EXHIBIT 10.4
FIRST AMENDMENT TO
JOINT VENTURE AGREEMENT
This First Amendment to Joint Venture Agreement ("First Amendment") is made and
entered into as of September 16th, 1997, by and among Trans Cosmos, Inc., a
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Japanese corporation ("TCI"), Primus Communications Corporation, a Washington
corporation ("Primus"), and Best Career Company, a Japanese corporation ("BCC").
Background
Primus and TCI are parties to a certain Joint Venture Agreement, dated November
16, 1995 ("Agreement").
Pursuant to the Agreement, Primus and TCI established Primus Communications
Corp. Japan, a Japanese corporation ("Xxxxxx XX"). The total outstanding stock
of Xxxxxx XX is 200 shares, of which Primus owns 100 shares and TCI owns 100
shares. The total authorized stock of Xxxxxx XX is 800 shares.
TCI and Primus wish to add BCC as a party to the Agreement and as a shareholder
of Xxxxxx XX.
TCI and Primus wish to amend the Agreement to provide for the issuance of
additional stock in Xxxxxx XX in order that TCI and Primus each holds
approximately 15% of the common stock of Xxxxxx XX, and BCC holds the remaining
approximately 70 percent, and to reconstitute the Board of Directors and
Statutory Auditors of Xxxxxx XX as set forth below.
Both Primus and TCI are willing to waive their preferential rights to receive
this additional stock under Article 8 of the Articles of Incorporation of
Xxxxxx XX.
To accomplish the foregoing, TCI, BCC and Primus are entering into this First
Amendment to the Agreement in accordance with Article 22 of the Agreement.
Agreement
For good and valuable consideration, the receipt and sufficiency of which the
parties acknowledge, the parties agree as follows:
Section 1. Defined Terms
Except as expressly defined in this Amendment, capitalized terms shall have the
same meanings ascribed to them in the Agreement.
Section 2. Amendment
2.1 Amendments. The Agreement is hereby amended as follows:
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(a) BCC is hereby added as a party to the Agreement.
(b) Article 1 is amended to provide that TCI and BCC shall have an
aggregate 85.71% voting interest and Primus 14.29% voting interest.
(c) Article 4(4) is amended to include a provision that Board of
Directors meetings shall be held on 14 days' notice and that, if necessary to
allow directors to attend, the corporation may hold Board of Directors meetings
by telephonic or video conferencing from time to time.
(d) Article 3(2) is amended to provide that Shareholders meetings shall
be held on 4 weeks' notice.
(e) Article 4(1) amended to provide that the Board is to be comprised
of six (6) Directors, of which five (5) Directors shall be elected from
candidates nominated by TCI and BCC and one (1) Director shall be elected from a
candidate nominated by Primus.
(f) Article 5 is amended to provide that TCI and BCC shall appoint
both auditors.
2.2 Documentation; Translations. Within ten days of the execution of this
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Amendment (the "Amendment Date"), TCI shall ensure that the Japanese version of
the Agreement is amended to reflect the terms to which the parties agree in this
Amendment and that all necessary Japanese government approvals and filings have
been obtained or made. On or before the Amendment Date, TCI shall also prepare
Japanese versions of all such corporate instruments as are necessary to effect
the transactions contemplated by this Amendment (the "Corporate Instruments").
The Corporate Instruments shall include, without limitation, the following:
(a) a resolution of the board of directors authorizing the issuance
of 500 additional shares of common stock to BCC such that the total outstanding
shares equal 700 shares: 100 held by Primus, 100 held by TCI and 500 held by
BCC;
(b) an amendment to the Articles of Incorporation of Xxxxxx XX to
provide for up to six directors, and to incorporate the additional notice
periods set forth in Section 2.1(c) and (d) above for shareholders and
directors meetings if necessary;
(c) written resolutions of Primus KK's directors and shareholders (i)
consenting to the changes described in paragraphs (a) and (b) above; (ii)
approving BCC's purchase of shares of common stock as above set forth; (iii)
accepting the resignation of one of the directors and the Statutory Auditor
designated by Primus; and (iv) appointing TCI's designees to fill the newly
created vacancies on the Board of Directors and the vacant seat of the Statutory
Auditor.
2.3 Effective Date of Japanese Versions. On or before the Amendment Date, TCI
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shall provide Primus with true, accurate and correct English translations of the
Japanese versions of the amended Agreement and the Corporate Instruments. Until
Primus receives such translations, the provisions of this English version shall
prevail among the parties, notwithstanding any provision of the Agreement to the
contrary.
Section 3. TCI's Purchase of Additional Stock
3.1 Stock Purchase. Upon execution of this Amendment, BCC shall pay Xxxxxx XX
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Twenty Five Million Yen (Y25,000,000) in readily available funds (the "Stock
Purchase Price"). As soon as possible thereafter, but in any event upon the
Corporate Instruments becoming effective, Xxxxxx XX shall issue to BCC Five
Hundred (500) shares of common stock of Xxxxxx XX.
3.2 Appointments to Board of Directors; Change in Statutory Auditor. On the
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Amendment Date, Primus shall cause one of the Xxxxxx XX Directors designated by
Primus to resign. Following such resignation, TCI and BCC shall designate three
directors to fill the three empty positions on Primus KK's Board of Directors
such that, after such change, TCI and BCC will occupy five Board Seats and
Primus will occupy one Board seat. In addition, Primus shall cause its
Statutory Auditor to resign, and TCI and BCC shall appoint a Statutory Auditor
in his stead.
3.3 Allocation of Profits. Upon BCC's payment of the Stock Purchase Price to
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Xxxxxx XX, TCI, BCC and Primus shall allocate Primus KK's profits and losses in
the proportions of their respective ownership of shares of Xxxxxx XX common
stock.
Section 4. Board Representation, Etc.
4.1 Execution of Corporate Instruments. Each of the parties to this
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Amendment shall execute the Japanese version of the amendment to the Agreement
and the Corporate Instruments, as necessary to effect the terms of this
Amendment.
Section 5. Exclusive Distribution Agreement.
Notwithstanding anything to the contrary in the Joint Venture Agreement, the
parties agree that TCI shall
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be granted the rights set forth in the Primus Communications Corporation
Exclusive Distribution License Agreement.
Section 6. Ongoing Joint Venture.
Primus and Xxxxxx XX shall each negotiate in good faith to establish a mutually
acceptable exclusive distribution license agreement between them, under which
Xxxxxx XX has exclusive worldwide rights for marketing, distribution and
licensing of all Asian language equivalents of all of Primus' products.
Section 7. Miscellaneous.
Except as expressly amended by this Amendment, the Agreement shall remain
unaltered and in full force and effect.
Executed as of the date set forth above.
PRIMUS COMMUNICATIONS TRANS COSMOS, INC.
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx X. Xxxxxx Xxxxxx Xxxxxxxxx
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Its: President and Chief Executive Officer Its: Director
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BEST CAREER COMPANY
By: /s/ Naka Ichiyanagi
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Naka Ichiyanagi
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Its: President
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ACCEPTED:
PRIMUS COMMUNICATIONS CORP. JAPAN
/s/ (signature illegible)
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By:
Its:
