Document:

exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is dated as of October 2, 2008, between Novavax,
Inc., a Delaware corporation having its principal office at 9920 Belward Campus Drive, Rockville,
MD 20850, and James Robinson, an individual with a mailing address of c/o Novavax, Inc. 9920
Belward Campus Drive, Rockville, MD 20850 (“Executive”).

     WHEREAS, Executive commenced employment with the Company on March 13, 2007 pursuant to an
offer letter dated February 19, 2007; and

     WHEREAS, Executive and the Company wish to enter into a more formal contractual relationship
at this time.

     The Company and Executive hereby agree as follows:

     1. Employment. The Company hereby employs Executive and Executive hereby accepts employment
as Vice President, Technical and Quality Operations upon the terms and conditions hereinafter set
forth. As used throughout this Agreement, “Company” shall mean and include any and all of its
present and future subsidiaries and any and all subsidiaries of a subsidiary. Executive warrants
and represents that he is free to enter into and perform this Agreement and is not subject to any
employment, confidentiality, non-competition or other agreement which prohibits, restricts, or
would be breached by either his acceptance or his performance of this Agreement.

     2. Duties. During the Term (as hereinafter defined), Executive shall devote his full business
time to the performance of services as Vice President, Technical and Quality Operations of Novavax,
Inc., performing such services, assuming such responsibilities and exercising such authority as are
set forth in the Bylaws of the Company for such offices and assuming such other duties and
responsibilities as prescribed by the President and CEO and Board of Directors. During the Term,
Executive’s services shall be completely exclusive to the Company and he shall devote his entire
business time, attention and energies to the business of the Company and the duties which the
Company shall assign to him from time to time. Executive agrees to perform his services faithfully
and to the best of his ability and to carry out the policies and directives of the Company.
Notwithstanding the foregoing, it shall not be a violation of this Agreement for the Executive to
serve as a director of any company whose products do not compete with those of the Company and to
serve as a director, trustee, officer, or consultant to a charitable or non-profit entity; provided
that such service does not adversely affect Executive’s ability to perform his obligations
hereunder. Executive agrees to take no action which is in bad faith and prejudicial to the
interests of the Company during his employment hereunder. Notwithstanding the location where
Executive shall be based, as set forth in this Agreement, he also may be required from time to time
to perform duties hereunder for reasonably short periods of time outside of said area.

     3. Term. The term of this Agreement shall be for the period beginning on October 2, 2008 and
continuing until October 2, 2009, unless earlier terminated pursuant to Section 7 hereof (the
“Term”) and shall be renewable on the terms set forth herein upon agreement of the Company and
Executive of the term of such renewal and the initial base compensation applicable to the renewal
term. The parties acknowledge that the employment hereunder is employment at will.

 

 

     4. Compensation.

          (a) Base Compensation. For all Executive’s services and covenants under this Agreement, the
Company shall pay Executive an annual salary, which is $236,127 as of this amendment and
restatement, established by the Board of Directors or an authorized committee thereof (in
accordance with the management processes) and payable in accordance with the Company’s payroll
policy as constituted from time to time. The Company may withhold from any amounts payable under
this Agreement all required federal, state, city or other taxes and all other deductions as may be
required pursuant to any law or government regulation or ruling.

          (b) Bonus Program. The Company agrees to pay the Executive a performance and incentive bonus
in respect of Executive’s employment with the Company each year in an amount determined by the
President and CEO and Board of Directors (or any committee of the Board of Directors authorized to
make that determination) to be appropriate based upon Executive’s, and the Company’s, achievement
of certain specified goals, with a target bonus of 40%, or any other percentage determined by the
Board of Directors, of Executive’s base salary during the year to which the bonus relates. Such
bonus shall be payable no later than two and one-half months following the year for which the bonus
applies. The bonus shall be paid out partly in cash and partly in shares of restricted stock, in
the discretion of the Board of Directors.

          (c) Stock Awards. Executive will be eligible for additional stock awards based upon
performance subject to the approval of the President and Chief Executive Officer and the Board of
Directors.

