Document:

Exhibit 10.4

 

FRAMEWORK AGREEMENT

 

between

 

VIA OPTRONICS GMBH

 

and

 

TOPPAN PRINTING CO., LTD.

 

dated

 

November 30, 2017

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS
    	
1
    
	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.02
    	
Other Defined Terms
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE II   OVERVIEW   OF THE TRANSACTION
    	
6
    
	
 
    	
 
    
	
Section 2.01
    	
L/Cs, Competition   Clearance, Spin-off; Share Transfer; Newco Governance
    	
6
    
	
 
    	
 
    	
 
    
	
Section 2.02
    	
Intellectual Property
    	
7
    
	
 
    	
 
    	
 
    
	
Section 2.03
    	
Business Employees
    	
8
    
	
 
    	
 
    	
 
    
	
Section 2.04
    	
Manufacturing Agreement
    	
9
    
	
 
    	
 
    	
 
    
	
Section 2.05
    	
Lease Agreement
    	
9
    
	
 
    	
 
    	
 
    
	
Section 2.06
    	
Bank Guarantee
    	
9
    
	
 
    	
 
    	
 
    
	
Section 2.07
    	
Other Agreements
    	
9
    
	
 
    	
 
    	
 
    
	
Section 2.08
    	
Pre-Closing and Post-Closing   Liabilities
    	
10
    
	
 
    	
 
    	
 
    
	
Section 2.09
    	
Share Purchase Price   Adjustment
    	
10
    
	
 
    	
 
    	
 
    
	
Section 2.10
    	
Further Assurances
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE III   CLOSING;   CLOSING DELIVERABLES
    	
11
    
	
 
    	
 
    
	
Section 3.01
    	
Closing
    	
11
    
	
 
    	
 
    	
 
    
	
Section 3.02
    	
Closing Deliverables   and Actions
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   REPRESENTATIONS   AND WARRANTIES OF TOPPAN
    	
13
    
	
 
    	
 
    
	
Section 4.01
    	
Organization and   Authority
    	
13
    
	
 
    	
 
    	
 
    
	
Section 4.02
    	
No Conflicts; Consents
    	
13
    
	
 
    	
 
    	
 
    
	
Section 4.03
    	
Legal Proceedings
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.04
    	
Antisocial Forces
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.05
    	
Title to Shares;   Capitalization
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.06
    	
Title to Transferred   Assets
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.07
    	
Condition of   Transferred Assets
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.08
    	
Spin-off
    	
14
    
	
 
    	
 
    	
 
    
	
Section 4.09
    	
Sufficiency of   non-Intellectual Property Assets
    	
15
    
	
 
    	
 
    	
 
    
	
Section 4.10
    	
Intellectual Property
    	
15
    
	
 
    	
 
    	
 
    
	
Section 4.11
    	
Balance Sheet
    	
16
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 4.12
    	
Brokers
    	
16
    
	
 
    	
 
    	
 
    
	
Section 4.13
    	
Exclusive   Representations and Warranties
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE V   REPRESENTATIONS   AND WARRANTIES OF VIA
    	
17
    
	
 
    	
 
    
	
Section 5.01
    	
Organization and   Authority
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.02
    	
No Conflicts; Consents
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.03
    	
Legal Proceedings
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.04
    	
Sufficiency of Funds
    	
17
    
	
 
    	
 
    	
 
    
	
Section 5.05
    	
Antisocial Forces
    	
18
    
	
 
    	
 
    	
 
    
	
Section 5.06
    	
Brokers
    	
18
    
	
 
    	
 
    	
 
    
	
Section 5.07
    	
Investigation by VIA
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   COVFNANTS
    	
18
    
	
 
    	
 
    
	
Section 6.01
    	
Conduct of Business   before Closing; Maintenance of Transferred IP
    	
18
    
	
 
    	
 
    	
 
    
	
Section 6.02
    	
Access to Information
    	
18
    
	
 
    	
 
    	
 
    
	
Section 6.03
    	
Closing Conditions
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.04
    	
Third-Person Consents;   Antitrust Approvals
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.05
    	
Confidentiality
    	
20
    
	
 
    	
 
    	
 
    
	
Section 6.06
    	
Balance Sheet
    	
20
    
	
 
    	
 
    	
 
    
	
Section 6.07
    	
Transferred IP
    	
21
    
	
 
    	
 
    	
 
    
	
Section 6.08
    	
Further Assurances
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   CONDITIONS   TO CLOSING
    	
21
    
	
 
    	
 
    
	
Section 7.01
    	
Conditions to   Obligations of Both Parties
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.02
    	
Conditions to   Obligations of VIA
    	
21
    
	
 
    	
 
    	
 
    
	
Section 7.03
    	
Conditions to   Obligations of Toppan
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   TERMINATION
    	
22
    
	
 
    	
 
    
	
Section 8.01
    	
Termination
    	
22
    
	
 
    	
 
    	
 
    
	
Section 8.02
    	
Effect of Termination
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE IX   INDEMNIFICATION
    	
24
    
	
 
    	
 
    
	
Section 9.01
    	
Survival
    	
24
    
	
 
    	
 
    	
 
    
	
Section 9.02
    	
Indemnification by   Toppan
    	
24
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 9.03
    	
Indemnification by VIA
    	
24
    
	
 
    	
 
    	
 
    
	
Section 9.04
    	
Certain Limitations
    	
25
    
	
 
    	
 
    	
 
    
	
Section 9.05
    	
Indemnification   Procedures
    	
26
    
	
 
    	
 
    	
 
    
	
Section 9.06
    	
Tax Treatment of   Indemnification Payments
    	
27
    
	
 
    	
 
    	
 
    
	
Section 9.07
    	
Exclusive Remedies
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE X   MISCELLANEOUS
    	
28
    
	
 
    	
 
    
	
Section 10.01
    	
Expenses
    	
28
    
	
 
    	
 
    	
 
    
	
Section 10.02
    	
Further Assurances
    	
28
    
	
 
    	
 
    	
 
    
	
Section 10.03
    	
Notices
    	
28
    
	
 
    	
 
    	
 
    
	
Section 10.04
    	
Headings
    	
29
    
	
 
    	
 
    	
 
    
	
Section 10.05
    	
Severability
    	
29
    
	
 
    	
 
    	
 
    
	
Section 10.06
    	
Entire Agreement
    	
29
    
	
 
    	
 
    	
 
    
	
Section 10.07
    	
Successors and Assigns;   Assignment
    	
30
    
	
 
    	
 
    	
 
    
	
Section 10.08
    	
No Third-party   Beneficiaries
    	
30
    
	
 
    	
 
    	
 
    
	
Section 10.09
    	
Amendment and   Modification; Waiver
    	
30
    
	
 
    	
 
    	
 
    
	
Section 10.10
    	
Governing Law; Dispute   Resolution
    	
30
    
	
 
    	
 
    	
 
    
	
Section 10.11
    	
Specific Performance
    	
31
    
	
 
    	
 
    	
 
    
	
Section 10.12
    	
Attorneys’ Fees
    	
31
    
	
 
    	
 
    	
 
    
	
Section 10.13
    	
Counterparts
    	
31
    
	
 
    	
 
    
	
Schedules and Exhibits
    	
 
    
	
 
    	
 
    
	
Schedule 1 — Disclosure   Schedule
    	
 
    
	
 
    	
 
    
	
Exhibit A —   Ancillary Agreements
    	
 
    
	
 
    	
 
    
	
Exhibit B — Terms   of Share Purchase Agreement
    	
 
    
	
 
    	
 
    
	
Exhibit C — Terms   of Shareholders’ Agreement
    	
 
    
	
 
    	
 
    
	
Exhibit D — IP   Transfer Agreement Terms
    	
 
    
	
 
    	
 
    
	
Exhibit E — IP   License Agreement Terms
    	
 
    

 

iii

 

FRAMEWORK AGREEMENT

 

This Framework Agreement (this “Agreement”) is entered into on [November 30], 2017 between VIA optronics GmbH, a company organized under the laws of Germany (“VIA”), and Toppan Printing Co., Ltd., a company organized under the laws of Japan (“Toppan”). Each of Toppan and VIA is referred to as a “Party”, and together, as the “Parties”.

 

RECITALS

 

A.                                    Toppan operates a business in Japan that develops, manufactures, and markets copper touch panel sensors used in touch panel modules and copper PET film used in touch panel sensors (such products, the “Products”, and such business, the “Business”).

 

B.                                    VIA is active in the field of optical bonding solutions.

 

C.                                    The Parties wish to engage in the Business together by having Toppan transfer certain assets and liabilities of the Business to a newly formed company (“Newco”) in which VIA will hold a 65% equity interest and Toppan a 35% equity interest.

 

D.                                    In connection with the operation of the Business through Newco, the Parties will enter into several undertakings, pursuant to the Transaction Documents, regarding Newco’s establishment and governance, a corporate spin-off, and commercial matters relating to the Business.

 

E.                                     VIA wishes to purchase from Toppan, and Toppan wishes to transfer to VIA, certain assets and liabilities of the Business.

 

The Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.01                            Definitions. The following terms have the meanings specified or referred to below:

 

Action: Any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

 

Affiliate: Of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

 

Ancillary Agreements: The agreements listed in Exhibit A.

 

Antisocial Force: An organized crime group (boryokudan), a member of an organized crime group, an individual for whom five years have not elapsed from the date he or she ceased to be an organized crime group member, a quasi-constituent member thereof, an enterprise related to an organized crime group, a corporate racketeer (sokaiya), an extortionist advocating social movement, a special intelligence violence group, and other similar Persons (collectively, “Organized Crime Group Member”), and a Person who falls under any of the following:

 

(i)                                     A Person that has any relationship by which its management is considered to be controlled by any Organized Crime Group Member,

 

(ii)                                  A Person that has any relationship by which any Organized Crime Group Member is considered to be involved substantially in its management,

 

(iii)                               A Person that has any relationship by which it is considered to make unlawful use of any Organized Crime Group Member for the purpose of securing unjust advantage for itself or any third party or for causing damage to any third Person,

 

(iv)                              A Person that has any relationship by which it is considered to offer funds or provide benefits to any Organized Crime Group Member, or

 

(v)                                 A person that has any officers or persons involved substantially in its management having socially condemnable relationships with any Organized Crime Group Member.

 

Antitrust Law: Statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other Laws of any jurisdiction that are designed or intended to prohibit, restrict or regulate actions that may have the purpose or effect of creating a monopoly, lessening competition or restraining trade.

 

Business Day: Any day except Saturday, Sunday or any other day on which commercial banks located in Tokyo, Japan or Frankfurt, Germany are authorized or required by Law to be closed for business.

 

Closing: The consummation of the Spin-off, the Share Transfer, and the other transactions contemplated in ARTICLE II.

 

Companies Act: The Companies Act of Japan (Act No. 86 of July 26, 2005).

 

Data Room: The virtual data room relating to the Business established by Toppan and hosted by Firmex, as it existed on the Business Day immediately preceding the Closing Date, unless the Parties decide to close the data room earlier, in which case it will be as it existed on the Business Day before the data room closes.

 

Disclosure Schedule: The schedule attached as Schedule 1 to this Agreement.

 

2

 

Encumbrance: Any mortgage, pledge, lien, charge, security interest, claim or other encumbrance.

 

Exchange Rate: For purposes of the Share Purchase Price, the IP Purchase Price, the Closing IP Purchase Price, the IP Purchase Price Balance, the Final Inventory Price, and the Target Inventory Valuation only, 1 USD equals 115 JPY.

 

Governmental Authority: Any national, prefectural, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

Governmental Order: Any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority.

 

Intellectual Property: Any of the following rights in any jurisdiction: (a) patents and patent applications, (b) trademarks, service marks, trade dress, and other proprietary indicia of goods and services, whether registered or unregistered, and the goodwill connected with the use of and symbolized by any of the foregoing, (c) original works of authorship in any medium of expression, whether or not published, all copyrights (whether registered or unregistered), all registrations and applications for registration of such copyrights all of the following and similar intangible property and related proprietary rights, and (d) confidential information, formulas, designs, devices, technology, know-how, research and development, inventions, methods, processes, compositions and other trade secrets, whether or not patentable.

 

Inventory: Work in progress, spare parts, photomasks, and supplies used by the Business to manufacture Products.

 

Law: Any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

 

Losses: Actual out-of-pocket losses, damages, liabilities, costs or expenses.

 

NDA: The Non-Disclosure Agreement dated December 7, 2016 between Toppan and VIA.

 

Other Antitrust Approvals: Any approval, other than the Identified Antitrust Approvals, of any Governmental Authority in relation to Antitrust Laws that is required to complete the Share Transfer and the other transactions contemplated by the Transaction Documents.

 

Permits: All permits, licenses, franchises, approvals, authorizations, registrations, certificates, variances and similar rights obtained, or required to be obtained, from Governmental Authorities.

 

3

 

Person: An individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

Representative: With respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

Retained IP: The Intellectual Property set forth under the heading “Retained IP” in Section 1.02 of the Disclosure Schedule.

 

Satte Facility: The facility located at 4237-1 Soushinden, Satte-shi, Saitama, 340-0013 Japan, that is currently being used by the Business.

 

Shiga Facility: The facility located at 1101-20, Myohoji-cho, Higashiomi, Shiga, 527-8566, Japan, that is currently being used by the Business.

 

Target Inventory Valuation: JPY200,896,000, which is equal to the valuation of the Inventory on August 31, 2017.

 

Termination Fee: JPY 55,000,000.

 

Toppan Account:

 

	
Bank Name &   Branch:
    	
Sumitomo Mitsui Banking   Corporation, Nihonbashi Branch
    
	
 
    	
 
    
	
Branch Address:
    	
2-1-1, Nihonbashi   Murromachi, Chuo-ku, Tokyo 103-0022, Japan
    
	
 
    	
 
    
	
Swift Code:
    	
SMBCJPJT
    
	
 
    	
 
    
	
Bank Account#:
    	
1025362
    

 

Transaction: The transactions contemplated by this Agreement and the Transaction Documents.

 

Transaction Documents: This Agreement and the Ancillary Agreements.

 

Transferred Assets: The assets set forth under the heading “Transferred Assets” in Section 1.01 of the Disclosure Schedule.

 

Transferred IP: The Intellectual Property set forth under the heading “Transferred IP” in Section 1.02 of the Disclosure Schedule.

 

Transferred Liabilities: The liabilities set forth under the heading “Transferred Liabilities” in Section 1.01 of the Disclosure Schedule.

 

VIA Account:

 

	
Bayerische Landesbank
    
	
SWIFT BIC BYLADEMMXXX
    

 

4

 

	
IBAN DE87 7005 0000   0004 5134 16 (EUR)
    
	
IBAN DE26 7005 0000   0174 5134 16 (USD)
    
	
IBAN DE61 7005 0000   0474 5134 16 (CNY)
    

 

Section 1.02                            Other Defined Terms. In addition to the terms defined above, the following terms shall have the respective meanings given thereto in the articles indicated below:

 

	
Defined Term
    	
 
    	
Section
    
	
Agreement
    	
 
    	
Preamble
    
	
Antitrust Approvals
    	
 
    	
Section 6.04(b)
    
	
Balance Sheet
    	
 
    	
Section 6.06
    
	
Bank
    	
 
    	
Section 2.06(a)
    
	
Business
    	
 
    	
Recitals
    
	
Business Assistance Agreement
    	
 
    	
Section 2.07(a) 
    
	
Closing Date
    	
 
    	
Section 3.01
    
	
Closing Date Inventory Statement
    	
 
    	
Section 2.09(a)
    
	
Closing IP Purchase Price
    	
 
    	
Section 2.02(a)
    
	
Direct Claim
    	
 
    	
Section 9.05(c)
    
	
Excluded Assets
    	
 
    	
Disclosure Schedule, Section 1.01
    
	
Excluded Liabilities
    	
 
    	
Disclosure Schedule, Section 1.01
    
	
Final Inventory Valuation
    	
 
    	
Section 2.09(c)
    
	
Governmental Approvals
    	
 
    	
Section 6.04(a)
    
	
Indemnified Party
    	
 
    	
Section 9.04
    
	
Indemnifying Party
    	
 
    	
Section 9.04
    
	
IP Purchase Price
    	
 
    	
Section 2.02(a)
    
	
IP Purchase Price Balance
    	
 
    	
Section 2.02(a)
    
	
Lease Agreement
    	
 
    	
Section 2.05
    
	
L/Cs
    	
 
    	
Section 2.06(a)
    
	
Loan
    	
 
    	
Section 2.01(e)
    
	
Loan Agreement
    	
 
    	
Section 2.01(e)
    
	
Manufacturing Agreement
    	
 
    	
Section 2.04
    
	
Newco
    	
 
    	
Recitals
    
	
Objection Notice
    	
 
    	
Section 2.09(c)
    
	
Party
    	
 
    	
Preamble
    
	
Perfection Actions
    	
 
    	
Section 2.02(a)
    
	
Products
    	
 
    	
Recitals
    
	
R&D Agreement
    	
 
    	
Section 2.07(c)
    
	
Re-employed Employees
    	
 
    	
Section 2.03(a)(i)
    
	
Seconded Employees
    	
 
    	
Section 2.03(b)(i)
    
	
Secondment Agreement
    	
 
    	
Section 2.03(b)(iii)
    
	
SHA
    	
 
    	
Section 2.01(d)
    
	
Share Purchase Price
    	
 
    	
Section 2.01(c)
    
	
Shares
    	
 
    	
Section 2.01(c)
    
	
Share Transfer
    	
 
    	
Section 2.01(c)
    
	
SPA
    	
 
    	
Section 2.01(c)
    
	
Spin-off
    	
 
    	
Section 2.01(a)
    

 

5

 

	
Spin-off Plan
    	
 
    	
Section 2.01(a)
    
	
System License Agreement
    	
 
    	
Section 2.07(b)
    
	
Third-Party Claim
    	
 
    	
Section 9.05(a)
    
	
Toppan
    	
 
    	
Preamble
    
	
Toppan Distribution Agreement
    	
 
    	
Section 2.07(d)
    
	
VIA
    	
 
    	
Preamble
    
	
VIA Distribution Agreement
    	
 
    	
Section 2.07(d)
    

 

ARTICLE II
 OVERVIEW OF THE TRANSACTION

 

Section 2.01                            L/Cs, Competition Clearance, Spin-off; Share Transfer; Newco Governance.

