exv10w5



 




Exhibit 10.5



Eddie Bauer Holdings, Inc.




5.25% Convertible Senior Notes due 2014




Registration Rights Agreement




April 4, 2007




J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York 10172




Goldman, Sachs & Co.

85 Broad Street

New York, New York 10004




Ladies and Gentlemen:




     This Registration Rights Agreement is made and entered into on the date indicated above by and
among Eddie Bauer Holdings, Inc., a Delaware corporation (the “Company”), the subsidiaries
of the Company listed on the signature page hereto (collectively, the “Guarantors”) and
J.P. Morgan Securities Inc. and Goldman, Sachs & Co. (the “Placement Agents”) pursuant to
the Placement Agency Agreement, dated March 28, 2007, among the Company and the Placement Agents
(the “Placement Agency Agreement”).



     In order to induce the investors (the “Purchasers”) to enter into the securities
purchase agreements, dated March 29, 2007 (each, a “Purchase Agreement” and collectively,
the “Purchase Agreements”), the Company has agreed to provide the registration rights set
forth in this Agreement. The execution of this Agreement is a condition to the closing under the
Purchase Agreements.



     The Company agrees with the Placement Agents for the benefit of the Holders (as defined
herein) of the 5.25% Convertible Senior Notes due 2014 (the “Notes”) and the beneficial
owners from time to time of the Shares (as defined herein) issued upon conversion of the Notes, as
follows:



     1. Certain Definitions.



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




     (a) “Additional Guarantor” means any subsidiary of the Company that executes a
Guarantee under the Indenture after the date of this Agreement.




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









 





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




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




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




     (f) “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.




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




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




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




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




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




     (l) “Free Writing Prospectus” means each free writing prospectus (as defined in
Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the sale of the Securities.




     (m) “Guarantee” means, individually, any guarantee of the Notes by a Guarantor
pursuant to the terms of the Indenture and any supplemental indenture thereto.




     (n) “Guarantors” means the entities guaranteeing the Notes pursuant to the
terms of the Indenture, including any Guarantor’s successors and any Additional Guarantors.




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




     (p) “Indenture” means the Indenture dated as of the date hereof among the
Company, the Guarantors and The Bank of New York, as Trustee, pursuant to which the Notes
and the Guarantees are being issued.




     (q) “Issuer Information” has the meaning set forth in Section 6(a) hereof.




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




     (s) “Majority Holders” shall mean, on any date, holders of the majority of the
Shares constituting Registrable Securities; for the purposes of this definition, Holders








 



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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.





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




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




     (v) “Notes” has the meaning specified in the first paragraph of this Agreement.




     (w) “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 Private Placement Memorandum.




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




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




     (z) “Placement Agents” has the meaning specified in the first paragraph of this
Agreement.




     (aa) “Private Placement Memorandum” means the Private Placement Memorandum
dated March 29, 2007 relating to the offer and sale of the Securities.




     (bb) “Prospectus” means the prospectus included in any Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus 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.




     (cc) “Purchase Agreements” has the meaning specified in the second paragraph of
this Agreement.




     (dd) “Purchasers” has the meaning specified in the second paragraph of this
Agreement.




     (ee) “Registrable Securities” means




	 	(i)	 	any Notes and the Guarantees until the earliest
of (i) their effective registration under the Securities Act and the
resale of all such Notes and Guarantees in accordance with the Shelf
Registration Statement, (ii) the date on which such Notes and
Guarantees are (A) sold pursuant to Rule 144 under circumstances in which any legend
borne by such Notes and Guarantees relating to restrictions










 



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	 	 	 	on transferability thereof, under the Securities Act or otherwise, is
removed or (B) the expiration of the holding period applicable to the
Notes under Rule 144(k) or (iii) the date on which such Notes have
been converted (and the related Guarantees have been terminated) or
otherwise cease to be outstanding;






	 	(ii)	 	any Shares issuable upon conversion of any
Notes constituting Registrable Securities, until the earliest of (i)
their effective registration under the Securities Act and the resale of
all such Shares in accordance with the Shelf Registration Statement,
(ii) the date on which such Shares are (A) freely transferable by
persons who are not affiliates of the Company without registration
under the Securities Act or (B) the expiration of the holding period
applicable to the Shares under Rule 144(k) or (iii) the date on which
such Shares cease to be outstanding.






