Exhibit 10.3

 

MYSPACE, INC.

 

SERIES A PREFERRED AND COMMON STOCK PURCHASE AGREEMENT

 

THIS SERIES A PREFERRED AND COMMON STOCK PURCHASE AGREEMENT (the “Agreement”) is
made and entered into as of February 11, 2005, by and among MYSPACE, INC., a
Delaware corporation (the “Company”), and each of those persons and entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as Exhibit A (which persons and entities are
hereinafter collectively referred to as “Purchasers” and each individually as a
“Purchaser”).

 

RECITALS

 

WHEREAS, the Company has authorized the sale and issuance of an aggregate of
eight hundred seventy thousand one hundred seventy-one (870,171) shares of its
Series A Preferred Stock (the “Preferred Shares”) and an aggregate of one
million one hundred thirty-seven thousand six hundred twenty-four (1,137,624)
shares of its Common Stock (the “Common Shares,” and together with the Preferred
Shares, the “Shares”);

 

WHEREAS, Purchasers desire to purchase the Shares on the terms and conditions
set forth herein; and

 

WHEREAS, the transactions contemplated by this Agreement and the transactions
contemplated by the Contribution Agreement (as defined below) are intended to
constitute a single transaction for purposes of Section 351 of the Internal
Revenue Code of 1986, as amended.

 

WHEREAS, the Company desires to issue and sell the Shares to Purchasers on the
terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

 

  1. AGREEMENT TO SELL AND PURCHASE.

 

1.1 Authorization of Shares. The Company has authorized (a) the sale and
issuance to Purchasers of the Shares and (b) the issuance of such shares of
Common Stock to be issued upon conversion of the Preferred Shares (the
“Conversion Shares”). The Shares and the Conversion Shares have the rights,
preferences, privileges and restrictions set forth in the Certificate of
Incorporation of the Company, in the form attached hereto as Exhibit B (the
“Charter”).

 

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1.2 Sale and Purchase. Subject to the terms and conditions hereof, at the
Closing (as hereinafter defined) the Company hereby agrees to issue and sell to
each Purchaser, and each Purchaser agrees to purchase from the Company,
severally and not jointly, (a) the number of Preferred Shares set forth opposite
such Purchaser’s name on Exhibit A, at a purchase price of seven dollars and
fifteen cents ($7.15) per share, and (b) the number of Common Shares set forth
opposite such Purchaser’s name on Exhibit A, at a purchase price of four dollars
and sixty-seven cents ($4.67) per share.

 

  2. CLOSING, DELIVERY AND PAYMENT.

 

2.1 Closing. The closing of the sale and purchase of the Shares under this
Agreement (the “Closing”) shall take place at 1:00 p.m. on the date hereof, at
the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los
Angeles, CA 90071, or at such other time or place as the Company and Purchasers
may mutually agree (such date is hereinafter referred to as the “Closing Date”).

 

2.2 Delivery. At the Closing, subject to the terms and conditions hereof, the
Company will deliver to each Purchaser a certificate representing the number of
Preferred Shares and a certificate representing the number of Common Shares to
be purchased at the Closing by such Purchaser, against payment of the purchase
price therefor by wire transfer of immediately available funds to an account
designated by the Company.

 

  3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

Except as set forth on a Schedule of Exceptions delivered by the Company to
Purchasers at the Closing, the Company hereby represents and warrants to each
Purchaser as of the date of this Agreement (after giving effect to the
consummation of the transactions contemplated by the Contribution Agreement,
unless otherwise noted below) as set forth below.

