EXHIBIT 10.33
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS
ENCLOSED BY BRACKETS AND UNDERLINED. THE CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
▇▇▇.▇▇▇ INC.
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
September 2, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Dear Gentlemen:
This letter agreement (the "Agreement") sets forth the principal terms
upon which ▇▇▇.▇▇▇ Inc., a Delaware corporation ("▇▇▇.▇▇▇"), on the one hand,
and SOFTBANK America Inc. and/or one or more of its affiliated entities
referenced in this Agreement (all such entities collectively referred to as
"SoftBank"), on the other hand, will form three separate joint ventures. The
principal terms of each of the joint ventures are set forth in Exhibit A,
---------
Exhibit B and Exhibit C (each a "Term Sheet" and collectively, the "Term
--------- ---------
Sheets"). This Agreement is being entered into contemporaneously with the
execution and delivery of that certain Series B Participating Convertible
Preferred Stock Purchase Agreement (the "Series B Agreement") of even date
herewith (the "Series B Preferred Stock Financing").
1. ▇▇▇.▇▇▇ Europe. ▇▇▇.▇▇▇ and SoftBank America Inc. will form a joint
--------------
venture according to the principal terms set forth in the Term Sheet attached
hereto as Exhibit A. The provisions set forth in the Term Sheet attached hereto
---------
as Exhibit A are intended to be binding on ▇▇▇.▇▇▇ and SoftBank, subject to the
---------
Closing of the Series B Preferred Stock Financing.
2. ▇▇▇.▇▇▇ UK. ▇▇▇.▇▇▇ and eVentures will form a joint venture according
----------
to the principal terms set forth in the Term Sheet attached hereto as Exhibit B.
---------
The provisions set forth in the Term Sheet attached hereto as Exhibit B are
---------
intended to be binding on ▇▇▇.▇▇▇ and eVentures, subject to the Closing of the
Series B Preferred Stock Financing.
3. ▇▇▇.▇▇▇ Japan. ▇▇▇.▇▇▇ and SoftBank America Inc. will form a joint
-------------
venture according to the principal terms set forth in the Term Sheet attached
hereto as Exhibit C. The provisions set forth in the Term Sheet attached hereto
---------
as Exhibit C are intended to be binding on ▇▇▇.▇▇▇ and SoftBank, subject to the
---------
Closing of the Series B Preferred Stock Financing.
4. Exclusive Negotiations. Each of the parties shall negotiate in good
----------------------
faith and cooperate fully with each other in the negotiation and execution of
the definitive joint venture documents for each of the three joint ventures.
Between the date that is 90 days from the date hereof or such earlier date as
the parties hereto mutually agree, SoftBank and ▇▇▇.▇▇▇ will not (and it will
assure that its officers, directors, employees, affiliates and legal, accounting
and financial advisors do not on its behalf) take any action to solicit,
initiate, seek, encourage, support or entertain any inquiry, proposal or offer
from, furnish any information to, or participate in any negotiations with, any
corporation, partnership, person or other entity or group (other than
Softbank
September 2, 1999
Page 2
negotiations with each other) regarding any international e-commerce joint
venture in the territories referenced in the Term Sheets.
5. No Public Announcement; No Disclosure. The parties shall make no
-------------------------------------
public announcement concerning this Agreement or the matters contemplated
herein, their discussions or any other memoranda, letters or agreements between
the parties relating to the matters contemplated herein without the prior
consent of the other party; provided, that either of the parties may at any time
make disclosure if it is advised by independent legal counsel that such
disclosure is required under applicable law or regulatory authority. Except as
permitted by the preceding proviso, under no circumstances will the parties (or
any of their respective officers, directors, employees or affiliates) discuss or
disclose the existence or terms of this Agreement (or that the parties are
holding discussions) with or to any third party other than such legal,
accounting and financial advisors of such parties who have a need to know such
information solely for purposes of assisting the parties in evaluating and
negotiating the matters contemplated herein.
6. Conditions to Close. The closing of the Series B Preferred Stock
-------------------
Financing and the sale of shares by The ▇▇▇▇▇ ▇. ▇▇▇▇ Separate Property Trust
(the "▇▇▇▇ Sales") and the receipt of the purchase price for such shares shall
be a condition to ▇▇▇.▇▇▇'s obligation to close the joint venture transactions
referenced in this Agreement.
