EXHIBIT 10.1
EXECUTION CONFIDENTIAL
THIRD ADDENDUM TO OVERTURE SEARCH SERVICES AGREEMENT
This Third Addendum (the "Third Addendum") is effective as of April 25, 2003
(the "Third Addendum Effective Date") and entered into by and between Overture
Services, Inc. ("Overture"), a Delaware corporation with offices at 00 Xxxxx
Xxxxxxxx Xxxxxx, 0x Xxxxx, Xxxxxxxx, XX 00000, and Yahoo! Inc. ("Yahoo"), a
Delaware corporation with offices at 000 Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, in
connection with the Overture Search Services Agreement effective as of May 1,
2002 and entered into by and between Overture and Yahoo, as amended by the First
Addendum to Overture Search Services Agreement effective as of October 1, 2002
and the Second Addendum to Overture Search Services Agreement effective as of
January 10, 2003 (collectively referred to as the "Agreement").
RECITALS
WHEREAS, the Agreement provides for, among other things, the delivery
by Overture and the display by Yahoo of sponsored search results in response to
search queries conducted through Yahoo's principal, U.S. targeted directory to
the World Wide Web.
WHEREAS, the parties anticipate expanding their strategic relationship
such that Overture will provide Yahoo with [*] sponsored search results (the
"[*] Results") in response to [*] search queries (the "[*] Queries") conducted
on xxxx://xxx.xxxxx.xxx or on any Yahoo Foreign Property as determined by Yahoo
and Overture, and the parties will share revenue generated from these [*]
Results in accordance with this Third Addendum, as further described herein.
NOW, THEREFORE, in consideration of the mutual promises and conditions
contained herein, and for good and valuable consideration, the parties agree as
follows:
AGREEMENT
1. Capitalized terms not defined herein have the meanings set forth in the
Agreement.
2. Section 4.2(a) in the Agreement is deleted and replaced with the following:
(a) [*] Overture Results.
(i) Provision of [*] Results; Implementation. Commencing upon delivery
of five days prior written notice to Overture of Yahoo's intention to
implement the [*] Results on Yahoo Search (the "[*] Launch Date"), upon
receipt by Overture of a Yahoo Search Query that (a) Overture
determines to be an [*] Query and (b) contains a [*] provided by Yahoo
that indicates the [*] Results, Overture will deliver [*] Results to
Yahoo for implementation on Yahoo Search in accordance with subpart
(ii) below. The manner of implementation of [*] Results on Yahoo Search
will be determined by [*], and will not be subject to [*] or
specifications regarding [*]). Without limiting the foregoing, Yahoo
will, on the [*] Launch Date only, display Yahoo Search Results Pages
containing [*] Results in a manner substantially similar to the U.S.
Implementation as of the [*] Launch Date. Upon the mutual agreement of
the parties, Yahoo may implement the [*] Results in other areas of the
Yahoo Network. Overture will deliver [*] Results solely for [*] Queries
unless otherwise instructed by Yahoo in writing. Overture will send
Yahoo an updated list of proposed modifications to the [*] keyword list
on a regular basis during the Term as mutually determined by the
parties (but no less frequently than on a monthly basis), and Yahoo
will have the opportunity to approve such modifications prior to
implementation by Overture. Yahoo will have final editorial review over
any modifications to the [*] keyword list that is used to deliver [*]
Results. Such editorial review shall be exercised consistently with
Yahoo's company-wide [*] concerning [*] content.
(ii) [*]. Yahoo will include a [*] on each Yahoo Search Query which
indicates whether the [*] Results. If the [*] indicates that a [*]
Results, then Overture will suppress [*] Results, at a minimum, to the
same degree as the [*] that appear on the Overture Site as of the Third
Addendum Effective Date and will send to
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
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Yahoo such [*] Overture Results. If the [*] indicates that a [*]
Results, Overture will determine whether to return [*] Results for such
Yahoo Search Query in accordance with subpart (i) above.
