EXHIBIT 4.8
THIS INVESTMENT WARRANT AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF
HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH
ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Dated January 31, 2002 Void after
June 3, 2012
AMENDED AND RESTATED
INVESTMENT WARRANT
DSI TOYS, INC.
THIS AMENDED AND RESTATED INVESTMENT WARRANT OF DSI TOYS, INC. (HEREINAFTER
THE "INVESTMENT WARRANT") AMENDS AND RESTATES IN ITS ENTIRETY THAT CERTAIN
INVESTMENT WARRANT OF DSI TOYS, INC. (THE "COMPANY") MADE IN FAVOR OF MVII, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY (THE "HOLDER"), DATED MARCH 19, 2001,
WHICH IS HEREBY TERMINATED, CANCELED AND REPLACED BY THIS INVESTMENT WARRANT.
THIS CERTIFIES THAT, for cash paid in the amount of TWO MILLION SEVEN HUNDRED
THOUSAND AND NO/100 DOLLARS ($2,700,000.00) (the "PURCHASE PRICE") on or about
March 19, 2001, the Holder is entitled to receive from the Company, at any time
or from time to time during the period specified in Paragraph 2, ONE MILLION
EIGHT HUNDRED THOUSAND (1,800,000) fully paid and nonassessable shares of the
Company's common stock, $0.01 par value per share (the "COMMON STOCK"). The term
"OPTION SHARES," as used herein, refers to the shares of Common Stock receivable
hereunder. The term "DEEMED CONVERSION PRICE," as used herein is $1.50 per
Option Share and refers to the price per share paid by the Holder for the right
to receive the Option Shares in accordance with the terms of this Investment
Warrant.
This Investment Warrant is subject to the following terms, provisions, and
conditions:
1. MANNER OF CONVERSION; ISSUANCE OF CERTIFICATES. Subject to the
provisions set forth herein, this Investment Warrant may be converted by any
Holder and/or its registered assigns, in whole or in part, by the surrender of
this Investment Warrant together with a completed conversion agreement in the
form attached to this Investment Warrant (the "CONVERSION AGREEMENT"), to the
Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder).
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The Option Shares received upon conversion shall be deemed to be issued to the
Holder, as the record owner of such shares, as of the close of business on the
date on which this Investment Warrant shall have been surrendered and the
completed Conversion Agreement shall have been delivered. Certificates for the
Option Shares shall be delivered to the Holder within a reasonable time, not to
exceed three business days after this Investment Warrant shall have been so
converted. The certificates so delivered shall be in such denominations as may
be requested by the Holder and shall be registered in the name of the Holder or
such other name as shall be designated by such Holder.
2. PERIOD OF CONVERSION. This Investment Warrant may be converted, at the
option of the Holder, in whole or in part, at any time from and after June 3,
2002, until 5:00 p.m., Central time, June 3, 2012 (the "EXERCISE PERIOD"),
unless it expires and terminates earlier as provided herein.
3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
a. SHARES TO BE FULLY PAID. All Option Shares will, upon issuance in
accordance with the terms of this Investment Warrant, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.
b. RESERVATION OF SHARES. During the Exercise Period, the Company shall
at all times have authorized, and reserved for the purpose of issuance upon
exercise of this Investment Warrant, a sufficient number of shares of Common
Stock to provide for the conversion of this Investment Warrant.
c. SUCCESSORS AND ASSIGNS. This Investment Warrant will be binding upon
any entity succeeding to the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets.
4. CONSOLIDATION, MERGER OR SALE. From and after the date of this
Investment Warrant, in case of any consolidation of the Company with, or merger
of the Company into, any other corporation, or in case of any sale or conveyance
of all or substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company, then as a
condition of such consolidation, merger or sale or conveyance, adequate
provision will be made whereby the Holder of this Investment Warrant will have
the right to acquire and receive such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for the number of shares
of Common Stock immediately acquirable and receivable had this Investment
Warrant been converted at that time had such consolidation, merger or sale or
conveyance not taken place. "Common Stock" for the purposes of this Paragraph 4,
includes the Common Stock or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger or sale of the character referred to in
this Paragraph, the stock or other securities or property provided for in such
Paragraph.
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5. ISSUE TAX. The issuance of certificates for Option Shares upon the
conversion of this Investment Warrant shall be made without charge to the Holder
or such shares for any issuance tax or other costs in respect thereof, provided
that the Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than the Holder of this Investment Warrant.
6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Investment Warrant shall
not entitle the Holder to any voting rights or other rights as a shareholder of
the Company. No provision of this Investment Warrant, and no mere enumeration
herein of the rights or privileges of the Holder, shall give rise to any
liability of such Holder, whether such liability is asserted by the Company or
creditors of the Company.
7. TRANSFER AND REPLACEMENT OF INVESTMENT WARRANT.
a. RESTRICTION ON TRANSFER. This Investment Warrant and the rights
granted to the Holder are transferable, in whole or in part, upon surrender of
this Investment Warrant, together with a properly executed assignment in the
form attached hereto, at the office of the Company referred to in Paragraph 7(d)
below, PROVIDED, HOWEVER, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(e). Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered Holder as the owner and Holder of this Investment Warrant for all
purposes, and the Company shall not be affected by any notice to the contrary.
b. REPLACEMENT OF INVESTMENT WARRANT. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Investment Warrant and, in the case of any such loss, theft,
or destruction, upon delivery of an indemnity agreement reasonably satisfactory
in form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Investment Warrant, the Company, at its
expense, will execute and deliver, in lieu thereof, a new Investment Warrant of
like tenor.
c. CANCELLATION, PAYMENT OF EXPENSES. Upon the surrender of this
Investment Warrant in connection with any transfer or replacement as provided in
Paragraph 7, this Investment Warrant shall be promptly canceled by the Company.
The Company shall pay all taxes (other than securities transfer taxes) and all
other expenses (other than legal expenses, if any, incurred by the Holder) in
connection with the preparation, execution, and delivery of Investment Warrants
pursuant to this Paragraph 7.
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D. REGISTER. The Company shall maintain, at its principal executive
offices (or such other office of the Company as it may designate by notice to
the Holder), a register for this Investment Warrant, in which the Company shall
record the name and address of the person in whose name this Investment Warrant
has been issued, as well as the name and address of each transferee and each
prior owner of this Investment Warrant.
e. EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of the
surrender of this Investment Warrant in connection with any conversion,
transfer, or exchange of this Investment Warrant, this Investment Warrant (or in
the case of any exercise, the Option Shares issuable hereunder) shall not be
registered under the Securities Act and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such
exercise, transfer, or exchange (i) that the Holder or transferee of this
Investment Warrant, as the case may be, furnish to the Company a written opinion
of counsel, which opinion and counsel are reasonably acceptable to the Company,
to the effect that such exercise, transfer, or exchange may be made without
registration under said Act and under applicable state securities or blue sky
laws, and (ii) that the Holder or transferee execute and deliver to the company
an investment letter in form and substance acceptable to the Company. The first
Holder of this Investment Warrant, by taking and holding the same, represents to
the Company that such Xxxxxx is acquiring this Investment Warrant for investment
and not with a view to the distribution thereof.
f. LEGEND. The Option Shares issued upon exercise of this Investment
Warrant shall contain a legend stating that their transfer is subject to
restriction as set forth in section 7(e) of this Investment Warrant and shall
further contain the following legend:
"THESE SECURITIES ARE SUBJECT TO CERTAIN RIGHTS AND
RESTRICTIONS CONTAINED IN A SHAREHOLDERS' AND VOTING AGREEMENT
OF DSI TOYS, INC. DATED AS OF APRIL 15, 1999, COPIES OF WHICH
ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. A COPY OF
SUCH AGREEMENT WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
OF THIS CERTIFICATE UPON RECEIPT BY THE COMPANY AT ITS
PRINCIPAL OFFICE OF A WRITTEN REQUEST FROM THE HOLDER
REQUESTING SUCH COPIES."
8. NOTICES. All notices, requests and other communications required or
permitted to be given or delivered hereunder to the Holder of this Investment
Warrant shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed to such Holder at the address shown for such Holder on the
books of the Company, or at such other address as shall have been furnished to
the Company by notice from such Holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight courier, postage
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prepaid and addressed to the office of the Company at 0000 X. Xxx Xxxxxxx
Xxxxxxx Xxxxx, Xxxxx X, Xxxxxxx, Xxxxx 00000, Attention: President, or at such
other address as shall have been furnished to the Holder of this Investment
Warrant by notice from the Company. Any such notice, request or other
communication may be sent by facsimile, but shall in such case be subsequently
confirmed by a writing personally delivered or sent by certified or registered
mail or by recognized overnight mail courier as provided above. All notices,
requests and other communications shall be deemed to have been given either at
the time of the receipt thereof by the person entitled to receive such notice at
the address of such person for purposes of this Paragraph 8 or, if mailed by
registered or certified mail or with a recognized overnight mail courier upon
deposit with the United States Post Office or such overnight mail courier, if
postage is prepaid and the mailing is properly addressed, as the case may be.
9. GOVERNING LAW. THIS INVESTMENT WARRANT SHALL BE GOVERNED AND
CONSTRUED AND ENFORCED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS WITHOUT REGARD TO THE BODY OF LAW CONTROLLING CONFLICTS OF LAW.
10. MISCELLANEOUS.
a. AMENDMENTS. This Investment Warrant may only be amended by an
instrument signed by the Company and the Holder.
b. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Investment Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the provisions
of this Investment Warrant.
c. SEVERABILITY AND SAVINGS CLAUSE. If any one or more of the provisions
contained in this Investment Warrant is for any reason (i) objected to,
contested, or challenged by any court, government authority, agency, department,
commission or instrumentality of the United States or any state or political
subdivision thereof, or any securities industry self-regulatory organization
(collectively, "GOVERNMENTAL AUTHORITY"), or (ii) held to be invalid, illegal,
or unenforceable in any respect, the Company and the Holder agree to negotiate
in good faith to modify such objected to, contested, challenged, invalid,
illegal, or unenforceable provision. It is the intention of the Company and the
Holder that there shall be substituted for such objected to, contested,
challenged, invalid, illegal, or unenforceable provision a provision as similar
to such provision as may be possible and yet be acceptable to any objecting
Governmental Authority and be valid, legal and enforceable. Further, should any
provisions of this Investment Warrant ever be reformed or rewritten by a
judicial body, those provisions as rewritten will be binding, but only in that
jurisdiction, on the Holder and the Company as if contained in the original
Investment Warrant. The invalidity, illegality, or unenforceability of any one
or more provisions of this Investment Warrant will not affect the validity and
enforceability of any other provisions of this Investment Warrant.
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IN WITNESS WHEREOF, the undersigned has executed this Investment Warrant as
of the date first set forth above.
DSI TOYS, INC.
By: /s/ XXXXXX X. XXXXXXXXXX
---------------------------------
Name: XXXXXX X. XXXXXXXXXX
-------------------------------
Title: CHIEF FINANCIAL OFFICER
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[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE INVESTMENT WARRANT)
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfer unto
Name:
-----------------------------------
Address:
-----------------------------------
Taxpayer ID/Social Security No.:
-----------------------------------
the accompanying Investment Warrant, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint:
attorney, to transfer the accompanying Investment Warrant on the books of the
Company, with full power of substitution. The transferee's tax identification or
social security number is: ______________________________.
Dated: ___________________, 200__.
[HOLDER]
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Investment Warrant or any prior
assignment thereof in every particular, without alteration or enlargement or
change whatsoever.
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[FORM OF CONVERSION AGREEMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO CONVERT THE INVESTMENT WARRANT)
To:
-----------------------------
The undersigned hereby irrevocably elects to convert the accompanying Investment
Warrant to receive _________ shares of Common Stock issuable thereunder and
requests that certificates for such shares be issued in the name of:
Name:
---------------------------
Address:
---------------------------
Taxpayer ID/Social Security No.:
---------------------------
The undersigned represents that it is acquiring the shares of Common Stock for
its own account and not with a view to distributions, and it will not sell these
shares unless they have been registered under the Securities Act of 1933 or an
exemption from such registration requirement is available.
If such number of shares of Common Stock shall not be all the shares of Common
Stock into which the accompanying Investment Warrant may be converted, a new
Investment Warrant for the balance remaining of such shares of Common Stock
shall be registered in the name of and delivered to:
Name:
---------------------------
Address:
---------------------------
Taxpayer ID/Social Security No.:
---------------------------
Dated:_______________________, 200__.
[HOLDER]
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
NOTICE
The signature to the foregoing Election must correspond to the name as
written upon the face of the accompanying Investment Warrant or any prior
assignment thereof in every particular, without alteration or enlargement or
change whatsoever.
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