Portions of
this exhibit indicated by “***” have been omitted
pursuant to the Company’s request for confidential treatment
under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended, and the omitted material has been separately filed with
the Securities and Exchange Commission.
SECOND AMENDMENT
TO
AMENDED AND RESTATED PFP
ADVERTISER
DISTRIBUTION
AGREEMENT
This Second
Amendment to Amended and Restated PFP Advertiser Distribution
Agreement (“ Second Amendment ”) is effective as
of the 1st day of March, 2009 (the “ Second Amendment
Effective Date ”) and entered into by and between
Local.com Corporation (f/k/a Interchange Corporation), a Delaware
corporation, whose principal offices are located at One Technology
Drive, Building G, Irvine CA 92618 (“ Local ”),
and Idearc Media LLC (f/k/a Idearc Media Corp., f/k/a Verizon
Directories Corp.), a Delaware corporation, with its principal
place of business located at 2200 West Airfield Drive, D/FW
Airport, Texas 75261 ( “
Idearc ”
), to amend the Amended and Restated
PFP Advertiser Distribution Agreement effective as of March 1,
2007 and entered into by and between Local and Idearc, as amended
(the “ Agreement ”).
1.
Amendments . The Agreement is hereby amended, as of the
Second Amendment Effective Date, as follows:
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a.
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Addition of Fixed Fee
Advertisements . Section 1(e)(Confidential
Information) is amended to change the reference to “the Pay
for Performance Advertisements” to “one or more PFP Ads
or Fixed Fee Ads”. Section 1(dd)(Results Pages) is amended to
change the reference to “one or more Pay for Performance
Advertisements” to “one or more PFP Ads or Fixed Fee
Ads”. The fourth sentence of Section 3(f)(i)(1) and the
third sentence of Section 3(f)(i)(2) are amended to change the
references to “but expressly excluding each and every PFP
Ad” to “but expressly excluding each and every PFP Ad
and each and every Fixed Fee Ad”. Section 3(f)(vi) is
amended to change the references to “Pay for Performance
Advertisements” to “PFP Ads and Fixed Fee Ads”.
Section 6(a)(iv) of the Agreement is amended to change the
reference to “Pay for Performance Advertisement(s)” to
“PFP Ad(s) and Fixed Fee Ad(s)” and to change the
reference to “Pay for Performance Advertisements” to
“PFP Ad(s) or Fixed Fee Ad(s)”. Section 9(c) is amended
to change the reference to “Pay for Performance
Advertisements” to “PFP Ads and Fixed Fee
Ads.”
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b.
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Definitions .
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i.
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Pay Per Click
Advertisements . Section 1(x) is amended to read in
its entirety as follows:
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“ Pay Per Click
Advertisements ” or “ PPC Ads
” means, collectively, (1) an advertising
product for which advertisers pay Idearc a specified amount
(“ PPC Bid Amount ”), pursuant to Idearc’s
policies, for each Qualified Click, and (2) an advertising
product obtained by Idearc from a third party and for which Idearc
earns a specified amount for qualified clicks.
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***
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Portions of
this page have been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange
Commission
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ii.
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Search Results
. Section 1(ll) is
amended to read in its entirety as follows:
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“Search
Results” shall mean the PFP Ads, Fixed Fee
Ads (and such other content as available within the then-current
version of the “Superpages.com XML API and Display
Requirements” document) provided by Idearc to Local in
response to Queries, as defined above, on a Query-by-Query
basis.
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iii.
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Additional Definitions
. Section 1 is
amended to add the following definitions, as subsections (vv), (ww)
(xx) and (yy), respectively:
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“Fixed Fee
Ad” means each of, and “ Fixed
Fee Ads ” means all of, the advertisements (including all
content contained therein), which may or may not contain active
links, for which the advertiser pays Idearc a specified flat fee
per month.
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“ LC Local Query
” means each of, and “ LC Local Queries ”
means all of, the Local Queries initiated through a Local Hosted
Search Form on the PG Local-Owned Web Site or through a Local
Hosted Search Form on an LC Co-Branded Site or through an LC TP
Search Form.
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c.
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Term; Renewal
. Section 2, first
sentence, is amended to read in its entirety as follows:
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Unless sooner terminated in
accordance with the terms of this Agreement, this Agreement will
commence on the Amended Effective Date and will continue until
March 31, 2010 (the “ Second Amendment Initial Term
”), after which it will automatically renew and extend on a
month to month basis until terminated in accordance with this
Agreement (collectively, the “ Term ”). Either
party may terminate this Agreement after it converts to a month to
month term for any reason or no reason upon sixty (60) days
prior written notice to the other party.
