Document:

Exhibit 10.8

 

AGREEMENT

 

This
Agreement, dated November 30, 2005 (this “Agreement”), is by and
between Genpact Global Holdings SICAR S.a.r.l., a Luxembourg société à responsabilité
limiteé qualifying as a Société d’investissment en capital à risque (the “Company”),
Macro*World Research Corporation, a North Carolina corporation (“WB”),
and Wachovia Corporation, a North Carolina corporation (“Guarantor”),
each of which agrees as follows:

 

RECITALS

 

WHEREAS,
concurrently with the execution and delivery of this Agreement, Genpact
International, a Luxembourg s.a.r.l. (“Genpact International”), WB and
Guarantor are entering into the Master Professional Services Agreement (as
defined herein) for the provision of services by Genpact International and
certain of its Affiliates or other subcontractors as permitted under the Master
Professional Services Agreement to WB and other Eligible Recipients (as defined
herein);

 

WHEREAS, the
Company, GE Capital International (Mauritius), a Mauritius corporation (“GE”),
Wachovia Investment Holdings, LLC, a Delaware limited liability company (“Purchaser”),
and Guarantor have entered into the Securities Purchase Agreement (as defined
herein) pursuant to which GE shall sell to Purchaser on the date hereof, and
Purchaser shall purchase from GE, 76,483 shares of Common Stock (as defined
herein) of the Company;

 

WHEREAS,
concurrently with the execution and delivery of this Agreement, the Company,
Purchaser and the existing shareholders of the Company shall enter into the
Amended and Restated Shareholders Agreement (as defined herein) which, among
other things, shall set forth WB’s rights and obligations as a shareholder of
the Company; and

 

WHEREAS, the
Company, WB and Guarantor desire to enter into this Agreement in order to set
forth the terms and conditions of their agreement with regard to certain
matters not addressed in the Master Professional Services Agreement, the
Securities Purchase Agreement or the Amended and Restated Shareholders
Agreement.

 

NOW,
THEREFORE, in consideration of the premises and mutual agreements and covenants
herein contained, and, intending to be legally bound hereby, the parties hereby
agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01.  Certain Defined Terms.
 Capitalized terms used in this Agreement
shall have the meanings specified below, or elsewhere in, this Agreement;

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

(a)           “2010 FTE
Measurement Date” means December 31, 2010.

 

(a)  “2011
Cash Payment” means the following:

 

(i)      [[[***]]]:

 

(ii)     [[[***]]]:

 

(b)           “Amended and
Restated Shareholders Agreement” means the Amended and Restated
Shareholders Agreement, dated as of the date hereof, by and among Purchaser,
the Company, Genpact Global (Lux) and the existing shareholders listed on the
signature pages thereto, as the same may be amended, modified or
supplemented from time to time in accordance with its terms.

 

(c)           “Applicable FTE
Level” means, (i) when calculating the 2011 Cash Payment, the FTEs as
of the 2010 FTE Measurement Date, and (ii) when calculating the Early
Termination Cash Payment, the FTEs on the MSA Termination Date.

 

(d)           “Applicable
Measurement Date” means (i) the 2010 FTE Measurement Date, when
calculating the 2011 Cash Payment, and (ii) the MSA Termination Date, when
calculating the Early Termination Cash Payment.

 

(e)           “Applicable Share
Amount” means [[[***]]]

 

(f)            “BPO/ITO Company”
means, as of the IPO Date and, with respect to any Replacement Company, as of
the Replacement Date, any publicly-traded company on a United States or major
international stock exchange or trading system whose primary business is the
provision of business process outsourcing or information technology outsourcing
services and that has a sufficient public float that would allow for customary
hedging transactions on the common equity securities of such company.

 

(g)           “Business Day”
means any day that is not a Saturday, a Sunday or other day on which banks are
required or authorized by law to be closed in the City of New York.

 

(h)           “Change of Control”
shall have the meaning set forth in the Amended and Restated Shareholders
Agreement.

 

(i)            “Common Stock”
shall have the meaning set forth in the Amended and Restated Shareholders
Agreement.

 

(j)            “Deemed Yield
Amount” means [[[***]]].

 

(k)           “Early Termination
Cash Payment” means the following: [[[***]]]

 

(l)            “Eligible
Recipients” shall have the meaning set forth in the Master Professional
Services Agreement.

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

(m)          “Fair Market Value”
means the price that would be paid in an arm’s-length transaction to a willing
seller under no compulsion to sell, by a willing buyer under no compulsion to
buy.

 

(n)           “FTE” means [[[***]]].

 

(o)           “Index” means an
index consisting of a number of shares (which could be fractions of shares) of
each Index Company determined by the Company in accordance with Section 2.04(a).  The number of shares of each Index Company to
be included in the Index is subject to the adjustments set forth in Section 2.04.

 

(p)           “Index Companies”
means, as of any date, the BPO/ITO Companies that populate the Index as of such
date.

 

(q)           “Index Differential”
means [[[***]]]%.

 

(r)            “Index
Representation” means, with respect to each Index Company, the number of
shares of such Index Company in the Index as of the IPO Date (as adjusted from
time to time pursuant to Section 2.04).

 

(s)           “Index Value”
means, as of any date, the value of the Index, as determined by the Company
pursuant to Section 2.04(a) (as adjusted from time to time pursuant
to Section 2.04).

 

(t)            “Initial Index
Value” means the Index Value as of the IPO Date, as determined by the
Company pursuant to Section 2.04(a).

 

(u)           “IPO Date” means
the date of the first Qualified Initial Public Offering.

 

(v)           “IPO Price”
means the volume weighted average price per share of Common Stock (or the class
of the securities that is sold in the Qualified Initial Public Offering) for
the twenty consecutive trading days following a Qualified Initial Public
Offering.

 

(w)          “Legal Proceedings”
means any judicial, administrative or arbitral actions, suits or proceedings
(public or private, at law or in equity) by or before a governmental entity.

 

(x)            “Master
Professional Services Agreement” means the Master Professional Services
Agreement, dated as of the date hereof, between the Company, WB and the
Guarantor, as the same may be amended, modified or supplemented from time to
time in accordance with its terms.

 

(y)           “MSA Date” means
the date of the Master Professional Services Agreement.

 

(z)            “MSA Expiration
Date” means November 30, 2012.

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

(aa)         “MSA Termination Date”
means, if, prior to the MSA Expiration Date, the Master Professional Services
Agreement is terminated by (i) WB, for any reason other than a bona fide
termination pursuant to Section 25.1(a), Section 25.5 or Section 25.7
of the Master Professional Services Agreement, or (ii) Genpact
International pursuant to Section 25 of the Master Professional Services
Agreement, the last day Genpact International is providing Services to WB (and
the other Eligible Recipients) under the Master Professional Services Agreement
(other than Termination Assistance Services) (as each term is defined in the
Master Professional Services Agreement).

 

(bb)         “Person” means any
individual, partnership, corporation, trust, limited liability company,
unincorporated organization, governmental entity and any other entity.

 

(cc)         “Purchase Price”
means $90,020,491.

 

(dd)         “Qualified Initial
Public Offering” shall have the meaning set forth in the Amended and
Restated Shareholders Agreement.

 

(ee)         “Sale Price” means
the Fair Market Value of a share of Common Stock at the time of a Change of
Control, as determined in good faith by the board of managers of the Company.

 

(ff)           “Securities Purchase
Agreement” means the Securities Purchase Agreement, dated as of November 30,
2005, by and between the Company, GE, Purchaser and Guarantor, as the same may
be amended, modified or supplemented from time to time in accordance with its
provisions.

 

(gg)         “Share Purchase Price”
means (i) the Purchase Price divided by (ii) the WB Share Amount.

 

(hh)         “Unrecovered Share
Purchase Price” means, as of any date, the excess, if any, of (i) the
sum of the Share Purchase Price plus the Deemed Yield Amount through the date
of determination over (ii) the cumulative amount of cash distributions and
the Fair Market Value (as determined in good faith by the board of managers of
the Company) of non-cash distributions distributed in respect of the WB Shares
through the date of determination, in each case calculated on a per share
basis.

 

(ii)           “WB Share Amount”
means 76,483 shares of Common Stock of the Company, as adjusted from time to
time pursuant to Section 2.06.

 

(jj)           “WB Shares”
means the equity interests in the Company and/or Genpact Global (Lux), as the
case may be, held by Purchaser (and its Permitted Transferees (as defined in
the Amended and Restated Shareholders Agreement)) as of any date.

