PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT (“Agreement”) is made as of the 16th
day of
November, 2006 by and among Corgi International Limited, a corporation organized
under the laws of Hong Kong (the “Company”), and the Investors set forth on the
signature pages affixed hereto (each an “Investor” and collectively the
“Investors”).
Recitals
A. The
Company and the Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended; and
B. The
Investors wish to purchase from the Company, and the Company wishes to sell
and
issue to the Investors, upon the terms and conditions stated in this Agreement,
(i) an aggregate of up to 16,000,000 (without giving effect to the Reverse
Split) of the Company’s American Depositary Shares (together with any securities
into which such American Depositary Shares may be reclassified the “ADSs”), at
purchase price of $1.10 per ADS (without giving effect to the Reverse Split),
and (ii) warrants to purchase an aggregate of up to 4,800,000 ADSs (without
giving effect to the Reverse Split) at an exercise price of $1.30 per ADS
(without giving effect to the Reverse Split) (subject to adjustment) in the
form
attached hereto as Exhibit A (the “Warrants”); and
C. Contemporaneous
with the sale of the ADSs and Warrants, the parties hereto will execute and
deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
B (the “Registration Rights Agreement”), pursuant to which the Company will
agree to provide certain registration rights under the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder, and applicable
state securities laws.
In
consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
1. Definitions.
In
addition to those terms defined above and elsewhere in this Agreement, for
the
purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Affiliate”
means,
with respect to any Person, any other Person which directly or indirectly
through one or more intermediaries Controls, is controlled by, or is under
common control with, such Person.
“Business
Day”
means
a
day, other than a Saturday or Sunday, on which banks in New York City and Hong
Kong are open for the general transaction of business.
“Cards”
means
Cards Inc. Limited, a corporation organized under the laws of the United
Kingdom.
“Cards
Acquisition”
means
the acquisition of Cards in accordance with the terms of the Cards
Agreement.
“Cards
Agreement”
means
the Share Purchase Agreement, dated November 1, 2006, among Xxxxxx Xxxxxxx,
Xxxxx Xxxxxxxx, Xxxx Xxxxxxxx and the Company.
“Common
Stock Equivalents”
means
any securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire at any time any Ordinary Shares or ADSs, including without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Ordinary Shares or
ADSs.
“Company’s
Knowledge”
means
the actual knowledge of the executive officers (as defined in Rule 405 under
the
0000 Xxx) of the Company, after due inquiry.
“Confidential
Information”
means
trade secrets, confidential information and know-how (including but not limited
to ideas, formulae, compositions, processes, procedures and techniques, research
and development information, computer program code, performance specifications,
support documentation, drawings, specifications, designs, business and marketing
plans, and customer and supplier lists and related information).
“Control”
(including the terms “controlling”, “controlled by” or “under common control
with”) means the possession, direct or indirect, 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.
“Deposit
Agreement”
means
the Deposit Agreement, dated as at January 1997, by and between the Company
and
The Bank of New York, as depositary, as the same may have been amended on or
prior to the date hereof.
“Effective
Date”
means
the date on which the initial Registration Statement is declared effective
by
the SEC.
“Effectiveness
Deadline”
means
the date on which the initial Registration Statement is required to be declared
effective by the SEC under the terms of the Registration Rights
Agreement.
“Intellectual
Property”
means
all of the following: (i) patents, patent applications, patent disclosures
and
inventions (whether or not patentable and whether or not reduced to practice);
(ii) trademarks, service marks, trade dress, trade names, corporate names,
logos, slogans and Internet domain names, together with all goodwill associated
with each of the foregoing; (iii) copyrights and copyrightable works; (iv)
registrations, applications and renewals
for
any
of the foregoing; and (v) proprietary computer software (including but not
limited to data, data bases and documentation).
“Master
Replicas”
means
Master Replicas Inc., a Delaware corporation.
“Master
Replicas Acquisition”
means
the acquisition of Master Replicas in accordance with the terms of the Master
Replicas Agreement.
“Master
Replicas Agreement”
means
the Agreement and Plan of Merger, dated as of October 4, 2006, by and among
Master Replicas, the Company and LightSaber Acquisition Corp.
“Material
Adverse Effect”
means
a
material adverse effect on (i) the assets, liabilities, results of operations,
condition (financial or otherwise), business, or prospects of the Company and
its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
its obligations under the Transaction Documents.
“MBO
Agreement”
means
the Sale and Purchase Agreement, dated as of November 3, 2006, between the
Company, Poundwell Limited, Zindart Manufacturing Limited, Dongguan Xinda
Giftware Co., Ltd., Luen Tat Model Design Company Limited, Luen Tat Mould
Manufacturing Limited and Onchart Industrial (BVI) Limited.
“Nasdaq”
means
The Nasdaq Stock Market, Inc.
“Note
Investors”
means
the investors party to the Note Purchase Agreement.
“Note
Purchase Agreement”
means
the Note and Warrant Purchase Agreement, dated as of April 28, 2006, among
the
Company and the Note Investors, as amended as of the date hereof.
“Notes”
means
the $5,000,000 in aggregate face amount of the Company’s convertible promissory
notes issued pursuant to the Note Purchase Agreement.
“Ordinary
Shares”
means
the Ordinary Shares of the Company and any securities into which such Ordinary
Shares may be reclassified.
“Person”
means
an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any
other
form of entity not specifically listed herein.
“Proxy
Statement”
has
the
meaning set forth in Section 7.10.
“Purchase
Price”
means
the aggregate purchase price for the Shares and the Warrants set forth on all
of
the executed signature pages hereto, which shall be up to Seventeen Million
Six
Hundred Thousand Dollars ($17,600,000).
“Registration
Statement”
has
the
meaning set forth in the Registration Rights Agreement.
“Reverse
Split”
means
a
one-for-six reverse split of the Ordinary Shares that does not reduce the number
of Ordinary Shares the Company is authorized to issue.
“SEC
Filings”
has
the
meaning set forth in Section 4.6.
“Securities”
means
the Shares, the Warrants and the Warrant Shares.
“Shareholders
Meeting”
has
the
meaning set forth in Section 7.10.
“Shareholders
Meeting Deadline”
has
the
meaning set forth in Section 7.10.
“Shares”
means
the ADSs being purchased by the Investors hereunder.
“Subsidiary”
of
any
Person means another Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its Board of Directors or other governing body (or, if
there
are no such voting interests, 50% or more of the equity interests of which)
is
owned directly or indirectly by such first Person.
“Transaction
Documents”
means
this Agreement, the Waiver Agreement, the Warrants and the Registration Rights
Agreement.
“Underlying
ADS Shares”
means
the Ordinary Shares underlying the Shares.
“Underlying
Warrant Shares”
means
the Ordinary Shares underlying the Warrant Shares.
“Waiver
Agreement”
means
the Third Amendment and Waiver Agreement, dated of even date herewith, among
the
Company and the Note Investors party thereto.
“Warrant
Shares”
means
the ADSs issuable upon the exercise of the Warrants.
“1933
Act”
means
the Securities Act of 1933, as amended, or any successor statute, and the rules
and regulations promulgated thereunder.
“1934
Act”
means
the Securities Exchange Act of 1934, as amended, or any successor statute,
and
the rules and regulations promulgated thereunder.
2. Purchase
and Sale of the Shares and Warrants.
Subject
to the terms and conditions of this Agreement, on the Closing Date, each of
the
Investors shall severally, and not jointly, purchase, and the Company shall
sell
and issue to the Investors, the Shares and Warrants
in
the
respective amounts set forth opposite the Investors’ names on the signature
pages attached hereto in exchange for the Purchase Price as specified in Section
3 below.
3. Closing.
Unless
an Investor or its representative shall have made alternative delivery
arrangements with the Company, upon confirmation that the other conditions
to
closing specified herein have been satisfied or duly waived by the Investors,
the Company shall deliver to Xxxxxxxxxx Xxxxxxx PC, in trust, a certificate
or
certificates, registered in such name or names as the Investors may designate,
representing the Shares and Warrants, with instructions that such certificates
are to be held for release to the Investors only upon payment in full of the
Purchase Price to the Company by all the Investors. Upon such receipt by
Xxxxxxxxxx Xxxxxxx PC of the certificates, or upon compliance with any
alternative delivery arrangement applicable to an Investor, each Investor shall
promptly, but no more than one Business Day thereafter, cause a wire transfer
in
same day funds to be sent to the account of the Company as instructed in writing
by the Company, in an amount representing such Investor’s pro rata portion of
the Purchase Price as set forth on the signature pages to this Agreement. On
the
date (the “Closing Date”) the Company receives the Purchase Price, the
certificates evidencing the Shares and Warrants shall be released to the
Investors (the “Closing”). The Closing of the purchase and sale of the Shares
and Warrants shall take place at the offices of Xxxxxxxxxx Xxxxxxx PC, 1251
Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
location and on such other date as the Company and the Investors shall mutually
agree.
4. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Investors that, except as set
forth in the schedules delivered herewith (collectively, the “Disclosure
Schedules”):
4.
1 Organization,
Good Standing and Qualification.
Each of
the Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry
on
its business as now conducted and to own its properties. Each of the Company
and
its Subsidiaries is duly qualified to do business as a foreign corporation
and
is in good standing in each jurisdiction in which the conduct of its business
or
its ownership or leasing of property makes such qualification or leasing
necessary unless the failure to so qualify has not had and could not reasonably
be expected to have a Material Adverse Effect. The Company’s Subsidiaries are
listed on Schedule
4.1
hereto.
4.2 Authorization.
Except
for approval of the Proposals by its shareholders as contemplated in Section
7.10, the Company has full power and authority and has taken all requisite
action on the part of the Company, its officers and directors, and as of the
Closing will have taken all requisite action of the part of its shareholders,
necessary for (i) the authorization, execution and delivery of the Transaction
Documents, (ii) the authorization of the performance of all obligations of
the
Company hereunder or thereunder, (iii) the authorization, issuance (or
reservation for issuance) and delivery of the Securities, and (iv) the
consummation of the Reverse Split.
The
Transaction Documents constitute the legal, valid and binding obligations of
the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and
similar laws of general applicability, relating to or affecting creditors’
rights generally.
4.3 Capitalization.
Schedule
4.3
sets
forth (a) the authorized capital stock of the Company on the date hereof; (b)
the number of shares of capital stock issued and outstanding; (c) the number
of
shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Shares and the Warrants) exercisable
for,
or convertible into or exchangeable for any shares of capital stock of the
Company. All of the issued and outstanding shares of the Company’s capital stock
have been duly authorized and validly issued and are fully paid, nonassessable
and free of pre-emptive rights and were issued in full compliance with
applicable state and federal securities law and any rights of third parties.
All
of the issued and outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued and are fully paid, nonassessable and
free of pre-emptive rights, were issued in full compliance with applicable
state
and federal securities law and any rights of third parties and are owned by
the
Company, beneficially and of record, subject to no lien, encumbrance or other
adverse claim. Except as provided in Section 7.9 or as described on Schedule
4.3,
no
Person is entitled to pre-emptive or similar statutory or contractual rights
with respect to any securities of the Company. Except for the Warrants and
as
provided in Section 7.9 or as described on Schedule
4.3,
there
are no outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company or any
of
its Subsidiaries is or may be obligated to issue any equity securities of any
kind and except as contemplated by this Agreement, the Cards Agreement and
the
Master Replicas Agreement, neither the Company nor any of its Subsidiaries
is
currently in negotiations for the issuance of any equity securities of any
kind.
Except as described on Schedule
4.3
and
except for the Registration Rights Agreement, there are no voting agreements,
buy-sell agreements, option or right of first purchase agreements or other
agreements of any kind among the Company and any of the securityholders of
the
Company relating to the securities of the Company held by them. Except as
described on Schedule
4.3
and
except as provided in the Registration Rights Agreement, the Master Replicas
Agreement and the Note Purchase Agreement, no Person has the right to require
the Company to register any securities of the Company under the 1933 Act,
whether on a demand basis or in connection with the registration of securities
of the Company for its own account or for the account of any other
Person.
Except
as
provided in the Cards Agreement and the Master Replicas Agreement, the issuance
and sale of the Securities hereunder will not obligate the Company to issue
Ordinary Shares, ADSs or other securities to any other Person (other than the
Investors) and will not result in the adjustment of the exercise, conversion,
exchange or reset price of any outstanding security.
The
Company does not have outstanding shareholder purchase rights or “poison pill”
or any similar arrangement in effect giving any Person the right to purchase
any
equity interest in the Company upon the occurrence of certain
events.
4.4 Valid
Issuance.
Except
for approval of the Proposals by its shareholders as contemplated in Section
7.10, the Shares and the Underlying ADS Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement and the
Deposit Agreement, will be validly issued, fully paid and nonassessable, and
shall be free and clear of all encumbrances and restrictions (other than those
created by the Investors), except for restrictions
on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws. The Warrants have been duly and validly authorized. When issued
in compliance with the terms of the Warrants and the Deposit Agreement upon
the
due exercise of the Warrants, the Warrant Shares and the Underlying Warrant
Shares will be validly issued, fully paid and non-assessable free and clear
of
all encumbrances and restrictions, except for restrictions on transfer set
forth
in the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investors. The Company has reserved a sufficient number
of ADSs and Ordinary Shares for issuance upon the exercise of the Warrants,
free
and clear of all encumbrances and restrictions, except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws and except for those created by the Investors.
4.5 Consents.
Except
for approval of the Proposals by its shareholders as contemplated in Section
7.10 and the effectuation of the Reverse Split and except as described in
Schedule
4.5,
the
execution, delivery and performance by the Company of the Transaction Documents
and the offer, issuance and sale of the Securities require no consent of, action
by or in respect of, or filing with, any Person, governmental body, agency,
or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable
time
periods. Subject to the accuracy of the representations and warranties of each
Investor set forth in Section 5 hereof, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities and the
Underlying ADS Shares, (ii) the issuance of the Warrant Shares and the
Underlying Warrant Shares upon due exercise of the Warrants, and (iii) the
other
transactions contemplated by the Transaction Documents from the provisions
of
any shareholder rights plan or other “poison pill” arrangement, any
anti-takeover, business combination or control share law or statute binding
on
the Company or to which the Company or any of its assets and properties may
be
subject and any provision of the Company’s Articles of Association or Memorandum
of Association that is or could reasonably be expected to become applicable
to
the Investors as a result of the transactions contemplated hereby, including
without limitation, the issuance of the Securities, the Underlying ADS Shares
and the Underlying Warrant Shares and the ownership, disposition or voting
of
the Securities by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction
Documents.
4.6 Delivery
of SEC Filings; Business.
The
Company has made available to the Investors through the XXXXX system true and
complete copies of the Company’s most recent Annual Report on Form 20-F for the
fiscal year ended March 31, 2006 (the “20-F”), and all other reports filed by
the Company pursuant to the 1934 Act since the filing of the 20-F and prior
to
the date hereof (collectively, the “SEC Filings”). The SEC Filings are the only
filings required of the Company pursuant to the 1934 Act for such period. The
Company and its Subsidiaries are engaged in all material respects only in the
business described in the SEC Filings and the SEC Filings contain a complete
and
accurate description in all material respects of the business of the Company
and
its Subsidiaries, taken as a whole.
4.7 Use
of
Proceeds.
The net
proceeds of the sale of the Shares and the Warrants hereunder shall be used
by
the Company to repay indebtedness and for working capital and general corporate
purposes.
4.8 No
Material Adverse Change.
Since
March 31, 2006, except for the Reverse Split, as identified and described in
the
SEC Filings or as described on Schedule
4.8,
there
has not been:
(i) any
change in the consolidated assets, liabilities, financial condition or operating
results of the Company from that reflected in the 20-F, except as contemplated
by the MBO Agreement or for changes in the ordinary course of business which
have not had and could not reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate;
(ii) any
declaration or payment of any dividend, or any authorization or payment of
any
distribution, on any of the capital stock of the Company, or any redemption
or
repurchase of any securities of the Company;
(iii) any
material damage, destruction or loss, whether or not covered by insurance to
any
assets or properties of the Company or its Subsidiaries;
(iv) any
waiver, not in the ordinary course of business, by the Company or any Subsidiary
of a material right or of a material debt owed to it;
(v) any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of the Company and its Subsidiaries
taken as a whole (as such business is presently conducted and as it is proposed
to be conducted);
(vi) any
change or amendment to the Company's Articles of Association or Memorandum
of
Association, or material change to any material contract or arrangement by
which
the Company or any Subsidiary is bound or to which any of their respective
assets or properties is subject;
(vii) any
material labor difficulties or labor union organizing activities with respect
to
employees of the Company or any Subsidiary;
(viii) other
than the transactions contemplated by this Agreement, the Cards Agreement,
the
Master Replicas Agreement and the MBO Agreement, any material transaction
entered into by the Company or a Subsidiary other than in the ordinary course
of
business;
(ix) except
as
contemplated by the Master Replicas Agreement and the MBO Agreement or as
otherwise disclosed to the Investors, the loss of the services of any key
employee, or material change in the composition or duties of the senior
management of the Company or any Subsidiary;
(x) the
loss
or threatened loss of any customer which has had or could reasonably be expected
to have a Material Adverse Effect; or
(xi) any
other
event or condition of any character that has had or could reasonably be expected
to have a Material Adverse Effect.
