EXHIBIT 10.5.1
TRANS COSMOS - ASK JEEVES INTERNATIONAL
JOINT VENTURE AGREEMENT
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TRANS COSMOS - ASK JEEVES INTERNATIONAL
JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("Agreement") is made and entered into as of
this 31st day of August, 2000, by and between Trans Cosmos Inc. USA Pacific
HoldingS company III ("TCI"), a Cayman Islands corporation, and ASK JEEVES
INTERNATIONAL, INC. ("AJI"), a Delaware corporation.
WHEREAS, AJI has formed a "Kabushiki Kaisha" under the applicable laws of
Japan (the "KK") to serve as the legal entity by which the activities
contemplated by this Agreement can be conducted;
WHEREAS, the AJI and TCI desire to utilize the KK (i) to conduct the
Business (as hereinafter defined) in the Territory (as hereinafter defined),
using Ask Jeeves, Inc., AJI's parent corporation ("AJ") technology, (ii) serve
as the exclusive vehicle for the implementation and distribution within the
Territory of a Japanese language version of all current and future products,
services and technology employed by AJ including its subsidiaries, and (iii) to
position the KK for a public offering of its stock in a Japanese stock exchange.
TCI and AJI shall jointly manage the KK's business operations as provided
herein;
WHEREAS, AJ is currently the defendant in two lawsuits alleging patent
infringement based upon use of some or all of the technology that the KK seeks
to license; and
WHEREAS, TCI and AJI desire to cooperate and assist each other in such a
joint venture with a view toward successfully operating said corporation, all in
accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following respective meanings, such meanings to be equally applicable to both
the singular and plural forms of the terms defined:
1.1 "Affiliate" shall mean any corporation, partnership, limited
liability company or other legal entity with a majority interest in any Party,
or which is under common control of such legal entity as any Party, or of which
a majority interest is owned by any Party.
1.2 "AJ Assets" shall mean all AJ Software, Licensed Software, AJ
Content, Updates and Documentation and all other current and future products,
services, technology and
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content developed by or for AJ and/or contained in the English-language version
of the Xxx.xxx Web Site, both during and after the term of this Agreement,
including without limitation all localized and internationalized versions
thereof, but excluding the Japanese Knowledge Base. AJI or Ask Jeeves, as the
case may be, shall retain full ownership of all AJ Assets and all IP Rights
therein, at all times during and after the term of this Agreement. Nothing in
this Agreement is intended by the parties or shall operate in any way to
transfer any ownership interest of any kind in the AJ Assets to the KK.
Notwithstanding the foregoing, "AJ Assets" shall not include the current or
future products, services, technology and content owned by an Acquiror of Ask
Jeeves.
1.3 "AJ Content" means all knowledge bases and other data and
information, in any medium, created and/or maintained by AJ using the AJ
Software, including without limitation any improvements, additions,
modifications and enhancements to the U.S. Knowledgebase and any text, music,
sound, photographs, video or graphics.
1.4 "Annual Plan" shall mean an annual operating plan which shall
include, but not be limited to, an annual operating budget, an annual capital
expense budget, an annual marketing plan and budget, and a general description
of the operating strategy for the KK for the next fiscal year.
1.5 "Business Day" shall mean as to a party hereto whose action is
required to take place within a number of Business Days (whether the giving of
notice or the making of a payment or otherwise), any day of the week which is
not a Saturday or Sunday and not a bank holiday in the state or country from
which such action is required to be made (as the case may be in the state of
California or in Japan).
1.6 "Business Plan" shall mean the business plan to be developed by
the Parties and in the substantial form attached hereto as Schedule 1.6.
1.7 "Change in Control" shall be deemed to have occurred if any of
the following occurs with respect to a Party (unless otherwise noted in context
below):
(a) the direct or indirect sale or exchange in a single series
of related transactions by the controlling shareholders or other holders
of controlling ownership interest in a Party, of more than fifty percent
(50%) of the voting stock or other voting ownership interests of such
Party; or
(b) the sale, exchange or transfer of all or substantially all
of the assets of a Party by such Party; or
(c) a liquidation or dissolution of a Party;
provided, however, that any transaction or series of transactions that are
effected solely in connection with a (i) grant of equity interests in connection
with a bona fide employee benefit
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arrangement, (ii) re-incorporation, (iii) a reorganization, recapitalization or
financing not in connection with the sale of all or substantially all of the
assets or stock or other ownership interests of a Party, or (iv) an underwritten
public offering of common stock of a Party, is not a Change in Control.
1.8 "Common Stock" shall mean voting common stock of the KK.
1.9 "Content" shall mean data, documentation, text, audio, video,
drawings, programming, meta-tags, links, icons, images, pictures, charts and
other elements of the "xxx.xxx" Web site(s) and any other Web site provided by
AJI.
1.10 "Equity Securities" shall mean (i) any common stock, preferred
stock or any other capital stock of the KK, (ii) any debt or equity security
convertible or exchangeable, with or without consideration, into any common
stock, preferred stock or other capital stock of the KK (including any option to
purchase such a convertible security), or (iii) any option, warrant or right to
subscribe to or purchase any common stock, preferred stock or other capital
stock of the KK.
1.11 "Fair Market Value" shall be determined by two appraisers who
must be an independent certified public accounting firm or investment banking
firm of international repute. TCI and AJI each shall appoint one appraiser
within five (5) Business Days of the deemed offer to purchase or sell. If the
appraisal price from each of the appraisers (the "Appraisals") is with ten
percent (10%) of each other then the Fair Market Value shall be the average of
the Appraisals. If the difference of the Appraisals is greater than ten percent
(10%) then a neutral investment banking firm selected by an arbitrator pursuant
to this Agreement ("Third Appraiser"), shall choose one of the Appraisals which
shall be the Fair Market Value. The Parties shall co-operate with such
appraisers and shall use all reasonable efforts to procure that the appraisers
deliver their determination as soon as practicable. The determination of Third
Appraiser shall be final and binding on the Parties. TCI and AJI shall bear the
cost of their respective appraisers. The costs of the Third Appraiser shall be
met equally between AJI and TCI.
1.12 "IPLearn Suit" means the suit filed by IPLearn, LLC in the
United States District Court, Northern District of California, Oakland Division,
Action No. C 99-03352 SBA (ENE).
1.13 "JV Agreement" means this Joint Venture Agreement.
1.14 "Xxxx Suit" means the suit filed by Xxxxxxx X. Xxxxxxx and
Xxxxx Xxxx in the United States District Court, District of Massachusetts, Civil
Action NO. 99-CV-012584-MLW.
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1.15 "KK Assets' shall mean all technology not derived from the AJ
Assets (which may include "plug-ins" to the extent they are useable apart from
the AJ Assets) but rather created independently by or on behalf of the KK during
the term of the JV Agreement (the "KK Technology") and all KK Content. For the
avoidance of doubt, it is agreed that KK developed non-derivative, independent
plug-ins to any AJ Asset will constitute the KK Technology. All KK Assets and
the IP Rights represented therein shall become the sole property of the KK upon
creation, and shall remain wholly owned by the KK. The KK shall have the sole
right to pursue any IP filings for the KK Assets. The KK will have the right to
use the U.S. Knowledgebase only for the purpose of facilitating the creation of
the Japanese Knowledge Base.
1.16 "KK Content" means the Japanese Knowledge Base and all other
knowledge bases and other data and information, in any medium, created and/or
maintained by the KK, whether or not derived from the AJ Content, including
without limitation any improvements, additions, modifications and enhancements
to the Japanese Knowledge Base(s) and any text, music, sound, photographs, video
or graphics. "KK Content" also includes all user data, including website
popularity data collected by the KK pursuant to the activities contemplated or
permitted by this Agreement.
1.17 "Party" shall mean, individually, AJI, or TCI and "Parties"
shall mean collectively, AJI and TCI.
1.18 "Marketable Securities" shall mean securities which are (i)
freely tradable on a major stock exchange (including without limitation NASDAQ
and the Tokyo Stock Exchange), or (ii) restricted securities with respect to
which the issuing corporation undertakes to file a registration statement at its
expense that will enable the holder of the securities to sell the securities, -
in either case subject to agree-upon volume restrictions to prevent a material
adverse effect on the price of the stock.
1.19 "Patent Suit" means collectively, the Xxxx Suit, the IPLearn
Suit and any further suits involving the licensed or sublicensed AJ technology
or services (whether brought within the United States or within the Territory)
that may arise and which AJ or AJI shall promptly report to the KK and to TCI.
1.20 "Percentage Interest" means, with respect to a Party, the
percentage of the KK's total issued and outstanding Equity Securities held by
such Party. Unless explicitly stated with regard to a specific provision of this
Agreement, options or warrants to purchase shares or debt convertible into
shares shall not be considered in the calculation of Percentage Interest.
1.21 "Technology Partner" means Basis Technology, Inc., a
Massachusetts corporation or other entity selected by AJI and TCI to
internationalize and localize the AJ Assets into the Japanese language.
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1.22 "Territory" means the country of Japan and individuals who read
and speak the Japanese language worldwide.
1.23 "AJURL" means the URL "xxx.xxxxxxxxx.xx.xx" and its
permutations, such as "xx.xx.xx", and "xxxx.xx.xx", "xxx.xx.xx", and "xxx.xx.xx"
(as and when acquired for or on behalf of AJI), and such placeholder URL(s) as
AJI may designate prior to securing the main URL (and its permutations).
