1
EXHIBIT 4.8
HEDSTROM CORPORATION
$110,000,000 10% SENIOR SUBORDINATED NOTES DUE 2007
HEDSTROM HOLDINGS, INC.
$44,612,000 12% SENIOR DISCOUNT NOTES DUE 2009
REGISTRATION RIGHTS AGREEMENT
June 9, 1997
Credit Suisse First Boston Corporation
Societe Generale Securities Corporation
UBS Securities LLC
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010
Dear Sirs:
Hedstrom Corporation, a Delaware corporation ("Hedstrom"), and
Hedstrom Holdings, Inc., a Delaware corporation ("Holdings" and, together with
Hedstrom, the "Issuers"), propose to issue and sell to Credit Suisse First
Boston Corporation, Societe Generale Securities Corporation and UBS Securities
(the "Initial Purchasers"), upon the terms set forth in a purchase agreement of
even date herewith (the "Purchase Agreement"), $110,000,000 aggregate principal
amount of Hedstrom's 10% Senior Subordinated Notes Due 2007 (the "Senior
Subordinated Notes"); and $44,612,000 aggregate principal amount at maturity of
Holdings' 12% Senior Discount Notes Due 2009 (the "Discount Notes" and,
together with the Senior Subordinated Notes, the "Notes"). The Senior
Subordinated Notes will be unconditionally guaranteed on a senior basis by
Holdings (in such capacity, the "Guarantor") and on a senior subordinated basis
by each domestic subsidiary of Hedstrom (the "Subsidiary Guarantors").
References herein to the Senior Subordinated Notes shall be deemed to include
the guarantees by the Guarantor and the Subsidiary Guarantors. Each of the
Senior Subordinated Notes and the Discount Notes will be issued pursuant to a
separate Indenture, dated as of June 1, 1997 (each, an "Indenture" and
collectively, the "Indentures"), among, in the case of the Indenture governing
the Senior Subordinated Notes, Hedstrom, the Guarantor, the Subsidiary
Guarantors and IBJ Schroder Bank & Trust Company, as Trustee (the "Senior
Subordinated Notes Trustee"), and, in the case of the Indenture governing the
Discount Notes, Holdings and the United States Trust Company of New York, as
Trustee (together with the Senior Subordinated Notes Trustee, the "Trustees").
As an inducement to the Initial Purchasers, the Issuers agree with the Initial
Purchasers, for the benefit of the holders of the Notes (including, without
limitation, the Initial Purchasers), the Exchange Securities (as defined below)
and the Private Exchange Securities (as defined below) (collectively, the
"Holders"), as follows:
1. Registered Exchange Offer. The Issuers shall, at their cost,
prepare and, not later than 45 days after (or if the 45th day is not a business
day, the first business day thereafter) the date of original issue of the Notes
(the "Issue Date"), file with the Securities and Exchange Commission (the
"Commission") a registration statement or statements (the "Exchange Offer
Registration Statement") on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), with respect to a proposed offer
(each, a "Registered Exchange Offer" and, collectively, the "Registered
Exchange Offers") to the Holders of each of the Senior Subordinated Notes and
the Discount Notes, who are not prohibited by any law or policy of the
Commission from participating in such a Registered Exchange Offer, to issue and
deliver to such Holders, in exchange for their respective Notes, a like
aggregate principal amount (or principal amount at maturity) of debt securities
of the applicable Issuer (collectively, the "Exchange Securities") issued under
the relevant Indenture and identical in all material respects to the Senior
Subordinated Notes or the Discount Notes (except for
2
2
the transfer restrictions relating to such Notes), as the case may be, that
would be registered under the Securities Act. The Issuers shall use their best
efforts to cause such Exchange Offer Registration Statement to become effective
under the Securities Act within 150 days (or if the 150th day is not a business
day, the first business day thereafter) after the Issue Date of the Notes and
shall keep such Exchange Offer Registration Statement effective for not less
than 30 days (or longer, if required by applicable law) after the date notice
of the Registered Exchange Offers is mailed to the Holders (such period being
called the "Exchange Offer Registration Period").
If the Issuers effect the Registered Exchange Offers, the Issuers will
be entitled to close such Registered Exchange Offers 30 days after the
commencement thereof provided that the applicable Issuer has accepted all the
Notes theretofore validly tendered in accordance with the terms of the relevant
Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Issuers shall promptly commence the Registered
Exchange Offers, it being the objective of such Registered Exchange Offers to
enable each Holder of the Notes electing to exchange such Notes for Exchange
Securities (assuming that such Holder is not an affiliate of the Issuers within
the meaning of the Securities Act, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements with any
person to participate in the distribution of the Exchange Securities and is not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offers) to trade such Exchange Securities from and after
their receipt without any limitations or restrictions under the Securities Act
and without material restrictions under the securities laws of the several
states of the United States.