7. Termination and Break Up Fee. This Agreement shall terminate upon the
----------------------------
occurrence of either of the following:
(a) At the election of ▇▇▇.▇▇▇, in the event the Series B Preferred Stock
Financing and the ▇▇▇▇ Sales have not closed prior to September 30, 1999,
provided that if the sole reason for the failure to close the Series B Preferred
Stock Financing and ▇▇▇▇ Sales is due to the requirement to comply with the ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, such closing date deadline
shall be extended until the waiting period has expired or been terminated, or
(b) At the election of ▇▇▇.▇▇▇ or SoftBank if such other party has failed
to comply with the terms of this Agreement, and has failed to cure such default
within thirty (30) days notice of such default by the non-breaching party.
(c) At the election of either party with respect to any of the three joint
ventures for which the parties have not executed and delivered definitive joint
venture documents within six (6) months of the date hereof with respect to the
▇▇▇.▇▇▇ Europe and ▇▇▇.▇▇▇ UK and nine (9) months of the date hereof with
respect to ▇▇▇.▇▇▇ Japan.
In the event this Agreement is terminated (i) pursuant to Section 7(b)
above as a result of a breach of this Agreement by a party or (ii) pursuant to
Section 7(c) above as a result of the bad faith actions of a party (in either
event such party at fault shall be a "breaching party"), such breaching party
shall pay to the non-breaching party a termination fee of One Million Dollars
(US$1,000,000). Sections 5, 9 and 11 will survive the termination of this
Agreement.
Softbank
September 2, 1999
Page 3
8. Effect of Agreement. This Agreement is intended to be a binding
-------------------
agreement of the parties hereto, effective and enforceable by the parties. By
SoftBank's signature hereto, SoftBank represents it has the authority to bind
itself and the SoftBank affiliates referenced in this Agreement. The Term
Sheets are incorporated into this Agreement and set forth the parties' intent
for the structure, terms and conditions of the respective joint ventures. The
definitive joint venture documents for each joint venture will contain
additional terms and conditions customary for transactions of this type.
9. Expenses. Each party will bear all fees and expenses incurred by it or
--------
on its behalf in connection with the matters set forth herein (including,
without limitation, the fees and expenses of attorneys, accountants,
consultants, lenders and other advisors).
10. Notices. All notices and other communications hereunder will be in
-------
writing and will be furnished by hand delivery (including recognized overnight
courier) or facsimile to the parties at the addresses set forth below. Any such
notice will be deemed duly given upon the date it is delivered to the address
shown below, addressed as follows:
If to ▇▇▇.▇▇▇:
▇▇▇.▇▇▇ Inc.
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to SoftBank:
SOFTBANK America Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Softbank
September 2, 1999
Page 4
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The addresses set forth above may be changed by any party upon furnishing to the
other parties a notice of change of address in accordance with the terms of this
paragraph.
11. Miscellaneous. This Agreement is governed by California law, without
-------------
regard to its choice of law rules. The parties expressly waive the application
of the United Nations Convention on Contracts for the International Sale of
Goods to the terms of this Agreement. The sole jurisdiction and venue for
actions related to the subject matter hereof shall be the state and federal
courts in Orange County, California. The official language for purposes
of this Agreement, the definitive joint venture documents and all notices and
communications hereunder and thereunder shall be English. This Agreement
constitutes the complete and exclusive agreement between the parties with
respect to the subject matter hereof, superseding and replacing any and all
prior or contemporaneous agreements, communications, and understanding (whether
written or oral) regarding such subject matter. This Agreement may only be
modified, or any rights under it waived, by a written document executed by all
of the parties, provided that the terms of each of the joint ventures may be
amended by the written consent of ▇▇▇.▇▇▇ and the particular SoftBank entity
participating in such joint venture. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which the party may be
entitled.
If you are in agreement with the foregoing, please sign in the space
provided below and return a copy of this letter to the undersigned.
Very truly yours,
▇▇▇.▇▇▇ INC.
By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
Softbank
September 2, 1999
Page 5
ACCEPTED and AGREED:
SOFTBANK AMERICA, INC.
