Exhibit 10.5

 

Execution Copy

 

$90,000,000

 

Encore Capital Group, Inc.

 

3.375% Convertible Senior Notes Due 2010

 

Registration Rights Agreement

 

September 19, 2005

 

J.P. Morgan Securities Inc.

277 Park Avenue

9th Floor

New York, New York 10172

 

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036-8293

 

Ladies and Gentlemen:

 

Encore Capital Group, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell to J.P. Morgan Securities Inc. (“JPMorgan”), Morgan Stanley & Co.
Incorporated (“Morgan Stanley” and together with JPMorgan, the “Initial
Purchasers”), upon the terms and subject to the conditions set forth in a
purchase agreement dated September 13, 2005 (the “Purchase Agreement”),
$90,000,000 aggregate principal amount of its 3.375% Convertible Senior Notes
due 2010 (the “Notes”). Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Purchase Agreement.

 

As an inducement to the Initial Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Initial Purchasers
thereunder, the Company agrees with the Initial Purchasers, for the benefit of
the holders (including the Initial Purchasers) of the Notes and the Shares (as
defined below) (collectively, the “Holders”), as follows:

 

1. Certain Definitions.

 

For purposes of this Registration Rights Agreement, the following terms shall
have the following meanings:

 

(a) “Additional Interest” has the meaning assigned thereto in Section 2(d).

 

(b) “Additional Interest Payment Date” has the meaning assigned thereto in
Section 2(d).

--------------------------------------------------------------------------------

(c) “Agreement” means this Registration Rights Agreement, as the same may be
amended from time to time pursuant to the terms hereof.

 

(d) “Closing Date” means the date on which any Notes are initially issued.

 

(e) “Commission” means the 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.

 

(f) “Company” has the meaning specified in the first paragraph of this
Agreement.

 

(g) “Deferral Notice” has the meaning assigned thereto in Section 3(b).

 

(h) “Deferral Period” has the meaning assigned thereto in Section 3(b).

 

(i) “Effective Period” has the meaning assigned thereto in Section 2(a).

 

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

(k) “Holder” means each holder, from time to time, of Registrable Securities
(including the Initial Purchasers).

 

(l) “Indenture” means the Indenture dated as of September 19, 2005, among the
Company and JPMorgan Chase Bank, N.A., as Trustee pursuant to which the Notes
are being issued.

 

(m) “Initial Placement” means the initial placement of the Notes pursuant to the
terms of the Purchase Agreement.

 

(n) “Initial Purchasers” has the meaning specified in the first paragraph of
this Agreement.

 

(o) “Material Event” has the meaning assigned thereto in Section 3(a)(iv).

 

(p) “Majority Holders” shall mean, on any date, holders of the majority of the
Shares constituting Registrable Securities; for the purposes of this definition,
Holders of Notes constituting Registrable Securities shall be deemed to be the
Holders of the number of Shares into which such Notes are or would be
convertible as of such date.

 

(q) “NASD” shall mean the National Association of Securities Dealers, Inc.

 

(r) “NASD Rules” shall mean the Conduct Rules and the By-Laws of the NASD.

 

(s) “Notes” means the 3.375% Convertible Senior Notes Due 2010, to be issued
under the Indenture and sold by the Company to the Initial Purchasers.

--------------------------------------------------------------------------------

(t) “Notice and Questionnaire” means a written notice delivered to the Company
containing substantially the information called for by the Form of Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum.

 

(u) “Notice Holder” means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

 

(v) “Offering Memorandum” means the Offering Memorandum dated September 13, 2005
relating to the offer and sale of the Securities.

 

(w) “Person” means a corporation, association, partnership, organization,
business, individual, government or political subdivision thereof or
governmental agency.

 

(x) “Prospectus” means the prospectus included in any Shelf Registration
Statement, as amended or supplemented by any amendment or prospectus supplement,
including post-effective amendments, and all materials incorporated by reference
or explicitly deemed to be incorporated by reference in such Prospectus.

 

(y) “Purchase Agreement” has the meaning specified in the first paragraph of
this Agreement.

 

(z) “Registrable Securities” means the Securities; provided, however, that such
Securities shall cease to be Registrable Securities when (i) in the
circumstances contemplated by Section 2(a), a registration statement registering
such Securities under the Securities Act has been declared or becomes effective
and such Securities have been sold or otherwise transferred by the Holder
thereof pursuant to such effective registration statement; (ii) such Securities
are sold pursuant to Rule 144 under circumstances in which any legend borne by
such Securities relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed or such Securities are eligible to be
sold pursuant to Rule 144(k) or any successor provision; or (iii) such
Securities shall cease to be outstanding (including, in the case of the Notes,
upon conversion into Shares).

