Amd. #2 to Prioritized Listings Syndication Agreement


 Exhibit 10.54 
  
 SECOND AMENDMENT TO THE PRIORITIZED
LISTINGS SYNDICATION AGREEMENT 
 BETWEEN
LOOKSMART, LTD. AND SEARCH123 INC. 
  
 This Second Amendment (the “Second Amendment”) to the Prioritized Listings Syndication Agreement dated as of August 21, 2001 (the
“Agreement”) and the Amendment dated as of June 7, 2002, is entered into and effective as of February 8, 2005 by and between LookSmart, Ltd., a Delaware corporation, (“LookSmart”) and Search123, Inc., a California
corporation (“Partner”). 
  
 NOW,
THEREFORE, in consideration of the mutual promises contained herein, the parties agree that during the term of this Second Amendment, the Agreement (as amended) shall be amended as follows: 
  

	1.	The following definitions shall be added to Section 1.1: 

  
 “Click” occurs when a bona fide Internet user (which excludes a robot, spider, software, scraper or other mechanical, artificial or
fraudulent means, or a person who is not seeking to use the Partner Network for a legitimate web search, e.g., has been paid or otherwise motivated to click) clicks on a Prioritized Listing and accesses the destination site. 
  
 “Partner Network” means the Search123 Site
together with the Search123 Affiliate Sites. 
  

	2.	Section 2 is hereby deleted and replaced with the following: 

  

	 	2.	Obligations. 

  

	 	2.1	Implementation of Prioritized Listings. Partner will query LookSmart’s servers for search queries on the Partner Network and will implement and display Prioritized
Listing provided by LookSmart as set forth on Exhibit A. 

  

	 	2.2	Attribution; Look and Feel. Partner may provide attribution on pages displaying Prioritized Listings. The size and location of such attribution shall be at the parties’
mutual agreement. Other than as set forth herein, Partner shall control the look and feel of its search service. 

  

	 	2.3	Service Levels/Technical Support. LookSmart will use commercially reasonable efforts to provide the Service Levels and Technical Support in Exhibit B.


  

	3.	Section 3 of the Agreement (as amended) is hereby deleted and replaced with the following: 

  
 3.1 Cost Per Click (CPC). Subject to the terms and conditions hereof, for any given calendar month, LookSmart will
pay Partner [***] for all valid Clicks generated by Partner, as recorded by LookSmart’s proprietary click tracking system. For each Click, the share of revenue paid to Partner will be equal to the CPC bid by LookSmart for the corresponding
search term, less a month-end adjustment for credit card fraud, advertising complaints or similar items. 
  


	***	Omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions filed separately with the Commission.


  

 1 







 LookSmart will determine the CPC bid and include it in the live feed sent in response to such query.
LookSmart will have sole discretion to decide the CPC bid for each search term, and such CPC bid may change frequently. Partner may use the CPC bid included in the live feed for its internal purposes, but the parties agree that all CPC bid amounts
submitted by LookSmart are confidential information for internal use only, and shall not be posted on Partner’s or Partner’s Network web pages or disclosed to any third parties. 
  
 3.2 Invalid Clicks. LookSmart shall have no obligation to pay for
clicks which are invalid as determined by its proprietary click tracking system. Invalid clicks may come as a result of but are not limited to clicks (i) generated via automated crawlers, robots or click generating scripts, (ii) that an advertiser
receives and rejects, (iii) that come as a result of auto-spawning of browsers, automated redirects, and clicks that are required for Users to navigate on the Partner Network, (iv) that are derived from international users (non-US and Canada) unless
otherwise specified by LookSmart, (v) that are derived from adult related traffic or (vi) that come as a result of any incentive such as cash, credits or loyalty points. LookSmart reserves the right to require Partner to provide server log files
that include, but are not limited to, the daily number of clicks delivered to LookSmart. In the event that LookSmart determines by its proprietary click tracking system that Partner has delivered invalid clicks or low quality traffic during the term
of this Agreement, LookSmart may immediately terminate this Agreement upon written notice to Partner. 
  
 IN WITNESS WHEREOF, the Parties have executed this Second Amendment as of the date set forth above. In the event of any conflict between the terms
hereof and the terms of the Agreement, the terms hereof shall govern. This Second Amendment may be executed in counterparts, each of which may be an original or fax copy, and all of which together shall form one instrument. 
  

									
	LookSmart Ltd.	 	 	 	Search123, Inc.
					