 

3.1 Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company has all requisite corporate power and authority
to own and operate its properties and assets, to execute and deliver this
Agreement and the Stockholders’ Agreement in the form attached hereto as Exhibit
C (the “Stockholders’ Agreement”), the Registration Rights Agreement in the form
attached hereto as Exhibit D (the “Registration Rights Agreement”), the
Contribution Agreement in the form attached hereto as Exhibit E (the
“Contribution Agreement”), the Transition and Finance Services Agreement in the
form attached hereto as Exhibit F (the “Services Agreement”), the Intellectual
Property License Agreement in the form attached hereto as Exhibit G (the
“License Agreement”) and the Management Rights Letter in the form attached
hereto as Exhibit H (collectively, the “Related Agreements”), to issue and sell
the Shares and the Conversion Shares, and to carry out the provisions of this
Agreement, the Related Agreements and the Charter and to carry on its business
as presently conducted and as presently proposed to be conducted. The Company is
duly qualified to do business and is in good standing as a foreign corporation
in all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the Company or its business.

 

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3.2 Subsidiaries. The Company does not own or control any equity security or
other interest of any other corporation, partnership, limited liability company
or other business entity. The Company is not a participant in any joint venture,
partnership, limited liability company or similar arrangement. Since its
inception, the Company has not consolidated or merged with, acquired all or
substantially all of the assets of, or acquired the stock of or any interest in
any corporation, partnership, limited liability company or other business entity
(other than pursuant to the Related Agreements).

 

3.3 Capitalization; Voting Rights.

 

(a) The authorized capital stock of the Company, immediately prior to the
Closing, consists of (i) 15,000,000 shares of Common Stock, par value $0.001 per
share, none of which are issued and outstanding, and (ii) 880,000 shares of
Preferred Stock, par value $0.001 per share, all shares of which are designated
Series A Preferred Stock, none of which are issued and outstanding. Immediately
after giving effect to the transactions contemplated by this Agreement and the
Contribution Agreement, there will be 6,760,563 shares of Common Stock issued
and outstanding and 870,171 shares of Series A Preferred Stock issued and
outstanding.

 

(b) No shares or options to purchase shares of Common Stock have been issued or
granted under the Company’s 2005 Equity Incentive Plan (the “Plan”), and 401,618
shares of Common Stock remain available for future issuance under the Plan to
officers, directors, employees and consultants of the Company. The Company has
not made any representations regarding equity incentives to any officer,
employee, director or consultant that are inconsistent with the share amounts
and terms set forth in the Company’s board minutes.

 

(c) Other than the shares reserved for issuance under the Plan and except as may
be granted pursuant to this Agreement and the Related Agreements, there are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal), proxy or stockholder agreements, or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities.

 

(d) All issued and outstanding shares of the Company’s Common Stock (i) have
been duly authorized and validly issued and are fully paid and nonassessable,
(ii) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities, and (iii) are subject to a right of first
refusal in favor of the Company on transfer.

 

(e) The rights, preferences, privileges and restrictions of the Shares are as
stated in the Charter. The Conversion Shares have been duly and validly reserved
for issuance. When issued in compliance with the provisions of this Agreement
and the Charter, the Shares and the Conversion Shares will be validly issued,
fully paid and nonassessable, and will be free of any liens or encumbrances
other than liens and encumbrances created by or imposed upon the Purchasers;
provided, however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer and subject to a purchase option under the Related
Agreements and under state and/or federal securities laws as set forth herein or
as otherwise required by such laws at the time a transfer is proposed. The sale
of the Shares and the subsequent conversion of the Preferred Shares into
Conversion Shares are not and will not be subject to any preemptive rights or
rights of first refusal that have not been properly waived or complied with.

 

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(f) No stock plan, stock purchase, stock option or other agreement or
understanding between the Company and any holder of any equity securities or
rights to purchase equity securities provides for acceleration or other changes
in the vesting provisions or other terms of such agreement or understanding as
the result of (i) termination of employment or consulting services (whether
actual or constructive); (ii) any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company; or (iii) the
occurrence of any other event or combination of events.

 

(g) All outstanding shares of Common Stock, and all outstanding shares of Common
Stock and Preferred Stock issuable upon the exercise or conversion outstanding
options, warrants or other exercisable or convertible securities, are subject to
a market standoff or “lockup” agreement of not less than 180 days following the
Company’s initial public offering.

 

3.4 Authorization; Binding Obligations. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Charter has been taken. The Agreement and the
Related Agreements, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights,
(b) general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions in the Investor Rights Agreement may be limited by applicable laws.