     5. Reimbursable Expenses. Executive shall be entitled to reimbursement for reasonable
expenses incurred by him in connection with the performance of his duties hereunder in accordance
with such procedures and policies for executive officers as the Company has heretofore or may
hereafter establish. The amount of expenses eligible for reimbursement during any calendar year
shall not affect the expenses eligible for reimbursement in any other calendar year, and the
reimbursement of an eligible expense shall be made as soon as practicable after Executive submits
the request for reimbursement, but not later than December 31 following the calendar year in which
the expense was incurred.

     6. Benefits. (a) Executive shall be entitled to four weeks of paid vacation time per year
starting from March 13, 2007, calculated and administered in accordance with Company policies for
executive officers in effect from time to time. The Executive shall be entitled to all other
benefits associated with normal full time employment in accordance with Company policies.

          (b) Executive shall be entitled to participate in the Company’s Change of Control Severance
Benefit Plan.

     7. Termination of Employment.

          (a) Notwithstanding any other provision of this Agreement, Executive’s employment may be
terminated, without such action constituting a breach of this Agreement:

               (i) By the Company, for “Cause,” as defined in Section 7(b) below;

 

 

               (ii) By the Company, upon 30 days’ notice to Executive, if he should be prevented by illness,
accident or other disability (mental or physical) from discharging his duties hereunder for one or
more periods totaling three consecutive months during any twelve-month period;

               (iii) By the Executive with “Good Reason”, as defined in Section 7(c) below, within 30 days of
the occurrence or commencement of such Good Reason;

               (iv) By the event of Executive’s death during the Term.

          (b) “Cause” shall mean (i) Executive’s willful failure or refusal to perform in all material
respects the services required of him hereby, (ii) Executive’s willful failure or refusal to carry
out any proper and material direction by the President and CEO or Board of Directors with respect
to the services to be rendered by him hereunder or the manner of rendering such services, (iii)
Executive’s willful misconduct in the performance of his duties hereunder, (iv) Executive’s
commission of an act of fraud, embezzlement or theft or a felony involving moral turpitude, (v)
Executive’s use or disclosure of Confidential Information (as defined in Section 10 of this
Agreement), other than for the benefit of the Company in the course of rendering services to the
Company or (vi) Executive’s engagement in any activity prohibited by Section 11 of this Agreement.
For purposes of this Section 7, the Company shall be required to provide Executive a specific
written warning with regard to any occurrence of subsections (b)(i), (ii) and (iii) above, which
warning shall include a statement of corrective actions and a 30 day period for the Executive to
respond to and implement such actions, prior to any termination of employment by the Company
pursuant to Section 7(a)(i) above.

          (c) “Good Reason” shall mean the Company’s material reduction or diminution of Executive’s
responsibilities and authority, other than for Cause, without his consent.

     8. Separation Pay. (a) Subject to Executive’s execution and delivery to the company of the
Company’s standard form of Separation and Release Agreement, the Company shall pay Executive an
amount equal to the Separation Pay upon the occurrence of the applicable Separation Event but in no
case later than two and one-half months following the year in which the Separation Event occurs.
Separation Pay shall each be payable in accordance with the Company’s payroll policy as constituted
from time to time, and shall be subject to withholding of all applicable federal, state and local
taxes and any other deductions required by applicable law. In the event of Executive’s death, the
Company’s obligation to pay further compensation hereunder shall cease forthwith, except that
Executive’s legal representative shall be entitled to receive his fixed compensation for the period
up to the last day of the month in which such death shall have occurred.

          (b) Section 8(a) above shall not apply should Executive receive severance benefits under the
Company’s Change in Control Severance Benefit Plan.

     9. “Separation Pay” shall mean a lump sum amount equal to twelve months of Executive’s then
effective salary.

          (a) “Separation Event” shall mean:

 

 

               (i) the Company’s termination of Executive’s employment by the Company without Cause, during
the Term; or (ii) the termination of Executive’s employment by the Executive for Good Reason.

     10. All Business to be Property of the Company; Assignment of Intellectual Property.

          (a) Executive agrees that any and all presently existing business of the Company and all
business developed by him or any other employee of the Company including without limitation all
contracts, fees, commissions, compensation, records, customer or client lists, agreements and any
other incident of any business developed, earned or carried on by Executive for the Company is and
shall be the exclusive property of the Company, and (where applicable) shall be payable directly to
the Company.

