Exchange And Registration Rights Agreement

EXHIBIT 10.1


AMERICAN ACHIEVEMENT CORPORATION


8.25% SENIOR SUBORDINATED NOTES DUE 2012


UNCONDITIONALLY GUARANTEED AS TO THE
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,
AND INTEREST BY THE GUARANTORS NAMED ON SCHEDULE I HERETO


EXCHANGE AND REGISTRATION RIGHTS AGREEMENT


March 25, 2004


Goldman, Sachs & Co., As representatives of the several Purchasers named in Schedule I to the Purchase Agreement 85 Broad Street New York, New York 10004


Ladies and Gentlemen:


American Achievement Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) an aggregate of $150,000,000 principal amount of its 8.25% Senior Subordinated Notes due 2012, which are unconditionally guaranteed by the Guarantors named in Schedule I hereto. As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company and the Guarantors agree with the Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:


1. Certain Definitions. For purposes of this Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings:


"Base Interest" shall mean the interest that would otherwise accrue
on the Securities under the terms thereof and the Indenture, without
giving effect to the provisions of this Agreement.


"Blackout Period" shall have the meaning set forth in Section 2(c)
hereof.


The term "broker-dealer" shall mean any broker or dealer registered
with the Commission under the Exchange Act.


"Closing Date" shall mean the date on which the Securities are
initially issued.


"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for
the particular purpose.


"Effective Time," in the case of (i) an Exchange Registration, shall
mean the time and date as of which the Commission declares the Exchange
Registration Statement effective or


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as of which the Exchange Registration Statement otherwise becomes
effective and (ii) a Shelf Registration, shall mean the time and date as
of which the Commission declares the Shelf Registration Statement
effective or as of which the Shelf Registration Statement otherwise
becomes effective.


"Effectiveness Target Date" shall have the meaning assigned thereto
in Section 2(d) hereof.


"Electing Holder" shall mean any holder of Registrable Securities
that has returned a completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.


"Exchange Act" shall mean the Securities Exchange Act of 1934, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.


"Exchange Offer" shall have the meaning assigned thereto in Section
2(a) hereof.


"Exchange Registration" shall have the meaning assigned thereto in
Section 3(c) hereof.


"Exchange Registration Statement" shall have the meaning assigned
thereto in Section 2(a) hereof.


"Exchange Securities" shall have the meaning assigned thereto in
Section 2(a) hereof.


"Guarantors" shall have the meaning assigned thereto in the
Indenture.


The term "holder" shall mean each of the Purchasers and other
persons who acquire Registrable Securities from time to time (including
any successors or assigns), in each case for so long as such person owns
any Registrable Securities.


"Indenture" shall mean the Indenture, dated as of March 25, 2004,
among the Company, the Guarantors and The Bank of New York, as Trustee, as
the same shall be amended from time to time.


"Notice and Questionnaire" means a Notice of Registration Statement
and Selling Securityholder Questionnaire substantially in the form of
Exhibit A hereto.


The term "person" shall mean a corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or governmental agency.


"Purchase Agreement" shall mean the Purchase Agreement, dated as of
March 17, 2004, among the Purchasers, the Guarantors, AAC Holding Corp., a
Delaware corporation and the Company relating to the Securities.


"Purchasers" shall mean the Purchasers named in Schedule I to the
Purchase Agreement.


"Registrable Securities" shall mean each Security until the earlier
to occur of: (a) the date on which such Security has been exchanged by a
person other than a broker-dealer for an Exchange Security in the Exchange
Offer; (b) following the exchange by a broker-dealer in the Exchange Offer
of a Security for an Exchange Security, the date on which such Exchange
Security is sold to a purchaser who receives from such broker-dealer on or
prior to the date of such sale a copy of the prospectus contained in the
Exchange Registration


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Statement; (c) the date on which such Security has been effectively
registered under the Securities Act and disposed of in accordance with the
Shelf Registration Statement; or (d) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act,
or is saleable pursuant to clause (k) of such Rule 144.


"Registration Default" shall have the meaning assigned thereto in
Section 2(d) hereof.


"Registration Expenses" shall have the meaning assigned thereto in
Section 4 hereof.


"Resale Period" shall have the meaning assigned thereto in Section
2(a) hereof.


