BOARD NOMINATION AGREEMENT
This BOARD NOMINATION AGREEMENT (this Agreement), dated as of September 11, 2020, is entered into by and among Party City Holdco Inc., a Delaware corporation (the Company), and each other party signatory hereto (collectively, the Nominating Parties), comprising the Backstop Parties and the Private Placement Parties (each as defined in the Backstop and Private Placement Agreement) (as defined below).
WHEREAS, the Company is a party to that certain Transaction Support Agreement, dated as of May 28, 2020 (as later amended, the TSA), by and among, inter alios, the Company, Party City Corporation, a Delaware corporation, Party City Holdings Inc., a Delaware corporation, certain guarantor parties thereto, and certain holders or investment advisors, sub-advisors or managers of discretionary accounts that hold Senior Notes (as defined in the TSA) party thereto;
WHEREAS, the Company is a party to that certain Backstop and Private Placement Agreement, dated as of June 26, 2020 (as later amended, the Backstop and Private Placement Agreement), by and among, inter alios, the Company and the Nominating Parties; and
WHEREAS, in connection with the transaction contemplated by the TSA and the Backstop and Private Placement Agreement, the Company has agreed to grant the Nominating Parties the nomination rights set forth herein on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Board Nomination.
(a) Pursuant to the terms and conditions set forth herein, the Nominating Parties shall have the right to jointly designate one individual (any such individual jointly designated by the Nominating Parties from time to time in accordance with this Agreement, including any alternate nominee, the Nominee) to serve as a director on the board of directors of the Company (the Party City Board); provided, that the Nominee shall meet the requirements specified in Section 1(f) and be reasonably acceptable to (x) the Nominating and Governance Committee of the Company (the Nominating & Governance Committee), on the one hand, and (y) each Nominating Party, on the other hand, as provided in writing (email being sufficient) by each Nominating Party. The Company and the Nominating Parties agree that the initial Nominee shall be Mr. Joel Alsfine.
(b) For so long as the Nominating Parties have the rights specified in Section 1(a), the Nominating & Governance Committee will designate an independent director from the Party City Board (the Anagram Appointee), as selected by the Nominating & Governance Committee in its sole and absolute discretion, to serve as a director of the board of directors of Anagram International Inc., a Minnesota corporation (the Anagram Board). The Anagram Board will appoint the initial Anagram Appointee no later than September 30, 2020.
(c) Until the earlier of (x) August 15, 2025, (y) in the event the New Money First Lien Issuer Notes (as defined in the TSA) are accelerated or otherwise become due prior to August 15, 2025 in accordance with the indenture governing the New Money First Lien Issuer Notes, such earlier date, and (z)