exv4w17



 





EXHIBIT 4.17




CORGI INTERNATIONAL LIMITED




AMENDMENT TO WARRANTS, COMMITMENT TO ISSUE REPLACEMENT

WARRANTS, AMENDMENT TO REGISTRATION RIGHTS AGREEMENT AND

WAIVER




     This Amendment to Warrants, Commitment to Issue Replacement Warrants, Amendment to
Registration Rights Agreement and Waiver (this “Amendment”), effective as of August 22,
2007, is entered into by and between Corgi International Limited, a corporation organized under the
laws of Hong Kong (the “Company”), and the undersigned warrantholders of and investors in
the Company (each a “Holder” and collectively the “Holders”), and amends (A) those
certain warrants issued on December 20, 2006 (each a “Warrant” and collectively, the
“Warrants”) pursuant to that (i) certain Purchase Agreement dated as of November 16, 2006
(the “Purchase Agreement”), by and among the Company and investors thereto and (ii) the
Note and Warrant Purchase Agreement dated as of April 28, 2006 among the Company and the note
investors thereto (as amended, the “Note Purchase Agreement”) and (B) that certain
Registration Rights Agreement among the Company and the Holders (the “Registration Rights
Agreement”). All capitalized terms not otherwise defined herein shall have the meaning set
forth in the Warrants, the Purchase Agreement and Registration Rights Agreement, as applicable.



RECITALS




WHEREAS, the parties hereto acknowledge the following:



     A. On December 20, 2006, the Company issued the Warrants exercisable for American Depositary
Shares (the “Warrant Shares”) of the Company at an exercise price of $7.80 per share (the
“Warrant Price”) pursuant to the terms of the Purchase Agreement and Note Purchase
Agreement.



     B. In accordance with the Registration Rights Agreement, the Company registered the resale of
the Registrable Securities (as defined in the Registration Rights Agreement), including the Warrant
Shares, which the U.S. Securities and Exchange Commission (the “SEC”) declared effective on
June 22, 2007.



     C. Pursuant to Section 20 of the Warrant, any term of the Warrant may be changed or waived
upon the written consent of at least the holders of 50% of the number of ADS then subject to all
outstanding Warrants (the “Majority Holders”); provided that (x) any such amendment or
wavier must apply to all Company Warrants and (y) the number of Warrants, the Warrant Price and
Expiration Date of any Warrant may not be amended, and the right to exercise a Warrant may not be
altered or waived, without the written consent of the applicable Warrantholder.



     D. Pursuant to Section 7(a) of the Registration Rights Agreement, the Registration Rights
Agreement may be amended only upon the written consent of the Required Investors (as defined in the
Registration Rights Agreement, Investors holding more than 50% of the Registrable Securities).



 









 





     E. The Company and Holders desire to amend the Warrant Price of the existing Warrants, issue
Replacement Warrants (as defined below) for Holders who exercise their Warrants, provide for the
Registration of the Warrant Shares issued upon exercise of any Replacement Warrants, and certain
other waivers and amendments as set forth below.



     NOW, THEREFORE, the parties agree as follows:



AGREEMENT




     1. Warrant Price/Replacement Warrants. For each outstanding Warrant, the first paragraph of
such Warrant is hereby amended by deleting the following clause:




     “at an exercise price per share equal to $1.30 (prior to giving effect to the Reverse
Merger)(the exercise price in effect being called the Warrant Price)”


or any substantially similar clause and replacing such clause with the following:





     “at an exercise price per share equal to $7.80 (after giving effect to the Reverse
Merger); provided, however, that if such Holder exercises any Warrant Shares
prior to 5:00 p.m. (Pacific Standard Time) on August 15, 2007 or on the 10th business day
following the consent of the Majority Holders of the Amendment to Warrants, Commitment to
Issue Replacement Warrants and Waiver (such early exercised Warrants referred to as the
“Early Exercised Warrants”), whichever is later, then for such Early Exercised
Warrants only at an exercise price per share equal to $5.00 (after giving effect to the
Reverse Merger) (the exercise price in effect being called the Warrant Price);
provided, further that the Company shall be required to issue to each Holder
who timely exercises their Early Exercised Warrants new Warrants at an exercise price of
$6.00 per share (the “Replacement Warrants”) to purchase the number of ADSs equal
to the product (rounded down to the nearest whole number) of (i) 0.5 and (ii) the number of
Warrants Shares received upon exercise of the Early Exercised Warrants”



