Joint Venture Agreement - SOFTBANK Corp. and Yahoo! Inc.
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JOINT VENTURE AGREEMENT
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Between
SOFTBANK Corporation
and
Yahoo! Inc.
Dated as of April 1, 1996
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JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT, dated as of April 1, 1996, by and between
SOFTBANK Corporation, a Japanese corporation ("SOFTBANK"), 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 is a leading computer publisher and software
distributor in Japan;
WHEREAS, SOFTBANK indirectly owns a minority interest in Yahoo; and
WHEREAS, SOFTBANK and Yahoo wish to form a joint venture company in
Japan called Yahoo Japan Corporation (the "Company"), to establish and manage in
Japan a Japanese version of the Yahoo Internet Guide, develop related Japanese
on-line navigational services, and conduct other related businesses;
NOW, THEREFORE, the parties hereby agree as follows:
1. OBJECTIVES OF THE COMPANY
The objectives of the Company shall be to engage in the businesses set
forth below:
(i) establishment and management in Japan of a Japanese version of
the Yahoo Internet Guide;
(ii) development of related Japanese on-line navigational services;
(iii) related sale of on-line advertisement space;
(iv) addition of Japanese specific informational content to the mirror
site database in Japan;
(v) [XXXX]
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XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX;
(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) Subject to the terms and conditions hereof, SOFTBANK agrees to
sell, and Yahoo agrees to purchase, XXXXX shares of Common Stock of the Company
(the "Shares") at a price of XXXXXX per share so that after such sale SOFTBANK
shall own XXXXXX shares of Common Stock and Yahoo shall own XXXXXX shares of
Common Stock of the Company.
(b) Concurrently with the execution of this Agreement, SOFTBANK shall
deliver to Yahoo stock certificates representing the Shares and registered in
the name of Yahoo, against payment by Yahoo of [XXXX] therefor in
immediately available funds to a bank account designated by SOFTBANK.
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 Japan 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) The Company has been incorporated on January 31, 1996 as a
Kabushiki Kaisha (a stock limited company). The registered office of the
Company is at 3-42-3, Nihonbashi-Hamacho, Chuo-ku, Tokyo 103, Japan. The
Company has been duly incorporated and is a validly existing corporation under
the laws of Japan and has full power and authority to carry on its business as
contemplated in this Agreement. Attached
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hereto as Exhibit A is a true and correct copy of the Articles of Incorporation
of the Company ("teikan") and a true and complete English translation thereof.
(d) The Company's authorized capital is [XXXX] shares of Common Stock,
par value [XXXX] per share, of which [XXXX] shares are issued and outstanding.
Prior to the Closing, SOFTBANK purchased such [XXXX] shares for a purchase price
of [XXXX] per share in cash, and SOFTBANK owns all of such issued and
outstanding shares of the Company. There are no options, warrants or
commitments of any kind relating to the capital stock of the Company, including
any preemptive or other rights to purchase its capital stock.
(e) The Shares have been duly authorized (including any required
approval by the Board of Directors of the Company) and validly issued and are
fully paid and non-assessable. Title to the Shares will be transferred from
SOFTBANK to Yahoo upon physical delivery of the stock certificates to Yahoo
at the Closing, free and clear of all liens, encumbrances, equities or claims.
(f) Prior to the Closing, the Company has not been engaged in any
business or activities and has not entered into to any contracts, except as
contemplated by this Agreement and the Company has net assets of [XXXX] in
the form of cash and cash equivalents.
(g) The Company has no liabilities, contingent or otherwise, and the
Company has complied in all material respects with all laws and regulations.
There is no litigation pending or threatened, and no basis therefor known to the
Company, to which the Company is or would be a party, to which any of the
Company's assets are or would be subject, or which question or challenge this
Agreement or the transactions contemplated hereby.
(h) 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 other than
as described in Section 15 hereof.
(i) A certified copy of the commercial register of the Company (and a
true and complete English translation thereof) is attached to this Agreement as
Exhibit B, and all information contained therein is complete and accurate.
4. REPRESENTATIONS AND WARRANTIES OF YAHOO
Yahoo represents and warrants to SOFTBANK as follows:
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(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.
(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 other than as described
in Section 15 hereof.
5. LICENSE AGREEMENT
Concurrently with the execution of this Agreement, Yahoo shall enter
into a license agreement, in the form of Exhibit C attached hereto (the "License
Agreement"), with the Company.
6. BOARD OF DIRECTORS; STATUTORY AUDITORS
(a) The total number of Directors comprising the Board shall be five.
SOFTBANK shall designate [XXXX] Directors, [XXXX], and Yahoo shall designate
XXXXXX Directors.
(b) The Company shall have one Statutory Auditor, which shall be
designated by SOFTBANK.
(c) The Company shall have one Representative Director, who shall be
the President. The President and Representative Director shall be a nominee of
SOFTBANK.
(d) In case of a vacancy in the office of Director, Statutory Auditor
or Representative Director during the term of office for whatever reason, the
vacancy shall be filled by the party that nominated the Director, Statutory
Auditor or Representative Director whose office became vacant.
(e) At any annual or special meeting of shareholders or any meeting
of the Board of Directors 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 Representative Director in accordance with
this Section 6 and otherwise as may be necessary to implement the provisions of
this Agreement.
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(f) No change shall be made in the number and/or allocation of
Directors, Statutory Auditor or Representative Director as stated in this
Section 6 or in the Articles of Incorporation of the Company; provided that if
the parties' respective shareholdings change, the parties shall adjust the
number and allocation of Directors and the designation or nomination of the
Statutory Auditor or Representative Director if and to the extent appropriate so
that their respective representation on the Board and in the Company is
generally proportionate to their respective shareholdings.