 

(aa) “Registration Default” has the meaning assigned thereto in Section 2(d).

 

(bb) “Registration Expenses” has the meaning assigned thereto in Section 5.

 

(cc) “Rule 144,” “Rule 405” and “Rule 415” means, in each case, such rule as
promulgated under the Securities Act.

 

(dd) “Securities” means, collectively, the Notes and the Shares.

 

(ee) “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

--------------------------------------------------------------------------------

(ff) “Shares” means the shares of common stock of the Company, par value $0.01
per share, into which the Notes are convertible or that have been issued upon
any conversion from Notes into common stock of the Company.

 

(gg) “Shelf Registration Statement” means the shelf registration statement
referred to in Section 2(a), as amended or supplemented by any amendment or
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such Shelf
Registration Statement.

 

(hh) “Special Counsel” shall have the meaning assigned thereto in Section 5.

 

(ii) “Trust Indenture Act” means 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.

 

(jj) “Trustee” shall have the meaning assigned such term in the Indenture.

 

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 Agreement,
and the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Section or
other subdivision. Unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor statute,
rule or regulation thereto) as it may be amended from time to time.

 

2. Registration Under the Securities Act.

 

(a) The Company agrees to file under the Securities Act as promptly as
practicable but in any event within 90 days after 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. The Company agrees to use its reasonable efforts to cause the Shelf
Registration Statement to become or be declared effective within 270 days after
the Closing Date and to keep such Shelf Registration Statement continuously
effective until the earlier of (i) the second anniversary of the Closing Date or
(ii) such time as there are no longer any Registrable Securities outstanding
(the “Effective Period”). None of the Company’s securityholders (other than
Holders of Registrable Securities) shall have the right to include any of the
Company’s securities in the Shelf Registration Statement.

 

(b) The Company further agrees that its shall cause the Shelf Registration
Statement and the related Prospectus and any amendment or supplement thereto, as
of the effective date of the Shelf Registration Statement or such amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act; and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made)

--------------------------------------------------------------------------------

not misleading, and the Company agrees to furnish to the Holders of the
Registrable Securities copies of any supplement or amendment prior to its being
used or promptly following its filing with the Commission; provided, however,
that the Company shall have no obligation to deliver to Holders of Registrable
Securities copies of any amendment consisting exclusively of an Exchange Act
report or other Exchange Act filing otherwise publicly available on the
Company’s website. If the Shelf Registration Statement, as amended or
supplemented from time to time, ceases to be effective for any reason at any
time during the Effective Period (other than because all Registrable Securities
registered thereunder shall have been sold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company shall use its
reasonable best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof.

 

(c) Each Holder of Registrable Securities agrees that if such Holder wishes to
sell Registrable Securities pursuant to the Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 2(c) and
Section 3(b). From and after the date the Shelf Registration Statement is
declared effective, the Company shall, as promptly as is practicable after the
date a Notice and Questionnaire is delivered, and in any event within five (5)
Business Days after such date,

 

(i) if required by applicable law, file with the Commission a post-effective
amendment to the Shelf Registration Statement or prepare and, if required by
applicable law, file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire is
named as a selling security holder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use its reasonable efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as is practicable;

 

(ii) provide such Holder copies of any documents filed pursuant to Section
2(c)(i); and

 

(iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(c)(i);

 

provided that the Company shall not be required to make more than one such
filing in any calendar quarter in the form of a post-effective amendment to the
Shelf Registration Statement; provided, further, that if such Notice and
Questionnaire is delivered during a Deferral Period, the Company shall so inform
the Holder delivering such Notice and Questionnaire and shall take the actions
set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral
Period in accordance with Section 3(b). Notwithstanding anything contained
herein to the contrary, the Company shall be under no obligation to name any
Holder that is not a Notice Holder as a selling securityholder in any Shelf

--------------------------------------------------------------------------------

Registration Statement or related Prospectus; provided, however, that any Holder
that becomes a Notice Holder pursuant to the provisions of this Section 2(c)
(whether or not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared effective) shall be named as a selling
securityholder in the Shelf Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(c).

