SECURITY AGREEMENT <\/b><\/p> \n
DEBTOR: eUniverse<\/b><\/p> \n\n\n
SECURED PARTY: VP Alpha Holdings IV, L.L.C.<\/b><\/p> \n\n
1. <\/p>
(a) Debtor, in consideration of the agreement of Secured Party to make a loan\nto Debtor pursuant to that certain Secured Note Purchase Agreement, of even date herewith, between Debtor and Secured Party (the \u0093Purchase Agreement<\/u>\u0094), and for other good and sufficient consideration, hereby grants to Secured Party\na first priority security interest in all of Debtor\u0092s right, title and interest in and to all of the Debtor\u0092s personal property and assets including without limitation the following property (except as set forth herein), including without\nlimitation any and all additions, accessions and substitutions thereto or therefore, whether now held or hereafter acquired (hereinafter called the \u0093Collateral<\/u>\u0094): (a) Accounts; (b) Instruments; (c) Documents; (d) Chattel Paper; (e)\nSupporting Obligations; (f) Letter of Credit Rights; (g) Equipment; (h) Fixtures; (i) General Intangibles; (j) Inventory; (k) Investment Property; (l) Deposit Accounts; (m) cash, money, currency, and liquid funds, wherever held; (n) Goods; (o)\nIntellectual Property; and (p) all Proceeds of each of the foregoing, to secure payment of the unpaid principal amount of and interest on the Note (as defined in the Purchase Agreement) and all other obligations and liabilities of Debtor to Secured\nParty, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Purchase Agreement or this Security Agreement and any other document\nexecuted and delivered in connection therewith or herewith and each other obligation and liability, whether direct or indirect, absolute or contingent, due or to become due, or now or hereafter existing, of the Debtor to Secured Party, whether on\naccount of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of counsel to Secured Party) or otherwise (the \u0093Obligations\u0094). <\/p>
(b) Capitalized terms used herein and not otherwise defined shall have the\nmeaning set forth in the Uniform Commercial Code of the State of Delaware (the \u0093UCC\u0094). For purposes hereof, the following definitions shall apply: <\/p>\n\n\n\n
\u0093Intellectual Property\u0094 means, collectively, all rights, priorities and privileges of the\nDebtor relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, inventions, patents, patent licenses, trademarks, trademark licenses and trade\nsecrets (including customer lists), domain names, Web sites and know-how, including, but not limited to, the patents, trademarks and copyrights set forth on Schedule 4(n) of the Purchase Agreement. <\/p>
2. Debtor expressly represents, warrants and covenants: <\/p>
(a) That except for the first priority security interest granted hereby, the\nlien in favor of 550 Digital Media Ventures, Inc. (\u0093550 DMV\u0094) which is pari passu<\/i> with the security interest created hereby and applies to all of the same Collateral, and the permitted liens listed on Schedule A<\/u> hereto (the\n\n\u0093Permitted Liens\u0094), Debtor is the owner of the Collateral free from any adverse lien, security interest or encumbrances; and that Debtor will defend the Collateral against all claims and demands of all persons at anytime claiming the same\nor any interest therein. The security interest granted pursuant to this Security Agreement will constitute a valid and continuing first priority perfected security interest in favor of the Secured Party in the Collateral for which perfection is\ngoverned by the UCC or filing with the United States Copyright Office or United States Patent and Trademark Office. Such security interest will be prior to all other liens on the Collateral, except for Permitted Liens. <\/p>
(b) That Debtor has the full power and authority to enter into this Security\nAgreement, that this Security Agreement has been duly authorized, executed, and delivered by the Debtor and Debtor\u0092s obligations under this Security Agreement are legal, valid, binding, absolute and unconditional. <\/p>
(c) That Debtor\u0092s location is as stated above and the Collateral will\nbe kept at that location or at the locations of Debtor\u0092s subsidiaries. <\/p>
(d) That Debtor will promptly notify Secured Party of any change in the location of the Collateral. <\/p>
(e) That Debtor will pay all taxes and assessments of every nature which may be levied or assessed against the Collateral. <\/p>
(f) That, except for liens disclosed herein or in the Schedules hereto,\nDebtor will not permit or allow any adverse lien, security interest or encumbrance whatsoever upon the Collateral and will not permit the same to be attached or replevined. <\/p>
