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EXHIBIT 10.5    
  

 
 
 

NETZERO, INC.
  AMENDMENT TO STOCK RESTRICTION AGREEMENT    
  

    THIS AMENDMENT TO STOCK RESTRICTION AGREEMENT (this "Amendment") is dated as of April 8, 1999, between Ronald T. Burr ("Founder") and
NetZero, Inc. (the "Company"). All capitalized terms used herein without definition shall have the meanings ascribed to them in that certain Stock Restriction Agreement dated as of
September 11, 1998 (the "Agreement"), between Founder and the Company. 

    In
consideration of good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 

    1.  Section 2(c)
of the Agreement is hereby amended by adding the following language to the end of such paragraph: 

"Notwithstanding
the foregoing, the Repurchase Right shall automatically lapse with respect to all shares of Unvested Stock in the event Founder is terminated without cause following, or in connection
with, a Corporate Transaction. As used in this Section, the term "Corporate Transaction" shall mean either of the following shareholder-approved transactions: 

	(i)
	a
merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or

	(ii)
	the
sale, transfer or other disposition of all or substantially all of the Company's assets in complete liquidation or dissolution of the Company. 

    2.  In
all other respects, the Agreement shall remain unchanged and in full force and effect in accordance with the terms thereof. 

    IN
WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the date first above written. 

	

 	
 	
NETZERO, INC.
	

 	
 	

By:	
 	

/s/ MARK R. GOLDSTON   
 Mark R. Goldston
 Chief Executive Officer
	
 	
 	

/s/ RONALD T. BURR   
 Ronald T. Burr

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EXHIBIT 10.5

AMENDMENT TO STOCK RESTRICTION AGREEMENTPrepared by MERRILL CORPORATION

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SECOND AMENDMENT TO STOCK RESTRICTION AGREEMENT    
  

    This Second Amendment to Stock Restriction Agreement (the "Second Amendment") is made and entered into effective as of the 9th day of February, 2001, by and
between NetZero, Inc., a Delaware corporation (the "Company"), with principal corporate offices at 2555 Townsgate Road, Westlake Village, CA 91361, and Ronald T. Burr ("Founder"). All
capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Stock Restriction Agreement by and between the Company and Founder dated as of September 11,
1998 and the Amendment to Stock Restriction Agreement by and between the Company and Founder dated as of April 8, 1999 (the "Amendment" and, as amended, the "Agreement"). 

    WHEREAS,
the Company and Founder desire to modify certain terms of the Agreement. 

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

	1.
	Paragraph 1
of the Amendment to the Agreement shall be replaced in its entirety with the following: 

"Section 2(c)
of the Agreement is hereby amended by adding the following language to the end of such paragraph: 

"Nothwithstanding
the foregoing, the Repurchase Right shall automatically lapse with respect to all shares of Unvested Stock in the event Founder is Involuntarily Terminated." 

	2.
	In
the event Founder is Involuntarily Terminated, each option to purchase the Company's Common Stock and each restricted stock grant then held by Founder shall automatically vest in
full (subject to any vesting deferrals provided in any restricted stock grant), and any such option shall remain in effect for a one (1) year period following the date of termination. Founder
shall be deemed "Involuntarily Terminated" for the purpose of this Agreement if (i) the Company or any successor to the Company terminates Founder's employment without cause in connection with
or following a Corporate Transaction or Change in Control (as defined in the Company's 1999 Stock Incentive Plan); or (ii) in connection with or following a Corporate Transaction or Change of
Control there is (a) a decrease in Founder's title or responsibilities (it being deemed to be a decrease in title and/or responsibilities if Founder is not offered the same position with the
Company or its successor as well as the acquiring and ultimate parent entity, if any, following the Corporate Transaction or Change of Control that Founder held prior to the Corporate Transaction or
Change in Control), (b) a decrease in pay and/or benefits from those provided by the Company immediately prior to the Corporate Transaction or
Change in Control, or (c) a requirement that Founder re-locate out of the greater Los Angeles metropolitan area.

	3.
	If
Founder is Involuntarily Terminated, the Company (or its successor, as the case may be) shall pay to Founder, on the date of termination, a severance payment in an amount equal
to four times Founder's base salary and annual bonus, payable in one lump sum, subject to withholding as may be required by law.

	4.
	For
the eighteen (18) month period following the termination of Founder's employment with the Company (the "Noncompetition Period"), Founder shall not directly engage in, or
manage or direct persons engaged in, a Competitive Business Activity (as defined below) anywhere in the Restricted Territory (as defined below); provided, that the Noncompetition Period shall
terminate if the Company terminates operations or if the Company no longer engages in any Competitive Business Activity. The term "Competitive Business Activity" shall mean the business of providing
consumers with dial-up Internet access services (free or pay). The term "Restricted Territory" shall mean each and every county, city or other political subdivision of the United States in
which the Company is engaged in business or providing its services.  The Company agrees that providing services to a company or entity that is involved in a 

Competitive
Business Activity but which services are unrelated to the Competitive Business Activity shall not be deemed a violation of this Second Amendment. 

