EXECUTION VERSION
AMENDMENT NO. 2
Effective Date of Amendment No. 2: September 1, 2002
This AMENDMENT NO. 2 ("Amendment No. 2") to that certain MSN Search Agreement
dated effective as of December 19, 2001, as amended by that certain Amendment
No. 1 effective as of March 17, 2002 (as amended the "Agreement") is made by and
among OVERTURE SERVICES, INC., A DELAWARE CORPORATION ("COMPANY"), OVERTURE
SEARCH SERVICES (IRELAND) LIMITED, AND MICROSOFT CORPORATION, A WASHINGTON
CORPORATION ("Microsoft").
RECITALS
The parties desire to amend the Agreement on the terms and conditions provided
herein; and
The parties desire to amend the Agreement to add the MSN Search Site in France
to the Agreement.
The parties hereby agree as follows:
AMENDMENT
1. Section 1.19 will be deleted in its entirety and replaced with the
following:
1.19 "Main Period Term" means the thirty-four (34) month period
commencing on the Effective Date and expiring December 31, 2004.
2. Section 1.20 will be deleted in its entirety and replaced with the
following:
1.20 "Minimum Queries" means [*] Queries rendering to the URL
http://search.msn.com and [*] Queries rendering to the URL
http://www.search.msn.fr.
3. Section 1.23 will be modified as follows (amendments in italics):
1.23 "MSN Home Page" means the initial MSN Web Pages in the
international markets, as shown below. This Agreement may be
extended to incorporate other international markets, which will
have attendant URLs, as mutually agreed by the parties or as
reasonably updated by Microsoft with successor URLs during the
Term.
Region Market URL(s)
------------- ------- -----------------------------------------
North US http://www.msn.com (English speaking)
America http://www.yupimsn.com (Spanish speaking)
Canada http://www.msn.ca (English speaking)
Non-North UK http://www.msn.co.uk
America
Germany http://www.msn.de
France http://www.msn.fr
4. Section 1.25 will be modified as follows (amendments in italics):
1.25 "MSN Search Site" means the MSN Search Results Pages in the
international markets shown below. This Agreement may be extended
to incorporate other international markets or languages in
current markets, which will have attendant URLs, as mutually
agreed by the parties or as
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EXECUTION VERSION
reasonably updated by Microsoft with successor URLs during the
Term.
Region Market URL(s)
------------- ------- -----------------------------------------
North US http://search.msn.com (English speaking)
America http://busqueda.yupimsn.com/ (Spanish
speaking)
Canada http://search.msn.ca (English Speaking)
Non-North UK http://search.msn.co.uk
America
Germany http://search.msn.de
France http://search.msn.fr
5. A new Section 1.44 will be added as follows:
1.44 "Guaranteed Payments for MSN France" means [*] as set forth in
Section 3.
6. A new Section 2.5.4 will be added as follows:
2.5.4 France. The Selected Terms list for Queries rendering to the URL
http://search.msn.fr will be agreed upon in writing.
7. Section 2.13 will be modified as follows (amendments in italics):
2.13 International Subsidiaries. Company may inform Microsoft that a
subsidiary that is wholly owned, directly or indirectly, by
Company will be responsible for the obligations of Company under
this Agreement with respect to the market served by that
wholly-owned subsidiary. Any such notification or delegation by
Company shall not limit Company's obligations and liabilities to
Microsoft under this Agreement, and Company hereby agrees to
guarantee all such obligations and liabilities in the relevant
market. Without limitation of the foregoing, Company has informed
Microsoft that Overture Search Services (Ireland) Limited, its
wholly-owned subsidiary, shall be responsible for Company's
obligations relating to the MSN Search Site in the UK market, the
MSN Search Site in Germany and the MSN Search Site in France.
8. Section 2.3 will be modified as follows (amendments in italics):
2.3 Successor Functionality to MSN Search on the MSN Home Page. If
Microsoft uses another entity within Microsoft as a provider of
Internet Search other than MSN Search for the MSN Home Page,
Microsoft will employ commercially reasonable efforts to ensure
that its obligations pursuant to this Agreement are fulfilled.
For the avoidance of doubt, the parties intend this Section 2.3
to allow Microsoft to remove MSN as the provider of Internet
Search from the MSN Home Page. The parties do not intend this
section to relieve Microsoft of its obligations under this
Agreement or to allow Microsoft to terminate or renegotiate this
Agreement. Although Microsoft may remove Internet Search from the
MSN Home Page under this Section 2.3, this Section has no effect
on Microsoft's obligations pursuant to Sections 2.1 and 2.9.
