exv4w1



 







 


Exhibit
4.1




EDDIE BAUER HOLDINGS, INC.,




THE SUBSIDIARY GUARANTORS PARTIES HERETO




AND




THE BANK OF NEW YORK,




AS TRUSTEE




5.25% Convertible Senior Notes due 2014




INDENTURE




Dated as of April 4, 2007











 







TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	ARTICLE 1	 	 	 	 
	 
	 	Definitions and Incorporation by Reference	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01 .
	 	Definitions.	 	 	1	 
	Section 1.02 .
	 	Incorporation by Reference of TIA	 	 	12	 
	Section 1.03 .
	 	Rules of Construction	 	 	13	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 2	 	 	 	 
	 
	 	The Securities	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01 .
	 	Title; Amount and Issue of Securities; Principal and Interest	 	 	13	 
	Section 2.02 .
	 	Form of Securities	 	 	14	 
	Section 2.03 .
	 	Legends	 	 	15	 
	Section 2.04 .
	 	Execution and Authentication	 	 	19	 
	Section 2.05 .
	 	Registrar and Paying Agent	 	 	20	 
	Section 2.06 .
	 	Paying Agent to Hold Money in Trust	 	 	20	 
	Section 2.07 .
	 	Holder Lists	 	 	21	 
	Section 2.08 .
	 	General Provisions Relating to Transfer and Exchange	 	 	21	 
	Section 2.09 .
	 	Book-Entry Provisions for the Global Securities	 	 	22	 
	Section 2.10 .
	 	Special Transfer Provisions	 	 	23	 
	Section 2.11 .
	 	Mutilated, Destroyed, Lost or Stolen Securities	 	 	25	 
	Section 2.12 .
	 	Outstanding Securities	 	 	25	 
	Section 2.13 .
	 	Temporary Securities	 	 	26	 
	Section 2.14 .
	 	Cancellation	 	 	26	 
	Section 2.15 .
	 	Payment of Interest; Defaulted Interest	 	 	27	 
	Section 2.16 .
	 	Computation of Interest	 	 	28	 
	Section 2.17 .
	 	CUSIP and ISIN Numbers	 	 	28	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 3	 	 	 	 
	 
	 	Covenants	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01 .
	 	Payment of Securities	 	 	28	 
	Section 3.02 .
	 	Financial Statements	 	 	29	 
	Section 3.03 .
	 	Future Subsidiary Guarantors	 	 	29	 
	Section 3.04 .
	 	Maintenance of Office or Agency	 	 	29	 
	Section 3.05 .
	 	Corporate Existence	 	 	30	 
	Section 3.06 .
	 	Payment of Taxes and Other Claims	 	 	30	 
	Section 3.07 .
	 	Compliance Certificate	 	 	30	 
	Section 3.08 .
	 	Further Instruments and Acts	 	 	30	 
	Section 3.09 .
	 	Statement by Officers as to Default	 	 	31	 
	Section 3.10 .
	 	Additional Interest	 	 	31	 




ii








 





	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 3.11 .
	 	Stay, Extension and Usury Laws	 	 	31	 
	Section 3.12 .
	 	No Amendment of Ownership Limitations	 	 	31	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 4	 	 	 	 
	 
	 	Successor Company	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01 .
	 	Consolidation, Merger and Sale of Assets of the Company	 	 	31	 
	Section 4.02 .
	 	Consolidation, Merger and Sale
of Assets of the Subsidiary Guarantors	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 5	 	 	 	 
	 
	 	Reserved	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 6	 	 	 	 
	 
	 	Defaults and Remedies	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01 .
	 	Events of Default	 	 	33	 
	Section 6.02 .
	 	Acceleration	 	 	35	 
	Section 6.03 .
	 	Other Remedies	 	 	35	 
	Section 6.04 .
	 	Waiver of Past Defaults	 	 	35	 
	Section 6.05 .
	 	Control by Majority	 	 	36	 
	Section 6.06 .
	 	Limitation on Suits	 	 	36	 
	Section 6.07 .
	 	Rights of Holders to Receive Payment	 	 	36	 
	Section 6.08 .
	 	Collection Suit by Trustee	 	 	37	 
	Section 6.09 .
	 	Trustee May File Proofs of Claim	 	 	37	 
	Section 6.10 .
	 	Priorities	 	 	37	 
	Section 6.11 .
	 	Restoration of Rights and Remedies	 	 	38	 
	Section 6.12 .
	 	Undertaking of Costs	 	 	38	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 7	 	 	 	 
	 
