Exhibit 10.07

 

ASSET ACQUISITION AGREEMENT

 

This ASSET ACQUISITION AGREEMENT (the “Agreement”) is entered into as of
December 17, 2003 (the “Closing Date”) by and between eUniverse, Inc., a
Delaware corporation (“EUNI”), and MySpace Ventures, LLC, a California limited
liability company (“Purchaser”).

 

RECITALS

 

WHEREAS, EUNI is the owner, operator and administrator of the business known as
“myspace.com” and the associated web site located at www.myspace.com (the
“Business”); and

 

WHEREAS, EUNI desires to sell, transfer and assign to Purchaser, and Purchaser
desires to purchase and acquire from EUNI an undivided one–third (1/3) interest
in such assets all on the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises, undertakings and
agreements below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

AGREEMENT

 

Section 1. PURCHASE AND SALE OF THE ASSETS.

 

1.1 Purchase and Sale of Assets. EUNI hereby sells, transfers, assigns and
delivers to Purchaser, free and clear of any liens or encumbrances of any kind
which have been created or granted by EUNI, one–third (1/3) of all of EUNI’s
right, title and interest in the following assets, whether now existing or
hereafter acquired (collectively, the “Assets”):

 

A. Domain Name. The “www.myspace.com” Internet domain name, including all
registrations thereof, including, without limitation, the Network Solutions,
Inc., or any other applicable registrar, registration thereof, and all rights to
listings or keyword associations in any Internet search engines or directories
associated with the domain name (collectively, the “Domain Name”).

 

B. Web Site and Web Site Materials. The web pages created or acquired by or for
EUNI with respect to the Business and associated with, or located at or under,
the Domain Name (collectively, the “Web Site”), including all Web Site
Materials. The “Web Site Materials” include, without limitation: (i) web pages,
support files and related information and data associated with the Web Site;
(ii) any and all text, graphics, HTML or similar code, applets, scripts,
programs, databases, source code, object code, templates, forms, image maps,
documentation, audio files, video files, log files or customer data; (iii) all
copyrights, copyright registrations, copyright applications, trade secrets,
moral rights, publicity rights and know-how; (iv) all content that has appeared
in any past or present editions of the Web Site, whether archived on the Web
Site or otherwise; and (v) the operation, concepts, look and feel of the Web
Site and Web Site Materials and business ideas associated with the Business (the
“Content”).

 

C. Trademarks. All trademarks, trade names or service marks related to the
Domain Name and “myspace.com” including any registrations or applications for
registration, and all goodwill associated therewith (collectively, the “Marks”).
All income, royalties, damages and payments due or payable and causes of action
for infringement or violation of all rights in and to the Marks after the
Closing Date as they pertain to the rights hereby assigned.

 

D. Customer Information. All customer lists, databases, files and documents
relating to customers.

 

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E. Permits and Licenses. All governmental franchises, licenses, approvals,
authorizations and permits that are held or used primarily in connection with
the Business.

 

1.2 Closing. On the Closing Date, Purchaser shall (a) pay the Purchase Price to
EUNI and (b) deliver the Rights Agreement, dated as of the Closing Date, by and
among EUNI and Purchaser, substantially in the form of Exhibit A hereto (the
“Rights Agreement”), duly executed by Purchaser. On the Closing Date, EUNI shall
deliver the Rights Agreement duly executed by EUNI.

 

1.3 Post Closing Activities.

 

A. Further Assurances. At any time or from time to time after the Closing Date,
upon either party’s written request and without further consideration, the other
party shall take such other actions as the requesting party may reasonably deem
necessary or desirable in order to consummate the terms of, obligations under
and transactions contemplated by, this Agreement.

 

B. Post Closing Operations. Following the Closing Date, EUNI shall have sole and
absolute discretion over the operation of the Business and exploitation and
disposition of the Assets, except as specifically set forth in the Rights
Agreement.

 

Section 2. PURCHASE PRICE. In consideration for EUNI’s sale, transfer and
assignment of a one–third (1/3) interest in the Assets, Purchaser shall pay to
EUNI the sum of Fifty Thousand Dollars ($50,000.00) (the “Purchase Price”).

 

Section 3. REPRESENTATIONS AND WARRANTIES.

 

3.1 Authority. EUNI and Purchaser each represent to the other that it has the
right to enter into this Agreement and has the ability to perform its
obligations hereunder, including the assignment, transfer and delivery by EUNI,
and purchase by Purchaser, of a one-third (1/3) interest in the Assets
hereunder. Each of EUNI and Purchaser is a corporation, limited liability
company, partnership, trust, limited partnership or similar entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.

