Exhibit 6
AMSCAN HOLDINGS, INC.
9 7/8% SENIOR SUBORDINATED NOTES
DUE DECEMBER 2007
_____________________________________
jointly and severally guaranteed
as to the payment of principal,
premium, if any, and interest
on a senior subordinated
basis by the Guarantors
_____________________________________
PURCHASE AGREEMENT
December 15, 1997
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Amscan Holdings, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to Xxxxxxx, Sachs & Co. (the
"Purchaser") an aggregate of $110,000,000 principal amount of
the Notes specified above. The Company's payment obligations
under the Notes will be jointly and severally guaranteed on a
senior subordinated basis (the "Senior Subordinated
Guarantees") by the Guarantors (as defined in the Indenture
referred to in Section 1(f) below). The Notes and the
Guarantees are hereinafter called the "Securities".
1. The Company and each Guarantor represent and warrant
to, and agree with, the Purchaser that:
(a) A preliminary offering circular, dated November
21, 1997 (the "Preliminary Offering Circular") and an
offering circular, dated December 15, 1997 (the "Offering
Circular"), in each case including the international
supplement thereto, have been prepared in connection with
the offering of the Securities. Any reference to the
Preliminary Offering Circular or the Offering Circular
shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 5(f)) furnished
by the Company prior to the completion of the distribution
of the Securities. The Preliminary Offering Circular or
the Offering Circular and any
amendments or supplements thereto did not and will not, as
of their respective dates, contain an untrue statement of
a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; provided, however, that this representation
and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the
Purchaser expressly for use therein;
(b) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited
financial statements included in the Offering Circular any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as
set forth or contemplated in the Offering Circular; and,
since the respective dates as of which information is
given in the Offering Circular, there has not been any
change in the capital stock of the Company or any of its
subsidiaries or change in the long-term debt (other than
scheduled maturities) of the Company and its subsidiaries
on a consolidated basis or any material adverse change, or
any development involving a prospective material adverse
change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Offering
Circular;
(c) The Company does not own any real property in
fee simple; the Company's subsidiaries have good and
marketable title in fee simple to all real property and
the Company and its subsidiaries have good title to all
personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such
as are described in the Offering Circular or such as do
not materially affect the value of such property and do
not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made
and proposed to be made of such property and buildings by
the Company and its subsidiaries;
(d) The Company has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of Delaware, with power and authority (corporate
and other) to own its properties and conduct its business
as described in the Offering Circular, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties
or conducts any business so as to require such
qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in
any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation (or, with respect to foreign
subsidiaries, such subsidiaries have been duly
constituted, are validly
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existing and, if applicable, are in good standing in the
respective jurisdictions where each such foreign
subsidiary has been so constituted) and each has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties
or conducts any business so as to require such
qualification, or is subject to no material liability or
disability by reason of failure to be so qualified in any
such jurisdiction
(e) The Company has an authorized capitalization as
set forth in the Offering Circular, and all of the issued
shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-
assessable; with respect to each of the subsidiaries of
the Company that are 100% owned by the Company as set
forth in the Offering Circular, all of the issued and
outstanding shares of capital stock of each such
subsidiary are fully paid and non-assessable and (except
as otherwise described in the Offering Circular) are owned
directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims; with respect
to each of the subsidiaries of the Company that is less
than 100% owned by the Company as set forth in the
Offering Circular, all of the issued shares of capital
stock owned by the Company of each such subsidiary have
been duly and validly authorized and issued, are fully
paid and non-assessable and (except as otherwise described
in the Offering Circular) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances,
equities or claims, and the percentage owned by the
Company of all of the outstanding shares of capital stock
of each such subsidiary is at least equal to the
percentage set forth in the Offering Circular;
(f) The Notes have been duly authorized by the
Company and, when issued and delivered pursuant to this
Agreement and duly authenticated by the trustee under the
Indenture (as defined below), will have been duly
executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the indenture
to be dated as of December 19, 1997 (the "Indenture")
among the Company, the Guarantors and IBJ Xxxxxxxx Bank &
Trust Company, as trustee (the "Trustee"), under which
they are to be issued, which will be substantially in the
form previously delivered to you, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights
and to general principles of equity (whether considered in
a proceeding in equity or at law); the Senior Subordinated
Guarantees have been duly authorized and, when the Notes
have been duly authenticated in accordance with the
Indenture and have been issued and delivered pursuant to
this Agreement with the Senior Subordinated Guarantees
endorsed thereon, will have been duly executed, issued and
delivered and will constitute valid and legally binding
obligations of the Guarantors entitled to the benefits
provided by the Indenture, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights
and to general principles of equity (whether considered in
a proceeding in equity or at law); the Indenture has been
duly authorized and, when executed and delivered by the
Company, the Guarantors and the Trustee, the
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Indenture will constitute a valid and legally binding
instrument, enforceable against the Company and the
Guarantors in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors'
rights and to general principles of equity (whether
considered in a proceeding in equity or at law); and the
Notes, the Senior Subordinate Guarantees and the Indenture
will conform to the descriptions thereof in the Offering
Circular and will be in substantially the form previously
delivered to you;
(g) None of the transactions contemplated by this
Agreement (including, without limitation, the use of the
proceeds from the sale of the Securities) will violate or
result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or
any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of
Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company
nor any of its affiliates (other than the Purchaser and
Xxxxxxx Sachs International, as to which no representation
or warranty is made or given) has taken any action which
is designed to or which has constituted or which might
have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company
in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the
compliance by the Company and the Guarantors with all of
the provisions of the Securities, the Indenture, this
Agreement, the Registration Rights Agreement (as defined
in the Offering Circular), the Bank Credit Agreement (as
defined in the Offering Circular) and the Transaction
Agreement (as defined in the Offering Circular) (together
the Registration Rights Agreement, the Transaction
Agreement and the Bank Credit Agreement, the "Related
Agreements" and each, a "Related Agreement") to which they
are a party, and the consummation of the transactions
herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its
subsidiaries is subject, which conflict, breach, violation
or default may reasonably be expected to have,
individually or in the aggregate, a material adverse
affect on the general affairs, management, financial
position, stockholders' equity or results of operations of
