Exhibit
4.3


 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


(as amended and restated December 21, 2007)


 


        1.    Purposes of the Plan.    The
purposes of this Stock Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company’s business. Options granted under the Plan may be Incentive Stock
Options or Nonstatutory Stock Options, as determined by the Administrator at
the time of grant. Stock Purchase Rights may also be granted under the Plan.


 


        2.    Definitions.    As
used herein, the following definitions shall apply:


 


        (a)   “Administrator” means the Board or any of
its Committees as shall be administering the Plan in accordance with Section 4
hereof.


 


        (b)   “Applicable Laws” means the requirements
relating to the administration of stock option plans under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any other country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.


 


        (c)   “Board” means the Board of Directors of the
Company.


 


        (d)   “Code” means the Internal Revenue Code of
1986, as amended.


 


        (e)   “Committee” means a committee of Directors
appointed by the Board in accordance with Section 4 hereof.


 


        (f)    “Common Stock” means the Class A
Common Stock of the Company.


 


        (g)   “Company” means Internet Brands, Inc.,
a Delaware corporation.


 


        (h)   “Consultant” means any person who is
engaged by the Company or any Parent or Subsidiary to render consulting or
advisory services to such entity.


 


        (i)    “Director” means a member of the Board of
Directors of the Company.


 


        (j)    “Disability” means total and permanent
disability as defined in Section 22(e)(3) of the Code.


 


        (k)   “Employee” means any person, including
Officers and Directors, employed by the Company or any Parent or Subsidiary of
the Company. A Service Provider shall not cease to be an Employee in the case
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor. For purposes of Incentive Stock Options, no such
leave may exceed ninety days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the 181st day
of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.


 


        (l)    “Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


        (m)  “Fair Market Value” means, as of any date,
the value of Common Stock determined as follows:


 


          (i)  If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;


 


         (ii)  If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination; or


 


        (iii)  In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Administrator.


 


        (n)   “Incentive Stock Option” means an Option
intended to qualify as an incentive stock option within the meaning of Section 422
of the Code.


 


        (o)   “Nonstatutory Stock Option” means an Option
not intended to qualify as an Incentive Stock Option.


 


        (p)   “Officer” means a person who is an officer
of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.


 


        (q)   “Option” means a stock option granted
pursuant to the Plan.


 


        (r)   “Option Agreement” means a written or
electronic agreement between the Company and an Optionee evidencing the terms
and conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.


 


        (s)   “Option Exchange Program” means a program
whereby outstanding Options are exchanged for Options with a lower exercise
price.


 


        (t)    “Optioned Stock” means the Common Stock
subject to an Option or a Stock Purchase Right.


 


        (u)   “Optionee” means the holder of an
outstanding Option or Stock Purchase Right granted under the Plan.


 


1

















 


        (v)   “Parent” means a “parent corporation,”
whether now or hereafter existing, as defined in Section 424(e) of
the Code.


 


        (w)  “Plan” means this 1998 Stock Plan.


 


        (x)   “Restricted Stock” means shares of Common
Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11
below.


 


        (y)   “Section 16(b)” means Section 16(b) of
the Securities Exchange Act of 1934, as amended.


 


        (z)   “Service Provider” means an Employee,
Director or Consultant.


 


        (aa) “Share” means a share of the Common Stock,
as adjusted in accordance with Section 12 below.


 


        (bb) “Stock Purchase Right” means a right to
purchase Common Stock pursuant to Section 11 below.


 


        (cc) “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.


 


        3.    Stock Subject to the Plan.    Subject
to the provisions of Section 12 of the Plan, the maximum aggregate number
of Shares which may be subject to option and sold under the Plan is 11,122,000
Shares. The Shares may be authorized but unissued, or reacquired Common Stock.


 


        If
an Option or Stock Purchase Right expires or becomes unexercisable without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated or the availability of such Shares arises on or after October 23,
2007). However, Shares that have actually been issued under the Plan, upon
exercise of either an Option or Stock Purchase Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.


 


        4.    Administration of the Plan.


 


        (a)    Administrator.    The
Plan shall be administered by the Board or a Committee appointed by the Board,
which Committee shall be constituted to comply with Applicable Laws.


 


        (b)    Powers of the Administrator.    Subject
to the provisions of the Plan and, in the case of a Committee, the specific
duties delegated by the Board to such Committee, and subject to the approval of
any relevant authorities, the Administrator shall have the authority in its
discretion:


 


          (i)  to
determine the Fair Market Value;


 


         (ii)  to
select the Service Providers to whom Options and Stock Purchase Rights may from
time to time be granted hereunder;


 


        (iii)  to
determine the number of Shares to be covered by each such award granted
hereunder;


 


        (iv)  to
approve forms of agreement for use under the Plan;


 


         (v)  to
determine the terms and conditions, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;


 


        (vi)  to
determine whether and under what circumstances an Option may be settled in cash
under subsection 9(e) instead of Common Stock;


 


       (vii)  to
reduce the exercise price of any Option to the then current Fair Market Value
if the Fair Market Value of the Common Stock covered by such Option has
declined since the date the Option was granted;


 


      (viii)  to
initiate an Option Exchange Program;


 


        (ix)  to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;


 


         (x)  to
allow Optionees to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued upon exercise of an Option or
Stock Purchase Right that number of Shares having a Fair Market Value equal to
the amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by Optionees to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and


 


        (xi)  to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan.


 


        (c)   Effect of Administrator’s Decision. All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees.


 


        5.    Eligibility.


 


        (a)   Nonstatutory
Stock Options and Stock Purchase Rights may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.


 


        (b)   Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first
time by the Optionee during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated
as Nonstatutory Stock Options. For purposes of this Section 5(b),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.


 


        (c)   Neither
the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee
any right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall it interfere in any way with his or her
right or the Company’s right to terminate such relationship at any time, with
or without cause.


 


2

















 


        6.    Term of Plan.    The
Plan shall become effective upon its adoption by the Board. It shall continue
in effect for a term of ten (10) years unless sooner terminated under Section 14
of the Plan.


 


        7.    Term of Option.    The
term of each Option shall be stated in the Option Agreement; provided, however,
that the term shall be no more than ten (10) years from the date of grant
thereof. In the case of an Incentive Stock Option granted to an Optionee who,
at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Option
Agreement.


 


        8.    Option Exercise Price and
Consideration.


 


        (a)   The
per share exercise price for the Shares to be issued upon exercise of an Option
shall be such price as is determined by the Administrator, but shall be subject
to the following:


 


          (i)  In
the case of an Incentive Stock Option


 


        (A)  granted
to an Employee who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be
no less than 110% of the Fair Market Value per Share on the date of grant.


 


        (B)  granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant.


 


         (ii)  In
the case of a Nonstatutory Stock Option


 


        (A)  granted
to a Service Provider who, at the time of grant of such Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the exercise price shall be
no less than 110% of the Fair Market Value per Share on the date of grant.


 


        (B)  granted
to any other Service Provider, the per Share exercise price shall be no less
than 85% of the Fair Market Value per Share on the date of grant.


 


        (iii)  Notwithstanding
the foregoing, Options may be granted with a per Share exercise price other
than as required above pursuant to a merger or other corporate transaction.


 


        (b)   The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in
the case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six months on the date of surrender, and (y) have a
Fair Market Value on the date of surrender equal to the aggregate exercise
price of the Shares as to which such Option shall be exercised, (5) consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan, or (6) any combination of the
foregoing methods of payment. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.


 


        9.    Exercise of Option.


 


        (a)    Procedure for Exercise; Rights as a
Stockholder.    Any Option granted hereunder
shall be exercisable according to the terms hereof at such times and under such
conditions as determined by the Administrator and set forth in the Option
Agreement. Except in the case of Options granted to Officers, Directors and
Consultants, Options shall become exercisable at a rate of no less than 20% per
year over five (5) years from the date the Options are granted. Unless the
Administrator provides otherwise, vesting of Options granted hereunder shall be
tolled during any unpaid leave of absence. An Option may not be exercised for a
fraction of a Share.


 


        An
Option shall be deemed exercised when the Company receives: (i) written or
electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised. Full payment may consist
of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.


 


        Exercise
of an Option in any manner shall result in a decrease in the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.


 


        (b)    Termination of Relationship as a
Service Provider.    If an Optionee ceases to be
a Service Provider, such Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement (of at least thirty
(30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the
Option as set forth in the Option Agreement). In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee’s termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.


 


        (c)    Disability of Optionee.    If
an Optionee ceases to be a Service Provider as a result of the Optionee’s
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement (of at least six (6) months)
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the
Optionee’s termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.


 


        (d)    Death of Optionee.    If
an Optionee dies while a Service Provider, the Option may be exercised within
such period of time as is specified in the Option Agreement (of at least six (6) months)
to the extent that the Option is vested on the date of death (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement) by the Optionee’s estate or by a person who acquires the right to
exercise the Option by bequest or inheritance. In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination. If, at the time of
death, the Optionee is not vested as to the entire Option, the Shares covered
by the unvested portion of the Option shall immediately revert to the Plan. If
the Option is not so exercised within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall revert to the
Plan.


 


3

















 


        (e)    Buyout Provisions.    The
Administrator may at any time offer to buy out for a payment in cash or Shares,
an Option previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that
such offer is made.


 


        10.    Non-Transferability of
Options and Stock Purchase Rights.    The
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will, by
the laws of descent and distribution, or as permitted by Rule 701 of the
Securities Act of 1933, as amended; provided, however, that no
such sale, pledge, assignment, hypothecation, transfer, or disposal may be made
unless it complies with all applicable state securities laws.


 


        11.    Stock Purchase Rights.


 


        (a)    Rights to Purchase.    Stock
Purchase Rights may be issued either alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing or electronically
of the terms, conditions and restrictions related to the offer, including the
number of Shares that such person shall be entitled to purchase, the price to
be paid, and the time within which such person must accept such offer. The
terms of the offer shall comply in all respects with Section 260.140.42 of
Title 10 of the California Code of Regulations. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by
the Administrator.


 


        (b)    Repurchase Option.    Unless
the Administrator determines otherwise, the Restricted Stock purchase agreement
shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser’s service with the Company for any
reason (including death or disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock purchase agreement shall be the
original price paid by the purchaser and the repurchase option shall be
exercised within ninety (90) days of termination of employment for cash or cancellation
of purchase-money indebtedness of the purchaser to the Company for the
Restricted Stock.  The repurchase option
shall lapse at such rate as the Administrator may determine. Except with
respect to Shares purchased by Officers, Directors and Consultants, the
repurchase option shall in no case lapse at a rate of less than 20% per year
over five (5) years from the date of purchase.


 


        (c)    Other Provisions.    The
Restricted Stock purchase agreement shall contain such other terms, provisions
and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.


 


        (d)    Rights as a Stockholder.    Once
the Stock Purchase Right is exercised, the purchaser shall have rights
equivalent to those of a stockholder and shall be a stockholder when his or her
purchase is entered upon the records of the duly authorized transfer agent of
the Company. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 12 of the Plan.


 


        12.    Adjustments Upon Changes in
Capitalization, Merger or Asset Sale.


 


        (a)    Changes in Capitalization.    Subject
to any required action by the stockholders of the Company, the number of shares
of Common Stock covered by each outstanding Option or Stock Purchase Right, and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per share
of Common Stock covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company. The conversion
of any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option
or Stock Purchase Right.


 


        (b)    Dissolution or Liquidation.    In
the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its
discretion may provide for an Optionee to have the right to exercise his or her
Option or Stock Purchase Right until fifteen (15) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares
as to which the Option or Stock Purchase Right would not otherwise be
exercisable. In addition, the Administrator may provide that any Company
repurchase option applicable to any Shares purchased upon exercise of an Option
or Stock Purchase Right shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option or
Stock Purchase Right will terminate immediately prior to the consummation of
such proposed action.


 


        (c)    Merger or Asset Sale.    In
the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Option
and Stock Purchase Right shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option or Stock Purchase Right, the Optionee shall
fully vest in and have the right to exercise the Option or Stock Purchase Right
as to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable. If an Option or Stock Purchase Right
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option or Stock Purchase Right
shall be fully exercisable for a period of fifteen (15) days from the date
of such notice, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or
Stock Purchase Right shall be considered assumed if, following the merger or
sale of assets, the option or right confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option or Stock Purchase Right
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger
or sale of assets is not solely common stock of the successor corporation or
its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Option or Stock Purchase Right, for each Share of Optioned Stock subject to
the Option or Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.


 


        13.    Time of Granting Options and
Stock Purchase Rights.    The date of grant of
an Option or Stock Purchase Right shall, for all purposes, be the date on which
the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Service Provider to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.


 


        14.    Amendment and Termination of
the Plan.


 


        (a)    Amendment and Termination.    The
Board may at any time amend, alter, suspend or terminate the Plan.


 


        (b)    Stockholder Approval.    The
Board shall obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws.


 


        (c)    Effect of Amendment or Termination.    No
amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Optionee, unless 


 


4

















 


mutually
agreed otherwise between the Optionee and the Administrator, which agreement
must be in writing and signed by the Optionee and the Company. Termination of
the Plan shall not affect the Administrator’s ability to exercise the powers granted
to it hereunder with respect to Options granted under the Plan prior to the
date of such termination.


 


        15.    Conditions Upon Issuance of
Shares.


 


        (a)    Legal Compliance.    Shares
shall not be issued pursuant to the exercise of an Option unless the exercise
of such Option and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.


 


        (b)    Investment Representations.    As
a condition to the exercise of an Option, the Administrator may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.


 


        16.    Inability to Obtain
Authority.    The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.


 


        17.    Reservation of Shares.    The
Company, during the term of this Plan, shall at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan.


 


        18.    Stockholder Approval.    The
Plan shall be subject to approval by the stockholders of the Company within
twelve (12) months after the date the Plan is adopted. Such stockholder
approval shall be obtained in the degree and manner required under Applicable
Laws.


 


        19.    Information to Optionees and
Purchasers.    The Company shall provide to each
Optionee and to each individual who acquires Shares pursuant to the Plan, not
less frequently than annually during the period such Optionee or purchaser has
one or more Options or Stock Purchase Rights outstanding, and, in the case of
an individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company
shall not be required to provide such statements to key employees whose duties
in connection with the Company assure their access to equivalent information.


 


20.  Cessation of Grants.  No new stock options or stock purchase rights
will be granted under the Plan on or after October 23, 2007.


