STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of the 7th day
of September, 2000, by and between The Kushner-Locke Company (the "Seller"), a
California corporation and Pequot Private Equity Fund II, L.P., a limited
partnership organized under the laws of Delaware (together with any of its
Affiliate, the "Purchasers" and each a "Purchaser"). The Purchasers
collectively and the Seller individually shall sometimes be referred to
respectively as a "party".
Whereas, the Seller and US SEARCH.com Inc., a Delaware corporation ("the
Company"), have entered into that certain Stock Purchase Agreement, dated
September 7, 2000 (the "USS Stock Purchase Agreement").
Whereas, the Seller desires to sell, and the Purchasers desire to purchase,
stock of the Company as herein described, on the terms and conditions
hereinafter set forth.
Now, therefore, it is agreed between the parties as follows:
1. Purchase and Sale of Stock. The Purchasers hereby agree to purchase
from the Seller, and the Seller hereby agrees to sell to the Purchasers, an
aggregate of Three Million Five Hundred Thousand (3,500,000) shares of common
stock, par value $.001, of the Company (the "Common Stock"), at a price equal to
$1.20 per share, for an aggregate purchase price of $4,200,000 (the "Purchase
Price"). The number of shares of Common Stock to be purchased by any Purchaser
is set forth opposite such Purchaser's name on the signature page of this
Agreement. The closing hereunder, including payment for and delivery of the
Common Stock (together with stock assignments separate from certificate, duly
endorsed in blank) shall occur at the offices of Dewey Ballantine LLP, 1301
Avenue of the Americas, New York, NY 10019 following the execution of this
Agreement, and satisfaction of the conditions described in Section 9 of this
Agreement, (the "Closing"), or at such other time and place as the parties may
mutually agree.
2. Limitations on Transfer. The Purchasers shall not assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Common
Stock except in compliance with the provisions herein and applicable securities
laws.
3. Restrictive Legends. All certificates representing the Common Stock
shall have endorsed thereon legends in substantially the following forms (in
addition to any other legend which may be required by other agreements between
the parties hereto):
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) Any legend required by federal or state securities laws.
4. Investment Representations. Each Purchaser understands that the Common
Stock has not been registered under the Securities Act of 1933, as amended (the
"Securities Act"). Each Purchaser also understands that the Common Stock is
being offered and sold pursuant to an exemption from registration contained in
the Securities Act based in part upon the Purchasers' representations contained
in this Agreement. Each Purchaser hereby represents and warrants as follows:
(a) Purchasers Bear Economic Risk. Each Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that such
Purchaser is capable of evaluating the merits and risks of such Purchaser's
investment in the Company and has the capacity to protect its own interests in
connection with the transactions contemplated in this Agreement. Each Purchaser
acknowledges that it will be required to hold the Common Stock indefinitely,
until the Common Stock is registered pursuant to the Securities Act, or an
exemption from registration is available. Each Purchaser understands that the
Company has no present intention of registering the Common Stock. Each
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow such Purchaser to transfer all or any
portion of the Common Stock under the circumstances, in the amounts or at the
times such Purchaser might propose.
(b) Acquisition for Own Account. Each Purchaser is
acquiring the Common Stock for such Purchaser's own account for investment only,
and not with a view towards its distribution, subject to the condition that the
disposition of such Purchaser's property is at all times within its control,
subject to compliance with applicable law.
(c) Purchasers Can Protect their Interest. By reason of
each Purchaser's business or financial experience, such Purchaser has the
capacity to protect such Purchaser's own interests in connection with the
transaction contemplated in this Agreement. Further, each Purchaser is aware of
no publication of any public advertisement in connection with the transaction
contemplated in the Agreement prior to the date hereof.
(d) Accredited Investor. Each Purchaser represents that
it is an accredited investor within the meaning of Rule 501 under the Securities
Act.
(e) Company Information. Each Purchaser has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and management of the Company. Each Purchaser has also
had the opportunity to ask questions of and receive answers from, the Company
and its management regarding the terms and conditions of this investment.
(f) Affiliate. Each Purchaser acknowledges that Seller
has advised it that Seller is an "affiliate" (within the meaning of the
Securities Act) of the Company.
