Joint Venture Agreement - SB Holdings (Europe) Ltd. Yahoo! Inc.
JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT, dated as of November 1, 1996, by and
between SB Holdings (Europe) Ltd. ("SOFTBANK"), a company organized under
the laws of the United Kingdom, and Yahoo! Inc., a California corporation
("Yahoo").
WHEREAS, Yahoo offers in the United States and certain other
geographic areas certain on-line navigational services on the World Wide
Web, including, without limitation, the Yahoo! Internet Guide.
WHEREAS, SOFTBANK through its affiliates Ziff-Davis UK, Ltd.,
Ziff-Davis France, SA and Ziff-Davis Verlag, GmbH (the "ZD Affiliates") is
a leading computer publisher in the United Kingdom, France and Germany;
WHEREAS, an affiliate of SOFTBANK indirectly owns a minority
interest in Yahoo; and
WHEREAS, SOFTBANK and Yahoo, directly or through wholly owned
affiliates, wish to jointly form joint venture companies in Germany, the
United Kingdom, and France (each a Company, collectively, the "Companies"),
to establish and manage versions of the Yahoo Internet Guide for the United
Kingdom, France and Germany (the "Territories"), develop related on-line
navigational services, and conduct other related businesses;
NOW, THEREFORE, the parties hereby agree as follows:
1. OBJECTIVES OF THE COMPANIES
The objectives of the Companies shall be to engage in the
businesses set forth below:
(i) establishment and management in the Territories of localized
versions of the Yahoo Internet Guide to be branded with the Yahoo!
name such as Yahoo! UK, Yahoo! France, and Yahoo! Germany (the
"Localized Guides"), all as set forth in the Business Plan attached as
Exhibit A (the "Business Plan");
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(ii) development and commercialization of related on-line
navigational services and other Yahoo branded products within the
Territories including off line products and publications (other than
as specified in 1(v) below) as described in the Business Plan;
(iii) related sale of on-line advertisement space through its
own efforts or through one or more third party sales representatives;
(iv) addition of specific informational content to the Localized
Guide in each of the Territories;
(v) [XXXX]
(vi) [XXXX]; and
(vii) other businesses relating to the foregoing as agreed upon
by the parties from time to time.
2. SALE AND PURCHASE OF SHARES; OWNERSHIP OF THE COMPANY.
(a) Prior to this date, Yahoo has organized the Companies in the
Territories and has invested, or shall invest (including amounts counted as
surplus capital), the aggregate amount of $1,400,000 in the Companies.
Subject to the terms and conditions hereof and pursuant to such
subscription agreements as local law may require, the Companies shall
issue, and Yahoo (to the extent it has not already fully subscribed) and
SOFTBANK shall subscribe to shares (or other ownership interests as local
law may dictate) of each of the Companies so that after such subscriptions
SOFTBANK shall own a 30% interest in each such Company and Yahoo shall own
a 70% interest. The total to be contributed by SOFTBANK for its shares in
all the Companies shall total $600,000 (including surplus capital). The
Companies are also reimbursing each of the parties for activities taken
prior to this date on behalf of the Companies and assuming any obligations
incurred on behalf of the Companies.
(b) Each party shall make such additional contributions to the
capital of the Companies (above the amounts in (a)) as the Board of
Directors shall determine in good faith are required to carry out the
Business Plan, up to an aggregate
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additional contribution by Yahoo of $1,400,000 (for a total aggregate
contribution of $2,800,000), and by SOFTBANK, of an additional $600,000
(for a total aggregate contribution by SOFTBANK of $1,200,000.
(c) Yahoo may transfer up to 10% of its shares in the Companies to a
third party subject to SOFTBANK's consent to that party, which should not
be unreasonably withheld. If the parties shall mutually determine that
such third party shall hold more than 10% of the Companies, that third
party's shares above 10% shall be transferred pro rata from Yahoo and
SOFTBANK or additional shares may be issued by such third party so that
Yahoo's and SOFTBANK's interests are diluted pro rata.