          (b) Executive hereby acknowledges that any plan, method, data, know-how, research,
information, procedure, development, invention, improvement, modification, discovery, design,
process, software and work of authorship, documentation, formula, technique, trade secret or
intellectual property right whatsoever or any interest therein whether patentable or
non-patentable, patents and applications therefor, trademarks and applications therefor or
copyrights and applications therefor (herein sometimes collectively referred to as “Intellectual
Property”) made, conceived, created, invested, developed, reduced to practice and/or acquired by
Executive solely or jointly with others during the Term is the sole and exclusive property of the
Company, as work for hire, and that he has no personal right in any such Intellectual Property.
Executive hereby grants to the Company (without any separate remuneration or compensation other
than that received by him from time to time in the course of his employment) his entire right,
title and interest throughout the world in and to, all Intellectual Property, which is made,
conceived, created, invested, developed, reduced to practice and/or acquired by him solely or
jointly with others during the Term.

          (c) Executive shall cooperate fully with the Company, both during and after his employment
with or engagement by the Company, with respect to the procurement, maintenance and enforcement of
copyrights, patents and other intellectual property rights (both in the United States and foreign
countries) relating to Intellectual Property. Without limiting the foregoing, Executive agrees
that to the extent copyrightable, any such original works of authorship shall be deemed to be
“works for hire” and that the Company shall be deemed the author thereof under the U.S. Copyright
Act, provided that in the event and to the extent such works are determined not to constitute
“works for hire” as a matter of law, Executive hereby irrevocably assigns and transfers to the
Company all right, title and interest in such works, including but not limited to copyrights
thereof. Executive shall sign all papers, including, without limitation, copyright applications,
patent applications, declarations, oaths, formal assignments, assignments of priority rights and
powers of attorney, which the Company may deem necessary or desirable in order to protect its
rights and interests in any Intellectual Property (at the Company’s expense) and agrees that these
obligations are binding upon his assigns, executors, administrators and other legal
representatives. To that end, Executive shall provide current contact information to the Company
including, but not limited to, home address, telephone number and email address, and shall update
his contact information whenever necessary.

     11. Confidentiality. Executive acknowledges his obligation of confidentiality with respect to
all proprietary, confidential and non-public information of the Company, including all Intellectual
Property. By way of illustration, but not limitation, confidential and proprietary information
shall be deemed to include any plan, method, data, know-how, research,

 

 

information, procedure,
development, invention, improvement, modification, discovery, process, work of authorship,
documentation, formula, technique, product, idea, concept, design, drawing, specification,
technique, trade secret or intellectual property right whatsoever or any interest therein whether
patentable or non-patentable, patents and applications therefor, trademarks and applications
therefor or copyrights and applications therefor, personnel data, records, marketing techniques and
materials, marketing and development plans, customer names and other information related to
customers, including prospective customers and contacts at customers, price lists, pricing policies
and supplier lists of the Company, in each case coming into Executive’s possession, or which
Executive learns, or to which Executive has access, or which Executive may discover or develop
(whether or not related to the business of the Company at the time this Agreement is signed or any
information Executive originates, discovers or develops, in whole or in part) as a result of
Executive’s employment by (either full-time or part-time), or retention as a consultant of, the
Company. Executive shall not, either during the Term or for a period of ten (10) years thereafter,
use for any purpose other than the furtherance of the Company’s business, or disclose to any person
other than a person with a need to know such confidential, proprietary or non-public information
for the furtherance of the Company’s business who is obligated to maintain the confidentiality of
such information, any information concerning any Intellectual Property, or other confidential,
proprietary or non-public information of the Company, whether Executive has such information in his
memory or such information is embodied in writing, electronic or other tangible form.

     All originals and copies of any of the foregoing, however and whenever produced, shall be the
sole property of the Company. All files, letters, memoranda, reports, records, data, sketches,
drawings, program listings, or other written, photographic, or other tangible or electronic
material containing confidential or proprietary information or Intellectual Property, whether
created by me or others, which shall come into Executive’s custody or possession, shall be and are
the exclusive property of the Company to be used by Executive only in the performance of his duties
for the Company. All electronic material containing confidential or proprietary information or
Intellectual Property will be stored on a computer supplied to Executive by the Company and, under
no circumstances, will it be transferred to a personal computer. Executive will promptly deliver
to the Company and/or a person or entity identified by the Company all such materials or copies of
such materials and all tangible property of the Company in Executive’s custody or possession, upon
the earlier of (i) a request by the Company or (ii) termination of employment or engagement by the
Company. After such delivery, Executive will not retain any such materials or copies or any such
tangible property or any summaries or memoranda regarding same.

