SC 13D

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

eUniverse, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

298 412 10 7

(CUSIP Number)

Rodi Guidero	Richard D. Harroch
VantagePoint Venture Partners	Orrick, Herrington & Sutcliffe LLP
1001 Bayhill Drive, Suite 300	400 Sansome Street
San Bruno, California 94006	San Francisco, CA 94111
(650) 866-3100	(415) 392-1122

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

July 16, 2003

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. []

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 298 412 10 7
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). VP ALPHA HOLDINGS, L.L.C.
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)
		(b)
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) WC, OO
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
	6.	Citizenship or Place of Organization DELAWARE
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0
			8.	Shared Voting Power 4,800,000
			9.	Sole Dispositive Power 0
			10.	Shared Dispositive Power 4,800,000
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,800,000
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
	13.	Percent of Class Represented by Amount in Row (11) 17.0%**
	14.	Type of Reporting Person (See Instructions) 00

**Based on 28,312,239 shares outstanding: (i) 1,750,000 shares issuable to VP Alpha Holdings IV, L.L.C. upon conversion of the Series B Convertible Preferred Stock issuable upon full exercise of the option described herein and (ii) 26,562,239 shares outstanding as of July 15, 2003 as represented by eUniverse, Inc. in the Secured Note Purchase Agreement, dated as of July 15, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.

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CUSIP No. 298 412 10 7
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). VANTAGEPOINT VENTURE ASSOCIATES IV, L.L.C.
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)
		(b)
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
	6.	Citizenship or Place of Organization DELAWARE
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0
			8.	Shared Voting Power 4,800,000
			9.	Sole Dispositive Power 0
			10.	Shared Dispositive Power 4,800,000
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,800,000
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
	13.	Percent of Class Represented by Amount in Row (11) 17.0%**
	14.	Type of Reporting Person (See Instructions) 00

**Based on 28,312,239 shares outstanding: (i) 1,750,000 shares issuable to VP Alpha Holdings IV, L.L.C. upon conversion of the Series B Convertible Preferred Stock issuable upon full exercise of the option described herein and (ii) 26,562,239 shares outstanding as of July 15, 2003 as represented by eUniverse, Inc. in the Secured Note Purchase Agreement, dated as of July 15, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.

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CUSIP No. 298 412 10 7
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). JAMES D. MARVER
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)
		(b)
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
	6.	Citizenship or Place of Organization UNITED STATES
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0
			8.	Shared Voting Power 4,800,000
			9.	Sole Dispositive Power 0
			10.	Shared Dispositive Power 4,800,000
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,800,000
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
	13.	Percent of Class Represented by Amount in Row (11) 17.0%**
	14.	Type of Reporting Person (See Instructions) IN

**Based on 28,312,239 shares outstanding: (i) 1,750,000 shares issuable to VP Alpha Holdings IV, L.L.C. upon conversion of the Series B Convertible Preferred Stock issuable upon full exercise of the option described herein and (ii) 26,562,239 shares outstanding as of July 15, 2003 as represented by eUniverse, Inc. in the Secured Note Purchase Agreement, dated as of July 15, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.

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CUSIP No. 298 412 10 7
	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). ALAN E. SALZMAN
	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)
		(b)
	3.	SEC Use Only
	4.	Source of Funds (See Instructions) AF
	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
	6.	Citizenship or Place of Organization UNITED STATES
Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0
			8.	Shared Voting Power 4,800,000
			9.	Sole Dispositive Power 0
			10.	Shared Dispositive Power 4,800,000
	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 4,800,000
	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
	13.	Percent of Class Represented by Amount in Row (11) 17.0%**
	14.	Type of Reporting Person (See Instructions) IN

**Based on 28,312,239 shares outstanding: (i) 1,750,000 shares issuable to VP Alpha Holdings IV, L.L.C. upon conversion of the Series B Convertible Preferred Stock issuable upon full exercise of the option described herein and (ii) 26,562,239 shares outstanding as of July 15, 2003 as represented by eUniverse, Inc. in the Secured Note Purchase Agreement, dated as of July 15, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.

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Item 1.	Security and Issuer
	This statement on Schedule 13D (this "Statement") relates to an option (the "Option") that may be exercised within the next 60 days to purchase shares of common stock, par value $0.001 per share (the "Common Stock"), and shares of Series B Convertible Preferred Stock (the “Series B”), par value $0.10 per share, of eUniverse, Inc., a Delaware corporation (the "Company").  The principal executive offices of the Company are located at 6060 Center Drive, Suite 300, Los Angeles, California 90045.
Item 2.	Identity and Background
	(a), (b), (c) and (f).
	This Statement is filed by (1) VP Alpha Holdings IV, L.L.C. ("VP Alpha LLC"), (2) VantagePoint Venture Associates IV, L.L.C. ("VP Associates LLC"), (3) James D. Marver and (4) Alan E. Salzman.  Messrs. Marver and Salzman, together with VP Alpha LLC and VP Associates LLC, are hereinafter referred to as the "Reporting Persons." VP Alpha LLC is a Delaware limited liability company with VP Associates LLC as its managing member.  James D. Marver and Alan E. Salzman are managing members of VP Associates LLC, which is a Delaware limited liability company. The principal business of the Reporting Persons is to provide venture capital financing and active assistance to information, internet and technology companies. The address of each of the Reporting Persons is 1001 Bayhill Drive, Suite 300, San Bruno, California 94066. Each of Messrs. Marver and Salzman are citizens of the United States.
	(d) and (c).
	During the last five years, none of the Reporting Persons has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3.	Source and Amount of Funds or Other Consideration
	The consideration paid for the Option as reported in Item 4 below was the assignment (the “Assignment”) to VP Alpha LLC of $500,000 of the existing debt of the Company to 550 Digital Media Ventures, Inc. (“550 DMV”), the grantor of the Option.  In connection with the Assignment, VP Alpha LLC paid $500,000 to 550 DMV.  Pursuant to the Option Agreement (as defined below), VP Alpha LLC agreed to pay 550 DMV $1.10 per share of Common Stock upon exercise of the Option.  If VP Alpha LLC sells any shares acquired from 550 DMV (each, a “Resold Share” and collectively, the “Resold Shares”) and receives cash consideration in excess of $3.00 per Resold Share, then VP Alpha LLC will pay over to 550 DMV an amount equal to 40% of the sale price over $3.00 per Resold Share received by VP Alpha LLC, but in no event more than $1.10 per Resold Share (the “Contingent Payment”).  In addition, if VP Alpha LLC distributes the shares to its limited partners, then the Contingent Payment will be made to 550 DMV in the form of a portion of the shares distributed, calculated to be equal to 40% of the excess of the fair market value price per share of Common Stock (which shall equal the average closing price over the 20 consecutive trading days immediately preceding the distribution or if the Common Stock is not publicly traded then the fair market value after taking into account lack of marketability and any other appropriate factors, as determined by an appraisal undertaken by an independent appraiser experienced in valuing securities similar to the shares which has been mutually selected by the parties) over $3.00 per share on the date of distribution, subject to a maximum distribution of shares to 550 DMV equal to a value of $1.10 per share.  The consideration for the Option that has been paid was, and any Contingent Payment and any exercise of the Option will be, funded by available cash of VP Alpha LLC, or in the case of a distribution of shares by VP Alpha LLC, by transferring a portion of the shares that would otherwise be distributed.

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Item 4.

Purpose of Transaction

The Reporting Persons currently intend to hold the Company’s securities for investment purposes.  The Reporting Persons may individually or together make additional purchases of shares of Common Stock in the open market or through privately negotiated transactions, in each case based upon the Reporting Persons' evaluation of the Company's business, prospects and financial condition, the market for the shares, other business and investment opportunities available to the Reporting Persons, general stock market and economic conditions, tax considerations, the likelihood that a third party may seek to obtain control of the Company and the terms of any transaction relating thereto, and other future developments. The Reporting Persons also may decide to sell all or part of their investment in the Company based upon their evaluation of the foregoing factors. Other than as discussed in this Statement, none of the Reporting Persons has any plans or proposals which relate to or would result in (i) the acquisition of additional securities of the Company or the disposition of securities of the Company; (ii) an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Company or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (iv) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (v) any material change in the present capitalization or dividend policy of the Company; (vi) any other material change in the Company's business or corporate structure; (vii) changes in the Company 's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (viii) causing a class of the Company's securities to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of the Company's equity securities becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities and Exchange Act of 1934; or (x) any action similar to any of those enumerated above. On July 1, 2003, VP Alpha LLC entered into two term sheets with respect to the Company.  One, among the Company, 550 DMV and VP Alpha LLC (“Term Sheet #1”) provides for the Option, among other things.  The other term sheet, between the Company and VP Alpha LLC (“Term Sheet #2”), provides for (i) a loan to the Company by VP Alpha LLC in the amount of $2 million and the $500,000 payment to 550 DMV referred to in Item 3 above, (ii) the issuance by the Company to VP Alpha LLC of warrants to purchase 200,000 shares of Series B if the Option is not exercised within 120 days, (iii) the right of VP Alpha LLC, subject to certain conditions (including that VP Alpha LLC complete its due diligence and approve the same in its sole discretion), to make a $10 million purchase of shares of Series B (the “PIPE transaction”), and (iv) the provision of a line of credit of up to $20 million from VP Alpha LLC to the Company contingent on the closing of the PIPE transaction.  Borrowings under such line of credit would be subject to VP Alpha LLC’s approval in its sole discretion.  If the PIPE transaction closes, VP Alpha LLC will have the right to elect the greater of (i) two members of the Company’s Board of Directors or (ii) the number of directors provided for in the Certificate of Designation of the Series B Convertible Preferred Stock of the Company. On July 15, 2003, VP Alpha LLC and 550 DMV signed the Option Agreement providing for the Option (the “Option Agreement”) and placed it into escrow.  On the same date, VP Alpha LLC, as purchaser, and the Company, as seller, signed a Secured Note Purchase Agreement (the “Note Purchase Agreement”), providing for the purchase and sale of a secured note of the Company in the aggregate principal amount of $2,500,000 (the “Loan transaction”) and a warrant to purchase 200,000 shares of the Series B (the “Warrant”), issuable in the event VP Alpha LLC does not exercise the Option within 120 days in exchange for the transfer of all VP Alpha LLC's rights under the Option Agreement to the Company.  The Loan transaction closed on July 16, 2003 and the Option Agreement was released from escrow and became effective.  In connection with the Loan transaction, VP Alpha LLC and 550 DMV entered into an Intercreditor Agreement and an Assignment Agreement, and the Company issued its Secured Promissory Note in the amount of $2,500,000 payable to VP Alpha LLC. Pursuant to the Option Agreement, VP Alpha LLC may purchase up to 3,050,000 shares of the Company’s Common Stock and up to 1,750,000 shares of the Series B held by 550 DMV.  The Option may be exercised in part as long as it is exercised for at least 50% of the shares subject to the Option. The 1,750,000 shares of Series B are currently convertible into an aggregate of 1,750,000 shares of Common Stock.  Exhibit B to the Option Agreement lists changes which would be made to the Company's existing Certificate of Designation of the Series B Convertible Preferred Stock upon the closing of the purchase of the shares subject to the Option.  In the event that the approval of the Company’s stockholders would be required to make such changes, a new class of preferred stock with the same rights, preferences and privileges as the Series B, after giving effect to the changes

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	contemplated by Exhibit B to the Option Agreement, would be established by the Company and VP Alpha LLC then could elect to exchange its Series B for shares of such new class of preferred stock immediately after the closing under the Option Agreement. Pursuant to the Company's Certificate of Designation of the Series B Convertible Preferred Stock (the “Series B Designation”) as proposed to be amended by Exhibit B to the Option Agreement (or the Certificate of Designation of the new series of preferred stock, as applicable): (a) dividends for shares of Series B held by VP Alpha LLC and its affiliates and assignees are entitled to an 8% cumulative dividend payable in additional shares of Series B; (b) the initial conversion price will be deemed to be $1.50 for shares of Series B held by VP Alpha LLC and its affiliates and assignees, (c)  if the Option is exercised for all the shares subject to it, 550 DMV and any assignee of its remaining Series B shares will be deemed to have voted or consented in the same manner as VP Alpha LLC, its affiliates and assignees with respect to the Series B shares issued pursuant to the Option (the “Series B Option Shares”), (d) the Series B Option Shares will only be convertible into common stock at VP Alpha LLC’s election or upon other events acceptable to VP Alpha LLC, (e) VP Alpha LLC will have the right to elect a number of the members of the Company’s Board of Directors which varies based on the size of the Board, (e) the affirmative vote of the holders of at least two-thirds of the Series B is required for (i) any changes in the Certificate of Incorporation or Bylaws, (ii) to create, authorize or issue any class, series or shares of preferred stock or any other class of capital stock ranking, either as to payment of dividends, distribution or as to distributions of assets upon liquidation, prior to or on a parity with the Series B, or (iii) increase the size of the Board of Directors beyond eleven members.  So long as VP Alpha LLC or any of its affiliates owns at least 1,442,308 shares of Series B or Common Stock (as adjusted for any stock split, combination, reorganization, reclassification, stock dividend, stock distribution or similar event), the Company will not, without the affirmative consent or  vote of at least two-thirds of the Board of Directors (i) enter into an agreement for or consummate, a Corporate Transaction (as defined in the Series B Designation), (ii) enter into transactions which result in or require the Company to issue shares of its capital stock in excess of 5% (in any one transaction) or 12.5% (in the aggregate) of the Company’s then-current market capitalization, (iv) increase or decrease the number of authorized shares of capital stock, (v) directly or indirectly declare or pay any dividend or make any other distribution in respect thereof, or purchase, redeem, repurchase or otherwise acquire any shares of capital stock of the Company or any subsidiary, other than as specified in the Series B Designation, or (vi) increase or decrease the size of the Company’s Board of Directors. Any and all rights that 550 DMV has associated with the Common Stock and the Series B, including but not limited to registration rights, voting rights, preemptive rights, liquidation preference, or otherwise, will be deemed transferred (to the extent transferable) to VP Alpha LLC upon its exercise of the Option and the payment of the related purchase price. In addition, 550 DMV has agreed that it will vote as a stockholder in favor of any investment and loan transaction between the Company and VP Alpha LLC resulting in an additional investment in the Company by VP Alpha LLC of not less than $5 million at a price of at least $1.00 per share (if an equity transaction), as approved by the board of directors of the Company.  In connection with consummation of any such transaction, 550 DMV will be deemed to have waived any anti-dilution protection and any pre-emptive rights and rights of first refusal that 550 DMV may have in connection with its securities holdings in the Company. All references to Term Sheet #1, Term Sheet #2, the Series B Designation, the Option Agreement, the Assignment Agreement and the Note Purchase Agreement are qualified in their entirety by the full text of such agreements, which are filed as exhibits to this Statement.
Item 5.	Interest in Securities of the Issuer
	(a) and (b).
	As a result of the Option described in Items 3 and 4 above, each of the Reporting Persons is the beneficial owner of up to 4,800,000 shares of the Company’s Common Stock or approximately 17.0% of the issued and outstanding shares of the Company’s Common Stock, comprised of the following: (i) up to 3,050,000 shares of Company Common Stock to be purchased by VP Alpha LLC upon exercise of the Option and (ii) up to an estimated 1,750,000 shares of Company Common Stock issuable to VP Alpha LLC upon conversion of the up to 1,750,000 shares of Series B to be purchased by VP Alpha LLC upon exercise of the Option.

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	Upon exercise of the Option, each of the Reporting Persons will share the power to vote, and the power to dispose of, 4,800,000 shares of Company Common Stock.
	(c)              None of the Reporting Persons has effected any transactions in the class of securities reported on this Statement during the past 60 days, other than as set forth in this Statement.
	(d) and (e).
	Not applicable.
Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	Except as described in this Statement, none of the Reporting Persons has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.
Item 7.	Material to Be Filed as Exhibits
	The following documents are filed as exhibits:
	1.Agreement of Joint Filing, dated as of July 25, 2003.
	2.Term Sheet #1, dated as of July 1, 2003, among eUniverse, Inc., 550 Digital Media Ventures, Inc. and VP Alpha Holdings IV, L.L.C.
	3.Term Sheet #2, dated as of July 1, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.
	4.Secured Note Purchase Agreement, dated as of July 15, 2003, between eUniverse, Inc. and VP Alpha Holdings IV, L.L.C.
	5.Form of Warrant to Purchase Series B Preferred Stock.
	6.Option Agreement, dated as of July 15, 2003, among eUniverse, Inc., 550 Digital Media Ventures, Inc. and VP Alpha Holdings IV, L.L.C.
	7.Certificate of Designation of Series B Convertible Preferred Stock.
	8.Assignment Agreement between VP Alpha Holdings IV, L.L.C. and 550 Digital Media Ventures, Inc.

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Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: July 25, 2003
	VP ALPHA HOLDINGS IV, L.L.C.
	By: VantagePoint Venture Associates IV, L.L.C.
	its Managing Member
	By:	/s/ Alan E. Salzman
	Name: Alan E. Salzman,
	Managing Member
	VANTAGEPOINT VENTURE ASSOCIATES IV, L.L.C.
	By:	/s/ Alan E. Salzman
	Name: Alan E. Salzman,
	Managing Member
	/s/ James D. Marver
	James D. Marver
	/s/ Alan E. Salzman
	Alan E. Salzman

EX-1

EXHIBIT 1

JOINT FILING AGREEMENT

                In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of the Schedule 13D to which this Agreement is an exhibit (and any further amendment filed by them) with respect to the shares of Common Stock, par value $0.001 per share, of eUniverse, Inc.

                This agreement may be executed simultaneously in any number of counterparts, all of which together shall constitute one and the same instrument.

Dated:  July 25, 2003

VP ALPHA HOLDINGS IV, L.L.C.
By:  VantagePoint Venture Associates IV, L.L.C.
its Managing Member
By:	/s/ Alan E. Salzman
Name: Alan E. Salzman, Managing Member
VANTAGEPOINT VENTURE ASSOCIATES IV, L.L.C.
By:	/s/ Alan E. Salzman
Name: Alan E. Salzman, Managing Member
/s/ James D. Marver
James D. Marver
/s/ Alan E. Salzman
Alan E. Salzman

EX-2

Exhibit 2

Not for Circulation

Confidential & Proprietary

Term Sheet # 1 - Sony

This term sheet is among eUniverse, Inc. (“Company”), 550 Digital Media Ventures, Inc., a wholly owned subsidiary of Sony Corporation of America (“Sony”), and VP Alpha Holdings IV, L.L.C. (“VPVP”).