the Company and its subsidiaries, taken as a whole (a
"Material Adverse Affect"), or in any way, individually or
in the aggregate, impair or delay the consummation of the
transactions contemplated by this Agreement, the Indenture
or any of the Related Agreements or the offering of the
Securities in the manner contemplated by the Offering
Circular, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-
laws or other constituent documents of the Company or any
of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body
having
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jurisdiction over the Company or any of its subsidiaries
or any of their properties which violation may reasonably
be expected to have, individually or in the aggregate, a
Material Adverse Affect, or in any way, individually or in
the aggregate, impair or delay the consummation of the
transactions contemplated by this Agreement, the Indenture
or any of the Related Agreements or the offering of the
Securities in the manner contemplated by the Offering
Circular; and no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body (other than filings to perfect
security interests in property) is required for the issue
and sale of the Securities or the consummation by the
Company or the Guarantors of the transactions contemplated
by this Agreement, any Related Agreement or the Indenture,
except (A) for the filing of registration statements by
the Company in connection with the Transaction and the
Exchange Offer (as defined in the Registration Rights
Agreement) or resale registration contemplated by the
Offering Circular with the United States Securities and
Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act"), (B) for
the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture
Act"), (C) such consents, approvals, authorizations,
registrations or qualifications as may be required in
connection with the transactions contemplated by the
Transaction Agreement and the Disclosure Schedule a part
thereof, the Exchange Offer and the resale registration
contemplated by the Offering Circular and (D) as have been
made or obtained, and, in connection with the purchase and
distribution of the Securities by the Purchaser, under
state securities or Blue Sky laws;
(j) Neither the Company nor any of its subsidiaries
is in violation of its Certificate of Incorporation or By-
laws or other constituent documents; neither the Company
nor any of its subsidiaries is in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which
it or any of its properties may be bound, which default
may reasonably be expected to have, individually or in the
aggregate, a Material Adverse Affect or in any way,
individually or in the aggregate, impair or delay the
consummation of the transactions contemplated by this
Agreement, any Related Agreement or the Indenture or the
offering of the Securities in the manner contemplated by
the Offering Circular;
(k) The statements set forth in the Offering
Circular under the caption "Description of Notes," insofar
as they purport to constitute a summary of the terms of
the Securities and under the captions "Description of
Certain Federal Income Tax Consequences of an Investment
in the Notes" and "Underwriting", insofar as they purport
to describe the provisions of the laws and the provisions
of documents referred to therein, are accurate, and fairly
summarize such provisions in all material respects;
(l) Other than as set forth in the Offering
Circular, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of
its subsidiaries is the
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subject which may reasonably be expected to have,
individually or in the aggregate, a Material Adverse
Affect or in any way, individually or in the aggregate,
impair or delay the consummation of the transactions
contemplated by this Agreement, any Related Agreement or
the Indenture or the offering of the Securities in the
manner contemplated by the Offering Circular; and, to the
best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(m) When the Securities are issued and delivered
pursuant to this Agreement, the Securities will not be of
the same class (within the meaning of Rule 144A under the
Act) as securities which are listed on a national
securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer
quotation system;
(n) Neither the Company nor any of the Guarantors
is, or after giving effect to the offering and sale of the
Securities, will be an "investment company," as such term
is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(o) Neither the Company, any of the Guarantors nor
any person acting on its behalf (other than the Purchaser
and Xxxxxxx Xxxxx International, as to which no
representation or warranty is made or given) has offered
or sold the Securities by means of any general
solicitation or general advertising within the meaning of
Rule 502(c) under the Act or, with respect to Securities
sold outside the United States to non-U.S. persons (as
defined in Rule 902 under the Act), by means of any
directed selling efforts within the meaning of Rule 902
under the Act and each of the Company, each of the
Guarantors, any affiliate of the Company or any of the
Guarantors and any person acting on its behalf (other than
the Purchaser and Xxxxxxx Sachs International, as to which
no representation or warranty is made or given) has com-
plied with and will implement the "offering restriction"
within the meaning of such Rule 902;
(p) Within the preceding six months, neither the
Company, any of its subsidiaries nor any other person
acting on behalf of the Company or any of its subsidiaries
(other than the Purchaser and Xxxxxxx Xxxxx International,
as to which no representation or warranty is made or
given) has offered or sold to any person any Securities,
or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the
Purchaser hereunder. The Company and each of its
subsidiaries will take reasonable precautions designed to
insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule
902 under the Act) of any Securities or any substantially
similar security issued by the Company or any of its
subsidiaries, within six months subsequent to the date on
which the distribution of the Securities has been
completed (as notified to the Company by the Purchaser),
is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer
and sale of the Securities in the United States and to
U.S. persons
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contemplated by this Agreement as transactions exempt from
the registration provisions of the Act;
(q) Neither the Company nor any of its affiliates
(other than the Purchaser and Xxxxxxx Sachs International,
as to which no representation or warranty is made or
given) does business with the government of Cuba or with
any person or affiliate located in Cuba within the meaning
of Section 517.075, Florida Statutes;
(r) KPMG Peat Marwick LLP, who have certified
certain financial statements of the Company and its
subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the
Commission thereunder;
(s) Each of the Company and its subsidiaries owns or
is licensed to use all patents, trademarks, service marks,
trade names and copyrights ("Intellectual Property")
currently used in the conduct of their business, except
for such Intellectual Property with respect to which the
failure to own or license same would not reasonably be
expected to have, individually or in the aggregate, a
Material Adverse Affect. To the best knowledge of the
Company and its subsidiaries, none of the activities
engaged in by the Company or its subsidiaries infringe
upon or otherwise conflict with Intellectual Property
rights of others, except for any such conflicts as would
not reasonably be expected to have a Material Adverse
Affect; and
(t) Each of the Related Agreements (other than the
Registration Rights Agreement) has been duly authorized,
executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the other parties
thereto, constitutes a valid and legally binding agreement
of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or
affecting creditors' rights and to general principles of
equity (whether considered in a proceeding in equity or at
law); the Registration Rights Agreement, which shall be
substantially in the form previously delivered to you, has
been duly authorized, and, when executed and delivered by
the Company and the Guarantors (assuming due
authorization, execution and delivery by the Purchaser),
will constitute a valid and legally binding agreement of
the Company and each Guarantor enforceable against the
Company and each Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or
affecting creditors' rights and to general principles of
equity (whether considered in a proceeding in equity or at
law).
