10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-51653

DealerTrack Holdings, Inc.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	52-2336218 (I.R.S. Employer Identification Number)
1111 Marcus Ave., Suite M04 Lake Success, NY (Address of principal executive offices)	11042 (Zip Code)

Registrant’s telephone number, including area code: (516) 734-3600

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Exchange Act Rule 12b-2.)

Large Accelerated Filer o               Accelerated Filer þ               Non-Accelerated Filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ

     As of July 31, 2007, 39,914,702 shares of the registrant’s common stock were outstanding.

DEALERTRACK HOLDINGS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements		1
Consolidated Balance Sheets (unaudited)		1
Consolidated Statements of Operations (unaudited)		2
Consolidated Statements of Cash Flows (unaudited)		3
Notes to Consolidated Financial Statements (unaudited)		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3. Quantitative and Qualitative Disclosures About Market Risk		18
Item 4. Controls and Procedures		19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		19
Item 1A. Risk Factors		20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 4. Submission of Matters to a Vote of Security Holders		20
Item 5. Other Information		21
Item 6. Exhibits		22
Signature
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATIONS
EX-10.1: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.2: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.3: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.4: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.5: AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.6: FIRST AMENDMENT TO DIRECTORS' DEFERRED COMPENSATION PLAN
EX-10.7: FIRST AMENDMENT TO EMPLOYEES' DEFERRED COMPENSATION PLAN
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DEALERTRACK HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS
(unaudited)

	June 30,			December 31,
	2007			2006
	(In thousands, except share
	and per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	33,599		$	47,080
Short-term investments		58,000			124,115
Accounts receivable — related party		434			398
Accounts receivable, net of allowances of $4,417 and $4,407 at June 30, 2007 and December 31, 2006, respectively		27,849			19,560
Prepaid expenses and other current assets		4,614			4,694
Deferred tax assets		3,846			2,483
Total current assets		128,342			198,330
Property and equipment, net		10,103			6,157
Software and web site developments costs, net		9,549			10,048
Intangible assets, net		77,324			37,918
Goodwill		115,344			52,499
Restricted cash		540			540
Deferred taxes and other long-term assets		18,728			16,021
Total assets	$	359,930		$	321,513
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,919		$	1,818
Accrued compensation and benefits		8,389			10,111
Accrued other		17,325			11,978
Deferred revenue		4,213			3,166
Due to acquirees and other current liabilities		2,623			2,440
Total current liabilities		35,469			29,513
Due to acquirees — long-term		2,336			2,982
Deferred taxes and other long-term liabilities		12,997			4,681
Total liabilities		50,802			37,176
Commitments and contingencies (Note 14)
Stockholders’ equity
Preferred stock, $0.01 par value; 10,000,000 shares authorized and no shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively		—			—
Common stock, $0.01 par value; 175,000,000 shares authorized; 39,706,368 and 39,703,333 shares issued and outstanding at June 30, 2007, respectively; and 39,358,769 and 39,357,550 shares issued and outstanding at December 31, 2006, respectively		397			393
Treasury stock, at cost, 3,035 and 1,219 shares at June 30, 2007 and December 31, 2006, respectively		(85	)		(31	)
Additional paid-in capital		297,157			289,490
Deferred stock-based compensation (APB 25)		(3,170	)		(4,322	)
Accumulated other comprehensive income (foreign currency)		4,950			37
Retained earnings (accumulated deficit)		9,879			(1,230	)
Total stockholders’ equity		309,128			284,337
Total liabilities and stockholders’ equity	$	359,930		$	321,513

The accompanying notes are an integral part of these consolidated financial statements.

1

DEALERTRACK HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
	(In thousands, except share and						(In thousands, except share and
	per share amounts)						per share amounts)
Revenue
Net revenue(1)	$	58,507		$	43,414		$	110,232		$	81,349
Operating costs and expenses
Cost of revenue(2)		24,158			17,289			45,458			32,408
Product development(2)		2,281			2,361			4,661			4,563
Selling, general and administrative(2)		22,313			16,474			43,561			32,443
Total operating costs and expenses		48,752			36,124			93,680			69,414
Income from operations		9,755			7,290			16,552			11,935
Interest income		1,220			785			2,751			1,748
Interest expense		(73	)		(69	)		(135	)		(141	)
Income before provision for income taxes		10,902			8,006			19,168			13,542
Provision for income taxes, net		(4,618	)		(3,351	)		(8,059	)		(5,451	)
Net income	$	6,284		$	4,655		$	11,109		$	8,091
Basic net income per share	$	0.16		$	0.13		$	0.29		$	0.23
Diluted net income per share	$	0.15		$	0.13		$	0.27		$	0.22
Weighted average shares outstanding		38,748,405			35,402,769			38,685,500			35,335,493
Weighted average shares outstanding assuming dilution		40,569,993			36,933,366			40,437,270			36,878,342

(1) Related party revenue for the three and six months ended June 30, 2007 and 2006 was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Related party revenue	$	622	$	11,067	$	1,242	$	20,319

(2) Stock-based compensation expense recorded for the three and six months ended June 30, 2007 and 2006 was classified as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Cost of revenue	$	476	$	271	$	890	$	524
Product development		153		90		289		168
Selling, general and administrative		1,817		1,036		3,396		1,929

The accompanying notes are an integral part of these consolidated financial statements.

2

DEALERTRACK HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Six Months Ended
	June 30,
	2007			2006
	(In thousands)
Cash flows from operating activities
Net income	$	11,109		$	8,091
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		16,944			12,239
Deferred tax benefit		(3,129	)		(2,548	)
Amortization of stock-based compensation		4,575			2,621
Provision for doubtful accounts and sales credits		2,388			2,321
Loss (gain) on sale of property and equipment		17			(47	)
Amortization of deferred interest		87			70
Deferred compensation		145			99
Amortization of bank financing costs		61			63
Stock-based compensation windfall tax benefit		(1,663	)		(1,072	)
Changes in operating assets and liabilities, net of effects of acquisitions
Trade accounts receivable		(8,137	)		(1,362	)
Accounts receivable — related party		(37	)		(1,651	)
Prepaid expenses and other current assets		1,086			891
Accounts payable and accrued expenses		(3,620	)		(3,247	)
Accounts payable — related party		—			(1,844	)
Deferred revenue and other current liabilities		1,048			349
Other long-term liabilities		(259	)		341
Deferred rent		94			152
Other assets		(171	)		11
Net cash provided by operating activities		20,538			15,477
Cash flows from investing activities
Capital expenditures		(3,038	)		(1,691	)
Funds released from escrow and other restricted cash		—			47
Purchase of short-term investments		(227,850	)		(76,250	)
Sale of short-term investments		293,965			15,750
Capitalized software and web site development costs		(2,053	)		(1,891	)
Proceeds from sale of property and equipment		7			50
Payment for net assets acquired, net of acquired cash		(99,387	)		(31,203	)
Net cash used in investing activities		(38,356	)		(95,188	)
Cash flows from financing activities
Principal payments on capital lease obligations		(5	)		(250	)
Proceeds from the exercise of employee stock options		1,552			901
Proceeds from employee stock purchase plan		823			370
Purchase of treasury stock		(54	)		—
Principal payments on notes payable		(211	)		(210	)
Stock-based compensation windfall tax benefit		1,663			1,072
Other		(1	)		12
Net cash provided by financing activities		3,767			1,895
Net decrease in cash and cash equivalents		(14,051	)		(77,816	)
Effect of exchange rate changes on cash and cash equivalents		570			71
Cash beginning of period		47,080			103,264
Cash end of period	$	33,599		$	25,519
Supplemental disclosure
Cash paid for:
Income taxes	$	11,181		$	7,629
Interest		48			38
Non-cash investing and financing activities:
Acquisition of capitalized software through note payable		—			2,608
Accrued capitalized hardware and software		609			1,132
Global Fax purchase price adjustment		—			400
Goodwill adjustment		72			382
Deferred compensation reversal to equity		211			209

The accompanying notes are an integral part of these consolidated financial statements.

3

DEALERTRACK HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Business Description

     DealerTrack Holdings, Inc. is a leading provider of on-demand software, network and data solutions for the automotive retail industry in the United States. Utilizing the Internet, we have built a network connecting automotive dealers with banks, finance companies, credit unions and other financing sources, and other service and information providers, such as aftermarket providers and the major credit reporting agencies. We have established a network of active relationships in the United States, which as of June 30, 2007, consisted of over 22,000 dealers, including over 90% of all franchised dealers; over 375 financing sources; including the 20 largest independent financing sources and a number of other service and information providers to the automotive retail industry. Our credit application processing product enables dealers to automate and accelerate the indirect automotive financing process by increasing the speed of communications between these dealers and their financing sources. We have leveraged our leading market position in credit application processing to address other inefficiencies in the automotive retail industry value chain. We believe our proven network provides a competitive advantage for distribution of our software and data solutions. Our integrated subscription-based software products and services enable our dealer customers to manage their dealership data and operations, receive valuable consumer leads, compare various financing and leasing options and programs, sell insurance and other aftermarket products, analyze inventory, document compliance with certain laws and execute financing contracts electronically. We have also created efficiencies for financing source customers by providing a comprehensive digital and electronic contracting solution. In addition, we offer data and other products and services to various industry participants, including lease residual value and automobile configuration data.

2. Basis of Presentation

     The accompanying unaudited consolidated financial statements as of June 30, 2007 and for the three and six months ended June 30, 2007 and 2006 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required for a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments, consisting only of normal and recurring adjustments, considered necessary for a fair statement have been included in the accompanying unaudited consolidated financial statements. All intercompany transactions and balances have been eliminated in consolidation. Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2007. The December 31, 2006 balance sheet information has been derived from the audited 2006 financial statements, but does not include all disclosures required for a complete set of financial statements in accordance with accounting principles generally accepted in the United States of America. For further information, please refer to the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2006, filed with the Securities and Exchange Commission on March 16, 2007 and amended on April 30, 2007.

     Included in our provision for income taxes for the three and six months ended June 30, 2006 is approximately $0.4 million and $0.2 million, respectively, of additional tax expense that relates to prior periods. This additional tax expense relates to an adjustment in our calculation of income taxes associated with our Canadian subsidiary, DealerTrack Canada, Inc. (formerly known as DealerAccess Canada Inc.).

3. Net Income per Share

     For the three and six months ended June 30, 2007 and 2006, we computed net income per share in accordance SFAS No. 128, Earnings per Share. Under the provisions of SFAS No. 128, basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding, assuming dilution, during the period. The diluted earnings per share calculation assumes that (i) all stock options, which are in the money are exercised at the beginning of the period and the proceeds used by us to purchase shares at the average market price for the period and (ii) if applicable, unvested awards that are considered to be contingently issuable shares because they contain either a performance or market condition will be included in diluted earnings per share in accordance with SFAS No. 128 if dilutive and if their conditions (a) have been satisfied at the reporting date or (b) would have been satisfied if the reporting date was the end of the contingency period.

4

     The following table sets forth the computation of basic and diluted net income per share (in thousands, except share and per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Numerator:
Net income	$	6,284	$	4,655	$	11,109	$	8,091
Denominator:
Weighted average common stock outstanding (basic)		38,748,405		35,402,769		38,685,500		35,335,493
Common equivalent shares from options to purchase common stock and restricted common stock (1)		1,821,588		1,530,597		1,751,770		1,542,849

Weighted average common stock outstanding (diluted)		40,569,993		36,933,366		40,437,270		36,878,342
Basic net income per share	$	0.16	$	0.13	$	0.29	$	0.23
Diluted net income per share	$	0.15	$	0.13	$	0.27	$	0.22

(1) In accordance with SFAS No. 128, for the three and six months ended June 30, 2007, we have excluded 290,000 contingently issuable shares from diluted weighted average common stock outstanding as their contingent conditions (a) have not been satisfied at the reporting date nor (b) would have been satisfied if the reporting date was the end of the contingency period. These contingent restricted common stock awards were not in effect for the six months ended June 30, 2006 (Refer to Note 13 for further information).

     The following is a summary of the securities outstanding during the respective periods that have been excluded from the diluted net income per share calculation because the effect would have been antidilutive:

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Stock options		488,966		738,450		431,245		738,450
Restricted common stock		—		28,000		101,300		154,000
Total		488,966		766,450		532,545		892,450

4. Comprehensive Income

     The components of comprehensive income were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Net income	$	6,284	$	4,655	$	11,109	$	8,091
Foreign currency translation adjustments		4,182		110		4,913		100
Total	$	10,466	$	4,765	$	16,022	$	8,191

5. Stock-Based Compensation Expense

     We have three types of stock-based compensation programs: stock options, restricted stock, and an employee stock purchase plan (ESPP). For further information see Notes 2 and 12 included in our Annual Report on Form 10-K for the year ended December 31, 2006.

     The following summarizes stock-based compensation expense recognized for the three and six months ended June 30, 2007 and 2006 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Stock options	$	1,473	$	1,015	$	2,698	$	1,930
Restricted common stock		904		342		1,732		626
ESPP		69		40		145		65
Total	$	2,446	$	1,397	$	4,575	$	2,621

     Stock-based compensation expense recognized for the three months ended June 30, 2007 was $2.4 million, of which $1.9 million was in accordance with FAS 123R and $0.5 million in accordance with APB 25. Stock-based compensation expense recognized for the three months ended June 30, 2006 was $1.4 million, of which $0.8 million was in accordance with FAS 123R and $0.6 million in accordance with APB 25.

     Stock-based compensation expense recognized for the six months ended June 30, 2007 was $4.6 million, of which $3.5 million was in accordance with FAS 123R and $1.1 million in accordance with APB 25. Stock-based compensation expense recognized for the six months ended June 30, 2006 was $2.6 million, of which $1.4 million was in accordance with FAS 123R and $1.2 million in accordance with APB 25.

     Refer to Note 13 for further information regarding our long-term incentive equity awards.

5

6. Business Combinations

Curomax Acquisition

     On February 1, 2007, we completed the purchase of all of the outstanding shares of Curomax Corporation and its subsidiaries (Curomax) pursuant to a shares purchase agreement, made as of January 16, 2007, for a cash purchase price of approximately $39.0 million (including estimated direct acquisition and restructuring costs of approximately $1.8 million). Under the terms of the shares purchase agreement, we have future contingent payment obligations of approximately $2.1 million in cash to be paid out based upon the achievement of certain operational objectives over the subsequent twenty-four months. The additional purchase consideration, if any, will be recorded as additional goodwill on our consolidated balance sheet when the contingency is resolved. As of June 30, 2007, none of these contingencies were resolved.

     Curomax offers an online financing portal similar to ours and DealerAccess. This acquisition will further enhance our ability to provide leading technology solutions to the Canadian automotive finance industry and expand our dealer and financing source customer base in Canada.

     In connection with the Curomax business combination we originally recorded in purchase accounting an estimated restructuring liability of $1.5 million relating to employee severance and related benefit costs. During the second quarter, we paid $0.4 million of employee severance and related benefit costs and also recorded an adjustment of $0.2 million to reduce the restructuring liability and the cost of the purchase. As of June 30, 2007, we have not yet completed all of the workforce reductions and the remaining liability is $0.9 million, which is expected to be paid by December 31, 2007. The estimated liability may change subsequent to its initial recognition, requiring adjustments to the purchase price recorded.

     This acquisition was recorded under the purchase method of accounting, resulting in the total purchase price being allocated to the assets acquired and liabilities assumed according to their estimated fair values at the date of acquisition as follows (in thousands):

Current assets	$	2,454
Property and equipment		339
Intangible assets		21,670
Goodwill		19,926
Total assets acquired		44,389
Total liabilities assumed		(5,424	)
Net assets acquired	$	38,965

     Total liabilities assumed includes a $3.9 million deferred tax liability that relates to the amortization of acquired intangibles.

     We allocated the amounts to intangible assets and goodwill based on fair value appraisals as follows: approximately $17.2 million of the purchase price has been allocated to customer contracts, $0.8 million to purchased technology and $3.7 million to non-compete agreements. These intangibles are being amortized on a straight-line basis over one to four years based on each intangible’s estimated useful life. We also recorded approximately $19.9 million in goodwill, which represents the remainder of the excess of the purchase price over the fair value of the net assets acquired.

     The results of Curomax were included in our consolidated statements of operations from the date of acquisition.

Arkona Acquisition

     On June 6, 2007, we completed the purchase of all of the outstanding shares of Arkona, Inc. (Arkona) for a cash purchase price of approximately $59.8 million (including estimated direct acquisition costs of approximately $0.9 million). This acquisition expands our product suite with an on-demand dealership management system that can be utilized by franchised, independent and other specialty retail dealers.

     This acquisition was recorded under the purchase method of accounting, resulting in the total purchase price being allocated to the assets acquired and liabilities assumed according to their estimated fair values at the date of acquisition as follows (in thousands):

Current assets	$	2,743
Property and equipment		2,065
Other assets		191
Intangible assets		22,988
Goodwill		40,792
Total assets acquired		68,779
Total liabilities assumed		(8,930	)
Net assets acquired	$	59,849

6

     Total liabilities assumed includes a $9.2 million deferred tax liability that relates to the amortization of acquired intangibles offset by a $5.3 million deferred tax asset that relates primarily to acquired net operating loss carryovers.

     We are in the process of finalizing the fair value assessment for the acquired identifiable assets, which is expected to be completed by December 31, 2007, and accordingly the related purchase accounting is not final as of June 30, 2007. We anticipate that these identifiable intangibles will include customer contracts, technology and non-compete agreements. As of June 30, 2007, we allocated $23.0 million to identifiable intangible assets and $40.8 million to goodwill utilizing an estimated useful life for the identifiable intangibles of five years. The amortization expense for the Arkona acquired intangible assets is being recorded to cost of revenue. The final allocation may be materially different from the preliminary allocation. For every 5% of the excess purchase price that our final assessment allocates toward additional identifiable intangibles rather than goodwill, amortization expense will increase approximately $0.4 million per annum. In addition, for every one year that the average useful life of the identifiable intangibles is less than the average five year estimate that was utilized in this preliminary assessment, our amortization expense will increase by approximately $1.1 million per annum. Conversely, for every one year that the average useful life of the identifiable intangibles exceeds the average five year estimate used for the purposes of the preliminary assessment, our amortization expense will be reduced by approximately $0.8 million per annum.

     The results of Arkona were included in our consolidated statements of operations from the date of acquisition.

Unaudited Pro Forma Summary of Operations

     The accompanying unaudited pro forma summary presents our consolidated results of operations as if the acquisitions of Arkona Inc., Curomax Corporation, DealerWare L.L.C., and Global Fax, L.L.C. had been completed as of the beginning of each period presented. The pro forma information does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of our future consolidated results.

	Three Months Ended June 30,
	2007		2006
	(Unaudited)
	(In thousands, except per share data)
Net revenue	$	61,724	$	50,546
Net income	$	4,953	$	1,736
Basic net income per share	$	0.13	$	0.05
Diluted net income per share	$	0.12	$	0.05

	Six Months Ended June 30,
	2007		2006
	(Unaudited)
	(In thousands, except per share data)
Net revenue	$	118,277	$	96,705
Net income	$	7,919	$	2,200
Basic net income per share	$	0.20	$	0.06
Diluted net income per share	$	0.20	$	0.06

7. Related Party Transactions

Service Agreement with Related Parties — Financing Sources

     We have entered into agreements with the automotive financing source affiliates of certain of our former stockholders. Each has agreed to subscribe to and use our network to receive credit application data and transmit credit decisions electronically and several have subscribed to our data services and other products. Under the agreements to receive credit application data and transmit credit decisions electronically, the automotive financing source affiliates of these current and former stockholders have “most favored nation” status, granting each of them the right to no less favorable pricing terms for certain of our products and services than those granted by us to other financing sources, subject to limited exceptions. The agreements of the automotive financing source affiliates of these stockholders also restrict our ability to terminate such agreements.

     The total amount of net revenue from these related parties for the three and six months ended June 30, 2006 was $10.2 million and $18.8 million, respectively.

     As a result of our October 12, 2006 public offering, we no longer have a financing source as a related party.

Service Agreements with Related Parties — Other Service and Information Providers

7

     During 2003, we entered into several agreements with a stockholder and its affiliates that is a service provider for automotive dealers. Automotive dealers may utilize our network to access customer credit reports and customer leads provided by or through this related party. We earn revenue, subject to certain maximums where applicable, from this related party for each credit report or customer lead that is accessed using our web-based service. The total amount of net revenue from this related party for the three months ended June 30, 2007 and 2006 was $0.6 million and $0.8 million, respectively. The total amount of net revenue from this related party for the six months ended June 30, 2007 and 2006 was $1.2 million and $1.5 million, respectively. The total amount of accounts receivable from this related party as of June 30, 2007 and December 31, 2006 was $0.4 million and $0.4 million, respectively.

8. Property and Equipment

     Property and equipment are recorded at cost and consist of the following (dollars in thousands):

	Estimated
	Useful Life		June 30,			December 31,
	(Years)		2007			2006
Computer equipment		3	$	14,413		$	9,671
Office equipment		5		1,338			1,245
Furniture and fixtures		5		1,943			1,627
Leasehold improvements		5-7		836			636
				18,530			13,179
Less: Accumulated depreciation and amortization				(8,427	)		(7,022	)
Total property and equipment, net			$	10,103		$	6,157

9. Intangible Assets

     Intangible assets principally are comprised of customer contracts, database, trade names, licenses, patents, partner agreements and non-compete agreements. The amortization expense relating to intangible assets is recorded as a cost of revenue. The gross book value, accumulated amortization and amortization periods of the intangible assets were as follows (dollars in thousands):

	June 30, 2007					December 31, 2006
	Gross					Gross					Amortization
	Book		Accumulated			Book		Accumulated			Period
	Value		Amortization			Value		Amortization			(Years)
Customer contracts	$	38,470	$	(16,028	)	$	19,308	$	(10,904	)		1-4
Database		16,433		(8,092	)		15,900		(6,666	)		3-6
Trade names		10,500		(3,955	)		10,500		(3,428	)		5-10
Patents/technology		16,880		(11,720	)		16,031		(8,806	)		1-5
Non-compete agreement		11,578		(3,258	)		3,308		(1,738	)		2-5
Partner agreements		4,400		(618	)		4,400		(206	)		5
Arkona preliminary intangible allocation		22,988		(383	)		—		—			5
Other		900		(771	)		900		(681	)		5
Total	$	122,149	$	(44,825	)	$	70,347	$	(32,429	)

     Amortization expense that will be charged to income for the remaining period of 2007, based on the June 30, 2007 book value, is approximately $14.3 million.

