EXHIBIT 6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of March 11, 2002 by and
among JAKKS Pacific, Inc., a Delaware corporation ("JAKKS "), and those Persons
identified on Schedule I hereto (each, a "Shareholder").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of February 8,
2002 among JAKKS, Toymax International, Inc., a Delaware corporation ("Toymax"),
and the Shareholders (the "Purchase Agreement"), JAKKS has agreed to issue and
deliver to the Shareholders 646,384 shares of JAKKS' common stock, par value
$.001 per share (the "JAKKS Common Stock"), in the aggregate, as payment, in
part, for certain shares of Toymax' common stock, par value $.01 per share (the
"Toymax Common Stock") to be sold and delivered to JAKKS by the Shareholders
(the "Toymax Shares"); and
WHEREAS, upon its purchase of the Toymax Shares, JAKKS will become the
owner of a majority of the outstanding shares of Toymax Common Stock; and
WHEREAS, concurrently with their entering into the Stock Purchase
Agreement, JAKKS and Toymax, together with JP/TII Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of JAKKS (the "Subsidiary") entered
into an Agreement of Merger (the "Merger Agreement") providing for a merger of
the Subsidiary into Toymax (the "Merger") in which Toymax will become a
wholly-owned subsidiary of JAKKS and the holders of Toymax Common Stock
immediately prior to the effective date of the Merger (the "Effective Date"),
other than JAKKS, will receive merger consideration consisting of cash and JAKKS
Common Stock; and
WHEREAS, the Shareholders desire to provide for the possible sale of
their shares of JAKKS Common Stock subject hereto in the public market after the
Effective Date and have required, as a condition to their entering into the
Purchase Agreement, that JAKKS commit to register such shares under the
applicable securities law; and
WHEREAS, to induce the Shareholders to enter into the Purchase
Agreement and to sell the Toymax Shares to JAKKS, JAKKS has agreed to enter into
this Agreement with the Shareholders, subject to and concurrently with the
closing of JAKKS' purchase of the Toymax Shares (the "First Closing");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. Certain Definitions.
In addition to other capitalized terms defined elsewhere herein, the
following capitalized terms are used herein as follows:
1.1 Agreement" means this Registration Rights Agreement, as amended or
supplemented.
1.2 "Blue Sky Filing" means any registration statement, notification or
other Notice required
to be filed, given or made pursuant to any Blue Sky Law in connection with any
offering of the Registrable Securities
1.3. "Blue Sky Laws" means the laws of any state, the District of
Columbia, or any territory or other jurisdiction in the United States governing
the purchase and/or sale of securities in such jurisdiction.
1.4. "Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended.
1.5. "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
1.6. "Governmental Authority" means any United States or foreign,
federal, state or local government or governmental authority, agency,
instrumentality, any court or arbitration panel of competent jurisdiction or the
Nasdaq Stock Market, Inc.
1.7. "JAKKS' Securities Claims" has the meaning provided for in Section
4.2 below.
1.8. "Notice" means any notice given to, or any declaration, filing,
registration or recordation made, with any Person.
1.9. "Order" means any judgment, order, writ, decree, award, directive,
ruling or decision of any Governmental Authority.
1.10. "Person" means any natural person, corporation, joint stock
company, limited liability company, partnership, joint venture, association,
trust, Governmental Authority or other entity, or any group of the foregoing
acting in concert.
1.11. "Proceeding" means any action, suit, arbitration, audit,
investigation or other proceeding, at law or in equity, before or by any
Governmental Authority.
1.12. "Register," "registered," "registration" and "registration
statement" shall refer to a registration of securities to be offered and sold
under a registration statement filed with the Commission pursuant to the
Securities Act or the Exchange Act and the applicable rules and regulations
under either such Act.
1.13. "Registrable Securities" means the shares of JAKKS Common Stock
issued and delivered to the Shareholders at the First Closing, as set forth on
Schedule I hereto (or any securities into which such shares are convertible or
for which such shares are exchangeable pursuant to any capital reorganization or
reclassification of JAKKS).
1.14. "Securities Act" means the U.S. Securities Act of 1933, as
amended.
1.15. "Shareholders' Securities Claims" has the meaning provided for in
Section 4.1 below.
2. Registration Rights.
2.1. Registration Statement. JAKKS shall use commercially reasonable
efforts to prepare and file with the Commission, as soon as practicable after
the date hereof, a Registration Statement on Form S-3 covering the Registrable
Securities (or, if Form S-3 is not then available, on such form of registration
statement as is then available to effect a registration of the Registrable
Securities) and shall use commercially reasonable efforts to cause such
registration statement to be declared effective by the
Commission on the Effective Date, or as soon as practicable thereafter, so as to
permit, when such registration statement becomes effective, the sale of the
Registrable Securities in conformity with Section 5 of the Securities Act.