2. Establishment of the KK.
2.1 General. Subject to the terms and conditions of this Agreement,
the Parties shall work together in financing and operating the KK under the
applicable laws of Japan. AJI initially capitalized the KK with (Yen)|*| in
exchange for Two Hundred (200) shares of Common Stock representing 100% of the
issued and outstanding Common Stock of the KK and warrants to purchase Two
Hundred (200) shares of Common Stock at (Yen)|*| per share, in the form attached
as Schedule 6.1 and incorporated by reference herein ("Warrants"). Subject to
its terms, the Warrants are payable in calls as follows: October 1, 2000
(Yen)|*| for 66 shares; January 1, 2001 (Yen)|*| for 67 shares; and April 1,
2001 (Yen)|*| for 67 shares.
2.2 KK Employee Fund. The KK will establish the Ask Jeeves Kabushiki
Kaisha Employee Fund and reserve shares of Common Stock in an amount of up to
10% of the total issued and outstanding equity interest in the KK as set forth
in Schedule 6.2, provided that such shares may not be issued or capital received
from employees until the KK's initial public offering.
2.3 TCI and AJI Employee Fund. The TCI Employee Fund shall receive
Common Stock in the KK, representing up to 1.5% of the total issued and
outstanding equity interest in the KK as set forth in Schedule 6.2. Subject to
creation of the AJI Employee Fund and approval of such fund by the Board of
Directors of AJI, the AJI Employee Fund shall receive Common Stock in the KK,
representing up to 1.5% of the total issued and outstanding equity interest in
the KK, as set forth in Schedule 6.2.
2.4 Technology Partner. The Technology Partner shall receive
nonvoting securities in the KK, the terms of which shall be agreed upon between
AJI and TCI, representing up to 2.1% of the total issued and outstanding equity
interest in the KK as set forth in Schedule 6.2. The Technology Partner shall be
selected upon the approval of AJI and TCI, not to be unreasonably withheld or
delayed and upon completion of due diligence.
2.5 Filings. Promptly after execution of this Agreement, the Parties
shall file with the appropriate authorities of Japan, by the names of the
Parties inasmuch as required by Japanese laws, an application for approval of
the business contemplated by this Agreement. TCI shall use its best efforts to
assist the Parties to obtain such approval. The Parties acknowledge that any and
all obligations of the other Parties pursuant to this Agreement and the
transactions
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contemplated herein are expressly subject to the condition that all necessary
approvals from Japanese governmental authorities shall be obtained.
2.6 Business Plan. The Parties shall cooperate to complete a
Business Plan.
3. Registered Name of the KK. The name of the KK is "Ask Jeeves Kabushiki
Kaisha" in Japanese and "Ask Jeeves Japan, Inc." in English. The KK shall have
its registered principal office in Tokyo, Japan, or any other suitable location
that the Parties might agree upon.
4. Articles of Incorporation. The KK shall have Amended and Restated
Articles of Incorporation in accordance with the provisions of this Agreement,
in substantial form attached hereto as Schedule 4, provided, however, that such
Amended and Restated Articles of Incorporation shall be approved in writing by
both AJI and TCI, any such approval not to be unreasonably withheld or delayed.
5. Business Purposes of the KK. The objective of the KK shall be to engage
in the following businesses (collectively the "Business"):
5.1 Development and maintenance of Japanese language version of the
Xxx.xxx Web site and related business in the Territory;
5.2 Marketing, advertising, sales, business development, and
engineering activities of KK Assets in the Territory;
5.3 Adding Japanese specific content to the KK Web site database in
Japan;
5.4 Marketing, advertising, sales, business development,
engineering, adaptation, development and maintenance of and with respect to the
Japanese language version of the AJ Assets for distribution and sublicense to
corporate customers within the Territory, both directly and indirectly through
resellers;
5.5 Serving as the exclusive vehicle for the implementation and
distribution of all current and future products, services and technology
employed by AJ including its subsidiaries; and
5.6 Such other business relating to the foregoing as the Parties may
agree upon from time to time.
6. Sale and Purchase of the KK Shares; Ownership of the KK.
6.1 Sale and Purchase. Subject to the terms and conditions hereof,
the KK agrees to sell, and TCI agrees to purchase, Two Hundred (200) shares of
Common Stock of the KK (the "Shares") at a price of (Yen)|*| per Share at
Closing and Warrants, attached as Schedule 6.1
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and incorporated by reference herein, to purchase Two Hundred (200) shares of
Common Stock at (Yen)|*| per share ("Warrant Shares") callable as follows:
(a) October 1, 2000 (Yen)|*| for 66 Warrant Shares;
(b) January 1, 2001 (Yen)|*| for 67 Warrant Shares;
and (c) April 1, 2001 (Yen)|*| for 67 Warrant Shares.
Notwithstanding the foregoing warrant call above, and subject to the terms of
the Warrant, if at any time before April 1, 2001, the cash balance of the KK
falls below (Yen)|*| as defined in the Business Plan, before the due date of any
of the warrant calls referred to in the preceding sentence, the next warrant
call shall accelerate and become due within ten (10) days from the date that the
KK notifies TCI and AJI, as applicable, that the KK's cash balance has fallen
below (Yen)|*|
6.2 Closing; Delivery. The closing of the sale and purchase of the
Shares and the Warrant under this Agreement shall be held at 12:00 p.m. on or
about August 31, 2000 at the offices of Xxxxxx Pepper & Shefelman PLLC, 0000
Xxxxx Xxx, Xxxxxxx Xxxxxxxxxx or at such other time and place as the Parties may
agree (the "Closing"). At Closing, the KK shall deliver to TCI one or more stock
certificates representing the Shares, one or more Warrants representing the
Warrants dated the date of the Closing (the "Closing Date") and registered in
the name of TCI, against payment by TCI of (Yen)|*| and one or more Warrants
representing the Warrants dated the Closing Date and registered in the name of
TCI, against payment by TCI of (Yen)|*|, in immediately available funds to an
interest bearing bank account designated by the KK. Upon each subsequent payment
referred to in Sections 2.1 and 6.1 in immediately available funds to a bank
account designated by the KK, the KK shall deliver to each of TCI and AJI one or
more stock certificates representing the Warrant Shares represented by the call
of such Warrants, duly registered in the names of TCI and AJI respectively. At
the Closing Date, the issuance of Common Stock the capitalization of the KK will
be as set forth in Schedule 6.2.
7. Warranties and Representations of the Parties and the KK.
7.1 Warranties and Representations of AJI.
(a) Authorization. All corporate action on the part of the
AJI, its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
AJI hereunder and thereunder has been taken or will be taken prior to the
Closing, and this Agreement constitute valid and legally binding obligations of
the AJI, enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
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(b) Compliance with Other Instruments. AJI is not in violation
or default in any material respect of any provision of its Articles of
Incorporation or Bylaws, or in any material respect of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound,
or, to its knowledge, any provision of any statute, rule or regulation
applicable to AJI. The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of AJI or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to AJI, its business or operations or any of its assets or
properties.
7.2 Warranties and Representations of TCI.
(a) Authorization. All corporate action on the part of the
TCI, its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations of
TCI hereunder and thereunder has been taken or will be taken prior to the
Closing, and this Agreement constitute valid and legally binding obligations of
the TCI, enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally, and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
(b) Compliance with Other Instruments. TCI is not in violation
or default in any material respect of any provision of its Articles of
Incorporation or Bylaws, or in any material respect of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound,
or, to its knowledge, any provision of any statute, rule or regulation
applicable to TCI. The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of AJI or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to AJI, its business or operations or any of its assets or
properties.
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7.3 Warranties and Representations of the KK.
(a) Organization, Good Standing and Qualification. The KK is a
corporation duly organized, validly existing and in good standing under the laws
of Japan and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted. The KK is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
business or properties.
(b) Valid Issuance of Common Stock. The Shares and Warrant
Shares that are being purchased by TCI and the Warrant Shares purchased by AJI,
when issued, sold and delivered in accordance with the terms of this Agreement
for the consideration expressed herein, will be duly and validly issued, fully
paid, and nonassessable, and will be free of any liens, encumbrances and
restrictions on transfer other than restrictions on transfer under this
Agreement and applicable Japanese securities laws. The Common Stock issuable
upon conversion of the Warrant Shares purchased under this Agreement has been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the Amended and Restated Articles of Incorporation, will be duly and
validly issued, fully paid, and nonassessable and will be free of any liens,
encumbrances and restrictions on transfer other than restrictions on transfer
under this Agreement, and applicable Japanese securities laws.
(c) Compliance with Other Instruments. The KK is not in
violation or default in any material respect of any provision of its Articles of
Incorporation or Bylaws, or in any material respect of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound,
or, to its knowledge, any provision of any statute, rule or regulation
applicable to KK. The execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby and thereby will not
result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of KK or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to KK, its business or operations or any of its assets or properties.
8. Pro Rata Right to Maintain Percentage Interest.
8.1 Each Party shall have the right to purchase its pro rata share
(as defined herein) of all Equity Securities that the KK may, from time to time,
propose to sell and issue, other than as excluded by Section 8.5. The KK may, at
its election, sell to each such Party its pro rata amount of new Equity
Securities at the initial closing of the sale of such securities or at a
subsequent closing which shall take place within ninety (90) days of the initial
closing. A
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Party's pro rata share shall be equal to its Percentage Interest immediately
prior to the issuance of such Equity Securities.