3. REPRESENTATIONS AND WARRANTIES OF SOFTBANK
SOFTBANK hereby represents and warrants to Yahoo as follows:
(a) SOFTBANK has been duly incorporated, and is a validly
existing corporation under the laws of the UK and has full power and
authority to enter into and perform this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by SOFTBANK and constitutes a valid and binding agreement of
SOFTBANK, enforceable against SOFTBANK in accordance with its terms.
(c) No consent, approval or authorization of or declaration or
filing with any governmental authority or other person or entity on the
part of SOFTBANK is required in connection with the execution or delivery
of this Agreement or the consummation of the transactions contemplated
hereby.
4. REPRESENTATIONS AND WARRANTIES OF YAHOO
Yahoo represents and warrants to SOFTBANK as follows:
(a) Yahoo has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of California, and
has full power and authority to enter into and perform this Agreement.
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(b) This Agreement has been duly authorized, executed and
delivered by Yahoo and constitutes a valid and binding agreement of Yahoo,
enforceable against Yahoo in accordance with its terms.
(c) No consent, approval or authorization of or declaration or
filing with any governmental authority or other person or entity on the
part of Yahoo is required in connection with the execution or delivery of
this Agreement or the consummation of the transactions contemplated hereby.
5. LICENSE/SERVICES AGREEMENTS
(a) Concurrently with the execution of this Agreement, Yahoo
shall enter into license agreements, in the forms attached hereto in
Exhibit B (the "License Agreements"), with each of the Companies.
(b) Concurrently with the execution of this Agreement, the ZD
Affiliates are entering into Services Agreements in the forms attached in
Exhibit C with each of the Companies (the "Services Agreements").
6. BOARD OF DIRECTORS; STATUTORY AUDITORS
(a) Subject to permissible corporate law in each of the
Territories, the Companies shall be managed by a single Board of Directors
with five members. SOFTBANK shall designate two Directors and Yahoo shall
designate three Directors. To the extent local law does not permit the
Companies to have a single Board of Directors, Yahoo and SOFTBANK shall
create a Management Committee of five members which shall act in the same
way as the single Board of Directors would act and each party shall cause
the members of each Board of Directors or other similar management group in
each of the Territories to act in accordance with the determination of that
Management Committee. If such a Management Committee is set up, any
reference to the Board of Directors or to Directors shall be deemed a
reference to the Management Committee and to the members of that Committee.
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(b) To the extent required by local law, each Company shall have
one Statutory Auditor, which shall be designated by Yahoo.
(c) The Companies shall have a Managing Director, who shall also
be the President (or similar officer) of each Company. The President and
Managing Director shall be a nominee of Yahoo, subject to Softbank's
approval, not unreasonably withheld.
(d) In case of a vacancy in the office of Director, Statutory
Auditor or Managing Director during the term of office for whatever reason,
the vacancy shall be filled by the party that nominated the Director,
Statutory Auditor or Managing Director whose office became vacant, but
still subject in the case of Managing Director to SOFTBANK's approval, not
unreasonably withheld.
(e) At any annual or special meeting of shareholders or any
meeting of the Board of Directors of any Company called for such purpose,
each party shall vote or cause to be voted all shares owned by it for the
election of nominees designated as Directors, Statutory Auditor or Managing
Director in accordance with this Section 6 and otherwise as may be
necessary to implement the provisions of this Agreement.
(f) No change shall be made in the number and/or allocation of
Directors, Statutory Auditor or Managing Director as stated in this Section
6 or in the Articles of Incorporation (or similar corporate document) of
any Company; provided that if the parties' respective shareholdings change
in a material way, the parties shall adjust the number and allocation of
Directors if and to the extent appropriate so that their respective
representation on the Board and in that Company is generally proportionate
to their respective shareholdings.