JAKKS, in its sole discretion, may include in the registration statement
covering the Registrable Securities any issued or authorized but unissued
securities of JAKKS for sale by JAKKS or its security holders.
2.2 Preparation and Filing of Registration Statement. With respect to
the registration statement to be prepared by JAKKS under this Agreement, JAKKS
shall, at its sole expense, as expeditiously as practicable:
i. prepare and file with the Commission a registration
statement necessary to permit the sale of the Registrable Securities in the
public securities markets upon the effectiveness of such registration statement,
and such amendments and supplements to such registration statement and the
prospectus included therein as may be necessary, to the extent reasonably
practicable, to cause such registration statement to be declared effective by
the Commission;
ii. furnish to each Shareholder such number of conformed
copies of such registration statement and of each amendment or supplement
thereto (in each case including all exhibits and documents incorporated therein
by reference), such number of copies of any prospectus included in such
registration statement and such other documents, in each case, as such
Shareholder may reasonably request in order to facilitate the sale of the
Registrable Securities in the public securities markets;
iii. register or qualify the Registrable Securities under the
Blue Sky Laws of each state governing the purchase or sale of securities as each
Shareholder may reasonably request, keep such registration or qualification in
effect for so long as such registration statement remains in effect and take any
other action that may be reasonably necessary or advisable to enable the
Shareholders to consummate the disposition in such states of the Registrable
Securities; provided that JAKKS shall not be required to keep such registration
or qualification in effect at any time after (a) the disposition of the
Registrable Securities in accordance with the manner of disposition set forth in
the registration statement relating thereto, or (b) [nine months] after the date
such registration statement becomes effective; and provided, further, that JAKKS
shall not be required (A) to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify or (B) subject
itself to taxation in any such jurisdiction;
iv. notify each Shareholder promptly when the registration
statement or any amendment thereto has been filed and when it has become
effective; and
v. cause all of the Registrable Securities covered by the
registration statement to be listed on each securities exchange, or designated
for inclusion in each automated interdealer quotation system, on which the JAKKS
Common Stock is then listed or included.
2.3 Limitations on Registrations. JAKKS may delay the filing, or the
making of a request for the acceleration of effectiveness, of a registration
statement pursuant to this Section 2 or withdraw or suspend the effectiveness of
a registration statement covering the Registrable Securities that has become
effective if, in the good faith and reasonable judgment of JAKKS' board of
directors, JAKKS would be required to include in such registration statement or
the prospectus included therein (or in an amendment or supplement thereto)
material information that at that time could not be publicly disclosed without
materially interfering with any financing, acquisition, corporate reorganization
or other material development or transaction then pending or as to which JAKKS
has taken substantive steps to structure or negotiate. JAKKS shall promptly make
such filing or amendment as is reasonably necessary to complete, restore or
reinstate such registration statement when the conditions leading to such delay,
suspension or
withdrawal no longer apply.
2.4 Shareholders' Obligations. It is a condition precedent to JAKKS'
obligation to register any Registrable Securities pursuant hereto that (a) the
Shareholders cooperate with JAKKS in the preparation of the Registration
Statement (or any amendment thereto), including providing any information with
respect to the Shareholders required to be included therein, and (b) in the case
of an underwritten public offering, the terms and conditions of the underwriting
agreement or any related agreement applicable to or any related agreement
applicable to or affecting JAKKS shall be reasonably acceptable to JAKKS.
3. Preparation; Reasonable Investigation. In connection with the preparation and
filing of the registration statement and any amendments thereto and any Blue Sky
Filing, JAKKS shall give each Shareholder and its counsel, accountant and other
advisors the opportunity to review, in each case, a reasonable time prior to its
filing, the registration statement, each prospectus included therein or filed
with the Commission, each document incorporated by reference therein and each
amendment thereof or supplement thereto and any related Blue Sky Filing in order
to verify the accuracy of any factual information concerning the Shareholders.
JAKKS shall pay for all registration and filing fees, printing expenses and fees
and disbursements of JAKKS' counsel and JAKKS' accountants in connection with
the preparation, review and filing of the registration statement or any related
Blue Sky Filing pursuant to this Agreement; provided, however, that the
Shareholders shall pay underwriting discounts and commissions applicable to the
sale of the Registrable Securities and any advisory or professional fees
incurred on their own behalf.