"Restricted Holder" shall mean (i) a holder that is an affiliate of
the Company within the meaning of Rule 405, (ii) a holder who acquires
Exchange Securities outside the ordinary course of such holder's business,
(iii) a holder who has arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing Exchange
Securities and (iv) a holder that is a broker-dealer, but only with
respect to Exchange Securities received by such broker-dealer pursuant to
an Exchange Offer in exchange for Registrable Securities acquired by the
broker-dealer directly from the Company.


"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
rule promulgated under the Securities Act (or any successor provision), as
the same shall be amended from time to time.


"Securities" shall mean, collectively, the 8.25% Senior Subordinated
Notes due 2012 of the Company to be issued and sold to the Purchasers, and
securities issued in exchange therefor or in lieu thereof pursuant to the
Indenture. Each Security is entitled to the benefit of the guarantees
provided for in the Indenture (the "Guarantees") and, unless the context
otherwise requires, any reference herein to a "Security," an "Exchange
Security" or a "Registrable Security" shall include a reference to the
related Guarantees.


"Securities Act" shall mean the Securities Act of 1933, or any
successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.


"Shelf Registration" shall have the meaning assigned thereto in
Section 2(b) hereof.


"Shelf Registration Statement" shall have the meaning assigned
thereto in Section 2(b) hereof.


"Special Interest" shall have the meaning assigned thereto in
Section 2(d) hereof.


"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
any successor thereto, and the rules, regulations and forms promulgated
thereunder, all as the same shall be amended from time to time.


Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision.


2. Registration Under the Securities Act.


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(a) Except as set forth in Section 2(b) below, the Company and the
Guarantors agree to file under the Securities Act, as soon as practicable,
but no later than 120 days after the Closing Date, a registration
statement relating to an offer to exchange (such registration statement,
the "Exchange Registration Statement," and such offer, the "Exchange
Offer") any and all of the Securities for a like aggregate principal
amount of debt securities issued by the Company and guaranteed by the
Guarantors, which debt securities and guarantees are substantially
identical to the Securities and the related Guarantees, respectively (and
are entitled to the benefits of a trust indenture which is substantially
identical to the Indenture or is the Indenture and which has been
qualified under the Trust Indenture Act), except that they have been
registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the additional interest
contemplated in Section 2(d) below (such new debt securities hereinafter
called "Exchange Securities"). The Company and the Guarantors agree to use
all commercially reasonable efforts to cause the Exchange Registration
Statement to become effective under the Securities Act as soon as
practicable, but no later than 240 days after the Closing Date. The
Exchange Offer will be registered under the Securities Act on the
appropriate form and will comply with all applicable tender offer rules
and regulations under the Exchange Act. The Company and the Guarantors
further agree to use all commercially reasonable efforts to (A) complete
the Exchange Offer promptly, but no later than 40 business days after such
Exchange Registration Statement has become effective, and (B) exchange
Exchange Securities for all Registrable Securities that have been properly
tendered and not withdrawn on or prior to the expiration of the Exchange
Offer. The Exchange Offer will be deemed to have been "completed" only if
the debt securities and the related guarantees received by holders other
than Restricted Holders in the Exchange Offer for Registrable Securities
are, upon receipt, transferable by each such holder without restriction
under the Securities Act and the Exchange Act and without material
restrictions under the blue sky or securities laws of a substantial
majority of the States of the United States of America. The Exchange Offer
shall be deemed to have been completed upon the earlier to occur of (i)
the Company having exchanged the Exchange Securities for all outstanding
Registrable Securities pursuant to the Exchange Offer and (ii) the Company
having exchanged, pursuant to the Exchange Offer, Exchange Securities for
all Registrable Securities that have been properly tendered and not
withdrawn before the expiration of the Exchange Offer. The Company agrees
(x) to include in the Exchange Registration Statement a prospectus for use
in any resales by any holder of Exchange Securities that is a
broker-dealer and (y) to keep such Exchange Registration Statement
effective for a period (the "Resale Period") beginning when Exchange
Securities are first issued in the Exchange Offer and ending upon the
earlier of the expiration of the 180th day after the Exchange Offer has
been completed or such time as such broker-dealers no longer own any
Registrable Securities. With respect to such Exchange Registration
Statement, such holders shall have the benefit of the rights of
indemnification and contribution set forth in Sections 6(a), (c), (d) and
(e) hereof.


