Exhibit 4.3
UNDERWRITER'S WARRANT AGREEMENT
UNDERWRITER'S WARRANT AGREEMENT dated as of May 10, 1994 among GRAND TOYS
INTERNATIONAL, INC., a Nevada corporation (the "company") and BERKELEY
SECURITIES CORPORATION, a Delaware corporation (hereinafter referred to
variously as the "Holder" or the "Underwriter").
W I T N E S S E T H
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WHEREAS, the Company proposes to issue to the Underwriter warrants ("Warrants")
to purchase up to an aggregate 100,000 shares of common stock, par value $.00l
per share, of the Company ("Common Stock"); and
WHEREAS, the Underwriter has agreed pursuant to the underwriting agreement (the
"Underwriting Agreement") dated as of the date hereof between the Underwriter
and the Company, to underwrite the Company's proposed public offering of up to
1,000,000 shares of Common Stock (the "Shares") at a public offering price of
$6.00 per share of Common Stock and 1,000,000 Redeemable Common Stock Purchase
Warrants (the "Public Warrants") at a public offering price of $.l0 per warrant
(the "Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be issued on
the Closing Date (as such term is defined in the Underwriting Agreement) by the
Company to the
Underwriter in consideration for, and as part of the compensation in connection
with the public offering;
NOW, THEREFORE, in consideration of the premises, the payment by the Underwriter
to the Company of an aggregate of one hundred dollars ($100.00), the agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant. The Holder is hereby granted the right to purchase, at any time
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from May 10, 1995 until 5:30 P.M., New York time, on May 9, 1999, up to an
aggregate 100,000 Shares at an initial exercise price (subject to adjustment as
provided in Section 8 hereof) of $9.00 per Share, subject to the terms and
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conditions of this Agreement. Except as set forth herein, the Shares issuable
upon exercise of the Warrants are in all respects identical to the Shares being
purchased by the Underwriter for resale to the public pursuant to the terms and
provisions of the Underwriting Agreement.
2. Warrant Certificates. The warrant certificates (the ``Warrant
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Certificates'') delivered and to be delivered pursuant to this Agreement shall
be in the form set forth in Exhibit A, attached hereto and made a part hereof,
with such appropriate insertions, omissions, substitutions, and other variations
as required or permitted by this Agreement.
3. Exercise of Warrant. The Warrants initially are exercisable at an
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aggregate initial exercise price (subject to adjustment as provided in Section 8
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hereof) per Share set forth in Section 6 hereof payable by certified or official
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bank check in New York Clearing House funds, subject to adjustment as provided
in Section 8 hereof. Upon surrender of a Warrant Certificate with the annexed
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Form of Election to Purchase duly executed, together with payment of the
purchase Price (as hereinafter defined) for the Shares purchased at the
Company's principal
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offices. The registered holder of a Warrant Certificate ("Holder" or "Holders")
shall be entitled to receive a certificate or certificates for the Shares so
purchased. The purchase rights represented by each Warrant certificate are
exercisable at the option of the Holder thereof, in whole or in part (but not as
to fractional shares of the Common Stock underlying the Warrants). In the case
of the purchase of less than all the Shares purchasable under any Warrant
Certificate, the company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the Shares purchasable thereunder.
4. Issuance of Certificates. Upon the exercise of the Warrants, the
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issuance of certificates for Shares or other securities, properties or rights
underlying such Warrants, shall be made forthwith (and in any event within three
(3) business days thereafter) without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 5
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and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Holder and the Company shall not be required to issue or deliver such
certificates unless to or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the Shares
(and/or other securities, property or rights issuable upon the exercise of the
Warrants) shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or
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Vice Chairman of the Board of Directors or President or Vice president of the
Company under its corporate seal reproduced thereon, attested to by the manual
or facsimile signature of the then present Secretary or Assistant Secretary of
the Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
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Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof; that the Warrants may not be sold, transferred, assigned, hypothecated
or otherwise disposed of, in whole or in part, for a period of one (1) year from
the date hereof, except to officers and employees of the Underwriter.
6. Exercise Price.
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(S)6.1 Initial and Adjusted Exercise Price. Except as otherwise
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provided in Section 8 hereof, the initial exercise price of each Warrant shall
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be $9.00 for each share purchased. The adjusted exercise price shall be the
price which shall result from time to time from any and all adjustments of the
initial exercise price in accordance with the provisions of Section 8 hereof.