4.9 SEC
Filings; F-3 Eligibility.
(a) At
the
time of filing thereof, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(b) Each
registration statement and any amendment thereto filed by the Company since
January 1, 2003 pursuant to the 1933 Act and the rules and regulations
thereunder, as of the date such statement or amendment became effective,
complied as to form in all material respects with the 1933 Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein not misleading; and each prospectus filed pursuant to Rule 424(b)
under the 1933 Act, as of its issue date and as of the closing of any sale
of
securities pursuant thereto did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) The
Company is eligible to use Form F-3 to register the Registrable Securities
(as
such term is defined in the Registration Rights Agreement) for sale by the
Investors as contemplated by the Registration Rights Agreement.
4.10 No
Conflict, Breach, Violation or Default.
Subject
to the approval of the Proposals by its shareholders as contemplated in Section
7.10, the execution, delivery and performance of the Transaction Documents
by
the Company and the issuance and sale of the Securities will not conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under (i) the Company’s Articles of Association or
Memorandum of Association, both as in effect on the date hereof (true and
complete copies of which have been made available to the Investors through
the
XXXXX system), or (ii)(a) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company, any Subsidiary or any of their respective assets
or properties, or (b) any agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or a Subsidiary is bound or to
which any of their respective assets or properties is subject.
4.11 Tax
Matters.
Except
as described on Schedule
4.11,
the
Company and each Subsidiary has timely prepared and filed all tax returns
required to have been filed by the Company or such Subsidiary with all
appropriate governmental agencies and timely paid all taxes shown thereon or
otherwise owed by it. Except as described on Schedule
4.11,
the
charges,
accruals
and reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material unpaid
assessments against the Company or any Subsidiary nor, to the Company’s
Knowledge, any basis for the assessment of any additional taxes, penalties
or
interest for any fiscal period or audits by any foreign, federal, state or
local
taxing authority except for any assessment which is not material to the Company
and its Subsidiaries, taken as a whole. Except as described on Schedule
4.11,
all
taxes and other assessments and levies that the Company or any Subsidiary is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when due.
There are no tax liens or claims pending or, to the Company’s Knowledge,
threatened against the Company or any Subsidiary or any of their respective
assets or property. Except as described on Schedule
4.11,
there
are no outstanding tax sharing agreements or other such arrangements between
the
Company and any Subsidiary or other corporation or entity.
4.12 Title
to Properties.
Except
as disclosed in the SEC Filings or as described on Schedule
4.12,
the
Company and each Subsidiary has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in the SEC Filings or as described on
Schedule
4.12,
the
Company and each Subsidiary holds any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the use made or currently planned to be made thereof by them.
4.13 Certificates,
Authorities and Permits.
The
Company and each Subsidiary possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by it, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation
or
modification of any such certificate, authority or permit that, if determined
adversely to the Company or such Subsidiary, could reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate.
4.14 Labor
Matters.
(a) Except
as
described on Schedule
4.14,
the
Company is not a party to or bound by any collective bargaining agreements
or
other agreements with labor organizations. Except as described on Schedule
4.14,
the
Company has not violated in any material respect any laws, regulations, orders
or contract terms, affecting the collective bargaining rights of employees,
labor organizations or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours.
(b) (i)
There
are no labor disputes existing, or to the Company's Knowledge, threatened,
involving strikes, slow-downs, work stoppages, job actions, disputes, lockouts
or any other disruptions of or by the Company's employees, (ii) there are no
unfair labor practices or petitions for election pending or, to the Company's
Knowledge, threatened before the National Labor Relations Board or any other
federal, state or local labor commission relating to the Company's employees,
(iii) no demand for recognition or certification heretofore made by
any
labor
organization or group of employees is pending with respect to the Company and
(iv) to the Company's Knowledge, the Company enjoys good labor and employee
relations with its employees and labor organizations.
(c) Except
as
described on Schedule
4.14,
the
Company is, and at all times has been, in compliance in all material respects
with all applicable laws respecting employment (including laws relating to
classification of employees and independent contractors) and employment
practices, terms and conditions of employment, wages and hours, and immigration
and naturalization.
(e) To
the
Company's Knowledge, the Company has no liability for the improper
classification by the Company of such employees as independent contractors
or
leased employees prior to the Closing.
4.15 Intellectual
Property.
(a) All
Intellectual Property of the Company and its Subsidiaries is currently
maintained in compliance with all legal requirements (including timely filings,
proofs and payments of fees) and is valid and enforceable. No Intellectual
Property of the Company or its Subsidiaries which is necessary for the conduct
of Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted has been or is now involved
in any cancellation, dispute or litigation, and, to the Company’s Knowledge, no
such action is threatened. No patent of the Company or its Subsidiaries has
been
or is now involved in any interference, reissue, re-examination or opposition
proceeding.
(b) All
of
the licenses and sublicenses and consent, royalty or other agreements concerning
Intellectual Property which are necessary for the conduct of the Company’s and
each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted to which the Company or any Subsidiary is
a
party or by which any of their assets are bound (other than generally
commercially available, non-custom, off-the-shelf software application programs
having a retail acquisition price of less than $10,000 per license)
(collectively, “License Agreements”) are valid and binding obligations of the
Company or its Subsidiaries that are parties thereto and, to the Company’s
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally, and
there exists no event or condition which will result in a material violation
or
breach of or constitute (with or without due notice or lapse of time or both)
a
default by the Company or any of its Subsidiaries under any such License
Agreement.
(c) The
Company and its Subsidiaries own or have the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s and
each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted and for the ownership, maintenance and
operation of the Company’s and its Subsidiaries’ properties and assets, free and
clear of all liens, encumbrances, adverse claims or obligations to license
all
such owned Intellectual Property and Confidential Information,
other
than
licenses entered into in the ordinary course of the Company’s and its
Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and
enforceable right to use all third party Intellectual Property and Confidential
Information used or held for use in the respective businesses of the Company
and
its Subsidiaries.
(d) The
conduct of the Company’s and its Subsidiaries’ businesses as currently conducted
does not infringe or otherwise impair or conflict with (collectively,
“Infringe”) any Intellectual Property rights of any third party or any
confidentiality obligation owed to a third party, and, to the Company’s
Knowledge, the Intellectual Property and Confidential Information of the Company
and its Subsidiaries which are necessary for the conduct of Company’s and each
of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted are not being Infringed by any third party.
There is no litigation or order pending or outstanding or, to the Company’s
Knowledge, threatened or imminent, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries and
the
Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.
(e) The
consummation of the transactions contemplated hereby and by the other
Transaction Documents will not result in the alteration, loss, impairment of
or
restriction on the Company’s or any of its Subsidiaries’ ownership or right to
use any of the Intellectual Property or Confidential Information which is
necessary for the conduct of Company’s and each of its Subsidiaries’ respective
businesses as currently conducted or as currently proposed to be
conducted.
(f) The
Company and its Subsidiaries have taken reasonable steps to protect the
Company’s and its Subsidiaries’ rights in their Intellectual Property and
Confidential Information. Each employee, consultant and contractor who has
had
access to Confidential Information which is necessary for the conduct of
Company’s and each of its Subsidiaries’ respective businesses as currently
conducted or as currently proposed to be conducted has executed an agreement
to
maintain the confidentiality of such Confidential Information and has executed
appropriate agreements that are substantially consistent with the Company’s
standard forms thereof. Except under confidentiality obligations, there has
been
no material disclosure of any of the Company’s or its Subsidiaries’ Confidential
Information to any third party.
4.16 Environmental
Matters.
Except
as described on Schedule
4.16,
neither
the Company nor any Subsidiary is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or
human exposure to hazardous or toxic substances (collectively, “Environmental
Laws”), owns or operates any real property contaminated with any substance that
is subject to any Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability
or
claim has had or could reasonably be expected to have a
Material
Adverse Effect, individually or in the aggregate; and there is no pending or,
to
the Company’s Knowledge, threatened investigation that might lead to such a
claim.
4.17 Litigation.
Except
as described on Schedule
4.17,
there
are no pending actions, suits or proceedings against or affecting the Company,
its Subsidiaries or any of its or their properties; and to the Company’s
Knowledge, no such actions, suits or proceedings are threatened or
contemplated.
