SOFTWARE DEVELOPMENT AGREEMENT
This Software Development Agreement ("Agreement") is made and entered into as of
the later of the two signature dates below (the "Effective Date") by and between
INKTOMI CORPORATION ("Inktomi"), a California corporation, 1900 South Norfolk
Street, Suite 110, San Mateo, California 94403, and MICROSOFT CORPORATION
("Microsoft"), a Washington Corporation, One Microsoft Way, Redmond, Washington
98052-6399, with reference to the facts set forth in the Recitals below.
Recitals
A. Inktomi develops and markets computer software products, including
without limitation "search engine" software for searching and indexing
information accessible through the Internet.
B. Microsoft develops, manufactures, distributes and markets computer
software products and services.
C. Inktomi and Microsoft desire to enter into a business relationship
pursuant to which, among other things, (i) Inktomi would (a) develop software
for Microsoft to implement desired features for a Microsoft search engine, (b)
provide search results for Microsoft using Inktomi's search engine customized
with, among other elements, the features developed for Microsoft, (c) provide
software hosting and maintenance services for Microsoft's benefit, and (d)
purchase additional hardware and software necessary or desirable to service
Microsoft's needs, and (ii) Microsoft would make certain payments to Inktomi,
and provide loans to Inktomi to facilitate Inktomi's purchase of additional
hardware and software necessary or desirable to service Microsoft's needs.
D. This Software Development Agreement is intended to delineate the terms
and conditions applicable to the software development aspects of such business
relationship.
Agreement
Accordingly, Inktomi and Microsoft agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms
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will have the indicated meanings:
1.1 "Ancillary Agreements" shall mean the following agreements
between Inktomi and Microsoft, and all amended versions thereof or successor
agreements thereto: (i) the Information Services Agreement of even date
herewith; (ii) the Software Hosting Agreement of even date herewith; (iii) the
Loan Agreement of even date herewith, and any and all "Promissory Notes" and/or
"New Note" executed pursuant
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thereto; (iv) the Security Agreement of even date herewith; and (v) the Escrow
Agreement of even date herewith.
1.2 The "Average Daily Hits" (or "ADH") for a particular calendar
month means the number of Hits in that month divided by the number of days in
that month.
1.3 "Coupled Cluster Technology" means Inktomi's proprietary computer
software that enables a collection of two or more individual computers to be
connected in such a way as to operate as a single computing system.
1.4 "Deliverables" means the software code in object and/or source
format (as set forth in the Specifications, provided that (i) if not specified,
delivery shall be in object code format, except (ii) in all cases, delivery of
code relating to Joint Derivative Technology and Microsoft Derivative Technology
shall be in both object code and source code format), documentation, and other
materials required to be delivered by Inktomi to Microsoft hereunder, as more
fully described in the Specifications. Unless otherwise set forth in this
Agreement (including the Specifications), or unless otherwise agreed by the
parties, all code to be delivered to Microsoft will be transmitted by Inktomi to
Microsoft electronically in accordance with such security measures as may be
mutually agreed by the parties.
1.5 "Derivative Technology" means any and all technology created or
developed by Inktomi pursuant to this Agreement based upon Inktomi Technology
and/or Microsoft Technology, which development is funded in whole or in
substantial part by Microsoft, including without limitation the following: (i)
for copyrightable or copyrighted material, any translation (including
translation into other computer languages), portation, modification, correction,
addition, extension, upgrade, improvement, compilation, abridgment or other form
in which an existing work may be recast, transformed or adapted; (ii) for
patentable or patented material, any improvement thereon; and (iii) for material
which is protected by trade secret, any new material derived from such existing
trade secret material, including new material which may be protected by
copyright, patent and/or trade secret. Derivative Technology shall be
categorized as one of the following three distinct types:
1.5.1 "Inktomi Derivative Technology" means Derivative
Technology which is, for functionality reasons, inseparably integrated with the
Inktomi Search Engine (as distinguished, for example, from technology which
could be linked to the Inktomi Search Engine through a programming interface).
1.5.2 "Microsoft Derivative Technology" means Derivative
Technology which is (i) based on Microsoft Technology and (ii) separable from
the Inktomi Search Engine.
1.5.3 "Joint Derivative Technology" means Derivative Technology
which is (i) separable from the Inktomi Search Engine and (ii) based on an
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idea supplied by Inktomi or Microsoft which idea theretofore was not developed
in any significant manner (such as by developing algorithms or substantial
portions of code toward implementation of the idea).
1.6 "Error(s)" means defect(s) in the Product or a Deliverable which
prevent(s) it from performing in accordance with the Specifications and/or a
Severity Level 1, 2 or 3 error, as such errors are defined in Exhibit B.
1.7 A "Hit" occurs each time an end user accesses a Web page
displaying the [*] of a [*] using the [*] conducted by the end user through a
[*]; the [*] displayed on such [*] is [*] in determining the [*] (for example,
viewing a [*] containing [*] constitutes [*]. A "Hit" does not occur when an end
user [*] or, if different from the applicable [*], the [*] in which the end user
[*], or [*] the [*]. Notwithstanding anything contained herein to the contrary,
no "Hits" will be deemed to [*] or otherwise until the [*] of the [*] is [*] for
[*] by the [*]. The parties acknowledge that access by an end user to a [*] does
not constitute a "Hit."
1.8 "Inktomi Technology" means (a) Inktomi's existing Search Engine
and Coupled Cluster Technology, and any and all future versions thereof and
enhancements, upgrades and modifications thereto, other than Derivative
Technology created during the Term, as well as (b) all other computer software
and/or technology which is supplied by Inktomi for use in or in connection with
the Product and/or Services and either is (i) existing as of the Effective Date,
(ii) developed by Inktomi at Microsoft's request but without any Microsoft
funding, or (iii) developed by Inktomi after the Effective Date independently.
1.9 "Internet" means any systems for distributing digital electronic
content and information to end users via transmission, broadcast, public
display, or other forms of delivery, whether direct or indirect, whether over
telephone lines, cable television systems, optical fiber connections, cellular
telephones, satellites, wireless broadcast, or other mode of transmission now
known or subsequently developed.
1.10 "Launch Date" will mean that date on which the Microsoft Search
Engine (other than any so-called "beta" version) is first generally available
for use by the public.
1.11 "Microsoft Site" means the Microsoft Web Site(s) or Microsoft
application(s) which, when accessed by an end user, will permit the end user to
conduct a search of the Internet (or a portion thereof) using the Product; if
Microsoft sublicenses its rights to use the search results generated by the
Product (as permitted under said Information Services Agreement), then the
site(s) of such Microsoft sublicensee(s) will
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be deemed to be Microsoft Site(s) for the purposes of computing Hits and
Inktomi's royalties under Section 2.1.2 below.
1.12 "Microsoft Technology" means all computer software and other
technology supplied by Microsoft for use in or in connection with the Product
and/or Services.
1.13 "Product" means computer software for Web-based and/or
application-based end user Internet searches which is an enhanced version of the
Inktomi Search Engine customized to Microsoft's specifications, as more fully
described in the Specifications, and all future versions thereof and
enhancements, upgrades and modifications thereto. The Microsoft Search Engine is
a Product, but other versions of the Product may be used by customers of Inktomi
other than Microsoft (subject to the terms and conditions contained in this
Agreement).
1.14 "Schedule" means the schedule(s) for completion of the Services,
as set forth in the Specifications.
1.15 "Search Engine" means computer software which crawls Web Sites,
downloads and analyzes text and other data, sorts and organizes the data,
creates an index of accessible data, and, after receiving a particular search
request (in the form of a word query which may or may not include limiting the
fields of data to be searched), locates material accessible in the database, and
presents the results of the search to the end user.
1.15.1 "Inktomi Search Engine" means Inktomi's current Search
Engine as of the Effective Date and all future versions thereof and
enhancements, upgrades and modifications thereto. The Inktomi Search Engine
includes, without limitation, such aspects of Inktomi's present and future
Coupled Cluster Technology as may be used in connection with the functioning of
the Inktomi Search Engine.
1.15.2 "Microsoft Search Engine" will mean those versions of the
Product used to generate search results for Microsoft under said Information
Services Agreement or for third parties requesting search results through
Microsoft.
1.16 "Services" means the customization and enhancement of the Product
(including the design and development of the Derivative Technology) in
accordance with the Specifications and delivery of the Deliverables, as they may
be modified from time to time, and all other services performed by Inktomi
pursuant to this Agreement.
1.17 "Specifications" means the specifications for the Services and
Product, attached to this Agreement as Exhibit A, which includes a product
design and content summary, as well as a detailed specification for all required
features and functionality, and a complete delivery and production schedule.
The parties contemplate that the Specifications may be modified by mutual
consent from time to time during the
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Term; if and when the Specifications are modified, the parties shall initial the
new Specifications or amendments to the existing Specifications, and immediately
following the last initialing such new Specifications or amendments shall
automatically be deemed to supercede or supplement (as the case may be) Exhibit
A.
1.18 "Term" means the period of time commencing on the Effective Date
and continuing thereafter indefinitely until this Agreement is terminated
pursuant to Section 9 below.
1.19 "Territory" means the entire universe.
1.20 "User Interface" means any and all visual mechanisms, metaphors
and/or appearance of the Microsoft Search Engine as designed to be seen by the
end user. Microsoft will be responsible for developing all software needed to
implement the User Interface for the Microsoft Search Engine. Microsoft and
Inktomi will cooperate with each other to ensure the seemless interaction of the
Product with the User Interface for the Microsoft Search Engine.
1.21 "Web" means the so-called World Wide Web, containing, inter alia,
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pages written in hypertext markup language (HTML) and/or any similar successor
technology.
1.22 "Web page" means a document on the Web which may be viewed in its
entirety without leaving the applicable distinct URL address.
1.23 "Web Site" means a collection of inter-related Web pages or
documents accessible through a Web page interface.
2. Compensation: Development Costs Plus Royalties.
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2.1 Microsoft shall pay Inktomi for all Inktomi's services hereunder
relating to the development and delivery of the Derivative Technology as
follows:
2.1.1 Microsoft will reimburse Inktomi for such development
services, computed [*], in accordance with the following payment schedule: [*]
upon [*]; [*] upon [*] of the [*]; and [*] upon [*] of the [*]. However, prior
to undertaking any such development activities, Inktomi shall obtain Microsoft's
written approval of a budget for such activities, and Inktomi shall not charge
Microsoft for [*] of the approved budget without Microsoft's prior written
approval.