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(S)6.2 Exercise Price. The term "Exercise Price" herein shall mean
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the initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
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(S)7.1 Registration Under the Securities Act of 1933. The Warrants,
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the Shares and any of the other securities issuable upon exercise of the
Warrants have not been registered under the Securities Act of 1933, as amended
(the "Act"). Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares underlying the Warrants and any of the other
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securities issuable upon exercise of the Warrants (collectively, the "Warrant
securities") shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended ("Act"), and
may not be offered or sold except pursuant to (i) an effective
registration statement under the Act, (ii) to the extent applicable,
Rule 144 under the Act (or any similar rule under such Act relating
to the disposition of securities), or (iii) an opinion of counsel,
if such opinion shall be reasonably satisfactory to counsel to the
issuer, that an exemption from registration under such Act is
available.
(S)7.2 Piggyback Registration. If, at any time commencing after May
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10, 1995, through and including May 9, 2001, the Company proposes to register
any of its securities under the Act (other than in connection with a merger or
pursuant to Form S-8 or any similar or successor form) it will give written
notice by registered mail, at least thirty (30) days prior to the filing of each
such registration statement, to each of the Underwriter and to all other Holders
of the Warrants and/or the Warrant Securities of its intention to do so. If any
of the Underwriter or other Holders of the Warrants and/or Warrant Securities
notify the Company within twenty (20) days after receipt of any such notice of
its or their desire to include any such securities in such proposed registration
statement, the Company shall afford each of the Underwriter and such Holders of
the Warrants and/or Warrant Securities the opportunity to have any such Warrants
and/or Warrant Securities registered under such registration statement. The
Holder shall have no say in the choice of underwriter or terms or conditions of
an offering pursuant to this section 7.2.
Notwithstanding the provisions of this Section 7.2, the Company shall have
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the right at any time after it shall have given written notice pursuant to this
Section 7.2 (irrespective of whether a written request for inclusion of any such
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securities shall have been made) to elect not
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to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the effective date thereof.
(S)7.3 Demand Registration.
(a) At any time commencing after May 10, 1995, through and including
May 9, 1999, the Holders of the Warrants and/or Warrant Securities representing
a "Majority" (as defined in Section 7(k)(l)) of such securities (assuming the
exercise of all of the warrants) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof), exercisable by
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written notice to the Company, to have the Company prepare and file with the
Commission, on one occasion, a registration statement and such other documents,
including a prospectus, as may be necessary in the opinion of both counsel for
the Company and counsel for the Underwriter and such Holders, in order to comply
with the provisions of the Act, so as to permit a public offering and sale of
their respective Warrant Securities for nine (9) consecutive months by such
Holders and any other Holders of the Warrants and/or warrant Securities who
notify the Company within ten (10) days after receiving notice from the Company
of such request.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
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other registered Holders of the Warrants and the Warrant Securities within ten
(10) days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 7.2 and
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subsection (a) of this Section 7.3, at any time commencing after May 10, 1995
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through and including May 9, 1999, Holders of the Warrants and/or Warrant
Securities representing a Majority shall have the right, exercisable by written
request to the Company, to have the
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Company prepare and file, on one occasion, with the Commission a registration
statement so as to permit a public offering and sale for nine (9) consecutive
months by any such Holder of its Warrant Securities provided, however, that the
provisions of Section 7.4(b) hereof shall not apply to any such registration
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request and registration and all costs incident thereto shall be at the expense
of the Holder or Holders making such request.
(d) Notwithstanding anything to the contrary contained herein, if the
Company shall not have filed a registration statement for the Warrant Securities
within the time period specified in Section 7.4(a) hereof pursuant to the
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written notice specified in Section 7.3(a) of a Majority of the Holders of the
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Warrants and/or Warrant Securities, unless the Holders fail to comply with their
obligation hereunder, the Company agrees that upon the written notice of
election of a Majority of the Holders of the Warrants and/or Warrant Securities
it shall repurchase (i) any and all Warrant Securities at the higher of the
Market Price (as defined in Section 8.1(a)) per share of Common Stock on (x) the
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date of the notice sent pursuant to Section 7.3(a) or (y) the expiration of the
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period specified in Section 7.4(a) and (ii) any and all Warrants at such Market
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Price less the exercise prices of such Warrant. Such repurchase shall be in
immediately available funds and shall close within two (2) days after the later
of (i) the expiration of the period specified in Section 7.4(a) or (ii) the
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delivery of the written notice of election specified in this Section 7.3(d).