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




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




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




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




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




     (kk) “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 a conversion
from Notes into common stock of the Company.




     (ll) “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.




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




     (nn) “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended,
or any successor thereto, and the rules, regulations and forms promulgated thereunder.




     (oo) “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,”









 



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“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 and the Guarantors agree to file under the Securities Act 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 and the Guarantors agree to use their
reasonable efforts to cause the Shelf Registration Statement to become effective within 180 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 or the Guarantors’ securityholders (other than Holders of Registrable
Securities) shall have the right to include any of the Company’s securities or the Guarantors’
securities in the Shelf Registration Statement.




     (b) The Company and the Guarantors further agree that they 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,
provided that the Company makes no representation with respect to any information provided by
Holders in their Notice and Questionnaires and the Company and the Guarantors agree 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 and the Guarantors shall use their 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). Holders
are required to complete and deliver the Notice and Questionnaire at least 10 days prior to
the effectiveness of the Shelf Registration Statement so that the Holder may be named as a
selling securityholder in the related prospectus at the time of effectiveness. From and after the
date the Shelf Registration Statement is declared or becomes effective, the Company and the









 



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Guarantors shall, as promptly as is practicable after the date a Notice and Questionnaire is
delivered, and in any event within fifteen (15) days after the date of receipt of such Notice and
Questionnaire, or if the use of the Prospectus has been suspended by the Company under Section
3(b) hereof at the time of receipt of the Notice and Questionnaire, fifteen (15) days after the
expiration of the period during which the use of the Prospectus is suspended:





     (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 and the Guarantors shall file a post-effective amendment
to the Shelf Registration Statement, use their reasonable efforts to cause such
post-effective amendment to be declared or to otherwise become effective under the
Securities Act as promptly as is practicable. Notwithstanding the foregoing, the Company
and the Guarantors shall not be required to file more than one post-effective amendment to
the Shelf Registration Statement or supplement to the related Prospectus during any thirty
(30) day period;




     (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 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 and the
Guarantors 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 or
otherwise became 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 jointly
and severally by the Company and the Guarantors to Holders in respect of the Notes as
follows:




     (i) if the Shelf Registration Statement is not declared effective and does not
otherwise become effective within 180 days following the Closing Date, then









 



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commencing on
the 181st 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 181st day and at a rate of 0.50%
per annum thereafter; or




     (ii) if the Company or the Guarantors have failed to perform their 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 and the Guarantors were 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 0.50% per annum thereafter;




     (iii) if the Shelf Registration Statement has been declared effective or has otherwise
become 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 0.50% per annum thereafter;
or




     (iv) 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 0.50% per annum thereafter;


provided, however, that the Additional Interest rate on the Notes shall not exceed in the aggregate
0.50% 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 0.50% per annum under the other, then
the Additional Interest rate shall be the higher rate of 0.50% 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 and the Guarantors of their 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.










 



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               Additional Interest on the Notes, if any, will be payable in cash on April 1 and October 1 of
each year (the “Additional Interest Payment Date”) to holders of record of outstanding
Notes that are Registrable Securities on each preceding March 15 and September 15; provided that
any Additional Interest accrued with respect to any Notes or portion thereof 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 conversion on the applicable conversion
date 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.




              (e) A Shelf Registration Statement pursuant to this Section 2 will not be deemed to have
become effective unless it has been declared effective by the SEC or is automatically effective
upon filing with the SEC as provided by Rule 462 under the Securities Act.