 

3.2 “As Is” “Where Is”. Purchaser has received all of information and
documentation it requires in connection with the Assets and, except as expressly
provided herein, is acquiring its interest in the Assets “as is” “where is”.

 

3.3 No Other Representations. Except as expressly set forth in this Agreement,
neither party makes any further representations or warranties concerning the
subject matter contained herein.

 

3.4 Survival. Each of the representations, warranties and agreements of each of
Purchaser and EUNI contained in this Agreement shall survive the Closing Date.

 

Section 4. MISCELLANEOUS.

 

4.1 Relationship of the Parties. Purchaser is and shall remain at all times an
independent contractor. Neither party is, nor will be deemed to be, an agent or
legal representative of the other party for any purpose. Neither party will be
entitled to enter into any contracts in the name of or on behalf of the other
party, and neither party will be entitled to pledge the credit of the other
party in any way or hold itself out as having authority to do so.

 

4.2 Assignment. Neither this Agreement nor any interest hereunder will be
assignable in part or in whole by either party without the prior written consent
of the non-assigning party, which consent will not be unreasonably withheld,
conditioned or delayed; provided, however, that (i) either party may freely
assign its rights to receive payments under this Agreement and (ii) either party
may assign is rights and obligations under this Agreement to any Affiliate. For
purposes hereof, “Affiliate” means, with respect any person or entity, any
person or entity that directly or indirectly through one or more intermediaries
controls or is controlled by, or is under common control with, such other person
or entity (where the term “control” means the possession, direct or indirect, of
the power to cause the direction of the management and policies of a person or
entity, whether through the ownership of voting

 

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securities, by contract or otherwise). This Agreement will be binding upon the
successors and permitted assigns of the parties and the name of a party
appearing herein will be deemed to include the names of such party’s successors
and permitted assigns to the extent necessary to carry out the intent of this
Agreement. Any assignment which is not in accordance with this section will be
void.

 

4.3 Governing Law and Venue. This Agreement is made in accordance with and shall
be governed and construed in accordance with the laws of the State of
California, U.S.A., excluding its conflict of law provisions. The federal and
state courts in the State of California shall have exclusive jurisdiction and
venue over all actions in connection with this Agreement.

 

4.4 Dispute Resolution. In the event of any controversy, dispute or claim
arising out of or related to this Agreement or the breach thereof, Purchaser and
EUNI agree to meet and confer in good faith to attempt to resolve the
controversy, dispute or claim without an adversary proceeding. If the
controversy, dispute or claim is not resolved to the mutual satisfaction of
Purchaser and EUNI within ten (10) business days of notice of the controversy,
dispute or claim, Purchaser and EUNI agree to waive their rights, if any, to a
jury trial, and to submit the controversy, dispute or claim to a retired judge
or justice for binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. Purchaser and EUNI agree that the
only proper venue for the submission of claims shall be the County of Los
Angeles, California, and that the hearing before the referee shall be concluded
within nine (9) months of the filing and service of the complaint. Judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Any dispute resolution proceedings contemplated by this
provision shall be as confidential and private as permitted by law.

 

4.5 Notices. All notices and other communications under this Agreement will be
in writing and shall be made by (i) personal delivery, (ii) certified or
registered mail, return receipt requested, (iii) fax or (iv) e-mail, delivery
acknowledgement requested. Notices shall be addressed as set forth on the
signature pages hereto. Notices given via personal delivery shall be effective
upon delivery. Notices given via certified or registered mail, return receipt
requested, fax or e-mail, delivery acknowledgement requested, shall be effective
five (5) days after delivery.

 

4.6 Amendment. No amendment, modification or supplement of any provision of this
Agreement will be valid or effective unless made in writing and signed by a duly
authorized officer of each party.

 

4.7 Waiver. No provision of this Agreement will be waived by any act, omission
or knowledge of a party or its agents or employees except by an instrument in
writing expressly waiving such provision and signed by a duly authorized officer
of the waiving party.

 

4.8 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be in effective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.

 

4.9 Attorneys’ Fees. In the event that any suit, arbitration, legal action,
proceeding or dispute between the parties arises in connection with this
Agreement, the party prevailing shall be entitled to recover all expenses, costs
and fees, including reasonable attorney’s fees, actually incurred in association
with such action.