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(S)7.4 Covenants of the Company With Respect to Registration. In
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connection with any registration under Section 7.2 or 7.3 hereof, the Company
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covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within thirty (30) days of receipt of any demand therefor under
Section 7.3, shall use
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its best efforts to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell -warrant
Securities such number of prospectuses as shall reasonably be requested.
b) The Company shall pay all costs (excluding fees and expenses of
any and all Holder(s) counsel and any underwriting or selling commissions), fees
and expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
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legal and accounting fees, printing expenses, blue sky fees and expenses. The
Holder(s) will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c). If the company shall
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fail to comply with the provisions of Section 7.4(a), the Company shall, in
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addition to any other equitable or other relief available to the Holder(s), be
liable for any or all incidental, special and consequential damages and damages
due to loss of profit sustained by the Holder(s) requesting registration of
their Warrant Securities.
(c) The Company will take all necessary action which may be required
in qualifying or registering the Warrant Securities-included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to service of
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Warrant
Securities to be sold pursuant to any registration statement and each person, if
any, who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense
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or liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify the
Underwriter contained in Section 7 of the Underwriting Agreement.
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(e) The Holder(s) of the Warrant Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
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Section 20(a) of the Exchange Act, against all loss, claim, damage or expense or
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liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or assigns, for
Specific inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in Section 7 of the Underwriting
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Agreement pursuant to which the Underwriter have agreed to indemnify the
Company.
(f) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to the initial filing
of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other
than the Warrants and Warrant Securities to be included in any registration
statement filed pursuant to Section 7.3 hereof, or permit any other registration
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statement to be or remain effective during the effectiveness of a registration
statement filed pursuant to Section 7.3 hereof,
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without the prior written consent of the Holders of the Warrants and Warrant
Securities representing a majority of such securities.
(h) The Company shall furnish to each Holder Participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the underwriting agreement) , and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(i) The Company as soon as practicable, but in any event not later
than 45 days after the end of the 12-month period beginning on the day after the
end of the fiscal quarter of the Company during which the effective date of the
Registration Statement occurs (90 days in the event that the end of such fiscal
quarter is the end of the Company's fiscal year), shall make generally available
to its security holders, in the manner specified in Rule 158(b) of the Rules and
Regulations, and to the Underwriter, an earnings statement which will be in the
detail required by, and will otherwise comply with, the provisions of Section
11(a) of the Act and Rule
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158(a) of the Rules and Regulations, which statement need not be audited unless
required by the Act, covering a period of at least 12 consecutive months after
the effective date of the Registration Statement.
j) The Company shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda described below and the
managing underwriters copies of all correspondence between the Commission and
the Company, its counsel or auditors and all memoranda relating to discussions
with the Commission or its staff with respect to the registration statement and
permit each Holder and underwriters to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.
(k) The Company shall enter into an underwriting agreement with the
managing underwriters selected for such underwriting by Holders holding a
Majority of the Warrant Securities requested to be included in such
underwriting. Such agreement shall be satisfactory in form and substance to the
Company, each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter.
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The Holders shall be parties to any underwriting agreement relating to
an underwritten sale of their Warrant Securities and say, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such Underwriters shall also be made to and for
the benefit of such Holders. Such Holders shall not be required to make any
presentations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
(1) For purposes of this Agreement, the term "Majority" in reference
to the Holders of Warrants and Warrant Securities, shall mean in excess of fifty
percent (50%) of the then outstanding warrants and Warrant Securities that (i)
are not held by the company, an affiliate, officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their family,-persons
acting as nominees or in conjunction therewith or (ii) have not been resold to
the public pursuant to a registration statement filed with the Commission under
the Act.