 

(a)                                 L/Cs and Antitrust Approvals. Promptly after execution of this Agreement, VIA shall deliver to Toppan the L/Cs and the Parties shall perform their obligations under Section 6.04.

 

(b)                                 Spin-off.

 

(i)                                     Promptly after execution of this Agreement, Toppan shall begin (A) formulating a plan (the “Spin-off Plan”) to transfer the Transferred Assets and Transferred Liabilities to Newco by means of an incorporation-type company split (shinsetsu bunkatsu) in accordance with the Companies Act (the “Spin-off”) and (B) preparing the documentation and take other steps necessary to implement the Spin-off. Toppan shall not implement the Spin-off Plan without VIA’s advance written consent, which consent VIA shall not unreasonably withhold, delay, or condition. Promptly following adoption of the Spin-off Plan, Toppan shall deliver a certified copy of the Spinoff Plan to VIA.

 

(ii)                                  The Spin-off Plan will provide for the incorporation of Newco as a joint stock company (kabushiki kaisha) under Japanese law.

 

(iii)                               As promptly as possible after VIA has obtained the Antitrust Approvals, Toppan shall implement the Spin-off Plan and complete the Spin-off through the filing with the relevant legal affairs bureau of an application for Newco’s commercial registry. Toppan shall show VIA a draft of the application at least seven Business Days before filing.

 

(c)                                  Share Transfer. At the Closing and immediately after the transfer of the Transferred Assets and Transferred Liabilities to Newco pursuant to the Spin-off, Toppan shall sell to VIA 65% of the Shares in exchange for payment by VIA to the Toppan Account of JPY211,231,000 (the “Share Purchase Price”) pursuant to a share purchase agreement that incorporates the terms set forth in Exhibit B (such agreement, the “SPA,” and such transfer of shares, the “Share Transfer”), such that following the Share Transfer, VIA will hold 65% of Newco’s share capital and Toppan will hold 35% of Newco’s share capital. The Parties shall exercise best efforts to finalize the SPA promptly

 

6

 

after execution of this Agreement and to execute the SPA promptly after it has been finalized, it being understood that the Share Transfer will occur, and other operative provisions of the SPA, will come into effect only when and if Closing occurs, and if this Agreement is terminated, the SPA will terminate automatically.

 

(d)                                 Shareholders’ Agreement. At Closing and immediately after the Share Transfer, the Parties shall enter into a shareholders’ agreement with respect to Newco that incorporates the terms set forth in Exhibit C (the “SHA”). The Parties shall exercise best efforts to finalize the SHA promptly after execution of this Agreement and to execute the SHA as promptly as practicable, it being understood that the operative provisions of the SHA will come into effect only when and if Closing occurs, and if this Agreement is terminated, the SHA will terminate automatically.

 

(e)                                  Loan to Newco. At the Closing and immediately after the Share Transfer, VIA shall extend a loan to Newco in the amount of JPY369,638,750, which represents 65% of the IP Purchase Price (the “Loan”), pursuant to a loan agreement between VIA and Newco (the “Loan Agreement”) that the Parties shall negotiate in good faith. The Loan will be at arm’s-length terms. The Parties shall cause Newco to use the entirety of the Loan proceeds to purchase the Transferred IP.

 

Section 2.02                            Intellectual Property.

 

(a)                                 Transfer of Transferred IP. At the Closing and immediately after extension of the Loan, Toppan shall transfer to Newco the Transferred IP in exchange for JPY568,675,000 (the “IP Purchase Price”), pursuant to an intellectual property purchase agreement between Toppan and Newco that incorporates the terms set forth in Exhibit D (the “IP Transfer Agreement”). Newco shall pay the IP Purchase Price to Toppan as follows: (i) JPY369,638,750 at Closing (the “Closing IP Purchase Price”) and (ii) the difference between the IP Purchase Price and the Closing IP Purchase Price (the “IP Purchase Price Balance”) in installments pursuant to terms to be agreed by the Parties in the IP Transfer Agreement. Newco’s obligation to pay the IP Purchase Price Balance will be secured by a security interest in all of Newco’s assets in favor of Toppan. The Parties shall, and shall cause Newco to, enter into an agreement and to take all actions necessary to create and perfect such security interest (the “Perfection Actions”), in forms to be agreed by the Parties. The Parties further agree that any costs associated with the Perfection Actions (including, but not limited to, applicable stamp duties, registration fees, filing fees as well as judicial scrivener fees or patent attorney fees, if applicable) shall be borne by Newco. For the avoidance of doubt, Toppan is entitled place and establish security interests to cover the amount of the unpaid IP Purchase Price Balance over the assets of Newco, and if Toppan enforces such security interests, Toppan is entitled to recover only the amount of such unpaid IP Purchase Price Balance at the time of such enforcement from such asset(s) enforced, the value of which will be determined in a commercially reasonable manner.

 

(b)                                 License of Retained IP. At the Closing and simultaneously with the transfer of the Transferred IP, Toppan shall license to Newco the Retained IP pursuant to an intellectual property license agreement between Toppan and Newco that incorporates

 

7

 

the terms set forth in Exhibit E (the “IP License Agreement”). The consideration for the license of the Retained IP is included in the Share Purchase Price and no separate consideration for the Retained IP license will be required.

 

Section 2.03                            Business Employees.

 

(a)                                 Re-employed Employees.

 

(i)                                     The Parties shall exercise reasonable efforts to cause certain employees of Toppan and its Affiliates agreed in advance by the Parties (the “Re-employed Employees”) to be employed by Newco at Closing immediately following the completion of the Spin-off, subject to their consent. It is anticipated that the Re-employed Employees will serve as management of Newco.

 

(ii)                                  As part of their reasonable efforts, the Parties shall cause Newco to offer to each Re-employed Employee, for a period of at least three years after Closing, employment terms (including compensation and retirement allowance) and work conditions that are, in the aggregate, at least equivalent to his or her employment terms and work conditions immediately before Closing.

 

(iii)                               Toppan shall pay to each Re-employed Employee at Closing the retirement allowance (taishokukin) or otherwise applicable allowances/considerations that he or she is entitled to receive upon retirement at Closing under Toppan’s work rules.

 

(iv)                              Neither Party will be required to offer a Re-employed Employee additional consideration to entice him or her to transfer to Newco in order for a Party to satisfy its reasonable efforts under this Section 2.03(a).

 

(b)                                 Seconded Employees.

 

(i)                                     The Parties shall negotiate in good faith to agree on a list of employees of Toppan and its Affiliates who are engaged in the manufacture, quality control, production management, production engineering, and line engineering of Products and who have the appropriate qualifications to be seconded to Newco (the “Seconded Employees”). In drawing up the list of Seconded Employees, the Parties shall take into account the distance between the employees’ residence and Newco’s facilities and Toppan’s need for such employees to work for Toppan.

 

(ii)                                  The duration of the Seconded Employees’ term of secondment will be three years from the Closing Date.

 

(iii)                               The Parties shall negotiate in good faith a secondment agreement to be entered into at Closing between Newco and Toppan that will define the Parties’ obligations with respect to the Seconded Employees (the “Secondment Agreement”).

 

8

 

Section 2.04                            Manufacturing Agreement. Toppan shall manufacture copper PET films at the Satte Facility for Newco for a post-Closing period to be agreed by the parties pursuant to a manufacturing agreement between Toppan and Newco (the “Manufacturing Agreement”).

 

Section 2.05                            Lease Agreement. Toppan shall lease space to Newco at the Shiga Facility for a post-Closing period to be agreed by the parties pursuant to a lease agreement between Toppan and Newco (the “Lease Agreement”) and with lease payments that are consistent with prevailing rates in the area. The Parties shall cause Newco to use the leased premises as its headquarters.

 

Section 2.06                            Bank Guarantee.

 

(a)                                 Promptly after execution of this Agreement, the Parties shall negotiate the terms of one or more standby letters of credit (the “L/Cs”) with a bank that is mutually agreeable to the Parties (the “Bank”) naming Toppan as the beneficiary.

 

(i)                                     One L/C will be in the amount of the Share Purchase Price and contain an undertaking by the Bank to pay the Share Purchase Price to Toppan if the Closing occurs.

 

(ii)                                  The other L/Cs will relate to the Termination Fee to Toppan if the Closing does not occur and if VIA is obligated to pay the Termination Fee pursuant to Section 8.02(a). The terms of these L/Cs will be negotiated by the Parties in good faith and these L/Cs may be delivered to Toppan separately from the first L/C.

 

(b)                                 VIA shall pay all fees and costs associated with the L/Cs.

 

Section 2.07                            Other Agreements.

 

(a)                                 Toppan shall provide various services agreed by the Parties to support the Business, such as administrative and back-office support, procurement support, and design and mask support. The Parties shall negotiate in good faith the scope, duration, fees and other terms of any such services in a services agreement between Toppan and Newco (the “Business Assistance Agreement”). Among other terms, the Business Assistance Agreement will specify that all supplies that Toppan procures from third parties and sells to Newco will be sold without any margin on the price that Toppan pays third parties for those supplies.

 

(b)                                 During the period agreed by the Parties, Toppan shall grant to Newco the right to use a production management software system developed by Toppan that is necessary to operate the Business. The fee payable by Newco to Toppan will be equal to 1% per annum of Newco’s annual global sales of Products for as long as Toppan is the sole party providing the system to Newco. If VIA provides all or a portion of the system to Newco, the Parties shall negotiate in good faith an equitable adjustment to the fee that reflects each Party’s contribution to Newco. The Parties shall negotiate in good faith the scope, duration and other terms of any such grant of right in a system license agreement between Toppan and Newco (the “System License Agreement”).

 

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(c)                                  Toppan and Newco shall negotiate in good faith the terms of a joint development agreement or a research and development service agreement to be entered into between Toppan and Newco pursuant to which Toppan will provide research and development-related activities that are necessary for the Business (the “R&D Agreement”). The parties will discuss the treatment of know-how developed after Closing that (i) is owned exclusively by Toppan and (ii) is necessary for the manufacture of Products.

 

(d)                                 It is contemplated that Newco will appoint Toppan and VIA as distributors to distribute Products manufactured by Newco. The Parties shall negotiate in good faith with Newco the scope, duration, and other terms of distribution agreements between Toppan and Newco (the “Toppan Distribution Agreement”) and between VIA and Newco (the “VIA Distribution Agreement”).

 

(e)                                  If either of the Parties believes it would be advisable for the Parties to enter into another agreement in furtherance of the Transaction, they shall discuss the terms of such an agreement in good faith.

 

Section 2.08                            Pre-Closing and Post-Closing Liabilities. Notwithstanding anything to the contrary contained in this Agreement and regardless of the definitions of Excluded Liabilities and Transferred Liabilities, the Parties agree that (i) Toppan shall be responsible for and Newco will not be responsible for any obligations and liabilities arising solely out of the Business operated by Toppan before the Closing, even if such obligations and liabilities arise after the Closing, and (ii) Newco shall be responsible for and Toppan will not be responsible for any obligations and liabilities arising out of the Business operated by, or any other activities of, Newco on or after the Closing.

 

Section 2.09                            Share Purchase Price Adjustment.

 

(a)                                 Between the date hereof and Closing, Toppan shall exercise reasonable commercial efforts to reduce the Inventory such that the Final Inventory Valuation is 1PY151,570,000. As part of these reasonable commercial efforts, Toppan shall disclose to VIA a non-binding plan to reduce its Inventory between the date hereof and Closing and Toppan shall report to VIA, by the 15th of each month between the date hereof and the Closing, Toppan’s non-binding valuation of the Inventory as of the end of the previous month.

 

(b)                                 Promptly after the Closing, Toppan shall review the Inventory and calculate the value of the Inventory as of the Closing Date. Toppan shall calculate the Inventory’s valuation using the same methodology it used to calculate the Target Inventory Valuation. Within 30 days after the Closing Date, Toppan shall deliver to VIA a list of the Closing Date Inventory and its valuation as of the Closing Date (the “Closing Date Inventory Statement”).

 

(c)                                  If VIA disagrees with the Closing Date Inventory Statement, VIA must deliver written notice of its objection and the bases therefor (the “Objection Notice”) within 15 business days after VIA’s receipt of the Closing Date Inventory Statement. If

 

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VIA does not deliver an Objection Notice within this 15-day period, the value of the Inventory on the Closing Date will be deemed final. If VIA delivers an Objection Notice within this 15-day period, the Parties shall discuss the area(s) of disagreement in the Closing Date Inventory Statement in good faith until they have agreed on the value of the Inventory on the Closing Date.

 

(d)                                 Within five Business Days after the value of the Inventory on the Closing Date has become final or agreed pursuant to Section 2.09(c) (the “Final Inventory Valuation”), the Parties shall make the following adjustments to the Share Purchase Price:

 

(i)                                     if the Final Inventory Valuation exceeds the Target Inventory Valuation, VIA shall pay the excess amount to the Toppan Account and the Share Purchase Price will be adjusted upward in the amount of the excess, and

 

(ii)                                  if the Target Inventory Valuation exceeds the Final Inventory Valuation, Toppan shall pay the excess amount to the VIA Account and the Share Purchase Price will be adjusted downward in the amount of the excess.

 

Section 2.10                            Further Assurances. Following the Closing, each Party shall execute and deliver any additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

ARTICLE III
 CLOSING; CLOSING DELIVERABLES

 

Section 3.01                            Closing. The Closing will take place at the Tokyo office of Jones Day 14 days after the completion of the Spin-off, unless any of the other conditions to closing set forth in ARTICLE VII have not been waived by the appropriate Party or satisfied before completion of the Spin-off (other than the conditions to be satisfied on the Closing Date, but subject to the waiver of those conditions by the appropriate Party or their satisfaction), in which case the Closing will take place within 14 days after waiver by the appropriate Party or satisfaction of all the conditions to closing set forth in ARTICLE VII (other than the conditions to be satisfied on the Closing Date, but subject to the waiver of those conditions by the appropriate Party or their satisfaction), or at such other times and places as the Parties may agree. The date on which the Closing occurs is called the “Closing Date.” Unless the Parties agree otherwise, the Closing will be deemed to occur and be effective at the close of business on the Closing Date.

 

Section 3.02                            Closing Deliverables and Actions.

 

(a)                                 VIA Closing Deliverables and Actions. VIA shall deliver the following documents and take the following actions at Closing:

 

(i)                                     pay the Share Purchase Price to the Toppan Account,

 

(ii)                                  make available the Loan amount to Newco,

 

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(iii)                               cause Newco to pay the Closing IP Purchase Price to the Toppan Account in immediately available funds,

 

(iv)                              deliver its executed signature page to the SPA (if it has not already done so),

 

(v)                                 deliver its executed signature page to the SHA (if it has not already done so),

 

(vi)                              deliver a fully executed copy of the Loan Agreement,

 

(vii)                           take all actions necessary, and deliver all signature pages and other documents necessary, to complete the Perfection Actions, and

 

(viii)                        deliver its signature page, as applicable, of any other Ancillary Agreement the Parties decide to execute or have executed at Closing.

