Document:

Exhibit 4.2

 

	
   

  	
   

  	
  October 26,
  2007

  

 

Internet
Brands, Inc. 

909 North Sepulveda Blvd., 11th Floor 

El Segundo, CA 90245

 

Attn:
General Counsel

 

 

To
Whom It May Concern:

 

                The undersigned, Idealab
Holdings, L.L.C. (“Idealab”), a
Delaware limited liability company, understands that Internet Brands, Inc.,
a Delaware corporation (the “Company”),
proposes to enter into an underwriting agreement with Thomas Weisel Partners
LLC (the “Underwriters”) in connection with a
public offering (the “Offering”) of
the Class A common stock ($0.001 par value) of the Company (the “Securities”) pursuant to a registration statement on Form S-1
filed with the Securities and Exchange Commission (the “Commission”)
on July 20, 2007. In connection with such Offering, Idealab will enter into
a lock-up with the Underwriters (the “Underwriter Lock-Up”).

 

                On March 10, 2005, Idealab
and the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”), which contained, among other
things, certain restrictions on the ability of Idealab to sell, dispose or
otherwise transfer its shares of the Company’s capital stock (the “Shares”). In order to provide for an orderly disposition by
Idealab of shares of the Company’s capital stock after the consummation of the
Offering, and in order for each to induce the other to proceed with the
Offering, Idealab and the Company hereby agree to the following:

 

                1. Exchange Agreement. In
contemplation of the Offering, Idealab and the Company have agreed to amend
Sections 5.5, 5.6 and 5.7 of the Share Exchange Agreement; provided that such
amendments (described in detail below) shall only become effective upon the
consummation of the Offering described above (the “Closing”).
If the Closing does not occur by April 30, 2008, the described amendments
shall have no force and effect and this Agreement shall terminate. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
given such terms in the Share Exchange Agreement.

 

                2. Company Lock-Up; Permitted
Transfers. In accordance with Section 5.5(b) of the Share
Exchange Agreement, which is hereby amended and restated in its entirety hereby
as set forth in this Section 2, Idealab agrees that during the Company
Lock-Up Period, as defined below, it will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any shares of the
Company’s capital stock or securities convertible into or exchangeable or
exercisable for any shares of the Company’s capital stock, enter into a
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Company’s capital stock, whether any such
aforementioned transaction is to be settled by delivery of the Company’s
capital stock or such other securities, in cash or

 

1

 

otherwise,
or publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other
arrangement, without, in each case, the prior written consent of the Company; provided,
that, subject to the restrictions, terms and conditions set forth in Section 5.3
of the Share Exchange Agreement, the Company shall permit the following;

 

(i)             sales or other
transfers to the Company;

 

(ii)          sales or other
transfers in connection with a Change in Control (as that term is defined in
the Idealab! Stockholder Agreement, dated as of December 30, 1999 (the “Stockholder Agreement”), by and between idealab!, Inc.,
a California corporation, and Idealab, on the one hand, and the Company, on the
other hand) of the Company approved in accordance with the Company’s Amended
and Restated Certificate of Incorporation;

 

(iii)       sales of shares
of the Company’s capital stock held by Idealab made pursuant to an effective
registration statement in connection with Idealab’s exercise of its piggyback
registration rights set forth in Section 5.2 of the Fifth Amended and
Restated Investor Rights Agreement, dated as of February 6, 2001 (the “IRA”) (subject to the restrictions, terms and conditions set
forth in the IRA);

 

(iv)      the distribution without
consideration of capital stock (A) by Idealab to any entity that controls
or is controlled by Idealab (collectively, the entities described in this
clause (A) are referred to herein as “Related Parties”)
and (B) by Idealab or by a Related Party to any stockholders, members or
partners of such parties (including natural persons who may also be officers
and/or directors of Idealab or a Related Party) (collectively, the persons and
entities described in this clause (B) are referred to herein as “Equityholders”); provided, that (x) prior to any
such distribution to a Related Party, it shall have executed and delivered to
the Company an appropriate document in form and substance reasonably
satisfactory to the Company confirming that such transferee takes such capital
stock subject to all of the restrictions, terms and conditions of the Share
Exchange Agreement, this Agreement and the IRA to the same extent as Idealab
was bound by such provisions, and (y) prior to any such distribution to an
Equityholder, such Equityholder shall have executed and delivered to the
Company, if required by Section 4 of the IRA, an appropriate document in
form and substance reasonably satisfactory to the Company confirming that such
Equityholder takes such capital stock subject to all of the restrictions, terms
and conditions of the IRA (other than the restrictions related to the second registration
in Section 7 thereof) (it being understood that upon transfer to an
Equityholder such shares shall no longer be subject to the restrictions, terms
and conditions of the Share Exchange Agreement or this Agreement);

