Memorandum of Understanding – Infoseek Corp. and Kanematsu Corp.
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
MEMORANDUM OF UNDERSTANDING
Infoseek Corporation ("Infoseek") is considering a two-phase strategic alliance
with Kanematsu Corporation ("Kanematsu") to establish Infoseek Japan ("Infoseek
Japan"). In the first phase of the alliance, Infoseek would enter into a
Marketing Alliance Agreement with Kanematsu Corporation to develop, deploy and
operate the initial Infoseek Japan service described below. In the second phase
of the alliance, Infoseek and Kanematsu would enter into a Joint Venture
Agreement, and collateral agreement(s) relative to technology licensing, and the
provision of other services, as applicable, to create a joint venture
corporation in Japan to develop, deploy and operate a second generation Infoseek
Japan service described below based on Infoseek search technology.
Based on preliminary discussions, it has been decided that detailed negotiations
are appropriate regarding the possible agreements between Infoseek and
Kanematsu.
This Memorandum of Understanding ("MOU") covers the draft proposal of the terms
and conditions of the strategic alliance, exchange of information and conduct of
such negotiations. The parties wish to avoid any misunderstandings and disputes
which might otherwise occur in the event that comprehensive agreements in this
subject are not fully negotiated and fully executed.
The parties acknowledge and agree that the subject matter of the negotiations
will involve numerous interrelated business and technical factors, and that,
except as set forth in this MOU, neither party shall be bound to the other for
any performance, payment license, right, or reliance with respect to the subject
matter, unless and until all material terms have been set forth in the
respective separate and binding agreements, the Marketing Alliance Agreement and
the Joint Venture Agreement, for Phase One and Phase Two of the Infoseek and
Kanematsu Strategic Alliance (as described below), respectively, signed by both
parties ("Comprehensive Agreement"). Unless otherwise specifically indicated
herein, where used herein "Comprehensive Agreement" shall refer to either the
Marketing Alliance Agreement or the Joint Venture Agreement. All proposals,
letters, agreements, points of proposed or actual agreements, "Term Sheets",
memos and charts used or exchanged in the negotiations either shall be reflected
in the applicable Comprehensive Agreement or shall be deemed rejected, rescinded
and void upon the end of negotiations. Nothing contained in this MOU shall be
deemed to limit the scope of the negotiations or the content of any
Comprehensive Agreement.
The parties acknowledge that Kanematsu is contemplating participating in the
Infoseek Series E Preferred Stock financing which both parties anticipate will
close on or about the time of execution of the Marketing Alliance Agreement.
I. PHASE ONE OF THE INFOSEEK AND KANEMATSU STRATEGIC ALLIANCE
----------------------------------------------------------
A. ALLIANCE STRUCTURE:
Joint marketing alliance.
B. PRODUCT/SERVICE:
The initial Infoseek Japan service ("Phase One Service") will consist of
three major components:
i. A command bar with Japanese relevant content
ii. An indexing and search capability which will index and search
Japanese documents
iii. A directory which will contain listings of Japanese sites with
reviews written in the Japanese language and a translation of the
Infoseek Guide directory (existing English language based directory)
into the Japanese
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language.
1. Kanematsu will be responsible for acquiring third-party content to be
placed on the command bar of the Phase One Service and all costs associated
with such acquisition.
2. Kanematsu will be responsible for acquiring or licensing an indexing and
searching capability which will index and search for Japanese documents,
and all costs associated with such acquisition. This indexing and searching
capability will be deployed on the Phase One Service.
3. Kanematsu will be responsible for acquiring or licensing a directory which
will contain listings of Japanese sites with reviews written in the
Japanese language, and all costs associated with such acquisition.
4. Kanematsu will translate the existing Infoseek Guide directory (including
site label/URL and site description/review).
5. Infoseek will assist Kanematsu in adding third-party content to the
Infoseek Japan command bar.
6. Infoseek will assist Kanematsu in adding translation changes to the
Infoseek Japan directory, including assistance in adding listings of
Japanese sites with reviews written in the Japanese language.
7. Infoseek will be responsible for and perform the design and implementation
of the Phase One Service.
8. Kanematsu will provide the necessary level of business and engineering
resources required during Phase One to:
i. license or acquire Japanese relevant third-party content
ii. license or acquire an indexing and search capability to be deployed
on the Phase One Service
iii. license or acquire directory listings of Japanese sites
iv. translate existing Infoseek Guide Directory listing
All other aspects pertaining to the design, development and implementation
of the Phase One Service shall be the responsibility of Infoseek.
9. The Phase One Service will be operated by infoseek at the Infoseek facility
in the United States.
C. FINANCIAL:
* 1. Kanematsu will pay Infoseek [ ] prior to the commencement of Phase One
for the design, implementation and operation of the Phase One Service;
* [ ] of which is associated with the purchase of dedicated equipment
for the Phase One Service (such equipment may be purchased directly or
leased by Infoseek, purchased directly or leased by Kanematsu). Any
purchased equipment will be owned by Kanematsu.