	By:	 	 /s/ Bryan Everett

	 	 	 	By:	 	 /s/ James K. Beriker


	Name:	 	Bryan Everett	 	 	 	Name:	 	James K. Beriker
	Title:	 	SVP, Sales	 	 	 	Title:	 	CEO

  

 2 







 EXHIBIT A 
  
 IMPLEMENTATION 
  

	1.	Display of Prioritized Listings. In connection with each search by a user on the Partner Network, Partner will query LookSmart’s servers via a live data feed. If any
Prioritized Listings are returned by LookSmart’s servers in response to such query, such Prioritized Listings will be displayed on search result pages on the Partner Network. All Prioritized Listings must be displayed in the order received from
LookSmart’s servers and prominently on such search results pages. Partner will not display any CPC or price-related data that would allow users to determine the price paid by advertisers in connection with Prioritized Listings. Partner will
cooperate with LookSmart to allow LookSmart to track clicks on Prioritized Listings displayed on the Partner Networks, including the use of redirects, tracking URLs or other methods as reasonably requested by LookSmart. Partner will not modify, add
to, edit or delete the URLs, titles or reviews contained within any Prioritized Listing without LookSmart’s prior written approval. Partner will use the tracking URLs associated with each individual Prioritized Listing provided by LookSmart
(though Partner may use the display URLs for purposes of displaying the listing). Other than as set forth herein, Partner shall be solely and exclusively responsible for the design, development, operation and maintenance of the Partner Network and
for all advertising, sponsorship or other use of the media contained therein. 

  

	2.	Partner Display Ordering. Partner represents that it displays and will continue to display Prioritized Listings on the Partner Network based on the Cost Per Click assigned to
the listings in the Prioritized Listings (CPC Sorted). In the event that Partner decides to change the method by which it determines the order of its Prioritized Listings, Partner will provide to LookSmart thirty (30) days written notice of such
change. Partner will make reasonable effort to work with LookSmart to display Prioritized Listings in the new display order at positions comparable to the CPC sorted implementation. 

  

	3.	Position in Search Results. In implementations where Partner determines the display and presentation of Prioritized Listings on the CPC paid to Partner, Partner agrees to
display Prioritized Listings in Partner’s Prioritized Listings in the position based on the agreed upon Cost Per Click. Based on the agreed upon CPC, Partner must display Prioritized Listings above (i) any other listing with the same CPC and
(ii) the listing with the next lowest CPC available for display in Partner’s Prioritized Listings. Partner will in no way manipulate Partner’s Prioritized Listings or any other listing CPCs to display Prioritized Listings in a position
below listings with CPCs lower than those agreed upon and thus assigned to Prioritized Listings. 

  

	4.	Top Bid Pricing. In implementations where Partner determines the display and presentation of Prioritized Listings on the CPC paid to Partner, Partner agrees to provide
LookSmart with an automated, regularly updated mechanism from which LookSmart can determine the bid prices (CPC paid to partner) of the top 5 listings for individual and specific keywords. For example, Partner may make available an API or other data
interface that provides such data. 

  

	5.	Query Source Identification. Partner must provide LookSmart with the IP, User Agent and HTTP referrer for every query for which Partner requests a LookSmart Prioritized
Listing. 

  

	6.	Traffic Volume and Increases. Partner will provide LookSmart with 3 days written notice before launching with new affiliates or traffic sources that will, in Partner’s
reasonable opinion, increase the number of Searches by the lesser of 50% over then-current levels or 500,000 queries per day. LookSmart will have no obligation to pay for Referrals for which a timely notice is not provided under this section.


  

	7.	Blocking Distribution. LookSmart may request that Partner block distribution of Prioritized Listings to a specified list of sources (sites and/or IP addresses) deemed
questionable by LookSmart. LookSmart may update the list from time to time, in its sole discretion. All sources contained within the list must be blocked from distribution by Partner as soon as practicable after, but in any event within 5 business
days from, receipt of notice from LookSmart. LookSmart shall have no obligation to pay Partner for Clicks delivered to Prioritized Listing from these sources, five business days beyond notice. Partner will not display, sublicense or syndicate the
Prioritized Listing on or to any third party, distribution network or web site (A) via spyware or any other form of advertising that delivers advertisements to a user without the user’s prior consent, (B) that displays adult-oriented content,
(C) via a web site or distribution network directed primarily at users outside of the United States or Canada, or (D) that violates any applicable laws or regulations. 

  

 3 







 EXHIBIT B 
  
 Service Level Agreement — LookSmart Data Feed (VAL) 
  
 Below is the level of service to be supplied by LookSmart in connection with LookSmart’s provision of Prioritized Listings (the
“Service”). The Service to be provided to Partner shall consist of a real-time data feed of Prioritized Listings as defined in the Agreement. 
  

Partner Implementation Guide. Following the execution of this Agreement, LookSmart will provide Partner with a partner implementation guide to assist in the
process of implementing the technical aspects of the Service. The parties will use commercially reasonable efforts to abide by the procedures and steps set forth in the guide. 
  
 Service Integration Technical Assistance. During the Term, LookSmart agrees to provide a designated technical account manager during
normal business hours (8am – 5pm Pacific Time) to Partner to assist in the effective integration of the Service onto the Partner’s site. In no event will such support exceed ten (10) hours per month, and all such support will be provided
during business hours. The parties agree that the Service is provided in a standard format and is well documented. LookSmart will not provide technical assistance relating to on-site server configuration or programming. 
  
