Japan Joint Venture Agreement

JOINT VENTURE AGREEMENT


This Joint Venture Agreement ("JV AGREEMENT") is made and entered into as of May 13, 1997 by and between CyberCash, Inc., a corporation organized under the laws of Delaware; CyberCash Japan C.V., a partnership organized under the laws of the Netherlands which is an indirect subsidiary of CyberCash (collectively, "CYBERCASH"); and SoftBank Corporation, a corporation organized under the laws of Japan ("SOFTBANK").


In consideration of the mutual promises set forth herein, CyberCash and SoftBank hereby agree as follows:


WHEREAS, CyberCash currently operates in the United States a suite of payment services for enabling payments on the Internet the, including a Secure Credit Card Service, the CyberCoin(TM) Service, and the PayNow(TM) Service, and intends to introduce additional payment services in the future (in the aggregate, the "CYBERCASH SERVICES"); and


WHEREAS, CyberCash wishes to offer the CyberCash Services in Japan, and wishes to cooperate with SoftBank in doing so; and


WHEREAS, CyberCash and SoftBank wish to form a joint venture relationship as equal partners for operating and marketing the CyberCash Services in Japan; and


WHEREAS, CyberCash wishes to develop for the joint venture a version of its software for the Japanese market and convey that software to the joint venture; and


WHEREAS, SoftBank wishes to invest in the joint venture a substantial portion of the funds necessary to finance the customization of the CyberCash Technology and to provide working capital for the joint venture;


NOW THEREFORE, CyberCash and SoftBank agree as follows:


1. FORMATION AND CAPITALIZATION OF THE JOINT VENTURE.


1.01 GENERAL. CyberCash has organized, and is the sole shareholder of a Japanese corporation, "CyberCash Kabushiki Kaisha" (known in English, as "CyberCash KK", and referred to in this Agreement as "CCKK"). The Articles of Incorporation of CCKK are attached hereto as Exhibit A. The principal office of CCKK shall be located in Tokyo, Japan.


1.02 PURPOSES OF CCKK. The purposes of CCKK shall be (i) to assist in the preparation of specifications for CyberCash's technology localized for the Japanese market (the "LOCAL SOFTWARE"), (ii) to finance the development of the Local Software, (iii) to provide the CyberCash Services in Japan, (iv) to market the CyberCash Services in the Japanese market, and (v) to engage in other business activities consistent with this JV Agreement as the Board of Directors shall determine.


1.03 TERM. The joint venture will have an initial term of five years.


2


1.04 CAPITAL STOCK. The authorized capital stock of CCKK initially shall be 800 shares of Common Stock (the "COMMON STOCK"). The company shall also be authorized to issue Convertible Preferred Stock not to exceed 1,000 shares (the "PREFERRED STOCK"). The Preferred Stock shall not have any dividend preference, but it shall have a liquidation preference giving its holders priority over the Common Stock in the event of liquidation.


1.05 INITIAL CAPITALIZATION. CyberCash is currently the sole shareholder of CCKK, having purchased 200 shares of Common Stock for the sum of 10,000,000 Yen.


1.06 INVESTMENT BY SOFTBANK. Within 10 business days of the execution of this Agreement, SoftBank shall purchase 80 shares of Preferred Stock at a purchase price of 2,500,000 Yen per share. (The time of such purchase shall be referred to herein as the "CLOSING.")


1.07 ADDITIONAL INVESTMENT BY SOFTBANK AFFILIATE. Not later than June 30, 1997, SoftBank shall purchase, or shall cause one of its affiliates to purchase an additional 120 shares of Preferred Stock at a purchase price of 2,500,000 Yen per share.


1.08 RESERVED SHARES. With the consent of CyberCash and SoftBank, CCKK may reserve 20 shares of Common Stock for issuance to CCKK's employees and consultants pursuant to stock options or other forms of employee benefit plans as determined by the Board of Directors.


1.09 ADDITIONAL CAPITAL. With the consent of CyberCash and SoftBank, CCKK may issue additional shares of capital stock in connection with capital contributions made after the Closing subject to applicable law and due approval by the Board of Directors. The Articles of Incorporation shall not provide any stockholder with preemptive rights. The parties acknowledge that they contemplate selling stock or warrants to Japanese banks as an incentive to the banks to make use of the services of CCKK. It is not, however, the intention of the parties to engage in additional financing during the six months after the Closing that would reduce CyberCash's position to less than 45% of the outstanding equity capital.


1.10 RESTRICTIONS ON TRANSFER. Neither CyberCash nor SoftBank shall voluntarily transfer, sell, assign, pledge, hypothecate, give or otherwise dispose of all or any portion of its Common Stock or any warrants to purchase Common Stock without the prior written approval of the other party, except in connection with a termination of the joint venture pursuant to Section 9 hereof. In implementation of the preceding sentence, each certificate evidencing shares of Common Stock or warrants will bear a restrictive legend. Any attempted transfer in violation of this Section 1.10 shall be void and shall not be reflected on CCKK's stock records. This restriction on transfer shall cease upon the completion of an initial public offering of CCKK's Common Stock.


1.11 DEADLOCK. Should the Board of Directors be deadlocked and unable to reach a decision with respect to any major issue for a period of two consecutive regular meetings, then either CyberCash or SoftBank (the "DISSENTING PARTY") may offer to sell its shares in CCKK to the other (the "NON-DISSENTING PARTY") at a price, and on terms and conditions, specified in writing (the "OFFER"). If the Non-Dissenting Party does not accept the Offer in writing within 30 days of receiving it, the Dissenting Party shall have an option to purchase the Non-Dissenting Party's shares in CCKK at the same price, and on the same terms and conditions as set forth in the Offer. If the Dissenting Party does not exercise that option within 30 days, it may sell its


2 3


shares to a third party; provided that the sale must be at a price, and on terms and conditions, no more favorable than those set forth in the Offer.


2. MANAGEMENT AND OPERATIONS OF THE JOINT VENTURE.


2.01 GENERAL. The powers, responsibilities and procedures of the stockholders, the Board of Directors and the officers shall be as specified in this Agreement and in the Articles of Incorporation and Bylaws of CCKK. Written agendas of the subjects or topics to be covered at CCKK stockholder and Board of Directors meetings shall be distributed to the participants in advance of such meetings; written descriptions of such meetings or topics to be covered shall be distributed at such meetings and be the basis of any discussion.


2.02 STOCKHOLDER MATTERS. Annual and special meetings of the stockholders shall be conducted as provided in the Articles of Incorporation and the Bylaws.


2.03 BOARD OF DIRECTORS.


(a) CCKK will be managed by a Board of Directors. Initially,
the Board will consist of three members, two of whom will be elected
by CyberCash and one by SoftBank. Upon the closing of the additional
investment by SoftBank or its affiliate contemplated by Section 1.07,
there shall be a fourth director, who shall be designated by SoftBank.
The parties agree so to vote their shares as to effectuate the
foregoing provisions. The powers and duties, indemnification and other
terms and conditions of such directors shall be as defined and set
forth in the Bylaws of CCKK.


(b) Subject to Section 2.03(c), unless otherwise required by
law, decisions of the Board of Directors shall require the affirmative
vote or consent of a majority of the total number of directors.


(c) Any of the following actions by the Board of Directors
shall require the affirmative vote of at least 75% of the directors:


(i) The adoption of, or any material change in, the
business plan and the operating plan for CCKK;


...