Exhibit 5
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of December 19,
1997 (the "Agreement"), by and among AMSCAN HOLDINGS, INC., a
Delaware corporation (the "Company"), GS CAPITAL PARTNERS II,
L.P., a Delaware limited partnership ("GSCP II"), GS CAPITAL
PARTNERS II OFFSHORE, L.P., a Cayman Islands exempt limited
partnership ("GSCP II Offshore"), XXXXXXX, XXXXX & CO. VERWAL-
TUNGS GMBH, a corporation recorded in the Commercial Register
Frankfurt, as nominee for GS Capital Partners II Germany C.L.P.
("GSCP II Germany"), STONE STREET FUND 1997, L.P., a Delaware
limited partnership ("Stone Street"), BRIDGE STREET FUND 1997,
L.P., a Delaware limited partnership ("Xxxxxx Xxxxxx" and, to-
gether with GSCP II, GSCP II Offshore, GSCP II Germany and
Stone Street, "GSCP") and each of the individuals and the Es-
xxxx of Xxxx X. Xxxxxxxxxxx (the "Estate") listed on Schedule I
hereto (collectively, including the Estate, the "Management In-
vestors"). References herein to the Company shall mean the
Company as the surviving corporation in the Merger (as defined
below). Employees, directors, consultants and certain other
Persons (as defined below) having significant business rela-
tionships with the Company and its Affiliates (as defined be-
low) may be issued shares of Common Stock (as defined below)
(or other equity securities of the Company) or securities con-
vertible into or exchangeable for Common Stock (or other equity
securities of the Company) subject to the terms of this Agree-
ment and, if so issued, the Company, without the consent of any
other party hereto, may amend this Agreement to allow any such
Person the Company so chooses to become an additional Manage-
ment Investor hereunder, subject to such Person becoming a sig-
natory to this Agreement. The parties hereto (other than the
Company) and any other Person who shall hereafter acquire
shares of Common Stock of the Company (or other equity securi-
ties of the Company) or securities convertible into or ex-
changeable for Common Stock (or other equity securities of the
Company) pursuant to the provisions of, and/or subject to the
restrictions and rights set forth in, this Agreement (including
through participation in certain Company stock or option plans)
are sometimes hereinafter referred to individually as a "Stock-
holder" or collectively as the "Stockholders."
RECITALS
A. The Company, as of the Effective Date (as defined
herein), will have an authorized capital stock consisting of
50,000,000 shares of Common Stock, par value $0.10 per share
(the "Common Stock"), each share of which is entitled to one
vote on all stockholder matters as more specifically provided
in the amended certificate of incorporation of the Company (the
"Amended Certificate"), and of which 1,010 shares will be is-
sued and outstanding immediately after the Effective Date. As
used in this Agreement, Common Stock shall include any shares
of Restricted Stock (as defined below) of the Company granted
to Management Investors; provided, however, that to the extent
the Transfer (as defined herein) thereof is otherwise prohib-
ited or restricted, no rights to Transfer, including pursuant
to Section 2.4 or Article III, shall be granted hereunder. In
addition, the Company will have reserved, as of the Effective
Date, 120 shares of Common Stock for issuance pursuant to the
Company 1997 Stock Incentive Plan (the "Stock Incentive Plan").
B. An Agreement and Plan of Merger, dated August 10,
1997 (the "Merger Agreement"), has been executed by and among
Confetti Acquisition, Inc., a Delaware corporation ("Con-
fetti"), and the Company, pursuant to which Confetti was merged
with and into the Company (the "Merger") with the Company as
the surviving corporation in the Merger.
C. In connection with the Merger, Confetti entered
into employment and/or equity agreements with certain Manage-
ment Investors (the "Employment Agreements") that provide for,
among other things, the investment by such Management Investors
in the Common Stock and the grant and/or rollover of Options to
such Management Investors. As of or immediately following the
Effective Date, the Company has executed or shall execute and
become a party to the Employment Agreements.
D. In connection with the Merger, Confetti entered
into a Voting Agreement, dated August 10, 1997 (the "Voting
Agreement"), by and among Confetti, the Estate and a certain
individual.
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E. The individual holdings of Common Stock of each
Stockholder, immediately after the closing of the transactions
contemplated in the Merger Agreement and the Employment Agree-
ments (not assuming the exercise of any Options) are as fol-
lows:
Number of Shares
of Common Stock
Name Held After Closing
GSCP II 517.6286775
GSCP II Offshore 205.7786775
GSCP II Germany 19.0926450
Stone Street 55.5348750
Bridge Street 26.9651250
Estate of Xxxx X. Xxxxxxxxxxx 100.0000000
Xxxxxx X. Xxxxxxxxxx 60.0000000
Xxxxx X. Xxxxxxxx 15.0000000
Xxxxxxx Xxxxxx 6.6666667
Xxxxx X. Xxxxx 1.3333333
Xxxxxxxxx X. Xxxxxxxx 2.0000000
__________________________ ___________
Total 1,010.0000000
F. The individual holdings of Options to purchase
shares of Common Stock of each Stockholder, immediately after
the closing of the transactions contemplated in the Merger
Agreement and the Employment Agreements are as set forth as
follows:
Number of Shares
of Common Stock
Subject to Options
Name Held After Closing
Xxxxxx X. Xxxxxxxxxx 16.648
Xxxxx X. Xxxxxxxx 16.268
Xxxxxxx X. Xxxxxx 16.441
Xxxxx X. Xxxxx 11.827
Xxxxxxxxx X. Xxxxxxxx 11.577
Xxxxxx Xxxxxx 2.383
Xxxxxxx Xxxx 1.280
Xxxxxx Xxxxxxxxx 2.477
Xxxxx XxXxxxxx 1.477
Xxxxx Xxxxxxx 1.280
Xxxxxx Xxxxxxx 1.280
Xxxxxx Xxxxxxxx 1.144
Xxxxxxx Xxxxxxxx 0.478
Xxxxx Xxxxx 1.144
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Xxxx Xxxxxxxxx 1.238
Xxxxx Xxxxxx 0.718
Xxxx Xxxxxxxx 1.238
Xxxxxxxx Xxxxxx 1.238
Xxxxx Xxxxx 1.238
Xxxxxxx Xxxxxxxx 0.794
Xxxxxxx X. Xxxxxxxx 2.570
Xxxx Xxxxxx 0.555
Xxxxx Xxxxxxx 0.999
Xxxxxx Xxxxxx 0.555
Xxxxxx Xxxxxxxxx 0.999
Xxxxxxx Xxxxxx 0.555
Xxxxxx Xxxxxxx 0.555
Xxxxxx Xxxxxxxx 0.555
Xxxxx Xxxxx 0.555
Xxxxxx Xxxxxxx 0.555
Xxx Xxxxxxxx 0.555
__________________________ ___________
Total 101.179
G. The parties hereto desire to restrict the sale,
assignment, transfer, encumbrance or other disposition of the
Common Stock which the parties hereto own or may hereafter ac-
quire, and to provide for certain rights and obligations in
respect thereof as hereinafter provided.
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NOW, THEREFORE, in consideration of the premises and of
the terms and conditions contained herein, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall
have the meanings ascribed to them below:
"Affected Holder" shall have the meaning ascribed to it in
Section 5.10 hereof.
"Affiliate" of a Person shall mean a Person directly or
indirectly controlled by, controlling or under common control
with such Person.
"Agreement" shall have the meaning ascribed to it in the
Introduction hereof.
"Amended Certificate" shall have the meaning ascribed to
it in the Recitals hereof.
"Bridge Street" shall have the meaning ascribed to it in
the Introduction hereof.
"Buy-Out Note" shall mean an unsecured promissory note of
the Company, or a direct or indirect subsidiary thereof, which
shall have a stated maturity of five (5) years, shall accrue
interest at seven (7) percent per annum, shall be prepayable at
the option of the Company or such subsidiary at any time, in
whole or in part, at its principal amount plus any accrued and
unpaid interest, shall provide for the reimbursement of reason-
able expenses incurred by the holder to enforce the note and
shall accelerate upon the earlier of a Change of Control or the
consummation of an IPO.
"Change of Control" shall mean (1) the acquisition by any
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) other than GSCP and
their Affiliates of a majority of the outstanding voting stock
of the Company or (2) the sale of or other disposition (other
than by way of merger or consolidation) of all or substantially
all of the assets of the Company and its subsidiaries taken as
a whole to any Person or group of Persons, other than to a Per-
son (or group of Persons) a majority of the outstanding voting
stock (or other interests) of which are beneficially owned by
GSCP and their Affiliates.
"Claims" shall mean losses, claims, damages or liabili-
ties, joint or several, actions or proceedings (whether com-
menced or threatened).
"Common Stock" shall have the meaning ascribed to it in
the Recitals hereof.
"Company" shall have the meaning ascribed to it in the
Introduction hereof.
"Confetti" shall have the meaning ascribed to it in the
Recitals hereof.
"Demand Registration" shall have the meaning ascribed to
it in Section 3.1(b) hereof.
"Drag-Along Right" shall have the meaning ascribed to it
in Section 2.5.1 hereof.
"Drag-Along Seller" shall have the meaning ascribed to it
in Section 2.5.2 hereof.
"Effective Date" shall have the meaning ascribed to it in
Section 5.1(a) hereof.
"Employment Agreements" shall have the meaning ascribed to
it in the Recitals hereof.
"Estate" shall have the meaning ascribed to it in the In-
troduction hereof.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Fair Market Value" shall mean fair value as reasonably
determined by Xxxxxxx Xxxxx in light of all circumstances in-
cluding comparable recent bona fide third party sales.