Loan:	Bridge loan to the Company from VPVP in the amount of $2.0 million (the “Loan”).  The principal of the Loan to be due and payable on the earlier of (a) the closing of the PIPE transaction referenced below, in which case the outstanding principal and interest under the Loan shall be applied toward the purchase price in the PIPE transaction, (b) the maturity date of the Company’s existing loan with an affiliate of Sony, (c) two years from the date of the Loan, or (d) the closing of any debt or equity financing by the Company in excess of $2.5 million.  $500,000 additional to Sony to purchase $500,000 of its existing promissory note with the Company.  Bridge loan is to be secured by a first priority lien on the assets of the Company on a pari passu basis with the Company’s existing loan from Sony, will be payable interest only at 8% per annum payable quarterly.  Form of Loan Agreement to be acceptable to VPVP in its sole discretion and acceptable to the Company in good faith.
Option:	Sony to grant VPVP an exclusive option to purchase 4.8 million shares held by Sony, consisting of a pro rata number of Common and Preferred shares held by Sony (the “Option”).  The Option shall be for 180 days, exercisable at a price equal to $1.10 per share.  In the event that VPVP sells or distributes the Option shares at a price in excess of $3 per share, then Sony shall receive a contingent payment equal to 40% of the amount in excess of $3 per share, subject to a maximum additional payment to Sony of $1.10 per share.  The contingent payment shall be in the form of cash if the shares are sold, or in the event of a distribution to VPVP’s limited partners, in the form of Company shares for Sony to sell or hold as it determines. The form of the Option shall contain customary representations, warranties and other terms acceptable to VPVP.  Sony will agree to vote in favor of the consummation of the PIPE transaction and related transactions set forth below, as approved by the Board of Directors of the Company.  Sony will also waive its anti-dilution rights with respect to the Series B shares if the PIPE transaction is completed.  The Company consents to the Option and the transactions contemplated thereunder.
PIPE Transaction:	The Company and VPVP plan to enter into a separate term sheet for possible additional investment by VPVP, the terms of which are still being negotiated.  The PIPE transaction is expected to be for a minimum of $5 million (with possibly greater amounts) and the purchase price per share is expected to be $1.00 or greater.
Capitalization:	The Company represents and warrants that its outstanding capitalization consists of the following:

Security	Number of Shares on an As Converted to Common Basis
Common(1)	25,866,812
Series A Preferred	400,000
Series B Preferred(2)	1,923,077
Warrants	700,000
Vested Options	3,673,277
Unvested Options	1,966,239
Ungranted Options	2,601,301
Total	37,130,706

Definitive Agreements: The Company and Sony will act in good faith to negotiate, complete and enter into a definitive Option Agreement, Loan Agreement, and related closing documents reflecting the terms and conditions hereof as soon as reasonably possible, with a goal of executing the Loan Agreement, Option, and related closing documents within 10 days hereof.

Closing and Closing Conditions:	The closing of the Loan Agreement and the other transactions contemplated hereby will be conditioned upon a variety of items for the benefit of VPVP (which may be waived by VPVP in its sole discretion only in a writing signed by VPVP), including but not limited to the following:
	(a)The parties shall have negotiated the definitive agreements on terms acceptable to VPVP in its sole discretion.
	(b)All representations and warranties of the Company in the definitive agreements shall be true at the signing dates and as of the closing dates.
	(c)The Company shall have performed all of its pre-closing covenants contained in the definitive agreements.
	(d)VPVP shall have completed its business and legal due diligence and approved the same in its sole discretion.
	(e)There shall have been no material adverse change or effect that, individually or when taken together with all other changes or effects, is or could be likely to be materially adverse to the business assets, financial condition, operations, capitalization, or prospects of the Company and its subsidiaries.
	The closing of the Loan Agreement shall be subject to applicable customary conditions for the benefit of the Company, but in no event more extensive than the conditions contained in the Company’s loan documents with Sony.
Representations and Warranties:	The Company will make representations and warranties in the definitive agreements customary in transactions of this kind including, without limitation, representations regarding due formation, qualification and good standing, organization documents and by-laws, company power, subsidiaries, capitalization, authorization, due issuance, financial

(1)Sony owns 3,366,154 shares of Common Stock and 1,923,077 shares of Series B Preferred Stock.  Except for such shares, Sony holds no options, warrants, or rights to acquire any securities of the Company.

(2)See footnote 1, above.

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	statements subsequent developments, no encumbrances, obligations, use of proceeds, assets, litigation, proprietary information, patents, contracts, and commitments.  The Company’s representations concerning financial statements, ownership of its intellectual property, compliance with laws and non-infringement of third party intellectual property rights, shall not be qualified by any “knowledge” qualifier.
Due Diligence Period to Invest and Right to Invest:	The Company recognizes that VPVP has and will expend considerable resources and time in negotiating definitive agreements with respect to the transactions contemplated herein. Accordingly, following execution of this Term Sheet, the Company and its shareholders, officers, directors and agents and Sony shall negotiate in good faith with VPVP for a period of 10 days (the “Due Diligence Period”), with respect to transactions contemplated hereby.  Such negotiations shall reflect the terms set forth in this Term Sheet.
	For valuable consideration, receipt of which is hereby acknowledged, the Company and Sony agree that VPVP shall have the right to complete its due diligence during the Due Diligence Period and to make a loan to the Company and obtain the Option on the terms outlined herein.  Once VPVP has notified the Company that it has satisfactorily completed its due diligence and wishes to complete the Loan (which notice, if to be given, must occur within 10 calendar days following execution of this Term Sheet), the Company and Sony agree to cooperate reasonably and in good faith to complete such transaction as expeditiously as practicable thereafter.
Indemnification:	The Company shall indemnify, defend and hold harmless VPVP and its affiliates, agents, employees, officers, directors and partners (collectively, the “Indemnitees”) from and against any investigations, proceedings, claims, lawsuits or actions, and for any expenses, losses, damages, attorneys’ fees and costs (payable in advance for the amounts expected to be incurred), and liabilities (joint or several), to which the Indemnitees may become subject under the Securities Act of 1933, the Securities Exchange Act of 1934, or any other applicable rule, regulation or law, arising out of or in any way related to this Term Sheet, the definitive agreements, and/or an investment in or loan to the Company.
Expenses and Professional Fees:	The Company shall pay to VPVP at the closing of the Loan Agreement VPVP’s attorneys’ fees and due diligence expenses, in connection with this transaction.  If for any reason the transactions contemplated by this Term Sheet do not close, the Company shall immediately reimburse VPVP’s out-of-pocket legal, accounting and due diligence expenses.
Confidentiality:	The terms and existence of this Term Sheet are confidential to VPVP and may not be disclosed by the Company or Sony except as may be approved by VPVP.
Miscellaneous:	The footnote contains various applicable miscellaneous provisions.*

*This Term Sheet 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 Term Sheet 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 Term Sheet 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 Term Sheet has been negotiated and drafted by each party, with counsel from each party reviewing the document.  The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party.  This Term Sheet, 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 Term Sheet 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 Term Sheet.  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 Term Sheet are intended solely for the benefit of the Company, VPVP, and Sony and no provision hereof may be enforced by any creditor, shareholder, officer, director, or agent of, or any other party affiliated with, the Company, VPVP or Sony.  The Company and Sony shall use its reasonable best efforts to perform such further acts and things as VPVP may reasonably request in order to carry out the intent and accomplish the purposes of the binding provisions of this Term Sheet.

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* * * *

Except as set forth in “Due Diligence Period and Right to Invest”, “Confidentiality”, “Indemnification”, and “Miscellaneous” above, the provisions of this Term Sheet are non-binding on each party.

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If the terms and conditions described above are acceptable to you, please so indicate by your signature below.  This proposal shall remain outstanding until 4:00 pm, San Francisco time, on June 26, 2003, unless previously revoked by us.

VP Alpha Holdings IV, L.L.C.
By:	VantagePoint Venture Associates IV, L.L.C.
	Its Managing Member
		By:			/s/ Alan E. Salzman
		Name:				Alan E. Salzman
		Title:				Managing Member
Agreed and Accepted:
	eUniverse, Inc.
	By:		/s/ Brad Greenspan
	Brad Greenspan, CEO
550 Digital Media Ventures, Inc.
	By:		/s/ Tom J. Connolly
	Title:			Sr. V.P. & Chief Financial Officer
		Date:

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EX-3

Exhibit 3

Not for Circulation

Confidential & Proprietary

Term Sheet # 2

This term sheet is among eUniverse, Inc. (“Company”) and VP Alpha Holdings IV, L.L.C. (“VPVP”).

Loan:	Bridge loan to the Company from VPVP in the amount of $2.0 million (the “Loan”).  The principal of the Loan to be due and payable on the earlier of (a) the closing of the PIPE transaction referenced below, in which case the outstanding principal and interest under the Loan shall be applied toward the purchase price in the PIPE transaction, (b) the maturity date of the Company’s existing loan with an affiliate of Sony, (c) two years from the date of the Loan, or (d) the closing of any debt or equity financing by the Company in excess of $2.5 million.  $500,000 additional paid directly to Sony to purchase $500,000 of its existing promissory note from the Company.  Bridge loan is to be secured by first priority lien on assets of the Company, on a pari passu basis with the Company’s existing loan from an affiliate of Sony, will be payable interest only at 8% per annum payable quarterly.  Form of Loan Agreement to be acceptable to VPVP in its sole discretion and acceptable to the Company in good faith.  If the Option referenced below is not exercised within 120 days, VPVP to receive 3-year warrants to purchase 200,000 shares of Series B Preferred Stock of the Company exercisable at $2.50 per share (as appropriately adjusted for stock splits, stock dividends, recapitalizations, and similar matters).  The form of warrant will be typical for venture capital transactions, including but not limited to a net issuance feature.
Option:	Sony to grant VPVP an exclusive option to purchase 4.8 million shares held by Sony, consisting of a pro rata number of Common and Preferred shares held by Sony (the “Option”).  The Option shall be for 180 days, exercisable at a price equal to $1.10 per share.  In the event that VPVP sells or distributes the Option shares at a net price in excess of $3 per share, then Sony shall receive a contingent payment equal to 40% of the amount in excess of $3 per share, subject to a maximum additional payment to Sony of $1.10 per share.  The contingent payment shall be in the form of cash if the shares are sold, or in the event of a distribution to VPVP’s limited partners, in the form of Company shares for Sony to sell or hold as it determines. The form of the Option shall contain customary representations, warranties and other terms acceptable to VPVP.  Sony will agree to vote in favor of the consummation of the PIPE transaction and related transactions referenced below, as approved by the Board of Directors of the Company.  The Company will consent to the Option and the transactions contemplated thereunder.
PIPE Transaction:	Purchase by VPVP of $10 million of shares of Series B Preferred Shares of the Company (with the Loan paid off in connection therewith) pursuant to the terms and conditions of a definitive Stock Purchase Agreement (the “Stock Purchase Agreement”).  The shares will consist of Series B Preferred  Stock of the Company, with the following changes to the existing terms:
	(a)The purchase price shall be as set forth below.

	(b)The initial conversion price shall be $1.50.
	(c)The authorized number of shares of Series B Preferred Stock will be increased to cover the issuance contemplated by this Term Sheet.
	(d)Reference to 550 Digital Media Ventures in the Series B Preferred Stock terms shall be changed to VPVP.
	(e)The Series B Preferred shares will be convertible to Common only on the election by VPVP, or upon other events acceptable to VPVP in its sole discretion.
	(f)The 8% dividend shall be mandatory and paid quarterly in shares of Series B Preferred.
	The Company will seek NASDAQ approval to allow the PIPE transaction to proceed without shareholder vote.  If shareholder vote is necessary for any reason, Company covenants to use its reasonable  best efforts to obtain such favorable vote or to otherwise stage or structure the transaction to accomplish the issuance of the shares or so many of such shares it may lawfully do without shareholder approval in a manner acceptable to VPVP.
Line of Credit:	In the event of a closing of the PIPE transaction contemplated by this Term Sheet, VPVP shall make available to the Company an acquisition and business development line of credit of up to $20 million (the “Line of Credit”).  The Line of Credit is intended to provide the Company with capital to make appropriate acquisitions and enter into strategic business development ventures (a “Transaction”).  Each Transaction is subject to VPVP’s approval in its sole discretion.  The definitive agreement for the Line of Credit shall be in form and substance acceptable to VPVP and the Company in their sole discretion.
Price:	The price for each share of Series B Preferred Stock under the PIPE transaction (the “Price”) shall be $1.50 per share, which takes into account the amount and type of securities set forth in “Capitalization” below.  This price takes into account (i) the fact that no underwriter fee will be paid by the Company; (ii) the Company’s stock is lightly traded; (iii) The Company is the subject of ongoing litigation; and (iv) the Shares are not immediately freely tradable.
Use of Proceeds from PIPE Transaction:	Ongoing operation and expansion of the Company.
Capitalization:	The Company represents and warrants that its outstanding capitalization (including any outstanding stock, convertible securities, warrants, options, or rights or commitments to issue any of the foregoing, contingent or fixed) consists of the following:

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Security	Number of Shares on an As Converted to Common Basis
Common(1)	25,866,812
Series A Preferred	400,000
Series B Preferred(2)	1,923,077
Warrants	700,000
Vested Options	3,673,277
Unvested Options	1,966,239
Ungranted Options	2,601,301
Total	37,130,706

Definitive Agreements:	The Company and Sony will act in good faith to negotiate, complete and enter into a definitive Option Agreement, Loan Agreement, Stock Purchase Agreement, and related closing documents reflecting the terms and conditions hereof as soon as reasonably possible, with a goal of executing the Loan Agreement and Option within 10 days hereof.
Information & Registration Rights:	VPVP shall receive standard information rights  and the right to have its shares in the Company registered under applicable securities laws (as soon as practicable after the closing of the PIPE transaction).
Closing and Closing Conditions:	The closing of the Loan Agreement and the other transactions contemplated hereby will be conditioned upon a variety of items for the benefit of VPVP (which may be waived by VPVP in its sole discretion only in a writing signed by VPVP), including but not limited to the following:
	(a)The parties shall have negotiated the definitive agreements on terms acceptable to VPVP in its sole discretion.
	(b)All representations and warranties of the Company in the definitive agreements shall be true at the signing dates and as of the closing dates.
	(c)The Company shall have performed all of its pre-closing covenants contained in the definitive agreements.
	(d)VPVP shall have completed its business and legal due diligence and approved the same in its sole discretion.
	(e)There shall have been no material adverse change or effect that, individually or when taken together with all other changes or effects, is or could be likely to be materially adverse to the business assets, financial condition, operations, capitalization, or prospects of the Company and its subsidiaries.
	(f)The price of the Company’s stock as traded on NASDAQ prior to the closing shall be acceptable to VPVP in its sole discretion.
	The Closing of the PIPE transaction shall be subject to a number of additional conditions for the benefit of VPVP, including resolution of litigation that the Company is involved in a manner satisfactory to VPVP.  The Closing of the PIPE transaction and the other transactions contemplated hereby, shall be subject to applicable customary conditions for the benefit

(1)Sony owns 3,366,154 shares of Common Stock and 1,923,077 shares of Series B Preferred Stock.  Except for such shares, Sony holds no options, warrants, or rights to acquire any securities of the Company.

(2)See footnote 1, above.

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	of the Company, but in no event more extensive than the conditions contained in the purchase agreement between Sony and the Company with respect to Sony’s prior purchase of Series B Preferred shares.
Board of Directors:	If the PIPE transaction closes, then VPVP shall have the right to designate the greater of (a) two directors to the Board or (b) the number of directors provided for in the Series B Preferred Stock Certificate of Designation.  To the extent that VPVP has representatives on the Board, those representatives shall be accorded no less favorable treatment than any other Board member with respect to all matters, including, without limitation, expense reimbursement, stock options or grants, benefits, and access to Company information and management.
Representations and Warranties:	The Company will make representations and warranties in the definitive agreements customary in transactions of this kind including, without limitation, representations regarding due formation, qualification and good standing, organization documents and by-laws, company power, subsidiaries, capitalization, authorization, due issuance, financial statements subsequent developments, no encumbrances, obligations, use of proceeds, assets, litigation, proprietary information, patents, contracts, and commitments.  The Company’s representations concerning financial statements, ownership of its intellectual property, compliance with laws and non infringement of third party intellectual property rights, shall be not be qualified by any “knowledge” qualifier.
Due Diligence Period and Right to Invest:	The Company recognizes that VPVP has and will expend considerable resources and time in negotiating definitive agreements with respect to the transactions contemplated herein. Accordingly, following execution of this Term Sheet, the Company and its shareholders, officers, directors and agents and Sony shall negotiate in good faith with VPVP for a period of 10 days for the Loan and 90 days for the PIPE transaction (the “Due Diligence Period”), with respect to transactions contemplated hereby.  Such negotiations shall reflect the terms set forth in this Term Sheet.
	For valuable consideration, receipt of which is hereby acknowledged, the Company agrees that VPVP shall have the right to complete its due diligence during the Due Diligence Period and to make the Loan to the Company and to invest in the PIPE transaction on the terms outlined herein.  Once VPVP has notified the Company that it has satisfactorily completed its due diligence and wishes to complete the Loan or PIPE transaction (which notice, if to be given, must occur within 10 calendar days following execution of this Term Sheet with respect to the Loan and within 90 days with respect to the PIPE transaction), the Company agrees to cooperate reasonably and in good faith to complete such transaction as expeditiously as practicable.
Directors Liability Insurance:	The Company will maintain, for the period that VPVP has a representative on the Board of Directors of the Company, a directors’ liability insurance policy in form and substance reasonably satisfactory to VPVP, covering the directors of the Company in the amount of at least $10 million.
Indemnification:	The Company shall indemnify, defend and hold harmless VPVP and its affiliates, agents, employees, officers, directors and partners (collectively,

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	the “Indemnitees”) from and against any investigations, proceedings, claims, lawsuits or actions, and for any expenses, losses, damages, attorneys’ fees and costs (payable in advance for the amounts expected to be incurred), and liabilities (joint or several), to which the Indemnitees may become subject under the Securities Act of 1933, the Securities Exchange Act of 1934, or any other applicable rule, regulation or law, arising out of or in any way related to this Term Sheet, the definitive agreements, and/or an investment in or loan to the Company.
Expenses and Professional Fees:	The Company shall pay to VPVP at the closing of the Loan Agreement VPVP’s attorneys’ fees and due diligence expenses, in connection with this transaction.  If for any reason the transactions contemplated by this Term Sheet do not close, the Company shall immediately reimburse VPVP’s out-of-pocket legal, accounting and due diligence expenses.  The Company shall pay to VPVP at the closing of the PIPE transaction VPVP’s attorneys fees and due diligence expenses in connection with that transaction.
Confidentiality:	The terms and existence of this Term Sheet are confidential to VPVP and may not be disclosed by the Company or Sony except as may be approved by VPVP.
Miscellaneous:	The footnote contains various applicable miscellaneous provisions. *

* * * *

Except as set forth in “Due Diligence Period and Right to Invest”, “Confidentiality”, “Indemnification”, and “Miscellaneous” above, the provisions of this Term Sheet are non-binding on each party.