By:_________________________
Name:_______________________
Title:______________________
EXHIBIT A
---------
TERM SHEET
for
▇▇▇.▇▇▇ EUROPE
TERM SHEET
FOR
▇▇▇.▇▇▇ EUROPE JOINT VENTURE
Purpose of Joint Venture: ▇▇▇.▇▇▇ INC. ("▇▇▇.▇▇▇") and SOFTBANK America
Inc. ("SoftBank") will form a joint venture
("▇▇▇.▇▇▇ Europe") to launch and operate an
Internet superstore in the countries and
territories listed below.
Territory Covered: The countries comprising the European Union,
Switzerland, all European countries east to the
Russian border (exclusive of Russia), all
European countries south to Greece (inclusive of
Greece), but excluding the United Kingdom,
Ireland, the Middle East and Africa (the
"Territory").
Launch Priority: It is anticipated that ▇▇▇.▇▇▇ Europe will
prioritize the countries in which it launches the
▇▇▇.▇▇▇ Internet superstore concept as follows:
First Stage: Germany, France
Second Stage: Benelux, Scandinavia
Third Stage: Italy, Spain
Future Stages: To be determined by the
▇▇▇.▇▇▇ Europe Board
Ownership and Structure: ▇▇▇.▇▇▇ Europe will be owned as follows:
50% ▇▇▇.▇▇▇
50% SOFTBANK America Inc.
The legal and tax structure of ▇▇▇.▇▇▇ Europe
will be determined by ▇▇▇.▇▇▇ and SoftBank in
consultation with their tax, legal and accounting
advisors. It is understood that the objective is
for ▇▇▇.▇▇▇ to be able to consolidate the
financial statements of ▇▇▇.▇▇▇ Europe into
▇▇▇.▇▇▇ until ▇▇▇.▇▇▇ Europe completes an IPO.
▇▇▇.▇▇▇ Europe will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of ▇▇▇.▇▇▇
Europe. The stock and option grants will be
subject to customary [***]. Any modifications to
---
such vesting schedule shall be at the discretion
of the ▇▇▇.▇▇▇ Europe Board on a case by case
basis.
______________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
Initial Funding of The initial funding of U.S. $8.2 million which
▇▇▇.▇▇▇ Europe: is intended to provide adequate working capital
through June 2000, will be provided entirely by
SoftBank as follows:
$2.73 million equity contribution from
SoftBank
$2.73 million working capital cash loan from
SoftBank to ▇▇▇.▇▇▇ Europe.
$2.73 million equity contribution from
▇▇▇.▇▇▇ (which amount will be funded by
SoftBank as a loan to ▇▇▇.▇▇▇ such that
▇▇▇.▇▇▇ receives credit for such capital
contribution on the books of ▇▇▇.▇▇▇ Europe.
The loan from SoftBank to ▇▇▇.▇▇▇ will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year
term with an acceleration clause for immediate
payment within ten (10) days of the closing of
▇▇▇.▇▇▇'s IPO.
The loan from Softbank to ▇▇▇.▇▇▇ Europe will
accrue interest at the lowest rate required to
avoid the imputation of interest and will have a
5 year term with an acceleration clause for
immediate payment within ten (10) days of the
closing of ▇▇▇.▇▇▇ Europe's IPO.
Ongoing Funding of ▇▇▇.▇▇▇ On an annual basis, management of ▇▇▇.▇▇▇ Europe
Europe: will prepare a Business Plan and Budget for
▇▇▇.▇▇▇ Europe for review and approval by the
▇▇▇.▇▇▇ Europe Board. Ongoing funding will be
obtained by additional pro rata investments by
▇▇▇.▇▇▇ and SoftBank or new third party
investments on terms approved by the ▇▇▇.▇▇▇
Europe Board. Any new third party investments
will dilute all shareholders pro-rata based on
their respective percentage ownership interests
on the date of such investment.
Preemptive Right: ▇▇▇.▇▇▇ and SoftBank will have a right to
participate in any future financing to maintain
their pro rata ownership in ▇▇▇.▇▇▇ Europe
subject to certain customary exceptions to be
included in the definitive joint venture
documents. This right will terminate upon an IPO
of ▇▇▇.▇▇▇ Europe.
2
Governance: ▇▇▇.▇▇▇ Europe will have a Board of Directors of
[***] members initially with ▇▇▇.▇▇▇ designating
---
[***] members [***] and SoftBank designating
--- ---
[***] members. The parties will enter into a
---
voting agreement to maintain the Board
composition which agreement will terminate upon
an IPO of ▇▇▇.▇▇▇ Europe.