(g) That Debtor has used, and will continue to use for the duration of this Security Agreement, consistent standards of\nquality in its provision of services sold under Debtor\u0092s service marks. Debtor shall use its best efforts to do any and all acts required by Secured Party to ensure Debtor\u0092s compliance with this subparagraph. <\/p>
(h) That the Collateral is in good condition, and that Secured Party may\nexamine and inspect the Collateral at any time, wherever located. Without limiting the generality of <\/p> \n\n
2 <\/p>\n\n\n\n\n
the foregoing, Debtor hereby grants to Secured Party and its employees and agents the right to visit\nDebtor\u0092s offices from which services are provided under any of Debtor\u0092s service marks, and to inspect the quality control relating thereto at reasonable times during regular business hours. <\/p>
(i) That Debtor will not do any act, or omit to do any act, whereby\nDebtor\u0092s service marks or any registration or application appurtenant thereto, may become abandoned, invalidated, unenforceable, avoided, avoidable, or will otherwise diminish in value, and shall notify Secured Party immediately if it knows of\nany reason or has reason to know of any ground under which this result may occur. Debtor shall take appropriate action at its expense to halt the infringement of Debtor\u0092s service marks and shall properly exercise its duty to control the nature\nand quality of the goods offered by any licensees in connection therewith. <\/p>
(j) That Debtor will not use the Collateral in violation of any applicable statutes, regulations or ordinances or rights to any third parties. <\/p>
(k) That Debtor will keep the Collateral at all times insured against risks of loss or damage by fire, theft and such other\ncasualties as Secured Party may reasonably require, all in such amounts, under such forms of policies, upon such terms, for such periods, and written by such companies or underwriters as Secured Party may approve, losses in all cases to be payable\nto Secured Party and Debtor as their interest may appear. Secured Party may act as attorney for Debtor in making, adjusting and settling claims under or canceling such insurance and endorsing Debtor\u0092s name on any drafts drawn by insurers of the\nCollateral. <\/p>
(l) At any time and from time to time, upon the\nrequest of Secured Party, Debtor will promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Secured Party may reasonably deem desirable in obtaining the full benefits of this\nSecurity Agreement, including, without limitation, the filing of any financing or continuation statement under the Uniform Commercial Code with respect to the liens and security interests granted hereby. Debtor hereby authorizes Secured Party to\nfile any such financing or continuation statement without the signature of Debtor to the extent permitted by applicable law. <\/p>
(m) That Debtor hereby indemnifies and holds Secured Party, its officers, directors, employees, affiliates, partners and shareholders, harmless from and\nagainst any claim, suit, loss, damage or expense (including reasonable attorneys\u0092 fees) arising out of this Security Agreement, the Purchase Agreement, or Debtor\u0092s operation of its business from the use of the Collateral. <\/p> \n\n(n) That, subject to Secured Party\u0092s Intercreditor Agreement with 550 DMV, Debtor hereby irrevocably appoints Secured Party, and its successors and assigns, Debtor\u0092s true and\nlawful attorney, with full power (in the name of Debtor or otherwise), after the occurrence and during the continuance of an Event of Default (defined in Section 4 below), to ask, require, demand, receive, compound and give acquittance for any and\nall moneys, claims and other amounts due and to \n
3 <\/p>\n\n\n\n
become due at any time under, or arising out of, the Collateral; to endorse any checks or other\ninstruments or orders in connection therewith; to enforce all Secured Party\u0092s rights hereunder, to enter into all agreements or instruments required to carry out the terms hereof which are required to be performed by Debtor; to execute such\nother assignments and mortgages of the Collateral as Secured Party may deem to be necessary or advisable. Such power of attorney shall be deemed a power coupled with an interest and, therefore, irrevocable. <\/p> \n\n
(o) Without thirty (30) days\u0092 prior written notice to, and the prior written consent from, the Secured Party, the Debtor shall not (i) change the Debtor\u0092s name, state of\n incorporation or organization, organizational identification number or place of business (or, if the Debtor has more than one place of business, its chief executive office).<\/p>\n