     12. Non-Competition Covenant. As the Executive has been granted options to purchase stock in
the Company and as such has a financial interest in the success of the Company’s business and as
Executive recognizes that the Company would be substantially injured by Executive competing with
the Company, Executive agrees and warrants that within the United States, he will not, unless
acting with the Company’s express prior written consent, directly or indirectly, while an employee
of the Company and during the Non-Competition Period, as defined below, own, operate, join,
control, participate in, or be connected as an officer, director, employee, partner, stockholder,
consultant or otherwise, with any business or entity which competes with the business of the
Company (or its successors or assigns) as such business is now constituted or as it may be
constituted at any time during the Term of this Agreement; provided, however, that Executive may
own, and exercise rights with respect to, less than one percent of the equity of a publicly traded
company. The “Non-Competition Period” shall be a period of twelve months following termination of
employment.

 

 

     Executive and the Company are of the belief that the period of time and the area herein
specified are reasonable in view of the nature of the business in which the Company is engaged and
proposes to engage, the state of its business development and Executive’s knowledge of this
business; however, if such period or such area should be adjudged unreasonable in any judicial
proceeding, then the period of time shall be reduced by such number of months or such area shall be
reduced by elimination of such portion of such area, or both, as are deemed unreasonable, so that
this covenant may be enforced in such area and during such period of time as is adjudged to be
reasonable.

     13. Non-Solicitation Agreement. Executive agrees and covenants that he will not, unless
acting with the Company’s express written consent, directly or indirectly, during the Term of this
Agreement or during the Non-Competition Period (as defined in Section 12 above) solicit, entice or
attempt to entice away or interfere in any manner with the Company’s relationships or proposed
relationships with any customer, officer, employee, consultant, proposed customer, vendor,
supplier, proposed vendor or supplier or person or entity or person providing or proposed to
provide research and/or development services to, on behalf of or with the Company.

     14. Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been given on actual receipt after having been delivered by hand, mailed by first
class mail, postage prepaid, or sent by Federal Express or similar overnight delivery services, as
follows: (a) if to Executive, at the address shown at the head of this Agreement, or to such other
person(s) or address(es) as Executive shall have furnished to the Company in writing and, if to the
Company, to it at the address set forth in the preamble hereto with a copy to Jennifer L. Miller,
Esq., Ballard Spahr Andrews & Ingersoll, LLP, 1735 Market Street, 51st Floor,
Philadelphia, Pennsylvania 19103, or to such other person(s) or address(es) as the Company shall
have furnished to Executive in writing.

     15. Assignability. In the event of a change of control (as defined in the Company’s Change of
Control Severance Benefit Plan), the terms of this Agreement shall inure to the benefit of, and be
assumed by, the acquiring person (as defined in the Company’s Change of Control Severance Benefit
Plan). This Agreement shall not be assignable by Executive, but it shall be binding upon, and to
the extent provided in Section 8 shall inure to the benefit of, his heirs, executors,
administrators and legal representatives.

     16. Entire Agreement. This Agreement contains the entire agreement between the Company and
Executive with respect to the subject matter hereof and there have been no oral or other prior
agreements of any kind whatsoever as a condition precedent or inducement to the signing of this
Agreement or otherwise concerning this Agreement or the subject matter hereof. Notwithstanding the
foregoing, Executive acknowledges that he is required as a condition to continued employment, to
comply at all times, with the Company’s policies affecting employees, including the Company’s
published Code of Ethics, as in effect from time to time. Executive further acknowledges that the
Non-Disclosure, Proprietary Information and Invention Assignment Agreement he signed upon becoming
an employee or thereafter remains in full force and effect despite the execution of this Agreement
and any changes in his employment status with the Company.