	 	Trustee	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01 .
	 	Duties of Trustee	 	 	38	 
	Section 7.02 .
	 	Rights of Trustee	 	 	39	 
	Section 7.03 .
	 	Individual Rights of Trustee	 	 	40	 
	Section 7.04 .
	 	Trustee’s Disclaimer	 	 	41	 
	Section 7.05 .
	 	Notice of Defaults	 	 	41	 
	Section 7.06 .
	 	Reports by Trustee to Holders	 	 	41	 
	Section 7.07 .
	 	Compensation and Indemnity	 	 	41	 
	Section 7.08 .
	 	Replacement of Trustee	 	 	42	 
	Section 7.09 .
	 	Successor Trustee by Merger	 	 	43	 
	Section 7.10 .
	 	Eligibility; Disqualification	 	 	43	 
	Section 7.11 .
	 	Preferential Collection of Claims Against Company	 	 	43	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 8	 	 	 	 
	 
	 	Discharge of Indenture	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.01 .
	 	Discharge of Liability on Securities	 	 	44	 




iii








 



 


	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 8.02 .
	 	Reinstatement	 	 	45	 
	Section 8.03 .
	 	Officers’ Certificate; Opinion of Counsel	 	 	45	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 9	 	 	 	 
	 
	 	Amendments	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.01 .
	 	Without Consent of Holders	 	 	45	 
	Section 9.02 .
	 	With Consent of Holders	 	 	46	 
	Section 9.03 .
	 	Compliance with TIA	 	 	47	 
	Section 9.04 .
	 	Revocation and Effect of Consents and Waivers	 	 	47	 
	Section 9.05 .
	 	Notation on or Exchange of Securities	 	 	48	 
	Section 9.06 .
	 	Trustee to Sign Amendments	 	 	48	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 10	 	 	 	 
	 
	 	Subsidiary Guarantees	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.01 .
	 	Subsidiary Guarantees	 	 	48	 
	Section 10.02 .
	 	Limitation on Liability; Release and Discharge; Termination	 	 	 	 
	 
	 	on Conversion	 	 	50	 
	Section 10.03 .
	 	Right of Contribution	 	 	51	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 11	 	 	 	 
	 
	 	Purchase at the Option of Holder Upon a Fundamental	 	 	 	 
	 
	 	Change	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.01 .
	 	Purchase at the Option of the Holder Upon a Fundamental Change	 	 	51	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 12	 	 	 	 
	 
	 	Conversion	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.01 .
	 	Conversion of Securities	 	 	56	 
	Section 12.02 .
	 	Adjustments to Conversion Rate	 	 	62	 
	Section 12.03 .
	 	Adjustment Upon Certain Fundamental Changes	 	 	69	 
	Section 12.04 .
	 	Effect of Reclassification, Consolidation, Merger or Sale	 	 	70	 
	Section 12.05 .
	 	Responsibility of Trustee	 	 	71	 
	Section 12.06 .
	 	Notice to Holders Prior to Certain Actions	 	 	72	 
	Section 12.07 .
	 	Stockholder Rights Plan	 	 	73	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE 13	 	 	 	 
	 
	 	Miscellaneous	 	 	 	 
	 
	 	 	 	 	 	 
	Section 13.01 .
	 	TIA Controls	 	 	73	 
	Section 13.02 .
	 	Notices	 	 	74	 
	Section 13.03 .
	 	Communication by Holders with other Holders	 	 	74	 
	Section 13.04 .
	 	Certificate and Opinion as to Conditions Precedent	 	 	74	 
	Section 13.05 .
	 	Statements Required in Certificate or Opinion	 	 	75	 
	Section 13.06 .
	 	When Securities Are Disregarded	 	 	75	 




iv








 



 


	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 13.07 .
	 	Rules by Trustee, Paying Agent and Registrar	 	 	75	 
	Section 13.08 .
	 	Legal Holidays	 	 	75	 
	Section 13.09 .
	 	Governing Law; Waiver of Jury Trial	 	 	76	 
	Section 13.10 .
	 	No Recourse Against Others	 	 	76	 
	Section 13.11 .
	 	Successors	 	 	76	 
	Section 13.12 .
	 	Multiple Originals	 	 	76	 
	Section 13.13 .
	 	Qualification of Indenture	 	 	76	 
	Section 13.14 .
	 	Table of Contents; Headings	 	 	76	 
	Section 13.15 .
	 	Severability Clause	 	 	76	 
	Section 13.16 .
	 	Calculations	 	 	76	 
	 
	 	 	 	 	 	 
	SCHEDULE A
	 	     Additional Shares	 	 	 	 
	EXHIBIT A
	 	     Form of the Security	 	 	 	 
	EXHIBIT B
	 	     Form of Supplemental Indenture	 	 	 	 




v








 



 


