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EXHIBIT 10.7
AGREEMENT REGARDING FUTURE SHARE DISTRIBUTIONS
THIS AGREEMENT REGARDING FUTURE SHARE DISTRIBUTIONS (the "Agreement")
is made and entered into as of this ____ day of January, 1997, by and among XXX
XXXXXX & COMPANY ("VK"), ZINDART PTE LIMITED (the "Shareholder") and ZINDART
LIMITED ("Zindart").
RECITALS
A. The Shareholder owns 100 percent of the outstanding capital stock of
Zindart, consisting of 5,000,000 Ordinary Shares.
B. Zindart has filed a registration statement on Form F-1
(the "Registration Statement") with the Securities and Exchange Commission
relating to the proposed public offering of 1,400,000 American Depositary Shares
("ADSs"), representing 1,400,000 ordinary Shares of Zindart.
C. The ADSs will be evidenced by American Depositary Receipts ("ADRs"),
and Zindart has applied for inclusion of the ADSs on the Nasdaq National Market
(the "National Market").
D. VK is the representative of the underwriters in the proposed public
offering.
E. The parties desire to agree on the procedures to be followed for
future issuances of Ordinary Shares by Zindart and transfers of the outstanding
Ordinary Shares by the Shareholder, in order to provide a broad and active
trading market for ADSs.
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THE PARTIES AGREE AS FOLLOWS:
1. Lock Up.
In consideration of VK's agreement to purchase the ADSs and to
conduct the offering contemplated by the Registration Statement (the
"Offering"), the Shareholder agrees, for a period of 180 days following the
closing of the Offering (the "Lock-Up Period") not to directly or indirectly
sell, enter into a contract to sell, offer to sell, loan, pledge, assign,
distribute or otherwise transfer or dispose of (each a "Transfer") any Ordinary
Shares, ADSs or other securities of the Company evidencing, exchangeable or
exercisable for or convertible into Ordinary Shares (the "Securities") which the
undersigned now owns or hereafter acquires without the written consent of the
Company and VK. The Shareholder further agrees not to engage in any
hedging or other transaction which is designed, or is reasonably expected, to
lead to a Transfer of the Securities during the Lock-Up Period, even if the
Securities would be disposed of by someone other than the undersigned. Such
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any put or call option with
respect to the Securities.
2. Future Issuance of Ordinary Shares.
Subject to the terms and conditions of this Agreement and as an
inducement to VK to proceed with the Offering, Zindart hereby agrees that any
public distribution of its Securities during the term of this Agreement shall be
accomplished by means of an offering in the United States of ADSs representing
Ordinary Shares, and that Zindart shall take all steps necessary to have such
ADSs included on the
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National Market. Notwithstanding the foregoing, Zindart may conduct a public
distribution outside the United States if VK and Zindart mutually agree that an
offering in the United States cannot be accomplished on commercially reasonable
terms. Zindart and VK shall seek to reach agreement on whether or not an
offering in the United States can be so accomplished within 30 days of Zindart
notifying VK in writing that it desires to undertake an offering of Securities
and of the proposed terms thereof.
3. Future Transfers by the Shareholder.
Subject to the terms and conditions of this Agreement and as
an inducement to VK to proceed with the proposed public offering, the
Shareholder hereby agrees that any Transfers of Securities of Zindart
beneficially owned by the Shareholder shall, during the term of this Agreement,
be made only as follows:
(a) in a private transaction not involving any public offering in which
each transferee agrees in writing for the benefit of VK that such transferee's
future Transfers of such Securities shall be subject to this Agreement; or
(b) in a registered public distribution provided such distribution is
made in the United States by means of an offering of ADSs; or
(c) by means of the sale of ADSs into the US market pursuant to Rule
144.
4. Further Assurances.
The parties agree to take any and all actions reasonably
necessary and appropriate to carry out the intent of this Agreement. The
Shareholder and Zindart agree to legend all
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certificates representing Securities with an appropriate legend referencing this
Agreement and to take all other actions (including without limitation issuing
stop transfer instructions) necessary and appropriate to cause any transferees
of the Shareholder who receive Securities from the Shareholder pursuant to
Section 3(a) to be bound by the terms of this Agreement.
5. Term.
This Agreement shall be effective from and after the
effectiveness of the Registration Statement and shall terminate on the second
anniversary of such date.
6. Miscellaneous.
6.1. Governing Law. This Agreement shall be governed by the
laws of the State of California applicable to contracts between California
residents and wholly to be performed in California.
6.2 Consent to Jurisdiction. The Shareholder and Zindart each
hereby agree that any action brought with respect to this Agreement can be
brought in the United States District Court for the Northern District of
California, and Shareholder and Zindart each hereby consent to the jurisdiction
of such court.
6.3 Notices. All notices and other communications which are
given pursuant to this Agreement shall be in writing and shall be sent by
express mail or other overnight delivery service or transmitted by facsimile
addressed as follows:
If to VK: Xxx Xxxxxx & Company
Facsimile (310)_________
If to the Shareholder: Zindart Pte Limited
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Facsimile____________
If to Zindart: Zindart Limited
Facsimile____________
6.4 Specific Performance. The Shareholder and Zindart
acknowledge that VK will have no adequate remedy at law in the event of a breach
of this Agreement and could suffer substantial and irreparable damages.
Accordingly, the Shareholder and Zindart agree that VK shall be entitled,
without the necessity of proving damages or posting bond, to obtain injunctive
relief in the event of a breach of this Agreement.
6.5 Entire Agreement. This Agreement represents the entire
agreement of the parties with respect to the subject matter hereof and supersede
all prior and contemporaneous discussions, correspondence, understandings and
agreements among the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
XXX XXXXXX & COMPANY ZINDART PTE LIMITED
By:_________________________ By:_________________________
Its_________________________ Its_________________________
ZINDART LIMITED
By:_________________________
Its_________________________
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