2. Subject to the terms and conditions herein set forth,
the Company agrees to issue and sell to the Purchaser, and the
Purchaser agrees to purchase from the Company, at a purchase
price of 100% of the principal amount thereof, plus accrued
interest, if any, from December 19, 1997 to the Time of
Delivery hereunder, the Notes, each of which will have duly
endorsed thereon the Senior Subordinated Guarantee of each
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Guarantor, and the Guarantors agree to issue their Senior
Subordinated Guarantees accordingly. The Company agrees to pay
to the Purchaser an underwriting discount of 3% of the
principal amount of the Notes.
3. Upon the authorization by you of the release of the
Securities, the Purchaser proposes to offer the Securities for
sale upon the terms and conditions set forth in this Agreement
and the Offering Circular and the Purchaser hereby represents
and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to:
(i) persons who it reasonably believes are "qualified
institutional buyers" ("QIBs") within the meaning of Rule
144A under the Act in transactions meeting the
requirements of Rule 144A or (ii) upon the terms and
conditions set forth in Annex I to this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any
form of general solicitation or general advertising,
including but not limited to the methods described in Rule
502(c) under the Act.
4. (a) The Securities to be purchased by the Purchaser
hereunder will be represented by one or more global Securities
in book-entry form which will be deposited by or on behalf of
the Company with The Depositary Trust Company (the "DTC") or
its designated custodian. The Company will deliver the
Securities to the Purchaser, against payment by or on behalf of
the Purchaser of the purchase price therefor (net of the
underwriting discount specified in Section 2 hereof) in Federal
(same day) funds, by causing DTC to credit the Securities to
the account of the Purchaser at DTC. The Company will cause
the certificates representing the Securities to be made
available to the Purchaser for checking at least twenty-four
hours prior to the Time of Delivery (as defined below) at the
office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on December 19, 1997 or such
other time and date as the Purchaser and the Company may agree
upon in writing. Such time and date are herein called the
"Time of Delivery".
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7
hereof, including the cross-receipt for the Securities and any
additional documents requested by the Purchaser pursuant to
Section 7(i) hereof, will be delivered at such time and date at
the offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Closing Location") (or
such other location as the Company and the Purchaser mutually
agree), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 2:00 p.m., New York City time, on the
New York Business Day next preceding the Time of Delivery (or
at such other time as the Company and the Purchaser mutually
agree), at which meeting the final drafts of the documents to
be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes
of this Section 4, "New York Business Day" shall mean each
Monday, Tuesday,
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Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. Each of the Company and the Guarantors, jointly and
severally, agrees with the Purchaser:
(a) To prepare the Offering Circular in a form
approved by you; to make no amendment or any supplement to
the Offering Circular which shall be disapproved by you
promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action
as you may reasonably request to qualify the Securities
for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings
therein in such jurisdictions until the Exchange Offer is
Consummated (as defined in the Registration Rights
Agreement), provided that in connection therewith neither
the Company nor the Guarantors shall be required to
qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the
New York Business Day next succeeding the date of this
Agreement and from time to time until such time as the
Exchange Offer is Consummated, to furnish the Purchaser
with a copy of the Offering Circular in New York City and
each amendment or supplement thereto signed by an
authorized officer of the Company with the independent
accountants' report(s) in the Offering Circular, and any
amendment or supplement containing amendments to the
financial statements covered by such report(s), signed by
the accountants, and additional copies thereof in such
quantities as you may from time to time reasonably
request, and if, at any time prior to the time the
Exchange Offer is Consummated, any event shall have
occurred as a result of which the Offering Circular as
then amended or supplemented would include an untrue
statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made
when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement
the Offering Circular, to notify you and upon your request
to prepare and furnish without charge to you and to any
dealer in securities as many copies as you may from time
to time reasonably request of an amended Offering Circular
or a supplement to the Offering Circular which will
correct such statement or omission or effect such
amendment or supplement;
(d) During the period beginning from the date hereof
and continuing until the date 90 days after the date of
the Offering Circular, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder
and in the Registration Rights Agreement, any securities
of the Company that are substantially similar to the
Securities or any securities of the Company convertible
into or exchangeable
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for securities of the Company substantially similar to the
Securities, without your prior written consent;
(e) Not to be or become, at any time prior to the
expiration of two years after the Time of Delivery, an
open-end investment company, unit investment trust,
closed-end investment company or face-amount certificate
company that is or is required to be registered under
Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to