8. Adjustments to Exercise Price and Number of Securities.
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(S)8.1 Computation of Adjusted Exercise Price. Except as hereinafter
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provided, in case the Company shall at any time after the date hereof issue or
sell any shares of Common Stock (other than the issuances or sales referred to
in Section 8.7 hereof), including shares held in the Company's treasury and
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shares of Common Stock issued upon the exercise of any options, rights or
warrants, to subscribe for shares of Common Stock and shares of common stock
issued upon the direct or indirect conversion or exchange of securities for
shares of Common Stock, for a consideration per share less than the Exercise
Price in effect immediately prior to the issuance or sale of such shares or the
Market Price" (as defined in Section 8.l(vi) hereof) per share of
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Common stock on the date immediately prior to the issuance or sale of such
shares or without consideration, then forthwith upon such jssuance or sale, the
Exercise Price shall (until another such issuance or sale) be reduced to the
price (calculated to the nearest full cent) equal to the quotient derived by
dividing (A) an amount equal to the sum of (X) the product of (a) the lower of
(i) the Exercise Price in effect immediately prior to such issuance or sale and
(ii) the Market Price per share of Common Stock on the date immediately prior to
the issuance or sale of such shares, in either event, reduced, but not below
.001, by the positive difference between the (u) "Market Price" per share of
Common Stock on the date immediately prior to the issuance or sale and (v) the
amount per share received in connection with such issuance or sale, multiplied
by (b) the total number of shares of Common Stock outstanding immediately prior
to such issuance or sale plus, (Y) the aggregate of the amount of all
consideration, if any, received by the Company upon such issuance or sale, by
(B) the total number of shares of Common Stock outstanding immediately after
such issuance or sale, provided, however, that in no event shall the Exercise
Price be adjusted pursuant to this computation to an amount in excess of the
Exercise Price in effect immediately prior to such computation, except in the
case of a combination of to outstanding shares of Common Stock, as provided by
Section 8.3 hereof. Such adjustment shall become effective at the close of
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business on such record date; provided, however, that, to the extent the shares
of Common Stock (or securities convertible to or exchangeable for shares of
Common Stock) are not delivered, the warrant Price shall be readjusted after the
expiration of such rights, options, or warrants (but only with respect to
Warrants exercised after such expiration), to the Warrant Price which would then
be in effect had the adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the number
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of shares of Common Stock or securities convertible into or exchangeable for
shares of Common Stock) actually issued.
For the purposes of this Section 8 the term Exercise Price shall mean the
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Exercise Price per share of Common Stock set forth in Section 6 hereof, as
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adjusted from time to time pursuant to the provisions of this Section 8.
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For the purposes of any computation to be made in accordance with this
Section 8.1, the following provisions shall be applicable:
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(i) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash received by the
Company for such shares (or, if shares of Common Stock are offered by the
Company for subscription, the subscription price, or, if either of such
securities shall be sold to underwriters or dealers for public offering without
a subscription offering, the initial public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale, underwriting or
purchase thereof by underwriters or dealers or others performing similar
services, or any expenses incurred in connection therewith.
(ii) In case of the issuance or sale (otherwise than as dividend or
other distribution on any stock of the Company) of shares of Common Stock for a
consideration part or all of which shall be other than cash, the amount of the
consideration therefor other than cash shall be deemed to be the value of such
consideration as determined in good faith by the Board of Directors of the
Company.
(iii) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued
immediately after
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the opening of business on the day following the record date for the
determination of stockholders entitled to receive such dividend or other
distribution and shall be deemed to have been issued without consideration.
(iv) The reclassification of securities of the Company other than
shares of Common Stock into securities including shares of Common Stock shall be
deemed to involve the issuance of such shares of Common Stock for a
consideration other than cash immediately prior to the close of business on the
date fixed for the determination of security holders entitled to receive such
shares, and the value of the consideration allocable to such shares of Common
Stock shall be determined as provided in subsection (ii) of this Section 8.1.
(v) The number of shares of Common Stock at any one time outstanding
shall include the aggregate number of shares issued or issuable (subject to
readjustment upon the actual issuance thereof) upon the exercise of options,
rights, warrants and upon the version or exchange of convertible or exchangeable
securities.
(vi) As used herein, the phrase "Market Price" at any date shall be
deemed to be the last reported sale price, or, in case no such reported sale
takes place on such day, the average of the last reported sale prices for the
last three (3) trading days, in either case as officially reported by the
principal securities exchange on which the Common Stock is listed or admitted to
trading or by the Nasdaq Stock Market, National Market ("NASDAQ"), or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted by NASDAQ, the average closing bid price as furnished by the
NASD through NASDAQ or similar organization if NASDAQ is no longer reporting
such information, or if the Common Stock is not quoted on NASDAQ, as determined
in good faith by resolution of the Board of Directors of the Company, based on
the best information available to it.