     2. Replacement Warrants. Promptly after a Holder timely exercises Early Exercised Warrants,
the Company shall promptly issue to such Holder Replacement Warrants as provided in paragraph 1
above. The terms and provisions of the Replacement Warrants shall be substantially on the same
terms as the original Warrants (without the amendment provided in paragraph 1 above), including an
Exercise Price of $6.00 per share and Expiration Date as provided in the original Warrants. Each
Holder, who exercises Early Exercised Warrants, as of the date of such exercise, represents and
warrants to the Company the representations and warranties made by such Holder in Section 5 of the
Purchase Agreement or Article 4 of the Note Purchase Agreement as if such Section or Article was
set forth herein mutatis mutandis with the term “Securities” or “Notes, Warrants and Shares” as
applicable replaced with the following: “Replacement Warrants and Warrant Shares issued upon
exercise of Replacement Warrants”. The Company hereby covenants to use its best efforts to have
its shareholders approve the Replacement Warrants (and the Warrant Shares issued upon exercise of
the Replacement Warrants) at the next annual meeting of the Company’s shareholders. The Company
represents that its Board of Directors has duly authorized the issuance of the Replacement Warrants
and the Warrant Shares issuable upon exercise thereof.



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     3. Effect of Amendment on Warrants/Further Consent. The Holders confirm that clause (y) of
Section 20 of the Warrant should be interpreted to mean that the Company may amend the Exercise
Price of the Warrants with the consent of the Majority Holders, but any amendment to the Exercise
Price of any specific Warrant would also require the consent of the holder thereof (i.e., the
amendment of the Exercise Price of the Warrants as provided in paragraph 1 above shall be effective
on the consent of the Majority Holders, but shall not be binding on any Holder not agreeing to this
Amendment). Except as otherwise expressly provided in this Amendment, the provisions of the
Warrants shall remain in full force and effect. However, notwithstanding the foregoing, the
undersigned Holder hereby consents to and agrees to any other amendment to the Warrant which the
Company and the Majority Warrantholders agree which further reduces the exercise price or extends
the exercise period for such reduced exercise price or amends any other term of the Warrants which
benefits the Warrantholders, without the written consent of the Holder to such amendment;
provided, that the Company gives written notice thereof to the Holder and the amendment
applies to all outstanding Warrants.



     4. Filing of Prospectus Supplement/Amendment of Registration Rights Agreement to include
Replacement Warrants and Waivers. The Company and the Holders, who constitute “Investors” as
defined in the Registration Rights Agreement, hereby agree to the following:



          (a) Within 30 days after the Holders constituting the Required Investors execute and deliver
to the Company this Amendment, pursuant to Section 3(h) of the Registration Rights Agreement (other
than the time periods), the Company shall file a supplement or amendment to the Prospectus (and any
report on Form 6-K) as may be necessary to update the Prospectus for the amendments set forth
herein. The Holders hereby (i) consent to the filing of such Prospectus supplement or amendment,
(ii) agree that the Company shall continue to have the right under Section 2(c)(ii) of the
Registration Rights Agreement for one additional Allowed Delay after this Amendment, and (iii)
waive any violation of such agreement by the Company prior to the date hereof. Except as otherwise
provided herein, the Company hereby confirms that the Registration Rights Agreement shall remain in
full force and effect, including without limitation, the Company’s obligations under Section 3 of
such agreement to cause the Registration Statement to remain effective as provided under such
agreement.




          (b) The Registration Rights Agreement shall be further amended as follows:




               (i) The term “Warrants” as defined in Recitals shall also be defined to include “Replacement
Warrants” issued in connection with the exercise of Early Exercised Warrants and the term “Warrant
Shares” as defined in the Recitals in the Registration Rights Agreement shall be defined to include
ADSs issued upon exercise of the Replacement Warrants.



               (ii) Notwithstanding any provision of Section 2 or any other term of the Registration Rights
Agreement, prior to the date of this Amendment, the Company had no duty to register the Warrant
Shares issuable upon exercise of the Replacement Warrants (or any liability relating to the failure
thereof). After the Required Investors execute this Amendment, the Company shall then have a duty
to prepare and file (or amend its existing Registration Statement) within 120 days after August 15,
2007 with the SEC a Registration Statement to register the Registrable Securities constituting the
Warrant Shares issuable upon exercise of the



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Replacement Warrants for resale; such Registration Statement shall include the plan of
distribution attached as Exhibit C to the Registration Rights Agreement. The Company shall
use commercially reasonable efforts to have such Registration Statement declared effective as soon
as practicable, but not later than 120 days after the filing of such Registration Statement. After
such effectiveness, the Company hereby confirms its obligations under Section 3 of the Registration
Rights Agreement to cause the Registration Statement covering the Warrant Shares issuable upon
exercise of the Replacement Warrants to remain effective as provided under such agreement.




     5. Counterparts. This Amendment may be executed and delivered (including by facsimile
transmission) in counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.



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     IN WITNESS WHEREOF, the Company and each undersigned Holder has executed this Amendment as of
the date indicated for the Company and such Holder, respectively, below.



	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CORGI INTERNATIONAL LIMITED,

a Hong Kong corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Cookson	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	WARRANT HOLDERS:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







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