CROSS-REFERENCE TABLE




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TIA	 	 	 	 	 	 	 	Indenture	 	 	 	 
	Section	 	 	 	 	 	 	 	Section	 	 	 	 
	310(a)

	 	 	(1	)	 	 	 	 	7.10	 	 	 	 	 
	(a)

	 	 	(2	)	 	 	 	 	7.10	 	 	 	 	 
	(a)

	 	 	(3	)	 	 	 	 	N.A.	 	 	 	 	 
	(a)

	 	 	(4	)	 	 	 	 	N.A.	 	 	 	 	 
	(a)

	 	 	(5	)	 	 	 	 	7.10	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	7.08;	 	7.10	 	 	 
	(c)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	311(a)

	 	 	 	 	 	 	 	 	7.11	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	7.11	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	312(a)

	 	 	 	 	 	 	 	 	2.07	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	13.03	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	13.03	 	 	 	 	 
	313(a)

	 	 	 	 	 	 	 	 	7.06	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	7.06	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	7.06	 	 	 	 	 
	(d)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	314(a)

	 	 	 	 	 	 	 	 	3.02	 	(b);	 	3.07	 
	(b)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	13.04	 	 	 	 	 
	(d)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	(e)

	 	 	 	 	 	 	 	 	13.05	 	 	 	 	 
	(f)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	315(a)

	 	 	 	 	 	 	 	 	7.01	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	7.05	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	7.01	 	 	 	 	 
	(d)

	 	 	 	 	 	 	 	 	7.01	 	 	 	 	 
	(e)

	 	 	 	 	 	 	 	 	6.12	 	 	 	 	 
	316(a)

	 	 	 	 	 	 	 	 	6.04,	 	6.05,	 	13.06	 
	(b)

	 	 	 	 	 	 	 	 	6.07	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	6.05	 	 	 	 	 
	317(a)

	 	 	 	 	 	 	 	 	6.08,	 	6.09	 	 	 
	(b)

	 	 	 	 	 	 	 	 	2.06	 	 	 	 	 
	318(a)

	 	 	 	 	 	 	 	 	13.01	 	 	 	 	 
	(b)

	 	 	 	 	 	 	 	 	N.A.	 	 	 	 	 
	(c)

	 	 	 	 	 	 	 	 	13.01	 	 	 	 	 






     N.A. means Not Applicable.


Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this
Indenture.


vi








 



 


     INDENTURE dated as of April 4, 2007, among EDDIE BAUER HOLDINGS, INC., a Delaware corporation
(the “Company”), the Subsidiary Guarantors (as defined below) and THE BANK OF NEW YORK, as Trustee
(the “Trustee”).



     Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company’s 5.25% Convertible Senior Notes due 2014 (the
“Securities”) and the Guarantees thereof by certain of the Company’s subsidiaries.



ARTICLE 1

Definitions and Incorporation by Reference




     Section 1.01 . Definitions.



     “Additional Interest” means all amounts, if any, payable pursuant to Section 2 of the
Registration Rights Agreement.



     “Additional Shares” has the meaning specified in Section 12.03(a).



     “Adjustment Event” has the meaning specified in Section 12.02(m).



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling,
controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.



     “Agent Members” has the meaning specified in Section 2.09(a).



     “Authenticating Agent” has the meaning specified in Section 2.04.



     “Bankruptcy Law” means Title 11 of the United States Code or any similar federal or state law
for the relief of debtors.



     “Beneficial Owner” shall mean any person who is considered a beneficial owner of a security in
accordance with Rule 13d-3 promulgated by the Commission under the Exchange Act.



     “Bid Solicitation Agent” means the agency appointed by the Company to solicit bids for the
Trading Price of the Securities in accordance with Section 12.01(a)(ii). The Bid Solicitation
Agent appointed by the Company shall initially be the Trustee.



     “Board of Directors” means, as to any Person, the board of directors of such Person or any
duly authorized committee thereof, and, unless specified to the contrary, refers to the Company’s
Board of Directors.









 



2


     “Board Resolution” means a copy of a resolution certified by the Secretary or Assistant
Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be
in full force and effect on the date of such certification.



     “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which the banking institutions in New York City are authorized or obligated by law or executive
order to close or be closed.



     “Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible
into such equity.



     “Certificate of Destruction” has the meaning specified in Section 2.14.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Commission” has the meaning specified in Section 1.02.



     “Common Equity” of any Person means Capital Stock of such Person that is generally entitled to
(1) vote in the election of directors of such Person or (2) if such Person is not a corporation,
vote or otherwise participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.



     “Common Stock” means the Company’s Common Stock, par value $0.01 per share, or, subject to
Section 12.04, shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which are not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then so issuable on
exchange shall be substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.



