EXHIBIT 10.9
FORM OF
INFOSPACE, INC.
CO-SALE AGREEMENT
This Co-Sale Agreement (the "Co-Sale Agreement") is entered into as of May
21, 1998, by and among InfoSpace, Inc., a Delaware corporation (the "Company"),
____________________ (the "Investor"), and Xxxxxx Xxxx (the "Founder").
RECITALS
A. Pursuant to that certain Common Stock and Common Stock Warrant Purchase
Agreement dated as of the date hereof (the "Purchase Agreement"), the Investor
is purchasing: (i) __________ shares of the common stock of the Company, par
value $.0001 per share (the "Common Stock") and (ii) three Warrants to purchase
up to __________ shares of Common Stock.
B. The execution and delivery of this Agreement is a condition to the
Closing under the Purchase Agreement.
AGREEMENTS
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the Company, the Investor and the Founder hereby agree as
follows:
1. RIGHT OF CO-SALE
1.1 SALES BY FOUNDER
In the event that the Founder proposes to sell, assign, transfer or
otherwise convey any shares of Common Stock or securities convertible into,
exchangeable for or exercisable for Common Stock ("Co-Sale Securities"), the
Founder shall offer in writing to the Investor the right to participate in such
sale on the same terms and conditions available to the Founder if, immediately
prior to or as a result of such proposed sale, the Founder has transferred or
would transfer more than 2,250,000 shares of Co-Sale Securities (such amount of
Co-Sale Securities, as adjusted to reflect any stock split, stock dividend or
recapitalization of the Company and subject to Section 1.4 hereof, the "Co-Sale
Cap"). Upon written notice to the Founder within fifteen (15) days of receipt
by the Investor of notification from the Founder of the proposed sale, the
Investor may sell that number of shares of Co-Sale Securities equal to (a) the
lesser of (i) the total number of shares to be sold in the transaction or (ii)
the difference between the total number of shares of Co-Sale Securities the
Founder would have transferred after the proposed sale and the Co-Sale
Cap, multiplied by (b) a fraction, the numerator of which is the number of
shares of Co-Sale Securities held by the Investor and the denominator of which
is the number of shares of Co-Sale Securities held by the Investor plus the
Founder. To the extent the Investor exercises such right of participation, the
number of shares of Co-Sale Securities that the Founder may sell in the
transaction shall be correspondingly reduced. For purposes of this Section 1.1,
the number of shares of Co-Sale Securities other than Common Stock shall be that
number of shares of Common Stock the Co-Sale Securities are convertible into,
exchangeable for, or exercisable for.
1.2 LIMITATIONS ON RIGHT OF CO-SALE
Section 1.1 of this Agreement shall not apply (and the amount of Co-Sale
Securities so transferred shall not be included in determining whether the
Founder has transferred Co-Sale Securities in excess of the Co-Sale Cap) where
the sale, assignment, transfer or other conveyance of Co-Sale Securities by the
Founder is: (a) to the Founder's spouse or former spouse, parents, or children
or other members of the Founder's family (including relatives by marriage), or
to a custodian, trustee or other fiduciary for the benefit of the Founder or
members of his family or to a family limited partnership, limited liability
company or other entity or person in connection with a bona fide estate planning
transaction; (b) by way of bequest or inheritance upon death; (c) to the
Company; (d) by way of a bona fide gift or (e) by way of any pledge of Co-Sale
Securities made by the Founder pursuant to a bona fide loan transaction with an
established financial institution that creates a mere security interest;
provided, however, that any transferees pursuant to this Section 1.2 shall
receive and hold such Co-Sale Securities subject in all respects to the
provisions of this Agreement, and that there shall be no further transfer of
such shares except in accordance herewith.
1.3 TERMINATION OF CO-SALE RIGHT
The Co-Sale Right set forth in this Agreement shall terminate and be of no
further force and effect immediately upon the earliest of:
(a) the closing of an initial firm commitment underwritten public
offering of the Company's Common Stock pursuant to an effective registration
statement on Form S-1 under the Securities Act of 1933, as amended, covering the
offer and sale of Common Stock by the Company to the public at an aggregate
offering price of at least $35,000,000 and a per share offering price to the
public at least equal to six dollars ($6.00) (appropriately adjusted to reflect
any stock split, stock dividend or recapitalization of the Company);
(b) the acquisition of all or substantially all the assets or stock of
the Company or the merger of the Company with or into any other entity in which
a change of control of the Company occurs; or
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(c) ten years after the date of this Agreement.
2. PROHIBITED TRANSFERS
2.1 TREATMENT OF PROHIBITED TRANSFERS
In the event the Founder sells any Co-Sale Securities of the Company in
contravention of the participation rights of the Investor under this Agreement
(a "Prohibited Transfer"), the Investor, in addition to such other remedies as
may be available at law, in equity or hereunder, shall have the put option
provided in Section 2.2 below, and the Founder shall be bound by the applicable
provisions of such put option.