 

(d) If any of the following events (any such event a “Registration Default”)
shall occur, then additional interest (the “Additional Interest”) shall become
payable by the Company to Holders in respect of the Notes as follows:

 

(i) if the Shelf Registration Statement is not filed with the Commission within
90 days following the Closing Date, then commencing on the 91st day after the
Closing Date, Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of 0.25% per annum
for the first 90 days following such 91st day and at a rate of 0.5% per annum
thereafter; or

 

(ii) if the Shelf Registration Statement is not declared effective by the
Commission within 270 days following the Closing Date, then commencing on the
271st day after the Closing Date, Additional Interest shall accrue on the
principal amount of the outstanding Notes that are Registrable Securities at a
rate of 0.25% per annum for the first 90 days following such 271st day and at a
rate of 0.5% per annum thereafter; or

 

(iii) if the Company has failed to perform its obligations set forth in Section
2(c) hereof within the time periods required therein, then commencing on the
first day after the date by which the Company was required to perform such
obligations, Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of 0.25% per annum
for the first 90 days and at a rate of 0.5% per annum thereafter;

 

(iv) if the Shelf Registration Statement has been declared effective but such
Shelf Registration Statement ceases to be effective at any time during the
Effective Period (other than pursuant to Section 3(b) hereof), then commencing
on the day such Shelf Registration Statement ceases to be effective, Additional
Interest shall accrue on the principal amount of the outstanding Notes that are
Registrable Securities at a rate of 0.25% per annum for the first 90 days
following such date on which the Shelf Registration Statement ceases to be
effective and at a rate of 0.5% per annum thereafter; or

 

(v) if the aggregate duration of Deferral Periods in any period exceeds the
number of days permitted in respect of such period pursuant to Section 3(b)
hereof, then commencing on the day the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period (and
again on the first day of any subsequent Deferral Period during such period),
Additional Interest shall accrue on the principal amount of the outstanding
Notes that are Registrable Securities at a rate of 0.25% per annum for the first
90 days and at a rate of 0.5% per annum thereafter;

--------------------------------------------------------------------------------

provided, however, that the Additional Interest rate on the Notes shall not
exceed in the aggregate 0.5% per annum and shall not be payable under more than
one clause above for any given period of time, except that if Additional
Interest would be payable under more than one clause above, but at a rate of
0.25% per annum under one clause and at a rate of 0.5% per annum under the
other, then the Additional Interest rate shall be the higher rate of 0.5% per
annum; provided further, however, that (1) upon the filing of the Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Shelf Registration Statement (in the case of clause (ii)
above), (3) upon the performance by the Company of its obligations set forth in
Section 2(c) hereof within the time periods required therein (in the case of
clause (iii) above), (4) upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause (iv)
above), (5) upon the termination of the Deferral Period that caused the limit on
the aggregate duration of Deferral Periods in a period set forth in Section 3(b)
to be exceeded (in the case of clause (v) above) or (6) upon the termination of
certain transfer restrictions on the Securities as a result of the application
of Rule 144(k) or any successor provision, Additional Interest on the Notes as a
result of such clause, as the case may be, shall cease to accrue.

 

Additional Interest on the Notes, if any, will be payable in cash on March 19
and September 19 of each year (the “Additional Interest Payment Date”) to
holders of record of outstanding Notes that are Registrable Securities at the
close of business on March 1 or September 1, as the case may be, immediately
preceding the relevant interest payment date, provided that in the case of an
event of the type described in clause (iii) above, such Additional Interest
shall be paid only to the Holders that have delivered Notice and Questionnaires
that caused the Company to incur the obligations set forth in Section 2(c), the
non-performance of which is the basis of such Registration Default; provided
further that any Additional Interest accrued with respect to any Notes or
portion thereof called for redemption on a redemption date or converted into
Shares on a conversion date prior to the Registration Default shall, in any such
event, be paid instead to the Holder who submitted such Notes or portion thereof
for redemption or conversion on the applicable redemption date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion). Following the cure of all Registration
Defaults requiring the payment of Additional Interest to the Holders of Notes
that are Registrable Securities pursuant to this Section, the accrual of
Additional Interest will cease (without in any way limiting the effect of any
subsequent Registration Default requiring the payment of Additional Interest).

 

The Company shall notify the Trustee immediately upon the happening of each and
every Registration Default. The Trustee shall be entitled, on behalf of Holders
of Securities, to seek any available remedy for the enforcement of this
Agreement, including for the payment of any Additional Interest. Notwithstanding
the foregoing, the parties agree that the sole monetary damages payable for a
violation of the terms of this Agreement with respect to which additional
monetary amounts are expressly provided

--------------------------------------------------------------------------------

shall be as set forth in this Section 2(d). Nothing shall preclude a Notice
Holder or Holder of Registrable Securities from pursuing or obtaining specific
performance or other equitable relief with respect to this Agreement.

