-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JfepnEiBxnd4cHfTayKYyhJ0e0eRa+4wAv71lo0ud4VKh3RR/HdmNR8ym7/KtlcA kKeF4KfXWJgcMK+80ZdgkA== 0000950135-98-001133.txt : 19980224 0000950135-98-001133.hdr.sgml : 19980224 ACCESSION NUMBER: 0000950135-98-001133 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19980223 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CYRK INC CENTRAL INDEX KEY: 0000864264 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 043081657 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-43175 FILM NUMBER: 98547516 BUSINESS ADDRESS: STREET 1: 3 POND RD CITY: GLOUCESTER STATE: MA ZIP: 01930 BUSINESS PHONE: 5082835800 MAIL ADDRESS: STREET 1: 3 POND RD CITY: GLOCESTER STATE: MA ZIP: 01930 FORMER COMPANY: FORMER CONFORMED NAME: CYRK INTERNATIONAL INC DATE OF NAME CHANGE: 19930521 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARNER TY CENTRAL INDEX KEY: 0001056306 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O TY INC STREET 2: 807 BLACKHAWK CITY: WESTMONT STATE: IL ZIP: 60559 SC 13D 1 CYRK, INC. ON BEHALF OF TY WARNER 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Cyrk, Inc. ------------------------------------------------- (Name of Issuer) Common Stock, $.01 par value ----------------------------------- (Title of Class of Securities) 232817 10 6 --------------------- (CUSIP Number) Ty Warner Ty, Inc. 807 Blackhawk Westmont, IL 60559 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Thomas J. Swan, III, Esq. Choate, Hall & Stewart Exchange Place, 53 State Street Boston, MA 02109 (617)248-5000 February 12, 1998 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13-1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (l) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item l; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) 2 SCHEDULE 13D - ------------------------------ --------------------------- CUSIP NO. 232817 10 6 PAGE 2 OF 28 PAGES - ------------------------------ --------------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Ty Warner - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION US - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER 1,075,610 NUMBER OF -------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 0 EACH -------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 1,075,610 -------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,075,610 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.4% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN ================================================================================ 3 ITEM 1. SECURITY AND ISSUER. This statement relates to the Common Stock, $.01 par value (the "Common Stock") of Cyrk, Inc. (the "Issuer"), a Delaware corporation, with its principal executive offices located at 3 Pond Road, Gloucester, Massachusetts 01930, and a warrant to purchase up to 100,000 shares of Common Stock. ITEM 2. IDENTITY AND BACKGROUND (a.) This Statement is being filed by Ty Warner (the "Reporting Person"). (b.) The Reporting Person's business address is c/o Ty, Inc., 807 Blackhawk, Westmont, IL 60559. (c.) The Reporting Person is employed as the Chairman of Ty, Inc., a Delaware Corporation with its principle place of business located at 807 Blackhawk, Westmont, IL 60559. (d.) The Reporting Person has not, during the past 5 years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e.) The Reporting Person has not, during the past 5 years, been a party to a civil proceeding before a judicial or administrative body of competent jurisdiction and the Reporting Person is not or has not been subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state security laws or finding any violation with respect to such laws as a result of such proceeding. (f.) The Reporting Person is a citizen of the United States of America. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to a Securities Purchase Agreement, dated as of February 12, 1998 (the "Agreement"), between the Reporting Person and the Issuer, the Reporting Person acquired (i) a warrant to purchase up to 100,000 shares of the Issuer's Common Stock, par value $.01, at a price per share of $10.25 (the "Warrant") and (ii) 975,610 shares of Common Stock, par value $.01, (the "Shares") for an aggregate purchase price of $10,000,000. The Reporting Person purchased the Shares and the Warrant through the use of personal funds. ITEM 4. PURPOSE OF TRANSACTION. The Reporting Person acquired the Shares and the Warrant for the purpose of investment for the Reporting Person's own account, not as a nominee or agent, and not with a view to the distribution of any part thereof, nor with a present intention of selling, granting any participation in, or otherwise distributing the same. The Reporting Person has not formulated any plans or proposals which relate to or would result in: (a) the acquisition by any person of 4 additional securities of the Issuer or the disposition of securities of the Issuer, (b) an extraordinary corporate transaction involving the Issuer or any of its subsidiaries, (c) a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries, (d) any change in the present Board or management of the Issuer, (e) any material change in the Issuer's capitalization or dividend policy, (f) any other material change in the Issuer's business or corporate structure, (g) any change in the Issuer's charter or bylaws, or other instrument corresponding thereto, or other action which may impede the acquisition of control of the Issuer by any person, (h) causing a class of the Issuer's securities to be deregistered or delisted, (i) a class of equity securities of the Issuer becoming eligible for termination of registration or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) The Reporting Person is deemed to own beneficially, under Rule 13D-3(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), Nine Seventy Five Thousand Six Hundred Ten (975,610) shares of Common Stock of the Issuer and, under Rule 13D-3(b) of the Exchange Act, One Hundred Thousand (100,000) shares of Common Stock of the Issuer which the Reporting Person has the ability to acquire within 60 days of the date hereof pursuant to the conversion of a warrant at a price per share of $10.25. The Shares and the Warrant (collectively the "Shares") represent approximately 7.4% of the total issued and outstanding shares of the Common Stock of the Issuer. (b) The Reporting Person has sole power to vote or direct the vote of the Shares and the sole power to dispose or to direct the disposition of the Shares. (c) Not applicable. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Pursuant to the Securities Purchase Agreement between the Reporting Person and the Issuer dated February 12, 1998 (the "Agreement"), the Reporting Person has the right to sell, and the Issuer the obligation to purchase, up to 500,000 shares of Common Stock held by the Reporting Person (the "Put"). The Put expires twelve weeks from the date of the Agreement and the price at which the shares must be repurchased pursuant to the Put is initially $10.25 and thereafter is reduced by $.50 per share per week. 5 Pursuant to the Agreement, at any time after the expiration or waiver of the Put, the Reporting Person may request that the Issuer prepare and file a registration statement under the Securities Act of 1933, as amended (the "Act") for all or part of the Shares held by the Reporting Person at the expense of the Issuer. Upon such request, the Issuer shall be obligated to use its best efforts to register such Shares under the Act. The Issuer shall be obligated to effect only one such demand registration. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Attached to this statement and filed with this statement as exhibits are the following documents: EXHIBIT A: Securities Purchase Agreement, dated as of February 12, 1998 by and among Cyrk, Inc. and Ty Warner EXHIBIT B: Warrant to purchase 100,000 shares of the Common Stock of the Issuer by the Reporting Person The foregoing descriptions of these Exhibits are qualified in their entirety by reference to the Exhibits themselves. 6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: February 19, 1998 /s/ Ty Warner --------------------------------- EX-99.A 2 SECURITIES PURCHASE AGREEMENT 1 EXHIBIT A Execution Copy SECURITIES PURCHASE AGREEMENT INTRODUCTION This Securities Purchase Agreement is made as of the 12th day of February, 1998, by and between Cyrk, Inc., a Delaware corporation (the "COMPANY"), and Ty Warner, an individual (the "PURCHASER"). NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: TERMS AND CONDITIONS ARTICLE I. THE PURCHASE AND SALE OF STOCK SECTION 1.01. SALE AND ISSUANCE OF COMMON STOCK AND WARRANT. Subject to the terms and conditions hereof, and in reliance on the representations and warranties contained herein, at the Closing described in Section 1.03, the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company (i) a warrant to purchase up to 100,000 shares of the Company's Common Stock, par value $0.01 per share, at a price per share of $10.25 (the "WARRANT") and (ii) 975,610 shares of Common Stock, par value $0.01 per share (the "PURCHASED SHARES") for an aggregate purchase price of $10,000,000 (the "PURCHASE Price"). SECTION 1.02. PAYMENT FOR THE STOCK AND WARRANT. The Purchaser shall pay the Purchase Price in full at the Closing by wire transfer of immediately available funds to an account designated in writing by the Company. SECTION 1.03. THE CLOSING. The purchase and sale of the Purchased Shares and Warrant shall take place at a closing (the "CLOSING") to be held at the offices of Choate, Mall & Stewart, Exchange Place, Boston, Massachusetts at 10:00 a.m. local time on the date hereof, or such other place, time and date as the Company and the Purchaser may agree in writing (the "CLOSING DATE"). 2 ARTICLE II. THE PUT OPTION AND THE REPURCHASE OPTION SECTION 2.01. PURCHASER'S RIGHT TO PUT; PUT PRICE; PAYMENT. For a period of twelve (12) weeks from the date hereof, the Purchaser shall have the right to sell; and the Company shall have the obligation to purchase, up to 500,000 of the Purchased Shares (the "PUT OPTION") at an initial price per share of $10.00 (the "INITIAL PUT PRICE"). The Initial Put Price shall be reduced by $0.50 per share each week. The Initial Put Price as reduced week to week is referred to as the "PUT PRICE." Payment to the Purchaser for any shares to be repurchased pursuant to this Put Option shall be made by wire transfer of immediately available funds in an amount equal to the number of shares then being purchased multiplied by the then applicable Put Price. The Put Option shall terminate and be of no further force or effect twelve (12) weeks from the date hereof or upon written waiver by the Purchaser, whichever is the first to occur. SECTION 2.02. RIGHT OF COMPANY TO REPURCHASE. If the License Agreement dated December 18, 1997 between the Purchaser and the Company (the "LICENSE AGREEMENT") is terminated for any reason, the Company shall have the option but not the obligation to repurchase all or any part of the Purchased Shares then held by the Purchaser or any affiliate, as defined under the Securities Act of 1933, as amended (the "SECURITIES ACT") of the Purchaser (the "REPURCHASE OPTION"). Such Repurchase Option shall be exercisable by written notice to the Purchaser within 180 days of the date of termination of the License Agreement. SECTION 2.03. REPURCHASE PRICE; PAYMENT. If the Company exercises the Repurchase Option, the price per share to be paid to the Purchaser shall be the average closing bid and ask price of the Company's Common Stock as reported by the Nasdaq National Market during the twenty (20) trading days immediately preceding the date the Repurchase Option is exercised (the "REPURCHASE PRICE"). Payment to the Purchaser for the shares to be repurchased hereunder shall be made by wire transfer of immediately available funds in an amount equal to the number of shares being repurchased multiplied by the Repurchase Price. SECTION 2.04. DELIVERY OF CERTIFICATE. If Purchased Shares shall be repurchased pursuant to the Repurchase Option or the Put Option, the Purchaser, or in the event of his death, his personal representative, shall forthwith deliver to the Secretary of the Company the certificates for such repurchased shares, free of all encumbrances, accompanied by such instrument of transfer, if any, as may reasonably be required by the Secretary of the Company. 2 3 ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Purchaser that as of the date hereof each of the statements contained in this Article III is true and correct and will be true and correct as of the Closing Date: SECTION 3.01. CORPORATE EXISTENCE AND POWER. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all necessary corporate and other power and authority to conduct its business and own its properties as now conducted. True and correct copies of the Certificate of Incorporation and By-laws of the Company, with all amendments thereto, as in effect on the date hereof, have been furnished to the Purchaser by the Company. The Company is licensed or qualified to do business as a foreign corporation in each jurisdiction in which the nature of its business or the ownership of its properties makes such licensing or qualification necessary and where the failure to so qualify would have a material adverse effect. SECTION 3.02. AUTHORITY; NO CONFLICT. This Agreement has been duly executed by the Company and is authorized by all necessary corporate action on the part of the Company, and is a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. The Company has all corporate power and authority necessary to enable it to carry out the transactions contemplated by this Agreement. Neither the execution or delivery by the Company of this Agreement or any document contemplated by this Agreement nor the consummation by the Company of the transactions contemplated by this Agreement or any document contemplated by this Agreement will violate, result in a breach of, constitute a default under, or give any party other than the Company or a subsidiary of the Company the right to terminate, or modify the rights or obligations of the Company or any of its subsidiaries under, (i) any agreement or instrument to which the Company or any of its subsidiaries is a party or by which any of them is bound, (ii) any statute, ordinance or other law to which the Company or any of its subsidiaries is subject, (iii) any rule or regulation of any governmental agency having jurisdiction over the Company or any of its subsidiaries, (iv) any license, permit or other governmental authorization held by the Company or any of its subsidiaries, or (v) any order or decree of any court or governmental agency having jurisdiction over the Company or any of its subsidiaries or any of their assets. SECTION 3.03. GOVERNMENT APPROVALS. No governmental filings, authorizations, approvals or consents, or other governmental action, are required to permit the Company to fulfill all of its obligations under this Agreement or any 3 4 document contemplated by this Agreement, except as contemplated by Article VI. SECTION 3.04. COMPLIANCE WITH LAWS. The Company has complied with, is not in violation of, and has not received any notices of violation with respect to, any federal, state or local statute, law or regulation with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which would not be reasonably likely to have a material adverse effect on the Company and its subsidiaries, taken as a whole. SECTION 3.05. SEC DOCUMENTS. The Company has made all necessary filings with the Securities and Exchange Commission during 1997, and, as of their respective filing dates, all such filings complied as to form in all material respects with the applicable requirements of the Securities Act or the Securities Exchange Act of 1934, as amended (the EXCHANGE ACT") and were complete and correct in all material respects. SECTION 3.06. AUTHORIZATION OF THE PURCHASED SHARES. The Purchased Shares and the Warrant Shares (as defined in the Warrant) to be issued pursuant to this Agreement, when issued and delivered in accordance with this Agreement, will be duly and validly authorized and issued, fully paid and nonassessable. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER Except as otherwise set forth in the separate disclosure schedules attached to and made a part of this Agreement, the Purchaser represents and warrants to the Company that as of the date hereof each of the statements contained in this Article IV is true and correct and will be true and correct as of the Closing Date: SECTION 4.01. GOVERNMENT APPROVALS. No governmental filings, authorizations, approvals or consents, or other governmental action, are required to permit the Purchaser to fulfill all its obligations under this Agreement or any document contemplated by this Agreement. SECTION 4.02. PURCHASE FOR INVESTMENT. This Agreement is made with the Purchaser in reliance upon the Purchaser's representation to the Company, which by execution of this Agreement the Purchaser hereby confirms, that the Purchased Shares, the Warrant and the Warrant Shares will be acquired for investment for the Purchaser's own account, not as a nominee or agent, and not with a view to the distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing 4 5 the same. By executing this Agreement, the Purchaser further represents that does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Purchased Shares, the Warrant or the Warrant Shares. The Purchaser understands that (i) the Purchased Shares, the Warrant and the Warrant Shares are not registered and must be held indefinitely unless registered under the Securities Act or unless an exemption from such registration is available; and (ii) routine sales of the Purchased Shares made in reliance upon Rule 144 under the Securities Act can be made only in accordance with the terms and conditions of such Rule. SECTION 4.03. RECEIPT OF INFORMATION. The Purchaser has received all information that it has requested from the Company and believes that such information is sufficient to make an informed decision with respect to the purchase of the Purchased Shares, the Warrant and the Warrant Shares. SECTION 4.04. FINANCIAL RESOURCES; KNOWLEDGE AND EXPERIENCE. The Purchaser possesses the financial resources to bear the risk of economic loss with respect to its purchase of the Purchased Shares, the Warrant and the Warrant Shares, including the loss of its entire investment. The Purchaser has such knowledge and experience in financial and business matters that it is able to evaluate the merits and make an informed investment decision with respect to its purchase of the Purchased Shares, the Warrant and the warrant Shares. SECTION 4.05. LEGEND. It is understood that legends in substantially the following forms will be placed on certificates representing the Purchased Shares and the Warrant: (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF EFFECTIVE REGISTRATION STATEMENTS COVERING SUCH SECURITIES UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. (b) THE COMPANY IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS AND SERIES OF STOCK. THE COMPANY WILL FURNISH THE HOLDER HEREOF A STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS AND SERIES OF STOCK AND THE QUALIFICATIONS, LIMITATION OR RESTRICTIONS OF SUCH 5 6 PREFERENCES AND/OR RIGHTS WITHOUT CHARGE UPON REQUEST. SECTION 4.06. ACCREDITED INVESTOR. This Agreement is