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Exhibit 10.1
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of December 19, 1997
by and among
Amscan Holdings, Inc.,
the Guarantors party hereto
and
Goldman, Sachs & Co.
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This Exchange and Registration Rights Agreement (this "Agreement")
is made and entered into as of December 19, 1997 by and among Amscan Holdings,
Inc., a Delaware corporation (the "Company"), each subsidiary of the Company
which is a signatory hereof and by each additional subsidiary of the Company
that is created or acquired after the date hereof that executes a counterpart to
this Agreement substantially in the form of Exhibit A attached hereto pursuant
to Section 6(d)(xxii) (collectively, including such signatories, the
"Guarantors"), and Goldman, Sachs & Co. (the "Initial Purchaser"), who has
agreed to purchase the Company's 9.875% Senior Subordinated Notes due 2007 (the
"Senior Subordinated Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated
December 15, 1997 (the "Purchase Agreement"), by and among the Company, the
Guarantors and the Initial Purchaser. In order to induce the Initial Purchaser
to purchase the Senior Subordinated Notes, the Company and the Guarantors have
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchaser set forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1 DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered with the Commission
under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Exchange Notes that
are acquired by a Restricted Broker-Dealer for its own account as a result of
market-making activities or other trading activities.
Closing Date: The date of the closing of the Transaction.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" (including correlative terms) for purposes of this Agreement upon
the occurrence of (i) the filing and effectiveness under the Act of the Exchange
Offer Registration Statement relating to the Exchange Notes to be issued in the
Exchange Offer, (ii) the maintenance of such Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the minimum period required pursuant to Section 3(b) hereof, and (iii) the
delivery by the Company to the Registrar under the Indenture (or an indenture
substantially identical to the Indenture) of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Senior
Subordinated Notes that were tendered by Holders thereof pursuant to the
Exchange Offer.
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Damages Payment Date: With respect to the Senior Subordinated Notes,
each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: Debt securities and guarantees of the Company and
the Guarantors, respectively, which debt securities and guarantees shall be
substantially identical to the Senior Subordinated Notes and the Senior
Subordinated Guarantees (as defined in the Indenture), respectively, except that
they have been registered pursuant to an effective Registration Statement under
the Act, and are entitled to the benefits of the Indenture or an indenture which
is substantially identical to the Indenture and which has been qualified under
the Trust Indenture Act.
Exchange Offer: The registration by the Company under the Act of the
Exchange Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Senior Subordinated Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act.
Guarantors: As defined in the preamble hereto.
Holders: As defined in Sections 2(b) and 2(c) hereof.
Indenture: The Indenture, dated as of December 19, 1997, among the
Company, IBJ Schroder Bank & Trust Company, as trustee (the "Trustee") and the
Guarantors, pursuant to which the Senior Subordinated Notes and the Exchange
Notes are to be issued, as such Indenture may be amended or supplemented from
time to time in accordance with the terms thereof; except that, if the Exchange
Notes are issued pursuant to an indenture substantially identical to the
Indenture, then Indenture shall also refer to such indenture.
Initial Purchaser: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
Market-Maker Prospectus: As defined in Section 4 hereof.
NASD: National Association of Securities Dealers, Inc.
Notes: The Senior Subordinated Notes and the Exchange Notes.
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Person: An individual, partnership, corporation, trust, limited
liability company or unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement
including, without limitation, a Market-Maker Prospectus, in each case, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.
Record Holder: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Restricted Broker-Dealer: Any Broker-Dealer that is an affiliate of
the Company and that holds Broker-Dealer Transfer Restricted Securities.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer, (b)
the registration for resale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, which is filed pursuant to the provisions of
Section 4(a) of this Agreement, or (c) the registration for resale of
Broker-Dealer Transfer Restricted Securities, which is filed pursuant to the
provisions of Section 4(c) of this Agreement, in each case, including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Senior Subordinated Notes: As defined in the preamble hereto.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Transaction: As defined in the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged by a person other than a
Broker-Dealer for an Exchange Note in the Exchange Offer and entitled to be
resold to the public by the Holder thereof without complying with the prospectus
delivery requirements of the Act, (b) following the exchange by a Broker-Dealer
in the Exchange Offer of a Senior Subordinated Note for an Exchange Note, the
date on which such Exchange Note is sold to a purchaser who receives from such
Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (c) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with a Shelf Registration Statement and (d) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date of the Indenture.
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Underwritten Registration or Underwritten Offering: A registration
in which securities of the Company are sold to an underwriter for reoffering to
the public.