	5.
	Company
and Founder agree that, for the purposes of damages to the Company with respect to any breach of Section 4 above, the value of Founder's obligations to the Company
under Section 4 equal 37.5% of the severance payment in paragraph 3 above. In the event that any amounts, benefits, and rights payable to Founder upon a termination of employment under
Section 4 (CIC Benefits) would be deemed under Section 280G of the Internal Revenue Code (Code) to constitute parachute payments, then the Founder's CIC Benefits shall be payable either
(a) in full, or (b) as to such lesser amount which would result in no portion of such CIC Benefits being subject to excise tax under Section 4999 of the Code, whichever of the
foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Founder on an
after-tax basis, of the greatest amount of benefits under Section 4 notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.
The determination as to whether and to what extent payments under Section 4 are required to be reduced in accordance with the preceding sentence shall be made at the Company's expense by
PricewaterhouseCoopers LLP or by such other nationally recognized certified public accounting firm, law firm, or benefits consulting firm as the Compensation Committee of the Company's Board of
Directors may designate, subject to the reasonable approval of Founder. PricewaterhouseCoopers LLP (or such other firm as may have been designated in accordance with the preceding sentence) shall have
the right to engage any service provider of their choosing to provide any assistance or services necessary in making such determination.

	6.
	If
any provision of this Agreement is held by an arbitrator or a court of competent jurisdiction to conflict with any federal, state or local law, or to be otherwise invalid or
unenforceable, such provision shall be construed in a manner so as to maximize its enforceability while giving the greatest effect as possible to the parties intent. To the extent any provision cannot
be construed to be enforceable, such provision shall be deemed to be eliminated from this Agreement and of no force or effect and the remainder of this Agreement shall otherwise remain in full force
and effect and be construed as if such portion had not been included in this Agreement.

	7.
	This
Second Amendment shall be deemed incorporated into the Agreement and, except as specifically modified by this Second Amendment, the Agreement shall remain unchanged and in full
force and effect. The Agreement shall remain in effect for a four (4) year period from the date hereof and shall be binding upon successors and assigns. 

    In
witness whereof, the parties have executed this Second Amendment to be effective as of the first date written above. 

	

 	
 	

 	
 	

 
	 	 	NETZERO, INC.
	

 	
 	

 	
 	

 
	 	 	By:	 	/s/ MARK R. GOLDSTON   
 Mark R. Goldston

Chief Executive Officer
	

 	
 	

 	
 	

 
	 	 	FOUNDER
	

 	
 	

 	
 	

/s/ RONALD T. BURR   
 Ronald T. Burr

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SECOND AMENDMENT TO STOCK RESTRICTION AGREEMENTPrepared by MERRILL CORPORATION

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Exhibit 4.3  

 
 

FIRST AMENDMENT
  TO
  CONVERTIBLE SUBORDINATED PROMISSORY NOTE    
  

    This First Amendment to Convertible Subordinated Promissory Note (this "Amendment") is intended to be
permanently affixed to that certain Convertible Subordinated Promissory Note, dated as of February 28, 2001, issued by U.S. SEARCH.COM INC. a Delaware corporation
("Borrower"), in favor of PEQUOT PRIVATE EQUITY FUND II, L.P., a Delaware limited partnership ("Holder")
in the outstanding principal amount of five million dollars $5,000,000.00 (the "Note"). When so affixed this Amendment shall constitute part of the
Note. 

    The
Note is hereby amended, effective as of March 30, 2001, by: 

	(a)
	replacing
the first sentence of the preamble with the following: 

    FOR
VALUE RECEIVED, the undersigned, US Search.com Inc., a Delaware corporation ("Borrower"), promises to pay to Pequot Private Equity Fund II, L.P. ("Holder"), the principal
sum of Five Million Dollars ($5,000,000.00) with interest from the date hereof, at the rate of (i) seven percent (7%) per annum on the unpaid balance prior to and on August 28, 2001 and
(ii) twelve percent (12%) per annum on the unpaid balance after August 28, 2001, until paid or until default, both principal and interest being payable in lawful money of the United
States of America, at 500 Nyala Farm Road, Westport, Connecticut 06880, or at such place as the Holder may designate in writing. 