2.1.2 In addition, Microsoft agrees to pay to Inktomi royalties
in connection with certain uses Microsoft makes of the Joint Derivative
Technology and the Microsoft Derivative Technology based upon Average Daily
Hits, from the Launch Date
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throughout the remainder of the Term, calculated by Microsoft monthly (but
reportable and payable in arrears in accordance with Section 3 below), as
follows:
(a) if the number of ADH in the applicable month is not
more than [*] ([*]), then an amount equal to: $[*] times the number of ADH times
the number of days in the month [or ($[*])(ADH)(days)];
(b) if the number of ADH in the applicable month is more
than [*] ([*]) but not more than [*] ([*]), then an amount equal to: $[*] times
the number of ADH times the number of days in the month, [*] $[*] times the
number of days in the month [or ($[*])(ADH)(days) [*] ($[*])([*])(days)]; or
(c) if the number of ADH in the applicable month is more
than [*] ([*]), then an amount equal to: $[*] times the number of ADH times the
number of days in the month, [*] $[*] times the number of days in the month
[($[*])(ADH)(days)[*]($[*])([*])(days)[*] ($[*])([*]) (days)].
2.2 As an advance against, and recoupable from, any and all amounts
that may otherwise be payable pursuant to Section 2.1.2 above, Microsoft agrees
to pay to Inktomi the sum of $[*] promptly after the execution of this
Agreement. Notwithstanding anything contained herein to the contrary, if the
Launch Date is [*], for [*] other than [*] to meet any requirement in the [*],
then on the [*] of each [*] (but attributable to the [*]) beginning on [*], and
continuing until the [*] of [*] or the [*], the [*] portion of [*] shall be
deemed by [*]. Notwithstanding the foregoing, with respect to the [*] in which
the [*] (if [*]), [*] will be reduced by the amount of [*] for such month
pursuant to Section [*].
2.3 Notwithstanding any other provision of this Agreement, Microsoft
shall have no obligation to use the Product, or to limit the number of search
results on any given Web page in the Microsoft Site. Inktomi acknowledges and
agrees that it is not entitled to any share in any revenue derived by Microsoft
from the Microsoft Site or the Microsoft Search Engine, regardless of how
derived, and that except as may be expressly provided otherwise in this
Agreement (or by subsequent mutual agreement of the parties) the royalties
payable (if any) under Sections 2.1 and 2.2 will be the only payments required
to be made to Inktomi for or in consideration of the development and use of the
Derivative Technology and/or rights granted to Microsoft hereunder, the Services
and all results and proceeds thereof. Nothing in this Agreement will be
construed as restricting Microsoft's ability to acquire, license, develop,
manufacture or distribute for itself, or have others acquire, license, develop,
manufacture or distribute for Microsoft, similar technology performing the same
or similar functions as the technology contemplated by
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this Agreement, or to market and distribute such similar technology in addition
to, or in lieu of, the technology contemplated by this Agreement.
2.4 Microsoft acknowledges that Inktomi has customized and provided,
and will continue to customize and provide, its software and technology to other
parties for use in connection with a variety of applications, including Search
Engine applications. Except as may be expressly provided to the contrary
elsewhere in this Agreement, nothing in this Agreement will be deemed to limit
or restrict Inktomi from customizing and providing its software and technology
to other parties for any purpose, including in connection with Search Engine
applications, or in any way affect the rights granted to such other parties.
2.5 Notwithstanding anything contained herein, in the event that
Inktomi licenses its Search Engine, and/or search results derived from the use
of such technology, to any third party (including but not limited to
arrangements whereby such technology is branded by such third party and/or such
technology is incorporated by a third party into its product) pursuant to which
such third party pays Inktomi [*], and in the event the [*] to the third
party than the [*] forth in this Agreement, then this Agreement shall be [*]
so that Microsoft shall [*] such [*].
3. Accountings and Audits.
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3.1 Within forty-five (45) days after the end of each calendar month
with respect to which Microsoft owes Inktomi any royalties, Microsoft shall
furnish Inktomi with a statement, together with payment for any amount shown
thereby to be due to Inktomi. The royalty statement shall be based upon the
calculations set forth in Section 2 during the month then ended, and shall
contain information reasonably sufficient to discern how the royalty payment, if
any, was computed. All statements and all other accounts rendered by Microsoft
to Inktomi shall be binding upon Inktomi and not subject to any objections by
Inktomi for any reason unless specific objection in writing, stating the basis
thereof, is received by Microsoft within one (1) year from the date rendered.
3.2 Taxes.
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3.2.1 All amounts to be paid by Microsoft to Inktomi herein are
exclusive of any federal, state, local, municipal or other governmental taxes,
including, without limitation, taxes based on, imposed on or measured by net or
gross income or receipts, franchise taxes, taxes on doing business, capital
stock taxes (including any minimum taxes and taxes measured by any item of tax
preference), sales, use, excise, property, withholding or similar taxes, duties,
levies, fees, excises or tariffs (all such taxes and other charges collectively
"Taxes") now or hereafter imposed on Inktomi under applicable law (the "Inktomi
Taxes"). Microsoft is not liable to Inktomi for any Taxes incurred in connection
with this Agreement, unless they are (i) owed by
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Microsoft under applicable law solely as a result of entering into this
Agreement (ii) are based solely upon the amounts payable under this Agreement,
and (iii) are required to be collected from Microsoft by Inktomi under
applicable law, provided, however, that solely with respect to sales tax or use
tax payable to those taxing jurisdictions that impose sales or use taxes under
applicable law upon the vendor, rather than the purchaser, clause (i) above
shall be modified to provide "sales taxes or use taxes that are owed by Inktomi
under applicable law solely as a result of entering into this Agreement and
clause (iii) shall be modified to provide "are permitted to be collected from
Microsoft by Inktomi under applicable law." (Such Taxes as are described in
clauses (i), (ii) and (iii) above, the "Invoiced Taxes"). The Invoiced Taxes
shall be stated separately as applicable on Inktomi's invoices and shall be
remitted by Microsoft to Inktomi. Inktomi shall promptly provide to Microsoft
official tax receipts indicating that such Invoiced Taxes have been collected by
Inktomi. Microsoft may provide to Inktomi an exemption certificate acceptable to
Inktomi and to the relevant taxing authority (including without limitation a
resale certificate) in which case Inktomi shall not collect the Taxes covered by
such certificate. Inktomi agrees to take such steps as are reasonably requested
by Microsoft to minimize such Invoiced Taxes in accordance with all relevant
laws and to reasonably cooperate with and assist Microsoft, at Microsoft's
request, in challenging the validity of any Invoiced Taxes or other Taxes paid
directly by Microsoft to the relevant taxing authority. Inktomi shall indemnify
and hold Microsoft harmless from any Taxes, penalties, interest, or additions to
tax arising from amounts paid by Microsoft to Inktomi under this Agreement that
are asserted or assessed against Microsoft to the extent such amounts are
related to Invoiced Taxes paid to Inktomi by Microsoft under this section. Other
than the Invoiced Taxes, all Inktomi Taxes shall be the responsibility of
Inktomi and may not be passed on to Microsoft. Inktomi takes full responsibility
for all such Inktomi Taxes, including penalties, interest and other additions
thereon and agrees to indemnify, defend and hold Microsoft harmless from any
claims, causes of action, costs (including without limitation, reasonable
attorneys' fees), penalties, interest charges and other liabilities of any
nature whatsoever associated therewith. All Taxes that are imposed on Microsoft
under applicable law (the "Microsoft Taxes") shall be the responsibility of
Microsoft and may not be passed on to Inktomi. Microsoft takes full
responsibility for all such Microsoft Taxes, including penalties, interest and
other additions thereon and agrees to indemnify, defend and hold Inktomi
harmless from any claims, causes of action, costs (including without limitation,
reasonable attorneys' fees), penalties, interest charges and other liabilities
of any nature whatsoever associated therewith.
3.2.2 In the event that Taxes are required to be withheld on
payments made hereunder by any U.S. (state, local or federal) or foreign
government, Microsoft may deduct such Taxes from the amount owed Inktomi and pay
them to the appropriate taxing authority. Microsoft shall in turn promptly
secure and deliver to Inktomi an official receipt for any Taxes withheld.
Inktomi may provide to Microsoft an exemption certificate acceptable to
Microsoft and to the relevant taxing authority (including without limitation a
resale certificate) in which case Microsoft shall not collect the Taxes covered
by such certificate. Microsoft agrees to take such steps as are reasonably
requested by Inktomi to minimize such Taxes in accordance with all relevant
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laws and to reasonably cooperate with and assist Inktomi, at Inktomi's request,
in challenging the validity of any such Taxes.
3.2.3 Inktomi agrees and acknowledges that it will be
responsible for all of its federal and state taxes, withholding, social
security, unemployment and other related taxes, insurance, and other benefits,
and all salaries, benefits, and other costs of its employees.
3.3 Microsoft agrees to keep, for not less than eighteen (18) months,
all proper records and books of account and all proper entries therein relating
to the calculations made under Section 2. Inktomi may cause an audit to be
made, at its expense, of the applicable records in order to verify statements
rendered hereunder. Any such audit shall be conducted only by a certified
public accountant (other than on a contingency-fee basis) and shall be conducted
during regular business hours at Microsoft's offices and in such a manner as not
to interfere with Microsoft's normal business activities. In no event shall an
audit with respect to any royalty statement commence later than eighteen (18)
months from the date of the statement involved, nor shall the audits be made
hereunder more frequently than once annually, nor shall the records supporting
any statements be audited more than once. Inktomi shall require the certified
public accountant when engaged to execute and deliver to Microsoft a certificate
in substantially the following form:
"I hereby certify that I have been engaged by Inktomi to audit the books and
records of MICROSOFT CORPORATION. Inktomi will not pay me on a contingent-
fee basis. The fees to be received by me for conducting the audit shall be
in no manner variable according to the findings or results of the audit.
Inktomi hereby agrees to make available to Microsoft, upon request, its records
and reports pertaining to the audit and any such records and reports prepared
for Inktomi by third parties (including the work sheets generated by its
auditors) but only in the event that Inktomi makes any claim with respect to
such audit. If any Inktomi audit should determine that Microsoft underpaid
Inktomi by an amount of 5% or more for the period audited, then in addition to
any and all other rights and remedies Inktomi may have under the circumstances,
Inktomi may require Microsoft to reimburse it for all costs it incurred relating
to such audit in addition to paying the amount otherwise owed.
4. Product Development.
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4.1 In General. Inktomi shall perform the Services, and deliver to
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Microsoft the Deliverables, in accordance with the Specifications (including the
Schedule), as the same may change from time to time during the Term with the
mutual consent of Microsoft and Inktomi, and all other terms and conditions
contained in this Agreement. Inktomi will use its best efforts to meet each
milestone in the Schedule for delivering the Product and the Deliverables.
Inktomi agrees that the Services shall be performed in a professional manner and
shall be of a high grade, nature and quality. Throughout the Term:
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4.1.1 Inktomi will assign human and financial resources to
maintain the Inktomi Search Engine and the Product, and develop enhancements
thereof, of at least the same quality and quantity as allocated to the
development and maintenance of the Inktomi Search Engine prior to the Effective
Date. Without limiting the generality of the foregoing, Inktomi agrees that, for
so long as he is an employee of Inktomi, [*] shall (i) be substantially
responsible for the guidance and direction of the Inktomi Search Engine and the
Product, including the development and enhancement thereof, and (ii) devote such
time and effort with respect to the Inktomi Search Engine and Product as may be
required to reasonably ensure the maintenance of their quality, functionality
and reliability. Inktomi further agrees that Microsoft will have the right to
approve [*] successor as "leader" of the Inktomi Search Engine team, if [*]
should cease to be an employee of Inktomi. Inktomi shall use its commercially
reasonable efforts to [*] within the Inktomi Search Engine development team, and
to ensure that the [*] is [*] than [*].
