exv10w8



 






EXHIBIT 10.8













 















ADR purchase agreement





by



and



among



Centralink Investments Limited



Stephen Altro,



2870304 Canada Inc.,




136011 Canada Inc.,




David Mars,




136012 Canada Inc.,




and




2884330 Canada Inc.




dated




[ ________________, 2004]


























 












Table of Contents




	 	 	 	 	 
	Recitals
	 	 	1	 
	I. Definitions
	 	 	1	 
	II. Purchase and Sale of Shares and Closing 
	 	 	3	 
	2.1 Purchase and Sale 
	 	 	3	 
	2.2 Purchase Price 
	 	 	3	 
	2.3 The Closing 
	 	 	4	 
	III. Representations and Warranties of Sellers 
	 	 	5	 
	3.1 Title to Shares 
	 	 	5	 
	3.2 Incorporation; Power and Authority 
	 	 	5	 
	3.3 Valid and Binding Agreement 
	 	 	5	 
	3.4 No Breach; Consents 
	 	 	5	 
	3.5 Brokerage 
	 	 	5	 
	IV. Representations and Warranties of Buyer 
	 	 	6	 
	4.1 Incorporation; Power and Authority 
	 	 	6	 
	4.2 Valid and Binding Agreement 
	 	 	6	 
	4.3 No Breach; Consents 
	 	 	6	 
	4.4 Brokerage 
	 	 	6	 
	V. Agreements of Sellers
	 	 	6	 
	5.1 Conditions 
	 	 	6	 
	5.2 Consents and Authorizations; Regulatory Filings 
	 	 	6	 
	5.3 No Sale 
	 	 	7	 
	VI. Agreement of Buyer 
	 	 	7	 
	6.1 Conditions 
	 	 	7	 
	VII. Conditions to Closing 
	 	 	7	 
	7.1 Conditions to Buyer’s Obligations 
	 	 	7	 
	7.2 Conditions to Sellers’ Obligations 
	 	 	7	 
	VIII. Termination 
	 	 	8	 
	8.1 Termination 
	 	 	8	 
	8.2 Effect of Termination 
	 	 	8	 
	IX. Indemnification 
	 	 	9	 
	9.1 Indemnification by Sellers 
	 	 	9	 
	9.2 Indemnification by Buyer 
	 	 	9	 
	9.3 Sole and Exclusive Remedy 
	 	 	10	 
	X. General 
	 	 	10	 
	10.1 Press Releases and Announcements 
	 	 	10	 







i









 






	 	 	 	 	 
	10.2   Expenses 
	 	 	10	 
	10.3   Further Assurances 
	 	 	11	 
	10.4   Amendment and Waiver 
	 	 	11	 
	10.5   Notices 
	 	 	11	 
	10.6   Assignment 
	 	 	12	 
	10.7   No Third Party Beneficiaries 
	 	 	12	 
	10.8   Severability 
	 	 	13	 
	10.9   Complete Agreement 
	 	 	13	 
	10.10 Signatures; Counterparts 
	 	 	13	 
	10.11 GOVERNING LAW 
	 	 	13	 
	10.12 Specific Performance 
	 	 	13	 
	10.13 Arbitration 
	 	 	13	 
	10.14 Construction 
	 	 	13	 
	10.15 Time of Essence 
	 	 	14	 
	Signatures
	 	 	 	 







ii









 






ADR PURCHASE AGREEMENT




     This ADR PURCHASE AGREEMENT (this “Agreement”) is made and entered into as
of the
          day
of           , 2004, by and among Centralink Investments
Limited, a limited company organized under the laws of the British Virgin
Islands (“Buyer”), Stephen Altro (“Altro”), 2870304 Canada Inc. and 136011
Canada Inc. (collectively, together with Altro, the “Altro Group”), and David
Mars (“Mars”), 136012 Canada Inc. and 2884330 Canada Inc. (collectively,
together with Mars, the “Mars Group” and, together with the Altro Group, the
"Sellers”).



     Recitals



     WHEREAS, The Altro Group and the Mars Group own American Depositary
Receipts representing ownership of, respectively,
         and          American Depositary Shares of Grand Toys International Limited, a
private limited company organized under the laws of the Hong Kong Special
Administrative Region of the Peoples Republic of China, each representing one
ordinary voting share in the capital of Buyer with a nominal value of one Hong
Kong dollar (HK$1.00) per share (each such American Depositary Share, a “Grand
ADR”) .