(b) If (i) on or prior to the time the Exchange Offer is completed
existing laws or Commission interpretations are changed such that the debt
securities or the related guarantees received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are
not or would not be, upon receipt, transferable by each such holder
without restriction under the Securities Act, (ii) the Exchange Offer has
not been completed within 240 days following the Closing Date or (iii) a
holder notifies AAC prior to the 20th business day following the
consummation of the Exchange Offer that the Exchange Offer is not
available to any holder of the Securities, the Company and the Guarantors
shall, in lieu of (or, in the case of clause (iii), in addition to)
conducting the Exchange Offer contemplated by Section 2(a), file under the
Securities Act as soon as practicable, but no later than the later of 60
days after the time such obligation to file arises or 180 days


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following the Closing Date, a "shelf" registration statement providing for
the registration of, and the sale on a continuous or delayed basis by the
holders of, all of the Registrable Securities, pursuant to Rule 415 or any
similar rule that may be adopted by the Commission (such filing, the
"Shelf Registration" and such registration statement, the "Shelf
Registration Statement"). The Company and the Guarantors agree to use all
commercially reasonable efforts (x) to cause the Shelf Registration
Statement to become or be declared effective no later than 90 days after
such Shelf Registration Statement is filed and to keep such Shelf
Registration Statement continuously effective for a period ending on the
earlier of the second anniversary of the Effective Time or such time as
there are no longer any Registrable Securities outstanding, provided,
however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the
prospectus forming a part thereof for resales of Registrable Securities
unless such holder is an Electing Holder who agrees to be bound by all of
the provisions of this Agreement applicable to such holder, and (y) after
the Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Registrable Securities that is not then an
Electing Holder, to take any action reasonably necessary to enable such
holder to use the prospectus forming a part thereof for resales of
Registrable Securities, including, without limitation, any action
necessary to identify such holder as a selling securityholder in the Shelf
Registration Statement, provided, however, that nothing in this Clause (y)
shall relieve any such holder of the obligation to return a completed and
signed Notice and Questionnaire to the Company and the Guarantors in
accordance with Section 3(d)(iii) hereof. The Company and the Guarantors
further agree to supplement or make amendments to the Shelf Registration
Statement, as and when required by the rules, regulations or instructions
applicable to the registration form used by the Company and the Guarantors
for such Shelf Registration Statement or by the Securities Act or rules
and regulations thereunder for shelf registration, and the Company agrees
to furnish to each Electing Holder copies of any such supplement or
amendment prior to its being used or promptly following its filing with
the Commission.


(c) Notwithstanding the foregoing, the Company, upon advising the
Purchasers in writing, may, pursuant to the advice of outside counsel to
the Company, delay the filing or effectiveness of any Exchange
Registration Statement or Shelf Registration Statement (if not filed or
effective, as applicable) or suspend, or otherwise fail to maintain, the
effectiveness thereof, for a period (the "Blackout Period") not to exceed
an aggregate of 60 days in any twelve consecutive month period in the
event that (1) the Board of Directors of the Company reasonably and in
good faith determines that the premature disclosure of a material event at
such time would have a material adverse effect on the Company's business,
operations or prospects or (2) the disclosure otherwise relates to a
material business transaction which has not been publicly disclosed and
the Board of Directors of the Company reasonably and in good faith
determines that any such disclosure would jeopardize the success of such
transaction; provided, that, upon the termination of such Blackout Period,
the Company promptly shall advise the Purchasers that such Blackout Period
has been terminated.


(d) In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the
date on which such registration statement is required to be filed pursuant
to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration
Statement or Shelf Registration Statement has not become effective or been
declared effective by the Commission on or before the date on which such
registration statement is required to become or be declared effective
pursuant to Section 2(a) or 2(b), respectively (each, an "Effectiveness
Target Date"), or (iii) the Exchange Offer has not been consummated within
40 business days after the Effectiveness Target Date relating to the
Exchange Offer (if the Exchange Offer is then required to be made) or (iv)
any Exchange