2. Both Infoseek and Kanematsu will sell advertising on the Phase One
* Service. If Infoseek sells advertising, Infoseek will receive [ ] of
net advertising revenues (net advertising revenues will be defined as
gross advertising revenues less applicable ad frequency discounts,
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agency discounts, and ad sales commissions). If Kanematsu sells
advertising, Kanematsu will receive 25% of net advertising revenues.
* 3. Kanematsu will receive [ ] of the net advertising revenues of the
Phase One Service as consideration for acquiring the content, licensing
or acquiring an indexing and search capability, licensing or acquiring
the directory listings, and translation of the Infoseek Guide Directory
listing.
4. It is Infoseek's assumption that a potential flat fee payment
arrangement between Infoseek and Infoseek's major distribution entity
will secure a position on the Phase Two Service (as defined below)
search page for Infoseek.
5. Both parties acknowledge that royalties and third party payments to
entities including, without limitation, distribution entities, may be
attributable to the Phase One Service and may be apportioned against
the remaining balance prior to the distribution to the parties. Both
parties will mutually agree to any such royalties and third party
payments attributable to the Phase One Service.
* 6. Any remaining balance of the net advertising revenues shall be [ ]
Infoseek and Kanematsu.
7. In the event any internationalization engineering is performed, with
* Kanematsu's prior express [ ], during Phase One to prepare the [ ]
indexing and searching technology to be localized for the Phase Two
* Service, [ ] applicable costs for such engineering. Costs associated
* with this engineering effort [ ] and shall be limited to direct costs.
D. TRADEMARKS:
All applicable Infoseek trademarks will be licensed to Kanematsu solely
for use in conjunction with the Phase One Service. Infoseek retains
ownership of all Infoseek trademarks.
E. ALLIANCES:
1. Kanematsu will establish the necessary alliances to acquire third-party
content for the Phase One Service.
* 2. Kanematsu will pursue an alliance with [ ] (which may include regional
and local advertising).
* 3. Infoseek will pursue an alliance with [ ] of the Phase One Service on
* the [ ] page for the Japanese version of the [ ].
F. TECHNOLOGY OWNERSHIP:
1. Ownership of any Infoseek technology, including but not limited to its
indexing and search capability, and any technology licensed or acquired
by Infoseek, and all applicable interfaces developed by Infoseek to
enable the translation efforts, will remain with Infoseek and its
licensors.
2. Ownership of any Kanematsu technology, including but not limited to its
index and search capability, and any technology licensed or acquired
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by Kanematsu, will remain with Kanematsu and its licensors.
G. MANAGEMENT:
1. Infoseek shall be responsible for the program management of the design,
implementation and operation of the Phase One Service which may include
management of Kanematsu personnel on loan to Infoseek.
2. During the Phase One period and in anticipation of Phase Two, Infoseek
and Kanematsu will cooperate to appoint the management personnel
specified in the Phase Two portion of this MOU.
3. During the Phase One period and in anticipation of Phase Two Kanematsu
shall organize and staff a working committee within Kanematsu to
promote Infoseek Japan, sell advertising, and prepare for the Phase Two
Service.
4. Kanematsu and any members of its working committee, may assist Infoseek
in the operation of Phase One Services on an interim basis.
H. TERM OF PHASE ONE:
The term of Phase One shall be for a period ending upon the completion of
* the development of Infoseek's [ ] indexing and search technology which is
* anticipated to be the [ ]. At the end of such Phase One term both parties
anticipate transitioning to Phase Two as described below. In the event
Infoseek and Kanematsu agree that Phase One Service should be extended for
an additional period of time, such extension shall be subject to terms for
such extension, as may be mutually agreed upon in writing, including
without limitation additional financing for such extended Phase One period.
II. PHASE TWO OF THE INFOSEEK AND KANEMATSU STRATEGIC ALLIANCE
----------------------------------------------------------
A. ALLIANCE STRUCTURE:
A joint venture arrangement between Infoseek and Kanematsu to establish
Infoseek Japan ("Infoseek Japan"). The ownership ratio in Infoseek Japan
* would be [ ] Kanematsu and [ ] Infoseek Corporation. Such joint venture
arrangement (including, without limitation, the structure thereof will be
subject to further approval by Infoseek and Kanematsu and the Joint Venture
Agreement. Capitalization of such joint venture will be negotiated by
Infoseek and Kanematsu. For such equity interest, it is anticipated that
* Kanematsu's [ ] that Infoseek's capital contribution for Infoseek Japan
* will be in the [ ]. The parties agree to explore this possibility in light
of U.S. and Japanese legal requirements.
B. PRODUCT/SERVICE:
1. In the second-phase Infoseek Japan Service ("Phase Two Service") the
Japanese language indexing and search technology acquired or licensed
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FOR REDACTED PORTION
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* by Kanematsu during Phase One [ ] indexing and search technology for
indexing and searching for Japanese language documents.