"Xxxxxxx Sachs" shall mean Xxxxxxx, Xxxxx & Co.
"GSCP", "GSCP II", "GSCP II Germany" and "GSCP II Off-
shore" shall have the meanings ascribed to them in the Intro-
duction hereof.
"IPO" shall mean an underwritten initial public offering
or public offerings (on a cumulative basis) of shares of Common
Stock pursuant to a registration statement or registration
statements under the Securities Act with aggregate gross pro-
ceeds to the Company of at least $50 million.
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"Management Investors" shall have the meaning ascribed to
it in the Introduction hereof.
"Merger" shall have the meaning ascribed to it in the Re-
citals hereof.
"Merger Agreement" shall have the meaning ascribed to it
in the Recitals hereof.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"New Cost Per Share" shall have the meaning ascribed to it
in the Employment Agreement, by and between Xxxxx X. Xxxxxxxx
and Confetti, dated as of August 10, 1997, as in effect on the
date hereof.
"Offer Shares" shall have the meaning ascribed to it in
Section 2.4.1.
"Offeree Stockholders" shall have the meaning ascribed to
it in Section 2.4.1.
"Options" shall mean options to purchase shares of Common
Stock from the Company, whether granted pursuant to the Stock
Incentive Plan or otherwise.
"Permitted Transferee" shall have the meaning ascribed to
it in Sections 2.3.3 and 2.3.4 hereof.
"Person" shall mean an individual, corporation, partner-
ship, joint venture, trust, unincorporated organization, gov-
ernment (or any department or agency thereof) or other entity.
"Piggyback Notice" shall have the meaning ascribed to it
in Section 3.1(a) hereof.
"Piggyback Registration" shall have the meaning ascribed
to it in Section 3.1(a) hereof.
"Proposed Transferee" means a Person or group as defined
in Section 13(d)(3) of the Exchange Act, other than any Stock-
holders or their Affiliates (whether any such Affiliate is such
prior to or upon consummation of the proposed Transfer, but not
solely by virtue of becoming a party to this Agreement), to
whom Common Stock is proposed to be Transferred pursuant to the
terms of Section 2.4.3(a) or 2.5 of this Agreement.
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"Registrable Securities" shall mean the shares of Common
Stock; provided, however, as to any particular Registrable Se-
curities, once issued such securities shall cease to be Reg-
istrable Securities when (i) a registration statement with re-
spect to the sale of such securities shall have become effec-
tive under the Securities Act and such securities shall have
been disposed of in accordance with such registration state-
ment, (ii) such securities shall have been sold pursuant to
Rule 144 (or any successor provision) under the Securities Act,
(iii) such securities shall have been otherwise transferred and
new certificates for such securities not bearing a legend re-
stricting further transfer shall have been delivered by the
Company, (iv) such securities shall have ceased to be outstand-
ing (and, in the case of shares of Common Stock underlying op-
tions granted under the Stock Incentive Plan or underlying op-
tions or warrants granted otherwise, such shares of Common
Stock shall have ceased to be outstanding after issuance pursu-
ant to the exercise of such options or warrants), or (v) in the
case of shares of Common Stock held by a Management Investor,
such securities shall have been transferred to any Person other
than a Management Investor or a Permitted Transferee.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with Article III of
this Agreement, including without limitation, (i) all SEC and
stock exchange or the NASD registration and filing fees, (ii)
all fees and expenses of complying with securities or "blue
sky" laws (including reasonable fees and disbursements of coun-
sel for the underwriters in connection with "blue sky" qualifi-
cations of the Registrable Securities), (iii) all printing,
messenger and delivery expenses, (iv) the fees and disburse-
ments of counsel for the Company and of the Company's indepen-
dent public accountants, including the expenses of any special
audits and/or "cold comfort" letters required by or incident to
such performance and compliance, (v) the reasonable fees and
disbursements of one counsel retained by the Stockholders (if
GSCP is one of the selling Stockholders, such counsel to be
selected by GSCP) as a group in connection with each such reg-
istration, (vi) any fees and disbursements of underwriters cus-
tomarily paid by issuers or sellers of securities and the rea-
sonable fees and expenses of any special experts retained in
connection with the requested registration, including any fee
payable to a qualified independent underwriter within the mean-
ing of the rules of the NASD, but excluding underwriting dis-
counts and commissions and transfer taxes, if any, (vii) inter-
nal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing
legal or accounting duties) and (viii) securities acts li-
ability insurance (if the Company elects to obtain such insur-
ance).
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"Restricted Stock" shall have the meaning ascribed to it
in the Employment Agreements.
"Rule 144" shall mean Rule 144 under the Securities Act.
"Sale Notice" shall have the meaning ascribed to it is
Section 2.4.1.
"SEC" shall mean the Securities and Exchange Commission.
"Section 3.1 Sale Number" shall have the meaning ascribed
to it in Section 3.1(d) hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Stock Incentive Plan" shall have the meaning ascribed to
it in the Recitals hereof.
"Stone Street" shall have the meaning ascribed to it in
the Introduction hereof.
"Subsidiary Dividend" shall have the meaning ascribed to
it in Section 4.1 hereof.
"Tag-Along Right" shall have the meaning ascribed to it in
Section 2.4.3(a) hereof.
"Tag-Along Seller" shall have the meaning ascribed to it
in Section 2.4.3(b) hereof.
"Tag-Along Shares" shall have the meaning ascribed to it
in Section 2.4.2 hereof.
"Transfer" shall mean to sell, assign, pledge or encumber
or otherwise transfer, directly or indirectly, whether or not
for consideration.
"Transferee" shall mean any Person to whom a Transfer is
made, regardless of the method of Transfer.
"Transferor" shall mean any Person by whom a Transfer is
made, regardless of the method of Transfer.
"Violation" shall have the meaning ascribed to it in Sec-
tion 3.3(a) hereof.
"Voting Agreement" shall have the meaning ascribed to it
in the Recitals hereof.
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ARTICLE II
RESTRICTIONS ON TRANSFERS OF STOCK
2.1 General Prohibition on Transfers.
(a) Prohibition on Transfers Generally. No Manage-
ment Investor shall, at any time prior to an IPO, Transfer any
shares of Common Stock, unless such Transfer is made in accord-
ance with Section 2.3, 2.4 or 2.5 or pursuant to a Piggyback
Registration, and any Transfer by any Management Investor of
any shares of Common Stock owned as of the date hereof or here-
after acquired not in accordance with such provisions shall be
null and void.
(b) Recordation. The Company shall not record upon
its books any Transfer of shares of Common Stock held or owned
by any of the Management Investors to any other Person except
Transfers in accordance with this Agreement.
(c) Obligations of Transferees. No Transfer of
shares of Common Stock by a Management Investor otherwise per-
mitted pursuant to this Agreement (other than pursuant to a
Piggyback Registration or pursuant to a Tag-Along Right or
Drag-Along Right) shall be effective unless (x) the Transferee
(including a Permitted Transferee pursuant to Section 2.3)
shall have executed an appropriate document in form and sub-
stance reasonably satisfactory to the Company confirming that
(i) the Transferee takes such shares subject to all the terms
and conditions of this Agreement to the same extent as its
Transferor was bound by and entitled to the benefits of such
provisions and (ii) the shares shall bear legends, substan-
tially in the forms required by Section 2.6, and (y) such docu-
ment shall have been delivered to and approved (as described
above) by the Company prior to such Transferee's acquisition of
shares of Common Stock.
(d) Transfers to Competitors. Notwithstanding any-
thing to the contrary in this Agreement, no Management Investor
shall, at any time, directly or indirectly, Transfer any shares
of Common Stock to any Person who is a competitor of the Com-
pany or to any Affiliate of such a competitor (other than
Transfers to the Company and its Affiliates), unless such
Transfer (i) is made in connection with the exercise of a Tag-
Along Right pursuant to Section 2.4 or in connection with the
exercise of a Drag-Along Right pursuant to Section 2.5, in
which event such sale may be effected only in accordance with
such Section 2.4 or Section 2.5, as applicable, or (ii) is made
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in accordance with the terms of this Agreement and is made pur-
suant to a widely distributed, underwritten public offering
registered under the Securities Act (or an underwritten offer-
ing pursuant to the exercise of such Management Investor's pig-
gyback registration rights pursuant to Section 3.1(a) hereof)
or pursuant to a sale effected through an open market, nondi-
rected broker's transaction pursuant to Rule 144 in which the
seller does not know that the buyer is a competitor. For pur-
poses of this provision, the good faith determination of a ma-
jority of the entire Board that a proposed Transferee is a
"competitor," made within thirty (30) days of written notice to
the Board of the proposed Transfer, shall in all respects be
conclusive.
2.2 Compliance with Securities Laws. No Management In-
vestor shall Transfer any shares of Common Stock unless the
Transfer is made in accordance with the terms of this Agreement
and (i) the Transfer is pursuant to an effective registration
statement under the Securities Act and in compliance with any
other applicable federal securities laws and state securities
or "blue sky" laws or (ii) such Management Investor shall have
furnished the Company with an opinion of counsel, if reasonably
requested by the Company, which opinion and counsel shall be
reasonably satisfactory to the Company, to the effect that no
such registration is required because of the availability of an
exemption from registration under the Securities Act and under
any applicable state securities or "blue sky" laws and that the
Transfer otherwise complies with this Agreement and any other
applicable federal securities laws and state securities or
"blue sky" laws.