     17. Equitable Relief. Executive recognizes and agrees that the Company’s remedy at law for
any breach of the provisions of Sections 10, 11, 12 or 13 hereof would be inadequate, and he agrees
that for breach of such provisions, the Company shall, in addition to such other remedies as may be
available to it at law or in equity or as provided in this Agreement, be

 

 

entitled to injunctive
relief and to enforce its rights by an action for specific performance. Should Executive engage in
any activities prohibited by this Agreement, he agrees to pay over to the Company all compensation,
remuneration or monies or property of any sort received in connection with such activities; such
payment shall not impair any rights or remedies of the Company or obligations or liabilities of
Executive which such parties may have under this Agreement or applicable law.

     18. Amendments. This Agreement may not be amended, nor shall any change, waiver,
modification, consent or discharge be effected except by written instrument executed by the Company
and Executive.

     19. Severability. If any part of any term or provision of this Agreement shall be held or
deemed to be invalid, inoperative or unenforceable to any extent by a court of competent
jurisdiction, such circumstances shall in no way affect any other term or provision of this
Agreement, the application of such term or provision in any other circumstances, or the validity or
enforceability of this Agreement. Executive agrees that the restrictions set forth in Sections 11
and 12 above (including, but not limited to, the geographical scope and time period of
restrictions) are fair and reasonable and are reasonably required for the protection of the
interests of the Company and its affiliates. In the event that any provision of Section 12 or 13
relating to time period and/or areas of restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time period or areas such court deems reasonable and
enforceable, said time period and/or areas of restriction shall be deemed to become and thereafter
be the maximum time period and/or areas which such court deems reasonable and enforceable.

     20. Paragraph Headings. The paragraph headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the interpretation hereof.

     21. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the law of the State of Maryland, without regard to the principles of conflict of
laws thereof.

     22. Resolution of Disputes. With the exception of proceedings for equitable relief brought
pursuant to Section 17 of this Agreement, any disputes arising under or in connection with this
Agreement including, without limitation, any assertion by any party hereto that the other party has
breached any provision of this Agreement, shall be resolved by arbitration, to be conducted in
Baltimore, Maryland, in accordance with the rules and procedures of the American Arbitration
Association. The parties shall bear equally the cost of such arbitration, excluding attorneys’
fees and disbursements which shall be borne solely by the party incurring the same; provided,
however, that if the arbitrator rules in favor of Executive, Company shall be solely responsible
for the payment of all costs, fees and expenses (including without limitation Executive’s
reasonable attorneys’ fees and disbursements) of such arbitration. Any reimbursement made by
Company pursuant to this Section 22 shall be payable as follows: (i) the amount of such expenses
eligible for reimbursement in any calendar year shall not affect the expenses eligible for
reimbursement in any other calendar year and (ii) all such reimbursements must be made on or before
the last day of the calendar year following the calendar year in which the expense was incurred.
The provisions of this Section 22 shall survive the termination for any reason of the Term (whether
such termination is by the Company, by Executive or upon the expiration of the Term).

 

 

     23. Indemnification; Insurance. The Executive shall be entitled to liability and expense
indemnification and reimbursement to the fullest extent permitted by the Company’s current By-laws
and Certificate of Incorporation, whether or not the same are subsequently amended. During the
Term, the Company will use commercially reasonable efforts to maintain in effect directors’ and
officers’ liability insurance no less favorable to Executive than that in effect as of the date of
this Agreement.

     24. Survival. Sections 8 through 23 shall survive the expiration or earlier termination of
this Agreement, for the period and to the extent specified therein.

     IN WITNESS WHEREOF, the parties have executed or caused to be executed under seal this
Agreement as of the date first above written.

	 	 	 	 	 	 	 
	 	 	NOVAVAX, INC.	 	 
	 
	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Rahul Singhvi	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Rahul Singhvi	 	 
	 

	 	Title:
	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ James Robinson	 	 
	 	 	 	 	 
	 	 	James Robinsonexv4w1

Exhibit 4.1

SECURITIES EXCHANGE AGREEMENT

April 2008

          THIS SECURITIES EXCHANGE AGREEMENT (“Agreement”) is made as of the 30th
day of April, 2008 by and among Corgi International Limited, a corporation organized under the laws
of Hong Kong (the “Company”), and the investors, set forth on the signature pages affixed
hereto (each an “Investor” and collectively the “Investors”).