the reporting requirements of Section 13 or 15(d) of the
Exchange Act, for the benefit of holders from time to time
of Securities, to furnish at its expense, upon request, to
holders of Securities and prospective purchasers of
securities information (the "Additional Issuer
Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act;
(g) To furnish to the holders of the Securities (i)
all quarterly and annual financial information that would
be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K under the Exchange Act
if the Company were required to file such forms, including
a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to
the annual information only, a report thereon by the
Company's certified independent accountants and (ii) all
current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to
file such reports under the Exchange Act;
(h) If requested by you, to use its best efforts to
cause the Securities to be eligible for the PORTAL trading
system of the National Association of Securities Dealers,
Inc.;
(i) During a period of five years from the date of
the Offering Circular, to furnish to you copies of all
reports or other communications (financial or other)
furnished to stockholders of the Company, and to deliver
to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed
with the Commission or any securities exchange on which
the Securities or any class of securities of the Company
or any Guarantor is listed; and (ii) such additional
information concerning the business and financial
condition of the Company and the Guarantors as you may
from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders
generally or to the Commission);
(j) To execute and deliver the Registration Rights
Agreement prior to the Time of Delivery; and
(k) To use the net proceeds received by it from the
sale of the Securities pursuant to this Agreement in the
manner specified in the Offering Circular under the
caption "Use of Proceeds".
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6. Each of the Company and the Guarantors, jointly and
severally, covenants and agrees with the Purchaser that the
Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and
accountants in connection with the issue of the Securities and
all other expenses in connection with the preparation, printing
and filing of the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the
Purchaser and dealers; (ii) the cost of printing or producing
this Agreement, the Registration Rights Agreement, the
Indenture, the Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel for
the Purchaser in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv)
any fees charged by securities rating services for rating the
Securities; (v) the cost of preparing the Securities; (vi) the
fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; (vii) any
cost incurred in connection with the designation of the
Securities for trading in PORTAL; and (viii) all other costs
and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 10 hereof, the
Purchaser will pay all of its own costs and expenses, including
the fees of its counsel, transfer taxes on resale of any of the
Securities by it, and any advertising expenses connected with
any offers it may make.
7. The obligations of the Purchaser hereunder shall be
subject, in its discretion, to the condition that all
representations and warranties and other statements of the
Company and the Guarantors herein are, at and as of the Time of
Delivery, true and correct, the condition that the Company and
the Guarantors shall have performed all of its obligations
hereunder theretofore to be performed, and the following
additional conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchaser,
shall have furnished to you such opinion or opinions,
dated such Time of Delivery, with respect to the
incorporation of the Company, the Purchase Agreement, the
validity of the Indenture and the Securities being
delivered at such Time of Delivery, the Offering Circular
and such other related matters as you may reasonably
request, and such counsel shall have received such papers
and information as they may reasonably request to enable
them to pass upon such matters;
(b) Wachtell, Lipton, Xxxxx & Xxxx, special counsel
for the Company, shall have furnished to you their written
opinion (a draft of such opinion is attached as Annex
II(b) hereto), dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company is validly existing as a
corporation in good standing under the laws of
Delaware;
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(ii) The Company has an authorized equity
capitalization as set forth in the Offering Circular;
(iii) Each of this Agreement and the Registration
Rights Agreement has been duly authorized, executed
and delivered by the Company and the Guarantors;
(iv) The Indenture has been duly authorized,
executed and delivered by the Company and the
Guarantors and constitutes a valid and legally
binding instrument of the Company and the Guarantors,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting
creditors' rights and to general principles of equity
(whether considered in a proceeding in equity or at
law);
(v) The Notes have been duly authorized,
executed, issued and delivered and, assuming the due
authentication by the Trustee under the Indenture,
constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the
Indenture, subject to bankruptcy, insolvency,
reorganization and other laws of general
applicability relating to or affecting creditors'
rights and to general principles of equity (whether
considered in a proceeding in equity or at law); the
Senior Subordinated Guarantees have been duly
authorized, executed, issued and endorsed onto the
global Notes and, assuming the due authentication of
the Notes by the Trustee under the Indenture,
constitute valid and legally binding obligations of
each of the Guarantors entitled to the benefits
provided by the Indenture, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors'
rights and to general principles of equity (whether
considered in a proceeding in equity or at law); and
the Notes, the Senior Subordinated Guarantees and the
Indenture conform to the descriptions thereof in the
Offering Circular;