(g) Rule 144. Each Purchaser has been advised or is
aware of the provisions of Rule 144 promulgated under the Securities Act, which
permits limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company and the
resale occurring following the required holding period under Rule 144.
(h) Due Diligence Investigation. Each Purchaser and
such Purchaser's representatives have been solely responsible for such
Purchaser's own "due diligence" investigation in connection the purchase of the
Common Stock, for its own analysis of the merits and risks of this investment,
and for such Purchaser's own analysis of the fairness and desirability of the
terms of the investment; provided, however, that the foregoing, does not limit
or modify the representations and warranties of the Seller set forth herein or
the right of such Purchaser to rely thereon. In taking any action or performing
any role relative to the arranging of the proposed investment, each Purchaser
has acted solely in such Purchaser's own interest, and neither such Purchaser
nor any of such Purchaser's agents or employees has acted as an agent of the
Seller.
5. Representation and Warranties of the Seller. In connection
with this Agreement, the Seller hereby represents and warrants to each Purchaser
as follows:
(a) Authorization. The Seller has the power, capacity
and authority to enter into, execute and deliver this Agreement, to consummate
the transactions contemplated hereby and to perform its obligations under this
Agreement. The execution and delivery by the Seller of this Agreement, and the
consummation by the Seller of the transactions contemplated hereby, have been
duly authorized by all necessary action on the part of the Seller.
(b) No Conflicts. The execution, delivery and
performance of this Agreement by the Seller will not (i) conflict with or
violate the articles of incorporation or bylaws of the Seller, (ii) violate any
law by which the Seller is bound, and (iii) result in a breach or violation of,
or constitute a default under, any material contract to which the Seller is a
party.
(c) Binding Obligations. This Agreement constitutes the
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally, and by general equitable principles.
(d) Title to Common Stock. The Seller is the record
owner of the Common Stock and owns such Common Stock beneficially, free and
clear of any liens, claims, rights, pledges, charges, third party rights,
security interests, restrictions or other encumbrances (other than any of the
foregoing that are identified on Schedule 5(d) hereto, all of which will be
released prior to the Closing and restrictions arising under applicable
securities laws) and at the Closing will have the absolute and unrestricted
right, power, authority and capacity to sell, assign and transfer the Common
Stock to the Purchasers.
(e) Consents. With the exception of any consent
required under the HSR Act (as defined in Section 8(c)(2) of this Agreement) or
the termination of any applicable waiting period thereunder, no consent,
approval or authorization of any governmental authority or of any third party is
required in connection with the execution and delivery of this Agreement or the
consummation of any of the transactions contemplated hereby. The consent to the
transactions contemplated in this Agreement that is required by the Seller from
[___________] under the Credit, Security, Guaranty and Pledge Agreement (the
"Credit Agreement"), dated as of June 19, 1996, as amended, among the Seller,
the Guarantors named therein, the lenders named therein and The Chase Manhattan
Bank, N.A. (formerly Chemical Bank) as Agent (as defined therein) and as
Fronting Bank (as defined therein) for the lenders is in effect as of the date
hereof, the Seller has provided the Purchasers with evidence thereof prior to
the date hereof, such consent will remain in effect at the Closing, and any
additional consents, releases or other instruments required to prevent an Event
of Default (as defined in the Credit Agreement) under the Credit Agreement will
be obtained and be in effect prior to and upon the Closing.
(f) Advertisement. Seller has not made, whether on its
own or through an intermediary, any public advertisement in connection with the
transactions contemplated in this Agreement, nor is Seller aware of any public
advertisement by other parties in connection herewith.
(g) No Brokers or Finders. No person has, or as a
result of the transactions contemplated herein will have, any right or valid
claim against the Company or any Purchaser for any commission, fee or other
compensation as a finder or broker, or in any similar capacity.
6. Representations and Warranties of Seller relating to the Company.
Seller hereby represents and warrants to each Purchaser, with respect to the
Company, as follows, in each case solely and only to the extent that Seller has
actual knowledge (without independent investigation or verification) relating to
each of the following:
SEC Documents; Financial Statements.