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(S)8.2 Options. Rights Warrants and Convertible and Exchangeable
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Securities. In case the Company shall at any time after the date hereof issue
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options, rights or warrants to subscribe for shares of Common Stock, or issue
any securities convertible into or exchangeable for shares of Common Stock, for
a consideration per share less than the Exercise Price in effect or the Market
Price immediately prior to the issuance of such options, rights or warrants, or
such convertible or exchangeable securities, or without consideration, the
Purchase Price in effect immediately prior to the issuance of such options,
rights or warrants, or such convertible or exchangeable securities, as the case
may be, shall be reduced to a price determined by making a computation in
accordance with the provisions of Section 8.1 hereof, provided that
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(a) The aggregate maximum number of shares of Common Stock, as the
case may be, issuable under such options, rights or warrants shall be deemed to
be issued and outstanding at the time such Options, rights or warrants were
issued, and for a consideration equal to the minimum purchase price per share
provided for in such options, rights or warrants at the time of issuance, plus
the consideration (determined in the same manner as consideration received on
the issue or sale of shares in accordance with the terms of the Warrants), if
any, received by the Company for such options, rights or warrants.
(b) The aggregate maximum number of shares of Common Stock issuable
upon conversion or exchange of any convertible or exchangeable securities shall
be deemed to be issued and outstanding at the time of issuance of such
securities, and for a consideration equal to the consideration (determined in
the same manner as consideration received on the issue or sale of shares of
Common Stock in accordance with the terms of the
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Warrants) received by the Company for such securities, plus the minimum
consideration, if any, receivable by the Company upon the conversion or exchange
thereof.
(c) If any change shall occur in the price per share provided for in
any of the options rights or warrants referred to in subsection (a) of this
Section 8.2 other than the Warrants, or in the price per share at which the
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securities referred to in subsection (b) of this Section 8.2 are convertible or
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exchangeable, such options, rights or warrants or conversion or exchange rights,
as the case may be, shall be deemed to have expired or terminated on the date
when such price change became effective in respect of shares not theretofore
issued pursuant to the exercise or conversion or exchange thereof, and the
Company shall be deemed to have issued upon such date new options, rights or
warrants or convertible or exchangeable securities at the new price in respect
of the number of shares issuable upon the exercise of such options, rights or
warrants or the conversion or exchange of such convertible or exchangeable
securities.
(S)8.3 Subdivision and Combination. In case the Company shall at any
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time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
(S)8.4 Adjustment in Number of Securities. Upon each adjustment of
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the Exercise Price pursuant to the provisions of this Section 8, the number of
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Warrant Securities issuable upon the exercise of each warrant shall be adjusted
to the nearest full amount by multiplying a number equal to the Exercise Price
in effect immediately prior to such adjustment by the number of Warrant
Securities issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
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(S)8.5 Definition of Common Stock. For the purpose of this
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Agreement, the term "Common Stock" shall mean (i) the class of stock designated
as Common Stock in the Certificate of Incorporation of the Company as may be
amended as of the date hereof, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock, consisting solely
of changes in par value, or from par value to no par value, or from no par value
to par value. In the event that the Company shall after the date hereof issue
securities with greater or superior voting rights than the shares of Common
Stock outstanding as of the date hereof, the Holder, at its option, may receive
upon exercise of any Warrant either shares of Common Stock or a like number of
such securities with greater or superior voting rights.
(S)8.6 Merger or Consolidation. In case of any consolidation of the
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Company with, or merger of the Company with, or merger of the any into, another
corporation (other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder a
supplemental warrant agreement providing that the holder of each Warrant then
outstanding or to be Outstanding shall have the right thereafter (until the
expiration of such Warrant) to receive, upon exercise of such warrant, the kind
and amount of shares of stock and other securities and property receivable upon
such consolidation or merger, by a holder of the number of shares of common
Stock of the Company for which such warrant might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 8. The above provision of this
-------
subsection shall Similarly apply to successive consolidations or mergers.
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(S)8.7 No Adjustment of Exercise Price in Certain Cases. No
-- ---------- -- -------- ----- -- ------- -----
adjustment of the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the shares of Common
Stock issuable upon the exercise of (i) the warrants or (ii) the Options or
warrants outstanding on the date hereof and described in the prospectus; or
(b) If the amount of said adjustment shall be less than two cents
($.02) per Security, provided, however, that in such case any adjustment that
would otherwise be required then to be made shall be carried forward and shall
be made at the time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount to at least two
cents ($.02) per Security.