*This Term Sheet 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 Term Sheet 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 Term Sheet 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 Term Sheet has been negotiated and drafted by each party, with counsel from each party reviewing the document.  The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party.  This Term Sheet, 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 Term Sheet 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 Term Sheet.  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 Term Sheet are intended solely for the benefit of the Company and VPVP and no provision hereof may be enforced by any creditor, shareholder, officer, director, or agent of, or any other party affiliated with, the Company or VPVP.  Company shall use its reasonable best efforts to perform such further acts and things as VPVP may reasonably  request in order to carry out the intent and accomplish the purpose of the binding provisions of this Term Sheet.

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If the terms and conditions described above are acceptable to you, please so indicate by your signature below.  This proposal shall remain outstanding until 4:00 pm, San Francisco time, on June 24, 2003, unless previously revoked by us.

VP Alpha Holdings IV, L.L.C.
By:	VantagePoint Venture Associates IV, L.L.C.
	Its Managing Member
	By:		/s/ Alan E. Salzman
	Name:		Alan E. Salzman
	Title:		Managing Member
Agreed and Accepted:
eUniverse, Inc.
By:		/s/ Brad Greenspan
		Brad Greenspan, CEO

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EX-4

Exhibit 4

EUNIVERSE, INC.

SECURED NOTE PURCHASE AGREEMENT

This Secured Note Purchase Agreement (the “Agreement”) is made this 15th day of July, 2003 (the “Effective Date”) by and between eUniverse, Inc., aDelaware corporation (the “Company”), and VP Alpha Holdings IV, L.L.C. (the “Purchaser”).

RECITALS

WHEREAS, on the terms and subject to the conditions of this Agreement, the Company desires to issue and sell, and the Purchaser desires to purchase from the Company, a secured note in the aggregate principal amount of $2,500,000, in the form attached hereto as Exhibit A (the “Note”), in consideration of $2,000,000 loaned directly to the Company and the cancellation of a $500,000 note (the “Assigned Note”) purchased by the Purchaser from 550 DMV (as defined below) in connection herewith;

WHEREAS, in further consideration of the purchase by the Purchaser of the Note, the Company may, subject to certain conditions, issue to the Purchaser a warrant to purchase 200,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.10 per share (or a substantially similar preferred stock with the changes set forth in the Option Agreement (as defined below)), in the form attached hereto as Exhibit B (the “Warrant”); and

WHEREAS, the Note, the Warrant, and any Preferred Stock issuable upon exercise of the Warrant are collectively referred to herein as the “Securities.”

AGREEMENT

In consideration of the mutual promises contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:

1.Purchase and Sale of Note.

(a)Sale and Issuance of Note.  At the Closing (as hereinafter defined), on the terms and subject to the conditions of this Agreement, the Purchaser agrees to purchase from the Company, and the Company agrees to issue and sell to the Purchaser, the Note.

(b)Closings.

(i)The sale and purchase of the Note to be purchased by the Purchaser (the “Closing”) shall occur at the offices of Fulbright & Jaworski L.L.P. 865 S. Figueroa St., 29^th Floor, Los Angeles, CA 90017, at 10:00 a.m. (Los Angeles time), on July 16, 2003 or on such other business day thereafter as may be agreed upon by the Company and the Purchaser. At the Closing, the Company will deliver to the Purchaser the Note dated the date of the Closing, and

registered in the name of the Purchaser, in exchange for delivery by the Purchaser to the Company or its order of immediately available funds in the amount of $2,000,000 and the Assigned Note.

2.Security Interest.The indebtedness represented by the Note shall be secured and shall be entitled to the benefit of a security agreement, in the form attached hereto as Exhibit C (the “Security Agreement”), pursuant to which the Purchaser shall be granted a first priority security interest in all of the assets of the Company, pari passu with the first priority security interest in favor of 550 DMV (as defined below) pursuant to the certain Security Agreement dated September 6, 2000, as amended or modified to date.

3.Conditions to Closing(s).  The Purchaser’s obligation to purchase and pay for the Notes to be sold to it at the Closing is subject to the fulfillment of the following conditions (unless waived in writing by Purchaser):

(a)Representations and Warranties.  The representations and warranties of the Company in the Transaction Documents (as defined in Section 4(a)) shall be correct when made and at the time of the Closing.

(b)Performance; No Default.  The Company shall have performed and complied with all agreements and conditions contained in the Transaction Documents  required to be performed or complied with by it prior to or at the Closing.

(c)Compliance Certificates.  The Company shall have delivered to the Purchaser an officer’s certificate, dated the date of the Closing, certifying that the conditions specified in Section 3(a) and Section 3(b) have been fulfilled.

(d)Due Diligence.  Purchaser shall have completed its business and legal due diligence of Borrower and approved the same in its sole discretion.

(e)No Material Adverse Change.  Since the date hereof, there shall have been no material adverse change or effect that, individually or when taken together with all other changes or effects, is or could be likely to be materially adverse to the business assets, financial condition, operations, capitalization, or prospects of the Company and its subsidiaries, taken as a whole.

(f)Note.  The Company shall have delivered to Purchaser the Note, duly executed by the Company.

(g)The Security Agreement.  The Company shall have delivered to Purchaser the Security Agreement, duly executed by the Company.

(h)The Option Agreement.  The Company shall have delivered to Purchaser the Option Agreement, duly executed by the Company and 550 DMV shall have delivered the Option Agreement (as defined in Section 7(k)), duly executed by 550 DMV.

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(i)The Intercreditor Agreement.  The Company shall have delivered to Purchaser an Intercreditor Agreement in the form of Exhibit D hereto (the “Intercreditor Agreement”), duly executed by the Company and 550 DMV shall have delivered the Intercreditor Agreement, duly executed by 550 DMV.

(j)Financing Statements.  The Company shall have delivered to Purchaser UCC-1 financing statements and other documents and instruments which Purchaser may reasonably request to perfect its security interest in the collateral described in the Security Agreement, duly executed by the Company.

(k)Expenses.  The Company shall have reimbursed Purchaser for its transaction expenses in accordance with Section 10(a).

(l)Opinion of Counsel.  Purchaser shall have received an opinion of legal counsel for the Company in the form of Exhibit E.

(m)Certificate of Good Standing.  A Certificate of Good Standing with respect to the Company, certified as of a recent date prior to the Closing by the Secretary of State of the State of Delaware.

(n)Secretary’s Certificate.A certificate of the Secretary of the Company, dated the Closing Date, certifying that (1) the Certificate of Incorporation of the Company, delivered to Purchaser pursuant to the terms hereof, is in full force and effect and has not been amended, supplemented, revoked or repealed since the date of such certification; (2) attached thereto is a true and correct copy of the Bylaws of the Company as in effect on the Closing Date; (3) attached thereto is a true and correct copy of resolutions duly adopted by the Board of Directors of the Company authorizing the execution, delivery, and performance by the Company of this Agreement and the other Transaction Documents (as defined in Section 4(a)) and the consummation of the transactions contemplated hereby and thereby; and (4) there are no proceedings for the dissolution or liquidation of the Company that have commenced or, to the knowledge of the Company, been threatened.

4.Representations and Warranties of the Company.The Company hereby represents and warrants to the Purchaser that as of the date hereof:

(a)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.  It has all requisite right, power and authority to (i) own or lease and operate its properties and assets, (ii) conduct its business as presently conducted, and (iii) engage in and consummate the transactions contemplated hereby, except as set forth on Schedule 4(a).  The Company is duly qualified or otherwise authorized as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification or authorization is required by applicable law except for those jurisdictions in which failure to do so would not have a material adverse effect on (x) the Company’s ability to perform its obligations under this Agreement, the Note, the Security Agreement, the Option Agreement, the Intercreditor Agreement or that certain Amendment to Second Amended and Restated Convertible Secured

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Promissory Note by the Company in favor of the Purchaser, dated as of the date hereof (the “Transaction Documents”) or (y) the results of operations, condition (financial or otherwise), business, assets or liabilities of the Company and its Subsidiaries, taken as a whole (in either case, a “Material Adverse Effect”).

(b)Authorization.All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the authorization, sale, issuance and delivery of the Note, and the performance of all obligations of the Company hereunder and thereunder has been taken.  The Agreement and the Note, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.  The Company’s Board of Directors has determined in its good faith business judgment that the issuance of the Securities hereunder and the consummation of the other transactions contemplated hereby are in the best interests of the Company and its stockholders.

(c)No Conflict with Other Instruments.  Except as set forth on Schedule 4(c), the execution, delivery and performance of this Agreement and the Note will not result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice: (i) any provision of the Company’s Certificate of Incorporation (the “Certificate”) or the Company’s by-laws; (ii) any provision of any judgment, decree or order to which the Company is a party or by which it is bound; (iii) any material contract, obligation or commitment to which the Company is a party or by which it is bound or other contract, obligation or commitment to which the Company is a party or by which it is bound and which would reasonably be expected to have a Material Adverse Effect or impair the Company’s performance of this Agreement or the Note; or (iv) any statute, rule or governmental regulation applicable to the Company.

(d)Securities Law Compliance.  Subject to the accuracy of the representations and warranties of the Purchaser set forth in Section 5, the offer, issue, and sale of the Note is exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Act”)and the qualification requirements, if any, of applicable state securities laws.

(e)Subsidiaries.  Except as set forth on Schedule 4(e), the Company has no Subsidiaries.  For purposes of this Agreement, “Subsidiary” means any corporation, association or other business entity in which the Company or one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or persons performing similar functions) of such entity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by the Company or one or more of its Subsidiaries (unless such partnership can and does ordinarily take major business actions without the prior approval of the Company or one or more of its Subsidiaries).

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(f)Absence of Changes.  Since March 31, 2003, except as set forth on Schedule 4(f) hereto, the Company and its Subsidiaries have not (1) sold, leased, transferred or otherwise disposed of any material portion of their assets (other than dispositions in the ordinary course of business consistent with past practices), (2) terminated or amended in any material respect any Material Contract to which the Company or any of its Subsidiaries is a party or to which it is bound or to which its properties are subject, (3) suffered any loss, damage or destruction, whether or not covered by insurance, which has had a Material Adverse Effect, (4) incurred any liabilities for indebtedness (other than in the ordinary course of business or contractual liabilities) which, individually or in the aggregate, have had a Material Adverse Effect, (5) incurred, created or suffered to exist any material Liens on its assets, (6) suffered any labor dispute, strike, or other work stoppage, (7) made or obligated itself to make any capital expenditures in excess of $100,000 individually, (8) paid any dividends, whether in cash or property, on account of, or repurchased any of, the Common Stock, (9) increased the compensation payable or to become payable to any of its executive officers out of the ordinary course of business,(10) entered into any contract or other agreement requiring the Company or a Subsidiary to make payments in excess of $250,000 individually, other than in the ordinary course of business consistent with past practices or (11) entered into any agreement to do any of the foregoing.

(g)Governmental Authorizations, Etc.  No consent, approval or authorization of, or registration, filing (other than notice filings) or declaration with, any court or any federal, state, municipal or local government or any political subdivision, governmental department, board, agency or instrumentality thereof, and any administrative or regulatory agency (each, a “Governmental Authority”) is required in connection with the execution, delivery or performance by the Company of this Agreement or the issuance, sale and delivery of the Note.

(h)Litigation.  Except as set forth on Schedule 4(h) hereto, there is no litigation, action, complaint, claim or suit, judicial or administrative action, audit, proceeding or governmental investigation pending or, to the knowledge of the Company, threatened, against the Company or its Subsidiaries or any of their respective properties.  Neither the Company nor any Subsidiary is in default in any material respect under any judgment, order or decree of a Governmental Authority.  There is no judgment, order, decree, injunction, stipulation or settlement against the Company or any Subsidiary that is reasonably likely to prevent, enjoin or materially alter or delay any of the transactions contemplated by this Agreement or that would reasonably be likely to cause a Material Adverse Effect.

(i)Taxes.  Except as set forth on Schedule 4(i), the Company and its Subsidiaries have timely filed all income tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments payable by them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (x) the amount of which is not individually or in the aggregate material or (y) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP.  Except as set forth on Schedule 4(i), none of the Company’s or its Subsidiaries’ tax returns is currently subject to an audit.

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(j)Title to Property; Leases.  Except as set forth on Schedule 4(j) hereto, the Company and its Subsidiaries have good and sufficient title to their respective properties and assets, including the properties and assets reflected in the most recent audited balance sheet of the Company or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens, except for those defaults in title and Liens which do not and will not materially detract from the value of the property subject thereto or interfere with the use of the property subject thereto or materially impair the respective operations of the Company and any Subsidiary involving such property.  All leases of the Company and its Subsidiaries are valid and subsisting and are in full force and effect in all material respects.  Neither the Company nor any of its Subsidiaries owns any real property and none of them is in material breach of any real property lease.

(k)Licenses, Permits, Etc.  The Company and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, that are material, without known conflict with the rights of others, except for those conflicts that, individually or in the aggregate, would not have a Material Adverse Effect.

(l)Employee Benefit Plans.  Except as set forth on Schedule 4(l) hereto: (i) neither the Company nor any Subsidiary has employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”)); (ii) the Company and each Subsidiary does not now, or has it ever, maintained, established, sponsored, participated in, or contributed to, any pension plan within the meaning of Section 3(2) of ERISA which is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code of 1986, as amended; and (iii) at no time has the Company or any Subsidiary contributed to or been requested to contribute to any multiemployer plan as defined in Section 3(37) of ERISA.

(m)Existing Indebtedness.  Except as described therein, Schedule 4(m) hereto sets forth a complete and correct list of all outstanding Indebtedness (as hereinafter defined) of the Company and its Subsidiaries as of May 31, 2003, since which date there has been no material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of the Company or such Subsidiary and no event or condition exists with respect to any Indebtedness of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.  For purposes of this Agreement, “Indebtedness” with respect to the Company means, at any time, without duplication, (i) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable preferred stock; (ii) its liabilities for the deferred purchase price of property acquired by the Company (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property); (iii) all liabilities appearing on its balance sheet in accordance with GAAP in respect of capital leases; (iv) all liabilities for borrowed money secured by any Lien with respect to any

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property owned by the Company (whether or not it has assumed or otherwise become liable for such liabilities); (v) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money); and (vi) any guaranty of the Company with respect to liabilities of a type described in any of subclauses (i) through (v) hereof.  Except as set forth on Schedule 4(m), since the date of the 2003 Financial Statements (as defined in Section 4(q)), neither the Company nor any Subsidiary has incurred any liabilities of any kind, character and description, whether accrued, absolute, secured or unsecured, contingent or otherwise of a kind that would have been required to be disclosed on such 2003 Financial Statements if they were dated as of the date hereof other than (i) liabilities incurred in the ordinary course of business subsequent to the date of the 2003 Financial Statements and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in the 2003 Financial Statements.

(n)Patents, Copyrights and Trademarks.  The Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and proprietary rights and processes necessary for its business as now conducted and as proposed to be conducted without any conflict with, or infringement of the rights of, others (collectively, “Intellectual Property”).  A list of the Company’s registered trademarks, copyrights and service marks, patents and domain names is set forth on Schedule 4(n).  The Company has not received any written communications alleging that any of the Company’s material Intellectual Property has violated any of the patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights or processes of any other person or entity.  Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as proposed, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated.  The Company does not believe it is or will be necessary to use any inventions of any of its employees (or persons it currently intends to hire) made prior to their employment by the Company, other than those which have been assigned to the Company.  The Company has no actual knowledge of any unauthorized use, infringement or misappropriation of its intellectual property rights or of any obligation on the part of the Company to pay any royalties or other payments to third parties.  The Company has entered into written agreements with all key employees and key contractors of the Company and each Subsidiary with provisions seeking to protect the confidentiality of all Company Intellectual Property and to ensure full and unencumbered ownership by the Company or a Subsidiary of all Company Intellectual Property including, without limitation, appropriate “work for hire” language.

(o)Status under Certain Statutes.  Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.

(p)Capitalization.  The authorized capital stock of the Company consists of

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250,000,000 shares of Common Stock, par value $0.001 per share, and 40,000,000 shares of preferred stock (“Preferred Stock”), par value $0.10 per share. 10,000,000 shares of the Preferred Stock have been designated as  Series A 6% Convertible Preferred Stock (the “Series A”) and  4,098,335 shares of preferred stock have been designated Series B Preferred Shares (the “Series B”). There are outstanding 26,562,239 shares of Common Stock, 350,250 shares of Series A and 1,923,077 shares of Series B, and the Company has no other shares of capital stock outstanding. All of the outstanding shares of capital stock of the Company have been duly authorized, validly issued and are fully paid and nonassessable.

Except as set forth on Schedule 4(p):  (1) there are no outstanding options, warrants, rights to subscribe for, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company, or arrangements by which the Company is or may become bound to issue additional shares of capital stock, nor are any such issuances or arrangements contemplated other than pursuant to the eUniverse, Inc. 1999 Stock Awards Plan and the eUniverse, Inc. 2002 Employee Stock Purchase Plan, (2) there are no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act of 1933, as amended (the “Securities Act”) and (3) the Company has no obligations (contingent or otherwise) to purchase, redeem or otherwise acquire any of its equity securities or any interests therein or to pay any dividend or make any distribution in respect thereof.

The Company has furnished to the Purchaser true and correct copies of the Company’s certificate of incorporation, including any certificates of designation (the “Certificate of Incorporation”) as in effect on the date hereof, and the Company’s by-laws (the “By-laws”) as in effect on the date hereof.  The Company is not in violation of any provision of its Certificate of Incorporation or By-laws.  Except as set forth in the Certificate of Incorporation or on Schedule 4(p) none of the Note or Series B are subject to preemptive rights or any other similar rights of the stockholders of the Company.