(1) Since June 24, 1999, the Company has filed all forms, reports and
documents with the Securities and Exchange Commission (the "Commission")
(including all exhibits thereto) required under the Securities Act or the
Exchange Act of 1934, as amended or the rules and regulations promulgated
thereunder (collectively, the "SEC Documents"), each of which complied in all
material respects with all applicable requirements of the Securities Act and of
the Exchange Act of 1934, as amended and in effect on the dates so filed. None
of the SEC Documents (as of their respective filing dates) 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 made therein, in
light of the circumstances under which they were made, not misleading.
(2) The financial statements contained in the SEC Documents: (i) comply
as to form in all material respects with the published rules and regulations of
the Commission applicable thereto; (ii) were prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered, except as may be indicated in the notes to such
financial statements and (in the case of unaudited statements) as permitted by
Form 10-Q of the Commission, and except that unaudited financial statements may
not contain footnotes and are subject to normal and recurring year-end audit
adjustments; and (iii) fairly present the consolidated financial position of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the periods covered thereby.
(3) No representation or warranty of the Company contained in any
document, certificate or written statement furnished or made available to such
Purchaser by or at the direction of the Company for use in connection with the
transactions contemplated by this Agreement and the USS Stock Purchase Agreement
contains any untrue statement of a material fact or omits to state any material
fact (known to the Company, in the case of information not furnished by them)
necessary in order to make the statements contained herein, therein or in the
USS Stock Purchase Agreement not misleading in light of the circumstances in
which the same were made. There are no facts known to the Seller or any
affiliates of the Seller (other than matters of a general economic nature) as to
which they have concluded would be expected to have a material adverse effect
upon the business operations, assets or condition (financial or other) of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Effect"),
and that have not been disclosed in the SEC Documents, this Agreement, the USS
Stock Purchase Agreement or in such other documents, certificates and statements
furnished to such Purchaser for use in connection with the transactions
contemplated by this Agreement.
7. Additional Representations and Warranties of each
Purchaser. In connection with this Agreement, each Purchaser represents and
warrants to the Seller as follows:
(a) Authorization. Each Purchaser has the requisite
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to perform its obligations under this
Agreement. The execution and delivery by each Purchaser of this Agreement, and
the consummation by such Purchaser of the transactions contemplated hereby, have
been duly authorized by all necessary partnership action by such Purchaser.
(b) Binding Obligations. This Agreement constitutes the
legal, valid and binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally, and by general equitable principles.
(c) Organization and Good Standing. Pequot Private
Equity Fund II, L.P. has been duly organized and is existing as a limited
partnership in good standing under the laws of Delaware and each Affiliate of
Pequot Private Equity Fund II, L.P. that is a party to this Agreement is an
entity validly existing and in good standing under the laws of its jurisdiction
of incorporation.
(d) No Brokers or Finders. No person has, or as a
result of the transactions contemplated herein will have, any right or valid
claim against the Company or Seller for any commission, fee or other
compensation as a finder or broker, or in any similar capacity
8. Covenants.
(a) No Sale; Pledge. The Seller hereby covenants and
agrees with each Purchaser that, subject to its fiduciary obligations, during
the period between the date of this Agreement and the Closing, it shall not
sell, transfer, assign or otherwise dispose of the Common Stock nor shall it
pledge or encumber the Common Stock, nor shall it grant any other rights with
respect to the Common Stock.
(b) No Solicitation. The Seller shall not, nor shall it
authorize or permit any of its officers, directors, employees, representatives
or agents to, directly or indirectly solicit, initiate or encourage any actions
or inquiries that may reasonably be expected to lead to the making of a proposal
for the transfer of the Common Stock other than as contemplated in this
Agreement. The Seller will immediately cease and cause to be terminated any
activities, discussions or negotiations conducted prior to the date of this
Agreement with any parties other than a Purchaser with respect to any of the
foregoing.
(c) Reasonable Commercial Efforts; Additional Actions.
