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(*) INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
EXHIBIT 10.16
AMENDMENT AGREEMENT
This Amendment Agreement ("Amendment") is entered into as of June 30,
1999 by and between Inktomi Corporation, a Delaware corporation with its
principal place of business at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx, 00000 ("Inktomi") and N2H2, Inc., a Washington corporation with its
principal place of business at 000 0xx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx,
00000 ("X0X0").
RECITALS
A. Inktomi and N2H2 entered into a Search Engine Services Agreement
dated as of January 19, 1998 (the "Agreement")
B. Inktomi and N2H2 wish to amend the Agreement as set forth herein.
AGREEMENT
In consideration of the foregoing and the mutual promises contained
herein, the parties agree as follows:
1. Section 1.11 (Definition of Net Revenues) is hereby amended and
restated in its entirety to read as follows:
"1.11 "Net Revenues" are gross advertising and sponsorship
revenues booked by N2H2 attributable to (i) the search service operated
by N2H2 through the Sites and (ii) all Initial Search Pages, all Results
Pages and all other Web pages on the Sites that relate to the function
of search provided by Inktomi, including without limitation save
searches pages and Add URL pages (collectively the "Search Related
Pages"), less: (a) fees actually payable by N2H2 to external third
parties and direct internal sales expenses actually incurred by N2H2 for
and relating to the placement of advertisements and sponsorships on the
Search Related Pages (provided however that the external third party
expenses shall be capped at *40% of gross revenue generated by N2H2
relating to the placement of advertisements and sponsorships on the
Search Related Pages and the direct internal sales expenses shall be
capped at *20% of gross revenue generated by N2H2 relating to the
placement of advertisements and sponsorships on the Search Related
Pages); (b) taxes actually payable by N2H2 and not re-billed or
re-billable to a third party (other than taxes based on N2H2's income),
if any, attributable to the search services provided by N2H2 through the
Sites; (c) advertising and sponsorship frequency discounts actually
payable; and (d) *."
2. Section 1.16 (Definition of Site) is hereby amended and restated in
its entirety to read as follows:
"1.16 "Site" means one or more Web sites established and
maintained by N2H2 through which end users may access the Inktomi Search
Engine and run searches against the Database. "Site" also includes all
sites linked to N2H2's Web sites so as to access the Inktomi Search
Engine as authorized under Section 2.1.1."
3. A new Section 2.1.1 is hereby added to the Agreement as follows:
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(*) INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
EXHIBIT 10.16
"2.1.1 Distribution Rights. N2H2 may make results sets generated
through search queries against the Database available to end-users of
third party Web sites subject to the provisions of this Section and all
other terms and conditions of this Agreement. N2H2 may make the results
sets available only in connection with the distribution of N2H2's search
services to such third party sites and for no other purpose. No Inktomi
Technology may be provided to such sites, and, unless otherwise agreed
in writing by Inktomi, the results sets shall be made available only
through N2H2 servers or similar means which prevent direct access to the
Inktomi Search Engine by such third party end users. N2H2 will provide
such services only pursuant to a written agreement which is at least as
protective of the Inktomi Technology as the terms of this Agreement and
which contains a disclaimer of all warranties and limitations of
liability on behalf of Inktomi in a form reasonably acceptable to
Inktomi. N2H2 will provide Inktomi a monthly report that sets forth the
third parties that have entered into a distribution relationship as
contemplated above."
4. Section 3.3 (House Ads) is hereby deleted from the Agreement.
5. Section 6.1 (Service Fees) is hereby amended and restated in its
entirety to read as follows:
"6.1 Service Fees. N2H2 shall pay the fees set forth in this
Section 6.1 and Exhibit A. N2H2 shall pay Inktomi monthly service fees
equal to the sum of (a) the Per-Hit Charge (as defined below) for such
month attributable to Hits generated by distribution partners of N2H2 as
described in Section 2.1.1; plus (b) the greater of (i) the Per-Hit
Charge (as defined below) for such month attributable to Hits generated
directly by N2H2 from Sites or (ii) * of Net Revenues for such month.
Notwithstanding the foregoing, N2H2 shall pay Inktomi a minimum of * for
the first year under this Agreement and * for each subsequent year under
this Agreement (with one-third attributable to Filtering Services and
two-thirds attributable to the Search Services). For the first year, the
minimum shall be paid as follows: * shall be paid upon execution of this
Agreement (which Inktomi acknowledges has been paid); * shall be paid on
or before January 31, 1998 (which Inktomi acknowledges has been paid); *
(or the monthly service fees as computed in the first sentence above if
such fees are greater than *) shall be paid on each of October 31, 1998,
November 30, 1998 and December 31, 1998; and the balance of the first
year minimum shall be paid on the earlier of October 31, 1998 or the
closing date of a capital-raising transaction by N2H2. Inktomi
acknowledges and agrees that N2H2 has paid the amounts required owed in
1998. For subsequent years (beginning January 1999), the minimum shall
be paid in equal monthly installments of *. Two-thirds of all such
minimum payments shall be credited against monthly service fees paid or
payable for such year. Monthly service fees shall be paid in arrears
within thirty (30) calendar days following the end of each month.
The "Per-Hit" Charge for each month shall be based on the total
number of Hits served during the month. These fees equal:
(A) the total number of Hits served during the month divided
by the total number of days in such month ("Average
Daily Hits Served"),
(B) multiplied and added in accordance with the following *:
* *
* *
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(*) INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
EXHIBIT 10.16
* *
* *
* *
* *
(C) multiplied by the total number of days in such month."
6. Exhibit A (Services) is hereby amended to provide the following:
a. Inktomi will use its commercially reasonable efforts to
tag the Database with an updated N2H2 Filter List on a
daily basis; provided, that N2H2 provides Inktomi an
updated N2H2 Filter List each day.
b. The parties acknowledge and agree that the number of
tags included in the N2H2 Filter List shall be increased
from * to *. Such tags are set forth on Schedule 1.
c. N2H2 shall pay Inktomi a non-recurring engineering fee
of * in consideration of the initial tagging of the
Database with the N2H2 Filter List. Such payment shall
be made by N2H2 within thirty (30) days of the Effective
Date.
7. For the provision of the services set forth in Exhibit A as amended
above, in addition to the fees currently to be paid by N2H2 under the Agreement,
Inktomi will charge N2H2 the following fees:
a. An annual Information Service fee of * to be paid in
twelve (12) monthly installments of * to be paid as part
of N2H2's monthly service fees, provided that when N2H2
exceeds an average daily hit rate of 500,000 queries per
day, such monthly Information Service fee shall decrease
as follows:
Queries Per Day Monthly Information Service Fee
--------------- -------------------------------
500,000 *
600,000 *
700,000 *
800,000 *
900,000 *
1,000,000 + *
8. Section 10.1 ("Term") is hereby amended to continue in force for a
period of three years following the effective date of this amendment, unless
earlier terminated as provided in the agreement.
9. All capitalized terms not otherwise defined herein shall have the
meanings given them in the Agreement, unless the context otherwise requires.
10. Except as amended by this Amendment, the Agreement shall remain in
full force and effect.
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EXHIBIT 10.16
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed
by their duly authorized representatives.
N2H2, INC. INKTOMI CORPORATION
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X. McEvay
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Title: CFO Title: Vice President
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Date: 6-30-99 Date: 6/30/99
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