(vi) The issue and sale of the Securities and
the compliance by the Company and the Guarantors, as
the case may be, with all of the provisions of the
Securities, the Indenture, this Agreement, and each
Related Agreement and the consummation of the
transactions herein and therein contemplated will not
result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the
Company;
(vii) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body (other than filings to
perfect security interests in property) having
jurisdiction over the Company or any of its
subsidiaries or any of their properties is required
for the issue and sale of the Securities or the
consummation by the Company or the Guarantors, as the
case may be, of the transactions contemplated by this
Agreement, the Indenture, or any Related Agreement,
except (A) for the filing and effectiveness of
registration statements by the
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Company in connection with the Transaction and the
Exchange Offer or resale registration contemplated by
the Offering Circular with the Commission pursuant to
the Act, (B) for the qualification of the Indenture
under the Trust Indenture Act, (C) such consents,
approvals, authorizations, orders, registrations or
qualifications as may be required in connection with
the transactions contemplated by the Transaction
Agreement and the Disclosure Schedule a part thereof,
the Exchange Offer and the resale registration
contemplated by the Offering Circular, (D) as have
been obtained or made and (E) in connection with the
purchase and distribution of the Securities by the
Purchaser, as may be required under state securities
or Blue Sky laws as to which counsel need not express
an opinion;
(viii) The statements set forth in the Offering
Circular under the caption "Description of Notes,"
insofar as they purport to constitute a summary of
the terms of the Securities and under the captions
"Description of Certain Federal Income Tax
Consequences of an Investment in the Notes" and
"Underwriting," insofar as they purport to describe
the provisions of the laws and documents referred to
therein, are accurate and fairly summarize such
provisions in all material respects;
(ix) No registration of the Securities under the
Act, and no qualification of an indenture under the
Trust Indenture Act with respect thereto, is required
for the offer, sale and initial resale of the
Securities by the Purchaser in the manner
contemplated by this Agreement and the Offering Cir-
cular, other than any registration or qualification
that may be required in connection with the Exchange
Offer contemplated by the Offering Circular or in
connection with the Registration Rights Agreement;
(x) Neither the Company nor any of the
Guarantors is an "investment company" as such term is
defined in the Investment Company Act;
(xi) The Exchange Notes (as defined in the
Registration Rights Agreement) have been duly and
validly authorized for issuance by the Company, and
when issued and authenticated in accordance with the
terms of the Indenture, the Registration Rights
Agreement and the Exchange Offer, will be the valid
and legally binding obligations of the Company
entitled to the benefits of the Indenture, subject to
bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting
creditors' rights and to general principles of equity
(whether considered in a proceeding in equity or at
law); and
(xii) The Senior Subordinated Guarantees of the
Exchange Notes have been duly authorized by each of
the Guarantors, and when duly and validly executed
and delivered in accordance with the terms of the
Indenture and when the Exchange Notes are duly and
validly issued and authenticated
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in accordance with the terms of the Indenture and the
Registration Rights Agreement, will be a valid and
legally binding obligation of each Guarantor,
enforceable against each Guarantor in accordance with
its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicabil-
ity relating to or affecting creditors' rights and to
general principles of equity (whether considered in a
proceeding in equity or at law).
In addition, such counsel shall state that they have
participated in conferences with officers and representatives
of the Company and the Guarantors, representatives of the
independent accountants of the Company and representatives of
the Purchaser at which the contents of the Offering Circular
and related matters were discussed and, subject to the fact
that such counsel shall not assume any responsibility for the
accuracy, completeness or fairness of the factual statements
contained in the Offering Circular and have made no independent
verification thereof, on the basis of the foregoing such
counsel shall state that nothing has come to such counsel's
attention that causes them to believe that the Offering
Circular and any further amendments or supplements thereto made
by the Company prior to the Time of Delivery (other than the
financial statements, schedules and other financial data
contained in the Offering Circular, as to which such counsel
need express no opinion) contained as of its date or contains
as of the Time of Delivery an untrue statement of a material
fact or omitted or omits, as the case may be, to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may state
that such opinion is limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and
the federal law of the United States of America. In rendering
such opinion, such counsel shall be entitled to rely, as to
certain matters of fact, on information contained in
certificates of officers of the Company and the Guarantors and
on certificates and reports of public officials.
(c) Xxxxxxx & Xxxxxxxxx, counsel for the Company,
shall have furnished to you their written opinion (a draft
of such opinion is attached as Annex II(c) hereto), dated
the Time of Delivery, in form and substance satisfactory
to you, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of Delaware, with corporate power and
authority to own its properties and conduct its
business as described in the Offering Circular;
(ii) Each of Amscan Inc., Am-Source, Inc.,
Trisar, Inc., JCS Realty Corp. and SSY Realty Corp.