The Issuers acknowledge that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Notes, acquired for its own account as a result of
market-making activities or other trading activities, for Exchange Securities
(an "Exchanging Dealer"), is required to deliver a prospectus containing the
information set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section of such
prospectus in connection with a sale of any such Exchange Securities received
by such Exchanging Dealer pursuant to a Registered Exchange Offer and (ii) an
Initial Purchaser that elects to sell Exchange Securities acquired in exchange
for Notes constituting any portion of an unsold allotment is required to
deliver a prospectus containing the information required by Items 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in connection with such
sale.
The Issuers shall use their best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however,
that (i) in the case where such prospectus and any amendment or supplement
thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such
period shall be the lesser of 180 days and the date on which all Exchanging
Dealers and the Initial Purchasers have sold all Exchange Securities held by
them (unless such period is extended pursuant to Section 3(j) below) and (ii)
the Issuers shall make such prospectus and any amendment or supplement thereto,
available to any broker-dealer for use in connection with any resale of any
Exchange Securities for a period not less than 90 days after the consummation
of the Registered Exchange Offers.
If, upon consummation of the Registered Exchange Offers, any Initial
Purchaser holds Senior Subordinated Notes or Discount Notes acquired by it as
part of its initial distribution, the applicable Issuer, simultaneously with
the delivery of the Exchange Securities pursuant to the relevant Registered
Exchange Offer, shall issue and deliver to such Initial Purchaser upon the
written request of such Initial Purchaser, in exchange (each, a "Private
Exchange" and, collectively, the "Private Exchanges") for the respective Notes
held by such Initial Purchaser, a like principal amount
3
3
(or principal amount at maturity) of debt securities of the applicable Issuer
issued under the relevant Indenture and identical in all material respects
(including the existence of restrictions on transfer under the Securities Act
and the securities laws of the several states of the United States) to the
Senior Subordinated Notes or the Discount Notes, as the case may be
(collectively, the "Private Exchange Securities"). The Notes, the Exchange
Securities and the Private Exchange Securities are herein collectively called
the "Securities".
In connection with each Registered Exchange Offer, the applicable
Issuer shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date notice thereof is
mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York, which
may be the relevant Trustee or an affiliate of such Trustee;
(d) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of a Registered Exchange Offer
or Private Exchange, as the case may be, the applicable Issuer shall:
(x) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer or the Private Exchange, as
the case may be;
(y) deliver to the relevant Trustee for cancelation all the Notes so
accepted for exchange;
and
(z) cause the relevant Trustee to authenticate and deliver promptly to
each Holder that validly tendered Notes, Exchange Securities or Private
Exchange Securities, as the case may be, equal in principal amount, or, in the
case of the Discount Notes (or the relevant Exchange Securities or Private
Exchange Securities) principal amount at maturity, to the Notes of such Holder
so accepted for exchange.
Each Indenture will provide that the Exchange Securities subject to
such Indenture will not be subject to the transfer restrictions set forth in
such Indenture. Each Indenture will also provide that all the Notes, Exchange
Securities and Private Exchange Securities subject to such Indenture will vote
and consent together on all matters as one class and that none of the Notes,
Exchange Securities or Private Exchange Securities subject to such Indenture
will have the right to vote or consent as a separate class from one another on
any matter.
Interest on each Exchange Security or Private Exchange Security issued
pursuant to a Registered Exchange Offer or Private Exchange will accrue from
the last interest payment date on which interest was paid on the Note
surrendered in exchange therefor or, if no interest has been paid on such Note,
from the date of original issue of such Note.
Each Holder tendering Notes in a Registered Exchange Offer shall be
required to represent to the applicable Issuer that at the time of the
consummation of such Registered Exchange Offer (i) any Exchange Securities
received by such Holder will be acquired in the ordinary course of business,
(ii) such Holder will have no arrangements or understanding with any person to
participate
4
4
in the distribution of the Notes or the Exchange Securities within the meaning
of the Securities Act, (iii) such Holder is not an "affiliate," as defined in
Rule 405 of the Securities Act, of such Issuer or if it is an affiliate, such
Holder will comply with the registration and prospectus delivery requirements
of the Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Notes that were acquired as a result of market-making activities
or other trading activities and that it will be required to acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange
Securities.