(1) Upon the terms and subject to the conditions of this Agreement, each
of the parties hereto shall cooperate and shall use its reasonable commercial
efforts to take, or cause to be taken, all action, and to do or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including using its
reasonable best efforts to effect promptly and prosecute diligently (including
responding to all reasonable requests for supplemental information) all
approvals, filings and/or notices required under any applicable laws for the
consummation of the transactions contemplated by this Agreement.
(2) Without limiting any of the foregoing, Seller will cooperate and
diligently assist each Purchaser and the Company and, if required, each
Purchaser and the Company will cooperate and diligently assist the Seller, with
all filings and reports with the Federal Trade Commission, the United States
Department of Justice and any other authority in order to comply with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all
applicable rules and regulations and any similar state acts (collectively, the
"HSR Act"). Seller and each Purchaser shall promptly furnish all materials
thereafter required by any authority having jurisdiction over such filings, and
shall take all reasonable actions and shall file and use all reasonable efforts
to have declared effective or approved all documents and notifications with any
such authorities, as may be required under the HSR Act or other federal or state
antitrust laws for the consummation of the transactions contemplated by this
Agreement and by the USS Stock Purchase Agreement. The Seller and each
Purchaser shall promptly notify each other upon receipt of any communication or
response from the Federal Trade Commission, the United States Department of
Justice and any other authority having jurisdiction over the HSR Act of any
determination or finding with respect to the filings under the HSR Act that are
contemplated hereunder.
(3) The Seller and each Purchaser acknowledge that pursuant to the USS
Purchase Agreement, the Company shall pay all filing and similar fees related to
compliance with the HSR Act in connection with the transactions contemplated by
this Agreement and by the USS Stock Purchase Agreement.
(d) Changes in Representation and Warranties. Between
the date of this Agreement and the Closing, the Seller shall not knowingly enter
into any transaction, take any action, or by inaction permit an event to occur,
which would result in any of the representations, warranties or covenants of the
Seller herein contained not being true and correct at and as of the Closing in
any respect which would reasonably be expected to have a Material Adverse Effect
or a material adverse effect on the Seller's ability to perform its obligations
hereunder or under any of the Documents (as defined in the USS Stock Purchase
Agreement) to which Seller is a party.
(e) Notification of Certain Matters. The Seller shall
give notice to each Purchaser, and each Purchaser shall give notice to the
Seller, promptly upon becoming aware of (i) any occurrence, or failure to occur,
of any event, which occurrence or failure to occur has caused or could
reasonably be expected to cause any representation or warranty in this Agreement
to be untrue or inaccurate in any material respect at any time after the date
hereof and prior to the Closing and (ii) any material failure on its part to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any such
notice shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
(f) Consents. The Seller shall take all actions advisable or required
to ensure that the transactions contemplated in this Agreement do not and will
not give rise to an Event of Default under the Credit Agreement.
9. Conditions to Closing. The obligation of each party to
this Agreement to effect the Closing shall be subject to the fulfillment by the
other party of the following additional conditions or the waiver of the
fulfillment of such conditions by the party entitled to benefit therefrom:
(i) the other party shall have performed in all material respects the
covenants and obligations required to be performed under this Agreement at or
prior to the Closing;
(ii) the waiting period (and any extensions thereof) applicable to the
consummation of the transactions contemplated by this Agreement and by the USS
Stock Purchase Agreement under the HSR Act shall have expired or been
terminated;
(iii) the First Closing under, and as defined in, the USS Stock Purchase
Agreement shall have occurred;
(iv) the representations and warranties of the other party contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing as if made on and as of such date (except to the extent any such
representation and warranty by its terms relates to a prior date);
(v) the Seller shall have performed in all respects all obligations and
agreements, and complied in all respects with all covenants, contained in this
Agreement, to be performed and complied with by it at or prior to the Closing;
(vi) the Seller and the Purchasers shall have executed the Escrow
Agreement in the form attached hereto as Exhibit A, the Stockholders Agreement,
the Right of First Refusal Agreement;
(vii) a letter in the form attached hereto as Exhibit B, addressed to U.S.