SECTION 2 SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities and Broker-Dealer Transfer
Restricted Securities. The securities entitled to the benefits of this Agreement
are the Transfer Restricted Securities and the Broker-Dealer Transfer Restricted
Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
(c) Holders of Broker-Dealer Transfer Restricted Securities. A
Restricted Broker-Dealer is deemed to be a holder of Broker-Dealer Transfer
Restricted Securities (each, a "Holder") whenever such Restricted Broker-Dealer
owns Broker-Dealer Transfer Restricted Securities.
SECTION 3 REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company and the Guarantors shall (i)
cause to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 45 days after the Closing Date, a Registration
Statement under the Act relating to the Exchange Notes and the Exchange Offer,
(ii) use their best efforts to cause such Registration Statement to become
effective at the earliest possible time, but in no event later than 105 days
after the date on which such Registration Statement is filed with the Commission
(which 105-day period shall be extended for a number of days equal to the number
of Business Days (as defined in the Indenture), if any, that the Commission is
officially closed during such period), (iii) in connection with the foregoing,
(A) file all pre-effective amendments to such Registration Statement as may be
necessary in order to cause such Registration Statement to become effective, (B)
file, if applicable, a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Act and (C) cause all necessary filings in
connection with the registration and qualification of the Exchange Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer
Registration Statement shall be on the appropriate form permitting registration
of the Exchange Notes to be offered in exchange for the Transfer Restricted
Securities and to permit resales of Notes held by Broker-Dealers as contemplated
by Section 3(c) below.
(b) The Company and the Guarantors shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Company and the Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Notes shall be included in the Exchange Offer Registration
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Statement. The Company and the Guarantors shall use their best efforts to cause
the Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 45 days thereafter.
(c) The Company and the Guarantors shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Senior
Subordinated Notes that are Transfer Restricted Securities and that were
acquired for its own account as a result of market-making activities or other
trading activities (other than Transfer Restricted Securities acquired directly
from the Company), may exchange such Senior Subordinated Notes pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with any sales of the Exchange Notes
received by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by the Commission.
The Company and the Guarantors shall use their best efforts to keep
the Exchange Offer Registration Statement continuously effective, supplemented
and amended as required by the provisions of Section 6(d) below to the extent
necessary to ensure that it is available for resales of Notes acquired by
Broker-Dealers for their own accounts as a result of market-making activities or
other trading activities, and to ensure that such Registration Statement
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of 195 days from the date on which the Exchange Offer Registration
Statement is declared effective.
The Company and the Guarantors shall promptly provide sufficient
copies of the latest version of such Prospectus to Broker-Dealers promptly upon
request, at any time during such 195-day period in order to facilitate such
sales.
SECTION 4 SHELF REGISTRATION; MARKET-MAKER PROSPECTUS
(a) Shelf Registration. If (i) the Company and the Guarantors are
not required to file an Exchange Offer Registration Statement or permitted to
Consummate the Exchange Offer, in either case, because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with) or (ii) any Holder of Transfer
Restricted Securities shall notify the Company on or prior to the 20th Business
Day following Consummation of the Exchange Offer that such Holder alone or
together with Holders who hold in the aggregate at least $1.0 million in
principal amount of Senior Subordinated Notes (A) is prohibited by law or
Commission policy from participating in the Exchange Offer, or (B) may not
resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and that the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or
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available for such resales by such Holder or (C) is a Broker-Dealer and holds
Notes acquired directly from the Company or one of the Company's affiliates,
then the Company and the Guarantors shall use their best efforts to
(x) cause to be filed a shelf registration statement pursuant to
Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earlier to occur of (1) the 45th day after
the date on which the Company is notified by the Commission or otherwise
determines that it is not required to file the Exchange Offer Registration
Statement or permitted to Consummate the Exchange Offer, and (2) the 45th
day after the date on which the Company receives notice from a Holder of
Transfer Restricted Securities as contemplated by clause (ii) above (such
earlier date being the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities
the Holders of which shall have provided the information required pursuant
to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective
by the Commission on or before the 105th day after the Shelf Filing
Deadline.