Notwithstanding any other provisions hereof, the Issuers will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto
and any prospectus forming part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain 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 and (iii) any
prospectus forming part of any Exchange Offer Registration Statement, and any
supplement to such prospectus, does not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Issuers
are not permitted to effect the Registered Exchange Offers, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offers are not consummated
within 180 days of the date hereof, (iii) any Initial Purchaser so requests
with respect to the Notes (or the Private Exchange Securities) not eligible to
be exchanged for Exchange Securities in a Registered Exchange Offer and held by
it following consummation of the Registered Exchange Offers or (iv) any Holder
of Notes (other than an Exchanging Dealer) is not eligible to participate in
the relevant Registered Exchange Offer or, in the case of any Holder (other
than an Exchanging Dealer) that participates in a Registered Exchange Offer,
such Holder does not receive freely tradeable Exchange Securities on the date
of the exchange, the Issuers shall take the following actions:
(a) The Issuers shall, at their cost, as promptly as practicable (but
in no event more than 30 days after so required or requested pursuant to this
Section 2) file with the Commission and thereafter shall use their best efforts
to cause to be declared effective a registration statement or statements (the
"Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, a "Registration Statement") on an appropriate form
under the Securities Act relating to the offer and sale of the Transfer
Restricted Securities (as defined in Section 6 hereof) by the Holders thereof
from time to time in accordance with the methods of distribution set forth in
the Shelf Registration Statement and Rule 415 under the Securities Act
(hereinafter, the "Shelf Registration"); provided, however, that no Holder
(other than an Initial Purchaser) shall be entitled to have the Securities held
by it covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder.
(b) The Issuers shall use their best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the relevant
Securities, for a period of two years (or for such longer period if extended
pursuant to Section 3(j) below) from the date of its effectiveness or such
shorter period that will terminate when all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto. The Issuers shall be
deemed not to have used their best efforts to keep the Shelf Registration
Statement effective during the requisite period if they voluntarily take any
action that would result in Holders of Securities covered thereby not being
able to offer and sell such Securities during that period, unless such action
is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Issuers shall
5
5
cause the Shelf Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf
Registration contemplated by Section 2 hereof and, to the extent applicable,
any Registered Exchange Offer contemplated by Section 1 hereof, the following
provisions shall apply:
(a) The applicable Issuer or Issuers shall (i) furnish to each
Initial Purchaser, prior to the filing thereof with the Commission, a copy of
the Registration Statement and each amendment thereof and each supplement, if
any, to the prospectus included therein and, in the event that an Initial
Purchaser (with respect to any portion of an unsold allotment from the original
offering) is participating in the Registered Exchange Offer or the Shelf
Registration shall use their best efforts to reflect in each such document,
when so filed with the Commission, such comments as such Initial Purchaser
reasonably may propose; (ii) include the information set forth in Annex A
hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section and in Annex C hereto
in the "Plan of Distribution" section of the prospectus forming a part of the
Exchange Offer Registration Statement and include the information set forth in
Annex D hereto in the Letter of Transmittal delivered pursuant to such
Registered Exchange Offer; (iii) if requested by an Initial Purchaser, include
the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement; (iv) include within the prospectus contained in
the Exchange Offer Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchasers, which shall
contain a summary statement of the positions taken or policies made by the
staff of the Commission with respect to the potential "underwriter" status of
any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
Exchange Securities received by such broker-dealer in such Registered Exchange
Offer (a "Participating Broker-Dealer"), whether such positions or policies
have been publicly disseminated by the staff of the Commission or such
positions or policies, in the reasonable judgment of the Initial Purchasers
based upon advice of counsel (which may be in-house counsel), represent the
prevailing views of the staff of the Commission; and (v) in the case of a Shelf
Registration, include the names of the Holders, who propose to sell Securities
pursuant to the Shelf Registration Statement, as selling securityholders.
(b) The Issuers shall give written notice to the Initial Purchasers,
the Holders of the Securities and any Participating Broker-Dealer from whom the
Issuers have received prior written notice that it will be a Participating
Broker-Dealer in a Registered Exchange Offer (which notice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of
the prospectus until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto has been
filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to
the Registration Statement or the prospectus included therein or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Issuers or their legal counsel of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
6
6
(v) of the happening of any event that requires the Issuers to make
changes in the Registration Statement or the prospectus in order that the
Registration Statement or the prospectus does not contain an untrue statement
of a material fact nor omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
prospectus, in light of the circumstances under which they were made) not
misleading.