 

3. Registration Procedures.

 

The following provisions shall apply to the Shelf Registration Statement filed
pursuant to Section 2:

 

(a) The Company shall:

 

(i) prepare and file with the Commission a registration statement with respect
to the shelf registration on any form which may be utilized by the Company and
which shall permit the disposition of the Registrable Securities in accordance
with the intended method or methods thereof, as specified in writing by the
Holders of the Registrable Securities, and use its reasonable efforts to cause
such registration statement to become effective in accordance with Section 2(a)
above;

 

(ii) before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the Commission, furnish to the Initial
Purchasers copies of all such documents proposed to be filed and use reasonable
efforts to reflect in each such document when so filed with the Commission such
comments as the Initial Purchasers reasonably shall propose within three (3)
Business Days of the delivery of such copies to the Initial Purchasers;

 

(iii) use its reasonable efforts to prepare and file with the Commission such
amendments and post-effective amendments to the Shelf Registration Statement and
file with the Commission any other required document as may be necessary to keep
such Shelf Registration Statement continuously effective until the expiration of
the Effective Period; cause the related Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act applicable to it with respect
to the disposition of all Securities covered by such Shelf Registration
Statement during the Effective Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Shelf Registration
Statement as so amended or such Prospectus as so supplemented;

 

(iv) promptly notify the Notice Holders of Registrable Securities (A) when such
Shelf Registration Statement or the Prospectus included therein or any amendment
or supplement to the Prospectus or post-effective amendment has been filed with
the Commission, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
request, following the effectiveness of the Shelf Registration Statement, by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Shelf Registration Statement or

--------------------------------------------------------------------------------

related Prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such Shelf
Registration Statement or the initiation or written threat of any proceedings
for that purpose, (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or written threat of any proceeding
for such purpose, (E) of the occurrence of (but not the nature of or details
concerning) any event or the existence of any fact (a “Material Event”) as a
result of which any Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided, however, that no notice by the Company shall be
required pursuant to this clause (E) in the event that the Company either
promptly files a prospectus supplement to update the Prospectus or a Form 8-K or
other appropriate Exchange Act report that is incorporated by reference into the
Shelf Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such Shelf
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading), (F) of the determination by the Company that
a post-effective amendment to the Shelf Registration Statement will be filed
with the Commission, which notice may, at the discretion of the Company (or as
required pursuant to Section 3(b)), state that it constitutes a Deferral Notice,
in which event the provisions of Section 3(b) shall apply or (G) at any time
when a Prospectus is required to be delivered under the Securities Act, that the
Shelf 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 and
the rules and regulations of the Commission thereunder;

 

(v) prior to any public offering of the Registrable Securities pursuant to the
Shelf Registration Statement, use its reasonable best efforts to register or
qualify, or cooperate with the Notice Holders of Securities included therein and
their respective counsel in connection with the registration or qualification
of, such Securities for offer and sale under the securities or blue sky laws of
such jurisdictions as any such Notice Holders reasonably requests in writing and
do any and all other acts or things necessary or advisable to enable the offer
and sale in such jurisdictions of the Securities covered by the Shelf
Registration Statement; prior to any public offering of the Registrable
Securities pursuant to the Shelf Registration Statement, use its reasonable
efforts to keep each such registration or qualification (or exemption therefrom)
effective during the Effective Period in connection with such Notice Holder’s
offer and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things
necessary or advisable to enable the disposition in such

--------------------------------------------------------------------------------

jurisdictions of such Registrable Securities in the manner set forth in the
Shelf Registration Statement and the related Prospectus; provided that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process or to taxation in any such jurisdiction
where it is not then so subject;

 

(vi) use its reasonable best efforts to prevent the issuance of, and if issued,
to obtain the withdrawal of any order suspending the effectiveness of the Shelf
Registration Statement or any post-effective amendment thereto, and to lift any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale, in each case at the
earliest practicable date;

 

(vii) upon reasonable notice, for a reasonable period prior to the filing of the
Shelf Registration Statement, and throughout the Effective Period, (i) make
reasonably available for inspection by a representative of, and Special Counsel
acting for, Majority Holders of the Securities being sold and any underwriter
(and its counsel) participating in any disposition of Securities pursuant to
such Shelf Registration Statement, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries
and (ii) use reasonable best efforts to have their officers, directors,
employees, accountants and counsel supply all relevant information reasonably
requested by such representative, Special Counsel or any such underwriter in
connection with such Shelf Registration Statement;

 