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

ARTICLE II

CASH PAYMENTS; INDEX

 

Section 2.01.  2011 Cash Payment.
 If a Qualified Initial Public Offering
or a Change of Control shall have occurred prior to the 2010 FTE Measurement
Date, WB shall pay, on January 31, 2011 (or the next Business Day),
subject to Section 2.04(f), the 2011 Cash Payment to the Company by wire
transfer of immediately available United States funds into an account
designated by the Company.

 

Section 2.02.  Early Termination Cash Payment.

 

(a)           If a Qualified Initial
Public Offering or a Change of Control shall have occurred prior to the MSA
Termination Date, WB shall pay on the MSA Termination Date (or the next
Business Day), subject to Section 2.04(f), the Early Termination Cash
Payment to the Company by wire transfer of immediately available United States
funds into an account designated by the Company.

 

(b)           If the MSA Termination
Date shall have occurred on or prior to the date of a Qualified Initial Public
Offering or the date of a Change of Control, on the earlier to occur of a
Qualified Initial Public Offering and a Change of Control, WB shall pay the
Early Termination Cash Payment to the Company by wire transfer of immediately
available United States funds into an account designated by the Company.

 

Section 2.03.  Qualified Initial Public Offering and
Change of Control.  If both a Qualified Initial Public Offering
and a Change of Control shall have occurred prior to any or each of the MSA
Termination Date, and/or the 2010 FTE Measurement Date, the calculations under
Sections 2.01 and 2.02 shall be based on the first to have occurred of a
Qualified Initial Public Offering and a Change of Control.

 

Section 2.04.  Index.

 

(a)           Index Population;
Index Value.  The initial population
of the Index, including the Index Representation, will be selected by the
Company in its sole discretion within ten (10) days after the IPO Date and
shall consist of no more than ten (10) BPO/ITO Companies.  The Initial Index Value shall be determined
by the Company in its sole discretion as of the date the Index is populated by
the Company pursuant to this Section 2.04(a).  The methodology for determining the Initial
Index Value shall be provided to WB by the Company promptly after its
determination.  The Index Value as of any
date shall be determined by the Company using the same methodology as was used
to calculate the Initial Index Value.

 

(b)           Removal of Index
Company.  If an Index Company ceases
to trade for more than twenty (20) consecutive trading days for any reason such
Index Company (the “Removed Company”) will be removed by the Company
from the Index as soon as practicable (the date of such removal, the “Removal
Date”) and the Company shall choose a BPO/ITO Company to replace the
Removed Company on the Removal Date 

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

(the “Replacement Company”).  The Company shall equitably adjust the Index
Value to reflect any change in value of the Removed Company through the Removal
Date and the Replacement Company thereafter.

 

(c)           Adjustment.  The Index Representation of each Index Company
and the Index Value will be equitably adjusted from time to time by the Company
to account for any cash distributions, non-cash distributions, stock splits,
dividends or other events involving Index Companies.

 

(d)           Index Differential
Calculation.  The Company will
deliver a notice to WB promptly following the MSA Termination Date or promptly
following the 2010 FTE Measurement Date, as applicable (in each case, provided
that a Qualified Initial Public Offering shall have occurred prior thereto),
which notice shall set forth the Company’s calculation of the Index
Differential as of the Applicable Measurement Date (the “Index Differential
Calculation”).

 

(e)           Determinations
Binding.  Absent manifest error, any
determination or adjustment made by the Company pursuant to clauses (a), (b), (c) or
(d) of this Section 2.04 shall be binding on the parties hereto.

 

(f)            Dispute Notice.

 

(i)            If WB disputes the
Index Differential Calculation based on manifest error, it shall deliver
written notice (the “Dispute Notice”) to the Company within ten (10) Business
Days after receipt by WB of the Index Differential Calculation, stating that WB
objects to the Index Differential Calculation, specifying in reasonable detail
the basis for such objection and setting forth WB’s proposed modification to
the Index Differential Calculation.  WB
and the Company will attempt to resolve and finally determine and agree upon
the Index Differential Calculation as promptly as practicable.  If WB and the Company are unable to agree
upon the Index Differential Calculation within thirty (30) days after delivery
of the Dispute Notice, a nationally recognized investment banking firm
reasonably acceptable to each of WB and the Company will resolve the items set
forth in the Dispute Notice within thirty (30) days of its engagement.  The fees, costs and expenses of the
investment banking firm will be borne by the party whose positions generally
did not prevail in such determination, as determined by such investment banking
firm, or if the investment banking firm determines that neither party could be
fairly found to be the prevailing party, then such fees, costs and expenses
will be borne 50% by WB and 50% by the Company. 
If WB does not deliver the Dispute Notice to the Company within ten (10) Business
Days after receipt by WB of the Index Differential Calculation, such Index
Differential Calculation will be conclusively presumed to be true and correct
in all respects and will be final and binding upon the parties.

 

(ii)           If, as of January 31,
2011, with respect to the 2011 Cash Payment, or the MSA Termination Date, with
respect to the Early Termination Cash Payment, the Index Differential
Calculation has not yet been finally determined in accordance with this Section 2.04(f),
WB shall be required to make the 2011 Cash 

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

Payment and the Early
Termination Cash Payment, as applicable, in accordance with Sections 2.01 and
2.02, respectively, based upon the Index Differential Calculation set forth in
the Dispute Notice.  Not later than the
third Business Day following the final determination of the Index Differential
Calculation pursuant to this Section 2.04(f), WB shall pay the excess, if
any, of the 2011 Cash Payment and the Early Termination Cash Payment, as
applicable, calculated based on the finally determined Index Differential
Calculation, over the 2011 Cash Payment and the Early Termination Cash Payment,
respectively, previously made by WB.

 

Section 2.05.  Illustration.
 Exhibit A attached hereto
sets forth an illustration of certain of the calculations referred to in this Article II.

 

Section 2.06.  WB Share Amount Adjustment.
 In the event of any merger,
reorganization, consolidation, change of control, recapitalization, stock
split, spin-off or other change in the corporate structure of the Company affecting
the equity interests in the Company and/or Genpact Global (Lux), the WB Share
Amount will be equitably adjusted in good faith by the board of managers of the
Company.

 

Section 2.07.  Sustainability.
 Without limiting WB’s rights and
remedies under the Master Professional Services Agreement, WB shall use
commercially reasonable efforts to maintain the Applicable FTE Level as of the
2010 FTE Measurement Date through March 31, 2012 as long as Genpact
International provides the Services (as defined in the Master Professional
Services Agreement) in accordance with the requirements of the Master
Professional Services Agreement and consistent with the potential expiration of
the Master Professional Services Agreement at the end of the Initial Term
thereof.

 

ARTICLE III

 

GENERAL

 

Section 3.01.  Assignment.  This Agreement shall not be assignable by the
Company without the prior written consent of WB, or by WB without the prior
written consent of the Company.  This
Agreement shall be binding upon, shall inure to the benefit of, and shall be
enforceable by the parties hereto and their permitted successors and assigns.  This Agreement shall continue to be binding
on WB following any transfer by WB of any WB Shares to any other person or
entity.

 

Section 3.02.  Entire Agreement; Amendment.
 This Agreement, including any schedules
and attachments referred to herein and attached hereto, constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.  There are no agreements, representations,
warranties, promises, covenants, commitments or undertakings other than those
expressly set forth in this Agreement.  This
Agreement is not a part of, and shall not be integrated with, the Master
Professional Services Agreement.  This
Agreement supersedes all prior agreements, representations, warranties,
promises, covenants, commitments or undertaking, whether written or oral, with
respect to the subject matter contained in this Agreement.  No 

 

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amendment, modification,
change, waiver, or discharge hereof shall be valid unless in writing and signed
by an authorized representative of the party against which such amendment,
modification, change, waiver, or discharge is sought to be enforced.

 

Section 3.03.  No Offset.  The obligations of WB under this Agreement are
absolute and unconditional and WB shall have no right to set-off, combine,
consolidate or otherwise appropriate or apply against, or on account of, any
obligations or liabilities owed by the Company or any of its affiliates to WB
under this Agreement or otherwise, including, without limitation, any amounts
that may be owed by the Company to WB or any of its Affiliates under the Master
Professional Services Agreement.

 

Section 3.04.  Counterparts.
 This Agreement may be executed in
several counterparts, all of which taken together shall constitute one single
agreement between the parties hereto.