8.2 If the KK proposes to issue any Equity Securities, it shall give
each Party written notice before such issuance or within ten (10) days
thereafter, describing the type of Equity Securities, the price and the number
of shares and the general terms and conditions upon which the KK proposes to
issue or issued the same. Each Party shall have thirty (30) days from the date
of such notice to agree to purchase up to the amount of Equity Securities equal
to such Party's Percentage Interest of all Equity Securities proposed to be
issued under Section 8.1 for the price and upon the general terms and conditions
specified in the notice by giving written notice to the KK and stating therein
the quantity of Equity Securities to be purchased.
8.3 If less than all the Parties elect to purchase their Percentage
Interest of the Equity Securities, then the KK shall promptly notify in writing
the Parties who do so elect, and shall offer such Parties the right to acquire
such unsubscribed Equity Securities. A Party who does not purchase its entire
pro-rata amount shall forfeit its right to purchase any of such Equity
Securities without forfeiting any subsequent right to purchase Equity Securities
in accordance with its adjusted Percentage Interest. Each Party shall have ten
(10) days after receipt of such notice to notify the KK of its election to
purchase all or a portion thereof of the unsubscribed Equity Securities.
8.4 If any such Party fails to exercise the right to maintain its
interest within said periods set forth in subsections (b) and (c), the KK shall
have ninety (90) days thereafter to sell the Equity Securities in respect of
which the Parties' rights were not exercised, at a price and upon general terms
and conditions no more favorable to the purchasers thereof than specified in the
KK's notice to the Parties pursuant to Section 8.2. If the KK has not sold such
Equity Securities within such 90-day period, the KK shall not thereafter issue
or sell any Equity Securities without first offering such securities to the
Parties in the manner provided above.
8.5 The rights in this Section 8 shall not apply to the issuance by
the KK of any of the following Equity Securities:
(i) Shares of common stock and/or options, warrants or other
common stock purchase rights issued or to be issued to employees, officers or
directors of, or consultants or advisors to the KK or any Affiliate of the KK
(other than any of the Parties), pursuant to stock purchase or stock option
plans or other similar arrangements approved by the Board of Directors of the
KK;
(ii) Equity Securities issued as consideration in lieu of cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
(iii) Equity Securities used in connection with any stock
split or stock dividend of the KK;
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(iv) Equity Securities issued as consideration in connection
with the purchase of all or substantially all the assets of another business
entity or division of another business; and
(v) Equity Securities issued in connection with the purchase or
license of any tangible or intangible assets for use in the KK's business,
including without limitation, patents, trade secrets and leasehold interests,
the lease of equipment by the KK, the provisions of lease financing to the KK or
the purchase of any products by the KK.
9. Duties of the Parties.
9.1 AJI's Duties. AJI shall use reasonable commercial efforts to
cause the KK to contract with TCI or an affiliate of TCI for advertising
services and back office support if offered at no more than arms-length prices.
9.2 TCI's Duties. TCI shall use its best efforts to facilitate the
start-up of the KK including leasing office space, hiring employees and business
planning for the KK.
10. Directors, Officers and Employees. The Directors, Statutory Auditors,
Representative Directors and Officers of the KK shall be appointed in the
following manner:
10.1 Directors. The Board of Directors of the KK (the "Board") shall
consist of four members, two of whom shall be designated by TCI and two of whom
shall be designated by AJI. One of the designees of TCI shall be the President
of the KK. One AJI designee shall be a Representative Director (daihyo) as
permitted under the Japanese Commercial Code. TCI and AJI shall always designate
the same number of directors to the Board. If a vacancy occurs on the Board, a
new director shall be nominated by the party that nominated the director whose
office has been vacated, and an election to fill such vacancy shall be held at a
shareholders' meeting to be called without delay. The Parties agree to exercise
their representative voting rights as shareholders of the KK so as to ensure
that the persons nominated as directors by the Parties are elected.
10.2 Statutory Auditor. The KK shall have the three required
statutory auditors (kansayaku) one of whom shall be nominated by TCI upon
consultation with and subject to the prior approval of AJI, such approval not to
be unreasonably withheld or delayed. At least one statutory auditor must serve
on a full-time basis, and at least one must be an individual who has not served
as a director or been employed as a director or been employed as a manager or in
another position by the KK, AJ, or TCI or an Affiliate of either during the past
five (5) years. The Parties agree to exercise their representative voting rights
as shareholders of the KK so as to ensure that the person nominated by TCI as
statutory auditor in accordance with the foregoing is
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elected. In addition, the KK shall have the required statutory accountant
auditor (kaikei kansanin).
10.3 President. TCI shall appoint the President of the KK, subject
to AJI's approval, not to be unreasonably withheld or delayed. The President
shall be a Representative Director (daihyo). The President may be removed by a
two-thirds affirmative vote by the Board including the affirmative vote of at
least one director designated by AJI and one director designated by TCI. In the
event that the office of the President becomes vacant, the selection of the
successor shall follow the same procedures in accordance with this Section 10.3.
10.4 Joint Actions by the President and the AJI appointed
Representative Director. All decisions made on behalf of the KK which do not
require Board approval but which exceed an aggregate monetary interest of
(Yen)5,000,000 or binds the KK for more than one (1) year shall be made only by
the two daihyos jointly.
10.5 Officers. The President of the KK may appoint officers as is
necessary or advisable in the conduct of the affairs of the KK from time to
time, subject to the approval of at least one director designated by AJI and one
director designated by TCI. Such officers may be removed with or without cause
by the Board, subject to the approval of at least one director designated by AJI
and one director designated by TCI. Officers shall be delegated such duties,
powers and authority (which shall not include the power to amend this Agreement)
as the Board may determine. Unless specifically limited by the Board, the
officers shall have the authority to delegate such of their duties, powers and
authority to such other officers, agents or representatives of the KK as they
shall determine.
11. Shareholder Meetings.
11.1 Regular Meetings. A regular meeting of shareholders of the KK
shall be held once every year in Japan in any location permitted by the Japanese
Commercial Code. The Parties shall be given twenty (20) days' prior written
notice of such meeting. The KK shall reimburse the Parties for business class
airfare in connection with the attendance of at least two representatives of
each Party at regular meetings of shareholders.
11.2 Special Meetings. Each of the Parties shall have the right to
request that the Board promptly call a special shareholder meeting. Shareholders
shall be given fourteen (14) days' prior written notice of such meeting, which
may be held in such place within Japan as determined by the Board. Each party
shall bear its own expense of attendance at all special shareholder meetings.
11.3 Presence at a Meeting. Presence at a meeting requires actual
personal attendance or as permitted by the Japanese Commercial Code. Any Party
may waive notice of a meeting in writing, either before or after the meeting.
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11.4 Quorum. Unless otherwise specifically provided in this
Agreement, a quorum of shareholders at any meeting of shareholders shall be
shareholders owning a sixty-seven percent (67%) of the Percentage Interest of
the KK.
11.5 Super Majority Provisions. All actions taken by shareholders
require an affirmative vote of shareholders owning sixty-seven percent (67%) of
the Percentage Interest of the KK, including without limitation:
(a) Revisions in the KK Articles of Incorporation
(b) Sale, transfer or other disposal of all or substantially
all of the KK assets, KK business, KK property, intellectual property rights, or
other assets whether by a single transaction or a series of related transactions
or not;
(c) Grant of exclusive license to any asset or right of the
KK;
(d) Increase the size of the Board of Directors of the KK;
(e) Issuance of Equity Securities;
(f) Declaration of dividends to shareholders;
(g) The merger or consolidation of the KK with any other
entity;
(h) Other than as set forth in Section 17, the dissolution or
liquidation of the KK, as well as the continuation or reestablishment of the KK
following dissolution; or
(i) Removal of a director.
(j) Ratification of the KK's independent accounting firm.
To the extent permitted by Japanese law, the foregoing approval requirements
shall also be set forth in the Amended and Restated Articles of Incorporation of
the KK.
12. Board of Director Meetings.
12.1 Regular Meetings. The regular meetings of the Board shall be
held once every three (3) months. The meetings shall alternate between Tokyo,
Japan and Los Angeles, California. Each party shall bear its own expense of
attendance at all Board meetings.
12.2 Special Meetings. Special meetings of the Board may be called
by any member of the Board upon at least seven (7) days notice for the meeting.
Each party shall bear its own expense of attendance at all Board meetings.
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12.3 Presence at a Meeting. Directors may participate in a regular
or special meeting of the Board by, or conduct the meeting through the use of,
any means of communication permissible under the Japanese Commercial Code.
Attendance at a meeting, either in person or by any means of communication
permissible under the Japanese Commercial Code, shall constitute waiver of
notice and any member may waive notice of a meeting in writing, either before or
after the meeting.
12.4 Quorum: Matters Requiring Board Approval. A quorum of the Board
of Directors for the purpose of transacting business at any meeting shall be a
majority of its members. Action may be taken at any Board meeting at which a
quorum is present by a vote of a majority of the Board present at such meeting,
provided that such majority includes the affirmative vote of at least one member
designated by AJI and one member designated by TCI.