Trust Company of California, N.A. and dated as of September 7, 2000, shall have
been executed by the Seller, U.S. Trust Company of California, N.A. and certain
other parties identified therein;
(viii) Paul Hastings Janofsky & Walker LLP shall have delivered to the
Purchasers two (2) opinions, one of which shall be dated as of the First Closing
and the other dated as of the Closing, addressed to the Purchasers in form and
substance satisfactory to the Purchasers;
(ix) all governmental, regulatory and third-party consents or clearances
necessary for the consummation of all of the transactions contemplated by the
Documents to which Seller is a party shall have been obtained and shall be in
full force and effect; and
(x) the Seller shall have provided each Purchaser with a copy of a
resolution duly adopted by the Board of Directors of Seller, certified as such
by the Seller's Secretary, authorizing the execution of this Agreement and any
other agreements arising in connection herewith and the Closing hereunder.
The Closing shall occur no later than two (2) business days following the
satisfaction of the foregoing conditions unless the parties hereto shall agree
that the Closing shall occur at another time.
10. Miscellaneous.
(a) Definitions. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings assigned to them in the USS
Stock Purchase Agreement.
(b) Successors and Assigns. This Agreement shall inure to the benefit of
the successors and assigns of the Seller and, subject to the restrictions on
transfer herein set forth, be binding upon each Purchaser and such Purchaser's
successors, and assigns.
(c) Attorneys' Fees. Should any party to this agreement
institute any legal action against the other party to enforce provisions hereof
(including any claim for breaches of representations and warranties), the
prevailing party in such action shall be entitled to receive from the losing
party, in addition to any other relief to which the prevailing party may be
entitled, all reasonable attorneys' fees and court costs.
(d) Expenses. The Seller and each Purchaser shall each pay
their own expenses incident to the negotiation, preparation and performance of
this Agreement and the transactions contemplated hereby.
(e) Governing Law; Venue. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York. The
parties agree that any action brought by either party to interpret or enforce
any provision of this Agreement shall be brought in, and each party agrees to,
and does hereby, submit to the jurisdiction and venue of, the appropriate state
or federal court in New York City.
(f) Jurisdiction, Venue, Service of Process.
(1) Each party hereto hereby expressly consents to personal jurisdiction
and venue in all federal and state courts sitting in New York City and all
federal and state courts sitting in New York City in connection with any suit,
action or proceeding relating to any provision of, or based on any matter
arising out of or in connection with, this Agreement , any instrument or
document referred to herein or related hereto. each party hereto hereby
expressly agrees that any process or notice of motion or other application to
any of the foregoing courts or a judge of such courts may be served upon the
sole shareholder within or without such courts jurisdiction by registered or
certified mail.
(2) Each party hereto hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
relating to any provision of, or based on any matter arising out of or in
connection with, this Agreement , any instrument or document referred to herein
or related hereto, brought in any federal or state court sitting in New York
City and hereby further irrevocably waives any claim that such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
(3) Notwithstanding the foregoing, any party hereto and their successors
and assigns may sue any other party hereto and their successors and assigns in
any jurisdiction where such other party or any of its or their assets may be
found and may service legal process upon such other party in any other manner
permitted by law.
(g) Indemnification.
(1) The Purchasers hereby agree to indemnify, defend and hold harmless the
Seller and its officers, directors, agents, affiliates and shareholders from and
against, any and all liability, damage, loss, cost or expense incurred on
account of or arising out of any breach of any of the Purchasers'
representations, warranties, covenants and agreements contained in this
Agreement.
(2) The Seller hereby agrees to indemnify, defend and hold harmless the
Purchasers and their respective officers, directors, agents, affiliates and
shareholders from and against, any and all liability, damage, loss, cost or
expense incurred on account of or arising out of any breach of any of the
Seller's representations, warranties, covenants and agreements contained in this
Agreement.
(h) Further Execution. The parties agree to take all such
further action(s) as may reasonably be necessary to carry out and consummate
this Agreement as soon as practicable, and to take whatever steps may be
necessary to obtain any governmental approval in connection with or otherwise
qualify the issuance of the securities that are the subject of this Agreement.
(i) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes and merges all prior agreements or understandings,
whether written or oral. This Agreement may not be amended, modified or
revoked, in whole or in part, except by an agreement in writing signed by each
of the parties hereto.