     WHEREAS, pursuant to Section 9.16 of that certain Subscription and
Exchange Agreement, dated as of November 14, 2003, by and among Grand Toys
International, Inc. (“Grand US”), Buyer and Centralink Investments Limited, as
amended by Amendment No. 1 to Subscription and Exchange Agreement, dated as of
March 6, 2004 and as further amended by Amendment No. 2 to Subscription and
Exchange Agreement, dated as of March [ ], 2004 (as so amended, the
"Subscription Agreement”), it is a condition to the completion of the
transactions contemplated by the Subscription Agreement that Buyer agree to
purchase from the Altro Group 465,634 Grand ADRs (the “Altro ADRs”) and from
the Mars Group 458,553 Grand ADRs (the “Mars ADRs” and, together with the Altro
ADRs, the “Sale ADRs”).



     WHEREAS, Sellers desire to sell, and Buyer desires to purchase, the Sale
ADRs on the terms and subject to the conditions set forth in this Agreement.



     NOW, THEREFORE, in consideration of the mutual representations, warranties
and agreements contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:



I. Definitions




     The following terms have the meanings assigned to them below:



     “Agreement” has the meaning set forth in the first paragraph of this
Agreement.



     “Affiliate” has the meaning set forth in Rule 12b-2 under the Exchange
Act.



     “Altro” has the meaning set forth in the first paragraph of this
Agreement.



     “Altro ADRs” has the meaning set forth in the recitals of this Agreement.



 









 





     “Altro Group” has the meaning set forth in the first paragraph of this
Agreement.



     “Altro Purchase Price” has the meaning set forth in Section 2.2.



     “Buyer” has the meaning set forth in the first paragraph of this
Agreement.



     “Buyer Losses” has the meaning set forth in Section 9.1(a)(v).



     “Closing” has the meaning set forth in Section 2.3(a).



     “Closing Date” has the meaning set forth in Section 2.3(a).



     “Consent” means any authorization, consent, approval, filing, waiver,
exemption or other action by or notice to any Person.



     “Contract” means a contract, agreement, commitment or binding
understanding, whether oral or written, that is in effect as of the date of
this Agreement or any time after the date of this Agreement.



     “Disclosure Schedule” means the schedule delivered by Sellers to Buyer on
or prior to the date of this Agreement.



     “Effective Time” has the meaning as defined in the Subscription Agreement.



     “Encumbrance” means any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership.



     “Governmental Authorization” means any approval, consent, license, permit,
waiver, registration or other authorization issued, granted, given, made
available or otherwise required by any Governmental Entity or pursuant to Law.



     “Governmental Entity” means any federal, state, local, foreign,
international or multinational entity or authority exercising executive,
legislative, judicial, regulatory, administrative or taxing functions of or
pertaining to government.



     “Governmental Order” means any judgment, injunction, writ, order, ruling,
award or decree by any Governmental Entity or arbitrator.



     “Grand ADRs” has the meaning set forth in the recitals of this Agreement.



     “Grand US” has the meaning set forth in the recitals of this Agreement.



     “Law” means any constitution, law, ordinance, principle of common law,
regulation, statute or treaty of any Governmental Entity.



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     “Loss” means any Litigation, Governmental Order, complaint, claim, demand,
damage, deficiency, penalty, fine, cost, amount paid in settlement, liability,
obligation, Tax, Encumbrance, loss, expense or fee, including court costs and
attorneys’ fees and expenses.



     “Mars” has the meaning set forth in the first paragraph of this Agreement.



     “Mars Group” has the meaning set forth in the first paragraph of this
Agreement.



     “Mars ADRs” has the meaning set forth in the recitals of this Agreement.



     “Mars Purchase Price” has the meaning set forth in Section 2.2.



     “Organizational Documents” means (i) the articles or certificate of
incorporation and the bylaws of a corporation, (ii) the partnership agreement
and any statement of partnership of a general partnership, (iii) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (iv) the limited liability company agreement and articles or
certificate of formation of a limited liability company, (v) any charter or
similar document adopted or filed in connection with the creation, formation or
organization of a Person and (vi) any amendment to any of the foregoing.



     “Person” means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, Governmental
Entity or other entity.



     “Required Consents” has the meaning set forth in Section 5.2.



     “Sale ADRs” has the meaning set forth in Section 2.1.