(collectively, the "Domestic Subsidiaries") has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued
shares of capital stock of each such subsidiary have
been duly and validly authorized and issued, are
fully paid
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and non-assessable, and (except for directors'
qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being
entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect
of matters of fact upon certificates of public
officials, officers of the Company and officers of
the Domestic Subsidiaries, provided that such counsel
shall state that they have no reason to believe that
both you and they are not justified in relying upon
such opinions and certificates);
(iii) Each of the Company and the Domestic
Subsidiaries has been duly qualified as a foreign
corporation for the transaction of business and is in
good standing under the laws of each other
jurisdiction in which it owns or leases properties or
conducts any business so as to require such
qualification, or is subject to no material liability
or disability by reason of the failure to be so
qualified in any such jurisdiction (such counsel
being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of
public officials and officers of the Company and of
the Domestic Subsidiaries, provided that such counsel
shall state that they have no reason to believe that
both you and they are not justified in relying upon
such opinions and certificates);
(iv) The Company does not own any real property
in fee simple; the Domestic Subsidiaries have good
and marketable title in fee simple to all real
properties owned by them; and, to the best of their
knowledge, all real property and buildings held under
lease by the Company and the Domestic Subsidiaries
are held by them under valid, subsisting and
enforceable leases with such exceptions as are not
material and do not interfere with the use made of
such property and buildings by the Company and such
subsidiaries (in giving the opinion in this clause,
such counsel may state that they are relying upon
opinions of local counsel, upon opinions of counsel
to the lessors of such property and, in respect of
matters of fact, upon certificates of public
officials and officers of the Company or such
subsidiaries, provided that such counsel shall state
that they have no reason to believe that both you and
they are not justified in relying upon such opinions
and certificates);
(v) To the best of such counsel's knowledge and
other than as set forth in the Offering Circular,
there are no legal or governmental proceedings
pending to which the Company or any of the Domestic
Subsidiaries is a party or of which any of their
property is the subject which, if determined
adversely to any of the Company or the Domestic
Subsidiaries can reasonably be expected to have,
individually or in the aggregate, a material adverse
effect on the consolidated financial position,
stockholders equity or results of operations of the
Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others;
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(vi) The issue and sale of the Securities and
the compliance by the Company and the Guarantors, as
the case may be, with all of the provisions of the
Securities, the Indenture, this Agreement, and each
Related Agreement and the consummation of the
transactions herein and therein contemplated will not
conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or
instrument known to such counsel to which the Company
or any of its Domestic Subsidiaries is a party or by
which the Company or any of its Domestic Subsidiaries
is bound or to which any of the property or assets of
the Company or any of its Domestic Subsidiaries is
subject, which conflict, breach, violation or default
may reasonably be expected to have individually or in
the aggregate, a material adverse effect on or
affecting the general affairs, management, financial
position, stockholders' equity or results of
operations of the Company or the Domestic
Subsidiaries, taken as a whole, or in any way,
individually or in the aggregate, impair or delay the
consummation of the transactions contemplated by this
Agreement or the Registration Rights Agreement or the
offering of the Securities in the manner contemplated
by the Offering Circular nor will such actions result
in any violation of the provisions of the Certificate
of Incorporation or By-laws of the Company or any
Guarantor or any statute or any order (which order is
known to such counsel), rule or regulation of any
court or governmental agency or body having
jurisdiction over the Company or any of the Domestic
Subsidiaries or any of their properties which
violation may reasonably be expected to have,
individually or in the aggregate, a material adverse
effect on or affecting the general affairs,
management, financial position, stockholders' equity
or results of operations of the Company or the
Domestic Subsidiaries, taken as a whole, or in any
way, individually or in the aggregate, impair or
delay the consummation of the transactions
contemplated by this Agreement or the Registration
Rights Agreement or the offering of the Securities in
the manner contemplated by the Offering Circular; and
(vii) Neither the Company nor any Guarantor is in
violation of its Certificate of Incorporation or By-
laws or, to the best of such counsel's knowledge
after reasonable investigation, in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is
a party or by which it or any of its properties may
be bound, which default may reasonably be expected to
have, individually or in the aggregate, a material
adverse affect on or affecting the general affairs,
management, financial position, stockholders' equity
or results of operations of the Company or the
Guarantors or in any way, individually or in the
aggregate, impair or delay the consummation of the
transactions contemplated by this Agreement or the
Registration Rights Agreement or the offering of the
Securities in the manner contemplated by the Offering
Circular.
-16-
In addition, such counsel shall state that they have
participated in conferences with officers and representatives
of the Company and the Guarantors, representatives of the
independent accountants of the Company and representatives of
the Purchaser at which the contents of the Offering Circular
and related matters were discussed and, subject to the fact
that such counsel shall not assume any responsibility for the
accuracy, completeness or fairness of the factual statements
contained in the Offering Circular and have made no independent
verification thereof, on the basis of the foregoing such
counsel shall state that nothing has come to such counsel's
attention that causes them to believe that the Offering
Circular and any further amendments or supplements thereto made
by the Company prior to the Time of Delivery (other than the
financial statements, schedules and other financial data
contained in the Offering Circular, as to which such counsel
need express no opinion) contained as of its date or contains
as of the Time of Delivery ati untrue statement of a material
fact or omitted or omits, as the case may be, to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may state
that such opinion is limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware and
the federal law of the United States of America. In rendering
such opinion, such counsel shall be entitled to rely, as to
certain matters of fact, on information contained in
certificates of officers of the Company and the Domestic
Subsidiaries and on certificates and reports of public
officials.