7. MANAGEMENT OF THE COMPANIES
(a) The Board of Directors shall be responsible for establishing
the overall policy and overall operating policies with respect to the
business affairs of the Companies.
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(b) Except as otherwise required by mandatory provisions of law
and as otherwise provided herein, resolutions of the Board of Directors
shall be adopted only by the affirmative vote of a majority of the
Directors present at a meeting duly called at which a quorum is present. A
majority of the Board of Directors shall constitute a quorum for the
transaction of business provided at least one Director designated by
SOFTBANK is present. Board meetings shall be held in accordance with
applicable local law provided that the Board of Directors shall meet no
less frequently than once in each calendar month. Any Director may attend
a Board meeting by conference telephone.
(c) Notwithstanding the general provisions set forth above, in
addition to any special approval requirements under the Articles of
Incorporation (or similar corporate document) or under local law, each of
the following corporate actions may be taken by a Company only (x) in the
case of any action that is permitted by law or under the Articles of
Incorporation to be taken by the Board of Directors alone, only upon
authorization by affirmative vote of at least one SOFTBANK director and at
least one Yahoo director and (y) in the case of actions required by law or
the Articles of Incorporation to be approved by the Company's shareholders,
only upon authorization by affirmative vote of both Yahoo and SOFTBANK as
shareholders:
(i) any merger or consolidation, whether or not the Company
is the surviving corporation; any sale, lease, exchange or other
disposition of all or substantially all of the assets of the Company;
any acquisition of all or substantially all of the capital stock or
assets of any other entity; or the liquidation or voluntary
dissolution of the Company;
(ii) any sale, lease, exchange or other disposition of
substantial assets (except in the ordinary course of business) of the
Company;
(iii) any capital expenditure of $100,000 or more, except as
may be specified in the Business Plan;
(iv) the raising of additional equity capital or the
issuance or sale of any debt or equity securities (including any
shareholder loan or guaranty) above the
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amounts specified in Section 2(b) above, and the terms thereof,
whether or not in connection with a call for additional capital
pursuant to Section 8 hereof;
(v) any declaration or payment of any dividend or other
distribution, directly or indirectly, on account of any shares of
capital stock of the Company, or any redemption, retirement, purchase
or other acquisition, directly or indirectly, by the Company of any
such shares (or of any warrants, rights or options to acquire any such
shares);
(vi) the incurrence or guarantee (directly or indirectly) by
the Company with respect to any indebtedness for borrowed money in
excess of $50,000;
(vii) any amendment, alteration or repeal of any provision of
the Articles of Incorporation (or similar corporate document) of the
Company; or
(viii) engagement in any business other than as set forth in
Section 1 hereof and activities incidental thereto, either directly or
through any corporation or other entity in which the Company has,
directly or indirectly, an equity interest;
(ix) approval of an annual business plan and operating
budget for the Company (which shall be made no later than thirty (30)
days prior to the commencement of each fiscal year of the Company),
and any determination to deviate in any material respect from such
business plan or budget as so approved;
(x) except as may be set forth in the Business Plan, the
authorization of execution of any contract or agreement (i) having a
period of performance greater than one year, (ii) involving aggregate
payments or consideration in excess of $100,000, (iii) involving any
license of trademarks, patents, copyrights or other intellectual
property rights of the Company, and (iv) between the Company and any
officer, shareholder or Director of the Company (or their respective
affiliates), and any waiver or variance of any contract described in
(i)-(iv) above; or
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(xi) except as may be set forth in the Business Plan,
compensation for all officers, Directors and Statutory Auditors of the
Company.
To the extent permitted by applicable law, the foregoing approval
requirements shall at all times also be set forth in the Articles of
Incorporation of the Company, unless amended as set forth.
8. ADDITIONAL CAPITAL
Subject to Section 7(c) hereof, the Board of each Company may, by
written notice to the parties, call for the parties to subscribe for
additional shares of capital stock of the Company or to make loan
guarantees or loans to the Company in proportion to their respective
holdings of common stock above the amounts specified in Section 2(b). If
one party shall decline to subscribe to additional shares above the amounts
specified in Section 2(b), and the other party shall subscribe to
additional shares, the subscribing party's total percentage of shares shall
increase and the non-subscribing party's ownership interest may thereby be
diluted.