(c) The Issuers shall use their best efforts to obtain the withdrawal
at the earliest possible time of any order suspending the effectiveness of the
Registration Statement.
(d) The Issuers shall furnish to each Holder of Securities included
within the coverage of the Shelf Registration, without charge, at least one
copy of the Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder so
requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).
(e) The Issuers shall deliver to each Exchanging Dealer and each
Initial Purchaser, and to any other Holder who so requests, without charge, at
least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if any Initial Purchaser or any such Holder requests, all exhibits thereto
(including those, if any, incorporated by reference).
(f) The Issuers shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus (including each
preliminary prospectus) included in the Shelf Registration Statement and any
amendment or supplement thereto as such person may reasonably request. The
Issuers consent, subject to the provisions of this Agreement, to the use of the
prospectus or any amendment or supplement thereto by each of the selling
Holders of the Securities in connection with the offering and sale of the
Securities covered by the prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
(g) The Issuers shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offers,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement and any amendment or supplement thereto as such
persons may reasonably request. The Issuers consent, subject to the provisions
of this Agreement, to the use of the prospectus or any amendment or supplement
thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer
and such other persons required to deliver a prospectus following the
Registered Exchange Offers in connection with the offering and sale of the
Exchange Securities covered by the prospectus, or any amendment or supplement
thereto, included in such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities, pursuant to any
Registration Statement, the Issuers shall register or qualify or cooperate with
the Holders of the Securities included therein and their respective counsel in
connection with the registration or qualification of the Securities for offer
and sale under the securities or "blue sky" laws of such states of the United
States as any Holder of the Securities reasonably requests in writing and do
any and all other acts or things necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities covered by such Registration
Statement; provided, however, that the Issuers shall not be required to (i)
qualify generally to do business in any jurisdiction where they are not then so
qualified or (ii) take any action which would subject them to general service
of process or to taxation in any jurisdiction where they are not then so
subject.
(i) The Issuers shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing the
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
the Holders may request a reasonable period of time prior to sales of the
Securities pursuant to such Registration Statement.
7
7
(j) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Issuers are
required to maintain an effective Registration Statement, the Issuers shall
promptly prepare and file a post-effective amendment to the Registration
Statement or a supplement to the related prospectus and any other required
document so that, as thereafter delivered to Holders of the Notes or purchasers
of Securities, the 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 light of the circumstances
under which they were made, not misleading. If the Issuers notify the Initial
Purchasers, the Holders of the Securities and any known Participating
Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b)
above to suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Initial Purchasers, the Holders of the
Securities and any such Participating Broker-Dealers shall suspend use of such
prospectus, and the period of effectiveness of the Shelf Registration Statement
provided for in Section 2(b) above or the Exchange Offer Registration Statement
provided for in Section 1 above, as the case may be, shall be extended by the
number of days from and including the date of the giving of such notice to and
including the date when the Initial Purchasers, the Holders of the Securities
and any known Participating Broker-Dealer shall have received such amended or
supplemented prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Issuers will provide CUSIP numbers for the Notes, the Exchange
Securities or the Private Exchange Securities, as the case may be, and provide
the applicable Trustee with printed certificates for the Notes, the Exchange
Securities or the Private Exchange Securities, as the case may be, in forms
eligible for deposit with The Depository Trust Company.
(l) The Issuers will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the Registered
Exchange Offers or the Shelf Registration, and Holdings will make generally
available to the Issuers' securityholders (or otherwise provide in accordance
with Section 11(a) of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after
the end of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of Holdings' first fiscal quarter commencing
after the effective date of the Registration Statement, which statement shall
cover such 12-month period.
(m) The Issuers shall cause the Indentures to be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), in a
timely manner and containing such changes, if any, as shall be reasonably
necessary for such qualification. In the event that such qualification would
require the appointment of a new trustee under any of the Indentures, the
Issuers shall appoint a new trustee thereunder pursuant to the applicable
provisions of such Indenture.
(n) The Issuers may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Issuers such
information regarding the Holder and the distribution of the Securities as the
Issuers may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Issuers may exclude from such registration the
Securities of any Holder that unreasonably fails to furnish or, if necessary,
update such information within a reasonable time after receiving such request.
(o) The Issuers shall enter into such customary agreements (including
if requested an underwriting agreement in customary form) and take all such
other action, if any, as any Holder of the Securities shall reasonably request
in order to facilitate the disposition of the Securities pursuant to any Shelf
Registration.