The Company and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (d) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, until the second anniversary of the Closing Date or such shorter period
that will terminate when all the Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement or become
eligible for resale pursuant to Rule 144 without volume or other restrictions.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 Business Days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
(c) Market-Maker Prospectus. The Company and the Guarantors
acknowledge that any Restricted Broker-Dealer holding Broker-Dealer Transfer
Restricted Securities may not resell such Broker-Dealer Transfer Restricted
Securities without delivering a Prospectus. Consequently, on the date that the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, is filed with the Commission, the Company and the Guarantors
shall file a Registration Statement for use with respect to
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such resales (which may be the Exchange Offer Registration Statement or, if the
filing of the Exchange Offer Registration Statement is not required hereunder,
the Shelf Registration Statement if permitted by the rules and regulations of
the Commission) and shall use their best efforts to cause such Registration
Statement to be declared effective by the Commission on or prior to the
Consummation of the Exchange Offer. The Company and the Guarantors shall use
their best efforts to keep such Registration Statement continuously effective,
supplemented and amended as required by the provisions of Sections 6(c) and (d)
hereof to the extent necessary to ensure that it is available for resales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers, and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, until such time as all Restricted Broker-Dealers determine in their
judgment that they are no longer required to deliver a Prospectus in connection
with sales of Broker-Dealer Transfer Restricted Securities. The Prospectus
included in such Registration Statement is referred to in this Agreement as a
"Market-Maker Prospectus."
SECTION 5 LIQUIDATED DAMAGES
If (i) either of the Registration Statements required by Section 3
or 4(a) of this Agreement is not filed with the Commission on or prior to the
date specified for such filing in this Agreement, (ii) either of such
Registration Statements has not been declared effective by the Commission on or
prior to the date specified for such effectiveness in this Agreement (the
"Effectiveness Target Date"), (iii) the Exchange Offer has not been Consummated
within 45 Business Days after the Effectiveness Target Date with respect to the
Exchange Offer Registration Statement or (iv) either Registration Statement
required by Section 3 or 4(a) of this Agreement is filed and declared effective
but shall thereafter cease to be effective or fail to be usable (except as
permitted by Section 6(d)(i) of this Agreement) for its intended purpose without
being succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself immediately declared
effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Company and the Guarantors hereby jointly and
severally agree to pay liquidated damages to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $0.05 per week
per $1,000 principal amount of Transfer Restricted Securities held by such
Holder for each week or portion thereof that the Registration Default continues.
The amount of the liquidated damages shall increase by an additional $0.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $0.50 per week per
$1,000 principal amount of Transfer Restricted Securities. All accrued
liquidated damages shall be paid to Record Holders by the Company by wire
transfer of immediately available funds on each Damages Payment Date, as
provided in the Indenture. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
liquidated damages with respect to such Transfer Restricted Securities will
cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
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SECTION 6 REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall comply with all of the
provisions of Section 6(d) below, shall use their best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is
a question as to whether the Exchange Offer is permitted by applicable
law, the Company and the Guarantors hereby agree to seek a no-action
letter or other favorable decision from the Commission allowing the
Company and the Guarantors to Consummate an Exchange Offer for such Senior
Subordinated Notes. The Company and the Guarantors each hereby agrees to
pursue the issuance of such a decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company and the Guarantors each hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursue a resolution (which need not be favorable) by
the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the Company
(which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary
course of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations for the
Exchange Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to participate
in a distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction should be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K
if the resales are of Exchange Notes obtained by such Holder in exchange
for Senior Subordinated Notes acquired by such Holder directly from the
Company.
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(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall, if required by the
Commission, provide a supplemental letter to the Commission (A) stating
that the Company and the Guarantors are registering the Exchange Offer in
reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and Co.,
Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above and (B) including a representation
that neither the Company nor the Guarantors have entered into any
arrangement or understanding with any Person to distribute the Exchange
Notes to be received in the Exchange Offer and that, to the best of the
Company's information and belief, each Holder participating in the
Exchange Offer is acquiring the Exchange Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes received in the
Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(d) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof, and
pursuant thereto, to the extent required by Section 4(a), the Company will as
expeditiously as possible prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted Securities
in accordance with the intended method or methods of distribution thereof.
(c) Market-Maker Prospectus. In connection with any Registration
Statement filed pursuant to Section 4(c) of this Agreement, during the period it
is required to be effective hereunder, the Company and the Guarantors will
comply with all of the provisions of Section 6(d) (other than sub-sections
(xii), (xiii), (xvi), (xix) and (xx)) below until such time as all Restricted
Broker-Dealers determine in their judgment that they are no longer required to
deliver Market-Maker Prospectuses in connection with sales of Broker-Dealer
Transfer Restricted Securities. The Company and Guarantors shall use their best
efforts to deliver Market-Maker Prospectuses to all Restricted Broker-Dealers
immediately upon the effectiveness of the Registration Statement and from time
to time thereafter, during the period the Registration Statement is required to
be effective hereunder, upon request, in such quantities as such Restricted
Broker-Dealer shall require.