4.18 Financial
Statements.
The
financial statements included in each SEC Filing present fairly, in all material
respects, the consolidated financial position of the Company as of the dates
shown and its consolidated results of operations and cash flows for the periods
shown, and such financial statements have been prepared in conformity with
United States generally accepted accounting principles applied on a consistent
basis (“GAAP”). Except as set forth in the financial statements of the Company
included in the SEC Filings filed prior to the date hereof or as described
in
the Cards Agreement, the Master Replicas Agreement or the MBO Agreement or
on
Schedule
4.18,
neither
the Company nor any of its Subsidiaries has incurred any liabilities, contingent
or otherwise, except those incurred in the ordinary course of business,
consistent (as to amount and nature) with past practices since the date of
such
financial statements, none of which, individually or in the aggregate, have
had
or could reasonably be expected to have a Material Adverse Effect.
4.19 Insurance
Coverage.
Except
as described on Schedule
4.19,
the
Company and each Subsidiary maintains in full force and effect insurance
coverage that is customary for comparably situated companies for the business
being conducted and properties owned or leased by the Company and each
Subsidiary, and the Company reasonably believes such insurance coverage to
be
adequate against all liabilities, claims and risks against which it is customary
for comparably situated companies to insure.
4.20 Compliance
with Nasdaq Continued Listing Requirements.
The
Company is in compliance with applicable Nasdaq continued listing requirements
and, upon consummation of the Cards Acquisition, the Master Replicas
Acquisition, the issuance of the Securities and the Reverse Split, the Company
will be in compliance with such listing requirements. There are no proceedings
pending or, to the Company’s Knowledge, threatened against the Company relating
to the continued listing of the ADSs on Nasdaq and the Company has not received
any notice of, nor to the Company’s Knowledge is there any basis for, the
delisting of the ADSs from Nasdaq.
4.21 Brokers
and Finders.
No
Person will have, as a result of the transactions contemplated by the
Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company, other than as described in Schedule
4.21.
4.22 No
Directed Selling Efforts or General Solicitation.
Neither
the Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation
D) in
connection with the offer or sale of any of the Securities.
4.23 No
Integrated Offering.
Neither
the Company nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any Company
security or solicited any offers to buy any security, under circumstances that
would adversely affect reliance by the Company on Section 4(2) for the exemption
from registration for the transactions contemplated hereby or would require
registration of the Securities under the 1933 Act.
4.24 Private
Placement.
Assuming the accuracy of the representations and warranties of the Investors
contained in Section 5 hereof, the offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements
of
the 1933 Act.
4.25 Questionable
Payments.
Neither
the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any of
their respective current or former shareholders, directors, officers, employees,
agents or other Persons acting on behalf of the Company or any Subsidiary,
has
on behalf of the Company or any Subsidiary or in connection with their
respective businesses: (a) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials
or employees from corporate funds; (c) established or maintained any unlawful
or
unrecorded fund of corporate monies or other assets; (d) made any false or
fictitious entries on the books and records of the Company or any Subsidiary;
or
(e) made any unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful payment of any nature.
4.26 Transactions
with Affiliates.
Except
as disclosed in the SEC Filings or as disclosed on Schedule
4.26,
none of
the officers or directors of the Company and, to the Company’s Knowledge, none
of the employees of the Company is presently a party to any transaction with
the
Company or any Subsidiary (other than as holders of stock options and/or
warrants, and for services as employees, officers and directors), including
any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the Company’s Knowledge, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
4.27 Internal
Controls.
The
Company is
in
material compliance with the provisions of the Xxxxxxxx-Xxxxx Act of 2002
currently applicable to the Company. The Company and
the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared
with
the existing assets at reasonable intervals and appropriate action is taken
with
respect to any differences. The Company has established disclosure controls
and
procedures (as defined in 1934
Act
Rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the Company,
including the Subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Company’s
most recently filed periodic report under the 1934 Act, as the case may be,
is
being prepared. The Company's certifying officers have evaluated the
effectiveness of the Company's controls and procedures as of the end of the
period covered by the most recently filed periodic report under the 1934 Act
(such date, the "Evaluation Date"). The Company presented in its most recently
filed periodic report under the 1934 Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures
based
on their evaluations as of the Evaluation Date. Since the Evaluation Date,
there
have been no significant changes in the Company's internal controls (as such
term is defined in Item 308 of Regulation S-K) or, to the Company's Knowledge,
in other factors that could significantly affect the Company's internal
controls. The Company maintains and will continue to maintain a standard system
of accounting established and administered in accordance with GAAP and the
applicable requirements of the 1934 Act.
4.28 Acquisition
Agreements.
The
Cards Agreement and the Master Replicas Agreement are in full force and effect.
Except as described in Schedule
4.28,
the
Company and its Subsidiaries are, and to the Company’s Knowledge, each of Cards
and Master Replicas is, in compliance in all material respects with the terms
of
the Cards Agreement and the Master Replicas Agreement, as applicable. To the
Company’s Knowledge, the representations and warranties of Cards in the Cards
Agreement and Master Replicas in the Master Replicas Agreement are true and
correct in all material respects.
4.29 Disclosures.
Neither
the Company nor any Person acting on its behalf has provided the Investors
or
their agents or counsel with any information that constitutes or might
constitute material, non-public information, except as described in Schedule
4.29
(the
“Nonpublic Information”). The Transaction Documents do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order
to make the statements contained therein, in light of the circumstances under
which they were made, not misleading.
5. Representations
and Warranties of the Investors.
Each of
the Investors hereby severally, and not jointly, represents and warrants to
the
Company that:
5.1 Organization
and Existence.
If such
Investor is not a natural person, such Investor is a validly existing
corporation, limited partnership or limited liability company and has all
requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization.
The
execution, delivery and performance by such Investor of the Transaction
Documents to which such Investor is a party have been duly authorized and will
each constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally.
5.3 Purchase
Entirely for Own Account.
The
Securities to be received by such Investor hereunder will be acquired for such
Investor’s own account, not as nominee or agent, and not with a view to the
resale or distribution of any part thereof in violation of the 1933 Act, and
such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same in violation of the 1933 Act
without
prejudice, however, to such Investor’s right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable
federal and state securities laws.
Nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time. Such
Investor
is not a broker-dealer registered with the SEC under the 1934 Act or an entity
engaged in a business that would require it to be so registered.
5.4 Investment
Experience.
Such
Investor acknowledges that it can bear the economic risk and complete loss
of
its investment in the Securities and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment contemplated hereby.
5.5 Disclosure
of Information.
Such
Investor has had an opportunity to receive all information related to the
Company requested by it and to ask questions of and receive answers from the
Company regarding the Company, its business and the terms and conditions of
the
offering of the Securities. Such Investor acknowledges receipt of copies of
the
SEC Filings. Neither such inquiries nor any other due diligence investigation
conducted by such Investor shall modify, limit or otherwise affect such
Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement.
5.6 Restricted
Securities.
Such
Investor understands that the Securities are characterized as “restricted
securities” under the U.S. federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering
and
that under such laws and applicable regulations such securities may be resold
without registration under the 1933 Act only in certain limited
circumstances.
5.7 Legends.
It is
understood that, except as provided below, certificates evidencing the
Securities may bear the following or any similar legend:
(a) “The
securities represented hereby may not be transferred unless (i) such securities
have been registered for sale pursuant to the Securities Act of 1933, as
amended, (ii) such securities may be sold pursuant to Rule 144(k), or (iii)
the
Company has received an opinion of counsel reasonably satisfactory to it that
such transfer may lawfully be made without registration under the Securities
Act
of 1933 or qualification under applicable state securities laws.”
(b) If
required by the authorities of any state in connection with the issuance of
sale
of the Securities, the legend required by such state authority.
5.8 Accredited
Investor.
Such
Investor is an accredited investor as defined in Rule 501(a) of Regulation
D, as
amended, under the 0000 Xxx.
5.9 No
General Solicitation.
Such
Investor did not learn of the investment in the Securities as a result of any
general solicitation or general advertising.
5.10 Brokers
and Finders.
No
Person will have, as a result of the transactions contemplated by the
Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Investor.
5.11 Prohibited
Transactions.