2. Initially, the Phase Two Service may be operated by Infoseek at the
Infoseek facility in the United States. Within a schedule to be
determined, the Phase Two Service will be deployed in Japan.
C. TECHNOLOGY OWNERSHIP:
1. Ownership of the Infoseek technology, including without limitation,
intellectual property (trademarks and look and feel), the indexing and
searching capabilities, all applicable interfaces developed by
Infoseek to enable the translation efforts, and derivative works based
thereon, will remain with Infoseek and Infoseek's licensors.
2. Ownership of any Kanematsu technology, and derivative works based
thereon, included in the Phase Two localized product shall remain in
Kanematsu.
3. Ownership of the User Interface of the Phase Two localized product
shall remain with Infoseek Japan.
4. The Infoseek technology will be licensed to Infoseek Japan under a
collateral technology licensing agreement. The parties anticipate that
* such license arrangement will grant to Infoseek Japan an [ ], as
mutually agreed upon by Infoseek and Kanematsu, with respect to the
Infoseek technology for use on an Internet search service in Japan. It
is anticipated that such licensing arrangement will be long term.
* 5. [ ]
6. The parties acknowledge that it is their intent to keep each party's
technology separate and to preserve the identification of the
respective technologies.
7. In the event third party technology is licensed for Phase Two
Services, any costs, including but not limited to any royalties or
fees, shall be borne by Infoseek Japan.
D. FINANCIAL:
* 1. [ ] finance the internationalization engineering required to prepare
* the [ ] indexing and searching technology to be localized for the
Phase Two Service. Costs associated with this engineering effort will
be determined by Infoseek and Kanematsu and shall be limited to direct
costs.
* 2. Infoseek Japan will pay [ ] of net advertising revenues (net
advertising revenues will be defined as gross advertising revenues
less applicable ad frequency discounts, agency discounts, and ad sales
commissions) during Phase Two. Infoseek Japan will also pay Kanematsu
* [ ] of net advertising revenue during Phase Two.
3. While the Phase Two Service is operated by Infoseek in the United
* States, Infoseek Japan will provide Infoseek with an [ ] of net
advertising revenue from the Phase Two Service. Infoseek Japan will
also fund the incremental equipment necessary to operate the Phase Two
Service in the United States.
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* CONFIDENTIAL TREATMENT REQUESTED
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* 4. Upgrades to the [ ]-based, translated indexing and search technology
* shall be provided to Infoseek Japan [ ].
* Such charges shall be applicable to [ ] to the Japanese version of the
* [ ] technology and based on direct costs associated therewith.
* 5. During Phase Two, a portion of the Infoseek [ ]. Such portion to be
reasonably determined by Infoseek and Kanematsu on a pro-rata
apportionment.
6. Both parties acknowledge that royalties and third party payments to
entities including, without limitation, distribution entities, may be
attributable to the Phase Two Service and may be apportioned against
the remaining balance prior to the distribution to the parties.
7. Any remaining balance of the net advertising revenues shall remain
with Infoseek Japan.
E. MANAGEMENT:
1. Infoseek Japan manages relationships with strategic partners and
alliances in Japan (i.e. content providers, service providers),
promotes distribution and supports the translation efforts, offers
ongoing local technical support, and oversees the ongoing Phase Two
Service.
2. Infoseek manages technology direction, provides assistance in on-going
design matters and U.S. technical support.
3. Infoseek Japan manages general day-to-day operation of Infoseek Japan.
4. Kanematsu will appoint Infoseek Japan operations and finance personnel
and will secure and/or provide all financial support of the ongoing
operating costs of Infoseek Japan.
5. At a minimum, Infoseek retains the right to appoint the lead
management positions of Corporate Marketing, Advertising, Direct
Marketing, and Editorial. Infoseek shall also participate in the
selection of Engineering management personnel.
6. Infoseek retains the right to a) appoint a U.S. representative
director(s) on the Infoseek Japan board to work in conjunction with a
Japanese counterpart(s) and b) appoint the appropriate number of
directors for the Infoseek Japan Board of Directors according to its
ownership equity ratio of Infoseek Japan.
7. Appropriate mutually agreeable provisions regarding protection of the
parties' interests in the joint venture will be added.
F. TRADEMARKS:
All applicable Infoseek trademarks will be licensed to Infoseek Japan
solely for use in conjunction with the Phase Two Service. Infoseek retains
ownership of all Infoseek trademarks.
G. SCHEDULE:
To be determined.
III. GENERAL
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A. Each party shall bear its own expenses and costs with regard to all
negotiations and activities relating to this MOU.
B. Notwithstanding any other provision of this MOU, to the extent the
provisions of the Infoseek Mutual Confidential Disclosure Agreement dated
January 20, 1996 ("CDA") conflict with the terms of this MOU, the CDA shall
control.