(d) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus required to permit resales of
Notes by Broker-Dealers) and Broker-Dealer Transfer Restricted Securities, the
Company and the Guarantors shall:
(i) use their best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4
of this Agreement, as applicable; upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
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to be effective and usable for resale of Transfer Restricted Securities or
Broker-Dealer Transfer Restricted Securities, as applicable, during the
period required by this Agreement, the Company and the Guarantors shall
file promptly an appropriate amendment to such Registration Statement, in
the case of clause (A), correcting any such misstatement or omission, and,
in the case of either clause (A) or (B), use their best efforts to cause
such amendment to be declared effective and such Registration Statement
and the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter. Notwithstanding the foregoing and the
provisions of Section 4, at any time after Consummation of the Exchange
Offer, the Company and the Guarantors may allow the Shelf Registration
Statement or Market-Maker Prospectus and the related Registration
Statement to cease to be effective and usable if (x) the Board of
Directors of the Company determines in good faith that such action is in
the best interests of the Company, and the Company notifies the Holders
within two Business Days after the Board of Directors makes such
determination, or (y) the Prospectus contained in the Shelf Registration
Statement or the Market-Maker Prospectus or the Registration Statement
relating to either, as the case may be, contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading; provided that the two-year period referred to
in Section 4(a) hereof during which the Shelf Registration Statement is
required to be effective and usable shall be extended by the number of
days during which such registration statement was not effective or usable
pursuant to the foregoing provisions;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable; cause the
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under
the Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders of
Transfer Restricted Securities and, following the Consummation of the
Exchange Offer, Holders of Broker-Dealer Transfer Restricted Securities,
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when the
same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, for offering or sale in any jurisdiction, or the initiation of
any proceeding
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for any of the preceding purposes, and (D) of the existence of any fact or
the happening of any event that makes any statement of a material fact
made in the Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference therein
untrue, or that requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of the
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, under state securities or Blue Sky laws, the
Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders of Transfer Restricted
Securities or Holders of Broker-Dealer Transfer Restricted Securities and
each of the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein
(except that the Exchange Offer Registration Statement need only be
provided to such underwriters) or any amendments or supplements to any
such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review of such Holders
and underwriter(s), if any, for a period of at least five Business Days,
and the Company and the Guarantors will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) if a selling Holder of Transfer Restricted
Securities or a Holder of Broker-Dealer Transfer Restricted Securities, as
applicable, covered by such Registration Statement or the underwriter(s),
if any, shall not have had such an opportunity to participate in the
preparation thereof;
(v) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders of Transfer
Restricted Securities or the Holders of Broker-Dealer Transfer Restricted
Securities, as applicable, and to the underwriter(s), if any, make the
Company's representatives available (and representatives of the
Guarantors) for discussion of such document and other customary due
diligence matters, and include such information in such document prior to
the filing thereof as such selling Holders or underwriter(s), if any,
reasonably may request;
(vi) make available at reasonable times at the Company's principal
place of business for inspection by the selling Holders of Transfer
Restricted Securities, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriter(s) who shall
certify to the Company and the Guarantors that they have a current
intention to sell Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities pursuant to a Shelf Registration Statement or
Market-Maker Prospectus, and, following the Consummation of the Exchange
Offer, the Holders of Broker-Dealer Transfer Restricted Securities, such
financial and other information of the Company and the Guarantors as
reasonably requested and cause the Company's and the Guarantors' officers,
directors and employees to respond to such
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inquiries as shall be reasonably necessary, in the reasonable judgment of
counsel to such Holders, to conduct a reasonable investigation; provided,
however, that each such party shall be required to maintain in confidence
and not to disclose to any other person any information or records
reasonably designated by the Company in writing as being confidential,
until such time as (A) such information becomes a matter of public record
(whether by virtue of its inclusion in such Registration Statement or
otherwise), or (B) such person shall be required so to disclose such
information pursuant to the subpoena or order of any court or other
governmental agency or body having jurisdiction over the matter (subject
to the requirements of such order, and only after such person shall have
given the Company prompt prior written notice of such requirement), or (C)
such information is required to be set forth in such Registration
Statement or the Prospectus included therein or in an amendment to such
Registration Statement or an amendment or supplement to such Prospectus in
order that such Registration Statement, Prospectus, amendment or
supplement, as the case may be, does not contain an untrue statement of a
material fact or omit to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
(vii) if requested by any selling Holders of Transfer Restricted
Securities or Holders of Broker-Dealer Transfer Restricted Securities, as
applicable, or the underwriter(s), if any, promptly incorporate in any
Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information that is required
by the Act as such Holders and underwriter(s), if any, may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering of the