(p) In the case of any Shelf Registration, the Issuers shall (i) make
reasonably available for inspection by the Holders of the Securities, any
underwriter participating in any disposition pursuant to the Shelf Registration
Statement and any attorney, accountant or other agent retained by the Holders
of the Securities or any such underwriter all relevant financial and other
records, pertinent
8
8
corporate documents and properties of the Issuers and (ii) cause the Issuers'
officers, directors, employees, accountants and auditors to supply all relevant
information reasonably requested by the Holders of the Securities or any such
underwriter, attorney, accountant or agent in connection with the Shelf
Registration Statement, in each case, as shall be reasonably necessary to
enable such persons, to conduct a reasonable investigation within the meaning
of Section 11 of the Securities Act; provided, however, that the foregoing
inspection and information gathering shall be coordinated on behalf of the
Initial Purchasers by you and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in Section 4
hereof.
(q) In the case of any Shelf Registration, the Issuers, if requested
by any Holder of Securities covered thereby, shall cause (i) their counsel to
deliver an opinion and updates thereof relating to the Securities in customary
form addressed to such Holders and the managing underwriters, if any, thereof
and dated, in the case of the initial opinion, the effective date of such Shelf
Registration Statement (it being agreed that the matters to be covered by such
opinion shall include, without limitation, the due incorporation and good
standing of the Issuers and their subsidiaries; the qualification of the
Issuers and their subsidiaries to transact business as foreign corporations;
the due authorization, execution and delivery of the relevant agreement of the
type referred to in Section 3(o) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
applicable Securities; the absence of material legal or governmental
proceedings involving the Issuers and their subsidiaries; the absence of
governmental approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable Securities, or
any agreement of the type referred to in Section 3(o) hereof and the compliance
as to form of such Shelf Registration Statement and any documents incorporated
by reference therein and of the Indentures with the requirements of the
Securities Act and the Trust Indenture Act, respectively. Such opinion shall
also state that no facts have come to its attention which lead such counsel to
believe that, as of the date of the opinion and as of the effective date of the
Shelf Registration Statement or most recent post-effective amendment thereto,
as the case may be, the Shelf Registration Statement and the prospectus
included therein, as then amended or supplemented, and from any documents
incorporated by reference therein contain any 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 in the light of the
circumstances existing at the time that such documents were filed with the
Commission under the Exchange Act (it being understood that such counsel shall
not be required to express any opinion as to the financial statements and
related notes, the financial projections and other financial, statistical and
accounting data included therein or appended thereto); (ii) their officers to
execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities and (iii)
their independent public accountants to provide to the selling Holders of the
applicable Securities and any underwriter therefor a comfort letter in
customary form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to receipt
of appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.
(r) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Issuers shall
cause (i) their counsel to deliver to such Initial Purchaser or such
Participating Broker-Dealer a signed opinion in the form set forth in Section
6(c) of the Purchase Agreement with such changes as are customary in connection
with the preparation of a Registration Statement and (ii) their independent
public accountants to deliver to such Initial Purchaser or such Participating
Broker-Dealer a comfort letter, in customary form, meeting the requirements as
to the substance thereof as set forth in Sections 6(a) and (k) of the Purchase
Agreement, with appropriate date changes.
(s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Notes by Holders to the Issuers (or to such
other Person as directed by the Issuers) in exchange for the Exchange
Securities or the Private Exchange Securities, as the case may be, the Issuers
shall mark, or cause to be marked, on the Notes so exchanged that such Notes
are being canceled in exchange for the Exchange Securities or the Private
Exchange Securities, as the case
9
9
may be; in no event shall the Notes be marked as paid or otherwise satisfied.
(t) The Issuers shall use their best efforts to (a) if the Notes have
been rated prior to the initial sale of such Notes, confirm such ratings will
apply to the Securities covered by a Registration Statement, or (b) if the
Notes were not previously rated, cause the Securities covered by a Registration
Statement to be rated with the appropriate rating agencies, if so requested by
Holders of a majority in aggregate principal amount (or principal amount at
maturity) of Securities covered by such Registration Statement, or by the
managing underwriters, if any.
(u) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as
an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Issuers shall assist such broker-dealer in complying
with the requirements of such Conduct Rules, including, without limitation, by
(i) if Rule 2720 thereto shall so require, engaging a "qualified independent
underwriter" (as defined in Rule 2720) to participate in the preparation of the
Registration Statement relating to such Securities, to exercise usual standards
of due diligence in respect thereto and, if any portion of the offering
contemplated by such Registration Statement is an underwritten offering or is
made through a placement or sales agent, to recommend the yield of such
Securities, (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the Conduct
Rules of the NASD.