     Amortization expense that will be charged to income for the subsequent five years and thereafter is estimated, based on the June 30, 2007 book value, to be $21.3 million in 2008, $16.0 million in 2009, $13.1 million in 2010, $6.5 million in 2011, $2.6 million in 2012 and thereafter $1.7 million.

     On May 4, 2007, we completed an asset acquisition from Manheim Auction, Inc. of a non-compete agreement, customer list and a three-year data license for approximately $5.1 million. Based upon a fair value assessment we allocated $4.2 million to the non-compete agreement, $0.4 million to the customer list and $0.5 million to the data license. All three intangibles will be amortized to cost of revenue over three years.

     Included in the gross book value as of June 30, 2007, is $1.9 million in foreign currency translation.

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10. Goodwill

The change in carrying amount of goodwill for the six months ended June 30, 2007 is as follows (in thousands):

Balance as of January 1, 2007	$	52,499
Acquisition of Curomax		19,926
Impact of change in Canadian dollar exchange rate		2,055
Acquisition of Arkona (preliminary allocation)		40,792
Other		72
Balance as of June 30, 2007	$	115,344

11. Other Accrued Liabilities

     Following is a summary of the components of other accrued liabilities (in thousands):

	June 30,		December 31,
	2007		2006
Professional fees	$	1,644	$	1,167
Software licenses		1,636		1,184
Customer deposits		2,666		2,685
Revenue share		1,620		1,926
Servicing costs		40		128
Public company costs		208		625
Severance		385		489
Taxes		303		1,774
Computer equipment		177		—
Acquisition costs		4,698		49
Other		3,948		1,951
Total other accrued liabilities	$	17,325	$	11,978

12. Income Taxes

     We adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109 of FIN 48, on January 1, 2007. FIN 48 specifies the way companies are to account for uncertainty in income tax reporting, and prescribes the methodology for recognizing, reversing, and measuring the tax benefits of a tax position taken, or expected to be taken, in a tax return. Our adoption of FIN 48 did not result in any change to the level of our liability for uncertain tax positions, and there was no adjustment to our retained earnings for the cumulative effect of an accounting change. At January 1, 2007, the total liability for uncertain tax positions recorded in our balance sheet in accrued other liabilities was $0.4 million. Approximately $0.3 million of the liability for uncertain tax positions would affect our effective rate upon the resolution of uncertain tax positions. We settled $0.3 million of these liabilities during the six months ended June 30, 2007. We do not expect any significant changes to our uncertain tax positions during the next six months.

     We file a consolidated U.S. income tax return and tax returns in various state and local jurisdictions. Certain of our subsidiaries also file income tax returns in Canada. The Internal Revenue Service has completed its examination of our federal income tax returns through 2004.

     Interest and penalties, if any, related to tax positions taken in our tax returns are recorded in general and administrative expenses in our consolidated statement of operations. At January 1, 2007, no amounts were accrued for interest and penalties related to tax positions taken on our tax returns. There was no change to this amount during the first six months of 2007.

13. Long-Term Incentive Equity Awards

     On August 2, 2006 and November 2, 2006, the compensation committee of the board of directors granted long-term incentive equity awards under the 2005 Incentive Award Plan consisting of 565,000 shares and 35,000 shares of restricted common stock, respectively, to certain executive officers and other employees. Each individual’s award is allocated 50% to achieving earnings before interest, taxes, depreciation and amortization, as adjusted to reflect any future acquisitions (EBITDA Performance Award) and 50% to the market value of our common stock (Market Value Award). The awards are earned upon our achievement of EBITDA and market-based targets for the years ending December 31, 2007, 2008 and 2009, but will not vest unless the grantee remains continuously employed in active service until January 31, 2010. If an EBITDA Performance Award or Market Value Award is not earned in an earlier year, it can be earned upon achievement of that target in a subsequent year. The awards will accelerate in full upon a change in control, if any.

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     In accordance with FAS 123R, we valued the EBITDA Performance Award and the Market Value Award using the Black-Scholes and binomial lattice-based valuation pricing models, respectively. The total fair value of the entire EBITDA Performance Award is $5.8 million (prior to estimated forfeitures), of which, in January 2007, we began expensing on a straight-line basis the amount associated with the 2007 award as it was deemed probable that the performance threshold for the year ending December 31, 2007 would be met. The expense recorded related to the EBITDA Performance Award was $0.3 million for the six months ended June 30, 2007. The total value of the entire Market Value Award is $2.4 million (including estimated forfeitures), which is expensed on a straight-line basis from the date of grant over the applicable service period. As long as the service condition is satisfied, the expense is not reversed, even if the market conditions are not satisfied. The expense recorded related to the Market Value Award was $0.3 million for the six months ended June 30, 2007.

14. Commitments and Contingencies

Executive Severance Commitment

     As of June 30, 2007, we are obligated to pay an executive severance commitment of $0.5 million, which will be paid in equal installments over the succeeding 15 months.

Retail Sales Tax

     The Ontario Ministry of Finance (the Ministry) has conducted a retail sales tax field audit on the financial records of one of our Canadian subsidiaries, DealerAccess Canada, Inc., for the period from March 1, 2001 through May 31, 2003. We received a formal assessment from the Ministry indicating unpaid Ontario retail sales tax totaling approximately $0.2 million, plus interest. Although we are disputing the Ministry’s findings, the assessment, including interest, has been paid in order to avoid potential future interest and penalties.

     As part of the purchase agreement dated December 31, 2003 between us and Bank of Montreal for the purchase of 100% of the issued and outstanding capital stock of DealerAccess, Bank of Montreal agreed to indemnify us specifically for this potential liability for all sales tax periods prior to January 1, 2004. As of December 31, 2005, all amounts paid to the Ministry by us for this assessment have been reimbursed by the Bank of Montreal under this indemnity.

     We have undertaken a comprehensive review of the audit findings of the Ministry using external tax experts. Our position is that our financing source revenue transactions are not subject to Ontario retail sales tax. We filed a formal Notice of Objection with the Ministry on December 12, 2005. No further communication from the Ministry has been received other than an acknowledgment of receipt of the Notice of Objection.

     Based upon our comprehensive review and the contractual obligations of our customers, we do not believe our services are subject to sales tax and have not accrued any sales tax liability for the period subsequent to December 31, 2003 for our Canadian subsidiary. In the event we are obligated to charge sales tax, our Canadian subsidiary’s contractual arrangements with its financing source customers obligate these customers to pay all sales taxes that are levied or imposed by any taxing authority by reason of the transactions contemplated under the contractual arrangement. However, there is no assurance that any of our customers would be able to pay such sales taxes when due. In the event of any failure to pay sales tax, we would be required to pay the obligation, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

Commitments

     Pursuant to employment or severance agreements with certain employees, we have a commitment to pay severance of approximately $7.9 million as of June 30, 2007 and $6.5 million as of December 31, 2006, in the event of termination without cause, as defined in the agreements, as well as certain potential gross-up payments to the extent any such severance payment would constitute an excess parachute payment under the Internal Revenue Code.

     We are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party with respect to breach of contract, infringement and other matters. Typically, these obligations arise in the context of agreements entered into by us, under which we customarily agree to hold the other party harmless against losses arising from breaches of representations, warranties and/or covenants. In these circumstances, payment by us is generally conditioned on the other party making a claim pursuant to the procedures specified in the particular agreement, which procedures typically allow us to challenge the other party’s claims. Further, our obligations under these agreements may be limited to indemnification of third-party claims only and limited in terms of time and/or amount. In some instances, we may have recourse against third parties for certain payments made by us.

     It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. To date, we have not been required to make any such payment. We believe that if we were to incur a loss in any of these matters, it is not probable that such loss would have a material effect on our business or financial condition. It is possible; however, that such loss could have a material impact on our results of operations in an individual reporting period.

Legal Proceedings

     From time to time, we are a party to litigation matters arising in connection with the normal course of our business, none of which is expected to have a material adverse effect on us. In addition to the litigation matters arising in connection with the normal course of our business, we are party to the litigation described below.

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     DealerTrack Inc. v. RouteOne LLC

     On January 28, 2004, we filed a Complaint and Demand for Jury Trial against RouteOne LLC (RouteOne) in the United States District Court for the Eastern District of New York, Civil Action No. CV 04-322 (SLT). The complaint seeks declaratory and injunctive relief as well as damages against RouteOne for infringement of two patents which are owned by us, which relate to computer implemented automated credit application analysis and decision routing inventions (the Patents). The complaint also seeks relief for RouteOne’s acts of copyright infringement, circumvention of technological measures and common law fraud and unfair competition.

     The court has approved a joint stipulation of dismissal with respect to this action. Pursuant to the joint stipulation, the patent count has been dismissed without prejudice to be pursued as part of the below consolidated actions and all other counts have been dismissed with prejudice.

DealerTrack, Inc. v. Finance Express et al., CV-06-2335;
DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864; and
DealerTrack Inc. v. RouteOne and Finance Express et al., CV-07-215

     On April 18, 2006, we filed a Complaint and Demand for Jury Trial against David Huber, Finance Express LLC (Finance Express), and three of their unnamed dealer customers in the United States District Court for the Central District of California, Civil Action No. CV 06-2335 (SJF). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of the Patents. We also are seeking relief for acts of copyright infringement and unfair competition.

     On June 8, 2006, David Huber and Finance Express filed their answer and counterclaims. The counterclaims seek damages for libel related to an allegation in the complaint, breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between the parties. On October 26, 2006, the Court dismissed the counterclaim for libel pursuant to a motion by us.

     On October 27, 2006, we filed a Complaint and Demand for Jury Trial against RouteOne, David Huber and Finance Express in the United States District Court for the Central District of California, Civil Action No. CV 06-6864 (SJF). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of the Patents. On November 28, 2006 and December 4, 2006, respectively, defendants RouteOne, David Huber and Finance Express filed their answers. Finance Express also asserted counterclaims for breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between Finance Express and us.

     On February 20, 2007, we filed a Complaint and Demand for Jury Trial against RouteOne LLC, David Huber and Finance Express in the United States District Court for the Central District of California, Civil Action No. CV 07-215 (CWx). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of U. S. Pat. No. 7,181,427 (the ‘427 Patent). On April 13, 2007 and April 17, 2007, respectively, defendants RouteOne, David Huber and Finance Express filed their answers. RouteOne, David Huber and Finance Express asserted counterclaims for a declaratory judgment of unenforceability due to inequitable conduct with respect to the ‘427 Patent and the Patents. David Huber and Finance Express also asserted counterclaims for breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between Finance Express and us.

     The DealerTrack, Inc. v. Finance Express et al., CV-06-2335 action, the DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864 action and the DealerTrack v. RouteOne and Finance Express et al., CV-07-215 action, described above, have been consolidated by the Court. Discovery is underway in the consolidated action. A hearing on claims construction, referred to as a “Markman” hearing, has been scheduled for September 2007.

     We intend to pursue our claims and defend any counter claims vigorously.

     We believe that the potential liability from all current litigations will not have a material effect on our financial position or results of operations when resolved in a future period.

15. Segment Information

     In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information (SFAS No. 131) segment information is being reported consistent with our method of internal reporting. In accordance with SFAS No. 131, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We have one reportable segment under SFAS No. 131. For enterprise-wide disclosure, we are organized primarily on the basis of service lines. Based on the nature and class of customer, as well as the similar economic characteristics, our product lines have been aggregated for disclosure purposes. Revenue earned outside of the United States is approximately 10% of our total net revenue.

     Supplemental disclosure of revenue by service type is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
Transaction services revenue	$	38,596	$	28,298	$	72,886	$	52,838
Subscription services revenue		17,444		12,991		33,213		24,622
Other		2,467		2,125		4,133		3,889
Total net revenue	$	58,507	$	43,414	$	110,232	$	81,349

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16. Credit Facility

     We have a $25.0 million revolving credit facility available to us at an interest rate of LIBOR plus 150 basis points or Prime plus 50 basis points. The revolving credit facility is available for general corporate purposes (including acquisitions), subject to certain conditions. As of June 30, 2007 and December 31, 2006, we had no amounts outstanding and $25.0 million available for borrowings under this revolving credit facility, which matures on April 15, 2008.

17. Subsequent Event

     AutoStyleMart Acquisition

     On August 1, 2007, we completed the purchase of all of the outstanding shares of AutoStyleMart, Inc. (AutoStyleMart), for a purchase price of $4.1 million in cash (including estimated direct acquisition costs of $0.3 million). Under the terms of the merger agreement, we have future contingent payment obligations of up to $11.0 million in cash, based upon the achievement of certain operational targets by February 1, 2010. AutoStyleMart is a provider of on-demand software solutions and services that enable auto dealers to procure, manage and sell vehicle accessories.

     Amended Employment Agreements

     On August 8, 2007, the Compensation Committee of our Board of Directors approved Amended and Restated Senior Executive Employment Agreements for each of our executive officers. Among other things, these amendments reduced the severance payment that certain of our executives were entitled to upon termination without good reason from 24 months to 12. The effect of this amendment will reduce our severance commitments for termination without good reason by approximately $2.4 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements. Certain statements in this Quarterly Report on Form 10-Q are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements involve a number of risks, uncertainties and other factors that could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that could materially affect such forward-looking statements can be found in the section entitled “Risk Factors” in Part I, Item 1A. in our Annual Report on Form 10-K for the year ended December 31, 2006 filed with the SEC on March 16, 2007 and amended on April 30, 2007. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date hereof and we will undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Overview

     DealerTrack is a leading provider of on-demand software, network and data solutions for the automotive retail industry in the United States. Utilizing the Internet, we have built a network connecting automotive dealers with banks, finance companies, credit unions and other financing sources, and other service and information providers, such as aftermarket providers and the major credit reporting agencies. We have established a network of active relationships in the United States, which, as of June 30, 2007, consisted of over 22,000 automotive dealers, including over 90% of all franchised dealers; over 375 financing sources, including the 20 largest independent financing sources and a number of other service and information providers to the automotive retail industry. Our credit application processing product enables dealers to automate and accelerate the indirect automotive financing process by increasing the speed of communications between these dealers and their financing sources. We have leveraged our leading market position in credit application processing to address other inefficiencies in the automotive retail industry value chain. We believe our proven network provides a competitive advantage for distribution of our software and data solutions. Our integrated subscription-based software products and services enable our dealer customers to manage their dealership data and operations, receive valuable consumer leads, compare various financing and leasing options and programs, sell insurance and other aftermarket products, analyze inventory, document compliance with certain laws and execute financing contracts electronically. We have also created efficiencies for financing source customers by providing a comprehensive digital and electronic contracting solution. In addition, we offer data and other products and services to various industry participants, including lease residual value and automobile configuration data.

     We are a Delaware corporation formed in August 2001. We are organized as a holding company and conduct a substantial amount of our business through our subsidiaries including Automotive Lease Guide (alg), Inc., Arkona, Inc., Chrome Systems, Inc., DealerTrack Aftermarket Services, Inc., DealerTrack Canada, Inc., DealerTrack Digital Services, Inc., DealerTrack, Inc., and webalg, inc.

     We monitor our performance as a business using a number of measures that are not found in our consolidated financial statements. These measures include the number of active dealers and financing sources in the DealerTrack network. We believe that improvements in these metrics will result in improvements in our financial performance over time. We also view the acquisition and successful integration of acquired companies as important milestones in the growth of our business as these acquired companies bring new products to our customers and expand

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our technological capabilities. We believe that successful acquisitions will also lead to improvements in our financial performance over time. In the near term, however, the purchase accounting treatment of acquisitions can have a negative impact on our net income as the depreciation and amortization expenses associated with acquired assets, as well as particular intangibles (which tend to have a relatively short useful life), can be substantial in the first several years following an acquisition. As a result, we monitor our EBITDA and other business statistics as a measure of operating performance in addition to net income and the other measures included in our consolidated financial statements.

     The following is a table consisting of EBITDA and certain other business statistics that management is continually monitoring (amounts in thousands, except active dealers and financing source data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2007		2006		2007		2006
EBITDA and Other Business Statistics:
EBITDA (1)	$	18,853	$	13,459	$	33,496	$	24,174
Capital expenditures, software and web site development costs	$	2,253	$	2,554	$	5,700	$	7,322
Active dealers in our network as of end of the period (2)		22,630		22,031		22,630		22,031
Active financing sources in our network as of end of period (3)		380		243		380		243

(1) EBITDA represents net income before interest (income) expense, taxes, depreciation and amortization. We present EBITDA because we believe that EBITDA provides useful information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. We rely on EBITDA as a primary measure to review and assess the operating performance of our company and management team in connection with our executive compensation plan incentive payments. In addition, our credit agreement uses EBITDA (with additional adjustments), in part, to measure our compliance with covenants such as interest coverage.

EBITDA has limitations as an analytical tool and you should not consider it in isolation, or as a substitute for analysis of our results as reported under Generally Accepted Accounting Principles (GAAP). Some of these limitations are:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

• EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• Other companies may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally. EBITDA is a measure of our performance that is not required by, or presented in accordance with, GAAP. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.

The following table sets forth the reconciliation of EBITDA, a non-GAAP financial measure, to net income, our most directly comparable financial measure in accordance with GAAP (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2007			2006			2007			2006
Net income	$	6,284		$	4,655		$	11,109		$	8,091
Interest income		(1,220	)		(785	)		(2,751	)		(1,748	)
Interest expense		73			69			135			141
Provision for income taxes, net		4,618			3,351			8,059			5,451
Depreciation of property and equipment and amortization of capitalized software and website costs		2,429			1,934			4,705			3,826
Amortization of acquired identifiable intangibles		6,669			4,235			12,239			8,413
EBITDA	$	18,853		$	13,459		$	33,496		$	24,174

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(2)	We consider a dealer to be active as of a date if the dealer completed at least one revenue-generating credit application processing transaction using the DealerTrack network during the most recently ended calendar month.
(3)	We consider a financing source to be active in our network as of a date if it is accepting credit application data electronically from dealers in the DealerTrack network.

Revenue

     Transaction Services Revenue. Transaction services revenue consists of revenue earned from our financing source customers for each credit application that dealers submit to them. We also earn transaction services revenue from financing source customers for each financing contract executed via our electronic contracting and digital contract processing solutions, as well as for any portfolio residual value analyses we perform for them. We also earn transaction services revenue from dealers or other service and information providers, such as aftermarket providers, vehicle sales lead distributors, and credit report providers, for each fee-bearing product accessed by dealers.

     Subscription Services Revenue. Subscription services revenue consists of revenue earned from our customers (typically on a monthly basis) for use of our subscription or license-based products and services. Some of these subscription services enable dealer customers to manage their dealership data and operations, obtain valuable consumer leads, compare various financing and leasing options and programs, sell insurance and other aftermarket products, analyze inventory, and execute financing contracts electronically.

Cost of Revenue and Operating Expenses

     Cost of Revenue. Cost of revenue primarily consists of expenses related to running our network infrastructure (including Internet connectivity and data storage), amortization expense on acquired intangible assets, compensation and related benefits for network personnel, amounts paid to third parties pursuant to contracts under which a portion of certain revenue is owed to those third parties (revenue share), direct costs (printing, binding, and delivery) associated with our residual value guides, hardware costs associated with our dealership management system product offering, allocated overhead and amortization associated with capitalization of software. We allocate overhead such as rent and occupancy charges, employee benefit costs, and depreciation expense to all departments based on headcount, as we believe this to be the most accurate measure. As a result, a portion of general overhead expenses is reflected in our cost of revenue and each operating expense category.

     We are in the process of finalizing the fair value assessment for the Arkona acquired identifiable assets, which is expected to be completed by December 31, 2007, and accordingly the related purchase accounting is not final as of June 30, 2007. We anticipate that these identifiable intangibles will include customer contracts, technology and non-compete agreements. As of June 30, 2007, we allocated $23.0 million to identifiable intangible assets and $40.8 million to goodwill utilizing an estimated useful life for the identifiable intangibles of five years. The amortization expense for the Arkona acquired intangible assets is being recorded to cost of revenue. The final allocation may be materially different from the preliminary allocation. For every 5% of the excess purchase price that our final assessment allocates toward additional identifiable intangibles rather than goodwill, amortization expense will increase approximately $0.4 million per annum. In addition, for every one year that the average useful life of the identifiable intangibles is less than the average five year estimate that was utilized in this preliminary assessment, our amortization expense will increase by approximately $1.1 million per annum. Conversely, for every one year that the average useful life of the identifiable intangibles exceeds the average five year estimate used for the purposes of the preliminary assessment, our amortization expense will be reduced by approximately $0.8 million per annum.

          Product Development Expenses. Product development expenses consist primarily of compensation and related benefits, consulting fees and other operating expenses associated with our product development departments. The product development departments perform research and development, as well as enhance and maintain existing products.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of compensation and related benefits, facility costs and professional services fees for our sales, marketing and administrative functions.

Acquisitions

     We have grown our business since inception through a combination of organic growth and acquisitions. The operating results of each business acquired have been included in our consolidated financial statements from the respective dates of acquisition.

     On June 6, 2007, we completed the purchase of all of the outstanding shares of Arkona, for a cash purchase price of approximately $59.8 million (including estimated direct acquisition costs of approximately $0.9 million). Arkona is a provider of on-demand dealer management systems for automotive dealerships.

     On February 1, 2007, we completed the purchase of all of the outstanding shares of Curomax for a cash purchase price of approximately $39.0 million (including estimated direct acquisition and restructuring costs of approximately $1.8 million). Under the terms of the shares purchase agreement, we have future contingent payment obligations of approximately $2.1 million in cash to be paid out based upon the achievement of certain operational objectives over the subsequent twenty-four months.

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     On August 1, 2006, we acquired substantially all of the assets and certain liabilities of DealerWare L.L.C. (DealerWare) for a purchase price of $5.2 million in cash (including estimated direct acquisition costs of approximately $0.2 million). DealerWare is a provider of aftermarket menu-selling and other dealership software.

     On May 3, 2006, we acquired substantially all of the assets and certain liabilities of Global Fax L.L.C. (Global Fax) for a purchase price of $24.6 million in cash (including estimated direct acquisition costs of approximately $0.3 million). Global Fax provides outsourced document scanning, storage, data entry and retrieval services for automotive financing customers.

     On February 2, 2006, we acquired substantially all of the assets and certain liabilities of WiredLogic, Inc., doing business as DealerWire, Inc. (DealerWire), for a purchase price of $6.0 million in cash (including estimated direct acquisition costs of approximately $0.1 million). DealerWire allows a dealership to evaluate its sales and inventory performance by vehicle make, model and trim, including information about unit sales, costs, days to turn and front-end gross profit.

Critical Accounting Policies and Estimates

     Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the amounts reported for assets, liabilities, revenue, expenses and the disclosure of contingent liabilities. A summary of our significant accounting policies is more fully described in Note 2 in the section entitled “Financial Statements” in Part I, Item 1. of this Quarterly Report on Form 10-Q.