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
(viii) furnish to each Holder of Transfer Restricted Securities or
Holders of Broker-Dealer Transfer Restricted Securities, as applicable,
and each of the underwriter(s), if any, without charge, at least one copy
of the Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(ix) deliver to each selling Holder of Transfer Restricted
Securities and each of the underwriter(s), if any, and each Holder of
Broker-Dealer Transfer Restricted Securities, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company and the Guarantors hereby consent to the use of the Prospectus
and any amendment or supplement thereto by each of the selling Holders and
each of the underwriter(s), if any, and each Holder of Broker-Dealer
Transfer Restricted Securities, in connection with the offering and the
sale of
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the Transfer Restricted Securities and Broker-Dealer Transfer Restricted
Securities, as applicable, covered by the Prospectus or any amendment or
supplement thereto;
(x) enter into, and cause the Guarantors to enter into, such
agreements (including an underwriting agreement), and make, and cause the
Guarantors to make, such representations and warranties, and take all such
other actions in connection therewith in order to expedite or facilitate
the disposition of the Transfer Restricted Securities and Broker-Dealer
Transfer Restricted Securities, as applicable, pursuant to any
Registration Statement contemplated by this Agreement, all to such extent
as may be requested by the Initial Purchaser or, in the case of
registration for resale of Transfer Restricted Securities pursuant to the
Shelf Registration Statement, by any Holder or Holders of Transfer
Restricted Securities who hold Transfer Restricted Securities in an amount
equal to at least 25% in aggregate principal amount of outstanding Notes
or, in the case of Broker-Dealer Transfer Restricted Securities, by any
Holder of Broker-Dealer Transfer Restricted Securities; provided, that,
the Company and the Guarantors shall not be required to enter into any
such agreement more than once with respect to all of the Transfer
Restricted Securities and, in the case of a Shelf Registration Statement,
may delay entering into such agreement if the Board of Directors of the
Company determines in good faith that it is in the best interests of the
Company; and whether or not an underwriting agreement is entered into and
whether or not the registration is an Underwritten Registration, the
Company and the Guarantors shall:
(A) furnish to the Initial Purchaser, the Holders of Transfer
Restricted Securities who hold Transfer Restricted Securities in an
amount equal to at least 25% in aggregate principal amount of
outstanding Notes (in the case of a Shelf Registration Statement),
each Holder of Broker-Dealer Transfer Restricted Securities and each
underwriter, if any, in such substance and scope as they may request
and as are customarily made in connection with an offering of debt
securities pursuant to a Registration Statement (i) upon the
effective date of any Registration Statement (and if such
Registration Statement contemplates an Underwritten Offering of
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, upon the date of the closing under the
underwriting agreement related thereto) and (ii) upon the filing of
any amendment or supplement to any Registration Statement or any
other document that is incorporated in any Registration Statement by
reference and includes financial data with respect to a fiscal
quarter or year:
(1) a certificate, dated the date of effectiveness of
any Registration Statement (and if such Registration Statement
contemplates an Underwritten Offering of Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, the date of the closing under the underwriting
agreement related thereto) or the date of the filing of any
other document pursuant to clause (A)(ii) above, as the case
may be, signed by (y) the President or any Vice President and
(z) a principal financial or accounting officer of each of the
Company and the Guarantors, confirming, as of the date
thereof, the matters set forth in paragraphs (e), (f) and (j)
of Section 7 of the
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Purchase Agreement and such other matters as such parties may
reasonably request;
(2) an opinion, dated the date of effectiveness of any
Registration Statement (and if such Registration Statement
contemplates an Underwritten Offering of Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, the date of the closing under the underwriting
agreement related thereto) or the date of the filing of any
other document pursuant to clause (A)(ii) above, as the case
may be, of counsel for the Company and the Guarantors,
covering the matters set forth in paragraphs (b) and (c) of
Section 7 of the Purchase Agreement and such other matter as
such parties may reasonably request, and in any event
including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors (if applicable), the Initial
Purchaser's representatives and the Initial Purchaser's
counsel in connection with the preparation of such
Registration Statement and the related Prospectus and have
considered the matters required to be stated therein and the
factual statements contained therein, although such counsel
has not independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to materiality
to a certain extent upon facts provided to such counsel by
officers and other representatives of the Company and the
Guarantors and without independent check or verification),
nothing came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective, and, in the case of the
Exchange Offer Registration Statement, as of the date of
Consummation, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer,
as of the date of Consummation, contained an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, has not
independently verified and expresses no opinion with respect
to, the accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
effectiveness of any Registration Statement (and if such
Registration Statement
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contemplates an Underwritten Offering of Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, the date of the closing under the underwriting
agreement related thereto) or the date of the filing of any
other document pursuant to clause (A) (ii) above, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters by underwriters in connection with
an offering of debt securities pursuant to a Registration
Statement, and affirming, or updating, as applicable, the
matters set forth in the comfort letters delivered pursuant to
Section 7(d) of the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company pursuant to this clause (x), if any.