2.3 Permitted Transfers.
2.3.1 GSCP Transfers. (a) GSCP and any Affiliate
of GSCP shall be free to Transfer shares of Common Stock to any
Person, in whole at any time, or in part from time to time;
provided, however, that if such Person is not Affiliate of
GSCP, such Transfer shall be subject to Section 2.4 and Section
2.5 hereof. In any Transfer made pursuant to the foregoing to
an Affiliate of GSCP, the Transferee shall agree, in connection
with such Transfer, for the benefit of the Company, that such
Transferee will Transfer back to the Transferor or another con-
tinuing Affiliate of GSCP (that will be similarly bound by this
sentence) any shares of Common Stock so Transferred, if the
Transferee at any time is no longer an Affiliate of GSCP.
(b) No Transfer of shares of Common Stock by GSCP or
an Affiliate of GSCP otherwise permitted pursuant to this Sec-
tion 2.3.1 shall be effective unless the Transferee (whether or
not an Affiliate of GSCP) shall have executed an appropriate
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document in form and substance reasonably satisfactory to the
Company confirming that the Transferee takes such shares sub-
ject to all the terms and conditions of this Agreement to the
same extent as its Transferor was bound by and entitled to the
benefits of such provisions.
2.3.2 Management Investors. (a) The restrictions
contained in Sections 2.1(a) of this Agreement with respect to
Transfers by Management Investors (other than the Estate) of
shares of Common Stock shall not apply to any Transfer by a
Management Investor (other than the Estate): (i) to or among
such Management Investor's spouse, children, grandchildren or
other living descendants, or to a trust or family partnership
of which there are no principal (i.e., corpus) beneficiaries or
partners other than the grantor or one or more of such Manage-
ment Investor, spouse or described relatives, and provided, in
the case of a trust, that the existing beneficiaries and/or
trustee(s) and/or grantor(s) of such trust have the power to
act with respect to the trust's assets without court approval
and, in the case of a family partnership, that the partners
thereof have the power to act with respect to the partnership's
assets without court approval and the partnership is not per-
mitted to (x) distribute assets to Persons who are not among
the relatives listed above or (y) have partners who are not
among the relatives listed above, and, in any case, all the
partners agree, for the benefit of the Company and GSCP, not to
amend such provisions; (ii) to a legal representative of such
Management Investor in the event such Management Investor be-
comes mentally incompetent or to such Management Investor's
personal representative following the death of such Management
Investor; (iii) with the prior written approval of the Company,
which approval may be granted or withheld by the Board of Di-
rectors of the Company in its sole and absolute discretion; and
(iv) pursuant to any pledge by a Management Investor to the
Company or an Affiliate thereof for money borrowed to purchase
shares of Common Stock pursuant to the Employment Agreements,
if applicable.
(b) The restrictions contained in Section 2.1(a) of
this Agreement with respect to Transfers by the Estate shall
not apply to any of the following Transfers by the Estate: (i)
to a qualified terminable interest property trust in accordance
with the terms of the will of the decedent of the Estate or
(ii) with the prior written approval of the Company which ap-
proval may be granted or withheld by the Board of Directors of
the Company in its sole and absolute discretion.
2.3.3 Permitted Transferees. Transferees to whom
Transfers are permitted pursuant to clauses (i), (ii) and (iii)
of Section 2.3.2(a) and clauses (i) and (ii) of Section
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2.3.2(b) are referred to herein as "Permitted Transferees."
Any such permitted Transfer shall be subject to the terms of
this Agreement, including compliance with Section 2.1(c).
2.3.4 Transfer by Permitted Transferees. The re-
strictions contained in Section 2.1(a) of this Agreement with
respect to Transfers by Management Investors of shares of Com-
mon Stock shall not apply to any Transfer by a Permitted Trans-
feree of a Management Investor to such Management Investor or
to another Permitted Transferee of such Stockholder, and any
such Transferee shall also be a "Permitted Transferee," subject
to the provisions of Section 2.3.3.
2.3.5 Other Transfer Restrictions. The restrictions
contained in Sections 2.1(a), 2.4 and 2.5 hereof and the provi-
sions regarding Permitted Transferees contained in this Section
2.3 shall be in addition to and not in lieu or limitation of
any restrictions on the ownership or Transfer of shares of Com-
mon Stock (including with respect to any Restricted Stock) con-
tained in any Employment Agreement or any analogous provision
of any employment, compensation or benefit agreement or ar-
rangement or other agreement between Confetti or the Company
and any Stockholder; provided, however, that upon the termina-
tion of any such Employment Agreement or other such agreement
or arrangement or lapsing of such restrictions, the restric-
tions and provisions contained herein shall continue in full
force and effect pursuant to this Agreement.
2.4 Tag-Along Rights.
2.4.1 Sale Notice. If GSCP proposes to sell any of
the Common Stock owned by it, other than (a) to an Affiliate of
GSCP, (b) pursuant to the exercise of a Drag-Along Right pursu-
ant to Section 2.5 of this Agreement, (c) pursuant to a Demand
Registration (which affords piggyback registration rights pur-
suant to Section 3.1) or Piggyback Registration, or (d) follow-
ing an IPO, sales effected through open market, nondirected
broker's transactions pursuant to Rule 144, then GSCP shall
first give written notice (the "Sale Notice") to the Company
and to each of the Management Investors (such Management Inves-
tors, being referred to herein as the "Offeree Stockholders"),
stating that GSCP desires to make such sale, referring to Sec-
tion 2.4 of this Agreement, specifying the number of shares of
Common Stock proposed to be sold by GSCP pursuant to the offer
(the "Offer Shares"), and specifying the price, the form of
consideration and the material terms pursuant to which such
sale is proposed to be made.
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2.4.2 Tag-Along Election. Within seven (7) days of
the date of receipt of the Sale Notice, each Offeree Stock-
holder, other than GSCP, shall deliver to GSCP and to the Com-
pany a written notice stating whether the Offeree Stockholder
elects to sell a pro rata portion of its Common Stock (equal to
(A) the total number of shares of Common Stock owned by such
Offeree Stockholder, plus the total number of shares of Common
Stock then issuable upon exercise of vested Options then exer-
cisable by such Offeree Stockholder, multiplied by (B) a frac-
tion, (i) the numerator of which is the number of Offer Shares
and (ii) the denominator of which is the total number of shares
of Common Stock held by GSCP plus the total number of shares of
Common Stock then issuable upon exercise or conversion of any
convertible securities, if applicable, then exercisable or con-
vertible by GSCP) to such Proposed Transferee on the same terms
and conditions as GSCP (with respect to each Offeree Stock-
holder, its "Tag-Along Shares"). An election pursuant to the
first sentence of this Section 2.4.2 shall constitute an ir-
revocable commitment by the Offeree Stockholder making such
election to sell such Common Stock to the Proposed Transferee
if the sale of Offer Shares to the Proposed Transferee occurs
on the terms contemplated hereby.
2.4.3 Seller's Rights to Transfer.
(a) Third Party Sale; Tag-Along Buyer. A sale to a
Proposed Transferee pursuant to Section 2.4 shall only be con-
summated if the Proposed Transferee shall purchase, within 120
days of the date of the Sale Notice, concurrently with and on
the same terms and conditions and at the same price as the Of-
fer Shares, all of each Offeree Stockholder's Tag-Along Shares
with respect to such sale, in accordance with their elections
pursuant to Section 2.4.2 (the "Tag-Along Right").
(b) Sale Agreement. Each Offeree Stockholder elect-
ing to sell Tag-Along Shares (a "Tag-Along Seller") agrees to
cooperate in consummating such a sale, including, without limi-
tation, by becoming a party to the sales agreement and all
other appropriate related agreements (other than any amendment
to such Tag-Along Seller's Employment Agreement, if any), xx-
xxxxxxxx at the consummation of such sale, stock certificates
and other instruments for such Common Stock duly endorsed for
transfer, free and clear of all liens and encumbrances, and
voting or consenting in favor of such transaction (to the ex-
tent a vote or consent is required) and taking any other neces-
sary or appropriate action in furtherance thereof, including
the execution and delivery of any other appropriate agreements,
certificates, instruments and other documents. The foregoing
notwithstanding, in connection with such sale, a Tag-Along
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Seller, as such, shall not be required to make any representa-
tions and warranties with respect to the Company or the
Company's business or with respect to any other seller. In
addition, each Tag-Along Seller shall be severally responsible
for its proportionate share of the expenses of sale incurred by
the sellers in connection with such sale and the obligations
and liabilities incurred by the sellers in connection with such
sale. Such obligations and liabilities shall include (to the
extent such obligations are incurred) obligations and li-
abilities for indemnification (including for (x) breaches of
representations and warranties made in connection with such
sale by the Company or any other seller with respect to the
Company or the Company's business, (y) breaches of covenants
and (z) other matters), and shall also include amounts paid
into escrow or subject to holdbacks, and amounts subject to
post-closing purchase price adjustments. The foregoing not-
withstanding, (1) without the written consent of a Tag-Along
Seller, the amount of such obligations and liabilities for
which such Tag-Along Seller shall be responsible shall not ex-
ceed the gross proceeds received by such Tag-Along Seller in
such sale and (2) a Tag-Along Seller shall not be responsible
for the fraud of any other seller or for any indemnification
obligations and liabilities for breaches of representations and
warranties made by any other seller with respect to such other
seller's (i) ownership of and title to shares of capital stock
of the Company, (ii) organization, (iii) authority and (iv)
conflicts and consents.
(c) No Liability. Notwithstanding any other provi-
sion contained in this Section 2.4.3, there shall be no li-
ability on the part of the Company or GSCP in the event that
the sale pursuant to this Section 2.4.3 is not consummated for
any reason whatsoever. The decision whether to effect a Trans-
fer pursuant to this Section 2.4.3 shall be in the sole and
absolute discretion of GSCP.