(viii) if requested by Majority Holders of the Securities being sold in an
underwriting, its Special Counsel or the managing underwriters (if any) in
connection with such Shelf Registration Statement, use its reasonable best
efforts to cause (i) its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities in customary form, (ii) its officers
to execute and deliver all customary documents and certificates requested by the
Majority Holders of the Securities being sold, their Special Counsel or the
managing underwriters (if any) and (iii) its independent public accountants to
provide a comfort letter or letters in customary form, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72;

 

(ix) if reasonably requested by the Initial Purchasers or any Notice Holder,
promptly incorporate in a prospectus supplement or post-effective amendment to
the Shelf Registration Statement such information as the Initial Purchasers or
such Notice Holder shall, on the basis of a written opinion of
nationally-recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such prospectus supplement or such post-effective amendment; provided, that
the Company shall not be required to take any actions under this Section
3(a)(ix) that are not, in the reasonable opinion of counsel for the Company, in
compliance with applicable law;

--------------------------------------------------------------------------------

(x) promptly furnish to each Notice Holder and the Initial Purchasers, upon
their request and without charge, at least one (1) conformed copy of the Shelf
Registration Statement and any amendments thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits; provided, however, that the
Company shall have no obligation to deliver to Notice Holders or Initial
Purchasers a copy of any amendment consisting exclusively of an Exchange Act
report or other Exchange Act filing otherwise publicly available on the
Company’s website;

 

(xi) during the Effective Period, deliver to each Notice Holder in connection
with any sale of Registrable Securities pursuant to the Shelf Registration
Statement, without charge, as many copies of the Prospectus relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Notice Holder may reasonably request; and the
Company hereby consents (except during such periods that a Deferral Notice is
outstanding and has not been revoked) to the use of such Prospectus or each
amendment or supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Securities covered by such Prospectus or
any amendment or supplement thereto in the manner set forth therein; and

 

(xii) cooperate with the Notice Holders of Securities to facilitate the timely
preparation and delivery of certificates representing Securities to be sold
pursuant to the Shelf Registration Statement free of any restrictive legends and
in such denominations and registered in such names as the Holders thereof may
request in writing at least two business days prior to sales of Securities
pursuant to such Shelf Registration Statement.

 

(b) Upon (A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any Material Event as a result of which the Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any corporate development that, in the discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, the Company will (i) in the case of clause (B) above,
subject to the third sentence of this provision, as promptly as practicable
prepare and file a post-effective amendment to such Shelf Registration Statement
or a supplement to the related Prospectus or any document incorporated therein
by reference or file any other required document that would be

--------------------------------------------------------------------------------

incorporated by reference into such Shelf Registration Statement and Prospectus
so that such Shelf Registration Statement does not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and such
Prospectus does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to the Shelf Registration Statement, subject to the
third sentence of this provision, use reasonable efforts to cause it to be
declared effective as promptly as is practicable, and (ii) give notice to the
Notice Holders that the availability of the Shelf Registration Statement is
suspended (a “Deferral Notice”). Upon receipt of any Deferral Notice, each
Notice Holder agrees not to sell any Registrable Securities pursuant to the
Shelf Registration Statement until such Notice Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until it
is advised in writing by the Company that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. The Company will use its
reasonable best efforts to ensure that the use of the Prospectus may be resumed
(x) in the case of clause (A) above, as promptly as practicable, (y) in the case
of clause (B) above, as soon as, in the sole judgment of the Company, public
disclosure of such Material Event would not be prejudicial to or contrary to the
interests of the Company or, if necessary to avoid unreasonable burden or
expense, as soon as practicable thereafter and (z) in the case of clause (C)
above, as soon as, in the discretion of the Company, such suspension is no
longer appropriate; provided that the period during which the availability of
the Shelf Registration Statement and any Prospectus is suspended (the “Deferral
Period”), without the Company incurring any obligation to pay Additional
Interest pursuant to Section 2(d), shall not exceed one hundred and twenty (120)
days in the aggregate in any twelve (12) month period.

 

(c) Each Holder of Registrable Securities agrees that upon receipt of any
Deferral Notice from the Company, such Holder shall forthwith discontinue (and
cause any placement or sales agent or underwriters acting on their behalf to
discontinue) the disposition of Registrable Securities pursuant to the
registration statement applicable to such Registrable Securities until such
Holder (i) shall have received copies of such amended or supplemented Prospectus
and, if so directed by the Company, such Holder shall deliver to the Company (at
the Company’s expense) all copies, other than permanent file copies, then in
such Holder’s possession of the Prospectus covering such Registrable Securities
at the time of receipt of such notice or (ii) shall have received notice from
the Company that the disposition of Registrable Securities pursuant to the Shelf
Registration may continue.