(xi) prior to any public offering of Transfer Restricted Securities
or Broker-Dealer Transfer Restricted Securities, as applicable, cooperate
with, and cause the Guarantors to cooperate with, the selling Holders of
Transfer Restricted Securities, the Holders of Broker-Dealer Transfer
Restricted Securities, the underwriter(s), if any, and their respective
counsel in connection with the registration and qualification of the
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, under the securities or Blue Sky laws of such
jurisdictions as the selling Holders of Transfer Restricted Securities or
Holders of Broker-Dealer Transfer Restricted Securities or underwriter(s)
may reasonably request and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, covered by any Registration Statement filed
pursuant to Section 4 hereof; provided, however, that neither the Company
nor the Guarantors shall be required to register or qualify as a foreign
corporation where they are not now so qualified or to take any action that
would subject them to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where they are not now so subject;
(xii) shall issue, upon the request of any Holder of Senior
Subordinated Notes covered by the Shelf Registration Statement, Exchange
Notes, having an aggregate principal amount equal to the aggregate
principal amount of Senior Subordinated Notes surrendered to the Company
by such Holder in exchange therefor or being sold by such Holder; such
Exchange Notes to be registered in the name of such Holder or in the name
of the purchaser(s) of such Notes, as the case may be; in return, the
Senior Subordinated Notes held by such Holder shall be surrendered to the
Company for cancellation;
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(xiii) cooperate with, and cause the Guarantors to cooperate with,
the selling Holders of Transfer Restricted Securities and the
underwriter(s), if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as
such Holders or the underwriter(s), if any, may request at least two
Business Days prior to any sale of Transfer Restricted Securities made by
such underwriter(s);
(xiv) use its reasonable best efforts to cause the Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s),
if any, to consummate the disposition of such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable,
subject to the proviso contained in clause (xi) above;
(xv) if any fact or event contemplated by clause (d)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities or Broker-Dealer Transfer Restricted Securities, as
applicable, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustees under the Indentures with printed certificates for
the Transfer Restricted Securities which are in a form eligible for
deposit with the Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD;
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal
quarter in which Transfer Restricted Securities are sold to underwriters
in a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;
(xix) cause the Indenture to be qualified under the Trust Indenture
Act not later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate, and
cause the Guarantors to cooperate, with the Trustees and the Holders of
Notes to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance
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with the terms of the Trust Indenture Act; and execute, and cause the
Guarantors to execute, and use their best efforts to cause the Trustees to
execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner;
(xx) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which
similar securities issued by the Company are then listed if requested by
the Holders of a majority in aggregate principal amount of Notes or the
managing underwriter(s), if any;
(xxi) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act; and
(xxii) cause each direct or indirect domestic subsidiary of the
Company that is created or acquired and that is required to become a
guarantor of the Notes under the Indenture, upon the creation or
acquisition of such subsidiary (if then required to become a guarantor),
to execute a counterpart to this Agreement in the form attached hereto as
Exhibit A and to deliver such counterpart, together with an opinion of
counsel as to the enforceability thereof against such entity, to the
Initial Purchaser no later than seven days following the execution
thereof.
Each Holder agrees by acquisition of a Transfer Restricted Security
or Broker-Dealer Transfer Restricted Securities, as applicable, that, upon
receipt of any notice from the Company of the existence of any fact of the kind
described in Section 6(d)(iii)(D) hereof, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(xv) hereof, or
until it is advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable, that
was current at the time of receipt of such notice. In the event the Company
shall give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4(a) hereof, as applicable,
shall be extended by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 6(d)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(d)(xv) hereof or shall have received the
Advice.