12.5 Matters Requiring Board Approval. The following corporate
actions shall require approval of the Board, including the affirmative vote of
the director designated by AJI and the director designated by TCI:
(a) Approvals of stock transfers (other than pursuant to
Section 14),
(b) Adoption of the Annual Plan and any changes to such
Annual Plan,
(c) Incurring liabilities not reflected in the Annual Plan
which period of indebtedness covers more than one year
or which amount exceeds (Yen)5,000,000, and any renewals
or revisions thereto,
(d) Disposition or acquisition of assets exceeding
(Yen)5,000,000 per year not reflected in the Business
Plan,
(e) Strategies and actions concerning trademark adoption and
intellectual property protection,
(f) Contracts concerning the license or transfer of
intellectual property of the KK, excluding standard form
agreements previously approved by the Board in
accordance with this Article 12.5,
(g) Any guarantee of indebtedness or liabilities of another
person or entity,
(h) Any issuance of corporate debt or bonds,
(i) Any decisions concerning material litigation,
(j) The declaration of any dividends to shareholders,
(k) Any hiring of and any terms of employment (including
compensation and benefits) for, or any termination of,
any officer or key employee of the KK, including the
President, COO, CFO, CMO and VP of Sales,
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(l) Any increases in stock allocated to the stock option
plan,
(m) Any transaction where a shareholder is an interested
party or,
(n) Appointment or removal of the KK's independent
accounting firm.
12.6 Check Approval. Any funds drawn from a KK account in excess of
(Yen)4,000,000 whether by check or electronic payment (such as wire transfer)
shall require the signature or other written approval of the President and one
director designated by AJI.
13. Accounting and Records.
13.1 Records. The KK shall keep true and accurate books of account
and records according to the Japanese Commercial Code, tax laws and other
relevant laws and regulations of Japan. The KK shall provide each party the
accounting information such party requires to comply with its own financial
reporting requirements.
13.2 Inspection. The Parties shall each have the right to inspect
the books of account and records as well as the operating conditions of the KK,
at the cost of such Party.
13.3 Auditing. The KK shall engage (in accordance with Section 11.5)
an independent accounting firm to audit its books and records.
13.4 Reports. The KK will deliver to each Party: (a) an unaudited
balance sheet, statement of operations and statement of cash flows for each
month within thirty (30) days following the end of such month; (b) an unaudited
balance sheet, statement of operations and statement of cash flows for each
quarter within forty (40) days following the end of such quarter; and (c) an
audited balance sheet, statement of operations and statement of cash flows for
each fiscal year within seventy (70) days following the end of such year.
Unaudited statements will be prepared in accordance with the books and records
of the KK and will fairly present the financial condition and results of
operations of the KK for the respective period. Audited statements will be
prepared in accordance with Japanese generally accepted accounting principles
consistently applied.
13.5 Annual Plan. The President of the KK shall draft the Annual
Plan which shall be completed no later than the beginning of each operating
fiscal year of the KK and which shall be reviewed, and, if approved, adopted at
the first Board meeting of each fiscal year.
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14. Transfer of Common Stock; Right of First Refusal; Co-Sale Right.
14.1 Transfer of Shares. Each shareholder may transfer its Common
Stock in the KK subject to the provisions of Sections 14.2 through 14.5. Each
shareholder shall not transfer its shares of Common Stock to a entity (or that
company's majority owned subsidiary) set forth in the Schedule 14.1. Transfers
by a Shareholder to its Affiliate shall not be subject to the Right of First
Refusal set forth in Section 14.2 or Co-Sale Right set forth in Section 14.5.
14.2 Right of First Refusal. In the event that a shareholder (the
"Selling Shareholder") desires to sell, transfer or dispose any of its Common
Stock in the KK, it shall offer to sell such Common Stock first to each other
shareholder (the "Non-selling Shareholder") and second, to the KK, at a price
and terms equal to: (i) in the event a third party offers to purchase such
Common Stock, the price and terms at which the prospective purchaser intends to
purchase such Common Stock, provided the Selling Shareholder first delivers a
written copy of the offer which includes the names of the third party, the
number of Common Stock the third party intends to purchase, and the price it
intends to pay, to each Non-selling Shareholder; (ii) in the event the Selling
Shareholder desires to transfer the Common Stock for no consideration, the Fair
Market Value; or (iii) in any event, such other price and terms as the
shareholder may agree upon. The provisions of this paragraph shall not apply to
transfers of a shareholder's Common Stock to its Affiliate.
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14.3 Offer Procedure.
(a) A Non-selling Shareholder to which an offer is made
pursuant to Section 14.2 above shall have thirty (30) days from the date of
receipt of the offer within which to accept such offer. If more than one
Non-selling Shareholder wishes to purchase Common Stock, each may purchase a
portion of the offered shares equal to its Percentage Interest divided by the
Percentage Interest of all Non-selling Shareholder desiring to purchase the
shares. In the event that any Non-selling Shareholder fails to purchase their
maximum portion of the offered Common Stock, such Non-selling Shareholder will
notify the other Non-selling Shareholder, and the Non-selling Parties which
desire to purchase such Common Stock shall have an ten (10) days from having
received notice of such notice of non-purchase to purchase their share of the
unpurchased portion.
(b) In the event that the offer to purchase the Selling
Shareholder's Common Stock is not accepted or is accepted for less than the
number of shares of Common Stock offered by the Selling Shareholder pursuant to
Section 14.3(a), the Selling Shareholder shall offer such remaining shares of
Common Stock to the KK for an additional period of fifteen (15) days. Such right
to purchase Common Stock by the KK is, upon approval by the Board, assignable by
the KK to any other person or entity.
(c) In the event that the offer to purchase the Selling
Shareholder's Common Stock is not accepted or is accepted for less than the
number of shares of Common Stock offered by the Selling Shareholder pursuant to
Sections 14.3(a) and 14.3(b), the Selling Shareholder shall, within thirty (30)
days following the expiration of such fifty-five (55) day period, seek the
Board's approval of a sale or transfer of the Common Stock not accepted to a
specified third party; provided, however, that in the event that a sale or
transfer to such third party is proposed on terms less favorable to the Selling
Shareholder than the terms of the offer made pursuant to Section 14.2 above,
then such transfer may not be completed without the Selling Shareholder again
adhering to the terms of this Section 14.3 with regard to the revised terms. In
no event shall the Selling Shareholder offer Common Stock to a competitor of the
KK or of any other Party.
14.4 Transferee Obligations. It shall be a condition to any sale or
transfer of voting shares to any third party that such third party shall become
a party to this Agreement.
14.5 Co-Sale Right. If at any time a Shareholder (a "Co-Sale
Shareholder") desires to sell all or any part of Common Stock held by it (the
Common Stock proposed for sale being the "Co-Sale Shares") to any person or
entity (a "Purchaser"), each Shareholder shall have the right to participate in
such sale of Common Stock, except as limited herein. Each Shareholder electing
to exercise this right (a "Participating Shareholder") may sell to the
Purchaser, on the same terms and conditions applicable to the sale by the
Co-Sale Shareholder, that number of shares of Common Stock held by such
Participating Shareholder equal to the product obtained by multiplying the
number of Co-Sale Shares by a fraction, the numerator of
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which is the number of Common Stock owned by the Participating Shareholder
(calculated on a fully-diluted basis) and the denominator of which is the
aggregate number of Common Stock owned by all Participating Shareholders
(calculated on a fully-diluted basis).
14.6 Shareholders Agreement. The Parties shall cause the KK to adopt
a Shareholders Agreement to be signed by all shareholders of voting stock of the
KK which shall at least contain the provisions set forth in this Section 14, and
shall provide that the KK's stock certificates shall be appropriately legended
as notice of the transfer restrictions set forth in this Section 14.
15. Term. This Agreement shall become effective as of the Closing Date and
shall continue unless earlier terminated by unanimous agreement of the Parties
or as provided herein.
16. Termination of this Agreement.
16.1 Triggering Events. This Agreement may be terminated by a Party
(the "Terminating Party") by written notice of termination to the other Party,
in the event another Party (hereinafter the "Defaulting Party"):
(a) commits a material breach of this Agreement and fails to
remedy such breach within sixty (60) days from the date of notice of breach;
(b) becomes insolvent or becomes a party, voluntarily or
involuntarily, to bankruptcy, composition for the benefit of creditors, or
reorganization proceedings; or
(c) becomes dissolved and liquidated or discontinues its
business (excluding a reorganization or merger of a Party into an Affiliate or
transfer of all or substantially all of Party's assets to an Affiliate).
Such notice of termination must be delivered within 120 days after the
Terminating Party becomes aware of a triggering event. After the expiration of
such 120-day time period, such right to give notice of termination shall end and
be null and void. In all cases Defaulting Party shall have 60 days from date of
notice of termination to cure the breach.
16.2 Termination for TCI's Breach. This Agreement may be terminated
by AJI by written notice of termination to TCI, in the event TCI fails to make
its payment in accordance with the schedule set forth in Section 6.1. TCI shall
have the right to cure within ten (10) Business days from the date of notice of
breach.
16.3 Terminating Party Remedies.
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(a) In the event that this Agreement is terminated pursuant to
Section 16.1 above, effective 120 days after the date of notice of termination,
the Terminating Party shall be entitled to: (i) dissolve the KK pursuant to
Sections 16.4, and 16.5 or 16.6 or (ii) purchase the Defaulting Party's Common
Stock at a purchase price equal to the Fair Market Value of the Common Stock at
the time of default.
(b) In the event that this Agreement is terminated pursuant to
TCI's breach described in Section 16.2 above, AJI may purchase all or part of
TCI's Shares in the KK at a purchase price of (Yen)|*| per Share.
16.4 Dissolution; Liquidation. In the event of a termination,
dissolution or liquidation of the KK for whatever reason, the Parties shall:
(a) Cooperate with the Terminating Party in the dissolution,
liquidation and termination proceedings of the KK;
(b) To the extent the KK has assets available for distribution
to its shareholders, each of TCI and AJI shall be entitled to a return of its
entire capital contribution;
(c) Subject to Sections 16.5 and 16.6 below, distribute all
remaining assets in proportion to each Party's then current Percentage Interest
in the KK.