     “Company” means Eddie Bauer Holdings, Inc. or its successors and assigns.



     “Company Notice” has the meaning specified in Section 11.02(a).



     “Company Notice Date” has the meaning specified in Section 11.02(a).



     “Company Order” has the meaning specified in Section 2.04.



     “Continuing Director” means a director who either was a member of the Board of Directors on
April 4, 2007, or who becomes a member of the Board of Directors subsequent to that date and whose
election, appointment or nomination for election by stockholders of the Company, is duly approved
by a majority of the continuing directors on the Board of Directors at









 



3

the time of such approval, either by a specific vote or by approval of the proxy statement
issued by the Company on behalf of the entire Board of Directors in which such individual is named
as nominee for director.




     “Conversion Agent” means the office or agency appointed by the Company where Securities may be
presented for conversion. The Conversion Agent appointed by the Company shall initially be the
Trustee.



     “Conversion Date” has the meaning specified in Section 12.01(b).



     “Conversion Notice” has the meaning specified in Section 12.01(b).



     “Conversion Obligation” has the meaning specified in Section 12.01(a).



     “Conversion Price” means, in respect of each $1,000 principal amount of Securities, $1,000
divided by the Conversion Rate, as may be adjusted from time to time as set forth herein.



     “Conversion Rate” means, in respect of each $1,000 principal amount of Securities, initially
73.8007 shares of Common Stock, subject to adjustments as set forth herein.



     “Conversion Retraction Period” has the meaning specified in Section 12.01(c).



     “Conversion Settlement Distribution” has the meaning specified in Section 12.01(c).



     “Credit Facilities” means (i) the Term Loan Agreement, dated as of June 21, 2005, among the
Company, Eddie Bauer, Inc., certain other subsidiaries parties thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent, and the lenders parties thereto from time to time, (ii) the Loan and
Security Agreement, dated as of June 21, 2005, among the Company, Eddie Bauer, Inc., certain other
subsidiaries parties thereto, the financial institutions named therein, and Bank of America, N.A.,
as agent, Banc of America Securities LLC, as sole lead arranger and book manager, Fleet Retail
Group, Inc. and The CIT Group/Business Credit, Inc., as co-syndication agents, and General Electric
Capital Corporation, as documentation agent, (iii) any other credit agreement entered into by the
Company or any of its Domestic Subsidiaries and (iv) any amendment, modification, renewal,
extension replacement, refunding or refinancing of such Agreements in whole or in part from time to
time (and whether or not with the original administrative agent and lenders or another
administrative agent or agents or other lenders and whether provided under the original Agreements
or any other credit or other agreements or indentures).



     “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.



     “Daily Conversion Value” means, for each of the 25 consecutive Trading Days during the
Observation Period, one-twenty-fifth (1/25) of the product of (1) the applicable Conversion Rate
and (2) the Daily VWAP of the Common Stock on such day. Following the occurrence of a
Reorganization Event, to the extent appropriate as determined by the Board of Directors acting in









 



4



good faith, “Reference Property” will be substituted for “Common Stock” for the purposes of
this definition.



     “Daily Settlement Amount,” for each of the 25 Trading Days during the Observation Period,
shall consist of:




     (i) cash equal to the lesser of $40 and the Daily Conversion Value relating to such
day; and




     (ii) to the extent the Daily Conversion Value exceeds $40, a number of shares equal
to (A) the difference between the Daily Conversion Value and $40, divided by (B) the
Daily VWAP of the Common Stock (or the consideration into which the Common Stock has been
exchanged in connection with certain corporate transactions) on such day.


Following the occurrence of a Reorganization Event, to the extent appropriate as determined by the
Board of Directors acting in good faith, “Reference Property” will be substituted for “Common
Stock” for the purposes of this definition




     “Daily VWAP” of the Common Stock means, for each of the 25 consecutive Trading Days during the
Observation Period, the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg Financial Markets page “EBHI<equity> AQR”, or any successor
page, in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day
(or if such volume-weighted average price is unavailable, the market value of one share of Common
Stock on such Trading Day as determined using a volume-weighted average method by a nationally
recognized independent investment banking firm selected by the Company for this purpose).
Following the occurrence of a Reorganization Event, to the extent appropriate as determined by the
Board of Directors acting in good faith, “Reference Property” will be substituted for “Common
Stock” for the purposes of this definition and the Bloomberg Financial Markets page reference will
be to the appropriate page displaying the volume weighted average price for the Reference Property.



     “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.



     “Defaulted Interest” has the meaning specified in Section 2.15.



     “Definitive Securities” mean certificated Securities that are not Global Securities.



     “Determination Date” has the meaning specified in Section 12.02(m).