Recitals

          A. The Company and the Investors are executing and delivering this Agreement in reliance upon
the exemption from securities registration afforded by the provisions of Regulation D
(“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended;

          B. The Investors wish to convert existing indebtedness (“Indebtedness”) as set forth
on the Schedule attached hereto, and the Company wishes to issue to the Investors, upon the
terms and conditions stated in this Agreement, American Depositary Shares (together with any
securities into which such American Depositary Shares may be reclassified the “ADSs”) as
set forth in Section 2.1 below; and

          C. In consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

     1. Definitions. In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have the meanings set
forth below:

          “Deposit Agreement” means the Deposit Agreement, dated as at January 1997, by and
between the Company and The Bank of New York, as depositary, as the same may have been amended on
or prior to the date hereof.

          “Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise), business, or prospects of
the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform
its obligations under the Transaction Documents.

          “Ordinary Shares” means the Ordinary Shares of the Company and any securities into
which such Ordinary Shares may be reclassified underlying the ADSs of the Company.

          “Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,

 

 

unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

          “Purchase Price” means the higher of $1.90 per Share, or if higher, the closing
consolidated bid price at 4:00 p.m. (Eastern time) on the date this Agreement is signed by the
Investors as reflected on the NASDAQ (General Market).

          “SEC Filings” has the meaning set forth in Section 4.4.

          “Shares” means the ADSs being purchased by the Investors hereunder.

          “Subsidiary” of any Person means another Person, an amount of the voting securities,
other voting ownership or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly or indirectly by such
first Person.

          “Transaction Documents” means this Agreement.

          “Underlying ADS Shares” means the Ordinary Shares underlying the Shares.

          “1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.

          “1934 Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

     2. Conversion of Indebtedness and Issuance of the Shares. Subject to the terms and
conditions of this Agreement, on the Closing as provided below, each of the Investors shall
severally, and not jointly, automatically convert the amount of outstanding Indebtedness as
indicated on the signature page hereto, and the Company shall issue to such Investors, the Shares
for the Purchase Price per Share, rounded down to the nearest whole share as described below in
Section 2.1 and 2.2.

          2.1 Conversion. On the Closing, the aggregate amount of Indebtedness as indicated on
the signature page hereto shall automatically be converted into the Company’s Shares issued at the
Purchase Price per Share, rounded down to the nearest whole share, and the issuance of such shares
upon such conversion shall be upon the terms and subject to this Agreement.

          2.2 Mechanics and Effect of Conversion. No fractional Shares will be issued upon
conversion of the Indebtedness. In lieu of any fractional share to which any Investor would
otherwise be entitled, the Company will pay to the Investor in cash the amount of the unconverted
Indebtedness that would otherwise be converted into such fractional share. On the Closing, upon
conversion of the Indebtedness, the Company will be forever released from all of

2

 

its obligations and liabilities under any of the Indebtedness including without limitation the
obligation to pay in cash any portion of the Indebtedness so converted.

     3. Closing The conversion of the Indebtedness shall automatically occur and be
converted upon full execution of this Agreement. The Company shall use reasonable commercial
efforts to cause the delivery of the certificates evidencing the ADS as promptly as possible after
the Closing.

     4. Representations and Warranties of the Company. The Company hereby represents and
warrants to the Investors the following:

          4.1 Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on its business as now
conducted and to own its properties. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or leasing necessary unless the
failure to so qualify has not had and could not reasonably be expected to have a Material Adverse
Effect.

          4.2 Authorization. The Company has full power and authority and has taken all
requisite action on the part of the Company, its officers and directors, and as of the Closing will
have taken all requisite action of the part of its shareholders, necessary for (i) the
authorization, execution and delivery of the Transaction Documents, (ii) the authorization of the
performance of all obligations of the Company hereunder or thereunder and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Shares. The Transaction Documents
constitute the legal, valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally.

          4.3 Valid Issuance. The Shares and the Underlying ADS Shares have been duly and
validly authorized and, when issued and paid for pursuant to this Agreement and the Deposit
Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Investors), except for restrictions
on transfer imposed by applicable securities laws.