(q)Financial Statements.  The Company has delivered or caused to be delivered to the Purchaser audited consolidated balance sheets and audited consolidated statements of income and retained earnings and cash flows of the Company and any Subsidiaries, as applicable, as of March 31, 2001, and March 31, 2002 (the “Delivered Financial Statements”).  Attached hereto as Schedule 4(q) are an unaudited consolidated balance sheet of the Company and the Subsidiaries, as applicable, as of March 31, 2003, and unaudited consolidated statements of income of the Company and any Subsidiaries, as applicable, for the year ended March 31, 2003 (the “2003 Financial Statements”).  Except as set forth on Schedule 4(q), the Delivered Financial Statements were prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis (except as may be indicated in the notes thereto) and present fairly, in all material respects, the financial position and the results of operations of the Company and the Subsidiaries, as applicable, as of the dates, and for the periods, referred to therein.  Except as set forth on Schedule 4(q), the 2003 Financial Statements were prepared in conformity with GAAP applied on a consistent basis (except for the lack of footnote disclosure) and present fairly, in all material respects, the financial position and the results of operations of the Company and the Subsidiaries, as applicable, as of the dates, and for the periods, referred to therein.

(r)SEC Documents.  Set forth in Schedule 4(r) is a list of all reports,

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schedules, forms, statements and other documents filed by the Company with the Securities and Exchange Commission (the “SEC”) pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the foregoing filed prior to the date hereof, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”) since March 31, 2003. Except as set forth on Schedule 4(r), the Company has delivered to the Purchaser true and complete copies of the SEC Documents.  As of their respective dates, the SEC Documents complied with the requirements of the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(s)Foreign Corrupt Practices Act.  Neither the Company nor any Subsidiary, director, officer, agent, employee or other Person acting on behalf of the Company or any Subsidiary has, in the course of his, her or its actions for, or on behalf of, the Company or any Subsidiary, offered or made, directly or indirectly through any other Person, any payments of anything of value (in the form of a contribution, gift, entertainment or other expense), to (a) any Person employed by, or acting in an official capacity on behalf of, any governmental agency, department or instrumentality, or (b) any foreign or domestic government official, political party or official of such party, or any candidate for political office or employee thereof. Neither the Company, any Subsidiary, nor any director, officer, agent, employee or other Person acting on behalf of the Company or any Subsidiary has violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or unlawful payment to any foreign or domestic government or political party official, employee, appointee or candidate.

(t)Material Contracts.  Each contract of the Company or a Subsidiary of the Company the absence of which would reasonably be expected to have a Material Adverse Effect (each “Material Contract”) is listed on Schedule 4(t) hereof. Each such Material Contract is the legal, valid and binding obligation of the Company, enforceable against the Company and/or such Subsidiary, as the case may be, in accordance with its terms.  Except as set forth on Schedule 4(t) there has not occurred any breach, violation or default by the Company or any event that, with the lapse of time, the giving of notice or the election of any Person, or any combination thereof, would constitute a breach, violation or default by the Company or a Subsidiary, as the case may be, under any such contract or, to the knowledge of the Company or its Subsidiary, as the case may be, by any other Person to any such contract.  Except as set forth on Schedule 4(t) neither the Company nor any Subsidiary has been notified that any party to any Material Contract intends to cancel, terminate, not renew or exercise an option under any Material Contract, whether in connection with the transactions contemplated hereby or otherwise.

(u)Right of First Refusal; Voting and Registration Rights.  To the Company’s actual knowledge and except as set forth on Schedule 4(u) or in the Certificate of Incorporation, no party has any right of first refusal, right of first offer, right of co-sale, preemptive right or other similar right with respect to the Note or Series B.  Except as set forth on Schedule 4(u) or in the Certificate of Incorporation or the By-laws of the Company or any of

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its Subsidiaries, there are no agreements to which the Company or any of its Subsidiaries is a party and no agreements by which the Company, any of its Subsidiaries are bound, which (1) may restrict the voting rights of the Purchaser with respect to the Note or Series B in its capacity as a stockholder of the Company, (2) restrict the ability of the Purchaser, or any successor thereto or assignee or transferee thereof, to transfer the Note or Series B, (3) require the vote of more than a majority of the Company’s issued and outstanding Common Stock, voting together as a single class, to take or prevent any corporate action, other than those matters requiring a class vote under Delaware law, or (4) entitle any party to nominate or elect any director of the Company or require any of the Company’s stockholders to vote for any such nominee or other Person as a director of the Company in each case, except as provided for in or contemplated by this Agreement.

(v)Compliance with Laws.  Except as set forth in Schedule 4(v), neither the Company nor any Subsidiary has received notification from any Governmental Entity (1) asserting a material violation of any law, statute, ordinance or regulation or the terms of any judgments, orders, decrees, injunctions or writs applicable to the conduct of its business, (2) threatening to revoke any material license, franchise, permit or government authorization, or (3) materially restricting or in any material way limiting its operations as currently conducted.  Except as set forth in Schedule 4(v), the Company is in full compliance with all laws, governmental rules, and  regulations to which it is subject, the violation of which would reasonably be expected to result in a Material Adverse Affect.

(w)Employee Relations.  All material bonus, deferred compensation, pension, retirement, profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock purchase, restricted stock plan, stock option or award plan, health and medical insurance plans, life insurance and disability insurance plans, other material employee benefit plans, contracts or arrangements which cover multiple employees of the Company or the Subsidiaries including, but not limited to, “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (collectively, the “Employee Benefit Plans”), are listed on Schedule 4(w).  No Employee Benefit Plans are or were collectively bargained for or have terms requiring assumption of any guarantee by the Purchaser.

There have been no violations of ERISA or the Internal Revenue Code of 1986, as amended (the “Code”) by the Company relating to any Employee Benefit Plan that would reasonably be expected to have a Material Adverse Effect.  The Company has timely filed all documents, notes and reports (including IRS Form 5500) for each such Employee Benefit Plan with all applicable governmental authorities and has timely furnished all required documents to the participants or beneficiaries of each such Employee Benefit Plans, except where the failure to timely file or furnish the foregoing would not reasonably be expected to have a Material Adverse Effect.

The Company and its Subsidiaries have operated and administered all plans, programs and arrangements providing compensation and benefits to employees materially in accordance with their terms and applicable laws.

The Company and its Subsidiaries are not delinquent in payments to any of their employees for any wages, salaries, commissions, bonuses or other direct compensation for any services performed through the date hereof.  The Company and its Subsidiaries are in compliance

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with all applicable federal and state laws, rules and regulations respecting employment, employment practices, labor, terms and conditions of employment and wages and hours, except for either immaterial instances of noncompliance or instances of noncompliance of which the Company is unaware. Neither the Company nor any Subsidiary is party to any collective bargaining agreement.  There is no labor strike, dispute, slowdown or stoppage actually pending or, to the knowledge of the Company, threatened against or involving the Company or any Subsidiary.

No director, officer or other employee of the Company or any Subsidiary will become entitled to any retirement, severance or similar benefit or enhanced or accelerated benefit (including any acceleration of vesting or lapse of repurchase rights or obligations with respect to any Employee Benefit Plan) solely as a result of the transactions contemplated in this Agreement; and no payment made or to be made to any current or former employee or director of the Company or any of its Affiliates by reason of the transactions contemplated hereby (whether alone or in connection with any other event, including, but not limited to, a termination of employment) will constitute an “excess parachute payment” within the meaning of Section 280G of the Code.  For the purposes of this Agreement “Affiliate” has the meanings assigned to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

(x)Brokers.  There is no investment banker, broker, finder, financial advisor or other Person which has been retained by or is authorized to act on behalf of the Company who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement payable by Purchaser.

(y)Environmental Matters.  (i) (A) No written notice, notification, demand, request for information, citation, summons, complaint or order has been received by, and no action, claim, suit or proceeding is pending or, to the knowledge of the Company, threatened by any Person against, the Company or any Subsidiary, and no penalty has been assessed against the Company or any Subsidiary, in each case, with respect to any matters relating to or arising out of any Environmental Law; (ii) to the actual knowledge of the Company, the Company and its Subsidiaries are in compliance with all Environmental Laws; and (iii) to the actual knowledge of the Company, there are no liabilities of or relating to the Company or any Subsidiary relating to or arising out of any Environmental Law.

For purposes of this Agreement, the term “Environmental Laws” means federal and state, statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders and codes, relating to human health and the environment, including, but not limited to, Hazardous Materials; and the term “Hazardous Material” means all substances or materials regulated as hazardous, toxic, explosive, dangerous, flammable or radioactive under any Environmental Law including, but not limited to:  (A) petroleum, asbestos, or polychlorinated biphenyls and (B) in the United States, all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances Pollution Contingency Plan.

(z)Related-Party Transactions.  Except as set forth on Schedule 4(z) hereto, no employee, officer, director, or Affiliate of the Company or member of his or her immediate family is currently indebted to the Company or any of its Subsidiaries in an aggregate amount in excess of $50,000, nor is the Company or any of its Subsidiaries indebted to any of such individuals in an aggregate amount in excess of $50,000. Except as set forth on Schedule 4(z)

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hereto, as of the date hereof none of such Persons has any direct or indirect ownership interest exceeding ten percent in any firm or corporation with which the Company is affiliated (other than any Subsidiary) or with which the Company has a material business relationship, or any firm or corporation that directly competes with the Company.  No officer or director of the Company is a party to any Material Contract with the Company, other than contracts relating to his or her employment or service as a director.

(aa)Insurance.  The Company has in force fire, casualty, product liability and other insurance policies, with extended coverage, sufficient in amount to allow it to replace any of its material properties or assets which might be damaged or destroyed or sufficient to cover liabilities to which the Company or any Subsidiary may reasonably become subject.  The Company has directors’ and officers’ liability insurance policies (primary and excess) that are in full force and effect for an aggregate of $10 million of coverage.

(bb)Acknowledgment Regarding the Purchaser’s Purchase of the Securities.  The Company acknowledges and agrees that the Purchaser and its agents, employees, attorneys and affiliates are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement or the transactions contemplated hereby, and the relationship between the Company and the Purchaser is “arms length” and that, except for the representations and warranties of the Purchaser under this Agreement, any statement made by the Purchaser or any of its representatives, employees, attorneys, affiliates or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Purchaser’s purchase of Securities and has not been relied upon by the Company, its officers or directors in any way.  The Company further represents to the Purchaser that the Company’s decision to enter into this Agreement has been based solely on an independent evaluation by the Company and its representatives.

(cc)Disclosure.  No representation or warranty by the Company contained in the Transaction Documents, and no representation, warranty or statement by the Company contained in any certificate or schedule furnished to the Purchaser pursuant to the Transaction Documents, contains any untrue statement by the Company of a material fact or omits to state any material fact necessary to make any statement herein or therein not misleading.

5.Representations and Warranties of the Purchaser.  The Purchaser hereby represents and warrants to the Company that:

(a)Purchase Entirely for Own Account. The Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof in any manner that would cause issuance of the Securities hereunder to fail to be exempt from the registration requirements of the Act, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same in any manner that would cause issuance of the Securities hereunder to fail to be exempt from the registration requirements of the Act.  The Purchaser has not been formed for the specific purpose of acquiring any of the Securities.

(b)Knowledge.  The Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an

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informed and knowledgeable decision to acquire the Securities.  Without limiting the foregoing, the Purchaser is aware that the Company intends to restate its financial statements for at least the second and third quarter of the fiscal year ended March 31, 2003 (“Fiscal 2003”), has issued an earnings warning for the fourth quarter of fiscal 2003, is the subject of an informal inquiry and a pending delisting proceeding with the Nasdaq and an informal inquiry from the SEC and is named as a defendant in several pending class action and shareholder derivative lawsuits.  Nothing contained in this Section 5(b) shall be deemed to in any way qualify any of the representations and warranties of the Company contained in Section 4.

(c)Restricted Securities.The Purchaser understands that the Securities have not been registered under the Act, by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Purchaser’s representations as expressed herein.  The Purchaser understands that the Securities are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Purchaser must hold theSecuritiesindefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available.  The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

(d)Legends.The Purchaser understands that the Securities, and any securities issued in respect thereof or exchange therefor, may bear one or all of the following legends:

(i)“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

(ii)Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.

(e)Accredited Investor. The Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Act.

6.Financial Statements and Information.  The Company shall deliver to the Purchaser so long as the Purchaser holds the Note:

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(a)Quarterly Statements.  Within 60 days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and (ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a senior financial officer of the Company as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6(a).

(b)Annual Statements.  Except with respect to fiscal 2003, within 105 days after the end of the fiscal year of the Company, copies of, (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and (ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, provided that delivery within the time period specified above of copies of the Company’s Annual Report on Form 10-K for such fiscal year (together with the Company’s annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Security Exchange Act of 1934, as amended) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 6(b).

(c)SEC and Other Reports.  Promptly upon their becoming available, one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to public securities holders generally, and (ii) each regular and periodic report, each registration statement that shall have become effective (without exhibits except as expressly requested by the Purchaser), and each final prospectus and all amendments thereto filed by the Company or any Subsidiary with the Securities and Exchange Commission.

(d)Notice of Default or Event of Default.  Promptly, and in any event within five days after the chief financial officer, principal accounting officer, treasurer or controller (each, a “Senior Financial Officer”) of the Company becoming aware of the existence of any event or condition, not otherwise disclosed herein or in the schedules hereto, the occurrence or

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existence of which would, with the lapse of time or the giving of notice, or both, become an Event of Default (as hereinafter defined) (a “Default”) or Event of Default, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto.

(e)Requested Information.  With reasonable promptness, such other data and information relating to the operations, condition (financial or otherwise), business, assets or liabilities of the Company, or any of its Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Note as from time to time may be reasonably requested by the Purchaser.

(f)Notices from Governmental Entity.  Promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Governmental Entity relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect.

7.Additional Agreements of the Parties.

(a)Use of Proceeds.  The Company shall use the net cash proceeds from the sale of the Note for working capital purposes.

(b)Visits and Inspections.  The Company agrees to permit, or, in the case of properties, books, records or persons not within its immediate control, promptly take such actions as are reasonably practicable in order to permit, representatives (whether or not officers or employees) of the Purchaser, from time to time upon reasonable advance notice to the chief executive officer, secretary or chief financial officer of the Company, as often as may be reasonably requested, to (i) visit and inspect any properties of the Company and its Subsidiaries, (ii) inspect and make extracts from the books and records of the Company and its Subsidiaries, including management letters prepared by its independent certified public accountants, and (iii) discuss with any person, including the principal officers and the independent certified public accountants of the Company, the results of operations, condition (financial or otherwise), business, assets or liabilities of the Company.  All such information received shall be held by the Purchaser and its representatives subject to the confidentiality requirements of that certain Mutual Nondisclosure Agreement, dated as of May 27, 2003 by and between the Company and VantagePoint Venture Partners (the “Nondisclosure Agreement”).

(c)No Impairment.  The Company will not, by amendment of its Certificate or By-laws, or through reorganization, consolidation, merger, dissolution, issuance or sale of securities, sale of assets or any other voluntary action, willfully avoid or seek to avoid the observance or performance of any of the terms of this Agreement, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Purchaser under this Agreement against wrongful impairment.

(d)Compliance with Law.  The Company will and will cause each of its Subsidiaries to comply with all laws, ordinances or governmental rules or regulations to which

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each of them is subject and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(e)Insurance.  The Company will and will cause each of its Subsidiaries to maintain, with financial sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated.  So long as the Note is outstanding, the Company shall maintain directors and officers insurance policies with an aggregate policy limit of at least ten million dollars ($10,000,000)

(f)Maintenance of Properties.  The Company will and will cause each of its Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance would not, individually or in the aggregate, have a Materially Adverse Effect.

(g)Payment of Taxes.  The Company will and will cause each of its Subsidiaries to file all income tax or similar tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies payable by any of them, to the extent such taxes and assessments have become due and payable and before they have become delinquent, provided that neither the Company nor any Subsidiary need pay any such tax or assessment if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in the aggregate would not reasonably be expected to have a Material Adverse Effect.

(h)Corporation Existence.  The Company will at all times preserve and keep in full force and effect its corporation existence.  The Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise would not, individually or in the aggregate, have a Material Adverse Effect.

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(i)Transactions with Affiliates.  The Company will not and will not permit any Subsidiary to enter into directly or indirectly any material transaction or material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or rendering of any services) with any affiliate (other than the Company or another Subsidiary), except pursuant to the reasonable requirements of the Company’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a person not an affiliate of the Company.

(j)Merger, Consolidation, etc.  The Company shall not consolidate with or merge with any other corporation or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to any person unless (i) the successor formed by such consolidation or the survivor of such merger or the person that acquires by conveyance, transfer or lease substantially all of the assets of the Company as an entirety, as the case may be, shall be a solvent corporation organized and existing under the laws of the U.S. or any state thereof (including the District of Columbia), and, if the Company is not such a corporation, such corporation shall have executed and delivered to the Purchaser its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement, the Note and the other Transaction Documents; and (ii) immediately after giving effect to such transaction, no Default or Event of Default (as hereinafter defined) shall have occurred and be continuing.  No such conveyance, transfer or lease of substantially all of the assets of the Company shall have the effect of releasing the Company or any successor corporation that shall theretofore have become such in the manner prescribed in this Section 7(k) from its liability under this Agreement, the Note or the other Transaction Documents.

(k)Contingent Warrant Issuance.  The Company and Purchaser acknowledge that concurrently herewith Purchaser is entering into an Option Agreement (the “Option Agreement”) with 550 Digital Media Ventures, Inc. (“550 DMV”), pursuant to which Purchaser is being given the right to purchase certain shares of the Company’s capital stock from 550 DMV.  If Purchaser does not exercise its option to purchase such stock under the Option Agreement within 120 days of the date hereof, Purchaser may elect, by written notice to the Company given within ten (10) days of the expiration of such 120 day period, to transfer all its rights under the Option Agreement to the Company in exchange for the Warrant.