 


* * *


 


5
















 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


STOCK OPTION AGREEMENT


 


Unless otherwise defined
herein, the terms defined in the 1998 Stock Plan shall have the same defined
meanings in this Stock Option Agreement.


 


I.      NOTICE
OF STOCK OPTION GRANT


 


	
  Name:

  	
  «First» «Last»

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


The undersigned Optionee
has been granted an Option to purchase Common Stock of the Company, subject to
the terms and conditions of the Plan and this Option Agreement, as follows:


 


	
   

  	
  Grant Number

  	
  «Number»

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant

  	
  «Option_Date»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Commencement Date

  	
  «Vest_Base_Date»

  
	
   

  	
   

  	
   

  
	
   

  	
  Exercise Price per Share

  	
  «Price»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares Granted

  	
  «Shares_Granted»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Exercise Price

  	
  «Total_Price»

  
	
   

  	
   

  	
   

  
	
   

  	
  Type of Option

  	
  «Option_Type»

  
	
   

  	
   

  	
   

  
	
   

  	
  Term/Expiration Date

  	
  «Expiration_Date»

  



 


Vesting Commencement Dates and
Schedules:


 


This Option shall be
exercisable in whole or in part, and shall vest according to one of the
following schedule, subject also to the Optionee being a Service Provider on
such dates:


 


20% of the shares shall
vest immediately upon grant, 20% of the shares shall vest upon the one year
anniversary of the Vesting Commencement Date, and the remaining shares shall
vest on a pro rata basis per quarter over the next 36 months.


 


Termination Period:


 


If Optionee ceases to be
a Service Provider without cause (the “Termination Date”), this Option shall be
exercisable for the earlier to occur of (i) twelve months after the
Termination Date, (ii) 190 days after an initial public offering of
the Company’s common stock (the “IPO”), or (iii) if the Termination Date
occurs subsequent to the 100 day anniversary of an IPO, this Option shall
be exercisable for 3 months following the Termination Date. Upon Optionee’s
death or disability, this Option may be exercised for 12 months after
Optionee ceases to be a Service Provider. In no event may Optionee exercise
this Option after the Term/Expiration Date.


 


Accelerated Vesting:


 


Upon the occurrence of a
“Change of Control” (as defined below) followed by (i) a material diminution
of Service Provider’s duties, (ii) geographical relocation or (iii) termination
of employment for reasons other than by Cause (as defined in the Severance
Payment Agreement) within 12 months


 


1

















 


after or 6 months prior to a change of
control, 50% of the unvested portion shall immediately vest and become
exercisable in full.


 


For purposes of this
Option Agreement, “Change of Control” shall mean the Company’s sale of all or
substantially all of its assets or the acquisition of the Company by another
entity or entities by means of merger, consolidation or series of related
transactions, resulting in the exchange of the outstanding shares of the
Company for securities or consideration issued, or caused to be issued, by the
acquiring corporation or its subsidiary, unless the stockholders of the Company
hold at least 50% of the voting power of the surviving corporation in such a
transaction.


 


II.    AGREEMENT


 


1.     Grant of
Option.  The Plan
Administrator of the Company hereby grants to the Optionee named in the Notice
of Grant (the “Optionee”), an option (the “Option”) to purchase the number of
Shares set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the “Exercise Price”), and subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 14(c) of the Plan, in the event of a conflict between the
terms and conditions of the Plan and this Option Agreement, the terms and
conditions of the Plan shall prevail.


 


If designated in the
Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended
to qualify as an Incentive Stock Option as defined in Section 422 of the
Code. Nevertheless, to the extent that it exceeds the $100,000 rule of
Code Section 422(d), this Option shall be treated as a Nonstatutory Stock
Option (“NSO”).


 


2.     Exercise of
Option.


 


a.     Right to Exercise.  This Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
with the applicable provisions of the Plan and this Option Agreement.


 


b.     Method of Exercise.  This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the “Exercise
Notice”) which shall state the election to exercise the Option, the number of
Shares with respect to which the Option is being exercised, and such other
representations and agreements as may be required by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This Option shall be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.


 


No Shares shall be
issued pursuant to the exercise of an Option unless such issuance and such
exercise complies with Applicable laws. Assuming such compliance, for income
tax purposes the Shares shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such Shares.


 


3.     Optionee’s
Representations.  In the event
the Shares have not been registered under the Securities Act of 1933, as
amended, at the time this Option is exercised, the Optionee shall, if required
by the Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement
in the form attached hereto as Exhibit B.


 


4.     Lock-Up
Period.  Optionee hereby
agrees that, if so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act,
Optionee shall not sell or otherwise transfer any Shares or other securities of
the Company during the 180-day period (or such other period as may be requested
in writing by the Managing Underwriter and agreed to in writing by the Company)
(the “Market Standoff Period”) following the effective date of a registration
statement


 


2

















 


of the Company filed under the Securities Act.
Such restriction shall apply only to the first registration statement of the
Company to become effective under the Securities Act that includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.


 


5.     Method of
Payment.  Payment of the
aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee:


 


a.     cash or
check;


 


b.     consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or


 


c.     surrender of
other Shares which, (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on
the date of surrender, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.


 


6.     Restrictions
on Exercise.  This Option may
not be exercised until such time as the Plan has been approved by the
shareholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any Applicable Law.


 


7.     Non-Transferability
of Option.  This Option may
not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee. The terms of the Plan and this Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.


 


8.     Term of
Option.  This Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.


 


9.     Tax
Consequences.  Set forth below
is a brief summary as of the date of this Option of some of the federal tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.


 


a.     Exercise of ISO.  If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price will be treated as an adjustment
to the alternative minimum tax for federal tax purposes and may subject the
Optionee to the alternative minimum tax in the year of exercise.


 


b.     Exercise of Nonstatutory Stock Option.  There may be a regular federal income tax
liability upon the exercise of a Nonstatutory Stock Option. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the Shares
on the date of exercise over the Exercise Price. If Optionee is an Employee or
a former Employee, the Company will be required to withhold from Optionee’s
compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income
at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of
exercise.


 


3

















 


c.     Disposition of Shares.  In the case of an NSO, if Shares are held for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes. In the case
of an ISO, if Shares transferred pursuant to the Option are held for at least
one year after exercise and of at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes. If Shares purchased under an ISO
are disposed of within one year after exercise or two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price and the lesser of (1) the Fair Market Value of
the Shares on the date of exercise, or (2) the sale price of the Shares.
Any additional gain will be taxed as capital gain, short-term or long- term
depending on the period that the ISO Shares were held.


 


d.     Notice of Disqualifying Disposition of ISO
Shares.  If the Option granted
to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of
any of the Shares acquired pursuant to the ISO on or before the later of (1) the
date two years after the Date of Grant, or (2) the date one year after the
date of exercise, the Optionee shall immediately notify the Company in writing
of such disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.


 


10.   Entire
Agreement; Governing Law.  The
Plan is incorporated herein by reference. The Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws but not the choice of law rules of
California.


 


11.   No Guarantee
of Continued Service. 
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.


 


[Signatures appear on next page.]


 


4

















 


Optionee acknowledges
receipt of a copy of the Plan and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Option subject to all
of the terms and provisions thereof. Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
arising under the Plan or this Option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.


 


	
  OPTIONEE

  	
   

  	
  INTERNET BRANDS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Internet Brands, Inc.

  909 N. Sepulveda Blvd, 11th Floor

  El Segundo, CA 90245

  	
   

  



 


5

















 


EXHIBIT A


 


1998 STOCK PLAN


EXERCISE NOTICE


 


Internet Brands, Inc.


909 N. Sepulveda Blvd, 11th Floor


El Segundo, CA 90245


 


Attention: Corporate Secretary


 


1.     Exercise of Option.  Effective as of today,                         ,             , the undersigned
(“Optionee”) hereby elects to exercise Optionee’s option to purchase                          shares of the
Common Stock (the “Shares”) of Internet Brands, Inc. (the “Company”) under
and pursuant to the 1998 Stock Plan (the “Plan”) and the Stock Option Agreement
dated «Option Date» (the “Option Agreement”).


 


2.     Delivery of Payment.  Purchaser herewith delivers to the Company
the full purchase price of the Shares, as set forth in the Option Agreement.


 


3.     Representations of Optionee.  Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.


 


4.     Rights as Shareholder.  Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is exercised. No
adjustment shall be made for a dividend or other right for which the record
date is prior to the date of issuance except as provided in Section 12 of
the Plan.


 


5.     Company’s Right of First Refusal.  Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
“Right of First Refusal”).


 


a.     Notice of
Proposed Transfer.  The Holder
of the Shares shall deliver to the Company a written notice (the “Notice”)
stating: (i) the Holder’s bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser or other
transferee (“Proposed Transferee”); (iii) the number of Shares to be
transferred to each Proposed Transferee; and (iv) the bona fide cash price
or other consideration for which the Holder proposes to transfer the Shares
(the “Offered Price”), and the Holder shall offer the Shares at the Offered
Price to the Company or its assignee(s).


 


b.     Exercise of
Right of First Refusal.  At
any time within thirty (30) days after receipt of the Notice, the Company
and/or its assignee(s) may, by giving written notice to the Holder, elect
to purchase all, but not less than all, of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (c) below.


 


c.     Purchase
Price.  The purchase price
(“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under
this Section shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.


 


1

















 


d.     Payment.  Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice
or in the manner and at the times set forth in the Notice.


 


e.     Holder’s
Right to Transfer.  If all of
the Shares proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company and/or its assignee(s) as
provided in this Section, then the Holder may sell or otherwise transfer such
Shares to that Proposed Transferee at the Offered Price or at a higher price,
provided that such sale or other transfer is consummated within 120 days
after the date of the Notice, that any such sale or other transfer is effected
in accordance with any applicable securities laws and that the Proposed
Transferee agrees in writing that the provisions of this Section shall
continue to apply to the Shares in the hands of such Proposed Transferee. If
the Shares described in the Notice are not transferred to the Proposed
Transferee within such period, a new Notice shall be given to the Company, and
the Company and/or its assignees shall again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.


 


f.      Exception
for Certain Family Transfers. 
Anything to the contrary contained in this Section notwithstanding,
the transfer of any or all of the Shares during the Optionee’s lifetime or on
the Optionee’s death by will or intestacy to the Optionee’s immediate family or
a trust for the benefit of the Optionee’s immediate family shall be exempt from
the provisions of this Section. “Immediate Family” as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section.


 


g.     Termination
of Right of First Refusal. 
The Right of First Refusal shall terminate as to any Shares upon the
first sale of Common Stock of the Company to the general public pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act of 1933, as amended.


 


6.     Tax Consultation.  Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or disposition
of the Shares and that Optionee is not relying on the Company for any tax
advice.


 


7.     Restrictive Legends and Stop-Transfer
Orders.


 


a.     Legends.  Optionee understands and agrees that the
Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
the Company or by state or federal securities laws:


 


THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”)
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.


 


THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF
FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE
EXERCISE


 


2

















 


NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING
ON TRANSFEREES OF THESE SHARES.


 


b.     Stop-Transfer
Notices.  Optionee agrees
that, in order to ensure compliance with the restrictions referred to herein,
the Company may issue appropriate “stop transfer” instructions to its transfer
agent, if any, and that, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.


 


c.     Refusal to
Transfer.  The Company shall
not be required (i) to transfer on its books any Shares that have been
sold or otherwise transferred in violation of any of the provisions of this
Agreement or (ii) to treat as owner of such Shares or to accord the right
to vote or pay dividends to any purchaser or other transferee to whom such
Shares shall have been so transferred.


 


8.     Successors and Assigns.  The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.


 


9.     Interpretation.  Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and
binding on all parties.


 


10.   Governing Law; Severability.  This Agreement is governed by the internal
substantive laws but not the choice of law rules, of California.


 


11.   Entire Agreement.  The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan, the Option
Agreement and the Investment Representation Statement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing
signed by the Company and Optionee.


 


[Signatures
appear on next page.]


 


3

















 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  909 N. Sepulveda Blvd,
  11th Floor

  El Segundo, CA 90245

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  	
   

  



 


4

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION
STATEMENT


 


	
  OPTIONEE:

  	
  «First» «Last»

  
	
   

  	
   

  
	
  COMPANY:

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  
	
  SECURITY:

  	
  COMMON STOCK

  
	
   

  	
   

  
	
  AMOUNT:

  	
                        
     shares

  
	
   

  	
   

  
	
  DATE:

  	
  ____________

  



 


In connection with the purchase of the above-listed
Securities, the undersigned Optionee represents to the Company the following:


 


a.     Optionee is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for
Optionee’s own account only and not with a view to, or for resale in connection
with, any “distribution” thereof within the meaning of the Securities Act of
1933, as amended (the “Securities Act”).


 


b.     Optionee acknowledges and understands that
the Securities constitute “restricted securities” under the Securities Act and
have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Optionee’s investment intent as expressed herein. In this
connection, Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if Optionee’s representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities laws.


 


c.     Optionee is familiar with the provisions of
Rule 701 and Rule 144, each promulgated under the Securities Act,
which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Optionee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including: (1) the
resale being made through a broker in an unsolicited “broker’s transaction” or
in transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, (3) the
amount of Securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), and (4) the timely filing of a Form 144,
if applicable.


 


1

















 


d.     In the event that the Company does not
qualify under Rule 701 at the time of grant of the Option, then the
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or
the date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by
an affiliate, or by a non-affiliate who subsequently holds the Securities less
than two years, the satisfaction of the conditions set forth in sections (1),
(2), (3) and (4) of the paragraph immediately above.


 


e.     Optionee further understands that in the
event all of the applicable requirements of Rule 701 or 144 are not
satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.


 


	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  «First» «Last»

  
	
   

  	
   

  
	
   

  	
  Date:

  



 


2

















 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


STOCK OPTION AGREEMENT


 


Unless otherwise defined herein, the terms defined in the
1998 Stock Plan shall have the same defined meanings in this Stock Option
Agreement.


 


I.      NOTICE OF STOCK OPTION GRANT


 


	
  Name:

  	
  «First» «Last»

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


The undersigned Optionee has been granted an Option to
purchase Common Stock of the Company, subject to the terms and conditions of
the Plan and this Option Agreement, as follows:


 


	
   

  	
  Grant Number

  	
  «Number»

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant

  	
  «Option_Date»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Commencement Date

  	
  «Vest_Base_Date»

  
	
   

  	
   

  	
   

  
	
   

  	
  Exercise Price per Share

  	
  «Price»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares Granted

  	
  «Shares_Granted»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Exercise Price

  	
  «Total_Price»

  
	
   

  	
   

  	
   

  
	
   

  	
  Type of Option

  	
  «Option_Type»

  
	
   

  	
   

  	
   

  
	
   

  	
  Term/Expiration Date

  	
  «Expiration»

  



 


Vesting Schedule:


 


This Option shall be exercisable in whole or in part, and
shall vest according to the following vesting schedule:


 


«Vest_Template»


 


Termination Period:


 


This Option shall be exercisable for three (3) months
after Optionee ceases to be a Service Provider. Upon Optionee’s death or
Disability, this Option may be exercised for one year after Optionee ceases to
be a Service Provider. In no event may Optionee exercise this Option after the
Term/Expiration Date as provided above.