     Our critical accounting policies are those that we believe are both important to the portrayal of our financial condition and results of operations and that involve difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The estimates are based on historical experience and on various assumptions about the ultimate outcome of future events. Our actual results may differ from these estimates in the event unforeseen events occur or should the assumptions used in the estimation process differ from actual results. Management believes there have been no material changes during the six months ended June 30, 2007 to the critical accounting policies discussed in the section entitled “Management Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 16, 2007 and amended on April 30, 2007.

     Results of Operations

     The following table sets forth, for the periods indicated, the selected consolidated statements of operations data expressed as a percentage of revenue:

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
	(% of net revenue)						(% of net revenue)
Consolidated Statements of Operations Data:
Net revenue (1)		100.0	%		100.0	%		100.0	%		100.0	%
Operating costs and expenses:
Cost of revenue		41.3	%		39.8	%		41.2	%		39.8	%
Product development		3.9	%		5.4	%		4.2	%		5.6	%
Selling, general and administrative		38.1	%		38.0	%		39.6	%		39.9	%
Total operating costs and expenses		83.3	%		83.2	%		85.0	%		85.3	%
Income from operations		16.7	%		16.8	%		15.0	%		14.7	%
Interest income		2.1	%		1.8	%		2.5	%		2.1	%
Interest expense		(0.2	)%		(0.2	)%		(0.1	)%		(0.2	)%
Income before provision for income taxes		18.6	%		18.4	%		17.4	%		16.6	%
Provision for income taxes, net		(7.9	)%		(7.7	)%		(7.3	)%		(6.7	)%
Net income		10.7	%		10.7	%		10.1	%		9.9	%

	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
	(% of net revenue)						(% of net revenue)
(1) Related party revenue		1.1	%		25.5	%		1.1	%		25.0	%

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Three Months Ended June 30, 2007 and 2006

Revenue

     Total net revenue increased $15.1 million, or 35%, to $58.5 million for the three months ended June 30, 2007 from $43.4 million for the three months ended June 30, 2006.

     Transaction Services Revenue. Transaction services revenue increased $10.3 million, or 36%, to $38.6 million for the three months ended June 30, 2007 from $28.3 million for the three months ended June 30, 2006. The increase in transaction services revenue was primarily the result of a 35% increase in the volume of transactions processed through our network to 23.5 million for the three months ended June 30, 2007 from 17.4 million for the three months ended June 30, 2006. The increased volume of transactions processed was the result of a 56% increase in financing source customers active in our network to 380 as of June 30, 2007 from 243 as of June 30, 2006, the increase in volume from existing customers, an increase in volume of eContracts processed through our network, and an increase in volume of transactions from our acquisitions of Global Fax and Curomax, which were acquired May 2006 and February 2007, respectively.

     Subscription Services Revenue. Subscription services revenue increased $4.4 million, or 34%, to $17.4 million for the three months ended June 30, 2007 from $13.0 million for the three months ended June 30, 2006. The increase in revenue from our subscription products was primarily the result of the 42% increase in total subscriptions to 25,621 as of June 30, 2007 from 18,064 as of June 30, 2006, including 784 subscriptions added through the acquisition of Arkona.

Cost of Revenue and Operating Expenses

     Cost of Revenue. Cost of revenue increased $6.9 million, or 40%, to $24.2 million for the three months ended June 30, 2007 from $17.3 million for the three months ended June 30, 2006. The $6.9 million increase was primarily the result of increased amortization and depreciation charges of $2.8 million primarily relating to the acquisitions of Arkona, Curomax, Global Fax and DealerWare, increased compensation and benefits related costs of $2.6 million due to overall headcount additions including those from acquired companies, and $0.7 million in cost of revenue from our digital contract business.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $5.8 million, or 35%, to $22.3 million for the three months ended June 30, 2007 from $16.5 million for the three months ended June 30, 2006. The $5.8 million increase in selling, general and administrative expenses was primarily the result of increased compensation and related benefit costs of approximately $4.2 million, which included $0.8 million in increased non-cash stock-based compensation, headcount additions and salary increases, $0.1 million in increased professional fees, and $0.4 million related to marketing and travel expenses.

Interest Income

     Interest income increased $0.4 million, or 55%, to $1.2 million for the three months ended June 30, 2007 from $0.8 million for the three months ended June 30, 2006. The $0.4 million increase is primarily related to the interest income earned on net cash proceeds from our public offering in October 2006.

Provision for Income Taxes

     The provision for income taxes for the three months ended June 30, 2007 of $4.6 million consisted primarily of $3.0 million of federal tax, $0.3 million of state and local income taxes, $0.6 million of adjustments due to a change in the New York State tax rate, and $0.7 million of tax expense for our Canadian subsidiaries. Included in the provision for income taxes for the three months ended June 30, 2007 is $0.3 million of non-deductible amortization of acquisition-related intangibles of our Canadian subsidiaries. The provision for income taxes for the three months ended June 30, 2006 of $3.3 million consisted primarily of $2.3 million of federal tax, $0.4 million of state and local income taxes, and $0.6 million of tax expense for our Canadian subsidiary. Included in our provision for income taxes for the three months ended June 30, 2006 is $0.4 million of additional tax expense that relates to prior periods. This additional tax expense relates to an adjustment in our calculation of income taxes associated with our Canadian subsidiary, DealerTrack Canada, Inc. (formerly known as DealerAccess Canada, Inc.) The effective tax rate reflects the impact of the applicable statutory rate for federal and state income tax purposes for the period shown.

Six Months Ended June 30, 2007 and 2006

Revenue

     Total net revenue increased $28.9 million, or 36%, to $110.2 million for the six months ended June 30, 2007 from $81.3 million for the six months ended June 30, 2006.

     Transaction Services Revenue. Transaction services revenue increased $20.1 million, or 38%, to $72.9 million for the six months ended June 30, 2007 from $52.8 million for the six months ended June 30, 2006. The increase in transaction services revenue was primarily the result of a 39% increase in the volume of transactions processed through our network to 46.2 million for the six months ended June 30, 2007 from 33.2 million for the six months ended June 30, 2006. The increased volume of transactions processed was the result of a 56% increase in financing source customers active in our network to 380 as of June 30, 2007 from 243 as of June 30, 2006, an increase in volume from existing customers, an increase in volume of eContracts processed through our network, and an increase in volume of transactions from our acquisitions of Global Fax and Curomax, which were acquired May 2006 and February 2007, respectively.

     Subscription Services Revenue. Subscription services revenue increased $8.6 million, or 35%, to $33.2 million for the six months ended June 30, 2007 from $24.6 million for the six months ended June 30, 2006. The increase in revenue from our subscription products was

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primarily the result of the 42% increase in total subscriptions to 25,621 from 18,064 as of June 30, 2006, including 784 subscriptions added through the acquisition of Arkona.

Cost of Revenue and Operating Expenses

     Cost of Revenue. Cost of revenue increased $13.1 million, or 40%, to $45.5 million for the six months ended June 30, 2007 from $32.4 million for the six months ended June 30, 2006. The $13.1 million increase was primarily the result of increased amortization and depreciation charges of $4.5 million primarily relating to the acquisitions of Arkona, Curomax, Global Fax, and DealerWare, increased compensation and benefits related costs of $5.3 million due to overall headcount additions including those from acquired companies, and $1.6 million in cost of revenue from our digital contract business.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $11.1 million, or 34%, to $43.5 million for the six months ended June 30, 2007 from $32.4 million for the six months ended June 30, 2006. The $11.1 million increase in selling, general and administrative expenses was primarily the result of increased compensation and related benefit costs of approximately $7.4 million, which included $1.5 million in increased non-cash stock-based compensation, headcount additions and salary increases, $0.5 million in increased professional fees, and $1.3 million related to marketing and travel expenses.

Interest Income

     Interest income increased $1.0 million, or 57%, to $2.7 million for the six months ended June 30, 2007 from $1.7 million for the six months ended June 30, 2006. The $1.0 million increase is primarily related to the interest income earned on net cash proceeds from our public offering in October 2006.

Provision for Income Taxes

     The provision for income taxes for the six months ended June 30, 2007 of $8.1 million consisted primarily of $5.9 million of federal tax, $0.8 million of state and local income taxes $0.6 million of adjustments due to a change in the New York State tax rate, and $0.8 million of tax expense for our Canadian subsidiaries. Included in the provision for income taxes for the six months ended June 30, 2007 is $0.5 million of non-deductible amortization of acquisition related intangibles of our Canadian subsidiaries. The provision for income taxes for the six months ended June 30, 2006 of $5.4 million consisted primarily of $4.1 million of federal income tax, $0.7 million of state and local income taxes, and $0.6 million of tax expense for our Canadian subsidiary. Included in our provision for income taxes for the six months ended June 30, 2006 is $0.2 million of additional tax expense that relates to prior periods. This additional tax expense relates to an adjustment in our calculation of income taxes associated with our Canadian subsidiary, DealerTrack Canada, Inc. The effective tax rate reflects the impact of the applicable statutory rate for federal and state income tax purposes for the period shown.

Liquidity and Capital Resources

     Our liquidity requirements are for working capital, acquisitions, capital expenditures and general corporate purposes. Our capital expenditures, software and web site development costs for the six months ended June 30, 2007 were $5.7 million, of which $5.1 million was in cash. We expect to finance our future liquidity needs through working capital and cash flows from operations, however future acquisitions or other strategic initiatives may require us to incur or seek additional financing. As of June 30, 2007, we had no amounts outstanding under our available $25.0 million revolving credit facility.

     As of June 30, 2007, we had $91.6 million of cash, cash equivalents and short-term investments and $92.9 million in working capital, as compared to $171.2 million of cash, cash equivalents and short-term investments and $168.8 million in working capital as of December 31, 2006.

     On June 6, 2007, we completed the purchase of all of the outstanding shares of Arkona for a cash purchase price of approximately $59.8 million (including estimated direct acquisition costs of approximately $0.9 million). Arkona is a provider of on-demand dealer management systems for automotive dealerships.

     On August 1, 2007, we completed the purchase of all of the outstanding shares of AutoStyleMart, Inc. (AutoStyleMart), for a purchase price of $4.1 million in cash (including estimated direct acquisition costs of $0.3 million). Under the terms of the purchase agreement, we have future contingent payment obligations of up to $11.0 million in cash, based upon the achievement of certain operational targets by February 1, 2010. AutoStyleMart is a provider of on-demand software solutions and services that enable auto dealers to procure, manage and sell vehicle accessories.

     The following table sets forth the cash flow components for the following periods (in thousands):

	Six Months Ended
	June 30,
	2007			2006
Net cash provided by operating activities	$	20,538		$	15,477
Net cash used in investing activities	$	(38,356	)	$	(95,188	)
Net cash provided by financing activities	$	3,767		$	1,895

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Operating Activities

     Net cash provided by operating activities for the six months ended June 30, 2007 was attributable to net income of $11.1 million, which includes depreciation and amortization of $16.9 million, amortization of stock-based compensation of $4.6 million, an increase to the provision for doubtful accounts and sales credits of $2.4 million, and an increase to deferred revenue and other current liabilities of $1.0 million, partially offset by a deferred tax benefit of $3.1 million, a stock-based compensation windfall tax benefit of $1.7 million, an increase in accounts receivable (including related party) of $8.2 million due to an overall increase in revenue, and a decrease in accounts payable and accrued expenses of $3.6 million. Net cash provided by operating activities for the six months ended June 30, 2006 was attributable to net income of $8.1 million, which includes depreciation and amortization of $12.2 million, amortization of stock-based compensation of $2.6 million, an increase to the provision for doubtful accounts of $2.3 million, an increase to deferred revenue and other current liabilities of $0.3 million and an increase to other long-term liabilities of $0.3 million, offset by a deferred tax benefit of $2.5 million and an increase in accounts receivable (including related party) of $3.0 million and a decrease in accounts payable and accrued expenses (including related party) of $5.1 million.

Investing Activities

     Net cash used in investing activities for the six months ended June 30, 2007 was attributable to capital expenditures of $3.0 million, an increase in capitalized software and web site development costs of $2.1 million, and payment for net assets acquired of $99.4 million, offset by the net sale of short-term investments of $66.1 million. Net cash used in investing activities for the six months ended June 30, 2006 was attributable to capital expenditures of $1.7 million, an increase in capitalized software and website development costs of $1.9 million, payments for net assets acquired of $31.2 million and the net purchase of short-term investments of $60.5 million.

Financing Activities

     Net cash provided by financing activities for the six months ended June 30, 2007 was attributable to the exercise of employee stock options of $1.6 million, net proceeds received from employee stock purchases under our employee stock purchase plan of $0.8 million, and stock-based compensation windfall tax benefit of $1.7 million. Net cash provided by financing activities for the six months ended June 30, 2006 was attributable to the receipt of cash proceeds from the exercise of employee stock options of $0.9 million, net proceeds from employee stock purchases under the ESPP of $0.4 million, and stock-based compensation windfall tax benefit of $1.1 million, offset by principal payments on note payable and capital lease obligations of $0.5 million.

Contractual Obligations

     As of June 30, 2007, there were no material changes in our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2006, as amened, except for the capital and operating lease obligations of $2.7 million, assumed in connection with the June 6, 2007 acquisition of Arkona.

Off-Balance Sheet Arrangements

     We do not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which are typically established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Industry Trends

     Our business is impacted by the volume of new and used automobiles financed or leased by our participating financing source customers, special promotions by automobile manufacturers and the level of indirect financing by captive finance companies not available in our network. Our business may be affected by these and other industry and promotional trends in the indirect automotive finance market.

Effects of Inflation

     Our monetary assets, consisting primarily of cash and cash equivalents, short-term investments and receivables, and our non-monetary assets, consisting primarily of intangible assets and goodwill, are not affected significantly by inflation. We believe that replacement costs of equipment, furniture and leasehold improvements will not materially affect our operations. However, the rate of inflation affects our expenses, which may not be readily recoverable in the prices of products and services we offer.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exposure

     We only have operations located in, and provide services to, customers in the United States and Canada. Our earnings are affected by fluctuations in the value of the U.S. dollar as compared with the Canadian dollar. Our exposure is mitigated, in part, by the fact that we incur certain operating costs in the same foreign currencies in which revenue is denominated. The foreign currency exposure that does exist is limited by the fact that the majority of transactions are paid according to our standard payment terms, which are generally short-term in nature.

Interest Rate Exposure

     As of June 30, 2007, we had cash, cash equivalents and short-term investments of $91.6 million invested in highly liquid money market instruments and tax-free and tax advantaged auction rate preferred securities. Such investments are subject to interest rate and credit risk. Our

18

policy of investing in securities with original maturities of three months or less minimizes such risks and a change in market interest rates would not be expected to have a material impact on our financial condition and/or results of operations. As of June 30, 2007, we had no borrowings outstanding under our revolving credit facility. Any borrowings under our revolving credit facility would bear interest at a variable rate equal to LIBOR plus a margin of 1.5% or Prime plus 0.5%.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

     We carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. In designing and evaluating our disclosure controls and procedures, we and our management recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that they believe that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

     There were no changes in our internal control over financial reporting during the quarter ended June 30, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We are in the process of evaluating our internal controls environment to determine if any changes are required based on our acquisitions of Curomax and Arkona.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     From time to time, we are a party to litigation matters arising in connection with the normal course of our business, none of which is expected to have a material adverse effect on us. In addition to the litigation matters arising in connection with the normal course of our business, we are party to the litigation described below.

     DealerTrack Inc. v. RouteOne LLC

     On January 28, 2004, we filed a Complaint and Demand for Jury Trial against RouteOne LLC (RouteOne) in the United States District Court for the Eastern District of New York, Civil Action No. CV 04-322 (SLT). The complaint seeks declaratory and injunctive relief as well as damages against RouteOne for infringement of two patents which are owned by us, which relate to computer implemented automated credit application analysis and decision routing inventions (the Patents). The complaint also seeks relief for RouteOne’s acts of copyright infringement, circumvention of technological measures and common law fraud and unfair competition. The court has approved a joint stipulation of dismissal with respect to this action. Pursuant to the joint stipulation, the patent count has been dismissed without prejudice to be pursued as part of the below consolidated actions and all other counts have been dismissed with prejudice.

DealerTrack, Inc. v. Finance Express et al., CV-06-2335;

DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864; and

DealerTrack Inc. v. RouteOne and Finance Express et al., CV-07-215

     On April 18, 2006, we filed a Complaint and Demand for Jury Trial against David Huber, Finance Express LLC (Finance Express), and three of their unnamed dealer customers in the United States District Court for the Central District of California, Civil Action No. CV 06-2335 (SJF). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of the Patents. We also are seeking relief for acts of copyright infringement and unfair competition.

     On June 8, 2006, David Huber and Finance Express filed their answer and counterclaims. The counterclaims seek damages for libel related to an allegation in the complaint, breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between the parties. On October 26, 2006, the Court dismissed the counterclaim for libel pursuant to a motion by us.

     On October 27, 2006, we filed a Complaint and Demand for Jury Trial against RouteOne, David Huber and Finance Express in the United States District Court for the Central District of California, Civil Action No. CV 06-6864 (SJF). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of the Patents. On November 28, 2006 and December 4, 2006, respectively, defendants RouteOne, David Huber and Finance Express filed their answers. Finance Express also asserted counterclaims for breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between Finance Express and us.

     On February 20, 2007, we filed a Complaint and Demand for Jury Trial against RouteOne LLC, David Huber and Finance Express in the United States District Court for the Central District of California, Civil Action No. CV 07-215 (CWx). The complaint seeks declaratory and injunctive relief as well as damages against the defendants for infringement of U. S. Pat. No. 7,181,427 (the ‘427 Patent). On April 13, 2007 and April 17, 2007, respectively, defendants RouteOne, David Huber and Finance Express filed their answers. RouteOne, David Huber and Finance Express asserted counterclaims for a declaratory judgment of unenforceability due to inequitable conduct with respect to the ‘427

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Patent and the Patents. David Huber and Finance Express also asserted counterclaims for breach of contract, deceit, actual and constructive fraud, misappropriation of trade secrets and unfair competition related to a confidentiality agreement between Finance Express and us.

     The DealerTrack, Inc. v. Finance Express et al., CV-06-2335 action, the DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864 action and the DealerTrack v. RouteOne and Finance Express et al., CV-07-215 action, described above, have been consolidated by the Court. Discovery is underway in the consolidated action. A hearing on claims construction, referred to as a “Markman” hearing, has been scheduled for September 2007.

     We intend to pursue our claims and defend any counter claims vigorously.

     We believe that the potential liability from all current litigations will not have a material effect on our financial position or results of operations when resolved in a future period.

Item 1A. Risk Factors

     In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in the section entitled “Risk Factors” in Part I, Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2006, as amended, which could materially affect our business, financial condition or results of operations. The risks described in that Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition and/or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

     From time to time, in connection with the vesting of restricted common stock under our 2005 Incentive Award Plan, we may receive shares of our common stock from certain restricted common stockholders in consideration of the tax withholdings due upon the vesting of restricted common stock.

     The following table sets forth the repurchases for the three months ended June 30, 2007:

					Total		Maximum
					Number of		Number
					Shares		of Shares
					Purchased		That
					as Part of		May Yet be
	Total Number		Average Price		Publicly		Purchased
	of Shares		Paid per		Announced		Under the
Period	Purchased		Share		Program		Program
April 2007		—	$	—		n/a		n/a
May 2007		402	$	33.05		n/a		n/a
June 2007		—	$	—		n/a		n/a
Total		402

Item 4. Submission of Matters to a Vote of Security Holders

     The 2007 Annual Meeting of Stockholders of DealerTrack Holdings, Inc. was held on July 11, 2007. A total of 37,808,475 shares of common stock were present or represented by proxy at the meeting. This represented 95.36% of the total shares outstanding. The following matters were voted on and approved:

1. The individuals named below were elected as a Class II Directors to a three-year term expiring at our annual meeting of stockholders in 2010 or until his or her earlier resignation or removal:

Name	Votes Received	Votes Withheld
Thomas F. Gilman	37,461,326	347,147
Ann B. Lane	37,460,826	347,647
John J. McDonnell, Jr.	32,840,857	4,967,616

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The other directors of the Company whose terms continued after the 2006 Annual Meeting were Mary Cirillo-Goldberg, Thomas R. Gibson, James David Powers III, Howard L. Tischler and Mark F. O’Neil.

2. The selection of PricewaterhouseCoopers LLP as DealerTrack’s independent registered public accounting firm for the fiscal year ending December 31, 2007 was ratified.

Vote For	Vote Against	Abstain
37,790,055	18,259	160

3. The amendment and restatement of DealerTrack’s 2005 Incentive Award Plan was approved.

Vote For	Vote Against	Abstain
26,450,531	8,927,723	12,566

Item 5. Other Information

     On August 8, 2007, each of our named executive officers entered into an Amended and Restated Senior Executive Employment Agreement. Among other things,these amendments reduced the duration of the severance payments that these executives will be entitled to upon their termination without good reason from 24 months to 12 months. Please see the agreements attached as Exhibits 10.1 to 10.5 to this Quarterly Report on Form 10-Q.

Item 6. Exhibits

Exhibit
Number	Description of Document
10.1*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Mark F. O’Neil and DealerTrack Holdings, Inc.
10.2*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Robert Cox and DealerTrack Holdings, Inc.
10.3*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between John A. Blair and Automotive Lease Guide (alg), Inc.
10.4*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Eric D. Jacobs and DealerTrack Holdings, Inc.
10.5*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Raj Sundaram and DealerTrack Holdings, Inc.
10.6*	First Amendment to DealerTrack Holdings, Inc. Directors’ Deferred Compensation Plan effective as of January 1, 2007.
10.7*	First Amendment to DealerTrack Holdings, Inc. Employees’ Deferred Compensation Plan effective as of January 1, 2007.
31.1	Certification of Mark F. O’Neil, Chairman, President and Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Robert J. Cox III, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a-14(a)and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Mark F. O’Neil, Chairman, President and Chief Executive Officer, and Robert J. Cox III, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Indicates a management contract or any compensatory plan, contract or arrangement.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DealerTrack Holdings, Inc. (Registrant)
Date August 9, 2007	/s/ Robert J. Cox III
	Robert J. Cox III Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit
Number	Description of Document
10.1*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Mark F. O’Neil and DealerTrack Holdings, Inc.
10.2*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Robert Cox and DealerTrack Holdings, Inc.
10.3*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between John A. Blair and Automotive Lease Guide (alg), Inc.
10.4*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Eric D. Jacobs and DealerTrack Holdings, Inc.
10.5*	Amended and Restated Senior Executive Employment Agreement, dated as of August 8, 2007, by and between Raj Sundaram and DealerTrack Holdings, Inc.
10.6*	First Amendment to DealerTrack Holdings, Inc. Directors’ Deferred Compensation Plan effective as of January 1, 2007.
10.7*	First Amendment to DealerTrack Holdings, Inc. Employees’ Deferred Compensation Plan effective as of January 1, 2007.
31.1	Certification of Mark F. O’Neil, Chairman, President and Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Robert J. Cox III, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to Rule 13a-14(a)and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certifications of Mark F. O’Neil, Chairman, President and Chief Executive Officer, and Robert J. Cox III, Senior Vice President, Chief Financial Officer and Treasurer, pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Indicates a management contract or any compensatory plan, contract or arrangement.