(S)8.9 Dividends and Other Distributions. In the event that the
--------- --- ----- -------------
company shall at any time prior to the exercise of all Warrants declare a
dividend (other than a dividend consisting solely of shares of Common Stock) or
otherwise distribute to its stockholders any assets, property, rights, evidences
of indebtedness, securities (other than shares of Common Stock), whether issued
by the Company or by another, or any other thing of value, the Holders of the
unexercised Warrants shall thereafter be entitled, in addition to the shares of
Common Stock or other securities and property receivable upon the exercise
thereof, to receive, upon the exercise of such Warrants, the same property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution as if the Warrants had been exercised immediately prior to such
dividend or distribution. At the time of any such dividend or distribution, the
Company shall make appropriate reserves to ensure the timely performance of the
provisions of this subsection 8.9.
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9. Exchange and Replacement of Warrant Certificates. Each Warrant
-------- --- ----------- -- ------- ------------
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Securities in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
----------- -- ---------- ---------
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Warrants, nor shall it be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
11. Reservation and Listing of Securities. The Company shall at all times
----------- --- ------- -- ----------
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the Exercise Price therefor, all shares
of Common Stock and other securities issuable upon such exercise shall be duly
and validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any stockholder. As
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long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common stock issuable upon the exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and/or quoted on the Nasdaq Stock Market.
12. Notices to Warrant Holders. Nothing contained in this Agreement shall
------- -- ------- -------
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) the Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property assets and business as an entirety shall be
proposed; then, in any one or more of said events the Company shall give written
notice of such event at least fifteen (15) days prior to the date fixed
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as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
13. Notices. All notices requests, consents and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 hereof or
-------
to such other address as the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the Underwriter may from
----------- --- ----------
time to time supplement or amend this Agreement without the approval of any
holders of Warrant Certificates (other than the Underwriter) in order to cure
any ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any provisions herein k or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Underwriter may deem necessary or desirable and which the Company and
the Underwriter deem shall not adversely affect the interests of the Holders of
Warrant Certificates.
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15. Successors. All the covenants and provisions of this Agreement shall
----------
be binding upon and inure to the benefit of the Company, the Holders and their
respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of business
-----------
on May 9, 2001. Notwithstanding the foregoing, the indemnification provisions
of Section 7 shall survive such termination until the close of business on May
-------
9, 2006.
17. Governing Law: Submission to Jurisdiction. This Agreement and each
--------- ---- ---------- -- ------------
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to the rules of
said State governing the conflicts of laws.
The Company, the Underwriter and the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of New York
or of the United States of America for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company, the Underwriter and the Holders hereby irrevocably waive any
objection to such exclusive jurisdiction or inconvenient forum. Any such
process or summons to be served upon any of the Company, the Underwriter and the
Holders (at the option of the party bringing such action, proceeding or claim)
may be served by transmitting a copy thereof, by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address set
forth in Section 13 hereof. Such mailing shall be deemed personal service and
-------
shall be legal and binding upon the party so served in any action, proceeding or
claim. The Company, the Underwriter and the Holders agree that the prevailing
party(ies) in any such action or proceeding shall be entitled to recover from
the other party(ies) all of its/their reasonable legal
-23-
costs and expenses relating to such action or proceeding and/or incurred in
connection with the preparation therefor.
18. Entire Agreement: Modification. This Agreement (including
------ ---------- ------------
underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought.
19. Severability. If any provision of this Agreement shall be held to be
------------
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
20. Captions. The caption headings of the Sections of this Agreement are
--------
for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits or this Agreement. Nothing in this Agreement shall be
-------- -- ---- ---------
construed to give to any person or corporation other than the Company and the
Underwriter and any other registered Holder(s) of the Warrant Certificates or
Warrant Securities any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of the
Company and the Underwriter and any other Holder(s) of the Warrant Certificates
or Warrant Securities.
22. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes are deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
[SEAL] GRAND TOYS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ Altro
▇▇▇▇▇▇▇ Altro
President
Attest:
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Secretary
BERKELEY SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name:
Title:
-25-
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, May 9, 1999
No. W- 100,000 Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Berkeley Securities Corporation, or
registered assigns, is the registered holder of 100,000 Warrants to purchase
initially, at any time from May 10, 1995 until 5:30 p.m. New York time on May 9,
1999 ("Expiration Date"), up to 100,000 fully paid and non-assessable shares of
common stock, par value $.001 per share ("Common Stock") of GRAND TOYS
INTERNATIONAL, INC., a Nevada corporation (the "Company"), at the initial
exercise price, subject to adjustment in certain events (the "Exercise Price"),
of $9.00 per share of Common Stock upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the warrant agreement dated as
of May 3, 1994 between the Company and BERKELEY SECURITIES CORPORATION, (the
"Warrant Agreement"). Payment of the Exercise Price shall be made by certified
or official bank check in New York Clearing House funds payable to the order of
the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Underwriter's Warrants evidenced hereby,
unless exercised prior thereto, hereby shall thereafter be void.
-26-
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants pursuant to the Underwriter's Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.
The Underwriter's Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant certificates
shall not in any way change, alter or otherwise impair, the rights of the holder
as set forth in the Underwriter's Warrant Agreement.
Upon due presentment for registration of transfer of this warrant
Certificate at an office or agency of the Company, a new warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
certificate, subject to the limitations provided herein and in the Underwriter's
Warrant Agreement, without any charge except for any tax or other governmental
charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Underwriter's Warrant Agreement shall have the meanings assigned to them in the
Underwriter's Warrant Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant certificate to be
duly executed under its corporate seal.
Dated as of May 10, 1994
GRAND TOYS INTERNATIONAL, INC.
By: _________________________________
Name: ▇▇▇▇▇▇▇ Altro
Title: President
[SEAL]
Attest:
------------------------------
Secretary
-28-
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase _________ shares of Common Stock and
herewith tenders in payment for such securities a certified or official bank
check payable in New York Clearing House Funds to the order of GRAND TOYS
INTERNATIONAL, INC. in the amount of $____________, all in accordance with the
terms hereof. The undersigned requests that a certificate for such securities
be registered in the name of ______________________________ whose address is
_______________________________________________ and that such certificate be
delivered to _____________________________ whose address is
__________________________________.
Dated
Signature ____________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
------------------------------------------
Insert Social Security or Other
Identifying Number of Holder)
-29-
ASSIGNMENT FORM
---------------
The Holder hereby assigns and transfers unto
Name
----------------------------------------------------------------------------
(Please typewrite or print in block letters)
Address
-------------------------------------------------------------------------
-------------------------------------------------------------------------
the right to purchase Common Stock of ______________ represented by this Warrant
to the extent of ________________ shares of Common Stock as to which such right
is exercisable and does hereby irrevocably constitute and appoint
___________________________________
Attorney to transfer the same on the books of _____________ with full power of
substitution in the premises.
Date: ________________, 199_
----------------------------------------
Name of Registered Holder
----------------------------------------
Signature
----------------------------------------
Signature, if held jointly
-30-
EXHIBIT 4.4
EXHIBIT B
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1932, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, MAY 9, 1999
NO. WW-2 10,000 Warrants
WARRANT CERTIFICATE
This Warrant certificate certifies that Berkeley Securities Corporation, or
registered assigns, is the registered holder of 10,000 Warrants to purchase
initially, at any time from May 10, 1995 until 5:30 p.m. New York time on May 9,
1999 ("Expiration Date"), up to 10,000 fully paid and non-assessable Public
Warrants, as defined in the Warrant Agreement referred to herein, of GRAND TOYS
INTERNATIONAL, INC., a Nevada corporation (the "Company"), at exercise price
(the "Exercise Price"), of $.15 per Public Warrant upon surrender of this
Warrant Certificate payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of May 10, 1994 between the Company and Berkeley Securities
Corporation, (the "Warrant Agreement"). Payment of the Exercise Price shall be
made by certified or official bank check in New York Clearing House funds
payable to the order of the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Underwriter's Warrants evidenced hereby,
unless exercised prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants pursuant to the Underwriter's Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a
-31-
description of the rights, limitation of rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Underwriter's Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter or otherwise impair, the rights of the holder
as set forth in the Underwriter's Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and. evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided herein and in the
Underwriter's Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such numbered unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Underwriter's Warrant Agreement shall have the meanings assigned to them in the
Underwriter's Warrant Agreement.
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IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of May 10, 1994
GRAND TOYS INTERNATIONAL, INC.
[SEAL] By /s/ ▇▇▇▇▇▇▇ Altro
Name: ▇▇▇▇▇▇▇ Altro
Title: President
Attest:
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Secretary
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