4.1.2 Inktomi will monitor the reliability and accessibility of
the Product, and ensure that it continues to perform in accordance with the
Specifications. Without limiting the generality of Section 4.1.3 below, if
Inktomi is contemplating any modifications to the Inktomi Search Engine or
Coupled Cluster Technology which might materially affect the performance of the
Product, Inktomi will confer in good faith with Microsoft regarding the
appropriateness of such modifications and mutually agree whether or not to make
such modifications; provided, however, that such consultation will not be deemed
to relieve Inktomi from its obligations to ensure that the Product continues to
meet the Specifications and operational cost estimates as specified in Exhibit C
at all times during the Term.
4.1.3 Prior to customization of the Inktomi Search Engine in
accordance with the Specifications, and thereafter throughout the Term, Inktomi
will keep Microsoft informed, in writing, of all planned enhancements to the
Inktomi Search Engine, and the status of development thereof, provided Inktomi
has the right to do so. Unless requested otherwise by Microsoft, Inktomi will
incorporate any or all such other planned enhancements into the Product,
provided Inktomi has the right to do so, in which case the Specifications shall
be deemed to be amended to include such enhancements.
4.1.4 From time to time, Microsoft may request that Inktomi
undertake to develop certain enhancements to the Product. Upon such request,
Inktomi shall confer in good faith with Microsoft regarding the feasibility of
developing such enhancements and the time frame for developing, testing and
incorporating such enhancements (giving due consideration to the status of
Microsoft as a primary licensee of Inktomi). Then, Inktomi and Microsoft shall
mutually agree as to whether Inktomi should pursue development of such
enhancements, and, if so, which of Inktomi and/or Microsoft will fund such
development, and, if funded in substantial part by Microsoft, whether the
enhancement will be Inktomi Derivative Technology, Microsoft Derivative
Technology, or Joint Derivative Technology. Upon mutual agreement, the
Specifications shall be deemed amended to include such enhancements.
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THE OMITTED PORTIONS.
4.2 Acceptance. The terms and conditions contained in this Section
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4.2 will apply to the initial release of the Product, as well as to each
subsequent release, upgrade, enhancement and version thereof.
4.2.1 Inktomi agrees to thoroughly test the Product (including
without limitation each and every release, version, and enhancement thereof), as
appropriate under the circumstances, at all appropriate stages of development,
and shall document its testing by written test documents delivered to Microsoft.
Inktomi will submit its test plans to Microsoft for review, so as to ensure that
Microsoft's standards of quality are maintained, and Inktomi agrees to
subsequently modify the test plans to accommodate Microsoft's requests if
Microsoft reasonably deems any changes to be necessary or appropriate. Such test
documents shall include a detailed description of the tests as conducted, and
test results (including, without limitation, resulting bug list and outstanding
issues list). Notwithstanding anything contained in this Agreement to the
contrary, Inktomi will not deploy the Product, and/or any enhancement thereof,
unless and until Microsoft authorizes such deployment in writing.
4.2.2 If either party is aware or becomes aware of a delay that
will prevent Inktomi from meeting a scheduled milestone for any Deliverable
under the Schedule, such party will promptly inform the other party of such
delay, and the reason therefor, in writing. If such delay is caused by
Microsoft, the Schedule will automatically be deemed extended, for the
applicable Deliverable and for subsequent deliverables, if and to the extent
minimally necessitated by the original delay. If such delay is caused by
Inktomi, Inktomi will be given a reasonable period (up to thirty (30) days,
depending on the circumstances) to cure the unmet Deliverable Schedule. However,
Inktomi acknowledges that timely meeting the Schedule is of critical importance
under this Agreement, and that time is of the essence in curing a delayed
delivery.
4.2.3 Microsoft shall evaluate the beta and final version of
each Deliverable and shall submit an acceptance or rejection to Inktomi within
ten (10) days after Microsoft's receipt of the engineering prototype and beta
versions and fifteen (15) calendar days after receipt of the final version of
the Deliverable. If Microsoft identifies Errors in any Deliverable prior to
acceptance, then Inktomi shall correct, at its sole expense, such Errors, and
use its best efforts to effect such correction within the applicable time
specified in Exhibit B.
4.2.4 If Inktomi fails to deliver any Deliverable within the
dates specified in the Schedule (after application of the applicable reasonable
cure period) and if any Errors discovered during the acceptance process cannot
be eliminated in the correction period specified in the Specifications or
Exhibit B (whichever is applicable) then Microsoft may, at its option: (i)
extend the correction period; or (ii) suspend its performance until the problem
is corrected to Microsoft's reasonable satisfaction and/or, if the failure to
deliver or uncorrected Error is material, terminate this Agreement for cause
pursuant to Section 9.
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4.2.5 Notwithstanding anything contained herein to the contrary,
Inktomi shall at all times hereunder be responsible for ensuring that the
Product meets all Specifications, and if any Error is discovered after
acceptance, Inktomi shall remain obligated to correct such Error in accordance
with the applicable timetable determined by Microsoft and Inktomi as set forth
in the Specifications or Exhibit B, or as otherwise may be mutually agreed under
the circumstances.
4.3 Specific Enhancements. Without limiting the foregoing, Inktomi
---------------------
and Microsoft acknowledge that at some time during the Term they contemplate the
following enhancements to the Product:
(a) [*] to the [*]. In this connection, as soon as practicable
following execution of this Agreement, Inktomi will undertake a study (using one
or more neutral, independent third party consultants the identity of whom will
be subject to Microsoft's reasonable prior approval) to determine the cost,
timing and other feasibility aspects [*]. Following completion of this
feasibility study, unless said mutually approved consultant(s) indicate(s) that
[*] is impossible or would require more than [*] ([*]) [*], Inktomi and
Microsoft will meet and mutually determine a timetable and milestones for
Inktomi to accomplish [*], with Inktomi using its commercially reasonable
efforts to complete the [*] by no later than [*].
(b) development of international versions of the Product, in any
and all languages desired by Microsoft, upon timetables and in accordance with
technical specifications as are mutually agreed by Microsoft and Inktomi from
time to time during the Term.
Unless otherwise agreed by the parties, Inktomi's Services hereunder will
include, without limitation, all development services required with respect to
[*]. However, with respect to the port, Microsoft will provide such [*]
(including the services of Microsoft's [*]) as may be reasonably available
to Microsoft and reasonably requested by Inktomi.
5. Scope of Rights.
---------------
5.1 Inktomi Technology. Nothing contained in this Agreement will
------------------
be deemed to transfer any ownership in the Inktomi Technology to Microsoft, and
insofar as Microsoft is concerned, Inktomi will own all rights in and to the
Inktomi Technology.
5.2 Microsoft Technology.
--------------------
5.2.1 Microsoft hereby grants to Inktomi a non-exclusive license
to incorporate Microsoft Technology into the Product, as contemplated by the
development process hereunder, provided that Inktomi may not itself use, nor
authorize
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[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
any third party's use of, the Microsoft Technology portion of the Product
without Microsoft's prior written approval (which Microsoft may give or withhold
in its sole and absolute discretion, and which may be conditioned, without
limitation, upon a royalty or other fee being payable to Microsoft).
5.2.2 Subject to Section 5.2.1 above, as between Microsoft and
Inktomi, Microsoft will own all rights in and to Microsoft Technology.
5.3 Derivative Technology.
---------------------
5.3.1 Inktomi Derivative Technology will be owned exclusively
by Inktomi and treated in the same manner as Inktomi Technology under this
Section 5, except as follows:
(a) Inktomi will not make available any Inktomi
Derivative Technology or any search engine features implemented thereby to any
third party search engine customer for a period of not less than [*] ([*]) years
commencing on the incorporation of the final (not "beta") version of the Inktomi
Derivative Technology into the Microsoft Search Engine. After the expiration of
said [*] ([*]) year exclusivity period, Inktomi will have the right to use the
Inktomi Derivative Technology in other versions of the Inktomi Search Engine,
but if Inktomi so uses any Inktomi Derivative Technology it will pay to
Microsoft, in [*], an amount equal to [*] of the amounts Microsoft paid for
development of such Inktomi Derivative Technology pursuant to Section 2.1.1
above, but except for such payments Inktomi will not owe any royalties or other
amounts to Microsoft for any use of the Inktomi Derivative Technology; and
(b) Inktomi hereby grants to Microsoft a non-exclusive
and irrevocable, fully paid-up, license under any and all patents that Inktomi
may own related to any portion of the Inktomi Derivative Technology, throughout
the Territory for the applicable life of the respective patent; provided,
however, that nothing contained in this clause (b) shall be deemed to require
Inktomi to deliver any code to Microsoft.
5.3.2 Each of Inktomi and Microsoft will own an [*] ([*])
interest in and to all Joint Derivative Technology, at all stages of
development, and the parties hereby assign to each other such individual rights
therein as necessary to effectuate said [*] ownership relationship. Subject to
the other rest of this Section 5.3.2, each party shall have the right to use
Joint Derivative Technology as each may determine (including creating other
derivative works based thereon) without any limitation or necessity to account
to the other. However, Inktomi will not make available any Joint Derivative
Technology or any search engine features implemented thereby to any third party
search engine customer for a period of not less than [*] ([*]) years commencing
on the incorporation of the final (not "beta") version of the Joint Derivative
Technology into the Microsoft Search Engine. After the expiration of said [*]
([*]) year exclusivity period, Inktomi will have the right to use the Joint
Derivative Technology in other versions of the Inktomi Search Engine, but if
Inktomi so uses any Joint Derivative
13
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Technology it will pay to Microsoft, in [*], an amount equal to [*] of the
amounts Microsoft paid for development of such Joint Derivative Technology
pursuant to Section 2.1.1 above, but except for such payments by Inktomi to
Microsoft, and the payments by Microsoft to Inktomi pursuant to Section 2.1.2
above, neither Microsoft nor Inktomi will owe any royalties or other amounts to
the other for any of their respective uses of the Joint Derivative Technology.
Each party will have the right to file registrations, and prosecute
infringements, relating to the Joint Derivative Technology, but will consult
with the other party before doing so, and will cooperate with the other should
it desire joint filings or prosecutions.
5.3.3 Subject to Section 5.3.4 below, as between Microsoft and
Inktomi, Microsoft will own all rights in and to the Microsoft Derivative
Technology.
(a) Inktomi acknowledges and agrees that, insofar as Inktomi is
concerned, the Microsoft Derivative Technology has been specially ordered
and commissioned by Microsoft and are "works made for hire" for copyright
purposes, with all copyrights in the Microsoft Derivative Technology owned
by Microsoft.