 

3.5 Liabilities. The Company has no material liabilities that would be required
to be reflected on a balance sheet in accordance with United States generally
acceptable accounting principles (“GAAP”) and, to the best of its knowledge, no
material contingent liabilities that would be required to be disclosed in
footnotes to the Company’s financial statements in accordance with GAAP, except
in each case current liabilities incurred in the ordinary course of business
which would not reasonably be expected to materially and adversely affect the
business, assets, properties or financial condition of the Company.

 

3.6 Agreements; Action.

 

(a) Except for agreements explicitly contemplated hereby and agreements between
the Company on the one hand and its employees with respect to the sale of the
Company’s outstanding Common Stock, there are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
employees, affiliates or any affiliate thereof on the other hand.

 

(b) There are no agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Company is a
party or to its knowledge by which it is bound which involve (i) future
obligations (contingent or otherwise) of, or payments to, the Company in excess
of $100,000, or (ii) the transfer or license of any material patent, copyright,
trade secret or other proprietary right to or from the Company (other

 

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than licenses by the Company of “off the shelf” or other standard products), or
(iii) provisions restricting the development, manufacture or distribution of the
Company’s products or services in any material respect, or (iv) indemnification
by the Company with respect to infringements of proprietary rights.

 

(c) The Company has not (i) accrued, declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred or guaranteed any indebtedness for money
borrowed or any other liabilities (other than trade payables incurred in the
ordinary course of business) individually in excess of $100,000 or, in the case
of indebtedness and/or liabilities individually less than $100,000, in excess of
$300,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.

 

(d) For the purposes of subsections (b) and (c) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company has reason to believe are affiliated therewith) shall be aggregated
for the purpose of meeting the individual minimum dollar amounts of such
subsections.

 

3.7 Obligations to Related Parties. Except pursuant to the Related Agreements
and the transactions contemplated thereby, there are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). Other than ownership of shares of stock of any
stockholder of the Company that is itself a corporation or limited liability
company, none of the officers, directors or, to the best of the Company’s
knowledge, key employees or stockholders of the Company or any members of their
immediate families, is indebted to the Company or has any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation that competes with the Company, other than (i) passive investments
in publicly traded companies (representing less than 1% of such company) which
may compete with the Company and (ii) investments by venture capital funds with
which directors of the Company may be affiliated and service as a board member
of a company in connection therewith due to a person’s affiliation with a
venture capital fund or similar institutional investor in such company. No
officer, director or stockholder, or any member of their immediate families, is,
directly or indirectly, interested in any material contract with the Company
(other than the Related Agreements and the transactions contemplated thereby and
other than such contracts as relate to any such person’s ownership of capital
stock or other securities of the Company).

 

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3.8 Changes. Since the formation of the Company (and after giving effect to
consummation of the transactions contemplated by the Contribution Agreement),
there has not been to the Company’s knowledge:

 

(a) Any change in the assets, liabilities, financial condition or operations of
the Company, other than changes in the ordinary course of business, none of
which individually or in the aggregate has had or is reasonably expected to have
a material adverse effect on such assets, liabilities, financial condition or
operations of the Company;

 

(b) Any resignation or termination of any officer, key employee or group of
employees of the Company;

 

(c) Any material change, except in the ordinary course of business, in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;

 

(d) Any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the properties, business or prospects or
financial condition of the Company;

 

(e) Any waiver by the Company of a valuable right or of a material debt owed to
it;

 

(f) Any material change in any compensation arrangement or agreement with any
employee, officer, director or stockholder;

 

(g) Any labor organization activity related to the Company;

 

(h) Any sale, assignment, or exclusive license or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;

 

(i) Any change in any material agreement to which the Company is a party or by
which it is bound which materially and adversely affects the business, assets,
liabilities, financial condition, operations or prospects of the Company;

 

(j) Any other event or condition of any character that, either individually or
cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition or operations of the Company; or

 

(k) Any arrangement or commitment by the Company to do any of the acts described
in subsection (a) through (j) above.