2.5 Drag-Along Right.
2.5.1 Exercise. If GSCP proposes to make a bona
fide sale of all of its shares of Common Stock to a Proposed
Transferee, pursuant to a stock sale, merger, business combina-
tion, recapitalization, consolidation, reorganization, restruc-
turing or similar transaction, GSCP shall have the right (a
"Drag-Along Right"), exercisable upon fifteen (15) days' prior
written notice to the other Stockholders, to require the other
Stockholders to sell all of their shares of Common Stock and,
at the election of GSCP, Options (whether vested or unvested)
to the Proposed Transferee on the same terms and conditions and
at the same price (in the case of Options the purchase price of
each Option shall be equal to the purchase price attributable
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to the number of shares of Common Stock issuable upon exercise
of such Option less the exercise price thereof) as GSCP.
2.5.2 Sale Agreement. Each Stockholder selling
shares of Common Stock pursuant to a transaction contemplated
by this Section 2.5 (a "Drag-Along Seller") agrees to cooperate
in consummating such a sale, including, without limitation, by
becoming a party to the sales agreement and all other appro-
priate related agreements (other than any amendment to such
Drag-Along Seller's Employment Agreement, if any), delivering
at the consummation of such sale, stock certificates and other
instruments for such shares of Common Stock duly endorsed for
transfer, free and clear of all liens and encumbrances, and
voting or consenting in favor of such transaction (to the ex-
tent a vote or consent is required) and taking any other neces-
sary or appropriate action in furtherance thereof, including
the execution and delivery of any other appropriate agreements,
certificates, instruments and other documents. The foregoing
notwithstanding, in connection with such sale, a Drag-Along
Seller, as such, shall not be required to make any representa-
tions and warranties with respect to the Company or the
Company's business or with respect to any other seller. In
addition, each Drag-Along Seller shall be severally responsible
for its proportionate share of the expenses of sale incurred by
GSCP in connection with such sale and the obligations and li-
abilities incurred by the seller in connection with such sale.
Such obligations and liabilities shall include (to the extent
such obligations are incurred) obligations and liabilities for
indemnification (including for (x) breaches of representations
and warranties made in connection with such sale by the Company
or any other seller with respect to the Company or the
Company's business, (y) breaches of covenants and (z) other
matters), and shall also include amounts paid into escrow or
subject to holdbacks, and amounts subject to post-closing pur-
chase price adjustments. The foregoing notwithstanding, (1)
without the written consent of a Drag-Along Seller, the amount
of such obligations and liabilities for which such Drag-Along
Seller shall be responsible shall not exceed the gross proceeds
received by such Drag-Along Seller in such sale and (2) a Drag-
Along Seller shall not be responsible for the fraud of any
other seller or any indemnification obligations and liabilities
for breaches of representations and warranties made by any
other seller with respect to such other seller's (i) ownership
of and title to shares of capital stock of the Company, (ii)
organization, (iii) authority and (iv) conflicts and consents.
2.5.3 No Liability. Notwithstanding any other pro-
vision contained in this Section 2.5, there shall be no liabil-
ity on the part of the Company or GSCP in the event that the
sale pursuant to this Section 2.5 is not consummated for any
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reason whatsoever. The decision whether to effect a Transfer
pursuant to this Section 2.5 shall be in the sole and absolute
discretion of GSCP.
2.6 Additional Provisions Relating to Restrictions on
Transfers.
2.6.1 Legends. Each of the Stockholders hereby
agrees that each outstanding certificate representing shares of
Common Stock held or owned by such Stockholder or its Trans-
feree, including any certificate representing shares of Common
Stock acquired in accordance with the provisions of this Agree-
ment or the Employment Agreements and any certificates repre-
senting shares of Common Stock issued upon exercise of the Op-
tions, in any case, subject to the provisions of this Agreement
and issued prior to the date when the applicable restrictions
are terminated pursuant to Section 2.6.3, shall bear endorse-
ments reading substantially as follows:
(a) The securities represented by this cer-
tificate have not been registered under the Securities Act
of 1933, as amended, or under the securities laws of any
state and may not be transferred, sold or otherwise dis-
posed of except while such a registration is in effect or
pursuant to an exemption from registration under said Act
and applicable state securities laws.
(b) The securities represented by this certifi-
cate are subject to the terms and conditions set forth in
a Stockholders' Agreement, dated as of December 19, 1997,
copies of which may be obtained from the issuer or from
the holder of this security. No transfer of such securi-
ties will be made on the books of the issuer unless ac-
companied by evidence of compliance with the terms of such
agreement.
Each outstanding certificate representing shares of
Common Stock shall also bear any legend required by the terms
of the Employment Agreements or the Stock Incentive Plan or as
the Company may otherwise deem appropriate.
2.6.2 Copy of Agreement. A copy of this Agreement
shall be filed with the corporate secretary of the Company and
kept with the records of the Company and shall be made avail-
able for inspection by any stockholder of the Company at the
principal executive offices of the Company.
2.6.3 Termination of Restrictions. The restriction
referred to in the endorsement required pursuant to Section
2.6.1(a) shall cease and terminate as to any particular shares
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of Common Stock when, in the reasonable opinion of counsel for
the Company, such restriction is no longer required in order to
assure compliance with the Securities Act. The Company or the
Company's counsel, at their election, may request from any
Stockholder a certificate or an opinion of such Stockholder's
counsel with respect to any relevant matters in connection with
the removal of the endorsement set forth in Section 2.6.1(a)
from such Stockholder's stock certificates, any such certifi-
cate or opinion of counsel to be reasonably satisfactory to the
Company and its counsel. The restrictions referred to in Sec-
tion 2.6.1(b) shall cease and terminate as to any particular
shares of Common Stock when, in the reasonable opinion of coun-
sel for the Company, the provisions of this Agreement are no
longer applicable to such shares or this Agreement shall have
terminated in accordance with its terms. Any other restric-
tions referred to in any other legends required pursuant to
Section 2.6.1 shall cease and terminate when, in the reasonable
opinion of counsel for the Company, such restrictions are no
longer applicable. Whenever such restrictions shall cease and
terminate as to any shares of Common Stock, the Stockholder
holding such shares shall be entitled to receive from the Com-
pany, without expense (other than applicable transfer taxes, if
any, if such unlegended shares are being delivered and trans-
ferred to any Person other than the registered holder thereof),
new certificates for a like number of shares of Common Stock
not bearing the relevant legend(s) set forth or referred to in
Section 2.6.1.
ARTICLE III
REGISTRATION RIGHTS
3.1 Piggyback and Demand Registrations.
(a) Piggyback Registrations. If at any time the
Company proposes to register for sale by the Company under the
Securities Act any of its equity securities (other than a reg-
istration on Form S-4 or Form S-8, or any successor or similar
forms), or any shares of Common Stock held by GSCP pursuant to
Section 3.1(b), in a manner that would permit registration of
Registrable Securities for sale to the public under the Securi-
ties Act and in an underwritten offering, the Company will each
such time promptly give written notice to all Stockholders who
beneficially own any Registrable Securities of its intention to
do so, of the registration form of the SEC that has been se-
lected by the Company and of such holders' rights under this
Section 3.1 (the "Piggyback Notice"). The Company will use its
reasonable best efforts to include, and to cause the under-
writer or underwriters to include, in the proposed offering, on
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the same terms and conditions as the securities of the Company
included in such offering, all Registrable Securities that the
Company has been requested in writing, within fifteen (15) cal-
endar days after the Piggyback Notice is given, to register by
the Stockholders thereof (each such registration pursuant to
this Section 3.1(a), a "Piggyback Registration"); provided,
however, that (i) if, at any time after giving a Piggyback No-
xxxx and prior to the effective date of the registration state-
ment filed in connection with such registration, the Company
shall determine for any reason not to register such equity se-
curities (or, in the case of a Demand Registration (as defined
below), GSCP so determines), the Company may, at its election
(or, in the case of a Demand Registration where GSCP so deter-
mines, the Company shall), give written notice of such determi-
nation to all Stockholders who beneficially own any Registrable
Securities and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such
abandoned registration, and (ii) in case of a determination by
the Company to delay registration of its equity securities (or,
in the case of a Demand Registration, GSCP so determines), the
Company shall be permitted to (or, in the case of a Demand Reg-
istration where GSCP so determines, the Company shall) delay
the registration of such Registrable Securities for the same
period as the delay in registering such other equity securities
(provided that clauses (i) and (ii) shall not relieve the Com-
pany of its obligations under Section 3.1(b)). In the case of
any registration of Registrable Securities in an underwritten
offering pursuant to this Section 3.1(a), all Stockholders pro-
posing to distribute their securities pursuant to this Section
3.1(a) shall, at the request of the Company (or, in the case of
a Demand Registration, GSCP), enter into an agreement in cus-
tomary form with the underwriter or underwriters selected by
the Company (or, in the case of a Demand Registration, selected
by GSCP). Notwithstanding the foregoing, following an IPO, the
Company shall not be obligated to effect registration of Regis-
trable Securities for which Piggyback Registration is requested
by a Management Investor if, at the time of such request, all
such Registrable Securities are eligible for sale to the public
by the requesting Management Investor without registration un-
der Rule 144 under the Securities Act, with such sale not being
limited by the volume restrictions thereunder.