 


II.    AGREEMENT


 


1.     Grant of Option.  The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant (the “Optionee”), an option
(the “Option”) to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the
“Exercise Price”), and subject to the terms and conditions of the Plan, which
is incorporated herein by reference. Subject to Section 14(c) of the
Plan, in the event of a conflict between the terms


 


1

















 


and conditions of the Plan and this Option Agreement, the
terms and conditions of the Plan shall prevail.


 


If designated in the Notice of Grant as an Incentive
Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock
Option as defined in Section 422 of the Code. Nevertheless, to the extent
that it exceeds the $100,000 rule of Code Section 422(d), this Option
shall be treated as a Nonstatutory Stock Option (“NSO”).


 


2.     Exercise of Option.


 


a.     Right to
Exercise.  This Option shall
be exercisable during its term in accordance with the Vesting Schedule set out
in the Notice of Grant and with the applicable provisions of the Plan and this
Option Agreement.


 


b.     Method of
Exercise.  This Option shall
be exercisable by delivery of an exercise notice in the form attached as Exhibit A
(the “Exercise Notice”) which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by the aggregate Exercise Price.


 


No Shares shall be issued pursuant to the exercise of an
Option unless such issuance and such exercise complies with Applicable laws.
Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.


 


3.     Optionee’s Representations.  In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, the Optionee shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B.


 


4.     Lock-Up Period.  Optionee hereby agrees that, if so requested
by the Company or any representative of the underwriters (the “Managing
Underwriter”) in connection with any registration of the offering of any
securities of the Company under the Securities Act, Optionee shall not sell or
otherwise transfer any Shares or other securities of the Company during the
180-day period (or such other period as may be requested in writing by the
Managing Underwriter and agreed to in writing by the Company) (the “Market
Standoff Period”) following the effective date of a registration statement of
the Company filed under the Securities Act. Such restriction shall apply only
to the first registration statement of the Company to become effective under
the Securities Act that includes securities to be sold on behalf of the Company
to the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities
subject to the foregoing restrictions until the end of such Market Standoff
Period.


 


5.     Method of Payment.  Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:


 


a.     cash or check;


 


b.     consideration received by the Company under
a formal cashless exercise program adopted by the Company in connection with
the Plan; or


 


c.     surrender of other Shares which, (i) in
the case of Shares acquired upon exercise of an option, have been owned by the
Optionee for more than six (6) months on the date of surrender, and (ii) have
a Fair Market Value on the date of surrender equal to the aggregate Exercise
Price of the Exercised Shares.


 


2

















 


6.     Restrictions on Exercise.  This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if
the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any Applicable
Law.


 


7.     Non-Transferability of Option.  This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.


 


8.     Term of Option.  This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.


 


9.     Tax Consequences.  Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.


 


a.     Exercise of
ISO.  If this Option qualifies
as an ISO, there will be no regular federal income tax liability upon the
exercise of the Option, although the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price will be treated
as an adjustment to the alternative minimum tax for federal tax purposes and
may subject the Optionee to the alternative minimum tax in the year of
exercise.


 


b.     Exercise of
Nonstatutory Stock Option. 
There may be a regular federal income tax liability upon the exercise of
a Nonstatutory Stock Option. The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of
the Fair Market Value of the Shares on the date of exercise over the Exercise
Price. If Optionee is an Employee or a former Employee, the Company will be
required to withhold from Optionee’s compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a
percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.


 


c.     Disposition
of Shares.  In the case of an
NSO, if Shares are held for at least one year, any gain realized on disposition
of the Shares will be treated as long-term capital gain for federal income tax
purposes. In the case of an ISO, if Shares transferred pursuant to the Option
are held for at least one year after exercise and of at least two years after
the Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
purchased under an ISO are disposed of within one year after exercise or two
years after the Date of Grant, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the difference between the Exercise Price and the lesser of (1) the
Fair Market Value of the Shares on the date of exercise, or (2) the sale
price of the Shares. Any additional gain will be taxed as capital gain,
short-term or long-term depending on the period that the ISO Shares were held.


 


d.     Notice of
Disqualifying Disposition of ISO Shares.  If the Option granted to Optionee herein is
an ISO, and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (1) the date two
years after the Date of Grant, or (2) the date one year after the date of
exercise, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.


 


3

















 


10.   Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.
The Plan and this Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of California.


 


11.   No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.


 


[Signatures
appear on next page.]


 


4

















 


Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof,
and hereby accepts this Option subject to all of the terms and provisions
thereof. Optionee has reviewed the Plan and this Option in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option and fully understands all provisions of the Option. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions arising under the Plan
or this Option. Optionee further agrees to notify the Company upon any change in
the residence address indicated below.


 


	
  OPTIONEE

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Internet Brands, Inc.

  909 N. Sepulveda Blvd., 11th Floor

  El Segundo, CA 90245

  	
   

  



 


5
















 


EXHIBIT A


 


1998 STOCK PLAN


EXERCISE NOTICE


 


Internet Brands, Inc.


909 N. Sepulveda Blvd., 11th Floor


El Segundo, CA 90245


 


1.     Exercise
of Option.  Effective as of
today,                       
 ,           
 , the undersigned (“Optionee”) hereby elects to exercise
Optionee’s option to purchase                          shares of the
Common Stock (the “Shares”) of Internet Brands, Inc. (the “Company”) under
and pursuant to the 1998 Stock Plan (the “Plan”) and the Stock Option Agreement
dated «Option_Date» (the “Option Agreement”).


 


2.     Delivery
of Payment.  Purchaser
herewith delivers to the Company the full purchase price of the Shares, as set
forth in the Option Agreement.


 


3.     Representations
of Optionee.  Optionee
acknowledges that Optionee has received, read and understood the Plan and the
Option Agreement and agrees to abide by and be bound by their terms and
conditions.


 


4.     Rights
as Shareholder.  Until the
issuance of the Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Shares shall be issued to the Optionee as soon as practicable after the Option
is exercised. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date of issuance except as provided in Section 12
of the Plan.


 


5.     Company’s
Right of First Refusal.  Before any Shares held by Optionee or any
transferee (either being sometimes referred to herein as the “Holder”) may be
sold or otherwise transferred (including transfer by gift or operation of law),
the Company or its assignee(s) shall have a right of first refusal to
purchase the Shares on the terms and conditions set forth in this Section (the
“Right of First Refusal”).


 


a.     Notice of Proposed Transfer.  The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the “Offered Price”), and the Holder shall offer the
Shares at the Offered Price to the Company or its assignee(s).


 


b.     Exercise of Right of First Refusal.  At any time within thirty (30) days
after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.


 


c.     Purchase Price.  The purchase price (“Purchase Price”) for the
Shares purchased by the Company or its assignee(s) under this Section shall
be the Offered Price. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.


 


d.     Payment.  Payment of the Purchase Price shall be made,
at the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding


 


1

















 


indebtedness of the
Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within 30 days after receipt of
the Notice or in the manner and at the times set forth in the Notice.


 


e.     Holder’s Right to Transfer.  If all of the Shares proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee
at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that
any such sale or other transfer is effected in accordance with any applicable
securities laws and that the Proposed Transferee agrees in writing that the
provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are
not transferred to the Proposed Transferee within such period, a new Notice
shall be given to the Company, and the Company and/or its assignees shall again
be offered the Right of First Refusal before any Shares held by the Holder may
be sold or otherwise transferred.


 


f.      Exception for Certain Family Transfers.  Anything to the contrary contained in this Section notwithstanding,
the transfer of any or all of the Shares during the Optionee’s lifetime or on
the Optionee’s death by will or intestacy to the Optionee’s immediate family or
a trust for the benefit of the Optionee’s immediate family shall be exempt from
the provisions of this Section. “Immediate Family” as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section.


 


g.     Termination of Right of First Refusal.  The Right of First Refusal shall terminate as
to any Shares upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as
amended.


 


6.     Tax
Consultation.  Optionee
understands that Optionee may suffer adverse tax consequences as a result of
Optionee’s purchase or disposition of the Shares. Optionee represents that
Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.


 


7.     Restrictive
Legends and Stop-Transfer Orders.


 


a.     Legends.  Optionee understands and agrees that the
Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
the Company or by state or federal securities laws:


 


THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.


 


THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS
SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF


 


2

















 


THE ISSUER. SUCH
TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF
THESE SHARES.


 


b.     Stop-Transfer Notices.  Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.


 


c.     Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so transferred.


 


8.     Successors
and Assigns.  The Company may
assign any of its rights under this Agreement to single or multiple assignees,
and this Agreement shall inure to the benefit of the successors and assigns of
the Company. Subject to the restrictions on transfer herein set forth, this
Agreement shall be binding upon Optionee and his or her heirs, executors,
administrators, successors and assigns.


 


9.     Interpretation.  Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or by the Company forthwith to
the Administrator which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Administrator shall be final and
binding on all parties.


 


10.   Governing
Law; Severability.  This
Agreement is governed by the internal substantive laws but not the choice of
law rules, of California.


 


11.   Entire
Agreement.  The Plan and
Option Agreement are incorporated herein by reference. This Agreement, the
Plan, the Option Agreement and the Investment Representation Statement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee.


 


[Signatures appear on next page.]


 


3

















 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   «First» «Last»

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  909
  N. Sepulveda Blvd., 11th Floor

  	
   

  
	
   

  	
   

  	
  El
  Segundo, CA 90245

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  	
   

  



 


4

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


 


	
  OPTIONEE:

  	
  «First» «Last»

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
  INTERNET BRANDS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECURITY:

  	
  COMMON STOCK

  	
   

  
	
   

  	
   

  	
   

  
	
  AMOUNT:

  	
                            shares

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
  ____________

  	
   

  



 


In connection with the
purchase of the above-listed Securities, the undersigned Optionee represents to
the Company the following:


 


a.     Optionee is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for Optionee’s
own account only and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”).


 


b.     Optionee acknowledges and understands that
the Securities constitute “restricted securities” under the Securities Act and
have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Optionee’s investment intent as expressed herein. In this
connection, Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if Optionee’s representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, a legend prohibiting
their transfer without the consent of the Commissioner of Corporations of the
State of California and any other legend required under applicable state
securities laws.


 


c.     Optionee is familiar with the provisions of
Rule 701 and Rule 144, each promulgated under the Securities Act,
which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Optionee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including: (1) the
resale being made through a broker in an unsolicited “broker’s transaction” or
in transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, (3) the
amount of


 


1

















 


Securities being sold during any three month
period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.


 


d.     In the event that the Company does not
qualify under Rule 701 at the time of grant of the Option, then the
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or
the date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by
an affiliate, or by a non-affiliate who subsequently holds the Securities less
than two years, the satisfaction of the conditions set forth in sections (1),
(2), (3) and (4) of the paragraph immediately above.


 


e.     Optionee further understands that in the
event all of the applicable requirements of Rule 701 or 144 are not
satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.


 


	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  «First» «Last»

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
					



 


2

















 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


STOCK OPTION AGREEMENT—EARLY EXERCISE


 


Unless otherwise defined
herein, the terms defined in the Internet Brands, Inc. 1998 Stock Plan
(the “Plan”) shall have the same defined meanings in this Stock Option
Agreement (the “Option Agreement”).


 


I.      NOTICE OF STOCK OPTION GRANT


 


	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


You have been granted an
option to purchase Common Stock of the Company, subject to the terms and
conditions of the Plan and this Option Agreement, as follows:


 


	
  Grant Number

  	
   

  
	
   

  	
   

  
	
  Date of Grant

  	
   

  
	
   

  	
   

  
	
  Vesting Commencement Date

  	
   

  
	
   

  	
   

  
	
  Exercise Price per Share

  	
  $

  
	
   

  	
   

  
	
  Total Number of Shares Granted

  	
  50,000

  
	
   

  	
   

  
	
  Total Exercise Price

  	
  $

  
	
   

  	
   

  
	
  Type of Option:

  	
  Non-statutory Stock Option

  
	
   

  	
   

  
	
  Term/Expiration Date:

  	
   

  



 


Vesting Schedule:


 


This Option shall be
exercisable in whole or in part, and shall vest according to the following
vesting schedule:


 


The shares shall vest
quarterly on a pro rata basis over a four (4) year period, subject to the
Optionee’s continuing to serve as a Director on the Company’s Board of
Directors, hereinafter “Service Provider,” on such dates.


 


Termination Period:


 


This Option may be
exercised, to the extent it is then vested, for three months after Optionee
ceases to be a Service Provider. Upon death or Disability of the Optionee, this
Option may be exercised, to the extent it is then vested, for one year after
Optionee ceases to be Service Provider. In no event shall this Option be
exercised later than the Term/Expiration Date as provided above.


 


Accelerated Vesting:


 


Upon the occurrence of a
“Change of Control” (as defined below) 50% of the unvested portion of the
options shall immediately vest and become exercisable in full.


 


For purposes of this
Option Agreement, “Change of Control” shall mean the Company’s sale of all or
substantially all of its assets or the acquisition of the Company by another
entity or entities by


 


1

















 


means of merger, consolidation or series of
related transactions, resulting in the exchange of the outstanding shares of
the Company for securities or consideration issued, or caused to be issued, by
the acquiring corporation or its subsidiary, unless the stockholders of the
Company hold at least 50% of the voting power of the surviving corporation in
such a transaction.


 


II.    AGREEMENT


 


1.     Grant of Option.  The Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant (the “Optionee”), an option
(the “Option”) to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 12(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and this Option Agreement, the terms and conditions of the Plan shall prevail.


 


(a)  If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in Section 422
of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of
Code Section 422(d), this Option shall be treated as a Nonstatutory Stock
Option (“NSO”).


 


2.     Exercise of Option.  This Option shall be exercisable during its
term in accordance with the provisions of Section 9 of the Plan as
follows:


 


(a)  Right
to Exercise.