     “Sellers” has the meaning set forth in the first paragraph of this
Agreement.



     “Seller Losses” has the meaning set forth in Section 9.2(a).



     “Subscription Agreement” has the meaning set forth in the recitals of this
Agreement.



II. Purchase and Sale of Shares and Closing




     2.1 Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, Sellers agree to sell to Buyer, and Buyer agrees to
purchase from Sellers, the Sale ADRs. Each Seller waives any co-sale rights,
rights of first refusal or similar rights that such Seller may have relating to
Buyer’s purchase of the Sale ADRs, whether conferred by the Buyer’s
Organizational Documents, by Contract or otherwise.



     2.2 Purchase Price. The purchase price (the “Altro Purchase Price”) of
the Altro ADRs, at $4.00 per Altro ADR, is one million eight hundred sixty two
thousand five hundred thirty six dollars
($1,862,536). The purchase price (the “Mars Purchase Price”) of the Mars
ADRs, at $4.00 per Mars ADR, is one million eight hundred thirty four thousand
two hundred twelve dollars ($1,834,212).



3









 





     2.3 The Closing.



     (a) The closing of the transactions contemplated by this Agreement (the
“Closing”) will take place at the offices of Katten Muchin Zavis Rosenman at
575 Madison Avenue, New York, New York, at 10:00 a.m. local time, on the second
Business Day following the Effective Time (the “Closing Date”) or at such other
place and on such other date as may be mutually agreed by Buyer and Sellers, in
which case “Closing Date” means the date so agreed. The failure of the Closing
will not ipso facto result in termination of this Agreement and will not
relieve any party of any obligation under this Agreement. The Closing will be
effective as of the close of business on the Closing Date.



     (b) Subject to the conditions set forth in this Agreement, on the Closing
Date (except as otherwise set forth below):




       (i) Sellers will deliver to Buyer:




   (A) certificates formerly representing their shares of Grand
US stock, free and clear of all Encumbrances, duly endorsed or
accompanied by duly executed stock powers;




   (B) a certificate of each Seller dated the Closing Date
stating that the conditions set forth in subsections (a) through
(c) of Section 7.1 have been satisfied;




   (C) a copy of the text of the resolutions adopted by the board
of directors (or similar body) of any Seller that is not a natural
person authorizing the execution, delivery and performance of this
Agreement, certified by an appropriate officer of such Seller; and




   (D) such other certificates, documents and instruments as
Buyer shall reasonably request for the purpose of (1) evidencing
the accuracy of Sellers’ representations and warranties, (2)
evidencing the performance and compliance by Sellers with
agreements contained in this Agreement, (3) evidencing the
satisfaction of any condition referred to in Section 7.1 or (4)
otherwise facilitating the consummation of the transactions
contemplated by this Agreement.




All actions to be taken by Sellers in connection with consummation of the
transactions contemplated by this Agreement and all certificates,
opinions, instruments and other documents required to effect the
transactions contemplated by this Agreement will be in form and substance
satisfactory to Buyer.




       (ii) Buyer will deliver to Sellers:




   (A) within three business days after the Closing Date, the
Altro Purchase Price and the Mars Purchase Price, by wire transfer
of immediately available funds to the accounts designated by Altro
and Mars, respectively, to Buyer by notice in writing given no
later than three business days prior to the Closing; and



4









 






   (B) a certificate of Buyer dated the Closing Date stating that
the conditions set forth in subsections (f) and (g) of Section 7.2
have been satisfied;



     (c) All items delivered by the parties at the Closing will be deemed to
have been delivered simultaneously, and no items will be deemed delivered or
waived until all have been delivered.



     (d) Notwithstanding any investigation made by or on behalf of any of the
parties to this Agreement or the results of any such investigation and
notwithstanding the fact of, or the participation of such party in, the
Closing, the representations, warranties and agreements in this Agreement will
survive the Closing.



III. Representations and Warranties of Sellers




     Each Seller represents and warrants to Buyer that, as to such Seller, as
of the date of this Agreement and as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this
Agreement):



     3.1 Title to Shares. Such Seller owns, of record and beneficially, the
number of Sale ADRs listed opposite such Seller’s name on Schedule 3.1, free
and clear of any Encumbrance. At Closing, Buyer will obtain good and valid
title to such Sale ADRs, of record and beneficially, free and clear of any
Encumbrance.



