Amendment No. 3 to the
AAH Holdings Corporation Stockholders Agreement
This Amendment No. 3, dated as of September 29, 2006, amends the AAH
Holdings Corporation Stockholders Agreement dated as of April 30, 2004, first
amended May 24, 2004 and second amended December 21, 2005 (the "Stockholders
Agreement") by and among (i) AAH Holdings Corporation, a Delaware corporation
(the "Company"), and (ii) the stockholders listed on the signature pages thereto
(the "Stockholders"). Terms defined in the Stockholders Agreement and not
otherwise defined herein are used herein as so defined.
WHEREAS, on April 30, 2004 the Stockholders and the Company entered into
the Stockholders Agreement for the purpose of regulating certain relationships
of the Stockholders with regard to the Company and certain restrictions on the
Common Stock and other equity securities owned by the Stockholders;
WHEREAS, the Stockholders Agreement was amended in certain respects on May
24, 2005 and December 21, 2005; and
WHEREAS, pursuant to Section 4.3 of the Stockholders Agreement, the
Stockholders Agreement may be amended in certain respects as set forth herein.
NOW, THEREFORE, the Stockholders Agreement is hereby amended as follows:
1. Rights of Participation. Section 2.7(a) is amended and restated as
follows:
"(a) Rights of Participation. The Company hereby grants: (i) to each Stockholder
so long as it shall own at least 5% of the Shares, (ii) to each Berkshire
Stockholder so long as the Berkshire Stockholders collectively own at least 5%
of the Shares, (iii) to each WP Stockholder so long as the WP Stockholders
collectively own at least 5% of the Shares, and (iv) to each Stockholder listed
on Exhibit C hereof so long as it shall own at least the number of Shares set
forth on such Exhibit, the right to purchase up to a pro rata portion of New
Securities (as defined in paragraph (b) below) which the Company, from time to
time, proposes to sell or issue following the date hereof. For purposes of this
Section 2.7(a), a Stockholder's pro rata portion, for purposes of this Section
2.7, is the product of (A) a fraction, the numerator of which is the number of
outstanding Shares which such Stockholder then owns (on a fully diluted basis
after giving effect to the exercise of all Rollover Options, if any, and the
conversion of all securities convertible into or exchangeable for Common Stock)
and the denominator of which is the total number of such Shares held by all
Stockholders (on a fully diluted basis after giving effect to the exercise of
all Rollover Options, if any and the conversion of all securities convertible
into or exchangeable for Common Stock), multiplied by (B) the number of New
Securities the Company proposes to sell or issue.
Notwithstanding the foregoing, in the event that the participation by any
Stockholder in a sale by the Company of New Securities would require under
applicable law (x) the registration or qualification of such securities or of
any Person as a broker or dealer or agent with respect to
such securities or (y) in the case of those Stockholders specified under clause
(i) in the preceding paragraph, the provision to any such Stockholder of any
material non-public information regarding the Company or such securities, such
Stockholder shall not have the right to purchase New Securities pursuant to this
Section, unless otherwise authorized by the Board. Without limiting the
generality of the foregoing, it is understood and agreed that the Company shall
not be under any obligation to effect a registration of such securities under
the 1933 Act or similar state statutes."
2. Financial and Business Information. Section 2.8 is amended and restated
as follows:
"Financial and Business Information. From and after the date hereof, each
Stockholder (other than those Stockholders set forth on Exhibit D hereto)
holding more than five percent (5%) of the outstanding Shares shall be entitled
to receive from the Company, upon request, the following information (i) as soon
as practicable following the end of each fiscal quarter of the Company,
unaudited quarterly financial reports; (ii) as soon as practicable following the
end of each fiscal year of the Company, audited annual financial reports; and
(iii) when and as approved by the Board of Directors, budgets and business plans
of the Company. In addition, the Berkshire Stockholders and the WP Stockholders
shall be entitled to receive from the Company, as soon as practicable following
the end of each month, unaudited financial results. Each Stockholder listed on
Exhibit D hereof, so long as it shall own at least the number of Shares set
forth on such Exhibit, shall be entitled to receive from the Company, upon
request, unaudited consolidated monthly financial statements, and at any time
Amscan Holdings, Inc. or any successor is not required or does not elect to file
public information with the SEC, upon reasonable request, the following
information: (i) as soon as practicable following the end of each fiscal quarter
of the Company, unaudited consolidated quarterly financial statements and (ii)
as soon as practicable following the end of each fiscal year of the Company,
audited consolidated annual financial statements; provided, however, that such
Stockholder shall not be entitled to receive any such statements or information
in the event that the Board of Directors of the Company reasonably and in good
faith determines at any time that such Stockholder or an Affiliate of such
Stockholder is competing with the Company or any of its subsidiaries."
3. Entire Agreement; Amendment; Waiver. Section 4.3 is amended by adding
the following sentence prior to the second to last sentence thereof:
"Without the consent of an affected Stockholder, no amendment may be made
to modify, in any adverse respect, the rights of such Stockholder under Section
2.7(a) or Section 2.8; provided, however, that nothing herein shall prohibit the
granting of any additional participation rights under 2.7(a) or information
rights under Section 2.8 to any other Stockholders unless otherwise prohibited
by the terms of this Agreement."
4. Miscellaneous. Except to the extent specifically amended by this
Amendment No. 3, the Stockholders Agreement as currently in effect shall remain
unmodified, and the Stockholders Agreement, as amended hereby is confirmed as
being in full force and effect. This Amendment No. 3 shall be governed by the
laws of the State of New York (regardless of the laws that might otherwise
govern under applicable New York principles of conflicts of law) as to
all matters, including but not limited to matters of validity, construction,
effect, performance and remedies. This Amendment No. 3 may be executed in two or
more counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart. This Amendment No. 3 shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns.
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Amendment No. 3 to Stockholders Agreement
IN WITNESS WHEREOF, the undersigned, representing the Company and a
majority of the Stockholders have caused this Amendment No. 3 to the
Stockholders Agreement to be duly executed as of the day and year first above
written.
THE COMPANY:
AAH HOLDINGS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: President
Amendment No. 3 to Stockholders Agreement
BERKSHIRE STOCKHOLDERS:
BERKSHIRE FUND V, LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Small
-------------------
Name: Xxxxxx X. Small
Title: Managing Director
BERKSHIRE FUND VI, LIMITED PARTNERSHIP
By: /s/ Xxxxxx X. Small
-------------------
Name: Xxxxxx X. Small
Title: Managing Director
BERKSHIRE INVESTORS LLC
By: /s/ Xxxxxx X. Small
-------------------
Name: Xxxxxx X. Small
Title: Managing Director
WP STOCKHOLDERS:
WESTON PRESIDIO CAPITAL IV, L.P.
By: Weston Presidio Capital Management IV, LLC, its
general partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Member
WPC ENTREPRENEUR FUND II, L.P.
By: Weston Presidio Capital Management IV, LLC,
its general partner
By: /s/ Xxxxx X. Xxxxx
------------------
Name: Xxxxx X. Xxxxx
Title: Member