(p) In no event shall the Debtor, either itself or through any agent, employee, licensee or designee, file an application for the registration of any patent, trademark or copyright with\n the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency without giving the Secured Party prior written notice thereof, and, upon request of the Secured Party, the Debtor shall execute and\n deliver any and all security documents as the Secured Party may request to evidence the Secured Party\u0092s Lien on such Intellectual Property and the general intangibles of the Debtor relating thereto or represented thereby. The Debtor hereby\n authorizes the Secured Party to amend this Agreement (without any further action or consent from the Debtor) to include any such patent, trademark or copyright as Collateral hereunder.\n \n \n \n <\/p>\n
3. Until an Event of Default, Debtor may have possession of the Collateral\nand use it in any lawful manner, and upon an Event of Default, Secured Party shall have the immediate right to the possession of the Collateral. The powers conferred on the Secured Party by this Section 3 are solely to protect the Secured\nParty\u0092s interests in the Collateral and shall not impose any duty upon it to exercise any such powers. The Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the\nSecured Party nor any of its officers, directors, employees or agents shall, <\/b>in the absence of willful misconduct or gross negligence, be responsible to the Debtor for any act or failure to act pursuant to this Section 3. <\/p>
4. Debtor shall be in default under this Security Agreement upon the\nhappening of any of the following events or conditions (each an \u0093Event of Default\u0094): <\/p>
(a) default in the payment or performance of any obligation, covenant or liability contained or referred to herein or in any note evidencing the same;\n\n<\/p>
(b) the making or furnishing of any warranty, representation\nor statement to Secured Party by or on behalf of Debtor which proves to have been false in any material respect when made or furnished; <\/p> \n
4 <\/p>\n\n\n\n\n
(c) loss, theft, damage, destruction, sale or encumbrance to or of any of the Collateral, or the making\nof any levy seizure or attachment thereof or thereon and, if capable of being remedied, such default shall continue unremedied for a period of 30 days; <\/p>
(d) dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the\nbenefit of creditors by, or the commencement of any proceeding under any bankruptcy or insolvency laws of, by or against Debtor or any guarantor or surety for Debtor; <\/p>
(e) any Event of Default under the Purchase Agreement; <\/p>
and Debtor shall give Secured Party immediate notice of the occurrence of any matter referred to in clause (d) of this paragraph.\n\n<\/p>
5. Subject to the Intercreditor Agreement with 550 DMV, upon\nsuch default and at any time thereafter, Secured Party may declare all obligations secured hereby immediately due and payable and shall have the remedies of a secured party under Article 9 of the Uniform Commercial Code. Secured Party may require\nDebtor to assemble the Collateral and deliver or make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Expenses of taking, holding, preparing for sale, or selling the\nCollateral or the like shall include Secured Party\u0092s reasonable attorney\u0092s fees and legal expenses. If an Event of Default has occurred and is continuing, the Secured Party may exercise, in addition to all other rights and remedies granted\nto it in this Agreement and in any other instrument or agreement relating to the Obligations, all rights and remedies of a secured party under the UCC. Without limiting the foregoing, the Secured Party, without demand of performance or other demand,\npresentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon the Debtor or any other person (all of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances\ncollect, receive, appropriate and realize upon any or all of the Collateral, and\/or may sell, lease, assign, give an option or options to purchase, or otherwise dispose of and deliver any or all of the Collateral (or contract to do any of the\nforegoing), in one or more parcels at a public or private sale or sales, at any exchange, broker\u0092s board or office of the Secured Party or elsewhere upon such terms and conditions as the Secured Party may deem advisable, for cash or on credit\nor for future delivery without assumption of any credit risk. The Secured Party shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all reasonable expenses incurred therein or\nin connection with the care or safekeeping of any of the Collateral (including, without limitation, reasonable attorneys\u0092 fees and expenses) to the payment in whole or in part of the Obligations, in such order as the Secured Party may elect,\nand only after such application and after the payment by the Secured Party of any other amount required by any provision of law, need the Secured Party account for the surplus, if any, to the Debtor. To the extent permitted by applicable law, the\nDebtor waives all claims, damages and demands it may acquire against the Secured Party arising out of the exercise by the Secured Party of any of its rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be\nrequired by law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition. The Debtor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the\nCollateral are insufficient to pay <\/p> \n