 

(v)         pledges of
capital stock to nationally recognized financial institutions (not affiliated
with Idealab or a Related Party (as such term is defined in the Stockholder
Agreement)) as collateral in connection with bona fide lending transactions;

 

(vi)      one or more private
placements or block sales of shares of the Company’s capital stock in an amount
not to exceed 9.9% of the Company’s outstanding capital stock during any single
120 day period; provided that no such sale or transfer pursuant to this
paragraph (vi) shall be effective if made to any Person or 13D Group, in
any single or series of related transactions, that, after giving effect to such
sale or transfer, would have beneficial ownership of more than 9.9% of the

 

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Company’s
outstanding capital stock (calculated in each case on an as-converted to Class A
common stock basis). Any sale or transfer in any single or series of related
transactions pursuant to this paragraph (vi) to any Person or 13D Group in
excess of 9.9% of the Company’s outstanding capital stock (or less than such
amount, if as a result of such sale or transfer, any such Person or 13D Group
would be the beneficial owner of more than 9.9% of the Company’s outstanding
capital stock) shall require the prior written consent of a majority of the
Company’s Independent Board of Directors; provided that such consent shall be
in the sole discretion of such Directors. Without limiting the foregoing, the
Independent Directors, in exercising their discretion, may consider, among other
things, the identity of any potential purchaser, the purpose of such purchase,
the purchaser’s pattern of conduct in the capital markets, and may require the
purchaser to enter into a standstill, lock-up or similar agreement as a
condition of such consent; and

 

(vii) sales of shares of the
Company’s capital stock held by Idealab made in compliance with the volume
limitations of Rule 144 of the Securities Act; provided such sales are
made in compliance with a “l0b5-l Plan” adopted by Idealab and administered
through the Company’s designated broker.

 

                For purposes of this Agreement, (i) “Independent
Directors” shall mean those directors who are not officers or directors of, or
otherwise affiliated with, Idealab or a Related Party, or who are otherwise disinterested
within the meaning of Delaware law; (ii) “13D Group” means any group of
Persons formed for the purpose of acquiring, holding, voting or disposing of
capital stock of the Company that would be required under Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(as in effect on, and based on legal interpretations thereof existing on, the
date hereof) to file a statement on Schedule l3D with the SEC as a “person”
within the meaning of Section 13(d)(3) of the Exchange Act if such
group beneficially owned capital stock of the Company representing more than 5% of any class of capital stock of the
Company then outstanding; (iii) “Person” means any individual, firm,
corporation, partnership, company, limited liability company, trust, joint
venture, association, governmental entity, unincorporated organization or other
entity; and (iv) “beneficial owner” and words of similar import have the
meaning assigned to such terms in Rule 13d-3 promulgated under the
Exchange Act as in effect on the date of this Agreement. For purposes of
determining the amount of the Company’s outstanding capital stock at anytime,
reference shall be made to the Company’s periodic report most recently filed
with the SEC.

 

                Any attempted sale, transfer or
other disposition of the capital stock of the Company during the Company
Lock-Up Period which is not in compliance with this Paragraph 2 shall be null
and void.

 

                3. Term of Company Lock-Up
Period. The “Company Lock-Up Period” shall
commence on the date of the expiration of the Underwriters Lock-Up and
terminate eighteen (18) months following such date (the latter date, the “Lock-Up Expiration Date”). Notwithstanding the foregoing, if
Idealab fails to exercise its piggyback registration rights in a Company
offering commenced at any time during the Company Lock-Up Period that would
have resulted in Idealab selling all of its capital stock, then the Lock-Up
Expiration Date shall automatically be extended to twenty four (24) months
following the date of the expiration of the Underwriters Lock-Up.

 

                4. Section 5.6. Section 5.6
of the Share Exchange Agreement shall be deleted hereby.

 

3

 

                5. Registration Rights. Section 5.7
of the Share Exchange Agreement is hereby amended and restated in its entirety
as follows:

 

                (a) Idealab and any
permitted transferee of Idealab’s registration rights shall be entitled to
exercise any and all of its registration rights set forth in Section 5.1
or Section 5.3 of the IRA beginning on the Reg Rights Commencement Date
(as defined below) and sell shares thereunder without regard to any
restrictions, terms and conditions imposed by the Share Exchange Agreement. “Reg
Rights Commencement Date” shall mean the earlier of(i) the date that is
one year from the date of the final prospectus for the Company’s IPO and (ii) the
date on which other “Initiating Holders” (as defined in the IRA) other than
Idealab exercise their rights to cause a registration of their shares under Section 5.1
of the IRA.