C. Unless either party sooner terminates this MOU, with or without cause, or
* unless the Marketing Alliance Agreement is not entered into on or before
March 29, 1996, this MOU will continue in effect until August 31, 1996.
Continuation of negotiations beyond these respective dates shall be
formally agreed upon in writing by the parties to extend the term for the
duration of negotiations.
D. Upon expiration or termination of this MOU, in the absence of a subsequent
Comprehensive Agreement, only Section III B of this MOU and Section III E
shall survive and continue.
E. Neither party shall make a claim against, nor be liable to, the other for
actual or consequential damages, including but not limited to lost profits,
suffered by it because of any performance or failure to perform any
obligations hereunder, or for termination of negotiations without a
Comprehensive Agreement. The foregoing limitation shall not be construed to
apply to claims arising separately from this MOU and negotiations hereunder
or actions under or with respect to unrelated or superseding contracts or
agreements. Nothing in this MOU obligates either party to sell or purchase
any item from the other party, nor to enter into any Comprehensive
Agreement.
F. No obligation, covenant, or agreement relating to this MOU shall be binding
until any of the Comprehensive Agreements are approved and signed by
Kanematsu and Infoseek.
G. Both parties agree that this MOU is the complete and exclusive statement of
understanding between the parties and supersedes all prior agreements,
whether oral or written, with respect to the subject matter hereof.
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ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
INFOSEEK CORPORATION KANEMATSU CORPORATION
IN SANTA CLARA, CALIFORNIA USA IN TOKYO, JAPAN
By: By:
----------------------------------- -----------------------------
Authorized Signature Authorized Signature
Name: ROBERT JOHNSON Name: MASAAKI TAKEUCHI
--------------------------------- ---------------------------
Print Print
Title: CEO Title: General Manager
------------------------------- Computer Communication
& Aircraft Div.
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Date: March 30, 1996 Date: March 11, 1996
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TYPE: EX-10.49
SEQUENCE: 12
DESCRIPTION: MARKETING ALLIANCE AGREEMENT W/ KANEMATSU 4/11/96
EXHIBIT 10.49
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
MARKETING ALLIANCE AGREEMENT
This Marketing Alliance Agreement ("Agreement") is entered as of April 11,
1996 by and between Infoseek Corporation ("Infoseek"), a California corporation
with its principal place of business at 2620 Augustine Drive, Suite 250, Santa
Clara, California 95054 (facsimile number: 408-986-1889), and Kanematsu
Corporation ("Kanematsu"), a Japanese corporation with its principal place of
business at 2-1, Shibaura 1-Chome, Minato-ku, Tokyo 105-05 (facsimile number:
011-81-3-5440-6524).
I. BACKGROUND
Infoseek and Kanematsu intend to pursue a two-phase strategic alliance.
This Marketing Alliance Agreement comprises the first phase of the alliance
whereby Infoseek and Kanematsu Corporation agree to jointly develop, deploy
and operate the Japanese-language Infoseek service described below ("Phase
One Service"). In the second phase of the alliance ("Phase Two Service"),
Infoseek and Kanematsu intend to enter into a Joint Venture Agreement to
create "Infoseek Japan JV," a joint venture corporation in Japan, which
will deploy and operate a second generation Infoseek Japan search service
utilizing an internationalized indexing and searching technology ("Moby
Technology") intended to be developed and financed during the Phase One
Service. This Agreement sets forth the terms and conditions of the first
phase of the strategic alliance and the exchange of information and conduct
of the parties for the Phase One Service. Furthermore, the parties
acknowledge that Kanematsu will be participating, on the same terms as the
other investors, in the Infoseek Series E Preferred Stock financing, which
the parties anticipate will close on or about the time of execution of this
Agreement. This Agreement does not create any obligations, other than those
created in the MOU, of either party with respect to Phase Two Service or
the Joint Venture Agreement; Phase Two Service and the Joint Venture
Agreement are subject to negotiation under the terms of the March 11, 1996
Memorandum of Understanding ("MOU") between the parties which,
notwithstanding Section M(1) hereof, remains in effect and in existence in
accordance with its terms insofar as it relates to the Phase Two Service
and the Joint Venture Agreement.
II. PHASE ONE SERVICE OF THE INFOSEEK AND KANEMATSU STRATEGIC ALLIANCE
A. PRODUCT/SERVICE:
The Phase One Service will consist of three major components:
i. a command bar with Japanese relevant content,
ii. an indexing and search capability which will index and search
Japanese documents and
iii. a directory which will contain listings of Japanese sites with
reviews written in the Japanese language and a translation of the
Infoseek Guide Directory into the Japanese language ("Infoseek Guide
Directory" is defined as Infoseek's current English language based
directory).
1. Kanematsu will be responsible for acquiring, on a continuing basis,
third-party content to be placed on the command bar of the Phase One
Service and all costs associated with such acquisition.