     “Domestic Subsidiary” means any Subsidiary of the Company organized under the laws of any
jurisdiction within the United States.









 



5


     “DTC” means The Depository Trust Company, its nominees and their respective successors and
assigns, or such other depository institution hereinafter appointed by the Company pursuant to the
terms of this Indenture.



     “Effective Date” has the meaning specified in Section 12.03(b).



     “Event of Default” has the meaning specified in Section 6.01.



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



     “Ex-Dividend Date” means, in respect of a dividend or distribution to holders of Common Stock,
the first date upon which a sale of the Common Stock does not automatically transfer the right to
receive the relevant dividend or distribution from the seller of the Common Stock to its buyer.



     “Expiration Time” has the meaning specified in Section 12.02(e).



     “Fair Market Value” means the amount that a willing buyer would pay a willing seller in an
arm’s length transaction.



     A “Fundamental Change” shall be deemed to have occurred at such time after the original
issuance of the Securities as any of the following occurs:




	 	(1)	 	any “person” or “group” within the meaning of Section 13(d) of the Exchange
Act, other than the Company, any Subsidiary of the Company or any employee benefit plan
of the Company or any such Subsidiary, files a Schedule TO or any other schedule, form
or report under the Exchange Act disclosing that such person or group has become the
Beneficial Owner of Common Equity of the Company representing more than 50% of the
ordinary voting power of the Company’s Common Equity;
	 
	 	(2)	 	consummation of any share exchange, consolidation or merger of the Company
pursuant to which the Common Stock will be converted into cash, securities or other
property or any conveyance, transfer, sale, lease or disposition (in one transaction or
a series of transactions) of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, taken as a whole, to any Person other than one of the
Company’s Subsidiaries; provided, however, that a transaction where the holders of more
than 50% of the Company’s Common Equity immediately prior to such transaction own,
directly or indirectly, more than 50% of the ordinary voting power of Common Equity of
the continuing or surviving corporation or transferee or the parent thereof immediately
after such event shall not be a Fundamental Change;
	 
	 	(3)	 	Continuing Directors cease to constitute at least a majority of the Board of
Directors;










 



6


	 	(4)	 	the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
	 
	 	(5)	 	the Common Stock (or other common stock into which the Securities are then
convertible) ceases to be listed on a national securities exchange or quoted on the
NASDAQ Global Market or an established automated over-the-counter trading market in the
United States;




provided, however, that a Fundamental Change shall be deemed not to have occurred if at least 90%
of the consideration received or to be received by the holders of the Common Stock, excluding cash
payments for fractional shares, in connection with the transaction or transactions constituting the
Fundamental Change consists of shares of common stock traded on a U.S. national securities exchange
or quoted on the NASDAQ Global Market or which shall be so traded or quoted when issued or
exchanged in connection with such Fundamental Change (such securities being referred to as
“Publicly Traded Securities”) and as a result of such transaction or transactions the Securities
become convertible into such Publicly Traded Securities pursuant to the terms of this Indenture.




     “Fundamental Change Purchase Date” has the meaning specified in Section 11.01.



     “Fundamental Change Purchase Notice” has the meaning specified in Section 11.01(b).



     “Fundamental Change Purchase Price” has the meaning specified in Section 11.01.



     “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the (i) Public Company Accounting Oversight Board, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) in such other statements by such
other entity as may be approved by a significant segment of the accounting profession as in effect
from time to time and (iv) the rules and regulations of the Commission governing the inclusion of
financial statements in period reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the Commission.



     “Global Securities” means certificated Securities in global form, without interest coupons,
substantially in the form of Exhibit A hereto and registered in the name of DTC or a nominee of
DTC.



     “Global Security Legend” has the meaning specified in Section 2.03(iv).



     “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any debt of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:




	 	(1)	 	to purchase or pay (or advance or supply funds for the purchase or payment of)
such debt of such other Person (whether arising by virtue of partnership










 



7


	 	 	 	arrangements, or by agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement conditions or
otherwise); or
	 
	 	(2)	 	entered into for purposes of assuring in any other manner the obligee of such
debt of the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part);




provided, however, that the term “Guarantee” will not include endorsements for collection or
deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding
meaning.




     “Guaranteed Obligations” has the meaning specified in Section 10.01.



     “Holder” means the Person in whose name a Security is registered in the Securities Register.



     “Indenture” means this Indenture, as amended or supplemented from time to time.



     “Issue Date” means April 4, 2007.