(l)Indemnification.  The Company agrees to protect, indemnify, defend and hold harmless Purchaser and all of its affiliates, partners, and their respective directors, members, attorneys (including, without limitation, those retained in connection with the transactions contemplated by the Transaction Documents), representatives, officers, and employees (collectively, the “Indemnitees”) from and against any and all liabilities, losses, damages or expenses (including in respect of or for attorney’s fees and other expenses) of any kind or nature and from any suits, claims or demands, causes of action, proceedings, (payable by the Company monthly in advance of being incurred if the Company is not immediately assuming satisfactory defense of the matter, in the amounts reasonably estimated by the Purchaser to be incurred) arising on account of, relating to, in connection with, or as a result of (i) any breach of a representation or warranty of the Company contained herein, (ii) any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents or in

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Term Sheet #2 (as defined in Section 10(b)), (iii) any use by the Company of any proceeds of the Note, and (iv) any violation by the Company, its Subsidiaries or their respective officers, directors and employees of the Act, the Exchange Act, or any other applicable rule, regulation or law arising on account of, relating to, in connection with, or as a result of the Transaction Documents and/or the transactions contemplated therein or in Term Sheet #2 (as defined in Section 10(b)), except to the  extent such liability is finally judicially determined to directly arise from the willful misconduct or gross negligence of any such Indemnitee.  Upon receiving knowledge of any suit, claim or demand asserted by a third party that Purchaser believes is covered by this indemnity, Purchaser shall give the Company notice of the matter and an opportunity to defend it, at the Company’s sole cost and expense, with legal counsel reasonably satisfactory to Purchaser. Any failure or delay of Purchaser to notify the Company of any such suit, claim or demand shall not relieve the Company of its obligations under this Section 7(l) but shall reduce such obligations to the extent of any increase in those obligations caused solely by any such failure or delay which is unreasonable.  The obligations of the Company under this Section 7(l) shall survive the payment and performance of the Company’s obligations under the Transaction Documents.

8.Events of Default.An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)Failure to Pay.  The Company’s failure to pay any of the Principal Amount (as defined in the Note) due under the Note on the date the same becomes due and payable, or any accrued interest or other amounts due under the Note after the same becomes due and payable; or

(b)Representations and Warranties.  Any representation and warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or

(c)Default in Performance.  The Company defaults in the performance of or compliance with any term contained herein and such default is not remedied within 30 days after the earlier of (i) an officer of the Company obtaining actual knowledge of such default, and (ii) the Company receiving written notice of such default from the Purchaser (any such written notice to be identified as a “notice of default”); or

(d)Other Defaults.  The Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in any aggregate principal amount of at least $100,000 beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least $100,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared due and payable before its stated maturity or before its regularly scheduled dates of payment; or

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(e)Inability to Pay Debts.  The Company or any Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other similar officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporation action for the purpose of any of the foregoing; or

(f)Defaults under Security Agreement.Any Event of Default under the Security Agreement; or

(g)Monetary Judgments.A final judgment or judgments for the payment of money (including a determination by the Pension Benefit Guaranty Corporation that the Company is so liable) aggregating in excess of $250,000 are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay.

9.Remedies on Default, Etc.

(a)Acceleration.

(i)If an Event of Default with respect to the Company described in Section 8(e) has occurred, the Note shall automatically become due and payable.

(ii)If any other Event of Default has occurred and is continuing, the Purchaser may at any time at its option, by notice to the Company, declare the Note to be immediately due and payable.

Upon the Note becoming due and payable under this Section 9(a), whether automatically or by declaration, the Note will forthwith mature and the entire unpaid principal amount of the Note plus all accrued and unpaid interest thereon shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  Effective upon an Event of Default that is not cured, the interest rate on the Note shall increase by the lesser of (i) 2% or (ii) the maximum penalty as shall be permitted by applicable law (the “Default Rate”).

(b)Other Remedies.  If any Default or Event of Default has occurred and is continuing, and irrespective of whether the Note has become or has been declared immediately due and payable under Section 9(a), the Purchaser may proceed to protect and enforce its rights by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein, in the Note or in the other Transaction Documents, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

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(c)No Waiver or Election of Remedies, Expenses, Etc.  No course of dealing and no delay on the part of the Purchaser in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice the Purchaser’s rights, powers and remedies.  No right, power or remedy conferred by this Agreement, the Note or the Security Agreement upon the Purchaser shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 9(a), the Company will pay to the Purchaser on demand such further amount as shall be sufficient to cover all costs and expenses of the Purchaser incurred in any enforcement or collection under this Section 9, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.

10.Miscellaneous.

(a)Transaction Expenses.  The Company shall pay to Purchaser at the Closing, Purchaser’s attorneys’ fees and due diligence expenses incurred in connection with this transaction.  Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including attorneys’ fees) incurred by Purchaser in connection with the transactions contemplated hereby.

(b)Survival of Representations and Warranties; Entire Agreement.  All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Note and the purchase or transfer by the Purchaser of the Note or portions thereof or interest therein, and may be relied upon by any subsequent holder of the Note, regardless of any investigation made at any time by or on behalf of the Purchaser or any such holder, until such time as the Note is paid in full.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement.  Subject to the preceding sentence, the Transaction Documents and the Nondisclosure Agreement embody the entire agreement and understandings between the Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof, except that certain Term Sheet #2, dated as of July 1, 2003, (“Term Sheet #2”) shall continue in full force and effect according to its terms as it relates to a potential PIPE transaction described therein and the rights of the Purchaser contained under “Due Diligence Period and Right to Invest” and the “Miscellaneous” clause contained therein.  Without limiting the foregoing, the section of Term Sheet #2 entitled “Indemnification” is hereby superseded by this Agreement.

(c)Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.  Notwithstanding the foregoing, the Purchaser may assign its rights under this Agreement in whole or in part to any of its affiliates.  No such assignment shall relieve the Purchaser of any of its obligations hereunder.  The Company shall not have the right to assign this Agreement without the Purchaser’s written consent.

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(d)Governing Law.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(e)Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(f)Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  Except as otherwise stated, all section and schedule references refer to Sections and Schedules in this Agreement.

(g)Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or 3 business days after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile numberas set forth on the signature page hereto or as subsequently modified by written notice.

(h)Finder’s Fee.Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction.  The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or representatives is responsible.  The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

(i)Amendments and Waivers.  Any term of this Agreement may be amended or waived only with the written consent of the Company and the Purchaser.  Any amendment or waiver effected in accordance with this Section shall be binding upon the Purchaser and each transferee of the Securities, each future holder of all such Securities, and the Company.

(j)Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable.  In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

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(k)Payments Due on Non-Business Days.  Anything in this Agreement or the Note to contrary notwithstanding, any payment of principal or interest on the Note that is due on a date other than a business day shall be made on the next succeeding business day without including the additional days elapsed in the computation of the interest payable on such next succeeding business day.

(l)Construction.All provisions of this Agreement have been negotiated at arms length, each party having legal counsel, and this Agreement shall not be construed for or against any party by reason of the authorship or alleged authorship of any provision hereof, notwithstanding that each party may have signed a separate signature page.  The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party.

[Signature Page Follows]

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The parties have executed this Secured Note Purchase Agreement as of the date first written above.

COMPANY:
EUNIVERSE, INC.
By:	/s/ Brad Greenspan
	Brad Greenspan, Chief Executive Officer
Address:
6060 Center Drive
Suite 300
Los Angeles, CA 90045
PURCHASER:
VP ALPHA HOLDINGS IV, L.L.C.
By:	Vantage Point Venture Associates IV, L.L.C., its Managing Member
By:	/s/ Alan E. Salzman
	Name: Alan E. Salzman
	Title: Managing Member
Address:
c/o Vantage Point Venture Partners
1001 Bayhill, Suite 300
San Bruno, CA 94066
Facsimile: 650-869-6344

[SIGNATURE PAGE TO SECURED NOTE PURCHASE AGREEMENT]

EX-5

Exhibit 5

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS.  NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THIS WARRANT.

eUniverse, Inc.

WARRANT TO PURCHASE SHARES
OF SERIES B PREFERRED STOCK

THIS CERTIFIES THAT, for value received, VP Alpha Holdings IV, L.L.C.., a Delaware corporation, and its assignees are entitled to subscribe for and purchase 200,000 shares of the fully paid and nonassessable Series B Preferred Stock (as adjusted pursuant to Section 5 hereof, the “Shares”) of eUniverse, Inc., a Delaware corporation (the “Company”), at the Warrant Price as set forth in Section 2 below, subject to the provisions and upon the terms and conditions hereinafter set forth.  As used herein, (a) the term “Series Preferred” shall mean the Company’s authorized Series B Preferred Stock, and any stock into or for which such Series B Preferred Stock may hereafter be converted or exchanged, and (b) the term “Date of Grant” shall mean the Date of Grant listed on the signature page hereof.

1.Term.  The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through 5 p.m., Pacific standard time, three (3) years from the Date of Grant.

2.Warrant Price.  The price at which this Warrant may be exercised shall be $2.50 per share of Series B Preferred Stock.  Such price and such other price as shall result, from time to time, from the adjustments specified in Section 5 hereof is herein referred to as the “Warrant Price”.

3.Method of Exercise; Payment; Issuance of New Warrant.  Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, by wire transfer to an account designated by the Company (a “Wire Transfer”), or by the cancellation by the holder hereof of indebtedness or other obligations of the Company to such holder of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased, or (b) exercise of the right provided for in Section 11.3 hereof.  The person or persons in whose name(s) any certificate(s) representing shares of Series Preferred shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.  In the event of any exercise of the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the holder hereof by the Company at the Company’s expense as soon as possible and in any event within thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period.

4.Stock Fully Paid; Reservation of Shares.  All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and conditions herein, be duly authorized, validly issued, fully paid and nonassessable, and free from all taxes, liens, encumbrances, preemptive rights and charges.  During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Series Preferred to provide for the exercise of the rights represented by this Warrant and a sufficient number of shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock, and from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Series Preferred issuable upon exercise of the Warrant (and shares of its Common Stock for issuance on conversion of such Series Preferred).

5.Adjustment of Warrant Price and Number of Shares.  The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a)Conversion of Series Preferred.  Should all of the Company’s Series Preferred be, or if outstanding would be, at any time prior to the expiration of this Warrant or any portion thereof, converted into shares of the Company’s Common Stock in accordance with the Company’s Certificate of Incorporation, then the Company shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), so that the holder of this Warrant shall have the right to receive that number of shares of the Company’s Common Stock equal to the number shares of the Common Stock that would have been received if this Warrant had been exercised in full and the Series Preferred received thereupon had bee simultaneously converted immediately prior to such event, and the Warrant Price shall immediately be adjusted to equal the quotient obtained by dividing (i) the aggregate Warrant Price of the maximum number of shares of Series Preferred for which this Warrant was exercisable immediately prior to such conversion, by (ii) the number of shares of Common Stock for which this Warrant is exercisable immediately after such conversion.  Such new Warrant shall be immediately exercisable and shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5 and shall provide for anti-dilution protection that shall be as nearly equivalent as may be practicable to the anti-dilution provision applicable to the Series Preferred on the Date of Grant.  For purposes of the

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foregoing, the “Certificate of Incorporation” shall mean the Certificate of Incorporation of the Company as amended and/or restated and effective immediately prior to the conversion of all of the Company’s Series Preferred.  At the time of any such conversion of all of the Company’s Series Preferred, references herein to Series Preferred shall be deemed to refer to the Company’s Common Stock to the extent necessary to give appropriate meaning to the provisions hereof.

(b)Reclassification or Merger.  In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another corporation (other than a merger with another corporation in which the Company is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the  holder of this Warrant), so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Series Preferred theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change or merger that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reclassification, change or merger if this Warrant had been exercised immediately before such reclassification, change or merger, all subject to further adjustment as provided in this Section 5.  Such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5 and, in the case of a new Warrant issuable after the amendment of the terms of the anti-dilution protection of the Series Preferred, shall provide for anti-dilution protection that shall be as nearly equivalent as may be practicable to the anti-dilution provisions applicable to the Series Preferred on the Date of Grant.  The provisions of this subparagraph (a) shall similarly apply to successive reclassifications, changes, mergers and transfers.

(c)Subdivision or Combination of Shares.  If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Warrant Price shall be proportionately decreased in the case of a split or subdivision or increased in the case of a combination, effective at the close of business on the date the subdivision or combination becomes effective.

(d)Stock Dividends and Other Distributions.  If the Company at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Series Preferred payable in Series Preferred, or (ii) make any other distribution with respect to Series Preferred (except any distribution specifically provided for in Sections 5(b) and 5(c)), of Series Preferred, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Price in effect immediately prior to such date of determination by a fraction (i) the numerator of which shall be the total number of shares of Series Preferred outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of shares of Series Preferred outstanding immediately after such dividend or distribution.

(e)Adjustment of Number of Shares.  Upon each adjustment in the Warrant Price, the number of Shares of Series Preferred purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

(f)Anti-dilution Rights.  The other antidilution rights applicable to the Shares of Series Preferred purchasable hereunder are set forth in the Company’s Certificate of Incorporation, as amended through the Date of Grant, a true and complete copy of which has been supplied to the holder of this Warrant (the “Charter”).  The Company shall promptly provide the holder hereof with any restatement, amendment, modification or waiver of the Charter promptly after the same has been made.

6.Notice of Adjustments.  Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 14 hereof, by first class mail, postage prepaid) to the holder of this Warrant.  In addition, whenever the conversion price or conversion ratio of the Series Preferred shall be adjusted, the Company shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Series Preferred after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 14 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

7.Fractional Shares.  No fractional shares of Series Preferred will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor based on the fair market value of the Series Preferred on the date of exercise as reasonably determined in good faith by the Company’s Board of Directors.

8.Compliance with Act; Disposition of Warrant or Shares of Series  Preferred.

(a)Compliance with Act.  The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the shares of Series Preferred to be issued upon exercise hereof and any Common Stock issued upon conversion thereof are being acquired for investment and that such holder will not offer, sell or otherwise dispose of this Warrant, or any shares of Series Preferred to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which will not result in a violation of the Act or any applicable state securities laws.  Upon exercise of this Warrant,

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unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the shares of Series Preferred so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Company.  This Warrant and all shares of Series Preferred issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF SECTION 8 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

Said legend shall be removed by the Company, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated.  In addition, in connection with the issuance of this Warrant, the holder specifically represents to the Company by acceptance of this Warrant as follows:

(1)The holder is acquiring this Warrant for its own account for investment purposes only and not with a view to, or for the resale in connection with, any “distribution” thereof in violation of the Act.  The holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Act.

(2)The holder understands that this Warrant has not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the holder’s investment intent as expressed herein.

(3)The holder further understands that this Warrant must be held indefinitely unless subsequently registered under the Act and qualified under any applicable state securities laws, or unless exemptions from registration and qualification are otherwise available.  The holder is aware of the provisions of Rule 144, promulgated under the Act.

(b)Disposition of Warrant or Shares.  With respect to any offer, sale or other disposition of this Warrant or any shares of Series Preferred acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence, if reasonably requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or such shares of Series Preferred or Common Stock and indicating whether or not under the Act certificates for this Warrant or such shares of Series Preferred to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law.  Promptly upon receiving such written notice and reasonably satisfactory opinion or other evidence, if so requested, the Company, as promptly as practicable but no later than fifteen (15) days after receipt of the written notice, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such shares of Series Preferred or Common Stock, all in accordance with the terms of the notice delivered to the Company.  If a determination has been made pursuant to this Section 8(b) that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made.  Notwithstanding the foregoing, this Warrant or such shares of Series Preferred or Common Stock may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under the Act, provided that the Company shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A have been satisfied.  Each certificate representing this Warrant or the shares of Series Preferred thus transferred (except a transfer pursuant to Rule 144 or 144A) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

(c)Applicability of Restrictions.  Neither any restrictions of any legend described in this Warrant nor the requirements of Section 8(b) above shall apply to any transfer or grant of a security interest in, this Warrant (or the Series Preferred or Common Stock obtainable upon exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership, (ii) to a partnership of which the holder is a partner, or (iii) to any affiliate of the holder if the holder is a corporation; provided, however, in any such transfer, if applicable, the transferee shall on the Company’s request agree in writing to be bound by the terms of this Warrant as if an original signatory hereto.

9.Rights as Shareholders; Information.  No holder of this Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Series Preferred or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.  Notwithstanding the foregoing, the Company will transmit to the holder of this Warrant such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Company concurrently with the distribution thereof to the shareholders.

10.Registration Rights.  The Company grants registration rights to the holder of this Warrant for any Common Stock of the Company obtained upon conversion of the Series Preferred,

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comparable to the registration rights granted to the investors in that certain                 Agreement dated as of          ,          (the “Registration Rights Agreement”).

11.Additional Rights.

11.1Secondary Sales.  The Company agrees that it will not interfere with the holder of this Warrant in obtaining liquidity if opportunities to make secondary sales of the Company’s securities become available.

11.2Mergers.  The Company shall provide the holder of this Warrant with at least thirty (30) days’ notice of the terms and conditions of any of the following potential transactions: (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Company’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Company), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Company is disposed of.  The Company will cooperate with the holder in arranging the sale of this Warrant in connection with any such transaction.

11.3Right to Convert Warrant into Stock:  Net Issuance.

(a)Right to Convert.  In addition to and without limiting the rights of the holder under the terms of this Warrant, the holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into shares of Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) as provided in this Section 11.3 at any time or from time to time during the term of this Warrant.  Upon exercise of the Conversion Right with respect to a particular number of shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder of any exercise price or any cash or other consideration) (X) that number of shares of fully paid and nonassessable Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) equal to the quotient obtained by dividing the value of this Warrant (or the specified portion hereof) on the Conversion Date (as defined in subsection (b) hereof), which value shall be determined by subtracting (A) the aggregate Warrant Price of the Converted Warrant Shares immediately prior to the exercise of the Conversion Right from (B) the aggregate fair market value of the Converted Warrant Shares issuable upon exercise of this Warrant (or the specified  portion hereof) on the Conversion Date (as herein defined) by (Y) the fair market value of one share of Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) on the Conversion Date (as herein defined).

Expressed as a formula, such conversion (assuming the Series Preferred has been automatically converted into Common Stock) shall be computed as follows:

X	=	B - A
		Y

Where:	X	=	the number of shares of Common Stock that may be issued to holder
	Y	=	the fair market value (FMV) of one share of Common Stock
	A	=	the aggregate Warrant Price (i.e., Converted Warrant Shares x Warrant Price)
	B	=	the aggregate FMV (i.e., FMV x Converted Warrant Shares)

No fractional shares shall be issuable upon exercise of the Conversion Right, and, if the number of shares to be issued determined in accordance with the foregoing formula is other than a whole number, the Company shall pay to the holder an amount in cash equal to the fair market value of the resulting fractional share on the Conversion Date (as hereinafter defined).  For purposes of Section 10 of this Warrant, shares issued pursuant to the Conversion Right shall be treated as if they were issued upon the exercise of this Warrant.

(b)Method of Exercise.  The Conversion Right may be exercised by the holder by the surrender of this Warrant at the principal office of the Company together with a written statement specifying that the holder thereby intends to exercise the Conversion Right and indicating the number of shares subject to this Warrant which are being surrendered (referred to in Section 11.3(a) hereof as the Converted Warrant Shares) in exercise of the Conversion Right.  Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent upon the closing of the sale of the Company’s Common Stock to the public in a public offering pursuant to a Registration Statement under the Act (a “Public Offering”).  Certificates for the shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing the balance of the shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.  Any conversion from Series Preferred to Common Stock shall be in the ratio of one (1) share of Common Stock for each share of Series Preferred (as adjusted herein and in the Charter).  On the Date of Grant, each share of the Series Preferred  represented by this Warrant is convertible into one (1) share of Common Stock.