The Company may require each Holder of Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities as to which any
registration is being effected to furnish to the Company such information
regarding such Holder and such Holder's intended method of distribution of the
applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities as the Company may from time to time reasonably
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request in writing, but only to the extent that such information is required in
order to comply with the Act. Each such Holder agrees to notify the Company as
promptly as practicable of (i) any inaccuracy or change in information
previously furnished by such Holder to the Company or (ii) the occurrence of any
event, in either case, as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities or omits to state any material fact regarding such Holder or such
Holder's intended method of distribution of the applicable Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities required to be stated
therein or necessary to make the statements therein not misleading and promptly
to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such Prospectus
shall not contain, with respect to such Holder or the distribution of the
applicable Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 7 REGISTRATION EXPENSES
(a) All expenses associated with and incident to the Company's or
the Guarantors' performance of or compliance with this Agreement will be borne
by the Company or the Guarantors, regardless of whether a Registration Statement
becomes effective, including without limitation: (i) all registration and filing
fees and expenses (including filings made by the Initial Purchaser or any Holder
with the NASD and reasonable counsel fees and disbursements in connection
therewith (and, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all reasonable fees and disbursements of
compliance with federal securities and state Blue Sky or securities laws
(including all reasonable fees and expenses of counsel to the underwriter(s) in
connection with compliance with state Blue Sky or securities laws); (iii) all
expenses of printing (including printing certificates for the Exchange Notes to
be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and the Guarantors and, subject to Section 7(b)) below, the
reasonable fees and disbursements of counsel for the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing Notes on a national securities exchange or automated quotation system
pursuant to the requirements hereof; (vi) all fees and expenses of the Trustees
under the Indenture to the extent provided in the Indenture and of any custodian
or exchange agent; and (vii) all fees and disbursements of independent certified
public accountants of the Company and the Guarantors (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company shall, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company shall reimburse the
Initial Purchaser and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or
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resold pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be such counsel as the Initial Purchaser shall
appoint or such other counsel as may be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared.
SECTION 8 INDEMNIFICATION
(a) Indemnification by the Company and the Guarantors. Upon any
registration of Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, pursuant to Sections 3 and 4 hereof, and
in consideration of the agreements of the Initial Purchaser contained herein,
and as an inducement to the Initial Purchaser to purchase the Notes, the Company
and the Guarantors, jointly and severally, shall and hereby agree to, (i)
indemnify and hold harmless each Holder of Transfer Restricted Securities and
Broker-Dealer Transfer Restricted Securities, as applicable, to be included in
such registration and each person who participates as a placement or sales agent
or as an underwriter in any offering or sale of such Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder, agent or underwriter may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, were registered under the Act, or any preliminary,
final or summary Prospectus contained therein or furnished by the Company to any
such Holder, agent or underwriter, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) reimburse such Holder, such agent
and such underwriter for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company and the Guarantors
shall not be liable under (i) above to any such person in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, or preliminary, final or summary
Prospectus, or amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by such person
expressly for use therein.
(b) Indemnification by the Holders and any Agents and Underwriters.
The Company and the Guarantors may require, as a condition to including any
Transfer Restricted Securities or Broker-Dealer Transfer Restricted Securities,
as applicable, in any Registration Statement filed pursuant to Sections 3 and 4
hereof and to entering into any underwriting or placement or sales agent
agreement, if any, with respect thereto, that the Company and the Guarantors
shall have received an undertaking reasonably satisfactory to them from the
Holders of such Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, and from each underwriter or agent named
in any such underwriting or placement or sales agent agreement, if any,
severally and not jointly, to (i) indemnify and hold harmless the Company and
the Guarantors, and, in the case of a Shelf Registration Statement, all other
Holders of Transfer Restricted Securities, against any
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losses, claims, damages or liabilities to which the Company, the Guarantors or
such other Holders of Transfer Restricted Securities or Broker-Dealer Transfer
Restricted Securities, as applicable, may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement, or
any preliminary, final or summary Prospectus contained therein or furnished by
the Company to any such Holder, agent or underwriter, if any, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
agent or underwriter expressly for use therein, and (ii) reimburse the Company
and the Guarantors for any legal or other expenses reasonably incurred by the
Company and the Guarantors in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that no
such Holder shall be required to undertake liability to any person under this
Section 8(b) for any amounts in excess of the dollar amount of the proceeds to
be received by such Holder from the sale of such Holder's Transfer Restricted
Securities or Broker-Dealer Transfer Restricted Securities, as applicable,
pursuant to such registration.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 8, notify such indemnifying party in writing of