 

4.10 Entire Agreement. This Agreement, including all Exhibits, is the complete,
final and exclusive understanding and agreement of the parties and cancels and
supersedes any and all prior negotiations, correspondence and agreements,
whether oral or written, between the parties respecting the subject matter of
this Agreement.

 

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

 

eUniverse, INC. By:  

/s/ Thomas J. Flahie

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Name:   Thomas J. Flahie Title:   Chief Financial Officer Address:   6060 Center
Drive, Suite 300     Los Angeles, CA 90045     Attn: Chris Lipp, General Counsel
    Facsimile: (310) 258-2757 MYSPACE VENTURES, LLC By:  

/s/ Chris DeWolfe

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Name:   Chris DeWolfe Title:   President Address:   2286 Gloaming Way    
Beverly Hills, CA 90210

 

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EXHIBIT A

 

Rights Agreement

 

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RIGHTS AGREEMENT

 

This RIGHTS AGREEMENT is entered into as of December 17, 2003, by and between
eUniverse, Inc., a Delaware corporation (“EUNI”), and MySpace Ventures, LLC, a
California limited liability company (“Purchaser”).

 

RECITALS:

 

WHEREAS, EUNI is the owner, operator and administrator of the business known as
“myspace.com” and the associated web site located at www.myspace.com (the
“Business”);

 

WHEREAS, in consideration of the sale, transfer and assignment of the Assets to
Purchaser as set forth in the Asset Acquisition Agreement, EUNI desires to grant
Purchaser certain rights relating to the operations of the Business and
potential transactions affecting the Business; and

 

WHEREAS, the parties desire to set forth funding and budget terms with respect
to the Business.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:

 

Article 1 - Definitions

 

1.1 Specified Definitions. The following terms as used in this Agreement shall
have the following meanings:

 

“Acquisition Transaction” means any transaction entered into by EUNI on behalf
of the Business relating to any acquisition or purchase of all or substantially
all of the business, properties or assets of, or any equity interest in, or any
merger, consolidation, business combination or similar transaction involving,
any third party.

 

“Agreement” means this Rights Agreement as originally executed and as amended
from time to time.

 

“Asset Acquisition Agreement” means that certain Asset Acquisition Agreement, of
even date herewith, by and between EUNI and Purchaser.

 

“Assets” shall have the meaning set forth in the Asset Acquisition Agreement.

 

“Bona Fide Offer” means a bona fide offer to enter into a Sale Transaction by
any non-interested third party for bona fide cash consideration.

 

“Liquidity Event” means any transaction in which a third party either (i) makes
a capital investment in MySpace, LLC (as defined below) of at least Five Hundred
Thousand Dollars ($500,000)in return for no less than a five percent (5%) equity
position in MySpace, LLC or (ii) purchases Purchaser’s one-third (1/3) interest
in the Assets, in its entirety.

 

“Offered Purchase Price” means the aggregate purchase price related to any Bona
Fide Offer.

 

“Profitability” means such time as the Business shall have achieved its first
calendar month of net income, according to generally accepted accounting
principles, consistently applied.

 

“Sale Transaction” means any transaction relating to any acquisition or purchase
of all or substantially all of the Business, properties or assets of the
Business (such assets shall be valued at their fair market value at the time of
sale), or all of the equity interests in, or any merger, consolidation, business
combination or similar transaction involving, MySpace, LLC, by any third party.

 

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Article 2 - Rights

 

2.1 Option to Require Formation of MySpace, LLC.

 

(a) Grant of Right. EUNI hereby grants Purchaser the right to require, at any
time after Profitability or receipt of a bona fide proposal of either a
Liquidity Event or an Acquisition Transaction, on the terms and conditions set
forth herein, EUNI to form a limited liability company (“MySpace, LLC”). Upon
formation of MySpace, LLC pursuant to this Agreement, each of EUNI and Purchaser
shall contribute their respective interests in and to the Assets and the
agreements exclusively related to the operation of the Business to MySpace, LLC
in exchange for a membership interests in MySpace, LLC of 66 2/3% to EUNI and
33 1/3% to Purchaser, and corresponding capital accounts. The parties shall (or
cause their agents or representatives to) negotiate in good faith an operating
agreement for MySpace, LLC upon such formation.

