchanged
for a duly executed amended
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CONTRIBUTION AGREEMENT
and restated Promissory Note in
accordance with this Section 2(b). As used in this Section 2(b),
“ Intermix Advance ” means the sum of (i) the
value of the tangible assets and software licenses purchased by
Intermix (or by Social Labs with funds advanced by Intermix) for
the Business prior to October 1, 2004 plus (ii) the amount of funds
expended by Intermix to purchase tangible assets and software
licenses for the Business (or advanced by Intermix to Social Labs
to purchase tangible assets or software licenses for the Business)
on or after October 1, 2004.
(c) Within 20 business days
of the date hereof, Intermix shall deliver to the Company
Intermix’s calculation of the Intermix Advance. In the event
the Company objects in good faith to Intermix’s calculation
of the Intermix Advance, then the Company shall notify Intermix of
such objection in writing with ten business days of receipt of such
calculation and set forth the basis for such objection in
reasonable detail (the “ Objection Notice ”). If
the Company does not notify Intermix in writing of an objection
within such ten-business day period, then Intermix’s
calculation of the Intermix Advance shall be binding upon the
parties hereto. If the Company does notify Intermix in writing of
such objection in accordance with this Section 2(c), then the
parties hereto shall use good faith efforts to resolve the dispute
in respect of the calculation of the Intermix Advance. In the event
the parties hereto are unable to resolve such dispute within ten
business days of Intermix’s receipt of the Objection Notice,
then the respective Chief Executive Officers of Intermix and the
Company shall attempt in good faith to resolve such dispute, and if
the dispute is not resolved within 20 business days of
Intermix’s receipt of the Objection Notice, then the parties
hereto shall refer the dispute to an independent accounting firm
(which shall not be the independent accounting firm of either of
Intermix or the Company) designated by Intermix and reasonably
acceptable to the Company, and the determination of such accounting
firm shall be binding on the parties hereto. The costs of such
independent accounting firm shall be borne by the party that is not
the prevailing party (the prevailing party shall be the party whose
calculation of the Intermix Advance is closest in amount to the
calculation of the Intermix Advance that is ultimately determined
by such accounting firm).
Section 3. Termination of
Rights Agreement
Each of MSV and Intermix
hereby agree that, as of the date hereof, the Rights Agreement,
dated as of December 17, 2003 (the “ Rights Agreement
”), by and between MSV and Intermix (formerly eUniverse,
Inc.), shall be terminated and of no further force or effect, and
each of MSV and Intermix agree that neither party shall have any
further obligations or liabilities to the other arising out of,
resulting from or in connection with the Rights Agreement or the
Asset Acquisition Agreement, dated as of December 17, 2003, by and
between MSV and Intermix.
Section 4. The
Closing
(a) The consummation of the
contribution of the Contributed Assets shall be held at the offices
of Latham & Watkins, LLP, at 633 West Fifth Street, Suite 4000,
Los Angeles, CA 90071, on the date hereof, or such other date after
the date hereof as the Company and the Contributors may mutually
agree in writing (the “ Closing Date
”).
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CONTRIBUTION AGREEMENT
(b) On the Closing Date, the
Contributors shall deliver (duly and fully executed, acknowledged
and notarized as appropriate) to the Company the
following:
(i) a duly executed
counterpart to the bill of sale for all of the Contributed Assets
that constitute tangible personal property in the form attached
hereto as Exhibit F (the “ Bill of Sale
”);
(ii) a duly executed
counterpart to the assignment of contracts rights in the form
attached hereto as Exhibit G (the “ Assignment of
Contract Rights ”);
(iii) a duly executed
counterpart to the assignment of intellectual property in the form
attached hereto as Exhibit H (the “ Assignment of
IP ”); and
(iv) such other bills of
sale, assignments, certificates of title, documents and other
instruments of transfer, conveyance and/or assumption as may be
reasonably necessary to transfer to the Company the
Contributors’ right, title and interest in and to the
Contributed Assets and for the Company to assume the Assumed
Liabilities.
(c) On the Closing Date, the
Company shall deliver (duly and fully executed, acknowledged and
notarized as appropriate) the following:
(i) cash in the amount set
forth in Section 2 above to each Contributor;
(ii) stock certificates to
each Contributor representing the number of shares to be issued to
such Contributor pursuant to Section 2 above;
(iii) a duly executed
counterpart to the Assignment of Contract Rights to each
Contributor;
(iv) a duly executed
counterpart to the assumption of liabilities in the form attached
hereto as Exhibit I (the “ Assumption of
Liabilities ”);
(v) the Promissory Note to
Intermix; an
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