     3.2 Incorporation; Power and Authority. If such Seller is not a natural
person, it is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization. Such Seller has all necessary
power and authority to execute, deliver and perform this Agreement.



     3.3 Valid and Binding Agreement. If such Seller is not a natural person,
the execution, delivery and performance of this Agreement by such Seller has
been duly and validly authorized by all necessary corporate or equivalent
action. This Agreement has been duly executed and delivered by such Seller and
constitutes the valid and binding obligation of such Seller, enforceable
against it in accordance with its terms.



     3.4 No Breach; Consents. Except as set forth in Schedule 3.4, he execution, delivery and
performance of this Agreement by such Seller will not (a) contravene any
provision of the Organizational Documents, if any, of such Seller; (b) violate
or conflict with any Law, Governmental Order or Governmental Authorization; (c)
conflict with, result in any breach of any of the provisions of, constitute a
default (or any event which would, with the passage of time or the giving of
notice or both, constitute a default) under, result in a violation of, increase
the burdens under, result in the termination, amendment, suspension,
modification, abandonment or acceleration of payment (or any right to
terminate) or require a Consent under any Contract or Governmental
Authorization that is either binding upon or enforceable against such Seller;
(d) result in the creation of any Encumbrance upon the Sale ADRs held by such
Seller; or (e) require any Governmental Authorization.



     3.5 Brokerage. No Person will be entitled to receive any brokerage
commission, finder’s fee, fee for financial advisory services or similar
compensation in connection with the



5









 




transactions contemplated by this Agreement
based on any Contract made by or on behalf of such Seller for which Buyer or
the Company is or could become liable or obligated.




IV. Representations and Warranties of Buyer




     Buyer represents and warrants to Sellers that as of the date of this
Agreement and as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement):



     4.1 Incorporation; Power and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, with all necessary power and authority to
execute, deliver and perform this Agreement.



     4.2 Valid and Binding Agreement. The execution, delivery and performance
of this Agreement by Buyer have been duly and validly authorized by all
necessary corporate action. This Agreement has been duly executed and
delivered by Buyer and constitutes the valid and binding obligation of Buyer,
enforceable against it in accordance with its terms.



     4.3 No Breach; Consents. The execution, delivery and performance of this
Agreement by Buyer will not (a) contravene any provision of the Organizational
Documents of Buyer; (b) violate or conflict with any Law, Governmental Order or
Governmental Authority; (c) conflict with, result in any breach of any of the
provisions of, constitute a default (or any event which would, with the passage
of time or the giving of notice or both, constitute a default) under, result in
a violation of, increase the burdens under, result in the termination,
amendment, suspension, modification, abandonment or acceleration of payment (or
any right to terminate) or require a Consent, including any
Consent under any Contract or Governmental Authorization that is either
binding upon or enforceable against Buyer; or (d) require any Governmental
Authorization.



     4.4 Brokerage. No Person will be entitled to receive any brokerage
commission, finder’s fee, fee for financial advisory services or similar
compensation in connection with the transactions contemplated by this Agreement
based on any Contract made by or on behalf of Buyer for which any Seller is or
could become liable or obligated.



V. Agreements of Sellers




     Sellers, jointly and severally, agree with Buyer that:



     5.1 Conditions. Sellers will use their best efforts to cause the
conditions set forth in Section 7.1 to be satisfied and to consummate the
transactions contemplated by this Agreement as soon as reasonably possible and
in any event prior to the Closing Date.



     5.2 Consents and Authorizations; Regulatory Filings. Sellers will obtain
all Consents and Governmental Authorizations required for the consummation of
the transactions contemplated by this Agreement, including those listed on
Schedule 3.4 (the “Required Consents”). Sellers will keep Buyer reasonably
advised of the status of obtaining the Required Consents.



6









 





     5.3 No Sale. No Seller will sell, pledge, transfer or otherwise place any
Encumbrance on any Sale ADRs owned by such Seller except as provided in this
Agreement.



VI. Agreement of Buyer




     6.1 Conditions. Buyer agrees with Sellers that Buyer will use its best
efforts to cause the conditions set forth in Section 7.2 to be satisfied and to
consummate the transactions contemplated by this Agreement as soon as
reasonably possible and in any event prior to the Closing Date.



