Under the terms of the Settlement Agreement, which is subject to court approval, InfoSpace will receive a gross amount of $26.65 million as consideration for the dismissal of all claims in the Derivative Action. This amount will be provided to InfoSpace in the form of cash, forgone contractual obligations of InfoSpace, and surrendered securities. The net final value of Settlement Agreement is uncertain because InfoSpace is obligated to pay certain fees and expenses for attorneys and others retained by InfoSpace, a Special Litigation Committee of its Board of Directors, plaintiffs, and defendants. While the exact amount of these fees and expenses are currently unknown, they are anticipated to account for a material percentage of the gross amount received by InfoSpace. In addition, InfoSpace has agreed to undertake certain specified corporate governance reforms and to avoid, in connection with any future special stockholder dividends, certain actions that were the subject of the Derivative Action. The proposed settlements do not involve any admission of wrongdoing or liability, and there has been no adjudication of the merits of the underlying claims.

The parties to the Settlement Agreement are as follows: the plaintiffs (Anne D. Manos and James N. Mercer), the nominal defendant (InfoSpace, Inc.), the Special Litigation Committee of the Board of Directors of InfoSpace, Inc., the named defendants (James F. Voelker, John E. Cunningham, IV, Jules Haimovitz, Richard D. Hearney, Lewis M. Taffer, George M. Tronsrue, III, Vanessa A. Wittman, Allen Hsieh, Brian T. McManus, Steven L. Elfman, and R. Bruce Easter, Jr.), and three non-parties to the Derivative Action (former InfoSpace Senior Vice President, Corporate Development, John Foster, Syzygy Consulting Group, and Wilson Sonsini Goodrich & Rosati, PC) (collectively, the "Settling Parties").

The Settling Parties intend to jointly request that the Superior Court in King County, Washington preliminarily approve the proposed settlement and then, following certain procedures to be set by the Court, subsequently enter final judgment providing for approval of the Settlement Agreement, dismissing the Derivative Action with prejudice, permanently enjoining the prosecution of any of the specified released claims against certain Settling Parties, and awarding attorneys' fees and reimbursement of expenses to the plaintiffs' counsel in an amount to be determined by the Court. There can be no assurance the court will approve the Settlement Agreement or any of the terms requested by the Settling Parties.