(iii) Separate Feed; Reporting; Guaranteed Impressions. As of the Third
Addendum Effective Date, Overture will account for the [*] Results as a
separate line item in any reports required hereunder. Any reports for
[*] Results will include CTR in the aggregate by search result
position. Yahoo will provide Overture with the same information at the
time-of-search for each [*] Query as it does for the U.S.
Implementation, and Overture will be entitled to use and disclose that
information subject to the use and disclosure restrictions set forth in
this Agreement. Overture will include a [*] identifying each [*] Result
as provided by either an [*] Advertiser or a [*] Advertiser. Finally,
Yahoo will have no obligation to deliver Guaranteed Impressions
pursuant to Section 9 of this Agreement with respect to the [*]
Results. Impressions delivered pursuant to the Third Addendum shall not
count towards the number of Guaranteed Impressions delivered by Yahoo
under Section 9 of this Agreement.
(iv) Cancellation; Suspension of [*] Service. Yahoo has the right to
cancel the delivery or suspend the display of [*] Results at any time
upon written notice provided to Overture (which notice can be via email
to xxxxx@xxxxxxxx.xxx) within one business day of such cancellation or
suspension. In the event that Yahoo either has cancelled delivery or
suspended its display of [*] Results, then Overture will suppress [*]
Results, at a minimum, to the same degree as the [*] that appear on the
Overture Site as of the Third Addendum Effective Date. Upon receipt by
Overture of an [*] Query for which Overture has [*] Overture Results,
Overture will send to Yahoo such [*] Overture Results. For all other
[*] Queries, Overture shall not return any [*] Results, and if Overture
does send an [*] Result, then Yahoo shall be entitled to [*] such [*]
Result from being displayed pursuant to Section 4.5(a) of this
Agreement.
(v) Other [*] Service Providers. The parties acknowledge and agree
that, subject to Section 7.1(b), which Section shall apply to [*]
Queries, [*].
3. The following subsection is added to the end of Section 4.5 ("Removal by
Yahoo; Potential Liability; Excluded Terms; Contextual Relevance") of the
Agreement:
(c) [*] Results. As it consistently administers its company-wide [*]
concerning [*] content, Yahoo will have the right to prevent the
display of [*] Results in response to [*] Queries at any time during
the Term.
4. Payment. Overture will make payments to Yahoo for Gross Revenue earned
pursuant to this Third Addendum in accordance with the following:
4.1 Revenue Share Payments. Overture will make Quarterly revenue share
payments to Yahoo based on Gross Revenue earned from [*] Results (the
"[*] Gross Revenue") in the applicable Quarter according to the
schedule set forth below. For purposes of calculating [*] Gross
Revenue, in determining the amount for subpart (i) in the definition of
Gross Revenue, the parties shall use Overture's actual amounts for bad
debt and credit card processing fees, which amounts will not exceed
[*]%. In calculating the [*] Gross Revenue, the remainder of the
definition of Gross Revenue remains unchanged. For clarity, for all
Gross Revenue other than [*] Gross Revenue, the definition of Gross
Revenue remains unchanged. Payments are due and payable to Yahoo within
[*] days after the end of the applicable Quarter.
[*]
Overture will retain all revenue that it derives from the [*] Results,
except as specifically set forth in this Third Addendum.
4.2 Payment Mechanics. Overture will make payments to Yahoo in U.S. dollars
via wire transfer into Yahoo's main account according to the
instructions set forth below:
[*]
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
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4.3 Late Payments. Any undisputed payment that is paid more than [*] days
late will bear interest at the rate of [*]% per month.
4.4 Audit Rights and Data Rights. Except as expressly set forth herein or
as otherwise agreed by the parties in writing, the audit rights and
data rights and obligations for the [*] Results will mirror the rights
and obligations set forth in Sections 8.4 (including Exhibit F) and 8.5
of the Agreement.
4.5 No Payment Adjustments. The parties acknowledge and agree that the
delivery of [*] Results will be tracked separately from the delivery of
all other Overture Results in Yahoo Search, and that the [*] Results
will not be included in the calculation of Impressions, Coverage, PPC,
CTR or of adjustments to the Estimated Yahoo Payment or the Guaranteed
Fixed Payment under the Agreement.