     “Last Reported Sale Price” of the Common Stock on any date means:



     (a) the closing sale price per share (or if no closing sale price is reported, the average of
the bid and ask prices or, if more than one in either case, the average of the average bid and the
average asked prices) on the NASDAQ Global Market on that date (or, if no closing sale price is
reported, the last reported sale price);



     (b) if the Common Stock is not listed for trading on the NASDAQ Global Market, the closing
sale price (or, if no closing sale price is reported, the last reported sale price) as reported on
that date in composite transactions for the principal U.S. national or regional securities exchange
on which the Common Stock is listed;



     (c) if the Common Stock is not so listed on a U.S. national or regional securities exchange,
the last sale price of the Common Stock on that date as reported by the NASDAQ Global Market (to
the extent that the NASDAQ Global Market is not at such time a U.S. national or regional securities
exchange);



     (d) if the Common Stock is not so reported by the NASDAQ Global Market (to the extent that the
NASDAQ Global Market is not at such time a U.S. national or regional securities exchange), the last
quoted bid price for the Common Stock on that date in the over-the-counter market as reported by
Pink Sheets LLC or similar organization; or



     (e) if the Common Stock is not so quoted by Pink Sheets LLC or similar organization, the
average of the mid-point of the last bid and ask prices for the Common Stock









 



8



on that date from a nationally recognized independent investment banking firm selected by the
Company for this purpose.



     For the purposes of Section 12.02(c), the Last Reported Sale Price of the Capital Stock or
similar equity interest distributed to holders of Common Stock shall have the same meaning as set
forth above, substituting the Capital Stock or similar equity interest distributed to holders of
Common Stock for the “Common Stock” referenced in clauses (a) though (e) above. Following the
occurrence of a Reorganization Event, to the extent appropriate as determined by the Board of
Directors acting in good faith, “Reference Property” will be substituted for “Common Stock” for the
purposes of this definition and the Bloomberg Financial Markets page reference will be to the
appropriate page displaying the volume weighted average price for the Reference Property.



     “Legal Holiday” has the meaning specified in Section 13.08.



     “Market Disruption Event” means:



     (a) for the purposes of Section 12.01(a), if the Common Stock is listed on the NASDAQ Global
Market, NYSE or another U.S. national or regional securities exchange, or is quoted on the NASDAQ
Global Market (to the extent that the NASDAQ Global Market is not at such time a U.S. national or
regional exchange), the occurrence or existence during the one half-hour period ending on the
scheduled close of trading on any Trading Day of any material suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the stock exchange or
otherwise) in the Common Stock or in any options, contracts or future contracts relating to the
Common Stock; and



     (b) for every other purpose (i) failure by the primary U.S. national securities exchange or
market on which the Common Stock is listed or admitted to trading to open for trading during its
regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time,
on any Trading Day for the Common Stock for an aggregate one half-hour period of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits permitted by the
stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts
relating to the Common Stock.



     “Measurement Period” has the meaning specified in Section 12.01(a)(ii).



     “NYSE” means the New York Stock Exchange, Inc.



     “Observation Period” means, with respect to a conversion of any Security, the 25 consecutive
Trading-Day period beginning on and including the second Trading Day immediately following the
Conversion Date for such Security.



     “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, any Vice President, the Treasurer or the
Secretary of the Company, and any individuals serving in such positions on an interim basis. The
term Officer of any Subsidiary Guarantor has a correlative meaning.









 



9


     “Officers’ Certificate” means a certificate signed by two Officers of the Company or the
Subsidiary Guarantors, as applicable.



     “Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable
to the Trustee, who may be counsel to the Company or a Subsidiary Guarantor, which opinion may be
subject to customary assumptions and qualifications. The counsel may be an employee of or counsel
to the Company or the Trustee.



     “Paying Agent” has the meaning specified in Section 2.05.



     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company, government or
any agency or political subdivision hereof or any other entity.



     “Placement Agents” means J.P. Morgan Securities Inc. and Goldman, Sachs & Co.



     “Preferred Stock”, as applied to the Capital Stock of any corporation, means Capital Stock of
any class or classes (however designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such corporation.



     “Private Placement Memorandum” means the private placement memorandum, dated March 29, 2007,
relating to the offering by the Company of the Securities.



     “Publicly Traded Securities” has the meaning specified in the definition of “Fundamental
Change” in this Section 1.01.



     “Purchase Agreements” means the Purchase Agreements dated March 29, 2007 between the Company
and the investors parties thereto relating to the sale of the Securities.



     “QIB” means any “qualified institutional buyer” as such term is defined in Rule 144A.



     “Record Date” means, in respect of a dividend or distribution to holders of Common Stock, the
date fixed for determination of holders of Common Stock entitled to receive such dividend or
distribution.



     “Reference Property” has the meaning specified in Section 12.04(a).



     “Registrar” has the meaning specified in Section 2.05.



     “Registration Rights Agreement” means the Registration Rights Agreement dated the Issue Date
among the Company, the Subsidiary Guarantors and the Placement Agents.