 


(i)  Subject
to subsections 2(a)(ii) and 2(a)(iii) below, this Option shall be
exercisable cumulatively according to the vesting schedule set forth in the
Notice of Grant. Alternatively, at the election of the Optionee, this Option
may be exercised in whole or in part at any time as to Shares which have not
yet vested. Vested Shares shall not be subject to the Company’s repurchase
right (as set forth in the Restricted Stock Purchase Agreement, attached hereto
as Exhibit C-1).


 


(ii)  As
a condition to exercising this Option for unvested Shares, the Optionee shall
execute the Restricted Stock Purchase Agreement.


 


(iii)  This
Option may not be exercised for a fraction of a Share.


 


(b)  Method of Exercise.  This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A
(the “Exercise Notice”) which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by the aggregate Exercise Price.


 


(c)  No Shares shall be
issued pursuant to the exercise of an Option unless such issuance and such
exercise complies with Applicable Laws. Assuming such compliance, for income
tax purposes the Shares shall be considered transferred to the Optionee on the
date on which the Option is exercised with respect to such Shares.


 


3.     Optionee’s
Representations.  In the event
the Shares have not been registered under the Securities Act of 1933, as
amended, at the time this Option is exercised, the Optionee shall, if required
by the Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement
in the form attached hereto as Exhibit B, and shall read the applicable rules
of the Commissioner of Corporations attached to such Investment Representation
Statement.


 


2

















 


4.     Lock-Up
Period.  Optionee hereby
agrees that, if so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”) in connection with any registration
of the offering of any securities of the Company under the Securities Act,
Optionee shall not sell or otherwise transfer any Shares or other securities of
the Company during the 180-day period (or such other period as may be requested
in writing by the Managing Underwriter and agreed to in writing by the Company)
(the “Market Standoff Period”) following the effective date of a registration
statement of the Company filed under the Securities Act. Such restriction shall
apply only to the first registration statement of the Company to become
effective under the Securities Act that includes securities to be sold on
behalf of the Company to the public in an underwritten public offering under
the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period.


 


5.     Method
of Payment.  Payment of the
aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee:


 


(a)  cash;


 


(b)  check;


 


(c)  consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or


 


(d)  surrender
of other Shares which, (i) in the case of Shares acquired upon exercise of
an option, have been owned by the Optionee for more than six (6) months on
the date of surrender, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.


 


(e)  with
the Administrator’s consent, delivery of Optionee’s promissory note (the “Note”)
in the form attached hereto as Exhibit E, in the amount of the aggregate
Exercise Price of the Exercised Shares together with the execution and delivery
by the Optionee of the Security Agreement attached hereto as Exhibit D.
The Note shall bear interest at the “applicable federal rate” prescribed under
the Code and its regulations at time of purchase, and shall be secured by a
pledge of the Shares purchased by the Note pursuant to the Security Agreement.


 


6.     Restrictions
on Exercise.  This Option may
not be exercised until such time as the Plan has been approved by the
shareholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any Applicable Law.


 


7.     Non-Transferability
of Option.  This Option may
not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee
only by Optionee. The terms of the Plan and this Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.


 


8.     Term of
Option.  This Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.


 


9.     Tax
Consequences.  Set forth below
is a brief summary as of the date of this Option of some of the federal tax
consequences of exercise of this Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.


 


(a)  Exercise of NSO.  There may be a regular federal income tax
liability upon the exercise of an NSO. The Optionee will be treated as having
received compensation income (taxable at


 


3

















 


ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to withhold from
Optionee’s compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.


 


(b)  Exercise of ISO.  If this Option qualifies as an ISO, there
will be no regular federal income tax liability upon the exercise of the
Option, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over the Exercise Price will be treated as an
adjustment to the alternative minimum tax for federal tax purposes and may
subject the Optionee to the alternative minimum tax in the year of exercise.


 


(c)  Exercise of ISO Following Disability.  If the Optionee ceases to be an Employee as a
result of a disability that is not a total and permanent disability as defined
in Section 22(e)(3) of the Code, to the extent permitted on the date
of termination, the Optionee must exercise an ISO within three months of such
termination for the ISO to be qualified as an ISO.


 


(d)  Disposition of Shares.  In the case of an NSO, if Shares are held for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes. In the case
of an ISO, if Shares transferred pursuant to the Option are held for at least
one year after exercise and at least two years after the Date of Grant, any
gain realized on disposition of the Shares will also be treated as long-term
capital gain for federal income tax purposes. If Shares purchased under an ISO
are disposed of within one year after exercise or two years after the Date of
Grant, any gain realized on such disposition will be treated as compensation
income (taxable at ordinary income rates) to the extent of the difference
between the Exercise Price of the Exercised Shares and the lesser of (i) the
Fair Market Value of the Exercised Shares on the date of exercise, or (ii) the
sale price of the Exercised Shares. Different rules may apply if the
Shares are subject to a substantial risk of forfeiture (within the meaning of Section 83
of the Code) at the time of purchase. Any additional gain will be taxed as
capital gain, short-term depending on the period that the ISO Shares were held.


 


(e)  Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to Optionee herein is
an ISO, and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two
years after the Date of Grant, or (ii) the date one year after the date of
exercise, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.


 


(f)  Section 83(b) Election for Unvested Shares
Purchased Pursuant to Options. 
With respect to the exercise of an Option for unvested Shares, an
election (the “Election”) may be filed by the Optionee with the Internal
Revenue Service, within 30 days
of the purchase of the Shares, electing pursuant to Section 83(b) of
the Code to be taxed currently on any difference between the purchase price of
the Shares and their Fair Market Value on the date of purchase. In the case of
an NSO, this will result in a recognition of taxable income to the Optionee on
the date of exercise, measured by the excess, if any, of the Fair Market Value
of the Exercised Shares, at the time the Option is exercised over the purchase
price for the Exercised Shares. Absent such an election, taxable income will be
measured and recognized by Optionee at the time or times on which the Company’s
Repurchase Option lapses. In the case of an ISO, such an election will result
in a recognition of income to the Optionee for alternative minimum tax purposes
on the date of exercise, measured by the excess, if any, of the Fair Market
Value of the Exercised Shares, at the time the Option is exercised, over the
purchase price for the Exercised Shares. Absent such an


 


4

















 


election, alternative
minimum taxable income will be measured and recognized by Optionee at the time
or times on which the Company’s Repurchase Option lapses. Optionee is strongly
encouraged to seek the advice of his or her own tax consultants in connection
with the purchase of the Shares and the advisability of filing of the Election
under Section 83(b) of the Code. A form of Election under Section 83(b) is
attached hereto as Exhibit C-5
for reference.


 


OPTIONEE ACKNOWLEDGES
THAT IT IS OPTIONEE’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE COMPANY OR
ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE’S BEHALF.


 


10.   Entire
Agreement; Governing Law.  The
Plan is incorporated herein by reference. The Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This Option Agreement is
governed by the internal substantive laws but not the choice of law rules of
Delaware.


 


Optionee acknowledges
receipt of a copy of the Plan and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Option subject to all
of the terms and provisions thereof. Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Option and fully understands all provisions of
the Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
arising under the Plan or this Option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.


 


	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  



 


5
















 


EXHIBIT A


 


INTERNET BRANDS, INC. 1998 STOCK PLAN


 


EXERCISE NOTICE


 


Internet Brands, Inc.


909 N. Sepulveda Blvd., 11th Floor


El Segundo, CA 90245


 


Attention: Stacey Peterson


 


1.     Exercise
of Option.  Effective as of
today,                       
 , the undersigned (“Optionee”) hereby elects to exercise
Optionee’s option (the “Option”) to purchase                          shares of the
Common Stock (the “Shares”) of Internet Brands, Inc. (the “Company”) under
and pursuant to the Internet Brands, Inc. 1998 Stock Plan (the “Plan”) and
the Stock Option Agreement dated August 9, 2005 (the “Option Agreement”).


 


2.     Delivery
of Payment.  Purchaser
herewith delivers to the Company the full purchase price of the Shares, as set
forth in the Option Agreement.


 


3.     Representations
of Optionee.  Optionee
acknowledges that Optionee has received, read and understood the Plan and the
Option Agreement and agrees to abide by and be bound by their terms and
conditions.


 


4.     Rights
as Shareholder.  Until the
issuance of the Shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder shall exist with
respect to the optioned stock, notwithstanding the exercise of the Option. The
Shares shall be issued to the Optionee as soon as practicable after the Option
is exercised. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date of issuance except as provided in Section 12
of the Plan.


 


5.     Company’s
Right of First Refusal. 
Before any Shares held by Optionee or any transferee (either being
sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or
its assignee(s) shall have a right of first refusal to purchase the Shares
on the terms and conditions set forth in this Section (the “Right of First
Refusal”).


 


(a)  Notice of Proposed Transfer.  The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the “Offered Price”), and the Holder shall offer the
Shares at the Offered Price to the Company or its assignee(s).


 


(b)  Exercise of Right of First Refusal.  At any time within thirty (30) days
after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than all,
of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c) below.


 


(c)  Purchase Price.  The purchase price (“Purchase Price”) for the
Shares purchased by the Company or its assignee(s) under this Section shall
be the Offered Price. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.


 


1

















 


(d)  Payment. 
Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a
portion of any outstanding indebtedness of the Holder to the Company (or, in
the case of repurchase by an assignee, to the assignee), or by any combination
thereof within 30 days after receipt of the Notice or in the manner and at
the times set forth in the Notice.


 


(e)  Holder’s Right to Transfer.  If all of the Shares proposed in the Notice
to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee
at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that
any such sale or other transfer is effected in accordance with any applicable
securities laws and that the Proposed Transferee agrees in writing that the
provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are
not transferred to the Proposed Transferee within such period, a new Notice
shall be given to the Company, and the Company and/or its assignees shall again
be offered the Right of First Refusal before any Shares held by the Holder may
be sold or otherwise transferred.


 


(f)  Exception for Certain Family Transfers.  Anything to the contrary contained in this Section notwithstanding,
the transfer of any or all of the Shares during the Optionee’s lifetime or on
the Optionee’s death by will or intestacy to the Optionee’s immediate family or
a trust for the benefit of the Optionee’s immediate family shall be exempt from
the provisions of this Section. “Immediate Family” as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section.


 


(g)  Termination of Right of First Refusal.  The Right of First Refusal shall terminate as
to any Shares upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as
amended.


 


6.     Tax
Consultation.  Optionee
understands that Optionee may suffer adverse tax consequences as a result of
Optionee’s purchase or disposition of the Shares. Optionee represents that
Optionee has consulted with any tax consultants Optionee deems advisable in
connection with the purchase or disposition of the Shares and that Optionee is
not relying on the Company for any tax advice.


 


7.     Restrictive
Legends and Stop-Transfer Orders.


 


(a)  Legends. 
Optionee understands and agrees that the Company shall cause the legends
set forth below or legends substantially equivalent thereto, to be placed upon
any certificate(s) evidencing ownership of the Shares together with any
other legends that may be required by the Company or by state or federal
securities laws:


 


THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.


 


THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT
OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE


 


2

















 


BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF
FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.


 


(b)  Stop-Transfer Notices.  Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.


 


(c)  Refusal to Transfer.  The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Exercise Notice or (ii) to
treat as owner of such Shares or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such Shares shall have been so
transferred.


 


8.     Successors
and Assigns.  The Company may
assign any of its rights under this Exercise Notice to single or multiple
assignees, and the terms and conditions of this Exercise Notice shall inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, the terms and conditions of this
Exercise Notice shall be binding upon Optionee and his or her heirs, executors,
administrators, successors and assigns.


 


9.     Interpretation.  Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by Optionee or by the Company forthwith
to the Administrator which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Administrator shall be final
and binding on all parties.


 


10.   Governing
Law; Severability.  This
Exercise Notice is governed by the internal substantive laws, but not the choice
of law rules, of Delaware.


 


11.   Entire
Agreement.  The Plan and
Option Agreement are incorporated herein by reference. This Exercise Notice,
the Plan, the Restricted Stock Purchase Agreement, the Option Agreement and the
Investment Representation Statement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee.


 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
  909
  N. Sepulveda Blvd., 11th Floor

  
	
   

  	
   

  	
  El
  Segundo, CA 90245

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  



 


3

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


 


	
  OPTIONEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
  INTERNET BRANDS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECURITY:

  	
  COMMON STOCK

  	
   

  
	
   

  	
   

  	
   

  
	
  AMOUNT:

  	
                            shares

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
  ____________

  	
   

  



 


In connection with the
purchase of the above-listed Securities, the undersigned Optionee represents to
the Company the following:


 


(a)   Optionee is aware of the Company’s business
affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Securities. Optionee is acquiring these Securities for investment for Optionee’s
own account only and not with a view to, or for resale in connection with, any “distribution”
thereof within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”).


 


(b)   Optionee acknowledges and understands that
the Securities constitute “restricted securities” under the Securities Act and
have not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of Optionee’s investment intent as expressed herein. In this
connection, Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if Optionee’s representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to
register the Securities. Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities unless they are registered or such registration is not required
in the opinion of counsel satisfactory to the Company, and with any other
legend required under applicable state securities laws.


 


(c)   Optionee is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in
substance, permit limited public resale of “restricted securities” acquired,
directly or indirectly from the issuer thereof, in a non-public offering
subject to the satisfaction of certain conditions. Rule 701 provides that
if the issuer qualifies under Rule 701 at the time of the grant of the
Option to the Optionee, the exercise will be exempt from registration under the
Securities Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter (or such longer period as any market
stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified
by Rule 144, including: (1) the resale being made through a broker in
an unsolicited “broker’s transaction” or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public
information about the Company, (3) the amount of Securities being sold
during any three month period not exceeding the limitations specified in Rule 144(e),
and (4) the timely filing of a Form 144, if applicable.


 


1

















 


(d)   In the event that the Company does not
qualify under Rule 701 at the time of grant of the Option, then the
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or
the date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by
an affiliate, or by a non-affiliate who subsequently holds the Securities less
than two years, the satisfaction of the conditions set forth in sections (1),
(2), (3) and (4) of the paragraph immediately above.


 


(e)   Optionee further understands that in the
event all of the applicable requirements of Rule 701 or 144 are not
satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.


 


	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
					



 


2

















 


EXHIBIT C-1


 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


RESTRICTED STOCK PURCHASE AGREEMENT


 


THIS AGREEMENT is made
between                          (the “Purchaser”)
and Internet Brands, Inc. (the “Company”) as of ________.


 


Unless otherwise defined
herein, the terms defined in the 1998 Stock Plan shall have the same defined
meanings in this Agreement.