▇▇▇.▇▇▇'s CEO, ▇▇▇▇ ▇▇▇▇▇▇▇, will serve as
Chairman of ▇▇▇.▇▇▇ Europe. The CEO or Managing
Director of ▇▇▇.▇▇▇ Europe will serve as one of
the [***] designees of ▇▇▇.▇▇▇ on the Board of
---
▇▇▇.▇▇▇ Europe and such individual will report to
▇▇. ▇▇▇▇▇▇▇.
▇▇▇.▇▇▇ and SoftBank will mutually recruit and
select a CEO and other senior management for
▇▇▇.▇▇▇ Europe.
Intellectual Property ▇▇▇.▇▇▇ will license its e-commerce technology to
▇▇▇.▇▇▇ Europe on a royalty free basis for use in
the Territory. ▇▇▇.▇▇▇ will retain ownership of
its trade name, brand and all trademark and
service marks and other intellectual property
rights relating thereto and will license its name
and its other intellectual property rights
necessary and applicable to the business of
▇▇▇.▇▇▇ Europe on a royalty free basis and on
such other terms to be established in the
definitive joint venture documents. These
licenses will be perpetual subject to certain
limitations to be provided for in the definitive
joint venture documents.
▇▇▇.▇▇▇ will receive a royalty free, perpetual
grant back license to all technology developed by
▇▇▇.▇▇▇ Europe.
Service Fees: If either ▇▇▇.▇▇▇ or SoftBank provides services
to ▇▇▇.▇▇▇ Europe, ▇▇▇.▇▇▇ Europe shall reimburse
such costs on an allocated basis and pay a
service fee to such party, provided that the
party providing such services will submit a
written proposal of such services and fees for
approval by a majority of the disinterested
▇▇▇.▇▇▇ Europe Board.
Co-Promotion and Cross ▇▇▇.▇▇▇ and SoftBank will discuss and negotiate
Marketing Opportunities: co-promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
______________________________
[***] Confidential treatment has been requested for the bracketed
---
portions. The confidential redacted portion has been omitted and filed
separately with the Securities and Exchange Commission.
3
Admission of Additional ▇▇▇.▇▇▇ Europe will not issue ownership interest
Partners: to a competitor of ▇▇▇.▇▇▇ without the prior
written consent of ▇▇▇.▇▇▇.
Co-Sale and Right of First Each of ▇▇▇.▇▇▇ and SoftBank will have a co-sale
Refusal Provisions right and right of first refusal over the other
partner's shares or other ownership interest in
▇▇▇.▇▇▇ Europe, excluding transfers to
affiliates. This agreement will terminate upon an
IPO of ▇▇▇.▇▇▇ Europe.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation
of the joint venture documents.
▇▇▇.▇▇▇ INC.
By:___________________________________
Name:_________________________________
Title:________________________________
SOFTBANK America Inc.
By:___________________________________
Name:_________________________________
Title:________________________________
4
EXHIBIT B
---------
TERM SHEET
for
▇▇▇.▇▇▇ UK
TERM SHEET
FOR
▇▇▇.▇▇▇ UK JOINT VENTURE
Purpose of Joint Venture: ▇▇▇.▇▇▇ INC. ("▇▇▇.▇▇▇") and eVentures, a joint
venture between SOFTBANK and ePartners Capital Ltd.
(collectively, "eVentures") will form a joint
venture ("▇▇▇.▇▇▇ UK") to launch and operate an
Internet superstore in the countries and territories
listed below.
Territory Covered: The countries include the United Kingdom, Australia,
New Zealand and India (the "Territory").
Launch Priority: It is anticipated that ▇▇▇.▇▇▇ UK will prioritize
the countries in which it launches the ▇▇▇.▇▇▇
Internet superstore concept as follows:
First Stage: United Kingdom
Second Stage: Australia
Third Stage: New Zealand
Future Stages: To be determined by the ▇▇▇.▇▇▇ UK
Board
Ownership and ▇▇▇.▇▇▇ UK will be owned as follows:
Structure:
50% ▇▇▇.▇▇▇
50% eVentures
[CAPTION]
The legal and tax structure of ▇▇▇.▇▇▇ UK will be
determined by ▇▇▇.▇▇▇ and eVentures in consultation
with their tax, legal and accounting advisors. It is
understood that the objective is for ▇▇▇.▇▇▇ to be
able to consolidate the financial statements of
▇▇▇.▇▇▇ UK into ▇▇▇.▇▇▇ until ▇▇▇.▇▇▇ UK completes
an IPO.