VII. Conditions to Closing




     7.1 Conditions to Buyer’s Obligations. The obligation of Buyer to take
the actions required to be taken by it at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Buyer’s sole discretion (but no
such waiver will waive any rights or remedy otherwise available to Buyer), of
each of the following conditions at or prior to the Closing:




   (a) The representations and warranties set forth in Article III will
be true and correct (without taking into account any supplemental
disclosures after the date of this Agreement by Sellers or the Company or
the discovery of information by Buyer);




   (b) Sellers will have performed and complied with each of their
agreements contained in this Agreement;




   (c) Each Required Consent was obtained and is in full force and
effect;




   (d) No Litigation is pending or threatened (i) challenging or
seeking to prevent or delay consummation of the transactions contemplated
by this Agreement, (ii) asserting the illegality of or seeking to render
unenforceable any material provision of this Agreement; or (iii) imposing
or seeking to impose material damages or sanctions directly arising out
of the transactions contemplated by this Agreement on Buyer or any of
their respective officers or directors; and




   (e) No Law or Governmental Order was enacted, entered, enforced,
promulgated, issued or deemed applicable to the transactions contemplated
by this Agreement by any Governmental Entity that would reasonably be
expected to result, directly or indirectly, in any of the consequences
referred to in Section 7.1(d).



     7.2 Conditions to Sellers’ Obligations. The obligation of Sellers to take
the actions required to be taken by them at the Closing is subject to the
satisfaction or waiver, in whole or in part, in Sellers’ sole discretion (but
no such waiver will waive any right or remedy otherwise available under this
Agreement), of each of the following conditions at or prior to the Closing:




   (f) The representations and warranties set forth in Article IV will
be true and correct;




   (g) Buyer will have performed and complied with each of its
agreements contained in this Agreement; and



7









 






   (h) No Law or Governmental Order will have been enacted, entered,
enforced, promulgated, issued or deemed applicable to the transactions
contemplated by this Agreement by any Governmental Entity that prohibits
the Closing.



VIII. Termination




     8.1 Termination. This Agreement may be terminated prior to the Closing:




   (i) by the mutual written consent of Buyer and Sellers;




   (j) by either Altro or Mars, if




   (i) Buyer has breached any representation, warranty or
agreement contained in this Agreement;




     (ii) the transactions contemplated by this Agreement have not
been consummated on or before the Closing Date; provided, that
neither Seller will not be entitled to terminate this Agreement
pursuant to this Section 8.1(j)(ii) if either Seller’s failure to
comply fully with its obligations under this Agreement has
prevented the consummation of the transactions contemplated by this
Agreement;




   (iii) any of the conditions set forth in Section 7.2 have
become impossible to satisfy;




   (k) by Buyer, if




   (iv) any Seller has breached any representation, warranty or
agreement contained in this Agreement;




     (v) the transactions contemplated by this Agreement have not
been consummated on or before the Closing Date; provided, that
Buyer will not be entitled to terminate this Agreement pursuant to
this Section 8.1(k)(v) if Buyer’s failure to comply fully with its
obligations under this Agreement has prevented the consummation of
the transactions contemplated by this Agreement;




   (vi) any of the conditions set forth in Section 7.1 have
become impossible to satisfy;



     8.2 Effect of Termination. The right of termination under Section 8.1 is
in addition to any other rights Buyer or Sellers may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an
election of remedies and will not preclude an action for breach of this
Agreement. If this Agreement is terminated, all continuing obligations of the
parties under this Agreement will terminate except that Sections 10.1 (press
releases), 10.2 (expenses), 10.11 (governing law) and 10.13 (arbitration) will
survive indefinitely unless sooner terminated or modified by the parties in
writing.


8









 





IX. Indemnification



     9.1 Indemnification by Sellers.



     (a) Sellers agree, jointly and severally, to indemnify in full Buyer and
hold it harmless against any Loss, whether or not actually incurred prior to
the applicable date referred to in Section 9.1(b), arising from, relating to or
constituting (i) any breach or inaccuracy in any of the representations and
warranties of Sellers contained in this Agreement or in the Disclosure Schedule
as the same may be brought down to the Closing Date or any closing certificate
delivered by or on behalf of Sellers pursuant to this Agreement (any such
breach or inaccuracy
determined without regard to any qualification for “materiality,” “in all
material respects” or similar qualifications), or (ii) any breach of any of the
agreements of any Seller contained in this Agreement (collectively, “Buyer
Losses”).