 

(b)                                 Toppan Closing Deliverables and Actions. Toppan shall deliver the following documents and take the following actions at Closing:

 

(i)                                     deliver to VIA a copy of the receipt of the application with the relevant legal affairs bureau for Newco’s commercial registry,

 

(ii)                                  deliver to VIA a certified copy of Newco shareholders’ register duly and validly recording the Share Transfer from Toppan to VIA,

 

(iii)                               deliver its executed signature page to the SPA (if it has not already done so),

 

(iv)                              deliver its executed signature page to the SHA (if it has not already done so),

 

(v)                                 deliver a fully executed copy of the IP Transfer Agreement,

 

(vi)                              deliver a fully executed copy of the IP License Agreement,

 

(vii)                           deliver a fully executed copy of the Secondment Agreement,

 

(viii)                        deliver a fully executed copy of the Manufacturing Agreement,

 

(ix)                              deliver a fully executed copy of the Lease Agreement,

 

(x)                                 deliver a fully executed copy of the Business Assistance Agreement,

 

(xi)                              deliver a fully executed copy of the System License Agreement,

 

(xii)                           deliver a fully executed copy of the Toppan Distribution Agreement,

 

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(xiii)                        deliver a fully executed copy of the VIA Distribution Agreement,

 

(xiv)                       deliver a fully executed copy of the R&D Agreement; and

 

(xv)                          deliver its signature page and Newco’s signature page, as applicable, of any other Ancillary Agreement the Parties decide to execute or have executed at Closing.

 

ARTICLE IV
 REPRESENTATIONS AND WARRANTIES OF TOPPAN

 

Toppan represents and warrants to VIA that the statements contained in this ARTICLE IV are true and correct as of the date hereof and as of the Closing Date (or other date specified in the representations and warranties).

 

Section 4.01                            Organization and Authority. Toppan is a company duly organized and validly existing under the Laws of Japan. Toppan has full corporate power and authority to enter into this Agreement and the Ancillary Agreement to which VIA is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Toppan of this Agreement and any Ancillary Agreement to which Toppan is a party, the performance by Toppan of its obligations hereunder and thereunder and the consummation by VIA of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Toppan. This Agreement has been duly executed and delivered by Toppan, and (assuming due authorization, execution and delivery by VIA) this Agreement constitutes a legal, valid and binding obligation of Toppan enforceable against Toppan in accordance with its terms, except to the extent enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive relief, specific performance and other equitable remedies. When each Ancillary Agreement to which Toppan is or will be a party has been duly executed and delivered by Toppan (assuming due authorization, execution and delivery by each other party thereto), that Ancillary Agreement will constitute a legal and binding obligation of Toppan enforceable against it in accordance with its terms, except to the extent enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive relief, specific performance and other equitable remedies.

 

Section 4.02                            No Conflicts; Consents. The execution, delivery and performance by Toppan of this Agreement and the Ancillary Agreement to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the articles of association or other organizational documents of Toppan or (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Toppan. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Toppan in connection with the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby.

 

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Section 4.03                            Legal Proceedings. There are no Actions pending or, to Toppan’s knowledge, threatened against Toppan or any of its Affiliates that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement and the Ancillary Agreements. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.

 

Section 4.04                            Antisocial Forces. Toppan is not an Antisocial Force and does not have any relationships or interactions with any Antisocial Force.

 

Section 4.05                            Title to Shares; Capitalization. Immediately after completion of the Spin-off and on the Closing Date:

 

(a)                                 Toppan will hold 100% of the share capital of Newco (the “Shares”);

 

(b)                                 Toppan will have legal title to the Shares, free and clear of all Encumbrances of any kind, and upon completion of the Share Transfer, VIA will receive legal title to Shares representing 65% of Newco’s share capital, free and clear of all Encumbrances of any kind, and Toppan will have legal title to Shares representing 35% of Newco’s share capital, free and clear of all Encumbrances of any kind;

 

(c)                                  the Shares will represent 100% of Newco’s authorized and issued and outstanding capital stock;

 

(d)                                 there will be no outstanding options, warrants, call rights or commitments, or any other agreements of any character binding on Newco with respect to Newco’s capital stock or obligating Newco to issue, transfer or sell, or cause to be issued, transferred or sold, any shares of capital stock of, or other equity interests in, Newco or securities convertible into or exchangeable for such shares, or equity interests, or obligating Newco to grant, extend or enter into any such option, warrant, call, right, commitment or other agreement; and

 

(e)                                  there will be no voting trusts, proxies, shareholders’ agreements or other agreements or understandings relating to Newco’s capital stock to which Newco is a party or is bound with respect to voting any shares of Newco’s capital stock.

 

Section 4.06                            Title to Transferred Assets. Toppan owns and has good title to the Transferred Assets, free and clear of Encumbrances on the date hereof and immediately before the completion of the Spin-off.

 

Section 4.07                            Condition of Transferred Assets. Except as set forth in Section 4.07 of the Disclosure Schedule, the Transferred Assets are in good condition and are adequate for the uses to which they are being put, and none is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.

 

Section 4.08                            Spin-off. Upon the completion of the Spin-off:

 

(a)                                 the Spin-off will have been completed in accordance with the Spin-off Plan,

 

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(b)                                 the Spin-off will have been completed in accordance with applicable Law without any objections from creditors,

 

(c)                                  Newco will be duly organized under the laws of Japan,

 

(d)                                 the Transferred Assets will have been validly transferred to Newco,

 

(e)                                  no Excluded Assets or Excluded Liabilities will have been transferred to Newco,

 

(f)                                   Newco will have all the permits necessary for the continued conduct of the Business after the Closing in substantially the same manner as conducted immediately before the Closing, and on the Closing Date:

 

(g)                                  Newco will own and have good title to the Transferred Assets, free and clear of Encumbrances, and

 

(h)                                 Newco will have all the permits necessary for the continued conduct of the Business after the Closing in substantially the same manner as conducted immediately before the Closing.

 

Section 4.09                            Sufficiency of non-Intellectual Property Assets. The Transferred Assets and the Re-employed Employees, together with the rights and services to be provided by Toppan to Newco pursuant to the Ancillary Agreements other than the IP License Agreement, are all the non-Intellectual Property assets and rights and services that are necessary and sufficient for the continued conduct of the Business after the Closing in substantially the same manner as conducted immediately before the Closing and constitute all the non-Intellectual Property rights, services, property and assets necessary to conduct the Business as currently conducted.

 

Section 4.10                            Intellectual Property.

 

(a)                                 The Transferred IP constitutes all patent rights and patent applications which, immediately before the Closing Date, (i) are owned exclusively by Toppan and (ii) are necessary for and used by Toppan exclusively for the manufacture, sale, and use of the Products. The heading entitled “Transferred IP” in Section 1.02 of the Disclosure Schedule lists all pending patent applications included in the Transferred IP and their status.

 

(b)                                 The Retained IP constitutes all patent rights and patent applications which, immediately before the Closing Date, (i) are owned exclusively by Toppan and (ii) are necessary for but not used by Toppan exclusively for the manufacture, sale, and use of the Products. The heading entitled “Retained IP” in Section 1.02 of the Disclosure Schedule lists all pending patent applications included in the Retained IP and their status.

 

(c)                                  Toppan owns all right, title and interest in and to the Transferred IP, free and clear of Encumbrances. None of the Transferred IP is subject to a license in favor of a third Person or to royalty payments to any third Person.

 

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(d)                                 Toppan has valid legal title to or contractual rights in all Retained IP as of the Closing.

 

(e)                                  As of the date hereof, (i) Toppan is not subject to any lawsuit alleging that (A) the Products, as sold by Toppan immediately before the date hereof, or the manufacture, sale, or use of such Products, or (B) carrying out the Business as conducted by Toppan immediately before the date hereof, in the case of each of (A) and (B), by using Transferred IP or Retained IP, infringes the intellectual property rights of any third Person, and (ii) Toppan has not received or is not aware of any advance written notice of filing of such lawsuit from any third Person. If between the date hereof and the Closing Date Toppan receives written notice of a lawsuit or an allegation that the use of Transferred IP or Retained IP infringes the intellectual property rights of any third Person, Toppan shall promptly inform VIA thereof and the Parties shall discuss in good faith how to address the lawsuit or allegation.

 

Section 4.11                            Balance Sheet. The Balance Sheet presents fairly, in all material respects, the financial condition of the Business as of the date of the Balance Sheet.

 

Section 4.12                            Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any Ancillary Agreement based upon arrangements made by or on behalf of Toppan.

 

Section 4.13                            Exclusive Representations and Warranties. The representations and warranties made by Toppan in this ARTICLE IV are the exclusive representations and warranties made by Toppan with respect to itself, the Transferred Assets, the Transferred IP, the Transferred Liabilities, the Business, or the Spin-off, other than representations and warranties relating to the Retained IP that Toppan will make in the IP License Agreement. Toppan hereby disclaims any other express or implied representations or warranties with respect to itself, the Transferred Assets, the Transferred IP, the Business, and the Spin-off, and VIA hereby waives such other express or implied representations or warranties. Notwithstanding the foregoing, Toppan represents and warrants that it has not intentionally disclosed (including through documents disclosed in the Data Room) to VIA or its Representatives any material information about the Transferred Assets, the Transferred IP, the Transferred Liabilities, the Business, or the Spin-off that Toppan knew to be materially false at the time of disclosure, nor has Toppan intentionally withheld information that would reasonably be expected to affect a reasonable buyer’s willingness to undertake the Transaction. VIA acknowledges that no documents (other than this Agreement and the IP License Agreement), statement or information made available to it or its Representatives by Toppan or its Representatives contains, directly or indirectly, and none will be deemed, directly or indirectly, to contain, representations or warranties of Toppan with respect to itself, the Transferred Assets, the Transferred IP, the Transferred Liabilities, the Business, or the Spin-off.

 

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ARTICLE V
 REPRESENTATIONS AND WARRANTIES OF VIA

 

VIA represents and warrants to Toppan that the statements contained in this ARTICLE V are true and correct as of the date hereof and as of the Closing Date (or other date specified in the representations and warranties).

 

Section 5.01                            Organization and Authority. VIA is a company duly organized and validly existing under the Laws of Germany. VIA has full corporate power and authority to enter into this Agreement and the Ancillary Agreement to which VIA is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by VIA of this Agreement and any Ancillary Agreement to which VIA is a party, the performance by VIA of its obligations hereunder and thereunder and the consummation by VIA of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of VIA. This Agreement has been duly executed and delivered by VIA, and (assuming due authorization, execution and delivery by Toppan) this Agreement constitutes a legal, valid and binding obligation of VIA enforceable against VIA in accordance with its terms, except to the extent enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive relief, specific performance and other equitable remedies. When each Ancillary Agreement to which VIA is or will be a party has been duly executed and delivered by VIA (assuming due authorization, execution and delivery by each other party thereto), that Ancillary Agreement will constitute a legal and binding obligation of VIA enforceable against it in accordance with its terms, except to the extent enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights and by the availability of injunctive relief, specific performance and other equitable remedies.

 

Section 5.02                            No Conflicts; Consents. The execution, delivery and performance by VIA of this Agreement and the Ancillary Agreement to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the articles of association or other organizational documents of VIA or (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to VIA. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to VIA in connection with the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby.

 

Section 5.03                            Legal Proceedings. There are no Actions pending or, to VIA’s knowledge, threatened against VIA or any of its Affiliates that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement and the Ancillary Agreement. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.

 

Section 5.04                            Sufficiency of Funds. VIA has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Share Purchase Price, to extend the Loan, and to consummate the transactions contemplated by this Agreement and the Ancillary Agreements.

 

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Section 5.05                            Antisocial Forces. VIA is not an Antisocial Force and does not have any relationships or interactions with any Antisocial Force.

 

Section 5.06                            Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any Ancillary Agreement based upon arrangements made by or on behalf of VIA.

 

Section 5.07                            Investigation by VIA. VIA has conducted its own independent investigation, verification, review and analysis of the Spin-off, Transferred Assets, Transferred Liabilities, and the Business and its operations, results of operations, financial condition, technology and prospects. In entering into this Agreement, VIA acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of Toppan or any of its Representatives, except the specific representations and warranties of Toppan set forth in ARTICLE IV of this Agreement. VIA acknowledges and agrees that, except as set forth in ARTICLE IV of this Agreement, neither Toppan nor any of its Representatives or any other Person makes, has made, or will make any oral or written representation or warranty (including in the Ancillary Agreements), either express or implied, as to the accuracy or completeness of any information relating to the Business, the Transferred Assets, the Transferred Liabilities, or the Spin-off in materials made available to VIA or its Representatives in the Data Room or otherwise.

 

ARTICLE VI
 COVFNANTS

 

Section 6.01                            Conduct of Business before Closing; Maintenance of Transferred IP. From the date of this Agreement until the Closing, except as otherwise provided in this Agreement or consented to in writing by VIA (which consent VIA shall not unreasonably withhold, condition or delay), Toppan shall (a) conduct the Business in the ordinary course of business consistent with past practice and (b) use reasonable efforts to maintain and preserve the Transferred Assets and the Business’ relationships with its customers and suppliers.

 

For purposes of this Section 6.01, “reasonable efforts” means that Toppan shall act in good faith and devote a level of effort and resources consistent with what a reasonable party to a purchase agreement exercising prudent business judgment would expend to preserve the assets of a target business until closing and to close a sale of the target business, including the expenditure of nonmaterial out-of-pocket costs and expenses in connection with taking actions that are necessary to perform the undertaking, but not including the expenditure of material amounts to perform the undertaking that the Party is not otherwise required to expend under the Agreement.

 

Section 6.02                            Access to Information. From the date of this Agreement until the Closing, if VIA requires access to information relating to the Business, the Transferred Assets, or the Transferred Liabilities and the information is reasonably necessary to allow VIA to investigate new issues that have arisen in connection therewith and that are material in the context of the Transaction, Toppan shall disclose such information reasonably requested by VIA.

 

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Section 6.03                            Closing Conditions. From the date of this Agreement until the Closing, each Party shall use Reasonable Efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in ARTICLE VII.

 

Section 6.04                            Third-Person Consents; Antitrust Approvals.

 

(a)                                 Each Party shall act diligently and reasonably and shall, at the request of the other Party, use reasonable efforts to secure any consents, waivers and approvals of any third Person (including any Governmental Authority) required to be obtained to consummate the transactions contemplated by this Agreement and the Ancillary Agreements, except that before the Closing, neither VIA nor its Affiliates nor any of their respective Representatives shall contact any customer or supplier of the Business without Toppan’s prior written consent (which consent Toppan shall not unreasonably withhold, condition or delay).

 

For purposes of this Section 6.04(a), “reasonable efforts” means that the Party with the undertaking shall act in good faith and devote a level of effort and resources consistent with what a reasonable party to a purchase agreement with the intention of consummating the transaction and exercising prudent business judgement would expend to consummate a transaction, including the expenditure of internal resources and out-of-pocket costs and expenses in connection with taking actions that are necessary to perform the undertaking, but not including (i) the expenditure of material monetary amounts to perform the undertaking that the Party is not otherwise required to expend under the Agreement, (ii) the payment of any amount to any third Person (including any Governmental Authority) as consideration to obtain a consent, waiver, or approval, (iii) the commencement or participation in any litigation, (iv) the offer or grant of any accommodation to any third Person (including any Governmental Authority) as consideration to obtain a consent, waiver, or approval, or (v) the undertaking of any obligation or liability (in each case financial or otherwise) to any third Person (including any Governmental Authority) as consideration to obtain a consent, waiver, or approval.

 

(b)                                 On the date hereof, VIA has concluded that the Share Transfer and the other transactions contemplated by the Transaction Documents will require it to make a filing with or to obtain the approval of the following Governmental Authorities in relation to Antitrust Laws: China and Germany (the “Identified Antitrust Approvals”). VIA shall use its best efforts to obtain, or cause to be obtained, as promptly as possible, the Identified Antitrust Approvals and the Other Antitrust Approvals (the “Antitrust Approvals”). In particular, VIA shall (i) make appropriate filing to the relevant Governmental Authorities in Germany for the Identified Antitrust Approval in Germany within 15 Business Days after the date hereof (ii) initiate contact with the relevant Governmental Authorities in connection with the filing for the Identified Antitrust Approvals in China within 15 Business Days after the date hereof and shall make an official filing submission with those Governmental Authorities as promptly as possible thereafter but in any event within 30 days after the date hereof, (iii) definitively identify all and Other Antitrust Approvals and notify Toppan of these approvals by December 13, (iv) make official filings for the Other Antitrust Approvals by December 29, 2017, and (iv) supply as promptly as practicable to those Governmental Authorities any additional

 

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information and documentary material that they may request. VIA shall pay all filing fees required to paid to any Governmental Authority in connection with any required Antitrust Approval. VIA shall provide updates to Toppan on a regular basis and when requested by Toppan on the status of the efforts to obtain the Antitrust Approvals and shall take into account any comments provided by Toppan in relation to the Antitrust Approvals. Toppan shall cooperate with VIA in promptly seeking to obtain the Antitrust Approvals.

 

(c)                                  Without limiting the generality of VIA’s undertaking pursuant to this Section 6.04, VIA shall take any and all steps necessary to avoid or eliminate each and every impediment or to satisfy each and every condition under any Antitrust Law that may be asserted by any Governmental Authority so as to obtain the Antitrust Approvals and to allow the Parties to close the Share Transfer and other transactions contemplated under the Transaction Documents as promptly as possible, including proposing, negotiating, committing to and effecting, the sale, divestiture or disposition of any of its assets, properties or businesses or of the assets, properties or businesses to be acquired by it pursuant to this Agreement as is required by a Governmental Authority to obtain Antitrust Approval.