(b) Demand Registrations. The Company, upon the
reasonable request of GSCP, shall, from time to time, use its
reasonable best efforts to register under the Securities Act
any reasonable portion of Registrable Securities held by GSCP
(including, at the election of GSCP, in an underwritten offer-
ing) and bear all expenses in connection with such offering in
a manner consistent with paragraph (c) below and shall enter
into such other agreements in furtherance thereof (including
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with underwriters selected by GSCP, including, in any case,
Affiliates of GSCP as lead underwriters, if requested by GSCP)
(each such registration pursuant to this Section 3.1(b), a "Xx-
xxxx Registration"), and the Company shall provide customary
indemnifications in such instances (in a manner consistent with
the indemnification provisions of this Article III) to GSCP and
any such underwriters; provided, however, that the Company
shall not be obligated to effect more than four Demand Regis-
trations. A registration shall not count as a Demand Registra-
tion unless and until the registration statement relating
thereto has been declared effective by the SEC and not with-
drawn.
(c) Expenses. The Company shall pay all Registra-
tion Expenses in connection with each registration of Regis-
trable Securities requested pursuant to this Section 3.1; pro-
vided, however, that each Stockholder shall pay all underwrit-
ing discounts and commissions and transfer taxes, if any, re-
lating to the sale or disposition of such Stockholder's Regis-
trable Securities pursuant to a registration statement effected
pursuant to this Section 3.1.
(d) Priority in Piggyback and Demand Registrations.
If the managing underwriter for a registration pursuant to this
Section 3.1 shall advise the Company in writing that, in its
opinion, the number of securities requested to be included in
such registration exceeds the number (the "Section 3.1 Sale
Number") that can be sold in an orderly manner in such offering
within a price range acceptable to the Company (or, in the case
of a Demand Registration, to GSCP), the Company shall include
in such offering (i) first, all the securities the Company pro-
poses to register for its own sale, and (ii) second, to the
extent that the securities the Company proposes to register are
less than the Section 3.1 Sale Number, all Registrable Securi-
ties requested to be included by all Stockholders; provided,
however, that if the number of such Registrable Securities ex-
ceeds (x) the Section 3.1 Sale Number less (y) the number of
securities included pursuant to clause (i) hereof, then the
number of such Registrable Securities included in such regis-
tration shall be allocated pro rata among all requesting Stock-
holders, on the basis of the relative number of shares of such
Registrable Securities each such Stockholder then holds. If
there is any reduction or exclusion of Registrable Securities
pursuant to this Section 3.1(d) in connection with a Demand
Registration, such registration shall not be deemed to be a
Demand Registration for purposes of determining the maximum
number of Demand Registrations the Company is obligated to ef-
fect pursuant to Section 3.1(b) hereof.
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(e) Underwriting Requirements. In connection with
any offering involving any underwriting of securities in a Pig-
gyback Registration, the Company shall not be required to in-
clude any Stockholder's Registrable Securities in such under-
writing unless such Stockholder accepts the terms of the under-
writing as agreed upon between the Company and the underwriters
in such quantities and on such terms as set forth in Section
3.1(a) hereof, and such Management Investor agrees to sell such
Management Investor's securities on the basis provided therein
and completes and/or executes all questionnaires, indemnities,
lock-ups, underwriting agreements and other documents (includ-
ing powers of attorney and custody arrangements) required gen-
erally of all selling Stockholders, in each case in customary
form and substance, which are requested to be executed in con-
nection therewith.
3.2 Registration Procedures. If and whenever the Company
is required to use its reasonable best efforts to effect or
cause the registration of any Registrable Securities under the
Securities Act as provided in this Article III, the Company
will, as soon as practicable:
(a) prepare and file with the SEC the requisite reg-
istration statement with respect to such Registrable Secu-
rities and use its reasonable best efforts to cause such
registration statement to become and remain effective;
(b) prepare and file with the SEC such amendments
and supplements to such registration statement and the
prospectus used in connection therewith as may be neces-
sary to keep such registration statement effective for
such period as the Company shall deem appropriate and to
comply with the provisions of the Securities Act with re-
spect to the sale or other disposition of all securities
covered by such registration statement during such period;
(c) furnish to each seller of such Registrable Secu-
rities and each underwriter such number of copies of such
registration statement and of each amendment and supple-
ment thereto (in each case including all exhibits), such
number of copies of the prospectus included in such regis-
tration statement (including each preliminary prospectus
and summary prospectus), in conformity with the require-
ments of the Securities Act, and such other documents as
such seller may reasonably request;
-17-
(d) promptly notify each Stockholder that holds Reg-
istrable Securities covered by such registration state-
ment, (i) when such registration statement or any post-
effective amendment or supplement thereto becomes effec-
tive, (ii) of the issuance by the SEC or any state securi-
ties authority of any stop order, injunction or other or-
der or requirement suspending the effectiveness of such
registration statement (and take all reasonable action to
prevent the entry of such stop order or to remove it if
entered, or the initiation of any proceedings for that
purpose), or (iii) of the happening of any event as a re-
xxxx of which the registration statement, as then in ef-
fect, the prospectus related thereto or any document in-
cluded therein by reference includes an untrue statement
of a material fact or omits to state a material fact re-
quired to be stated therein or necessary to make the
statements therein not misleading in the light of the cir-
cumstances under which they were made and promptly file
such amendments and supplements which may be required on
account of such event and use its reasonable best efforts
to cause each such amendment and supplement to become ef-
fective;
(e) promptly furnish counsel for each underwriter,
if any, and for the selling Stockholders of Registrable
Securities copies of any written request by the SEC or any
state securities authority for amendments or supplements
to a registration statement and prospectus or for ad-
ditional information;
(f) use reasonable best efforts to obtain the with-
drawal of any order suspending the effectiveness of a reg-
istration statement at the earliest possible time;
(g) use its best efforts to cause all such Regis-
trable Securities covered by such registration statement
to be listed on the principal securities exchange or au-
thorized for quotation on Nasdaq on which similar equity
securities issued by the Company are then listed or autho-
rized for quotation, or eligible for listing or quotation,
if the listing or authorization for quotation of such se-
curities is then permitted under the rules of such ex-
change or the NASD;
(h) enter into an underwriting agreement with the
underwriter of such offering in the form customary for
such underwriter for similar offerings, including such
representations and warranties by the Company, provisions
-18-
regarding the delivery of opinions of counsel for the Com-
pany and accountants' letters, provisions regarding indem-
nification and contribution, and such other terms and con-
ditions as are at the time customarily contained in such
underwriter's underwriting agreements for similar offer-
ings (the sellers of Registrable Securities which are to
be distributed by such underwriter(s) may, at their op-
tion, require that any or all of the representations and
warranties by, and the other agreements on the part of,
the Company to and for the benefit of such underwriter(s)
shall also be made to and for the benefit of such sellers
of Registrable Securities);
(i) make available for inspection by representatives
of the selling Stockholders who hold Registrable Securi-
ties and any underwriters participating in any disposition
pursuant hereto and any counsel or accountant retained by
such Stockholders or underwriters, all relevant financial
and other records, pertinent corporate documents and prop-
erties of the Company and cause the respective officers,
directors and employees of the Company to supply all in-
formation reasonably requested by any such representative,
underwriter, counsel or accountant in connection with a
registration pursuant hereto; provided, however, that,
with respect to records, documents or information which
the Company determines, in good faith, to be confidential
and as to which the Company notifies such representatives,
underwriters, counsel or accountants in writing of such
confidentiality, such representatives, underwriters, coun-
sel or accountants shall not disclose such records, docu-
ments or information unless (i) the release of such rec-
ords, documents or information is ordered pursuant to a
subpoena or other order from a court of competent juris-
diction, (ii) such records, documents or information have
previously been generally made available to the public, or
(iii) the disclosure of such records, documents or infor-
mation is necessary, in the written opinion of outside
legal counsel, to avoid or correct a material misstatement
or omission in the registration statement and then only
after reasonable request has been made to the Company to
make such disclosure and the Company has denied such re-
quest. Each selling Stockholder of such Registrable Secu-
rities agrees that information obtained by it as a result
of such inspections shall be deemed confidential and shall
not be used by it as the basis for any market transactions
in the securities of the Company or its Affiliates (or for
such Stockholder's business purposes or for any reason
other than in connection with a registration hereunder)
-19-
unless and until such information is made generally avail-
able (other than by such Stockholder or where such Stock-
holder knows that such information became publicly avail-
able as a result of a breach of any confidentiality ar-
rangement) to the public. Each selling Stockholder of
such Registrable Securities further agrees that it will,
upon learning that disclosure of such records is sought,
give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent dis-
closure of the records deemed confidential;
(j) permit any beneficial owner of Registrable Se-
curities who, in the sole judgment, exercised in good
faith, of such holder, might be deemed to be a controlling
person of the Company, to participate in the preparation
of such registration or comparable statement and to re-
quire the insertion therein of material, furnished to the
Company in writing, that in the judgment of such holder,
as aforesaid, should be included; and
(k) make reasonably available its employees and per-
sonnel and otherwise provide reasonable assistance to the
underwriters (taking into account the needs of the
Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any
underwritten offering.
The Company may require each seller of Registrable
Securities as to which any registration is being effected to
furnish the Company such information regarding such seller and
the distribution of such securities as the Company may from
time to time reasonably request in writing. The Company shall
not be required to register or qualify any Registrable Securi-
ties covered by such registration statement under any state
securities, or "blue sky," laws of such jurisdictions other
than as it deems necessary in connection with the chosen method
of distribution or to take any other actions or do any other
things other than those it deems necessary or advisable to con-
summate such distribution, and the Company shall not for any
such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not
otherwise be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction or to consent to general ser-
vice of process in any such jurisdiction.