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EX-10.1

Exhibit 10.1

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

          This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between Mark F. O’Neil (“Executive”) and DealerTrack Holdings, Inc, a Delaware corporation (“Employer”) with principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042.

          WHEREAS, Executive and Employer are parties to a senior executive employment agreement, dated as of May 26, 2005 (the “Existing Employment Agreement”); and

          WHEREAS, the parties hereto wish to amend and restate the Existing Employment Agreement pursuant to this Agreement;

          NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment Agreement is hereby amended and restated in its entirety as follows:

          Section 1. Term

          Employer shall continue to employ Executive and Executive agrees to continue such employment, upon the terms and conditions hereinafter set forth, from the Effective Date through and including August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for successive one year periods (each, a “Renewal Term”) unless one party gives notice to the other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any renewal) of its desire to terminate the Agreement. The term of this Agreement, including the Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

          Section 2. Executive’s Duties

          (a) Executive shall be Chairman and Chief Executive Officer and shall report directly to the Board of Directors of Employer (the “Board”). Executive shall faithfully and diligently perform his duties at the direction of the Board, or a committee of the Board, to the best of Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full business time and attention to the performance of the services customarily incident to such office, subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii) carry out his duties in a competent and professional manner; and (iii) generally promote the interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any activity that is detrimental to the interests of Employer or any of its affiliates, including, without limitation, any public criticism or disparagement of any type by Executive, through the media or otherwise, of Employer or any of its affiliates or employees, except in connection with the exercise of Executive’s rights against Employer or any of its affiliates.

          (b) Executive agrees to abide by all policies applicable to senior executive officers of Employer promulgated from time to time by Employer, which policies are enforced uniformly and applicable to all similar executives of Employer.

          (c) Except for such business travel as may be incident to his duties hereunder, Executive shall perform his duties at Employer’s offices at the address set forth in the preamble to this Agreement or at such other location as may be approved by Employer.

          Section 3. Compensation for Executive’s Services

          In consideration of the duties and services to be performed by Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

          (a) Salary. Executive shall earn salary (the “Salary”) at the annual rate of Five Hundred Ten Thousand Dollars ($510,000) (the “Minimum Salary”), less all applicable federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in periodic installments in accordance with Employer’s payroll practices. During the Term, the Board or the Compensation Committee of the Board (the “Compensation Committee”) will review the Salary annually and may in its discretion increase the Salary, but may not reduce it during the Term unless Employer institutes salary reductions across the board; provided, however, that in no event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

          (b) Bonus. For each fiscal year of Employer (each, a “Fiscal Year”), Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be based on the achievement of certain performance benchmarks by Employer during such Fiscal Year which shall be determined by the Board. The Board shall review the target Bonus on an annual basis and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus shall not be decreased except in connection with company-wide bonus reductions. The target Bonus for any Fiscal Year shall be at least eighty (80%) percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with Employer’s bonus payments to its other similarly situated senior executive officers by no later than two and one half (2¹/2) months following the end of such Fiscal Year. Executive understands and agrees that the Bonus is established in part as an inducement for Executive to remain employed by Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal Year during the Term, then Executive shall not receive payment of any Bonus for such year.

          (c) Equity. In connection with Executive’s employment, Executive has been and may continue to be granted stock options (“Stock Options”) to purchase equity securities of Employer pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or any other successor equity incentive plans (collectively, the “Stock Incentive Plans”). Except as otherwise provided herein, the terms of the Stock Options shall be governed by the

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Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of Control (defined below). Executive shall be credited with full acceleration and vesting of his Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a material negative change in Executive’s compensation or responsibilities within twelve (12) months after a Change of Control; or (3) the requirement that Executive be based at a location which is more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with Good Reason or by Employer without Cause, or under circumstances described above which would result in certain accelerated vesting of any unvested Stock Options held by Executive, the unexercised portion of any Stock Options held by Executive will not terminate until the twelve (12) month anniversary of the date of termination of Executive’s employment. In the event Employer elects to grant equity based awards other than Options, such grants shall, where appropriate, be subject to equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a “Change of Control” shall mean and includes each of the following:

     (i) A transaction or series of transactions (other than an offering of shares of Employer to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Employer, any of its subsidiaries, an employee benefit plan maintained by the Employer or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Employer) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer possessing more than 50% of the total combined voting power of the Employer’s securities outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Board or nomination for election by the Employer’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer (whether directly involving the Employer or indirectly involving the Employer through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Employer’s assets in any single transaction or

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series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

     (A) Which results in the Employer’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Employer or the person that, as a result of the transaction, controls, directly or indirectly, the Employer or owns, directly or indirectly, all or substantially all of the Employer’s assets or otherwise succeeds to the business of the Employer (the Employer or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

     (B) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Employer prior to the consummation of the transaction; or

     (iv) The Employer’s stockholders approve a liquidation or dissolution of the Employer.

The Board or its designee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control of the Employer has occurred, and the date of the occurrence of such Change of Control and any incidental matters relating thereto.

          (d) Benefits. Employer shall provide Executive with the right to participate in and receive benefits from all life, accident, disability, medical and pension plans, and all similar benefits as are from time to time in effect and are generally made available to similar situated senior executive officers of Employer. The amount and extent of benefits to which Executive is entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

          (e) Expenses. Employer shall promptly reimburse Executive for reasonable expenses for cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s expense reimbursement policies and guidelines.

          (f) Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used in accordance with Employer’s policy and procedure for other similarly situated senior executive officers.

          (g) Modification. Employer reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs referenced in Sections 3(d) and (e) at any time in its discretion without recourse by Executive so long as such action is taken generally with respect to other similarly situated senior executive officers. Any

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such modification, suspension or discontinuance of the plans, practices and policies referenced in Section 3(e) will not apply to otherwise reimbursable expenses incurred by Executive prior to any such modification, suspension or discontinuance.

          Section 4. Termination of Employment

          (a) Resignation. Executive may voluntarily terminate his employment with Employer, at any time, with or without Good Reason, upon written notice to Employer.

          (b) Termination. Employer may terminate Executive’s employment at any time, with or without Cause, upon written notice to Executive.

          (c) Death or Disability. Executive’s employment shall terminate immediately upon Executive’s death. In the event Employer, in good faith, determines that Executive is unable to perform the functions of his position due to a Disability (as defined below), it may notify Executive in writing of its intention to terminate Executive’s employment and Executive’s employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment that substantially limits a major life activity of Executive and renders Executive unable to perform the essential functions of his position even with reasonable accommodation (that does not impose an undue hardship on Employer), and which has lasted at least (i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any, under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any election period under the Employer’s long term disability program (without regard to whether Executive is awarded benefits under such program), whichever is longer.

          (d) Cause. Employer may immediately terminate Executive’s employment for “Cause” by giving written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

(1)	Executive’s commission of an act of fraud or embezzlement upon Employer or any of its affiliates; or
(2)	Executive’s commission of any willful act intended to injure the reputation, business, or any business relationship of Employer or any of its affiliates; or
(3)	Executive is found by a court of competent jurisdiction to have committed a felony; or
(4)	the refusal or failure of Executive to perform Executive’s duties with Employer in a competent and professional manner that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in

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nature or is not susceptible of cure, then no cure period shall be required hereunder; or

(5)

the refusal or failure of Executive to comply with any of his material obligations under this Agreement (including any exhibit hereto) that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes Executive has materially breached this Agreement; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder.

          (e) Good Reason. Executive may terminate his employment for “Good Reason,” by delivering written notice of such termination (“Employer Default Notice”) to Employer within sixty (60) days of the occurrence of any of the following events, each of which shall constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the Stock Incentive Plans or any agreements thereunder, which has not been cured within the allotted time; (ii) a material reduction of Executive’s then current title, status, authority, responsibility or duties or the assignment to Executive of any duties materially inconsistent with Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits; (iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi) the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days following delivery to Employer of the Employer Default Notice.

          (f) Continuing Obligations. Executive acknowledges and agrees that any termination under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall continue in full force and effect beyond such termination for any reason.

          Section 5. Termination Obligations

          (a) Resignation. If Executive’s employment is terminated voluntarily by Executive without Good Reason, Executive’s employment shall terminate without further obligations to Executive other than for payment of the sum of any unpaid Salary determined by the Board and reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date of termination. If Executive voluntarily terminates his employment without

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Good Reason and within (30) days of such termination, Employer determines that it would have had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been terminated for Cause and the terms of Section 5(b) shall apply.

          (b) Cause. If Executive’s employment is terminated by Employer for Cause, this Agreement shall terminate without further obligations to Executive other than for the timely payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall apply.

          (c) By Employer Other than for Cause; Death or Disability; By Executive for Good Reason.

               (1) If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or (y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good Reason, Employer shall have no further obligations to Executive other than for (i) the payment of Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and payable within thirty (30) days of the Severance Commencement Date; provided, however, that in the event that Executive’s termination of employment is within twelve (12) months after a Change of Control, such severance pay shall be increased to an amount equal to twenty four (24) months of Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive worked for Employer during the year of his termination by Executive’s target Bonus for such year and payable within thirty (30) days of the Severance Commencement Date, and (iv) the reimbursement of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier. For purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of Employer or its affiliates is publicly traded on an established securities market or otherwise and the Board (or its delegate) determines that as of the date of termination of Executive’s employment that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder) and that Section 409A of the Code applies with respect to payments to Executive pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s “separation from service” (within the meaning of section 409A of the Code); or (y) if the Board (or its delegate) determines that Executive is not such a “key employee” as of date of Executive’s termination of employment (or that Section 409A of the Internal Revenue Code does not apply with respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s termination of employment.

               (2) If Executive terminates his employment for Good Reason and it is subsequently determined by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a voluntary resignation, the terms of Section 5(a) shall apply, and all

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monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

               (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall receive for termination in accordance with this Section 5(c); provided, however, that no amounts shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of Sections 7, 8 or 9 of this Agreement.

          (d) Release. Notwithstanding anything to the contrary contained herein, no severance payments required hereunder shall be made by Employer until such time as Executive shall execute a general release for the benefit of Employer and its affiliates in a form satisfactory to Employer. Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s charter or bylaws, any indemnification agreement or applicable law.

          (e) Equity Compensation Awards. Except as expressly provided herein, except for the provisions of Section 3(c) of this Agreement, the terms of the Stock Incentive Plans and any related award agreements and/or notice of grant shall govern the termination, vesting, and/or exercise of Executive’s stock options or other equity awards upon the termination of Executive’s employment for any reason.

          (f) Exclusive Remedy. Executive agrees that the payments set forth in this Agreement shall constitute the exclusive and sole remedy for any termination of Executive’s employment and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to this Agreement.

          (g) Termination of Executive’s Office. Following the termination of Executive’s employment for any reason, Executive shall hold no further office or position with Employer or any of its affiliates.

          Section 6. Parachute Payments.

          (a) If it is determined by a nationally recognized United States public accounting firm selected by the Employer and approved in writing by the Executive (which approval shall not be unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the Executive in connection with this Agreement or otherwise (including without limitation any Stock Option or other equity based award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections

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280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

          (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax group which includes the Employer) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by the Executive. The Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the Employer, provide to the Employer true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Employer, evidencing such payment. If, after the Employer’s payment to the Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or such determination is made by the Internal Revenue Service, then within ten (10) business days of such determination, the Executive shall pay to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the amount of any such increase; provided, however, that in no event shall the Executive have any such refund obligation if it is determined by the Employer that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by the Executive; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered in connection with the Auditor’s determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon the Executive to the extent that such interest and penalties are related to the Auditor’s determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his employment for any reason and the termination or expiration of this Agreement for any reason.

          Section 7. Restrictions Respecting Confidential Information

          Executive hereby covenants and agrees that, during his employment and thereafter, Executive will not, under any circumstance, disclose in any way any Confidential Information (as defined below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii) to his attorney or other advisers in connection with Executive’s enforcement of his rights hereunder, provided such individuals or entities agree to be bound by the confidentiality restrictions herein contained, and if such Confidential Information is relevant to such enforcement action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes of the foregoing, “Confidential Information” means any information pertaining to the assets, business, creditors, vendors, manufacturers, customers, data, employees, financial condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers, systems and technologies of Employer and its affiliates, including (without limitation) the contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer and its affiliates; provided, however, that Confidential Information shall exclude any information that was, is, or becomes publicly available other than through disclosure by Executive or any other person known to Executive to be subject to confidentiality obligations to Employer. All

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Confidential Information is and will remain the sole and exclusive property of Employer and its affiliates. Following the termination of his employment, Executive shall return all documents and other tangible items containing Confidential Information to Employer, without retaining any copies, notes or excerpts thereof.

          Section 8. Proprietary Matters

          Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes, or know-how that are generated or conceived by Executive during the Term (collectively, the “Inventions”) will be the sole and exclusive property of Employer, and Executive will, whenever requested to do so by Employer (either during the Term or thereafter), execute and assign any and all applications, assignments and/or other instruments and do all things which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce and defend patents, copyrights, trade names or trademarks of the United States or of foreign countries for said Inventions, or in order to assign and convey or otherwise make available to Employer the sole and exclusive right, title, and interest in and to said Inventions, applications, patents, copyrights, trade names or trademarks; provided, however, that the provisions of this Section 8 shall not apply to an Invention that Executive developed entirely on his own time without using Employer’s Confidential Information except for those Inventions that either (i) directly and materially relate, at the time of conception or reduction to practice of the invention, to Employer’s business, or actual or demonstrably anticipated research or development of Employer, or (ii) directly and materially result from any work performed by Executive for Employer. Executive shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by him during his employment by Employer, whether solely or jointly with others, and whether or not patentable or copyrightable, (a) which relate to any matters or business of the type carried on or being developed by Employer, or (b) which result from or are suggested by any work done by him in the course of his employment by Employer. Executive shall also promptly communicate and disclose to Employer all material other data obtained by him concerning the business or affairs of Employer in the course of his employment by Employer.

          Section 9. Nonsolicitation/Non-Compete

          (a) Executive agrees that throughout his employment and for a period of two (2) years following the termination of his employment for any reason, he will not directly or indirectly, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or be connected with, or have any financial interest in, any Competitor. Ownership, for personal investment purposes only, of not to exceed (i) individually, two (2%) percent of the outstanding capital stock of any privately held entity, or (ii) voting stock of any publicly held corporation shall not constitute a violation hereof. For purposes of this Agreement, the term “Competitor” shall mean any individual or entity, present or future, then providing any of the following products or services: (1) a multi-finance source automotive finance portal, (2) electronic contracting for automotive finance or lease transactions, other than at a financing source entity that purchases electronic contracts or leases from automotive dealers, (3) automotive lease, retail and/or balloon payment comparison or desking tools, (4) dealer management systems (DMS), (5) any other sales or finance and insurance-related products or services for automotive dealerships similar to any products or services offered by Employer or

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any of its affiliates, or (6) any other products or services similar to any products or services offered by Employer or any of its affiliates and which product or service category accounts for at least 15% of the consolidated revenues for the last fiscal quarter of Employer.

          (b) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not actively solicit for employment, consulting or any other arrangement any employee of Employer or any of its present or future affiliates (while an affiliate).

          (c) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not influence or attempt to influence customers of Employer or any of its present or future affiliates, either directly or indirectly, to divert their business to any Competitor.

          (d) The restrictions contained in this Section 9 are necessary for the protection of the business and goodwill of Employer and are considered by Executive to be reasonable for such purpose. Further, Executive represents that these restrictions will not prevent him from earning a livelihood during the restricted period.

          (e) This Section 9 shall survive the termination or expiration of this Agreement.

          Section 10. Equitable Relief

          Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be adequately compensated by money damages in the event of a breach, or threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any such breach, or threatened breach, Employer will not have an adequate remedy at law. It is therefore agreed that Employer, in addition to all other such rights, powers, privileges and remedies that it may have, shall be entitled to injunctive relief, specific performance or such other equitable relief as Employer may request to enforce any of those terms and provisions and to enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby waives any objection or defense that there is an adequate remedy available at law. Notwithstanding the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive hereby consents to the jurisdiction of the state and federal courts of New York for purposes of such an action. Executive agrees that any claim he may have against Employer or any of its affiliates shall not constitute a defense against the issuance of any such equitable relief. The foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and remedies against or in respect of a breaching party or any other person or thing under this Agreement, or applicable law.

          Section 11. Notice

          Any notice, request, demand or other communication hereunder shall be in writing, shall be delivered by hand or sent by registered or certified mail or by reputable overnight delivery service, postage prepaid, to the addressee at the address set forth below (or at

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such other address as shall be designated hereunder by written notice to the other party hereto) and shall be deemed conclusively to have been given when actually received by the addressee.

          All notices and other communications hereunder shall be addressed as follows:

               If to Executive at the address set forth in the Employer’s payroll records.

               If to Employer:

               DealerTrack Holdings, Inc.
               1111 Marcus Avenue, Suite M04
               Lake Success, NY 11042

               With a copy to:

               General Counsel
               DealerTrack Holdings, Inc.
               1111 Marcus Avenue, Suite M04
               Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in writing in accordance herewith.

          Section 12. Legal Counsel

          In entering into this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

          Section 13. Section and Other Headings

          The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

          Section 14. Governing Law

          This Agreement has been executed and delivered, and shall be governed by and construed in accordance with the applicable laws pertaining, in the State of New York, without regard to conflicts of laws principles.

          Section 15. Severability

          In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a governmental authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability, to the maximum extent

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permissible by law, (a) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (b) by or before any other authority of any of the terms and provisions of this Agreement.

          Section 16. Counterparts

          Section 17. This Agreement may be executed in two counterpart copies of the entire document or of signature pages to the document, each of which may be executed by one of the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon both of the parties hereto.

          Section 18. Benefit

          This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns. Insofar as Executive is concerned, this Agreement, being personal, cannot be assigned; provided, however, that should Executive become entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his legal representatives, successors, and assigns. Without limiting the generality of the foregoing, all representations, warranties, covenants and other agreements made by or on behalf of Executive in this Agreement shall inure to the benefit of the successors and assigns of Employer.

          Section 19. Modification

          This Agreement may not be amended or modified other than by a written agreement executed by all parties hereto.

          Section 20. Entire Agreement

          Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the parties and supersedes all other representations, warranties, agreements and understandings, oral or otherwise, among the parties with respect to the matters contained herein, including any prior employment agreements between Executive and Employer or any affiliate of Employer.

          Section 21. Arbitration

          (a) Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the termination thereof, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by expedited, binding arbitration to be held in New York, New York in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

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          (b) The arbitrator shall apply New York law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

          (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

          Section 22. Representations and Warranties of Executive

          In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer, to the best of his knowledge after the review of his personnel files, that: (a) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement or other understanding to which Executive is a party or by which he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement, document, arrangement or other understanding with any person (other than Employer) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services.

          Section 23. Waiver of Breach

          Except as may specifically provided herein, the failure of a party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver hereto must be in writing.

[signature page follows]

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

EXECUTIVE:
Mark F. O’Neil
EMPLOYER:
By:
	Name:
	Title:
	Date:

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EX-10.2

Exhibit 10.2

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

          This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between Robert Cox (“Executive”) and DealerTrack Holdings, Inc, a Delaware corporation (“Employer”) with principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042.

          WHEREAS, Executive and Employer are parties to a senior executive employment agreement, dated as of May 26, 2005 (the “Existing Employment Agreement”); and

          WHEREAS, the parties hereto wish to amend and restate the Existing Employment Agreement pursuant to this Agreement;

          NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment Agreement is hereby amended and restated in its entirety as follows:

          Section 1. Term

          Employer shall continue to employ Executive and Executive agrees to continue such employment, upon the terms and conditions hereinafter set forth, from the Effective Date through and including August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for successive one year periods (each, a “Renewal Term”) unless one party gives notice to the other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any renewal) of its desire to terminate the Agreement. The term of this Agreement, including the Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

          Section 2. Executive’s Duties

          (a) Executive shall be Senior Vice President, Chief Financial Officer and Treasurer and shall report directly to Employer’s Chief Executive Officer or his designee. Executive shall faithfully and diligently perform his duties at the direction of Employer’s Chief Executive Officer, or his designee, to the best of Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full business time and attention to the performance of the services customarily incident to such office, subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii) carry out his duties in a competent and professional manner; and (iii) generally promote the interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any activity that is detrimental to the interests of Employer or any of its affiliates, including, without limitation, any public criticism or disparagement of any type by Executive, through the media or otherwise, of Employer or any of its affiliates or employees, except in connection with the exercise of Executive’s rights against Employer or any of its affiliates.

          (b) Executive agrees to abide by all policies applicable to senior executive officers of Employer promulgated from time to time by Employer, which policies are enforced uniformly and applicable to all similar executives of Employer.

          (c) Except for such business travel as may be incident to his duties hereunder, Executive shall perform his duties at Employer’s offices at the address set forth in the preamble to this Agreement or at such other location as may be approved by Employer.

          Section 3. Compensation for Executive’s Services

          In consideration of the duties and services to be performed by Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

          (a) Salary. Executive shall earn salary (the “Salary”) at the annual rate of Two Eighty Thousand Dollars ($280,000) (the “Minimum Salary”), less all applicable federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in periodic installments in accordance with Employer’s payroll practices. During the Term, the Board of Directors of Employer (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”) will review the Salary annually and may in its discretion increase the Salary, but may not reduce it during the Term unless Employer institutes salary reductions across the board; provided, however, that in no event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

          (b) Bonus. For each fiscal year of Employer (each, a “Fiscal Year”), Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be based on the achievement of certain performance benchmarks by Employer during such Fiscal Year which shall be determined by the Board. The Board shall review the target Bonus on an annual basis and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus shall not be decreased except in connection with company-wide bonus reductions. The target Bonus for any Fiscal Year shall be at least sixty (60%) percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with Employer’s bonus payments to its other similarly situated senior executive officers by no later than two and one half (2¹/2) months following the end of such Fiscal Year. Executive understands and agrees that the Bonus is established in part as an inducement for Executive to remain employed by Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal Year during the Term, then Executive shall not receive payment of any Bonus for such year.