(b) To the extent (if any) that any Microsoft Derivative Technology
does not qualify as a work made for hire under applicable law, and to the
extent that the Microsoft Derivative Technology includes material subject
to copyright, patent, trade secret, or other proprietary right protection,
Inktomi hereby assigns to Microsoft, its successors and assigns, all right,
title and interest in and to the Microsoft Derivative Technology,
including, but not limited to, all rights in and to any inventions and
designs embodied in the Microsoft Derivative Technology or developed in the
course of Inktomi's creation of the Microsoft Derivative Technology. The
foregoing assignment includes a license under any current and future
patents owned or licensable by Inktomi to the extent necessary to combine
the Microsoft Derivative Technology with any hardware and software.
(c) Inktomi hereby irrevocably transfers and assigns to Microsoft any
and all "moral rights" that Inktomi may have in the Microsoft Derivative
Technology. Inktomi also hereby forever waives and agrees never to assert
any and all "moral rights" it may have in the Microsoft Derivative
Technology, even after termination of the Services.
5.3.4 Microsoft hereby grants to Inktomi a non-exclusive
license to incorporate Microsoft Derivative Technology into the Product, as
contemplated by the development process hereunder, provided that Inktomi may not
itself use, nor authorize any third party's use of, the Microsoft Derivative
Technology portion of the Product without Microsoft's prior written approval
(which Microsoft may give or withhold in its sole and absolute discretion, and
which may be conditioned, without limitation, upon a royalty or other fee being
payable to Microsoft).
14
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
5.4 User Interface. Microsoft intends to develop a User Interface(s)
--------------
for the Product; accordingly, any such User Interface would be Microsoft
Technology. If and to the extent that any User Interface for the Product is
developed by Inktomi, Inktomi acknowledges that it would be Microsoft Derivative
Technology. In either event, subject only to Section 5.2.2 or 5.3.3 (whichever
is applicable), as between Microsoft and Inktomi, Microsoft will own all rights
in and to any User Interface.
5.5 Deliverables.
------------
5.5.1 Microsoft will own all tangible materials (such as disks,
CD-ROMs, tapes and the like) delivered by Inktomi to Microsoft in connection
with this Agreement, and Inktomi hereby transfers all right, title and interest
in and to the same to Microsoft (subject to the other provisions in this Section
5).
5.5.2 Without limitation, and notwithstanding anything
contained in or omitted from the Specifications, all object code, source code
and related documentation for Joint Derivative Technology and Microsoft
Derivative Technology, and all data derived from testing the same, will be
deemed to be Deliverables under this Agreement, and Inktomi agrees to provide
Microsoft with copies thereof promptly after creation.
5.6 Assistance. Each party shall execute and deliver such
----------
instruments and take such other action as may be requested by the other to
perfect, protect, evidence or effectuate their respective rights in the Product,
Derivative Technology or any other technology referenced herein. In case one
party requests the other to execute and deliver any such instrument necessary to
perfect, protect, evidence or effectuate its rights and such other party fails
to accommodate any reasonable such request within thirty (30) days, such other
party hereby appoints and constitutes the requesting party as its attorney-in-
fact to execute, acknowledge and file all such instruments and to take such
other steps in its name as the requesting party, in its reasonable judgment, may
deem necessary or desirable to secure and/or protect its rights, such
appointment being a right coupled with an interest and irrevocable.
5.7 No Trademark License. Nothing in this Agreement or its
--------------------
performance shall grant either party any right, title, interest, or license in
or to the other's names, logos, logotypes, trade dress, designs, or other
trademarks.
6. Representations and Warranties.
------------------------------
6.1 By Inktomi. Inktomi warrants and represents that:
----------
(a) It has the full power to enter into this Agreement and to
grant the rights set forth herein;
15
(b) It has not previously and will not grant any rights in
the Inktomi Technology, the Product, the Derivative Technology or Deliverables
to any third party that are inconsistent with this Agreement (including without
limitation pursuant to agreements with [*]);
(c) Except for the portion thereof consisting of Microsoft
Technology (if any), (i) the Deliverables and Derivative Technology [*], or [*]
held by [*], and Inktomi has [*] of [*] of any [*], and (ii) the operation of
the Deliverables and Derivative Technology as part of the Product as intended
under this Agreement and/or the Information Services Agreement of even date
herewith [*], or [*] held by any third party, and Inktomi has [*] of [*] of any
[*];
(d) The Deliverables, Product and Derivative Technology will
[*] throughout the Term; provided, however, that a [*] and [*] to so perform
will not be deemed to be a material breach hereunder;
(e) The Product [*] to the extent Microsoft requires throughout
the Term, [*] with the [*] set forth in [*] (which is appended hereto and
incorporated herein by this reference); and
(f) The Derivative Technology, Deliverables and Product will
be created by employees of Inktomi within the scope of their employment and
under obligation to assign inventions to Inktomi, and/or by independent
contractors under written obligations to assign all rights in the Derivative
Technology, Deliverables and Product to Inktomi.
6.2 By Microsoft. Microsoft warrants and represents that it has the
------------
full power to enter into this Agreement.
6.3 Exclusions. Inktomi's warranties under Section [*] above will
----------
[*] to [*]: (i) use by Microsoft of the [*]; (ii) [*], or [*], the Product made
by Microsoft, unless such [*] or [*] and [*] by Microsoft; (iii) use by
Microsoft of the [*] with data or software or hardware which is [*] with the
Product [*] was [*] in writing; or (iv) [*] made to the [*] purported to be made
by [*] without the [*] of Inktomi.
7. Indemnification.
---------------
16
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
7.1 By Inktomi. Inktomi shall, [*] and Microsoft's request, defend
----------
[*] claim or action brought against Microsoft, and [*] and [*], which, [*],
would constitute a [*] of any [*] or [*] made by Inktomi under this Agreement,
and Inktomi will [*] and [*] Microsoft [*] any [*], [*] and [*] by Microsoft,
including but [*] to [*] of [*] and [*], that are attributable to such claim.
Microsoft shall: (i) provide Inktomi reasonably prompt notice in writing of any
such claim or action and [*], through [*] to Microsoft and Inktomi, to [*] and
[*] such claim or action; and (ii) provide [*] and [*], at [*], to [*] Inktomi
to [*] such claim or action. Inktomi will [*] for any [*] by [*] without [*],
which [*] will [*].
7.2 By Microsoft. Microsoft shall, at [*] and Microsoft's request,
------------
defend [*] or action brought against Inktomi, [*] and [*], which, [*], (i)
would constitute a [*] of any [*] or [*] made by Microsoft under this Agreement,
(ii) is [*] in [*] upon [*] to [*] made by [*] by Inktomi, (iii) is [*] in [*]
upon [*] of the [*] is [*] by Section [*] above, and/or (iv) is based in [*] on
[*], and Microsoft will [*] and [*] Inktomi [*] any [*] and [*] incurred by
Inktomi, including but [*] to [*] of [*] and [*], that are attributable to such
claim. Inktomi shall: (i) provide Microsoft reasonably prompt notice in writing
of any such claim or action and [*], through counsel [*] to Inktomi and
Microsoft, to [*] and [*] such claim or action; and (ii) provide Microsoft [*]
and [*], at [*], to [*] Microsoft to [*] such claim or action. [*] will [*] for
any [*] by [*] without [*], which [*] will [*].
7.2 Separate Counsel; Reimbursement. An indemnified party shall
-------------------------------
have the right to employ separate counsel and participate in the defense of any
claim or action. The indemnifying party shall reimburse the indemnified party
upon demand for any payments made or loss suffered by it at any time after the
date hereof, based upon the judgment of any court of competent jurisdiction or
pursuant to a bona fide compromise or settlement of claims, demands, or actions,
in respect to any damages related to any claim or action under this Section 7.
7.3 Settlement. The indemnifying party may [*] any claim or action
----------
under this Section 7 [*] the [*] written [*], which [*] will [*]. In the event
Microsoft and Inktomi agree to settle a claim or action, each party agrees not
to publicize the
17
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
settlement without first obtaining the other's written permission, which
permission will not be unreasonably withheld.
7.4 Proprietary Rights Infringement. Without limiting any of
-------------------------------
[*], in the event of any [*] or [*] by [*] of Section [*]([*]), [*] shall notify
[*] and shall [*] (i) [*] for [*] so that [*] shall [*] be in [*] of Section
[*]([*]), or (ii) [*] the [*] or [*] thereof, or [*] the [*] with [*] having [*]
the same or [*]. If neither of the foregoing is [*] to achieve within a [*] of
time, then, in addition to any [*] available to [*], [*] may [*] this Agreement.
8. LIMITATION OF LIABILITY. EXCEPT FOR [*] CAUSED BY A [*] OF
-----------------------
SECTION [*], NEITHER PARTY SHALL BE [*] (IN CONNECTION WITH OR PURSUANT TO THIS
AGREEMENT AND THE ANCILLARY AGREEMENTS TAKEN AS A WHOLE) FOR ANY [*], [*] OR [*]
(INCLUDING [*]) [*] OF [*] ([*]), [*] OF THE [*] OF [*], EVEN IF [*]
HAD BEEN [*] OF THE [*] OF SUCH [*].
9. Termination and Other Remedies.
------------------------------
9.1 Termination At Will by Either Party.
-----------------------------------
9.1.1 Microsoft may terminate this Agreement without cause upon
[*]'s prior written notice, provided that such notice may not be given prior to
the [*] of the [*].
9.1.2 Inktomi may terminate this Agreement without cause upon
[*]'s prior written notice, provided that such notice may not be given prior to
the [*] of the [*].
9.2 In addition to any other rights and/or remedies that Microsoft
may have under the circumstances, all of which are expressly reserved, Microsoft
may suspend performance and/or terminate this Agreement immediately upon written
notice at any time if:
(a) Inktomi is in material breach of [*] or [*] of this
Agreement, other than those contained in Section 10.1, and fails to cure that
breach within [*] ([*]) days after written notice thereof; or
(b) Inktomi is in material breach of Section [*]; or
18
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
(c) Inktomi becomes insolvent or makes any assignment for the
benefit of creditors or similar transfer evidencing insolvency; or suffers or
permits the commencement of any form of insolvency or receivership proceeding;
or has any petition under any bankruptcy law filed against it, which petition is
not dismissed within sixty (60) days of such filing; or has a trustee or
receiver appointed for its business or assets or any part thereof.
9.3 In addition to any other rights and/or remedies that Inktomi may
have under the circumstances, all of which are expressly reserved, Inktomi may
suspend performance and/or terminate this Agreement immediately upon written
notice at any time if:
(a) Microsoft is in material breach of [*] or [*] of this
Agreement, other than those contained in Section [*], and fails to cure that
breach within [*] ([*]) days after written notice thereof; or
(b) Microsoft is in material breach of Section [*]; or
(c) Microsoft becomes insolvent or makes any assignment for
the benefit of creditors or similar transfer evidencing insolvency; or suffers
or permits the commencement of any form of insolvency or receivership
proceeding; or has any petition under any bankruptcy law filed against it, which
petition is not dismissed within sixty (60) days of such filing; or has a
trustee or receiver appointed for its business or assets or any part thereof.