Each beneficial owner of Registrable Securities
agrees that upon receipt of any notice from the Company of the
happening of any event of the kind described in subclauses (i)
and (ii) of clause (d) of this Section 3.2, such beneficial
owner will forthwith discontinue disposition of Registrable
-20-
Securities pursuant to the registration statement covering such
Registrable Securities until such beneficial owner's receipt of
the copies of the supplemented or amended prospectus contem-
plated by clause (d) of this Section 3.2, and, if so directed
by the Company, such beneficial owner will deliver to the Com-
pany (at the Company's expense) all copies, other than perma-
nent file copies then in such beneficial owner's possession, of
the prospectus covering such Registrable Securities that was in
effect prior to such amendment or supplement.
3.3 Indemnification.
(a) In the event of any registration of any Reg-
istrable Securities pursuant to this Article III, the Company
will, and hereby does, indemnify and hold harmless, to the
fullest extent permitted by law, the seller of any Registrable
Securities covered by such registration statement, its direc-
tors, officers, fiduciaries, employees and stockholders or gen-
eral and limited partners (and the directors, officers, fidu-
ciaries, employees and stockholders or general and limited
partners thereof), each other Person who participates as an
underwriter or a qualified independent underwriter, if any, in
the offering or sale of such securities, each director, of-
ficer, fiduciary, employee and stockholder or general and lim-
ited partner of such underwriter or qualified independent un-
derwriter, and each other Person (including any such Person's
directors, officers, fiduciaries, employees and stockholders or
general and limited partners), if any, who controls such seller
or any such underwriter or qualified independent underwriter,
within the meaning of the Securities Act, against any and all
Claims in respect thereof and expenses (including reasonable
fees and expenses of counsel and any amounts paid in any set-
tlement effected with the Company's consent, which consent
shall not be unreasonably withheld or delayed) to which each
such indemnified party may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Claims or
expenses arise out of or are based upon any of the following
actual or alleged statements, omissions or violations (each, a
"Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration
statement under which such securities were registered pursuant
to this Agreement under the Securities Act or the omission or
alleged omission to state therein a 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, (ii) any untrue statement or alleged untrue state-
ment of a material fact contained in any preliminary, final or
summary prospectus or any amendment or supplement thereto, to-
gether with the documents incorporated by reference therein, or
the omission or alleged omission to state therein a material
-21-
fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances un-
der which they were made, not misleading, or (iii) any xxxxx-
tion by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action re-
quired of or inaction by the Company in connection with any
such registration, and the Company will reimburse any such in-
demnified party for any legal or other expenses reasonably in-
curred by such indemnified party in connection with investigat-
ing or defending any such Claim as such expenses are incurred;
provided, that the Company shall not be liable to any such in-
demnified party in any such case to the extent such Claim or
expense arises out of or is based upon any Violation which oc-
curs in reliance upon and in conformity with written informa-
tion furnished to the Company or its representatives by or on
behalf of such indemnified party expressly stating that such
information is for use therein.
(b) Each holder of Registrable Securities that are
included in the securities as to which any Demand Registration
or Piggyback Registration is being effected (and, if the Com-
pany requires as a condition to including any Registrable Secu-
rities in any registration statement filed in connection with
any Demand Registration or Piggyback Registration, any under-
writer and qualified independent underwriter, if any) shall,
severally and not jointly, indemnify and hold harmless (in the
same manner and to the same extent as set forth in paragraph
(a) of this Section 3.3), to the extent permitted by law, the
Company, its directors, officers, fiduciaries, employees and
stockholders (and the directors, officers, fiduciaries, employ-
ees and stockholders or general and limited partners thereof)
and each Person (including any such Person's directors, offic-
ers, fiduciaries, employees and stockholders or general and
limited partners), if any, controlling the Company within the
meaning of the Securities Act and all other prospective sellers
and their directors, officers, fiduciaries, employees and
stockholders or general and limited partners and respective
controlling Persons (including any such Person's directors,
officers, fiduciaries, employees and stockholders or general
and limited partners) against any and all Claims and expenses
(including reasonable fees and expenses of counsel and any
amounts paid in any settlement effected with the consent of the
indemnifying party, which consent shall not be unreasonably
withheld or delayed) to which each such indemnified party may
become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims or expenses arise out of or
are based upon any Violation which occurs in reliance upon and
in conformity with written information furnished to the Company
or its representatives by or on behalf of such holder or under-
writer or qualified independent underwriter, if any, expressly
-22-
stating that such information is for use in connection with any
registration statement, preliminary, final or summary prospec-
tus or amendment or supplement or document incorporated by ref-
erence into any of the foregoing; provided, however, that the
aggregate amount which any such holder, underwriter or quali-
fied independent underwriter shall be required to pay pursuant
to this Section 3.3(b) and Sections 3.3(c) and (e) shall be
limited to (x) in the case of any such holder, the amount of
the gross proceeds received by such holder upon the sale of the
Registrable Securities pursuant to the registration statement
giving rise to such claim and (y) in the case of any such un-
derwriter or qualified independent underwriter, the amount of
the total sales price of the Registrable Securities sold
through or by it pursuant to the registration statement giving
rise to such claim.
(c) Indemnification similar to that specified in the
preceding paragraphs (a) and (b) of this Section 3.3 (with ap-
propriate modifications) shall be given by the Company and each
seller of Registrable Securities (and, if the Company requires
as a condition to including any Registrable Securities in any
registration statement filed in connection with any Demand Reg-
istration or Piggyback Registration, any underwriter and quali-
fied independent underwriter, if any) with respect to any re-
quired registration or other qualification of securities under
any state securities and "blue sky" laws.
(d) Any Person entitled to indemnification under
this Agreement shall notify promptly the indemnifying party in
writing of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursu-
ant to this Section 3.3, but the failure of any indemnified
party to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of this
Section 3.3, except to the extent the indemnifying party is
prejudiced thereby and shall not relieve the indemnifying party
from any liability which it may have to any indemnified party
otherwise than under this Section 3.3. In case any action or
proceeding is brought against an indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein
and, unless in the reasonable opinion of outside counsel to the
indemnified party a conflict of interest between such indemni-
fied and indemnifying parties may exist in respect of such
claim, to assume the defense thereof jointly with any other
indemnifying party similarly notified, to the extent that it
chooses, with counsel reasonably satisfactory to such indem-
nified party, and after notice from the indemnifying party to
such indemnified party that it so chooses, the indemnifying
party shall not be liable to such indemnified party for any
-23-
legal or other expenses subsequently incurred by such indemni-
fied party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that (i)
if the indemnifying party fails to take reasonable steps neces-
sary to defend diligently the action or proceeding within
twenty (20) days after receiving notice from such indemnified
party that the indemnified party believes it has failed to do
so; or (ii) if such indemnified party who is a defendant in any
action or proceeding which is also brought against the indemni-
fying party reasonably shall have concluded that there may be
one or more legal defenses available to such indemnified party
which are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise
inappropriate under applicable standards of professional con-
duct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth
above (but with no more than one firm of counsel for all indem-
nified parties in each jurisdiction, except to the extent any
indemnified party or parties reasonably shall have concluded
that there may be legal defenses available to such party or
parties which are not available to the other indemnified par-
ties or to the extent representation of all indemnified parties
by the same counsel is otherwise inappropriate under applicable
standards of professional conduct) and the indemnifying party
shall be liable for any expenses therefor. No indemnifying
party shall, without the written consent of the indemnified
party, which consent shall not be unreasonably withheld, 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 (A) includes an uncondi-
tional release of the indemnified party from all liability
arising out of such action or claim and (B) 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.
(e) If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified
party under Section 3.3(a), (b) or (c), then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of any Claim in such proportion
as is appropriate to reflect the relative fault of the indemni-
fying party on the one hand and the indemnified party on the
other from the relevant offering of securities. If, however,
the allocation provided in the immediately preceding sentence
is not permitted by applicable law, or if the indemnified party
failed to give the notice required by Section 3.3(d) above and
-24-
the indemnifying party is prejudiced thereby, then each indem-
nifying party shall contribute to the amount paid or payable by
such indemnified party in such proportion as is appropriate to
reflect not only such relative fault of but also the relative
benefits received by the indemnifying party, on the one hand,
and the indemnified party, on the other hand, as well as any
other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things,
whether the Violation relates to information supplied by the
indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and op-
portunity to correct or prevent such Violation. The parties
hereto agree that it would not be just and equitable if contri-
butions pursuant to this Section 3.3(e) were to be determined
by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in the preceding sentences of this Section 3.3(e).
The amount paid or payable in respect of any Claim shall be
deemed to include any legal or other expenses reasonably in-
curred by such indemnified party in connection with investigat-
ing or defending any such Claim. No person guilty of fraudu-
lent 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.
Notwithstanding anything in this Section 3.3(e) to the con-
trary, no indemnifying party (other than the Company) shall be
required pursuant to this Section 3.3(e) to contribute any
amount in excess of (x) in the case of an indemnifying party
that is a holder of Registrable Securities, the gross proceeds
received by such indemnifying party from the sale of Regis-
trable Securities in the offering to which the losses, claims,
damages or liabilities of the indemnified parties relate, or
(y) in the case of an indemnifying party that is an underwriter
or a qualified independent underwriter, the amount of the total
sales price of the Registrable Securities sold through or by it
in the offering to which the losses, claims, damages or li-
abilities of the indemnified parties relate, less, in any such
case referred to in (x) and (y), the amount of all indemni-
fication and contribution payments made pursuant to Sections
3.3(b) and (c) and this Section 3.3(e), as the case may be, in
connection with such offering.
(f) The indemnity agreements contained herein shall
be in addition to any other rights to indemnification or con-
tribution which any indemnified party may have pursuant to law
or contract and shall remain operative and in full force and
effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer
of the Registrable Securities by any such party.