     “Regular Record Date” for the payment of interest on the Securities (including Additional
Interest, if any), means the March 15 (whether or not a Business Day) immediately









 



10



preceding an interest payment date on April 1 and the September 15 (whether or not a Business
Day) immediately preceding an interest payment date on October 1.



     “Reorganization Event” has the meaning specified in Section 12.04(a).



     “Restricted Securities” has the meaning specified in Section 2.03.



     “Restricted Securities Legend” has the meaning specified in Section 2.03.



     “Restriction Release Date” has the meaning set forth in Article V of the Company’s certificate
of incorporation as of the Issue Date.



     “Rule 144A” means Rule 144A under the Securities Act.



     “Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the primary U.S.
national securities exchange or market on which the Common Stock is listed or admitted for trading.



     “Securities” has the meaning ascribed to it in the second introductory paragraph of this
Indenture.



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



     “Securities Custodian” means the custodian with respect to a Global Security (as appointed by
DTC), or any successor Person thereto and shall initially be the Trustee.



     “Securities Register” has the meaning specified in Section 2.05.



     “Settlement Amount” has the meaning specified in Section 12.01(c).



     “Settlement Notice Period” has the meaning specified in Section 12.01(c).



     “Shelf Registration Statement” shall have the meaning contemplated by and in accordance with
the terms of the Registration Rights Agreement.



     “Significant Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the
Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.



     “Special Interest Payment Date” has the meaning specified in Section 2.15(a).



     “Special Record Date” has the meaning specified in Section 2.15(a).



     “Spin-Off” has the meaning specified in Section 12.02(c).









 



11


     “Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision, but shall not include any contingent obligations to
repay, redeem or repurchase any such principal prior to the date originally scheduled for the
payment thereof.



     “Stock Price” means, for purposes of Section 12.03, the price per share of Common Stock paid
in connection with a Fundamental Change pursuant to clause (1) or (2) of the definition of
“Fundamental Change”, which shall be equal to (i) if such Fundamental Change is a transaction
pursuant to clause (2) of the definition thereof, and holders of Common Stock receive only cash in
such transaction, the cash amount paid per share of Common Stock and (ii) in all other cases, the
average of the Last Reported Sale Prices of the Common Stock over the five Trading Day period
ending on the Trading Day preceding the Effective Date of such Fundamental Change.



     “Subsidiary” of the Company means (i) a corporation a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by
one or more Subsidiaries of the Company or (ii) any other Person (other than a corporation) in
which the Company, one or more Subsidiaries of the Company or the Company and one or more
Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has
greater than a 50% ownership interest.



     “Subsidiary Guarantee” means, individually, any Guarantee of the Guaranteed Obligations by a
Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto,
and, collectively, all such Guarantees.



     “Subsidiary Guarantors” means all existing and future Subsidiaries of the Company that from
time to time are parties to any of the Credit Facilities, whether as a borrower, co-borrower or
guarantor.



     “Successor Company” has the meaning specified in Section 4.01(a).



     “TIA” means the Trust Indenture Act of 1939, as in effect on the Issue Date, except as
provided in Section 9.03.



     “Trading Day” means:



     (a) for the purposes of Section 12.01(a), a day during which (i) trading in the Common Stock
generally occurs on the primary U.S. national securities exchange or market on which the Common
Stock is listed or admitted for trading, (ii) there is no Market Disruption Event and (iii) a Last
Reported Sale Price for the Common Stock is available on the primary U.S. national securities
exchange or market on which the Common Stock of the Company is listed or admitted for trading; and









 



12


     (b) for every other purpose, a day during which (i) trading in the Common Stock generally
occurs on the primary U.S. national securities exchange or market on which the Common Stock is
listed or admitted for trading and (ii) there is no Market Disruption Event.



     “Trading Price” of the Securities on any date of determination means the average of the
secondary market bid quotations obtained by the Bid Solicitation Agent for $5,000,000 aggregate
principal amount of the Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities dealers selected by the
Company; provided that, if only two such bids can reasonably be obtained, then the average of the
two bids shall be used, and if only one such bid can reasonably be obtained, that one bid shall be
used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $5,000,000
aggregate principal amount of the Securities, then, for purposes of Section 12.01(a)(ii) only, the
Trading Price per $1,000 principal amount of Securities will be deemed to be less than 98% of the
product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.



     “Trust Officer” means, when used with respect to the Trustee, the officer within the corporate
trust department of the Trustee having direct responsibility for the administration of this
Indenture.



     “Trustee” means the party named as such in this Indenture until a successor replaces it and,
thereafter, means the successor.



     “UCC” means the Uniform Commercial Code as in effect in the State of New York.