9.4 In the event of termination or expiration of this Agreement for
any reason, Sections 1, 3, 5.1, 5.2.2, 5.3.1(a), 5.3.2, 5.3.3, 5.3.4, 5.4, 5.5,
5.6, 5.7, 6, 7, 8, 10.1 and 12 (other than Section 12.12) shall survive
termination. Neither party shall be liable to the other for damages of any sort
resulting solely from terminating this Agreement in accordance with its terms.
9.5 If Inktomi is in material breach of this Agreement, then, in
addition to any other remedies which Microsoft may have under the circumstances,
Microsoft will have the right to withhold payment of amounts otherwise owed by
Microsoft to Inktomi pursuant to this and/or any Ancillary Agreement; provided,
however, that Microsoft shall give Inktomi not less than forty-five (45) days to
cure such breach prior withholding any such payments.
9.6 A breach of this Agreement by either party will also constitute a
breach by such party of each and every other Ancillary Agreement; and a breach
by either party of any Ancillary Agreement will also consitute a breach of this
Agreement by such party.
9.7 Except as expressly provided herein, upon expiration of the Term
or upon any termination of this Agreement, Microsoft shall have no further
rights with
19
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
respect to the Product or Inktomi Technology, and will promptly return to
Inktomi or destroy all copies of Inktomi Technology then in its possession or
under its control.
10. Confidentiality.
---------------
10.1 The parties hereby agree that all terms and conditions of that
certain Microsoft Corporation Non-Disclosure Agreement between them dated March
18, 1997, shall govern the disclosure of confidential and proprietary
information made under this Agreement. In this connection, the parties hereby
agree that the terms of this Agreement, the Specifications, the Derivative
Technology and all Microsoft-requested enhancements to the Inktomi Search Engine
shall be treated as confidential in accordance with the terms of said Non-
Disclosure Agreement.
10.2 Without having first sought and obtained Microsoft's written
approval (which Microsoft may withhold in its sole and absolute discretion),
Inktomi shall not, directly or indirectly, (i) trade upon this transaction or
any aspect of Inktomi's relationship with Microsoft, or (ii) otherwise deprecate
Microsoft technology.
10.3 Neither party will issue any press release or make any public
announcement(s) relating in any way whatsoever to this Agreement or the
relationship established by this Agreement without the express prior written
consent of the other party. However, the parties acknowledge that this
Agreement, or portions thereof, may be required under applicable law to be
disclosed, as part of or an exhibit to a party's required public disclosure
documents. If either party is advised by its legal counsel that such disclosure
is required, it will notify the other in writing and the parties will jointly
seek confidential treatment of this Agreement to the maximum extent reasonably
possible, in documents approved by both parties and filed with the applicable
governmental or regulatory authorities. Notwithstanding the foregoing, Microsoft
and Inktomi will cooperate to create a mutually approved joint press release
regarding the non-confidential aspects of this Agreement, which press release
shall be issued by each party on the Launch Date; provided, however, that the
precise timing of such press release shall be subject to the approval of
Microsoft (in its sole and absolute discretion).
11. Technology Escrow.
-----------------
11.1 To ensure that Microsoft will have access to such technology as
may be necessary or appropriate to permit it to use the Product to generate
search results (and to develop enhancements and other derivative works for use
in connection with the Product) as contemplated by this Agreement and the
Ancillary Agreements, Inktomi agrees to provide to an escrow agent, the identity
of which is satisfactory to Inktomi and Microsoft, a copy of all source code,
binary code and related documentation used in, or in connection with the
development of, the Product or the Deliverables (including all related
enhancements), concurrently with the deployment or delivery of the applicable
Deliverable or Product (including all related enhancements) to Microsoft.
Without limiting the generality of the foregoing, all source code, binary code
and documentation for the Inktomi's Search Engine and relevant Coupled Cluster
Technology will be
20
escrowed hereunder. Said escrow agent will hold such code and documentation in
escrow, and release it if and only if it is permitted to do so pursuant to the
terms and conditions of the Escrow Agreement appended hereto as Schedule I. The
parties shall execute an Escrow Agreement substantially in the form of Schedule
I concurrently with the execution of this Agreement.
11.2 If Microsoft is entitled to receive any source code, binary code
and/or documentation pursuant to said Escrow Agreement, (i) Inktomi will be
deemed to automatically have granted to Microsoft a non-exclusive and
irrevocable license during the remainder of the Term and throughout the
Territory to use the Product (and all required underlying Inktomi Technology)
solely to generate search results (and to create enhancements and derivative
works for use in connection with the Product) as contemplated by this Agreement
and the Ancillary Agreements, and (ii) Inktomi agrees to furnish to Microsoft,
upon Microsoft's request, the services of Inktomi personnel familiar with the
structure and operation of such source code and/or binary code to explain such
code and train Microsoft personnel in its operation. Such services shall
continue for so long as is reasonably required by Microsoft personnel to become
proficient in its use and application, and Inktomi will charge Microsoft only
for its direct, actual, out-of-pocket costs of such services.
12. Miscellany.
----------
12.1 Neither party shall represent itself as the agent or legal
representative of the other for any purpose whatsoever, and neither party shall
have the right to create or assume for the other any obligation of any kind.
This Agreement shall not create or be deemed to create an agency, partnership,
franchise, employment relationship or joint venture between the parties. Each
party's employees who perform services related to this Agreement shall remain
under the exclusive direction and control of their respective employer and shall
receive such salaries, compensation and benefits as their respective employer
may from time to time determines. Each party shall have full and sole
responsibility for its employees who perform any service related to this
Agreement with regard to compliance with all applicable laws, rules and
regulations governing such party relating to employment, labor, wages, benefits,
taxes and other matters affecting its employees.
12.2 Any notice required or permitted to be given under this
Agreement shall be made in writing and shall be deemed to have been given or
made if it is in writing and is: (i) delivered in person, (ii) sent by same day
or overnight courier, (iii) mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the party at its address set
forth below or at such other address as such party may subsequently furnish to
the other party by notice hereunder, or (iv) delivered by facsimile, the
transmittal of which shall be confirmed by a telephone call to the other party
and by dispatch of a confirming copy of the transmittal by registered or
certified mail, postage prepaid. Notices will be deemed effective on the date of
delivery in the case of personal delivery, or three (3) business days after
mailing, or on the date of dispatch in the case of notification by facsimile
(assuming confirmation of transmission).
21
The parties' addresses for purposes of notice shall be as set forth above,
provided that all notices to Inktomi shall be sent to the attention of General
Counsel; and all notices to Microsoft shall be sent to the attention of Shirish
Nadkarni, with a copy to: Law & Corporate Affairs, U.S. Legal.
12.3 This Agreement shall be construed, enforced, performed and in
all respects governed by and in accordance with the laws in the State of
Washington. In any action or suit to enforce any right or remedy under this
Agreement the prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs.
12.4 In the event any provision of this Agreement is rendered null,
void or otherwise ineffective in any given country or any political subdivision
in a given country, then (i) the parties agree to negotiate in good faith an
acceptable alternative provision which reflects as closely as possible the
intent of the unenforceable provision and which shall apply only with respect to
that portion of the Territory in which the original provision is rendered null,
void or otherwise ineffective and (ii) notwithstanding, and regardless of
whether the parties reach agreement after the good faith negotiations described
in clause (i) immediately above, the validity, legality and enforceability of
the remaining provisions of this Agreement with respect to such portion of the
Territory (and of all of the provisions of this Agreement with respect to the
balance of the Territory) shall not in any way be affected or impaired thereby
and shall remain in full force and effect. Section and all other headings used
herein are provided for convenience only and are not to be given any legal
effect or considered in interpreting any provision of this Agreement. No
provision of this Agreement shall be interpreted against any party because such
party or its legal representative drafted such provision.
12.5 Except as expressly permitted hereunder or in Exhibit D hereto,
neither party may transfer, assign or sublicense this Agreement, or any rights
or obligations hereunder, whether by contract or by operation of law, except
with the express written consent of the other party, and any attempted transfer,
assignment or sublicense by a party in violation of this Section shall be void.
For purposes of this Agreement, an "transfer" under this Section shall be deemed
to include, without limitation, the following: (a) a merger or any other
combination of an entity with another party (other than a reincorporation of
Inktomi from the State of California to the State of Delaware), whether or not
the entity is the surviving entity; (b) any transaction or series of
transactions whereby a third party acquires direct or indirect power to control
the management and policies of an entity, whether through the acquisition of
voting securities, by contract, or otherwise; (c) in the case of Inktomi, the
sale or other transfer of Inktomi's search engine business or any other
substantial portion of Inktomi's assets (whether in a single transaction or
series of transactions), or (d) the transfer of any rights or obligations in the
course of a liquidation or other similar reorganization of an entity (other than
a reincorporation of Inktomi from the State of California to the State of
Delaware). Neither party will unreasonably withhold or delay its consent to a
requested transfer, assignment or sublicense. Subject to the provisions of this
Section, this Agreement shall be binding upon and inure to the benefit of each
party and their respective successors and assigns.
22
12.6 All rights and obligations of the parties hereunder are
personal to them. Except as otherwise specifically stated herein, this Agreement
is not intended to benefit, nor shall it be deemed to give rise to, any rights
in any third party.
12.7 Each party shall be responsible for compliance with all
applicable laws, rules and regulations, if any, related to the performance of
its obligations under this Agreement.
12.8 No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof or thereof, and no waiver shall be effective
unless made in writing and signed by an authorized representative of the waiving
party.
12.9 Neither party shall be liable hereunder by reason of any
failure or delay in the performance of its obligations hereunder during any
event of force majeure.
12.10 This Agreement, along with the Ancillary Agreements, together
contain the entire agreement of the parties with respect to the premises, and
may not be modified or amended except by a written instrument executed by the
party sought to be charged or bound thereby.
12.11 The parties acknowledge that there may be instances during the
Term when, notwithstanding the Non-Disclosure Agreement referred to in Section
10.1 above, Inktomi will not wish to disclose or have Microsoft become aware
(through inspection or otherwise) of certain confidential and proprietary
information of Inktomi relating to its business and/or technology. In those
instances, the parties agree to work together in a spirit of cooperation to work
around such disclosure so that Inktomi is able to perform the Services to
Microsoft's reasonable satisfaction and otherwise discharge its obligations
under this Agreement without making such disclosure.
12.12 Inktomi will notify Microsoft of all meetings of Inktomi's
Board of Directors (and all meetings of any executive committee of such Board),
with such notice being given at the same time and in the same manner as Inktomi
notifies the members of such Board (or executive committee, if applicable).