 

Section 3.05.  Heading.  The Article and Section headings and
used herein are for reference and convenience only and shall not be considered
in the interpretation of this Agreement.

 

Section 3.06.  Severability.
 In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid or unenforceable by a court with
jurisdiction over the parties hereto, such provision shall be deemed to be
restated to reflect as nearly as possible the original intentions of the
parties hereto in accordance with applicable law.  The remaining provisions of this Agreement
and the application of the challenged provision to persons or circumstances
other than those as to which it is invalid or unenforceable shall not be
affected thereby, and each such provision shall be valid and enforceable to the
full extent permitted by applicable law.

 

Section 3.07.  Waiver of Default; Cumulative Remedies.

 

(a)           Waiver of Default.
 A delay or omission by either party hereto
to exercise any right or power under this Agreement shall not be construed to
be a waiver thereof.  A waiver by either
of the parties hereto of any of the covenants to be performed by the other or
any breach thereof shall not be construed to be a waiver of any succeeding
breach thereof or of any other covenant herein contained.  All waivers must be in writing and signed by
the party waiving its rights.

 

(b)           Cumulative Remedies.
 All remedies provided for in this
Agreement shall be cumulative and in addition to and not in lieu of any other
remedies available to either party hereto at law, in equity or otherwise.  The election by a party hereto of any remedy
provided for in this Agreement or otherwise available to such party shall not
preclude such party from pursuing any other remedies available to such party at
law, in equity, by contract or otherwise.

 

Section 3.08.  Survival.  This Agreement shall survive the expiration or
termination of the Master Professional Services Agreement.

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

Section 3.09.  Third Party Beneficiaries.
 This Agreement is for the sole benefit
of the parties to this Agreement and their permitted successors and assigns and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

 

Section 3.10.  Notices.  All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by facsimile with
receipt confirmed (followed by delivery of an original via overnight courier
service) or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 3.10):

 

if to the
Company:

 

GENPACT GLOBAL
HOLDINGS SICAR S.A.R.L.

65, Boulevard Grande Duchesse Charlotte

L - 1331

Attention:              Board
of Managers

Facsimile:               352 26 383 509

 

with a copy to
(which shall not constitute notice):

 

GENPACT GLOBAL
HOLDINGS SICAR S.A.R.L. 

1251 Avenue of the Americas

Suite 41

New York, NY 10020

Attention:              Eileen
S. Silvers, Esq.

Facsimile:               (646) 823-0467

 

and

 

PAUL, WEISS, RIFKIND,
WHARTON

& GARRISON LLP

1285 Avenue of
the Americas

New York, NY 10019

Attention:              Kenneth
M. Schneider, Esq.

Facsimile:               (212) 592-0303

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

if to WB or
Guarantor:

 

WACHOVIA
CORPORATION 

301 South College St. NC0630 

Charlotte, NC 28288-0630

Attention:              Sterling
A. Spainhour, Esq.

Facsimile:               (704) 715-4498

 

with a copy to
(which shall not constitute notice):

 

JONES DAY

2727 North Harwood Street 

Dallas, Texas 75201-1515

Attention:              John
A. Funk, Esq.

Facsimile:               (214) 969-5100

 

Failure or
delay in delivering any notice, demand, request, consent, approval, declaration
or other communication to any Person designated to receive a copy thereof shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.

 

Section 3.11.  Governing Law.

 

(a)           This Agreement and
performance under it shall be governed by and construed in accordance with the
applicable laws of the State of New York, without giving effect to the
principles thereof relating to conflicts of laws other than Section 5-1401
of the General Obligations Law of the State of New York.

 

(b)           Each of the parties by
this Agreement irrevocably and unconditionally:

 

(i)            submits for itself and
its property in any Legal Proceeding relating to this Agreement, or for
recognition and enforcement of any judgment in respect hereof, to the exclusive
jurisdiction of the Courts of the State of New York sitting in the County of
New York, the court of the United States of America for the Southern District
of New York, and appellate courts having jurisdiction of appeals from any of
the foregoing, and agrees that all claims in respect of any such Legal
Proceeding shall be heard and determined in such New York State court or, to
the extent permitted by law, in such federal court;

 

(ii)           consents that any such
Legal Proceeding may and shall be brought in such courts and waives any
objection that it may now or hereafter have to the venue or jurisdiction of any
such Legal Proceeding in any such court or that such Legal Proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;

 

(iii)          waives all right to
trial by jury in any Legal Proceeding (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement, or its performance
under or the enforcement of this Agreement;

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

(iv)          agrees that service of
process in any such Legal Proceeding may be effected by mailing a copy of such
process by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such party at its address as provided in Section 3.10;
and

 

(v)           agrees that nothing in
this Agreement shall affect the right to effect service of process in any other
manner permitted by the laws of the State of New York.

 

Section 3.12.  Further Assurances.
 Each party hereto covenants and agrees
that, subsequent to the execution and delivery of this Agreement and without
any additional consideration, each party hereto shall execute and deliver any
further legal instruments and perform any acts that are or may become necessary
to effectuate the purposes of this Agreement.

 

Section 3.13.  Guarantee.  Guarantor hereby guarantees the payment and
performance of all obligations, liabilities and indemnities of WB now existing
or hereafter arising under this Agreement (collectively, the “Obligations”).  This guarantee shall be a full,
unconditional, irrevocable, absolute and continuing guarantee of payment and
performance and not a guarantee of collection, and Guarantor shall remain
liable on the Obligations hereunder until the payment in full of the
Obligations.  Guarantor’s guarantee and
responsibility shall not be discharged, released, diminished, or impaired by
any setoff, counterclaim, defense, act or occurrence which Guarantor may have
against the Company as a result of or arising out of this Agreement.  If under applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws of
general application with respect to creditors, any payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or
returned by the Company, this guarantee shall continue to be effective, or be
reinstated, as the case may be, all as though such payment had not been made.

 

[[[***]]] CONFIDENTIAL
TREATMENT REQUESTED.  CONFIDENTIAL
PORTIONS HAVE BEEN REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

 

 

IN WITNESS
WHEREOF, each of the parties hereto has caused this Agreement to be executed on
its behalf by its officers or representatives thereunto duly authorized, as of
the date first above written.

 

	
   

  	
  GENPACT
  GLOBAL HOLDINGS SICAR

  S.A.R.L.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Eileen S. Silvers

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, Taxes and 

  Corporate Affairs

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MACRO*WORLD
  RESEARCH

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jean E. Davis

  
	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
  WACHOVIA CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas K. Hoops

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

[[[***]]] CONFIDENTIAL TREATMENT REQUESTED.  CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND
FILED SEPARATELY WITH THE COMMISSION.Exhibit 4.2

 

EXECUTION COPY

 

 

 

SHARE EXCHANGE AGREEMENT

 

BY AND BETWEEN

 

CARSDIRECT.COM, INC.,

 

AND

 

IDEALAB HOLDINGS, L.L.C.

 

 

 

March 10, 2005

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  THE TRANSACTION

  	
  2

  
	
  1.1

  	
   

  	
  Transfer of Preferred Shares

  	
  2

  
	
  1.2

  	
   

  	
  Share Exchange

  	
  2

  
	
  ARTICLE 2

  	
  CLOSING; DELIVERIES

  	
  2

  
	
  2.1

  	
   

  	
  Closing Date

  	
  2

  
	
  2.2

  	
   

  	
  Idealab Delivery

  	
  2

  
	
  2.3

  	
   

  	
  The Company Delivery

  	
  2

  
	
  ARTICLE 3

  	
  REPRESENTATIONS AND WARRANTIES OF IDEALAB

  	
  3

  
	
  3.1

  	
   

  	
  Organization and Standing

  	
  3

  
	
  3.2

  	
   

  	
  Corporate Power

  	
  3

  
	
  3.3

  	
   

  	
  Authorization

  	
  3

  
	
  3.4

  	
   

  	
  Old Shares

  	
  3

  
	
  3.5

  	
   

  	
  Investment Representations

  	
  3

  
	
  ARTICLE 4

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  5

  
	
  4.1

  	
   

  	
  Organization and Standing

  	
  5

  
	
  4.2

  	
   

  	
  Corporate Power

  	
  5

  
	
  4.3

  	
   

  	
  Authorization

  	
  5

  
	
  4.4

  	
   

  	
  New Shares and Conversion Shares

  	
  6

  
	