 

(d) The Company may require each Holder of Registrable Securities as to which
any registration pursuant to Section 2(a) is being effected to furnish to the
Company such information regarding such Holder and such Holder’s intended method
of distribution of such Registrable Securities as the Company may from time to
time reasonably request in writing, but only to the extent that such information
is required in

--------------------------------------------------------------------------------

order to comply with the Securities Act. Each such Holder agrees to notify the
Company as promptly as practicable of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event in either case as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder’s intended method of disposition of such
Registrable Securities or omits to state any material fact regarding such Holder
or such Holder’s intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading, and promptly to furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such Prospectus shall not contain, with respect to such Holder or the
disposition of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.

 

(e) The Company shall comply with all applicable rules and regulations of the
Commission and make generally available to its securityholders earning
statements (which need not be audited) satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of the Shelf Registration Statement,
which statements shall cover said 12-month periods.

 

(f) The Company shall provide a CUSIP number for all Registrable Securities
covered by the Shelf Registration Statement not later than the effective date of
such Shelf Registration Statement and provide the Trustee for the Notes and the
transfer agent for the Shares with printed certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository Trust
Company.

 

(g) The Company shall use its reasonable efforts to provide such information as
is required for any filings required to be made with the National Association of
Securities Dealers, Inc.

 

(h) Until the expiration of two years after the Closing Date, the Company will
not, and will not permit any of its “affiliates” (as defined in Rule 144) to,
resell any of the Securities that have been reacquired by any of them except
pursuant to an effective registration statement under the Securities Act.

 

(i) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a timely manner.

 

(j) The Company shall enter into such customary agreements and take all such
other necessary and lawful actions in connection therewith (including those
requested by the Majority Holders of the Registrable Securities being sold) in
order to expedite or facilitate disposition of such Registrable Securities.

--------------------------------------------------------------------------------

4. Holder’s Obligations.

 

Each Holder agrees, by acquisition of the Registrable Securities, that no Holder
of Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to the Shelf Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with a
Notice and Questionnaire as required pursuant to Section 2(c) hereof (including
the information required to be included in such Notice and Questionnaire) and
the information set forth in the next sentence. Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Notice
Holder not misleading and any other information regarding such Notice Holder and
the distribution of such Registrable Securities as may be required to be
disclosed in the Shelf Registration Statement under applicable law or pursuant
to Commission comments. Each Holder further agrees not to sell any Registrable
Securities pursuant to the Shelf Registration Statement without delivering, or
causing to be delivered, a Prospectus to the purchaser thereof and, following
termination of the Effective Period, to notify the Company, within 10 Business
Days of a request by the Company, of the amount of Registrable Securities sold
pursuant to the Shelf Registration Statement and, in the absence of a response,
the Company may assume that all of the Holder’s Registrable Securities were so
sold.

 

5. Registration Expenses.

 

The Company agrees to bear and to pay or cause to be paid promptly upon request
being made therefor all expenses incident to the Company’s performance of or
compliance with this Agreement, including, but not limited to, (a) all
Commission and any NASD registration and filing fees and expenses, (b) all fees
and expenses in connection with the qualification of the Securities for offering
and sale under the State securities and Blue Sky laws referred to in Section
3(a)(v) hereof, including reasonable fees and disbursements of one counsel for
the placement agent or underwriters, if any, in connection with such
qualifications, (c) all expenses relating to the preparation, printing,
distribution and reproduction of the Shelf Registration Statement, the related
Prospectus, each amendment or supplement to each of the foregoing, the
certificates representing the Securities and all other documents relating
hereto, (d) fees and expenses of the Trustee under the Indenture, any escrow
agent or custodian, and of the registrar and transfer agent for the Shares, (e)
fees, disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or “cold
comfort” letters required by or incident to such performance and compliance) and
(f) reasonable fees, disbursements and expenses of one counsel for the Holders
of Registrable Securities retained in connection with the Shelf Registration
Statement, as selected by the Company (unless reasonably objected to by the
Majority Holders of the Registrable Securities being registered, in which case
the Majority Holders shall select such counsel for the Holders)(“Special
Counsel”), and fees, expenses and disbursements of any other Persons, including
special experts, retained by the Company in connection with such registration
(collectively, the “Registration Expenses”). To the extent that any Registration
Expenses are incurred, assumed or paid by any Holder of Registrable Securities
or any underwriter or placement agent therefor, the Company shall reimburse such
Person for the full amount of the Registration Expenses so incurred, assumed or
paid promptly after receipt of a documented request therefor. Notwithstanding
the foregoing, the Holders of the Registrable Securities being

--------------------------------------------------------------------------------

registered shall pay all underwriting discounts and commissions and placement
agent fees and commissions attributable to the sale of such Registrable
Securities and the fees and disbursements of any counsel or other advisors or
experts retained by such Holders (severally or jointly), other than the counsel
and experts specifically referred to above.