          (c) Equity. In connection with Executive’s employment, Executive has been and may continue to be granted stock options (“Stock Options”) to purchase equity securities of Employer pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or any other successor equity incentive plans (collectively, the “Stock Incentive Plans”). Except as otherwise provided herein, the terms of the Stock Options shall be governed by the

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Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of Control (defined below). Executive shall be credited with full acceleration and vesting of his Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a material negative change in Executive’s compensation or responsibilities within twelve (12) months after a Change of Control; or (3) the requirement that Executive be based at a location which is more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with Good Reason or by Employer without Cause, or under circumstances described above which would result in certain accelerated vesting of any unvested Stock Options held by Executive, the unexercised portion of any Stock Options held by Executive will not terminate until the twelve (12) month anniversary of the date of termination of Executive’s employment. In the event Employer elects to grant equity based awards other than Options, such grants shall, where appropriate, be subject to equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a “Change of Control” shall mean and includes each of the following:

     (i) A transaction or series of transactions (other than an offering of shares of Employer to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Employer, any of its subsidiaries, an employee benefit plan maintained by the Employer or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Employer) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer possessing more than 50% of the total combined voting power of the Employer’s securities outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Board or nomination for election by the Employer’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer (whether directly involving the Employer or indirectly involving the Employer through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Employer’s assets in any single transaction or

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series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

     (A) Which results in the Employer’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Employer or the person that, as a result of the transaction, controls, directly or indirectly, the Employer or owns, directly or indirectly, all or substantially all of the Employer’s assets or otherwise succeeds to the business of the Employer (the Employer or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

     (B) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Employer prior to the consummation of the transaction; or

     (iv) The Employer’s stockholders approve a liquidation or dissolution of the Employer.

The Board or its designee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control of the Employer has occurred, and the date of the occurrence of such Change of Control and any incidental matters relating thereto.

          (d) Benefits. Employer shall provide Executive with the right to participate in and receive benefits from all life, accident, disability, medical and pension plans, and all similar benefits as are from time to time in effect and are generally made available to similar situated senior executive officers of Employer. The amount and extent of benefits to which Executive is entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

          (e) Expenses. Employer shall promptly reimburse Executive for reasonable expenses for cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s expense reimbursement policies and guidelines.

          (f) Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used in accordance with Employer’s policy and procedure for other similarly situated senior executive officers.

          (g) Modification. Employer reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs referenced in Sections 3(d) and (e) at any time in its discretion without recourse by Executive so long as such action is taken generally with respect to other similarly situated senior executive officers. Any

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such modification, suspension or discontinuance of the plans, practices and policies referenced in Section 3(e) will not apply to otherwise reimbursable expenses incurred by Executive prior to any such modification, suspension or discontinuance.

          Section 4. Termination of Employment

          (a) Resignation. Executive may voluntarily terminate his employment with Employer, at any time, with or without Good Reason, upon written notice to Employer.

          (b) Termination. Employer may terminate Executive’s employment at any time, with or without Cause, upon written notice to Executive.

          (c) Death or Disability. Executive’s employment shall terminate immediately upon Executive’s death. In the event Employer, in good faith, determines that Executive is unable to perform the functions of his position due to a Disability (as defined below), it may notify Executive in writing of its intention to terminate Executive’s employment and Executive’s employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment that substantially limits a major life activity of Executive and renders Executive unable to perform the essential functions of his position even with reasonable accommodation (that does not impose an undue hardship on Employer), and which has lasted at least (i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any, under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any election period under the Employer’s long term disability program (without regard to whether Executive is awarded benefits under such program), whichever is longer.

          (d) Cause. Employer may immediately terminate Executive’s employment for “Cause” by giving written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

(1)	Executive’s commission of an act of fraud or embezzlement upon Employer or any of its affiliates; or
(2)	Executive’s commission of any willful act intended to injure the reputation, business, or any business relationship of Employer or any of its affiliates; or
(3)	Executive is found by a court of competent jurisdiction to have committed a felony; or
(4)	the refusal or failure of Executive to perform Executive’s duties with Employer in a competent and professional manner that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in

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     nature or is not susceptible of cure, then no cure period shall be required hereunder; or

(5) the refusal or failure of Executive to comply with any of his material obligations under this Agreement (including any exhibit hereto) that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes Executive has materially breached this Agreement; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder.

          (e) Good Reason. Executive may terminate his employment for “Good Reason,” by delivering written notice of such termination (“Employer Default Notice”) to Employer within sixty (60) days of the occurrence of any of the following events, each of which shall constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the Stock Incentive Plans or any agreements thereunder, which has not been cured within the allotted time; (ii) a material reduction of Executive’s then current title, status, authority, responsibility or duties or the assignment to Executive of any duties materially inconsistent with Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits; (iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi) the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days following delivery to Employer of the Employer Default Notice.

          (f) Continuing Obligations. Executive acknowledges and agrees that any termination under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall continue in full force and effect beyond such termination for any reason.

          Section 5. Termination Obligations

          (a) Resignation. If Executive’s employment is terminated voluntarily by Executive without Good Reason, Executive’s employment shall terminate without further obligations to Executive other than for payment of the sum of any unpaid Salary determined by the Board and reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date of termination. If Executive voluntarily terminates his employment without

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Good Reason and within (30) days of such termination, Employer determines that it would have had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been terminated for Cause and the terms of Section 5(b) shall apply.

          (b) Cause. If Executive’s employment is terminated by Employer for Cause, this Agreement shall terminate without further obligations to Executive other than for the timely payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall apply.

          (c) By Employer Other than for Cause; Death or Disability; By Executive for Good Reason.

               (1) If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or (y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good Reason, Employer shall have no further obligations to Executive other than for (i) the payment of Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and payable within thirty (30) days of the Severance Commencement Date; provided, however, that in the event that Executive’s termination of employment is within twelve (12) months after a Change of Control, such severance pay shall be increased to an amount equal to twenty four (24) months of Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive worked for Employer during the year of his termination by Executive’s target Bonus for such year and payable within thirty (30) days of the Severance Commencement Date, and (iv) the reimbursement of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier. For purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of Employer or its affiliates is publicly traded on an established securities market or otherwise and the Board (or its delegate) determines that as of the date of termination of Executive’s employment that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder) and that Section 409A of the Code applies with respect to payments to Executive pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s “separation from service” (within the meaning of section 409A of the Code); or (y) if the Board (or its delegate) determines that Executive is not such a “key employee” as of date of Executive’s termination of employment (or that Section 409A of the Internal Revenue Code does not apply with respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s termination of employment.

               (2) If Executive terminates his employment for Good Reason and it is subsequently determined by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a voluntary resignation, the terms of Section 5(a) shall apply, and all

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monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

               (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall receive for termination in accordance with this Section 5(c); provided, however, that no amounts shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of Sections 7, 8 or 9 of this Agreement.

          (d) Release. Notwithstanding anything to the contrary contained herein, no severance payments required hereunder shall be made by Employer until such time as Executive shall execute a general release for the benefit of Employer and its affiliates in a form satisfactory to Employer. Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s charter or bylaws, any indemnification agreement or applicable law.

          (e) Equity Compensation Awards. Except as expressly provided herein, except for the provisions of Section 3(c) of this Agreement, the terms of the Stock Incentive Plans and any related award agreements and/or notice of grant shall govern the termination, vesting, and/or exercise of Executive’s stock options or other equity awards upon the termination of Executive’s employment for any reason.

          (f) Exclusive Remedy. Executive agrees that the payments set forth in this Agreement shall constitute the exclusive and sole remedy for any termination of Executive’s employment and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to this Agreement.

          (g) Termination of Executive’s Office. Following the termination of Executive’s employment for any reason, Executive shall hold no further office or position with Employer or any of its affiliates.

          Section 6. Parachute Payments.

          (a) If it is determined by a nationally recognized United States public accounting firm selected by the Employer and approved in writing by the Executive (which approval shall not be unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the Executive in connection with this Agreement or otherwise (including without limitation any Stock Option or other equity based award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections

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280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

          (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax group which includes the Employer) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by the Executive. The Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the Employer, provide to the Employer true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Employer, evidencing such payment. If, after the Employer’s payment to the Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or such determination is made by the Internal Revenue Service, then within ten (10) business days of such determination, the Executive shall pay to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the amount of any such increase; provided, however, that in no event shall the Executive have any such refund obligation if it is determined by the Employer that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by the Executive; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered in connection with the Auditor’s determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon the Executive to the extent that such interest and penalties are related to the Auditor’s determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his employment for any reason and the termination or expiration of this Agreement for any reason.

          Section 7. Restrictions Respecting Confidential Information

          Executive hereby covenants and agrees that, during his employment and thereafter, Executive will not, under any circumstance, disclose in any way any Confidential Information (as defined below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii) to his attorney or other advisers in connection with Executive’s enforcement of his rights hereunder, provided such individuals or entities agree to be bound by the confidentiality restrictions herein contained, and if such Confidential Information is relevant to such enforcement action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes of the foregoing, “Confidential Information” means any information pertaining to the assets, business, creditors, vendors, manufacturers, customers, data, employees, financial condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers, systems and technologies of Employer and its affiliates, including (without limitation) the contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer and its affiliates; provided, however, that Confidential Information shall exclude any information that was, is, or becomes publicly available other than through disclosure by Executive or any other person known to Executive to be subject to confidentiality obligations to Employer. All

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Confidential Information is and will remain the sole and exclusive property of Employer and its affiliates. Following the termination of his employment, Executive shall return all documents and other tangible items containing Confidential Information to Employer, without retaining any copies, notes or excerpts thereof.

          Section 8. Proprietary Matters

          Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes, or know-how that are generated or conceived by Executive during the Term (collectively, the “Inventions”) will be the sole and exclusive property of Employer, and Executive will, whenever requested to do so by Employer (either during the Term or thereafter), execute and assign any and all applications, assignments and/or other instruments and do all things which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce and defend patents, copyrights, trade names or trademarks of the United States or of foreign countries for said Inventions, or in order to assign and convey or otherwise make available to Employer the sole and exclusive right, title, and interest in and to said Inventions, applications, patents, copyrights, trade names or trademarks; provided, however, that the provisions of this Section 8 shall not apply to an Invention that Executive developed entirely on his own time without using Employer’s Confidential Information except for those Inventions that either (i) directly and materially relate, at the time of conception or reduction to practice of the invention, to Employer’s business, or actual or demonstrably anticipated research or development of Employer, or (ii) directly and materially result from any work performed by Executive for Employer. Executive shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by him during his employment by Employer, whether solely or jointly with others, and whether or not patentable or copyrightable, (a) which relate to any matters or business of the type carried on or being developed by Employer, or (b) which result from or are suggested by any work done by him in the course of his employment by Employer. Executive shall also promptly communicate and disclose to Employer all material other data obtained by him concerning the business or affairs of Employer in the course of his employment by Employer.

          Section 9. Nonsolicitation/Non-Compete

          (a) Executive agrees that throughout his employment and for a period of two (2) years following the termination of his employment for any reason, he will not directly or indirectly, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or be connected with, or have any financial interest in, any Competitor. Ownership, for personal investment purposes only, of not to exceed (i) individually, two (2%) percent of the outstanding capital stock of any privately held entity, or (ii) voting stock of any publicly held corporation shall not constitute a violation hereof. For purposes of this Agreement, the term “Competitor” shall mean any individual or entity, present or future, then providing any of the following products or services: (1) a multi-finance source automotive finance portal, (2) electronic contracting for automotive finance or lease transactions, other than at a financing source entity that purchases electronic contracts or leases from automotive dealers, (3) automotive lease, retail and/or balloon payment comparison or desking tools, (4) dealer management systems (DMS), (5) any other sales or finance and insurance-related products or services for automotive dealerships similar to any products or services offered by Employer or

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any of its affiliates, or (6) any other products or services similar to any products or services offered by Employer or any of its affiliates and which product or service category accounts for at least 15% of the consolidated revenues for the last fiscal quarter of Employer.

          (b) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not actively solicit for employment, consulting or any other arrangement any employee of Employer or any of its present or future affiliates (while an affiliate).

          (c) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not influence or attempt to influence customers of Employer or any of its present or future affiliates, either directly or indirectly, to divert their business to any Competitor.

          (d) The restrictions contained in this Section 9 are necessary for the protection of the business and goodwill of Employer and are considered by Executive to be reasonable for such purpose. Further, Executive represents that these restrictions will not prevent him from earning a livelihood during the restricted period.

          (e) This Section 9 shall survive the termination or expiration of this Agreement.

          Section 10. Equitable Relief

          Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be adequately compensated by money damages in the event of a breach, or threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any such breach, or threatened breach, Employer will not have an adequate remedy at law. It is therefore agreed that Employer, in addition to all other such rights, powers, privileges and remedies that it may have, shall be entitled to injunctive relief, specific performance or such other equitable relief as Employer may request to enforce any of those terms and provisions and to enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby waives any objection or defense that there is an adequate remedy available at law. Notwithstanding the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive hereby consents to the jurisdiction of the state and federal courts of New York for purposes of such an action. Executive agrees that any claim he may have against Employer or any of its affiliates shall not constitute a defense against the issuance of any such equitable relief. The foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and remedies against or in respect of a breaching party or any other person or thing under this Agreement, or applicable law.

          Section 11. Notice

          Any notice, request, demand or other communication hereunder shall be in writing, shall be delivered by hand or sent by registered or certified mail or by reputable overnight delivery service, postage prepaid, to the addressee at the address set forth below (or at

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such other address as shall be designated hereunder by written notice to the other party hereto) and shall be deemed conclusively to have been given when actually received by the addressee.

          All notices and other communications hereunder shall be addressed as follows:

If to Executive at the address set forth in the Employer’s payroll records.

If to Employer:

DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

With a copy to:

General Counsel
DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in writing in accordance herewith.

          Section 12. Legal Counsel

          In entering into this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

          Section 13. Section and Other Headings

          The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

          Section 14. Governing Law

          This Agreement has been executed and delivered, and shall be governed by and construed in accordance with the applicable laws pertaining, in the State of New York, without regard to conflicts of laws principles.

          Section 15. Severability

          In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a governmental authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability, to the maximum extent

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permissible by law, (a) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (b) by or before any other authority of any of the terms and provisions of this Agreement.

          Section 16. Counterparts

          Section 17. This Agreement may be executed in two counterpart copies of the entire document or of signature pages to the document, each of which may be executed by one of the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon both of the parties hereto.

          Section 18. Benefit

          This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns. Insofar as Executive is concerned, this Agreement, being personal, cannot be assigned; provided, however, that should Executive become entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his legal representatives, successors, and assigns. Without limiting the generality of the foregoing, all representations, warranties, covenants and other agreements made by or on behalf of Executive in this Agreement shall inure to the benefit of the successors and assigns of Employer.

          Section 19. Modification

          This Agreement may not be amended or modified other than by a written agreement executed by all parties hereto.

          Section 20. Entire Agreement

          Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the parties and supersedes all other representations, warranties, agreements and understandings, oral or otherwise, among the parties with respect to the matters contained herein, including any prior employment agreements between Executive and Employer or any affiliate of Employer.

          Section 21. Arbitration

          (a) Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the termination thereof, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by expedited, binding arbitration to be held in New York, New York in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

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          (b) The arbitrator shall apply New York law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

          (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

          Section 22. Representations and Warranties of Executive

          In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer, to the best of his knowledge after the review of his personnel files, that: (a) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement or other understanding to which Executive is a party or by which he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement, document, arrangement or other understanding with any person (other than Employer) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services.

          Section 23. Waiver of Breach

          Except as may specifically provided herein, the failure of a party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver hereto must be in writing.

[signature page follows]

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

EXECUTIVE:
Robert Cox
EMPLOYER:
By:
	Name:
	Title:
	Date:

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EX-10.3

Exhibit 10.3

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

     This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between John A. Blair (“Executive”) and Automotive Lease Guide (alg), Inc., a Delaware corporation (“Employer”) with principal offices at 3760 State Street, Suite 200, Santa Barbara, CA, 93105.

     WHEREAS, Executive and Employer are parties to a senior executive employment agreement, dated as of May 25, 2005(the “Existing Employment Agreement”); and

     WHEREAS, the parties hereto wish to amend and restate the Existing Employment Agreement pursuant to this Agreement;

     NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment Agreement is hereby amended and restated in its entirety as follows:

     Section 1. Term

     Employer shall continue to employ Executive and Executive agrees to continue such employment, upon the terms and conditions hereinafter set forth, from the Effective Date through and including August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for successive one year periods (each, a “Renewal Term”) unless one party gives notice to the other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any renewal) of its desire to terminate the Agreement. The term of this Agreement, including the Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

     Section 2. Executive’s Duties

     (a) Executive shall be Chief Executive Officer of Employer and shall report directly to the Board of Director’s of Employer (the “Board”) and the Employer’s Chief Executive Officer and or President of DealerTrack Holdings, Inc. (“Parent”) or his designee. Executive shall faithfully and diligently perform his duties at the direction of the Board, Parent’s Chief Executive Officer, President, or his designee, to the best of Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full business time and attention to the performance of the services customarily incident to such office, subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii) carry out his duties in a competent and professional manner; and (iii) generally promote the interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any activity that is detrimental to the interests of Employer, Parent or any of their affiliates, including, without limitation, any public criticism or disparagement of any type by Executive, through the media or otherwise, of Employer or any of its affiliates or employees, except in connection with the exercise of Executive’s rights against Employer or any of its affiliates.

     (b) Executive agrees to abide by all policies applicable to senior executive officers of Employer promulgated from time to time by Parent or Employer, as applicable, which policies are enforced uniformly and applicable to all similar executives of Employer.

     (c) Except for such business travel as may be incident to his duties hereunder, Executive shall perform his duties at Employer’s offices at the address set forth in the preamble to this Agreement or at such other location as may be approved by Employer.

     Section 3. Compensation for Executive’s Services

     In consideration of the duties and services to be performed by Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

     (a) Salary. Executive shall earn salary (the “Salary”) at the annual rate of Two Hundred Sixty Eight Thousand Dollars ($268,000) (the “Minimum Salary”), less all applicable federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in periodic installments in accordance with Employer’s payroll practices. During the Term, the Board of Directors of Parent (the “Parent Board”) or the Compensation Committee of the Parent Board (the “Compensation Committee”) will review the Salary annually and may in its discretion increase the Salary, but may not reduce it during the Term unless Parent institutes salary reductions across the board; provided, however, that in no event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

     (b) Bonus. For each fiscal year of Parent (each, a “Fiscal Year”), Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be based on the achievement of certain performance benchmarks by Parent and/or Employer during such Fiscal Year which shall be determined by the Parent Board. The Parent Board shall review the target Bonus on an annual basis and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus shall not be decreased except in connection with company-wide bonus reductions. The target Bonus for any Fiscal Year shall be at least fifty (50%) percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with Employer’s bonus payments to its other similarly situated senior executive officers by no later than two and one half (2¹/2) months following the end of such Fiscal Year. Executive understands and agrees that the Bonus is established in part as an inducement for Executive to remain employed by Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal Year during the Term, then Executive shall not receive payment of any Bonus for such year.

     (c) Additional Compensation. Without limiting the amounts otherwise set forth in this Agreement, Executive shall receive a payment each month (the “Additional Compensation”) in arrears from the Effective Date of this Agreement until the Note described in Section 3(d) below is issued, based on the following formula:

[ $1,200,000 (the “Face Amount”) ] x [the prime interest rate, as published in the Wall Street Journal as of the Effective Date, plus 1%, up to an aggregate maximum rate of 7%) (the “Interest Rate”)] / 12

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     (d) Additional Bonus. As an additional inducement for Executive to remain employed by Employer, Executive shall be eligible to receive an additional bonus (the “Additional Bonus”), less all applicable federal, state and local tax withholdings, as follows:

(1)	If in any calendar year ending on or before December 31, 2009 (y) the revenue from sales of Employer products and Chrome Systems Corporation (“Chrome”) products (“ALG/Chrome Revenues”) for such year equals or exceeds $50.0 million (the “ALG/Chrome Revenue Milestone”) and (z) the EBITDA Ratio for the ALG/Chrome business for such year equals or exceeds the EBITDA Ratio of the Parent business as a whole (exclusive of the ALG/Chrome business), then Parent shall promptly issue to Executive a note in the principal amount of $1,200,000 on the terms described in (d)(3) below (the “Note”). “EBITDA Ratio” shall mean the ratio of the earnings before interest, taxes, depreciation, and amortization for the respective business in question divided by the revenue from such business.
(2)	If ALG/Chrome Revenues for the year ending December 31, 2009 equal 70% of the ALG/Chrome Revenue Milestone, and (d)(1)(z) above occurs for that year, Parent shall issue to Executive a Note in the principal amount of $600,000. If ALG/Chrome Revenues for the year ending December 31, 2009 are greater than 70% of the ALG/Chrome Revenue Milestone, but less than 100% of such milestone and (d)(1)(z) above occurs, then Parent shall issue to Executive a Note in the principal amount of (x) $600,000 plus (y) $20,000 for each additional $500,000 of ALG/Chrome Revenues for the year ending December 31, 2009 in excess of 70% of the ALG/Chrome Revenue Milestone and less than 100% of the ALG/Chrome Revenue Milestone. For the avoidance of doubt, there will be no additional $20,000 (or portion thereof) added to the principal of the Note for each incremental additional ALG/Chrome Revenues for the year ending December 31, 2009 of less than $500,000. For example, if ALG/Chrome Revenues for the year ending December 31, 2009 are $36,200,000, then an additional amount of $40,000 (i.e., $20,000 x2) shall be added to the principal amount of the Note for a total principal amount of $640,000.
(3)	The Note will provide that (w) it shall bear interest at the Interest Rate, (x) interest accrued on the Note will be paid to the Executive monthly, (y) it will be payable in full on June 30, 2010, and (z) it may be prepaid without penalty at any time in Parent’s sole discretion.