 

3.9 Title to Properties and Assets; Liens, Etc. The Company has good and
marketable title to its owned properties and assets and a valid leasehold
interest in its leasehold estates, in each case subject to no mortgage, pledge,
lien, lease, encumbrance or charge, other than (a) those resulting from taxes
which have not yet become delinquent, (b) minor liens and encumbrances which do
not materially detract from the value of the property subject thereto or
materially impair the operations of the Company, and (c) those that have
otherwise arisen in the ordinary course of business.

 

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3.10 Intellectual Property.

 

(a) The Company owns or possesses sufficient legal rights to all patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information and other proprietary rights and processes necessary for its
business as now conducted and as presently proposed to be conducted, without any
known infringement of the rights of others. There are no outstanding material
options, licenses or agreements of any kind relating to the foregoing
proprietary rights, nor is the Company bound by or a party to any material
options, licenses or agreements with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and other
proprietary rights and processes of any other person or entity other than such
licenses or agreements arising from the purchase of “off the shelf” or standard
products.

 

(b) The Company has not received any written communications alleging that the
Company has violated or, by conducting its business as presently proposed to be
conducted, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity.

 

(c) The Company is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with their duties to the Company or
that would conflict with the Company’s business as proposed to be conducted.
Each employee, officer and consultant of the Company has executed a proprietary
information and inventions agreement in the form previously provided to the
Purchasers or their respective counsel. No employee, officer or consultant of
the Company has excluded works or inventions made prior to his or her employment
with the Company from his or her assignment of inventions pursuant to such
employee, officer or consultant’s proprietary information and inventions
agreement. The Company does not believe it is or will be necessary to utilize
any inventions, trade secrets or proprietary information of any of its employees
made prior to their employment by the Company, except for inventions, trade
secrets or proprietary information that have been assigned to the Company.

 

(d) The Company is not subject to any “open source” or “copyleft” obligations or
otherwise required to make any public disclosure or general availability of
source code either used or developed by the Company.

 

3.11 Compliance with Other Instruments. The Company is not in violation or
default of any term of its charter documents, each as amended. The Company is
not in violation or default under any provision of any mortgage, indenture,
contract, lease, agreement, instrument or contract to which it is party or by
which it is bound or of any judgment, decree, order or writ which would
materially adversely affect the Company’s business, assets, properties or
financial condition. The execution, delivery, and performance of and compliance
with this Agreement, and the Related Agreements, and the issuance and sale of
the Shares pursuant hereto and of the Conversion Shares pursuant to the Charter,
will not, with or without the passage of time or giving of notice, result in any
such violation, or be in conflict with or constitute a default under any such
term or provision, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its assets or properties.

 

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3.12 Litigation. There is no action, suit, proceeding or investigation pending
or, to the Company’s knowledge, currently threatened against the Company that
would reasonably be expected to result, either individually or in the aggregate,
in any material adverse change in the assets, business, properties or financial
condition of the Company or any change in the current equity ownership of the
Company or that questions the validity of this Agreement or the Related
Agreements or the right of the Company to enter into any of such agreements, or
to consummate the transactions contemplated hereby or thereby. The foregoing
includes, without limitation, actions pending or, to the Company’s knowledge,
threatened involving the prior employment of any of the Company’s employees,
their use in connection with the Company’s business of any information or
techniques allegedly proprietary to any of their former employers, or their
obligations under any agreements with prior employers. The Company is not a
party or to its knowledge subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.

 

3.13 Tax Returns and Payments. The Company is and always has been a subchapter C
corporation. The Company has not been required to file any tax returns (federal,
state and local) prior to the date hereof (and no such tax returns have been
filed). The Company has no knowledge of any liability of any tax to be imposed
upon its properties or assets as of the date of this Agreement that is not
adequately provided for.