 

(b) Initial Terms. Upon the formation of MySpace, LLC, with respect to the
operations of MySpace, LLC, both parties agree as follows:

 

(i) Distributions of all profits, less reserves for current commitments, shall
be made within thirty (30) days following the end of each full fiscal quarter
based upon the parties respective membership interests;

 

(ii) Quarterly budgets shall require the approval of at least seventy five
percent (75%) of the membership interests of MySpace, LLC;

 

(iii) Any acquisition or purchase of all or substantially all of the business,
properties or assets of, or any equity interest in, or any merger,
consolidation, business combination or similar transaction involving MySpace,
LLC shall require the approval of at least seventy five percent (75%) of the
membership interests of MySpace, LLC; and

 

(iv) The dissolution, liquidation or winding up of MySpace, LLC shall require
the approval of at least seventy five percent (75%) of the membership interests
of MySpace, LLC.

 

2.2 Put Right.

 

(a) Grant of Right. EUNI hereby grants Purchaser the right, upon receipt of a
Bona Fide Offer, to require EUNI, on the terms and conditions set forth herein,
either to (i) repurchase Purchaser’s one-third (1/3) ownership interest in the
Assets for an amount equal to one-third (1/3) of the Offered Purchase Price (the
“Asset Repurchase”) or (ii) negotiate in good faith definitive documents in
order to consummate a Sale Transaction within one hundred twenty (120) days of
receipt of the Bona Fide Offer. In connection with the closing of any Sale
Transaction, the parties agree that the purchase price shall be allocated among
the assets purchased based on the relative fair market value of such assets at
such time.

 

(b) Notice. Prior to the exercise of the Put Option or the negotiation of a Sale
Transaction, Purchaser shall give written notice (the “Put Notice”) to EUNI
stating (i) the Offered Purchase Price; (ii) the name of the proposed purchaser
and (iii) a complete description of the form and details of the proposed
transaction. Within fifteen (15) days after receiving the Put Notice, EUNI shall
notify Purchaser of its decision whether to effect the Asset Repurchase or agree
to negotiate a Sale Transaction (the “Put Response”).

 

(c) Closing of Asset Repurchase. The closing of the Asset Repurchase, if any,
shall take place as soon as commercially practicable following delivery of the
Put Response.

 

Article 3 – Funding; Budgets

 

3.1 Quarterly Budget. The parties shall jointly create and approve quarterly
budgets with respect to the Business, which such quarterly budgets shall provide
for all costs, fees, expenses and expenditures to be incurred by the Business
during said quarter (the “Budget”).

 

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3.2 Funding. Until Profitability, EUNI agrees to provide funding for the
Business as required to pay operating expenses and other costs associated with
the Business as specified in the Budget. Funding by EUNI in amounts in excess of
those contemplated by the Budget shall be at the sole discretion of EUNI.

 

3.3 Funding. Distributions. Following Profitability, Purchaser shall receive
quarterly distributions of one-third (1/3) of all profits, less reserves for
current commitments, generated by the Business in each full fiscal quarter,
which distributions shall be made no later than thirty (30) days following the
end of such full fiscal quarter.

 

Article 4 – Miscellaneous

 

4.1 Notices. All notices and any other communications under this Agreement shall
be in writing and shall be made by (i) personal delivery, (ii) certified or
registered mail, return receipt requested, (iii) fax, or (iv) email, delivery
acknowledgement requested. Notice shall be addressed as set forth on the
signature pages hereto. Notices given via personal delivery shall be effective
upon delivery. Notices given via certified or registered mail, return receipt
requested, fax or e-mail, delivery acknowledgement requested, shall be effective
five (5) days after delivery.

 

4.2 Amendments. This Agreement may only be amended by a writing signed by both
parties.

 

4.3 Assignment; Successors. Neither this Agreement nor any interest hereunder
will be assignable in part or in whole by either party without the prior written
consent of the non-assigning party, which consent will not be unreasonably
withheld, conditioned or delayed; provided, however, that (i) either party may
freely assign its rights under this Agreement and (ii) either party may assign
is rights and obligations under this Agreement to any Affiliate. For purposes
hereof, “Affiliate” means, with respect any person or entity, any person or
entity that directly or indirectly through one or more intermediaries controls
or is controlled by, or is under common control with, such other person or
entity (where the term “control” means the possession, direct or indirect, of
the power to cause the direction of the management and policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise). This Agreement will be binding upon the successors and permitted
assigns of the parties and the name of a party appearing herein will be deemed
to include the names of such party’s successors and permitted assigns to the
extent necessary to carry out the intent of this Agreement. Any assignment which
is not in accordance with this section will be void.

 

4.4 Captions. Any article, section or paragraph title or caption contained in
this Agreement and the table of contents is for convenience of reference only
and shall not be deemed a part of this Agreement.