  4.5

  	
   

  	
  Capitalization

  	
  6

  
	
  4.6

  	
   

  	
  Exchange

  	
  6

  
	
  ARTICLE 5

  	
  COVENANTS

  	
  7

  
	
  5.1

  	
   

  	
  Company Stockholder Approvals

  	
  7

  
	
  5.2

  	
   

  	
  Charter Amendment Filing

  	
  7

  
	
  5.3

  	
   

  	
  Restrictive Legend; Notice of Proposed Transfers

  	
  7

  
	
  5.4

  	
   

  	
  Pre-IPO Restrictions on Transferability

  	
  8

  
	
  5.5

  	
   

  	
  IPO Lock-Up Agreements

  	
  8

  
	
  5.6

  	
   

  	
  Post-Lock-Up Expiration Date Restrictions on
  Transferability

  	
  11

  
	
  5.7

  	
   

  	
  Registration Rights

  	
  13

  
	
  5.8

  	
   

  	
  Expenses

  	
  13

  
	
  ARTICLE 6

  	
  CONDITIONS TO CLOSING

  	
  13

  
					

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Conditions to Obligations of Idealab

  	
  13

  
	
  6.2

  	
   

  	
  Conditions to Obligations of the Company

  	
  14

  
	
  ARTICLE 7

  	
  TERMINATION

  	
  15

  
	
  7.1

  	
   

  	
  Termination Events

  	
  15

  
	
  7.2

  	
   

  	
  Effect of Termination

  	
  16

  
	
  ARTICLE 8

  	
  MISCELLANEOUS

  	
  16

  
	
  8.1

  	
   

  	
  Survival

  	
  16

  
	
  8.2

  	
   

  	
  Notices

  	
  16

  
	
  8.3

  	
   

  	
  Governing Law

  	
  17

  
	
  8.4

  	
   

  	
  Entire Agreement

  	
  17

  
	
  8.5

  	
   

  	
  Amendment

  	
  17

  
	
  8.6

  	
   

  	
  Waiver

  	
  17

  
	
  8.7

  	
   

  	
  Invalid Provisions

  	
  18

  
	
  8.8

  	
   

  	
  No Assignment; Binding Effect

  	
  18

  
	
  8.9

  	
   

  	
  Third-Party Beneficiaries

  	
  18

  
	
  8.10

  	
   

  	
  Construction

  	
  18

  
	
  8.11

  	
   

  	
  Incorporation by Reference

  	
  18

  
	
  8.12

  	
   

  	
  Headings

  	
  18

  
	
  8.13

  	
   

  	
  Counterparts

  	
  18

  
					

 

ii

 

SHARE EXCHANGE AGREEMENT

 

This SHARE EXCHANGE AGREEMENT
(as it may be amended, modified or supplemented from time to time, this “Agreement”)
is entered into as of March 10, 2005, by and between CARSDIRECT.COM, INC., a
Delaware corporation (the “Company”) and IDEALAB HOLDINGS, L.L.C., a
Delaware limited liability company (“Idealab”).

 

RECITALS

 

WHEREAS, Idealab desires to
exchange (the “Share Exchange”) 4,400,000 shares of the Company’s Series
D Preferred Stock held by it (the “Old Shares”) for 4,000,000 shares of
the Company’s Class B Common Stock to be issued to it by the Company (the “New
Shares”);

 

WHEREAS, the respective board
of directors or managers of the Company and Idealab has or have each determined
that this Agreement and the transactions contemplated hereby, including the
Share Exchange, are advisable and in the best interests of it and its
equityholders;

 

WHEREAS, the respective board
of directors or managers of the Company and Idealab has or have each approved
and adopted this Agreement and, upon the terms and subject to the conditions
set forth herein, approved the transactions contemplated hereby, including the
Share Exchange;

 

WHEREAS, in connection with the
transactions contemplated by this Agreement, including the Share Exchange, the
board of directors of the Company has, upon the terms and subject to the
conditions set forth herein, (a) approved, adopted and deemed advisable an
amendment to the Company’s Amended and Restated Certificate of Incorporation in
the form attached hereto as Exhibit A (the “Charter Amendment”) that
would (i) increase the authorized number of shares of the Company’s Class B
Common Stock by 4,000,000 and (ii) reduce the minimum percentage of outstanding
capital stock of the Company that the “Idealab Related Parties” (as such term
is defined in the Company’s Amended and Restated Certificate of Incorporation)
must hold and have the right to vote from 20% of the outstanding shares of
capital stock of the Company to 15%, and (b) approved and deemed advisable the
issuance of the New Shares to Idealab;

 

WHEREAS, the board of directors
of the Company, pursuant to the authority granted to it by Section 1 of the
CarsDirect.com, Inc. Fifth Amended and Restated Investor Rights Agreement,
dated as of February [    ], 2001 (the “IRA”), has
authorized the shares of the Company’s Class A Common Stock issued or issuable
upon conversion of the New Shares (the “Conversion Shares”) to be “Registrable
Securities” under such agreement; and

 

WHEREAS, the board of directors
of the Company has determined that the New Shares are being issued to Idealab
pursuant to a transaction involving a corporate partner primarily for purposes
other than raising capital.

 

NOW, THEREFORE, in
consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and for other

 

1

 

good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound hereby, agree as
follows:

 

ARTICLE 1

 

THE TRANSACTION

 

1.1                                 Transfer
of Preferred Shares. At the Closing (as defined in Section 2.1 below) and
on the terms and subject to the conditions set forth herein, Idealab shall transfer
to the Company all rights, title and interest to and in the Old Shares, free
and clear of any and all liens, claims, charges, security interests, pledges,
assessments or other encumbrances or adverse claims or interests of any nature.
Upon such transfer, each such Old Share shall no longer be outstanding and
shall automatically be retired and canceled, and Idealab shall cease to have
any rights with respect thereto, except the right to receive New Shares as set
forth in Section 1.2 below.

 

1.2                                 Share
Exchange. At the Closing and on the terms and subject to the conditions set
forth herein, the Company shall issue to Idealab the New Shares in exchange for
the Old Shares.

 

ARTICLE 2

 

CLOSING; DELIVERIES

 

2.1                                 Closing
Date. Unless this Agreement shall have been terminated pursuant to Section
7.1 below, and subject to the satisfaction or waiver of the conditions set
forth in ARTICLE 6 below, the closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Munger,
Tolles & Olson LLP in Los Angeles, California at such time and place as the
parties hereto may mutually agree (the date of the Closing is hereinafter
referred to as the “Closing Date”).

 

2.2                                 Idealab
Delivery. At the Closing, Idealab shall deliver to the Company a stock
certificate or stock certificates representing the Old Shares, duly endorsed in
negotiable form or accompanied by stock powers duly endorsed in blank, with all
necessary stock transfer and other documentary stamps requested by the Company.

 

2.3                                 The
Company Delivery. At the Closing, following the delivery set forth in
Section 2.2 above, the Company shall deliver to Idealab a stock certificate or
stock certificates in Idealab’s name evidencing the New Shares, stamped or
otherwise imprinted with a legend as set forth in Section 5.3 below.

 

2

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF IDEALAB

 

Idealab hereby represents and
warrants to the Company as follows:

 

3.1                                 Organization
and Standing. Idealab is a limited liability company duly organized,
validly existing and in good standing under, and by virtue of, the laws of the
State of Delaware. Idealab has all requisite corporate power and authority to
own, operate and lease its assets and properties, and to carry on its business
as presently conducted.

 

3.2                                 Corporate
Power. Idealab has all requisite legal and corporate power and authority to
execute and deliver this Agreement, to deliver the Old Shares to the Company in
exchange for New Shares hereunder, to carry out and perform its obligations
under the terms of this Agreement, and to consummate the transactions
contemplated by this Agreement.

 

3.3                                 Authorization.
All corporate action on the part of Idealab, its managers and members necessary
for the authorization, execution, delivery and performance of this Agreement by
Idealab, the delivery of the Old Shares to the Company, and the performance of
Idealab’s obligations under this Agreement, has been taken or will be taken
prior to the Closing. This Agreement, when executed and delivered by Idealab,
shall constitute the legal, valid and binding obligations of Idealab,
enforceable against Idealab in accordance with their terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies.

 

3.4                                 Old
Shares. The Old Shares are free and clear of any and all liens, claims,
charges, security interests, pledges, assessments or other encumbrances or
adverse claims or interests of any nature, other than those created by the IRA.