 

3.14 Employees. The Company has no collective bargaining agreements with any of
its employees. There is no labor union organizing activity pending or, to the
Company’s knowledge, threatened with respect to the Company. The Company is not
a party to or bound by any currently effective employment contract, deferred
compensation arrangement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation plan or agreement. No
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. To the Company’s knowledge, no employee of the Company, nor
any consultant with whom the Company has contracted, is in violation of any term
of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company; and to the Company’s knowledge the continued
employment by the Company of its present employees, and the performance of the
Company’s contracts with its independent contractors, will not result in any
such violation. The Company has not received any notice alleging that any such
violation has occurred. The Company is not aware that any officer, key employee
or group of employees intends to terminate his, her or their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any officer, key employee or group of employees. Each former
employee of the Company whose employment was terminated by the Company has
entered into an agreement with the Company providing for the full release of any
claims against the Company or any related party arising out of such employment.
There are no actions pending, or to the Company’s knowledge, threatened, by any
former or current employee concerning such person’s employment by the Company.

 

3.15 Registration Rights and Voting Rights. Except as required pursuant to the
Registration Rights Agreement, the Company is presently not under any
obligation, and has not granted any rights, to register under the Securities Act
of 1933, as amended (the “Securities

 

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Act”), any of the Company’s presently outstanding securities or any of its
securities that may hereafter be issued. To the Company’s knowledge, except as
contemplated in the Stockholders’ Agreement, no stockholder of the Company has
entered into any agreement with respect to the voting of equity securities of
the Company.

 

3.16 Compliance with Laws; Permits. The Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties, which violation
would materially and adversely affect the business, assets, properties or
financial condition of the Company. No domestic governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement or the issuance of the Shares or
the Conversion Shares, except such as have been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing, as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, assets, properties or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.

 

3.17 Environmental and Safety Laws. To its knowledge, the Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety in any material respect, and to
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.

 

3.18 Offering Valid. Assuming the accuracy of the representations and warranties
of Purchasers contained in Section 4.2 hereof, the offer, sale and issuance of
the Shares and the Conversion Shares will be exempt from the registration
requirements of the Securities Act, and will have been registered or qualified
(or are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities laws.
Neither the Company nor any agent on its behalf has solicited or will solicit
any offers to sell or has offered to sell or will offer to sell all or any part
of the Shares to any person or persons so as to bring the sale of such Shares by
the Company within the registration provisions of the Securities Act or any
state securities laws.

 

3.19 Full Disclosure. The Company has provided Purchasers with all information
requested by the Purchasers in connection with their decision to purchase the
Shares. To the Company’s knowledge, there are no facts which (individually or in
the aggregate) materially adversely affect the business, assets, liabilities,
financial condition or operations of the Company that have not been set forth in
the Agreement, the exhibits hereto, the Related Agreements or in other documents
delivered to Purchasers or their attorneys or agents in connection herewith.

 

3.20 Qualified Small Business. The Company represents and warrants to Purchasers
that, to the best of its knowledge, the Company is a “qualified small business”
within the meaning of Section 1202(d) of the Internal Revenue Code of 1986, as
amended (the “Code”),

 

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as of the date hereof and the Shares should qualify as “qualified small business
stock” as defined in Section 1202(c) of the Code as of the date hereof. The
Company further represents and warrants that, as of the date hereof, it meets
the “active business requirement” of Section 1202(e) of the Code, and it has
made no “significant redemptions” within the meaning of Section 1202(c)(3)(B) of
the Code.

 

3.21 Minute Books. The minute books of the Company made available to Purchasers
contain a complete summary of all meetings of directors and stockholders since
the time of incorporation.

 

3.22 Real Property Holding Corporation. The Company is not a real property
holding corporation within the meaning of Code Section 897(c)(2) and any
regulations promulgated thereunder.

 

3.23 Insurance. The Company has or will obtain (or arrange to be covered by)
promptly following the Closing general commercial, product liability, fire and
casualty insurance policies with coverage customary for companies similarly
situated to the Company.

 

  4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.