(v) The Issuers shall use their best efforts to take all other steps
necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.
4. Registration Expenses. The Issuers shall bear all fees and expenses
incurred in connection with the performance of their obligations under Sections
1 through 3 hereof (including the reasonable fees and expenses, if any, of
Cravath, Swaine & Moore, counsel for the Initial Purchasers, incurred in
connection with the Registered Exchange Offers), whether or not a Registered
Exchange Offer or a Shelf Registration is filed or becomes effective, and, in
the event of a Shelf Registration, shall bear or reimburse the Holders of the
Securities covered thereby for the reasonable fees and disbursements of one
firm of counsel designated by the Holders of a majority in principal amount (or
principal amount at maturity) of the Securities covered thereby to act as
counsel for the Holders of the Securities in connection therewith, provided
that such Holders shall be responsible for any and all (i) underwriting
discounts and commissions and (ii) other out-of-pocket expenses of such Holders
incurred in connection with the Shelf Registration.
5. Indemnification. (a) The Issuers severally and jointly agree to
indemnify and hold harmless each Holder of the Securities, any Participating
Broker-Dealer and each person, if any, who controls such Holder or such
Participating Broker-Dealer within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each such
indemnified party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in
any amendment or supplement thereto or in any preliminary prospectus relating
to a Shelf Registration, 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 shall
reimburse, as incurred, the such indemnified parties for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action in respect thereof;
provided, however, that (i) the Issuers shall not be liable in any such case to
the extent that such loss, claim, damage or
10
10
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in a Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to a Shelf Registration in reliance upon and in conformity
with written information pertaining to such Holder and furnished to the Issuers
by or on behalf of such Holder specifically for inclusion therein and (ii) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any prospectus relating to a Shelf Registration Statement, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Holder or Participating Broker-Dealer from whom the person
asserting any such losses, claims, damages or liabilities purchased the
Securities concerned, to the extent that a prospectus relating to such
Securities was required to be delivered by such Holder or Participating
Broker-Dealer under the Securities Act in connection with such purchase and any
such loss, claim, damage or liability of such Holder or Participating
Broker-Dealer results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Securities
to such person, a copy of the final prospectus, as amended on supplement, if
the Issuers had previously furnished copies thereof to such Holder or
Participating Broker-Dealer; provided further, however, that this indemnity
agreement will be in addition to any liability which the Issuers may otherwise
have to such indemnified party. The Issuers shall also indemnify underwriters,
their officers and directors and each person who controls such underwriters
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Securities if requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Issuers and each person, if any, who controls
the Issuers within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Issuers or any such
controlling person may become subject under the Securities Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement or
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus relating to a Shelf Registration, or arise out of or are based upon
the omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, in light of the circumstances under
which they were made, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Issuers by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Issuers for any legal
or other expenses reasonably incurred by the Issuers or any such controlling
person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have to the Issuers
or any of their controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (in
which case, such indemnified party shall be entitled, at its option, to engage
at the indemnifying party's cost, separate counsel reasonably satisfactory to
the indemnifying party to act on behalf of all indemnified parties in
connection with such action), and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof the
11
11
indemnifying party will not be liable to such indemnified party under this
Section 5 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the relevant
Notes, pursuant to the relevant Registered Exchange Offer, or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on the
other in connection with the statements or omissions that 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 the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuers on the one hand or such Holder or such other indemnified party, as
the case may be, on the other, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this Section 5(d), the Holders of the
Securities shall not be required to contribute any amount in excess of the
amount by which the net proceeds received by such Holders from the sale of the
Securities pursuant to a Registration Statement exceeds the amount of damages
which such Holders have 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph
(d), each person, if any, who controls such indemnified party within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act shall have the same rights to contribution as such indemnified party and
each person, if any, who controls the Issuers within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as the Issuers.
(e) The agreements contained in this Section 5 shall survive the sale
of the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancelation of this
Agreement or any investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances. (a) Additional
interest (the "Additional Interest") with respect to a series of Securities
shall be assessed as follows if any of the following events occur (each such
event in clauses (i) through (iii) below, a "Registration Default"):
(i) If by July 28, 1997, neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement relating to such series of
Securities has been filed with the Commission;
(ii) If by December 9, 1997, neither the Registered Exchange Offer
relating to such series of Securities is consummated nor, if required in lieu
thereof, a Shelf Registration Statement relating
12
12
to such series of Securities is declared effective by the Commission; or
(iii) If, after December 9, 1997, and after either the Exchange Offer
Registration Statement or the Shelf Registration Statement relating to such
series of Securities is declared effective (A) such Registration Statement
thereafter ceases to be effective (except as permitted in paragraph (b)); or
(B) such Registration Statement or the related prospectus ceases to be usable
(except as permitted in paragraph (b)) in connection with resales of Transfer
Restricted Securities during the periods specified herein because either (1)
any event occurs as a result of which the related prospectus forming part of
such Registration Statement would include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, or (2) it shall be necessary to amend such Registration Statement
or supplement the related prospectus, to comply with the Securities Act or the
Exchange Act or the respective rules thereunder.