9. DISPOSITION OF COMMON STOCK
Neither party shall directly or indirectly sell, assign, transfer
or otherwise dispose of, or pledge or otherwise encumber, any shares of
common stock of any Company without the prior consent of the other party
except to an affiliate of that party provided, however, the selling party
shall continue to be liable for all of its obligations.
10. ACCOUNTING; ACCESS TO INFORMATION
(a) The fiscal year of each Company shall be the calendar year.
(b) Each Company shall maintain its accounts and prepare its
financial statements (including, without limitation, a balance sheet,
profit and loss statement and statement of cash flows) in accordance with
generally accepted accounting principles applicable in the country of
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incorporation, and shall cause its annual financial statements to be
audited by an internationally recognized independent auditing firm
reasonably acceptable to each party, and such financial statements and the
auditors' opinion to be delivered to each party no later than sixty (60)
days following the end of each fiscal year. Each Company also shall
deliver to each party unaudited monthly and quarterly financial statements
within thirty days following the end of each month or fiscal quarter, as
the case may be, certified (in the case of quarterly financial statements)
by the chief accounting officer of the Company. All financial statements
shall be accurately and completely translated into English prior to
delivery to SOFTBANK or Yahoo, and shall be accompanied by a reasonably
detailed schedule that sets forth the differences between the generally
accepted accounting principles applied in that Company's country of
incorporation and U.S. generally accepted accounting principles as applied
to such financial statements.
(c) Each party shall, during all business hours and at all other
times as reasonable, have access to the books and records of each Company
and to the legal, tax and auditing personnel of that Company, internal and
external; provided, however, that the cost and expense necessary for such
inspection shall be borne by the party making the inspection.
11. TERM OF THE AGREEMENT
(a) Subject to Section 12, this Agreement shall remain in effect
perpetually, provided that, if for the calendar year ending [XXXX]. For
purposes of this paragraph the "primary business" of the Companies shall
mean the business of providing the Localized Guides and selling ad space in
connection with or obtaining other revenues from those Guides; all other
products and services of the Companies shall be excluded.
(b) [XXXX].
12. TERMINATION OF THE AGREEMENT
(a) If either party fails in any material respect to perform or
fulfill in the time and manner herein provided
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any obligation or condition herein required to be performed or fulfilled by
such party, and if such default shall continue for sixty (60) days after
written notice thereof from the other party, then the other party shall
have the right to terminate this Agreement by written notice of termination
to the defaulting party at any time after such sixty (60) days. Either
party may also terminate this Agreement immediately by giving a written
notice to the other party in the event such other party shall be dissolved
or liquidated or declared insolvent or bankrupt.
(b) Upon termination of this Agreement [XXXX].
(c) Termination of this Agreement for any reason shall not
release either party from any liability which at the time of termination
has already accrued to the other party or which thereafter may accrue in
respect of any act or omission prior to such termination.
13. CONFIDENTIALITY
Each party shall hold and shall cause its respective
representatives to hold in confidence all confidential information made
available to it or its representatives by the other party, directly or
through any Company, and shall not pass such information on, wholly or
partly, to third parties without the written consent of the other party,
unless such information (i) becomes generally available to the public other
than as a result of a disclosure by such party or its representatives, (ii)
becomes available to such party from other sources not known by such party
to be bound by a confidentiality obligation, or (iii) is independently
acquired by such party as a result of work carried out by any employee or
representative of such party to whom no disclosure of such information has
been made.
14. OTHER VENTURES
(a) [XXXX].
(b) Yahoo hereby agrees to discuss in good faith with SOFTBANK
and allow SOFTBANK to make a first offer on any plans to establish [XXXX];
provided that the foregoing
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shall not obligate either party to enter into any such arrangement.