 

6. Indemnification.

 

(a) The Company shall indemnify and hold harmless each Holder (including,
without limitation, any such Initial Purchaser), its affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls such Holder within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section 6
and Section 7 as a Holder) from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of Securities), to which that Holder may become subject,
whether commenced or threatened, under the Securities Act, the Exchange Act, any
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement or any Prospectus forming part
thereof or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and shall reimburse
each Holder promptly upon demand for any legal or other expenses reasonably
incurred by that Holder in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with any information provided by a Holder in its most recent Notice
and Questionnaire; and provided, further, that with respect to any such untrue
statement in or omission from any related preliminary prospectus, the indemnity
agreement contained in this Section 6(a) shall not inure to the benefit of any
Holder from whom the person asserting any such loss, claim, damage, liability or
action received Securities to the extent that such loss, claim, damage,
liability or action of or with respect to such Holder results from the fact that
both (A) a copy of the final prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of such Securities to such
person and (B) the untrue statement in or omission from the related preliminary
prospectus was corrected in the final prospectus unless, in either case, such
failure to deliver the final Prospectus was a result of non-compliance by the
Company with Section 4. This indemnity agreement shall be in addition to any
liability that the Company may otherwise have.

 

The Company shall indemnify and hold harmless as provided in this Section 6(a)
or contribute as provided in Section 7 hereof to loss, claim, damage, liability
or action of each underwriter, if any, of Securities registered under the Shelf
Registration Statement,

--------------------------------------------------------------------------------

its affiliates, their respective officers, directors, employees, representatives
and agents, and each person, if any, who controls such underwriter within the
meaning of the Securities Act or the Exchange Act on substantially the same
basis as that of the indemnification of the selling Holders provided in this
paragraph (a) and shall, if requested by any Holder, enter into an underwriting
agreement reflecting such agreement.

 

(b) Each Holder shall indemnify and hold harmless the Company, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any information furnished to the Company
by such Holder in its most recent Notice and Questionnaire, and shall reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that no such Holder shall be liable for any indemnity claims hereunder in excess
of the amount of net proceeds received by such Holder from the sale of
Securities pursuant to such Shelf Registration Statement. This indemnity
agreement will be in addition to any liability which any such Holder may
otherwise have.

 

(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to

--------------------------------------------------------------------------------

assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than the reasonable costs of investigation; provided,
however, that an indemnified party shall have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment or if the
indemnifying party has not paid the expenses and fees for which it is liable 20
days after notice by the indemnified party of request for reimbursement. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement or admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.

 

(d) The provisions of this Section 6 and Section 7 shall remain in full force
and effect, regardless of any investigation made by or on behalf of any Holder,
the Company, or any of the indemnified Persons referred to in this Section 6 and
Section 7, and shall survive the sale by a Holder of securities covered by the
Shelf Registration Statement.

--------------------------------------------------------------------------------

7. Contribution.

 

If the indemnification provided for in Section 6 is unavailable or insufficient
to hold harmless an indemnified party under Section 6(a) or 6(b), then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Notes, on the one
hand, and a Holder with respect to the sale by such Holder of Securities, on the
other, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and such Holder on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Notes (before deducting expenses) received by or on behalf of the
Company, on the one hand, and the total discounts and commissions received by
such Holder with respect to the Securities, on the other, bear to the total
gross proceeds from the sale of Securities. 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 the Company or information supplied by the Company on
the one hand or to any information contained in the relevant Notice and
Questionnaire supplied by such Holder on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 7 were
to be determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 7 shall be deemed to include, for purposes of this Section 7, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Securities shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Securities sold by such indemnifying party to any purchaser exceeds the
amount of any damages which such indemnifying party has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

 

8. Rule 144A and Rule 144.

 

So long as any Restricted Securities remain outstanding, the Company shall use
its reasonable best efforts to file the reports required to be filed by it under
Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner
and, if at any time the Company is not required to file such reports, it will,
upon the written request of any Holder of Restricted Securities, make publicly
available other information so long as necessary to permit sales of such

--------------------------------------------------------------------------------

Holder’s securities pursuant to Rules 144 and 144A. The Company covenants that
it will take such further action as any Holder of Restricted Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)). Upon the
written request of any Holder of Restricted Securities, the Company shall
deliver to such Holder a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 8
shall be deemed to require the Company to register any of its securities
pursuant to the Exchange Act.