the commencement of such action; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party other than under the indemnification provisions of or
contemplated by Section 8(a) or 8(b) hereof. In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless the indemnified party shall have been advised by
counsel that representation of the indemnified party by counsel provided by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between the indemnifying party and the indemnified party, including
situations in which there are one or more legal defenses available to the
indemnified party that are different from or additional to those available to
the indemnifying party; provided, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
of attorneys at any time for all indemnified parties, except to the extent that
local counsel, in addition to its regular counsel, is
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required in order to effectively defend against such action or proceeding. The
indemnifying party shall not be required to indemnify any indemnified party for
any amount paid or payable by such indemnified party in the settlement of any
action, proceeding or investigation without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) Contribution. Each party hereto agrees that, if for any reason
the indemnification provisions contemplated by Section 8(a) or Section 8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were determined by pro rata allocation (even if the Holders or any
agents or underwriters or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages, or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), no Holder shall
be required to contribute any amount in excess of the amount by which the dollar
amount of the proceeds received by such Holder from the sale of any Transfer
Restricted Securities (after deducting any fees, discounts and commissions
applicable thereto) or Broker-Dealer Transfer Restricted Securities, as
applicable, exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission, and no underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the
Transfer Restricted Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' and any underwriters' obligations in
this Section 8(d) to contribute shall be several in proportion to the principal
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amount of Transfer Restricted Securities or Broker-Dealer Transfer Restricted
Securities, as applicable, registered or underwritten, as the case may be, by
them and not joint.
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company and the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and partner of each Holder, agent and
underwriter and each person, if any, who controls any Holder, agent or
underwriter within the meaning of the Act; and the obligations of the Holders
and any underwriters contemplated by this Section 8 shall be in addition to any
liability which the respective Holder or underwriter may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company and the Guarantors (including any person who, with his consent,
is named in any Registration Statement as about to become a director of the
Company and the Guarantors) and to each person, if any, who controls the Company
and the Guarantors within the meaning of the Act.
SECTION 9 RULE 144A
The Company and the Guarantors hereby agree with each Holder, for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11 SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Company; provided, that such
investment bankers and managers must be Goldman, Sachs & Co. or another firm
reasonably satisfactory to the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering.
SECTION 12 MISCELLANEOUS
(a) Remedies. The Company and the Guarantors agree that monetary
damages (including the liquidated damages contemplated hereby) would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this
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Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, and will cause
the Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither the Company nor the Guarantors have previously
entered into any agreement granting any registration rights with respect to its
debt securities or convertible debt securities to any Person. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the Guarantors
shall not take any action, or permit any change to occur, with respect to the
Notes that would materially and adversely affect the ability of the Holders to
Consummate the Exchange Offer or the ability of the Holders to include such
Notes in the Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered. The provisions of
Sections 4(c), 6(d), 7, 8 and this Section 12(d) may not be amended, modified or
supplemented without the written consent of the Initial Purchaser.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrars under the Indentures, with a copy to the Registrars under the
Indentures; and
(ii) if to the Company and the Guarantors:
Amscan Holdings, Inc.
80 Grasslands Road
Elmsford, New York 10523
Telecopier No.: (914) 345-2056
Attention: Secretary
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With a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopier No.: (212) 403-2000
Attention: Mitchell S. Presser
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustees at the
address specified in the Indentures.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the Indenture,
the Notes and Purchase Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company and the
Guarantors with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
AMSCAN HOLDINGS, INC.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: Chief Executive Officer
AMSCAN INC.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: President
AM-SOURCE, INC.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: President
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TRISAR, INC.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: President
SSY REALTY CORP.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: President
JCS REALTY CORP.
By: /s/ GERALD C. RITTENBERG
------------------------------------
Name: Gerald C. Rittenberg
Title: President
GOLDMAN, SACHS & CO.
/s/ GOLDMAN, SACHS & CO.
------------------------------------
(Goldman, Sachs & Co.)
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29
Exhibit A
Counterpart To Exchange and Registration Rights Agreement
The undersigned hereby absolutely, unconditionally and irrevocably
agrees to be bound by the terms and provisions of the Exchange and Registration
Rights Agreement, dated as of December 19, 1997, by and among Amscan Holdings,
Inc., a Delaware corporation, each of the Guarantors (as defined therein) and
the Initial Purchaser (as defined therein).
IN WITNESS WHEREOF, the undersigned has executed this Counterpart as
of _______________, 199_.
[NAME]
By:
------------------------------
Name:
Title:
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