During
the last thirty (30) days prior to the date hereof, neither such Investor nor
any Affiliate of such Investor which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to such Investor’s
investments or trading or information concerning such Investor’s investments,
including in respect of the Securities, or (z) is subject to such Investor’s
review or input concerning such Affiliate’s investments or trading
(collectively, “Trading Affiliates”) has, directly or indirectly, effected or
agreed to effect any short sale, whether or not against the box, established
any
“put equivalent position” (as defined in Rule 16a-1(h) under the 0000 Xxx) with
respect to the ADSs or the Ordinary Shares, granted any other right (including,
without limitation, any put or call option) with respect to the ADSs or the
Ordinary Shares or with respect to any security that includes, relates to or
derived any significant part of its value from the ADSs or the Ordinary Shares
or otherwise sought to hedge its position in the Securities (each, a “Prohibited
Transaction”). Prior to the earliest to occur of (i) the termination of this
Agreement, (ii) the Effective Date or (iii) the Effectiveness Deadline, such
Investor shall not, and shall cause its Trading Affiliates not to, engage,
directly or indirectly, in a Prohibited Transaction. Such Investor acknowledges
that the representations, warranties and covenants contained in this Section
5.11 are being made for the benefit of the Investors as well as the Company
and
that each of the other Investors shall have an independent right to assert
any
claims against such Investor arising out of any breach or violation of the
provisions of this Section 5.11.
6.
Conditions
to Closing.
6.1 Conditions
to the Investors’ Obligations.
The
obligation of each Investor to purchase the Shares and the Warrants at the
Closing is subject to the fulfillment to such Investor’s satisfaction, on or
prior to the Closing Date, of the following conditions, any of which may be
waived by such Investor (as to itself only):
(a) The
representations and warranties made by the Company in Section 4 hereof qualified
as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty
shall be true and correct as of such earlier date, and, the representations
and
warranties made by the Company in Section 4 hereof not qualified as to
materiality shall be true and correct in all material respects at all times
prior to and on the Closing Date, except to the extent any such representation
or warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct in all material respects
as
of such earlier date. The Company shall have performed in all
material
respects all obligations and covenants herein required to be performed by it
on
or prior to the Closing Date.
(b) The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers (including, without limitation, shareholder approval
of the Proposals in accordance with applicable law and Nasdaq Marketplace Rule
4350(i)) necessary or appropriate for consummation of the purchase and sale
of
the Securities and the consummation of the other transactions contemplated
by
the Transaction Documents, all of which shall be in full force and
effect.
(c) The
Company shall have executed and delivered the Registration Rights
Agreement.
(d) The
Company shall have received confirmation from Nasdaq to the effect that the
Shares and the Warrant Shares have been approved for inclusion in The Nasdaq
National Market System upon official notice of issuance.
(e) The
Company shall have received gross proceeds from the sale of the Shares and
Warrants as contemplated hereby of at least Ten Million Dollars
($10,000,000).
(f) No
judgment, writ, order, injunction, award or decree of or by any court, or judge,
justice or magistrate, including any bankruptcy court or judge, or any order
of
or by any governmental authority, shall have been issued, and no action or
proceeding shall have been instituted by any governmental authority, enjoining
or preventing the consummation of the transactions contemplated hereby or in
the
other Transaction Documents.
(g) The
Company shall have consummated the Cards Acquisition and shall have, and shall
have caused Master Replicas to, delivered all documents, instruments and other
arrangements necessary or advisable to consummate the Master Replicas
Acquisition into escrow pursuant to the terms of an escrow agreement which
provides that the only condition to the release of such documents, instruments
and other arrangements is the consummation of the Closing and the repayment
of
indebtedness as provided in the Master Replicas Agreement and which provides
for
an irrevocable procedure for repaying such indebtedness as promptly following
the Closing as practicable.
(h) The
Company shall have delivered a Certificate, executed on behalf of the Company
by
its Chief Executive Officer or its Chief Financial Officer, dated as of the
Closing Date, certifying to the fulfillment of the conditions specified in
subsections (a), (b), (d), (e), (f), (g), (k), (l), (m), (n) and (p) of this
Section 6.1.
(i) The
Company shall have delivered a Certificate, executed on behalf of the Company
by
its Secretary, dated as of the Closing Date, certifying the resolutions adopted
by the Board of Directors of the Company approving the transactions contemplated
by this Agreement and the other Transaction Documents, the Reverse Split and
the
issuance of the Securities, certifying the current versions of the Articles
of
Association and Memorandum of
Association
of the Company and certifying as to the signatures and authority of persons
signing the Transaction Documents and related documents on behalf of the
Company.
(j) The
Investors shall have received an opinion from Xxxxxx Godward Kronish LLP, the
Company's US counsel, and Xxxxxxx Xxxxx & Xxxxx LLP, the Company’s Hong Kong
counsel, each dated as of the Closing Date, in form and substance reasonably
acceptable to the Investors and addressing such legal matters as the Investors
may reasonably request.
(k) No
stop
order or suspension of trading shall have been imposed by Nasdaq, the SEC or
any
other governmental or regulatory body with respect to public trading in the
ADSs
or the Ordinary Shares.
(l) The
Company’s shareholders shall have approved the issuance of the Securities in
accordance with applicable law and Nasdaq Marketplace Rule 4350(i).
(m) The
Waiver Agreement shall have been executed and delivered by the Company and
a
sufficient number of Note Investors and shall have become
effective.
(n) The
Notes
shall have been converted into ADSs in accordance with the terms of the Notes
and the Waiver Agreement.
(o) The
Note
Investors party to the Waiver Agreement shall have executed and delivered the
Registration Rights Agreement.
(p) The
Reverse Split shall have been effected.
6.2 Conditions
to Obligations of the Company.
The
Company's obligation to sell and issue the Shares and the Warrants at the
Closing is subject to the fulfillment to the satisfaction of the Company on
or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
(a) The
representations and warranties made by the Investors in Section 5 hereof, other
than the representations and warranties contained in Sections 5.3, 5.4, 5.5,
5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and
correct in all material respects when made, and shall be true and correct in
all
material respects on the Closing Date with the same force and effect as if
they
had been made on and as of said date. The Investment Representations shall
be
true and correct in all respects when made, and shall be true and correct in
all
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date. The Investors shall have performed in all material
respects all obligations and covenants herein required to be performed by them
on or prior to the Closing Date.
(b) The
Investors shall have executed and delivered the Registration Rights
Agreement.
(c) The
Company shall have received gross proceeds from the sale of the Shares and
Warrants as contemplated hereby of at least Ten Million Dollars
($10,000,000).
(d) The
Company’s shareholders shall have approved the issuance of the Securities in
accordance with applicable law and Nasdaq Marketplace Rule 4350(i).
6.3 Termination
of Obligations to Effect Closing; Effects.
(a) The
obligations of the Company, on the one hand, and the Investors, on the other
hand, to effect the Closing shall terminate as follows:
(i) Upon
the
mutual written consent of the Company and the Investors;
(ii) By
the
Company if any of the conditions set forth in Section 6.2 shall have become
incapable of fulfillment, and shall not have been waived by the
Company;
(iii) By
an
Investor (with respect to itself only) if any of the conditions set forth in
Section 6.1 shall have become incapable of fulfillment, and shall not have
been
waived by the Investor; or
(iv) By
either
the Company or any Investor (with respect to itself only) if the Closing has
not
occurred on or prior to December 31, 2006;
provided,
however, that, except in the case of clause (i) above, the party seeking to
terminate its obligation to effect the Closing shall not then be in breach
of
any of its representations, warranties, covenants or agreements contained in
this Agreement or the other Transaction Documents if such breach has resulted
in
the circumstances giving rise to such party’s seeking to terminate its
obligation to effect the Closing.
(b) In
the
event of termination by the Company or any Investor of its obligations to effect
the Closing pursuant to this Section 6.3, written notice thereof shall forthwith
be given to the other Investors and, subject to the provisions in the last
paragraph of Section 6.3(a), the other Investors shall have the right to
terminate their obligations to effect the Closing upon written notice to the
Company and the other Investors. Nothing in this Section 6.3 shall be deemed
to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of
its
obligations under this Agreement or the other Transaction
Documents.
7. Covenants
and Agreements of the Company.
7.1 Reservation
of Shares.
The
Company shall at all times reserve and keep available out of its authorized
but
unissued Ordinary Shares and ADSs, solely for the purpose of providing for
the
exercise of the Warrants, such number of Ordinary Shares and ADSs as
shall
from
time
to time equal the Warrant Shares and the Underlying Warrant Shares issuable
upon
such exercise.
7.2 Reports.
The
Company will furnish to the Investors and/or their assignees such information
relating to the Company and its Subsidiaries as from time to time may reasonably
be requested by the Investors and/or their assignees; provided, however, that
the Company shall not disclose material nonpublic information to the Investors,
or to advisors to or representatives of the Investors, unless prior to
disclosure of such information the Company identifies such information as being
material nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.