▇▇▇.▇▇▇ UK will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of ▇▇▇.▇▇▇ UK.
The stock and option grants will be subject to
customary [***]. Any modifications to such vesting
---
schedule shall be at the discretion of the ▇▇▇.▇▇▇
UK Board on a case by case basis.
Initial Funding of The initial funding of U.S. $6 million which is
▇▇▇.▇▇▇ UK: intended to provide adequate working capital through
June 2000, will be provided entirely by Softbank
and/or eVentures as follows:
$2 million equity contribution from
Softbank/eVentures
__________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
$2 million working capital cash loan from Softbank
to ▇▇▇.▇▇▇ UK. $2 million equity contribution from
▇▇▇.▇▇▇ (which amount will be funded by Softbank
as a loan to ▇▇▇.▇▇▇ such that ▇▇▇.▇▇▇ receives
credit for such capital contribution on the books
of ▇▇▇.▇▇▇ UK).
The loan from Softbank to ▇▇▇.▇▇▇ will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of ▇▇▇.▇▇▇'s
IPO.
The loan from Softbank to ▇▇▇.▇▇▇ UK will accrue
interest at the lowest rate required to avoid
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of ▇▇▇.▇▇▇ UK's
IPO.
Ongoing Funding of On an annual basis, management of ▇▇▇.▇▇▇ UK will
▇▇▇.▇▇▇ UK: prepare a Business Plan and Budget for ▇▇▇.▇▇▇ UK
for review and approval by the ▇▇▇.▇▇▇ UK Board.
Ongoing funding will be obtained by additional pro
rata investments by ▇▇▇.▇▇▇ and eVentures or new
third party investments on terms approved by the
▇▇▇.▇▇▇ UK Board. Any new third party investments
will dilute all shareholders pro-rata based on their
respective percentage ownership interests on the
date of such investment.
Preemptive Right: ▇▇▇.▇▇▇ and eVentures will have a right to
participate in any future financing to maintain
their pro rata ownership in ▇▇▇.▇▇▇ UK subject to
certain customary exceptions to be included in the
definitive joint venture documents. This right will
terminate upon an IPO of ▇▇▇.▇▇▇ UK.
Governance: ▇▇▇.▇▇▇ UK will have a Board of Directors of [***]
---
members initially with ▇▇▇.▇▇▇ designating [***]
---
members (one of which will be the CEO or Managing
Director of ▇▇▇.▇▇▇ UK) and eVentures designating
[***] members. The parties will enter into a voting
---
agreement to maintain the Board composition which
agreement will terminate upon an IPO of ▇▇▇.▇▇▇ UK.
▇▇▇.▇▇▇'s CEO, ▇▇▇▇ ▇▇▇▇▇▇▇, will serve as Chairman
of ▇▇▇.▇▇▇ UK. The CEO or Managing Director of
▇▇▇.▇▇▇ UK will serve as one of the [***] designees
---
of ▇▇▇.▇▇▇ on the Board of ▇▇▇.▇▇▇ UK and such
individual will report to ▇▇. ▇▇▇▇▇▇▇.
▇▇▇.▇▇▇ and eVentures will mutually recruit and
select a CEO and other senior management for ▇▇▇.▇▇▇
UK.
________________________________________________________________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
Intellectual Property: ▇▇▇.▇▇▇ will license its e-commerce technology to
▇▇▇.▇▇▇ UK on a royalty free basis for use in the
Territory. ▇▇▇.▇▇▇ will retain ownership of its
trade name, brand and all trademark and service
marks and other intellectual property rights
relating thereto and will license its name and its
other intellectual property rights necessary and
applicable to the business of ▇▇▇.▇▇▇ UK on a
royalty free basis and on such other terms to be
established in the definitive joint venture
documents. These licenses will be perpetual subject
to certain limitations to be provided for in the
definitive joint venture documents.