 

4.5 Terms. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the context may require.

 

4.6 Invalidity. If any provision of this Agreement shall be held invalid, it
shall not affect in any respect whatsoever the validity of the remainder of this
Agreement.

 

4.7 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, when taken together, shall
constitute one and the same instrument, binding on the parties, and the
signature of any party to any counterpart shall be deemed a signature to, and
may be appended to, any other counterpart.

 

4.8 Further Assurances. The parties hereto agree that they will cooperate with
each other and will execute and deliver or cause to be delivered, all such other
instruments in order to effectuate the provisions and purposes hereof.

 

4.9 Complete Agreement. This Agreement constitutes the entire, complete and
exclusive agreement of the parties with respect to the subject matter hereof and
the transactions contemplated herein. All prior understandings, agreements,
representations, statements or other communications, whether written or oral,
between and among the parties hereto with respect to the subject matter hereof
are superseded and merged into this Agreement. No representation, statement,
condition or warranty not contained in this Agreement shall be binding on the
parties or have any force or effect whatsoever.

 

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4.10 Governing Law and Venue. This Agreement is made in accordance with and
shall be governed and construed in accordance with the laws of the State of
California, U.S.A., excluding its conflict of law provisions. The federal and
state courts in the State of California shall have exclusive jurisdiction and
venue over all actions in connection with this Agreement.

 

4.11 No Third Party Beneficiary. Any agreement to pay any amount and any
assumption of liability herein contained, express or implied, shall be only for
the benefit of the parties and their respective heirs, successors and assigns,
and such agreements and assumption shall not inure to the benefit of the
obligees of any indebtedness or any other party, whomsoever, it being the
intention of the parties that no one shall be deemed to be a third party
beneficiary of this Agreement.

 

4.12 References to this Agreement. Numbered or lettered articles, sections and
subsections herein contained refer to articles, sections and subsections of this
Agreement unless otherwise expressly stated.

 

4.13 Dispute Resolution. In the event of any controversy, dispute or claim
arising out of or related to this Agreement or the breach thereof, Purchaser and
EUNI agree to meet and confer in good faith to attempt to resolve the
controversy, dispute or claim without an adversary proceeding. If the
controversy, dispute or claim is not resolved to the mutual satisfaction of
Purchaser and EUNI within ten (10) business days of notice of the controversy,
dispute or claim, Purchaser and EUNI agree to waive their rights, if any, to a
jury trial, and to submit the controversy, dispute or claim to a retired judge
or justice for binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. Purchaser and EUNI agree that the
only proper venue for the submission of claims shall be the County of Los
Angeles, California, and that the hearing before the referee shall be concluded
within nine (9) months of the filing and service of the complaint. Judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Any dispute resolution proceedings contemplated by this
provision shall be as confidential and private as permitted by law.

 

4.14 Waiver. Any failure or delay by either party in exercising any right, power
or remedy under this Agreement shall not in any circumstance impair such right,
power or remedy nor operate as a waiver of it. The single or partial exercise by
either party of any right, power or remedy under this Agreement shall not in any
circumstances preclude any other or further exercise of it, or the exercise of
any right, power or remedy. Except as expressly provided in this Agreement, the
rights, powers and remedies provided in this Agreement are cumulative and not
exclusive of any rights, powers and remedies provided by law. Any waiver of a
breach of, or default under, any of the terms or conditions of this Agreement
shall not be deemed a waiver of any subsequent breach or default and shall in no
way affect the other terms of this Agreement.

 

4.15 Attorneys’ Fees. In the event that any suit, arbitration, legal action,
proceeding or dispute between the parties arises in connection with this
Agreement, the party prevailing shall be entitled to recover all expenses, costs
and fees, including reasonable attorney’s fees, actually incurred in association
with such action.

 

4.16 Termination. This agreement shall terminate and all rights and obligations
of the parties hereunder shall expire upon formation of MySpace, LLC and the
execution and delivery of the operating agreement therefor.

 

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

 

MYSPACE VENTURES, LLC By:  

/s/ Chris DeWolfe

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Name:   Chris DeWolfe Its:   President Address:   2286 Gloaming Way     Beverly
Hills, CA 90210 EUNIVERSE, INC. By:  

/s/ Thomas J. Flahie

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Name:   Thomas J. Flahie Its:   Chief Financial Officer Address:   6060 Center
Drive, Suite 300     Los Angeles, CA 90045     Facsimile: (310) 258-2757    
Attn: Christopher Lipp, General Counsel

 

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