7.3 No
Conflicting Agreements.
The
Company will not take any action, enter into any agreement or make any
commitment that would conflict or interfere in any material respect with the
Company’s obligations to the Investors under the Transaction
Documents.
7.4 Insurance.
The
Company shall not materially reduce the insurance coverages described in Section
4.19.
7.5 Compliance
with Laws.
The
Company will comply in all material respects with all applicable laws, rules,
regulations, orders and decrees of all governmental authorities.
7.6 Listing
and Related Matters.
Promptly following the date hereof, the Company shall take all necessary action
to cause the Shares and the Warrant Shares to be approved for listing on the
Nasdaq Global Market subject to official notice of issuance no later than the
Closing Date. Further, if the Company applies to have its ADSs traded on any
other principal stock exchange or market, it shall include in such application
the Shares and the Warrant Shares and will take such other action as is
necessary to cause them to be so listed. The Company will use commercially
reasonable efforts to continue the listing and trading of its ADSs on the Nasdaq
Global Market and, in accordance, therewith, will use commercially reasonable
efforts to comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of such market.
7.7 Termination
of Covenants.
The
provisions of Sections 7.2 through 7.5 shall terminate and be of no further
force and effect on the date on which the Company’s obligations under the
Registration Rights Agreement to register or maintain the effectiveness of
any
registration covering the Registrable Securities (as such term is defined in
the
Registration Rights Agreement) shall terminate.
7.8 Removal
of Legends.
Upon
the earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) Rule 144(k) becoming available the Company shall (A) deliver
to the transfer agent for the ADSs (the “Transfer Agent”) irrevocable
instructions that the Transfer Agent shall reissue a certificate representing
ADSs without legends upon receipt by such Transfer Agent of the legended
certificates for such ADSs, together with
either
(1) a customary representation by the Investor that Rule 144(k) applies to
the
ADSs represented thereby or (2) a statement by the Investor that such Investor
has sold the ADSs represented thereby in accordance with the Plan of
Distribution contained in the Registration Statement, and (B) cause its counsel
to deliver to the Transfer Agent one or more blanket opinions to the effect
that
the removal of such legends in such circumstances may be effected under the
1933
Act. From and after the earlier of such dates, upon an Investor’s written
request, the Company shall promptly cause certificates evidencing the Investor’s
Securities to be replaced with certificates which do not bear such restrictive
legends, and Warrant Shares subsequently issued upon due exercise of the
Warrants shall not bear such restrictive legends provided the provisions of
either clause (i) or clause (ii) above, as applicable, are satisfied with
respect to such Warrant Shares. When the Company is required to cause unlegended
certificates to replace previously issued legended certificates, if unlegended
certificates are not delivered to an Investor within three (3) Business Days
of
submission by that Investor of legended certificate(s) to the Transfer Agent
as
provided above (or to the Company, in the case of the Warrants), the Company
shall be liable to the Investor for liquidated damages in an amount equal to
1.0% of the aggregate purchase price of the Securities evidenced by such
certificate(s) for each thirty (30) day period (or portion thereof) beyond
such
three (3) Business Day that the unlegended certificates have not been so
delivered.
7.9 Right
to Participate in Future Financings.
From
the
date hereof until two years after the Closing Date, each Investor shall have
the
right to participate in any proposed private sale by the Company of its ADSs,
Ordinary Shares or Common Stock Equivalents primarily for the purpose of raising
capital (a “Subsequent Financing”) as provided herein. At least five (5)
Business Days prior to the closing of the Subsequent Financing, the Company
shall deliver to each Investor a written notice of its intention to effect
a
Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Investor if
it wants to review the details of such financing (such additional notice, a
“Subsequent Financing Notice”). Upon the request of an Investor, and only upon a
request by such Investor, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one Business Day after such request, deliver a
Subsequent Financing Notice to such Investor.
The
Subsequent Financing Notice shall describe in reasonable detail the proposed
terms of such Subsequent Financing, the amount of proceeds intended to be raised
thereunder, the Person with whom such Subsequent Financing is proposed to be
effected, and attached to which shall be a term sheet or similar document
relating thereto. Each Investor shall notify the Company by 6:30 p.m. (New
York
City time) on the fifth (5th)
Business Day after their receipt of the Subsequent Financing Notice of its
willingness to provide the Subsequent Financing on the terms described in the
Subsequent Financing Notice, subject to completion of mutually acceptable
documentation. If one or more Investors shall fail to so notify the Company
of
their willingness to participate in the Subsequent Financing, the Investors
agreeing to participate in the Subsequent Financing (the “Participating
Investors”) shall have the right to provide all of the Subsequent Financing. If
one or more Investors fail to notify the Company of their willingness to provide
all of the Subsequent Financing and the Participating Investors do not agree
to
provide all of the Subsequent Financing, the Company may effect the remaining
portion of such Subsequent Financing on the terms and to the Persons set forth
in the Subsequent Financing Notice; provided that the Company must provide
the
Investors with a second Subsequent Financing Notice, and the Investors will
again have the right of first refusal set forth above in this Section 7.9,
if
the Subsequent Financing subject to the initial Subsequent
Financing
Notice is not consummated for any reason on the terms set forth in such
Subsequent Financing Notice within 60 Business Days after the date of the
initial Subsequent Financing Notice with the Person identified in the Subsequent
Financing Notice. In the event the Company receives responses to Subsequent
Financing Notices from Investors seeking to purchase more than the financing
sought by the Company in the Subsequent Financing such Investors shall have
the
right to purchase their Pro Rata Portion (as defined below) of the ADSs,
Ordinary Shares or Common Stock Equivalents to be issued in such Subsequent
Financing. “Pro Rata Portion” is the ratio of (x) the amount invested by such
Investor pursuant to this Agreement (the “Subscription Amount”) and (y) the
aggregate sum of all of the Subscription Amounts. Notwithstanding the foregoing,
this Section 7.9 shall not apply in respect of the issuance of (a) ADSs,
Ordinary Shares or options to employees, consultants, officers or directors
of
the Company pursuant to any stock or option plan duly adopted by a majority
of
the non-employee members of the Board of Directors of the Company or a majority
of the members of a committee of non-employee directors established for such
purpose and (b) securities upon the exercise of or conversion of any convertible
securities, options or warrants issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date
of
this Agreement to increase the number of ADSs or Ordinary Shares issuable
thereunder or to lower the exercise or conversion price thereof.
7.10 Proxy
Statement; Shareholders Meeting.
(a)
Promptly following the execution and delivery of this Agreement the Company
shall take all action necessary to call a meeting of its shareholders (the
“Shareholders Meeting”), which shall occur not later than December 31, 2006 (the
“Shareholders Meeting Deadline”), for the purpose of seeking approval of the
Company’s shareholders for (i) the issuance and sale to the Investors of the
Securities and (ii) the Reverse Split (the “Proposals”). In connection
therewith, the Company will promptly prepare and mail to its shareholders proxy
materials (including a proxy statement (the “Proxy Statement”) and form of
proxy) for use at the Shareholders Meeting. Each Investor shall promptly furnish
in writing to the Company such information relating to such Investor and its
investment in the Company as the Company may reasonably request for inclusion
in
the Proxy Statement. Any form of proxy to be sent to the shareholders of the
Company in connection with the Shareholders Meeting, and the Proxy Statement
shall not, on the date that the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to shareholders or at the time of the
Shareholders Meeting, contain any untrue statement of a material fact or omit
to
state any material fact necessary in order to make the statements made therein
not false or misleading, or omit to state any material fact necessary to correct
any statement in any earlier communication with respect to the solicitation
of
proxies or the Shareholders Meeting which has become false or misleading. If
the
Company should discover at any time prior to the Shareholders Meeting, any
event
relating to the Company or any of its Subsidiaries or any of their respective
affiliates, officers or directors that is required to be set forth in a
supplement or amendment to the Proxy Statement, the Company will promptly inform
the Investors thereof and shall promptly amend or supplement the Proxy Statement
and deliver such amended Proxy Statement or any supplement thereto to its
shareholders.
(b) Subject
to their fiduciary obligations under applicable law (as determined in good
faith
by the Company’s Board of Directors after consultation with the Company’s
outside counsel), the Company's Board of Directors shall recommend, and shall
not alter or
withdraw
such recommendation, to the Company's shareholders that the shareholders vote
in
favor of the approval of the Proposals and take all commercially reasonable
action (including, without limitation, the hiring of a proxy solicitation firm
of nationally recognized standing) to solicit the approval of the shareholders
for the Proposals.
8. Survival
and Indemnification.
