EXHIBIT 99.1
THIS SECURITY IS NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) TO THE COMPANY, (2) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER THAT IS AWARE THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A OR (3) PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF THE GUARANTEE
AND SECURITY AGREEMENT DATED SEPTEMBER 9, 2002 AMONG THE COMPANY, CERTAIN
SUBSIDIARY GUARANTORS THERETO AND THE PURCHASER, AS AMENDED, MODIFIED AND
SUPPLEMENTED FROM TIME TO TIME (THE "SECURITY AGREEMENT").
ENGAGE, INC.
Senior Secured Promissory Note
Due September 9, 2006
U.S. $2,000,000 (subject to adjustment) September 9, 2002
FOR VALUE RECEIVED, the undersigned, Engage, Inc., a Delaware
corporation (the "COMPANY"), hereby promises to pay to CMGI, Inc., a Delaware
corporation (the "PURCHASER"), the principal sum of US$2,000,000 (the
"PRINCIPAL") on or before September 9, 2006 (the "MATURITY DATE"), subject to
adjustment as provided herein. No interest shall accrue on the Principal.
This Note is being delivered pursuant to a Transaction Agreement, dated
as of September 9, 2002, between the Company and the Purchaser (the "TRANSACTION
AGREEMENT"). The Transaction Agreement provides for the payment, as specified
therein, of $6 million by the Company to the Purchaser (the "EARNOUT PAYMENTS").
In the event that on the Maturity Date the Earnout Payments actually made prior
to the Maturity Date (the "PAST EARNOUT PAYMENTS"), plus the Principal, would
exceed $6 million, the Principal shall be reduced to equal (A) $6 million less
(B) the Past Earnout Payments less (C) any prior prepayments of the Principal.
This Note shall automatically terminate without payment of the Principal if,
prior to the Maturity Date, the Purchaser has
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been paid $6 million pursuant to the Earnout Payments. The Company shall have
the right to prepay the Principal, without premium or penalty, in whole or in
part at any time and from time to time at the Company's election.
1. Certain Definitions. All capitalized terms used but not otherwise
defined herein shall have the meaning ascribed to such terms in the Transaction
Agreement.
2. Security. The Purchaser's right to payment pursuant to the terms of
this Note shall be secured to the extent and on the terms and conditions set
forth in the Security Agreement, and the terms and provisions of the Security
Agreement are incorporated herein by reference.
3. Payment. The Principal shall be repaid on or before the Maturity Date
by check payable to the Purchaser at the Purchaser's principal address set forth
in the Transaction Agreement (or at such other place as the Purchaser hereof
shall notify the Company in writing) or, if the Purchaser so specifies by
written notice to the Company given not less than two Business Days prior to the
Maturity Date, by bank wire transfer in immediately available funds to the
account so specified, in lawful money of the United States of America. If the
Maturity Date occurs on a date that is not a Business Day, then the Principal
shall be paid on the next succeeding Business Day.
4. Event of Default. This Note may be declared immediately due and
payable in full following the occurrence at any time of any Event of Default as
set forth in the Transaction Agreement. Upon the occurrence of an Event of
Default, the Purchaser shall have then, or at any time thereafter, all of the
rights and remedies afforded by the Uniform Commercial Code as from time to time
in effect in the Commonwealth of Massachusetts or afforded by other applicable
law.
5. Governing Law. This Note shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts in all respects,
including all matters of construction, validity and performance, without regard
to the choice of law provisions thereof.
IN WITNESS WHEREOF, the Company has caused this Note to be signed on its
behalf, in its corporate name, by its duly authorized officer as an instrument
under seal, as of the day and year first above written.
ATTEST: ENGAGE, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxxxxxx Xxxxx
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Name: Xxxxxx X. Xxxxxxx Name: Xxxxxxxxxxx Xxxxx
Title: Vice President and General Counsel Title: President and CEO
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