Microsoft shall have the right to designate one individual to attend (at
Microsoft's sole expense) each such meeting in a non-voting, observer capacity,
and in this connection, Inktomi will provide to such individual copies of all
information packages, slides and other review and/or presentation materials (if
any) made available to members of such Board relating to Inktomi's search engine
business; provided, however, that Inktomi shall have the right without prior
written notice to exclude the Microsoft representative from any part of the
discussion (and/or refrain from delivering copies of materials) if the Board
determines in good faith that the material to be discussed is privileged or of
such a sensitive nature that such representative should not be present. In
addition, Inktomi shall provide such representative with copies of all written
materials supplied by Inktomi to potential third party investors during the
Term. All information learned by the representative by
23
attending such meeting and all written materials delivered to the representative
shall be treated as Confidential Information in accordance with the Non-
Disclosure Agreement.
13. Insurance.
---------
13.1 Throughout the term of this Agreement, Inktomi shall
procure and maintain insurance coverage. Such insurance shall be in a form and
with insurers reasonably acceptable to Microsoft, and shall comply with the
following minimum requirements:
(i) [*] Liability insurance with policy limits of not
less than [*] Dollars (US$[*]) [*] each occurrence for [*] and [*] combined.
Such policy shall be the [*] including coverage for [*].
(ii) [*] Liability Insurance with policy limits of not
less than [*] (US$[*]) each claim with a [*] of not more than [*] Dollars
(US$[*]). Such insurance shall include coverage for [*] (other than [*]) of [*]
[*] including without limitation [*] and [*] as related to Inktomi's performance
under this Agreement.
(iii) [*]. Inktomi shall at all times comply with all
applicable workers' compensation, occupational disease, and occupational health
and safety laws, statutes, and regulations to the full extent applicable. Such
workers' compensation and occupational disease requirements shall include
coverage for all employees of Inktomi, and for all [*] by Inktomi, [*]
(including [*]) by [*] which arises out of or in connection with the performance
of this Agreement by Inktomi. Satisfaction of these requirements shall include,
but shall not be limited to:
a. full participation in any required governmental
occupational injury and/or disease insurance program, to the extent
participation in such program is mandatory in any jurisdiction, and
b. purchase of [*] and [*] insurance providing
benefits to employees in full compliance with all applicable laws,
statutes, and regulations (but only to the extent such coverage is not
provided under a mandatory government program as in a. above), and/or
c. maintenance of a legally permitted and
governmentally approved program of self insurance for [*] and [*].
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Except to the extent prohibited by law, the program of Inktomi's compliance with
[*] laws, statutes, and regulations in a., b., or c. above shall provide for a
full waiver of rights of subrogation against Microsoft, its directors, officers,
and employees. If Inktomi, or any subcontractor retained by Inktomi, fails to
effect and maintain a program of compliance with applicable [*] laws, statutes,
and regulations, and Microsoft incurs liability or fines or is required by law
to provide benefits to such employees, or to obtain coverage for such employees,
Inktomi shall indemnify Microsoft for such fines, payment of benefits to Inktomi
or subcontractor employees or their heirs or legal representatives, and/or the
cost of effecting coverage on behalf of such employees. Any amount owed to
Microsoft by Inktomi pursuant to this indemnity may be deducted from any
payments owed by Microsoft to Inktomi for performance of this Agreement.
13.2 Promptly following execution of this Agreement, Inktomi
shall provide to Microsoft proof evidencing full compliance with the insurance
requirements set forth herein. Inktomi shall notify Microsoft in writing at
least fifteen (15) days in advance if Inktomi's insurance coverage is to be
canceled or materially altered so as not to comply with the requirements of this
section. In the event Inktomi fails to provide such proof or fails to provide
such notice as requested herein, and in the event of liability or expense
incurred by Microsoft as a result of such failure by Inktomi, Inktomi hereby
agrees to indemnify Microsoft for all liability and expense (including
reasonable attorneys' fees and expenses associated with establishing the right
to indemnity) incurred by Microsoft as a result of such failure by Inktomi.
13.3 Inktomi agrees that Microsoft will not be responsible for
loss of or damage to any personal property located on Microsoft premises
belonging to Inktomi or any subcontractor retained by Inktomi. This Section 13.3
will not apply to the moved Hosting Servers (as defined in the Software Hosting
Agreement of even date herewith) if Microsoft exercises its right to require
Inktomi to move the Hosting Servers pursuant to Section 2.6.2 of said Software
Hosting Agreement.
13.4 Upon termination of this Agreement, Inktomi will maintain
an extended reporting period providing that the claims first made and reported
to the insurance company within one year after the end of this Agreement will be
deemed to have been made during the applicable policy period.
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Executed as of the Effective Date on the signature dates below.
INKTOMI CORPORATION MICROSOFT CORPORATION
By: /s/ David C. Peterschmidt By: /s/ Laura Jennings
-------------------------- -------------------------
David C. Peterschmidt, CEO Laura Jennings
----------------------------- ----------------------------
(printed name and title) (printed name and title)
Date: July 24, 1997 Date: July 27, 1997
26
EXHIBIT A
---------
PRODUCT SPECIFICATIONS
----------------------
(32 pages follow)
27
EXHIBIT A
---------
YUKON REQUIREMENTS FOR THE INKTOMI SEARCH SERVICE
MICROSOFT CONFIDENTIAL
-----------------------------------------------------------------------
VERSION: 1.0
STABILITY: High
FILENAME: Yukon requirements for Inktomi search service.doc
DATE: 07/07/97 3:57 PM
AUTHOR(S): William Jones wjones
-----------------------------------------------------------------------
Page i of 32
. Table of Contents
[*]
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1. OVERVIEW
================================================================================
The goal of this document is to provide a reasonably complete list of Yukon
requirements for the Inktomi search service. Note that a number of the
requirements in this document are met by the existing search service but are
included anyway for the sake of completeness.
The Section 2 lists all requirements according to area (Performance and
Scalability, Reliability and Fault Tolerance, ...) together with information on
Target Release and Due Date as defined below. The Appendix (Section 7) follows a
similar organization and provides more detail on the requirements..
[*]
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EXHIBIT B
---------
[*]
----------------
. [*]: A "[*]" is a [*] which causes the system or a major component to [*]
or renders it otherwise [*] (e.g. [*]; [*]; [*]; [*]).
. [*]: A "[*]" is a [*] in which [*] of a component [*] from the behavior as
[*] in the [*] of [*] or causes a component to [*] without [*] the [*]
(e.g. [*] with [*]; [*]; [*] in [*]).
. [*]: A "[*]" is a [*] in which a component [*] from [*] in a [*] or [*]
(e.g. an [*]; [*] with [*]; [*]; [*]).
[*]
---------------
[*] are determined by the [*] which shall determine the [*] and [*] of [*]. For
instance, a [*] that causes the system to [*] but the user is [*], might be [*].
The [*] includes representatives from [*], and [*].
The criteria used for determining [*] is as follows:
. [*]: A "[*]" is a [*] for which a [*] is [*]. For all releases, this would
be a [*] by which the [*] is [*]. For an [*], this [*] may also indicate a
[*] that is [*] or [*] to [*]
. [*]: A "[*]" is a [*] for which a [*] is [*], but [*].
. [*]: A "[*]" is a [*] for which a [*] is [*].
TIMETABLE FOR [*] AND [*]/1/
-----------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
[*] Plan /2/ [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
[*] [*] [*] [*] [*]
--------------------------------------------------------------------------------------------------------
/1/ For each cell in the timetable, the time should be met for [*] or more of
the [*].
/2/ Time within which Inktomi must provide a [*] and, if possible, a [*]
/3/Software that includes the [*] is [*] on the [*].
/4/ Software that includes the [*] is [*] in the [*].
28
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EXHIBIT C
---------
SCALABILITY COST PROJECTIONS
----------------------------
GROSS
CAPITAL $
Size of Database
50M 75M 100M
2M $ [*] $ [*] $ [*]
4M $ [*] $ [*] $ [*]
[*] 6M $ [*] $ [*] $ [*]
8M $ [*] $ [*] $ [*]
10M $ [*] $ [*] $ [*]
12M $ [*] $ [*] $ [*]
14M $ [*] $ [*] $ [*]
20M $ [*] $ [*] $ [*]
* [*] relating to [*] by the Product at [*] with (i) an [*] of less than [*] and
(ii) [*] than [*] containing [*] and (iii) [*] than [*] being [*] (i.e.,
[*]) [*].
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EXHIBIT D
---------
Transfer of Control by Inktomi
------------------------------
If Inktomi requests Microsoft's consent to a transfer as described in clause (a)
of Section 12.5 of this Software Development Agreement to which this Exhibit D
is appended, and Microsoft reasonably withholds its consent to such transfer (an
"Unconsented Transfer"), then Inktomi will nevertheless have the right to
transfer this Agreement in connection with its proposed Unconsented Transfer
subject to the following conditions precedent to the Unconsented Transfer:
(i) Inktomi, at its sole cost and expense, and without any financing supplied
by Microsoft, will create a separate cluster of Hosting Servers for Microsoft
required to service Microsoft's reasonably anticipated needs for a period of
twelve months after the commencement of operation of such new and relocated
cluster (provided however that Microsoft will purchase, or fund (in accordance
with the Loan Agreement of even date herewith) Inktomi's purchase of, (whichever
Microsoft elects) any new hosting servers beyond the Hosting Servers purchased
by Inktomi under the Software Hosting Agreement of even date herewith necessary
to service Microsoft's reasonably anticipated needs as set forth above);
(ii) Inktomi will relocate, at its sole cost and expense (including, without
limitation, indemnifying Microsoft and holding it harmless against any and all
Taxes that arise as a direct or indirect result of the relocation of the Hosting
Servers), all Hosting Servers referred to in clause (i) to a location designated
by Microsoft, in its sole discretion;
(iii) Inktomi, at its sole cost and expense, will provide training to Microsoft
personnel to the extent requested by Microsoft, to enable such personnel to use
and maintain the Microsoft Search Engine, and to create enhancements thereto,
with reasonable competence (all as determined by Microsoft in its sole
discretion);
(iv) Inktomi will grant to Microsoft an irrevocable, non-exclusive, royalty-
free license to use the Product (and all required underlying Inktomi Technology)
solely in connection with Microsoft's operation of the Microsoft Search Engine
(which license shall include the right to create enhancements and other
derivative works based thereon for use in conjunction therewith) for such period
as Microsoft may require to transition its search engine services to non-Inktomi
technology (the "Transition Period"), and Inktomi will waive all royalties
otherwise payable pursuant to this Software Development Agreement and/or the
Information Services Agreement of even date herewith; for the purposes of this
clause (iv), the Transition Period will commence at such time as Microsoft
assumes control over said separate cluster and begins itself operating the
Microsoft Search Engine, and will continue thereafter for eighteen months (18)
or until the termination of said Software Development Agreement and Information
Services Agreement (whichever is longer);
30
(v) Inktomi will direct the Escrow Agent to release to Microsoft all
Confidential Materials held by the Escrow Agent, subject to Microsoft's
agreement to use such Confidential Materials only in connection with its
licensed rights under clause (iv) above;
(vi) Inktomi will agree to reimburse Microsoft for all reasonable costs
incurred by Microsoft in transitioning its search engine to non-Inktomi
technology (whether created by Microsoft or by a third party); and
(vii) Inktomi will cause the applicable proposed transferee of this Agreement to
assume, jointly and severally with Inktomi, all of Inktomi's obligations
hereunder.