Additional Interest shall accrue on the Notes and any Private Securities
exchanged therefor, at a rate of 0.50% per annum (the "Additional Interest
Rate") over and above the interest set forth in the title of the Notes, in each
case, from and including the date on which any such Registration Default shall
occur to but excluding the date on which all such Registration Defaults
relating to the relevant Securities have been cured.
(b) A Registration Default referred to in Section 6(a)(iii) shall be
deemed not to have occurred and be continuing in relation to a Registration
Statement or the related prospectus if (i) such purported Registration Default
has occurred solely as a result of (x) the filing of a post-effective amendment
to such Shelf Registration Statement to incorporate annual audited financial
information with respect to the Issuers where such post-effective amendment is
not yet effective and needs to be declared effective to permit Holders to use
the related prospectus or (y) the occurrence of other material events with
respect to the Issuers that would need to be described in such Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Issuers are proceeding promptly and in good faith to amend or supplement such
Registration Statement and related prospectus to describe such events;
provided, however, that in any case if such purported Registration Default
occurs for a continuous period in excess of 45 days, Additional Interest shall
be payable in accordance with the above paragraph from the 46th day following
the day such Registration Default occurs until such Registration Default is
cured or until the relevant Issuer is no longer required pursuant to this
Agreement to keep such Registration Statement effective or such Registration
Statement or related prospectus usable.
(c) Any amounts of Additional Interest due pursuant to clause (a)(i),
(a)(ii) or (a)(iii) of Section 6 above will be payable in cash, (A) in the case
of the Senior Subordinated Notes and any Private Exchange Securities exchanged
therefor, on each scheduled interest payment date, commencing with the first
scheduled interest payment date following the applicable Registration Default,
and (B) in the case of the Discount Notes and any Private Exchange Securities
exchanged therefor, on each Semi-Annual Accrual Date (as defined in the
applicable Indenture) or scheduled interest payment date, as the case may be,
commencing with the first Semi-Annual Accrual Date following the applicable
Registration Default. The amount of Additional Interest will be determined by
multiplying the Additional Interest Rate by, (A) in the case of the Senior
Subordinated Notes and any Private Exchange Securities exchanged therefor, the
principal amount of such Securities, in each case, multiplied by a fraction
(the "Additional Interest Fraction"), the numerator of which is the number of
days the Additional Interest Rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months), and the
denominator of which is 360 and (B) in the case of the Discount Notes and any
Private Exchange Securities exchanged therefor, the Accreted Value of such
Securities on the date of payment of such Additional Interest, in each case,
multiplied by the Additional Interest Fraction.
(d) "Transfer Restricted Securities" means each Security until (i)
the date on which such Security has been exchanged by a person other than a
broker-dealer for a freely transferrable Exchange Security in a Registered
Exchange Offer, (ii) following the exchange by a broker-dealer
13
13
in a Registered Exchange Offer of such Security for an Exchange Security, the
date on which such Exchange Security 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, (iii) the
date on which such Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iv) the date on which such Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act.
7. Rules 144 and 144A. The Issuers shall use their best efforts to
file the reports required to be filed by them under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Issuers are not
required to file such reports, they will, upon the request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of their securities pursuant to Rules 144 and
144A. The Issuers covenant that they will take such further action as any
Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Issuers will provide a copy of this
Agreement to prospective purchasers of Notes (or Private Exchange Securities)
identified to the Issuers by the Initial Purchasers upon request. Upon the
request of any Holder of Transfer Restricted Securities, the Issuers shall
deliver to such Holder a written statement as to whether they have complied
with such requirements. Notwithstanding the foregoing, nothing in this Section
7 shall be deemed to require the Issuers to register any of its securities
pursuant to the Exchange Act.