2. Kanematsu will be responsible for acquiring or licensing a third
party indexing and searching capability which will index and search
for Japanese documents,
and all costs associated with such acquisition. This indexing and
searching capability will be deployed on the Phase One Service.
3. Kanematsu will be responsible for acquiring or licensing, on a
continuing basis, third party directories for use in the Phase One
Service which will contain listings of Japanese sites with reviews
written in the Japanese language, and all costs associated with such
acquisition.
4. Kanematsu will be responsible for translating the existing Infoseek
Guide Directory for use in the Phase One Service (including site
label/title and site descriptions/reviews).
5. Infoseek will assist Kanematsu in adding third-party content to the
Infoseek Japan command bar.
6. Infoseek will assist Kanematsu in adding translation changes to the
Infoseek Japan directory, including assistance in adding listings of
Japanese sites with reviews written in the Japanese language.
7. Infoseek will have the overall responsibility for the design,
implementation and operation of the Phase One Service, including the
incorporation of the Kanematsu acquired or licensed third-party
content and technology into the Phase One Service; accordingly,
Kanematsu's activities under Sections A(1), A(2), A(3) and A(4) will
be subject to the reasonable approval of Infoseek.
8. Kanematsu agrees to (i) assist Infoseek in understanding the Japanese
market and the Kanematsu acquired or licensed third-party content and
technology and (ii) provide the necessary level of business and
engineering resources required during the Phase One Service to
implement Sections A(1), A(2), A(3) and A(4), namely to, without
limitations:
i. license or acquire Japanese relevant third-party content,
ii. license or acquire third-party directory listings of Japanese
sites,
iii. license or acquire third-party indexing and search capability
to be deployed on the Phase One Service and
iv. translate the existing Infoseek Guide Directory listings.
Any payments to third parties in connection with anything acquired
or licensed from a third-party, as contemplated above, whether in
connection with up-front fees, royalties or otherwise will be borne
by Kanematsu and Kanematsu will indemnify Infoseek from any damages,
liabilities, costs, expenses and attorneys fees in connection with
any claim of infringement, misappropriation or otherwise in
connection therewith or with anything else provided by Kanematsu.
Infoseek will similarly indemnify Kanematsu from third party claims
of infringement or misappropriation by anything provided by Infoseek
to Kanematsu.
9. The Phase One Service shall be operated by Infoseek at an Infoseek
facility in the United States.
B. FINANCIAL:
1. Within five (5) days after the date this Agreement is signed by the
* parties, Kanematsu will make a non-refundable payment to Infoseek of
[ ], which is intended to fund the direct costs of the design,
implementation and operation
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* of the Phase One Service; up to [ ] of which is associated with the
purchase of dedicated equipment for the Phase One Service. This
equipment may be purchased directly or leased by Infoseek as
determined by Infoseek or purchased directly or leased by Kanematsu,
whichever is more cost effective for the parties. Any purchased
equipment will be owned by Kanematsu. Infoseek has provided Kanematsu
with a rough breakdown of currently anticipated cost categories.
2. Both Infoseek and Kanematsu will sell advertising on the Phase One
Service pursuant to standard mutually agreed upon terms, conditions
and policies; provided that neither party may make any commitment on
the other party's behalf. Kanematsu shall forward any advertising
order to Infoseek for acceptance and implementation. Each party
will be responsible for collecting on advertising it sells. If
* Infoseek sells advertising, Infoseek will receive [ ] of the Net
Advertising Revenues from advertising which Infoseek sells ("Net
Advertising Revenues" is defined as the gross advertising revenues
actually received less any applicable advertising frequency
discounts, advertising agency discounts, advertising sales
commissions, refund, rebates and other standard deductions). If
* Kanematsu sells advertising, Kanematsu will receive [ ] of Net
Advertising Revenues from advertising for which Kanematsu forwarded
firm orders. However, neither party will be entitled under this
* Section B(2) to [ ] of Net Advertising Revenue from advertising [ ]
* those specified in the [ ] applicable [ ] for the Phase One Service.
* (Until a separate suggested [ ] is mutually agreed, Infoseek's
* current [ ] will be used.)
* 3. Notwithstanding the [ ] Kanematsu may receive pursuant to Section
* B(2), Kanematsu will receive [ ] of the Net Advertising Revenues of
the Phase One Service as consideration for acquiring the content,
licensing or acquiring an indexing and search capability, licensing
or acquiring the directory listings, and translation of the Infoseek
Guide Directory listings.
4. It is Infoseek's assumption under this Agreement and the MOU that a
* [ ] arrangement between Infoseek and Infoseek's major distribution
* entity will [ ] for the Phase One Service and Phase Two Service on
such distributor's search page. If this flat fee payment arrangement
is made, then any expenses associated with this arrangement will not
be deducted from the Net Advertising Revenue during the Phase One
Service. If a flat fee payment arrangement is not made, the above
percentages, as well as the MOU's allocations, to which Kanematsu is
entitled may have to be adjusted downward. Such adjustment shall be
mutually agreed upon by both parties. Such agreement shall not be
unreasonably withheld or delayed.