made with the Purchaser in reliance upon the Purchaser's representation to the Company, which by execution of this Agreement the Purchaser hereby confirms, that the Purchaser is an "accredited investor" as such term is defined in Regulation D under the Securities Act. SECTION 4.07. NO CONFLICTS. The Purchaser is not subject to or bound by any provision of: (a) any law, statute, rule, regulation or judicial or administrative decision, (b) any articles or certificates of incorporation or by-laws, (c) any mortgage, deed of trust, lease, note, shareholders' agreement, bond, indenture, other material instrument or agreement, license, permit, trust, custodianship, other restriction, or (d) any judgment, order, writ, injunction or decree of any court, governmental body, administrative agency or arbitrator, that would prevent, or be violated by, or that would result in the creation of any encumbrance or lien as a result of, or under which there would be a default or right of termination as a result of, the execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby other than violations, defaults, cancellations, terminations, payments, acceleration rights or failures to obtain consents which, singly and in the aggregate, have not had and would not have a material adverse effect on the enforceability or validity of this Agreement. ARTICLE V. CONDITIONS TO THE CLOSING The obligation of the Purchaser to purchase the Purchased Shares and the Warrant at the Closing shall be subject to the satisfaction of the following conditions contained in Sections 5.01 through 5.04, in each case at and as of the Closing: SECTION 5.01. ISSUANCE OF SECURITIES. The Company shall have duly issued and delivered to the Purchaser a certificate for the Purchased Shares and a Warrant. 6 7 SECTION 5.02. REPRESENTATIONS CORRECT, ETC. The representations and warranties of the Company set forth in Article III shall be true at and as of the Closing, in all material respects, as if made as of the date of the Closing, and the Company shall be in compliance in all material respects with each of the covenants contained in Article VI of this Agreement. SECTION 5.03. NO LITIGATION. No action, suit, proceeding or investigation shall have been instituted or, to the Company's knowledge, threatened which seeks to restrain, restrict or prohibit or impose material penalties or damages with respect to the consummation of the transactions contemplated by this Agreement. SECTION 5.04. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in form and substance to the Purchaser and its counsel. The obligation of the Company to sell the Purchased Shares to the Purchaser at the Closing shall be subject to the satisfaction of the following conditions contained in Sections 5.06 through 5.08, in each case at and as of the time of the Closing: SECTION 5.05. PAYMENT OF PURCHASE PRICE. The Purchaser shall have paid the Purchase Price for the Purchased Shares and the Warrant pursuant to Section 1.02. SECTION 5.06. REPRESENTATIONS CORRECT, ETC. The representations and warranties of the Purchaser set forth in Article IV shall be true at and as of the Closing, in all material respects, as if made as of the date of the Closing. SECTION 5.07. NO LITIGATION. No action, suit, proceeding or investigation shall have been instituted or, to the Company's knowledge, threatened which seeks to restrain, restrict or prohibit or impose material penalties or damages with respect to the consummation of the transactions contemplated by this Agreement. SECTION 5.08. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection with the transactions contemplated hereby and all documents and instruments incident to such transactions shall be reasonably satisfactory in form and substance to the Company and its counsel. ARTICLE VI. REGISTRATION RIGHTS SECTION 6.01. DEMAND REGISTRATION RIGHTS. If, at any time after the expiration or waiver of the Put Option, the Purchaser 7 8 requests that the Company file a registration statement under the Securities Act of 1933, as amended (the "Act"), for all or part of the Purchased Shares, provided that the number of shares covered by such request equals or exceeds 250,000 shares, the Company shall use its best efforts to register under the Act the shares of Common Stock held by the Purchaser requested to be registered in accordance with the procedures outlined herein. The Company shall only be required to effect one such demand registration. Notwithstanding the foregoing, (i) if, after the Purchaser has requested a registration of the Purchased Shares, the Company shall furnish the Purchaser a certificate signed by an officer of the Company stating that in the good faith judgment of the Company it would have a materially adverse impact on the business of the Company and be materially adverse to its shareholders for such registration statement to be filed and it is therefor essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than 120 days from the date of the initial request and (ii) the Purchaser shall not be allowed to exercise its registration rights within 180 days from the date that the Company has registered any shares of Common Stock or any securities similar to Common Stock for its own or others' account under the Act (other than a registration statement on Form S-4 or S-8 or any substitute form that may be adopted by the Securities and Exchange Commission (the "Commission")). SECTION 6.02. PIGGYBACK REGISTRATION RIGHTS. (a) Whenever, at any time after the expiration or waiver of the Put Option, the Company proposes to register any shares of Common Stock for its own or others' account under the Act, other than a registration solely relating to employee benefit plans or a registration solely relating to shares to be sold under Rule 145 under the Act, the Company shall give the Purchaser prompt written notice of its intent to do so no less than 30 days before the filing of any registration statement. Upon the written request of the Purchaser given within 15 days after receipt of such notice, the Company shall, subject to Section 6.02(b), cause to be included in such registration all of the Purchased Shares specified in such written request. (b) If the Company is advised in writing in good faith by any managing underwriter of the securities being offered pursuant to any registration statement under this Section 6.02 that, because of marketing considerations, the number of shares of Common Stock to be sold by persons other than the Company is greater than the number