Joint Venture Agreement

This JOINT VENTURE AGREEMENT is entered into as of the 16 day of November 1995, between Trans Cosmos K.K., a Japanese corporation (hereinafter referred to as "TCI"), and Primus Communications Corporation, a Washington corporation (hereinafter referred to as "PCC").



RECITALS



A. TCI and PCC desire to establish a joint venture for the purpose of localizing and selling certain products developed and manufactured by PCC in Japan.



B. TCI and PCC desire to form a Japanese kabushiki kaisha through which to operate the joint venture, on certain mutually acceptable terms and conditions.



AGREEMENT



Accordingly, TCI and PCC agree as follows:



Article 1: Joint Venture Business

Subject to the terms and conditions set forth in this Agreement, TCI and P CC will form a "kabushiki kaisha" (hereinafter referred to as "Newco") to jointly localize and market in Japan "SolutionBuilder" (as such term is defined below) and other products which PCC offers to Newco and Newco agrees to localize and market (Solution Builder and such other products, hereinafter to be referred to, collectively and severally, as the "Products").



TCI and PCC shall hold equal voting interests in Newco and, except as otherwise provided in this Agreement, shall bear equal responsibility for Newco's operation. TCI and PCC shall share equally in the profits of Newco.



In this Agreement, the term "SolutionBuilder" refers to a software product developed by PCC known as "SolutionBuilder" and any enhanced (revised) versions of that pro duct, as well as any product which is the functional equivalent of SolutionBuilder or any enhanced (revised) versions thereof, so long as any such product is developed by PCC.



Article 2: Structure and Establishment

Newco shall be formed by TCI and PCC in accordance with Japanese law and pursuant to the formation documents attached to this Agreement as Exhibit A. However, in the event of any inconsistency or conflict between this Agreement and the incorporation documents of Newco, this Agreement sha ll prevail.



Any increase in Newco's authorized capital or paid-in capital shall require the prior written approval of both TCI and PCC.







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All costs incurred by promoters or incorporators to form Newco shall be reimbursed by Newco promptly upon formation.



The target date for establishment of Newco shall be November 20, 1995.



Promptly upon appointment and each year thereafter whil e Newco is in existence, Newco's board of directors shall establish a "Business Strategy." The "Business Strategy" shall be a written document identifying Newco's intended approach to marketing and servicing the Products and shall include staffing plans, contemplated distribution methodology and service, support and pricing guidelines.





Article 3: Shareholders Meetings



1. Shareholders meetings



Regular shareholders meetings shall be convened within 3 months of the last day of each fiscal year. Extraord inary shareholders meetings shall be scheduled as necessary or appropriate. All regular and extraordinary shareholders meetings shall be convened in Japan.



2. Notification of shareholders meetings



Notification of shareholders meetings shall be provided in writing to all voting shareholders no less than three weeks prior to the date of the meeting.



3. Voting procedure, quorum



For Newco's shareholders meetings, representation of more than half the issued shares shall constitute a quorum. Resolutions presented by shareholders will be adopted if agreed to by a majority the quorum.



4. Important items



The major items described here will be discussed at the shareholders meetings. General voting rules notwithstanding, appropriate items will be adopted upon unanimous approval of attending shareholders.



(1) Changes in business purpose



(2) Increasing or decreasing capitalization



(3) Disposal of all or a major portion of assets



(4) Determination of dividends



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(5) Dissolution, liquidation, merger



(6) Alteration or amendment of the Articles of Incorporation





Article 4: Board of Directors



1. Composition of the Board of Directors



For the foreseeable future, the Board shall be composed of 4 Directors. Of these, 2 shall be elected from candidates nominated by TCI and 2 shall be elected from candidates nominated by PCC.



2. Appointment and term of the Directors



All Directors will be selected at Newco's shareholders meeting and will serve for a term of two year from the time of their appointment. However, the term of service for Directors selected at the establishment of Newco will ex tend to the first regular shareholder's meeting. Directors can be re-appointed.