     3. Registration Procedures.



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





     (a) The Company and the Guarantors 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 the Guarantors 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 their 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 Placement Agents and any Notice
Holder who so requests 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 Placement Agents and any such Notice Holders reasonably
shall propose within three (3) Business Days of the delivery of such copies to the Placement
Agents and any such Notice Holders;









 



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     (iii) use their 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, including the receipt by the Company of
any notice of objection of the Commission to the use of a Shelf Registration Statement or
any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act,
(D) of the receipt by the Company or any Guarantor 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









 



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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 their 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 and the Guarantors 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, in the event of an objection of the SEC pursuant to Rule 401(g)(2), promptly
file an amendment to such Shelf Registration Statement on the proper form, 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 during normal business hours 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 provided, however, that any information that is designated by the Company, in
good faith, as confidential at the time of delivery of such information shall be kept
confidential by such persons except information that (i) was in the possession of such
persons prior to disclosure by the Company; (ii) is publicly disclosed other than by such
persons in violation of this Agreement; (iii) is obtained by such persons from a person
other than the









 



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Company who, to the knowledge of such person, is not bound by a
confidentiality agreement with the Company; (iv) the Company agrees may be disclosed; or (v)
is required to be disclosed in conformity with applicable securities laws or requested to be
disclosed under compulsion of law (whether by oral question, interrogatory, subpoena, civil
investigative demand or otherwise), by order or act of any court or governmental or
regulatory authority or body;




     (viii) if requested by Majority Holders of the Securities being sold in an
underwriting, their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use their reasonable best efforts to cause (i) their
counsel to deliver an opinion relating to the Shelf Registration Statement and the
Securities in customary form, (ii) their 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) their independent
registered public accounting firm to provide a standard form of auditor’s “cold comfort”
letters.




     (ix) if reasonably requested by the Placement Agents or any Notice Holder, promptly
incorporate in a prospectus supplement or post-effective amendment to the Shelf Registration
Statement such information as the Placement Agents 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 Placement Agents, 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
the Placement Agents 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









 



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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; provided
that nothing herein shall require the Company to deliver certificated Notes to any
beneficial holder of Notes except as required by the Indenture.




     (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 is 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 (or, to the extent permitted by law, made available) 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 or otherwise become 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 is 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









 



13



Period”), without the Company incurring any obligation to pay Additional Interest pursuant to
Section 2(d), shall not exceed 120 days in the aggregate in any 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 and the Guarantors shall, so long as any Registrable Securities remain
outstanding, cause each Additional Guarantor upon the creation or acquisition by the Company of
such Additional Guarantor, to (i) execute and deliver a supplemental indenture to the Indenture
and (ii) deliver to the Trustee an opinion of counsel to the effect that (A) the supplemental
indenture has been duly executed and authorized and (B) the supplemental indenture constitutes a
valid, binding and enforceable obligation of such Additional Guarantor, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof
is subject to general principles of equity.




     (e) 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 by executing and delivering a Notice and Questionnaire shall be deemed to have
agreed 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.




     (f) 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 (i) 40









 



14



days after the end of any
12-month period (or 60 days after the end of any 12-month period if such period is a fiscal year)
if the Company is at such time an “accelerated filer” and (ii) 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)
if the Company is not an “accelerated filer” 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.




     (g) The Company shall provide a CUSIP number for all Registrable Securities covered by the
Shelf Registration Statement not later than the initial 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.




     (h) 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.




     (i) 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.




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




     (k) The Company shall enter into such customary agreements and take all such other
necessary, reasonable and lawful actions in connection therewith (including those requested by
the Majority Holders of the Registrable Securities covered by the Shelf Registration Statement)
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









 



15

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 performance by the Company and the Guarantors 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 and 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 (not to exceed $250,000 in the aggregate) of not more
than 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 and each of the Guarantors shall jointly and severally indemnify and hold
harmless each Placement Agent and each Holder (including, without limitation, the Purchasers),
its affiliates, their respective officers, directors, employees, representatives and agents, and
each person, if any, who controls any such Placement Agent or Holder within the meaning of the
Securities Act or the Exchange Act (all such Placement
Agents, Holders and other persons being 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









 



16



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, (ii) any untrue statement or alleged untrue statement of a material fact contained in
any Prospectus, any Free Writing Prospectus or any “issuer information” (“Issuer
Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act
or (ii) any 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 and the Guarantors 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 or any Guarantor with Section 4. This indemnity
agreement shall be in addition to any liability that the Company or the Guarantor may otherwise
have.