-25-
(g) The indemnification and contribution required by
this Section 3.3 shall be made by periodic payments of the
amount thereof during the course of the investigation or de-
fense, as and when bills are received or expense, loss, damage
or liability is incurred.
(h) In connection with underwritten offerings, the
Company will use reasonable best efforts to negotiate terms of
indemnification that are reasonably favorable to the various
sellers pursuant thereto, as appropriate under the circum-
stances.
3.4 Holdback Agreement.
(a) If requested in writing by the Company or the
underwriter, if any, of any offering affording Stockholders
registration rights pursuant to Section 3.1 (whether or not
some or all of such Stockholder's Registrable Securities are
subject to a cutback pursuant to Section 3.1 of this Agree-
ment), including without limitation an IPO, each Stockholder
agrees not to effect any public sale or distribution, including
any sale pursuant to Rule 144, of any Registrable Securities or
any other equity security of the Company or of any security
convertible into or exchangeable or exercisable for any equity
security of the Company (in each case, other than as part of
such underwritten public offering) within fourteen (14) days
before or 180 days after the effective date of a registration
statement affording Stockholders registration rights pursuant
to Section 3.1 (including where subject to a cutback pursuant
to Section 3.1(d)).
(b) If requested in writing by the underwriter of
any offering in connection with a Demand Registration, the Com-
pany agrees not to effect any public sale or distribution
(other than public sales or distributions solely by and for the
account of the Company of securities issued (x) pursuant to any
employee or director benefit or similar plan or any dividend
reinvestment plan or (y) in any acquisition by the Company) of
any Registrable Securities or any other equity security of the
Company or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (in each
case, other than as part of such underwritten public offering),
within fourteen (14) days before or 180 days after the effec-
tive date of a registration statement filed in connection with
a Demand Registration, or for such shorter period as the sole
or lead managing underwriter shall request, in any such case,
unless consented to by such underwriter.
-26-
ARTICLE IV
MANAGEMENT INVESTORS' PUTS AND CALLS
4.1 Call Rights. If, prior to the consummation of an
IPO, a Management Investor (other than the Estate or the
Estate's Permitted Transferees) dies or the Management
Investor's (other than the Estate or the Estate's Permitted
Transferees) employment by the Company terminates for any rea-
son (including due to a Disability, as defined in such Manage-
ment Investor's Employment Agreement or any analogous provision
of any employment, compensation or benefit agreement or ar-
rangement, if any, and if not so defined, upon the good faith
determination of the Board of Directors of the Company of such
Disability), the Company shall have the right, at its election,
to purchase all (but not less than all) of the Management
Investor's shares of Common Stock (including any shares held by
its Permitted Transferees) within six (6) months after such
termination, or fifteen (15) months after such termination in
the case of death of the Management Investor (with respect to
any shares of Common Stock acquired after such termination or
death upon the exercise of Options held by the Management In-
vestor, such period to run from the date of exercise) at a
price equal to the Fair Market Value of such Common Stock de-
termined as of, in all cases other than the death of the Man-
agement Investor, the date such termination is effective and,
in the case of the Management Investor's death, as of the date
of death. The Company shall pay the purchase price in cash to
the extent that (x) subsidiaries of the Company are permitted
to dividend the funds for such purchase to the Company (a "Sub-
sidiary Dividend") (under both applicable law and the indebted-
ness of the Company and its Affiliates) and (y) the Company is
permitted to purchase such shares for cash (under both ap-
plicable law and such indebtedness). The Company shall fund
any amount not permitted to be funded through a Subsidiary
Dividend or to be used to purchase such shares with a Buy-Out
Note. The Board of Directors of the Company may, in its dis-
cretion, assign the rights and obligations of the Company under
this Section 4.1 to any other Person, but no such assignment
shall relieve the Company of its obligations hereunder to the
extent not satisfied by such assignee.
4.2 Put Rights. If, prior to the consummation of an
IPO, a Management Investor (other than the Estate or the
Estate's Permitted Transferee) dies or the Management
Investor's (other than the Estate or the Estate's Permitted
Transferee's) employment by the Company is terminated by the
Company for any reason (including due to a Disability, as de-
fined in such Management Investor's Employment Agreement or any
analogous provision of any employment, compensation or benefit
-27-
agreement or arrangement, if any, and if not so defined, upon
the good faith determination of the Board of Directors of the
Company of such Disability), the Management Investor or the
Management Investor's legal representative or trustee, as the
case may be, shall have the right, within three (3) months af-
ter such termination is effective (or one year after the date
of death in the case of the Management Investor's death), to
require the Company to purchase all (but not less than all) of
the Management Investor's Common Stock (including any shares
held by its Permitted Transferees) at a price equal to (A) in
the case of termination by reason of death or Disability, the
Fair Market Value thereof determined as of the date of death
(in the case of termination due to death) or the date such
other termination is effective and (B) in the case of termina-
tion by the Company for any other reason, the lower of (1) Fair
Market Value and (2) the product of (x) the number of shares of
Common Stock and (y) the New Cost Per Share (subject to adjust-
ment to reflect any adjustments to the Common Stock made to re-
flect any merger, reorganization, consolidation, recapitali-
zation, spinoff, stock dividend, stock split, extraordinary
distribution with respect to the Common Stock or other change
in corporate structure affecting the Common Stock, as the Com-
pany reasonably shall deem fair and appropriate). To the ex-
tent the funds for such purchase are permitted under the in-
debtedness of the Company and its Affiliates and applicable law
to be funded through a Subsidiary Dividend and to be used to
purchase such shares, the Company shall pay the purchase price
in cash. The Company shall pay any amount not permitted to be
funded through a Subsidiary Dividend or to be used to purchase
such shares with a Buy-Out Note. The Board of Directors of the
Company may, in its discretion, assign the rights and obliga-
tions of the Company under this Section 4.2 to any other Per-
son, but no such assignment shall relieve the Company of its
obligations hereunder to the extent not satisfied by such as-
signee.
ARTICLE V
MISCELLANEOUS
5.1 Effectiveness; Term. (a) This Agreement shall be-
come effective (the "Effective Date") simultaneously with the
closing of the transactions under the Merger Agreement and
shall terminate without liability or penalty on the part of any
party or its directors, officers, fiduciaries, employees and
stockholders or general and limited partners (and the direc-
tors, officers, fiduciaries, employees and stockholders or gen-
eral and limited partners thereof) to any other party or such
-28-
other party's Affiliates upon the termination of the Merger
Agreement pursuant to its terms.
(b) Unless theretofore terminated pursuant to the
preceding paragraph, the rights and obligations of, and re-
strictions on, the Stockholders under Article II of this Agree-
ment shall terminate when GSCP and its Affiliates no longer
hold in the aggregate at least 40% of the fully diluted shares
of Common Stock then outstanding. Notwithstanding the forego-
ing, in the event the Company enters into any agreement to
merge with or into any other Person or adopts any other plan of
recapitalization, consolidation, reorganization or other re-
structuring transaction as a result of which the Stockholders
and their respective Permitted Transferees (including GSCP and
any Affiliates thereof) shall own less than a majority of the
outstanding voting power of the entity surviving such transac-
tion, this Agreement shall terminate.
(c) Unless theretofore terminated pursuant to Sec-
tion 5.1(a), and notwithstanding anything in Section 5.1(b) to
the contrary, the provisions contained in Article III hereof
shall continue to remain in full force and effect until the
earlier to occur of the twentieth anniversary of the date
hereof and the date on which there are no longer any Regis-
trable Securities outstanding or issuable or thereafter avail-
able for or subject to issuance to any Stockholder upon exer-
cise or conversion of any options, warrants, rights or other
convertible securities; provided, however, that the provisions
of Section 3.3 hereof shall survive termination pursuant to
Section 5.1(b) or (c) of this Agreement.
5.2 No Voting or Conflicting Agreements. Prior to an
IPO, no Management Investor shall grant any proxy or enter into
or agree to be bound by any voting trust with respect to the
Common Stock nor, at any time, shall any Management Investor
enter into any stockholder agreements or arrangements of any
kind with any Person with respect to the Common Stock inconsis-
tent with the provisions of this Agreement (whether or not such
agreements and arrangements are with other Management Investors
or holders of Common Stock that are not parties to this Agree-
ment). The foregoing prohibition includes, but is not limited
to, agreements or arrangements with respect to the acquisition,
disposition or voting of shares of Common Stock inconsistent
with the provisions of this Agreement. No Management Investor
shall act, at any time, for any reason, as a member of a group
or in concert with any other Persons in connection with the
acquisition, disposition or voting of shares of Common Stock in
any manner which is inconsistent with the provisions of this
Agreement.
-29-
5.3 Approval of Stock Incentive Plan by Stockholders.
The Stockholders by their execution of this Agree-
ment, hereby approve the Stock Incentive Plan, a copy of which
is attached hereto as Exhibit A.
5.4 Specific Performance. The parties hereto acknowledge
that there would be no adequate remedy at law if any party
fails to perform any of its obligations hereunder, and accord-
ingly agree that each party, in addition to any other remedy to
which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other
party under this Agreement in accordance with the terms and
conditions of this Agreement. Any remedy under this Section
5.4 is subject to certain equitable defenses and to the discre-
tion of the court before which any proceedings therefor may be
brought.
5.5 Notices. All notices, statements, instructions or
other documents required to be given hereunder shall be in
writing and shall be given either personally or by mailing the
same in a sealed envelope, by overnight courier or by first-
class mail, postage prepaid and either certified or registered,
in either case, return receipt requested, or by telecopy, ad-
dressed to the Company at its principal offices and to the
other parties at their addresses reflected on the signature
pages hereto. Each party hereto, by written notice given to
the other parties hereto in accordance with this Section 5.5,
may change the address to which notices, statements, instruc-
tions or other documents are to be sent to such party. All
notices, statements, instructions and other documents hereunder
that are mailed or telecopied shall be deemed to have been giv-
en on the date of mailing or, in the case of telecopying, upon
confirmation of receipt.