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d.
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Local’s Obligations
.
Section 3(f)(i)(1)(a) is amended to read in its entirety as
follows:
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“display (to the end user who
initiated such Local Query) the PFP Ads and Fixed Fee Ads contained
within Search Results resulting from such Local Query on each
applicable resulting Local Results Page of the Local.com Web Site,
in accordance with the rules set forth on Exhibit H-1
to this Agreement (the “ Local.com Results Page Display
Rules ”), without altering the content of the PFP Ads or
the Fixed Fee Ads, and”
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***
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Portions of
this page have been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange
Commission
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2
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e.
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Local’s Obligations
.
Section 3(f)(i)(2)(a) is amended to read in its entirety as
follows:
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“display (to the end user who
initiated such Local Query) the PFP Ads and Fixed Fee Ads
(contained within Search Results provided by Idearc as a result of
such Local Query) on the Local Results Pages of the particular
Local Web Site from which such Local Query was initiated (or, to
the extent such Local Query producing such PFP Ads and/or Fixed Fee
Ads was initiated on an LC Third Party Web Site, on the Local
Results Pages of the LC Co-Branded Site corresponding to such LC
Third Party Web Site), in accordance with the rules set forth on
Exhibit H-2 to this Agreement (the “ LC Web
Sites – Results Page Display Rules ”), without
altering the content of the PFP Ads or the Fixed Fee Ads,
and”
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f.
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Local’s Obligations
.
Section 3(f)(i)(2) is amended to add the following sentence at
the end thereof:
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Local shall ensure that *** featured
advertising box (labeled “Featured Sponsors” or labeled
with similar text) appears on each Local Results Page (of the
applicable LC Web Site) resulting from an LC Local Query, above the
fold, and before any other featured advertising space (the “
LC First Featured Advertising Box ”), provided that
the applicable third-party partner of Local permits Local to
include an LC First Featured Advertising Box on such Local Results
Pages, which LC First Featured Advertising Box will initially
appear as set forth in Exhibit G (Mock-Up of Results
Page on LC Web Sites).
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g.
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License Grants; Covenants —
Idearc .
Section 4(a) is amended to add the following sentence:
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Notwithstanding anything to the
contrary, nothing contained in this Section 4(a) will be construed
to give Local the right to (and Local shall not) display any Fixed
Fee Ad on any Local Business Detail Page or any Additional Local
Page on the Local.com Web Site or any LC Web Site (or at any other
page or position of the Local Network, except (i) in the First
Featured Advertising Box in accordance with the Local.com Results
Page Display Rules and the terms and conditions of this Agreement
and (ii) in the LC First Featured Advertising Box in
accordance with the LC Web Sites – Results Page Display Rules
and the terms and conditions of this Agreement).
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h.
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Compensation — Revenue
Share .
Section 6(a)(i)(1) is amended to change the reference to
“Section 6(a)(i)(2)” to
“Section 6(d)”. The third sentence of
Section 6(a)(i)(1) is amended to read in its entirety as
follows:
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For
purposes of this Agreement, (a) “ Total Revenue
”, with respect to each calendar month, means *** of
(i) all fees billed by Idearc to its Bid Program
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***
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Portions of
this page have been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange
Commission
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3
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advertisers for Qualified Clicks
(occurring during such calendar month) on PPC Ads, (ii) all
fees earned by Idearc from a third party for Qualified Clicks
(occurring during such calendar month) on PPC Ads obtained by
Idearc from a third party and for which advertisers pay such third
party and (iii) the PPC Equivalent Bid Amount for each
Qualified Click (occurring during such calendar month) on a PfC Ad,
each to the express exclusion of any “minimum monthly
fees” or other fees due to Idearc from its advertisers that
are not applied towards PPC or PfC fees for Qualified Clicks, and
(b) “ Local Revenue ”, with respect to each
calendar month, means *** of (i) all fees billed by Idearc to
its Bid Program advertisers for Local Qualified Clicks (occurring
during such calendar month) on PPC Ads, (ii) all fees earned
by Idearc from a third party for Local Qualified Clicks (occurring
during such calendar month) on PPC Ads obtained by Idearc from a
third party and for which advertisers pay such third party and
(iii) the PPC Equivalent Bid Amount for each Local Qualified
Click (occurring during such calendar month) on a PfC Ad, each to
the express exclusion of any “minimum monthly fees” or
other fees due to Idearc from its advertisers that are not applied
towards PPC or PfC fees for Local Qualified Clicks. Idearc shall
not include any ads, other than PFP Ads and Fixed Fee Ads, in
Search Results provided to Local under this Agreement, without
Local’s prior written consent.