3. Representative Director (Daihyo Torishimariyaku)



Newco will have two representative directors, one selected by TCI from among the two directors TCI appoints, and the other selected by PCC from among the two directors appointed by PCC.



4. Quorum and voting regulations



At Board meetings, each Director will have the rights to one vote. A quorum will be 2/3 of the total number of Directors. Adoption of motions at Bo ard meetings will require a simple majority of votes by Directors in attendance. In cases where voting at a Board meeting is deadlocked or reached an impasse, the decision of the Representative Director shall hold final sway.



5. Vacancies on the Board



Regardless of the reason for the vacancy, vacancies on the Board will be filled by a replacement named by the party that nominated the original Director.



6. Important Items



Determination of the following points will be made by unanimous vote of the attending



Page (3) Directors at a Board meeting where at least one Director nominated by each parent company is present:



(1) All expenditures, borrowings, guarantees, loans or asset sales

of the corporation in excess of (Yen)[10] million or with terms of more

than one year.



(2) The adoption of and any changes to the Business Strategy of the

company, as such is established by the company's Board of Directors,

including, without limitation, any provisions relating to the marketing

plan for "SolutionBuilder" and other products of PCC to be localized or

marketed or both by the company.



(3) The amendment, settlement, rescission or termination of any

contract or commitment of the company, if, as a result thereof, the

company could incur a liability in excess of (Yen)[10] million).



(4) The sale, pledge, mortgage or other transfer or lease of all or

substantially all of the assets of the company.



(5) The execution, amendment, rescission, or termination of any

license, assistance or marketing services agreement.



(6) The approval of yearly budgets and amendments thereto.



(7) Any changes in capitalization and requests for capital

contributions by existing or prospective shareholders.



(8) The purchase, acquisition, transfer, pledge or encumbrance of

any shares or other equity participation in any other entity and the

exercise of any voting rights inherent in such shares or other equity



(9) The determination of compensation of specific officers in the



(10) The approval of all contracts by which any individual or legal

entity not a full-time employee of the company is authorized to bind the

company and the approval of transactions contemplated with shareholders.



(11) The transfer of shares in the company.



(12) The amendment of the Articles of Incorporation.



(13) The registration, sale, acquisition or enforcement of production

rights, publishing rights, trade secrets, know-how, patents, trademarks,

trade names or other intellectual property in which the company has or

intends to have an interest.



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(14) The payment to any shareholder of any funds, including, without

limitation advances, royalties, service fees and dividends.



Article 5: Auditor

Newco will have two auditors, one appointed by TCI and one by PCC.



Article 6: Officers

In order to manage the operations of Newco, it will be possible to designate any of the following officers:



(1) President



(2) Chairman



(3) Vice President



(4) Senior Managing Director, Managing Director



The election of any of the above officers will be the responsibility of the Board of Directors.



Article 7: Accounting Register

Newco will maintain complete books and records in accordance with Japanese accounting regulations, and the auditors' repor t will be presented to TCI and PCC within 20 days of completion of the audit. Furthermore, Newco will provide PCC with quarterly reports prepared in accordance with U.S. standard accounting principles (GAAP) and either TCI or PCC may request, no more than once annually, a special audit of Newco to be conducted by an accounting firm qualified to conduct an audit under U.S. GAAP. TCI and PCC shall be able inspect the books and records of Newco, and inspect its accounting at any time.



Article 8: TCI's Support of Newco

For one year after its establishment, TCI shall provide Newco with office and employees at no cost, and will bear the cost of regular operating expenses. Following the first year, the distribution of operating cost will be decided by mutual agreement of TCI and PCC based on the profitability of Newco.



Article 9: Product License, Localization and Marketing Terms.

Any license to be granted to Newco by PCC shall be granted under a written license agreement in form and substance satisfact o ...