          4.4 Delivery of SEC Filings; Business. The Company has made available to the
Investors through the EDGAR system true and complete copies of the Company’s most recent Annual
Report on Form 20-F for the fiscal year ended March 31, 2007 (the “20-F”), and all other reports
filed by the Company pursuant to the 1934 Act since the filing of the 20-F and prior to the date
hereof (collectively, the “SEC Filings”).

          4.5 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other compensation

3

 

pursuant to any agreement, arrangement or understanding entered into by or on behalf of the
Company.

     5 Representations and Warranties of the Investors. Each of the Investors hereby
severally, and not jointly, represents and warrants to the Company that:

          5.1 Organization and Existence. If such Investor is not a natural person, such
Investor is a validly existing corporation, limited partnership or limited liability company and
has all requisite corporate, partnership or limited liability company power and authority to invest
in the Shares pursuant to this Agreement.

          5.2 Authorization. The execution, delivery and performance by such Investor of the
Transaction Documents to which such Investor is a party have been duly authorized and will each
constitute the valid and legally binding obligation of such Investor, enforceable against such
Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability, relating to or
affecting creditors’ rights generally.

          5.3 Purchase Entirely for Own Account. The Shares to be received by such Investor
hereunder will be acquired for such Investor’s own account, not as nominee or agent, and not with a
view to the resale or distribution of any part thereof in violation of the 1933 Act, and such
Investor has no present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the 1933 Act without prejudice, however, to such Investor’s
right at all times to sell or otherwise dispose of all or any part of such Shares in compliance
with applicable federal and state securities laws. Nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Shares for any period of time. Such
Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in
a business that would require it to be so registered.

          5.4 Investment Experience. Such Investor acknowledges that it can bear the economic
risk and complete loss of its investment in the Shares and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and risks of the
investment contemplated hereby.

          5.5 Disclosure of Information. Such Investor has had an opportunity to receive all
information related to the Company requested by it and to ask questions of and receive answers from
the Company regarding the Company, its business and the terms and conditions of the offering of the
Shares. Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries
nor any other due diligence investigation conducted by such Investor shall modify, limit or
otherwise affect such Investor’s right to rely on the Company’s representations and warranties
contained in this Agreement.

          5.6 Restricted Shares. Such Investor understands that the Shares are characterized as
“restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering and that under

4

 

such laws and applicable regulations such securities may be resold without registration under the
1933 Act only in certain limited circumstances.

          5.7 Legends. It is understood that, except as provided below, certificates evidencing
the Shares may bear the following or any similar legend:

               (a) “The securities represented hereby may not be transferred unless (i) such securities have
been registered for sale pursuant to the Securities Act of 1933, as amended, (ii) such securities
may be sold pursuant to Rule 144(k) or Rule 144(1), or (iii) the Company has received an opinion of
counsel reasonably satisfactory to it that such transfer may lawfully be made without registration
under the Securities Act of 1933 or qualification under applicable state securities laws.”

               (b) If required by the authorities of any state in connection with the issuance of sale of the
Securities, the legend required by such state authority.

          5.8 Accredited Investor. Such Investor is an accredited investor as defined in Rule
501(a) of Regulation D, as amended, under the 1933 Act.

          5.9 No General Solicitation. Such Investor did not learn of the investment in the
Shares as a result of any general solicitation or general advertising.

          5.10 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim against or upon the
Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to
any agreement, arrangement or understanding entered into by or on behalf of such Investor.

     6. Miscellaneous.

          6.1 Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or the Investors.

          6.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement may also be executed via facsimile, which shall be deemed an
original.

          6.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

          6.4 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and the Investors holding a majority of the aggregate Indebtedness being converted for

5

 

Shares hereunder. Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any Shares purchased under this Agreement at the time outstanding, each
future holder of all such Shares, and the Company.

          6.5 Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Investors without the prior
consent of the Company.

          6.6 Entire Agreement. This Agreement, including the Exhibits constitutes the entire
agreement among the parties hereof with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.

          6.7 Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

          6.8 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the State of
California without regard to the choice of law principles thereof.