 

                (b) Subject to the
restrictions, terms and conditions imposed by any Underwriter Lock-Up
Agreement, commencing on the date of the final prospectus for the Company’s IPO,
Idealab and any permitted transferee of Idealab’s registration rights shall be
entitled to exercise any and all piggyback registration rights set forth in Section 5.2
of the IRA (as defined in the IRA) and sell such shares thereunder without
regard to any restrictions, terms and conditions imposed by the Share Exchange
Agreement.

 

                6. Notice of Proposed
Transfers. Idealab consents to the Company making a notation in its records
and giving stop transfer instructions to any transfer agent of its capital
stock in order to implement the restrictions of transfer established in the
Share Exchange Agreement, Section 4 of the IRA, and this Agreement.

 

                7. Miscellaneous. This
Agreement may only be modified or amended by the written agreement of a
majority of Independent Directors. This Agreement shall be binding on Idealab
and its successors, personal representatives and assigns. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of
California.

 

	
   

  	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Marcia Goodstein

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Idealab
  Holdings, L.L.C.

  
	
   

  	
   

  	
  By:
  Marcia Goodstein

  
	
   

  	
   

  	
  Title:
  Secretary

  

 

4EXHIBIT 10.1

 

March 14, 2008

 

2008
Bonus and Incentive Share Award For:

 

«Name»

 

	
  GRANT
  DATE:

  	
   

  	
  February 26,
  2008

  
	
  VESTING
  DATE:

  	
   

  	
  February 26,
  2012

  

 

UNRESTRICTED SHARES (YOUR “BONUS SHARES”)

 

	
  After-Tax Shares
  Distributable Immediately:

  	
  «CS_Bonus_Shs»

  	
  (“After-Tax
  Bonus Shares”)

  
	
   

  	
   

  	
   

  
	
  Shares Deferred
  on a Pre-Tax Basis:

  	
  «Deferred_Bonus_Shs»

  	
  (“Deferred
  Bonus Shares”)

  
	
   

  	
   

  	
   

  
	
  TOTAL
  Unrestricted Shares:

  	
  «Bonus_Shares»

  	
  (“Total
  Bonus Shares”)

  

 

RESTRICTED SHARES  (YOUR “INCENTIVE SHARES”)

 

	
  After-Tax Shares
  Distributable Upon Vesting:

  	
  «CS_Inc_Shs»

  	
  (“After-Tax
  Incentive Shares”)

  
	
   

  	
   

  	
   

  
	
  Shares Deferred
  on a Pre-Tax Basis:

  	
  «Deferred_Inc_Shs»

  	
  (“Deferred
  Incentive Shares”)

  
	
   

  	
   

  	
   

  
	
  TOTAL
  Restricted Shares:

  	
  «Incentive_Shares»

  	
  (“Total
  Incentive Shares”)

  

 

I am pleased to confirm the award made to you on February 26,
2008 by the Compensation Committee of the Board of Directors of Bonus Shares
and Incentive Shares of the Company’s common stock in the amounts set forth
above.

 

Your Bonus Shares are immediately vested.  Your entire grant of Incentive Shares awarded
to you will vest only if you remain employed by the West and retain all of the Bonus
Shares granted to you during the time period between the Grant Date and the
Vesting Date.

 

The entire award of Bonus Shares and Incentive Shares
are subject to the other terms and conditions specified in the West
Pharmaceutical Services, Inc. 2007 Omnibus Incentive Compensation Plan
(the “Omnibus Plan”).  Enclosed with this
award letter are a summary of important Terms and Conditions applicable to your
Bonus Shares and Incentive Shares and a Participant Information Statement for
the Omnibus Plan.  You should review both
documents carefully.

 

If you wish to sell or withdraw any of the After-Tax
Bonus Shares or vested Incentive Shares credited to your account, you should
contact the Company’s stock plan administrator, Computershare at +1.888.472.3073.  A Sale or Withdrawal of Shares form is
enclosed for your convenience.

 

Your Deferred Bonus Shares are also subject to the
restrictions contained in the Company’s Non-qualified Deferred Compensation
Plan for Designated Employees (the “Deferred Compensation Plan”) and the
elections that you have previously made regarding distribution of your account
under the Deferred

 

 

Compensation
Plan.  Therefore, you may not sell,
transfer, pledge or otherwise dispose of your Deferred Bonus Shares or Deferred
Incentive Shares.