2.2 PUT OPTION
In the event of a Prohibited Transfer, the Investor shall have the right to
sell to the Founder, and, if such right is exercised, the Founder shall have the
obligation to purchase from the Investor, a number of shares of Common Stock of
the Company (either directly or through delivery of Co-Sale Securities) equal to
the number of shares the Investor would have been entitled to transfer to the
purchaser in the Prohibited Transfer pursuant to the terms hereof. Such sale
shall be made on the following terms and conditions:
(a) The price per share at which the shares are to be sold to the
Founder shall be equal to the price per share paid by the purchaser to the
Founder in the Prohibited Transfer. The Founder shall also reimburse the
Investor for any and all reasonable fees and expenses, including legal fees and
expenses, promptly following demand therefor, incurred pursuant to the exercise
or the attempted exercise of the Investor's rights under this Section 2.
(b) In order to exercise the put option created under this Section 2,
the Investor must, within 20 days after the later of the date on which the
Investor (i) received notice from the Founder of the Prohibited Transfer or (ii)
otherwise become aware of the Prohibited Transfer, deliver to the Founder the
certificate or certificates representing shares to be sold, each certificate to
be properly endorsed for transfer.
(c) The Founder shall, upon receipt of the certificate or certificates
for the shares to be sold by the Investor, pursuant to Section 2.2(b), promptly
pay the aggregate purchase price therefor and the amount of reimbursable fees
and expenses, as specified in Section 2.2(a), by certified check or bank draft
made payable to the order of the Investor.
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3. MISCELLANEOUS
3.1 GOVERNING LAW
This Agreement shall be governed in all respects by and construed in all
respects in accordance with the laws of the State of Washington, without regard
to the conflicts of laws provisions of such State.
3.2 SUCCESSORS AND ASSIGNS
Except as otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
transferees, executors and administrators of the parties hereto. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
3.3 ENTIRE AGREEMENT
This Agreement constitutes the full and entire understanding and agreement
between the parties hereto with regard to the subject matter hereof and
supersedes any prior or contemporaneous agreements or understandings with
respect thereto.
3.4 AMENDMENT AND WAIVER
This Agreement, or any provision hereof, may be amended or waived only in
writing signed by the Company, the Founder and the Investor, and any amendment
or waiver so approved shall be binding upon the Founder and Investor (including
the transferee of any Founder or the Investor).
3.5 NOTICES, ETC.
All notices and other communications required or permitted hereunder shall
be in writing and shall be mailed by first class mail, postage prepaid, or
otherwise delivered by hand or by messenger, facsimile or courier, addressed (a)
if to the Investor, at the Investor's address set forth on the signature page
hereto, or at such other address as the Investor shall have furnished to the
Company and the Founder in writing, with a copy to Xxxx X. Xxxxx, Xxxxx Xxxxxx
Xxxxxxxx, 0000 Xxxxxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000, (b) if to
the Founder, at the address as it appears on the books of the Company or at such
other address as the Founder shall have furnished the Company and the Investor
in writing, or (c) if to the Company, at
its principal executive office, attention President, or at such other address as
the Company shall have furnished to the Investor and the Founder, with a copy to
Xxxxxxx X. Xxxx, Xx., Xxxxxxx Coie, 0000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
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XX 00000. If notice is provided by mail, it shall be deemed to be given three
(3) business days after proper deposit in the U.S. Mail, and if notice is given
by hand or by messenger, facsimile or courier, it shall be deemed to be given
upon receipt.
3.6 SEVERABILITY
In the event that any provision of this Agreement is held to be
unenforceable under applicable law, this Agreement shall continue in full force
and effect without said provision and shall be enforceable in accordance with
its terms.
3.7 TITLES AND SUBTITLES
The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
3.8 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
3.9 NO ADVERSE EFFECT
Failure of the Investor to exercise a right under Section 1 or Section 2 of
this Agreement shall not adversely affect the Investor's rights upon subsequent
sales or proposed sales by the Founder.
3.10 LEGENDED CERTIFICATES
Each certificate representing shares of the Co-Sale Securities of the
Company or issued to any permitted transferee pursuant to Section 1.2 shall be
endorsed with the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN CO-SALE AGREEMENT BY AND AMONG THE STOCKHOLDER, THE
CORPORATION AND A CERTAIN HOLDER OF COMMON STOCK OF THE CORPORATION.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE CORPORATION."
The foregoing legend shall be removed upon termination of this Co-Sale
Agreement in accordance with the provisions of Section 1.3.
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IN WITNESS WHEREOF, the parties have executed this Co-Sale Agreement as of
the date first above written.
INFOSPACE, INC.
By: _____________________________________
Xxxxxx Xxxx, President and Chief
Executive Officer
FOUNDER:
_________________________________________
Xxxxxx Xxxx
INVESTOR:
ACORN VENTURES-IS, LLC
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Tax I.D. No.: ___________________________
Address: 0000 - 000xx Xxxxxx XX
Xxxxx 000
Xxxxxxxx, XX 00000
[SIGNATURE PAGE FOR CO-SALE AGREEMENT]
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INVESTOR LIST
Acorn Ventures-IS, LLC 1,875,000 shares of Common Stock
Three Common Stock Purchase Warrants to
purchase up to 3,375,457 shares
Xxxxxxx Partners LLP 325,000 shares of Common Stock
Three Common Stock Purchase Warrants to
purchase up to 460,561 shares
Xxxx and Xxxxxxx Xxxxxxxxxx 62,500 shares of Common Stock
Three Common Stock Purchase Warrants to
purchase up to 153,521 shares
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