of such shares which can be offered without materially and adversely affecting the offering, the Company may reduce PRO RATA the number of shares offered for the accounts of such persons (based upon the number of shares requested by each such person to be included in the registration) 8 9 to a number deemed sufficient by such managing underwriter to eliminate the material and adverse effect. SECTION 6.03. SELECTION OF UNDERWRITER. If the Company so requires, or if the Purchaser so elects, the offering of shares of Common Stock held by the Purchaser shall be in the form of a firm commitment underwritten offering. In such event, the Company shall select the book-running and other managing underwriters in connection with such offering and any additional investment bankers and managers to be used in connection with such offering. SECTION 6.04. REGISTRATION PROCEDURES. If the Company is required by the provisions of this Agreement to use its best efforts to effect the registration of any shares of Common Stock under the Act, the Company shall: (i) as expeditiously as reasonably possible file with the Commission a registration statement, in form and substance required by the Act, with respect to such Common Stock and use its best efforts to cause that registration statement to become effective; (ii) as expeditiously as reasonably possible, prepare and file with the Commission any amendments and supplements to the registration statement and the prospectus included in the registration statement as may be necessary to keep the registration statement effective, in the case of a firm commitment underwritten public offering, until completion of the distribution of all securities described therein and, in the case of any other offering, until the earlier of the sale of all Common Stock covered thereby or 120 days after the effective date thereof; (iii) as expeditiously as reasonably possible, furnish to the Purchaser, such reasonable number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein) and the prospectus included in such registration statement, including each preliminary prospectus, in conformity with the requirements of the Act, and such other documents as the Purchaser may reasonably request in order to facilitate the public sale or other disposition of the Common Stock owned by the Purchaser; (iv) as expeditiously as reasonably possible, use its best efforts to register or qualify the Common Stock covered by the registration statement for offer and sale under the securities or blue sky laws of such jurisdictions in the United States as the Purchaser shall reasonably request, and do any and all other acts and things that may be necessary or desirable to enable the Purchaser to consummate the public sale or other disposition in such jurisdictions of the Common Stock owned by 9 10 the Purchaser; PROVIDED, HOWEVER, that the Company shall not be required in connection with this paragraph (iv) to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction; (v) after the filing of the registration statement, promptly notify the Purchaser of any stop order issued or, to the knowledge of the Company, threatened to be issued by the Commission and use all commercially reasonable efforts to prevent the entry of such stop order or to remove it if entered; (vi) in connection with an underwritten public offering, enter into a written agreement with the managing underwriter in such form and containing such provisions as are customary in the securities business for such an arrangement between such underwriter and companies of the Company's size and investment stature; (vii) furnish to each underwriter, if any, and the Purchaser, a legal opinion of its counsel and a comfort letter from its independent certified public accountants, each in customary form and substance, at such time or times as such documents are customarily provided in the type of offering involved; (viii) as promptly as practicable, notify the Purchaser, at any time when a prospectus relating to the sale of the Common Stock is required by law to be delivered in connection with sales by an underwriter or dealer, of the occurrence of any event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the registered Common Stock, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and as promptly as practicable make available to the Purchaser and to the underwriters any such supplement or prospectus; (ix) whenever the Company is registering any Common Stock under the Act and the Purchaser is selling securities under such registration or determines that it may be a controlling person under the Act, keep the Purchaser advised in writing of the initiation, progress and completion of such registration, allow the Purchaser and the Purchaser's counsel to participate in the preparation of the registration statement and to have access to all relevant corporate records, documents and information, include in the registration statement such information as such holder may reasonably request and take all such other action as such holder may reasonably request; (x) as of the effective date of any registration statement relating thereto, cause all such Common Stock to be 10 11 listed on each securities exchange on which similar securities issued by the Company are then listed, and, if not so listed, to be listed on the NASDAQ National Market; and (xi) as of the effective date of any registration statement relating thereto, provide a transfer agent and registrar for all such Common Stock. The Purchaser shall furnish to the Company such information regarding the Purchaser and the distribution proposed by the Purchaser as the Company may reasonably request in writing and as shall be required in connection with the registration, qualification or compliance referred to in this Agreement. SECTION 6.05. EXPENSES. The Company shall pay all expenses incurred in complying with this Agreement, including, without limitation, all registration and filing fees, exchange listing fees, printing expenses, transfer taxes, fees and expenses of counsel and independent certified public accountants for the Company, state securities and blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration, but excluding underwriting discounts and selling commissions relating to the sale of the Common Stock. The Company shall pay all internal Company expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties) incurred in complying with this Agreement. SECTION 6.06. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold harmless the Purchaser from and against any and all losses, claims, damages and liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus relating to the Common Stock to be registered (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Company by or on behalf of the Purchaser expressly for use therein. SECTION 6.07. INDEMNIFICATION BY THE PURCHASER. The Purchaser agrees to indemnify and hold harmless the Company, its officers and directors, and each person, if any, who controls the company within the meaning of the Act or the Securities Exchange Act of 1934, as amended, (the "Exchange Act") to the same extent as the foregoing indemnity from the Company to the Purchaser, but only with reference to information furnished in writing by or on behalf of the Purchaser expressly for use in any registration 11 12 statement or prospectus relating to Common Stock to be registered, or any amendment or supplement thereto, or any preliminary prospectus. SECTION 6.08. LOCK-UP AGREEMENT. The Purchaser agrees that in connection with any public offering of the Company's Common Stock, and upon the request of the managing underwriter in such offering, the Purchaser will not sell, grant any option for the purchase of, or otherwise dispose of any of the Company's securities held by the Purchaser (other than those included in such registration) without the prior written consent of such underwriter, for such period of time as may be requested by such underwriter (not to exceed 90 days after the effective date of such registration). SECTION 6.09. ASSIGNMENT. The rights of the Purchaser to cause the Company to register shares pursuant to this Agreement shall not be assignable or transferable to any other person or entity without the Company's prior written consent; PROVIDED, HOWEVER, that the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective executors, administrators, heirs, successors and permitted assigns of each of the Purchaser. ARTICLE VII. MISCELLANEOUS SECTION 7.01. NOTICES. All notices to a party hereunder shall be in writing and shall be deemed to have been adequately given if delivered in person, by facsimile transmission with receipt acknowledged or by delivery by a recognized courier for overnight delivery, or mailed, certified mail, return receipt requested, to such party at its address set forth on below (or such other address as it may from time to time designate in writing to the other parties hereto). If to the Company: Cyrk, Inc. 3 Pond Road Gloucester, Massachusetts 01930 Attention: Dominic F. Mammola with a copy to: Choate, Hall & Stewart Exchange Place 53 State Street Boston, Massachusetts 02109 Attention: Cameron Read, Esq. 12 13 If to the Purchaser: Ty Warner 807 Blackhawk Westmont, Illinois 60559 SECTION 7.02. GENERAL INDEMNIFICATION. If any representation or warranty contained in Article III or Article IV or in any certificate delivered at or prior to the Closing is not correct in any respect, the party which gave that representation or warranty will indemnify the other party against, and will hold the other party harmless from, all liabilities, costs and expenses, including legal and accounting fees and disbursements and costs of settlements or judgments, which the other party suffers because the facts were not as represented or warranted, so that the indemnified party will be in the same position in which it would have been if the facts had been as represented or warranted. SECTION 7.03. NO WAIVER. No failure to exercise and no delay in exercising, on the part of the Company or the Purchaser, any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. SECTION 7.04. AMENDMENTS. This Agreement may be amended only by a document in writing signed by the Purchaser and Company. SECTION 7.05. SURVIVAL OF AGREEMENTS, ETC. All agreements, representations and warranties contained herein or made in writing by or on behalf of the Company and the Purchaser in connection with the transactions contemplated hereby shall survive the execution and delivery of this Agreement, the Closing and any investigation at any time made by or on behalf of the Purchaser, except that the representations and warranties contained herein shall survive the closing only for a period of one year. All statements contained in any certificate or other instrument delivered by or on behalf of the Company or the Purchaser pursuant hereto or in connection with the transactions contemplated hereby shall be deemed representations and warranties by the Company or the Purchaser, as the case may be. SECTION 7.06. CONSTRUCTION. This Agreement shall be governed by and construed in accordance with the internal laws of The Commonwealth of Massachusetts (without regard for its conflicts of laws principles), except for those matters governed by the General Corporation Law of the State of Delaware, and 13 14 decisional law relating thereto, which shall be governed by the laws of the State of Delaware, SECTION 7.07. ENTIRE AGREEMENT. This document, together with the documents and agreements to be delivered as provided in this Agreement, contain the entire agreement between Company and the Purchaser regarding the subject matter of this Agreement and those other documents. All prior negotiations, understandings and agreements between Company and the Purchaser are superseded by this Agreement, and there are no representations, warranties, understandings or agreements concerning the transactions which are the subject of this Agreement, other than those expressly set forth in this Agreement and in the documents and instruments expressly contemplated by this Agreement. SECTION 7.08. EFFECT OF HEADINGS. The Article and Section headings are for reference only, and do not affect the meaning or interpretation of this Agreement. SECTION 7.09. PROHIBITION AGAINST ASSIGNMENT. Neither this Agreement nor any right of any party under it may be assigned by any party hereto without the consent of the other party and any purported assignment in violation hereof shall be null and void. SECTION 7.10, REPRESENTATIONS REGARDING BROKERS. Each party to this Agreement represents and warrants to each other party that no one acted as a broker, a finder or in any similar capacity in connection with the transactions which are the subject of this Agreement. Each party to this Agreement indemnifies the other party against, and agrees to hold the other party harmless from, all liabilities and expenses (including reasonable attorneys fees) in connection with any claim by anyone for compensation as a broker, a finder or in any similar capacity by reason of services allegedly rendered to the indemnifying party in connection with the transactions which are the subject of this Agreement. SECTION 7.11. COUNTERPARTS. This Agreement may be executed in any number of counterparts, and with counterpart signature pages, and all such counterparts shall constitute one and the same instrument. 