5. Both parties acknowledge that royalties and third party payments paid
by Infoseek to entities including, without limitation, distribution
entities (other than the major distribution entity referred to in
Section B(4) above), may be attributable to the Phase One Service and
may be apportioned against the remaining balance of the Net
Advertising Revenues prior to the distribution to the parties.
(However, any payments Kanematsu is required to bear under Section A
hereof, except for mutually agreed payments to content providers
based on Net Advertising Revenues, will not be so apportioned.) Both
parties will mutually agree in writing and in advance to any such
royalties and third party payments attributable to the Phase One
Service.
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6. Any remaining balance of the Net Advertising Revenues shall be shared
on an equal basis by Infoseek and Kanematsu.
7. Any internationalization engineering performed by Infoseek during the
* Phase One Service term, with [ ] as to cost to prepare and develop
* the Moby Technology to be localized for the Phase Two Service, [ ].
Costs associated with this engineering effort will be determined by
Infoseek and shall be limited to direct costs. If the Phase Two
Service is implemented, Infoseek shall grant a royalty-free (except
as provided in Section II.C.7 of the MOU) license to the relevant
Infoseek technology to Infoseek Japan JV for the Phase Two Service,
in accordance with Section II.C.4 of the MOU. If the Phase Two
Service is not implemented and the parties cannot agree on a
* mutually satisfactory licensing arrangement, [
* ].
8. Within thirty (30) days after the end of each calendar quarter, each
party will provide the other with its calculation of Net Advertising
Revenues and apportionment with respect thereto in detail. Within an
additional thirty (30) days thereafter, the parties will reconcile
their accounts and make payments (i) to effect the foregoing
allocation of Net Advertising Revenues and (ii) to ensure that each
party is reimbursed for the portion borne by it of amounts deducted
in determining Net Advertising Revenues or apportioned against Net
Advertising Revenues. All payments between the parties will be made
in U.S. dollars and all conversions from yen will be calculated based
on the mean of the exchange rates quoted in the New York Wall Street
Journal for the first day of the applicable quarter and the last day
of the applicable quarter. Each party shall have the right, at its
own expense, during the term of this Agreement and for one (1) year
thereafter, to hire an independent public accountant, reasonably
acceptable to the other, to examine the relevant financial books and
records of the other at normal business hours, upon reasonable notice
to determine or verify the calculation and apportionment of Net
* Advertising Revenues. If errors of [ ] percent [ ] or more in the
other party's favor are discovered as a result of such examination,
the other party shall bear the expense of such examination and pay
the deficiency immediately. As a condition to such examination, the
independent public accountant shall execute a written agreement,
reasonably satisfactory in form and substance, to maintain in
confidence all information obtained during the course of any such
examination, except for disclosure to the hiring party as necessary
to evidence improper calculation or apportionment of Net Advertising
Revenues.
9. It is currently anticipated that if the Phase Two Service is
* implemented, Kanematsu shall [ ] incurred pursuant to Sections [ ]
* and [ ] of this Agreement from Infoseek Japan JV, subject to
* financing for such [ ] being made available to Infoseek Japan JV
* from Kanematsu over [ ] period beginning on the [ ] of the Joint
* Venture Agreement at a [ ] rate and on [ ] to be [ ] between
Kanematsu and Infoseek Japan JV.
C. TRADEMARKS:
All applicable Infoseek trademarks and service marks will be licensed to
Kanematsu solely for use in advertising brochures and other promotional
material in conjunction with the Phase One Service, all subject to the
reasonable approval of Infoseek. Infoseek retains ownership of all
Infoseek trademarks and service marks. Kanematsu agrees to
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utilize the Infoseek trademarks and service marks according to Infoseek's
current guidelines.
D. ALLIANCES:
1. Kanematsu will pursue the necessary alliances to acquire third-party
content for the Phase One Service.
2. Kanematsu will pursue an alliance with Dentsu for advertising sales
and NTT for business listings (which may include regional and local
advertising).
* 3. Infoseek will [ ] for premier listing of the Phase One Service on
* the [ ] page for the Japanese version of the [ ].