          The Company and the Guarantors also shall jointly and severally indemnify and hold harmless as
provided in this Section 6(a) or contribute as provided in Section 7 hereof with respect to any
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, each Guarantor and their
respective affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company or any
Guarantor 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,









 



17



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









 



18



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, the Guarantors
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 and the Guarantors 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 and each of the Guarantors 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 and the Subsidiary Guarantor shall be









 



19

deemed to be
equal to the total net proceeds from the initial offering of the Notes (before deducting expenses).
The relative benefits received by the Holders shall be deemed to be equal to the value of having
the Securities registered under the Securities Act. Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover
page of the Prospectus forming a part of the Shelf Registration Statement which resulted in such
losses, claims, damages or liabilities. 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 and each of the
Guarantors or information supplied by the Company and each of the Guarantors 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. The Holders’
obligations to contribute pursuant to this Section 7 are several and not joint.




     8. Rule 144A and Rule 144.



     So long as any Registrable 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 Registrable
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 and the Guarantors covenant that
they will take such further action as any Holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell Registrable 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 Registrable Securities, the Company and the Guarantors 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









 



20



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.
Notwithstanding the foregoing, in no event shall this Section 9(a) be amended.




     (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:




     (i) if to the Company or the Guarantors, initially at the address set forth in the
Purchase Agreements;




     (ii) if to the Placement Agents, initially at their addresses set forth in the
Placement Agreement; and




     (iii) 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, the
Guarantors and their 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 each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York are authorized or obligated by law or executive
order to close, (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.









 



21



     (h) Remedies. In the event of a breach by the Company or any of the Guarantors or
by any Holder of any of their respective obligations under this Agreement, each Holder or the
Company or any Guarantor, 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 or any Guarantor of their 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, each Guarantor 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. Each of the Company and each Guarantor represents,
warrants and agrees that (i) it has not entered into, and 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 Registrable 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 the Guarantors nor any
of their respective security holders (other than the Holders of Registrable Securities in such
capacity) shall have the right to include any securities of the Company in any Shelf Registration
Statement other than Registrable 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









 



22



the Registrable Securities pursuant to the Purchase Agreements 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.









 



 


     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, the Guarantors and the Placement Agents in accordance with its terms.



	 	 	 	 	 
	 	Very truly yours,



EDDIE BAUER HOLDINGS, INC.

 	 
	 	By:  	/s/ David Taylor	 
	 	 	Name: David Taylor	 	 
	 	 	Title: Interim Chief Financial Officer	 	 
	 



	 	 	 	 	 
	 	EDDIE BAUER, INC.

 	 
	 	By:  	/s/ David Taylor	 
	 	 	Name: David Taylor	 	 
	 	 	Title: Interim Chief Financial Officer	 	 
	 



	 	 	 	 	 
	 	EDDIE BAUER FULFILLMENT

     SERVICES, INC.

 	 
	 	By:  	/s/ David Taylor	 
	 	 	Name: David Taylor	 	 
	 	 	Title: Interim Chief Financial Officer	 	 
	 



	 	 	 	 	 
	 	EDDIE BAUER DIVERSIFIED SALES,

     LLC

 	 
	 	By:  	/s/ David Taylor	 
	 	 	Name: David Taylor	 	 
	 	 	Title: Interim Chief Financial Officer	 	 
	 



	 	 	 	 	 
	 	EDDIE BAUER SERVICES, LLC

 	 
	 	By:  	/s/ David Taylor	 
	 	 	Name: David Taylor	 	 
	 	 	Title: Interim Chief Financial Officer	 	 









 



 

	 	 	 	 	 



	 	 	 	 	 
	 	EDDIE BAUER INTERNATIONAL

     DEVELOPMENT, LLC

 	 
	 	By:  	/s/
David Taylor 	 
	 	 	Name:  	David Taylor 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	EDDIE BAUER INFORMATION

      TECHNOLOGY, LLC

 	 
	 	By:  	/s/
David Taylor 	 
	 	 	Name:  	David Taylor 	 
	 	 	Title:  	Interim Chief Financial Officer 	 











 




 




	 	 	 	 	 



The foregoing Agreement is hereby confirmed

and accepted as of the date first above written.




J.P. MORGAN SECURITIES INC.




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 






GOLDMAN, SACHS & CO.




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

     (Goldman, Sachs & Co.)