EXHIBIT B
AGREEMENT
This Agreement (this "Agreement") is made and entered into as of April 26,
2007, by and between InfoSpace, Inc. (the "Company" or "InfoSpace"), and the
entities listed on SCHEDULE A hereto (collectively, the "Xxxxxxx Group") (each
of the Company and the Xxxxxxx Group, a "Party" to this Agreement, and
collectively, the "Parties").
RECITALS
A. The Xxxxxxx Group beneficially owns, in the aggregate, 2,771,204 shares
of the Company's outstanding common stock, par value $.0001 per share (the
"Common Stock"), and has initiated a proxy solicitation (the "Proxy
Solicitation") to elect three individuals to the InfoSpace Board of Directors
(the "InfoSpace Board") and to repeal any amendments to the Company's bylaws
that were adopted by the InfoSpace Board after February 12, 2003 (the "Bylaw
Proposal");
B. The Parties have agreed that the Xxxxxxx Group shall withdraw its
nominees to the InfoSpace Board and terminate the Proxy Solicitation and that
the Xxxxxxx Group will not present any nominees or proposals at the Company's
2007 Annual Meeting of Stockholders (including any adjournment or postponement
thereof, the "Annual Meeting");
C. The InfoSpace Board has determined that it is in the best interests of
the stockholders of the Company to appoint Xxxx Xxxxxxxx to the InfoSpace Board
as a Class II director, and to nominate Xx. Xxxxxxxx for election as a Class II
director at the Company's Annual Meeting in place of Xxxxxxx X. Xxxxxxxxxxx, and
to recommend Xx. Xxxxxxxx for election to the InfoSpace Board, and to appoint
Xxxxxxx X. Xxxxxxxxxxx to the existing Class I vacancy on the Board of
Directors, after the Annual Meeting;
D. The Xxxxxxx Group has agreed to certain restrictions with respect to
the Company prior to the end of the Standstill Period (as defined below),
including refraining from submitting any stockholder proposal or director
nominations at the 2007 Annual Meeting or at any other meetings of stockholders
which may be held prior to the end of the Standstill Period (as defined below)
and to vote in favor of the Company's nominees for directors at the Annual
Meeting;
E. The Company and the Xxxxxxx Group desire, in connection with the
foregoing, to make certain covenants and agreements with one another pursuant to
this Agreement.
NOW THEREFORE, in consideration of the covenants and premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
1. Upon the issuance of the press release referred to in Section 9, the
Xxxxxxx Group withdraws its nomination of Xxxx Xxxxxxxx, Xxxxxxxx X. Xxxxx and
Xxxx X. Xxxxxx, withdraws the Bylaw Proposal, and withdraws and terminates the
Proxy Solicitation. The Xxxxxxx Group shall also (i) promptly file with the
Securities and Exchange Commission (the "SEC") as soliciting material under Rule
14a-12 promulgated under Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the press release described in Section 9, the form of which is
attached as EXHIBIT A hereto, and shall indicate that it is no longer soliciting
proxies and does not intend to vote any proxies it has received or receives and
(ii) take any other actions necessary to terminate the Proxy Solicitation.
2. (a) No later than seven (7) days after the date of this Agreement, Xxxx
Xxxxxxxx shall be appointed to the InfoSpace Board as a Class II director. The
Company agrees that, and shall promptly amend the Schedule 14A filed by the
Company and the InfoSpace Board to indicate that, (i) Xxxxxxx X. Xxxxxxx, Xxxxx
X. Xxxxxxx and Xxxx Xxxxxxxx (collectively, the "Nominees") will be nominated by
InfoSpace's Board as the sole nominees for election as Class II directors at the
Annual Meeting, (ii) Xxxxxxx X. Xxxxxxxxxxx will not stand for election at the
Annual Meeting, (iii) InfoSpace's Board recommends a vote "for" the Nominees at
the Annual Meeting, and shall solicit its stockholders to vote for such
Nominees, (iv) proxies solicited by the InfoSpace Board will be voted "for" the
Nominees at the Annual Meeting; (v) Xx. Xxxxxxxx will be appointed as a member
of a newly formed committee of the Board of Directors created for the purpose of
evaluating and making recommendations concerning the Company's business and
strategy; (vi) Xxxxxxx X. Ruckleshaus will be appointed to the Board of
Directors to fill the existing Class I vacancy on the Infospace Board
immediately following the Annual Meeting.