8.1 Survival.
The
representations, warranties, covenants and agreements contained in this
Agreement shall survive the Closing of the transactions contemplated by this
Agreement.
8.2 Indemnification.
The
Company agrees to indemnify and hold harmless each Investor and its Affiliates
and their respective directors, officers, employees and agents from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable attorney fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
(collectively, “Losses”) to which such Person may become subject as a result of
any breach of representation, warranty, covenant or agreement made by or to
be
performed on the part of the Company under the Transaction Documents, and will
reimburse any such Person for all such amounts as they are incurred by such
Person.
8.3 Conduct
of Indemnification Proceedings.
Promptly
after receipt by any Person (the “Indemnified
Person”) of notice of any demand, claim or circumstances which would or might
give rise to a claim or the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought pursuant to Section
8.2, such Indemnified Person shall promptly notify the Company in writing and
the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person, and shall assume
the
payment of all fees and expenses; provided,
however, that
the
failure of any Indemnified Person so to notify the Company shall not relieve
the
Company of its obligations hereunder except to the extent that the Company
is
materially prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed
to
the retention of such counsel; or (ii) in the reasonable judgment of counsel
to
such Indemnified Person representation of both parties by the same counsel
would
be inappropriate due to actual or potential differing interests between them.
The Company shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
but if settled with such consent, or if there be a final judgment for the
plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
from and against any loss or liability (to the extent stated above) by reason
of
such settlement or judgment. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, the
Company shall not effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Person
from all liability arising out of such proceeding.
9. Miscellaneous.
9.1 Successors
and Assigns.
This
Agreement may not be assigned by a party hereto without the prior written
consent of the Company or the Investors, as applicable, provided, however,
that
an Investor may assign its rights and delegate its duties hereunder in whole
or
in part to an Affiliate or to a third party acquiring some or all of its
Securities in a private transaction without the prior written consent of the
Company or the other Investors, after notice duly given by such Investor to
the
Company provided, that no such assignment or obligation shall affect the
obligations of such Investor hereunder. The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied,
is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.2 Counterparts;
Faxes.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. This Agreement may also be executed via facsimile, which shall
be
deemed an original.
9.3 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
9.4 Notices.
Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (i) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (ii) if given by telex or telecopier, then such notice
shall be deemed given upon receipt of confirmation of complete transmittal,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given
by
an internationally recognized overnight air courier, then such notice shall
be
deemed given one Business Day after delivery to such carrier. All notices shall
be addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice to
the other party:
If
to the
Company:
Corgi
International Limited
Xxxx
00,
00/X, Xxx Xxx Xxxxxx
00-00
Xx
Xxx Xxx Street, Fotan, New Territories
Hong
Kong, S.A.R., China
Attention:
Chief Financial Officer
Fax:
(000) 000-0000-0000
With
a
copy to:
Cooley
Godward Kronish LLP
000
Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxxxxxxx, XX 00000-0000
Attention:
Xxxxx Xxxxxxx
Fax:
(000) 000-0000
and
Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP
The
Xxxxxx Building
000
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, XX 00000
Attention:
Xxxxxxxx X. Xxxx
Fax:
(000) 000-0000
If
to the
Investors:
to
the
addresses set forth on the signature pages hereto.
9.5 Expenses.
The
parties hereto shall pay their own costs and expenses in connection herewith,
except that the Company shall pay the reasonable fees and expenses of Xxxxxxxxxx
Xxxxxxx PC not to exceed $30,000; it being understood that Xxxxxxxxxx Xxxxxxx
PC
has only rendered legal advice to the SRB Greenway Capital related funds and
the
Special Situations Funds participating in this transaction and not to the
Company or any other Investor in connection with the transactions contemplated
hereby, and that each of the Company and each Investor has relied for such
matters on the advice of its own respective counsel. Such expenses shall be
paid
not later than the Closing. The Company shall reimburse the Investors upon
demand for all reasonable out-of-pocket expenses incurred by the Investors,
including without limitation reimbursement of attorneys’ fees and disbursements,
in connection with any amendment, modification or waiver of this Agreement
or
the other Transaction Documents. In the event that legal proceedings are
commenced by any party to this Agreement against another party to this Agreement
in connection with this Agreement or the other Transaction Documents, the party
or parties which do not prevail in such proceedings shall severally, but not
jointly, pay their pro rata share of the reasonable attorneys’ fees and other
reasonable out-of-pocket costs and expenses incurred by the prevailing party
in
such proceedings.
9.6 Amendments
and Waivers.
Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any Securities purchased under
this Agreement at the time outstanding, each future holder of all such
Securities, and the Company.
9.7 Publicity.
Except
as set forth below, no public release or announcement concerning the
transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the Company (in the case of a release or
announcement by the Investors) or the Investors (in the case of a release or
announcement by the Company) (which consents shall not be unreasonably
withheld), except as such release or announcement may be required by law or
the
applicable rules or regulations of any securities exchange or securities market,
in which case the Company or the Investors, as the case may be, shall allow
the
Investors or the Company, as applicable, to the extent reasonably practicable
in
the circumstances, reasonable time to comment on such release or announcement
in
advance of such issuance. By 8:30 a.m. (New York City time) on the trading
day
immediately following the Closing Date, the Company shall issue a press release
disclosing the consummation of the transactions contemplated by this Agreement.
No later than the third trading day following the Closing Date, the Company
will
file a Current Report on Form 6-K attaching the press release described in
the
foregoing sentence as well as copies of the Transaction Documents. Such report
shall also disclose all of the Nonpublic Information unless the Company
determines (and so advises the Investors in writing) that any undisclosed
Nonpublic Information is not material nonpublic information under applicable
securities laws and that the Investors are free to trade the Company’s
securities notwithstanding possession of such undisclosed Nonpublic Information.
In addition, the Company will make such other filings and notices in the manner
and time required by the SEC or Nasdaq. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Investor, or include the
name of any Investor in any filing with the SEC (other than the Registration
Statement and any exhibits to filings made in respect of this transaction in
accordance with periodic filing requirements under the 0000 Xxx) or any
regulatory agency or Nasdaq, without the prior written consent of such Investor,
except to the extent such disclosure is required by law or trading market
regulations, in which case the Company shall provide the Investors with prior
notice of such disclosure.
9.8 Severability.
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law
which
renders any provision hereof prohibited or unenforceable in any
respect.
9.9 Entire
Agreement.
This
Agreement, including the Exhibits and the Disclosure Schedules, and the other
Transaction Documents constitute the entire agreement among the parties hereof
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.
9.10 Further
Assurances.
The
parties shall execute and deliver all such further instruments and documents
and
take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.
9.11 Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York
for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served
on
each party hereto anywhere in the world by the same methods as are specified
for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that
any
such suit, action or proceeding brought in any such court has been brought
in an
inconvenient forum. EACH
OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.
9.12 Independent
Nature of Investors' Obligations and Rights.
The
obligations of each Investor under any Transaction Document are several and
not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by
such
Investor independently of any other Investor. Nothing contained herein or in
any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents.
Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.
[signature
page follows]
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.
The
Company:
CORGI
INTERNATIONAL LIMITED
By:
/s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx Xxxxxxxxx
Title:
Chief Executive Officer
ROYAL
CAPITAL VALUE FUND, LP
ROYAL
CAPITAL VALUE FUND QP, LP
ROYALCAP
VALUE FUND LTD
ROYALCAP
VALUE FUND LTD II
ROYAL
CAPITAL LH MANAGED ACCOUNT
By:
Royal
Capital Management, LLC
Its:
General Partner
By:
/s/
Xxxxxx X. Medway
Xxxxxx
X.
Medway, Managing Partner
Royal
Capital Value Fund, LP
Aggregate
Purchase Price: $98,000.10
Number
of
Shares: 89,091
Number
of
Warrants: 26,727
Royal
Capital Value Fund QP, LP
Aggregate
Purchase Price: $941,000.50
Number
of
Shares: 855,455
Number
of
Warrants: 256,636
RoyalCap
Value Fund LTD
Aggregate
Purchase Price: $759,999.90
Number
of
Shares: 690,909
Number
of
Warrants: 207,272
RoyalCap
Value Fund LTD II
Aggregate
Purchase Price: $77,999.90
Number
of
Shares: 70,909
Number
of
Warrants: 26,727
RoyalCap
LH Managed Account
Aggregate
Purchase Price: $122,999.80
Number
of
Shares: 89,091
Number
of
Warrants: 21,272
Address
for Notice:
c/o
Royal
Capital Management, LLC
000
Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn.
Xxxxxx X. Medway
SPECIAL
SITUATIONS FUND III QP, L.P.