16.5 Dissolution by Mutual Agreement. In the event of a termination,
dissolution or liquidation of the KK by mutual agreement of the Parties, the
Parties shall:
(a) Distribute to AJI and TCI for their free and unrestricted
use, the Localized AJ Assets and KK Assets. AJI will provide technical support
to TCI at AJI's then current market rate for at least six (6) months;
(b) AJI shall have exclusive use of the "Ask Jeeves"
trademarks and design as well as the URLs. TCI will transfer ownership in the
URLs to any AJI designated entities. TCI shall be compensated for the fair
market value of the goodwill built up in the URLs in proportion to its ownership
share in the KK. TCI shall have exclusive use of all other URLs registered by
the KK. AJI shall be compensated for the fair market value of the goodwill built
up in the other URLs;
(c) For six (6) months after dissolution of the KK: (i) the
URLs and their permutations will direct 50% of the Web users to the Web site
operated by TCI and 50% of the Web users to the Web site operated by AJI, and
(ii) TCI shall post a banner advertisement and link to AJI's Web site, and AJI
will post a banner advertisement and link to the TCI Web site, each directing
users to the other's Web site.
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16.6 Dissolution by reason of a Material Breach. In the event of a
termination, dissolution or liquidation of the KK due to a material breach by a
Party, the Terminating Shareholder shall have the ongoing exclusive use of the
Localized AJ Assets and KK Assets subject to any agreed upon restrictions
thereto, and all agreements shall be assigned to the Terminating Shareholder and
shall continue in full force and effect.
16.7 Nonexclusive Remedy. Nothing in this Agreement shall be
construed to restrict any Party's claims against any other Party for damages in
the event of a breach of this Agreement.
17. Confidentiality
17.1 Definition. "Confidential Information" shall mean any data or
information disclosed hereunder (whether written or oral or graphical) that
relates to the disclosing party's products, financial information, technology,
research, development, customers or business activities, and which is
confidential or proprietary to or a trade secret of the disclosing party,
provided that either the information is marked or identified as confidential at
the time of disclosure or any other information that from the circumstances of
its disclosure, ought in good faith be treated as confidential. Confidential
Information includes, without limitation, any data or information related to,
and any user information retained by, or stored by, a Web Site of AJI or its
Affiliates, and amounts paid to KK by TCI. Confidential Information shall not
include any information, data or material which: (1) the disclosing party
expressly agrees in writing is free of any nondisclosure obligations; (2) at the
time of disclosure to the receiving party was known to the receiving party (as
evidenced by documentation in the receiving party's possession) to be free of
any non-disclosure obligations; (3) is independently developed by the receiving
party (as evidenced by documentation in the receiving party's possession); (4)
is lawfully received by the receiving party, free of any non-disclosure
obligation, from a third party having the right to so furnish such Confidential
Information; or (5) is or becomes generally available to the public without any
breach of this Agreement or unauthorized disclosure of such Confidential
Information by the receiving party.
17.2 Agreement of Confidentiality. Except as expressly authorized by
any other Party, each Party agrees not to disclose, use or permit the disclosure
or use by others of any Confidential Information unless and to the extent such
Confidential Information is marked or designated in writing as suitable for
disclosure and is provided for a purpose that reasonably contemplates disclosure
to or use by others. The foregoing confidentiality obligation shall also apply
to the contents of this Agreement.
17.3 Standard of Care. In furtherance, and not in limitation of the
foregoing Section 17.2, each Party agrees to do the following with respect to
any such Confidential Information: (i) exercise the same degree of care to
safeguard the confidentiality of, and prevent the unauthorized use of, such
information as that Party exercises to safeguard the confidentiality of its own
Confidential Information; and (ii) instruct and require such advisors,
employees, sub-
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licensees, and agents to maintain the confidentiality of such information and
not to use such Confidential Information except as expressly permitted herein.
Each Party further agrees not to remove or destroy any proprietary or
confidential legends or markings placed upon any documentation or other
materials.
17.4 Government Disclosures. The obligations under this Section 17
shall not prevent the Parties from disclosing the Confidential Information or
terms of this Agreement to any governmental authority as required by law or
regulation (including those requiring filing of documents in connection with
registrations under the Securities Act of 1933) or as ordered by a court
(provided that the Party intending to make such disclosure in such
circumstances: (i) has given the appropriate other Party prompt notice prior to
making such disclosure so that the other Party may seek a protective order or
other appropriate remedy prior to such disclosure, (ii) cooperates fully with
the other Party in seeking such order or remedy), and seek Confidential
Treatment of the Confidential Information, this Agreement when disclosed to a
governmental authority. In the event the governmental authority denies
Confidential Treatment, the Parties will use their best efforts to redact
Confidential Information, financial information and payment schedules from this
Agreement.
17.5 The KK Confidentiality Obligation. The KK shall require each
employee, independent contractor, consultant and any other person who will have
access to Confidential Information of the KK or of any Party to enter into a
confidentiality agreement and, if applicable, an inventions assignment
agreement, the forms of which are to be approved by the Board.
18. Right of First Negotiation. AJI hereby grants to TCI a right of first
negotiation to enter into a joint venture for the non-English localization and
distribution of current and future products, services, content, technology and
trademarks and other intellectual property used by AJ, including the Corporate
Answer Service products and services in China, Korea, Taiwan and non-English
speaking markets within the Pan-Asian region where AJI is not in joint venture
negotiations as of the date of execution of this Agreement. TCI hereby agrees
that in each of these markets it will be required to share its one-half (1/2)
ownership of the joint venture with a local partner, which local partner shall
be chosen by mutual agreement between TCI and AJI.
19. Conditions of the Parties Obligations.
19.1 The obligations of TCI to the KK under this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against TCI unless it
consents in writing thereto:
(a) Performance. AJI and the KK shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
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(b) Secretary's Certificate. The KK shall deliver to TCI a
certificate certifying the KK's Articles, Bylaws and resolutions approved by the
Board relating to the issuance of the Shares.
(c) Qualifications. All authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of Japan or of any
county that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
(d) Filing of Certificate. The Articles shall have been
accepted for filing with the appropriate regulatory authority in Japan.
(e) Board of Directors. The directors of the KK shall consist
of four (4) persons, two (2) persons designated by TCI and two (2) persons
designated by AJI.
(f) Business Plan. AJI shall have approved of the Business
Plan.
(g) Warrant. The KK and AJI shall have approved of the
Warrant.
19.2 The obligations of the KK to TCI under this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions by TCI:
(a) Performance. TCI and the KK shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing
(b) Payment of Purchase Price. TCI shall have delivered the
purchase price specified in Section 6.1.
(c) Business Plan. TCI shall have approved of the Business
Plan.
(d) Warrant. TCI shall have approved of the Warrant.
20. Notices. All notices required or permitted to be given hereunder shall
be in writing and shall be given by registered airmail, hand delivery or by
facsimile transmission to the following addresses:
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To TCI: Trans Cosmos Inc.
0-0-0, Xxxxxxx
Xxxxxx-xx, Xxxxx 000, Xxxxx
Fax: 00-0000-0000
Attention: Xxxx Xxxxx, President
With a copy to Xxxxxx Pepper & Shefelman, PLLC
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
Attention: Xxxxx X. Xxxxxxx
To Company: Ask Jeeves International, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxx Xxxxxxx, CEO
With a copy to: Cooley Godward LLP.
Five Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxx Xxxxx
And (required to
constitute notice): Ask Jeeves, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxxxxxx, General Counsel
To the KK: Ask Jeeves Japan, Inc.
0-0-0, Xxxxxxx
Xxxxxx-xx Xxxxx, 000
Xxxxx
21. Assignment of Rights and Obligations. This Agreement and the rights
and obligations hereunder may not be assigned without the other Party's prior
written consent except, (i) the sale of all or substantially all of the assets
of a Party, or any merger, consolidation or other transaction or series of
related transactions in which the voting equity holders of a Party immediately
prior to any such transaction are holders of less than a majority of the voting
securities of the surviving entity, shall NOT constitute an assignment for which
consent is
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required under this Section 21, and (ii) the Parties may assign their rights and
delegate their obligations under this Agreement to their respective Affiliates.
22. Succession of Rights and Obligations. This Agreement is binding on all
Parties and their successors and assigns. The Parties hereto shall cause their
successors and assigns, including without limitation those resulting from
merger, consolidation, acquisition or other like events, to perform their
obligations under this Agreement.
23. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Japan.
24. Dispute Escalation Procedures. The Parties agree to discuss
differences of opinion and attempt an amiable resolution of any disputes prior
to initiating any formal actions. In this regard, any disputes between the
Parties which cannot be resolved with the best efforts of the Parties under
normal circumstances shall be referred to the chief executive officer of each
Party and such chief executive officers shall make themselves available on an as
needed basis in an attempt to resolve the dispute.
25. Arbitration. Any unresolved disputes shall be finally settled by
arbitration in accordance with the rules then in effect of the Japan Commercial
Arbitration Association by one arbitrator 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 AJI). 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. The Parties
shall keep any proceedings and award confidential.
26. Entire Agreement, Modification, Waiver.
26.1 Entire Agreement. This Agreement constitutes the entire
agreement of the Parties with respect to the subject matter hereof, and
supersedes all prior or other agreements, verbal or written, which may exist
between the Parties. This Agreement may not be modified except by a written
agreement signed by duly authorized representatives of each Party.