Microsoft will cooperate with Inktomi and use its reasonable best efforts so as
to enable Inktomi to satisfy the foregoing conditions precedent in a timely
manner. Upon satisfaction of the foregoing conditions precedent, said Software
Hosting Agreement shall be deemed terminated pursuant to Section 10.1 thereof.
Upon expiration of the Transition Period, all rights granted to Microsoft to use
the Product (other than Microsoft Technology, Joint Derivative Technology and
the Microsoft Derivative Technology) and/or any Inktomi Technology under the
transitional license referred to in clause (iv) or otherwise shall cease, and
Microsoft shall immediately return to Inktomi all Confidential Materials (and
all copies thereof), provided however that, notwithstanding any provision of the
Ancillary Agreements to the contrary, the undertaking by Inktomi to indemnify
Microsoft and hold it harmless against Taxes as provided in clause (ii) above
shall survive any such terminations.
31
SCHEDULE I
----------
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into this ___ day of __________, 1997 by and
among INKTOMI CORPORATION ("Inktomi"), a California corporation, whose address
is 1900 South Norfolk Street, Suite 110, San Mateo, California 94403, DATA BASE,
INC. ("Escrow Agent"), a Washington corporation, whose address is 307 South
140th Street, Seattle, WA 98168, and MICROSOFT CORPORATION ("Microsoft"), a
Washington corporation whose address is One Microsoft Way, Redmond, WA 98052-
6399.
A. Inktomi is the owner of computer programs and supporting documentation
that contain confidential information and are protected under copyright and as
trade secrets. Inktomi authorizes others to use the computer programs and
documentation under writtenagreements which, among other things, require the
other party to protect the confidentiality of Inktomi's property.
B. Computer programs can be expressed in machine-readable form, called
binary code, and in human-readable form, called source code or source listings.
Generally, parties are unable to modify or correct errors in the binary code
without having the source code.
C. This escrow arrangement is provided to assure Microsoft of access to
the source code, binary code and confidential supporting documentation in the
event that Inktomi (i) discontinues all or substantially all of its search
engine business operations or (ii) ceases to provide software development, error
correction, product enhancements and upgrades, and regular maintenance of the
computer programs (collectively, "Support") under and in accordance with the
Software Development Agreement and/or the Information Services Agreement (the
"Agreements") between Inktomi and Microsoft of even date herewith (as it may be
amended by mutual agreement of Inktomi and Microsoft from time to time).
THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, Inktomi, Microsoft and Escrow Agent agree as follows:
1. Confidential Materials.
----------------------
1.1 Escrow Agent, as escrow agent, agrees to accept from Inktomi, for
storage purposes only, confidential materials in the form of source code and
binary code, program listings, supporting documentation, and other related
materials for certain computer programs owned by Inktomi (collectively,
"Confidential Materials"). Inktomi will furnish to Escrow Agent a list naming
or describing all computer programs for which Confidential Materials are
deposited into escrow. This list shall be certified by Inktomi as complete and
accurate. A list of computer programs for which Confidential Materials are
currently on deposit with Escrow Agent is attached as Exhibit A to this
Agreement. This list will be supplemented and updated by Inktomi with each
future deposit or withdrawal of Confidential Materials. For each deposit,
Escrow Agent will issue receipts to Inktomi.
1.2 Upon each deposit of Confidential Materials, Inktomi shall furnish to
Microsoft a copy of the list provided to Escrow Agent pursuant to this Section
1. Such list shall constitute notice to Microsoft that the Confidential
Materials listed thereon have been deposited with Escrow Agent. Upon the
request of Microsoft, Escrow Agent shall supply to Microsoft copies of all lists
furnished by Inktomi to Escrow Agent hereunder. Escrow Agent shall not be
required to determine the accuracy or completeness of the list(s) furnished by
Inktomi hereunder, nor shall Escrow Agent be responsible for Confidential
Materials not actually deposited with it, whether or not such Confidential
Materials were required to be deposited under the terms of this Agreement, any
license agreement between Inktomi and Microsoft or any other agreement.
2. Retention of Confidential Materials. Escrow Agent agrees to hold in
-----------------------------------
safekeeping the Confidential Materials deposited hereunder, and shall release or
disclose any or all such Confidential Materials only in accordance with the
terms of this Agreement.
3. Release of Confidential Materials. Inktomi authorizes Escrow Agent to
---------------------------------
release Confidential Materials only as follows:
(a) Escrow Agent shall release to Inktomi all Confidential Materials
requested by written demand of both Inktomi and Microsoft, provided that such
Confidential Materials are specifically identified to the satisfaction of Escrow
Agent, and provided that all fees payable to Escrow Agent for performance of its
services hereunder have been fully paid.
(b) Provided that all fees payable to Escrow Agent for the performance of
its services hereunder have been fully paid, all Confidential Materials shall be
returned to Inktomi at any time that Escrow Agent ceases doing business or is
unable to hold the same in accordance with the terms of this Agreement due to
forces beyond its reasonable control; provided however, that Escrow Agent gives
such advance notice to Inktomi and Microsoft as is reasonably practicable, but
in no event less than thirty (30) days.
(c) In the event of (1) a demand by Microsoft pursuant to Subsection 4.1
hereof which is not disputed by Inktomi in the manner and within the time
prescribed in Subsection 4.2 hereof, or (2) a determination by the panel of
arbitrators in accordance with Section 5 hereof that (A) the applicable
Agreement remains in force and effect and (B) Inktomi has discontinued all or
substantially all of its search engine business operations or has ceased to
Support the Confidential Materials on a timely basis as required under the terms
of the applicable Agreement, then Escrow Agent shall, upon the receipt from
Microsoft of full payment for the costs and expenses of duplication, make
duplicate copies of those Confidential Materials which relate to the computer
program or programs with respect to which demand is made and shall deliver such
duplicate copies to Microsoft. Escrow Agent agrees that the "Write-Protect
Ring" on magnetic tape reels furnished to Escrow Agent by Inktomi shall not be
removed at any time.
(d) Escrow Agent shall release such Confidential Materials to such persons
and in such manner as shall be directed by order of any court of competent
jurisdiction pursuant to
-2-
Section 6 or otherwise. Escrow Agent may also release Confidential Materials
pursuant to the provisions of Section 11 below.
4. Demand and Dispute.
------------------
4.1 In the event Microsoft desires release of Confidential Materials
relating to one or more computer programs, Microsoft shall make written demand
on Escrow Agent therefor, specifically designating the computer program or
programs for which Confidential Materials are requested. Such demand must be
accompanied by all of the following documents and certificates, each executed
under oath by an authorized officer or representative of Microsoft:
(a) A certified true copy of a notice that Microsoft has mailed to
Inktomi at the address stated in this Agreement. The notice must contain a
statement that Microsoft has determined that Inktomi has discontinued all or
substantially all of its search engine business operations or has ceased to
Support the Confidential Materials on a timely basis as required under the terms
of the Agreements.
(b) A certificate stating that (i) Microsoft mailed to Inktomi,
registered or certified mail, the notice described in Paragraph 4.1(a) above,
and that ten (10) business days have elapsed from such mailing without response
from Inktomi, and (ii) before mailing the notice, Microsoft made a request upon
Inktomi for support services and Microsoft did not receive a response to such
request or received a response to the effect that Inktomi was unable or
unwilling to provide such services or Inktomi in fact did not timely provide
such services.
(c) A copy of each of the Agreements, as executed by Inktomi and such
Microsoft, together with a statement by Microsoft, certified by Microsoft, that
the copies of the Agreements are true copies, and that the applicable
Agreement(s) is(are) still in force and grants Microsoft the rights to use the
computer program or programs for which Confidential Materials are requested.
(d) A certificate stating that Microsoft will pay in advance for all
expenses and costs of copying the Confidential Materials requested.
(e) A Confidentiality and Use Limitation Certificate, in the form of
Exhibit B attached hereto, for the benefit of Escrow Agent, Inktomi and any
successor of either.
(f) A certificate stating that Microsoft shall indemnify and hold
harmless Escrow Agent from and against any and all losses, damages, and expenses
(including attorney's fees) that may be incurred by Microsoft and/or Escrow
Agent by reason of Escrow Agent's compliance in good faith with the terms of
this Agreement.
4.2 Upon receipt of a demand and all required supporting documents
described in Subsection 4.1 hereof, Escrow Agent shall promptly give notice to
Inktomi of such receipt and transmit with such notice a copy of such demand and
all accompanying documents. Inktomi or its successor may dispute such demand,
at any time within ten (10) business days following
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Escrow Agent's notice to Inktomi hereunder by (i) giving written notice to
Escrow Agent that it continues to conduct all or substantially all of its search
engine business operations and continues to Support the Confidential Materials
on a timely basis as required under the terms of the Agreements, or (ii)
otherwise specifically denying any statements made by Microsoft in one or more
of the documents described in Paragraphs 4.1(a), (b) or (c) hereof. Such notice
shall be accompanied by a certificate to Escrow Agent stating that Inktomi will
submit to arbitration under the terms and conditions described in Section 5
hereof and abide by any decision rendered by the arbitrators in connection
therewith.
4.3 Upon receipt of Inktomi's notice of dispute as provided in Subsection
4.2 hereof, Escrow Agent shall promptly give notice to Microsoft of such receipt
and transmit with such notice a copy of such documents received from Inktomi
relating to such dispute. Subject to the last sentence of this Subsection 4.3,
Microsoft shall, within thirty (30) days following receipt of Inktomi's notice
of dispute, furnish Escrow Agent with a certificate stating that Microsoft will
submit to Arbitration under the terms and conditions described in Section 5
hereof and abide by any decision rendered by the arbitrators in connection
therewith. Microsoft may withdraw its demand for release of the Confidential
Materials at any time by giving Escrow Agent and Inktomi written notice of such
withdrawal.
5. Arbitration. Upon the earlier of the expiration of the thirty (30) day
-----------
period described in Subsection 4.3 or the receipt by Escrow Agent of Microsoft's
certificate described in Subsection 4.3, the matter shall be submitted to
arbitration proceedings in Seattle, Washington, which proceedings shall be
conducted under the commercial rules then prevailing of the American Arbitration
Association, by a panel of not less than three professional experts in the field
of computer software technology. Each party will choose one arbitrator and the
two arbitrators so chosen will choose a third. If the two designated
arbitrators do not so choose a third within thirty (30) days, either party may
apply to the local Superior Court to appoint a third arbitrator. The sole issue
for arbitration shall be whether the Agreements remain in force and effect and
whether Inktomi has discontinued all or substantially all of its search engine
business operations or has ceased to Support the Confidential Materials on a
timely basis as required under the terms of either or both of the Agreements.