14 15 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as sealed instrument as of the date first above written. CYRK, INC. By: /s/ Patrick D. Brady By: /s/ Ty Warner ----------------------- ---------------------------- Name: Ty Warner Title: 15 EX-99.B 3 WARRANT TO PURCHASE SHARES OF COMMON STOCK 1 EXHIBIT B Execution Copy THE SECURITIES REPRESENTED BY THIS WARRANT (AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES STATUTE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT (I) AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES STATUTE, OR (II) AN OPINION OF COUNSEL FOR The HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. Shares Issuable 100,000 shares of the Common Stock of Cyrk, Inc., a Delaware corporation WARRANT TO PURCHASE SHARES OF COMMON STOCK Expires February 12, 2003 THIS CERTIFIES THAT, for value received, Ty Warner ("Purchaser"), is entitled to purchase up to 100,000 shares (as adjusted pursuant to the provisions hereof) (the "Shares-) of the fully paid and nonassessable Common Stock, $.01 par value (the "Common Stock") of Cyrk, Inc., a Delaware corporation (the "Company"), for a price per share equal to $10.25 or the adjusted price per share determined in accordance with Section 4 of this Warrant (the "Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, the term "warrant Shares" shall mean the Company's presently authorized Common Stock, or any stock into or for which such Common Stock shall have been or may hereafter be converted or exchanged company as pursuant from time t(degree) to the such Certificate of Incorporation (hereinafter the "Certificate of Incorporation"), and the term "Grant Date" shall mean February 12, 1998. 1. TERM. Subject to the provisions of this Warrant, the purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time To time from and after the Grant Date and prior to February 12, 2003. 2 2. METHOD OF EXERCISE. 2.1. STANDARD METHOD. The purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A duly executed) at the principal office of the Company and by the payment to the Company, by certified or bank check or by wire transfer, of an amount equal to the then applicable Warrant Price per share multiplied by the number of Warrant Shares then being purchased. The person or persons in whose name (s) any certificate(s) representing Warrant Shares shall be issuable upon exercise of this Warrant shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised and the then applicable Warrant Price paid. In the event of any exercise of the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the holder hereof as soon as possible and in any event within thirty days of receipt of such notice and payment of the then applicable Warrant Price and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the holder hereof as soon as possible and in any event within such thirty-day period. 2.2 NET ISSUE EXERCISE. (a) In lieu of exercising this Warrant, the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with notice of such election in which event the Company shall issue to Holder a number of shares of the Company's Common Stock computed using the following formula: Y (A-B) X= ------- A Where X = the number of shares of Common Stock to be issued to the Molder. Y = the number of shares of Common Stock purchasable under this Warrant or portion thereof being exercised. 2 3 A = the fair market value of one share of the Company's Common Stock. B = the Warrant Price (as adjusted to the date of such calculations). (b) For purposes of this Section, fair market value of one share of the Company's Common Stock shall be based on the average of the closing bid and asked prices of the Company's Common Stock as reported by the Nasdaq National Market for the twenty trading days prior to the date of determination of fair market value. 3. STOCK FULLY PAID; RESERVATION OF SHARES. All Warrant Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved for the purpose of issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of Warrant Shares warrant to provide for the exercise of the right represented by this 4. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The number and kind of securities purchasable upon the exercise of the Warrant and the Warrant Price shall be determined, and shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: 4.1 RECLASSIFICATION OR MERGER. In case of any reclassification, change or conversion of securities of the class issuable upon exercise of this Warrant (other than a change in pay value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Company with or into another corporation (other than a merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Company, the Company, or such successor or purchasing corporation, as the case may be, shall execute a new Warrant (in form and substance satisfactory to the holder of this Warrant) providing that the holder of this Warrant shall have the right to exercise such new Warrant and upon such exercise to receive, in lieu of each share of Common Stock therefore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change or merger by a holder of one share of Common Stock. Such new Warrant shall provide for adjustments 3 4 that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Paragraph 4. The provisions of this Section 4.1 shall similarly apply to successive reclassification, changes, mergers and transfers. 4.2 SUBDIVISIONS OR COMBINATION OF SHARES. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the Warrant Price shall be proportionately adjusted. 4.3 STOCK DIVIDENDS. If the Company at any time while this Warrant is outstanding and unexpired shall pay a dividend payable in shares of Common Stock (except any distribution specifically provided for in the foregoing Sections 4.1 and 4.2), then the warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Price in effect immediately prior to such date of determination by a fraction (a) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution (assuming the conversion, exchange or exercise of all securities convertible into, exchangeable for or exercisable for Common Stock), and (b) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution (assuming the conversion, exchange or exercise of all securities convertible into, exchangeable for or exercisable for Common Stock). 