(c)Determination of Fair Market Value.  For purposes of this Section 11.3, “fair market value” of a share of Series Preferred (or Common Stock if the Series Preferred has been automatically converted into Common Stock) as of a particular date (the “Determination Date”) shall mean:

(i)If the Conversion Right is exercised in connection with and contingent upon the closing of the sale and issuance of shares of Common Stock of the Company in a firmly underwritten public offering, pursuant to an effective registration statement under the Securities Act of 1933, as amended, (“Public Offering”), and if the Company’s Registration Statement relating to such Public Offering (“Registration Statement”) has been declared effective by the SEC, then the initial “Price to Public” specified in the final prospectus with respect to such offering.

(ii)If the Conversion Right is not exercised in connection with and contingent upon a Public Offering, then as follows:

(A)If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices of the

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Common Stock on such exchange over the 30-day period ending five business days prior to the Determination Date, and the fair market value of the Series Preferred shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible;

(B)If traded over-the-counter, the fair market value of the Common Stock shall be deemed to be the average of the closing bid prices of the Common Stock over the 30-day period ending five business days prior to the Determination Date, and the fair market value of the Series Preferred shall be deemed to be such fair market value of the Common Stock multiplied by the number of shares of Common Stock into which each share of Series Preferred is then convertible; and

(C)If there is no public market for the Common Stock, then fair market value shall be determined by mutual agreement of the holder of this Warrant and the Company.

12.Representations and Warranties.  The Company represents and warrants to the holder of this Warrant that:

(a)Loan Agreement.The representations and warranties of the Company contained in that certain Secured Note Purchase Agreement (the “Note Purchase Agreement”) between the Company and the initial holder hereof, dated as of                    , 2003, are true, complete and correct.

(b)Corporate Power.  The Company has all requisite legal and corporate power to execute and deliver this Warrant and any other agreement contemplated hereby, to sell and issue the Warrant, to sell and issue the Shares upon exercise of the Warrant upon the terms of the Warrant, to sell and issue the shares of Common Stock issuable upon conversion of the Shares (the “Conversion Shares”) and to carry out and perform its obligations under the terms of this Agreement and any other agreement contemplated hereby or thereby.  (The Shares and the Conversion Shares are collectively referred to hereinafter as the “Underlying Stock.”)

(c)Authorization.  All corporate action on the part of the Company, its directors and stockholders necessary for the authorization, sale and issuance of the Warrant, the Warrant Shares and the Conversion Shares, and the performance of the Company’s obligations hereunder, contemplated hereby and the reservation of the Underlying Stock has been taken.  This Agreement and the Warrant and the other transactions contemplated hereby are valid and binding obligations of the Company, enforceable in accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors.

(d)Rights.  The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company’s Certificate of Incorporation, a true and complete copy of which has been provided to the holder of this Warrant.

(e)No Inconsistency.  The execution and delivery of this Warrant is not, and the issuance of the Shares upon exercise of the Warrant in accordance with the terms hereof, and the issuance of the Conversion Shares upon conversion of the Shares, will not be, inconsistent with the Certificate of Incorporation or the Company’s Bylaws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration or filing with or the taking of any action in respect of or by, any Federal, state or local government authority or agency or other person, except for the filing of notices pursuant to federal and state securities laws, which filings will be effected by the time required thereby and, except for defaults, conflicts, or contraventions, or where the failure to obtain any such consent or approval, or to register, file, or take any action, would not have a Material Adverse Effect (as defined in the Note Purchase Agreement).

(f)No Suits.  There are no actions, suits, audits, investigations or proceedings pending or, to the knowledge of the Company, threatened against the Company in any court or before any governmental commission, board or authority which, if adversely determined, would reasonably be expected to have a Material Adverse Effect (as defined in the Note Purchase Agreement) or a material adverse effect on the ability of the Company to perform its obligations under this Warrant.

13.Modification and Waiver.  This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

14.Notices.  Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor on the signature page of this Warrant.

15.Binding Effect on Successors.  This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets, and all of the obligations of the Company relating to the Series Preferred issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant.

16.Lost Warrants or Stock Certificates.  The Company covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

17.Descriptive Headings.  The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

18.Governing Law.  This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of California without regard to the conflicts of law principle.

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19.Survival of Representations, Warranties and Agreements.  All representations and warranties of the Company and the holder hereof contained herein shall survive the Date of Grant and the exercise or conversion of this Warrant (or any part hereof).  All agreements of the Company and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

20.Remedies.  In case any one or more of the covenants and agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company), or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or its rights either by suit in equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

21.No Impairment of Rights.  The Company will not, by amendment of its Charter or through any other means, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

22.Severability.  The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

23.Dispute Resolution.  In the event of any dispute arising out of or relating to this Warrant, then such dispute shall be resolved solely and exclusively by confidential binding arbitration with the San Francisco branch of JAMS (“JAMS”) to be governed by JAMS’ Commercial Rules of Arbitration (the “JAMS Rules”) and heard before one arbitrator.  The parties shall attempt to mutually select the arbitrator.  In the event they are unable to mutually agree, the arbitrator shall be selected by the procedures prescribed by the JAMS Rules.  Each party shall bear its own attorneys’ fees, expert witness fees, and costs incurred in connection with any arbitration.

23.Construction.  This Agreement has been negotiated and drafted by both parties with counsel and its language shall be construed as to its fair meaning and not strictly for or against any party.

24.Entire Agreement; Modification.  This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

eUniverse, Inc.

By
Title
Address:
Date of Grant:	,

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EXHIBIT A
NOTICE OF EXERCISE

To:  eUniverse, Inc

1.The undersigned hereby:

oelects to purchase          shares of Series B Preferred Stock of eUniverse, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full, or

oelects to exercise its net issuance rights pursuant to Section 11.3 of the attached Warrant with respect to         Shares of Series B Preferred Stock.

2.Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below:

(Name)

(Address)

3.The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

(Signature)

  (Date)

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EX-6

Exhibit 6

OPTION AGREEMENT

OPTION AGREEMENT, dated as of July 15, 2003, among 550 Digital Media Ventures, Inc. (“Seller”), an affiliate of Sony Broadband Entertainment, Inc., eUniverse, Inc., a Delaware corporation (the “Company”), and VP Alpha Holdings IV, L.L.C. (“Buyer”).

R E C I T A L S

This Agreement is entered into upon the basis of the following facts and intentions of the parties:

A.Seller owns 3,050,000 shares of the Common Stock and 1,750,000 shares of the Series B Preferred Stock (each, a “Share”, and collectively the “Shares”) of the Company that will be subject to this Agreement.  Seller separately owns an additional 316,154 shares of the Common Stock and 173,077 shares of the Series B Preferred Stock of the Company, which shares shall not be subject to this Agreement.

B.Seller desires to grant to Buyer an option to purchase the Shares.

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

1.Option.  Seller hereby grants to Buyer an option (the “Option”) to purchase any and all (but not less than 50%) of the Shares from Seller upon all of the terms, covenants and conditions hereinafter set forth.  The share certificates representing the Shares shall hereafter bear a legend referring to this Option Agreement.

2.Consideration for the Option.  Seller acknowledges that it has received good, valuable and sufficient consideration for the Option.

3.Term and Exercise.  Buyer may exercise the Option at any time up to 5:00 p.m., New York City time on January 16, 2004 (the “Termination Date”) by delivery to Seller of written notice of its exercise of the Option, together with its check for the full Purchase Price (as defined below).  Within 5 business days following exercise of the Option, Seller shall deliver to Buyer certificates for the Shares, duly exercised for transfer, at which time the closing of the purchase of the Shares from Seller shall occur (the “Closing”).  The date of the Closing is referred to herein as the “Closing Date.”

4.Purchase Price.

(a)The purchase price (“Purchase Price”) which Buyer agrees to pay upon exercise of the Option is one dollar and ten cents ($1.10) per Share, payable in cash at the Closing.

(b)In the event that Buyer thereafter sells any Shares acquired from Seller (each, a “Resold Share” and collectively, the “Resold Shares”) and receives cash consideration in excess of $3 per Resold Share, then Buyer shall, promptly after consummation

of such sale, pay over to Seller an amount equal to 40% of the sale price over $3 per Resold Share received by Buyer, but in no event more than $1.10 per Resold Share (the “Contingent Payment”).  In the event that Buyer distributes the Shares to its limited partners, then the Contingent Payment shall be made to Seller in the form of a portion of the Shares distributed, calculated to be equal to 40% of the excess of the fair market value price per share of the Company’s Common Stock (which shall equal the average closing price over the 20 consecutive trading days immediately preceding the distribution or if the Company’s Common Stock is not publicly traded then the fair market value after taking into account lack of marketability and any other appropriate factors, as determined by an appraisal undertaken by an independent appraiser experienced in valuing securities similar to the Shares which has been mutually selected by Buyer and Seller) over $3 per Share on the date of the Distribution, subject to a maximum distribution of Shares to Seller equal to a value of $1.10 per Share.  By way of example, if Buyer exercises the option for all of the Shares, and then two (2) years later sells all of the Shares for a sale price cash consideration of $5 per Share, then Seller shall be entitled to a payment equal to $0.80 per Share ($5 - $3 x 40%).  By way of further example, if Buyer exercises the Option for all of the Shares and Buyer distributes Shares to its limited partners and the fair market value of such distributed Shares as determined pursuant hereto is $7 per Share, then Seller shall be entitled to receive a number of Shares that have a fair market value of $5.28 million ($7 - $3 x 40%, subject to the maximum of $1.10 per Share, times 4.8 million Shares.)

5.Number of Shares.  The number and class of Shares specified in this Agreement and/or the Purchase Price or per share number are subject to appropriate adjustment in the event of any stock dividend, stock split, share combination or other similar event affecting the Shares.

6.Representations and Warranties of Seller.  Seller represents, warrants and covenants to Buyer, as of the date hereof and as of the Closing Date, that:

(a)Due Authorization.  This Agreement has been duly authorized, executed and delivered by or on behalf of Seller and is a valid and binding agreement of Seller, enforceable in accordance with its terms against Seller.

(b)No Conflict.  The execution and delivery by Seller of, and the performance by Seller of its obligations under this Agreement, will not contravene any provision of applicable law, or the certificate of incorporation, or by-laws of Seller, or to Seller’s knowledge, any agreement or other instrument binding upon Seller or any judgment, order or decree of any governmental body, agency or court having jurisdiction over Seller, and to Seller’s knowledge, no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by Seller of its obligations under this Agreement.

(c)Good Title to Shares.  Seller has, and on the Closing Date will have, valid title to the Shares to be sold by Seller and the legal right and power, and all authorization and approval required by law, to enter into this Agreement, and to sell, transfer, and deliver the Shares to be sold by Seller.

(d)Delivery of Shares.  Delivery of the Shares to be sold by Seller

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pursuant to this Agreement will pass title to such Shares free and clear of any security interests, claims, liens, equities, and other encumbrances, other than any encumbrances or restrictions imposed on the Shares under securities laws or by the Company.

(e)No Price Stabilization or Manipulation.  Seller has not taken and will not take, directly or indirectly, any action designed cause or result in stabilization or manipulation of the price of any of the Shares.

(f)Certain Transactions.  Except as set forth in Exhibit A, the Company is not indebted, either directly or indirectly, to Seller, Sony Music Entertainment Inc. or any of its subsidiaries or any of their officers, directors or employees.  Each of the Seller and Sony Music Entertainment Inc. and its subsidiaries hereby waives any breach or default under any agreement with the Company.

(g)Value.  The Purchase Price may or may not reflect the actual value of the Shares, that Seller has investigated the value independently, that it has been represented by independent counsel, and that it understands that the value of the Shares when and if the Option is exercised may be significantly higher than the Purchase Price.

(h)Assignment.  Prior to the Termination Date, Seller shall not sell, assign, transfer, pledge, hypothecate, or otherwise encumber any of the Shares.

7.Representations and Warranties of Buyer.  Buyer represents, warrants and covenants to Seller, as of the date hereof and as of the Closing Date, that:

(a)Due Authorization.  This Agreement has been duly authorized, executed and delivered by or on behalf of Buyer and is a valid and binding agreement of Buyer, enforceable in accordance with its terms against Buyer.

(b)No Conflict.  The execution and delivery by Buyer of, and the performance by Buyer of its obligations under this Agreement, will not contravene any provision of applicable law, or the organizational documents of Buyer, or to Buyer’s knowledge, any agreement or other instrument binding upon Buyer or any judgment, order or decree of any governmental body, agency or court having jurisdiction over Buyer, and to Buyer’s knowledge, no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by Buyer of its obligations under this Agreement.

(c)No Price Stabilization or Manipulation.  Buyer has not taken and will not take, directly or indirectly, any action designed to cause or result in stabilization or manipulation of the price of any of the Shares.

(d)Value.  The Purchase Price may or may not reflect the actual value of the Shares, that Buyer has investigated the value independently and that it has been represented by independent counsel.

(e)Investment Intent, Etc.  Buyer is an “accredited investor” within the meaning of Rule 501(a) under the Securities Act of 1933, and Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks

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of, and is able to bear the economic risk of, its respective acquisition of the Shares.  Buyer has had the opportunity to do its own due diligence regarding the Company, and Buyer is not relying on Seller with respect to such due diligence.  Buyer is not acquiring the Shares with any present intention of offering or selling any of the Shares in a transaction that would violate the Securities Act 1933 or the securities laws of any state of the United States or any other applicable jurisdiction.

8.Rights.  Any and all rights that Seller has associated with the Shares, including but not limited to registration rights, voting rights, preemptive right, liquidation preference, or otherwise, shall be deemed transferred (to the extent transferable) to Buyer upon Buyer’s exercise of the Option and payment of the Purchase Price.

9.Cooperation.  If the Option is exercised, Seller and the Company shall, upon request of Buyer, promptly execute and deliver all additional documents reasonably deemed by Buyer to be necessary, appropriate or desirable to complete and evidence the sale, assignment and transfer of the Shares pursuant to this Agreement and to accomplish the other matters contemplated herein.

10.Certain Transactions.  Seller shall vote as a stockholder in favor of an investment and loan transaction between the Company and Buyer resulting in an additional investment in the Company by Buyer of no less than $5 million at a price of at least $1 per share (if an equity transaction), as approved by the Board of Directors of the Company (the “Transaction”).  In connection with consummation of any Transaction, Seller shall be deemed to have waived any anti-dilution protection and any pre-emptive rights and rights of first refusal that Seller may have in connection with its securities holdings in the Company.

11.Amended and Restated Certificate of Designation.  Subject to the exercise of the Option, Seller and the Company consent and agree to the terms set forth in Exhibit B.  An amendment to the certificate of incorporation of the Company amending the terms of the Series B Preferred Stock shall be filed by the Company with the Delaware Secretary of State as of the Closing Date which reflects the changes contemplated by such Exhibit B.  If the Company reasonably determines that stockholder approval of such amendment is required under the laws of the State of Delaware, then the Board of Directors of the Company shall establish, before the Closing Date, a new class of preferred stock with the same rights, preferences and privileges as the Series B Preferred Stock after giving effect to the changes contemplated by Exhibit B.  Immediately after the Closing, Buyer may elect to exchange its Series B Preferred Stock for shares of such new class of preferred stock (at the rate of one share for one share).

12.Purchase and Sale.  If Buyer exercises the Option, at the Closing, Seller shall sell, transfer and deliver the Shares, represented by certificates duly endorsed in blank or accompanied by stock powers duly executed, to Buyer, and Buyer shall purchase the Shares in exchange for the Purchase Price.

13.Acceptance.  Company hereby consents to the transaction contemplated hereunder and confirms to Buyer that the Company’s representations and warranties contained in that Loan Agreement dated the date hereof between Buyer and the Company are true, correct, and complete.

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14.Buyer May Exercise Option For Less Than All Shares.  Notwithstanding any other provision herein to the contrary, Buyer may exercise the Option with respect to less than all of the Shares, but in no event less than 50% of the Shares.

15.Survival.  All representations, warranties and agreements made by Seller and by Buyer in this Agreement shall survive the execution of this Agreement for a period of one (1) year from the date hereof, except for the provisions of Sections 6(a) and 6(c), which shall survive indefinitely.

16.Miscellaneous.  This 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 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 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 Agreement has been negotiated and drafted by each party, with counsel from each party reviewing the document.  The language in this Agreement shall be construed as to its fair meaning and not strictly for or against any party.  This 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 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 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 Agreement are intended solely for the benefit of the Company, Buyer, and Seller and no provision hereof may be enforced by any creditor, shareholder, officer, director, or agent of, or any other party affiliated with, the Company, Seller or Buyer.  The Company and Seller shall use their commercially reasonable efforts to perform such further acts and things as Buyer may reasonably request in order to carry out the intent and accomplish the purpose of this Agreement.

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IN WITNESS WHEREOF, this Option Agreement has been duly executed and delivered by Buyer, Company, and Seller as of the day and year first written below:

SELLER:

550 Digital Media Ventures, Inc.,
on behalf of itself and Sony Music
Entertainment Inc. and its subsidiaries

By:	/s/ Mark Eisenberg
Name:			Mark Eisenberg
Title:		Sr. V.P. & General Counsel

COMPANY

eUniverse, Inc.

By:	/s/ Brad Greenspan
Name:  Brad Greenspan
Title:  Chief Executive Officer

BUYER

VP Alpha Holdings IV, L.L.C.

By:	VantagePoint Venture Associates IV, L.L.C.,
	Its Managing Member
	By:	/s/ Alan E. Salzman
	Name:		Alan E. Salzman
	Title:  Managing Member

[SIGNATURE PAGE TO OPTION AGREEMENT]

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Exhibit A

Indebtedness

Second Amended and Restated Promissory Note dated March 28, 2003 in the principal amount of $2,289,764, executed by eUniverse, Inc. payable to 550 Digital Media Ventures, Inc.

A-1

Exhibit B

Changes to Terms of Series B Preferred Shares

The Company’s existing Certificate  of Designation of Series B Convertible Preferred Stock, filed with the Secretary of State of Delaware on January 8, 2003, shall be amended in a manner acceptable to Buyer to encompass the following changes:

1.The authorized number of shares of Series B Preferred Stock shall be increased to 20,000,000 shares.