26.2 Saving Provision. If any part of this Agreement is held to be
unenforceable, it shall not affect any other part. If any part of this Agreement
is held to be unenforceable as written, it shall be enforced to the maximum
extent allowed by applicable law.
26.3 Waiver. No waiver of any provision of this Agreement shall be
valid unless in writing, signed by the party against whom the waiver is sought
to be enforced. The waiver of any breach of this Agreement or failure to enforce
any provision of this Agreement shall not waive any later breach.
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27. Survival of Provisions.
27.1 General. Sections 16.4, 17 and 21 through 27 shall survive
indefinitely the termination of this Agreement. Except as otherwise explicitly
set forth in this Agreement, upon the termination of the Agreement all other
provisions shall terminate.
27.2 Confidentiality. If a Party sells or transfers all of its
Common Stock in the KK, or if the KK is dissolved, or if this Agreement is
terminated for any reason, the obligations hereunder of each Party to the other
and to the KK will terminate, except the obligations under Section 17 will
continue to survive indefinitely after any such transfer, dissolution or
termination.
27.3 Initial Public Offering. Sections 8, 10.1, 11.1, 12.4, 14,
ERROR! REFERENCE SOURCE NOT FOUND., and 16 shall terminate upon a public
offering of securities of the KK which has been approved by the Board.
27.4 Ownership Reduction. If a Party's Percentage Interest is less
than or if it is reduced below 10%, such Party shall not benefit from or be able
to enforce any provisions in Sections 8, 10, 11.1, 11.4, 11.5, 12.4, 14, ERROR!
REFERENCE SOURCE NOT FOUND. and 16, but such provisions shall be obligations of
and may be enforced against such Party.
28. Additional Parties. Additional parties may be admitted to this joint
venture and may join in this Agreement upon unanimous consent of other Parties.
In such case, Schedule 6.2 should be revised accordingly and following such
revision shall be distributed to all Parties.
29. Announcement. Except as otherwise stated in Section 17.4, the Parties
may announce the existence of their relationship and this Agreement only upon
unanimous agreement. Any press releases by a Party relating to this Agreement
shall be unanimously approved in advance by all Parties.
30. Counterparts, Language.
30.1 This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which shall be deemed to constitute one
and the same agreement.
30.2 This Agreement shall be made in the English language, which
language shall be controlling in all respects. A Japanese translation may be
prepared for the general reference of the Parties, but shall have no legal
effect. In the event that there is any inconsistency between the English
original and the Japanese translation, the English original shall prevail.
31. Reservation of Right to Revise Joint Venture Structure. The Parties
hereby agree to cooperate and act in good faith to change the method of
effecting the establishment of the KK
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-25-
and TCI's purchase of Equity Securities; provided, however, (a) no such change
shall alter or change the amount of Equity Securities to be issued to TCI as
provided in this Agreement, and (b) no such change shall adversely affect the
tax treatment to the Parties.
32. Force Majeure. Each Party will have no liability to the other Party as
a result of any delay or failure in the performance of such party's obligations
under this Agreement if the delay or failure is caused by events or
circumstances beyond such party's control including earthquakes, fires, floods,
riots, wars, labor disputes, shortages of materials or supplies, changes in laws
or government requirements, and transportation difficulties. If either Party is
prevented from performing any of its obligations hereunder due to any such event
or circumstance beyond its control, it will use reasonable efforts under the
circumstances to notify the other Party and to resume performance as soon as
reasonably possible.
33. AJURL Registration. The KK will register and own any and all
additional URLs that serve the KK. The KK acknowledges that the AJURL, or any
portion of it, may be registered in the name of one or more entities not owned
or controlled by AJI. The parties further acknowledge that the AJURL, or any
portion of it, may be registered in the name of one or more entities not owned
or controlled by TCI and the KK. Notwithstanding anything to the contrary
provided in this Agreement, each of TCI and the KK undertakes that (at such time
when such assignment and transfer shall be permitted under Japanese law) upon
AJI's request it shall cause such entity or entities controlled by TCI or the KK
(as the case may be) to freely assign and transfer to AJI (or such entity or
entities as AJI may designate for that purpose) The KK will register and own any
and all additional URLs that serve the KK. The KK acknowledges that the AJURL,
or any portion of it, may be registered in the name of one or more entities not
owned or controlled by AJI. The parties further acknowledge that the AJURL, or
any portion of it, may be registered in the name of one or more entities not
owned or controlled by TCI and the KK. Notwithstanding anything to the contrary
provided in this Agreement, each of TCI and the KK undertakes that (at such time
when such assignment and transfer shall be permitted under Japanese law) upon
AJI's request it shall cause such entity or entities controlled by TCI or the KK
(as the case may be) to freely assign and transfer to AJI (or such entity or
entities as AJI may designate for that purpose).
SIGNATURES APPEAR ON THE FOLLOWING PAGES
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
-26-
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto
have signed this Joint Venture Agreement as of the date and year set forth
above.
Trans Cosmos USA Pacific Holdings Company III.
Signature: /s/ Masatake Okudu
-------------------------------
Print Name: Masatake Okudu
------------------------------
Title: Executive Vice President
-----------------------------------
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
-27-
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto
have signed this Joint Venture Agreement as of the date and year set forth
above.
Ask Jeeves International, Inc.
Signature: /s/ Xxxxxx Xxxxxxx
---------------------------------
Print Name: Xxxxxx Xxxxxxx
--------------------------------
Title: President
-------------------------------------
IN WITNESS WHEREOF, the authorized representatives of the Parties hereto
have signed this Joint Venture Agreement as of the date and year set forth
above.
Ask Jeeves Japan, Inc.
Signature: /s/ Xxxxxxxxx Xxxx
---------------------------------
Print Name: Xxxxxxxxx Xxxx
--------------------------------
Title: President
-------------------------------------
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
-28-
SCHEDULE 4
Ask Jeeves Kabushiki Kaisha Articles of Incorporation
(TRANSLATION)
ARTICLES OF INCORPORATION
OF
A.J.J. Co., Ltd.
Authenticated on May 17, 2000
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(TRANSLATION)
ARTICLES OF INCORPORATION
OF
A.J.J. Co., Ltd.
CHAPTER I GENERAL PROVISIONS
Article 1. (Corporate Name)
This Company shall be called "Kabushiki Kaisha A.J.J.," which shall be expressed
in English as "A.J.J. Co., Ltd."
Article 2. (Objects and Purposes)
The objects and purposes of the Company shall be as follows:
(a) Providing Internet Web site information and operating services;
(b) Research, development, design, production, sales and leasing of
Internet software products;
(c) Providing research, development, design and maintenance service
for information technology and operating systems; and
(d) To conduct any and all business incidental or relating to the
above.
Article 3. (Location of Head Office)
The Company shall have its head office located at Chiyoda-ku, Tokyo.
Article 4. (Method of Public Notice)
All public notices of the Company shall be published in the Official Gazette
(Kampo).
CHAPTER II SHARES
Article 5. (Number of Shares Authorized to be Issued by the Company)
The total number of shares of stock authorized to be issued by the Company shall
be Eight Hundred (800) shares.
Article 6. (Type and Par Value of Shares)
All shares issued by the Company shall be of a single class of par value common
stock in registered form and shall have a par value of |*| Yen ((Yen)|*|) per
share.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 7. ( Type of Share Certificates)
All share certificates to be issued by the Company shall be in denomination of
one (1) share each or in such other denominations as shall be determined by the
Board of Directors.
Article 8. (Waiver of Possession of Share Certificates)
To waive possession of share certificates, a written waiver in the form
prescribed by the Company bearing the name and the seal impression of the person
concerned and the share certificates representing such shares, if any, shall be
submitted to the Company; provided, however, that if no share certificate has
been issued by the Company, submission of share certificates shall not be
required. If a shareholder who has waived possession of share certificates
desires to request reissuance or return of share certificates, he shall submit
to the Company a written request in the form prescribed by the Company bearing
his name and seal impression.
Article 9. (Registration, Etc., of Shares and Shareholders)
The procedures for registration of transfer or pledge of shares, issuance and
reissuance of share certificates, notification of the addresses and
representatives of shareholders, fees therefor, and other similar matters shall
be established by regulations of the Board of Directors.
Article 10. (Closing of the Register of Shareholders)
Entries in the register of shareholders of the Company shall be suspended from
the day following the last day of the business year of the Company until the
closing of the ordinary general meeting of shareholders pertaining to the same
business year. In addition to the case provided for in the preceding sentence,
the Company may suspend any new entry in the register of shareholders, whenever
necessary to determine persons entitled to exercise their rights as shareholders
or pledgees, upon giving prior public notice thereof.
Article 11. (Restriction on Transfer of Shares)
Any transfer of shares of stock of the Company shall require approval by the
Board of Directors.
CHAPTER III GENERAL MEETINGS OF SHAREHOLDERS
Article 12. (Convocation of General Meeting of Shareholders)
The ordinary general meetings of shareholders of the Company shall be convened
within three (3) months after the close of each business year of the Company.
Extraordinary general meetings of shareholders of the Company may be convened
from time to time by resolution of the Board of Directors whenever necessary.