5 <\/p>\n\n\n\n\n
the Obligations and the fees and disbursements of any attorneys employed by the Secured Party to collect such deficiency.\nIn furtherance of the Secured Party\u0092s rights hereunder while an Event of Default has occurred and is continuing, the Debtor hereby grants to the Secured Party an irrevocable, non-exclusive license (exercisable without royalty or other payment\nby the Secured Party) to use, license or sublicense any patent, trademark, tradename, copyright or other Intellectual Property in which the Debtor now or hereafter has any right, title or interest together with the right of access to all media in\nwhich any of the foregoing may be recorded or stored. <\/p>
6. No\nwaiver by Secured Party of any Event of Default shall operate as a waiver of any other Event of Default or of the same Event of Default on a future occasion. The taking of this Security Agreement shall not waive or impair any other security said\nSecured Party may have or hereafter acquire for the payment of the above indebtedness, nor shall the taking of any such additional security waive or impair this Security Agreement; but said Secured Party may, resort to any security it may have in\nthe order it may deem proper, and notwithstanding any collateral security, Secured Party shall retain its rights of set-off against Debtor. <\/p>
7. Secured Party\u0092s rights hereunder shall be senior to the rights of any other person except for 550 DMV and as listed on Schedule A<\/u> hereto.\n<\/p>
8. All rights of Secured Party hereunder shall inure to the\nbenefit of its successors and assigns; and all promises and duties of Debtor shall bind his heirs, executors or administrators or his or its successors or assigns. If there be more than one Debtor, their liabilities hereunder shall be joint and\nseveral. <\/p>
9. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND\nCONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUDING CONFLICT OF LAWS PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION. <\/p>
10. This Security Agreement may be executed in counterparts, each of which shall be deemed an original but all of which\ntogether shall constitute one and the same instrument. <\/p>
[signature page follows] <\/p> \n\n
6 <\/p>\n\n\n\n\n
Dated this 15th day of July, 2003. <\/p> \n<\/pre>\n
| \n Debtor:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | \n Secured Party:<\/p>\n<\/td>\n<\/tr>\n | |||||||||||||||||||||||||||||||||||||||
| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | |||||||||||||||||||||||||||||||||||||||||
eUNIVERSE, INC<\/small>.<\/b><\/td>\n| <\/td>\n | <\/td>\n | <\/td>\n | VP ALPHA<\/small> HOLDINGS<\/small> IV, L.L.C. ,<\/b><\/td>\n<\/tr>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | \n | By: VANTAGE<\/small> POINT<\/small> VENTURE<\/small><\/p>\n ASSOCIATES<\/small> IV, L.L.C.,<\/p>\n its Managing Member<\/p>\n<\/td>\n<\/tr>\n <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n | By:<\/p>\n<\/td>\n <\/td>\n | \n | \/s\/ BRAD<\/small> GREENSPAN<\/small><\/p>\n Title:<\/p>\n<\/td>\n \/s\/ ALAN<\/small> E. SALZMAN<\/small><\/p>\n Name:<\/p>\n<\/td>\n Name:<\/p>\n<\/td>\n Title:<\/p>\n<\/td>\n Title:<\/p>\n<\/td>\n [SIGNATURE PAGE TO 7 <\/p>\n Schedule A<\/u> <\/b><\/p>\n Permitted Liens <\/b><\/p>\n Secured Party has agreed that the first priority security interest granted to it pursuant to the terms of this Security Agreement shall be subordinate to a revolving, Secured Party\u0092s security interest in any Collateral subject to a purchase money security Secured Party\u0092s security interest shall be pari passu with the security interest of 550 DMV. <\/p>\n Liens for taxes not yet due and payable, materialman\u0092s, warehouseman\u0092s and mechanics\u0092 liens for amounts not yet due and payable, liens created by statute for amounts not yet due and payable. <\/p>\n Liens in connection with equipment leases. <\/p>\n Security interests in proceeds in Debtor accounts held with merchant providers. <\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7885],"corporate_contracts_industries":[9497],"corporate_contracts_types":[9560,9570],"class_list":["post-41307","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-intermix-media-inc","corporate_contracts_industries-retail__electronics","corporate_contracts_types-finance","corporate_contracts_types-finance__security"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41307"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41307"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41307"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} |