 

Section 6.05                            Confidentiality.

 

(a)                                 VIA acknowledges that the information being provided to it in connection with the transactions contemplated by the Transaction Documents is subject to the terms of the NDA, the terms of which are incorporated herein by reference. Effective upon, and only upon, the Closing, the obligations under the NDA will terminate except with respect to provisions regarding disclosure and use of confidential information not related to the Transferred Assets and Retained IP, which will continue indefinitely. If for any reason this Agreement is terminated prior to the Closing Date, the NDA will continue in full force and effect in accordance with its terms.

 

(b)                                 VIA shall, and shall cause Newco after the Closing to, to the extent either of them has any nonpublic information not relating solely to the Transferred Assets and Retained IP (any such information, “Toppan Information”) (i) treat Toppan Information strictly confidentially, (ii) not use Toppan Information for any purpose, and (iii) to the extent Toppan Information is documented or exists in written, photographical or other physical form, return such information (and any copies made thereof) to Toppan, and to the extent it is stored in electronic form, make a copy available to Toppan and expunge such information from any computer or other data carrier, in each case promptly after the Closing, and VIA shall, upon written request of Toppan, confirm to Toppan in writing compliance with these obligations by VIA and Newco.

 

Section 6.06                            Balance Sheet. Before the Closing, the Parties shall discuss in good faith and agree on a balance sheet for Newco as of immediately following completion of the Spin-off (the “Balance Sheet”).

 

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Section 6.07                            Transferred IP.

 

(a)                                 Until Closing, Toppan will exercise commercially reasonable efforts consistent with Toppan’s IP policies to prosecute the patent applications included in the Transferred IP and to maintain the patents included in the Transferred IP.

 

(b)                                 The Parties shall cause Newco to take all necessary steps to record the transfer of the Transferred IP with the Japan Patent Office and other relevant patent offices and to perfect the transfer of the Transferred IP promptly after the Closing. Toppan shall provide reasonable assistance to Newco in this regard.

 

(c)                                  Before Closing, Toppan shall inform VIA in writing of the estimated time and costs necessary for the issuance of the patent applications included in the Transferred IP. The Parties shall discuss these estimates and VIA shall, after discussion, acknowledge these estimates.

 

(d)                                 After Closing, Newco shall be solely responsible for prosecuting any patent applications included in the Transferred IP. Toppan shall provide reasonable assistance to Newco with respect to ongoing patent applications in exchange for reasonable compensation payable by Newco as agreed by the Parties.

 

Section 6.08                            Further Assurances. Following the Closing, each Party shall execute and deliver any additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

ARTICLE VII
 CONDITIONS TO CLOSING

 

Section 7.01                            Conditions to Obligations of Both Parties. The obligations of each Party to consummate the transactions contemplated by the Transaction Documents are subject to the fulfillment, at or before the Closing, of each of the following conditions:

 

(a)                                 No Law is in effect, and no Governmental Authority has enacted, issued, promulgated, enforced or entered any Governmental Order, that has the effect of making the transactions contemplated by the Transaction Documents illegal, otherwise restraining, enjoining, or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

 

(b)                                 No waiting period (including any extensions thereof) under Antitrust Laws or investigation by a Governmental Authority relating to the transactions contemplated by the Transaction Documents is unexpired or pending.

 

Section 7.02                            Conditions to Obligations of VIA. The obligation of VIA to consummate the transactions contemplated by the Transaction Documents is subject to the satisfaction of the following conditions:

 

(a)                                 The representations and warranties of Toppan in this Agreement are true and correct in all material respects on the date hereof and on the Closing Date with the same effect as though made on such date (except those representations and warranties

 

21

 

that address matters only as of a specified date, the accuracy of which will be determined on that specified date in all respects).

 

(b)                                 Toppan has duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it before the Closing Date.

 

Section 7.03                            Conditions to Obligations of Toppan. The obligation of Toppan to consummate the transactions contemplated by the Transaction Documents is subject to the satisfaction of the following conditions:

 

(a)                                 The representations and warranties of VIA in this Agreement are true and correct in all material respects on the date hereof and on the Closing Date with the same effect as though made on such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which will be determined on that specified date in all respects).

 

(b)                                 VIA has duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and each of the other Transaction Documents to be performed or complied with by it before the Closing Date.

 

ARTICLE VIII
 TERMINATION

 

Section 8.01                            Termination. This Agreement may be terminated at any time before the Closing:

 

(a)                                 by the mutual written consent of the Parties;

 

(b)                                 by VIA by written notice to Toppan if:

 

(i)                                     VIA is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Toppan pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure has not been cured by Toppan within 20 days after Toppan’s receipt of written notice of such breach from VIA; or

 

(ii)                                  any condition set forth in Section 7.01 or Section 7.02 has not been, or if it becomes apparent that any such condition will not be, fulfilled by June 30, 2018, unless the failure is due to the failure of VIA to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it before the Closing; or

 

22

 

(c)                                  by Toppan by written notice to VIA if:

 

(i)                                     Toppan is not then in material breach of any provision of this Agreement and there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by VIA pursuant to this Agreement that would give rise to the failure of any of the conditions specified in ARTICLE VII and such breach, inaccuracy or failure has not been cured by VIA within 20 days after VIA’s receipt of written notice of such breach from Toppan; or

 

(ii)                                  any condition set forth in Section 7.01 or Section 7.03 has not been, or if it becomes apparent that any of such condition will not be, fulfilled by June 30, 2018, unless such failure is due to the failure of Toppan to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it before the Closing.

 

Section 8.02                            Effect of Termination. If this Agreement is terminated in accordance with this ARTICLE VIII, this Agreement will immediately become void and:

 

(a)                                 If Toppan terminates this Agreement pursuant to Section 8.01(c)(i), VIA shall pay the Termination Fee in immediately available funds to the Toppan Account within 30 days after Toppan’s notice of termination. VIA acknowledges that (i) the agreement contained in this Section 8.02(a) is an integral part of the transactions contemplated by this Agreement and (ii) in light of the difficulty of accurately determining actual damages upon Toppan’s termination of this Agreement under circumstances in which the Termination Fee is payable pursuant to this Section 8.02(a), Toppan’s right to the Termination Fee constitutes a reasonable estimate of the losses that will be suffered by reason of any such termination of this Agreement and thus constitutes liquidated damages (and not a penalty). If VIA fails to pay the Termination Fee when due, VIA shall reimburse Toppan and its Affiliates for all reasonable costs and expenses actually incurred or accrued by them (including reasonable fees and expenses of counsel) in connection with any action (including the filing of any lawsuit) taken to collect payment of the Termination Fee, together with interest on such unpaid amounts at five percent per year calculated on a daily basis from the date the Termination Fee was required to be paid to the date of actual payment.

 

(b)                                 If VIA terminates this Agreement pursuant to Section 8.01(b)(i), Toppan shall pay the Termination Fee in immediately available funds to the VIA Account within 30 days after VIA’s notice of termination. Toppan acknowledges that (i) the agreement contained in this Section 8.02(a) is an integral part of the transactions contemplated by this Agreement and (ii) in light of the difficulty of accurately determining actual damages upon VIA’s termination of this Agreement under circumstances in which the Termination Fee is payable pursuant to this Section 8.02(a), VIA’s right to the Termination Fee constitutes a reasonable estimate of the losses that will be suffered by reason of any such termination of this Agreement and thus constitutes liquidated damages (and not a penalty). If Toppan fails to pay the Termination Fee when due, Toppan shall reimburse VIA and its Affiliates for all reasonable costs and expenses actually incurred or accrued by them (including reasonable fees and expenses of counsel) in connection with any action (including the filing of any lawsuit) taken to collect payment of the Termination

 

23

 

Fee, together with interest on such unpaid amounts at five percent per year calculated on a daily basis from the date the Termination Fee was required to be paid to the date of actual payment.

 

(c)                                  Neither Party will have any liability except as set forth in Section 8.02(a) or Section 8.02(b) relating to payment of the Termination Fee, Section 6.05, this ARTICLE VIII, ARTICLE IX, ARTICLE X, or in any corresponding definitions set forth in ARTICLE I.

 

(d)                                 Nothing herein relieves either Party from liability for fraud or for any breach of any provision of this Agreement before termination.

 

ARTICLE IX
 INDEMNIFICATION

 

Section 9.01                            Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein will survive the Closing and will remain in full force and effect for a period of 12 months from the Closing Date. None of the covenants or other agreements contained in this Agreement will survive the Closing Date other than those which by their terms contemplate performance after the Closing Date, and each such surviving covenant and agreement will survive the Closing for the period contemplated by its terms. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching Party to the breaching Party before the expiration of the applicable survival period will not thereafter be barred by the expiration of that survival period and such claims will survive until finally resolved.

 

Section 9.02                            Indemnification by Toppan. Subject to the other terms and conditions of this ARTICLE IX, Toppan shall indemnify VIA against, and shall hold VIA harmless from and against, any and all Losses incurred or sustained by, or imposed upon, VIA based upon, arising out of, with respect to or by reason of:

 

(a)                                 any inaccuracy in or breach of any of the representations or warranties of Toppan contained in this Agreement; or

 

(b)                                 any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Toppan pursuant to this Agreement.

 

Section 9.03                            Indemnification by VIA. Subject to the other terms and conditions of this ARTICLE IX, VIA shall indemnify Toppan against, and shall hold Toppan harmless from and against, any and all Losses incurred or sustained by, or imposed upon, Toppan based upon, arising out of, with respect to or by reason of:

 

(a)                                 any inaccuracy in or breach of any of the representations or warranties of VIA contained in this Agreement; or

 

(b)                                 any breach or non-fulfillment of any covenant, agreement or obligation to be performed by VIA pursuant to this Agreement.

 

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Section 9.04                            Certain Limitations. The party making a claim under this ARTICLE IX is referred to as the “Indemnified Party” and the party against whom that claim is asserted under this ARTICLE IX is referred to as the “Indemnifying Party.” The indemnification provided for in Section 9.02 and Section 9.03 is subject to the following limitations:

 

(a)                                 The Indemnifying Party will not be liable to the Indemnified Party for indemnification under Section 9.02(a) or Section 9.03(a), as the case may be, until the aggregate amount of all Losses in respect of indemnification under Section 9.02(a) or Section 9.03(a) exceeds JPY10,000,000, in which event the Indemnifying Party shall pay or be liable only for Losses in excess of this amount.

 

(b)                                 The aggregate amount of all Losses for which an Indemnifying Party shall be liable pursuant to Section 9.02(a) or Section 9.03(a), as the case may be, will not exceed (i) 40% of the Share Purchase Price actually received by Toppan, if Toppan is the Indemnifying Party, or (ii) 20% of the Share Purchase Price, if VIA is the Indemnifying Party, unless VIA’s indemnification obligation arises from its failure to pay the Share Purchase Price, in which event VIA’s liability will not exceed 100% of the Share Purchase Price.

 

(c)                                  Payments by an Indemnifying Party pursuant to Section 9.02 or Section 9.03 in respect of any Loss will be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Indemnified Party (or the Company) in respect of any such claim. The Indemnified Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any Losses before seeking indemnification under this Agreement.

 

(d)                                 Payments by an Indemnified Party pursuant to or in respect of any Loss will be reduced by an amount equal to any tax benefit realized as a result of such Loss by the Indemnified Party. If an Indemnified Party is required under this Agreement to indemnify an Indemnified Party for a Loss suffered by the Indemnified Party (the “Indemnified Loss”) and if it is reasonably expected that the Indemnifiable Loss could lead the Indemnified Party to realize a tax benefit but the realization of the tax benefit is not certain when the Indemnifying Party must pay the Indemnifiable Loss, the Indemnifying Party may withhold payment of the portion of the Indemnifiable Loss equal to the reasonably expected tax benefit (the “Anticipated Tax Benefit Amount”) until it is possible to confirm whether the tax benefit will be realized. As soon as the amount of the realized tax benefit has been confirmed, the Indemnifying Party shall pay to the Indemnified Party the difference between the withheld Anticipated Tax Benefit Amount and the actually realized tax benefit. For the avoidance of doubt, the Indemnifying Party shall pay the portion of the Indemnifiable Loss other than the Anticipated Tax Benefit Amount.

 

(e)                                  In no event will any Indemnifying Party be liable to any Indemnified Party for any punitive, incidental, consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach

 

25

 

or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple.

 

(f)                                   Each Indemnified Party shall take, and cause its Affiliates to take, all reasonable steps to mitigate any Loss upon becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Loss.

 

(g)                                  Toppan will not be liable under this Agreement for any Losses based upon or arising out of a fact or event that occurred before the Closing and that Toppan disclosed to VIA either (i) in the Disclosure Schedule, or (ii) in the Data Room.

 

Section 9.05                            Indemnification Procedures.

 

(a)                                 Third-Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any action, suit, claim or other legal proceeding made or brought by any Person who is not a party to this Agreement or an Affiliate of a Party to this Agreement or a Representative of the foregoing (a “Third-Party Claim”) against such Indemnified Party with respect to which the Indemnifying Party is obligated to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice will not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party must describe the Third-Party Claim in reasonable detail, must include copies of all material written evidence thereof, and must specify the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party may participate in, or by giving written notice to the Indemnified Party, may assume the defense of, any Third-Party Claim at the Indemnifying Party’s expense and by the Indemnifying Party’s own counsel, in which case the Indemnified Party shall cooperate in good faith in such defense. If the Indemnifying Party assumes the defense of any Third-Party Claim, subject to Section 9.05(b), it may take such action as it deems necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third-Party Claim in the name and on behalf of the Indemnified Party. The Indemnified Party may, at its own cost and expense, participate in the defense of any Third-Party Claim with counsel selected by it subject to the Indemnifying Party’s right to control the defense thereof. If the Indemnifying Party elects not to compromise or defend such Third-Party Claim or fails to promptly notify the Indemnified Party in writing of its election to defend as provided in this Agreement, the Indemnified Party may, subject to Section 9.05(b), pay, compromise, defend such Third-Party Claim and seek indemnification for any and all Losses based upon, arising from or relating to such Third-Party Claim. The Parties shall cooperate with each other in all reasonable respects in connection with the defense of any Third-Party Claim, including making available (subject to the provisions of Section 6.05) records relating to such Third-Party Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending Party, management employees of the non-defending Party as may be reasonably necessary for the preparation of the defense of the Third-Party Claim.

 

26

 

(b)                                 Settlement of Third-Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into settlement of any Third-Party Claim without the advance written consent of the Indemnified Party (which consent the Indemnified Party shall not unreasonably withhold, delay, or condition), except as provided in this Section 9.05(b). If a firm offer is made to settle a Third-Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with the Third-Party Claim and the Indemnifying Party desires to accept and agree to the offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to the settlement offer within ten days after its receipt of the notice, the Indemnified Party may continue to contest or defend the Third-Party Claim, and in such event, the maximum liability of the Indemnifying Party as to the Third-Party Claim will not exceed the amount of the settlement offer. If the Indemnified Party fails to consent to the settlement offer and also fails to assume defense of the Third-Party Claim, the Indemnifying Party may settle the Third-Party Claim upon the terms set forth in the settlement offer.

 

(c)                                  Direct Claims. If the Indemnified Party has a claim on account of a Loss that does not result from a Third-Party Claim (a “Direct Claim”), Indemnified Party shall assert the Direct Claim by giving the Indemnifying Party prompt written notice thereof. The failure to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified Party must describe the Direct Claim in reasonable detail, must include copies of all material written evidence thereof, and must specify the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party must respond in writing to such Direct Claim within 30 days after its receipt of the notice. During this 30-day period, the Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim, and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Company’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within the 30-day period, the Indemnifying Party will be deemed to have rejected the claim, in which case the Indemnified Party may pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

 

Section 9.06                            Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement will be treated by the Parties as an adjustment to the Share Purchase Price for tax purposes, unless otherwise required by Law or by tax authorities or other Governmental Authorities.

 

27

 

Section 9.07                            Exclusive Remedies. The Parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from intentional fraud on the part of a Party in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement, will be pursuant to the indemnification provisions set forth in this ARTICLE IX. Nothing in this Section 9.07 limits either Party’s right to seek any remedy on account of intentional misrepresentation or fraud by either Party.

 

ARTICLE X
 MISCELLANEOUS

 

Section 10.01                     Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the Party incurring such costs and expenses.

 

Section 10.02                     Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Party shall, at the request of the other Party, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be required to carry out the provisions hereof and give effect to the transactions contemplated hereby.