 


RECITALS


 


A.    Pursuant to the exercise of the option
(grant number                         )
granted to Purchaser under the Plan and pursuant to the Option Agreement
dated              by and between the
Company and Purchaser with respect to such grant (the “Option”), which Plan and
Option Agreement are hereby incorporated by reference, Purchaser has elected to
purchase 50,000 of those shares of Common Stock which have not become vested
under the vesting schedule set forth in the Option Agreement (“Unvested Shares”).
The Unvested Shares and the shares subject to the Option Agreement which have
become vested are sometimes collectively referred to herein as the “Shares”.


 


B.    As required by the Option Agreement, as a
condition to Purchaser’s election to exercise the option, Purchaser must
execute this Agreement, which sets forth the rights and obligations of the
parties with respect to Shares acquired upon exercise of the Option.


 


1.     Repurchase
Option.


 


(a)  If
Purchaser’s status as a Service Provider is terminated for any reason,
including for cause, death, and Disability, the Company shall have the right
and option to purchase from Purchaser, or Purchaser’s personal representative,
as the case may be, all of the Purchaser’s Unvested Shares as of the date of
such termination at the price paid by the Purchaser for such Shares (the “Repurchase
Option”).


 


(b)  Upon
the occurrence of such termination, the Company may exercise its Repurchase
Option by delivering personally or by registered mail, to Purchaser (or his
transferee or legal representative, as the case may be), within ninety
(90) days of the termination, a notice in writing indicating the Company’s
intention to exercise the Repurchase Option and setting forth a date for
closing not later than thirty (30) days from the mailing of such notice.
The closing shall take place at the Company’s office. At the closing, the
holder of the certificates for the Unvested Shares being transferred shall
deliver the stock certificate or certificates evidencing the Unvested Shares,
and the Company shall deliver the purchase price therefor.


 


(c)  At
its option, the Company may elect to make payment for the Unvested Shares to a
bank selected by the Company. The Company shall avail itself of this option by
a notice in writing to Purchaser stating the name and address of the bank, date
of closing, and waiving the closing at the Company’s office.


 


(d)  If
the Company does not elect to exercise the Repurchase Option conferred above by
giving the requisite notice within ninety (90) days following the
termination, the Repurchase Option shall terminate.


 


(e)  The
Repurchase Option shall terminate in accordance with the vesting schedule
contained in Optionee’s Option Agreement.


 


1

















 


2.     Transferability
of the Shares; Escrow.


 


(a)  Purchaser
hereby authorizes and directs the Secretary of the Company, or such other
person designated by the Company, to transfer the Unvested Shares as to which
the Repurchase Option has been exercised from Purchaser to the Company.


 


(b)  To
insure the availability for delivery of Purchaser’s Unvested Shares upon
repurchase by the Company pursuant to the Repurchase Option under Section 1,
Purchaser hereby appoints the Secretary, or any other person designated by the
Company as escrow agent, as its attorney-in-fact to sell, assign and transfer
unto the Company, such Unvested Shares, if any, repurchased by the Company
pursuant to the Repurchase Option and shall, upon execution of this Agreement,
deliver and deposit with the Secretary of the Company, or such other person
designated by the Company, the share certificates representing the Unvested
Shares, together with the stock assignment duly endorsed in blank, attached
hereto as Exhibit C-2. The
Unvested Shares and stock assignment shall be held by the secretary in escrow,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
as Exhibit C-3 hereto, until
the Company exercises its Repurchase Option, until such Unvested Shares are
vested, or until such time as this Agreement no longer is in effect. As a
further condition to the Company’s obligations under this Agreement, the spouse
of the Purchaser, if any, shall execute and deliver to the Company the Consent
of Spouse attached hereto as Exhibit C-4. Upon vesting of the Unvested
Shares, the escrow agent shall promptly deliver to the Purchaser the
certificate or certificates representing such Shares in the escrow agent’s
possession belonging to the Purchaser, and the escrow agent shall be discharged
of all further obligations hereunder; provided, however, that the escrow agent
shall nevertheless retain such certificate or certificates as escrow agent if
so required pursuant to other restrictions imposed pursuant to this Agreement.


 


(c)  The
Company, or its designee, shall not be liable for any act it may do or omit to
do with respect to holding the Shares in escrow and while acting in good faith
and in the exercise of its judgment.


 


(d)  Transfer
or sale of the Shares is subject to restrictions on transfer imposed by any
applicable state and federal securities laws. Any transferee shall hold such
Shares subject to all the provisions hereof and the Exercise Notice executed by
the Purchaser with respect to any Unvested Shares purchased by Purchaser and
shall acknowledge the same by signing a copy of this Agreement.


 


3.     Ownership,
Voting Rights, Duties.  This
Agreement shall not affect in any way the ownership, voting rights or other
rights or duties of Purchaser, except as specifically provided herein.


 


4.     Legends.  The share certificate evidencing the Shares
issued hereunder shall be endorsed with the following legend (in addition to
any legend required under applicable federal and state securities laws):


 


THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND
RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.


 


5.     Adjustment
for Stock Split.  All
references to the number of Shares and the purchase price of the Shares in this
Agreement shall be appropriately adjusted to reflect any stock split, stock
dividend or other change in the Shares which may be made by the Company
pursuant to Section 12 of the Plan after the date of this Agreement.


 


2

















 


6.     Notices.  Notices required hereunder shall be given in
person or by registered mail to the address of Purchaser shown on the records
of the Company, and to the Company at their respective principal executive
offices.


 


7.     Survival
of Terms.  This Agreement
shall apply to and bind Purchaser and the Company and their respective
permitted assignees and transferees, heirs, legatees, executors, administrators
and legal successors.


 


8.     Section 83(b) Election.  Purchaser hereby acknowledges that he or she
has been informed that, with respect to the exercise of an Option for Unvested
Shares, an election (the “Election”) may be filed by the Purchaser with the
Internal Revenue Service, within
30 days of the purchase of the exercised Shares, electing
pursuant to Section 83(b) of the Code to be taxed currently on any
difference between the purchase price of the exercised Shares and their Fair
Market Value on the date of purchase. In the case of a Nonstatutory Stock
Option, this will result in a recognition of taxable income to the Purchaser on
the date of exercise, measured by the excess, if any, of the Fair Market Value
of the exercised Shares, at the time the Option is exercised over the purchase
price for the exercised Shares. Absent such an Election, taxable income will be
measured and recognized by Purchaser at the time or times on which the Company’s
Repurchase Option lapses. In the case of an Incentive Stock Option, such an
Election will result in a recognition of income to the Purchaser for
alternative minimum tax purposes on the date of exercise, measured by the
excess, if any, of the Fair Market Value of the exercised Shares, at the time
the option is exercised, over the purchase price for the exercised Shares.
Absent such an Election, alternative minimum taxable income will be measured
and recognized by Purchaser at the time or times on which the Company’s
Repurchase Option lapses. Purchaser is strongly encouraged to seek the advice of
his or her own tax consultants in connection with the purchase of the Shares
and the advisability of filing of the Election under Section 83(b) of
the Code. A form of Election under Section 83(b) is attached hereto
as Exhibit C-5 for
reference.


 


PURCHASER ACKNOWLEDGES
THAT IT IS PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF PURCHASER
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER’S
BEHALF.


 


9.     Representations.  Purchaser has reviewed with his own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Purchaser understands that he (and not the
Company) shall be responsible for his own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.


 


10.   Governing
Law.  This Agreement shall be
governed by the internal substantive laws, but not the choice of law rules, of
Delaware.


 


Purchaser represents
that he has read this Agreement and is familiar with its terms and provisions.
Purchaser hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under this
Agreement.


 


IN WITNESS WHEREOF, this
Agreement is deemed made as of the date first set forth above.


 


	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  



 


3

















 


EXHIBIT C-2


 


ASSIGNMENT SEPARATE FROM CERTIFICATE


 


FOR VALUE RECEIVED I,                         , hereby sell, assign
and transfer unto Internet Brands, Inc.                          shares of the
Common Stock of Internet Brands, Inc. standing in my name of the books of
said corporation represented by Certificate No.             herewith and do hereby
irrevocably constitute and appoint                          to transfer the said stock on
the books of the within named corporation with full power of substitution in
the premises.


 


This Stock Assignment
may be used only in accordance with the Restricted Stock Purchase Agreement
between Internet Brands, Inc. and the undersigned dated                         .


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  



 


INSTRUCTIONS:  Please do not fill in any blanks other than
the signature line. The purpose of this assignment is to enable the Company to
exercise its “repurchase option,” as set forth in the Agreement, without
requiring additional signatures on the part of the Purchaser.


 


1

















 


EXHIBIT C-3


 


JOINT ESCROW INSTRUCTIONS


 


Date: ________


 


Corporate Secretary


909 N. Sepulveda Blvd., 11th Floor


El
Segundo, CA 90245


 


Attention:
B. Lynn Walsh


 


Dear Ms.Walsh:


 


As Escrow Agent for both
Internet Brands, Inc. (the “Company”), and the undersigned purchaser of
stock of the Company (the “Purchaser”), you are hereby authorized and directed
to hold the documents delivered to you pursuant to the terms of that certain
Restricted Stock Purchase Agreement (“Agreement”) between the Company and the
undersigned, in accordance with the following instructions:


 


1.     In the event the Company and/or any
assignee of the Company (referred to collectively for convenience herein as the
“Company”) exercises the Company’s repurchase option set forth in the
Agreement, the Company shall give to Purchaser and you a written notice
specifying the number of shares of stock to be purchased, the purchase price,
and the time for a closing hereunder at the principal office of the Company.
Purchaser and the Company hereby irrevocably authorize and direct you to close
the transaction contemplated by such notice in accordance with the terms of
said notice.


 


2.     At the closing, you are directed (a) to
date the stock assignments necessary for the transfer in question, (b) to
fill in the number of shares being transferred, and (c) to deliver the
stock assignments, together with the certificate evidencing the shares of stock
to be transferred, to the Company or its assignee, against the simultaneous
delivery to you of the purchase price (by cash, a check, or some combination
thereof) for the number of shares of stock being purchased pursuant to the
exercise of the Company’s repurchase option.


 


3.     Purchaser irrevocably authorizes the
Company to deposit with you any certificates evidencing shares of stock to be
held by you hereunder and any additions and substitutions to said shares as
defined in the Agreement. Purchaser does hereby irrevocably constitute and
appoint you as Purchaser’s attorney-in-fact and agent for the term of this
escrow to execute with respect to such securities all documents necessary or
appropriate to make such securities negotiable and to complete any transaction
herein contemplated, including but not limited to the filing with any
applicable state blue sky authority of any required applications for consent
to, or notice of transfer of, the securities. Subject to the provisions of this
paragraph 3, Purchaser shall exercise all rights and privileges of a
stockholder of the Company while the stock is held by you.


 


4.     Upon written request of the Purchaser, but
no more than once per calendar year, unless the Company’s repurchase option has
been exercised, you will deliver to Purchaser a certificate or certificates
representing so many shares of stock as are not then subject to the Company’s
repurchase option. Within 120 days after cessation of Purchaser’s
continuous employment by or services to the Company, or any parent or
subsidiary of the Company, you will deliver to Purchaser a certificate or
certificates representing the aggregate number of shares held or issued
pursuant to the Agreement and not purchased by the Company or its assignees
pursuant to exercise of the Company’s repurchase option.


 


5.     If at the time of termination of this
escrow you should have in your possession any documents, securities, or other
property belonging to Purchaser, you shall deliver all of the same to Purchaser
and shall be discharged of all further obligations hereunder.


 


1

















 


6.     Your duties hereunder may be altered,
amended, modified or revoked only by a writing signed by all of the parties
hereto.


 


7.     You shall be obligated only for the
performance of such duties as are specifically set forth herein and may rely
and shall be protected in relying or refraining from acting on any instrument
reasonably believed by you to be genuine and to have been signed or presented
by the proper party or parties. You shall not be personally liable for any act
you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for
Purchaser while acting in good faith, and any act done or omitted by you
pursuant to the advice of your own attorneys shall be conclusive evidence of
such good faith.


 


8.     You are hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or by any
other person or corporation, excepting only orders or process of courts of law
and are hereby expressly authorized to comply with and obey orders, judgments
or decrees of any court. In case you obey or comply with any such order,
judgment or decree, you shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such compliance, notwithstanding
any such order, judgment or decree being subsequently reversed, modified,
annulled, set aside, vacated or found to have been entered without
jurisdiction.


 


9.     You shall not be liable in any respect on
account of the identity, authorities or rights of the parties executing or
delivering or purporting to execute or deliver the Agreement or any documents
or papers deposited or called for hereunder.


 


10.   You shall not be liable for the outlawing of
any rights under the Statute of Limitations with respect to these Joint Escrow
Instructions or any documents deposited with you.


 


11.   You shall be entitled to employ such legal
counsel and other experts as you may deem necessary properly to advise you in
connection with your obligations hereunder, may rely upon the advice of such
counsel, and may pay such counsel reasonable compensation therefor.


 


12.   Your responsibilities as Escrow Agent
hereunder shall terminate if you shall cease to be an officer or agent of the
Company or if you shall resign by written notice to each party. In the event of
any such termination, the Company shall appoint a successor Escrow Agent.


 


13.   If you reasonably require other or further
instruments in connection with these Joint Escrow Instructions or obligations
in respect hereto, the necessary parties hereto shall join in furnishing such
instruments.


 


14.   It is understood and agreed that should any
dispute arise with respect to the delivery and/or ownership or right of
possession of the securities held by you hereunder, you are authorized and
directed to retain in your possession without liability to anyone all or any
part of said securities until such disputes shall have been settled either by
mutual written agreement of the parties concerned or by a final order, decree
or judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but you shall be under no duty
whatsoever to institute or defend any such proceedings.


 


15.   Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States Post Office, by registered or
certified mail with postage and fees prepaid, addressed to each of the other
parties thereunto entitled at the following addresses or at such other
addresses as a party may designate by ten days’ advance written notice to each
of the other parties hereto.


 


16.   By signing these Joint Escrow Instructions,
you become a party hereto only for the purpose of said Joint Escrow
Instructions; you do not become a party to the Agreement.


 


17.   This instrument shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and
permitted assigns.


 


18.   These Joint Escrow Instructions shall be
governed by the internal substantive laws, but not the choice of law rules, of
Delaware.