 

3.5                                 Investment
Representations.

 

(a)                                  Preexisting
Relationship; Business or Financial Experience. Idealab, either by reason
of a prior business and/or financial relationship with the Company or by reason
of its business or financial experience, or the business or financial
experience of its professional advisors who are unaffiliated with the Company
and who are not compensated, directly or indirectly, by the Company or its
affiliates, is capable of evaluating the merits and risks of the Share Exchange
and has the capacity to protect its own interests in connection with the Share
Exchange.

 

(b)                                 No
Advertising. Idealab has not seen, received, been presented with or been
solicited by, any leaflet, public promotional meeting, newspaper or magazine
article or advertisement, radio or television advertisement, or any other form
of advertising or general solicitation with respect to the Share Exchange.

 

(c)                                  Investment
Intent. Idealab is acquiring the New Shares (and, if issued, the Conversion
Shares) for its own account for investment purposes only, not as a nominee or
agent, and not with a view to, or for resale in connection with, any

 

3

 

“distribution” thereof for purposes of the Securities
Act of 1933, as amended (the “Securities Act”).

 

(d)                                 Economic
Risk. Idealab acknowledges that its acquisition of the New Shares (and, if
issued, the Conversion Shares) is a speculative investment which involves a
substantial degree of risk of loss by it of its entire investment in the
Company, and is financially able to bear the economic risk of such investment,
including the total loss thereof.

 

(e)                                  Tax
Consequences. Idealab acknowledges that the tax consequences to it of the
Share Exchange will depend upon its particular circumstances, and it will look
solely to, and rely solely upon, it own advisers with respect to the tax
consequences of the Share Exchange.

 

(f)                                    No
Registration. Idealab understands that the New Shares (and, if issued, the
Conversion Shares) have not been registered under the Securities Act or any
other applicable blue sky laws in reliance upon a specific exemption therefrom,
the availability of which may depend upon, among other things, the bona fide
nature of its investment intent as expressed herein and the accuracy of its
representations, warranties and agreements as expressed herein.

 

(g)                                 Restrictions
on Transferability. Idealab understands that the New Shares (and, if
issued, the Conversion Shares) are “restricted securities” under the Securities
Act in that the New Shares (and Conversion Shares) will be acquired from the
Company in a transaction not involving a public offering. Idealab further
understands that the New Shares (and the Conversion Shares) must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption therefrom is otherwise available. Moreover, Idealab understands
that the Company is under no obligation to register the New Shares (or the
Conversion Shares), other than as set forth in this Agreement and the IRA. In
addition, Idealab understands that there will be substantial restrictions on
the transferability of its New Shares (and the Conversion Shares) pursuant to
this Agreement and that the certificate or certificates evidencing the New
Shares (and the Conversion Shares) will be stamped or otherwise imprinted with
a legend restricting transfer except in compliance therewith.

 

(h)                                 No
Public Market. Idealab understands that no public market now exists for any
of the New Shares (or the Conversion Shares) and that the Company has made no
assurances that a public market will ever exist for the New Shares (or the
Conversion Shares).

 

(i)                                     Rule
144. Idealab is aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted
securities” acquired directly or indirectly from the issuer thereof (or from an
affiliate of such issuer) in a non-public offering subject to the satisfaction
of certain conditions.

 

4

 

(j)                                     Methods
of Disposition. Idealab understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Securities
Act or reliance upon an exemption from such registration will be required to
permit a sale of the New Shares (or Conversion Shares), and that,
notwithstanding the fact that Rule 144 is not exclusive, the Staff of the SEC
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and other than pursuant to Rule
144 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.

 

(k)                                  Information
Reviewed. Idealab has received and reviewed all information it considers
necessary or appropriate for deciding whether to consummate the Share Exchange.
Idealab has had an opportunity to ask questions and receive answers from the
Company and its directors, officers, employees, agents and representatives
regarding the terms and conditions of the Share Exchange and regarding the
business, financial affairs and other aspects of the Company, and has further
had the opportunity to obtain all information (to the extent that the Company
possesses or can acquire such information without unreasonable effort or
expense) which Idealab deems necessary to evaluate the investment and to verify
the accuracy of the information otherwise provided to it.

 

ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company hereby represents
and warrants to Idealab as follows:

 

4.1                                 Organization
and Standing. The Company is a corporation duly organized, validly existing
and in good standing under, and by virtue of, the laws of the State of Delaware.
The Company has all requisite corporate power and authority to own, operate and
lease its assets and properties, and to carry on its business as presently
conducted.

 

4.2                                 Corporate
Power. The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement, to issue the New Shares to
Idealab hereunder, to issue the Conversion Shares in accordance with the terms
and conditions of the Company’s Amended and Restated Certificate of
Incorporation, to carry out and perform its obligations under the terms of this
Agreement, and to consummate the transactions contemplated by this Agreement.

 

4.3                                 Authorization.
All corporate action on the part of the Company, its directors and stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company, the authorization, issuance and delivery to Idealab
of the New Shares (and, if issued, the Conversion Shares), and the performance
of the Company’s obligations under this Agreement, has been taken or will be
taken prior to the Closing. This Agreement, when executed and delivered by the
Company, shall constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of

 

5

 

debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.

 

4.4                                 New
Shares and Conversion Shares. The New Shares, when issued in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will have the rights, preferences, privileges and
restrictions described in the Company’s Amended and Restated Certificate of
Incorporation. The Conversion Shares issuable upon conversion of the New Shares
have been duly and validly reserved and, when issued in compliance with the
terms and conditions of the Company’s Amended and Restated Certificate of
Incorporation, will be validly issued, fully paid and nonassessable.

 

4.5                                 Capitalization.
As of December 31, 2004, the authorized capital stock of the Company consists
of (a) 125,000,000 shares of Class A Common Stock (of which 17,720,582 shares
are outstanding), (b) 2,050,000 shares of Class B Common Stock (all of which
are outstanding), (c) 2,000,000 shares of Class C Common Stock (of which 167,918
shares are outstanding), (d) 7,131,179 shares of Class D Common Stock (all of
which are outstanding), (e) 10,000,000 shares of Series A Preferred Stock (all
of which are outstanding), (f) 9,558,572 shares of Series B Preferred Stock (of
which 9,558,571 shares are outstanding), (g) 9,945,000 shares of Series C
Preferred Stock (of which 9,943,004 shares are outstanding), (h) 28,000,000
shares of Series D Preferred Stock (of which 18,168,299 shares are outstanding),
(i) 1,633,608 shares of Series E Preferred Stock (of which 1,570,591 shares are
outstanding), and 3,808,629 shares of Series F Preferred Stock (none of which
is outstanding). As of the date hereof, all issued and outstanding shares of
Common Stock of the Company are duly authorized, validly issued, fully paid and
nonassessable. Upon the filing of the Charter Amendment, the Company shall have
a sufficient number of shares of Class B Common Stock for issuance hereunder. As
of the date hereof, the Company has reserved a sufficient number of shares of
Class A Common Stock for issuance upon conversion of the New Shares. As of the
date hereof, there are outstanding no options, warrants or other rights to
acquire capital stock from the Company, other than (x) options representing in
the aggregate the right to purchase no more than 4,292,615 shares of Class A
Common Stock under the Company’s 1998 Stock Plan and 452,791 shares of Class C
Common Stock under the Company’s 2000 Stock Plan, (y) warrants representing in
the aggregate the right to purchase no more than 2,095,970 shares of Class A
Common Stock, 4,130,710 shares of Series D Preferred Stock and 3,808,629 shares
of Series F Preferred Stock, and (z) rights set forth in (i) the  Company’s Amended and Restated Certificate of
Incorporation, (ii) the IRA, (iii) the Idealab Stockholder Agreement, dated as
of December [    ], 1999 (the “Stockholder Agreement”),
by and between Idealab, a California corporation, and Idealab, on the one hand,
and the Company, on the other hand, and (iv) the CarsDirect.com, Inc. Series B
Preferred Stock Purchase Agreement, dated as of April 12, 1999.

 

4.6                                 Exchange.
Subject to the accuracy of the representations of Idealab in Section 3, the
offer, sale and issuance of the New Shares and the Conversion Shares constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act.