5. Term and Termination.
5.1 Term. This Third Addendum will become effective as of the Third
Addendum Effective Date and, unless terminated as set forth herein,
will remain effective for the same period as the Agreement remains
effective.
5.2 Termination in connection with Agreement. This Third Addendum will
terminate to the extent that the Agreement is terminated in accordance
with its terms, effective as of the effective date of termination of
the Agreement.
5.3 Termination with Cause. If either party breaches this Third Addendum in
any material respect, and that party does not cure its breach within
[*] after written notice by the non-breaching party of its breach, then
the non-breaching party will be entitled to terminate this Third
Addendum immediately upon written notice to the breaching party after
failure to cure within those [*]. The parties acknowledge and agree
that a breach under this Third Addendum will not affect the Agreement,
regardless of whether the breach gives rise to termination of this
Third Addendum.
5.4 Termination by Overture. Overture may terminate this Third Addendum for
[*] upon providing Yahoo with [*] prior written notice.
5.5 Effect of Termination. Sections 1, 4 (with respect to payments accrued
during the Term), and 6 through 8 of this Third Addendum will survive
termination or expiration of this Third Addendum.
6. Notice of [*] Content. Yahoo will use commercially reasonable efforts to
provide prompt written notice (as set forth in Section 16.1 of the
Agreement) to Overture whenever a third party has notified Yahoo that any
content appearing on the Yahoo Search Results Pages that include [*]
Results or the content of [*] Advertiser web sites linked to from [*]
Results contains content that violates any applicable law, rule or
regulation or infringes the rights of any third party, including but not
limited to intellectual property rights, privacy and publicity rights,
claims of defamation, false or deceptive advertising claims, consumer fraud
or would otherwise violate Yahoo's company-wide [*] concerning [*] content.
7. Overture Warranties. As of this Third Addendum Effective Date, Overture
represents and warrants that it has implemented a screening policy whereby
it screens the Advertiser web page that is directly linked to from the [*]
Result as part of the initial registration process in an effort to exclude
from [*] Results web sites that contain the following [*].
8. Overture Screening Policy Covenant. Overture's screening policies are
subject to change during the Term; however, (1) Overture will provide Yahoo
with prompt written notice of any change to its [*] content screening
policy, and (2) during the Term, Overture will use commercially reasonable
efforts to exclude [*] Results (at the point in time such [*] Results go
through the initial registration process described in Section 7) that
directly link to a web page that contains the [*] content listed in Section
7. To the extent that Yahoo does not approve of a
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
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change to Overture's [*] screening policy, then Yahoo may exercise its
right of cancellation as set forth in Section 4.2(a)(iv) of this Agreement.
If Yahoo has not exercised this cancellation right after receiving notice
from Overture as described in this Section, then Overture shall be deemed
to have complied with its continuing obligations to use commercially
reasonable efforts to exclude [*] Results that would otherwise violate this
Section.
9. Press Release and Public Statements. Each party is expressly prohibited
from making any press release or public statement related to either party's
performance under this Third Addendum without the other party's prior
written approval.
10. Replacement of "Fraudulent Clicks" with "Invalid Clicks". All instances of
"Fraudulent Clicks" in this Agreement is hereby replaced with the term
"Invalid Clicks".
11. Exclusion of Certain Provisions of the Agreement. For purposes of clarity,
Sections 2.5, 3.2, 4.3(a) and (b), 5.1, 5.2, 7.1(a), 8.1 through 8.3, 8.6
through 8.9 and 9 of the Agreement will not apply to this Third Addendum
solely to the extent that such provisions apply to [*] Queries and the
display of [*] Results within the Yahoo Network.
[signature page follows]
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
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IN WITNESS WHEREOF, the parties have caused this Third Addendum to be executed
by their duly authorized representatives as of the Third Addendum Effective
Date.
YAHOO! INC. OVERTURE SERVICES, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx Name: Xxxx Xxxxx
Title: Senior Vice President, Search Title: Senior Vice President &
and Marketplace General Manager,
Affiliate Business Group
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