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EXHIBIT 10.48
*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
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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
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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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* 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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* 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:
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Authorized Signature Authorized Signature
Name: ROBERT JOHNSON Name: MASAAKI TAKEUCHI
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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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