(b) The Company further agrees that, during his term of office as a
director, Xx. Xxxxxxxx may be replaced by another designee of the Xxxxxxx Group
who is reasonably acceptable to the InfoSpace Board in the event that Xx.
Xxxxxxxx dies, is unable to perform his duties as a director, or is no longer
associated with the Xxxxxxx Group.
3. The Xxxxxxx Group will cause all shares of Common Stock beneficially
owned by it and its controlled affiliates to be present for quorum purposes and
to be voted at the Annual Meeting, (a) in favor of election of the Nominees at
the Annual Meeting; and (b) against approval of any proposal made in opposition
to, or in competition with, any proposal or Nominee recommended by Company's
Board of Directors at the Annual Meeting. For purposes of this Agreement,
"affiliate" has the meaning set forth in Rule 12b-2 promulgated by the SEC under
the Exchange Act.
4. The Company agrees (i) to pay a special dividend to its stockholders
aggregating at least $200 million as promptly as practicable after the date
hereof (it being the Company's intent that such special dividend be paid within
thirty (30) days from the date hereof), (ii) to reauthorize, and not abandon
such reauthorization, its previously authorized $100 million share repurchase
program, and (iii) to form a Board committee to evaluate and make
recommendations concerning the Company's business and strategy.
5. During the period commencing with the execution of this Agreement and
ending on the earlier to occur of (a) the date that is eighty (80) days prior to
the date of the Company's 2008 Annual Meeting of Stockholders (provided,
however, that if the InfoSpace Board takes any action to amend the Company's
restated bylaws in such a manner as to increase the time period prior to the
2008 Annual Meeting of Stockholders by which a holder of the Company's Common
Stock must provide timely notice to the Company of (i) its nomination of a
person or persons to the InfoSpace Board at a meeting of the Company's
stockholders, (ii) or of its proposal to bring business before a meeting of the
Company's stockholders (clause (i) and (ii) together, the "Stockholder
Matters"), then the Standstill Period (as defined herein) shall expire ten (10)
days prior to the date on which a stockholder must give notice to the Company
with respect to any Stockholder Matters), and (b) a material breach by the
Company of its obligations under this Agreement (the "Standstill Period"),
neither the Xxxxxxx Group nor any of its controlled affiliates shall, without
the prior written consent of the Company:
(a) acquire or agree to acquire, or publicly offer or propose to
acquire, directly or indirectly, by purchase or otherwise, any voting securities
or direct or indirect rights or options to acquire any voting securities of the
Company or any subsidiary thereof, or any assets of the Company or any
subsidiary or division thereof; provided, however, that nothing herein shall
limit the ability of the Xxxxxxx Group to (i) transfer any voting securities or
direct or indirect rights or options to acquire any voting securities of the
Company to any of its controlled affiliates, so long as such any such controlled
affiliates agree to be bound by
the terms of this Agreement and execute a joinder agreement to this Agreement,
in the form attached hereto as EXHIBIT B (a "Joinder Agreement"), or (ii) enter
into any swap or other arrangement whereby it acquires the economic consequences
of ownership of the Common Stock without also acquiring the voting or other
rights, privileges or powers associated with the ownership of the underlying
Common Stock;
(b) other than as provided in this Agreement, seek or propose to
influence or control the management or the policies of the Company (provided
that Xx. Xxxxxxxx'x actions (or those of his replacement as contemplated by
Section 2) as a member of the InfoSpace Board shall not be deemed to violate the
foregoing) or to obtain representation on the InfoSpace Board (other than the
nomination of Xx. Xxxxxxxx as a Nominee), directly or indirectly engage in any
activities in opposition to the recommendation of the Infospace Board (including
the recommendation of the Nominees as the sole directors to be elected at the