 

Section 10.03                     Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder must be in writing and will be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) on the date sent by facsimile or e-mail of a PDF document, if sent during the recipient’s normal business hours, and on the next Business Day, if sent after the recipient’s normal business hours, on condition that the communication sent by facsimile or e-mail is also sent by certified or registered mail, return receipt requested, postage prepaid; or (c) if sent internationally, on the fifth day, and if sent within Japan, on the second day, after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the Parties at the following addresses (or at such other address for a Party of which that Party notifies the other Party in accordance with this Section 10.03):

 

	
If to VIA:
    	
 
    	
VIA optronics GmbH
   Lettenfeldstr. 15, 90592 Schwarzenbruck
   Facsimile:
   E-mail: djuergens@via-optronics.com; jwoerle@via-optronics.com
   Attention: Daniel Jürgens and Dr. Jasmin Wörle
    
	
 
    	
 
    	
 
    
	
With a copy to (which will not constitute   notice):
    	
 
    	
Kloepfel Corporate Finance GmbH (Hauptsitz)
   Rundfunkplatz 2
   80335 Munchen
   Facsimile:
   E-mail:
    

 

28

 

	
 
    	
 
    	
Attention: Dr. Heiko Frank
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Jones Day
   Kamiyacho Prime Place
   1-17, Toranomon 4-chome
   Minato-ku, Tokyo 105-0001, JAPAN
   E-mail: mushijima@jonesday.com
   Attention: Makiko Ushijima
    
	
 
    	
 
    	
 
    
	
If to Toppan:
    	
 
    	
Toppan Printing Co., Ltd.
   Toppan Shibaura Bldg., 3-19-26 Shibaura, Minato-ku, Tokyo 108-8539
   Facsimile:
   E-mail: teruo.ninomiya@toppan.co.jp,
   kentaro.kitaoka@toppan.co.jp,
   Attention: Teruo Ninomiya and Kentaro Kitaoka
    
	
 
    	
 
    	
 
    
	
With a copy to (which will not constitute   notice):
    	
 
    	
southgate (registered association)
   Pacific Square Kudan-Minami, 7th Fl
   2-4-11 Kudan-Minami, Chiyoda-ku, Tokyo 102-0074, JAPAN
   E-mail: emarcks@southgate-law.com
   Attention: Eric Marcks
    

 

Section 10.04                     Headings. The headings in this Agreement are for reference only and do not affect its interpretation.

 

Section 10.05                     Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, that invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable that term or provision in any other jurisdiction. Upon determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the Parties’ original intent as closely as possible in a mutually acceptable manner so that the transactions contemplated hereby may be consummated as originally contemplated to the greatest extent possible.

 

Section 10.06                     Entire Agreement. This Agreement and all related Exhibits and Schedules hereto constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to this subject matter (including the Touch Panel Business Project Term Sheet entered into by the Parties on July 13, 2017. In particular, ARTICLE III and ARTICLE IX constitute the sole and entire agreement of the Parties with respect to representations and warranties and indemnification and supersede all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, including those contained in the Ancillary Agreements, with respect to representations and warranties and indemnification.

 

29

 

Section 10.07                     Successors and Assigns; Assignment. This Agreement is binding upon and will inure to the benefit of the Parties and their respective successors and permitted assigns. Neither Party shall assign its rights or obligations hereunder without the advance written consent of the other Party, which consent must not be unreasonably withheld or delayed by either Party. No assignment will relieve the assigning Party of any of its obligations hereunder.

 

Section 10.08                     No Third-party Beneficiaries. This Agreement is for the sole benefit of the Parties (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or will confer upon any other Person, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 10.09                     Amendment and Modification; Waiver. This Agreement may be amended, modified or supplemented only by an agreement in writing signed by each Party. No waiver by either Party of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by that Party. No waiver by either Party will be, or will be construed as, a waiver in respect of any failure, breach or default not expressly identified by that written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement will be, or will be construed as, a waiver thereof; nor will any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 10.10                     Governing Law; Dispute Resolution.

 

(a)                                 This Agreement is governed by and to be construed in accordance with the laws of Japan without giving effect to any choice or conflict of law provision or rule.

 

(b)                                 The Parties shall endeavor to resolve any dispute, controversy or difference arising out of, in connection with, or related to this Agreement (a “Dispute”) through good-faith negotiations. If a Dispute is not settled within 20 days after the receipt by a Party of a written request for negotiation under this Section 10.10(b), the Dispute will be referred for consideration by the Parties’ senior officers. The senior officers will have full authority to settle the Dispute.

 

(c)                                  If the senior officers are unable to resolve the Dispute within 20 days after the receipt by a Party of a written request for consideration of the Dispute by senior officers under Section 10.10(b), the Parties shall submit the Dispute to arbitration in Tokyo in accordance with the Commercial Arbitration Rules of the Japan Commercial Arbitration Association for final settlement. The Parties shall appoint three arbitrators in accordance with the rules and shall conduct the arbitration in English. The decision by the arbitration tribunal will be final and binding on the Parties and may be approved of or entered in (or otherwise be granted enforceability through necessary procedures by) any court having jurisdiction. The Parties consent to consolidation by the Japan Commercial Arbitration Association of arbitral proceedings initiated under this Agreement with arbitration proceedings initiated under any one or more of the Ancillary Agreements (notwithstanding the fact that those agreements may be governed by different laws).

 

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Section 10.11                     Specific Performance. The Parties agree that irreparable damage will occur if any provision of this Agreement is not performed in accordance with its terms and that the Parties are entitled to specific performance of its terms, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 10.12                     Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of the Agreement, the prevailing Party will be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which that Party may be entitled.

 

Section 10.13                     Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

31

 

IN WITNESS WHEREOF, the Parties execute this Agreement on the date stated in the introductory clause.

 

 

	
VIA OPTRONICS GMBH
    	
 
    	
VIA OPTRONICS GMBH
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jürgen Eichner
    	
 
    	
By:
    	
/s/ Daniel Jürgens
    
	
Name:
    	
Jürgen Eichner
    	
 
    	
Name:
    	
Daniel Jürgens
    
	
Title:
    	
Managing Director
    	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TOPPAN PRINTING CO., LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Teruo Ninomiya
    
	
 
    	
 
    	
Name:
    	
Teruo Ninomiya
    
	
 
    	
 
    	
Title:
    	
Senior General Manager
    
						

 

32Exhibit 10.5

 

SHAREHOLDERS’ AGREEMENT

 

between

 

VIA OPTRONICS GMBH

 

and

 

TOPPAN PRINTING CO., LTD.

 

dated

 

March 23, 2018

 

 

TABLE OF CONTENTS

 

	
ARTICLE I EFFECTIVENESS;   DEFINITIONS; INTERPRETATION
    	
1
    
	
 
    	
 
    
	
ARTICLE II   MANAGEMENT AND OPERATION OF THE COMPANY
    	
5
    
	
 
    	
 
    
	
ARTICLE III CALL   AND PUT OPTIONS
    	
8
    
	
 
    	
 
    
	
ARTICLE IV   TRANSFER OF SHARES
    	
11
    
	
 
    	
 
    
	
ARTICLE V   PRE-EMPTIVE RIGHTS
    	
15
    
	
 
    	
 
    
	
ARTICLE VI   NON-COMPETE AND OTHER AGREEMENTS
    	
17
    
	
 
    	
 
    
	
ARTICLE VII TERM   AND TERMINATION
    	
20
    
	
 
    	
 
    
	
ARTICLE VIII   MISCELLANEOUS
    	
21
    

 

 

Shareholders’ Agreement

 

This Shareholders’ Agreement (this “Agreement”) is entered into on March 23, 2018 between VIA optronics GmbH, a company organized under the laws of Germany (the “VIA”) and Toppan Printing Co., Ltd., a company organized under the laws of Japan (the “Toppan” and, together with VIA, the “Shareholders”)

 

Recitals

 

A.            Pursuant to the Framework Agreement, the Shareholders have agreed to establish a company under the laws of Japan (the “Company”) that will operate a business (the “Business”) in Japan that develops, manufactures, and markets copper touch panel sensors used in touch panel modules (“Sensors”) and copper PET film used in touch panel sensors (“Films”; with the Sensors, the “Products”).

 

B.            Pursuant to the Framework Agreement, VIA will own 65% of the issued and outstanding capital stock of the Company and Toppan will own 35% of the issued and outstanding capital stock of the Company.

 

C.            The Shareholders wish to set forth in this Agreement their respective rights and obligations in connection with the Company.

 

The Shareholders hereby agree as follows:

 

ARTICLE I
 EFFECTIVENESS; DEFINITIONS; INTERPRETATION

 

Section 1.01.                         Effectiveness. This Agreement will not become effective until the completion of the Closing (the “Effective Date”). If the Closing does not occur, this Agreement will not come into effect and no Shareholder will be bound by any of its terms.

 

Section 1.02.                         Definitions. The following terms have the meanings specified or referred to below:

 

Affiliate: Means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. For purposes of this definition, “control” (including the terms “controlling”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Business Day: Any day except Saturday, Sunday or any other day on which commercial banks located in Tokyo, Japan or Frankfurt, Germany are authorized or required by Law to be closed for business.

 

Closing: The Closing of the transactions contemplated under the Framework Agreement, as defined in the Framework Agreement.

 

 

Companies Act: The Company Act of Japan (Act No. 86 of July 26, 2005, as amended).

 

Controlled Affiliates: In the case of VIA, any other Person that directly or indirectly, through one or more intermediaries, is wholly-owned by, VIA, and in the case of Toppan, means any other Person that directly or indirectly, through one or more intermediaries, is wholly-owned by Toppan, and reports to the Electronics Division in the organizational structure of Toppan group. For the purpose of this definition, Electronics Division means the electronics business division, or any successor thereof, within the Toppan group, which develops, manufacturers, and markets display-and semiconductor-related products.

 

Fiscal Year: April 1 to March 31.

 

Framework Agreement: The Framework Agreement entered into between the Shareholders on November 30, 2017.

 

GAAP: Generally accepted accounting principles in effect from time to time in Japan.

 

Going Concern FMV: The price on which a willing and able buyer and a willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell the Shares, would agree for 100% of the Shares, taking into account any entitlements for distribution of profits that may pass to the buyer, calculated on a going-concern basis (i.e., enterprise value adjusted for net debt). The Going Concern FMV will in no case be less than the Company’s liquidation value (net asset value in a liquidation scenario).

 

Government Approval: Any authorization, consent, approval, waiver, exception, variance, order, exemption, publication, filing, declaration, concession, grant, franchise, agreement, permission, permit, or license of, from or with any Governmental Authority, the giving notice to, or registration with, any Governmental Authority or any other action in respect of any Governmental Authority.

 

Governmental Authority: Any national, prefectural, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

Law: Any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule of law of any Governmental Authority.

 

Lien: Any lien, claim, charge, mortgage, pledge, security interest, option, preferential arrangement, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever.

 

Material Breach: A breach of any of the following provisions of this Agreement: Section 2.02(c), Section 2.02(d), Section 2.02(e), ARTICLE III (but only to the extent that the breach prevents the non-breaching Shareholder from exercising its rights under ARTICLE III),

 

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Section 4.01, Section 4.02 (but only to the extent that the breach prevents the non-breaching Shareholder from exercising its rights under Section 4.02), Section 4.03 (but only to the extent that the breach prevents the non-breaching Shareholder from exercising its rights under Section 4.03), Section 6.01 (but only to the extent the breach has a material and adverse effect on the non-breaching Shareholder), and Section 6.02(e) (but only to the extent the breach has a material and adverse effect on the non-breaching Shareholder).

 

Net Asset HMV: The fair market value of the Company’s assets less its liabilities as calculated in accordance with GAAP. The valuation of the Company’s assets will be the price on which a willing and able buyer and a willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell the assets, would agree for the assets.

 

Permitted Transferee: With respect to any Shareholder, any Affiliates of such Shareholder that do not compete with any business in which the other Shareholder or its Affiliates engage.

 

Person: An individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

Representative: With respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

Satte Facility: The facility located at 4237-1 Soushinden, Satte-shi, Saitama, 340-0013 Japan.

 

Share: A share of capital stock of the Company.

 

Shiga Facility: The facility located at 1101-20, Myohoji-cho, Higashiomi, Shiga, 527-0046, Japan.

 

Third-Party Purchaser: Any Person who, immediately before the contemplated transaction, (a) does not directly or indirectly own or have the right to acquire any outstanding Shares or (b) is not a Permitted Transferee of any Person who directly or indirectly owns or has the right to acquire any Shares.

 

Transfer: To sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Share owned by a Person or any interest (including a beneficial interest) in any Share owned by a Person.

 

Section 1.03.                         Shareholders’ Obligation to Cause the Company to Act.

 

(a)                                 To the extent this Agreement contemplates any obligation on the Company, the Shareholders shall cause the Company to perform that obligation.

 

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(b)                                 If this Agreement requires a Shareholder to cause the Company to perform an obligation, that Shareholder must take all necessary or desirable actions within its control, including the exercise of all voting rights associated with all Shares over which it has control, to cause the Company to perform the obligation.

 

Section 1.04.                         Other Defined Terms. In addition to the terms defined above, the following terms shall have the respective meanings given thereto in the articles indicated below:

 

	
Defined Term
    	
 
    	
Section
    
	
 
    	
 
    	
 
    
	
Agreement
    	
 
    	
Preamble
    
	
Board
    	
 
    	
Section 2.02(a)
    
	
Business
    	
 
    	
Recitals
    
	
Company
    	
 
    	
Recitals
    
	
Deadlock
    	
 
    	
Section 3.01(a)
    
	
Deadlock Call Right
    	
 
    	
Section 3.01(b)(i)
    
	
Deadlock Put Right
    	
 
    	
Section 3.01(b)(ii)
    
	
Director
    	
 
    	
Section 2.02(a)
    
	
Effective Date
    	
 
    	
Section 1.01
    
	
Exercising Shareholder
    	
 
    	
Section 5.01(d)
    
	
Films
    	
 
    	
Recitals
    
	
Independent Accountants
    	
 
    	
Section 3.04(a)
    
	
Initiating Shareholder
    	
 
    	
Section 3.01(b)
    
	
Information
    	
 
    	
Section 6.03(b)
    
	
Issuance Notice
    	
 
    	
Section 5.01(b)
    
	
Lock-up Period
    	
 
    	
Section 4.01(a)
    
	
New Shares
    	
 
    	
Section 5.01(a)
    
	
Non-Exercising Shareholder
    	
 
    	
Section 5.01(d)
    
	
Non-Compete Period
    	
 
    	
Section 6.01(c)
    
	
Over-allotment Exercise Period
    	
 
    	
Section 5.01(d)
    
	
Over-allotment New Shares
    	
 
    	
Section 5.01(d)
    
	
Over-allotment Notice
    	
 
    	
Section 5.01(d)
    
	
Pre-emptive Exercise Period
    	
 
    	
Section 5.01(c)
    
	
Pre-emptive Pro Rata Portion
    	
 
    	
Section 5.01(c)
    
	
Pre-emptive Shareholder
    	
 
    	
Section 5.01(a)
    
	
Products
    	
 
    	
Recitals
    
	
Proposed Transfer Shares
    	
 
    	
Section 4.02(a)
    
	
Purchasing Shareholder
    	
 
    	
Section 4.02(d)
    
	
Rights Exercise Period
    	
 
    	
Section 4.02(d)
    
	
ROFR Notice
    	
 
    	
Section 4.02(d)
    
	
ROFR Holder
    	
 
    	
Section 4.02(a)
    
	
Sale Notice
    	
 
    	
Section 4.02(b)
    
	
Selling Shareholder
    	
 
    	
Section 4.02(a)
    
	
Sensors
    	
 
    	
Recitals
    
	
Shareholders
    	
 
    	
Preamble
    
	
Statutory Auditor
    	
 
    	
Section 2.04
    
	
Tag-along Notice
    	
 
    	
Section 4.03(b)
    

 

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Tag-along Sale
    	
 
    	
Section 4.03(a)
    
	
Tag-along Shareholder
    	
 
    	
Section 4.03(a)
    
	
Toppan
    	
 
    	
Preamble
    
	
Toppan Director
    	
 
    	
Section 2.02(a)(ii)
    
	
VIA
    	
 
    	
Preamble
    
	
VIA Director
    	
 
    	
Section 2.02(a)(i)
    

 

ARTICLE II
 MANAGEMENT AND OPERATION OF THE COMPANY

 

Section 2.01.                         Corporate Name and Headquarters. Unless agreed to otherwise by the Shareholders:

 

(a)                                 the Company will be a joint stock company (kabushiki kaisha);

 

(b)                                 the Company’s corporate name will initially be Toppan Touch Panel Products Co., Ltd and it will be changed to VTS-Touchsensor Co., Ltd. promptly after the Effective Date; and

 

(c)                                  the Company’s headquarters will be at the Shiga Facility.

 

Section 2.02.                         Board of Directors.

 

(a)                                 The Company’s board of directors (the “Board”) will consist of up to three members (each, a “Director”). The Directors will be elected to the Board in accordance with the following procedures:

 

(i)                                     VIA may designate two Directors (the “VIA Directors”); and

 

(ii)                                  Toppan may designate one Director, (the “Toppan Director”).

 

(b)                                 The Company will have one representative director, who will be designated by VIA from among the VIA Directors.