If the arbitrators determine that Inktomi has discontinued all or substantially
all of its search engine business operations or has ceased to Support the
Confidential Materials on a timely basis, the arbitrators shall order the
release of Confidential Materials. The prevailing party in the arbitration
proceedings shall be awarded reasonable attorneys' fees, expert and non-expert
witness costs and expenses, and all other costs and expenses incurred directly
or indirectly in connection with the proceedings, unless the arbitrators for
good cause determine otherwise. The decision of the arbitrators shall be final
and binding on the Inktomi and Microsoft and may be entered and enforced in any
court of competent jurisdiction.
6. Interpleader. Notwithstanding any other provisions of this Agreement, if
------------
Escrow Agent receives a written demand from Microsoft for release of
Confidential Materials and Escrow Agent is uncertain whether Inktomi's exercise
of its right to dispute such demand pursuant to Subsection 4.2 hereof was timely
or otherwise effective, then Escrow Agent may, in its sole discretion, begin an
interpleader action, pursuant to applicable law, and deposit the Confidential
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Materials with the clerk of the court or withhold release of the Confidential
Materials until instructed otherwise by the court order.
7. Fees. Microsoft shall pay to Escrow Agent, in advance, fees at the standard
----
rate prescribed from time to time by Escrow Agent for performance of services
hereunder. Prices will be revised annually in accordance with Escrow Agent's
regular schedule of fees.
8. No Duty to Inquire into Truth, Authenticity or Authority; Right to Require
--------------------------------------------------------------------------
Additional Documents. Escrow Agent shall not be required to inquire into the
--------------------
truth of any statements or representatives contained in any notices,
certificates or other documents required or otherwise provided hereunder, and
shall be entitled to assume that the signatures on such documents are genuine,
that the persons signing on behalf of any party thereto are duly authorized to
execute the same, and that all actions necessary to render any such documents
binding on the party purportedly executing the same have been duly undertaken.
Without in any way limiting the foregoing, Escrow Agent may in its discretion
require from Inktomi or Microsoft additional documents which it deems to be
necessary or desirable in the course of performing its obligations hereunder.
9. Waiver of Claims.
----------------
(a) Inktomi hereby waives any claim for damages or otherwise which it may
have against Escrow Agent for any acts undertaken by Escrow Agent pursuant to
Microsoft's direction in Escrow Agent's good faith compliance with the terms of
this Agreement.
(b) Microsoft hereby waives any claim for damages or otherwise which it
may have against Escrow Agent for any acts undertaken by Escrow Agent pursuant
to Inktomi's direction in Escrow Agent's good faith compliance with the terms of
this Agreement.
10. Notices. Notices under this Agreement shall be in writing, addressed to
-------
the parties at the addresses listed in this Agreement, or to such other
addresses as a party shall have designated by notice to the other parties, and
shall be delivered by registered or certified mail, return receipt requested, to
the intended recipient. Notices shall be deemed to have been given and received
(i) when signed for on the return receipt, or (ii) if the party to receive
notice refuses to sign the return receipt or cannot be located after the
exercise of due diligence, three (3) business days after deposit of the notice
in the U.S. mail, properly addressed, with postage prepaid.
11. Termination.
-----------
(a) This Agreement shall terminate upon termination of both the
Agreements. Upon such termination, Inktomi shall give written notice to Escrow
Agent, and provide a copy of such notice to Microsoft in the manner set forth in
applicable notice provisions of the Agreements. Unless Microsoft disputes such
notice by written notice to that effect to Escrow Agent and Inktomi within ten
(10) business days (the "Objection Period") after Microsoft's receipt of said
notice from Inktomi, and provided that all fees payable to Escrow Agent for the
performance of
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its services hereunder have been fully paid, Escrow Agent shall release and
return all Confidential Materials to Inktomi promptly after the expiration of
the Objection Period.
(b) Except as provided in Subsection 11(a) above or Section 1 hereof with
respect to modification of Exhibit A hereto, this Agreement may not be
terminated or modified except in writing signed by Escrow Agent, Inktomi and
Microsoft. Escrow Agent may, at any time, terminate this Agreement by resigning
as escrow agent hereunder. Escrow Agent shall provide Inktomi and Microsoft
ninety (90) days advance written notice of its intention to resign. Unless
within such period Escrow Agent receives written notice from the Inktomi and
Microsoft instructing Escrow Agent to deliver the Confidential Materials to one
or both of the parties, or to a third party, Escrow Agent shall deliver the
Confidential Materials to Inktomi.
(c) Upon the delivery of the Confidential Materials to one or both of the
parties, or to a third party, as permitted hereunder, all obligations of Escrow
Agent under this Agreement shall cease.
12. Bankruptcy. In the event of the commencement of a case by or against
----------
Inktomi pursuant to 11 U.S.C. Sections 301, 302, or 303, Microsoft may elect to
retain its right under this Agreement pursuant to 11 U.S.C. Section 365 (n). In
this regard, the Confidential Materials shall be deemed to be "intellectual
property" within the meaning of 11 U.S.C. Section 101. Inktomi's obligations
under this Agreement shall be binding on Inktomi's successors, including any
trustee or debtor in possession that may succeed to Inktomi's rights under this
Agreement.
13. Miscellany.
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13.1 This Agreement shall be construed, enforced, performed and in all
respects governed by and in accordance with the laws in the State of Washington.
In any action or suit to enforce any right or remedy under this Agreement the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
costs.
13.2 In the event any provision of this Agreement is rendered null, void
or otherwise ineffective, then (i) the parties agree to negotiate in good faith
an acceptable alternative provision which reflects as closely as possible the
intent of the unenforceable provision and (ii) notwithstanding, and regardless
of whether the parties reach agreement after the good faith negotiations
described in clause (i) immediately above, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby and shall remain in full force and effect.
Section and all other headings used herein are provided for convenience only and
are not to be given any legal effect or considered in interpreting any provision
of this Agreement. No provision of this Agreement shall be interpreted against
any party because such party or its legal representative drafted such provision.
13.3 Subject to such rights as Microsoft and/or Inktomi may have under the
Agreements, no party hereto shall voluntarily or by operation of law assign,
sublicense, transfer, encumber or otherwise dispose of all or any part of its
interest in this Agreement without the prior written consent of the non-
assigning party. Any attempted assignment, sub-license,
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transfer, encumbrance or other disposal without such consent shall be void and
shall constitute a material default and breach of this Agreement. Subject to the
provisions of this Section, this Agreement shall be binding upon and inure to
the benefit of each party and their respective successors and assigns.
13.4 All rights and obligations of the parties hereunder are personal to
them. Except as otherwise specifically stated herein, this Agreement is not
intended to benefit, nor shall it be deemed to give rise to, any rights in any
third party.
13.5 Each party shall be responsible for compliance with all applicable
laws, rules and regulations, if any, related to the performance of its
obligations under this Agreement.
13.6 No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof or thereof, and no waiver shall be effective unless
made in writing and signed by an authorized representative of the waiving party.
13.7 This Escrow Agreement (and, as between Inktomi and Microsoft, the
Agreements) contains the entire agreement of the parties with respect to the
premises, and may not be modified or amended except by a written instrument
executed by the party sought to be charged or bound thereby.
13.8 For the purposes of this Agreement, Inktomi and Microsoft hereby
designate the following individuals (and such additional individuals or
substitutes therefor as may hereafter be designated by written notice from
Inktomi or Microsoft, whichever is applicable) as having the authority to
provide directions to Escrow Agent hereunder:
Inktomi designates: David Peterschmidt, Jerry Kennelly
Microsoft designates: ____________________________________________
Executed as of the date first written above.
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Escrow Agent: DATA BASE, INC.
------------
Data Base, Inc. By:____________________________
307 South 140th Street
Seattle, WA 98168 Print Name:____________________
Title:_________________________
Date:__________________________
INKTOMI CORPORATION
Inktomi:
-------
Inktomi Corporation By:____________________________
1900 South Norfolk Street, Suite 110
San Mateo, CA 94403 Print Name:____________________
ATTN: General Counsel
Title:_________________________
Date:__________________________
MICROSOFT CORPORATION
Microsoft:
---------
Microsoft Corporation By:____________________________
One Microsoft Way
Redmond, WA 98053-6399 Print Name:____________________
ATTN: Law & Corporate Affairs, U.S. Legal
Title:_________________________
Date:__________________________
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EXHIBIT A
---------
COMPUTER PROGRAMS FOR WHICH CONFIDENTIALMATERIALS ARE DEPOSITED
WITH ESCROW AGENT
-9-
EXHIBIT B
---------
CONFIDENTIALITY AND USE LIMITATION CERTIFICATE
STATE OF WASHINGTON )
)
COUNTY OF KING )
The undersigned, being first duly sworn upon oath, does state as follows:
1. The undersigned has certain rights in and to certain computer programs and
data, under a Software Development Agreement and Search Results Agreement(the
"Agreements") between the undersigned and Inktomi Corporation, a California
corporation ("Inktomi").
2. The undersigned has demanded, and expects to receive, source listings
and/or other related documentation for such computer programs ("Confidential
Materials"). These materials are the confidential and proprietary information of
Inktomi, and Inktomi claims protection thereof under applicable of copyright and
trade secret law.
3. Upon receipt of the Confidential Materials, the undersigned shall limit the
use thereof solely for purposes of installation, operation, maintenance,
modification and enhancement of the computer programs. The Confidential
Materials, and any copies thereof, shall be used by the undersigned for internal
purposes only, and the undersigned shall not make any use of the binary/object
codes translated from the Confidential Materials, except as expressly permitted
under the Agreements. At all times that the undersigned is entitled to use the
Confidential Materials, the undersigned shall continue to pay to Inktomi all
royalties and other amounts which Inktomi is entitled to receive under the
Agreements.
4. The Confidential Materials shall at all times remain the sole and exclusive
property of Inktomi, and the delivery thereof to the undersigned shall not be
deemed a grant or transfer of such proprietary interests to the undersigned. The
undersigned accepts the Confidential Materials in strict confidence, and shall
not make available, provide or otherwise allow or permit the provision, directly
or indirectly, of the Confidential Materials, or any part or portion thereof, in
any form, representation, or medium, to any person or entity other than the
authorized personnel or consultants of the undersigned.
5. The undersigned agrees that Inktomi and DATA BASE, INC. ("Escrow Agent"), a
Washington corporation, and any successor thereto or employees or agents
thereof, may rely upon this Certificate and the representations made herein for
the delivery of the Confidential Materials to the undersigned, and the
undersigned agrees to indemnify and hold harmless such persons and entities from
and against any and all losses, damages and expenses (including attorneys' fees)
arising out of the undersigned's failure to use the Confidential Materials in
accordance with this Certificate or the Agreements, or otherwise as a result of
any release of any Confidential Materials by Escrow Agent in response to the
undersigned's request.
6. Notwithstanding anything to the contrary, this Certificate shall not limit
or enlarge the rights or obligations of the parties under the Agreements.
DATED this _____ day of ____________, 19___.
MICROSOFT CORPORATION
By:___________________________
Print Name:___________________
Title:________________________
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