Annual Meeting), submit any proposal (whether pursuant to Rule 14a-8 or
otherwise) or nomination of a director or directors for stockholder action, or
solicit, or encourage or in any way participate in the solicitation of, any
proxies or consents with respect to any voting securities of the Company;
provided, however, that the foregoing shall not prohibit the Xxxxxxx Group from
(i) making public statements (including statements contemplated by Rule
14a-1(l)(2)(iv) under the Exchange Act), or (ii) engaging in discussions with
other stockholders (so long as the Xxxxxxx Group does not seek directly or
indirectly, either on its own or another's behalf, the power to act as proxy for
a security holder and does not furnish or otherwise request, or act on behalf of
a person who furnishes or requests, a form of revocation, abstention, consent or
authorization, and such discussions are in compliance with subsection (d)
hereof) (clause (i) and (ii), together, "Permitted Actions") with respect to any
transaction that has been public announced by the Company involving a
recapitalization of the Company, an acquisition, disposition or sale of assets
or a business by the Company where the consideration to be received or paid in
such transaction exceeds $75 million in the aggregate, or a change of control of
the Company (each, a "Material Transaction");
(c) make any public announcement with respect to, or publicly offer to
effect, seek or propose (with or without conditions) a merger, consolidation,
business combination or other extraordinary transaction with or involving the
Company or any of its subsidiaries or any of its or their securities or assets;
provided, however, that nothing in this subsection (c) shall prevent the Xxxxxxx
Group from taking Permitted Actions with respect to a Material Transaction;
(d) (i) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Exchange Act, and the rules and regulations promulgated
thereunder, other than a "group" that includes all or some lesser number of
persons identified as members of the Xxxxxxx Group, or (ii) enter into any
negotiations, arrangements or understandings with any third parties, other than
members of the Xxxxxxx Group solely with respect to the existing members of the
Xxxxxxx Group, in connection with becoming a "group" as defined in Section
13(d)(3) of the Exchange Act; or
(e) publicly seek or request permission to do any of the foregoing,
request to amend or waive any provision of this paragraph (including, without
limitation, any of clauses (a)-(d) hereof), or make or seek permission to make
any public announcement with respect to any of the foregoing.
6. The Xxxxxxx Group agrees that, during the Standstill Period, it shall
not offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend (other than in a customary commingled brokerage
account in the ordinary course of business), or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable, directly or indirectly, for
Common Stock, whether any such transaction described above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise (any
such action a "Transfer"), in each case without the prior written consent of the
Company; provided that the foregoing shall not restrict the Xxxxxxx Group from
(i) a Transfer
of any shares to a controlled affiliate which agrees to be bound by the terms of
this Agreement and executes a Joinder Agreement, (ii) subject to compliance with
law, the Transfer of shares in either (1) brokers' transactions (within the
meaning of Rule 144(g) of the Securities Act of 1933 (the "Securities Act")),
but not in transactions directly with a market maker (as defined in Section
3(a)(38) of the Exchange Act), or (2) private Transfers (including transactions
with, or indirectly through, a market maker), in a single Transfer or series of
related Transfers, which would not result in the ultimate purchaser of such
shares of Common Stock from the Xxxxxxx Group beneficially owning, together with
its affiliates, following such Transfer or Transfers, in excess of 5% of the
Company's Common Stock in the aggregate, or (iii) Transfers made pursuant to (x)
tender offers in respect of the Company's Common Stock made by the Company or
any third party, or (y) repurchase offers in respect of the Company's Common
Stock made directly with the Company.