(i) Within 90 days following each of the years ending December 31, 2006, 2007, 2008 and 2009, Parent shall deliver to Executive Parent’s calculation, with reasonable

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	supporting detail (the “Parent’s Calculation”) of ALG/Chrome Revenues or Employer Revenues, as the case may be, and the applicable EBITDA Ratios (collectively, the “Financial Milestones”) for the preceding calendar year.
(ii)	If Executive disagrees with the Parent’s Calculation, the Executive may, within 30 days after delivery of the Parent’s Calculation, deliver a notice to Parent disagreeing with any portion of the Parent’s Calculation for such year (the “Objection Notice”). The Objection Notice shall specify in reasonable detail those items or amounts as to which Executive disagrees. If Executive does not deliver an Objection Notice during such time period or Executive indicates agreement with the Parent’s Calculation, then the Parent’s Calculation shall be the agreed upon amounts for the Financial Milestones for such applicable period.
(iii)	If Executive shall have delivered the Objection Notice within the 30 day period referred to in clause (ii) above, then Parent and Executive shall, during the 30 days following such delivery, use their good faith efforts to reach agreement on the disputed items or amounts in order to determine the Financial Milestones. If Parent and Executive are unable to reach agreement during such period, they shall promptly thereafter cause a mutually acceptable independent public accounting firm (the “Accounting Referee”) to review the disputed items or amounts for the purpose of calculating the Financial Milestone(s) in dispute. The Accounting Referee may request additional supporting detail from the Parent pertaining to the portion of the Parent’s Calculation identified by Executive in the Objection Notice. Within ten (10) days after delivery of such additional detail, the Executive may supplement the Objection Notice to add any disputes newly discovered by the Executive from the additional detail, but only if such item in dispute could not reasonably have been ascertained from the supporting detail provided by Parent with the Parent Calculation. The Objection Notice may be supplemented only once. In making such calculation, the Accounting Referee shall consider only those items or amounts in the Parent’s Calculation as to which the Executive has disagreed and which are specifically identified in reasonable notice in the Objection Notice, as supplemented, if applicable. The Accounting Referee shall deliver to Parent and Executive, as promptly as practicable, a written report setting forth its calculation of the items or amounts in dispute. Such report

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shall be final and binding upon Parent and Executive, absent manifest error or willful misconduct. The cost of such review and report shall be borne (x) by Executive, if Parent’s calculation of the Financial Milestone(s) in dispute is closer to the Accounting Referee’s determination than Executive’s calculation thereof, (y) by Parent, if the reverse is true and (z) except as provided in (x) or (y) above, equally by Executive and Parent.

(4) If Parent sells or disposes of some or all of the assets of Employer or Chrome or does not collect fair market value for the products/services of Employer or Chrome because said products/services were sold as part of a bundle of products/services offered by Parent, the terms of this Section 3(d) will be adjusted equitably in the manner described under similar circumstances in that Asset Purchase Agreement, dated May 25, 2005, by and among Automotive Lease Guide (alg), LLC, ALG, Executive and other parties (the “Purchase Agreement”).

     (e) Equity. In connection with Executive’s employment, Executive has been and may continue to be granted stock options (“Stock Options”) to purchase equity securities of Parent pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or any other successor equity incentive plans (collectively, the “Stock Incentive Plans”). Except as otherwise provided herein, the terms of the Stock Options shall be governed by the Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of Control (defined below). Executive shall be credited with full acceleration and vesting of his Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a material negative change in Executive’s compensation or responsibilities within twelve (12) months after a Change of Control; or (3) the requirement that Executive be based at a location which is more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with Good Reason or by Employer without Cause, or under circumstances described above which would result in certain accelerated vesting of any unvested Stock Options held by Executive, the unexercised portion of any Stock Options held by Executive will not terminate until the twelve (12) month anniversary of the date of termination of Executive’s employment. In the event Employer elects to grant equity based awards other than Options, such grants shall, where appropriate, be subject to equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a “Change of Control” shall mean and includes each of the following:

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     (i) A transaction or series of transactions (other than an offering of shares of Parent to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Parent, any of its subsidiaries, an employee benefit plan maintained by the Parent or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Parent) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer or Parent possessing more than 50% of the total combined voting power of the Employer’s or Parent’s securities outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Parent Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Parent Board or nomination for election by the Parent’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer or Parent (whether directly involving the Employer or Parent or indirectly involving the Employer or Parent through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Employer’s or Parent’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

     (A) Which results in the Employer’s or Parent’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Employer or Parent or the person that, as a result of the transaction, controls, directly or indirectly, the Employer or Parent or owns, directly or indirectly, all or substantially all of the Employer’s or Parent’s assets or otherwise succeeds to the business of the Employer or Parent (the Employer or Parent or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

     (B) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Employer or Parent prior to the consummation of the transaction; or

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(iv) The Employer’s or Parent’s stockholders approve a liquidation or dissolution of the Employer or Parent.

The Parent Board or its designee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control of the Employer or Parent has occurred, and the date of the occurrence of such Change of Control and any incidental matters relating thereto.

     (f) Benefits. Employer shall provide Executive with the right to participate in and receive benefits from all life, accident, disability, medical and pension plans, and all similar benefits as are from time to time in effect and are generally made available to similar situated senior executive officers of Employer. The amount and extent of benefits to which Executive is entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

     (g) Expenses. Employer shall promptly reimburse Executive for reasonable expenses for cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s expense reimbursement policies and guidelines.

     (h) Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used in accordance with Employer’s policy and procedure for other similarly situated senior executive officers.

     (i) Modification. Employer reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs referenced in Sections 3(f) and (g) at any time in its discretion without recourse by Executive so long as such action is taken generally with respect to other similarly situated senior executive officers. Any such modification, suspension or discontinuance of the plans, practices and policies referenced in Section 3(g) will not apply to otherwise reimbursable expenses incurred by Executive prior to any such modification, suspension or discontinuance.

     Section 4. Termination of Employment

     (a) Resignation. Executive may voluntarily terminate his employment with Employer, at any time, with or without Good Reason, upon written notice to Employer.

     (b) Termination. Employer may terminate Executive’s employment at any time, with or without Cause, upon written notice to Executive.

     (c) Death or Disability. Executive’s employment shall terminate immediately upon Executive’s death. In the event Employer, in good faith, determines that Executive is unable to perform the functions of his position due to a Disability (as defined below), it may notify Executive in writing of its intention to terminate Executive’s employment and Executive’s employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment that substantially limits a major life activity of Executive and renders Executive unable to perform the essential functions of his position even with reasonable

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accommodation (that does not impose an undue hardship on Employer), and which has lasted at least (i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any, under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any election period under the Employer’s long term disability program (without regard to whether Executive is awarded benefits under such program), whichever is longer.

     (d) Cause. Employer may immediately terminate Executive’s employment for “Cause” by giving written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

(1)	Executive’s commission of an act of fraud or embezzlement upon Employer or any of its affiliates; or
(2)	Executive’s commission of any willful act intended to injure the reputation, business, or any business relationship of Employer or any of its affiliates; or
(3)	Executive is found by a court of competent jurisdiction to have committed a felony; or
(4)	the refusal or failure of Executive to perform Executive’s duties with Employer in a competent and professional manner that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder; or
(5)	the refusal or failure of Executive to comply with any of his material obligations under this Agreement (including any exhibit hereto) that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes Executive has materially breached this Agreement; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder.

     (e) Good Reason. Executive may terminate his employment for “Good Reason,” by delivering written notice of such termination (“Employer Default Notice”) to Employer within sixty (60) days of the occurrence of any of the following events, each of which shall constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the Stock Incentive Plans or any agreements thereunder, which has not been cured

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within the allotted time; (ii) a material reduction of Executive’s then current title, status, authority, responsibility or duties or the assignment to Executive of any duties materially inconsistent with Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits; (iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi) the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days following delivery to Employer of the Employer Default Notice.

     (f) Continuing Obligations. Executive acknowledges and agrees that any termination under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall continue in full force and effect beyond such termination for any reason.

     Section 5. Termination Obligations

     (a) Resignation. If Executive’s employment is terminated voluntarily by Executive without Good Reason, Executive’s employment shall terminate without further obligations to Executive other than for payment of the sum of any unpaid Salary determined by the Parent Board and reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date of termination. If Executive voluntarily terminates his employment without Good Reason and within (30) days of such termination, Employer determines that it would have had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been terminated for Cause and the terms of Section 5(b) shall apply.

     (b) Cause. If Executive’s employment is terminated by Employer for Cause, this Agreement shall terminate without further obligations to Executive other than for the timely payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall apply.

     (c) By Employer Other than for Cause; Death or Disability; By Executive for Good Reason.

          (1) If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or (y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good Reason, Employer shall have no further obligations to Executive other than for (i) the payment of Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and payable within thirty (30) days of the Severance

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Commencement Date; provided, however, that in the event that Executive’s termination of employment is within twelve (12) months after a Change of Control, such severance pay shall be increased to an amount equal to twenty four (24) months of Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive worked for Employer during the year of his termination by Executive’s target Bonus for such year and payable within thirty (30) days of the Severance Commencement Date, (iv) the reimbursement of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier, (v) the Additional Bonus, payable, if any, as set forth in Section 3(d) above, and (vi) the Additional Compensation, payable as set forth in Section 3(c) above until the earlier of June 30, 2010 or the Note is issued.. For purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of Parent or its affiliates is publicly traded on an established securities market or otherwise and the Parent Board (or its delegate) determines that as of the date of termination of Executive’s employment that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder) and that Section 409A of the Code applies with respect to payments to Executive pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s “separation from service” (within the meaning of section 409A of the Code); or (y) if the Parent Board (or its delegate) determines that Executive is not such a “key employee” as of date of Executive’s termination of employment (or that Section 409A of the Internal Revenue Code does not apply with respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s termination of employment.

          (2) If Executive terminates his employment for Good Reason and it is subsequently determined by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a voluntary resignation, the terms of Section 5(a) shall apply, and all monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

          (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall receive for termination in accordance with this Section 5(c); provided, however, that no amounts shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of Sections 7, 8 or 9 of this Agreement.

     (d) Release. Notwithstanding anything to the contrary contained herein, no severance payments required hereunder shall be made by Employer until such time as Executive shall execute a general release for the benefit of Employer and its affiliates in a form satisfactory to Employer. Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s or Parent’s charter or bylaws, any indemnification agreement or applicable law.

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     (e) Equity Compensation Awards. Except as expressly provided herein, except for the provisions of Section 3(e) of this Agreement, the terms of the Stock Incentive Plans and any related award agreements and/or notice of grant shall govern the termination, vesting, and/or exercise of Executive’s stock options or other equity awards upon the termination of Executive’s employment for any reason.

     (f) Exclusive Remedy. Executive agrees that the payments set forth in this Agreement shall constitute the exclusive and sole remedy for any termination of Executive’s employment and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to this Agreement.

     (g) Termination of Executive’s Office. Following the termination of Executive’s employment for any reason, Executive shall hold no further office or position with Employer or any of its affiliates.

     Section 6. Parachute Payments.

     (a) If it is determined by a nationally recognized United States public accounting firm selected by the Employer and approved in writing by the Executive (which approval shall not be unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the Executive in connection with this Agreement or otherwise (including without limitation any Stock Option or other equity based award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

     (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax group which includes the Employer) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by the Executive. The Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the Employer, provide to the Employer true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Employer, evidencing such payment. If, after the Employer’s payment to the Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or such determination is made by the Internal Revenue Service, then within ten (10) business days of such determination, the Executive shall pay to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the amount of any such increase; provided, however,

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that in no event shall the Executive have any such refund obligation if it is determined by the Employer that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by the Executive; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered in connection with the Auditor’s determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon the Executive to the extent that such interest and penalties are related to the Auditor’s determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his employment for any reason and the termination or expiration of this Agreement for any reason.

     Section 7. Restrictions Respecting Confidential Information

     Executive hereby covenants and agrees that, during his employment and thereafter, Executive will not, under any circumstance, disclose in any way any Confidential Information (as defined below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii) to his attorney or other advisers in connection with Executive’s enforcement of his rights hereunder, provided such individuals or entities agree to be bound by the confidentiality restrictions herein contained, and if such Confidential Information is relevant to such enforcement action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes of the foregoing, “Confidential Information” means any information pertaining to the assets, business, creditors, vendors, manufacturers, customers, data, employees, financial condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers, systems and technologies of Employer and its affiliates, including (without limitation) the contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer and its affiliates; provided, however, that Confidential Information shall exclude any information that was, is, or becomes publicly available other than through disclosure by Executive or any other person known to Executive to be subject to confidentiality obligations to Employer. All Confidential Information is and will remain the sole and exclusive property of Employer and its affiliates. Following the termination of his employment, Executive shall return all documents and other tangible items containing Confidential Information to Employer, without retaining any copies, notes or excerpts thereof.

     Section 8. Proprietary Matters

     Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes, or know-how that are generated or conceived by Executive during the Term (collectively, the “Inventions”) will be the sole and exclusive property of Employer, and Executive will, whenever requested to do so by Employer (either during the Term or thereafter), execute and assign any and all applications, assignments and/or other instruments and do all things which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce and defend patents, copyrights, trade names or trademarks of the United States or of foreign countries for said Inventions, or in order to assign and convey or otherwise make

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available to Employer the sole and exclusive right, title, and interest in and to said Inventions, applications, patents, copyrights, trade names or trademarks; provided, however, that pursuant to California Labor Code Section 2872 and any successor thereto, the provisions of this Section 8 shall not apply to an Invention that fully under the provisions of California Labor Code Section 2870 (and any successor thereto) which provides:

“Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either: (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or (2) Result from any work performed by the employee for the employer.”

     Executive shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by him during his employment by Employer, whether solely or jointly with others, and whether or not patentable or copyrightable, (a) which relate to any matters or business of the type carried on or being developed by Employer, or (b) which result from or are suggested by any work done by him in the course of his employment by Employer. Executive shall also promptly communicate and disclose to Employer all material other data obtained by him concerning the business or affairs of Employer in the course of his employment by Employer.

     Section 9. Nonsolicitation

     (a) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not actively solicit for employment, consulting or any other arrangement any employee of Employer or any of its present or future affiliates (while an affiliate).

     (b) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not influence or attempt to influence customers of Employer or any of its present or future affiliates, either directly or indirectly, to divert their business to any Competitor.

     (c) The restrictions contained in this Section 9 are necessary for the protection of the business and goodwill of Employer and are considered by Executive to be reasonable for such purpose. Further, Executive represents that these restrictions will not prevent him from earning a livelihood during the restricted period.

     (d) This Section 9 shall survive the termination or expiration of this Agreement.

     Section 10. Equitable Relief

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     Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be adequately compensated by money damages in the event of a breach, or threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any such breach, or threatened breach, Employer will not have an adequate remedy at law. It is therefore agreed that Employer, in addition to all other such rights, powers, privileges and remedies that it may have, shall be entitled to injunctive relief, specific performance or such other equitable relief as Employer may request to enforce any of those terms and provisions and to enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby waives any objection or defense that there is an adequate remedy available at law. Notwithstanding the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive hereby consents to the jurisdiction of the state and federal courts of Los Angeles for purposes of such an action. Executive agrees that any claim he may have against Employer or any of its affiliates shall not constitute a defense against the issuance of any such equitable relief. The foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and remedies against or in respect of a breaching party or any other person or thing under this Agreement, or applicable law.

     Section 11. Notice

     Any notice, request, demand or other communication hereunder shall be in writing, shall be delivered by hand or sent by registered or certified mail or by reputable overnight delivery service, postage prepaid, to the addressee at the address set forth below (or at such other address as shall be designated hereunder by written notice to the other party hereto) and shall be deemed conclusively to have been given when actually received by the addressee.

     All notices and other communications hereunder shall be addressed as follows:

If to Executive at the address set forth in the Employer’s
payroll records.

If to Employer:

DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

With a copy to:

General Counsel
DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in writing in accordance herewith.

     Section 12. Legal Counsel

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     In entering into this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

     Section 13. Section and Other Headings

     The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

     Section 14. Governing Law

     This Agreement has been executed and delivered, and shall be governed by and construed in accordance with the applicable laws pertaining, in the State of California, without regard to conflicts of laws principles.

     Section 15. Severability

     In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a governmental authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability, to the maximum extent permissible by law, (a) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (b) by or before any other authority of any of the terms and provisions of this Agreement.

     Section 16. Counterparts

     Section 17. This Agreement may be executed in two counterpart copies of the entire document or of signature pages to the document, each of which may be executed by one of the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon both of the parties hereto.

     Section 18. Benefit

     This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns. Insofar as Executive is concerned, this Agreement, being personal, cannot be assigned; provided, however, that should Executive become entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his legal representatives, successors, and assigns. Without limiting the generality of the foregoing, all representations, warranties, covenants and other agreements made by or on behalf of Executive in this Agreement shall inure to the benefit of the successors and assigns of Employer.

     Section 19. Modification

     This Agreement may not be amended or modified other than by a written agreement executed by all parties hereto.

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     Section 20. Entire Agreement

     Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the parties and supersedes all other representations, warranties, agreements and understandings, oral or otherwise, among the parties with respect to the matters contained herein, including any prior employment agreements between Executive and Employer or any affiliate of Employer. Nothing in this Agreement shall be deemed to affect in any way the term or enforceability of that certain Unfair Competition and NonSolicitation Agreement by and between Employer which agreement shall remain in full force and effect.

     Section 21. Arbitration

     (a) Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the termination thereof, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by expedited, binding arbitration to be held in Los Angeles, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

     (b) The arbitrator shall apply California law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

     (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

     Section 22. Representations and Warranties of Executive

     In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer, to the best of his knowledge after the review of his personnel files, that: (a) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement or other understanding to which Executive is a party or by which he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement, document, arrangement or other understanding with any person (other

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than Employer) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services.

     Section 23. Waiver of Breach

     Except as may specifically provided herein, the failure of a party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver hereto must be in writing.

[signature page follows]

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

EXECUTIVE:

John A. Blair

EMPLOYER:

Automotive Lease Guide (alg), Inc.

By:

Name:

Title:

Date:

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EX-10.4

Exhibit 10.4

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

          This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between Eric D. Jacobs (“Executive”) and DealerTrack Holdings, Inc, a Delaware corporation (“Employer”) with principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042.

          WHEREAS, Executive and Employer are parties to a senior executive employment agreement, dated as of May 26, 2005 (the “Existing Employment Agreement”); and

          WHEREAS, the parties hereto wish to amend and restate the Existing Employment Agreement pursuant to this Agreement;

          NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment Agreement is hereby amended and restated in its entirety as follows:

          Section 1. Term

          Employer shall continue to employ Executive and Executive agrees to continue such employment, upon the terms and conditions hereinafter set forth, from the Effective Date through and including August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for successive one year periods (each, a “Renewal Term”) unless one party gives notice to the other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any renewal) of its desire to terminate the Agreement. The term of this Agreement, including the Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

          Section 2. Executive’s Duties

          (a) Executive shall be Senior Vice President, General Counsel and Secretary and shall report directly to Employer’s Chief Executive Officer or his designee. Executive shall faithfully and diligently perform his duties at the direction of Employer’s Chief Executive Officer, or his designee, to the best of Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full business time and attention to the performance of the services customarily incident to such office, subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii) carry out his duties in a competent and professional manner; and (iii) generally promote the interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any activity that is detrimental to the interests of Employer or any of its affiliates, including, without limitation, any public criticism or disparagement of any type by Executive, through the media or otherwise, of Employer or any of its affiliates or employees, except in connection with the exercise of Executive’s rights against Employer or any of its affiliates.

          (b) Executive agrees to abide by all policies applicable to senior executive officers of Employer promulgated from time to time by Employer, which policies are enforced uniformly and applicable to all similar executives of Employer.

          (c) Except for such business travel as may be incident to his duties hereunder, Executive shall perform his duties at Employer’s offices at the address set forth in the preamble to this Agreement or at such other location as may be approved by Employer.

          Section 3. Compensation for Executive’s Services

          In consideration of the duties and services to be performed by Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

          (a) Salary. Executive shall earn salary (the “Salary”) at the annual rate of Two Hundred Seventy Thousand Dollars ($270,000) (the “Minimum Salary”), less all applicable federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in periodic installments in accordance with Employer’s payroll practices. During the Term, the Board of Directors of Employer (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”) will review the Salary annually and may in its discretion increase the Salary, but may not reduce it during the Term unless Employer institutes salary reductions across the board; provided, however, that in no event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

          (b) Bonus. For each fiscal year of Employer (each, a “Fiscal Year”), Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be based on the achievement of certain performance benchmarks by Employer during such Fiscal Year which shall be determined by the Board. The Board shall review the target Bonus on an annual basis and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus shall not be decreased except in connection with company-wide bonus reductions. The target Bonus for any Fiscal Year shall be at least fifty five (55%) percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with Employer’s bonus payments to its other similarly situated senior executive officers by no later than two and one half (2¹/2) months following the end of such Fiscal Year. Executive understands and agrees that the Bonus is established in part as an inducement for Executive to remain employed by Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal Year during the Term, then Executive shall not receive payment of any Bonus for such year.

          (c) Equity. In connection with Executive’s employment, Executive has been and may continue to be granted stock options (“Stock Options”) to purchase equity securities of Employer pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or any other successor equity incentive plans (collectively, the “Stock Incentive Plans”). Except as otherwise provided herein, the terms of the Stock Options shall be governed by the

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Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of Control (defined below). Executive shall be credited with full acceleration and vesting of his Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a material negative change in Executive’s compensation or responsibilities within twelve (12) months after a Change of Control; or (3) the requirement that Executive be based at a location which is more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with Good Reason or by Employer without Cause, or under circumstances described above which would result in certain accelerated vesting of any unvested Stock Options held by Executive, the unexercised portion of any Stock Options held by Executive will not terminate until the twelve (12) month anniversary of the date of termination of Executive’s employment. In the event Employer elects to grant equity based awards other than Options, such grants shall, where appropriate, be subject to equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a “Change of Control” shall mean and includes each of the following:

     (i) A transaction or series of transactions (other than an offering of shares of Employer to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Employer, any of its subsidiaries, an employee benefit plan maintained by the Employer or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Employer) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer possessing more than 50% of the total combined voting power of the Employer’s securities outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Board or nomination for election by the Employer’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer (whether directly involving the Employer or indirectly involving the Employer through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Employer’s assets in any single transaction or

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series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

     (A) Which results in the Employer’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Employer or the person that, as a result of the transaction, controls, directly or indirectly, the Employer or owns, directly or indirectly, all or substantially all of the Employer’s assets or otherwise succeeds to the business of the Employer (the Employer or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

     (B) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Employer prior to the consummation of the transaction; or

     (iv) The Employer’s stockholders approve a liquidation or dissolution of the Employer.

The Board or its designee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control of the Employer has occurred, and the date of the occurrence of such Change of Control and any incidental matters relating thereto.

          (d) Benefits. Employer shall provide Executive with the right to participate in and receive benefits from all life, accident, disability, medical and pension plans, and all similar benefits as are from time to time in effect and are generally made available to similar situated senior executive officers of Employer. The amount and extent of benefits to which Executive is entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

          (e) Expenses. Employer shall promptly reimburse Executive for reasonable expenses for cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s expense reimbursement policies and guidelines.

          (f) Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used in accordance with Employer’s policy and procedure for other similarly situated senior executive officers.