 Service Response Time. The load time for a non-page-load query (i.e. where the data
returned does not include the formatted page), as measured round-trip from the time Partner servers send a search request to LookSmart to the time of Partner’s servers’ receipt of a completed set of search result(s) will be less than 375
milliseconds at least 98% of the time, as measured daily, weekly, and monthly, from domestic locations. 
  
 Service Uptime. The Service will be available 24 hours/day, 7 days/week. Scheduled downtime will be communicated to partners with 5 business days notice. Service is guaranteed to be up 99.5% of the time as
measured weekly and 99.8% of the time as measured monthly, excluding scheduled downtime. Should LookSmart determine that a reconfiguration of the Service is required, such as major software version changes, changes in hosting facilities or other
network reconfiguration; LookSmart will provide Partner with 30-day notice of such change, and will work in good faith to minimize any Service outages. 
  
 Quality Criteria. LookSmart will use commercially reasonable efforts to ensure that the Service shall not contain more than 3% Inactive Links out of any random
sample of 10,000+ queries. “Inactive Links” shall be defined as any link provide by the Service which, when clicked, does not result in the user receiving a web page within 60 seconds at least 3 out of 5 times in any 1 week period.

  
 TECHNICAL SUPPORT 
  
 To ensure that problems with the Service are identified, addressed and resolved in a timely
manner, the following framework shall be followed for reporting problems, communicating progress on troubleshooting activities, resolving problems, and, if necessary, escalating the level of attention placed on such problems. This framework
proposes a three-category approach to technical support for dealing with problems. The first type deals with general technical support such as consultation regarding technical specification interpretation and understanding the process, the
second with changes in the Service, and the third addresses problem reporting and resolution associated with the Service. 
  
 Type 1: General Technical Support 
  
 This category of service provides consultation regarding the proper interpretation of format specifications and data, as well as support on how the Service works, the
quality or content of Service results for specific queries or how Partners might integrate the Service into their Web site(s). It does not address any desired changes in the basic service parameters. Within 3 business days of the Execution Date of
this Agreement, Partner will be provided with the names of both a business development account manager and a technical account manager who will provide this type of service during normal business hours, up to 10 hours per month, for the first three
months. Partner should expect a response to Type 1 issues within 2 business days, after which they should be escalated as detailed below. 
  
 Type 2: Changes 
  
 Requests for changes in the Service should be directed to the business development account manager who will be assigned to Partner within 3 days of the Execution Date of this Agreement. Partner should expect a
response to Type 2 issues within 2 business days, after which they should be escalated as detailed below. 
  
 Type 3: Problem Reporting and Resolution 
  
 Problems reaching LookSmart servers (e.g., major networking issues, Service outage, etc.) should be addressed with the LookSmart Technical Operations team as detailed below. ALL OTHER requests (e.g. product issues) should be treated as Type
1 or Type 2 issues. 
  

	 	1.	Contact the System Technical Support team by: 

  

					
	 •
	 	   Email:
	 	xxxx@looksmart.net
	 •
	 	   Email Page:
	 	xxxx@looksmart.net
	 •
	 	   Please remember to include an area code with the callback telephone number


  
 If after 15 minutes, a
callback is not received... 
  

	 	2.	Contact the Director of Production Operations by use of the following contact information: 

  

					
	•	  	  Dean Cookson	 	 
	•	  	  Work/Day:	 	  415-348-xxxx
	•	  	  Cell:	 	  415-516-xxxx
	•	  	  Email:	 	  xxxx@looksmart.net
	•	  	  Email Page:	 	  xxxx@looksmart.net

  

 4 







 If after 15 minutes, a callback was not received... 
  

	 	3.	Contact the Vice President of Technical Operations by use of the following contact information: 

  

					
	•	  	  Michael Grubb	 	 
	•	  	  Work/Day:	 	  415-348-xxxx
	•	  	  Cell:	 	  415-308-xxxx
	•	  	  Email:	 	  xxxx@looksmart.net
	•	  	  Email Page:	 	  xxxx@looksmart.net

  
 Escalation Procedures 
  
 If Partner does not receive timely responses (according to the timetables outlined above)
issues should be escalated to any of the following individuals: 
  

									
	Person to Contact

	 	Title

	 	Role

	 	Phone

	 	Email


	David Hoare	 	Technical Account Manager	 	Business Development	 	415-348-xxxx (o)
415-378-xxxx (m)	 	xxxx@looksmart.net

  
 Partner Points of Contact

  
 Communication of issues from LookSmart to Partner should be directed to
the following individuals: 
  

									
	Person to Contact

	 	Title

	 	Role

	 	Phone

	 	Email


	Aaron Bush	 	Partner Operations Manager	 	Business Development	 	818-575-xxxx (o)	 	xxxx@valueclick.com
	Kelly Harrel	 	Director	 	Engineering	 	818-575-xxxx	 	xxxx@valueclick.com
	Brian McCarthy	 	VP	 	Search Services	 	818-575-xxxx (o)
310-991-xxxx (m)	 	xxxx@valueclick.com

  

 5