 

(c)                                  Each Shareholder shall exercise all voting rights associated with all Shares over which it has control and shall take all other necessary or desirable actions within its control to elect to the Board any individual designated by an Shareholder pursuant to Section 2.02(a).

 

(d)                                 Each Shareholder may at any time remove (with or without cause) any Director designated by it for election to the Board and each other Shareholder shall vote all shares of Common Stock over which it has voting control and shall take all other necessary or desirable actions within its control to remove from the Board any individual designated by it that it desires to remove pursuant to this Section 2.02. Except as provided in the preceding sentence, unless an Shareholder otherwise consents in writing, no other Shareholder shall take any action to cause the removal of any Directors designated by an Shareholder.

 

(e)                                  If a vacancy is created on the Board at any time and for any reason (whether as a result of death, disability, retirement, resignation or removal pursuant to Section

 

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2.02(d)), the Shareholder that designated the vacating Director may designate a different individual to replace that Director and each other Shareholder shall vote all Shares over which it has voting control and shall take all other necessary or desirable actions within its control to elect to the Board any individual designated by that Shareholder.

 

Section 2.03.                         Meetings of the Board of Directors.

 

(a)                                 The Board will meet at least once every calendar quarter at such times and in such places (in or outside Japan) as the Board may designate from time to time, on condition that at least 20 Business Days’ advance written notice be given to the Directors. At least two of these meetings must be in-person meetings. In addition to the regular meetings contemplated by the two foregoing sentences, special meetings of the Board may be called by any Director or Shareholder on at least 20 Business Days’ advance written notice of the time, place and agenda of the meeting. If the Directors agree to shorten the notice period for a quarterly or a special Board meeting, that meeting will be held on the earlier date agreed by the Directors.

 

(b)                                 The Directors may participate in any meeting of the Board that is not an in-person meeting by means of video conference, teleconference or other similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation will constitute such Director’s presence in person at the meeting. When an in-person meeting is held, a Director who wishes to participate in the meeting must do so by physically attending the meeting.

 

(c)                                  The presence of a majority of Directors then in office will constitute a quorum, on condition that the notice periods specified in Section 2.03(a) have been followed. If a quorum is not achieved at any duly called meeting, the meeting may be postponed to a time no earlier than five Business Days after written notice of such postponement has been given to the Directors.

 

(d)                                 Unless otherwise restricted by this Agreement, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee.

 

(e)                                  Board meetings will be conducted in English; except that the Shareholders shall cause the Company to make, upon advance written request by Toppan, arrangements of a simultaneous interpreter into Japanese at the Toppan’s expense. Written minutes of the meetings will be prepared in Japanese and English by the Company and distributed to each Director and the Statutory Auditor promptly following each meeting.

 

(f)                                   Any time an action is required to be approved by resolution at a duly convened and constituted meeting of the Board, the Board may act without advance convocation notice and without meeting and a vote if a consent in writing setting forth the resolution so made is executed by all Directors and all Statutory Auditor(s). Such consents in writing may be communicated and executed in counterparts and by electronic means, including e-mail.

 

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Section 2.04.                         Statutory Auditor. The Company will have one statutory auditor (kansayaku) (the “Statutory Auditor”), who will be designated by VIA. The Statutory Auditor may be removed at any time by VIA. lithe Statutory Auditor ceases acting as Statutory Auditor for any reason, the Representative Director may designate a replacement who is approved in writing by VIA. Each Shareholder shall take all necessary or desirable actions within its control to ensure the appointment of such replacement.

 

Section 2.05.                         Shareholders’ Meetings. The Company will have at least one shareholders’ meeting each Fiscal Year. The meeting will take place at such time and place as is determined by the Board in accordance with the Companies Act with at least 14 days’ advanced written notice to the Shareholders. Shareholders may attend shareholders’ meetings in person, by teleconference, by videoconference, or by any other means of attendance permitted under the Companies Act and the Company’s Articles of Incorporation. Except for the Shareholder Reserved Matters or as otherwise set out in the Companies Act, all matters arising at any shareholders’ meeting or otherwise proposed to the Shareholders will require an affirmative vote of a majority of the issued and outstanding Shares present and eligible to vote at a shareholders’ meeting. Meetings will be conducted in English; except that the Shareholders shall cause the Company to make, upon advanced written request by Toppan, arrangements of a simultaneous interpreter into Japanese at the Toppan’s expense. Written minutes of each meeting will be prepared by the Company in English and Japanese and distributed to each Shareholder promptly following each meeting. Any time an action is required to be approved by resolution at a duly convened and constituted shareholders’ meeting, the Shareholders may act without advanced convocation notice and without meeting and a vote if a consent in writing setting forth the resolution so made is executed by all Shareholders. Such consents in writing may be communicated and executed in counterparts and by electronic means, including e-mail.

 

Section 2.06.                         Voting Arrangements.

 

(a)                                 The actions set forth as Board Reserved Matters in Part 1 of Exhibit A must not be taken unless they have been approved by resolution (i) at a duly convened and constituted Board meeting at which a quorum is present and (ii) in favor of which the Toppan Director has voted.

 

(b)                                 The actions set forth as Shareholder Reserved Matters in Part 2 of Exhibit A must not be taken unless they have been approved by resolution (i) at a duly convened and constituted shareholders’ meeting and (ii) in favor of which Toppan has voted.

 

(c)                                  Matters not set forth as Board Reserved Matters or Shareholder Reserved Matters in Exhibit A that are subject to statutory special resolution (super-majority voting of shareholders) pursuant to the Companies Act must be approved by a super-majority pursuant to the Companies Act.

 

Section 2.07.                         Financing.

 

(a)                                 The Company’s capital expenditures will be financed by the following means in the following order:

 

(i)                                     the Company’s operating cash flow,

 

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(ii)                                            debt financing from a third Person such as bank loans, finance lease, etc.,

 

(iii)                               loans provided by one or more of the Shareholders, and

 

(iv)                              capital increase (additional equity contribution).

 

No Shareholder will be required to make shareholder loans or to participate in capital increases provided in clause (iii) or (iv) without that Shareholder’s consent, which it may withhold in its sole discretion.

 

(b)                                 The Shareholders shall cause the Company to provide a business plan for the use of any financing it may request.

 

(c)                                  If the Board determines to increase production capacity of films for the Business’s growth, the Shareholders shall cause the Company to invest to increase production capacity. Notwithstanding Section 2.07(a), one or both Shareholders may make a loan to the Company to cover the costs to increase production capacity, at its sole discretion. The detailed conditions of the loan by the Shareholder(s) will be determined upon mutual consultation before the decision of such investment is made by the Board.

 

Section 2.08.                         Company Seal. The official company seal of the Company registered with the Legal Affairs Bureau (the “Company Seal”) shall be stored in a secure place at the Company’s headquarters. Access to and use of the Company Seal will be restricted to two individuals designated by VIA and notified to Toppan (together, the “Authorized Individuals”) and to the Company’s representative director. VIA may change the Authorized Individuals from time to time after discussion with Toppan, on condition that the Authorized Individuals be based at the Company’s headquarters.

 

ARTICLE III
 CALL AND PUT OPTIONS

 

Section 3.01.                         Deadlock.

 

(a)                                 If at two successive meetings of the Board the Directors are unable to reach a decision by the required vote regarding any Board Reserved Matter, or if at two successive shareholders’ meetings the Shareholders are unable to reach a decision by the required vote regarding any Shareholder Reserved Matter (a “Deadlock”), the Board or the Shareholders, as the case may be, shall refer the matter subject to the Deadlock to senior executives of the Shareholders, who shall attempt, through good-faith discussions, to resolve such matter within 30 days after referral to them of the Deadlocked issue (or, if mutually agreed by the Shareholders, a longer period of time). Any resolution agreed to by the Shareholders will be final and binding on the Company and the Shareholders.

 

(b)                                 If the issue subject to the Deadlock has not been resolved in accordance with Section 3.01(a) and if a Shareholder believes in good faith acting reasonably that the Company cannot be effectively operated or managed as a result of the Deadlock and if that Shareholder provides the other Shareholders a written explanation of the basis for this belief

 

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within 30 days after the expiration of the period described in Section 3.01(a) (the “Initiating Shareholder”), then within 30 days after the expiration of the period described in Section 3.01(a):

 

(i)                                     if the Initiating Shareholder is VIA, it will have the right (a “Deadlock Call Right”) by written notice to Toppan to purchase all of the Shares owned by Toppan and its Permitted Transferees, and

 

(ii)                                  if the Initiating Shareholder is Toppan, it will have the right (a “Deadlock Put Right”) by written notice to VIA to cause VIA to purchase all of the Shares owned by Toppan and its Permitted Transferees.

 

(c)                                  The purchase price payable by VIA upon the exercise of a Deadlock Call Right will be equal to 103% of the Going Concern FMV of the Shares held by Toppan and its Permitted Transferees and the purchase price payable by VIA upon the exercise of a Deadlock Put Right will be equal to 97% of the Going Concern FMV of the Shares held by Toppan and its Permitted Transferees.

 

(d)                                 During the continuation of any Deadlock and before the closing of any sale and purchase pursuant to this Section 3.01, the Shareholders shall cause the Company to continue to operate in a manner consistent with its prior practices and this Agreement until the Deadlock is resolved.

 

Section 3.02.                         Material Breach.

 

(a)                                 If Toppan commits a Material Breach, VIA may purchase all Shares held by Toppan for 50% of their Going Concern FMV and if VIA commits a Material Breach, Toppan may cause VIA to purchase all Shares held by Toppan for 150% of their Going Concern FMV.

 

(b)                                 If a Shareholder commits a Material Breach and the other Shareholder wishes to exercise its rights set forth in Section 3.02(a), the exercising Shareholder shall deliver to the breaching Shareholder a written notice of the breach. If the breach is of a nature that can be cured, the exercising Shareholder may exercise its rights under Section 3.02(a) if the breaching Shareholder has not cured the breach within 30 days after the date of the exercising Shareholder’s written notice to the breaching Shareholder, and if the breach is of a nature that cannot be cured, the exercising Shareholder may exercise its rights under Section 3.02(a) immediately upon the date of the exercising Shareholder’s written notice to the breaching Shareholder.

 

Section 3.03.                         Consecutive Losses.

 

(a)                                 If the Company generates net losses for three straight years, the Shareholders shall meet in person, on two separate occasions within a two-month period, to discuss in good faith and to formulate a plan to bring the Company to profitability. If the Shareholders are unable to agree on such a plan at these two meetings, VIA may purchase all Shares held by Toppan for 100% of those Shares’ Net Asset FMV (i.e., Toppan’s shareholder percentage multiplied by the Company’s Net Asset FMV) and Toppan may cause VIA to

 

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purchase all Shares held by Toppan for 100% of those Shares’ Net Asset FMV (i.e., Toppan’s shareholder percentage multiplied by the Company’s Net Asset FMV).

 

(b)                                 If an Shareholder wishes to exercise its rights set forth in Section 3.03(a), the exercising Shareholder shall deliver to the other Shareholder a written notice of its intention to exercise those rights after the conclusion of the second meeting at which the Shareholders are unable to formulate a plan to bring the Company to profitability.

 

Section 3.04.                         Determination of Fair Market Values.

 

(a)                                 Within 20 days after the exercise of the Deadlock Call Right or Deadlock Put Right or the rights under Section 3.02 or Section 3.03, as the case may be, the Shareholders shall appoint a firm of internationally-recognized independent accountants on which the Shareholders agree (the “Independent Accountants”) to determine (i) the Going Concern FMV of the Shares held by Toppan and its Permitted Transferees, in the event Deadlock Call Right, Deadlock Put Right or the rights under Section 3.02 are exercised, and (ii) the Net Assets FMV of the Shares held by Toppan and its Permitted Transferees, in the event the rights under Section 3.03 are exercised. The Shareholders shall instruct the Independent Accountant to render its determination of the Going Concern FMV or the Net Asset FMV, as the case may be, in writing within 30 days after the Independent Accountants’ appointment. The Independent Accountant’s determination will be final for all purposes of Section 3.01, Section 3.02 and Section 3.03. The costs and expenses of the Independent Accountant will be borne equally by the Shareholders.

 

(b)                                 To enable the Independent Accountant to conduct the valuation, the Shareholders shall, and Shareholders shall cause the Company to, furnish to the Independent Accountant such information as the Independent Accountant may request, including information regarding the Business and the Company’s assets, properties, financial condition, earnings and prospects.

 

Section 3.05.                         Closing of Put and Call Options.

 

(a)                                 Within 20 days after the date of the final determination of the Going Concern FMV or the Net Asset FMV, as the case may be (which period will be extended solely to the extent necessary to obtain any required Government Approvals, on condition that each Shareholder shall, and shall cause its Permitted Transferees to, use their reasonable best efforts to obtain such approval in a timely manner), Toppan shall, and shall cause its Permitted Transferees to, sell to VIA, free and clear of any Liens, all of the Shares held by them.

 

(b)                                 Each Shareholder shall take all actions as may be reasonably necessary to consummate the sale contemplated by Section 3.01, Section 3.02 and Section 3.03, including entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

 

(c)                                  At the closing of any sale and purchase pursuant to Section 3.01, Section 3.02 and Section 3.03, Toppan shall, and shall cause its Permitted Transferees to, sign and deliver to VIA and the Company the instructions (the entry request letter) to update the Company’s shareholders’ register to record the Share Transfer (kabunushi meibo kakikae

 

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seikyuusho) against receipt of the purchase price therefor from VIA by wire transfer of immediately available funds.

 

ARTICLE IV
 TRANSFER OF SHARES

 

Section 4.01.                         Lock-up; Restrictions on Transfer.

 

(a)                                 For the two-year period beginning on the date hereof and ending on the second anniversary of the date hereof (“Lock-up Period”), no Shareholder shall Transfer any of its Shares except:

 

(i)                                     to a Permitted Transferee that agrees to be bound by the terms of this Agreement;

 

(ii)                                  in accordance with the procedures described in Section 3.01 or Section 3.02; or

 

(iii)                               pursuant to a merger, consolidation or other business combination of the Company with a Third-Party Purchaser that has been approved in compliance with Section 2.06.

 

(b)                                 After the expiration of the Lock-up Period, no Shareholder shall, Transfer any of its Shares except:

 

(i)                                     to a Permitted Transferee that agrees to be bound by the terms of this Agreement;

 

(ii)                                  in accordance with the procedures described in ARTICLE III, Section 4.02, or Section 4.03; or

 

(iii)                               pursuant to a merger, consolidation or other business combination of the Company with a Third-Party Purchaser that has been approved in compliance with Section 2.06.

 

(c)                                  Each Shareholder making a Transfer (whether or not to a Permitted Transferee) of Shares shall give advance notice to the Company of such Transfer (whether or not to a Permitted Transferee). Before the consummation of any Transfer by any Shareholder of any of its Shares, that Shareholder shall cause the transferee thereof to be bound by the terms and conditions of this Agreement. Upon any Transfer by any Shareholder of any of its Shares in accordance with the terms of this Agreement, the transferee thereof will be substituted for, and will assume all the rights and obligations under this Agreement of, the transferring Shareholder.

 

(d)                                 Any Transfer or attempted Transfer of any Shares in violation of this Agreement will be null and void and the Shareholders shall cause the Company to refrain from recording any such Transfer on the Company’s books and the purported transferee in any such Transfer will not be treated (and the purported transferor shall continue be treated) as the owner of such Shares for all purposes of this Agreement.

 

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Section 4.02.                         Right of First Refusal.

 

(a)                                 If at any time after the Lock-up Period a Shareholder (such Shareholder, the “Selling Shareholder”) receives a bona fide offer from any Third-Party Purchaser to purchase all or any portion of the Shares (the “Proposed Transfer Shares”) owned by the Selling Shareholder and the Selling Shareholder desires to Transfer the Proposed Transfer Shares (other than Transfers that are permitted by Section 4.01(b)), the Selling Shareholder must first offer the Proposed Transfer Shares to the other Shareholder (such Shareholder, the “ROFR Holder”) in accordance with the provisions of this Section 4.02.

 

(b)                                 The Selling Shareholder shall, at least 60 days before the anticipated closing of the Transfer, give written notice (the “Sale Notice”) to the Company and the ROFR Holder stating that it has received a bona fide offer from a Third-Party Purchaser and specifying:

 

(i)                                     the number of Proposed Transfer Shares to be Transferred by the Selling Shareholder;

 

(ii)                                  the identity of the Third-Party Purchaser;

 

(iii)                               the per Share purchase price and the other material terms and conditions of the Transfer, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof;

 

(iv)                              the proposed date, time and location of the closing of the Transfer; and

 

(v)                                 a copy of any form of agreement proposed to be executed in connection therewith.

 

The Sale Notice will constitute the Selling Shareholder’s offer to Transfer the Proposed Transfer Shares to the ROFR Holder, which offer will be irrevocable until the end of the Rights Exercise Period.