4.4 NO IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Article 4 and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment. 5. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price or number of Warrant Shares shall be adjusted pursuant to the provisions hereof, the Company shall within thirty (30) days of such adjustment deliver a certificate signed by its chief financial officer to the registered holder(s) hereof setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price after giving effect to such adjustment. 4 5 6. FRACTIONAL SHARES. No fractional Warrant Shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Warrant Price then in effect. 7. COMPLIANCE WITH SECURITIES ACT; DISPOSITION OF WARRANT OR WARRANT SHARES. 7.1 COMPLIANCE WITH SECURITIES ACT. The holder of this Warrant, by acceptance hereof, confirms as to itself the representations made by the holder in Article IV of the Securities Purchase Agreement dated as of the date hereof by and among the Purchaser and the Company (the "PURCHASE AGREEMENT") and agrees to the placement of a restrictive transfer legend on this Warrant and the certificates representing the Warrant Shares in accordance with the terms hereof. 7.2 DISPOSITION OF WARRANT AND WARRANT SHARES. With respect to any offer, sale or other disposition of this Warrant or any Warrant Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant Shares, the holder hereof and each subsequent holder of this Warrant agrees to give written notice to the Company thereto, describing briefly the manner thereof, together with a written opinion of such holder's counsel, if reasonably requested by the Company (and, in such case, such counsel and opinion must be reasonably acceptable to the Company), to the effect that such offer, sale or other disposition may be effected without registration or qualification under the Securities Act of 1933 (the "Act") as then in effect and/or any other federal or state law then in effect of this Warrant or such Warrant Shares and indicating whether or not under the Act certificates for this Warrant or such Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to insure compliance with the Act. Each certificate representing this Warrant or the Warrant Shares thus transferred (except a transfer pursuant to Rule 144) shall bear a legend as to the applicable restrictions on transferability in order to insure compliance with the Act, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to insure compliance with the Act. 8. NO RIGHTS AS SHAREHOLDER. No holder of the Warrant, as such, shall be entitled to vote or receive dividends or be deemed the holder of Warrant Shares or any other securities of the Company which may at any time be issuable on the exercise thereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right of vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or 5 6 otherwise until this Warrant shall have been exercised and the Warrant Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 9. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and warrants that this Warrant is issued and delivered on the basis of the following: 9.1 AUTHORIZATION AND DELIVERY. This Warrant has been duly authorized and executed by the Company and when delivered will be the valid and binding obligation of the Company enforceable in accordance with its terms; 9.2 WARRANT SHARES. The Warrant Shares have been duly authorized and reserved for issuance by the Company and, when issued and paid for in accordance with the terms hereof, will be validly issued, fully paid and nonassessable; 9.3 NO INCONSISTENCY. The execution and delivery of this warrant are not, and the issuance of the Warrant Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company's Certificate of Incorporation or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and do not and will not contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any Federal, state or local government authority or agency or other person. 10. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 11. NOTICES. Any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered by facsimile where confirmation of receipt by the receiving party's receiver can be documented, or delivered by hand, or shall be sent by reputable overnight courier, certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Company or the Company at the address indicated therefor on the signature page of this Warrant. 12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any corporation succeeding the Company by merger or consolidation, and all of the obligations of the Company relating to the Warrant Shares issuable upon the exercise of this Warrant shall be as set forth in the Company's Certificate of 6 7 Incorporation and the Company's by-laws (each as amended from time to time) and shall survive the exercise and termination of this Warrant and all of the covenants and agreements herein and in such other documents and instruments of the Company shall insure to the benefits of the successors and assigns of the holder hereof. 13. LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to the holder hereof that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, or like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 14. DESCRIPTIVE HEADINGS. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. 15. GOVERNING LAW. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Delaware. CYRK, INC. By: /s/ Patrick D. Brady -------------------------------- Address: 21 Pond Road Gloucester, MA 01930 Date: February 12 1998 7 8 EXHIBIT A NOTICE OF EXERCISE To: 1. The undersigned hereby elects to purchase ___ shares of Common Stock of Cyrk, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 2. Please issue a certificate or certificates representing said shares in the name of the undersigned or, subject to compliance with the restrictions on transfer set forth in Section 7 of the Warrant, in such other name or names as are specified below: -------------------------- (Name) -------------------------- -------------------------- -------------------------- (Address) 3. The undersigned represents that the aforesaid shares being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. ------------------------------------------ Signature - --------------------------------- Date 8 -----END PRIVACY-ENHANCED MESSAGE-----