 

Each Purchaser hereby represents and warrants to the Company, severally and not
jointly, as follows (provided, that such representations and warranties do not
lessen or obviate the representations and warranties of the Company set forth in
this Agreement):

 

4.1 Requisite Power and Authority. Purchaser has all necessary power and
authority to execute and deliver this Agreement and the Related Agreements and
to carry out their provisions. All action on Purchaser’s part required for the
lawful execution and delivery of this Agreement and the Related Agreements has
been taken. Upon their execution and delivery, this Agreement and the Related
Agreements will be valid and binding obligations of Purchaser, enforceable in
accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors’ rights, (b) as limited by general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of the Investor
Rights Agreement may be limited by applicable laws.

 

4.2 Investment Representations. Purchaser understands that neither the Shares
nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser’s representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:

 

(a) Purchaser Bears Economic Risk. Purchaser has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered
pursuant to the Securities Act, or an exemption from registration is available.
Purchaser understands that the Company has no present intention of registering
the

 

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Shares, the Conversion Shares or any shares of its Common Stock. Purchaser also
understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of the Shares
or the Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.

 

(b) Acquisition for Own Account. Purchaser is acquiring the Shares and the
Conversion Shares for Purchaser’s own account for investment only, and not with
a view towards their distribution.

 

(c) Purchaser Can Protect Its Interest. Purchaser represents that by reason of
its, or of its management’s, business or financial experience, Purchaser has the
capacity to protect its own interests in connection with the transactions
contemplated in this Agreement, and the Related Agreements. Further, Purchaser
is aware of no publication of any advertisement in connection with the
transactions contemplated in the Agreement.

 

(d) Accredited Investor. Purchaser represents that it is an accredited investor
within the meaning of Regulation D under the Securities Act.

 

(e) Company Information. Purchaser has had an opportunity to discuss the
Company’s business, management and financial affairs with directors, officers
and management of the Company and has had the opportunity to review the
Company’s operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.

 

(f) Rule 144. Purchaser acknowledges and agrees that the Shares, and, if issued,
the Conversion Shares are “restricted securities” as defined in Rule 144
promulgated under the Securities Act as in effect from time to time and must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Purchaser has been
advised or is aware of the provisions of Rule 144, which permits limited resale
of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring following the
required holding period under Rule 144 and the number of shares being sold
during any three-month period not exceeding specified limitations.

 

(g) Residence. If Purchaser is an individual, then Purchaser resides in the
state or province identified in the address of Purchaser set forth on Exhibit A;
if Purchaser is a partnership, corporation, limited liability company or other
entity, then the office or offices of Purchaser in which its investment decision
was made is located at the address or addresses of Purchaser set forth on
Exhibit A.

 

(h) Foreign Investors. If Purchaser is not a United States person (as defined by
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), Purchaser
hereby represents that it has satisfied itself as to the full observance of the
laws of its jurisdiction in connection with any invitation to subscribe for the
Shares or any use of this Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Shares, (ii) any

 

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foreign exchange restrictions applicable to such purchase, (iii) any government
or other consents that may need to be obtained, and (iv) the income tax and
other tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Shares. The Company’s offer and sale and
Purchaser’s subscription and payment for and continued beneficial ownership of
the Shares will not violate any applicable securities or other laws of
Purchaser’s jurisdiction.

 

4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Stockholders’ Agreement.

 

  5. CONDITIONS TO CLOSING.

 

5.1 Conditions to Purchasers’ Obligations at the Closing. Purchasers’
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:

 

(a) Representations and Warranties True; Performance of Obligations. The
representations and warranties made by the Company in Section 3 hereof shall be
true and correct as of the Closing Date with the same force and effect as if
they had been made as of the Closing Date, and the Company shall have performed
all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing.

 

(b) Legal Investment. On the Closing Date, the sale and issuance of the Shares
and the proposed issuance of the Conversion Shares shall be legally permitted by
all laws and regulations to which Purchasers and the Company are subject.

 

(c) Consents, Permits, and Waivers. The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by the Agreement and the Related Agreements (including
any filing required to comply with the Hart Scott Rodino Antitrust Improvements
Act of 1976) except for such as may be properly obtained subsequent to the
Closing.

 

(d) Filing of Charter. The Charter shall have been filed with the Secretary of
State of the State of Delaware and shall continue to be in full force and effect
as of the Closing Date.

 

(e) Corporate Documents. The Company shall have delivered to Purchasers or their
counsel copies of all corporate documents of the Company as Purchasers shall
reasonably request.

 

(f) Reservation of Conversion Shares. The Conversion Shares issuable upon
conversion of the Preferred Shares shall have been duly authorized and reserved
for issuance upon such conversion.

 

(g) Compliance Certificate. The Company shall have delivered to Purchasers a
Compliance Certificate, executed by the President of the Company, dated the

 

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Closing Date, to the effect that the conditions specified in subsections (a),
(c), (d) and (f) of this Section 5.1 have been satisfied.

 

(h) Secretary’s Certificate. Purchasers shall have received from the Company’s
Secretary, a certificate having attached thereto (i) the Company’s Charter as in
effect at the time of the Closing, (ii) the Company’s Bylaws as in effect at the
time of the Closing, and (iii) resolutions approved by the Board of Directors
authorizing the transactions contemplated hereby.

 

(i) Related Agreements. The Stockholders’ Agreement, Registration Rights
Agreement, Contribution Agreement, License Agreement and Services Agreement
shall each have been executed and delivered by the parties thereto.

 

(j) Board of Directors. Upon the Closing, the authorized size of the Board of
Directors of the Company shall be five (5) members and the Board shall consist
of Richard Rosenblatt, Andrew Sheehan, Geoffrey Yang, Christopher DeWolfe and
there will be one vacancy.

 

(k) Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to Purchasers and their special counsel, and Purchasers and
their special counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.

 

(l) Management Rights. A Management Rights Letter substantially in the form
attached hereto as Exhibit H shall have been executed by the Company and
delivered to each Purchaser to whom it is addressed.

 

5.2 Conditions to Obligations of the Company. The Company’s obligation to issue
and sell the Shares at each Closing is subject to the satisfaction, on or prior
to such Closing, of the following conditions:

 

(a) Representations and Warranties True. The representations and warranties in
Section 4 made by those Purchasers acquiring Shares hereof shall be true and
correct at the date of the Closing, with the same force and effect as if they
had been made on and as of said date.

 

(b) Performance of Obligations. Such Purchasers shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by such Purchasers on or before the Closing.

 

(c) Related Agreement. The Stockholders’ Agreement, Registration Rights
Agreement, Contribution Agreement, License Agreement and Services Agreement
shall have been executed and delivered by the parties hereto.

 

(d) Consents, Permits, and Waivers. The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of

 

13

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the transactions contemplated by the Agreement and the Related Agreements
(including any filing required to comply with the Hart Scott Rodino Antitrust
Improvements Act of 1976, and except for such as may be properly obtained
subsequent to the Closing).

 

  6. MISCELLANEOUS.

 

6.1 Governing Law. This Agreement shall be governed by and construed under the
laws of the State of California in all respects as such laws are applied to
agreements among California residents entered into and performed entirely within
California, without giving effect to conflict of law principles thereof.

 

6.2 Survival. The representations, warranties, covenants and agreements made
herein shall survive the closing of the transactions contemplated hereby. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument. The representations, warranties, covenants and
obligations of the Company, and the rights and remedies that may be exercised by
the Purchasers, shall not be limited or otherwise affected by or as a result of
any information furnished to, or any investigation made by or knowledge of, any
of the Purchasers or any of their representatives.

 

6.3 Successors and Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon the parties
hereto and their respective successors, assigns, heirs, executors and
administrators and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time; provided, however,
that prior to the receipt by the Company of adequate written notice of the
transfer of any Shares specifying the full name and address of the transferee,
the Company may deem and treat the person listed as the holder of such Shares in
its records as the absolute owner and holder of such Shares for all purposes.

 

6.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the
Related Agreements and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable for or bound to any other in
any manner by any oral or written representations, warranties, covenants and
agreements except as specifically set forth herein and therein.

 

6.5 Severability. In the event one or more of the provisions of this Agreement
should, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.