	(b)
	replacing
the clause (i) of the final sentence of the preamble with the following:

	(i)
	The
entire unpaid balance shall be due and payable on April 1, 2002 (the "Due Date"); and 

	(c)
	replacing
Section 1(a)(i) in its entirety with the following:

	(i)
	the
Borrower and the Holder shall enter an agreement or agreements (the "Financing Agreements") for the Holder's purchase of Financing Shares (as
defined below) of the Borrower and the exchange by the Holder of issued and outstanding capital stock of the Borrower on the terms and subject to the conditions generally set forth in the Summary of
Terms for Preferred Stock Issuance/Restructuring of Series A-1 Preferred Stock (the "Summary of Terms") dated as of February 19, 2001, as amended on the date hereof, between
the Borrower and the Holder, including without limitation, that the Financing Shares shall be convertible into Common Stock of the Borrower at a price per share equal to the lesser of
(A) $2.00, (B) 105% of the ten day average of the closing bid prices of the Company's Common Stock for the ten trading days prior to but not including the date on which the Financing
Shares are purchased by the Holder and (C) if the Financing Shares are not purchased by the Holder on or prior to April 15, 2001, 105% of the ten day average of the closing bid prices of
the Company's common stock for the ten trading days prior to but not including the date of April 15, 2001 (the agreement or agreements and such terms and conditions being referred to as the
"Financing"); and 

	(d)
	adding
after the final sentence of Section 1(a) the following: 

The
Borrower shall proceed diligently, expeditiously and in good faith to negotiate, execute and deliver the Financing Agreements. 

1

 

	(e)
	omitting
the "or" preceding clause (v) of the final paragraph of Section 1(b) and adding after clause (v) of such final paragraph of Section 1(b) the
following: 

or
(vi) any breach occurs of a representation, warranty or covenant hereunder not remedied by the Borrower within thirty days after notice thereof by the Holder. 

and
(d) replacing Section 2.3 in its entirety with the following: 

	2.3
	Capitalization.  The authorized capital stock of the Borrower consists of: (1) 40,000,000 shares of Common Stock, of which
17,908,244 shares are issued and outstanding, and (2) 1,000,000 shares of Preferred Stock, $0.001 par value per share, of which (i) 350,000 shares have been designated as Series A
Preferred, (ii) 100,000 shares are issued and outstanding, and (iii) 75,000 shares are reserved for issuance upon the conversion and upon exercise of that certain Warrant, dated as of
September 7, 2000, in the name of the Holder (the "September Warrant"). All of the issued and outstanding shares of Common
Stock and Preferred Stock have been duly authorized and validly issued and are fully paid and nonassessable. Shares of the authorized Common Stock (as adjusted to reflect stock splits, stock
dividends, conversion price adjustments and similar events) have been reserved as follows: (i) 5,872,098 shares of the authorized Common Stock have been reserved for issuance upon conversion of
currently outstanding Preferred Stock; and (ii) 1,750,000 shares of authorized Common Stock have been reserved for issuance pursuant to the exercise of the Warrant Agreement by and between the
Borrower and Infospace Inc. dated October 1, 2000. As of the date hereof and immediately prior to the issuance of the Note, all issued and outstanding shares of the Borrower's capital
stock have been duly authorized and validly issued, are fully paid and nonassessable and owned of record, and to the Borrower's knowledge, beneficially. Except as aforesaid and as set forth on  Exhibit A
 hereto, there are no options, warrants, conversion privileges, or preemptive or other rights or agreements presently outstanding to
purchase or otherwise acquire any authorized but unissued shares of the capital stock or other securities of the Borrower. Except as aforesaid and as contemplated herein, and other than that certain
Stockholders Agreement, dated as of September 7, 2000, by and among the Borrower, the Holder and The Kushner-Locke Company, the Borrower is not a party or subject to any agreement or
understanding that affects or relates to the voting or giving of written consents with respect to any security, or the voting by a director, of the Borrower. Except as aforesaid, to the Borrower's
knowledge, no stockholder has granted options or other rights to any person (other than the Borrower) to purchase any shares of Common Stock or other equity securities of the Borrower from such
stockholder. Except as aforesaid and as set forth on Exhibit A  hereto, the Borrower is not subject to any obligation (contingent or otherwise)
to repurchase or otherwise to acquire or retire any shares of its capital stock. Since its initial public offering on June 24, 1999, the Borrower has not declared or paid any dividend or made
any other distribution of cash, stock or other property to its stockholders. All of the issued and outstanding shares of capital stock of the Borrower listed on  Exhibit A  have been offered,
issued and sold by the Borrower in compliance with applicable Federal and state securities laws. 

    The
Note is hereby further amended by deleting in its entirety Section 3.3 thereof. 

    Except
as amended hereby the provisions of the Note shall remain unchanged and in full force and effect. This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York. 

[Signatures Page follows]  

2

 

    IN WITNESS WHEREOF, Borrower and Holder have caused this Amendment to be duly executed as of the 30th day of March, 2001. 

	 	 	US SEARCH.COM INC.,

  a Delaware corporation
	

  	
 	

By:
	 	 	
   Brent N. Cohen

   Chief Executive Officer
	

Acknowledged as of the

30th day of March, 2001:	
 	

 
	
PEQUOT PRIVATE EQUITY FUND II, L.P.,

a Delaware limited partnership	
 	

 
	

By: Pequot Capital Management, Inc.,	
 	

 
	 	 	its Investment Manager	 	 
	 	

By:	
 	

 
	 	   
	 	 
	 	   Kevin E. O'Brien	 	 
	 	   General Counsel	 	 

3

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FIRST AMENDMENT TO CONVERTIBLE SUBORDINATED PROMISSORY NOTE

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