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employee (other than Mr. Jain) and that he would always have more stock options than any other such employee. The employee also contends 

that he was falsely promised certain levels of authority and support in his position. The employee seeks unspecified compensatory damages 

from us as well as equitable relief. On March 29, 2001 the court dismissed the plaintiff's claims for breach of the covenant of good faith and 

fair dealing. On March 1, 2002, the court dismissed the employee's claims for breach of contract, fraudulent and negligent misrepresentation 

with respect to the alleged promise that the employee would always have more stock options than any other InfoSpace employee, and violation 

of the RICO Act, and also denied certain other motions by the plaintiff. The only surviving claim is plaintiff's allegation of fraudulent and 

negligent misrepresentation based on the alleged representation that the stock options received by the employee at the time he was hired were 

the most given to any InfoSpace employee (other than Mr. Jain). The parties are scheduled for trial on the surviving claim on June 24, 2002. 

We believe we have meritorious defenses to this claim. Nevertheless, litigation is uncertain and we may not prevail in this suit.  

In September of 2000, Go2Net sued FreeYellow.com, Inc. a Florida corporation, and John Molino, FreeYellow's sole shareholder, in the 

Superior Court of Washington for King County seeking to rescind its acquisition of FreeYellow that closed in October of 1999, and in the 

alternative, seeking damages. Molino denied the allegations, and asserted a counterclaim for breach of the merger agreement. In October 2000, 

Go2Net was acquired by and become a wholly owned subsidiary of InfoSpace. On August 6, 2001, Go2Net amended the complaint to add a 

claim against FreeYellow and Molino under the Securities Act of Washington ( WSA ). Both parties moved for summary judgment on the 

merits of their respective claims, and those motions were denied. In February of 2002, Go2Net moved for summary judgment to dismiss 

Molino's equitable defenses of waiver and estoppel to Go2Net's WSA claim. Molino opposed that motion, and moved to dismiss Go2Net's 

WSA claim. On March 8, 2002, the court granted Go2Net's summary judgment motion and denied Molino's motion to dismiss. The case is 

scheduled to go to trial on July 1, 2002. We believe we have meritorious defenses to these claims. Nevertheless, litigation is uncertain and we 

may not prevail in this suit.  

Two of nine founding shareholders and three other shareholders of Authorize.Net Corporation, a subsidiary acquired through our merger 

with Go2Net, filed a lawsuit on May 2, 2000 in Utah State Court in Provo, Utah. This action was brought to reallocate amongst the founding 

shareholders the consideration received in the acquisition of Authorize.Net by Go2Net. The plaintiffs allege that the corporate officers of 

Authorize.Net fraudulently obtained a percentage of Authorize.Net shares greater than what was anticipated by the founding shareholders, and 

are making claims under the Utah Uniform Securities Act as well as claims of fraud, negligent misrepresentation, breach of fiduciary duty, 

conflict of interest, breach of contract and related claims. Plaintiffs seek compensatory and punitive damages in the amount of $200 million, 

rescission of certain transactions in Authorize.Net securities, and declaratory and injunctive relief. The plaintiffs subsequently amended the 

claim to name Authorize.Net as a defendant with regard to the claims under the Utah Uniform Securities Act and have asserted related claims 

against Go2Net. The case is currently in the expert witness discovery phase, which is expected to end on March 29, 2002. We have filed a 

motion for summary judgment on behalf of Authorize.Net and have asserted counterclaims against the plaintiffs. We believe we have 

meritorious defenses to these plaintiffs' claims. Nevertheless, litigation is uncertain and we may not prevail in this suit.  

One of the shareholders of INEX Corporation filed a complaint with the Ontario Superior Court of Justice in Canada on September 22, 

1999 alleging that the original shareholders of INEX and INEX itself were bound by a shareholders agreement that entitled the shareholder to 

pre emptive rights and rights of first refusal. The complaint was amended on December 20, 1999 to allege that we assumed the obligations of 

INEX under the alleged shareholders agreement as a result of our acquisition of INEX on October 14, 1999. The plaintiff has agreed to dismiss 

the complaint with prejudice and release all claims against defendants in exchange for the defendants' agreement to forego collection of 

litigation costs assessed against the plaintiff to date in the suit. Defendants have submitted settlement documents to plaintiff's counsel who has 

approved them. The parties are awaiting final signatures to complete the settlement.  

On December 5, 2001, a complaint entitled The boxLot Company v. InfoSpace, Inc., et. al. was filed in the Superior Court of California 

for San Diego County. The complaint names as defendants InfoSpace and certain of  

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