15. GOVERNING LAW
This Agreement shall be governed by and construed in accordance
with the laws of California applicable to agreements made and to be
performed therein.
16. DISPUTE RESOLUTION
All disputes between the parties arising directly or indirectly
out of this Agreement shall be settled by the parties amicably through
their good faith discussions. In the event that any such dispute cannot be
resolved thereby, such dispute shall be finally settled by arbitration in
accordance with the rules then in effect of the American Arbitration
Association by three arbitrators appointed in accordance with such rules.
Any such arbitration shall be held in New York, New York. The arbitration
award shall be final and binding upon the parties, and judgment on such
award may be entered in any court having jurisdiction thereof.
17. MISCELLANEOUS
(a) This Agreement may be amended only by a written instrument
signed by both parties.
(b) This Agreement may not be assigned by either party hereto
except with the written consent of the other party; provided, however, that
this Agreement may be assigned to (x) an affiliate corporation or (y) any
corporation which shall succeed to the business of a party by merger,
consolidation, or the transfer of all or substantially all of the assets of
such party and which shall expressly assume the obligations of such party
hereunder.
(c) Any and all notices, requests, demands and other
communications required or otherwise contemplated to be made under this
Agreement shall be in writing and in English and shall be deemed to have
been duly given (a) if delivered personally, when received, (b) if
transmitted by facsimile, upon receipt of a transmittal confirmation, (c)
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if sent by registered airmail, return receipt requested, postage prepaid,
on the sixth business day following the date of deposit in the mail or (d)
if by international courier service, on the second business day following
the date of deposit with such courier service, or such earlier delivery
date as may be confirmed to the sender by such courier service. All such
notices, requests, demands and other communications shall be addressed as
follows:
(i) If to SOFTBANK:
SB Holdings (Europe) Ltd.
c/o Ziff-Davis Verlag Gmbh
Riesstrasse 25,
80992 Munich 50
Germany
Attention: J.B. Holston
Telephone: (4989) 1431-2401
Facsimile: (4989) 1431-2400
with a copy to:
Ziff-Davis Publishing Company
One Park Avenue
NY, New York 10016
Attention: Legal Department
Telephone: (212) 503-3575
Facsimile: (212) 503-3581
(ii) If to the Company:
Yahoo! Inc.
635 Vaqueros Ave.
Sunnyvale, California 94086
Attention: Mr. Timothy Koogle
President
Telephone: (408) 328-3300
Facsimile: (408) 328-3301
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with a copy to:
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, California 94025
Attention: James L. Brock, Esq.
Telephone: (415) 854-4488
Facsimile: (415) 854-1121
or in each case to such other address or facsimile number as the party may
have furnished to the other party in writing.
(d) In the event of the invalidity of any part or provision of
this Agreement, such invalidity shall not affect the enforceability of any
other part or provision of this Agreement.
(e) No waiver by any party of any default in the performance of
or compliance with any provision herein shall be deemed to be a waiver of
the performance and compliance as to any other provision, or as to such
provision in the future; nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter. No remedy expressly granted herein to any
party shall be deemed to exclude any other remedy which would otherwise be
available.
(f) This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and shall supersede all
prior understandings and agreements between the parties with respect to
such subject matter. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Nothing herein express or implied, is intended to or shall
be construed to confer upon or give to any person, firm, corporation or
legal entity, other than the parties hereto and their affiliates, any
interests, rights, remedies or other benefits with respect to or in
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connection with any agreement or provision contained herein or contemplated
hereby.
IN WITNESS WHEREOF, the parties hereto have duly signed this
Agreement as of the day and year first above written.
SB HOLDINGS (EUROPE) LTD.
By: /S/ DAVID CRAVER
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Name: David Craver
Title: VP, IMG
YAHOO! INC.
By: /S/ TIMOTHY KOOGLE
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Name: Timothy Koogle
Title: President
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