9. Section 3.2 will be deleted in its entirety and replaced with the
following:
3.2 Payment
3.2.1 Main Period Payment. North America. During the Main Period
Term, Company will pay to Microsoft per month the greater
of: (i) the Guaranteed Payment, and (ii) the Revenue Share
Payment according to the [*] in Table 1 below if the
following [*] conditions are met: [*]. If any of the above
[*] conditions are not met, Company will pay Microsoft a
Revenue Share Payment as outlined in Table 1. The Revenue
Share Payment for the MSN Search Sites in North America
will be determined by multiplying each MSN
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EXECUTION VERSION
Search Site's monthly Gross Revenue by the appropriate
percentage from Table 1's Column [*].
Table 1: [*]
[*]
For the avoidance of doubt, [*].
3.2.2 Main Period Payment, Non-North America. If the aggregate
Gross Revenue from all Non-North American Search Sites
exceeds [*], the Revenue Share Payment for the MSN Search
Site outside North America (except any MSN Search Site in
a Guaranteed Phase as outlined in Section 3.2.3) will be
determined by multiplying each MSN Search Site's monthly
Gross Revenue by the appropriate percentage from Table 1's
Column [*]. If the aggregate Gross Revenue from all
Non-North American Search Sites is below [*], the Revenue
Share Payment for the MSN Search Site outside North
America (except any MSN Search Site in a Guaranteed
Payment Phase as outlined in Section 3.2.3 ) will be
determined by multiplying each MSN Search Site's monthly
Gross Revenue by the appropriate percentage from Table 1's
Column [*], up to a maximum Gross Revenue share percentage
of [*]%.
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EXECUTION VERSION
3.2.3 Guaranteed. Phase: France. For the nine-month period
beginning September 2002 and ending May 2003 (the
"Guaranteed Phase for MSN France"), Company will pay to
Microsoft the monthly guaranteed payments in Table 2. If
Microsoft fails to deliver [*] Queries rendering to the
URL http://www.search.msn.fr ("Guaranteed Queries in
France") before June 1, 2003, then the Guaranteed Payment
Phase for MSN France will extend until all Guaranteed
Queries in France are delivered (the "Guaranteed Phase
Extension for MSN France"). During the Guaranteed Phase
Extension for MSN France France, Company will not be
required to make any payments to Microsoft. Once the
Guaranteed Phase for MSN France has concluded, then
Company shall pay Microsoft pursuant to Section 3.2.2 for
Gross Revenue derived from the France Search Site.
Table 2
Guaranteed Payment for the MSN Search Site in France
Guaranteed
Month Period Payment (in Euros)
--------- ------------------ ------------------
1 September 2002 [*]
2 October 2002 [*]
3 November 2002 [*]
4 December 2002 [*]
5 January 2003 [*]
6 February 2003 [*]
7 March 2003 [*]
8 April 2003 [*]
9 May 2003 [*]
3.2.4 Company will make all payments due to Microsoft per
Section 3.2.1 and 3.2.2 in U.S. Dollars, or other currency
as mutually agreed by the parties within forty-five (45)
days after the end of each calendar month. All payments
will be accompanied by a statement showing in reasonable
detail the basis for the payment(s). Company and Microsoft
will mutually agree on whether Company will make a single
payment for all amounts due hereunder or separate payments
for individual markets. The parties have agreed to make
payments in Euros for payments relating to the German and
France Search Sites and in British Pounds for payments
relating to the UK Search Site.
3.2.5 Make-Good Period. If Microsoft fails to deliver [*]
Queries rendering to the URL http://search.msn.com by the
end of the Main Period Term, then Microsoft will display
Company Search Results on the English-speaking MSN Search
Site until all such Queries are delivered (the "Make-Good
Period"). For the avoidance of doubt, during the Make-Good
Period, Company will not be required to make any
additional Guaranteed Payments, but Company will continue
to make Revenue Share Payments.
3.2.6 Cost-Recovery Fee. Company will pay Microsoft [*] for
program management, development and testing service to
expand Queries or meet other goal(s) as determined by
Microsoft in its sole discretion. Microsoft will invoice
Company for this cost-recovery fee via one or more
invoices, which invoice(s) will be payable by Company to
Microsoft thirty (30) days after Company's receipt of each
invoice.