Article 13. (Person to Convene Meetings and Chairman Thereof)
Except as otherwise required by mandatory provisions of law, general meetings of
shareholders shall be convened by the representative director of the Company in
accordance with a resolution
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
of the Board of Directors, and the representative director of the Company shall
act as chairman (Gicho) at such meetings. If the representative director of the
Company is unable to convene any general meetings of shareholders or to act as
chairman at any general meetings of shareholders, then any director of the
Company shall take his place in the order previously determined by the Board of
Directors.
Article 14. (Notice of Convocation)
In convening the general meetings of shareholders, notice shall be sent to each
shareholder of record, either by mail or by facsimile, not less than thirty (30)
days prior to the date of convocation of each such meeting, setting forth in
full the agenda of the meeting and the text of all resolutions proposed for
adoption at such meeting; provided, however, that such period of notice may be
shortened for a particular meeting in the case of urgent necessity with the
unanimous written consent of all the shareholders of record.
Article 15. (Place of Meetings)
All ordinary and extraordinary general meetings of shareholders of the Company
shall be held at the head office of the Company or at any other place that may
be designated by the unanimous consent of all the shareholders of record.
Article 16. (Resolutions)
Except as otherwise required by mandatory provisions of law or as otherwise
provided for in these Articles of Incorporation, resolutions of a general
meeting of shareholders shall be adopted by a majority of votes cast at a
meeting at which shareholders holding a majority of the issued and outstanding
shares are present or represented by proxy.
Article 17. (Proxy Voting)
A shareholder may exercise his vote by proxy. The proxy need not be a
shareholder of the Company; provided, however, that such proxy shall present to
the Company a document evidencing his appointment as proxy for each general
meeting of shareholders.
Article 18. (Minutes of Meetings)
Except as otherwise required by mandatory provisions of law, the substance of
the agenda of business at general meetings of shareholders and the results
thereof shall be recorded in minutes of the meeting, which shall bear the names
and seal impressions or signatures of the chairman and the directors present at
the meeting, and all such minutes shall be preserved at the head office of the
Company.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
CHAPTER IV DIRECTORS; REPRESENTATIVE DIRECTORS;
BOARD OF DIRECTORS; AND STATUTORY
AUDITORS
Article 19. (Number of Directors and Statutory Auditors)
The Company shall have three (3) or more directors and one (1) or more statutory
auditors.
Article 20. (Election of Directors and Statutory Auditors)
All directors and statutory auditors shall be elected at general meetings of
shareholders.
Article 21. (Term of Office)
The term of office of each director shall expire at the close of the ordinary
general meeting of shareholders to be held with respect to the last business
year terms ending within two (2) years subsequent to his assumption of office,
and the term of office of statutory auditors shall expire at the close of the
ordinary general meeting of shareholders to be held with respect to the last
business year terms ending within three (3) years subsequent to his assumption
of office. The term of office of any director or statutory auditor elected to
fill a vacancy shall be coterminous with the remainder of the term of office of
his predecessor. The term of office of a director elected as a result of an
increase in the number of directors shall be coterminous with the remainder of
the term of office of the other directors.
Article 22. (Representative Directors)
The Company shall have one (1) or more representative directors. Representative
directors shall be elected by resolution of the Board of Directors.
Article 23. (Board of Directors)
The directors of the Company shall constitute the Board of Directors. The Board
of Directors shall decide by resolution all important matters pertaining to the
management of the Company, as well as matters prescribed by law or by these
Articles of Incorporation.
Article 24. (Person to Convene Meetings)
Except as otherwise required by mandatory provisions of law, meetings of the
Board of Directors shall be convened by the representative director of the
Company. If the representative director of the Company is unable to convene any
meetings of the Board of Directors, then any director of the Company shall take
his place in the order previously determined by the Board of Directors.
Article 25. (Notice of Convocation)
In convening meetings of the Board of Directors, notice shall be sent to each
director not less than three (3) days prior to the date of convocation of each
such meeting; provided, however, that such period of notice may be shortened or
dispensed for a particular meeting in case of urgent necessity with the
unanimous written consent of all directors.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 26. (Chairman of Meetings)
The representative director of the Company shall act as chairman (Gicho) of
meetings of the Board of Directors. If the representative director of the
Company is unable to act as chairman of any meetings of the Board of Directors,
then any director of the Company shall take his place in the order previously
determined by the Board of Directors.
Article 27. (Quorum)
Except as otherwise required by mandatory provisions of law or as otherwise
provided for in these Articles of Incorporation, a quorum for a meeting of the
Board of directors shall require the presence of a majority of the directors of
the Company elected to office pursuant to these Articles of Incorporation.
Article 28. (Resolutions)
Except as otherwise required by mandatory provisions of law or as otherwise
provided for in these Articles of Incorporation, resolutions of the Board of
Directors shall be adopted only by the affirmative vote of a majority of the
directors of the Company.
Article 29. (Minutes of Meetings)
Except as otherwise required by mandatory provisions of law, the substance of
the agenda of business at meetings of the Board of Directors and the results
thereof shall be recorded in minutes of the meeting, which shall bear the names
and seal impressions or signatures of the chairman and the directors present,
and all such minutes shall be preserved at the head office of the Company.
Article 30. (Remuneration of Directors and Statutory Auditors)
The remuneration of the directors and of the statutory auditors shall be
separately determined by a resolution of a general meeting of shareholders.
CHAPTER V ACCOUNTING
Article 31. (Business Year)
The business year of the Company shall commence on January 1 of each year and
shall end on December 31.
Article 32. (Payment of Dividend and Interim Dividend)
1. Dividends may be paid to the shareholders and pledgees of record
as of the last day of each business year of the Company for which
dividends are declared (subject to the resolution of the
shareholders at the ordinary general meeting of shareholders of
the Company) within the scope of such sum as is legally permitted
under applicable laws.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
2. The Company may, by resolution of the Board of Directors, declare
an interim dividend under Article 293-5 of the Commercial Code of
Japan to the shareholders and pledgees of record as of the 30th
day of June of each year.
3. The Company shall not be obliged to pay any dividend or interim
dividend in cases in which any such dividend has not been
collected within three (3) full years after the date such
dividend becomes due and payable.
CHAPTER VI SUPPLEMENTARY PROVISIONS
Article 33. (Shares to be Issued Upon Establishment)
The total number of shares of stock of the Company to be issued upon
establishment of the Company shall be Two Hundred (200) par value shares of
common stock, and the issuing price of each share shall be |*| Yen ((Yen)|*|).
Article 34. (Initial Term of Office)
Notwithstanding the provisions of Article 21 of the Articles of Incorporation,
the terms of office of the initial directors and statutory auditors of the
Company shall expire at the close of the ordinary general meeting of
shareholders to be held with respect to the last business term ending within one
(1) year after their assumption of offices.
Article 35. (Initial Business Term)
The initial business term of the Company shall be from the date of its
incorporation to December 31, 2000.
Article 36. (Name and Address of the Promoter and Number of Shares Subscribed
Thereby)
Name and address of the promoter of the Company and the number of the shares of
stock of the Company subscribed by him is as follows:
Name and Address Number of Shares Subscribed
---------------- ---------------------------
Shunsuke Saeki 1 par value share of stock
San Gebul 103
7-5, Hiyoshi-honcho 2-chome,
Kohoku-ku
Yokohama-shi Kanagawa
IN WITNESS WHEREOF, for the purposes of the establishment of A.J.J. Co., Ltd.,
these Articles of Incorporation have been prepared, and the promoter has entered
his printed name and affixed his seal hereunto.
May 17, 2000
Shunsuke Saeki [Seal]
Promoter
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TOBO No. 116 of 2000
AUTHENTICATION
It is hereby certified that the Promoter, Shunsuke Saeki, stated that he himself
executed the attached Articles of Incorporation.
Xxxxxx Xxxxxxxxx
Notary Public
Tokyo Legal Affairs Bureau
0-00, Xxxxxxxxx 0-Xxxxx
Xxxxxxx-xx, Xxxxx
At the Notary Public Office
May 17, 2000
This is a certified copy.
Xxxxxx Xxxxxxxxx [Seal]
Notary Public
Tokyo Legal Affairs Bureau
0-00, Xxxxxxxxx 0-Xxxxx
Xxxxxxx-xx, Xxxxx
At the Notary Public Office
May 17, 2000
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
SCHEDULE 6.1
Warrant
[English Translations]
TERMS OF WARRANT
These terms are applicable to the warrant attached to the first
unsecured bond (with warrant) to be issued on September 1, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 1, 2000 to
October 1, 2000 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Warrant,no person may assert his/her rights pursuant to the Warrant
against the Company. (3) The Warrant may only be assigned collectively.
9. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The Exercise Value of the Warrant shall
be capitalized in its entirety.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
Article 7.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
Article 8.
In the event it becomes necessary to change the matters set forth herein
or when matters not described herein arise, the Warrant holder and the Company
shall execute an agreement in relation to such matters on a case-by-case basis
subject to common consent, and such agreement shall form a part of these terms.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TERMS OF WARRANT
These terms are applicable to the warrant attached to the second
unsecured bond (with warrant) to be issued on September 1, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 1, 2000 to
January 1, 2001 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock Warrant, no person may assert his/her rights
pursuant to the Warrant against the Company. (3) The Warrant may only be
assigned collectively.
9. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The Exercise Value of the Warrant shall
be capitalized in its entirety.
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filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
Article 7.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 8.