     (b) If Buyer has a claim for indemnification under this Section 9.1, Buyer
will deliver to Sellers one or more written notices of Buyer Losses prior to
the second anniversary of the Closing Date. Sellers will have no liability
under this Section 9.1 unless the written notices required by the preceding
sentence are given in a timely manner. Any written notice will state in
reasonable detail the basis for such Buyer Losses to the extent then known by
Buyer and the nature of the Buyer Loss for which indemnification is sought, and
it may state the amount of the Buyer Loss claimed. If such written notice (or
an amended notice) states the amount of the Buyer Loss claimed and Sellers
notify Buyer that Sellers do not dispute the claim described in such notice or
fails to notify Buyer within 20 business days after delivery of such notice by
Buyer whether Sellers dispute the claim described in such notice, the Buyer
Loss in the amount specified in Buyer’s notice will be admitted by Sellers, and
Sellers will pay the amount of such Buyer Loss to Buyer. If Sellers have
timely disputed the liability of Sellers with respect to such claim, Sellers
and Buyer will proceed in good faith to negotiate a resolution of such dispute.
If a written notice does not state the amount of the Buyer Loss claimed, such
omission will not preclude Buyer from recovering from Sellers the amount of the
Buyer Loss with respect to the claim described in such notice if any such
amount is promptly provided after it is determined. In order to assert its
right to indemnification under this Article IX. , Buyer will not be required to
provide any notice except as provided in this Section 9.1(b).



     (c) Sellers will pay the amount of any Buyer Loss to Buyer within ten days
following the determination of Sellers’ liability for and the amount of a Buyer
Loss (whether such determination is made pursuant to the procedures set forth
in this Section 9.1, by agreement between Buyer and Sellers, by arbitration
award or by final adjudication).



     9.2 Indemnification by Buyer.



     (a) Buyer agrees to indemnify in full Sellers and hold them harmless
against any Loss, whether or not actually incurred prior to the date referred
to in Section 9.2(b), arising from, relating to or constituting (i) any breach
or inaccuracy in any of the representations and warranties of Buyer contained
in this Agreement or any closing certificate delivered by or on behalf of Buyer
pursuant to this Agreement (any such breach or inaccuracy to be determined
without regard to any qualification as to “materiality,” “in all material
respects” or similar qualifications) or (ii) any breach of any of the
agreements of Buyer contained in this Agreement (“Sellers Losses”).



9









 





     (b) If Sellers have a claim for indemnification under this Section 9.2,
Sellers will deliver to Buyer one or more written notices of Sellers Losses
prior to the second anniversary of the Closing Date. Buyer will have no
liability under this Section 9.2 unless the written notices required by the
preceding sentence are given in a timely manner. Any written notice will state
in reasonable detail the basis for such Sellers Losses to the extent then known
by Sellers and the nature of Sellers Loss for which indemnification is sought,
and it may state the amount of Sellers
Loss claimed. If such written notice (or an amended notice) states the
amount of Sellers Loss claimed and Buyer notifies Sellers that Buyer does not
dispute the claim described in such notice or fails to notify Sellers within 20
business days after delivery of such notice by Sellers whether Buyer disputes
the claim described in such notice, Sellers Loss in the amount specified in
Sellers’ notice will be admitted by Buyer, and Buyer will pay the amount of
such Sellers Loss to Sellers. If Buyer has timely disputed its liability with
respect to such claim, Buyer and Sellers will proceed in good faith to
negotiate a resolution of such dispute. If a written notice does not state the
amount of Sellers Loss claimed, such omission will not preclude Sellers from
recovering from Buyer the amount of Sellers Loss with respect to the claim
described in such notice if any such amount is promptly provided once
determined. In order to assert its right to indemnification under this Article
IX. , Sellers will not be required to provide any notice except as provided in
this Section 9.2(b).



     (c) Buyer will pay the amount of any Sellers Loss to Sellers within ten
days following the determination of Buyer’s liability for and the amount of a
Sellers Loss (whether such determination is made pursuant to the procedures set
forth in this Section 9.2, by agreement between Sellers and Buyer, by
arbitration award or by final adjudication).



     9.3 Sole and Exclusive Remedy. Prior to or in connection with the
Closing, the parties will have available to them all remedies available under
Law, including specific performance or other equitable remedies. After the
Closing, the rights set forth in Sections 9.1 and 9.2 will be the exclusive
remedy for breach or inaccuracy of any of the representations and warranties
contained in Article III and IV of this Agreement occurring on or prior to the
Closing Date and will be in lieu of other contract damages, but the parties
otherwise will have available to them all other remedies available under Law,
including specific performance or other equitable remedies. Notwithstanding
the foregoing, nothing in this Agreement will prevent any party from bringing
an action based upon allegations of fraud by the other party in connection with
this Agreement. In the event such action is brought, the prevailing party’s
attorneys’ fees and costs will be paid by the non-prevailing party.