 

9. Miscellaneous.

 

(a) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Majority Holders. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose Securities are being sold pursuant to
the Shelf Registration Statement and that does not directly or indirectly affect
the rights of other Holders may be given by Holders of a majority in aggregate
amount of the Securities being sold by such Holders pursuant to the Shelf
Registration Statement.

 

(b) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:

 

(1) If to the Company, initially at the address set forth in the Purchase
Agreement;

 

(2) If to the Initial Purchasers, initially at their respective addresses set
forth in the Purchase Agreement; and

 

(3) If to a Holder, to the address of such Holder set forth in the security
register, the Notice and Questionnaire or other records of the Company.

 

All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; one business day after being
delivered to a next-day air courier; five business days after being deposited in
the mail; and when receipt is acknowledged by the recipient’s telecopier
machine, if sent by telecopier.

 

(c) Successors And Assigns. This Agreement shall be binding upon the Company and
its respective successors and assigns.

 

(d) Counterparts. This Agreement may be executed in any number of counterparts
(which may be delivered in original form or by telecopier) and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

--------------------------------------------------------------------------------

(e) Definition of Terms. For purposes of this Agreement, (a) the term “business
day” means any day on which the New York Stock Exchange, Inc. is open for
trading, (b) the term “subsidiary” has the meaning set forth in Rule 405 under
the Securities Act and (c) except where otherwise expressly provided, the term
“affiliate” has the meaning set forth in Rule 405 under the Securities Act.

 

(f) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

(h) Remedies. In the event of a breach by the Company or by any Holder of any of
their respective obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted
by law, including recovery of damages (other than the recovery of damages for a
breach by the Company of its obligations under Section 2 hereof for which
Additional Interest have been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

 

(i) No Inconsistent Agreements. The Company represents, warrants and agrees that
(i) it has not entered into, shall not, on or after the date of this Agreement,
enter into any agreement that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof,
(ii) it has not previously entered into any agreement which remains in effect
granting any registration rights with respect to any of its debt securities to
any person and (iii) without limiting the generality of the foregoing, without
the written consent of the Holders of a majority in aggregate principal amount
of the then outstanding Restricted Securities, it shall not grant to any person
the right to request the Company to register any debt securities of the Company
under the Securities Act unless the rights so granted are not in conflict or
inconsistent with the provisions of this Agreement.

 

(j) No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Holders of Restricted Securities in such capacity) shall
have the right to include any securities of the Company in any Shelf
Registration Statement other than Restricted Securities.

 

(k) Severability. The remedies provided herein are cumulative and not exclusive
of any remedies provided by law. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

--------------------------------------------------------------------------------

(l) Survival. The respective indemnities, agreements, representations,
warranties and each other provision set forth in this Agreement or made pursuant
hereto shall remain in full force and effect regardless of any investigation (or
statement as to the results thereof) made by or on behalf of any Holder of
Registrable Securities, any director, officer or partner of such Holder, any
agent or underwriter or any director, officer or partner thereof, or any
controlling person of any of the foregoing, and shall survive delivery of and
payment for the Registrable Securities pursuant to the Purchase Agreement and
the transfer and registration of Registrable Securities by such Holder.

 

(m) Securities Held by the Company, etc. Whenever the consent or approval of
Holders of a specified percentage of Securities is required hereunder,
Securities held by the Company or its affiliates (other than subsequent Holders
of Securities if such subsequent Holders are deemed to be affiliates solely by
reason of their holdings of such Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.

--------------------------------------------------------------------------------

Execution Copy

 

If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement among the Company and the several Initial
Purchasers in accordance with its terms.

 

Very truly yours, ENCORE CAPITAL GROUP, INC. By:  

/s/ Paul Grinberg

--------------------------------------------------------------------------------

Name:   Paul Grinberg Title:   EVP & CFO

--------------------------------------------------------------------------------

Accepted: September 19, 2005

 

By:   J.P. MORGAN SECURITIES INC.     By:  

/s/ Gautam Sareen

--------------------------------------------------------------------------------

        Authorized Signatory

--------------------------------------------------------------------------------

By:   MORGAN STANLEY & CO. INCORPORATED     By:  

/s/ Bryan Andrzejewski

--------------------------------------------------------------------------------

        Authorized Signatory