          (g) Modification. Employer reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs referenced in Sections 3(d) and (e) at any time in its discretion without recourse by Executive so long as such action is taken generally with respect to other similarly situated senior executive officers. Any

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such modification, suspension or discontinuance of the plans, practices and policies referenced in Section 3(e) will not apply to otherwise reimbursable expenses incurred by Executive prior to any such modification, suspension or discontinuance.

          Section 4. Termination of Employment

          (a) Resignation. Executive may voluntarily terminate his employment with Employer, at any time, with or without Good Reason, upon written notice to Employer.

          (b) Termination. Employer may terminate Executive’s employment at any time, with or without Cause, upon written notice to Executive.

          (c) Death or Disability. Executive’s employment shall terminate immediately upon Executive’s death. In the event Employer, in good faith, determines that Executive is unable to perform the functions of his position due to a Disability (as defined below), it may notify Executive in writing of its intention to terminate Executive’s employment and Executive’s employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment that substantially limits a major life activity of Executive and renders Executive unable to perform the essential functions of his position even with reasonable accommodation (that does not impose an undue hardship on Employer), and which has lasted at least (i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any, under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any election period under the Employer’s long term disability program (without regard to whether Executive is awarded benefits under such program), whichever is longer.

          (d) Cause. Employer may immediately terminate Executive’s employment for “Cause” by giving written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

(1) Executive’s commission of an act of fraud or embezzlement upon Employer or any of its affiliates; or

(2) Executive’s commission of any willful act intended to injure the reputation, business, or any business relationship of Employer or any of its affiliates; or

(3) Executive is found by a court of competent jurisdiction to have committed a felony; or

(4) the refusal or failure of Executive to perform Executive’s duties with Employer in a competent and professional manner that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in

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nature or is not susceptible of cure, then no cure period shall be required hereunder; or

(5) the refusal or failure of Executive to comply with any of his material obligations under this Agreement (including any exhibit hereto) that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes Executive has materially breached this Agreement; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder.

          (e) Good Reason. Executive may terminate his employment for “Good Reason,” by delivering written notice of such termination (“Employer Default Notice”) to Employer within sixty (60) days of the occurrence of any of the following events, each of which shall constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the Stock Incentive Plans or any agreements thereunder, which has not been cured within the allotted time; (ii) a material reduction of Executive’s then current title, status, authority, responsibility or duties or the assignment to Executive of any duties materially inconsistent with Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits; (iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi) the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days following delivery to Employer of the Employer Default Notice.

          (f) Continuing Obligations. Executive acknowledges and agrees that any termination under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall continue in full force and effect beyond such termination for any reason.

          Section 5. Termination Obligations

          (a) Resignation. If Executive’s employment is terminated voluntarily by Executive without Good Reason, Executive’s employment shall terminate without further obligations to Executive other than for payment of the sum of any unpaid Salary determined by the Board and reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date of termination. If Executive voluntarily terminates his employment without

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Good Reason and within (30) days of such termination, Employer determines that it would have had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been terminated for Cause and the terms of Section 5(b) shall apply.

          (b) Cause. If Executive’s employment is terminated by Employer for Cause, this Agreement shall terminate without further obligations to Executive other than for the timely payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall apply.

          (c) By Employer Other than for Cause; Death or Disability; By Executive for Good Reason.

                    (1) If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or (y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good Reason, Employer shall have no further obligations to Executive other than for (i) the payment of Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and payable within thirty (30) days of the Severance Commencement Date; provided, however, that in the event that Executive’s termination of employment is within twelve (12) months after a Change of Control, such severance pay shall be increased to an amount equal to twenty four (24) months of Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive worked for Employer during the year of his termination by Executive’s target Bonus for such year and payable within thirty (30) days of the Severance Commencement Date, and (iv) the reimbursement of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier. For purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of Employer or its affiliates is publicly traded on an established securities market or otherwise and the Board (or its delegate) determines that as of the date of termination of Executive’s employment that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder) and that Section 409A of the Code applies with respect to payments to Executive pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s “separation from service” (within the meaning of section 409A of the Code); or (y) if the Board (or its delegate) determines that Executive is not such a “key employee” as of date of Executive’s termination of employment (or that Section 409A of the Internal Revenue Code does not apply with respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s termination of employment.

                    (2) If Executive terminates his employment for Good Reason and it is subsequently determined by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a voluntary resignation, the terms of Section 5(a) shall apply, and all

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monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

                    (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall receive for termination in accordance with this Section 5(c); provided, however, that no amounts shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of Sections 7, 8 or 9 of this Agreement.

          (d) Release. Notwithstanding anything to the contrary contained herein, no severance payments required hereunder shall be made by Employer until such time as Executive shall execute a general release for the benefit of Employer and its affiliates in a form satisfactory to Employer. Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s charter or bylaws, any indemnification agreement or applicable law.

          (e) Equity Compensation Awards. Except as expressly provided herein, except for the provisions of Section 3(c) of this Agreement, the terms of the Stock Incentive Plans and any related award agreements and/or notice of grant shall govern the termination, vesting, and/or exercise of Executive’s stock options or other equity awards upon the termination of Executive’s employment for any reason.

          (f) Exclusive Remedy. Executive agrees that the payments set forth in this Agreement shall constitute the exclusive and sole remedy for any termination of Executive’s employment and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to this Agreement.

          (g) Termination of Executive’s Office. Following the termination of Executive’s employment for any reason, Executive shall hold no further office or position with Employer or any of its affiliates.

          Section 6. Parachute Payments.

          (a) If it is determined by a nationally recognized United States public accounting firm selected by the Employer and approved in writing by the Executive (which approval shall not be unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the Executive in connection with this Agreement or otherwise (including without limitation any Stock Option or other equity based award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections

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280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

          (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax group which includes the Employer) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by the Executive. The Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the Employer, provide to the Employer true and correct copies (with any amendments) of his federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Employer, evidencing such payment. If, after the Employer’s payment to the Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or such determination is made by the Internal Revenue Service, then within ten (10) business days of such determination, the Executive shall pay to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the amount of any such increase; provided, however, that in no event shall the Executive have any such refund obligation if it is determined by the Employer that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by the Executive; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered in connection with the Auditor’s determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon the Executive to the extent that such interest and penalties are related to the Auditor’s determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his employment for any reason and the termination or expiration of this Agreement for any reason.

          Section 7. Restrictions Respecting Confidential Information

          Executive hereby covenants and agrees that, during his employment and thereafter, Executive will not, under any circumstance, disclose in any way any Confidential Information (as defined below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii) to his attorney or other advisers in connection with Executive’s enforcement of his rights hereunder, provided such individuals or entities agree to be bound by the confidentiality restrictions herein contained, and if such Confidential Information is relevant to such enforcement action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes of the foregoing, “Confidential Information” means any information pertaining to the assets, business, creditors, vendors, manufacturers, customers, data, employees, financial condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers, systems and technologies of Employer and its affiliates, including (without limitation) the contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer and its affiliates; provided, however, that Confidential Information shall exclude any information that was, is, or becomes publicly available other than through disclosure by Executive or any other person known to Executive to be subject to confidentiality obligations to Employer. All

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Confidential Information is and will remain the sole and exclusive property of Employer and its affiliates. Following the termination of his employment, Executive shall return all documents and other tangible items containing Confidential Information to Employer, without retaining any copies, notes or excerpts thereof.

          Section 8. Proprietary Matters

          Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes, or know-how that are generated or conceived by Executive during the Term (collectively, the “Inventions”) will be the sole and exclusive property of Employer, and Executive will, whenever requested to do so by Employer (either during the Term or thereafter), execute and assign any and all applications, assignments and/or other instruments and do all things which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce and defend patents, copyrights, trade names or trademarks of the United States or of foreign countries for said Inventions, or in order to assign and convey or otherwise make available to Employer the sole and exclusive right, title, and interest in and to said Inventions, applications, patents, copyrights, trade names or trademarks; provided, however, that the provisions of this Section 8 shall not apply to an Invention that Executive developed entirely on his own time without using Employer’s Confidential Information except for those Inventions that either (i) directly and materially relate, at the time of conception or reduction to practice of the invention, to Employer’s business, or actual or demonstrably anticipated research or development of Employer, or (ii) directly and materially result from any work performed by Executive for Employer. Executive shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by him during his employment by Employer, whether solely or jointly with others, and whether or not patentable or copyrightable, (a) which relate to any matters or business of the type carried on or being developed by Employer, or (b) which result from or are suggested by any work done by him in the course of his employment by Employer. Executive shall also promptly communicate and disclose to Employer all material other data obtained by him concerning the business or affairs of Employer in the course of his employment by Employer.

          Section 9. Nonsolicitation/Non-Compete

          (a) Executive agrees that throughout his employment and for a period of two (2) years following the termination of his employment for any reason, he will not directly or indirectly, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or be connected with, or have any financial interest in, any Competitor. Ownership, for personal investment purposes only, of not to exceed (i) individually, two (2%) percent of the outstanding capital stock of any privately held entity, or (ii) voting stock of any publicly held corporation shall not constitute a violation hereof. For purposes of this Agreement, the term “Competitor” shall mean any individual or entity, present or future, then providing any of the following products or services: (1) a multi-finance source automotive finance portal, (2) electronic contracting for automotive finance or lease transactions, other than at a financing source entity that purchases electronic contracts or leases from automotive dealers, (3) automotive lease, retail and/or balloon payment comparison or desking tools, (4) dealer management systems (DMS), (5) any other sales or finance and insurance-related products or services for automotive dealerships similar to any products or services offered by Employer or

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any of its affiliates, or (6) any other products or services similar to any products or services offered by Employer or any of its affiliates and which product or service category accounts for at least 15% of the consolidated revenues for the last fiscal quarter of Employer.

          (b) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not actively solicit for employment, consulting or any other arrangement any employee of Employer or any of its present or future affiliates (while an affiliate).

          (c) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not influence or attempt to influence customers of Employer or any of its present or future affiliates, either directly or indirectly, to divert their business to any Competitor.

          (d) The restrictions contained in this Section 9 are necessary for the protection of the business and goodwill of Employer and are considered by Executive to be reasonable for such purpose. Further, Executive represents that these restrictions will not prevent him from earning a livelihood during the restricted period.

          (e) This Section 9 shall survive the termination or expiration of this Agreement.

          Section 10. Equitable Relief

          Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be adequately compensated by money damages in the event of a breach, or threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any such breach, or threatened breach, Employer will not have an adequate remedy at law. It is therefore agreed that Employer, in addition to all other such rights, powers, privileges and remedies that it may have, shall be entitled to injunctive relief, specific performance or such other equitable relief as Employer may request to enforce any of those terms and provisions and to enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby waives any objection or defense that there is an adequate remedy available at law. Notwithstanding the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive hereby consents to the jurisdiction of the state and federal courts of New York for purposes of such an action. Executive agrees that any claim he may have against Employer or any of its affiliates shall not constitute a defense against the issuance of any such equitable relief. The foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and remedies against or in respect of a breaching party or any other person or thing under this Agreement, or applicable law.

          Section 11. Notice

          Any notice, request, demand or other communication hereunder shall be in writing, shall be delivered by hand or sent by registered or certified mail or by reputable overnight delivery service, postage prepaid, to the addressee at the address set forth below (or at

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such other address as shall be designated hereunder by written notice to the other party hereto) and shall be deemed conclusively to have been given when actually received by the addressee.

          All notices and other communications hereunder shall be addressed as follows:

If to Executive at the address set forth in the Employer’s
payroll records.

If to Employer:

DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

With a copy to:

General Counsel
DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in writing in accordance herewith.

          Section 12. Legal Counsel

          In entering into this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

          Section 13. Section and Other Headings

          The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

          Section 14. Governing Law

          This Agreement has been executed and delivered, and shall be governed by and construed in accordance with the applicable laws pertaining, in the State of New York, without regard to conflicts of laws principles.

          Section 15. Severability

          In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a governmental authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability, to the maximum extent

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permissible by law, (a) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (b) by or before any other authority of any of the terms and provisions of this Agreement.

          Section 16. Counterparts

          Section 17. This Agreement may be executed in two counterpart copies of the entire document or of signature pages to the document, each of which may be executed by one of the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon both of the parties hereto.

          Section 18. Benefit

          This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns. Insofar as Executive is concerned, this Agreement, being personal, cannot be assigned; provided, however, that should Executive become entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his legal representatives, successors, and assigns. Without limiting the generality of the foregoing, all representations, warranties, covenants and other agreements made by or on behalf of Executive in this Agreement shall inure to the benefit of the successors and assigns of Employer.

          Section 19. Modification

          This Agreement may not be amended or modified other than by a written agreement executed by all parties hereto.

          Section 20. Entire Agreement

          Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the parties and supersedes all other representations, warranties, agreements and understandings, oral or otherwise, among the parties with respect to the matters contained herein, including any prior employment agreements between Executive and Employer or any affiliate of Employer.

          Section 21. Arbitration

          (a) Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the termination thereof, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by expedited, binding arbitration to be held in New York, New York in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

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          (b) The arbitrator shall apply New York law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

          (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

          Section 22. Representations and Warranties of Executive

          In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer, to the best of his knowledge after the review of his personnel files, that: (a) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement or other understanding to which Executive is a party or by which he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement, document, arrangement or other understanding with any person (other than Employer) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services.

          Section 23. Waiver of Breach

          Except as may specifically provided herein, the failure of a party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver hereto must be in writing.

[signature page follows]

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

EXECUTIVE:
Eric D. Jacobs
EMPLOYER:
By:
	Name:
	Title:
	Date:

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EX-10.5

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

     This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between Rajesh Sundaram (“Executive”) and DealerTrack Holdings, Inc, a Delaware corporation (“Employer”) with principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY 11042.

     WHEREAS, Executive and DealerTrack, Inc. are parties to a senior executive employment agreement, dated as of August 21, 2006 (the “Existing Employment Agreement”); and

     WHEREAS, the parties hereto wish to amend and restate the Existing Employment Agreement pursuant to this Agreement to, among other things, change employer from DealerTrack, Inc. to DealerTrack Holdings, Inc. and amend certain severance and non-compete terms;

     NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment Agreement is hereby amended and restated in its entirety as follows:

     Section 1. Term

     Employer shall continue to employ Executive and Executive agrees to continue such employment, upon the terms and conditions hereinafter set forth, from the Effective Date through and including August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for successive one year periods (each, a “Renewal Term”) unless one party gives notice to the other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any renewal) of its desire to terminate the Agreement. The term of this Agreement, including the Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

     Section 2. Executive’s Duties

     (a) Executive shall be Senior Vice President, Dealer Solutions and shall report directly to Employer’s Chief Executive Officer or his designee. Executive shall faithfully and diligently perform his duties at the direction of Employer’s Chief Executive Officer, or his designee, to the best of Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full business time and attention to the performance of the services customarily incident to such office, subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii) carry out his duties in a competent and professional manner; and (iii) generally promote the interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any activity that is detrimental to the interests of Employer or any of its affiliates, including, without limitation, any public criticism or disparagement of any type by Executive, through the media or otherwise, of Employer or any of its affiliates or employees, except in connection with the exercise of Executive’s rights against Employer or any of its affiliates.

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     (b)  Executive agrees to abide by all policies applicable to senior executive officers of Employer promulgated from time to time by Employer, which policies are enforced uniformly and applicable to all similar executives of Employer.

     (c)  Except for such business travel as may be incident to his duties hereunder, Executive shall perform his duties at Employer’s offices at the address set forth in the preamble to this Agreement or at such other location as may be approved by Employer.

     Section 3. Compensation for Executive’s Services

     In consideration of the duties and services to be performed by Executive pursuant to Sections 1 and 2 hereof, Executive shall receive:

     (a)  Salary. Executive shall earn salary (the “Salary”) at the annual rate of Two Hundred Sixty Eight Thousand Dollars ($268,000) (the “Minimum Salary”), less all applicable federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in periodic installments in accordance with Employer’s payroll practices. During the Term, the Board of Directors of Employer (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”) will review the Salary annually and may in its discretion increase the Salary, but may not reduce it during the Term unless Employer institutes salary reductions across the board; provided, however, that in no event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

     (b)  Bonus. For each fiscal year of Employer (each, a “Fiscal Year”), Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be based on the achievement of certain performance benchmarks by Employer during such Fiscal Year which shall be determined by the Board. The Board shall review the target Bonus on an annual basis and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus shall not be decreased except in connection with company-wide bonus reductions. The target Bonus for any Fiscal Year shall be at least fifty five (55%) percent of the Salary for such Fiscal Year. The Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with Employer’s bonus payments to its other similarly situated senior executive officers by no later than two and one half (21/2) months following the end of such Fiscal Year. Executive understands and agrees that the Bonus is established in part as an inducement for Executive to remain employed by Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal Year during the Term, then Executive shall not receive payment of any Bonus for such year.

     (c)  Additional Compensation. Without limiting the amounts otherwise set forth in this Agreement, Executive shall receive a payment each month (the “Additional Compensation”) in arrears from the Effective Date of this Agreement until the Note described in Section 3(d) below is issued, based on the following formula:

     [ $1,200,000 (the “Face Amount”) ] x [the prime interest rate, as published in the Wall Street Journal as of the Effective Date, plus 1%, up to an aggregate maximum rate of 7%) (the “Interest Rate”)] / 12

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     (d)  Additional Bonus. As an additional inducement for Executive to remain employed by Employer, Executive shall be eligible to receive an additional bonus (the “Additional Bonus”), less all applicable federal, state and local tax withholdings, as follows:

     (1) If in any calendar year ending on or before December 31, 2009 (y) the revenue from sales of Automotive Lease Guide (alg), Inc. (“ALG”) products and Chrome Systems Corporation (“Chrome”) products (“ALG/Chrome Revenues”) for such year equals or exceeds $50.0 million (the “ALG/Chrome Revenue Milestone”) and (z) the EBITDA Ratio for the ALG/Chrome business for such year equals or exceeds the EBITDA Ratio of the Employer business as a whole (exclusive of the ALG/Chrome business), then Employer shall promptly issue to Executive a note in the principal amount of $1,200,000 on the terms described in (d)(3) below (the “Note”). “EBITDA Ratio” shall mean the ratio of the earnings before interest, taxes, depreciation, and amortization for the respective business in question divided by the revenue from such business.

     (2) If ALG/Chrome Revenues for the year ending December 31, 2009 equal 70% of the ALG/Chrome Revenue Milestone, and (d)(1)(z) above occurs for that year, Employer shall issue to Executive a Note in the principal amount of $600,000. If ALG/Chrome Revenues for the year ending December 31, 2009 are greater than 70% of the ALG/Chrome Revenue Milestone, but less than 100% of such milestone and (d)(1)(z) above occurs, then Employer shall issue to Executive a Note in the principal amount of (x) $600,000 plus (y) $20,000 for each additional $500,000 of ALG/Chrome Revenues for the year ending December 31, 2009 in excess of 70% of the ALG/Chrome Revenue Milestone and less than 100% of the ALG/Chrome Revenue Milestone. For the avoidance of doubt, there will be no additional $20,000 (or portion thereof) added to the principal of the Note for each incremental additional ALG/Chrome Revenues for the year ending December 31, 2009 of less than $500,000. For example, if ALG/Chrome Revenues for the year ending December 31, 2009 are $36,200,000, then an additional amount of $40,000 (i.e., $20,000 x2) shall be added to the principal amount of the Note for a total principal amount of $640,000.

     (3) The Note will provide that (w) it shall bear interest at the Interest Rate, (x) interest accrued on the Note will be paid to the Executive monthly, (y) it will be payable in full on June 30, 2010, and (z) it may be prepaid without penalty at any time in Employer’s sole discretion.

     (i) Within 90 days following each of the years ending December 31, 2006, 2007, 2008 and 2009, Employer shall

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deliver to Executive Employer’s calculation, with reasonable supporting detail (the “Employer’s Calculation”) of ALG/Chrome Revenues or ALG Revenues, as the case may be, and the applicable EBITDA Ratios (collectively, the “Financial Milestones”) for the preceding calendar year.

     (ii) If Executive disagrees with the Employer’s Calculation, the Executive may, within 30 days after delivery of the Employer’s Calculation, deliver a notice to Employer disagreeing with any portion of the Employer’s Calculation for such year (the “Objection Notice”). The Objection Notice shall specify in reasonable detail those items or amounts as to which Executive disagrees. If Executive does not deliver an Objection Notice during such time period or Executive indicates agreement with the Employer’s Calculation, then the Employer’s Calculation shall be the agreed upon amounts for the Financial Milestones for such applicable period.

     (iii) If Executive shall have delivered the Objection Notice within the 30 day period referred to in clause (ii) above, then Employer and Executive shall, during the 30 days following such delivery, use their good faith efforts to reach agreement on the disputed items or amounts in order to determine the Financial Milestones. If Employer and Executive are unable to reach agreement during such period, they shall promptly thereafter cause a mutually acceptable independent public accounting firm (the “Accounting Referee”) to review the disputed items or amounts for the purpose of calculating the Financial Milestone(s) in dispute. The Accounting Referee may request additional supporting detail from the Employer pertaining to the portion of the Employer’s Calculation identified by Executive in the Objection Notice. Within ten (10) days after delivery of such additional detail, the Executive may supplement the Objection Notice to add any disputes newly discovered by the Executive from the additional detail, but only if such item in dispute could not reasonably have been ascertained from the supporting detail provided by Employer with the Employer Calculation. The Objection Notice may be supplemented only once. In making such calculation, the Accounting Referee shall consider only those items or amounts in the Employer’s Calculation as to which the Executive has disagreed and which are specifically identified in reasonable notice in the Objection Notice, as supplemented,

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if applicable. The Accounting Referee shall deliver to Employer and Executive, as promptly as practicable, a written report setting forth its calculation of the items or amounts in dispute. Such report shall be final and binding upon Employer and Executive, absent manifest error or willful misconduct. The cost of such review and report shall be borne (x) by Executive, if Employer’s calculation of the Financial Milestone(s) in dispute is closer to the Accounting Referee’s determination than Executive’s calculation thereof, (y) by Employer, if the reverse is true and (z) except as provided in (x) or (y) above, equally by Executive and Employer.

     (4) If Employer sells or disposes of some or all of the assets of ALG or Chrome or does not collect fair market value for the products/services of ALG or Chrome because said products/services were sold as part of a bundle of products/services offered by Employer, the terms of this Section 3(d) will be adjusted equitably in the manner described under similar circumstances in that Asset Purchase Agreement, dated May 25, 2005, by and among Automotive Lease Guide (alg), LLC, ALG, Executive and other parties (the “Purchase Agreement”).