E. TECHNOLOGY OWNERSHIP:
1. Ownership of any Infoseek technology, including but not limited to
its indexing and search capability, and any technology licensed or
acquired by Infoseek, and all applicable interfaces developed by
Infoseek to enable the translation efforts, will remain with Infoseek
and its licensors. Furthermore, Infoseek shall exclusively own all
right, title and interest (including patent rights, copyrights, trade
secret rights, and other rights throughout the world) in any
inventions, works of authorship, ideas or information made or
conceived or reduced to practice, during the term of this Agreement,
by Kanematsu personnel that are loaned to Infoseek as contemplated by
Section H(1) or that otherwise assist Infoseek in connection with the
subject matter of this Agreement or the Moby Technology.
i. Kanematsu hereby makes and will provide all assignments
necessary to accomplish the foregoing ownership provision and
agrees to assist Infoseek, at Infoseek's expense, in every
proper way to evidence, record and perfect the assignment and
to apply for and obtain recordation of and from time to time
enforce, maintain, and defend such proprietary right.
ii. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other
rights that may be known as or referred to as "moral rights"
(collectively "Moral Rights"). To the extent such Moral Rights
cannot be assigned under the applicable law, the assigning
party hereby waives such Moral Rights and consents to any
action consistent with the terms of this Agreement that would
violate such Moral Rights in the absence of such consent. The
assigning party will obtain and confirm any such waivers and
consents from time to time as requested by the other party.
2. Except as provided in Section E(1), ownership of any Kanematsu
technology, including but not limited to its index and search
capability, and any technology licensed or acquired by Kanematsu,
will remain with Kanematsu and its licensors. However, if any
developments or ideas assigned to Infoseek under Section E(1) cannot
be reasonably made, used, reproduced or distributed without using or
violating the intellectual property rights in the technology owned by
Kanematsu and not assigned hereunder, Kanematsu hereby grants the
Infoseek a perpetual, worldwide, royalty-free, non-exclusive,
sublicensable right and license to exploit and exercise all such
technology rights, except those technology rights related to indexing
and searching technology acquired by Kanematsu pursuant to fulfilling
its obligation in Section A(2).
- ---------------
* CONFIDENTIAL TREATMENT REQUESTED
FOR REDACTED PORTION
5
F. CONFIDENTIALITY:
1. Kanematsu agrees that all code, inventions, algorithms, know-how and
ideas and, if in (or, within 30 days of disclosure, reduced to)
tangible form and marked as "Confidential" or "Proprietary," all
other business, technical and financial information it obtains from
Infoseek, shall be the Proprietary Information of Infoseek. Infoseek
agrees that any marketing techniques or information it obtains from
Kanematsu that are in (or, within 30 days of disclosure are reduced
to) tangible form and marked "Confidential" or "Proprietary" shall be
the Proprietary Information of Kanematsu. Except as expressly and
unambiguously allowed herein, each party will hold in confidence and
not use or disclose any of the other party's Proprietary Information
and shall similarly bind its employees in writing. Neither party
shall be obligated under this Section F with respect to information
it can document:
i. is or has become readily publicly available without
restriction through no fault of the receiving party or its
employees or agents; or
ii. is received by it without restriction from a third party
lawfully in possession of such information and lawfully
empowered to disclose such information; or
iii. was rightfully in the possession of the receiving party
without restriction prior to its disclosure by the disclosing
party; or
iv. was independently developed by employees or consultants of the
receiving party without access to the disclosing party's
Proprietary Information.
Notwithstanding the foregoing, anything assigned by Kanematsu to
Infoseek in connection with this Agreement shall be deemed the
Proprietary Information of Infoseek disclosed by Infoseek to
Kanematsu and exceptions (iii) and (iv) above will not be applicable
thereto.
2. Each party acknowledges that any disclosure or unauthorized use of
the other party's Proprietary Information will constitute a material
breach of this Agreement and cause substantial harm to such other
party for which damages would not be a fully adequate remedy, and,
therefore, in the event of any such breach, in addition to other
available remedies, such other party shall have the right to obtain
injunctive relief.
G. LIMITED LIABILITY:
1. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, EXCEPT
UNDER SECTION F, NEITHER PARTY SHALL BE LIABLE OR OBLIGATED UNDER ANY
SECTION OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER.
H. MANAGEMENT:
1. Infoseek shall be responsible for the program management of the
design, development and operation of the Phase One Service, which may
include management of Kanematsu personnel loaned to Infoseek at
Infoseek's request (such personnel will remain employees of Kanematsu
and Kanematsu will be
6
responsible for compensation, insurance, tax withholding and all
other matters with respect to such employees); Infoseek may terminate
the loan of any Kanematsu personnel at any time at its will.
Employees of Kanematsu who are on loan to Infoseek do not have any
power or authority whatsoever to enter into any contract or
agreements with, or make any commitment to, Infoseek on Kanematsu's
behalf, unless expressly authorized to do so by Kanematsu.
2. During the Phase One Service period and in anticipation of the Phase
Two Service, Infoseek and Kanematsu will cooperate to appoint the
management personnel for the Phase Two Service.
3. During the Phase One Service period, Kanematsu shall organize and
staff a working committee ("Working Committee") within Kanematsu to
promote Infoseek Japan, sell advertising, and prepare for the Phase
Two Service.
4. Kanematsu and any members of its Working Committee, may assist
Infoseek, at Infoseek's request, in the operation of the Phase One
Service on an interim basis.