4. Indemnification.
4.1 Shareholders' Indemnity. Each Shareholder, jointly and severally,
shall indemnify and defend JAKKS and each stockholder, director, officer,
employee and agent of JAKKS against, and hold each of them harmless from, any
loss, liability, obligation, damage or expense (including reasonable attorneys'
fees and disbursements) which any of them may suffer or incur incidental to any
claim or any Proceeding against any of them arising out of, based upon or
resulting from an untrue statement or alleged untrue statement of a material
fact contained in, or omission or alleged omission of a material fact from, the
registration statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or any document incidental to
the registration or qualification of the Registrable Securities that is required
to be stated therein or necessary to make the statements therein not misleading
or, with respect to any prospectus, necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, which
statement or omission is made in reliance upon and in conformity with written
information furnished to JAKKS by the Shareholders solely for use in the
preparation thereof, or any violation by any Shareholder or its Affiliates of
the Securities Act or Blue Sky Laws applicable to them and relating to action or
inaction required of such Shareholder or its Affiliates in connection with such
registration or qualification under such Blue Sky Laws ("Shareholders'
Securities Claims").
4.2 JAKKS' Indemnity. JAKKS shall indemnify and defend each Shareholder
and hold each of them harmless from, any loss, liability, obligation, damage or
expense (including reasonable attorneys' fees and disbursements) which any of
them may suffer or incur incidental to any claim or any Proceeding against any
of them arising out of, based upon or resulting from an untrue statement or
alleged untrue statement of a material fact contained in, or omission or alleged
omission of a material fact from, the registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or any document prepared and/or furnished by JAKKS incidental to the
registration or qualification of the Registrable Securities that is required to
be stated therein or
necessary to make the statements therein not misleading or, with respect to any
prospectus, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or any violation by
JAKKS or its Affiliates of the Securities Act or Blue Sky Laws applicable to
them and relating to action or inaction required of JAKKS or its Affiliates in
connection with such registration or qualification under such Blue Sky Laws
("JAKKS' Securities Claims"); provided, however, that JAKKS shall not be liable
in any such case to the extent that such Securities Claims arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in, or omission or alleged omission of a material fact from, the
registration statement, such preliminary prospectus or such prospectus or such
amendment or supplement or any document incident to the registration or
qualification of the Registrable Securities in reliance upon and in conformity
with written information furnished to it by the Shareholders or any other holder
of such Registrable Securities or their respective agents solely for use in the
preparation thereof.
4.3 Claims Procedure. Promptly after Notice to an indemnified party of
any claim or the commencement of any Proceeding by a third party involving any
loss, liability, obligation, damage or expense referred to in Section 4.1 or
4.2, such indemnified party shall, if a claim for indemnification in respect
thereof is to be made against an indemnifying party, give written Notice to the
latter of the commencement of such claim or Proceeding, setting forth in
reasonable detail the nature thereof and the basis upon which such party seeks
indemnification hereunder; provided that the failure of any indemnified party to
give such Notice shall not relieve the indemnifying party of its obligations
under such Section, except to the extent that the indemnifying party is actually
prejudiced by the failure to give such Notice. In case any such Proceeding is
brought against an indemnified party, and provided that proper Notice is duly
given, the indemnifying party shall assume and control the defense thereof
insofar as such Proceeding involves any loss, liability, obligation, damage or
expense in respect of which indemnification may be sought hereunder, with
counsel selected by the indemnifying party (and reasonably satisfactory to such
indemnified party), and, after Notice from the indemnifying party to such
indemnified party of its assumption of the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof (but the indemnified party shall have the right, but not the
obligation, to participate at its own cost and expense in such defense by
counsel of its own choice) or for any amounts paid or foregone by the
indemnified party as a result of the settlement or compromise thereof (without
the written consent of the indemnifying party), except that, if both the
indemnifying party and the indemnified party are named as parties or subject to
such Proceeding and either such party reasonably determines with advice of
counsel that a material conflict of interest between such parties may exist in
respect of such Proceeding, the indemnifying party may decline to assume the
defense on behalf of the indemnified party or the indemnified party may retain
the defense on its own behalf, and, in either such case, after Notice to such
effect is duly given hereunder to the other party, the indemnifying party shall
be relieved of its obligation to assume the defense on behalf of the indemnified
party, but shall be required to pay any legal or other expenses, including