In the event it becomes necessary to change the matters set forth herein or when
matters not described herein arise, the Warrant holder and the Company shall
execute an agreement in relation to such matters on a case-by-case basis subject
to common consent, and such agreement shall form a part of these terms.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TERMS OF WARRANT
These terms are applicable to the warrant attached to the third
unsecured bond (with warrant) to be issued on September 1, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 1, 2000 to
April 1, 2001 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock Warrant, no person may assert his/her rights
pursuant to the Warrant against the Company. (3) The Warrant may only be
assigned collectively.
9. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The Exercise Value of the Warrant shall
be capitalized in its entirety.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
Article 7.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 8.
In the event it becomes necessary to change the matters set forth herein or when
matters not described herein arise, the Warrant holder and the Company shall
execute an agreement in relation to such matters on a case-by-case basis subject
to common consent, and such agreement shall form a part of these terms.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TERMS OF WARRANT
These terms are applicable to the warrant attached to the fifth
unsecured bond (with warrant) to be issued on September 27, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 28, 2000 to
October 1, 2000 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock Warrant, no person may assert his/her rights
pursuant to the Warrant against the Company. (3) The Warrant may only be
assigned collectively.
9. Substitute payment: Upon exercising the Warrant, the Warrant holder may
make payment of the issue value of the bond, as a substitute for
redeeming the bond, by submitting the bond and making a
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
demand. In the event fractional shares arise pursuant to the substitute
payment, the balance of the bond denomination equivalent to such
fractional shares shall be adjusted by refunding in cash at a ratio of
(Yen)|*| per face value of (Yen)|*|.
10. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The amount of the Exercise Value of the
Warrant that shall not be capitalized shall be an amount obtained by
deducting the amount to be capitalized from the Exercise Value. The
amount to be capitalized shall be an amount obtained by multiplying 0.5
with the Exercise Value, and fractions less than one yen arising as a
result of such calculation shall be rounded up; provided, however, that
in no case shall the amount to be capitalized fall below the par value
of the Company's Common Stock.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
Article 7.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
Article 8.
In the event it becomes necessary to change the matters set forth herein
or when matters not described herein arise, the Warrant holder and the Company
shall execute an agreement in relation to such matters on a case-by-case basis
subject to common consent, and such agreement shall form a part of these terms.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TERMS OF WARRANT
These terms are applicable to the warrant attached to the sixth
unsecured bond (with warrant) to be issued on September 27, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 28, 2000 to
January 1, 2001 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock Warrant, no person may assert his/her rights
pursuant to the Warrant against the Company. (3) The Warrant may only be
assigned collectively.
9. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The amount of the Exercise Value of the
Warrant that shall not be capitalized shall be an amount obtained
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
by deducting the amount to be capitalized from the Exercise Value. The
amount to be capitalized shall be an amount obtained by multiplying 0.5
with the Exercise Value, and fractions less than one yen arising as a
result of such calculation shall be rounded up; provided, however, that
in no case shall the amount to be capitalized fall below the par value
of the Company's Common Stock.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 7.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
Article 8.
In the event it becomes necessary to change the matters set forth herein or when
matters not described herein arise, the Warrant holder and the Company shall
execute an agreement in relation to such matters on a case-by-case basis subject
to common consent, and such agreement shall form a part of these terms.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
TERMS OF WARRANT
These terms are applicable to the warrant attached to the seventh
unsecured bond (with warrant) to be issued on September 27, 2000 by K.K. AJJ
based on legal authorization (hereinafter referred to as the "Bond", and the
warrant initially attached to the Bond is hereinafter referred to as the
"Warrant").
Article 1.
Description of the Warrant shall be as follows:
1. Form of stock warrant: Name warrant.
2. Total amount and quantity of exercise value of respective stock
warrants: Issued will be one stock warrant for a total of (Yen)|*| of
the issue value (hereinafter referred to as the "Exercise Value") of the
Company's par value common stock (hereinafter referred to as the "Common
Stock") to be issued pursuant to the exercise of the Warrant; provided,
however, that the denomination may not be apportioned.
3. Grant ratio of warrants: The total amount of the issue value of the
Company's Common Stock that may be subscribed pursuant to the exercise
of warrants granted per (Yen)|*| face value of bonds is (Yen)|*|.
4. Description of shares issued pursuant to exercise of warrants: The
description of shares to be issued pursuant to the exercise of the
Warrant shall be the Company's Common Stock having a current face value
of (Yen)|*| per share; provided, however, that if the shares issued
pursuant to the exercise of the Warrant are the Company's non par value
common stock, such shares shall be the Company's non par value common
stock.
5. Exercise Value and total amount of Exercise Value: The Exercise Value
shall be (Yen)|*| per share, and the total amount of such Exercise Value
shall be (Yen)|*|.
6. Number of shares issued pursuant to exercise of warrants: (1) The number
of shares the Company's Common Stock to be issued pursuant to the
exercise of the Warrant shall be as follows:
Total amount indicated on Stock Warrant
submitted by holder for requesting the exercise
Number of Shares = of the Warrant
-------------------------------------------------
Exercise Value
Fractional shares arising in the foregoing case shall be rounded down.
(2) A part of the allocation of one Stock Warrant may not be exercised.
7. Term for requesting exercise of warrants: From September 28, 2000 to
April 1, 2001 (In the event that the final day of the term for
requesting the exercise of rights falls under a non-business day of the
bank, the previous business day of the bank will be the final day of
such term.)
8. Assignment of warrants: (1) Only the Stock Warrant may be assigned upon
separating the Warrant from the Bond. (2) With respect to the transfer
of the Warrant, unless the name and address of the acquisitor are
indicated on the main book of the Warrant and such name is also
indicated on the Stock Warrant, no person may assert his/her rights
pursuant to the Warrant against the Company. (3) The Warrant may only be
assigned collectively.
9. Amount of issue value of shares issued pursuant to exercise of rights
that shall not be capitalized: The amount of the Exercise Value of the
Warrant that shall not be capitalized shall be an amount obtained
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
by deducting the amount to be capitalized from the Exercise Value. The
amount to be capitalized shall be an amount obtained by multiplying 0.5
with the Exercise Value, and fractions less than one yen arising as a
result of such calculation shall be rounded up; provided, however, that
in no case shall the amount to be capitalized fall below the par value
of the Company's Common Stock.
Article 2.
1. When the holder of the Warrant wishes to exercise the right thereof,
such holder shall fill in the requisite items in a prescribed written
request for the exercise of warrants, affix one's name and seal
thereunto, submit such written request within the term prescribed in
Article 1, Paragraph 7 above, and remit the amount to be paid pursuant
to the exercise of the Warrant (hereinafter referred to as the
"Payment") to the payment-handling bank. The Payment shall be an amount
obtained by multiplying the number of shares prescribed in Article 1,
Paragraph 6 with the Exercise Value prescribed in Article 1, Paragraph 5
above. Here, fractions less than one yen shall be rounded down.
2. The Warrant holder who exercises the Warrant may not thereafter cancel
the same.
3. The exercise of the Warrant shall come into effect at the time the
Payment is remitted in the bank handling the payment of the exercise of
warrants after the procedures prescribed in Article 2, Paragraph 1 above
are completed, regardless of the date indicated on the written request
for the exercise of warrants.
Article 3.
With respect to the initial profit dividends on the Common Stock issued
pursuant to the exercise of the Warrant, such profit dividends shall be paid on
the premise that the exercise of warrants was implemented at the beginning of
the business year to which the exercise date of warrants falls under; provided,
however, that when the Company introduces the interim dividend system set forth
in Article 293-5 of the Commercial Code, such exercise of warrants shall be
treated as having been implemented at the beginning of the business year to
which the exercise of warrants falls under if the exercise of warrants is
implemented prior to the reference date of the interim dividend, and such
exercise of warrants shall be treated as having been implemented on the day
following the reference date of the interim dividend if the exercise of warrants
is implemented on or after the interim dividend reference date but prior to the
final day of the business year to which the exercise of warrants falls under.
Article 4.
The Company shall deliver the stock certificates promptly after the
exercise of the Warrant comes into effect; provided, however, that if the
Company retains a transfer register agent, such agent shall make the delivery.
Further, if the Company introduces the unit stock system set forth in Article 16
of the supplementary regulations of the Commercial Code, stock certificates
shall not be issued for odd lot certificates.
Article 5.
The bank to handle the payment of the exercise of warrants shall be The
Chuo Mitsui Trust and Banking Company, Limited; Toranomon Branch.
Article 6.
The approval of the board of directors is required for assigning the
Company shares.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Article 7.
Notifications to the Warrant holder shall be made in writing to the
address indicated on the main book of the Warrant, and such notifications shall
be deemed delivered at the ordinary time of delivery.
Article 8.
In the event it becomes necessary to change the matters set forth herein
or when matters not described herein arise, the Warrant holder and the Company
shall execute an agreement in relation to such matters on a case-by-case basis
subject to common consent, and such agreement shall form a part of these terms.
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
SCHEDULE 6.2
Capitalization as of the Closing Date
AJ KK CAPITALIZATION
PERCENTAGE
SHAREHOLDER NO. OF SHARES OWNERSHIP
------------------------ ------------- -----------
TRANS COSMOS 400 42.45%
ASK JEEVES INT'L 400 42.45%
KK EMPLOYEE FUND 94 10.0%
BASIS TECHNOLOGY 20 2.1%
TCI EMPLOYEE FUND 14 1.5%
AJI EMPLOYEE FUND 14 1.5%
TOTAL 942 100%
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
SCHEDULE 1
List of TCI and AJI's Competitors
AJI COMPETITOR LIST TCI COMPETITOR LIST
|*| |*|
--------
|*| Indicates that certain information in this exhibit has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