7. It is understood and that in consideration of the mutual promises and
covenants contained herein, and after consultation with their respective
counsel, the Company, on the one hand, and the Xxxxxxx Group, on the other hand,
on behalf of themselves and for all of their past and present affiliated,
associated, related, parent and subsidiary companies, joint venturers and
partnerships, successors, assigns, and the respective owners, officers,
directors, agents, employees, shareholders, consultants and attorneys of each of
them (collectively "Affiliated Persons"), irrevocably and unconditionally
release, acquit and forever discharge the other and all of their Affiliated
Persons, from any and all causes of action, claims, actions, rights, judgments,
obligations, damages, demands, losses, controversies, contentions, complaints,
promises, accountings, bonds, bills, debts, dues, sums of money, expenses,
specialties and fees and costs (whether direct, indirect or consequential,
incidental or otherwise including, without limitation, attorney's fees or court
costs, of whatever nature) incurred in connection therewith of any kind
whatsoever, whether known or unknown, suspected or unsuspected, in their own
right and derivatively, in law or in equity or liabilities of whatever kind or
character (the "Claims"), which the Parties have or may have against one another
based upon events occurring prior to the date of the execution of this Agreement
arising out of or related to the proxy solicitations being conducted by each of
the Company and the Xxxxxxx Group in connection with the Annual Meeting (the
"Released Matters"). The Parties acknowledge that this general release of claims
includes, but is not limited to, any and all statutory and common law claims
for, among other things, fraud and breach of fiduciary duty based upon events
occurring prior to the date of the execution of this Agreement. The Parties
intend that the foregoing release be broad with respect to the Released Matters,
provided, however, this release and waiver of Claims shall not include claims to
enforce the terms of this Agreement.
8. The Parties do hereby expressly waive and relinquish all rights and
benefits afforded by California Civil Code Section 1542, and do so understanding
and acknowledging the significance and consequences of such specific waiver of
California Civil Code Section 1542.
The Parties acknowledge and understand that they are being represented in
this matter by counsel of their own choice, and acknowledge that they are
familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
Thus, notwithstanding these provisions of law, the Parties expressly
acknowledge and agree that this Section 8 is also intended to include in its
effect, without limitation, all such claims which they do not know or suspect to
exist at the time of the execution of this Agreement, and that this Agreement
contemplates the extinguishment of those claims.
9. (a) Promptly following the execution of this Agreement, the Company and
the Xxxxxxx Group shall jointly issue a mutually agreeable press release
announcing the terms of this Agreement, in the form attached hereto as EXHIBIT
A.
(b) During the Standstill Period, neither the Company nor the Xxxxxxx
Group, nor any of their respective affiliates will, directly or indirectly, make
or issue or cause to be made or issued any disclosure, announcement or statement
(including without limitation the filing of any document or report with the SEC
or any other governmental agency or any disclosure to any journalist, member of
the media or securities analyst) concerning the other Party or any of its
controlled affiliates, which disparages such Party or any of its controlled
affiliates as individuals (provided that each Party, after consultation with
counsel, may make any disclosure that it determines in good faith is required to
be made under applicable law; and provided further, that the foregoing shall not
prohibit the Xxxxxxx Group from taking a Permitted Action with respect to any
Material Transaction).
10. The Xxxxxxx Group agrees it will cause its controlled affiliates to
comply with the terms of this Agreement.
11. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy, when such telecopy is transmitted to the telecopy number set forth
below and the appropriate confirmation is received or (b) if given by any other
means, when actually received during normal business hours at the address
specified in EXHIBIT C or such other address as may be given pursuant to this
notice provision.
12. This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all prior agreements
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than Nondisclosure and Non-Use Agreement, dated as
of April 20, 2007 between the Company and the Xxxxxxx Group (the
"Confidentiality Agreement"), as such agreement may be amended from time to
time, which shall survive in accordance with its terms. No modifications of this
Agreement can be made except in writing signed by an authorized representative
of each the Company and the Xxxxxxx Group. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, and nothing in this Agreement is intended to confer on
any person other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
13. If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this Agreement.
14. Each Party agrees to take or cause to be taken such further actions,
and to execute, deliver and file or cause to be executed, delivered and filed
such further documents and instruments, and to obtain such consents, as may be
reasonably required or requested by the other party in order to effectuate fully
the purposes, terms and conditions of this Agreement. The Xxxxxxx Group shall
cause Xx. Xxxxxxxx to provide to the Company, as promptly as practicable, the
information required by the rules and regulations of the SEC to be included with
respect to Xx. Xxxxxxxx in the Company's proxy statement for the Annual Meeting.