2.No shares of Series B Preferred Stock shall be issued without the consent of Buyer.

3.Dividends for shares of Series B Preferred Stock held by Buyer, its affiliates and their assignees shall be entitled to an 8% cumulative dividend, payable quarterly.  The dividend shall be payable in additional shares of Series B Preferred Stock, as amended for the matters contemplated by this Exhibit B.

4.Section 4(d) shall be amended to remove the reference to 550 Digital Media Ventures, Inc. and be substituted with reference to VP Alpha Holdings IV, L.L.C.

5.The initial Conversion Price defined in Section 5(c) shall be deemed to be $1.50 for shares held by Buyer, its affiliates and their assignees.

6.If Buyer has exercised the Option for all of the Shares, in the event of any vote or consent  by the holders of Series B Preferred Stock, Seller and any assignee of its Series B Preferred Stock shall be deemed to have voted or consented in the same manner as the vote or consent of Buyer, its affiliates and assignees with respect to the Shares.

7.The provisions dealing with the “Company Election” shall not apply to the shares held by Buyer, its affiliates and their assignees.

8.The shares of Series B Preferred Stock held by Buyer, its affiliates and their assignees shall only be convertible into common stock of the Company at Buyer’s election or upon other events acceptable to Buyer in its sole discretion.

B-1

EX-7

Exhibit 7

CERTIFICATE OF DESIGNATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
eUNIVERSE, INC.

eUniverse, Inc., a Delaware corporation (the “Company”), hereby certifies that the following resolution was adopted by the sole Director of the Company, as required by Section 151 of the Delaware General Corporation Law pursuant to a written consent of the sole Director dated October 31, 2002:

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company (the “Board of Directors”) by the provisions of the Certificate of Incorporation of the Company (the “Certificate of Incorporation”), there is hereby created, out of the 40,000,000 shares of preferred stock, par value $.10 per share, of the Company authorized in Article Fourth of the Certificate of Incorporation (the “Preferred Stock”), a series of the Preferred Stock consisting of 4,098,335 shares, which series shall have the following powers, designations, preferences and relative, participating, optional or other rights, and the following qualifications, limitations and restrictions (in addition to any powers, designations, preferences and relative, participating, optional or other rights, and any qualifications, limitations and restrictions, set forth in the Certificate of Incorporation which are applicable to the Preferred Stock):

Section 1.    Designation of Amount.

The shares of Preferred Stock created hereby shall be designated the “Series B Convertible Preferred Stock” (the “Series B Preferred Stock”) and the authorized number of shares constituting such series shall be 4,098,335. The Series B Preferred Stock shall rank senior to the Series A 6% Convertible Preferred Stock as to dividends, distributions or as to distributions of assets upon liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary.

Section 2.    Dividends.

(a)  The holders of the then outstanding shares of Series B Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors out of funds of the Company legally available therefor, non-cumulative cash dividends, accruing on a daily basis from the Original Issuance Date (as hereinafter defined) through and including the date on which such dividends are paid at the annual rate of 8% (the “Applicable Rate”) of the Liquidation Preference (as hereinafter defined) per share of the Series B Preferred Stock. The term “Original Issuance Date” means October 23, 2001. The cash dividends provided for in this Section 2(a) are hereinafter referred to as “Base Dividends.”

(b)  In addition to Base Dividends, in the event any dividends are declared or paid or any other distribution is made on or with respect to the common stock, par value $.001 per share (“Common Stock”), the holders of the Series B Preferred Stock as of the record date established by the Board of Directors for such dividend or distribution on the Common Stock shall be entitled to receive as additional dividends (the “Additional Dividends”) an amount (whether in the form of cash, securities or other property) equal to the amount (and in the form) of the dividends or distribution that such holder would have received had the Series B Preferred Stock been converted into Common Stock as of the date immediately prior to the record date of such dividend or distribution on the Common Stock, such Additional Dividends to be payable on the same payment date as the payment date for the dividend on the Common Stock established by the Board of Directors (the “Additional Dividend Payment Date”); provided, however, that if the Company declares and pays a dividend or makes a distribution on the Common Stock consisting in whole or in part of Common Stock, then no such dividend or distribution shall be payable in respect of the Series B Preferred Stock on account of the portion of such dividend or distribution on the Common Stock payable in Common Stock and in lieu thereof the anti-dilution adjustment in Section 5(e) below shall apply. The record date for any such

Additional Dividends shall be the record date for the applicable dividend or distribution on the Common Stock, and any such Additional Dividends shall be payable to the individual, entity or group (a “Person”) in whose name the Series B Preferred Stock is registered at the close of business on the applicable record date.

(c)  No dividend shall be paid or declared on any share of Common Stock (other than dividends payable in Common Stock for which an adjustment is made pursuant to Section 5(e)(iv) hereof), unless a dividend, payable in the same consideration and manner, is simultaneously paid or declared, as the case may be, on each share of Series B Preferred Stock in an amount determined as set forth in paragraph (b) above. For purposes hereof, the term “dividends” shall include any pro rata distribution by the Company, out of funds of the Company legally available therefor, of cash, property, securities (including, but not limited to, rights, warrants or options) or other property or assets to the holders of the Common Stock, whether or not paid out of capital, surplus or earnings.

(d)  Prior to declaring any dividend or making any distribution on or with respect to shares of Common Stock, the Company shall take all prior corporate action necessary to authorize the issuance of any securities payable as a dividend in respect of the Series B Preferred Stock.

Section 3.    Liquidation Preference.

In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (a “Liquidation”), the holders of the Series B Preferred Stock then outstanding shall be entitled to receive out of the available assets of the Company, whether such assets are stated capital or surplus of any nature, an amount on such date equal to $2.60 per share of Series B Preferred Stock plus the amount of any accrued and unpaid Base Dividends as of such date, calculated pursuant to Section 2 and any declared but unpaid Additional Dividends as of such date (collectively, the “Liquidation Preference”). Such payment shall be made before any payment shall be made or any assets distributed to the holders of any class or series of the Common Stock, the holders of the Series A 6% Convertible Preferred Stock or any other class or series of the Company’s capital stock ranking junior as to liquidation rights to the Series B Preferred Stock. After the Liquidation Preference has been paid in full pursuant to this Section 3, the holders of the Series A 6% Convertible Preferred Stock shall be entitled to receive their liquidation preference as set forth in the First Amendment to the Certificate of Designation of the Series A 6% Convertible Preferred Stock. Following payment, first, to the holders of the Series B Preferred Stock of the full preferential amounts described in the first sentence of this Section 3 and, second, to the holders of the Series A 6% Convertible Preferred Stock of the full preferential amounts described in the First Amendment to the Certificate of Designation of the Series A 6% Convertible Preferred Stock, the remaining assets (if any) of the Company available for distribution to stockholders of the Company shall be distributed, subject to the rights of the holders of shares of any other series of Preferred Stock ranking prior to the Common Stock as to distributions upon Liquidation, pro rata among (i) the holders of the then outstanding shares of Series B Preferred Stock (as if the Series B Preferred Stock had been converted into Common Stock as of the date immediately prior to the date fixed for determination of stockholders entitled to receive such distribution) and (ii) the holders of the Common Stock and any other shares of capital stock of the Company ranking on a parity with the Common Stock as to distributions upon Liquidation. If upon any Liquidation the assets available for payment of the Liquidation Preference are insufficient to permit the payment to the holders of the Series B Preferred Stock of the full preferential amounts described in this paragraph, then all the remaining available assets shall be distributed among the holders of the then outstanding Series B Preferred Stock pro rata according to the number of then outstanding shares of Series B Preferred Stock held by each holder thereof. A Corporate Transaction (as hereinafter defined), shall at the election of the holders of a majority of the Series B Preferred Stock outstanding at the time constitute a Liquidation for purposes of this Section 3, other than an Excluded Corporate Transaction.

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Section 4.    Voting Rights.

(a)  Except as otherwise provided by applicable law and in addition to any voting rights provided by law, the holders of outstanding shares of the Series B Preferred Stock:

(i)    shall be entitled to vote together with the holders of the Common Stock as a single class on all matters submitted for a vote of holders of Common Stock;

(ii)  shall have such other voting rights as are specified in the Certificate of Incorporation or as otherwise provided by Delaware law; and

(iii)  shall be entitled to receive notice of any stockholders’ meeting in accordance with the Certificate of Incorporation and By-laws of the Company.

For purposes of the voting rights set forth in this Section 4(a), each share of Series B Preferred Stock shall entitle the holder thereof to cast one vote for each whole vote that such holder would be entitled to cast had such holder converted its Series B Preferred Stock into shares of Common Stock as of the date immediately prior to the record date for determining the stockholders of the Company eligible to vote on any such matter.

(b)  The holders of Series B Preferred Stock shall have the exclusive right, voting separately as a single class, to elect the following number of members of the Board of Directors: one (1) member in the event the Board of Directors consists of one (1) to five (5) members; two (2) members in the event the Board of Directors consists of six (6) to eight (8) members; and three (3) members in the event the Board of Directors consists of nine (9) to eleven (11) members (each such member elected by the Series B Preferred Stockholders, a “Preferred Stock Director”). Except as permitted by Section 4(c) below in no event shall the total number of members of the Board of Directors exceed eleven (11). In any such election the holders of Series B Preferred Stock shall be entitled to cast one vote per share of Series B Preferred Stock held of record on the record date for the determination of the holders of Series B Preferred Stock entitled to vote on such election. The initial Preferred Stock Director(s) shall be Thomas Gewecke, and he is elected to serve until his successors are duly elected; and thereafter the Preferred Stock Directors shall be elected at the same time as other members of the Board of Directors. A Preferred Stock Director may only be removed by the written consent or affirmative vote of at least a majority of the Series B Preferred Stock. If for any reason a Preferred Stock Director shall resign or otherwise be removed from the Board of Directors, then his or her replacement shall be a person elected by the holders of the Series B Preferred Stock, in accordance with the voting procedures set forth in this Section 4(b). The Preferred Stock Directors shall be appointed by the Board of Directors to serve on each committee of the Board of Directors at least in the same proportions that the number of Preferred Stock Directors bears to the total number of directors then comprising the entire Board of Directors.

(c)  So long as any shares of Series B Preferred Stock remain outstanding, the Company shall not, without the written consent or affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock, (i) amend, alter, waive or repeal, whether by merger, consolidation, combination, reclassification or otherwise, the Certificate of Incorporation, including this Certificate of Designation, or By-laws of the Company or any provisions thereof (including the adoption of a new provision thereof), (ii) create, authorize or issue any class, series or shares of Preferred Stock or any other class of capital stock ranking either as to payment of dividends, distributions or as to distributions of assets upon Liquidation (x) prior to the Series B Preferred Stock, or (y) on a parity with the Series B Preferred Stock or (iii) increase the size of the Board or Directors beyond eleven (11) members. The vote of the holders of at least two-thirds of the outstanding shares of Series B Preferred Stock, voting separately as one class, shall be necessary to adopt any alteration, amendment or repeal of any provision of this Resolution, in addition to any other vote of stockholders required by law.

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(d)  So long as 550 Digital Media Ventures Inc. or any of its affiliates owns at least 1,442,308 shares of Series B Preferred Stock or Common Stock (as appropriately adjusted for any stock split, combination, reorganization, reclassification, stock dividend, stock distribution or similar event), the Company shall not, without the written consent or affirmative vote of at least two-thirds of the Board of Directors (i) enter into an agreement to, or consummate, a Corporate Transaction, (ii) enter into transactions which result in or require the Company to issue shares of its capital stock in excess of 5% (in any one transaction) or 12.5% (in the aggregate, in a series of transactions commencing on or after the Original Issuance Date) of the Company’s issued and outstanding shares of capital stock, (iii) enter into transactions which result in or require the Company to pay (whether in cash, stock or a combination thereof) in excess of 5% (in any one transaction) or 12.5% (in the aggregate, in a series of transactions commencing on or after the Original Issuance Date) of the Company’s then-current market capitalization, (iv) increase or decrease the number of authorized shares of capital stock, (v) directly or indirectly declare or pay any dividend or make any other distribution in respect thereof, or directly or indirectly purchase, redeem, repurchase or otherwise acquire any shares of capital stock of the Company or any subsidiary, whether in cash or property or in obligations of the Company or any subsidiary, other than repurchases pursuant to an employee’s employment or incentive agreement and upon an employee’s termination and at a price not to exceed such employee’s cost, (vi) increase or decrease the size of the Company’s Board of Directors; provided that in no event shall the total number of members of the Board of Directors exceed eleven (11).

Section 5.    Conversion Rights.

(a)  General. Subject to and upon compliance with the provisions of this Section 5, the holders of the shares of Series B Preferred Stock shall be entitled, at their option, at any time to convert all or any such shares of Series B Preferred Stock into a number of fully paid and non-assessable shares (calculated as to each conversion to the nearest 1/100,000th of a share) of Common Stock. The number of shares of Common Stock to which a holder of Series B Preferred Stock shall be entitled upon conversion shall be determined by dividing (x) the Liquidation Preference of such Series B Preferred Stock as of the Conversion Date (as hereinafter defined) by (y) the Conversion Price in effect at the close of business on the Conversion Date (determined as provided in this Section 5).

(b)  Automatic Conversion. Each share of Series B Preferred Stock shall automatically convert, immediately upon the earlier of (1) the written consent of holders of more than 50% of issued and outstanding Series B Preferred Stock, and (2) the Company Election (each, an “Automatic Conversion Date”) into fully paid and non-assessable shares of Common Stock. The number of shares of Common Stock (calculated as to each conversion to the nearest 1/100,000th of a share) to which a holder of Series B Preferred Stock shall be entitled upon such automatic conversion shall be determined by dividing (x) the Liquidation Preference of such Series B Preferred Stock as of the Automatic Conversion Date by (y) the Conversion Price in effect at the close of business on the Business Day immediately preceding such closing date. Such conversion shall occur automatically and without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent. Upon the occurrence of such automatic conversion of the Series B Preferred Stock, the holders of Series B Preferred Stock shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Series B Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Series B Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred.

(c)  Conversion Price. The conversion price (the “Conversion Price”) shall initially be $2.60, subject to adjustment from time to time in accordance with Section 5(e).

(d)  Fractions of Shares. Unless the holder of shares of Series B Preferred Stock being converted specifies otherwise, the Company shall issue fractional shares of Common Stock (carried out to seven

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decimal places) upon conversion of shares of Series B Preferred Stock. If more than one share of Series B Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock to be issued shall be computed on the basis of the aggregate number of shares of Series B Preferred Stock so surrendered. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of any shares of Series B Preferred Stock, the Company shall pay a cash adjustment in respect of such fractional share in an amount equal to the product of such fraction multiplied by the Fair Market Value (as hereinafter defined) of one share of Common Stock on the Conversion Date.

(e)  Adjustments to Conversion Price. The Conversion Price shall be subject to adjustment from time to time as follows:

(i)    Upon Issuance of Common Stock. If the Company shall, at any time or from time to time after the Original Issuance Date, issue any shares of Common Stock (other than an issuance of Common Stock as a dividend or in a split of or subdivision in respect of which the adjustment provided for in Section 5(e)(iv) applies), options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock, or options to purchase or rights to subscribe for such convertible or exchangeable securities (other than Excluded Stock (as defined below)) without consideration or for consideration per share less than the Conversion Price in effect immediately prior to such issuance, then such Conversion Price shall forthwith be lowered to a price equal to the price obtained by multiplying:

(A)  the Conversion Price in effect immediately prior to the issuance of such Common Stock, options, rights or securities by

(B)  a fraction of which (x) the denominator shall be the number of shares of Common Stock outstanding on a fully-diluted basis immediately after such issuance and (y) the numerator shall be the sum of (i) the number of shares of Common Stock outstanding on a fully-diluted basis immediately prior to such issuance and (ii) the number of additional shares of Common Stock which the aggregate consideration for the number of shares of Common Stock so offered would purchase at the Conversion Price.

For purposes of this Section 5(e), “fully diluted basis” shall be determined in accordance with the treasury stock method of computing fully diluted earnings per share in accordance with GAAP.

(ii)  Upon Acquisition of Common Stock. If the Company or any subsidiary shall, at any time or from time to time after the Original Issuance Date, directly or indirectly, redeem, purchase or otherwise acquire any shares of Common Stock, options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock (other than shares of Series B Preferred Stock that are redeemed according to their terms), or options to purchase or rights to subscribe for such convertible or exchangeable securities, for a consideration per share greater than the Fair Market Value (plus, in the case of such options, rights, or securities, the additional consideration required to be paid to the Company upon exercise, conversion or exchange) per share of Common Stock immediately prior to such event, then the Conversion Price shall forthwith be lowered to a price equal to the price obtained by multiplying:

(A)  the Conversion Price in effect immediately prior to such event by

(B)  a fraction of which (x) the denominator shall be the Fair Market Value per share of Common Stock immediately prior to such event and (y) the numerator shall be the result of dividing:

a)    (1) the product of (A) the number of shares of Common Stock outstanding on a fully-diluted basis and (B) the Fair Market Value per share of Common Stock,

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in each case immediately prior to such event, minus (2) the aggregate consideration paid by the Company in such event (plus, in the case of such options, rights, or convertible or exchangeable securities, the aggregate additional consideration to be paid by the Company upon exercise, conversion or exchange), by

b)    the number of shares of Common Stock outstanding on a fully-diluted basis immediately after such event.

(iii)  For the purposes of any adjustment of a Conversion Price pursuant to paragraphs (1) of this Section 5(e), the following provisions shall be applicable:

(1)  In the case of the issuance of Common Stock for cash in a public offering or private placement, the consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance and sale thereof.

(2)  In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the Fair Market Value thereof.

(3)  In the case of the issuance of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock, or options to purchase or rights to subscribe for such convertible or exchangeable securities (except for options to acquire Excluded Stock):

(A)  the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subparagraphs (i) and (ii) above), if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the Common Stock covered thereby;

(B)  the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities, options, or rights were issued and for a consideration equal to the consideration received by the Company for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in paragraphs (i) and (ii) above);

(C)  on any change in the number of shares or exercise price of Common Stock deliverable upon exercise of any such options or rights or conversions of or exchanges for such securities, other than a change resulting from the anti-dilution provisions thereof, the applicable Conversion Price shall forthwith be readjusted to such Conversion Price as would have been obtained had the adjustment made upon the issuance of such options, rights or securities not converted prior to such change or options or rights related to such securities not converted prior to such change been made upon the basis of such change; and

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(D)  no further adjustment of the Conversion Price adjusted upon the issuance of any such options, rights, convertible securities or exchangeable securities shall be made as a result of the actual issuance of Common Stock on the exercise of any such rights or options or any conversion or exchange of any such securities.

