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Stockholders Agreement

 

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Title:

Stockholders Agreement

Entities:

Pequot Capital Management Inc

Date:

2000

Size:

Preview shows 6KB of 31KB total

Price:

$44

ID:

#2354612

 

 

► Corporate ► Holder ► Stockholder Agreements

 

 

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                             STOCKHOLDERS AGREEMENT


This Stockholders Agreement (this "Agreement") is made as of the 7th day of
September, 2000, by and among US Search.com, Inc., a Delaware corporation (the
"Company"), The Kushner-Locke Company, a California corporation (together with
any of its affiliates who currently own shares of Common Stock of the Company,
"KL"), Pequot Private Equity Fund II, L.P., a Delaware limited partnership and
(together with its Affiliates (as defined herein) the "Purchasers").
WITNESSETH

WHEREAS, the Purchasers have entered into a Stock Purchase Agreement (the
"USS Stock Purchase Agreement") with the Company dated September 7, 2000,
pursuant to which the Purchasers are making a significant equity contribution to
the Company by, among other things, purchasing 100,000 shares of the Company's
Series A Convertible Preferred Stock (the "Series A Preferred"), and may in the
future acquire up to an additional 175,000 shares of the Series A Preferred;
WHEREAS, the Purchasers have also entered into that certain Stock Purchase
Agreement (the "KL Purchase Agreement") and that Right of First Refusal
Agreement (the "KL Right of First Refusal Agreement") with KL, both of which are
dated as of September 7, 2000, whereby, among other things, KL has agreed to
sell to the Purchasers 3,500,000 shares of voting Common Stock, par value $.001
per share, of the Company (the "Common Stock").
WHEREAS, the Certificate of Designations contemplated by the USS Stock Purchase
Agreement (the "Certificate of Designations") grants the right to the Purchasers
to collectively nominate two persons for election to the Board of Directors of
the Company, and the Purchasers seek reasonable assurance that such nominees
will be appointed and elected to the Board of Directors of the Company after
nomination by the Purchasers.
WHEREAS, the parties hereto wish to set forth additional agreements among
them relating to the size and composition of the Board of Directors of the
Company, as well as certain amendments to the Company's certificate of
incorporation (the "Certificate of Incorporation"), exclusive of the Certificate
of Designations (the "Charter") and bylaws (the "Bylaws").
WHEREAS, KL owns and has voting power over a substantial number of
additional shares of Common Stock.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
undertakings of the parties, and intending to be legally bound hereby, the
parties hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the terms listed below
shall be defined as follows:
(a) "Affiliate" means, with respect to any person, any person that, directly
or indirectly, controls, is controlled by or is under common control with
such person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of voting securities
or by contract or otherwise. Without limiting the foregoing, the ownership by
any person of 50% or more of the outstanding voting securities of any other
person shall be deemed to be "control" for the purposes of this Agreement.
(b) "Board" means the Board of Directors of the Company.
(c) "Permitted Transferee" means any Affiliate of the Purchasers or KL who
receives Voting Shares by way of purchase, transfer or assignment from the
Purchasers or KL.
(d) "Stockholder" means any Person that owns any capital stock of the
Company and is a party to this Agreement, including, without limitation, KL, the
Purchasers and any of their respective transferees who become parties to this
Agreement.
(e) "Voting Shares" means with respect to any party, any Common Stock, any
Series A Preferred and any other shares of capital stock or other equity
security owned by such party at the applicable time; or with respect to which
such party has the power or authority to vote.
Capitalized terms used and not otherwise defined in this Agreement shall
have the meanings assigned to them in the USS Stock Purchase Agreement.
2. ELECTION OF DIRECTORS AND BOARD REPRESENTATION.
(a) Pursuant to the Bylaws of the Corporation, the number of directors
comprising the Board is fixed by resolution of the Board at seven (7) and the
affirmative vote required for action by the Board is fixed at a majority of the
members of the Board. The Stockholders shall vote their respective Voting
Shares and take all other actions reasonably necessary to maintain the number of
members of the Board at seven (7) and maintain the aforementioned majority
voting provision.
(b) During the term of this Agreement, all of the Voting Shares held by a
Stockholder, whether now owned or hereafter acquired, shall be voted to elect
directors in accordance with, and in order to give effect to, the following and
each Stockholder shall take all actions reasonably necessary to cause itself or,
as the case may be, its nominee on the Board, subject to applicable law, to
give effect to the following:
One (1) member of the Board shall be nominated for election by KL to
fill one seat on the Board (the "KL Board Member"); provided, that KL's right to
nominate one director pursuant to this Section 2(b)(i) and Section 4 of this
Agreement shall continue so long as KL and its Permitted Transferees
collectively are the beneficial owners of at least Ten Percent (10%) of all

 

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