8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering (the "Managing Underwriters") will be
selected by the Holders of a majority in aggregate principal amount (or
principal amount at maturity) of such Transfer Restricted Securities to be
included in such offering; provided that Managing Underwriters must be
reasonably satisfactory to the Issuers.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
reasonably required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, except by the Issuers and the
written consent of the Holders of a majority in principal amount (or principal
amount at maturity) of the Securities affected by such amendment, modification,
supplement, waiver or consents (taken as a class).
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class
mail, facsimile transmission, or air courier which guarantees overnight
delivery:
(1) if to a Holder of the Securities, at the most current address
given by such Holder to the Issuers in accordance with the provisions of this
Section 9(b).
14
14
(2) if to the Initial Purchasers, at the following address:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010
Telephone: (212) 325-2107
Telecopy.: (212) 325-8029
Attention: Transactions Advisory Group
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
Telephone: (212) 474-1000
Telecopy: (212) 474-3700
Attention: Kris F. Heinzelman
(3) if to the Issuers, at their address as follows:
Hedstrom Corporation
Hedstrom Holdings, Inc.
Cherrington Corporate Center
300 Corporate Center Drive
Suite 100
Coraopolis, PA 15108
Telephone: (412) 269-9530
Telecopy: (412) 269-9655
Attention: David F. Crowley
with copies to:
Hicks, Muse, Tate & Furst Incorporated
1325 Avenue of the Americas, 25th Floor
New York, New York 10019
Telephone: (212) 424-1400
Telecopy: (212) 424-1450
Attention: Alan B. Menkes
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Telephone: (214) 740-7300
Telecopy: (214) 740-7313
Attention: Lawrence D. Stuart, Jr.
15
15
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, TX 75201-6950
Telephone: (214) 746-7700
Telecopy: (214) 746-7777
Attention: Glenn D. West
Alan Plotkin, Esq.
18 East 48th Street
New York, NY 10017
Telephone: (212) 758-2008
Telecopy: (212) 758-2268
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when
receipt is acknowledged by recipient's facsimile machine operator, if sent by
facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Issuers have not, as of the date
hereof, entered into, nor shall they, on or after the date hereof, enter into,
any agreement with respect to their securities that is inconsistent with the
rights granted to the Holders herein or otherwise conflicts with the provisions
hereof.
(d) Successors and Assigns. This Agreement shall be binding upon the
Issuers and their successors and assigns.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(h) Severability. If 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.
(i) Securities Held by the Issuers. Whenever the consent or approval
of Holders of a specified percentage of principal amount (or principal amount
at maturity) of Securities is required hereunder, Securities held by the
Issuers or their affiliates (other than subsequent Holders of Securities if
such subsequent Holders are deemed to be affiliates solely by reason of their
holdings of such Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
16
16
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Issuers a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the several Initial Purchasers and the Issuers in accordance
with its terms.
Very truly yours,
HEDSTROM CORPORATION, as an Issuer
By: /s/ ANDREW S. ROSEN
------------------------------
Name: Andrew S. Rosen
Title:
HEDSTROM HOLDINGS, INC., as an
Issuer and a Guarantor
By: /s/ ANDREW S. ROSEN
------------------------------
Name: Andrew S. Rosen
Title:
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
SOCIETE GENERALE SECURITIES CORPORATION
UBS SECURITIES LLC
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ SEAN P. MADDEN
-----------------------------
Name: Sean P. Madden
Title:
17
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to an Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Securities received in
exchange for Notes where such Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities. The Issuers
have agreed that, for a period of 180 days after the Expiration Date (as
defined herein), they will make this Prospectus available to any broker-dealer
for use in connection with any such resale. See "Plan of Distribution."
A-1
18
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
B-1
19
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to an Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received
in exchange for Notes where such Notes were acquired as a result of
market-making activities or other trading activities. The Issuers have agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until , 199 , all dealers
effecting transactions in the Exchange Securities may be required to deliver a
prospectus. [1]
The Issuers will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to an Exchange Offer may be sold from time to
time in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to an Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may
be deemed to be an "underwriter" within the meaning of the Securities Act and
any profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that,
by acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Issuers will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Issuers have agreed to pay all expenses
incidental to the Exchange Offers (including the expenses of one counsel for
the Holders of the Securities) other than commissions or concessions of any
brokers or dealers and will indemnify the Holders of the Securities (including
any broker-dealers) against certain liabilities, including liabilities under
the Securities Act.
- ---------------
[1] In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
C-1
20
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
--------------------------------------------------------
Address:
-----------------------------------------------------
-------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Notes that were acquired as a
result of market-making activities or other trading activities, it acknowledges
that it will deliver a prospectus in connection with any resale of such
Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
D-1