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