 

(c)                                  By delivering the Sale Notice, the Selling Shareholder represents and warrants to the Company and to the ROFR Holder that: (i) the Selling Shareholder has full right, title and interest in and to the Proposed Transfer Shares; (ii) the Selling Shareholder has all the necessary power and authority and has taken all necessary action to Transfer such Proposed Transfer Shares as contemplated by this Section 4.02; and (iii) the Proposed Transfer Shares are free and clear of any and all Liens other than those arising as a result of or under the terms of this Agreement.

 

(d)                                 Upon receipt of the Sale Notice, the ROFR Holder will have 60 days (the “Rights Exercise Period”) to elect to purchase all (and not less than all) of the Proposed Transfer Shares by delivering a written notice (a “ROFR Notice”) to the Selling Shareholder and the Company stating that it offers to purchase such Proposed Transfer Shares on the terms specified in the Sale Notice. Any ROFR Notice will be binding upon delivery and irrevocable by the ROFR Holder. If the ROFR Holder delivers a ROFR Notice, ROFR Holder (the “Purchasing

 

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Shareholder”), it shall purchase, and the Selling Shareholder shall sell to it, all the Proposed Transfer Shares.

 

(e)                                  If the ROFR Holder does not deliver a ROFR Notice during the Rights Exercise Period, it will be deemed to have waived all its rights to purchase the Proposed Transfer Shares under this Section 4.02.

 

(f)                                   Each Shareholder shall take all actions as may be reasonably necessary to consummate the Transfer contemplated by this Section 4.02, including entering into agreements and delivering certificates and instruments and consents as may be deemed necessary or appropriate.

 

(g)                                  At the closing of any Transfer pursuant to this Section 4.02, the Selling Shareholder shall deliver to the Purchasing Shareholder the certificate or certificates representing the Proposed Transfer Shares to be sold (if any), accompanied by stock powers and all necessary stock transfer taxes paid and stamps affixed, if necessary, against receipt of the purchase price therefor from the Purchasing Shareholder by wire transfer of immediately available funds.

 

Section 4.03.                         Tag-along Rights.

 

(a)                                 If the ROFR Holder does not deliver a ROFR Notice during the Rights Exercise Period or does not exercise its rights to purchase any Proposed Transfer Shares under Section 4.02, the ROFR Holder may participate in the Selling Shareholder’s Transfer of the Proposed Transfer Shares to the Third-Party Purchaser as described in the Sale Notice on the terms and conditions set forth in this Section 4.03 (a “Tag-along Sale”).

 

(b)                                 If the ROFR Holder satisfies the conditions set forth in Section 4.03(a) and wishes to participate in a Tag-along Sale (the “Tag-along Shareholder”), it may do so by delivering to the Selling Shareholder a written notice (a “Tag-along Notice”) before expiration of the Rights Exercise Period stating its election to do so and specifying the number of Shares to be Transferred. The offer of the Tag-along Shareholder set forth in a Tag-along Notice will be irrevocable, and the Tag-along Shareholder shall participate in the Tag-along Sale on the terms and conditions set forth in this Section 4.03. The Selling Shareholder and the Tag-along Shareholder may Transfer in a Transfer pursuant to this Section 4.03 the number of Shares equal to the product of (x) the aggregate number of Shares the Third-Party Purchaser proposes to buy as stated in the Sale Notice less any Shares subject to a ROFR Notice delivered in accordance with Section 4.02(d) and (y) a fraction, (A) the numerator of which is equal to the number of Shares then held by the Selling Shareholder or the Tag-along Shareholder, as the case may be, and (B) the denominator of which is equal to the number of Shares then held by the Selling Shareholder and the Tag-along Shareholder.

 

(c)                                  If the ROFR Holder does not deliver a Tag-along Notice in compliance with Section 4.03(b) above it will be deemed to have waived all its rights to participate in the Transfer and the Selling Shareholder may thereafter Transfer to the-Third-Party Purchaser its Shares at a per share price that is no greater than the per share price set forth in the Sale Notice and on other same terms and conditions that are not materially more favorable to the Selling

 

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Shareholder than those set forth in the Sale Notice without any further obligation to the ROFR Holder.

 

(d)                                 The Tag-along Shareholder participating in a Transfer pursuant to this Section 4.03 will receive the same consideration per Share as the Selling Shareholder after deduction of that Tag-along Shareholder’s proportionate share of the related expenses in accordance with Section 4.03(f) below.

 

(e)                                  The Tag-along Shareholder shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Selling Shareholder makes or provides in connection with the Tag-along Sale (except that in the case of representations, warranties, covenants, indemnities and agreements pertaining specifically to the Selling Shareholder, the Tag-along Shareholder shall make the comparable representations, warranties, covenants, indemnities and agreements pertaining specifically to itself); provided that all representations, warranties, covenants and indemnities will be made by the Selling Shareholder and the Tag-along Shareholder severally and not jointly and any indemnification obligation in respect of breaches of representations and warranties will be pro rata based on the consideration received by the Selling Shareholder and the Tag-along Shareholder, in each case, in an amount not to exceed the aggregate proceeds received by the Selling Shareholder and the Tag-along Shareholder in connection with any Tag-along Sale.

 

(f)                                   The fees and expenses of the Selling Shareholder incurred in connection with a Tag-along Sale and for the benefit of both Shareholders participating in the Tag-along Sale (it being understood that costs incurred by or on behalf of the Selling Shareholder for its sole benefit will not be considered to be for the benefit of both Shareholders participating in the Tag-along Sale), to the extent not paid or reimbursed by the Company or the Third-Party Purchaser, will be shared by both Shareholders participating in the Tag-along Sale on a pro rata basis, based on the aggregate consideration received by each such Shareholder, except that neither Shareholder will be obligated to make or reimburse any out-of-pocket expenditure before the consummation of the Tag-along Sale.

 

(g)                                  The Selling Shareholder and the Tag-along Shareholder shall take all actions as may be reasonably necessary to consummate the Tag-along Sale, including entering into agreements and delivering certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered by the Selling Shareholder.

 

(h)                                 The Selling Shareholder will have 60 days following the expiration of the Rights Exercise Period in which to Transfer the Shares described in the Sale Notice that are not subject to a duly delivered ROFR Notice or a Tag-along Notice on the terms set forth in the Sale Notice (such 60-day period may be extended for a reasonable time not to exceed 90 days to the extent reasonably necessary to obtain any Government Approvals). If at the end of that 60-day period (or extended 90-day period) the Selling Shareholder has not completed the Transfer, the Selling Shareholder may not complete the Transfer of Shares without again fully complying with the provisions of Section 4.02 or this Section 4.03.

 

(i)                                     If the Selling Shareholder Transfers to the Third-Party Purchaser any of its Shares in breach of this Section 4.03, the Tag-along Shareholder may Transfer to the Selling

 

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Shareholder, and the Selling Shareholder shall purchase from the Tag-along Shareholder, the number of Shares that the Tag-along Shareholder would have had the right to Transfer to the Third-Party Purchaser pursuant to this Section 4.03, for a per share amount and form of consideration and upon the terms and conditions on which the Third-Party Purchaser bought the Shares from the Selling Shareholder, but without indemnity being granted by the Tag-along Shareholder to the Selling Shareholder, except that this Section 4.03 does not preclude the Tag-along Shareholder from seeking alternative remedies against the Selling Shareholder as a result of that Selling Shareholder’s breach of this Section 4.03. The Selling Shareholder shall also reimburse the Tag-along Shareholder for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Tag-along Shareholder’s rights.

 

ARTICLE V
 PRE-EMPTIVE RIGHTS

 

Section 5.01.                         Pre-emptive Right. The Shareholders will have pre-emptive rights with respect to issuances of new Shares by the Company consistent with subsections (a) through (f) of this Section 5.01. The Shareholders shall cause the Company to perform all its obligations set forth under subsections (a) through (f) of this Section 5.01 and the Shareholders shall cause the Company’s Articles of Incorporation to have a provision that is consistent with subsections (a) through (f) of this Section 5.01.

 

(a)                                 The Company shall grant to each Shareholder (each, a “Pre-emptive Shareholder”) the right to purchase its pro rata portion of any new Shares (the “New Shares”) that the Company may from time to time propose to issue or sell to any Person.

 

(b)                                 The Company shall give written notice (an “Issuance Notice”) of any proposed issuance or sale described in subsection (a) above to the Pre-emptive Shareholders within five Business Days following any meeting of the Board or Shareholders at which any such issuance or sale is approved. The Issuance Notice must set forth the material terms and conditions of the proposed issuance, including:

 

(i)                                     the number of New Shares proposed to be issued and the percentage of the Company’s outstanding Shares, on a fully diluted basis, that such issuance would represent;

 

(ii)                                  the proposed issuance date, which must be at least 45 days from the date of the Issuance Notice; and

 

(iii)                               the proposed purchase price per Share.

 

(c)                                  Each Pre-emptive Shareholder may, for a period of 60 days following the receipt of an Issuance Notice (the “Pre-emptive Exercise Period”), elect irrevocably to purchase, at the purchase price set forth in the Issuance Notice, the number of New Shares equal to the product of (x) the total number of New Shares to be issued by the Company on the issuance date and (y) a fraction determined by dividing (A) the number of Shares owned by such Pre-emptive Shareholder immediately before the issuance by (B) the total number of Shares outstanding on such date immediately before the issuance (the “Pre-emptive Pro Rata

 

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Portion”) by delivering a written notice to the Company. Such Pre-emptive Shareholder’s election to purchase New Shares will be binding and irrevocable.

 

(d)                                 No later than five Business Days following the expiration of the Pre-emptive Exercise Period, the Company shall notify each Pre-emptive Shareholder in writing of the number of New Shares that each Pre-emptive Shareholder has agreed to purchase (including, for the avoidance of doubt, where such number is zero) (the “Over-allotment Notice”). Each Pre-emptive Shareholder exercising its right to purchase its Pre-emptive Pro Rata Portion of the New Shares in full (an “Exercising Shareholder”) will have a right of over-allotment such that if any other Pre-emptive Shareholder fails to exercise its right under this Section 5.01 to purchase its Pre-emptive Pro Rata Portion of the New Shares (each, a “Non-Exercising Shareholder”), such Exercising Shareholder may purchase all or any portion of such Non-Exercising Shareholder’s allotment (the “Over-allotment New Shares”) by giving written notice to the Company, within 30 days after receipt of the Over-allotment Notice (the “Over-allotment Exercise Period”), setting forth the number of Over-allotment New Shares that such Exercising Shareholder is willing to purchase. Such Exercising Shareholder’s election to purchase Over-allotment New Shares will be binding and irrevocable. If more than one Exercising Shareholder elects to exercise its right of over-allotment, each Exercising Shareholder may purchase the number of Over-allotment New Shares it elected to purchase in its written notice, except that if the Over-allotment New Shares are over-subscribed, each Exercising Shareholder shall purchase its pro rata portion of the available Over-allotment New Shares based upon the relative Pre-emptive Pro Rata Portions of the Exercising Shareholders.

 

(e)                                  The Company may complete the proposed issuance or sale of New Shares described in the Issuance Notice with respect to any New Shares not elected to be purchased pursuant to Section 5.01(c) and Section 5.01(d) in accordance with the terms and conditions set forth in the Issuance Notice (except that the amount of New Shares to be issued or sold by the Company may be reduced) so long as such issuance or sale is closed within 30 days after the expiration of the Over-allotment Exercise Period (subject to the extension of such 30-day period for a reasonable time not to exceed 60 days to the extent reasonably necessary to obtain any Government Approvals). If the Company has not sold the New Shares within that period, the Company shall not thereafter issue or sell any New Shares without first again offering them to the Shareholders in accordance with the procedures set forth in this Section 5.01.

 

(f)                                   Upon the consummation of the issuance of any New Shares in accordance with this Section 5.01, the Company shall deliver to each Exercising Shareholder certificates (if any) evidencing the New Shares, the Company shall issue the New Shares free and clear of any Liens (other than those arising hereunder and those attributable to the actions of the purchasers thereof), and the Company shall so represent and warrant to the purchasers thereof, and further represent and warrant to the purchasers that the New Shares will be, upon issuance thereof to the Exercising Shareholders and after payment therefor, duly authorized, validly issued, fully paid and non-assessable. Each Exercising Shareholder shall deliver to the Company the purchase price for the New Shares purchased by it by wire transfer of immediately available funds. Each party to the purchase and sale of New Shares shall take all other actions as may be reasonably necessary to consummate the purchase and sale including entering into additional agreements as may be necessary or appropriate.

 

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ARTICLE VI
 NON-COMPETE AND OTHER AGREEMENTS

 

Section 6.01.                         Non-Compete.

 

(a)                                 During the Non-Compete Period, neither Shareholder nor any of its Permitted Transferees shall, directly or indirectly through one or more of any of their respective Controlled Affiliates, manufacture or have manufactured any Product anywhere in the world, except that (i) they may have the Company manufacture Products and sell the Products to the Shareholders, (ii) Toppan may manufacture copper PET film as contemplated in and in accordance with the Manufacturing Agreement (as defined in the Framework Agreement), (iii) if the Company is not able to supply either Shareholder with Products that satisfy the quantities, specifications, and pricing required by that Shareholder (with market price being the benchmark), that Shareholder may use the Transferred IP (as defined in the Framework Agreement) to manufacture and use the Products, and (iv) the Shareholders may manufacture Products as otherwise agreed by the Shareholders.

 

(b)                                 During the Non-Compete Period, neither Shareholder nor any of its Permitted Transferees shall, directly or indirectly through one or more of any of their respective Affiliates, solicit for employment or hire any employee of the other Shareholder or induce any such employee to terminate his or her employment with the other Shareholder, except that neither Shareholder will be prohibited from soliciting or hiring any employees of the other Shareholder who initiate contact with the first Shareholder in response to a general employment solicitation or advertisement made by or on behalf of the first Shareholder that is not targeted or directed at the employees of the other Shareholder.

 

(c)                                  The “Non-Compete Period” is the period starting on the Effective Date and ending on the later of (1) the date on which either Shareholder or its Permitted Transferees cease to hold any Shares and (2) three years after the Effective Date, except that the Non-Compete Period may be terminated earlier in any of the following cases:

 

(i)                                     if Toppan has exercised its rights under Section 3.02 upon a Material Breach by VIA, in which case the Non-Compete Period will terminate for Toppan but not VIA upon exercise by Toppan of those rights,

 

(ii)                                  if VIA has exercised its rights under Section 3.02 upon a Material Breach by Toppan, in which case the Non-Compete Period will terminate for VIA but not Toppan upon exercise by VIA of those rights,

 

(iii)                               if the Company has three consecutive years of net losses and either Shareholder has exercised its rights under Section 3.03, in which case the Non-Compete Period will terminate for both Shareholders upon exercise by either Shareholder of those rights, or

 

(iv)                              if VIA has exercised its Deadlock Call Right or Toppan has exercised its Deadlock Put Right, in which case the Non-Compete Period will terminate for both Shareholders upon exercise by either Shareholder of those rights.

 

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(d)                                 Scope of Application. The non-compete obligations in this Section 6.01 apply not only to each Shareholder, but also to each Shareholder’s Controlled Affiliates, and each Shareholder shall cause its Controlled Affiliates to comply with the non-compete obligations in this Section 6.01 as if that Controlled Affiliate were a Shareholder to this Agreement. Further, neither Shareholder shall take any action for the express purpose of circumventing the objectives of this Section 6.01, including but not limited to, (i) reducing the ownership stake of a Controlled Affiliate or, (ii) in the case of Toppan, having a Person that is wholly owned by Toppan but that does not report to the Electronic Division in the Toppan group’s organizational structure engage in the activities restricted in this Section 6.01, except that if Toppan or an Controlled Affiliate that does not report to the Electronics Division acquires a Person that already engages in the activities restricted in this Section 6.01 and if that Person does not report to the Electronics Division, Toppan will not be deemed to have breached Section 6.01 as a result acquiring that Person.

 

Section 6.02.                         Manufacture and Purchase of Products.

 

(a)                                 The Shareholders shall cause the Company not to engage, directly or indirectly, in any manufacturing, with the following exceptions:

 

(i)                                     the Company may manufacture Sensors only at the Shiga Facility only;

 

(ii)                                  the Company may have subcontractors manufacture Products only; and

 

(iii)                               the Company may have Toppan manufacture Films only at the Satte Facility only.

 

(b)                                 The Company may purchase Films from suppliers.

 

(c)                                  The Company may distribute Products through the Shareholders pursuant to distribution agreements entered into between the Company and each Shareholder (the “Distribution Agreements”).

 

(d)                                 The Shareholders will be distributors for Products and each Shareholder’s distribution rights will be set forth in its respective Distribution Agreement.

 

(e)                                  Each Shareholder shall purchase Products exclusively from the Company through its respective Distribution Agreement, but if the Company is not able to supply either Shareholder with Products that satisfy the quantities, specifications, and pricing required by that Shareholder (with market price being the benchmark), that Shareholder may use the Transferred IP (as defined in the Framework Agreement) to manufacture and use the Products.