     (e) Equity. In connection with Executive’s employment, Executive has been and may continue to be granted stock options (“Stock Options”) to purchase equity securities of Employer pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or any other successor equity incentive plans (collectively, the “Stock Incentive Plans”). Except as otherwise provided herein, the terms of the Stock Options shall be governed by the Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of Control (defined below). Executive shall be credited with full acceleration and vesting of his Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a material negative change in Executive’s compensation or responsibilities within twelve (12) months after a Change of Control; or (3) the requirement that Executive be based at a location which is more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with Good Reason or by Employer without Cause, or under circumstances described above which would result in certain accelerated vesting of any

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     unvested Stock Options held by Executive, the unexercised portion of any Stock Options held by Executive will not terminate until the twelve (12) month anniversary of the date of termination of Executive’s employment. In the event Employer elects to grant equity based awards other than Options, such grants shall, where appropriate, be subject to equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a “Change of Control” shall mean and includes each of the following:

     (i) A transaction or series of transactions (other than an offering of shares of Employer to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Employer, any of its subsidiaries, an employee benefit plan maintained by the Employer or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Employer) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer possessing more than 50% of the total combined voting power of the Employer’s securities outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Board or nomination for election by the Employer’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer (whether directly involving the Employer or indirectly involving the Employer through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Employer’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

     (A) Which results in the Employer’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Employer or the person that, as a result of the transaction, controls, directly or indirectly, the Employer or owns, directly or indirectly, all or substantially all of the Employer’s assets or otherwise succeeds to the business of the Employer (the Employer or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

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(B) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Employer prior to the consummation of the transaction; or

     (iv) The Employer’s stockholders approve a liquidation or dissolution of the Employer.

     The Board or its designee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether a Change of Control of the Employer has occurred, and the date of the occurrence of such Change of Control and any incidental matters relating thereto.

     (f)  Benefits. Employer shall provide Executive with the right to participate in and receive benefits from all life, accident, disability, medical and pension plans, and all similar benefits as are from time to time in effect and are generally made available to similar situated senior executive officers of Employer. The amount and extent of benefits to which Executive is entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

     (g)  Expenses. Employer shall promptly reimburse Executive for reasonable expenses for cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s expense reimbursement policies and guidelines.

     (h)  Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks (4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used in accordance with Employer’s policy and procedure for other similarly situated senior executive officers.

     (i)  Modification. Employer reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs referenced in Sections 3(f) and (g) at any time in its discretion without recourse by Executive so long as such action is taken generally with respect to other similarly situated senior executive officers. Any such modification, suspension or discontinuance of the plans, practices and policies referenced in Section 3(g) will not apply to otherwise reimbursable expenses incurred by Executive prior to any such modification, suspension or discontinuance.

     Section 4. Termination of Employment

     (a)  Resignation. Executive may voluntarily terminate his employment with Employer, at any time, with or without Good Reason, upon written notice to Employer.

     (b) Termination. Employer may terminate Executive’s employment at any time, with or without Cause, upon written notice to Executive.

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     (c)  Death or Disability. Executive’s employment shall terminate immediately upon Executive’s death. In the event Employer, in good faith, determines that Executive is unable to perform the functions of his position due to a Disability (as defined below), it may notify Executive in writing of its intention to terminate Executive’s employment and Executive’s employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a physical or mental impairment that substantially limits a major life activity of Executive and renders Executive unable to perform the essential functions of his position even with reasonable accommodation (that does not impose an undue hardship on Employer), and which has lasted at least (i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any, under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any election period under the Employer’s long term disability program (without regard to whether Executive is awarded benefits under such program), whichever is longer.

     (d)  Cause. Employer may immediately terminate Executive’s employment for “Cause” by giving written notice to Executive. For purposes of this Agreement, “Cause” shall mean:

     (1) Executive’s commission of an act of fraud or embezzlement upon Employer or any of its affiliates; or

     (2) Executive’s commission of any willful act intended to injure the reputation, business, or any business relationship of Employer or any of its affiliates; or

     (3) Executive is found by a court of competent jurisdiction to have committed a felony; or

     (4) the refusal or failure of Executive to perform Executive’s duties with Employer in a competent and professional manner that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive’s duties; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in nature or is not susceptible of cure, then no cure period shall be required hereunder; or

     (5) the refusal or failure of Executive to comply with any of his material obligations under this Agreement (including any exhibit hereto) that is not cured by Executive within ten (10) business days after a written demand therefor is delivered to Executive by the Board which specifically identifies the manner in which the Board believes Executive has materially breached this Agreement; provided, further, however, that if the Board, in good faith, determines that the refusal or failure by Executive is egregious in

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nature or is not susceptible of cure, then no cure period shall be required hereunder.

     (e)  Good Reason. Executive may terminate his employment for “Good Reason,” by delivering written notice of such termination (“Employer Default Notice”) to Employer within sixty (60) days of the occurrence of any of the following events, each of which shall constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the Stock Incentive Plans or any agreements thereunder, which has not been cured within the allotted time; (ii) a material reduction of Executive’s then current title, status, authority, responsibility or duties or the assignment to Executive of any duties materially inconsistent with Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits; (iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi) the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days following delivery to Employer of the Employer Default Notice.

     (f)  Continuing Obligations. Executive acknowledges and agrees that any termination under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall continue in full force and effect beyond such termination for any reason.

     Section 5. Termination Obligations

     (a)  Resignation. If Executive’s employment is terminated voluntarily by Executive without Good Reason, Executive’s employment shall terminate without further obligations to Executive other than for payment of the sum of any unpaid Salary determined by the Board and reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date of termination. If Executive voluntarily terminates his employment without Good Reason and within (30) days of such termination, Employer determines that it would have had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been terminated for Cause and the terms of Section 5(b) shall apply.

     (b) Cause. If Executive’s employment is terminated by Employer for Cause, this Agreement shall terminate without further obligations to Executive other than for the timely payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall apply.

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     (c)  By Employer Other than for Cause; Death or Disability; By Executive for Good Reason.

     (1)  If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or (y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good Reason, Employer shall have no further obligations to Executive other than for (i) the payment of Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and payable within thirty (30) days of the Severance Commencement Date; provided, however, that in the event that Executive’s termination of employment is within twelve (12) months after a Change of Control, such severance pay shall be increased to an amount equal to twenty four (24) months of Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive worked for Employer during the year of his termination by Executive’s target Bonus for such year and payable within thirty (30) days of the Severance Commencement Date, (iv) the reimbursement of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier, (v) the Additional Bonus, payable, if any, as set forth in Section 3(d) above, and (vi) the Additional Compensation, payable as set forth in Section 3(c) above until the earlier of June 30, 2010 or the Note is issued. For purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of Employer or its affiliates is publicly traded on an established securities market or otherwise and the Board (or its delegate) determines that as of the date of termination of Executive’s employment that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder) and that Section 409A of the Code applies with respect to payments to Executive pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s “separation from service” (within the meaning of section 409A of the Code); or (y) if the Board (or its delegate) determines that Executive is not such a “key employee” as of date of Executive’s termination of employment (or that Section 409A of the Internal Revenue Code does not apply with respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be made within thirty (30) days of the date of Executive’s termination of employment.

     (2)  If Executive terminates his employment for Good Reason and it is subsequently determined by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a voluntary resignation, the terms of Section 5(a) shall apply, and all monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

     (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall receive for termination in accordance with this Section 5(c); provided, however, that no amounts shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of Sections 7, 8 or 9 of this Agreement.

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     (d)  Release. Notwithstanding anything to the contrary contained herein, no severance payments required hereunder shall be made by Employer until such time as Executive shall execute a general release for the benefit of Employer and its affiliates in a form satisfactory to Employer. Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s charter or bylaws, any indemnification agreement or applicable law.

     (e)  Equity Compensation Awards. Except as expressly provided herein, except for the provisions of Section 3(c) of this Agreement, the terms of the Stock Incentive Plans and any related award agreements and/or notice of grant shall govern the termination, vesting, and/or exercise of Executive’s stock options or other equity awards upon the termination of Executive’s employment for any reason.

     (f)  Exclusive Remedy. Executive agrees that the payments set forth in this Agreement shall constitute the exclusive and sole remedy for any termination of Executive’s employment and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to this Agreement.

     (g)  Termination of Executive’s Office. Following the termination of Executive’s employment for any reason, Executive shall hold no further office or position with Employer or any of its affiliates.

     Section 6. Parachute Payments.

     (a)  If it is determined by a nationally recognized United States public accounting firm selected by the Employer and approved in writing by the Executive (which approval shall not be unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the Executive in connection with this Agreement or otherwise (including without limitation any Stock Option or other equity based award vesting) (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of making the calculations required by this Agreement, the Auditors may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, provided that the Auditors’ determinations must be made with substantial authority (within the meaning of Section 6662 of the Code).

     (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax group which includes the Employer) shall be prepared and filed on a basis consistent with the determination of the Auditors with respect to the Parachute Tax payable by the Executive. The Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the Employer, provide to the Employer true and correct copies (with any

11

     amendments) of his federal income tax return as filed with the Internal Revenue Service, and such other documents reasonably requested by the Employer, evidencing such payment. If, after the Employer’s payment to the Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the Gross-Up Payment should be reduced or increased, or such determination is made by the Internal Revenue Service, then within ten (10) business days of such determination, the Executive shall pay to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the amount of any such increase; provided, however, that in no event shall the Executive have any such refund obligation if it is determined by the Employer that to do so would be a violation of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further, that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such refund shall be due only to the extent that a refund of such amount is received by the Executive; and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and accounting fees) incurred for services rendered in connection with the Auditor’s determination of the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon the Executive to the extent that such interest and penalties are related to the Auditor’s determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his employment for any reason and the termination or expiration of this Agreement for any reason.

     Section 7. Restrictions Respecting Confidential Information

     Executive hereby covenants and agrees that, during his employment and thereafter, Executive will not, under any circumstance, disclose in any way any Confidential Information (as defined below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii) to his attorney or other advisers in connection with Executive’s enforcement of his rights hereunder, provided such individuals or entities agree to be bound by the confidentiality restrictions herein contained, and if such Confidential Information is relevant to such enforcement action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes of the foregoing, “Confidential Information” means any information pertaining to the assets, business, creditors, vendors, manufacturers, customers, data, employees, financial condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers, systems and technologies of Employer and its affiliates, including (without limitation) the contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer and its affiliates; provided, however, that Confidential Information shall exclude any information that was, is, or becomes publicly available other than through disclosure by Executive or any other person known to Executive to be subject to confidentiality obligations to Employer. All Confidential Information is and will remain the sole and exclusive property of Employer and its affiliates. Following the termination of his employment, Executive shall return all documents and other tangible items containing Confidential Information to Employer, without retaining any copies, notes or excerpts thereof.

     Section 8. Proprietary Matters

12

     Executive expressly understands and agrees that any and all improvements, inventions, discoveries, processes, or know-how that are generated or conceived by Executive during the Term (collectively, the “Inventions”) will be the sole and exclusive property of Employer, and Executive will, whenever requested to do so by Employer (either during the Term or thereafter), execute and assign any and all applications, assignments and/or other instruments and do all things which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce and defend patents, copyrights, trade names or trademarks of the United States or of foreign countries for said Inventions, or in order to assign and convey or otherwise make available to Employer the sole and exclusive right, title, and interest in and to said Inventions, applications, patents, copyrights, trade names or trademarks; provided, however, that the provisions of this Section 8 shall not apply to an Invention that Executive developed entirely on his own time without using Employer’s Confidential Information except for those Inventions that either (i) directly and materially relate, at the time of conception or reduction to practice of the invention, to Employer’s business, or actual or demonstrably anticipated research or development of Employer, or (ii) directly and materially result from any work performed by Executive for Employer. Executive shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by him during his employment by Employer, whether solely or jointly with others, and whether or not patentable or copyrightable, (a) which relate to any matters or business of the type carried on or being developed by Employer, or (b) which result from or are suggested by any work done by him in the course of his employment by Employer. Executive shall also promptly communicate and disclose to Employer all material other data obtained by him concerning the business or affairs of Employer in the course of his employment by Employer.

     Section 9. Nonsolicitation/Non-Compete

     (a)  Executive agrees that throughout his employment and for a period of two (2) years following the termination of his employment for any reason, he will not directly or indirectly, own, manage, operate, control, or participate in the ownership, management, operation, or control of, or be connected with, or have any financial interest in, any Competitor. Ownership, for personal investment purposes only, of not to exceed (i) individually, two (2%) percent of the outstanding capital stock of any privately held entity, or (ii) voting stock of any publicly held corporation shall not constitute a violation hereof. For purposes of this Agreement, the term “Competitor” shall mean any individual or entity, present or future, then providing any of the following products or services: (1) a multi-finance source automotive finance portal, (2) electronic contracting for automotive finance or lease transactions, other than at a financing source entity that purchases electronic contracts or leases from automotive dealers, (3) automotive lease, retail and/or balloon payment comparison or desking tools, (4) dealer management systems (DMS), (5) any other sales or finance and insurance-related products or services for automotive dealerships similar to any products or services offered by Employer or any of its affiliates, or (6) any other products or services similar to any products or services offered by Employer or any of its affiliates and which product or service category accounts for at least 15% of the consolidated revenues for the last fiscal quarter of Employer.

     (b) Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not

13

     actively solicit for employment, consulting or any other arrangement any employee of Employer or any of its present or future affiliates (while an affiliate).

     (c)  Executive agrees that during his employment with Employer and for a period of two (2) years following the termination of his employment for any reason, he will not influence or attempt to influence customers of Employer or any of its present or future affiliates, either directly or indirectly, to divert their business to any Competitor.

     (d)  The restrictions contained in this Section 9 are necessary for the protection of the business and goodwill of Employer and are considered by Executive to be reasonable for such purpose. Further, Executive represents that these restrictions will not prevent him from earning a livelihood during the restricted period.

     (e)  This Section 9 shall survive the termination or expiration of this Agreement.

     Section 10. Equitable Relief

     Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be adequately compensated by money damages in the event of a breach, or threatened breach, of any of the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any such breach, or threatened breach, Employer will not have an adequate remedy at law. It is therefore agreed that Employer, in addition to all other such rights, powers, privileges and remedies that it may have, shall be entitled to injunctive relief, specific performance or such other equitable relief as Employer may request to enforce any of those terms and provisions and to enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby waives any objection or defense that there is an adequate remedy available at law. Notwithstanding the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive hereby consents to the jurisdiction of the state and federal courts of New York for purposes of such an action. Executive agrees that any claim he may have against Employer or any of its affiliates shall not constitute a defense against the issuance of any such equitable relief. The foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and remedies against or in respect of a breaching party or any other person or thing under this Agreement, or applicable law.

     Section 11. Notice

     Any notice, request, demand or other communication hereunder shall be in writing, shall be delivered by hand or sent by registered or certified mail or by reputable overnight delivery service, postage prepaid, to the addressee at the address set forth below (or at such other address as shall be designated hereunder by written notice to the other party hereto) and shall be deemed conclusively to have been given when actually received by the addressee.

     All notices and other communications hereunder shall be addressed as follows:

     If to Executive at the address set forth in the Employer’s payroll records.

14

If to Employer:

DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

With a copy to:

General Counsel
DealerTrack Holdings, Inc.
1111 Marcus Avenue, Suite M04
Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

     Section 12. Legal Counsel

     In entering into this Agreement, the parties represent that they have relied upon the advice of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement have been completely read and explained to them by their attorneys, and that those terms are fully understood and voluntarily accepted by them.

     Section 13. Section and Other Headings

     The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

     Section 14. Governing Law

     This Agreement has been executed and delivered, and shall be governed by and construed in accordance with the applicable laws pertaining, in the State of New York, without regard to conflicts of laws principles.

     Section 15. Severability

     In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a governmental authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability, to the maximum extent permissible by law, (a) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (b) by or before any other authority of any of the terms and provisions of this Agreement.

     Section 16. Counterparts

     Section 17. This Agreement may be executed in two counterpart copies of the entire document or of signature pages to the document, each of which may be executed by one of

15

     the parties hereto, but all of which, when taken together, shall constitute a single agreement binding upon both of the parties hereto.

     Section 18. Benefit

     This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns. Insofar as Executive is concerned, this Agreement, being personal, cannot be assigned; provided, however, that should Executive become entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his legal representatives, successors, and assigns. Without limiting the generality of the foregoing, all representations, warranties, covenants and other agreements made by or on behalf of Executive in this Agreement shall inure to the benefit of the successors and assigns of Employer.

     Section 19. Modification

     This Agreement may not be amended or modified other than by a written agreement executed by all parties hereto.

     Section 20. Entire Agreement

     Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the parties and supersedes all other representations, warranties, agreements and understandings, oral or otherwise, among the parties with respect to the matters contained herein, including any prior employment agreements between Executive and Employer or any affiliate of Employer. Nothing in this Agreement shall be deemed to affect in any way the term or enforceability of that certain Unfair Competition and NonSolicitation Agreement by and between ALG and Executive or the Relocation Letter sent to Executive in connection with his relocation to New York which agreements shall remain in full force and effect.

     Section 21. Arbitration

     (a)  Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement or the termination thereof, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by expedited, binding arbitration to be held in New York, New York in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

     (b)  The arbitrator shall apply New York law to the merits of any dispute or claim, without reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law.

     (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING

16

     THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING, BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

     Section 22. Representations and Warranties of Executive

     In order to induce Employer to enter into this Agreement, Executive represents and warrants to Employer, to the best of his knowledge after the review of his personnel files, that: (a) the execution and delivery of this Agreement by Executive and the performance of his obligations hereunder will not violate or be in conflict with any fiduciary or other duty, instrument, agreement, document, arrangement or other understanding to which Executive is a party or by which he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement, document, arrangement or other understanding with any person (other than Employer) requiring or restricting the use or disclosure of any confidential information or the provision of any employment, consulting or other services.

     Section 23. Waiver of Breach

     Except as may specifically provided herein, the failure of a party to insist on strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any term of this Agreement. Any waiver hereto must be in writing.

     [signature page follows]

17

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

EXECUTIVE:

Rajesh Sundaram

EMPLOYER:

By:  

Name:

Title:

Date:

Agreed to and acknowledged

DealerTrack, Inc.

By:

Name:

Title:

Date:

18 EX-10.6 7 y38132exv10w6.htm EX-10.6: FIRST AMENDMENT TO DIRECTORS' DEFERRED COMPENSATION PLAN

Exhibit 10.6

FIRST AMENDMENT
TO
DEALERTRACK HOLDINGS, INC.
DIRECTORS’ DEFERRED COMPENSATION PLAN

A. The DealerTrack Holdings, Inc. Directors’ Deferred Compensation Plan, effective as of June 30, 2005 (the “Plan”) is hereby amended as follows:

     1. Section 1.13 is hereby amended by deleting said Section in its entirety and substituting the following in lieu thereof:

     “1.13 ‘Fair Market Value’ means, as of any given date, (a) if Common Stock is traded on an exchange, the closing price of a share of Common Stock as reported in the Wall Street Journal for such date, or if there is no closing price for the Stock on the date in question, then the Fair Market Value shall be the first trading date immediately prior to such date during which a sale occurred; or (b) if Common Stock is not publicly traded, the fair market value established by the Board acting in good faith.”

     2. Section 2.1 is hereby amended by deleting the second sentence thereof and substituting the following in lieu thereof:

     “Any person who shall become a Director during any Plan Year, and who previously is not eligible to make any deferral elections under any nonqualified deferred compensation plan that would be aggregated with this Plan under Section 409A, may elect, no later than thirty (30) days after the Director’s term begins, to defer payment of all or a specified part of such Fees payable with respect to services rendered after the date of election (and, to the extent set forth in Section 2.2, for any succeeding Plan Years until the Director ceases to be a Director).”

B. Except as amended herein, the Plan is confirmed in all other respects.

C. The Effective Date of this First Amendment is as of January 1, 2007.

EX-10.6

EX-10.6

EX-10.7

Exhibit 10.7

FIRST AMENDMENT
TO
DEALERTRACK HOLDINGS, INC.
EMPLOYEES’ DEFERRED COMPENSATION PLAN

A. The DealerTrack Holdings, Inc. Employees’ Deferred Compensation Plan, effective as of June 30, 2005 (the “Plan”) is hereby amended as follows:

     1. Section 1.16 is hereby amended by deleting said Section in its entirety and substituting the following in lieu thereof:

     “1.16 ‘Fair Market Value’ means, as of any given date, (a) if Common Stock is traded on an exchange, the closing price of a share of Common Stock as reported in the Wall Street Journal for such date, or if there is no closing price for the Common Stock on the date in question, then the Fair Market Value shall be the first trading date immediately prior to such date during which a sale occurred; or (b) if Common Stock is not publicly traded, the fair market value established by the Board acting in good faith.”

     2. Section 2.1 is hereby amended by deleting the second sentence thereof and substituting the following in lieu thereof:

     “Any person who shall become an Employee during any Plan Year, and who previously is not eligible to make any deferral elections under any nonqualified deferred compensation plan that would be aggregated with this Plan under Section 409A, may elect, no later than thirty (30) days after the Employee becomes eligible to participate in the Plan, to defer payment of all or a specified part of such Bonuses payable with respect to services rendered after the date of election (and, to the extent set forth in Section 2.2, for any succeeding Plan Years until the Employee ceases to be an Employee).”

     3. Section 2.5 is hereby deleted in its entirety.

B. Except as amended herein, the Plan is confirmed in all other respects.

C. The Effective Date of this First Amendment is as of January 1, 2007.

EX-31.1

Exhibit 31.1

CERTIFICATION

     I, Mark F. O’Neil, certify that:

     (1) I have reviewed this Quarterly Report on Form 10-Q of DealerTrack Holdings, Inc.;

     (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     (3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     (4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - -15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     (5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Mark F. O’Neil  

Mark F. O’Neil 

Chairman, President and Chief Executive Officer 

August 9, 2007

EX-31.2

Exhibit 31.2

CERTIFICATION

     I, Robert J. Cox, certify that:

     (1) I have reviewed this Quarterly Report on Form 10-Q of DealerTrack Holdings, Inc.;

     (2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     (3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     (4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - -15(f) and 15d-15(f)) for the registrant and have:

     (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

     (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     (5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Robert J. Cox III  

Robert J. Cox III 

Senior Vice President, Chief Financial Officer
and Treasurer 

August 9, 2007

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of DealerTrack Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Mark F. O’Neil, Chief Executive Officer of the Company, and Robert J. Cox, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Mark F. O'Neil
Name:	Mark F. O'Neil
Title:	Chairman, President and Chief Executive Officer
Date:	August 9, 2007
/s/ Robert J. Cox III
Name:	Robert J. Cox III
Title:	Senior Vice President, Chief Financial Officer and Treasurer
Date:	August 9, 2007

     A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.