 


2

















 


	
  PURCHASER:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ESCROW AGENT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Corporate Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					



 


3

















 


EXHIBIT C-4


 


CONSENT OF SPOUSE


 


I,                         , spouse
of                         , have read
and approve the foregoing Restricted Stock Purchase Agreement (the “Agreement”).
In consideration of granting of the right to my spouse to purchase shares of
Internet Brands, Inc., as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under
the Agreement and agree to be bound by the provisions of the Agreement insofar
as I may have any rights in said Agreement or any shares issued pursuant
thereto under the community property laws or similar laws relating to marital
property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement.


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  



 


1

















 


EXHIBIT D


 


SECURITY AGREEMENT


 


This Security Agreement
is made as of                       
  between Internet Brands, Inc., a Delaware corporation (“Pledgee”),
and                          (“Pledgor”).


 


Recitals


 


Pursuant to Pledgor’s
election to purchase Shares under the Option Agreement dated (the “Option”),
between Pledgor and Pledgee under Pledgee’s 1998 Stock Option Plan, and Pledgor’s
election under the terms of the Option to pay for such shares with his
promissory note (the “Note”), Pledgor has purchased 50,000 shares of Pledgee’s
Common Stock (the “Shares”) at a price of $                         per share, for a total
purchase price of $                       
.. The Note and the obligations thereunder are as set forth in Exhibit E
to the Option.


 


NOW, THEREFORE, it is
agreed as follows:


 


1.     Creation
and Description of Security Interest.  In consideration of the transfer of the
Shares to Pledgor under the Option Agreement, Pledgor, pursuant to the Delaware
Commercial Code, hereby pledges all of such Shares (herein sometimes referred
to as the “Collateral”) represented by certificate number     , duly endorsed in blank or with
executed stock powers, and herewith delivers said certificate to the Secretary
of Pledgee (“Pledgeholder”), who shall hold said certificate subject to the
terms and conditions of this Security Agreement.


 


The pledged stock
(together with an executed blank stock assignment for use in transferring all
or a portion of the Shares to Pledgee if, as and when required pursuant to this
Security Agreement) shall be held by the Pledgeholder as security for the
repayment of the Note, and any extensions or renewals thereof, to be executed
by Pledgor pursuant to the terms of the Option, and the Pledgeholder shall not
encumber or dispose of such Shares except in accordance with the provisions of
this Security Agreement.


 


2.     Pledgor’s
Representations and Covenants. 
To induce Pledgee to enter into this Security Agreement, Pledgor
represents and covenants to Pledgee, its successors and assigns, as follows:


 


(a)  Payment of Indebtedness.  Pledgor will pay the principal sum of the
Note secured hereby, together with interest thereon, at the time and in the
manner provided in the Note.


 


(b)  Encumbrances.  The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.


 


(c)  Margin Regulations.  In the event that Pledgee’s Common Stock is
now or later becomes margin-listed by the Federal Reserve Board and Pledgee is
classified as a “lender” within the meaning of the regulations under Part 207
of Title 12 of the Code of Federal Regulations (“Regulation G”), Pledgor agrees
to cooperate with Pledgee in making any amendments to the Note or providing any
additional collateral as may be necessary to comply with such regulations.


 


3.     Voting
Rights.  During the term of
this pledge and so long as all payments of principal and interest are made as
they become due under the terms of the Note, Pledgor shall have the right to
vote all of the Shares pledged hereunder.


 


4.     Stock
Adjustments.  In the event
that during the term of the pledge any stock dividend, reclassification,
readjustment or other changes are declared or made in the capital structure of
Pledgee, all new, substituted and additional shares or other securities issued
by reason of any such change shall be delivered to and held by the Pledgee
under the terms of this Security Agreement in the same manner as the Shares
originally pledged hereunder. In the event of substitution of such securities,
Pledgor, Pledgee and Pledgeholder shall cooperate and execute such documents as
are reasonable so as


 


1

















 


to provide for the substitution of such Collateral
and, upon such substitution, references to “Shares” in this Security Agreement
shall include the substituted shares of capital stock of Pledgor as a result
thereof.


 


5.     Options
and Rights.  In the event
that, during the term of this pledge, subscription Options or other rights or
options shall be issued in connection with the pledged Shares, such rights,
Options and options shall be the property of Pledgor and, if exercised by
Pledgor, all new stock or other securities so acquired by Pledgor as it relates
to the pledged Shares then held by Pledgeholder shall be immediately delivered
to Pledgeholder, to be held under the terms of this Security Agreement in the
same manner as the Shares pledged.


 


6.     Default.  Pledgor shall be deemed to be in default of
the Note and of this Security Agreement in the event:


 


(a)  Payment of principal or interest on
the Note shall be delinquent for a period of 10 days or more; or


 


(b)  Pledgor fails to
perform any of the covenants set forth in the Option or contained in this
Security Agreement for a period of 10 days after written notice thereof
from Pledgee.


 


In the case of an event
of Default, as set forth above, Pledgee shall have the right to accelerate
payment of the Note upon notice to Pledgor, and Pledgee shall thereafter be
entitled to pursue its remedies under the Delaware Commercial Code.


 


7.     Release of
Collateral.  Subject to any
applicable contrary rules under Regulation G, there shall be released
from this pledge a portion of the pledged Shares held by Pledgeholder hereunder
upon payments of the principal of the Note. The number of the pledged Shares
which shall be released shall be that number of full Shares which bears the
same proportion to the initial number of Shares pledged hereunder as the
payment of principal bears to the initial full principal amount of the Note.


 


8.     Withdrawal
or Substitution of Collateral. 
Pledgor shall not sell, withdraw, pledge, substitute or otherwise
dispose of all or any part of the Collateral without the prior written consent
of Pledgee.


 


9.     Term.  The within pledge of Shares shall continue
until the payment of all indebtedness secured hereby, at which time the
remaining pledged stock shall be promptly delivered to Pledgor, subject to the
provisions for prior release of a portion of the Collateral as provided in
paragraph 7 above.


 


10.   Insolvency.  Pledgor agrees that if a bankruptcy or
insolvency proceeding is instituted by or against it, or if a receiver is
appointed for the property of Pledgor, or if Pledgor makes an assignment for
the benefit of creditors, the entire amount unpaid on the Note shall become
immediately due and payable, and Pledgee may proceed as provided in the case of
default.


 


11.   Pledgeholder
Liability.  In the absence of
willful or gross negligence, Pledgeholder shall not be liable to any party for
any of his acts, or omissions to act, as Pledgeholder.


 


12.   Invalidity of
Particular Provisions. 
Pledgor and Pledgee agree that the enforceability or invalidity of any
provision or provisions of this Security Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.


 


13.   Successors or
Assigns.  Pledgor and Pledgee
agree that all of the terms of this Security Agreement shall be binding on
their respective successors and assigns, and that the term “Pledgor” and the
term “Pledgee” as used herein shall be deemed to include, for all purposes, the
respective designees, successors, assigns, heirs, executors and administrators.


 


14.   Governing
Law.  This Security Agreement
shall be interpreted and governed under the internal substantive laws, but not
the choice of law rules, of Delaware.


 


2

















 


IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year first above
written.


 


	
  “PLEDGOR”

  	
   

  
	
   

  	
   

  
	
  “PLEDGEE”

  	
  Internet Brands, Inc.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
  “PLEDGEHOLDER”

  	
  Secretary of Internet Brands, Inc.

  



 


3
















 


EXHIBIT E


 


NOTE


 


	
  $55,000.00

  	
  El Segundo, CA

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


FOR VALUE RECEIVED,                          promises to pay to
Internet Brands, Inc., a Delaware corporation (the “Company”), or order,
the principal sum of $55,000.00, together with interest on the unpaid principal
hereof from the date hereof at the rate of              percent per annum, compounded
semiannually.


 


Principal and interest shall be due and payable on
the earlier to occur of (i) the date the Company files a registration
statement with the Securities and Exchange Commission to become a publicly
reporting company, or (ii) four years from the date hereof. Payment of
principal and interest shall be made in lawful money of the United States of
America.


 


The undersigned may at any time prepay all or any
portion of the principal or interest owing hereunder.


 


This Note is subject to the terms of the Option,
dated as of August 9, 2005. This Note is secured in part by a pledge of
the Company’s Common Stock under the terms of a Security Agreement of even date
herewith and is subject to all the provisions thereof.


 


The holder of this Note shall have full recourse
against the undersigned, and shall not be required to proceed against the
collateral securing this Note in the event of default.


 


In the event the undersigned shall cease to be an
employee, director or consultant of the Company for any reason, this Note
shall, at the option of the Company, be accelerated, and the whole unpaid
balance on this Note of principal and accrued interest shall be immediately due
and payable.


 


Should any action be instituted for the collection
of this Note, the reasonable costs and attorneys’ fees therein of the holder
shall be paid by the undersigned.


 


	
   

  	
   

  



 


1

















 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


STOCK OPTION AGREEMENT—EARLY EXERCISE


 


Unless otherwise defined herein, the terms defined
in the INTERNET BRANDS, INC. 1998 Stock Plan (the “Plan”) shall have the
same defined meanings in this Stock Option Agreement (the “Option Agreement”).


 


I.      NOTICE OF STOCK OPTION GRANT


 


	
  Name:

  	
  «First» «Last»

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


You have been granted an option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:


 


	
  Grant Number

  	
  «Number»

  
	
   

  	
   

  
	
  Date of Grant

  	
  «Option_Date»

  
	
   

  	
   

  
	
  Vesting Commencement Date

  	
  «Vest_Base_Date»

  
	
   

  	
   

  
	
  Exercise Price per Share

  	
  $«Price»

  
	
   

  	
   

  
	
  Total Number of Shares Granted

  	
  «Shares_Granted»

  
	
   

  	
   

  
	
  Total Exercise Price

  	
  $«Total_Price»

  
	
   

  	
   

  
	
  Type of Option:

  	
  «Option_Type»

  
	
   

  	
   

  
	
  Term/Expiration Date:

  	
  «Expiration_Date»

  



 


Vesting Schedule:


 


This Option shall be exercisable in whole or in
part, and shall vest according to one of the following schedule, subject also
to the Optionee being a Sevice Provider on such dates:


 


20% of the shares shall
vest immediately upon grant, 20% of the shares shall vest upon the one year
anniversary of the Vesting Commencement Date, and the remaining shares shall
vest on a pro rata basis per quarter over the next 36 months.


 


Termination Period:


 


If Optionee ceases to be a Service Provider
without cause (the “Termination Date”), this Option shall be exercisable for
the earlier to occur of (i) twelve months after the Termination Date, (ii) 190 days
after an initial public offering of the Company’s common stock (the “IPO”), or (iii) if
the Termination Date occurs subsequent to the 100 day anniversary of an
IPO, this Option shall be exercisable for 3 months following the
Termination Date. Upon Optionee’s death or disability, this Option may be exercised
for 12 months after Optionee ceases to be a Service Provider. In no event
may Optionee exercise this Option after the Term/Expiration Date.


 


Accelerated Vesting:


 


Upon the occurrence of a “Change of Control” (as
defined below) followed by (i) a material diminution of Service Provider’s
duties, (ii) geographical relocation or (iii) termination of
employment 


 


1

















 


for reasons other than by Cause (as defined in the
Severance Payment Agreement) within 12 months after or 6 months prior
to a change of control, 50% of the unvested portion shall immediately vest and
become exercisable in full.


 


For purposes of this Option Agreement, “Change of
Control” shall mean the Company’s sale of all or substantially all of its
assets or the acquisition of the Company by another entity or entities by means
of merger, consolidation or series of related transactions, resulting in the
exchange of the outstanding shares of the Company for securities or
consideration issued, or caused to be issued, by the acquiring corporation or
its subsidiary, unless the stockholders of the Company hold at least 50% of the
voting power of the surviving corporation in such a transaction.


 


II.    AGREEMENT


 


1.     Grant of Option.  The Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant (the “Optionee”), an option
(the “Option”) to purchase the number of Shares set forth in the Notice of
Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise
Price”), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 12(c) of the
Plan, in the event of a conflict between the terms and conditions of the Plan
and this Option Agreement, the terms and conditions of the Plan shall prevail.


 


(a)   If designated in the Notice of
Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify
as an Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d),
this Option shall be treated as a Nonstatutory Stock Option (“NSO”).


 


2.     Exercise of Option.  This Option shall be exercisable during its
term in accordance with the provisions of Section 9 of the Plan as
follows:


 


(a)   Right to
Exercise.


 


(i)    Subject to subsections 2(a)(ii) and
2(a)(iii) below, this Option shall be exercisable cumulatively according
to the vesting schedule set forth in the Notice of Grant. Alternatively, at the
election of the Optionee, this Option may be exercised in whole or in part at
any time as to Shares which have not yet vested. Vested Shares shall not be
subject to the Company’s repurchase right (as set forth in the Restricted Stock
Purchase Agreement, attached hereto as Exhibit C-1).


 


(ii)   As a condition to exercising
this Option for unvested Shares, the Optionee shall execute the Restricted
Stock Purchase Agreement.


 


(iii)  This Option may not be
exercised for a fraction of a Share.


 


(b)   Method of
Exercise.  This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A
(the “Exercise Notice”) which shall state the election to exercise the Option,
the number of Shares with respect to which the Option is being exercised, and
such other representations and agreements as may be required by the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by the aggregate Exercise Price.


 


(c)   No Shares shall be issued
pursuant to the exercise of an Option unless such issuance and such exercise
complies with Applicable Laws. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on which
the Option is exercised with respect to such Shares.


 


2

















 


3.     Optionee’s Representations.  In the event the Shares have not been
registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, the Optionee shall, if required by the Company,
concurrently with the exercise of all or any portion of this Option, deliver to
the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B, and shall read the applicable rules of the
Commissioner of Corporations attached to such Investment Representation
Statement.


 


4.     Lock-Up Period.  Optionee hereby agrees that, if so requested
by the Company or any representative of the underwriters (the “Managing Underwriter”) in connection with
any registration of the offering of any securities of the Company under the
Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period (or such other period
as may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the “Market Standoff Period”) following the effective
date of a registration statement of the Company filed under the Securities Act.
Such restriction shall apply only to the first registration statement of the
Company to become effective under the Securities Act that includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.


 


5.     Method of Payment.  Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:


 


(a)   cash;


 


(b)   check;


 


(c)   consideration received by the
Company under a formal cashless exercise program adopted by the Company in
connection with the Plan; or


 


(d)   surrender of other Shares
which, (i) in the case of Shares acquired upon exercise of an option, have
been owned by the Optionee for more than six (6) months on the date of
surrender, and (ii) have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the Exercised Shares.