 

This Award is governed by all of the terms and
conditions contained in this award letter (including the Terms and Conditions),
the Omnibus Plan and, if applicable, the Deferred Compensation Plan.  In the event of a conflict between this award
letter and the applicable Plans, the provisions of the applicable Plan shall
control for any and all purposes.

 

Please review the attached documentation
carefully.  I would be happy to answer any questions about the terms and
conditions of your awards.

 

 

	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
  

  
	
   

  	
   

  	
  Richard D. Luzzi

  
	
   

  	
   

  	
  Vice President
  Human Resources

  
	
   

  	
   

  	
   

  
	
  RDL/rmm

  	
   

  	
   

  
	
  Attachments

  	
   

  	
   

  
				

 

 

Terms and
Conditions for

Employee
Bonus and Incentive Stock Awards

 

1.               After-Tax Bonus Shares are shares of Company stock
awarded to you and are considered “Stock Bonuses” under the Company’s 2007
Omnibus Incentive Compensation Plan. 
After-Tax Incentive Shares are shares of stock that are subject to risk
of forfeiture as explained below and are considered “Restricted Stock” under
the Omnibus Plan.

 

2.               Upon grant, the number of After-Tax Bonus Shares and
After-Tax Incentive Shares shown on the accompanying grant letter will be held
in an account with Computershare on your behalf.  You will be permitted to indirectly vote
their allocated after-tax shares through the Computershare

 

3.               You will be entitled to receive dividends and other
distributions with respect to all of your Bonus Shares and Incentive Shares,
except that dividends on Bonus Shares and Incentive Shares will be reinvested
automatically in additional shares of stock automatically.  If you forfeit your Incentive Shares, you
have no right to receive shares purchased through dividends paid on the
restricted shares.

 

4.               All Incentive Shares are not vested on grant.  All of the Incentive Shares will vest 100% on
the fourth anniversary of the grant date (the “Vesting Date”), subject to the
following events occurring:

 

	
  Event

  	
   

  	
  Effect on Incentive Shares

  
	
   

  	
   

  	
   

  
	
  If before the
  Vesting Date,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  . . . you sell,
  assign, exchange, pledge, hypothecate or otherwise encumbers any of the Bonus
  Shares

  	
   

  	
  . . . all of the
  Incentive Shares are immediately forfeited.

  
	
   

  	
   

  	
   

  
	
  . . . you tender
  Bonus Shares as full or partial payment of the exercise price of a stock
  option granted under a Company plan

  	
   

  	
  . . . the
  Incentive Shares continue to vest according to the original schedule.

  
	
   

  	
   

  	
   

  
	
  . . . you tender
  Bonus Shares to satisfy applicable tax withholding requirements as permitted
  by the Plan

  	
   

  	
  . . . the
  Incentive Shares continue to vest according to the original schedule.

  
	
   

  	
   

  	
   

  
	
  If you terminate
  employment before the Vesting Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  . . . due to
  death, disability or retirement under a retirement plan maintained by the
  Company

  	
   

  	
  . . . the
  following percentage of the Incentive Shares will vest:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)    25%,
  if at least 1 but less than 2 years has elapsed since the Grant Date;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)   50%,
  if at least 2 but less than 3 years has elapsed since the Grant Date; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)  75%, if
  at least 3 years has elapsed since the Grant Date.

  
	
   

  	
   

  	
   

  
	
  . . . for any
  reason other than death, disability or retirement

  	
   

  	
  . . . all of the
  Incentive Shares are immediately forfeited.

  

 

 

5.               This Award granted hereunder is subject
to the applicable terms and conditions of the Omnibus Plan, which are
incorporated herein by reference, and in the event of any contradiction,
distinction or differences between this award letter and its summary and the
terms of the Omnibus Plan, the terms of the Omnibus Plan will control.

 

6.               If you have elected to defer some or all of the Bonus
Shares and Incentive Shares under the Company’s Deferred Compensation Plan,
these shares will be credited to a bookkeeping account by Vanguard.  Your Deferred Bonus Shares and Deferred
Incentive Shares are considered “Deferred Stock” under the Omnibus Plan. You
are not permitted to vote your Deferred Bonus Shares or Deferred Incentive
Shares.  Additional restrictions
regarding the distribution of these deferred apply to these shares as set forth
in the Deferred Compensation Plan.  In
the event of a contradiction, distinction or difference between this award
letter and its summary and the terms Deferred Compensation Plan, the terms of the
Deferred Compensation Plan will control.

 

7.               The Company may condition delivery
of certificates for shares upon the prior receipt from Employee of any
undertakings which it may determine are required to assure that the
certificates are being issued in compliance with federal and state securities
laws.

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