I. TERM AND TERMINATION:
1. The term of the Phase One Service shall be for a period ending upon
the completion of the development of Infoseek's Moby Technology which
is anticipated to be the end of July 1996. At the end of the Phase
One Service term both parties anticipate transitioning to the Phase
Two Service. In the event Infoseek and Kanematsu agree that the Phase
One Service should be extended beyond July 1996, such extension shall
be subject to terms for such extension as may be mutually agreed upon
in writing, including without limitation, additional financing for
such extended Phase One Service period.
2. Either party may terminate this Agreement upon 30 days written notice
if the assumption made in Section B(4) does not materialize or any
financial arrangement or adjustment referred to in Section B is
materially wrong or cannot be agreed upon or if such party is
otherwise materially losing money on the Phase One Service.
3. If either party should materially breach a material provision of this
Agreement, the other may terminate this Agreement upon 60 days
written notice unless the breach is cured within the notice period.
4. Responsibilities for payments to third parties, indemnities and
accrued payments, as well as Sections E, F, G and J through M will
survive any expiration or termination of this Agreement.
J. RELATIONSHIP OF THE PARTIES:
Notwithstanding any provision hereof, for all purposes of this Agreement
each party shall be and act as an independent contractor and not as
partner, joint venturer, or agent of the other and shall not bind nor
attempt to bind the other to any contract or obligation.
K. ASSIGNMENT:
Neither party shall have any right or ability to assign, transfer, or
sublicense any obligations or benefits under this Agreement without the
written consent of the other
7
except that a party may assign and transfer this Agreement and its rights
and obligations hereunder to any third party who succeeds to substantially
all its business or assets.
L. NOTICE:
Notices under this Agreement shall be sufficient only if personally
delivered, sent by confirmed facsimile, delivered by a major commercial
rapid delivery courier service or mailed by certified or registered mail,
return receipt requested to a party at its addresses set forth herein or as
amended by notice pursuant to this subsection. If not received sooner,
notice by mail shall be deemed received 5 days after deposit in the U.S.
mails.
M. MISCELLANEOUS:
1. This Agreement supersedes all proposals, oral or written, all
negotiations, conversations, or discussions between or among parties
relating to the subject matter of this Agreement and all past dealing
or industry custom. The failure of either party to enforce its rights
under this Agreement at any time for any period shall not be
construed as a waiver of such rights. No changes or modifications or
waivers are to be made to this Agreement unless evidenced in writing
and signed for and on behalf of both parties.
2. During the term of this Agreement and for eighteen months thereafter,
neither party will encourage or solicit any employee or consultant to
leave the employ of the other party; the foregoing does not prohibit
mass media advertising not specifically directed towards the other
party's employees or consultants.
* 3. Both parties agree that [ ] of this Agreement or, [ ] the MOU is [ ],
neither party nor any affiliate thereof, will engage in any
* Internet [ ] or Internet [ ] business or activity (or preparation
* therefor) specifically directed to [ ] or [ ] markets other than
pursuant to this Agreement, or assist or encourage any other person
* or organization in doing so. This will not prevent [ ] from accepting
* [ ] in connection with an [ ] service not specifically [ ] on [ ].
4. In the event that any provision of this Agreement shall be determined
to be illegal or unenforceable, that provision will be limited or
eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.
5. Both parties agree that no press releases or other publicity relating
to the existence or substance of the matters contained herein will be
made without the joint approval of the parties.
6. This Agreement shall be governed by and construed under the laws of
the State of California and the United States without regard to
conflicts of laws provisions thereof and without regard to the United
Nations Convention on Contracts for the International Sale of Goods.
Any disputes will be settled by arbitration in Santa Clara,
California (which arbitration shall be binding and enforceable in any
court of competent jurisdiction) in accordance with the rules of the
American Arbitration Association (AAA). In any action or proceeding
to enforce rights under this Agreement, the prevailing party shall be
entitled to recover costs and attorneys' fees.
---------------
* CONFIDENTIAL TREATMENT REQUESTED
FOR REDACTED PORTION
8
7. The rights and remedies of a party set forth herein with respect to
failure of the other to comply with the terms of this Agreement
(including, without limitation, rights of full termination of this
Agreement) are not exclusive, the exercise thereof shall not
constitute an election of remedies and the aggrieved party shall in
all events be entitled to seek whatever additional remedies may be
available in law or in equity.
8. No liability or loss of rights hereunder shall result to either party
from delay or failure in performance (other than payment) caused by
force majeure, that is, circumstances beyond the reasonable control
of such party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth above.
INFOSEEK CORPORATION
in Santa Clara, California, USA
By
-------------------------------
Name ROBERT E. L. JOHNSON
-----------------------------
Title April 11, 1996
----------------------------
KANEMATSU CORPORATION
in Tokyo, Japan
By
-------------------------------
Name MASAAKI TAKEUCHI
-----------------------------
Title General Manager
Computer Communication & Aircraft Div.
-------------------------------------
9
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