(iv)  Upon Stock Dividends, Subdivisions or Splits. If, at any time after the Original Issuance Date, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, following the record date for the determination of holders of Common Stock entitled to receive such stock dividend, or to be affected by such subdivision or split-up, the Conversion Price shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of Series B Preferred Stock shall be increased in proportion to such increase in outstanding shares.

(v)  Upon Combinations. If, at any time after the Original Issuance Date, the number of shares of Common Stock outstanding is decreased by a combination of the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, following the record date to determine shares affected by such combination, the Conversion Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each share of Series B Preferred Stock shall be decreased in proportion to such decrease in outstanding shares.

(vi)  Upon Reclassifications, Reorganizations, Consolidations or Mergers. In the event of any capital reorganization of the Company, any reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or any consolidation or merger of the Company with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock), each share of Series B Preferred Stock shall after such reorganization, reclassification, consolidation, or merger be convertible into the kind and number of shares of stock or other securities or property of the Company or of the successor corporation resulting from such consolidation or surviving such merger, if any, to which the holder of the number of shares of Common Stock deliverable (immediately prior to the time of such reorganization, reclassification, consolidation or merger) upon conversion of such Series B Preferred Stock would have been entitled upon such reorganization, reclassification, consolidation or merger. The provisions of this clause shall similarly apply to successive reorganizations, reclassifications, consolidations, or mergers. The Company shall not effect any such reorganization, reclassification, consolidation or merger unless, prior to the consummation thereof, the successor corporation (if other than the Company) resulting from such reorganization, reclassification, consolidation, shall assume, by written instrument, the obligation to deliver to the holders of the Series B Preferred Stock such shares of stock, securities or assets, which, in accordance with the foregoing provisions, such holders shall be entitled to receive upon such conversion.

(vii) Deferral in Certain Circumstances. In any case in which the provisions of this Section 5(e) shall require that an adjustment shall become effective immediately after a record date of an event, the Company may defer until the occurrence of such event:

(1)  issuing to the holder of any Series B Preferred Stock converted after such record date and before the occurrence of such event the shares of capital stock issuable upon such conversion by reason of the adjustment required by such event and issuing to such holder only the shares of capital stock issuable upon such conversion before giving effect to such adjustments, and

(2)  paying to such holder any amount in cash in lieu of fractional share of capital stock pursuant to Section 5(d) above;

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provided, however, that the Company shall deliver to such holder an appropriate instrument or due bills evidencing such holder’s right to receive such additional shares and such cash.

(viii)  Other Anti-Dilution Provisions. If the Company has issued or issues any securities on or after the Original Issuance Date containing provisions protecting the holder or holders thereof against dilution in any manner more favorable to such holder or holders thereof than those set forth in this Section 5, such provisions (or any more favorable portion thereof) shall be deemed to be incorporated herein as if fully set forth herein and, to the extent inconsistent with any provision herein, shall be deemed to be substituted therefor.

(ix)  Appraisal Procedure. In any case in which the provisions of this Section 5(e) shall necessitate that the Appraisal Procedure be utilized for purposes of determining an adjustment to the Conversion Price, the Company may defer until the completion of the Appraisal Procedure and the determination of the adjustment:

(1)  issuing to the holder of any share of Series B Preferred Stock converted after the date of the event that requires the adjustment and before completion of the Appraisal Procedure and the determination of the adjustment, the shares of capital stock issuable upon such conversion by reason of the adjustment required by such event and issuing to such holder only the shares of capital stock issuable upon such conversion before giving effect to such adjustment and

(2)  paying to such holder any amount in cash in lieu of a fractional share of capital stock pursuant to Section 5(d) above; provided, however, that the Company shall deliver to such holder an appropriate instrument or due bills evidencing such holder’s right to receive such additional shares and such cash.

(x)  Exceptions. Section 5(e) shall not apply to (i) any issuance of Common Stock upon any grant or exercise of any warrants or options awarded to employees or directors of the Company pursuant to an employee stock option plan or stock incentive plan approved by the Board of Directors, (ii) any issuance of Common Stock upon conversion of the Preferred Stock, (iii) upon approval by the Preferred Stockholder, (x) any issuance of Common Stock or any grant of any warrants or options to purchase Common Stock as payment for services or compensation or (y) in connection with an asset or stock acquisition (collectively, the “Excluded Stock”).

(f)    Exercise of Conversion Privilege.

(i)    Except in the case of an automatic conversion pursuant to Section 5(b), in order to convert shares of Series B Preferred Stock, a holder must (A) surrender the certificate or certificates evidencing such holder’s shares of Series B Preferred Stock to be converted, duly endorsed in a form satisfactory to the Company, at the office of the Company and (B) notify the Company at such office that such holder elects to convert Series B Preferred Stock and the number of shares such holder wishes to convert. Such notice referred to in clause (B) above shall be delivered substantially in the following form:

“NOTICE TO EXERCISE CONVERSION RIGHT

The undersigned, being a holder of the Series B Convertible Preferred Stock of eUniverse, Inc. (the “Convertible Preferred Stock”), irrevocably exercises the right to convert                        outstanding shares of Convertible Preferred Stock on                        ,            , into shares of Common Stock of eUniverse, Inc. In accordance with the terms of the shares of Convertible Preferred Stock, and directs that the shares issuable and deliverable upon the conversion be issued and delivered in the denominations indicated below to the registered holder hereof unless a different name has been indicated below.

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Dated: [At least one Business Day prior to the date fixed for conversion]

Fill in for registration of
shares of Common Stock
if to be issued other than
to the registered holder:

Name
Address
Please print name and address, including postal code number	(Signature)
Denominations:                        ”

(ii)  Series B Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day (the “Conversion Date”) of surrender of such shares of Series B Preferred Stock for conversion in accordance with the foregoing provisions (or, in the case of an automatic conversion pursuant to Section 5(b), the Automatic Conversion Date, and at such time the rights of the holders of such shares of Series B Preferred Stock as holder shall cease, and the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be treated for all purposes as the record holder or holders of such Common Stock as and after such time. As promptly as practicable on or after the Conversion Date, the Company shall issue and shall deliver at any office or agency of the Company maintained for the surrender of Series B Preferred Stock a certificate or certificates for the number of full shares of Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as provided in Section 5(d).

(iii)  In the case of any certificate evidencing shares of Series B Preferred Stock which is converted in part only, upon such conversion the Company shall execute and deliver a new certificate representing an aggregate number of shares of Series B Preferred Stock equal to the unconverted portion of such certificate.

(g)  Notice of Adjustment of Conversion Price. Whenever the Conversion Price is adjusted as herein provided: (i) the Company shall compute the adjusted Conversion Price in accordance with Section 5(e) and shall prepare a certificate signed by the Treasurer or Chief Financial Officer of the Company setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall forthwith be filed at each office or agency maintained for such purpose or conversion of shares of Series B Preferred Stock; and (ii) a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall forthwith be prepared by the Company, and as soon as practicable after it is prepared, such notice shall be mailed by the Company at its expense to all holders at their last addresses as they shall appear in the stock register.

(h)  Notice of Certain Corporate Action. In case: (i) the Company shall take an action or an event shall occur, that would require a Conversion Price adjustment pursuant to Section 5(e); or (ii) the Company shall grant to the holders of its Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class; or (iii) of any reclassification of the Common Stock (other than a subdivision or combination of the outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (iv) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or (v) the Company or any subsidiary shall commence a tender offer for all or a portion of the outstanding shares of Common Stock (or shall amend any such tender offer to change the

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maximum number of shares being sought or the amount or type of consideration being offered therefor); then the Company shall cause to be filed at each office or agency maintained for such purpose, and shall cause to be mailed to all holders at their last addresses as they shall appear in the stock register, at least 30 days prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of the amendment thereto). Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of the Series B Preferred Stock. Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (i) through (v) of this Section 5(h).

(i)    Company to Reserve Common Stock. The Company shall at all times reserve and keep available, free from preemptive rights, out of the authorized but unissued Common Stock or out of the Common Stock held in treasury, for the purpose of effecting the conversion of Series B Preferred Stock, the full number of shares of Common Stock then issuable upon the conversion of all outstanding shares of Series B Preferred Stock.

Before taking any action that would cause an adjustment reducing the Conversion Price below the then par value (if any) of the shares of Common Stock deliverable upon conversion of the Series B Preferred Stock or that would cause the number of shares of Common Stock deliverable upon conversion of the Series B Preferred Stock to exceed (when taken together with all other outstanding shares of Common Stock) the number of shares of Common Stock that the Company is authorized to issue, the Company will take any corporate action that, in the opinion of its counsel, is necessary in order that the Company may validly and legally issue the full number of fully paid and non-assessable shares of Common Stock issuable upon conversion at such adjusted conversion price.

(j)    Taxes on Conversions. The Company will pay any and all original issuance, transfer, stamp and other similar taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Series B Preferred Stock pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that of the holder of the share(s) of Series B Preferred Stock to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the reasonable satisfaction of the Company that such tax has been or will be paid.

(k)  Cancellation of Converted Series B Preferred Stock. All Series B Preferred Stock delivered for conversion shall be delivered to the Company to be canceled.

(l)    Certain Definitions. The following terms shall have the following respective meanings herein:

“Appraisal Procedure” if applicable, means the following procedure to determine the fair market value, as to any security, for purposes of the definition of “Fair Market Value” or the fair market value, as to any other property (in either case, the “Valuation Amount”). The Valuation Amount shall be determined in good faith jointly by the Board of Directors and the holders of

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more than 50% of the issued and outstanding shares of Series B Preferred Stock (the “Majority Holder”); provided, however, that if such parties are not able to agree on the Valuation Amount within a reasonable period of time (not to exceed twenty (20) days), the Valuation Amount shall be determined by an investment banking firm of national recognition, which firm shall be reasonably acceptable to the Board of Directors and the Majority Holder. If the Board of Directors and the Majority Holder are unable to agree upon an acceptable investment banking firm within ten (10) days after the date either party proposed that one be selected, the investment banking firm will be selected by an arbitrator located in New York City, New York, selected by the American Arbitration Association (or if such organization ceases to exist, the arbitrator shall be chosen by a court of competent jurisdiction). The arbitrator shall select the investment banking firm (within ten (10) days of his appointment) from a list, jointly prepared by the Board of Directors and the Majority Holder, of not more than six investment banking firms of national standing in the United States, of which no more than three may be named by the Board of Directors and no more than three may be named by the Majority Holder. The arbitrator may consider, within the ten-day period allotted, arguments from the parties regarding which investment banking firm to choose, but the selection by the arbitrator shall be made in its sole discretion from the list of six. The Board of Directors and the Majority Holder shall submit their respective valuations and other relevant data to the investment banking firm, and the investment banking firm shall, within thirty days of its appointment, make its own determination of the Valuation Amount. The final Valuation Amount for purposes hereof shall be the average of the two Valuation Amounts closest together, as determined by the investment banking firm, from among the Valuation Amounts submitted by the Company and the Majority Holder and the Valuation Amount calculated by the investment banking firm. The determination of the final Valuation Amount by such investment-banking firm shall be final and binding upon the parties. The Company shall pay the fees and expenses of the investment banking firm and arbitrator (if any) used to determine the Valuation Amount. If required by any such investment banking firm or arbitrator, the Company shall execute a retainer and engagement letter containing reasonable terms and conditions, including, without limitation, customary provisions concerning the rights of indemnification and contribution by the Company in favor of such investment banking firm or arbitrator and its officers, directors, partners, employees, agents and affiliates.

“Business Day” means a day other than a Saturday, Sunday or day on which banking institutions in New York are authorized or required to remain closed.

“Company Election” means the election by the Company to exercise its right to convert the Series B Preferred Stock into Common Stock within 60 days of the public filing by the Company on Form 10-K or 10-Q, as applicable, evidencing the Company’s achievement of four (4) consecutive quarters (commencing after the Original Issuance Date) of individual quarterly Operating Profits equal to or greater than $750,000 in each of the four (4) consecutive quarters.

“Corporate Transaction” means a reorganization, merger, change of control or consolidation of the Company or sale or other disposition of all or substantially all of the assets of the Company.

“Excluded Corporate Transaction” means a Corporate Transaction pursuant to which the individuals or entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the outstanding securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from, or the transferee Person, in such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns 100% of the Outstanding Company Common Stock or all or substantially all of the Company’s assets either directly or indirectly) in substantially the same proportions relative to each other as their

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ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be.

“Fair Market Value” means, as to any security, the Twenty Day Average of the average closing prices of such security’s sales on all domestic securities exchanges on which such security may at the time be listed, or, if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ National Market System as of 4:00 P.M., New York City time, on such day, or, if on any day such security is not quoted in the NASDAQ National Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar or successor organization (and in each such case excluding any trades that are not bona fide, arm’s length transactions). If at any time such security is not listed on any domestic securities exchange or quoted in the NASDAQ National Market System or the domestic over-the-counter market, the “Fair Market Value” of such security shall be the fair market value thereof as determined in accordance with the Appraisal Procedure, using any appropriate valuation method, assuming an arms-length sale to an independent party. In determining the Fair Market Value of any class or series of Common Stock, a sale of all of the issued and outstanding Common Stock will be assumed, without giving regard to the lack of liquidity of such stock due to any restrictions (contractual or otherwise) applicable thereto or any discount for minority interests and assuming the conversion or exchange of all securities then outstanding that are convertible into or exchangeable for Common Stock and the exercise of all rights and warrants then outstanding and exercisable to purchase shares of such stock or securities convertible into or exchangeable for shares of such stock; provided, however that such assumption will not include those securities, rights and warrants convertible into Common Stock where the conversion, exchange or exercise price per share is greater than the Fair Market Value; provided, further, however, that Fair Market Value shall be determined with regard to the relative priority of each class or series of Common Stock (if more than one class or series exists). “Fair Market Value” means with respect to property other than securities, the “fair market value” determined in accordance with the Appraisal Procedure.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, which are in effect from time to time.

“Operating Profits” means earnings before interest, taxes and purchase price amortization, adjusted to exclude non-recurring items, equity earnings/losses and minority interests.

“Outstanding Company Common Stock” means the then outstanding shares of Common Stock.

“Outstanding Company Voting Securities” means the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors.

“Twenty Day Average” means, with respect to any prices and in connection with the calculation of Fair Market Value, the average of such prices over the twenty Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined.

“Voting Stock” shall mean shares of Common Stock, Preferred Stock and any other class of securities of the Company having the power to elect directors to the Board of Directors and any other general voting power (and shall include any shares of Voting Stock issuable upon exercise, exchange or conversion of securities exercisable or exchangeable for or convertible into shares of

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Voting Stock). Each share of Common Stock shall count as one share of Voting Stock, each share of Preferred Stock shall count as a number of shares of Voting Stock equal to the number of shares of Common Stock into which such share of Preferred Stock is then convertible and each share of any other class of securities of the Company constituting Voting Stock shall count as a number of shares of Voting Stock equal to the number of shares of Common Stock into which such share of Voting Stock is then convertible, exchangeable or exercisable, as the case may be.

“Voting Stock Equivalents” means any right, warrant, option or security of the Company which is exercisable or exchangeable for or convertible into, or represents the right to otherwise acquire, directly or indirectly, Voting Stock, whether at the time of issuance or upon the passage of time or the occurrence of some future event. Each Voting Stock Equivalent shall count as a number of shares of Voting Stock equal to the number of shares of Common Stock into which such Voting Stock Equivalent is then convertible, exchangeable or exercisable.

Section 6.    Dividend Received Deduction.

For federal income tax purposes, the Company shall report distributions on the Series B Preferred Stock as dividends, to the extent of the Company’s current and accumulated earnings and profits (as determined for federal income tax purposes).

Section 7.    Preemptive Rights.

In case the Company proposes at any time to issue or sell any Voting Stock, options, rights or warrants to purchase Voting Stock or Voting Stock Equivalents or any other securities (whether debt or equity) of the Company, other than Excluded Stock (collectively, the “Company Offered Securities”), the Company shall, no later than twenty-five (25) days prior to the consummation of such transaction (a “Preemptive Rights Transaction”), give notice in writing (the “Preemptive Rights Offer Notice”) to each holder of Series B Preferred Stock of such Preemptive Rights Transaction. The Preemptive Rights Offer Notice shall describe the proposed Preemptive Rights Transaction, identify the proposed purchaser, and contain an offer (the “Preemptive Rights Offer”) to sell to each holder of Series B Preferred Stock, at the same price and for the same consideration to be paid by the proposed purchaser (provided, that, in the event any of such consideration is non-cash consideration, at the election of such holder of Series B Preferred Stock to whom the Preemptive Rights Offer is made, such holder of Series B Preferred Stock may pay cash equal to the value of such non-cash consideration), all or any part of such holder of Series B Preferred Stock’s pro rata portion of the Company Offered Securities (which shall be a fraction of the Company Offered Securities determined by dividing the number of shares of outstanding Voting Stock owned by such holder of Series B Preferred Stock by the sum of (i) the number of shares of outstanding Voting Stock owned by such holder of Series B Preferred Stock and (ii) the number of outstanding shares of Voting Stock not held by such holder of Series B Preferred Stock). If any holder of Series B Preferred Stock to whom a Preemptive Rights Offer is made fails to accept (a “Non-Responding Holder”) in writing the Preemptive Rights Offer by the tenth (10^th) day after the Company’s delivery of the Preemptive Rights Offer Notice, such Non-Responding Holders shall have no further rights with respect to the proposed Preemptive Rights Transaction.

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IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the Company by its duly authorized officer this 31st day of October, 2002.

eUNIVERSE, INC.
By:	/s/  CHRISTOPHER S. LIPP
	Christopher S. Lipp
	Secretary, Senior Vice President and
	General Counsel

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EX-8

Exhibit 8

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”).

                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.

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                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.

                (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

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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 Act 1933 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, 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/ Mark Eisenberg
	Name:		Mark Eisenberg
	Title:		Sr. V.P. & General Counsel
ASSIGNEE:	VP Alpha Holdings IV, L.L.C.
	By:  Vantage Point Venture Associates IV, L.L.C.,
	its Managing Member
	By:			/s/ Alan E. Salzman
	Name:			Alan E. Salzman
	Title:	Managing Member
AGREED AND CONSENTED TO:	eUniverse, Inc., a Delaware corporation
BORROWER
	By:		/s/ Brad Greenspan
	Name:		Brad Greenspan
	Title:	Chief Executive Officer

[SIGNATURE PAGE TO ASSIGNMENT AGREEMENT]

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