     X. General



     10.1 Press Releases and Announcements. Any public announcement, or
similar publicity with respect to this Agreement or the transactions
contemplated by this Agreement, will be issued, if at all, at such time and in
such manner as Buyer determines and approves. Buyer will have the right to be
present for any in-person announcement. Unless consented to by Buyer or
required by Law, Sellers will keep this Agreement and the transactions
contemplated by this Agreement confidential.



     10.2 Expenses. Except as otherwise expressly provided for in this
Agreement, Sellers, on the one hand, and Buyer, on the other hand, will each
pay all expenses incurred by each of



10









 




them in connection with the transactions
contemplated by this Agreement, including legal, accounting, investment banking
and consulting fees and expenses incurred in negotiating, executing and
delivering this
Agreement and the other agreements, exhibits, documents and instruments
contemplated by this Agreement (whether the transactions contemplated by this
Agreement are consummated or not).




     10.3 Further Assurances. On and after the Closing Date, Sellers will take
all appropriate action and execute any documents, instruments or conveyances of
any kind that may be reasonably requested by Buyer to carry out any of the
provisions of this Agreement.



     10.4 Amendment and Waiver. This Agreement may not be amended, nor may any
provision of this Agreement or any default, misrepresentation, or breach of
warranty or agreement under this Agreement be waived, except in a writing
executed by the party against which such amendment or waiver is sought to be
enforced. Neither the failure nor any delay by any Person in exercising any
right, power or privilege under this Agreement will operate as a waiver of such
right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right,
power or privilege or the exercise of any other right, power or privilege. In
addition, no course of dealing between or among any persons having any interest
in this Agreement will be deemed effective to modify or amend any part of this
Agreement or any rights or obligations of any person under or by reason of this
Agreement. The rights and remedies of the parties to this Agreement are
cumulative and not alternative.



     10.5 Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given (i) when delivered if personally
delivered by hand (with written confirmation of receipt), (ii) when received if
sent by a nationally recognized overnight courier service (receipt requested),
(iii) five business days after being mailed, if sent by first class mail,
return receipt requested, or (iv) when receipt is acknowledged by an
affirmative act of the party receiving notice, if sent by facsimile, telecopy
or other electronic transmission device (provided that such an acknowledgement
does not include an acknowledgment generated automatically by a facsimile or
telecopy machine or other electronic transmission device). Notices, demands
and communications to Buyer and Sellers’ Representative will, unless another
address is specified in writing, be sent to the address indicated below:



     If to Buyer:




Centralink Investments Limited

Room UG 202, Floor UG2

Chinachem Golden Plaza

77 Mody Road

Tsimshatsui East

Kowloon, Hong Kong

Attn: Mr. Henry Hu

Facsimile No. 852-2520-5515



11









 





     With a copy to:




Dorsey & Whitney

One Pacific Place, Suite 3008

88 Queensway

Hong Kong

Attn: Steven C. Nelson, Esq.

Facsimile No. 011 852 2524 3000




     If to any Seller in the Altro Group:




[ADDRESS]

Attn:

Facsimile No.




     With a copy to:




Katten Muchin Zavis Rosenman

575 Madison Avenue

New York, New York 10022

Attn: Paul J. Pollock, Esq.

Facsimile No. (212) 894-5511



     If to any Seller in the Mars Group:




[ADDRESS]

Attn:

Facsimile No.



     With a copy to:




Katten Muchin Zavis Rosenman

575 Madison Avenue

New York, New York 10022

Attn: Paul J. Pollock, Esq.

Facsimile No. (212) 894-5511



     10.6 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder may be assigned by any party to this Agreement without
the prior written consent of the other parties to this Agreement, except that
Buyer may assign any of its rights under this Agreement to any Subsidiary of
Buyer, so long as it remains responsible for the performance of all of its
obligations under this Agreement. Subject to the foregoing, this Agreement and
all of the provisions of this Agreement will be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and
permitted assigns.



     10.7 No Third Party Beneficiaries. Nothing expressed or referred to in
this Agreement confers any rights or remedies upon any Person that is not a
party or permitted assign of a party to this Agreement.



