EXHIBIT 99.1
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of July 15, 2003, is by and
between:
(1) 550 Digital Media Ventures, Inc. ("Assignor"); and
(2) VP Alpha Holdings IV, L.L.C. ("Assignee").
RECITALS
A. Assignor is a party to the Secured Note and Warrant Purchase
Agreement dated as of September 6, 2000, by and between eUniverse, Inc., a
Delaware corporation ("Borrower"), and Assignor, as amended by the Amendment to
Secured Promissory Note dated October 24, 2001 and the letter agreement dated
March 28, 2003 (the "Note Agreement"), pursuant to which Borrower has issued to
Assignor a Second Amended and Restated Convertible Secured Promissory Note dated
March 28, 2003 in the principal amount of $2,289,764 (the "Note").
B. Borrower's obligations under the Note are secured pursuant to the
Security Agreement by Borrower dated September 6, 2000 (the "Security
Agreement").
C. The current outstanding principal amount of the Note is $2,289,764.
D. Assignor wishes to sell, and Assignee wishes to purchase, a portion
of the Note and Assignor's related rights under the Note Agreement and the
Security Agreement.
E. Under the Note Agreement, Borrower must consent to such assignment.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Note Agreement
have the respective meanings given to those terms in the Note Agreement.
2. Sale and Assignment. Subject to the terms and conditions of this
Assignment Agreement, Assignor hereby agrees to sell, assign and delegate to
Assignee and Assignee hereby agrees to purchase $500,000 in principal amount of
the Note. Such sale, assignment and delegation shall become effective on the
date hereof (the "Assignment Effective Date").
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3. Assignment Effective Date. On the Assignment Effective Date,
Assignee shall pay to Assignor, in immediately available funds, $500,000 (the
"Purchase Price"), for the portion of the Note purchased by Assignee hereunder.
Effective upon receipt by Assignor of the Purchase Price payable by Assignee,
the sale, assignment and delegation to Assignee of such portion of the Note
shall become effective.
4. Payments After the Assignment Effective Date. Assignor and Assignee
hereby agree that Borrower shall, and hereby authorize and direct Borrower to,
pay amounts payable under the Note Agreement as follows:
(a) All principal payments made after the Assignment Effective
Date with respect to the portion of the Note assigned to Assignee
pursuant to this Assignment Agreement shall be payable to Assignee.
(b) All interest, fees and other amounts accrued after the
Assignment Effective Date with respect to the portion of the Note
assigned to Assignee pursuant to this Assignment Agreement shall be
payable to Assignee.
5. Delivery of Notes. On or prior to the Assignment Effective Date,
Assignor will deliver to Borrower the Note payable to Assignor with instructions
to re-issue such Note in accordance with this Agreement. On the Assignment
Effective Date, Borrower will deliver a new Note for Assignee and Assignor, in
each case in principal amounts reflecting their respective interests in the
Note. Any new Note issued to Assignee shall reflect such amendments thereto as
may be agreed to by Borrower and Assignee.
6. Copies of Note Agreement Documents. Attached hereto as Exhibit A are
copies of all documents delivered to Assignor on or prior to the Closing Date in
satisfaction of the conditions precedent set forth in the Note Agreement and any
amendments or modifications thereto.
7. Further Assurances. Each of the parties to this Assignment Agreement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.
8. Further Representations, Warranties and Covenants. Assignor further
represents and warrants to and covenants with Assignee as follows:
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned hereby free and clear
of any lien, encumbrance, security interest or adverse claim, and has
the power and authority to transfer such interest pursuant to this
Assignment Agreement.
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(b) Assignor has not made to Assignee any untrue statement of
a material fact about Borrower, or omitted to state a material fact
about Borrower, necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
9. Assignee Representation. Assignee represents and warrants to
Assignor that it is an "accredited investor" within the meaning of Rule 501(a)
under the Securities Act of 1933, and Assignee has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of, and is able to bear the economic risk of, its acquisition of a
portion of the Note. Assignee has had the opportunity to do its own due
diligence regarding the Borrower, and Assignee is not relying on Assignor with
respect to such due diligence. Assignee is not acquiring a portion of the Note
with any present intention of offering or selling any interest therein in a
transaction that would violate the Securities Xxx 0000 or the securities laws of
any state of the United States or any other applicable jurisdiction.
10. Effect of this Assignment Agreement. On and after the Assignment
Effective Date, Assignee shall be a Purchaser with a principal amount equal to
$500,000 and shall have the rights of a Purchaser under the Note Agreement and
the related Security Agreement.
11. Miscellaneous. This Assignment Agreement constitutes and contains
the entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes any prior or contemporaneous oral or
written agreements or understandings. Each party acknowledges and agrees that
they have not made any representations, warranties or agreements of any kind
regarding the subject matter hereof, except as expressly set forth herein. This
Assignment Agreement may not be modified or amended, except by an instrument in
writing signed by duly authorized officers of both of the parties hereto. The
parties agree that any dispute arising out of or in connection with this
Assignment Agreement will be resolved solely by confidential binding arbitration
in San Francisco, California according to the commercial arbitration rules of
JAMS. Each party shall bear its own attorneys' fees, expert witness fees, and
costs in connection with such arbitration. This Assignment Agreement has been
negotiated and drafted by each party, with counsel from each party reviewing the
document. The language in this Assignment Agreement shall be construed as to its
fair meaning and not strictly for or against any party. This Assignment
Agreement, and any dispute arising hereunder, shall be governed by California
law, without giving effect to any choice of law or conflict of law provision or
rule that would cause the application of the laws of any jurisdiction other than
California. If any provision of this Assignment Agreement is determined to be
invalid in whole or in part for any reason, such unenforceable or invalid
provision shall not affect the legality, enforceability or validity of the rest
of this Assignment Agreement. If any provision is stricken in accordance with
the previous sentence, then the stricken provision shall be replaced with a
legal, enforceable and valid provision that is as similar in tenor to the
stricken provision as is legally possible. The provisions of this Assignment
Agreement are intended solely for the benefit of the Assignor and Assignee and
no provision hereof may be enforced by any creditor,
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shareholder, officer, director, or agent of, or any other party affiliated with,
the Assignor or Assignee. The Assignor shall use its commercially reasonable
efforts to perform such further acts and things as Assignee may reasonably
request in order to carry out the intent and accomplish the purpose of this
Assignment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth above.
ASSIGNOR: 550 Digital Media Ventures, Inc.
a Delaware corporation
By: /s/
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Name: Xxxx Xxxxxxxxx
Title: Senior VP and General Counsel
ASSIGNEE: VP Alpha Holdings IV, L.L.C.
By: Vantage Point Venture
Associates IV, L.L.C.,
its Managing Member
By: /s/
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Member
AGREED AND CONSENTED TO: eUniverse, Inc., a Delaware corporation
BORROWER
By: /s/
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Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO ASSIGNMENT AGREEMENT]
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