Exhibit 4.2
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
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