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EXECUTION VERSION
3.2.7 Up-Front Fees. Company will pay Microsoft prior to [*] the
non-refundable up-front fees below for services between
September 1, 2002 to June 30, 2003.
a. MSN Search Site in the U.S. For the MSN Search
Sites in the U.S., Company will pay Microsoft a
non-refundable fee of [*].
b. MSN Search Site in Canada. For the MSN Search Site
in Canada, Company will pay Microsoft a
non-refundable fee of [*].
c. MSN Search Site in the U.K. For the MSN Search Site
in the U.K., Company will pay Microsoft a
non-refundable fee of [*].
d. MSN Search Site in Germany. For the MSN Search Site
in Germany, Company will pay Microsoft a
non-refundable fee of [*].
10. Section 3.3 will be amended by adding the following sentence at the end
of the paragraph:
"Beginning with the investor-relations call scheduled for July 2002,
Company will provide to Microsoft a written transcript of Company's
investor-relations conference calls within a reasonable period of time
after each call not to exceed thirty (30) days."
11. Section 7.1 will be modified as follows (amendments in italics):
7.1 Term. This Agreement commences on the Effective Date and
automatically extends into the Main Period Term unless on or
before February 15, 2002, one party notifies the other that it
does not wish to extend. If such notice is given, this Agreement
will expire on February 28, 2002. If no such notice is given, the
Main Period Term will commence March 1, 2002 and continue through
December 31, 2004. However, if Microsoft has not delivered all of
the Minimum Queries by the conclusion of the Main Period Term,
Microsoft will continue its display of Company Search Results on
the appropriate MSN Search Site during the Make-Good Period in
accordance with this Agreement until the under-delivered Queries
are provided, and Company will continue to pay Microsoft
according to Section 3.2, except as set forth therein.
12. Section 7.2 will be deleted in its entirety and will be replaced with
the following:
7.2 Microsoft Extension Right. Microsoft may -- at its sole
discretion and in writing -- opt to extend the Main Period Term
for two additional two-year periods. The first option to extend
("First Extension") allows Microsoft to extend the Main Period
Term for a period commencing on January 1, 2005 and continuing
until December 31, 2006, provided Microsoft notifies Company in
writing on or before September 30, 2004 of its intention to enter
into the First Extension. The second option to extend ("Second
Extension") allows Microsoft to extend the Main Period Term for a
period commencing on January 1, 2007 and continuing until
December 31, 2008, provided Microsoft notifies Company in writing
on or before September 30, 2006 of its intention to enter into
the Second Extension. In order for Microsoft to exercise the
Second Extension, Microsoft must have exercised the First
Extension. If Microsoft elects to extend the Main Period Term
according to this Section 7.2, the percentage of revenue Company
pays to Microsoft will be determined by Section 3.2.1 and 3.2.2.
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EXECUTION VERSION
13. In Exhibit A, Section C, the last two sentences of the third paragraph
shall be deleted.
Defined terms herein have the same meaning as set forth in the Agreement, except
as otherwise provided.
This Amendment No. 2 amends, modifies and supersedes to the extent of any
inconsistencies, the provisions of the Agreement. Except as expressly amended by
this Amendment No. 2, the Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as of the
Amendment No. 2 Effective Date set forth above. All signed copies of this
Amendment No. 2 are deemed originals. This Amendment No. 2 does not constitute
an offer by either party. This Amendment No. 2 is effective upon execution on
behalf of Company and Microsoft by their duly authorized representatives.
MICROSOFT CORPORATION OVERTURE SERVICES, INC.
One Microsoft Way 74 N. Pasadena Avenue, 3rd Floor
Redmond, WA 98052-6399 Pasadena, CA 91103
By /s/ JOHN KRASS /s/ TED MEISEL
----------------------------------- --------------------------------------
(Sign) (Sign)
John Krass Ted Meisel
-------------------------------------- --------------------------------------
Name(Print) Name(Print)
PUM CEO
-------------------------------------- --------------------------------------
Title Title
Without limiting Company's obligations hereunder, Overture Search Services
(Ireland) Limited hereby executes this Amendment for purposes of assuming the
obligations (subject to the guarantee by Company provided in Section 2.13 of the
Agreement) for the UK market as provided in Section 2.13 of the Agreement.
OVERTURE SEARCH SERVICES (IRELAND) LIMITED
By /s/ JOHANNES LARCHER
-----------------------------------
(Sign)
Johannes Larcher
--------------------------------------
Name(Print)
Director
--------------------------------------
Title
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