7. MANAGEMENT OF THE COMPANY
(a) The Board of Directors of the Company shall be responsible for
establishing the overall policy and operating procedures with respect to the
business affairs of the Company.
(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 Yahoo is present. Board meetings shall be held
in Japan in accordance with applicable 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 under law, each of the following corporate actions may be taken
by the Company only (i) 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,
upon authorization by affirmative vote of at least one SOFTBANK director and at
least one Yahoo director and (ii) in the case of actions required by law or the
Articles of Incorporation to be approved by the Company's shareholders, 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;
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(iii) any capital expenditure of Y10 million or more;
(iv) the raising of additional equity capital or the issuance or sale
of any debt or equity securities (including any shareholder loan or
guaranty) 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
Y10 million;
(vii) any amendment, alteration or repeal of any provision of the
Articles of Incorporation 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 deviation in any
material respect from such business plan or budget as so approved;
(x) 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 Y10 million,
(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
(xi) compensation for all officers, Directors and Statutory Auditors
of the Company.
To the extent permitted by Japanese 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.
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8. ADDITIONAL CAPITAL
Subject to Section 7(c) hereof, the Board 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 at any time. Each party
agrees to provide such additional capital or support in accordance with the
Board's action.
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 the Company without the prior consent of the other party; provided
that, at such time as the shares of the Company are publicly traded, either
party shall be entitled to make sales of its shares in the open market to the
extent permitted by applicable law.
10. ACCOUNTING; ACCESS TO INFORMATION
(a) The fiscal year of the Company shall be from the first day of
April of each year to the 31st day of March of the following year.
(b) The 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 in Japan, 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. The 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 Yahoo, and shall be accompanied by
a reasonably detailed schedule that sets forth the differences between Japanese
generally accepted accounting principles 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 the Company and to
the legal, tax and auditing personnel of the 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. DIVIDENDS
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To the extent permitted by law, the Company will pay dividends to its
shareholders from the Company's net earnings in accordance with and subject to
the conditions set forth in Exhibit D; provided that no dividends shall be
required to be paid prior to XXXXXXXXXXXXXX, or following the time at which the
Company's shares of Common Stock are publicly traded.
12. TERM OF THE AGREEMENT
Subject to Section 13, this Agreement shall remain in effect
perpetually, provided that, if as of [XXXX].
13. TERMINATION OF THE AGREEMENT
(a) If either party fails in any material respect to perform or
fulfill in the time and manner herein provided 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, the parties shall negotiate
in good faith the possible purchase by one party of all the shares in the
Company held by the other party or the sale of the Company to a third party. If
such negotiation fails to result in a mutually acceptable agreement, the Company
shall be dissolved in accordance with Japanese law.
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(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.
14. 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 the 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.
15. GOVERNMENT FILINGS
(a) Promptly after execution of this Agreement, notification of such
execution shall be submitted by SOFTBANK to the Fair Trade Commission of Japan.
In the event the Fair Trade Commission advises the parties hereto to amend this
Agreement and/or the License Agreement, the parties shall promptly comply with
such request; provided, however, that if either party considers such amendment
to be material and adverse to it, then such party may terminate this Agreement
by giving written notice to such effect to the other party hereto.
(b) Within fifteen (15) days following the date of this Agreement,
Yahoo will submit the required notification to the Bank of Japan under the
Foreign Exchange and Foreign Trade Control Law.
(c) If any Japanese withholding taxes are imposed on dividends
payable to Yahoo by the Company under Section 11, the Company shall (or SOFTBANK
shall cause the Company to) withhold such amounts, pay the same to the Japanese
tax authority, and promptly furnish Yahoo with appropriate documentation of the
amounts so withheld as soon as practicable. The Company shall (or SOFTBANK
shall cause the Company to) cooperate with Yahoo to make any necessary filings
to utilize the lowest withholding rate available under any treaty between Japan
and the United States.
16. OTHER VENTURES
(a) [XXXX]
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(b) Yahoo hereby agrees to discuss in good faith with SOFTBANK joint
efforts to establish [XXXX]; provided that the foregoing shall not obligate
either party to enter into any such arrangement.
17. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Japan.
18. 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 Japan Commercial Arbitration Association by three
arbitrators appointed in accordance with such rules. Any such arbitration shall
be held in Tokyo, Japan and shall be conducted in Japanese (with English
translation to the extent requested by Yahoo). 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.
19. 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 a 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.
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(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) 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:
SOFTBANK Corporation
24-1, Nihonbashi-Hakozakicho
Chuo-ku, Tokyo 103, Japan
Attention: Mr. Masayoshi Son
President and Chief
Executive Officer
Telephone: (813) 5642-8020
Facsimile: (813) 5641-3400
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Stephen A. Grant, Esq.
Telephone: (212) 558-3504
Facsimile: (212) 558-3588
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(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
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
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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 connection with any
agreement or provision contained herein or contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement
as of the day and year first above written.
SOFTBANK CORPORATION
By: _____________________________
Name: Masayoshi Son
Title: President
YAHOO! INC.
By: _____________________________
Name: Timothy Koogle
Title: President
Attachments:
Exhibit A Articles of Incorporation of the Company
Exhibit B Commercial Register of the Company
Exhibit C License Agreement
Exhibit D Milestones for Required Dividend Payments
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