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i.
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Compensation – Revenue
Share . The
Agreement is amended to delete Section 6(a)(i)(2) (Time and
Manner of Payment) and Section 6(a)(ii)(2)(Time and Manner of
Payment) in their entirety.
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j.
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Compensation — Revenue
Share .
Section 6(a)(ii)(1) is amended to read in its entirety as
follows:
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Amount . With respect to each calendar
month of this Agreement (beginning with March 1, 2009), Idearc
will pay Local *** of the Network Revenue relating to such calendar
month (the “ Network PFP Revenue Share ”), in
accordance with the provisions of Section 6(d), below. For
purposes of this Agreement, “ Network Revenue ”,
with respect to each calendar month, means *** of (i) all fees
billed by Idearc to its Bid Program advertisers for Network
Qualified Clicks (occurring during such calendar month) on PPC Ads
displayed on a Network Results Page in accordance with the terms
and conditions of this Agreement, (ii) all fees received by
Idearc from a third party for Network Qualified Clicks (occurring
during such calendar month) on PPC Ads obtained by Idearc from a
third party and for which advertisers pay such third party and
(iii) the PPC Equivalent Bid Amount for each Network Qualified
Click (occurring during such calendar month) on a PfC Ad displayed
on a Network Results Page in accordance with the terms and
conditions of this Agreement, each to the express exclusion of any
“minimum monthly fees” or other fees due to Idearc from
its advertisers that are not applied towards PPC or PfC fees for
Network Qualified Clicks. For example, if Network
Revenue
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***
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Portions of
this page have been omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange
Commission
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4
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relating to May 2009 is of a
total amount of ***, Idearc will pay Local ***, in accordance with
the provisions of Section 6(d), below).
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k.
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Compensation –
Miscellaneous. The fourth sentence of Section
6(a)(iii) of the Agreement is amended to read in its entirety as
follows:
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“Local acknowledges and agrees
that Idearc will receive any and all remaining proceeds arising out
of the PFP Ads and Fixed Fee Ads and the aforementioned
compensation (specified in Sections 6(a)(i)(1) and
6(a)(ii)(1)) is the sole compensation due to Local, except as
expressly set forth in Section 6(b) or any other section of this
Agreement.”
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l.
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Compensation – Enabled Search
Fees . The
Agreement is amended to add Section 6(b), to read in its
entirety as follows:
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Enabled Search Fees
.
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i.
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Initial Amount;
Miscellaneous . Idearc will pay Local *** for each
Enabled Search (as defined below), ***
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ii.
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Benchmarking Related to Fixed Fee
Ads . For the
period beginning on the date on which Idearc first includes a Fixed
Fee Ad in Search Results provided to Local in response to a Local
Query through the date that is *** thereafter, Idearc shall
determine (a) the percentage of Local Queries in response to
which Idearc provides Local with Search Results that contain only
Fixed Fee Ad(s) during such period (the “ Fixed Fee Only
Benchmark Percentage ”, (b) the percentage of Local
Queries in response to which Idearc provides Local with Search
Results that contain PFP Ad(s) and Fixed Fee Ad(s) during such
period, and (c) the percentage of Local Queries in response to
which Idearc provides Local with Search Results that contain only
PFP Ad(s) during such period. In the event that, (a) during
any calendar month during the Term of this Agreement, the
percentage of Local Queries in response to which Idearc provides
Local with Search Results that contain only Fixed Fee Ad(s) is
greater than the Fixed Fee Only Benchmark Percentage plus *** (the
“ Fixed Fee Threshhold Percentage ”) and
(b) the percentage of Local Queries in response to which
Idearc provides Local with Search Results that contain only Fixed
Fee Ad(s), over the *** period following Idearc’s receipt of
written notice from Local that the Fixed Fee Threshhold Percentage
was exceeded, is not less than or equal to the Fixed Fee Threshhold
Percentage, then Idearc and Local will renegotiate the amount of
the Enabled Search Fee and/or the Local PFP Revenue Share for Local
Queries. Idearc’s determination and calculation of the Fixed
Fee Only Benchmark Percentage, the percentage of Local Queries in
response to
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