12









 





     10.8 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable Law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.



     10.9 Complete Agreement. This Agreement contains the complete agreement
between the parties and supersede any prior understandings, agreements or
representations by or between the parties, written or oral.



     10.10 Signatures; Counterparts. This Agreement may be executed in one or
more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one
and the same instrument. A facsimile signature will be considered an original
signature.



     10.11 GOVERNING LAW. THE DOMESTIC LAW, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES, OF THE STATE OF NEW YORK WILL GOVERN ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE
PERFORMANCE OF THE OBLIGATIONS IMPOSED BY THIS AGREEMENT.



     10.12 Specific Performance. Each of the parties acknowledges and agrees
that the subject matter of this Agreement is unique, that the other parties
would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or
otherwise are breached, and that the remedies at law would not be adequate to
compensate such other parties not in default or in breach. Accordingly, each
of the parties agrees that the other parties will be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions of this
Agreement in addition to any other remedy to which they may be entitled, at law
or in equity. The parties waive any defense that a remedy at law is adequate
and any requirement to post bond or provide similar security in connection with
actions instituted for injunctive relief or specific performance of this
Agreement.



     10.13 Arbitration. Any dispute, claim or controversy arising out of or in
connection with this Agreement shall be fully determined by arbitration in
accordance with the International Arbitration Rules of the American Arbitration
Association. Unless the parties agree otherwise, there shall be three
arbitrators. The place of arbitration shall be New York, New York, United
States of America and the language of the arbitration shall be English. None
of the Parties shall contest the choice of New York as the proper forum for
such dispute and notice in accordance with Section 10.5 shall be sufficient for
such arbitration panel to conduct such proceedings. Except as the arbitrators
shall otherwise determine, the evidentiary aspects of the arbitral proceedings
shall be conducted in accordance with the Rules on the Taking of Evidence in
International Commercial Arbitration adopted by the Council of the
International Bar Association on June 1, 1999.



     10.14 Construction. The parties and their respective counsel have
participated jointly in the negotiation and drafting of this Agreement. In
addition, each of the parties acknowledges



13









 




that it is sophisticated and has
been advised by experienced counsel and, to the extent it deemed necessary,
other advisors in connection with the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties
and no presumption or burden of proof will arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.
The parties intend that each representation, warranty and agreement contained
in this Agreement will have independent significance. If any party has
breached any representation, warranty or agreement in any respect, the fact
that there exists another representation, warranty or agreement relating to the
same subject matter (regardless of the relative levels of specificity) that the
party has not breached will not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or agreement. Any
reference to any Law will be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The headings
preceding the text of articles and sections included in this Agreement and the
headings to the schedules and exhibits are for convenience only and are not be
deemed part of this Agreement or given effect in interpreting this Agreement.
References to sections, articles, schedules or exhibits are to the sections,
articles, schedules and exhibits contained in, referred to or attached to this
Agreement, unless otherwise specified. The word “including” means “including
without limitation.” The use of the masculine, feminine or neuter gender or
the singular or plural form of words will not limit any provisions of this
Agreement. A statement that an item is listed, disclosed or described means
that it is correctly listed, disclosed or described, and a statement that a
copy of an item has been delivered means a true and correct copy of the writing
has been delivered.




     10.15 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.



14









 





     IN WITNESS WHEREOF, Buyer and Sellers have executed this ADR Purchase
Agreement as of the date first above written.



	 	 	 	 	 	 	 
	BUYER:

	 	SELLERS:
	

	 	 	 	 	 	 
	GRAND TOYS INTERNATIONAL, LTD.
	 	 	 	 
	

	 	 	 	
 
	By:

	 	 	 	Name: Stephen Altro
	

	
 	 	 	 	 
	Name:
	 	 	 	 	 	 
	

	 	
 	 	 	 	 
	Title:

	 	 	 	2870304 CANADA INC.
	

	 	
 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	 
	 
	

	 	 	 	136011 CANADA INC.	 	 
	 
	

	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	
 
	 
	

	 	 	 	
 
	

	 	 	 	Name: David Mars
	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	136012 CANADA INC.	 	 
	 
	

	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title:	 	 
	

	 	 	 	 	 	
 
	 
	

	 	 	 	2884330 CANADA INC.	 	 
	 
	

	 	 	 	 	 	 
	

	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	Title: