THIRD AMENDMENT AND WAIVER AGREEMENT
This
Third Amendment and Waiver Agreement (the
“Agreement”)
is
being entered into as of November 16, 2006 by and among Corgi International
Limited, a corporation organized under the laws of Hong Kong (the “Company”),
and
certain of the entities and individuals listed on the Schedule of Purchasers
(the “Purchasers”)
attached as Exhibit C to that certain Note and Warrant Purchase Agreement dated
April 28, 2006, by and among the Company and the Purchasers, as amended by
that
certain Amendment and Waiver Agreement (the “Initial
Amendment”)
and
that certain Second Amendment and Waiver Agreement (the “Second
Amendment”)
previously executed and delivered by the Company and certain of the Purchasers
(together, the “April
Purchase Agreement”).
Capitalized terms not otherwise defined in this Agreement shall have the meaning
ascribed to them in the April Purchase Agreement.
Whereas,
pursuant to the terms of the April Purchase Agreement the Company has issued
promissory notes (collectively, the “Notes”)
and
warrants to purchase American Depositary Shares (collectively, the “Warrants”)
to the
Purchasers; and
Whereas,
contemporaneously
herewith, the Company is entering into a Purchase Agreement (the “New
Purchase Agreement”)
with
various entities and individuals, including the Purchasers (the “Investors”),
pursuant to which the Company is issuing American Depositary Shares and warrants
(the “New
Financing”)
and
will at the time of such issuance enter into a Registration Rights Agreement
with the investors in the New Financing and the Purchasers (the “New
Registration Rights Agreement”),
and
the Company and the Purchasers that are parties to this Agreement desire to
conform certain provisions of the April Purchase Agreement to those of the
New
Purchase Agreement and the New Registration Rights Agreement; and
Whereas,
pursuant
to Section 9.1 of the April Purchase Agreement, the written consent of the
Company and the record holders of more than 60% of the Registrable Shares then
outstanding and held by Purchasers may waive or amend any term of Article VII
of
the Purchase Agreement, and any such amendment or waiver shall be binding upon
the Company and all holders of Registrable Shares; and
Whereas,
the
Purchasers that are parties to this Agreement are holders of more than 60%
of
the Registrable Shares as of the date of this Agreement; and
Whereas,
pursuant
to Section 11 of the Notes, any term of the Notes may be amended or waived
upon
the written consent of the Company and the Majority Holders (as such term is
defined in the Notes); provided, that (a) any such amendment or waiver must
apply to all outstanding Notes and (b) without the consent of a specific
Purchaser, no amendment or waiver shall (i) change the Stated Maturity Date
(as
defined in the Notes) of such Purchaser's Note, (ii) reduce the principal amount
of or the interest rate due on such Purchaser's Note; (iii) change the
Conversion Price (as defined in the Notes) of such Purchaser's Note or (iv)
change the place of payment of such Purchaser's Note; and
Whereas,
the
Purchasers that are parties to this Agreement constitute the Majority Holders;
and
Whereas,
pursuant
to Section 15 of the Warrants, any term of the Warrants may be amended or waived
upon the written consent of the Company and the holders of Warrants representing
at least 60% of the shares issuable upon exercise of all Warrants then
outstanding; provided, that (a) any such amendment or waiver must apply to
all
outstanding Warrants and (b) without the consent of a specific Purchaser, no
amendment or waiver shall (i) change the Exercise Period (as defined in the
Warrants) of such Purchaser's Warrant, (ii) change the number of shares issuable
upon exercise of such Purchaser's Warrant, (iii) change
the
Exercise Price (as defined in the Warrants) of such Purchaser's Warrant or
(iv)
change the place to which a Notice of Exercise must be delivered; and
Whereas,
the
Purchasers that are parties to this Agreement hold Warrants representing at
least 60% of the shares issuable upon exercise of all Warrants outstanding
as of
the date of this Agreement; and
Whereas, the
Company and the Purchasers desire to amend the April Purchase Agreement, the
Notes and the Warrants as set forth below.
Agreement
Now,
Therefore, in
consideration of these premises and for other good and valid consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties agree
as
follows:
1. Termination
of Sections 7.1 through 7.7 of the April Purchase
Agreement.
Sections
7.1 through 7.7 of the April Purchase Agreement shall terminate as of the
closing of the New Financing and shall be of no further force or effect. The
Purchasers hereby waive any right they may have to receive any payments of
liquidated damages by operation of Sections 7.2(a) or 7.2(b) of the April
Purchase Agreement.
2. Termination
of Section 7.10 of the April Purchase Agreement.
Section
7.10 of the April Purchase Agreement shall terminate as of the closing of the
New Financing and thereafter shall be of no further force or effect. The
undersigned hereby waive any rights they may have to participate in the New
Financing pursuant to said Section 7.10.
3. Amendment
to Section 1.1 of Warrants.
Provided that each Purchaser is a party to this Agreement, Section 1.1 of each
Warrant shall be deleted in its entirety and replaced with the
following:
“Exercise
Period” shall mean the period commencing on the date the Shareholder Approval
(as defined in the Purchase Agreement) is obtained and ending on April 27,
2009.
Notwithstanding the foregoing, the Exercise Period shall not commence unless
the
merger with Master Replicas Inc. contemplated by the Agreement and Plan of
Merger, dated as of October 4, 2006, among the Company, Master Replicas Inc.
and
LightSaber Acquisition Corp. is not consummated on or prior to December 31,
2006.
4. Amendment
to First Paragraph of Notes. The
first
paragraph of each Note shall be deleted in its entirety and replaced with the
following:
For
value
received, Corgi
International Limited,
a Hong
Kong corporation (the “Company”),
promises to pay to [Name of Holder] (“Holder”)
at its
address at [address of Holder], the principal sum of [Holder’s principal amount]
with simple interest on the outstanding principal amount at the rate of (a)
11%
per annum until and including June 26, 2006 (the “Approval
Date”)
and
(b) 7.5% per annum thereafter. Interest shall commence with the date hereof
and
shall continue on the outstanding principal until paid in full or converted.
Interest shall be computed on the basis of a year of 365 days for the actual
number of days elapsed. Interest on this Note shall accrue semi-annually and
shall be payable semi-annually on the last day of June and December of each
year
(each, an “Interest
Payment Date”),
commencing on September 30, 2006, to the Holder of record on the immediately
preceding June 15 or December 15, as applicable (each, an “Interest
Record Date”);
provided,
however,
that no
interest shall be payable until the earlier to
occur
of
(i) conversion of this Note upon consummation of the financing contemplated
by
the Purchase Agreement, dated as of November 16, 2006, among the Company and
the
investors named therein (in which case such interest shall convert into ADSs
as
provided in this Note), and (ii) the termination of the Merger Agreement, dated
as of October 4, 2006, among the Company, Master Replicas Inc. and LightSaber
Acquisition Corp. in accordance with its terms (at which time all interest
accrued through the most recent payment date shall be due and payable). Subject
to the other provisions of this Note, the principal of this Note and all accrued
and unpaid interest hereon shall mature and become due and payable on October
31, 2008 (the “Stated
Maturity Date”).
The
parties also hereby waive any Event of Default resulting from the Company’s
failure to pay interest and any right to penalty interest that may have accrued
under the Notes prior to the amendment to the Notes contained in this
Agreement.
5. Full
Force and Effect.
Except
as expressly modified by this Agreement, the Initial Amendment and the Second
Amendment, all of the terms and conditions of the April Purchase Agreement,
the
Notes and the Warrants shall remain in full force and effect.
6. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
7. Governing
Law.
This
Agreement shall be governed in all respects by the laws of the State of New
York, without giving effect to conflict of law principles thereof.
[Signature
pages follow]
The
parties hereto have executed this Third Amendment and Waiver Agreement as of
the
date first set forth above.
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Company:
CORGI
INTERNATIONAL LIMITED
By:
/s/
Xxxxxx Xxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxx
Title:
Chief Executive Officer and President
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Purchasers:
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Lagunitas
Partners, LP
By:
Xxxxxx & XxXxxxx Capital Management LLC
Its:
General Partner
By:
/s/
X. Xxxxxxxxx McBaine
Name:
X. Xxxxxxxxx XxXxxxx
Title:
Manager
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Xxxxxx
and McBaine International
By:
Xxxxxx & XxXxxxx Capital Management LLC
Its:
Attorney-in-Fact
By:
/s/
X. Xxxxxxxxx McBaine
Name:
X. Xxxxxxxxx XxXxxxx
Title:
Manager
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Xxx
X. & Xxxxx X. Xxxxxx Trust
By:
/s/
Xxx X. Xxxxxx
Name:
Xxx X. Xxxxxx
Title:
Trustee
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/s/
X. Xxxxxxxxx McBaine
X.
Xxxxxxxxx XxXxxxx
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/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx
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/s/
Xxxxxxx XxXxxxxxxx
Xxxxxxx
XxXxxxxxxx
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LJHS
Company,
a
XxXxxx Family Partnership
By:
/s/
Xxxx X. XxXxxx
Name:
Xxxx X. XxXxxx
Title:
Agent
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SYM
Partners,
a
XxXxxx Family Partnership
By:
/s/
Xxxx X. XxXxxx
Name:
Xxxx X. XxXxxx
Title:
Agent
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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
SRB
GREENWAY CAPITAL QP, 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
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
XXXXXX
XXXXX INTERNATIONAL FUND, LTD.
By:
WS
Capital Management, L.P., Attorney-in-Fact
By:
WS
Capital, L.L.C., General Partner
By:
/s/
Xxxx
X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Member
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/
Xxxx
X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Member
XXXXXX
XXXXX CAPITAL, L.P.
By:
WS
Capital Management, L.P., General Partner
By:
WS
Capital, L.L.C., General Partner
By:
/s/
Xxxx
X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Member
HHMI
INVESTMENTS, L.P.
By:
WS
Capital Management, L.P., Investment Manager
By:
WS
Capital, L.L.C., General Partner
By:
/s/
Xxxx
X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Member