 

6

 

ARTICLE 5

 

COVENANTS

 

5.1                                 Company
Stockholder Approvals. The Company shall, promptly following the execution
of this Agreement, submit the Charter Amendment to the stockholders of the
Company for approval, including for approval by (a) a majority of the
outstanding stock entitled to vote thereon, (b) a majority of the total number
of shares of the Company’s Class A Common Stock, voting as a separate class,
and (c) a majority of the total number of shares of the Company’s Class B
Common Stock, voting as a separate class. The Company shall, promptly following
the execution of this Agreement, seek consents from the holders of a majority
of the Registrable Securities (as defined in the IRA) waiving the Right of
First Refusal set forth in Section 8 of the IRA with respect to the
transactions contemplated by this Agreement. Idealab shall, if requested by the
Company, (x) execute, date and deliver to the Company, in accordance with
Section 228 of the Delaware General Corporation Law, a consent of stockholders
in lieu of meeting approving the Charter Amendment or (y) vote in favor of such
Charter Amendment at any meeting of stockholders at which a vote on the Charter
Amendment takes place.

 

5.2                                 Charter
Amendment Filing. The Company shall, promptly following the approval of the
Charter Amendment by the stockholders of the Company, file the Charter
Amendment with the Secretary of State of the State of Delaware. If such
approval is obtained by consent of stockholders in lieu of meeting, the Company
shall, following such filing, provide prompt notice of the taking of such
corporate action without a meeting to those stockholders who have not consented
in writing and who, if the action had been taken at a meeting, would have been
entitled to notice of such meeting.

 

5.3                                 Restrictive
Legend; Notice of Proposed Transfers.

 

(a)                                  Each
certificate representing New Shares, Conversion Shares or any other securities
issued in respect of such shares upon any stock split, stock dividend,
recapitalization, merger or similar event shall be stamped or otherwise
imprinted with a legend in substantially the following form (in addition to any
other legends required by agreement or by applicable federal or state
securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE TRANSFERRED UNLESS REGISTERED AND
QUALIFIED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR UNLESS, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH REGISTRATION AND
QUALIFICATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED
HEREBY IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS
(INCLUDING CERTAIN RESTRICTIONS, TERMS AND CONDITIONS BINDING UPON TRANSFEREES
OF THESE SECURITIES) WHICH ARE SET

 

7

 

FORTH IN THE SHARE EXCHANGE AGREEMENT, DATED AS OF MARCH [    ],
2005, BY AND BETWEEN THE COMPANY AND IDEALAB HOLDINGS, L.L.C., AS AMENDED, AND,
WHEN EXECUTED, IN ONE OR MORE LOCK-UP AGREEMENTS, AS AMENDED, COPIES OF WHICH
ARE AVAILABLE AT THE PRINCIPAL OFFICE OF THE ISSUER.

 

(b)                                 Idealab
acknowledges that the New Shares, the Conversion Shares and any other
securities issued in respect of such shares upon any stock split, stock
dividend, recapitalization, merger or similar event shall be deemed to be “Restricted
Securities” under the IRA and, upon acceptance of any such shares, agrees to
comply in all respects with the provisions of Section 4 of the IRA with respect
to such shares (except that references in such Section 4 to the legend set
forth in Section 3 of the IRA shall be deemed to be references to the legend
set forth in this Section 5.3).

 

(c)                                  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 on transfer established in this Agreement and
Section 4 of the IRA.

 

5.4                                 Pre-IPO
Restrictions on Transferability. In addition (and not in lieu of) the
restrictions, terms and conditions set forth in Section 5.3 above, Idealab
agrees to be bound by the restrictions on transferability set forth in Section
2.2 of the Stockholder Agreement for a period commencing on the date hereof and
terminating on the date of the Company’s initial public offering (“IPO”);
provided that if the Company’s IPO has not occurred by December 31, 2006
(the “Trigger Date”), Idealab shall be permitted to (a) sell or
otherwise transfer in a private placement up to an aggregate of 25% of the
Company’s capital stock held by Idealab as of the date hereof (calculated on an
as-converted to Class A Common Stock basis and as adjusted for stock splits,
combinations, recapitalizations and the like) and (b) make the sales, transfers
or distributions permitted by Section 5.5(b)(i), (ii), (iv) and (v) hereof.

 

5.5                                 IPO
Lock-Up Agreements.

 

(a)                                  In
connection with the Company’s IPO, Idealab shall, promptly upon request by the
Company or any managing underwriter for the Company’s IPO, enter into a lock-up
agreement (the “Underwriter Lock-Up Agreement”) with the underwriters
for the Company’s IPO prohibiting the sale or other transfer of any securities
of the Company; provided, that,

 

(i)                                     if
the IPO has occurred by the Trigger Date, the Underwriter Lock-Up Agreement is
also entered into, on substantially similar terms, by and among the
underwriters for the Company’s IPO, on the one hand, and the Company’s
directors and executive officers holding at least 90% of the capital stock and
rights to acquire capital stock of the Company (on a fully-diluted and an as-converted
to Class A Common Stock basis) that is held by all of the Company’s directors
and executive officers as a group (excluding Idealab and its affiliates) and,
if requested by a managing underwriter for the Company’s IPO,

 

8

 

each stockholder holding more than 5% of the capital
stock of the Company (on a non-diluted and an as-converted to Class A Common
Stock basis), on the other; provided, further, that if, following
execution thereof, the terms of the Underwriter Lock-Up Agreement are modified
or waived for any signatory other than Idealab, Idealab shall be entitled to
receive a similar modification or waiver, or

 

(ii)                                  if
the IPO occurs after the Trigger Date, the Underwriter Lock-Up Agreement is also
entered into, on substantially similar terms, by and among the underwriters for
the Company’s IPO, on the one hand, and the Company’s directors and executive
officers holding at least 90% of the capital stock and rights to acquire
capital stock of the Company (on a fully-diluted and an as-converted to Class A
Common Stock basis) that is held by all of the Company’s directors and
executive officers as a group (excluding Idealab and its affiliates) and each
stockholder holding more than 5% of the equity of the Company (on a non-diluted
and an as-converted to Class A Common Stock basis), on the other; provided,
further, that if, following execution thereof, the terms of the
Underwriter Lock-Up Agreement are modified or waived for any signatory other
than Idealab, Idealab shall be entitled to receive a similar modification or
waiver.

 

(b)                                 In
connection with the Company’s IPO, Idealab shall, promptly upon request by the
Company, enter into a lock-up agreement (the “Company Lock-Up Agreement”)
with the Company prohibiting the sale or other transfer of any securities of
the Company on terms substantially similar with the Underwriter Lock-Up
Agreement (or, if there is no Underwriter Lock-Up Agreement, on terms customary
for a lock-up agreement with underwriters in connection with an initial public
offering of the size contemplated by the Company); provided, however,
that notwithstanding the term of the Underwriter Lock-Up Agreement (or the term
of a customary lock-up agreement), the term of the Company Lock-Up Agreement
shall commence on the date of the final prospectus for the Company’s IPO and
terminate on the date 18 months following the date of such final prospectus
(such latter date, the “Lock-Up Expiration Date”); provided, further,
that the Company Lock-Up Agreement shall permit, subject to the restrictions,
terms and conditions set forth in Section 5.3 above:

 

(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 Stockholder Agreement) 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 IRA (subject to
the restrictions, terms and conditions set forth in this Agreement and the
IRA);

 

9

 

(iv)                              the
distribution without consideration of capital stock by Idealab to any entity
that controls or is controlled by Idealab (collectively, the “Related
Parties”) and the distribution without consideration of capital stock by
Idealab or by a Related Party to any stockholders, members or partners of such
parties (the “Equityholders”); provided, that (A) 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 this Agreement, the Company
Lock-Up Agreement and the IRA to the same extent as Idealab was bound by such
provisions, and (B) 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
this Agreement or the Company Lock-Up Agreement); except  that, if
the IPO occurs prior to the Trigger Date, Idealab shall, prior to any such
distribution, cause each such Equityholder to agree not to sell any of their
distributed capital stock for a period of one year from the date of the IPO and
not more than one-third (1/3) of their distributed capital stock in each
subsequent thirty (30) day period after such one-year lock-up period;

 

(v)                                 pledges
of capital stock to nationally recognized financial institutions (not
affiliated with Idealab or a Related Party) as collateral in connection with
bona fide lending transactions; and

 

(vi)                              (A) if
the IPO occurs prior to the Trigger Date, one or more private placements of not
more than an aggregate of 25% of the shares of the Company’s capital stock held
by Idealab as of the date hereof (calculated on an as-converted to Class A
Common Stock basis and as adjusted for stock splits, combinations, reorganizations
and the like) or (B) if the IPO occurs after the Trigger Date, one or more
private placements of shares of the Company’s capital stock held by Idealab or
a Related Party of not more than the sum of (x) 43.75% of the shares of the
Company’s capital stock held by Idealab as of the date hereof less (y) the
number of shares sold pursuant to Section 5.4(a) hereof (calculated in each
case on an as-converted to Class A Common Stock basis and as adjusted for stock
splits, combinations, reorganizations and the like); provided, in the
case of clauses (A) and (B), that any such private placement of the shares of
the Company’s capital stock held by Idealab does not result in the Idealab
Related Parties (as such term is defined in the Company’s Amended and Restated
Certificate of Incorporation) collectively ceasing to hold at least 15% of the
shares of outstanding capital stock of the Company (calculated on an
as-converted to Class A Common Stock basis); provided, further,
that, in each case, prior to any such private placement, the transferee shall
have executed and delivered to the

 

10

 

Company, if required by Section 4 of the IRA, 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 IRA (it being understood that
upon transfer to transferee such shares shall no longer be subject to the
restrictions, terms and conditions of this Agreement or the Company Lock-Up
Agreement).