▇▇▇.▇▇▇ will receive a royalty free, perpetual grant
back license to all technology developed by ▇▇▇.▇▇▇
UK.
Service Fees: If either ▇▇▇.▇▇▇ or eVentures provides services to
▇▇▇.▇▇▇ UK, ▇▇▇.▇▇▇ UK shall reimburse such costs on
an allocated basis and pay a service fee to such
party, provided that the party providing such
services will submit a written proposal of such
services and fees for approval by a majority of the
disinterested ▇▇▇.▇▇▇ UK Board.
Co-Promotion and Cross ▇▇▇.▇▇▇ and eVentures shall discuss and negotiate
Marketing Opportunities: co-promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
Admission of Additional ▇▇▇.▇▇▇ UK will not issue ownership interest to a
Partners: competitor of ▇▇▇.▇▇▇ without the prior written
consent of ▇▇▇.▇▇▇.
Co-Sale and Right of Each of ▇▇▇.▇▇▇ and eVentures will have a co-sale
First Refusal Provisions: right and right of first refusal over the other
partner's shares or other ownership interest in
▇▇▇.▇▇▇ UK, excluding transfers to affiliates. This
agreement will terminate upon an IPO of ▇▇▇.▇▇▇ UK.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation of
the joint venture documents.
▇▇▇.▇▇▇ INC.
By: ______________________________
Name: ____________________________
Title: ___________________________
eVentures
By: ______________________________
Name: ____________________________
Title: ___________________________
3
EXHIBIT C
---------
TERM SHEET
for
▇▇▇.▇▇▇ JAPAN
TERM SHEET
FOR
▇▇▇.▇▇▇ JAPAN JOINT VENTURE
Purpose of Joint Venture: ▇▇▇.▇▇▇ INC. ("▇▇▇.▇▇▇") and SOFTBANK America, Inc.
("Softbank") will form a joint venture ("▇▇▇.▇▇▇
Japan") to launch and operate an Internet superstore
in Japan.
Territory Covered: The countries include Japan (the "Territory").
Launch Priority: It is anticipated that ▇▇▇.▇▇▇ Japan will prioritize
the countries in which it launches the ▇▇▇.▇▇▇
Internet superstore concept as follows:
First Stage: Japan
Ownership and Structure: ▇▇▇.▇▇▇ Japan will be owned as follows:
50% ▇▇▇.▇▇▇
50% Softbank
The legal and tax structure of ▇▇▇.▇▇▇ Japan will be
determined by ▇▇▇.▇▇▇ and Softbank in consultation
with their tax, legal and accounting advisors. It is
understood that the objective is for ▇▇▇.▇▇▇ to be
able to consolidate the financial statements of
▇▇▇.▇▇▇ Japan into ▇▇▇.▇▇▇ until ▇▇▇.▇▇▇ Japan
completes an IPO.
▇▇▇.▇▇▇ Japan will establish an employee equity
incentive [***] of the initial capitalization for
---
issuance to employees and officers of ▇▇▇.▇▇▇ Japan.
The stock and option grants will be subject to
customary [***]. Any modifications to such vesting
---
schedule shall be at the discretion of the ▇▇▇.▇▇▇
Japan Board on a case by case basis.
Initial Funding of The initial funding of U.S. $9 million which is
▇▇▇.▇▇▇ Europe: intended to provide adequate working capital through
June 2000, will be provided entirely by Softbank as
follows:
$3 million equity contribution from Softbank
$3 million working capital cash loan from
Softbank to ▇▇▇.▇▇▇ Japan.
$3 million equity contribution from ▇▇▇.▇▇▇
(which amount will be funded by Softbank
as a loan to ▇▇▇.▇▇▇ such that
_________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
▇▇▇.▇▇▇ receives credit for such capital
contribution on the books of ▇▇▇.▇▇▇ Japan).
The loan from Softbank to ▇▇▇.▇▇▇ will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of ▇▇▇.▇▇▇'s
IPO.
The loan from Softbank to ▇▇▇.▇▇▇ Japan will accrue
interest at the lowest rate required to avoid the
imputation of interest and will have a 5 year term
with an acceleration clause for immediate payment
within ten (10) days of the closing of ▇▇▇.▇▇▇
Japan's IPO.