 

Section 6.03.                         Confidentiality.

 

(a)                                 Each Shareholder shall and shall cause its Representatives to, keep confidential and not divulge any information (including all budgets, business plans and analyses) concerning the Company, including its assets, business, operations, financial condition or

 

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prospects (“Information”), and to use, and cause its Representatives to use, the Information only in connection with the operation of the Company; provided that nothing herein will prevent any Shareholder from disclosing the Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over that Shareholder, (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery requests, (iv) to the extent necessary in connection with the exercise of any remedy hereunder, (v) to other Shareholders, (vi) to that Shareholder’s Representatives or Affiliates that, in the reasonable judgment of that Shareholder, need to know the Information for the purpose of furtherance of the Business by the Company, or (vii) to any potential Permitted Transferee in connection with a proposed Transfer of Common Stock from such Shareholder, provided, further, that in the case of clause (i), (ii) or (iii), that Shareholder shall notify the other Shareholder of the proposed disclosure as far in advance of disclosure as practicable and use reasonable efforts to ensure that any Information so disclosed is accorded confidential treatment, when and if available, and in the case of clause (vi) or (vi), the Shareholder making such disclosure cause its Representatives or Affiliates or potential Permitted Transferees that have received any Information of the other Shareholder to comply with this provision and that the disclosing Shareholder be responsible for any act by such Representatives or Affiliates or potential Permitted Transferees that would constitute a breach of this provision had the act been undertaken by the disclosing Shareholder.

 

(b)                                 The restrictions of Section 6.03(a) do not apply to information that (i) is or becomes generally available to the public other than as a result of a disclosure by a Shareholder or any of its Representatives or Affiliates in violation of this Agreement, (ii) is or becomes available to a Shareholder or any of its Representatives or Affiliates on a non-confidential basis before its disclosure to the receiving Shareholder and any of its Representatives or Affiliates, (iii) is or has been independently developed or conceived by a Shareholder without use of the Company’s Information, or (iv) becomes available to the receiving Shareholder or any of its Representatives or Affiliates on a non-confidential basis from a source other than the Company, any other Shareholder or any of their respective Representatives or Affiliates, as long as such source is not known by the recipient of the information to be bound by a confidentiality agreement with the disclosing Shareholder or any of its Representatives or Affiliates.

 

Section 6.04.                         Financial Statements. In addition to, and without limiting any rights that a Shareholder may have with respect to inspection of the books and records of the Company under the Companies Act, the Shareholders shall cause the Company to furnish to each Shareholder the following information:

 

(a)                                 As soon as available, and in any event within 90 days after the end of each Fiscal Year, the audited balance sheet of the Company as at the end of each such Fiscal Year and the audited statements of income, cash flows and changes in shareholders’ equity for such year, accompanied by the certification of independent certified public accountants of recognized national standing selected by the Board to the effect that, except as set forth therein, such financial statements have been prepared in accordance with GAAP, applied on a basis consistent with prior years and fairly present in all material respects the financial condition of the Company as of the dates thereof and the results of its operations and changes in its cash flows and shareholders’ equity for the periods covered thereby.

 

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(b)                                 As soon as available, and in any event within 30 days after the end of each fiscal quarter, the balance sheet of the Company at the end of such quarter and the statements of income, cash flows and changes in shareholders’ equity for such quarter, all in reasonable detail and all prepared in accordance with GAAP, consistently applied, and certified by the Company’s representative director.

 

(c)                                  Any reports, as soon as they become available, that the Company is required by applicable Law or pursuant to the terms of any outstanding indebtedness of the Company.

 

Section 6.05.                         Inspection Rights.

 

(a)                                 The Shareholders shall cause the Company to, and to cause its officers, Directors and employees to, (i) afford each Shareholder that owns at least 3% of the Company’s outstanding Shares and the Representatives of each such Shareholder, during normal business hours and upon reasonable notice, reasonable access at all reasonable times to its officers, employees, auditors, properties, offices, plants and other facilities and to all books and records, and (ii) afford such Shareholder the opportunity to consult with the Company’s officers from time to time regarding the Company’s affairs, finances and accounts as each such Shareholder may reasonably request upon reasonable notice.

 

(b)                                 The right set forth in Section 6.05(b) above does not and is not intended to limit any rights that the Shareholders may have with respect to the books and records of the Company, or to inspect its properties or discuss its affairs, finances and accounts, under applicable Law.

 

Section 6.06.                         Adjustment of Rights. The rights of each Shareholder and other terms of this Agreement (including the Reserved Matters) will be adjusted equitably and in good faith if the Shareholders’ respective Share ownership percentages change after the date hereof.

 

ARTICLE VII
 TERM AND TERMINATION

 

Section 7.01.                         Termination. This Agreement will terminate upon the earliest of:

 

(a)                                 the date on which only one of the Shareholders holds any Shares;

 

(b)                                 the dissolution, liquidation, or winding up of the Company; and

 

(c)                                  upon the unanimous agreement of the Shareholders.

 

Section 7.02.                         Effect of Termination.

 

(a)                                 The termination of this Agreement will terminate all further rights and obligations of the Shareholders under this Agreement except that such termination will not affect:

 

(i)                                     the Company’s existence;

 

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(ii)                                  the obligation of any Shareholder to pay any amounts arising on or before the date of termination, or as a result of or in connection with such termination;

 

(iii)                               the rights that any Shareholder may have by operation of law as a shareholder of the Company; or

 

(iv)                              the rights contained herein which, by their terms are intended to survive termination of this Agreement.

 

(b)                                 The following provisions will survive the termination of this Agreement: ARTICLE I, Section 6.01, Section 6.03, this Section 7.02(b), and ARTICLE VIII.

 

ARTICLE VIII
 MISCELLANEOUS

 

Section 8.01.                         Representations and Warranties. Each Shareholder, severally and not jointly, represents and warrants to each other Shareholder that, except for this Agreement, such Shareholder has not entered into or agreed to be bound by any other agreements or arrangements of any kind with any other party with respect to the Shares, including agreements or arrangements with respect to the acquisition or disposition of Shares or any interest therein or the voting of Shares (whether or not such agreements and arrangements are with the Company or any other Shareholder).

 

Section 8.02.                         Limitation on Damages. In no event will a Shareholder be liable to the other Shareholders for lost opportunities, lost revenues, or indirect, consequential, punitive, or other special damages regardless of legal theory relating to the breach or alleged breach of this Agreement, except for the violation of the non-compete obligation in Section 6.01.

 

Section 8.03.                         Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the Shareholder incurring such costs and expenses.

 

Section 8.04.                         Release of Liability. In the event any Shareholder Transfers all of the Shares held by it in compliance with the provisions of this Agreement without retaining any interest therein, that Shareholder will cease to be a party to this Agreement and will be relieved and have no further liability arising hereunder for events occurring from and after the date of that Transfer.

 

Section 8.05.                         Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder must be in writing and will be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) on the date sent by e-mail of a PDF document, if sent during the recipient’s normal business hours, and on the next Business Day, if sent after the recipient’s normal business hours, on condition that the communication sent by e-mail is also sent by certified or registered mail, return receipt requested, postage prepaid; or (c) if sent internationally, on the fifth day, and if sent within Japan, on the second day, after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the Shareholders at the following addresses (or at such other

 

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address for a Shareholder of which that Shareholder notifies the other Shareholder in accordance with this Section 8.05):

 

	
If to VIA:
    	
 
    	
VIA optronics GmbH

Sieboldstr. 18, 90411 Nurnberg
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail: djuergens@via-optronics.com; jwoerle@via-optronics.com

Attention: Daniel Jürgens and Dr. Jasmin Wörle
    
	
 
    	
 
    	
 
    
	
With a copy to (which will not   constitute notice):
    	
 
    	
VIA optronics GmbH

Sieboldstr. 18, 90411 Nürnberg
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail: KBickelbacher@via-optronics.com

Attention: Kathrin   Bickelbacher
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Jones Day

Kamiyacho Prime Place

1-17, Toranomon 4-chome

Minato-ku, Tokyo   105-0001, JAPAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail:   mushijima@jonesday.com

Attention: Makiko   Ushijima
    
	
 
    	
 
    	
 
    
	
If to Toppan:
    	
 
    	
Toppan Printing   Co., Ltd.

Toppan Shibaura Bldg.,   3-19-26 Shibaura

Minato-ku, Tokyo   108-8539
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail: teruo.ninomiya@toppan.co.jp, kentaro.kitaoka@toppan.co.jp,

Attention: Teruo   Ninomiya and Kentaro Kitaoka
    
	
 
    	
 
    	
 
    
	
With a copy to (which will not   constitute notice):
    	
 
    	
southgate (registered   association)

Pacific Square   Kudan-Minami, 7th Fl

2-4-11 Kudan-Minami, Chiyoda-ku, Tokyo 102-0074,

JAPAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
E-mail: emarcks@southgate-law.com

Attention: Eric Marcks
    

 

Section 8.06.                         Headings. The headings in this Agreement are for reference only and do not affect its interpretation.

 

Section 8.07.                         Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, that invalidity, illegality or unenforceability will not affect any other term or provision of this Agreement or invalidate or render unenforceable that term or provision in any other jurisdiction. Upon determination that any term or other provision is

 

22

 

invalid, illegal or unenforceable, the Shareholders shall negotiate in good faith to modify this Agreement so as to effect the Shareholders’ original intent as closely as possible in a mutually acceptable manner so that the transactions contemplated hereby may be consummated as originally contemplated to the greatest extent possible.

 

Section 8.08.                         Entire Agreement. This Agreement and all Exhibits and Schedules hereto constitutes the sole and entire agreement of the Shareholders with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to this subject matter.

 

Section 8.09.                         Successors and Assigns; Assignment. This Agreement is binding upon and will inure to the benefit of the Shareholders and their respective successors and permitted assigns. No Shareholder shall assign its rights or obligations hereunder without the advance written consent of the other Shareholders, which consent must not be unreasonably withheld or delayed. No assignment will relieve the assigning Shareholder of any of its obligations hereunder.

 

Section 8.10.                         No Third-party Beneficiaries. This Agreement is for the sole benefit of the Shareholders (and their respective heirs, executors, administrators, successors and assigns) and nothing herein, express or implied, is intended to or will confer upon any other Person, any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 8.11.                         Amendment and Modification; Waiver. This Agreement may be amended, modified or supplemented only by an agreement in writing signed by each Shareholder. No waiver by a Shareholder of any of the provisions hereof will be effective unless explicitly set forth in writing and signed by that Shareholder. No waiver by a Shareholder will be, or will be construed as, a waiver in respect of any failure, breach or default not expressly identified by that written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement will be, or will be construed as, a waiver thereof; nor will any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 8.12.                         Governing Law. This Agreement is governed by and to be construed in accordance with the laws of Ja pan without giving effect to any choice or conflict of law provision or rule.

 

Section 8.13.                         Dispute Resolution.

 

(a)                                 The Shareholders shall endeavor to resolve any dispute, controversy or difference arising out of, in connection with, or related to this Agreement (a “Dispute”) through good-faith negotiations. If a Dispute is not settled within 20 days after the receipt by a Shareholder of a written request for negotiation under this Section 8.13, the Dispute will be referred for consideration by the Shareholders’ senior officers. The senior officers will have full authority to settle the Dispute.

 

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(b)                                 If the senior officers are unable to resolve the Dispute within 20 days after the receipt by a Shareholder of a written request for consideration of the Dispute by senior officers under Section 8.13, the Shareholders shall submit the Dispute to arbitration in Tokyo in accordance with the Commercial Arbitration Rules of the Japan Commercial Arbitration Association for final settlement. The Shareholders shall appoint three arbitrators in accordance with the rules and shall conduct the arbitration in English. The decision by the arbitration tribunal will be final and binding on the Shareholders and may be approved of or entered in (or otherwise be granted enforceability through necessary procedures by) any court having jurisdiction. The Shareholders consent to consolidation by the Japan Commercial Arbitration Association of arbitral proceedings initiated under this Agreement with arbitration proceedings initiated under the Framework Agreement.

 

Section 8.14.                         Equitable Remedies. The Shareholders agree that irreparable damage will occur if any provision of this Agreement is not performed in accordance with its terms and that the Shareholders are entitled to specific performance of its terms, in addition to any other remedy to which they are entitled at law or in equity.

 

Section 8.15.                         Attorneys’ Fees. if any action at law or in equity is necessary to enforce or interpret the terms of the Agreement, the prevailing Shareholder will be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which that Shareholder may be entitled.

 

Section 8.16.                         Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

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IN WITNESS WHEREOF, the Shareholders have executed this Shareholders’ Agreement on the date stated in the introductory clause.

 

 

	
 
    	
VIA optronics GmbH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jürgen Eichner
    
	
 
    	
Name: Jürgen Eichner
    
	
 
    	
Title: Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Jürgens
    
	
 
    	
Name: Daniel Jürgens
    
	
 
    	
Title: Managing   Director
    

 

 

IN WITNESS WHEREOF, the Shareholders have executed this Shareholders’ Agreement on the date stated in the introductory clause.

 

 

	
 
    	
Toppan Printing Co., Ltd.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Teruo Ninomiya
    
	
 
    	
Name: Teruo Ninomiya
    
	
 
    	
Title: Senior General   Manager
    

 

 

EXHIBIT A

 

Part 1— Board Reserved Matters

 

1)                                     The decision on any delegation, assignment or revocation of any authority to a person, committee or other organization of the Company other than the Board (e.g. Managing Director, General Manager etc.) regarding any matters on which the Board has the authority to make a decision.

 

2)                                     The approval and modification of business plan and strategic guidelines of the Company regarding the Business and new business lines (other than the Business) which is to be implemented by the Company.

 

3)                                     The decision to invest or disinvest in new business lines other than the Business.

 

4)                                     The decision on matters related to bonds for subscription.

 

5)                                     The decision on matters related to mergers, company split, share swaps and/or share transfers, business transfer, or acquisition of business.

 

6)                                     The decision on the establishment, relocation, closure, integration of a place of business (branch office, branch, sales office, plant research facility, etc.)

 

7)                                     The decision on the payment to a third party that fall outside the normal course of business (indemnification, compensation or damage, donations, grants or monetary contributions, condolence payments or rewards, etc.), which is or exceeds JPY10 million in total per case or project.

 

8)                                     The decision on the acquisition, purchase, transfer, lease, rental, lending or other disposition of fixed asset, intangible asset, or real estate, where the consideration, price, fee or charge is or exceeds JPY10 million per month, or JPY100 million in total, which is not approved by the Shareholders in a business plan or in this Agreement.

 

9)                                     The decision on the acquisition or transfer of share, or on the creation of real rights or other security interests of shares of any other joint-stock company, where the consideration, price, fee or charge is or exceeds JPY 10 million in total per case or project.

 

10)                              The decision on the contribution or transfer of investment on entity other than joint-stock company, where the consideration, price, fee or charge is or exceeds JPY 10 million in total per case or project.

 

11)                              The decision on giving loans or granting collaterals to any third party(ies).

 

12)                              The decision on the matters related to fund management facilities (i.e. in the event the Company hold excess funds, to decide how to manage such excess funds.).

 

 

13)                              The decision on borrowing of funds, borrowing facilities for funds, bill discount facilities or the liquidation of assets, where the amount is or exceeds JPY10 million per case or project.

 

14)                              The decision on debt guarantees and reservations of guarantees.

 

15)                              The decision on the provision of collateral or other security interests.

 

16)                              The decision on joint venture, partnership or other strategic alliance (regardless of whether entering into written contract or not) with third parties which contains important matters for the Shareholders or the Company

 

17)                              The decision on the conclusion of any contracts by the Company that fall outside the normal course of business, where the consideration, price, fee or charge is or exceeds JPY100 million.

 

18)                              The decision on conclusion, amendment, dissolution or termination of any contracts between the Company and either Shareholder that fall outside the normal course of business.

 

19)                              The decision on matters related to the payment from or to either the Shareholder excluding the payment in accordance with certain contracts entered into by and between the Company and either the Shareholder and that will remain in full force and effect at the time.

 

Part 2 — Shareholder Reserved Matters

 

1)                                     The decision on the establishment of a subsidiary of the Company

 

2)                                     The decision on matters related to acquisition of treasury stock of the Company.

 

3)                                     The decision on the combination of Shares of the Company.

 

4)                                     The decision on the issuance of New Shares for subscription or offers of stock acquisition rights of the Company.

 

5)                                     The decision on the remuneration of directors and statutory auditor of the Company

 

6)                                     The decision on the exemption of responsibility of directors to the Company regarding compensation for damages.

 

7)                                     Increase and decrease in amount of capital or reserves.

 

8)                                     Amendment of the Articles of Incorporation.

 

9)                                     The decision on matters related to merger, company split, share swaps and/or share transfers, business transfer, or acquisition of business.

 

 

10)                              The decision on dissolution, liquidation, continuation of the Company prior to the consummation of liquidation, filing of bankruptcy or putting under receivership.

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