 


(e)   with the Administrator’s
consent, delivery of Optionee’s promissory note (the “Note”) in the form
attached hereto as Exhibit E, in the amount of the aggregate Exercise
Price of the Exercised Shares together with the execution and delivery by the
Optionee of the Security Agreement attached hereto as Exhibit D. The Note
shall bear interest at the “applicable federal rate” prescribed under the Code
and its regulations at time of purchase, and shall be secured by a pledge of
the Shares purchased by the Note pursuant to the Security Agreement.


 


6.     Restrictions on Exercise.  This Option may not be exercised until such
time as the Plan has been approved by the shareholders
of the Company, or if the issuance of such Shares upon such exercise or the
method of payment of consideration for such shares would constitute a violation
of any Applicable Law.


 


7.     Non-Transferability of Option.  This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.


 


8.     Term of Option.  This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option.


 


3

















 


9.     Tax Consequences.  Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS
ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.


 


(a)   Exercise of
NSO.  There may
be a regular federal income tax liability upon the exercise of an NSO. The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market
Value of the Exercised Shares on the date of exercise over the Exercise Price.
If Optionee is an Employee or a former Employee, the Company will be required
to withhold from Optionee’s compensation or collect from Optionee and pay to
the applicable taxing authorities an amount in cash equal to a percentage of
this compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.


 


(b)   Exercise of ISO.  If this Option qualifies as an
ISO, there will be no regular federal income tax liability upon the exercise of
the Option, although the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to the alternative minimum tax in the year of
exercise.


 


(c)   Exercise of ISO Following
Disability.  If the Optionee ceases to be an Employee as a
result of a disability that is not a total and permanent disability as defined
in Section 22(e)(3) of the Code, to the extent permitted on the date
of termination, the Optionee must exercise an ISO within three months of such
termination for the ISO to be qualified as an ISO.


 


(d)   Disposition of Shares.  In the case of an NSO, if
Shares are held for at least one year, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal income tax
purposes. In the case of an ISO, if Shares transferred pursuant to the Option
are held for at least one year after exercise and at least two years after the
Date of Grant, any gain realized on disposition of the Shares will also be
treated as long-term capital gain for federal income tax purposes. If Shares
purchased under an ISO are disposed of within one year after exercise or two
years after the Date of Grant, any gain realized on such disposition will be
treated as compensation income (taxable at ordinary income rates) to the extent
of the difference between the Exercise Price of the Exercised Shares and the
lesser of (i) the Fair Market Value of the Exercised Shares on the date of
exercise, or (ii) the sale price of the Exercised Shares. Different rules may
apply if the Shares are subject to a substantial risk of forfeiture (within the
meaning of Section 83 of the Code) at the time of purchase. Any additional
gain will be taxed as capital gain, short-term depending on the period that the
ISO Shares were held.


 


(e)   Notice of Disqualifying
Disposition of ISO Shares.  If the Option granted to Optionee herein is
an ISO, and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the ISO on or before the later of (i) the date two
years after the Date of Grant, or (ii) the date one year after the date of
exercise, the Optionee shall immediately notify the Company in writing of such
disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the
Optionee.


 


(f)    Section 83(b) Election
for Unvested Shares Purchased Pursuant to Options.  With respect to the exercise of
an Option for unvested Shares, an election (the “Election”) may be filed by the
Optionee with the Internal Revenue Service, within 30 days of the purchase
of the Shares, electing pursuant to Section 83(b) of the Code to be
taxed currently on any difference between the purchase price of the Shares and
their Fair Market Value on the date of purchase. In the case of an NSO, this
will result in a recognition of taxable income to the Optionee on the date of
exercise, 


 


4

















 


measured by the excess,
if any, of the Fair Market Value of the Exercised Shares, at the time the
Option is exercised over the purchase price for the Exercised Shares. Absent
such an election, taxable income will be measured and recognized by Optionee at
the time or times on which the Company’s Repurchase Option lapses. In the case
of an ISO, such an election will result in a recognition of income to the
Optionee for alternative minimum tax purposes on the date of exercise, measured
by the excess, if any, of the Fair Market Value of the Exercised Shares, at the
time the Option is exercised, over the purchase price for the Exercised Shares.
Absent such an election, alternative minimum taxable income will be measured
and recognized by Optionee at the time or times on which the Company’s
Repurchase Option lapses. Optionee is strongly encouraged to seek the advice of
his or her own tax consultants in connection with the purchase of the Shares
and the advisability of filing of the Election under Section 83(b) of
the Code. A form of Election under Section 83(b) is attached hereto
as Exhibit C-5 for
reference.


 


OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE’S SOLE
RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b),
EVEN IF OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING
ON OPTIONEE’S BEHALF.


 


10.   Entire Agreement; Governing Law.  The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing
signed by the Company and Optionee. This Option Agreement is governed by the
internal substantive laws but not the choice of law rules of Delaware.


 


11.   No Guarantee of Continued Service.  OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN
DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.


 


Optionee acknowledges receipt of a copy of the
Plan and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.


 


	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  



 


5

















 


EXHIBIT A


 


INTERNET BRANDS, INC. 1998 STOCK PLAN


 


EXERCISE NOTICE


 


Internet Brands, Inc.


909 N. Sepulveda Blvd, 11th Floor


El Segundo, CA 90245


 


Attention: Corporate Secretary


 


1.     Exercise of Option.  Effective as of today, «Option_Date», the
undersigned (“Optionee”) hereby elects to exercise Optionee’s option (the “Option”)
to purchase «Shares_Granted» shares of the Common Stock (the “Shares”) of
INTERNET BRANDS, INC. (the “Company”) under and pursuant to the INTERNET
BRANDS, INC. 1998 Stock Plan (the “Plan”) and the Stock Option Agreement
dated «Option_Date» (the “Option Agreement”).


 


2.     Delivery of Payment.  Purchaser herewith delivers to the Company
the full purchase price of the Shares, as set forth in the Option Agreement.


 


3.     Representations of Optionee.  Optionee acknowledges that Optionee has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.


 


4.     Rights as Shareholder.  Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the optioned
stock, notwithstanding the exercise of the Option. The Shares shall be issued
to the Optionee as soon as practicable after the Option is exercised. No
adjustment shall be made for a dividend or other right for which the record
date is prior to the date of issuance except as provided in Section 12 of
the Plan.


 


5.     Company’s Right of First Refusal.  Before any Shares held by
Optionee or any transferee (either being sometimes referred to herein as the “Holder”)
may be sold or otherwise transferred (including transfer by gift or operation
of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this Section (the
“Right of First Refusal”).


 


(a)   Notice of
Proposed Transfer.  The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Holder proposes to
transfer the Shares (the “Offered Price”), and the Holder shall offer the
Shares at the Offered Price to the Company or its assignee(s).


 


(b)   Exercise of Right of First
Refusal.  At any
time within thirty (30) days after receipt of the Notice, the Company
and/or its assignee(s) may, by giving written notice to the Holder, elect
to purchase all, but not less than all, of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subSection (c) below.


 


(c)   Purchase Price.  The purchase price (“Purchase
Price”) for the Shares purchased by the Company or its assignee(s) under
this Section shall be the Offered Price. If the Offered Price includes
consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in
good faith.


 


1

















 


(d)   Payment.  Payment of the Purchase Price
shall be made, at the option of the Company or its assignee(s), in cash (by
check), by cancellation of all or a portion of any outstanding indebtedness of
the Holder to the Company (or, in the case of repurchase by an assignee, to the
assignee), or by any combination thereof within 30 days after receipt of
the Notice or in the manner and at the times set forth in the Notice.


 


(e)   Holder’s Right to Transfer.  If all of the Shares proposed
in the Notice to be transferred to a given Proposed Transferee are not
purchased by the Company and/or its assignee(s) as provided in this
Section, then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that
such sale or other transfer is consummated within 120 days after the date
of the Notice, that any such sale or other transfer is effected in accordance
with any applicable securities laws and that the Proposed Transferee agrees in
writing that the provisions of this Section shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, a new
Notice shall be given to the Company, and the Company and/or its assignees
shall again be offered the Right of First Refusal before any Shares held by the
Holder may be sold or otherwise transferred.


 


(f)    Exception for
Certain Family Transfers.  Anything to the contrary contained in this Section notwithstanding,
the transfer of any or all of the Shares during the Optionee’s lifetime or on
the Optionee’s death by will or intestacy to the Optionee’s immediate family or
a trust for the benefit of the Optionee’s immediate family shall be exempt from
the provisions of this Section. “Immediate Family” as used herein shall mean
spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section.


 


(g)   Termination of Right of
First Refusal.  The Right of
First Refusal shall terminate as to any Shares upon the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended.


 


6.     Tax Consultation.  Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee’s purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.


 


7.     Restrictive Legends and Stop-Transfer Orders.


 


(a)   Legends.  Optionee understands and agrees
that the Company shall cause the legends set forth below or legends
substantially equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
the Company or by state or federal securities laws:


 


THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF
COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER,
SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.


 


THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT
OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET
FORTH IN THE EXERCISE NOTICE 


 


2

















 


BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF
FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.


 


(b)   Stop-Transfer Notices.  Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.


 


(c)   Refusal to Transfer.  The Company shall not be
required (i) to transfer on its books any Shares that have been sold or
otherwise transferred in violation of any of the provisions of this Exercise
Notice or (ii) to treat as owner of such Shares or to accord the right to
vote or pay dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.


 


8.     Successors and Assigns.  The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and the terms and
conditions of this Exercise Notice shall inure to the benefit of the successors
and assigns of the Company. Subject to the restrictions
on transfer herein set forth, the terms and conditions of this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.


 


9.     Interpretation.  Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by Optionee or by the Company forthwith to the Administrator which
shall review such dispute at its next regular meeting. The resolution of such a
dispute by the Administrator shall be final and binding on all parties.


 


10.   Governing Law; Severability.  This Exercise Notice is governed by the
internal substantive laws, but not the choice of law rules, of Delaware.


 


11.   Entire Agreement.  The Plan and Option Agreement are
incorporated herein by reference. This Exercise Notice, the Plan, the
Restricted Stock Purchase Agreement, the Option Agreement and the Investment
Representation Statement constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and Optionee.


 


	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  909
  N. Sepulveda Blvd., 11th Floor  

  
	
   

  	
   

  	
  El
  Segundo, CA 90245

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Received

  



 


3

















 


EXHIBIT B


 


INVESTMENT REPRESENTATION STATEMENT


 


	
  OPTIONEE:

  	
  «First» «Last»

  
	
   

  	
   

  
	
  COMPANY:

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  
	
  SECURITY:

  	
  COMMON STOCK

  
	
   

  	
   

  
	
  AMOUNT:

  	
  «Shares_Granted» shares

  
	
   

  	
   

  
	
  DATE:

  	
  «Option_Date»

  



 


In connection with the purchase of the
above-listed Securities, the undersigned Optionee represents to the Company the
following:


 


(a)   Optionee is aware of the
Company’s business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Optionee is acquiring these Securities for
investment for Optionee’s own account only and not with a view to, or for
resale in connection with, any “distribution” thereof within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”).


 


(b)   Optionee acknowledges and
understands that the Securities constitute “restricted securities” under the
Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of Optionee’s investment intent as
expressed herein. In this connection, Optionee understands that, in the view of
the Securities and Exchange Commission, the statutory basis for such exemption
may be unavailable if Optionee’s representation was predicated solely upon a
present intention to hold these Securities for the minimum capital gains period
specified under tax statutes, for a deferred sale, for or until an increase or
decrease in the market price of the Securities, or for a period of one year or
any other fixed period in the future. Optionee further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Optionee further acknowledges and understands that the Company is under no obligation
to register the Securities. Optionee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required in the opinion of counsel satisfactory to the Company, and with
any other legend required under applicable state securities laws.


 


(c)   Optionee is familiar with the
provisions of Rule 701 and Rule 144, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly from the issuer thereof, in a
non-public offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to the Optionee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such
longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of
certain of the conditions specified by Rule 144, including: (1) the
resale being made through a broker in an unsolicited “broker’s transaction” or
in transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the
availability of certain public information about the Company, (3) the
amount of Securities being sold during any three 


 


1

















 


month
period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.


 


(d)   In the event that the Company
does not qualify under Rule 701 at the time of grant of the Option, then
the Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than
one year after the later of the date the Securities were sold by the Company or
the date the Securities were sold by an affiliate of the Company, within the
meaning of Rule 144; and, in the case of acquisition of the Securities by
an affiliate, or by a non-affiliate who subsequently holds the Securities less
than two years, the satisfaction of the conditions set forth in sections (1),
(2), (3) and (4) of the paragraph immediately above.


 


(e)   Optionee further understands
that in the event all of the applicable requirements of Rule 701 or 144
are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rules 144 and 701 are not exclusive,
the Staff of the Securities and Exchange Commission has expressed its opinion
that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their
own risk. Optionee understands that no assurances can be given that any such
other registration exemption will be available in such event.


 


	
   

  	
   

  	
  Signature of Optionee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  «First» «Last»

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  



 


2

















 


EXHIBIT C-1


 


INTERNET BRANDS, INC.


 


1998 STOCK PLAN


 


RESTRICTED STOCK PURCHASE AGREEMENT


 


THIS AGREEMENT is made
between «First» «Last» (the “Purchaser”) and INTERNET BRANDS, INC. (the “Company”)
as of________________.


 


Unless otherwise defined
herein, the terms defined in the 1998 Stock Plan shall have the same defined
meanings in this Agreement.


 


RECITALS


 


A.    Pursuant
to the exercise of the option (grant number «Number») granted to Purchaser
under the Plan and pursuant to the Option Agreement dated «Option            Date» by and between the Company
and Purchaser with respect to such grant (the “Option”), which Plan and Option
Agreement are hereby incorporated by reference, Purchaser has elected to
purchase___________of those shares of Common Stock which have not become vested
under the vesting schedule set forth in the Option Agreement (“Unvested Shares”).
The Unvested Shares and the shares subject to the Option Agreement which have
become vested are sometimes collectively referred to herein as the “Shares”.


 


B.    As
required by the Option Agreement, as a condition to Purchaser’s election to
exercise the option, Purchaser must execute this Agreement, which sets forth
the rights and obligations of the parties with respect to Shares acquired upon
exercise of the Option.


 


1.     Repurchase Option.


 


(a)   If Purchaser’s status as a
Service Provider is terminated for any reason, including for cause, death, and
Disability, the Company shall have the right and option to purchase from
Purchaser, or Purchaser’s personal representative, as the case may be, all of
the Purchaser’s Unvested Shares as of the date of such termination at the price
paid by the Purchaser for such Shares (the “Repurchase Option”).