Ongoing Funding of On an annual basis, management of ▇▇▇.▇▇▇ Japan will
▇▇▇.▇▇▇ Europe: prepare a Business Plan and Budget for ▇▇▇.▇▇▇ Japan
for review and approval by the ▇▇▇.▇▇▇ Japan Board.
Ongoing funding will be obtained by additional pro
rata investments by ▇▇▇.▇▇▇ and Softbank or new
third party investments on terms approved by the
▇▇▇.▇▇▇ Japan Board. Any new third party investments
will dilute all shareholders pro-rata based on their
respective percentage ownership interests on the
date of such investment.
Preemptive Right: ▇▇▇.▇▇▇ and Softbank will have a right to
participate in any future financing to maintain
their pro rata ownership in ▇▇▇.▇▇▇ Japan subject to
certain customary exceptions to be included in the
definitive joint venture documents. This right will
terminate upon an IPO of ▇▇▇.▇▇▇ Japan.
Governance: ▇▇▇.▇▇▇ Japan will have a Board of Directors of
[***] members initially with ▇▇▇.▇▇▇ designating
---
[***] members (one of which will be the CEO or
---
Managing Director of ▇▇▇.▇▇▇ Japan) and Softbank
designating [***] members. The parties will enter
---
into a voting agreement to maintain the Board
composition which agreement will terminate upon an
IPO of ▇▇▇.▇▇▇ Japan.
▇▇▇.▇▇▇'s CEO, ▇▇▇▇ ▇▇▇▇▇▇▇, will serve as Chairman
of ▇▇▇.▇▇▇ Japan. The CEO or Managing Director of
▇▇▇.▇▇▇ Japan will serve as one of the [***]
designees of ▇▇▇.▇▇▇ on the Board of ▇▇▇.▇▇▇ Japan
and such individual will report to ▇▇. ▇▇▇▇▇▇▇.
▇▇▇.▇▇▇ and Softbank will mutually recruit and
select a CEO and other senior management for ▇▇▇.▇▇▇
Japan.
Intellectual ▇▇▇.▇▇▇ will license its e-commerce technology to
▇▇▇.▇▇▇ Japan
_______________________________________________________________________________
[***] Confidential treatment has been requested for the bracketed portions.
---
The confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
2
Property on a royalty free basis for use in the Territory.
▇▇▇.▇▇▇ will retain ownership of its trade name,
brand, and all trademark and service marks and other
intellectual property rights relating thereto and
will license its name and its other intellectual
property rights necessary and applicable to the
business of ▇▇▇.▇▇▇ Japan on a royalty free basis
and on such other terms to be established in the
definitive joint venture documents. These licenses
will be perpetual subject to certain limitations to
be provided for in the definitive joint venture
documents.
▇▇▇.▇▇▇ will receive a royalty free, perpetual grant
back license to all technology developed by ▇▇▇.▇▇▇
Japan.
Service Fees: If either ▇▇▇.▇▇▇ or Softbank provides services to
▇▇▇.▇▇▇ Japan, ▇▇▇.▇▇▇ Japan shall reimburse such
costs on an allocated basis and pay a service fee to
such party, provided that the party providing such
services will submit a written proposal of such
services and fees for approval by a majority of the
disinterested ▇▇▇.▇▇▇ Japan Board.
Co-Promotion and Cross ▇▇▇.▇▇▇ and Softbank will discuss and negotiate co-
Marketing Opportunities: promotion and cross marketing opportunities to
include within the definitive joint venture
documents.
Admission of Additional ▇▇▇.▇▇▇ Japan will not issue ownership interest to a
Partners: competitor of ▇▇▇.▇▇▇ without the prior written
consent of ▇▇▇.▇▇▇.
Co-Sale and Right of Each of ▇▇▇.▇▇▇ and Softbank will have a co-sale
First Refusal Provisions right and right of first refusal over the other
partner's shares or other ownership interest in
▇▇▇.▇▇▇ Japan, excluding transfers to affiliates.
This agreement will terminate upon an IPO of ▇▇▇.▇▇▇
Japan.
Expenses: Each party will pay its own costs incurred in
connection with the preparation and negotiation of
the joint venture documents.
▇▇▇.▇▇▇ INC.
By:________________________________
Name:______________________________
Title:_____________________________
SOFTBANK AMERICA, INC.
By:________________________________
Name:______________________________
Title:_____________________________
3