 

(c)                                  Any
attempted sale, transfer or other disposition of capital stock which is not in
compliance with this Section 5.5 shall be null and void.

 

5.6                                 Post-Lock-Up
Expiration Date Restrictions on Transferability.

 

(a)                                  Idealab
agrees that for a period commencing on the Lock-Up Expiration Date and
terminating on the date 18 months following the Lock-Up Expiration Date (such
latter date, the “Post-Lock-Up Expiration Date”) it shall not sell,
transfer, pledge, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise dispose of, any capital stock of the Company; provided,
that subject to the restrictions, terms and conditions set forth in Section 5.3
above, 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 Stockholder Agreement) 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 in compliance
with the volume limitations of Rule 144 of the Securities Act;

 

(iv)                              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 IRA (subject to
the restrictions, terms and conditions set forth in this Agreement and the
IRA);

 

(v)                                 the
distribution without consideration of capital stock by Idealab to a Related
Party and the distribution without consideration of capital stock by Idealab or
by a Related Party to any Equityholder; provided, that (A) 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 this
Agreement, the Company Lock-Up Agreement and the IRA to the same extent as
Idealab was bound by such provisions, and (B) 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

 

11

 

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 referenced 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 this Agreement or the
Company Lock-Up Agreement); except  that, if the IPO occurs prior
to the Trigger Date, Idealab shall, prior to any such distribution, cause each
such Equityholder to agree not to sell any of their distributed capital stock
for a period of one year from the date of the IPO and not more than one-third
(1/3) of their distributed capital stock in each subsequent thirty (30) day
period after such one-year lock-up period;

 

(vi)                              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; and

 

(vii)                           (A)  if the IPO occurs before the Trigger Date,
one or more private placements of not more than an aggregate of 25% of the
shares of the Company’s capital stock held by Idealab as of the date hereof
(calculated on an as-converted to Class A Common Stock basis) or (B) if the IPO
occurs after the Trigger Date, one or more private placements of shares of the
Company’s capital stock held by Idealab or a Related Party of not more than the
sum of (i) 57.85% of the shares of the Company’s capital stock held by Idealab
as of the date hereof less (ii) the number of shares sold pursuant to Section
5.4(a) and 5.5(b)(vi)(B) hereof (calculated in each case on an as-converted to
Class A Common Stock basis and as adjusted for stock splits, combinations,
reorganizations and the like); provided, that, in the case of clauses (A)
and (B) above, any such private placement of the shares of the Company’s
capital stock held by Idealab does not result in the Idealab Related Parties
(as such term is defined in the Company’s Amended and Restated Certificate of
Incorporation) collectively ceasing to hold at least 15% of the shares of
outstanding capital stock of the Company (calculated on an as-converted to
Class A Common Stock basis), provided, further, that, in each
case, prior to any such private placement, the transferee 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 transferee takes such capital stock subject to all
of the restrictions, terms and conditions of the IRA (it being understood that
upon transfer to transferee such shares shall no longer be subject to the
restrictions, terms and conditions of this Agreement or the Company Lock-Up
Agreement).

 

(b)                                 Any
attempted sale, transfer or other disposition of capital stock which is not in
compliance with this Section 5.6 shall be null and void.

 

12

 

5.7                                 Registration
Rights.

 

(a)                                  From
the date hereof until the Post-Lock-Up Expiration Date, Idealab shall not
exercise, or participate in the exercise of, any registration rights set forth
in Section 5.1 or Section 5.3 of the IRA or, other than as set forth in Section
5.7(b) below, any registration rights set forth in Section 5.2 of the IRA.

 

(b)                                 Subject
to the restrictions, terms and conditions imposed by any Underwriter Lock-Up
Agreement, for the period commencing on the date of the final prospectus for
the Company’s IPO and terminating on the Post-Lock-Up Expiration Date, Idealab
may exercise its piggyback registration rights set forth in Section 5.2 of the
IRA with respect to Registrable Securities (as defined in the IRA) held by
Idealab and sell such shares without regard to the restrictions, terms and
conditions imposed by Section 5.5 and Section 5.6; provided, that such
rights are only exercised with respect to 10% or less of Idealab’s and any
Related Party’s then-current holdings of the Company’s capital stock in the
aggregate (calculated on an as-converted to Class A Common Stock basis),
subject to any cutback restrictions set forth in Section 5.2 of the IRA.

 

5.8                                 Expenses.
Whether or not the transactions contemplated hereby are consummated, the
Company and Idealab shall bear one-half of all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, execution and performance of this Agreement (including
the opinion referenced in Section 6.1(a)(viii) below) and the transactions
contemplated hereby, including all costs and expenses incurred by the Company
in obtaining a fairness opinion from a financial advisor reasonably
satisfactory to the Company and to Idealab to the effect that the exchange
ratio of 1.1 shares of the Company’s Series D Preferred Stock for each share of
the Company’s newly issued Class B Common Stock is fair, from a financial point
of view, to the Company.

 

ARTICLE 6

 

CONDITIONS TO CLOSING

 

6.1                                 Conditions
to Obligations of Idealab.

 

(a)                                  The
obligations of Idealab hereunder to consummate the transactions contemplated
hereby are subject to the fulfillment, at or prior to the Closing, of each of
the following conditions (all or any of which may be waived in whole or in part
by Idealab in its sole discretion):

 

(i)                                     the
representations and warranties made by the Company in ARTICLE 4 above shall be
true and correct in all material respects as of the Closing Date as though made
on and as of the Closing Date (except to the extent that such representations
and warranties speak as of another date);

 

(ii)                                  the
Company shall have performed and complied with, in all material respects, the
covenants, agreements and obligations required by this Agreement to be
performed or complied with by the Company at or prior to the Closing;

 

13

 

(iii)                               there
shall not be in effect on the Closing Date any order or law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement;

 

(iv)                              the
special committee of the Board of Directors composed of directors unaffiliated
with Idealab shall have approved this Agreement and the transactions
contemplated by it;

 

(v)                                 the
Company shall have received all necessary stockholder approvals for the Charter
Amendment, and the Company shall have filed the Charter Amendment with the
Secretary of State of the State of Delaware;

 

(vi)                              the
Company shall have obtained consents from the holders of a majority of the
Registrable Securities (as defined in the IRA) waiving the Right of First
Refusal set forth in Section 8 of the IRA with respect to the transactions
contemplated by this Agreement;

 

(vii)                           the
Company shall have delivered to Idealab a certificate signed by the Secretary
of the Company certifying that the Board of Directors, pursuant to the
authority granted to it by Section 1 of the IRA, has authorized the Conversion
Shares to be “Registrable Securities” under the IRA; and

 

(viii)                        Idealab
shall have received from Munger, Tolles & Olson LLP, counsel to the
Company, an opinion addressed to Idealab, dated as of the Closing Date, in
substance reasonably satisfactory to Idealab.

 

(b)                                 Notwithstanding
Section 6.1(a) above, Idealab’s obligations to consummate the transactions
contemplated hereby shall not be relieved by the failure of any of the
foregoing conditions if such failure is the result, directly or indirectly, of
any breach by Idealab of any of its covenants, agreements or obligations under
this Agreement with respect to the transactions contemplated hereby.