 

6.6 Amendment and Waiver. This Agreement may be amended or modified, and the
obligations of the Company and the rights of the holders of the Shares and the
Conversion Shares under the Agreement may be waived, only upon the written
consent of the Company and holders of a majority of the Shares purchased or
agreed to be purchased pursuant

 

14

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to this Agreement (treated as if converted and including any Conversion Shares
into which the then outstanding Shares have been converted that have not been
sold to the public).

 

6.7 Delays or Omissions. It is agreed that no delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on any party’s
part of any breach, default or noncompliance under this Agreement or any waiver
on such party’s part of any provisions or conditions of the Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement by law, or otherwise afforded
to any party, shall be cumulative and not alternative.

 

6.8 Notices. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed electronic mail, telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth on the signature page hereof and to Purchaser at the
address set forth on Exhibit A attached hereto or at such other address or
electronic mail address as the Company or Purchaser may designate by ten (10)
days advance written notice to the other parties hereto.

 

6.9 Expenses. Each party shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of the
Agreement; provided, however, that the Company shall, at the Closing, reimburse
the reasonable fees of Cooley Godward LLP, not to exceed $40,000, and in
addition to such fees shall reimburse such special counsel for reasonable
expenses incurred in connection with the negotiation, execution, delivery and
performance of this Agreement.

 

6.10 Attorneys’ Fees. In the event that any suit or action is instituted under
or in relation to this Agreement, including without limitation to enforce any
provision in this Agreement, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

 

6.11 Titles and Subtitles. The titles of the sections and subsections of the
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

 

6.12 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.

 

15

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6.13 Broker’s Fees. Each party hereto represents and warrants that no agent,
broker, investment banker, person or firm acting on behalf of or under the
authority of such party hereto is or will be entitled to any broker’s or
finder’s fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.13 being untrue.

 

6.14 Exculpation Among Purchasers. Each Purchaser acknowledges that it is not
relying upon any person, firm, or corporation, other than the Company and its
officers and directors, in making its investment or decision to invest in the
Company. Each Purchaser agrees that no Purchaser nor the respective controlling
persons, officers, directors, partners, agents, or employees of any Purchaser
shall be liable to any other Purchaser for any action heretofore or hereafter
taken or omitted to be taken by any of them in connection with the purchase of
the Shares and Conversion Shares.

 

6.15 Pronouns. All pronouns contained herein, and any variations thereof, shall
be deemed to refer to the masculine, feminine or neutral, singular or plural, as
to the identity of the parties hereto may require.

 

6.16 California Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH
QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH QUALIFICATION IS
UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE COMPANY, THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION BEING
AVAILABLE.

 

**End of Agreement – Signature Page Follows**

 

16

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IN WITNESS WHEREOF, the parties hereto have executed the SERIES A PREFERRED AND
COMMON STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph
hereof.

 

COMPANY: MYSPACE, INC. By:   /s/ Christopher DeWolfe

Name:

  Christopher DeWolfe

Title:

  President

 

Address:   1333 Second Street     Santa Monica, CA 90401

 

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IN WITNESS WHEREOF, the parties hereto have executed the SERIES A PREFERRED AND
COMMON STOCK PURCHASE AGREEMENT as of the date set forth in the first paragraph
hereof.

 

PURCHASERS:

Redpoint Ventures I, L.P., by its General Partner
Redpoint Ventures I, LLC

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

Redpoint Associates I, LLC, as nominee

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

Redpoint Ventures II, L.P. by its General Partner
Redpoint Ventures II, LLC

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

Redpoint Associates II, LLC, as nominee

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

Redpoint Technology Partners Q-1, L.P., by its General Partner
Redpoint Ventures I, LLC

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

Redpoint Technology Partners A-1, L.P., by its General Partner
Redpoint Ventures I, LLC

By:   /s/ W. Allen Beasley     W. Allen Beasley, Manager

 

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Address for all Redpoint entities:

3000 Sand Hill Road

Building 2, Suite 290

Menlo Park, CA 94025

Attn: Chris Moore