5.6 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties, and
their respective successors and assigns. If any Stockholder or
any Affiliate thereof or any Transferee of any Stockholder
shall acquire any shares of Common Stock in any manner, whether
by operation of law or otherwise, such shares shall be held
subject to all of the terms of this Agreement, and by taking
and holding such shares such Person shall be conclusively
deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement.
5.7 Recapitalizations and Exchanges Affecting Common
Stock. The provisions of this Agreement shall apply, to the
full extent set forth herein with respect to Common Stock, to
any and all shares of capital stock or equity securities of the
-30-
Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may
be issued in respect of, in exchange for, or in substitution
of, the Common Stock, or which may be issued by reason of any
stock dividend, stock split, reverse stock split, combination,
recapitalization, reclassification or otherwise. Upon the oc-
xxxxxxxx of any of such events, numbers of shares and amounts
hereunder shall be appropriately adjusted, as determined in
good faith by the Board of Directors of the Company.
5.8 Governing Law. This Agreement shall be governed and
construed and enforced in accordance with the laws of the State
of New York, without regard to the principles of conflicts of
law thereof.
5.9 Descriptive Headings, Etc. The headings in this
Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning of terms contained
herein. Unless the context of this Agreement otherwise re-
quires, references to "hereof," "herein," "hereby," "hereunder"
and similar terms shall refer to this entire Agreement.
5.10 Amendment; Waiver; Bylaws. This Agreement may not
be amended or supplemented except by an instrument in writing
signed by the Company and by Stockholders holding a majority of
the then outstanding shares of Common Stock held by all Stock-
holders; provided that any amendment, supplement or modifica-
tion of this Agreement which adversely affects the rights and
obligations of any Stockholder (an "Affected Holder") differ-
ently than those of any other Stockholder shall also require
the approval of such Affected Holder; provided further, the
foregoing proviso notwithstanding, any amendment, supplement or
modification of this Agreement that adversely affects the Man-
agement Investors (or a group thereof) as a class may be ap-
proved by Management Investors (or members of such group, as
the case may be) holding Common Stock or Options to purchase
Common Stock, which together represent a majority of the sum of
the total number of (x) the shares of such Common Stock and (y)
the shares of Common Stock issuable upon exercise of such Op-
tions held by all the Management Investors (or such group, as
the case may be). The foregoing notwithstanding, (i) the Com-
pany, without the consent of any other party hereto, may amend
Schedule I and the signature pages hereto, in order to add any
Management Investor or any other party that becomes a holder of
Common Stock or securities convertible into or exercisable for
Common Stock and (ii) GSCP and the Company may amend Article
III of this Agreement (other than in a manner that would mate-
rially reduce the Management Investor's rights or materially
increase the Management Investor's obligations with respect to
-31-
Piggyback Registrations) without the agreement or consent of
any Management Investor.
5.11 Severability. If any term or provision of this
Agreement shall to any extent be invalid or unenforceable, the
remainder of this Agreement shall not be affected thereby, and
each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. Upon the
determination that any term or other provision is invalid, il-
legal or incapable of being enforced, the parties shall nego-
tiate in good faith to modify this Agreement so as to effect
their original intent as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
5.12 Further Assurances. The parties hereto shall from
time to time execute and deliver all such further documents and
do all acts and things as the other party may reasonably re-
quire to effectively carry out or better evidence or perfect
the full intent and meaning of this Agreement, including, to
the extent necessary or appropriate, using all reasonable ef-
forts to cause the amendment of the Amended Certificate or the
By-Laws in order to provide for the enforcement of this Agree-
ment in accordance with its terms. In furtherance and not in
limitation of the foregoing, in the event of any amendment,
modification or termination of this Agreement in accordance
with its terms, the Stockholders shall cause the Board to meet
within thirty (30) days following such amendment, modification
or termination or as soon thereafter as is practicable for the
purpose of amending the Amended Certificate and By-Laws, as may
be required as a result of such amendment, modification or ter-
mination, and, to the extent required by law, proposing such
amendments to the stockholders of the Company entitled to vote
thereon, and such action shall be the first action to be taken
at such meeting.
5.13 Complete Agreement; Counterparts. This Agreement
(together with the Merger Agreement, the Voting Agreement, the
Stock Incentive Plan, the Employment Agreements and the other
agreements referred to herein and therein) constitutes the en-
tire agreement and supersedes all other agreements and under-
standings, both written and oral, among the parties or any of
them, with respect to the subject matter hereof. This Agree-
ment may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together con-
stitute one and the same instrument.
5.14 Certain Transactions. The parties hereto agree that
Xxxxxxx Xxxxx shall have the exclusive right to perform all
-32-
consulting, financing, investment banking and similar services
for the Company and its subsidiaries (including as lead under-
writer or in any analogous role in connection with any public
or private offering of securities or debt, and including in
connection with the Merger), for customary compensation and on
other terms that are customary for similar engagements with
unaffiliated third parties, and neither the Company nor its
subsidiaries shall engage any other Person to perform such ser-
vices during the term of this Agreement except to the extent
Xxxxxxx Sachs shall consent thereto or shall decline, at its
sole election, to perform such services.
5.15 No Third Party Beneficiaries. The provisions of
this Agreement shall be only for the benefit of the parties to
this Agreement, and no other Person (other than Xxxxxxx Xxxxx
with respect to Section 5.14) shall have any third party ben-
eficiary or other right hereunder.
-33-
IN WITNESS WHEREOF, the parties hereto have caused
this instrument to be duly executed on the date first written
above.
AMSCAN HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
Address: 00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Secretary
Telecopier No.: (000) 000-0000
GS CAPITAL PARTNERS II, L.P.
By: GS Advisors, L.P.
General Partner
By: GS Advisors Inc., its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Address: c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
GS CAPITAL PARTNERS II OFFSHORE, L.P.
By: GS Advisors II (Cayman), L.P.
General Partner
By: GS Advisors II, Inc., its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Address: c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
XXXXXXX, XXXXX & CO. VERWALTUNGS GMBH
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President
By: /s/ Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Registered Agent
Address: c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier No.: (212) 357-5505
XXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street Asset Corp.
General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Address: c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
XXXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street Asset Corp.
Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
Address: c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx
Telecopier No.: (000) 000-0000
THE ESTATE OF XXXX X. XXXXXXXXXXX
By: /s/ Xxxxxxxxx Xxxxxxxxxxx
Name: Xxxxxxxxx Xxxxxxxxxxx
Title: Executrix
Address: c/o Xxx Xxxxxxxx Xxxxxx
0 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
The following individuals, in their
capacities as trustees or other fidu-
ciaries (whether on the date hereof
or at any point in the future) of any
trust or similar instrument created
by or at the instruction of, or under
the last will and testament of, Xxxx
X. Xxxxxxxxxxx or the Estate, ac-
knowledge this Agreement and agree to
be bound by the terms hereof in each
such capacity, such agreement being
for the benefit of each of the par-
ties hereto, and such individuals
further agree to cause any such trust
or similar instrument upon its forma-
tion to become a party to this Agree-
ment as a Permitted Transferee pursu-
ant to Section 2.3.3 hereof (and as
if a Management Investor hereunder)
and in accordance herewith have
agreed to and acknowledged this
Agreement:
By: /s/ Xxx Xxxxxxxx Xxxxxx Dated: December 18, 1997
Name: Xxx Xxxxxxxx Xxxxxx
Title: Attorney-In-Fact for Trustee
Address: 0 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
By: /s/ Xxxxx X. Xxxxxx Dated: December 18, 1997
Name: Xxxxx X. Xxxxxx
Title: Trustee
Address: 0 Xxxxx Xxxxxxxx
Xxxxx Xxxxxx, XX 00000
EXHIBIT A
[STOCK INCENTIVE PLAN]
Schedule I
Management Investors
Options
Xxxxxx X. Xxxxxxxxxx 16.648
Xxxxx X. Xxxxxxxx 16.268
Xxxxxxx X. Xxxxxx 16.441
Xxxxx X. Xxxxx 11.827
Xxxxxxxxx X. Xxxxxxxx 11.577
Xxxxxx Xxxxxx 2.383
Xxxxxxx Xxxx 1.280
Xxxxxx Xxxxxxxxx 2.477
Xxxxx XxXxxxxx 1.477
Xxxxx Xxxxxxx 1.280
Xxxxxx Xxxxxxx 1.280
Xxxxxx Xxxxxxxx 1.144
Xxxxxxx Xxxxxxxx 0.478
Xxxxx Xxxxx 1.144
Xxxx Xxxxxxxxx 1.238
Xxxxx Xxxxxx 0.718
Xxxx Xxxxxxxx 1.238
Xxxxxxxx Xxxxxx 1.238
Xxxxx Xxxxx 1.238
Xxxxxxx Xxxxxxxx 0.794
Xxxxxxx X. Xxxxxxxx 2.570
Xxxx Xxxxxx 0.555
Xxxxx Xxxxxxx 0.999
Xxxxxx Xxxxxx 0.555
Xxxxxx Xxxxxxxxx 0.999
Xxxxxxx Xxxxxx 0.555
Xxxxxx Xxxxxxx 0.555
Xxxxxx Xxxxxxxx 0.555
Xxxxx Xxxxx 0.555
Xxxxxx Xxxxxxx 0.555
Xxx Xxxxxxxx 0.555