The Xxxxxxx Group acknowledges that Xx. Xxxxxxxx (or his replacement as
contemplated by Section 2) will be subject to all of the Company's policies and
procedures applicable to independent directors, including the Company's policies
concerning trading in the Company's securities, and acknowledges that it is
aware of the restrictions imposed by the federal securities laws on its trading
in the Company's securities.
15. Each of the Parties acknowledges and agrees that irreparable injury to
the other Parties hereto would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached and that such injury would not be adequately compensable in
damages. It is accordingly agreed by each of the Parties that a Party so moving
(the "Moving Party") shall each be entitled to specific enforcement of, and
injunctive relief to prevent any violation of, the terms hereof and the other
Parties hereto will not take action, directly or indirectly, in opposition to
the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity.
16. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without reference to the
conflict of laws principles thereof. Each of the Parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this Agreement and the rights and obligations
arising hereunder brought by the other party hereto or its successors or
assigns, shall be brought and determined exclusively in the Delaware Court of
Chancery and any state appellate court therefrom within the State of Delaware
(or, if the Delaware Court of Chancery declines to accept jurisdiction over a
particular matter, any state or federal court within the State of Delaware).
Each of the Parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Agreement in any court other
than the aforesaid courts.
17. This Agreement may be executed in one or more counterparts which
together shall constitute a single agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
PLEASE READ CAREFULLY THIS AGREEMENT THAT INCLUDES
A RELEASE OF KNOWN AND UNKNOWN CLAIMS
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or caused the same to be executed by its duly authorized representative as of
the date first above written.
INFOSPACE, INC.
By: /s/ X. X. Xxxxxxx
----------------------------
Name: X. X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
[SIGNATURE PAGE TO SETTLEMENT AGREEMENT]
XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CASTLERIGG MASTER INVESTMENTS LTD.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CASTLERIGG INTERNATIONAL LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CASTLERIGG INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CASTLERIGG GLOBAL SELECT FUND, LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CGS, LTD.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
CASTLERIGG GS HOLDINGS, LTD.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
[SIGNATURE PAGE TO SETTLEMENT AGREEMENT]
SCHEDULE A
XXXXXXX GROUP
Xxxxxxx Asset Management Corp.
Castlerigg Master Investments Ltd.
Castlerigg International Limited
Castlerigg International Holdings Limited
Castlerigg Global Select Fund, Limited
CGS, Ltd.
Castlerigg GS Holdings, Ltd.
EXHIBIT A
FORM OF PRESS RELEASE
EXHIBIT B
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof, to
become a party to that certain Agreement, dated as of April 26, 2007, by and
among InfoSpace, Inc., a Delaware corporation (the "Company"), and the entities
listed on SCHEDULE A thereto (collectively, the "Xxxxxxx Group") (the
"Settlement Agreement"). By executing this joinder agreement, the undersigned
hereby agrees to be, and shall be, deemed a "Party" and a member of the "Xxxxxxx
Group" for all purposes of the Settlement Agreement, entitled to the rights and
subject to the obligations thereunder with respect to the voting securities of
the Company acquired from the Xxxxxxx Group.
The address and facsimile number to which notices may be sent to the
undersigned is as follows:
-------------------------
-------------------------
Facsimile No.: _____________
-----------------------
Name:
Date: _____________
EXHIBIT C
ADDRESSES FOR NOTICE
if to the Company:
InfoSpace, Inc.
000 000xx Xxxxxx XX, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: R. Xxxxx Xxxxxx, Xx.
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
if to the Investors:
Xxxxxxx Asset Management Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx