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Registration Statement or Shelf Registration Statement required by Section
2(a) or 2(b) hereof is filed and declared effective but shall thereafter,
if on or after the date on which such registration statement is required
to become or declared effective pursuant to Section 2(a) or 2(b) hereof,
either be withdrawn by the Company or shall become subject to an effective
stop order issued pursuant to Section 8(d) of the Securities Act
suspending the effectiveness of such registration statement (except as
specifically permitted herein) without the Company proceeding promptly,
with all commercially reasonable efforts to file, and have declared
effective an additional registration statement (each such event referred
to in clauses (i) through (iv), a "Registration Default" and each period
during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Section 9(b), special
interest ("Special Interest"), in addition to the Base Interest, shall
accrue at a rate of $.05 per week per $1,000 principal amount of Notes for
the first 90 days of the Registration Default Period, and the amount of
Special Interest shall increase by an additional $.05 per week per $1,000
principal amount of Notes with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
Special Interest of $.25 per week per $1,000 principal amount of Notes for
the remaining portion of the Registration Default Period. Notwithstanding
the foregoing, (1) the amount of Special Interest payable shall not
increase because more than one Registration Default has occurred and is
pending and (2) a Holder of Registrable Securities that is not entitled to
the benefits of the Shelf Registration Statement (e.g., such Holder has
not elected to include information) shall not be entitled to Special
Interest with respect to a Registration Default that pertains to the Shelf
Registration Statement.


(e) The Company shall take, and shall cause the Guarantors to take,
all actions necessary or advisable to be taken by it to ensure that the
transactions contemplated herein are effected as so contemplated,
including all actions necessary or desirable to register the Guarantees
under the registration statement contemplated in Section 2(a) or 2(b)
hereof, as applicable.


(f) Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference
herein to any post-effective amendment to a registration statement as of
any time shall be deemed to include any document incorporated, or deemed
to be incorporated, therein by reference as of such time.


3. Registration Procedures.


If the Company and the Guarantors file a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply:


(a) At or before the Effective Time of the Exchange Offer or the
Shelf Registration, as the case may be, the Company shall qualify the
Indenture under the Trust Indenture Act.


(b) In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall
appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.


(c) In connection with the Company's and the Guarantors' obligations
with respect to the registration of Exchange Securities as contemplated by
Section 2(a) (the "Exchange Registration"), if applicable, the Company and
the Guarantors shall, as soon as practicable (or as otherwise specified):


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(i) prepare and file with the Commission, no later than 120
days after the Closing Date, an Exchange Registration Statement on
any form which may be utilized by the Company and the Guarantors and
which shall permit the Exchange Offer and resales of Exchange
Securities by broker-dealers during the Resale Period to be effected
as contemplated by Section 2(a), and use all commercially reasonable
efforts to cause such Exchange Registration Statement to become
effective as soon as practicable thereafter, but no later than 240
days after the Closing Date;


(ii) as soon as practicable prepare and file with the
Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as may be
necessary to effect and maintain the effectiveness of such Exchange
Registration Statement for the periods and purposes contemplated in
Section 2(a) hereof and as may be required by the applicable rules
and regulations of the Commission and the instructions applicable to
the form of such Exchange Registration Statement, and promptly
provide each broker-dealer holding Exchange Securities with such
number of copies of the prospectus included therein (as then amended
or supplemented), in conformity in all material respects with the
requirements of the Securities Act and the Trust Indenture Act, as
such broker-dealer reasonably may request prior to the expiration of
the Resale Period, for use in connection with resales of Exchange
Securities;


(iii) promptly notify each broker-dealer that has requested or
received copies of the prospectus included in such registration
statement, and confirm such advice in writing, (A) when such
Exchange Registration Statement or the prospectus included therein
or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to such Exchange
Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any comments by the Commission and
by the blue sky or securities commissioner or regulator of any state
with respect thereto or any request by the Commission for amendments
or supplements to such Exchange Registration Statement or prospectus
or for additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of such Exchange
Registration Statement or the initiation or threatening of any
proceedings for that purpose, (D) if at any time the representations
and warranties of the Company contemplated by Section 5 cease to be
true and correct in all material respects, (E) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, or (F) at any time during the Resale Period when a
prospectus is required to be delivered under the Securities Act,
that such Exchange Registration Statement, prospectus, prospectus
amendment or supplement or post-effective amendment does not conform
in all material respects to the applicable requirements of the
Securities Act and the Trust Indenture Act or contains an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;


(iv) in the event that the Company and the Guarantors would be
required, pursuant to Section 3(c)(iii)(F) above, to notify any
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