without limitation reasonable attorneys' fees and disbursements incurred by the
indemnified party in such defense; provided, however, that the indemnifying
party shall not be liable for such expenses on account of more than one separate
firm of attorneys (and, if necessary, local counsel) at any time representing
such indemnified party in connection with any Proceeding or separate Proceedings
in the same jurisdiction arising out of or based upon substantially the same
allegations or circumstances. If the indemnifying party shall assume the defense
of any such Proceeding, the indemnified party shall cooperate fully with the
indemnifying party and shall appear and give testimony, produce documents and
other tangible evidence, allow the indemnifying party access to the books and
records of the indemnified party and otherwise assist the indemnifying party in
conducting such defense. No indemnifying party shall, without the consent of the
indemnified party, which consent shall not be unreasonably withheld, consent to
entry of any judgment or enter into any settlement or compromise in respect of
any claim or Proceeding which (i) does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
Proceeding and (ii) involves solely monetary damages (and not injunctive or
other equitable relief or any admission of guilt or fault). Provided that proper
Notice is duly given, if the indemnifying party shall fail promptly and
diligently to assume the defense thereof, if and in the manner required
hereunder, the indemnified party may respond to, contest and defend against such
Proceeding (but the indemnifying party shall have the right to participate at
its own cost and expense in such defense by counsel of its own choice) and may
make in good faith any compromise or settlement with respect thereto, and
recover the entire cost and expense thereof, including without limitation
reasonable attorneys' fees and disbursements and all amounts paid or foregone as
a result of such Proceeding, or the settlement or compromise thereof, from the
indemnifying party. Any indemnification required to be made hereunder shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills or invoices are received or loss,
liability, obligation, damage or expense is actually suffered or incurred.
4.4 Limitations.
i. Any other provision hereof notwithstanding, no indemnified
party shall be entitled to any indemnification under this Agreement to the
extent that it actually receives or is entitled to receive any amount in respect
of any loss, liability, obligation, damage or expense from other sources,
including without limitation insurance or third-party indemnity; provided that
such indemnified party shall not be required to commence any Proceeding to
collect any such amount.
ii. The indemnification obligations under this Agreement are
independent of any other indemnification obligations that any of the parties
hereto may have to one another under any other agreement between or among them,
and, in particular, none of the limitations upon the indemnification obligations
of the parties to the Stock Purchase Agreement shall apply to the
indemnification obligations of the parties under this Agreement.
5. Miscellaneous.
5.1 Limitation of Authority. Except as expressly provided herein, no
provision hereof shall be deemed to create any partnership, joint venture or
joint enterprise or association among the parties hereto, or to authorize or to
empower any party hereto to act on behalf of, obligate or bind any other party
hereto.
5.2 Fees and Expenses. Each party hereto shall bear such fees and
expenses as may be incurred by it in connection with this Agreement and the
Acquisition.
5.3 Notices. Any Notice or demand required or permitted to be given or
made hereunder to or upon any party hereto shall be deemed to have been duly
given or made for all purposes if (a) in writing and sent by (i) messenger or
reputable overnight courier service against receipt, or (ii) certified or
registered mail, postage paid, return receipt requested, or (b) sent by
facsimile, provided that the sender receives a printed confirmation of receipt,
to such party at the following address:
to JAKKS: 00000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
with a copy to:
Feder, Kaszovitz, Isaacson, Weber,
Xxxxx, Bass & Rhine LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
to any Shareholder at its address on Schedule I
with a copy to: Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or such other address as any party hereto may at any time, or from time to time,
direct by Notice given to the other parties in accordance with this Section.
Except as otherwise expressly provided herein, the date of giving or making of
any such Notice or demand shall be, in the case of clause (a)(i) or (a)(ii), the
date of the receipt, or in the case of clause (b), the business day next
following the date such Notice or demand is sent.
5.4 Amendment. Except as otherwise expressly provided herein, no
amendment of this Agreement shall be valid or effective, unless in writing and
signed by or on behalf of the parties hereto.
5.5 Waiver. No course of dealing or omission or delay on the part of
any party hereto in asserting or exercising any right hereunder shall constitute
or operate as a waiver of any such right. No waiver of any provision hereof
shall be effective, unless in writing and signed by or on behalf of the party to
be charged therewith. No waiver shall be deemed a continuing waiver or waiver in
respect of any other or subsequent breach or default, unless expressly so stated
in writing.
5.6 Governing Law. This Agreement shall be governed by, and
interpreted and enforced in accordance with, the laws of the State of New York
without regard to principles of choice of law or conflict of laws.
5.7 Arbitration. Any claim, dispute or controversy between or among
any of the parties hereto shall be submitted to arbitration in New York, New
York in accordance with the then current Commercial Arbitration Rules of the
American Arbitration Association. JAKKS, on the one hand, and the Shareholders,
on the other, shall each pay one_half of any filing fees or other administrative
costs to be paid in advance of or during such Proceeding. There shall be a
single arbitrator. The arbitrator shall render a reasoned decision with respect
to such Proceeding which shall include, in addition to the imposition of
monetary damages or any other remedy or relief available hereunder, an
allocation of the costs thereof. The decision of the arbitrator shall be final
and binding upon the parties to such Proceeding, and judgment thereon may be
entered in any court of competent jurisdiction. No party hereto shall be liable
for punitive damages, unless such party is found to have committed fraud or
willful malfeasance against another party hereto.
5.8 Remedies. Notwithstanding the provisions of Section 7.7, in the
event of any actual or prospective breach or default by any party hereto, any
other party hereto shall be entitled to equitable relief from any court of
competent jurisdiction, including remedies in the nature of rescission,
injunction
and specific performance. Subject to the provisions of Section 7.7, all remedies
hereunder are cumulative and not exclusive, and nothing herein shall be deemed
to prohibit or limit any party from pursuing any other remedy or relief
available at law or in equity for such actual or prospective breach or default,
including the recovery of damages; provided, however, that the indemnification
provisions of Section 4 shall be the sole and exclusive remedy, as among the
parties hereto, with respect to any claim for monetary damages under this
Agreement.
5.9 Severability. The provisions hereof are severable and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect by a court of competent jurisdiction, the remaining
provisions hereof shall not be affected, but shall, subject to the discretion of
such court, remain in full force and effect, and any invalid or unenforceable
provision shall be deemed, without further action on the part of the parties
hereto, amended and limited to the extent necessary to render the same valid and
enforceable.
5.10 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall constitute
one and the same agreement.
5.11 Further Assurances. Each party hereto agrees to cooperate fully
with the other parties in connection with preparing and filing any Notices or
documents in connection with any registration hereunder. Each party hereto shall
promptly execute, deliver, file or record such agreements, instruments,
certificates and other documents and perform such other and further acts as any
other party hereto may reasonably request or as may otherwise be reasonably
necessary or proper, to effect any such registration.
5.12 Binding Effect. Subject to Section 11.13, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement is not intended, and shall not
be deemed, to create or confer any right or interest for the benefit of any
Person not a party hereto.
5.13 Assignment. This Agreement, and each right, interest and
obligation hereunder, may not be assigned by any party hereto without the prior
written consent of the other parties hereto, and any purported assignment
without such consent shall be void and without effect.
5.14 Titles and Captions. The titles and captions of the Articles and
Sections of this Agreement are for convenience of reference only and do not in
any way define or interpret the intent of the parties or modify or otherwise
affect any of the provisions hereof.
5.15 Grammatical Conventions. Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the plural
sense and each capitalized term defined herein and each pronoun used herein
shall be construed in the masculine, feminine or neuter sense.
5.16 References. The terms "herein," "hereto," "hereof," and
"hereunder," and other terms of similar import, refer to this Agreement as a
whole, and not to any Section or other part hereof.
5.17 No Presumptions. Each party hereto acknowledges that it has
participated, with the advice of counsel, in the preparation of this Agreement.
No party hereto is entitled to any presumption with respect to the
interpretation of any provision hereof or the resolution of any alleged
ambiguity herein based on any claim that any other party hereto drafted or
controlled the drafting of this Agreement.
5.18 Exhibits and Schedules. The Exhibits and Schedules hereto are an
integral part of this Agreement and are incorporated in their entirety herein by
this reference.
5.19 Entire Agreement. This Agreement embodies the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, commitments or arrangements relating thereto.
IN WITNESS WHEREOF, JAKKS, by its duly authorized officers, and the
Shareholders have duly executed this Agreement as of the date first above
written.
JAKKS PACIFIC, INC. /s/ XXXXXX XXXXXXXX
-------------------------------------
Xxxxxx Xxxxxxxx
By: /s/ XXXX X. XXXXXXX /s/ XXXXXX X. XXXXXXXXXX
--------------------------- -------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxxxx
Title: Exec VP/CFO Title:
BEST PHASE LIMITED
By: /s/ XXXXX KI XXXX XXX
-------------------------------------
Name: Xxxxx Ki Xxxx Xxx
Title: President
HARGO BARBADOS LIMITED
By: /s/ XXXXXXX XXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
By: CIBC BANK AND TRUST CO. (CAYMAN)
LIMITED
Secretary
By: /s/ XXXX XXXXXXXX
-------------------------------------
Name: Xxxx Xxxxxxxx
By: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