(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 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.
(k) 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, which agreement shall be enforceable
against the parties actually executing such counterpart. Facsimile execution
and delivery of this Agreement shall be legal, valid and binding execution and
delivery for all purposes.
(l) Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified or supplemented, whether before or
after the closing hereof, only by a written agreement signed by each of the
parties hereto.
(m) Specific Performance. In addition to any other
remedies which the Purchasers (or any of them) may have at law or in equity, the
Seller hereby acknowledges that the Seller, its subsidiaries and the Common
Stock are unique, and that the harm to the Purchasers (or any of them) resulting
from breaches by the Seller of its obligations hereunder cannot be adequately
compensated by damages. Accordingly, the Seller agrees that the Purchasers (or
any of them) shall have the right to have all obligations, under-takings,
agreements, covenants and other provisions of this Agreement specifically
performed by the Seller, and the Purchasers (or any of them) shall have the
right to obtain an order or decree of such specific performance in any of the
courts of the United States of America, any state or other political subdivision
thereof or any other applicable jurisdiction.
(n) Notices. Any notice, response or other communication required or
permitted hereunder shall be effectively given, in the case of a communication
to a Purchaser, to the attention of both David Malat, the Chief Accounting
Officer of each Purchaser's Investment Manager and to Carol Holley, the Vice
President of each Purchaser's Investment Manager, or to such other person or
persons as shall have been designated in writing to Kushner-Locke by a
Purchaser, and, in the case of a communication to Kushner-Locke, to the
attention of Donald Kushner and Peter Locke. Such notice, response or other
communication shall be by personal delivery to the applicable party's address,
as indicated below that party's signature to this Agreement, by facsimile
transmission to the number to shown below the applicable party's signature to
this Agreement, or by Federal Express or similar service for overnight delivery
to the party's address, as indicated below that party's signature to this
Agreement. In the event of personal delivery, such communication shall be
deemed effectively given as of the date upon which it shall have been delivered
to both David Malat, the Chief Accounting Officer of each Purchaser's Investment
Manager and to Carol Holley, the Vice President of each Purchaser's Investment
Manager, or to such other person or persons as shall have been designated in
writing to Kushner-Locke by a Purchaser. In the event of any other personal
delivery and of delivery by facsimile delivery, such communications shall be
deemed effectively given as of the date of such personal or facsimile delivery.
In the event of personal delivery by Federal Express or similar service for
overnight delivery, such communication shall be deemed effectively given upon
receipt. Any party to this Agreement may designate by ten (10) days' advance
written notice to the other party hereto by registered or certified mail with
postage and fees prepaid, addressed to the attention of Donald Kushner and Peter
Locke at the address shown below or at such other address as such party may
designate by ten (10) days' advance written notice to the other party hereto.
(o) Termination of Agreement and of Representations and Warranties of
Seller Relating to the Company. This Agreement may be terminated at any time by
either party (the "Terminating Party") if the conditions described in Section 9
hereof have not been satisfied on or before sixty (60) days following the date
hereof, unless the failure to satisfy such conditions and to consummate the
Closing is the result of a breach of this Agreement by the Terminating Party or
any affiliate of such party, in which case the Terminating Party shall not be
authorized to terminate this Agreement. The Representations and Warranties of
Seller Relating to the Company shall terminate upon the Closing of this
Agreement.
In Witness Whereof, the parties hereto have executed this Stock
Purchase Agreement as of the day and year first above written.
Number of shares of Common Stock to be Purchased
THE KUSHNER-LOCKE COMPANY
By:
Name: Donald Kushner
Title: Co-Chief Executive Officer
Address: 11601 Wilshire Boulevard
21st Floor
Los Angeles, California 90025
Facsimile: (310) 481-2101
PEQUOT PRIVATE EQUITY FUND II, L.P.
By: PEQUOT CAPITAL MANAGEMENT, INC.,
its Investment Manager
By:
Name: Kevin E. O'Brien
Title: General Counsel
Address: 500 Nyala Farm Road
Westport, CT 06880
3,500,000 Facsimile: (203) 429-2420