 

6.2                                 Conditions
to Obligations of the Company.

 

(a)                                  The
obligations of the Company hereunder to consummate the transactions
contemplated hereby are subject to the fulfillment, at or prior to the Closing,
of each of the following conditions (all or any of which may be waived in whole
or in part by the Company in its sole discretion):

 

(i)                                     the
representations and warranties made by Idealab in ARTICLE 3 above shall be true
and correct in all material respects as of the Closing Date as though made on
and as of the Closing Date;

 

(ii)                                  Idealab
shall have performed and complied with, in all material respects, the
covenants, agreements and obligations required by this Agreement to be
performed or complied with by it at or prior to the Closing;

 

14

 

(iii)                               there
shall not be in effect on the Closing Date any order or law restraining,
enjoining or otherwise prohibiting or making illegal the consummation of the
transactions contemplated by this Agreement; and

 

(iv)                              the
Company shall have received all necessary stockholder approvals for the Charter
Amendment, and the Company shall have filed the Charter Amendment with the
Secretary of State of the State of Delaware.

 

(b)                                 Notwithstanding
Section 6.2(a) above, the Company’s obligations to consummate the transactions
contemplated hereby shall not be relieved by the failure of any of the
foregoing conditions if such failure is the result, directly or indirectly, of
any breach by the Company of any of its covenants, agreements or obligations
under this Agreement with respect to the transactions contemplated hereby.

 

ARTICLE 7

 

TERMINATION

 

7.1                                 Termination
Events. This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, at any time prior to the Closing Date:

 

(a)                                  by
mutual written agreement of the parties hereto;

 

(b)                                 by
Idealab, upon written notification to the Company if there has been a material
breach of any representation, warranty, covenant, agreement or obligation on
the part of the Company and such breach is not curable or, if curable, has not
been cured within ten business days following receipt by the Company of notice
of such breach from Idealab;

 

(c)                                  by
Idealab, upon written notification to the Company if any of the conditions set
forth in Section 6.1(a) above is or becomes impossible to fulfill, other than
as a result, directly or indirectly, of any breach by Idealab of any of its
covenants, agreements or obligations under this Agreement with respect to the
transactions contemplated hereby, and Idealab has not waived such condition;

 

(d)                                 by
the Company, upon written notification to Idealab if there has been a material
breach of any representation, warranty, covenant, agreement or obligation on
the part of Idealab and such breach is not curable or, if curable, has not been
cured within ten business days following receipt by Idealab of notice of such
breach from the Company;

 

(e)                                  by
the Company, upon written notification to Idealab if any of the conditions set
forth in Section 6.2(a) above is or becomes impossible to fulfill, other than
as a result, directly or indirectly, of any breach by the Company of any of its
covenants, agreements or obligations under this Agreement with respect to the
transactions contemplated hereby, and the Company has not waived such
condition; or

 

15

 

(f)                                    by
either the Company or Idealab, upon written notification to the other if the
Closing has not occurred, other than as a result, directly or indirectly, of
any breach by the party seeking to terminate this Agreement of any of its
covenants, agreements or obligations under this Agreement with respect to the
transactions contemplated hereby, on or before April 30, 2005, or such later
date as the parties hereto may mutually agree in writing.

 

7.2                                 Effect
of Termination. If this Agreement is validly terminated pursuant to Section
7.1 above, this Agreement shall forthwith become null and void and of no
further effect, and there will be no liability or obligation on the part of any
party hereto, except that, this Section 7.2 and ARTICLE 8 below, and the
obligations of the parties thereunder, shall survive any such termination.

 

ARTICLE 8

 

MISCELLANEOUS

 

8.1                                 Survival.
The representations and warranties contained in this Agreement shall not
survive the Closing. The covenants contained herein shall survive the Closing
only to the extent that such covenants are to be performed, in whole or in
part, after the Closing.

 

8.2                                 Notices.
All notices, requests and other communications hereunder must be in writing and
shall be deemed to have been duly given only if delivered personally or by
facsimile transmission or internationally recognized courier, to the intended
party at the following address or facsimile number:

 

	
   

  	
  If to Idealab to:

  
	
   

  	
   

  
	
   

  	
  Idealab Holdings, L.L.C.

  
	
   

  	
  130 West Union Street

  
	
   

  	
  Pasadena, CA 91103

  
	
   

  	
  Fax:

  	
  (626) 535-2703

  
	
   

  	
  Attn:

  	
  General Counsel

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Latham & Watkins LLP

  
	
   

  	
  633 West Fifth Street, Suite 4000

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Fax:

  	
  (213) 891-8763

  
	
   

  	
  Attn:

  	
  Jeffrey L. Kateman, Esq.

  
				

 

16

 

	
   

  	
  If to the Company, to:

  
	
   

  	
   

  
	
   

  	
  CarsDirect.com, Inc.

  
	
   

  	
  909 North Sepulvada

  
	
   

  	
  El Segundo, CA 90245

  
	
   

  	
  Fax:

  	
  (310) 280-4335

  
	
   

  	
  Attn:

  	
  General Counsel

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Munger, Tolles & Olson LLP

  
	
   

  	
  355 South Grand Avenue, 35th Floor

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Fax:

  	
  (213) 687-3702

  
	
   

  	
  Attn:

  	
  Robert B. Knauss, Esq.

  
				

 

All such notices, requests and other communications shall (a) if
delivered by facsimile transmission, be deemed given upon electronic
confirmation of receipt, and (b) if delivered personally or by internationally
recognized courier, be deemed given upon actual receipt by the person to
receive delivery. Any party hereto may from time to time change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.

 

8.3                                 Governing
Law. The parties hereto expressly agree that all the terms and conditions
hereof shall be construed under the laws of the State of California applicable
to agreements made and to be performed entirely therein.

 

8.4                                 Entire
Agreement. This Agreement sets forth the full and entire understanding and
agreement of the parties hereto relating to the subject matter hereof and
supersedes all prior understanding and agreements of the parties hereto in
connection therewith.

 

8.5                                 Amendment.
Neither this Agreement nor any term hereof may be amended, supplemented or
modified other than by a written instrument duly executed by the party against
whom enforcement of any such amendment, supplement or modification is sought.

 

8.6                                 Waiver.
Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of the
party waiving such term or condition. No waiver by any party hereto of any term
or condition of this Agreement, in any one or more instances, shall be deemed
to be or construed as a waiver of the same or any other term or condition of
this Agreement on any future occasion. No delay or omission in the exercise of
any power, remedy or right herein provided or otherwise available to any party
will impair or affect the right of such party thereafter to exercise the same. Any
extension of time or other indulgence granted to any party will not otherwise
alter or affect any power, remedy or right with respect to any other party, or
the obligations of the party to whom such extension or indulgence is granted.

 

17

 

8.7                                 Invalid
Provisions. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or
obligations of any party hereto under this Agreement shall not be materially
and adversely affected thereby, (a) such provision shall be fully severable,
(b) this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part hereof, and (c) the
remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom.

 

8.8                                 No
Assignment; Binding Effect. Neither this Agreement nor any right, interest
or obligation hereunder may be assigned by any party hereto without the prior
written consent of the other parties hereto and any attempt to do so shall be
void. Subject to the preceding sentence, this Agreement is binding upon, inures
to the benefit of and is enforceable by the parties hereto and their respective
successors and permitted assigns.

 

8.9                                 Third-Party
Beneficiaries. This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto, their respective successors and permitted
assigns, and nothing herein, express or implied, is intended to or shall confer
upon any other persons any legal or equitable right, benefit, or remedy of any
nature whatsoever, except as expressly set forth herein.

 

8.10                           Construction.
Every term and provision of this Agreement shall be construed simply according
to its fair meaning and not strictly for or against any party hereto.

 

8.11                           Incorporation
by Reference. The exhibit attached hereto and referred to herein is
incorporated in this Agreement by reference.

 

8.12                           Headings.
The headings used in this Agreement have been inserted for convenience of
reference only, and are not intended to describe, interpret, define or limit
the scope, extent or intent of this Agreement or any provision hereof.

 

8.13                           Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

18

 

IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by each party hereto as of the
date first above written.

 

	
   

  	
  THE COMPANY

  
	
   

  	
   

  
	
   

  	
  CARSDIRECT.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert N. Brisco

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IDEALAB

  
	
   

  	
   

  
	
   

  	
  IDEALAB HOLDINGS, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcia Goodstein

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

19

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