          6.9 Independent Nature of Investors’ Obligations and Rights. The obligations of each
Investor are several and not joint with the obligations of any other Investor, and no Investor
shall be responsible in any way for the performance of the obligations of any other Investor. The
decision of each Investor to purchase ADS has been made by such Investor independently of any other
Investor. Nothing contained herein and no action taken by any Investor pursuant thereto, shall be
deemed to constitute the Investors as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Investors are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated hereby. Each Investor
acknowledges that no other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no Investor will be acting as agent of such Investor in
connection with monitoring its investment in the Shares or enforcing its rights under the
Transaction Documents. Each Investor shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement and it shall not be
necessary for any other Investor to be joined as an additional party in any proceeding for such
purpose.

[signature pages follow]

6

 

          IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized
officers to execute this Agreement as of the date first above written.

	 	 	 	 	 	 	 
	The Company:	 	CORGI INTERNATIONAL LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 

[Securities Exchange Agreement Signature Page]

 

 

INVESTOR

JOHN CLOUGH

	 	 	 	 	 
	Total Amount of Indebtedness being converted:
	 	$	157,637.25	 
	 
	 	 	 	 
	Description of Indebtedness:
	 	 	 	 
	 
	 	 	 	 
	Accrued and Unpaid Board Fees:
	 	$	134,500.00	 
	 
	 	 	 	 
	Unreimbursed Expenses:
	 	$	23,137.25	 

Number of ADS:                     

[Securities Exchange Agreement Signature Page]

 

 

INVESTOR

CHARLES MCGETTIGAN

	 	 	 	 	 
	Total Amount of Indebtedness being converted:
	 	$	87,756.00	 
	 
	 	 	 	 
	Description of Indebtedness:
	 	 	 	 
	 
	 	 	 	 
	Accrued and Unpaid Board Fees:
	 	$	80,500.00	 
	 
	 	 	 	 
	Unreimbursed Expenses:
	 	$	7,256.00	 

Number of ADS:                     

[Securities Exchange Agreement Signature Page]

 

 

INVESTOR

LEO PAUL KOULOS

	 	 	 	 	 
	Total Amount of Indebtedness being converted:
	 	$	196,804.80	 
	 
	 	 	 	 
	Description of Indebtedness:
	 	 	 	 
	 
	 	 	 	 
	Accrued and Unpaid Board Fees:
	 	$	91,000.00	 
	 
	 	 	 	 
	Principal Amount of Note dated November 9, 2007:
	 	$	100,000.00	 
	 
	 	 	 	 
	Interest Amount of Note dated November 9, 2007 to
February 9, 2008 (90 Days @ 15% APR)
	 	$	3,750.00	 
	 
	 	 	 	 
	Interest Amount of Note from February 9, 2008 to
April 1, 2008 (30 Days @ 25% APR):
	 	$	2,054.80	 

Number of ADS:                     

[Securities Exchange Agreement Signature Page]

 

 

INVESTOR

DANIEL WIDDICOMBE

	 	 	 	 	 
	Total Amount of Indebtedness being converted:
	 	$	103,820.69	 
	 
	 	 	 	 
	Description of Indebtedness:
	 	 	 	 
	 
	 	 	 	 
	Accrued and Unpaid Board Fees:
	 	$	91,000.00	 
	 
	 	 	 	 
	Unreimbursed Expenses:
	 	$	12,820.69	 

Number of ADS:                     

[Securities Exchange Agreement Signature Page]

 

 

INVESTOR

TIMOTHY STEEL

	 	 	 	 	 
	Total Amount of Indebtedness being converted:
	 	$	56,000.00	 
	 
	 	 	 	 
	Description of Indebtedness:
	 	 	 	 
	 
	 	 	 	 
	Accrued and Unpaid Board Fees:
	 	$	56,000.00	 

Number of ADS:                     

[Securities Exchange Agreement Signature Page]

 

 

SCHEDULE OF INDEBTEDNESS

Closing April 30, 2008

	 	 	 	 	 	 	 	 	 
	Name of Investor	 	Total Amount of Indebtedness	 	Number of ADS
	John Clough
	 	$	157,637.25	 	 	 	82,966	 
	Charles McGettigan
	 	$	87,756.00	 	 	 	46,187	 
	Leo Paul Koulos
	 	$	196,804.80	 	 	 	103,581	 
	Daniel Widdicombe
	 	$	103,820.69	 	 	 	54,642	 
	Timothy Steele
	 	$	56,000.00	 	 	 	29,473	 
	TOTAL
	 	$	602,018.74	 	 	 	316,849

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