 


(b)   Upon the occurrence of such
termination, the Company may exercise its Repurchase Option by delivering personally
or by registered mail, to Purchaser (or his transferee or legal representative,
as the case may be), within ninety (90) days of the termination, a notice
in writing indicating the Company’s intention to exercise the Repurchase Option
and setting forth a date for closing not later than thirty (30) days from
the mailing of such notice. The closing shall take place at the Company’s
office. At the closing, the holder of the certificates for the Unvested Shares
being transferred shall deliver the stock certificate or certificates
evidencing the Unvested Shares, and the Company shall deliver the purchase
price therefor.


 


(c)   At its option, the Company may
elect to make payment for the Unvested Shares to a bank selected by the
Company. The Company shall avail itself of this option by a notice in writing
to Purchaser stating the name and address of the bank, date of closing, and
waiving the closing at the Company’s office.


 


(d)   If the Company does not elect
to exercise the Repurchase Option conferred above by giving the requisite
notice within ninety (90) days following the termination, the Repurchase
Option shall terminate.


 


(e)   The Repurchase Option shall
terminate in accordance with the vesting schedule contained in Optionee’s
Option Agreement.


 


1

















 


2.     Transferability of the Shares; Escrow.


 


(a)   Purchaser hereby authorizes and
directs the Secretary of the Company, or such other person designated by the
Company, to transfer the Unvested Shares as to which the Repurchase Option has
been exercised from Purchaser to the Company.


 


(b)   To insure the availability for
delivery of Purchaser’s Unvested Shares upon repurchase by the Company pursuant
to the Repurchase Option under Section 1, Purchaser hereby appoints the
Secretary, or any other person designated by the Company as escrow agent, as
its attorney-in-fact to sell, assign and transfer unto the Company, such
Unvested Shares, if any, repurchased by the Company pursuant to the Repurchase
Option and shall, upon execution of this Agreement, deliver and deposit with
the Secretary of the Company, or such other person designated by the Company,
the share certificates representing the Unvested Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit C-2. The Unvested Shares and
stock assignment shall be held by the secretary in escrow, pursuant to the
Joint Escrow Instructions of the Company and Purchaser attached as Exhibit C-3 hereto, until the Company
exercises its Repurchase Option, until such Unvested Shares are vested, or
until such time as this Agreement no longer is in effect. As a further
condition to the Company’s obligations under this Agreement, the spouse of the
Purchaser, if any, shall execute and deliver to the Company the Consent of
Spouse attached hereto as Exhibit C-4. Upon vesting of the Unvested
Shares, the escrow agent shall promptly deliver to the Purchaser the
certificate or certificates representing such Shares in the escrow agent’s
possession belonging to the Purchaser, and the escrow agent shall be discharged
of all further obligations hereunder; provided, however, that the escrow agent
shall nevertheless retain such certificate or certificates as escrow agent if
so required pursuant to other restrictions imposed pursuant to this Agreement.


 


(c)   The Company, or its designee,
shall not be liable for any act it may do or omit to do with respect to holding
the Shares in escrow and while acting in good faith and in the exercise of its
judgment.


 


(d)   Transfer or sale of the Shares
is subject to restrictions on transfer imposed by any applicable state and
federal securities laws. Any transferee shall hold such Shares subject to all
the provisions hereof and the Exercise Notice executed by the Purchaser with
respect to any Unvested Shares purchased by Purchaser and shall acknowledge the
same by signing a copy of this Agreement.


 


3.     Ownership, Voting Rights, Duties.  This Agreement shall not affect
in any way the ownership, voting rights or other rights or duties of Purchaser,
except as specifically provided herein.


 


4.     Legends.  The share certificate evidencing the Shares
issued hereunder shall be endorsed with the following legend (in addition to
any legend required under applicable federal and state securities laws):


 


THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND
RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.


 


5.     Adjustment for Stock Split.  All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company pursuant to Section 12 of the Plan
after the date of this Agreement.


 


6.     Notices.  Notices required hereunder shall be given in
person or by registered mail to the address of Purchaser shown on the records
of the Company, and to the Company at their respective principal executive
offices.


 


2

















 


7.     Survival of Terms.  This Agreement shall apply to and bind
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.


 


8.     Section 83(b) Election.  Purchaser hereby acknowledges
that he or she has been informed that, with respect to the exercise of an
Option for Unvested Shares, an election (the “Election”) may be filed by the
Purchaser with the Internal Revenue Service, within
30 days of the purchase of the exercised Shares, electing
pursuant to Section 83(b) of the Code to be taxed currently on any
difference between the purchase price of the exercised Shares and their Fair
Market Value on the date of purchase. In the case of a Nonstatutory Stock
Option, this will result in a recognition of taxable income to the Purchaser on
the date of exercise, measured by the excess, if any, of the Fair Market Value
of the exercised Shares, at the time the Option is exercised over the purchase
price for the exercised Shares. Absent such an Election, taxable income will be
measured and recognized by Purchaser at the time or times on which the Company’s
Repurchase Option lapses. In the case of an Incentive Stock Option, such an
Election will result in a recognition of income to the Purchaser for
alternative minimum tax purposes on the date of exercise, measured by the
excess, if any, of the Fair Market Value of the exercised Shares, at the time the
option is exercised, over the purchase price for the exercised Shares. Absent
such an Election, alternative minimum taxable income will be measured and
recognized by Purchaser at the time or times on which the Company’s Repurchase
Option lapses. Purchaser is strongly encouraged to seek the advice of his or
her own tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) of the
Code. A form of Election under Section 83(b) is attached hereto as Exhibit C-5 for reference.


 


PURCHASER ACKNOWLEDGES
THAT IT IS PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY
THE ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF PURCHASER
REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER’S
BEHALF.


 


9.     Representations.  Purchaser has reviewed with his own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. Purchaser understands that he (and not the
Company) shall be responsible for his own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.


 


10.   Governing Law.  This Agreement shall be governed by the
internal substantive laws, but not the choice of law rules, of Delaware.


 


Purchaser represents
that he has read this Agreement and is familiar with its terms and provisions.
Purchaser hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions arising under this
Agreement.


 


IN WITNESS WHEREOF, this
Agreement is deemed made as of the date first set forth above.


 


	
  OPTIONEE:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dated:

  	
   

  



 


3

















 


EXHIBIT C-2


 


ASSIGNMENT SEPARATE FROM CERTIFICATE


 


FOR VALUE RECEIVED I,
«First» «Last», hereby sell, assign and transfer unto INTERNET
BRANDS, INC._________shares of the Common Stock of INTERNET
BRANDS, INC. standing in my name of the books of said corporation
represented by Certificate No.___herewith and do hereby irrevocably constitute
and appoint INTERNET BRANDS, INC. to transfer the said stock on the books
of the within named corporation with full power of substitution in the
premises.


 


This Stock Assignment
may be used only in accordance with the Restricted Stock Purchase Agreement
between INTERNET BRANDS, INC. and the undersigned dated «Option_Date».


 


	
  Dated:

  	
   

  	
  Signature:

  	
   

  



 


INSTRUCTIONS:  Please do not fill in any blanks
other than the signature line. The purpose of this assignment is to enable the
Company to exercise its “repurchase option,” as set forth in the Agreement,
without requiring additional signatures on the part of the Purchaser.


 


1

















 


EXHIBIT C-3


 


JOINT ESCROW INSTRUCTIONS


 


	
   

  	
  Date:

  	
   

  



 


Corporate Secretary


909 N. Sepulveda Blvd., 11th Floor


El Segundo, CA 90245


 


Corporate Secretary:


 


As Escrow Agent for both
INTERNET BRANDS, INC. (the “Company”), and the undersigned purchaser of
stock of the Company (the “Purchaser”), you are hereby authorized and directed
to hold the documents delivered to you pursuant to the terms of that certain
Restricted Stock Purchase Agreement (“Agreement”) between the Company and the
undersigned, in accordance with the following instructions:


 


1.     In the
event the Company and/or any assignee of the Company (referred to collectively
for convenience herein as the “Company”) exercises the Company’s repurchase
option set forth in the Agreement, the Company shall give to Purchaser and you
a written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of
the Company. Purchaser and the Company hereby irrevocably authorize and direct
you to close the transaction contemplated by such notice in accordance with the
terms of said notice.


 


2.     At the
closing, you are directed (a) to date the stock assignments necessary for
the transfer in question, (b) to fill in the number of shares being
transferred, and (c) to deliver the stock assignments, together with the
certificate evidencing the shares of stock to be transferred, to the Company or
its assignee, against the simultaneous delivery to you of the purchase price
(by cash, a check, or some combination thereof) for the number of shares of
stock being purchased pursuant to the exercise of the Company’s repurchase
option.


 


3.     Purchaser
irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and
substitutions to said shares as defined in the Agreement. Purchaser does hereby
irrevocably constitute and appoint you as Purchaser’s attorney-in-fact and
agent for the term of this escrow to execute with respect to such securities
all documents necessary or appropriate to make such securities negotiable and
to complete any transaction herein contemplated, including but not limited to
the filing with any applicable state blue sky authority of any required
applications for consent to, or notice of transfer of, the securities. Subject
to the provisions of this paragraph 3, Purchaser shall exercise all rights
and privileges of a stockholder of the Company while the stock is held by you.


 


4.     Upon
written request of the Purchaser, but no more than once per calendar year,
unless the Company’s repurchase option has been exercised, you will deliver to
Purchaser a certificate or certificates representing so many shares of stock as
are not then subject to the Company’s repurchase option. Within 120 days
after cessation of Purchaser’s continuous employment by or services to the
Company, or any parent or subsidiary of the Company, you will deliver to
Purchaser a certificate or certificates representing the aggregate number of
shares held or issued pursuant to the Agreement and not purchased by the
Company or its assignees pursuant to exercise of the Company’s repurchase
option.


 


5.     If at
the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall
deliver all of the same to Purchaser and shall be discharged of all further
obligations hereunder.


 


1

















 


6.     Your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.


 


7.     You
shall be obligated only for the performance of such duties as are specifically
set forth herein and may rely and shall be protected in relying or refraining
from acting on any instrument reasonably believed by you to be genuine and to
have been signed or presented by the proper party or parties. You shall not be
personally liable for any act you may do or omit to do hereunder as Escrow
Agent or as attorney-in-fact for Purchaser while acting in good faith, and any
act done or omitted by you pursuant to the advice of your own attorneys shall
be conclusive evidence of such good faith.


 


8.     You are
hereby expressly authorized to disregard any and all warnings given by any of
the parties hereto or by any other person or corporation, excepting only orders
or process of courts of law and are hereby expressly authorized to comply with
and obey orders, judgments or decrees of any court. In case you obey or comply
with any such order, judgment or decree, you shall not be liable to any of the
parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding any such order, judgment or decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.


 


9.     You
shall not be liable in any respect on account of the identity, authorities or
rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.


 


10.   You
shall not be liable for the outlawing of any rights under the Statute of
Limitations with respect to these Joint Escrow Instructions or any documents
deposited with you.


 


11.   You
shall be entitled to employ such legal counsel and other experts as you may
deem necessary properly to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.


 


12.   Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to be an officer or agent of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company shall
appoint a successor Escrow Agent.


 


13.   If you
reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.


 


14.   It is
understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities held by you
hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes
shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but you shall be under no duty whatsoever to institute or defend any
such proceedings.


 


15.   Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery or upon deposit in the United
States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days’ advance written notice to each of the other parties hereto.


 


16.   By
signing these Joint Escrow Instructions, you become a party hereto only for the
purpose of said Joint Escrow Instructions; you do not become a party to the
Agreement.


 


17.   This
instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.


 


18.   These
Joint Escrow Instructions shall be governed by the internal substantive laws,
but not the choice of law rules, of Delaware.


 


2

















 


	
  PURCHASER:

  	
   

  	
  INTERNET BRANDS, INC.

  
	
   

  	
   

  	
   

  
	
  «First» «Last»

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  ESCROW AGENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Corporate Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
				



 


3

















 


EXHIBIT C-4


 


CONSENT OF SPOUSE


 


I,____________, spouse of «First» «Last», have
read and approve the foregoing Restricted Stock Purchase Agreement (the “Agreement”).
In consideration of granting of the right to my spouse to purchase shares of
INTERNET BRANDS, INC., as set forth in the Agreement, I hereby appoint my
spouse as my attorney-in-fact in respect to the exercise of any rights under
the Agreement and agree to be bound by the provisions of the Agreement insofar
as I may have any rights in said Agreement or any shares issued pursuant
thereto under the community property laws or similar laws relating to marital
property in effect in the state of our residence as of the date of the signing
of the foregoing Agreement.


 


 


	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  



 


1

















 


EXHIBIT C-5


 


ELECTION UNDER SECTION 83(b)


OF THE INTERNAL REVENUE CODE OF 1986


 


The undersigned taxpayer
hereby elects, pursuant to Sections 55 and 83(b) of the Internal
Revenue Code of 1986, as amended, to include in taxpayer’s gross income or
alternative minimum taxable income, as the case may be, for the current taxable
year the amount of any compensation taxable to taxpayer in connection with
taxpayer’s receipt of the property described below:


 


1.     The
name, address, taxpayer identification number and taxable year of the
undersigned are as follows:


 


	
  NAME:

  	
  TAXPAYER: «First» «Last»

  	
  SPOUSE:

  
	
   

  	
   

  	
   

  
	
  ADDRESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IDENTIFICATION NO.:  TAXPAYER:

  	
  SPOUSE:

  	
   

  
	
   

  	
   

  	
   

  
	
  TAXABLE YEAR: 2000

  	
   

  	
   

  
						



 


2.     The
property with respect to which the election is made is described as follows:____________shares
(the “Shares”) of the Common Stock of INTERNET BRANDS, INC. (the “Company”).


 


3.     The
date on which the property was transferred is:_______________.


 


4.     The
property is subject to the following restrictions:


 


The Shares may not be
transferred and are subject to forfeiture under the terms of an agreement
between the taxpayer and the Company. These restrictions lapse upon the
satisfaction of certain conditions contained in such agreement.


 


5.     The
fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of
such property is:


 


$_____________.


 


6.     The
amount (if any) paid for such property is:


 


$_____________.


 


The undersigned has
submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described
property. The transferee of such property is the person performing the services
in connection with the transfer of said property.


 


The undersigned understands that the foregoing election may
not be revoked except with the consent of the Commissioner.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Taxpayer

  



 


The undersigned spouse
of taxpayer joins in this election.


 


	
  Dated:

  	
   

  	
   

  	
   

  



 


1