By:
/s/
Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
General Partner
Aggregate
Purchase Price: $2,999,997
Number
of
Shares: 2,727,270
Number
of
Warrants: 818,181
Address
for Notice:
000
Xxxxxxx Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
SPECIAL
SITUATIONS PRIVATE EQUITY FUND, L.P.
By:
/s/
Xxxxxx X. Xxxxx
Name:
Xxxxxx X. Xxxxx
Title:
General Partner
Aggregate
Purchase Price: $1,849,001
Number
of
Shares: 1,680,910
Number
of
Warrants: 504,273
000
Xxxxxxx Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
SRB
GREENWAY CAPITAL, L.P.
By:
SRB
Management, L.P., General Partner
By:
BC
Advisors, L.L.C., General Partner
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Member
Aggregate
Purchase Price: $104,599
Number
of
Shares: 95,090
Number
of
Warrants: 28,527
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
SRB
GREENWAY CAPITAL (Q.P.), L.P.
By:
SRB
Management, L.P., General Partner
By:
BC
Advisors, L.L.C., General Partner
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Member
Aggregate
Purchase Price: $857,098
Number
of
Shares: 779,180
Number
of
Warrants: 233,754
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
SRB
GREENWAY OFFSHORE
OPERATING
FUND, L.P.
By:
SRB
Management, L.P., General Partner
By:
BC
Advisors, L.L.C., General Partner
By:
/s/ Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Member
Aggregate
Purchase Price: $38,302
Number
of
Shares: 34,820
Number
of
Warrants: 10,446
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
XXXXXX
XXXXX INTERNATIONAL FUND, LTD.
By:
WS
Capital Management, L.P., Attorney-in-Fact
By:
WS
Capital, L.L.C., General Partner
By:
/s/ G. Xxxxx Xxxxx
Name:
G.
Xxxxx Xxxxx
Title:
Member
Aggregate
Purchase Price: $453,695
Number
of
Shares: 412,450
Number
of
Warrants: 123,735
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
XXXXXX
XXXXX CAPITAL (Q.P.), L.P.
By:
WS
Capital Management, L.P., General Partner
By:
WS
Capital, L.L.C., General Partner
By:
/s/ G. Xxxxx Xxxxx
Name:
G.
Xxxxx Xxxxx
Title:
Member
Aggregate
Purchase Price: $325,501
Number
of
Shares: 295,910
Number
of
Warrants: 88,773
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
XXXXXX
XXXXX CAPITAL, L.P.
By:
WS
Capital Management, L.P., General Partner
By:
WS
Capital, L.L.C., General Partner
By:
/s/ G. Xxxxx Xxxxx
Name:
G.
Xxxxx Xxxxx
Title:
Member
Aggregate
Purchase Price: $50,699
Number
of
Shares: 46,090
Number
of
Warrants: 13,827
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
HM
INVESTMENTS, L.P.
By:
WS
Capital Management, L.P., Investment Manager
By:
WS
Capital, L.L.C., General Partner
By:
/s/ G. Xxxxx Xxxxx
Name:
G.
Xxxxx Xxxxx
Title:
Member
Aggregate
Purchase Price: $170,104
Number
of
Shares: 156,640
Number
of
Warrants: 46,392
Address
for Notice:
000
Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
with
a
copy to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
Attn:
Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
Lagunitas
Partners LP
(Name
of
Investor)
By:
/s/
X.
Xxxxxxxxx XxXxxxx
Name:
Xxxxxx & McBaine Capital Management
Title:
General Partner
Aggregate
Purchase Price: $722,001.50
Number
of
Shares: 656,365
Number
of
Warrants: 196,909
Address
for Notice:
Xxxxxx
& XxXxxxx Cap Mgmt
50
Xxxxxx
Place - Penthouse
Xxx
Xxxxxxxxx, XX 00000
Xxxxxx
& XxXxxxx International
(Name
of
Investor)
By:
/s/
X.
Xxxxxxxxx McBaine
Name:
Xxxxxx & XxXxxxx Capital Management
Title:
Investment Advisor
Aggregate
Purchase Price: $198,000.00
Number
of
Shares: 180,000
Number
of
Warrants: 54,000
Address
for Notice:
Xxxxxx
& McBaine Cap Mgmt
50
Xxxxxx
Place - Penthouse
Xxx
Xxxxxxxxx, XX 00000
Xxx
D
and Xxxxx X Xxxxxx Trust
(Name
of
Investor)
By:
/s/
Xxx
X. Xxxxxx
Name:
Xxx
X. Xxxxxx
Title:
Trustee
Aggregate
Purchase Price: $114,999.50
Number
of
Shares: 104,545
Number
of
Warrants: 31,363
Address
for Notice:
Xxxxxx
& McBaine Cap Mgmt
50
Xxxxxx
Place - Penthouse
Xxx
Xxxxxxxxx, XX 00000
X.
Xxxxxxxxx McBaine
(Name
of
Investor)
By:
/s/
X.
Xxxxxxxxx XxXxxxx
Aggregate
Purchase Price: $114,999.50
Number
of
Shares: 104,545
Number
of
Warrants: 31,363
Address
for Notice:
Xxxxxx
& McBaine Cap Mgmt
50
Xxxxxx
Place - Penthouse
Xxx
Xxxxxxxxx, XX 00000
CONSOR
CAPITAL II, L.P.
By:
Consor Capital LLC
Its:
General Partner
By:
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx, Manager
CONSOR
CAPITAL II, L.P.
Aggregate
Purchase Price: $499,950
Number
of
Shares: 454,500
Number
of
Warrants: 136,350
Address
for Notice:
c/o
Consor Capital LLC
000
Xxxx
Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attn.
Xxxxxx Xxxxxxx
XXXXXX
CAPITAL I, L.P.
By:
Consor Capital LLC
Its:
General Partner
By:
/s/
Xxxxxx Xxxxxxx
Xxxxxx
Xxxxxxx, Manager
CONSOR
CAPITAL I, L.P.
Aggregate
Purchase Price: $99,990
Number
of
Shares: 90,900
Number
of
Warrants: 27,270
Address
for Notice:
c/o
Consor Capital LLC
000
Xxxx
Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attn.
Xxxxxx Xxxxxxx
Xxxxx
Partners, LP
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
General Partner
Xxxxx
Partners, LP
Aggregate
Purchase Price: $1,898,600
Number
of
Shares: 1,726,000
Number
of
Warrants: 517,800
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Matterhorn
Offshore Fund Ltd
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $2,997,710
Number
of
Shares: 2,724,700
Number
of
Warrants: 817,410
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Common
Fund Hedged Equity Co.
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $227,370
Number
of
Shares: 206,700
Number
of
Warrants: 62,010
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Shoshone
Partners, LP
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $1,214,290
Number
of
Shares: 1,103,900
Number
of
Warrants: 331,170
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Finderne
LLC
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $76,890
Number
of
Shares: 69,900
Number
of
Warrants: 20,970
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Good
Xxxxxxx Trading Co. spc
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $71,060
Number
of
Shares: 64,600
Number
of
Warrants: 19,380
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Mulsanne
Partners, LP
(Name
of
Investor)
By:
/s/
Xxxxx
X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President
Dorset
Management Corp.
Investment
Advisor
Aggregate
Purchase Price: $14,630
Number
of
Shares: 13,300
Number
of
Warrants: 3,990
Address
for Notice:
000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxx,
XX 00000
Xxxxxx
X. Xxxxxxxxx
(Name
of
Investor)
By:
/s/
Xxxxxx X. Xxxxxxxxx
Aggregate
Purchase Price: $150,040
Number
of
Shares: 136,400
Number
of
Warrants: 40,920
Address
for Notice:
Xxxxxx
X.
Xxxxxxxxx
UBS
Financial Services Inc.
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
JORDAN
X. XXXXXXXX
/s/
Jordan X. Xxxxxxxx
Aggregate
Purchase Price: $299,970
Number
of
Shares: 272,700
Number
of
Warrants: 81,810
Address
for Notice:
Jordan
X.
Xxxxxxxx
0
Xxxxxxxx Xxxxxxx
Xxxxxxxxxx,
XX 00000
Tallac
Partners, LLC
(Name
of
Investor)
By:
/s/
Xxxxx
Xxxxxxxxx
Name:
Xxxxx Xxxxxxxxx
Title:
Sole Member
Aggregate
Purchase Price: $50,050.00
Number
of
Shares: 45,500
Number
of
Warrants: 15,015
Address
for Notice:
Tallac
Partners, LLC
0000
Xxxxx Xxxxxx
Xxx
Xxxxxxxxx, XX 00000