(d) On the date of the Offering Circular prior to
the execution of this Agreement and also at the Time of
Delivery, KPMG Peat Marwick LLP shall have furnished to
you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex II(a) hereto (the
executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex II(d)
hereto and a draft of the from of the letter to be
delivered as of the Time of Delivery is attached as Annex
II(a) hereto);
(e) (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the
latest audited financial statements included in the
Offering Circular any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Offering Circular, and (ii) since the respective dates as
of which information is given in the Offering Circular
there shall not have been any change in the capital stock
of the Company or any of its subsidiaries or change in the
long-term debt (other than scheduled maturities) of the
Company and its subsidiaries on a consolidated basis or
any change, or any development involving a prospective
change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of
operations of the Company and its subsidiaries on a
consolidated basis, otherwise than as set forth or
contemplated in the Offering Circular, the effect of
which, in any such case described in Clause (i) or (ii),
is in the judgment of the Purchaser so material and
adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the
-17-
Securities on the terms and in the manner contemplated in
this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading
shall have occurred in the rating accorded the Company's
or any Guarantor's debt securities by any "nationally
recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization
(which had not heretofore made such announcement) shall
have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or
material limitation in trading in securities generally on
the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on The
Nasdaq Stock Market, Inc. (other than as a direct result
of the consummation of the Transaction (as defined in the
Offering Circular)); (iii) a general moratorium on
commercial banking activities declared by either Federal
or New York State authorities; (iv) the outbreak or
escalation of hostilities involving the United States or
the declaration by the United States of a national
emergency or war, if the effect of any such event
specified in this Clause (v) in the judgment of the
Purchaser makes it impracticable or inadvisable to proceed
with the offering or the delivery of the Securities on the
terms and in the manner contemplated in the Offering
Circular; or (vi) the occurrence of any material adverse
change in the existing financial, political or economic
conditions in the United States or elsewhere which, in the
judgment of the Purchaser, would materially and adversely
affect the financial markets or the markets for the
Securities and other debt securities;
(h) The Securities have been designated for trading
on PORTAL;
(i) The Company shall have entered into the
Registration Rights Agreement and the Bank Credit
Agreement and shall have consummated the Transaction (as
defined in the Offering Circular); and
(j) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of
officers of the Company and the Guarantors satisfactory to
you as to the accuracy of the representations and
warranties of the Company and the Guarantors herein at and
as of such Time of Delivery, as to the performance by the
Company and the Guarantors of all of their obligations
hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (e) of
this Section and as to such other matters as you may
reasonably request.
8. (a) The Company and the Guarantors, jointly and
severally, will indemnify and hold harmless the Purchaser
against any losses, claims, damages or liabilities to which the
Purchaser may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
-18-
actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact necessary to make the statements
therein not misleading, and will reimburse the Purchaser for
any reasonable legal or other expenses reasonably incurred by
the Purchaser in connection with investigating or defending any
such action or claim as such expenses are incurred; provided,
however, that neither the Company nor the Guarantors shall be
liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Circular or
the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by the Purchaser expressly for use
therein.
(b) The Purchaser will indemnify and hold harmless the
Company and the Guarantors against any losses, claims, damages
or liabilities to which the Company and the Guarantors may
become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Offering Circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a
material fact or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by the Purchaser
expressly for use therein; and will reimburse the Company and
the Guarantors for any legal or other expenses reasonably
incurred by the Company and the Guarantors in connection with
investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of
any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under
such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein
and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party
shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry
of any judgment with respect to, any pending or
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threatened action or claim in respect of which indemnification
or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (ii)
does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above in respect
of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the Guarantors on the one hand and
the Purchaser on the other from the offering of the Securities.
If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the
Company and the Guarantors on the one hand and the Purchaser on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
Company and the Guarantors on the one hand and the Purchaser on
the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total
underwriting discounts and commissions received by the
Purchaser, in each case as set forth in the Offering Circular.
The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or
the Guarantors on the one hand or the Purchaser on the other
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The Company, the Guarantors and the Pur-
chaser agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by
pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
subsection (d), the Purchaser shall not be required to
contribute any amount in excess of the amount by which the
total price at which the Securities were offered to the public
exceeds the amount of any damages which the Purchaser has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(e) The obligations of the Company and the Guarantors
under this Section 8 shall be in addition to any liability
which the Company and the Guarantors may otherwise
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have and shall extend, upon the same terms and conditions, to
each person, if any, who controls the Purchaser within the
meaning of the Act; and the obligations of the Purchaser under
this Section 8 shall be in addition to any liability which the
Purchaser may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the
Company or the Guarantors and to each person, if any, who
controls the Company or the Guarantors within the meaning of
the Act.
9. The respective indemnities, agreements,
representations, warranties and other statements of the
Company, the Guarantors and the Purchaser, as set forth in this
Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to
the results thereof) made by the Purchaser or any controlling
person of the Purchaser, or the Company, the Guarantors, or any
officer or director or controlling person of the Company or the
Guarantors, and shall survive delivery of and payment for the
Securities.
10. If, for any reason, the Securities are not delivered
by or on behalf of the Company and the Guarantors as provided
herein, the Company and the Guarantors will reimburse the
Purchaser for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably
incurred by the Purchaser in making preparations for the
purchase, sale and delivery of the Securities, but neither the
Company nor the Guarantors shall then be under further
liability to the Purchaser except as provided in Sections 6 and
8 hereof.
11. All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Purchaser shall be
delivered or sent by mail, telex or facsimile transmission to
it at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Circular,
Attention: Secretary.
12. This Agreement shall be binding upon, and inure
solely to the benefit of, the Purchaser, the Company, the
Guarantors and, to the extent provided in Sections 8 and 9
hereof, the officers and directors of the Company or any
Guarantor and each person who controls the Company, any
Guarantor or the Purchaser, and their respective heirs, execu-
tors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of
this Agreement. No purchaser of any of the Securities from the
Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of this Agreement.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. This Agreement 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 respective
counterparts shall together constitute one and the same
instrument.
-21-
If the foregoing is in accordance with your understanding,
please sign and return to us 6 counterparts hereof, and upon
the acceptance hereof by you, this letter and such acceptance
hereof shall constitute a binding agreement between the
Purchaser, the Company and the Guarantors.
Very truly yours,
Amscan Holdings, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Acting Chairman of the
Board and President
Amscan Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Acting Chairman of the
Board and President
Am-Source, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
Trisar, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
SSY Realty Corp.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
JCS Realty Corp.
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
Accepted as of the date hereof:
By: /s/ Xxxxxxx, Xxxxx & Co.
(Xxxxxxx, Sachs & Co.)
-22-
ANNEX I
(1) The Securities have not been and will not be
registered under the Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S.
persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of
the Act. The Purchaser represents that it has offered and sold
the Securities, and will offer and sell the Securities (i) as
part of its distribution at any time and (ii) otherwise until
40 days after the later of the commencement of the offering and
the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act. Accordingly, the
Purchaser agrees that neither it, its affiliates (other than
the Company) nor any persons acting on its behalf has engaged
or will engage in any directed selling efforts (within the
meaning of Rule 902 under Regulation S) with respect to the
Securities and the Purchaser, its affiliates (other than the
Company) and each person acting on its behalf have complied and
will comply with the offering restrictions requirement of
Regulation S. The Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant
to Rule 144A), it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been
registered under the U.S Securities Act of 1933 (the
"Securities Act") and may not be offered and sold within
the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the
commencement of the offering and the closing date, except
in either case in accordance with Regulation S (or Rule
144A if available) under the Securities Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by
Regulation S.
The Purchaser further agrees that it has not entered and
will not enter into any contractual arrangement with respect to
the distribution or delivery of the Securities, except with its
affiliates or with the prior written consent of the Company.
(2) Notwithstanding the foregoing, Securities in
registered form may be offered, sold and delivered by the
Purchaser in the United States and to U.S. persons pursuant to
Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) The Purchaser further represents and agrees that (i)
it has not offered or sold and prior to the date six months
after the date of issue of the Securities will not offer or
sell any Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995, (b) it has
complied, and will comply, with all applicable provisions of
the Financial Services Act of 1986 of Great Britain with
respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (c) it
has only issued or passed on and will only issue
or pass on in the United Kingdom any document received by it in
connection with the issuance of the Securities to a person who
is of a kind described in Article 11(3) of the Financial Ser-
vices Xxx 0000 (Investment Advertisements) (Exemptions) Order
1996 of Great Britain or is a person to whom the document may
otherwise lawfully be issued or passed on.
(4) The Purchaser agrees that it will not offer, sell or
deliver any of the Securities in any jurisdiction outside the
United States except under circumstances that will result in
compliance with the applicable laws thereof, and that it will
take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such juris-
dictions. The Purchaser understands that no action has been
taken to permit a public offering in any jurisdiction outside
the United States where action would be required for such
purpose.
(5) The Purchaser represents and agrees that the
Securities offered and sold in reliance on Regulation S have
been and will be offered and sold only in offshore transac-
tions.
(6) The Purchaser agrees not to cause any advertisement
of the Securities to be published in any newspaper or
periodical or posted in any public place and not to issue any
circular relating to the Securities, except such advertisements
that include the statements required by Regulation S.
ANNEX II(a)
Pursuant to Section 7(d) of the Purchase Agreement, the
accountants shall furnish letters to the Purchaser to the
effect that:
(i) They are independent certified public
accountants with respect to the Company and its
subsidiaries under rule 101 of the American Institute of
Certified Public Accountants' Code of Professional
Conduct, and its interpretations and rulings;
(ii) The unaudited selected financial information
with respect to the consolidated results of operations and
financial position of the Company for the most recent
fiscal years included in the Offering Circular agrees with
the corresponding amounts (after restatements where
applicable) in the audited consolidated financial
statements for such periods;
(iii) On the basis of limited procedures not
constituting an audit in accordance with generally
accepted auditing standards, consisting of a reading of
the unaudited financial statements and other information
referred to below, a reading of the latest available
interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering
Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention
that caused them to believe that:
(A) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering
Circular are not in conformity with generally
accepted accounting principles applied on the basis
substantially consistent with the basis for the
audited condensed consolidated statements of income,
consolidated balance sheets and consolidated
statements of cash flows included in the Offering
Circular;
(B) other unaudited income statement data and
balance sheet items included in the Offering Circular
do not agree with the corresponding items in the
unaudited consolidated financial statements from
which such data and items were derived, and any such
unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated
financial statements included in the Offering
Circular;
(C) the unaudited financial statements which
were not included in the Offering Circular but from
which were derived any unaudited
condensed financial statements referred to in Clause
(A) and any unaudited income statement data and
balance sheet items included in the Offering Circular
and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for
the audited consolidated financial statements
included in the Offering Circular;
(D) the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of the pro forma consolidated condensed
financial statements included in the Offering
Circular;
(E) as of a specified date not more than five
days prior to the date of such letter, there have
been any changes in the consolidated capital stock or
any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders'
equity or other items specified by the Purchaser, or
any increases in any items specified by the
Purchaser, in each case as compared with amounts
shown in the latest balance sheet included in the
Offering Circular except in each case for changes,
increases or decreases which the Offering Circular
discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest
financial statements included in the Offering
Circular to the specified date referred to in Clause
(E) there were any decreases in consolidated sales or
operating income or net income or the total or per
share amounts of consolidated net income or other
items specified by the Purchaser, or any increases or
decreases in any items specified by the Purchaser, in
each case as compared with the comparable period of
the preceding year and with any other period of
corresponding length specified by the Purchaser,
except in each case for decreases or increases which
the Offering Circular discloses have occurred or may
occur or which are described in such letter; and
(iv) In addition to the examination referred to in
their report(s) included in the Offering Circular and the
limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraphs (iii) and
(iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to
certain amounts, percentages and financial information
specified by the Purchaser, which are derived from the
general accounting records of the Company and its
subsidiaries, which appear in the Offering Circular, and
have compared certain of such amounts, percentages and
financial information with the accounting records of the
Company and its subsidiaries and have found them to be in
agreement.
II(a)-2