     Section 1.02 . Incorporation by Reference of TIA. This Indenture is subject to the mandatory
provisions of the TIA which are incorporated by reference in and made a part of this Indenture.
The following TIA terms have the following meanings:



     “Commission” means the Securities and Exchange Commission.



     “indenture securities” means the Securities.



     “indenture security holder” means a Holder.



     “indenture to be qualified” means this Indenture.



     “indenture trustee” or “institutional trustee” means the Trustee.



     “obligor” on the indenture securities means the Company and any other obligor on the
Securities.



     All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by
reference to another statute or defined by Commission rule have the meanings assigned to them by
such definitions.









 



13


     Section 1.03 . Rules of Construction. Unless the context otherwise requires:



     (a) a term has the meaning assigned to it;




     (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP;



     (c) “or” is not exclusive;




     (d) “including” means including without limitation;




     (e) words in the singular include the plural and words in the plural include the singular;




(f) the principal amount of any non-interest bearing or other discount security at any date
shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP; and



(g) the principal amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such Preferred Stock and (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock.



ARTICLE 2

The Securities




     Section 2.01 . Title; Amount and Issue of Securities; Principal and Interest. The Securities
shall be known and designated as the “5.25% Convertible Senior Notes due 2014” of the Company. The
aggregate principal amount of Securities which may be authenticated and delivered under this
Indenture is limited to $75,000,000, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Securities pursuant to
Section 2.03, 2.04, 2.08 2.09, 2.10, 2.11, 2.13, 9.05, or 12.01. The Securities shall be issuable
in denominations of $1,000 or multiples thereof.



     (a) The Securities shall mature on April 1, 2014, unless earlier converted or repurchased in
accordance with the provisions hereof.



     (b) Interest on the Securities shall accrue from and including the date specified in the
Securities until the principal thereof is paid or made available for payment. Interest shall be
payable semiannually in arrears on April 1 and October 1 in each year, commencing October 1, 2007.



     (c) The Securities shall be jointly and severally Guaranteed by the Subsidiary Guarantors as
provided in Article 10.



     (d) A Holder of any Security at 5:00 p.m., New York City time, on a Regular Record Date shall
be entitled to receive interest (including any Additional Interest), on such Security on the
corresponding interest payment date, notwithstanding the conversion of such Securities at









 



14



any time
after 5:00 p.m., New York City time, on such Regular Record Date. Securities surrendered for
conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to
9:00 a.m., New York City time, on the corresponding interest payment date must be accompanied by
payment of an amount equal to the interest (including any Additional Interest) that the Holder is
to receive on the Securities. Notwithstanding the foregoing, no such payment of interest
(including any Additional Interest) need be made by any converting Holder (i) if the Company has
specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to
the third Trading Day after the corresponding interest payment date, or (ii) to the extent of any
overdue interest (including any Additional Interest) existing at the time of conversion of such
Security. Except as described above, no interest or Additional Interest on converted Securities
will be payable by the Company on any interest payment date subsequent to the date of conversion,
and delivery of the cash and/or shares of Common Stock pursuant to Article 12 hereunder, together
with any cash payment for any fractional share, upon conversion will be deemed to satisfy in full
the Company’s obligation to pay the principal amount of the Securities and accrued and unpaid
interest and Additional Interest, if any, to, but not including, the related Conversion Date (but
excluding overdue interest, if any).



     (e) Principal of and interest (including Additional Interest, if any) on Global Securities
shall be payable to DTC in immediately available funds.



     (f) Principal on Definitive Securities shall be payable at the office or agency of the Company
maintained for such purpose, which initially shall be the corporate trust office of the Trustee at
its agency in New York, New York. Interest (including Additional Interest, if any) on Definitive
Securities will be payable (i) to Holders having an aggregate principal amount of $5,000,000 or
less, by check mailed to the Holders of these Securities and (ii) to Holders having an aggregate
principal amount of more than $5,000,000, either by check mailed to each Holder or, upon
application by a Holder to the Registrar not later than the relevant Regular Record Date, by wire
transfer in immediately available funds to such Holder’s account within the United States, which
application shall remain in effect until the Holder notifies, in writing, the Registrar to the
contrary.



     Section 2.02 . Form of Securities. Except as otherwise provided pursuant to this Section 2.02, the
Securities are issuable in fully registered form without coupons in substantially the form of
Exhibit A hereto, with such applicable legends as are provided for in Section 2.03. The Securities
are not issuable in bearer form. The terms and provisions contained in the form of Security shall
constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable,
the Company, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. Any of the Securities may have such
letters, numbers or other marks of identification and such notations, legends and endorsements as
the officers executing the same may approve (execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Indenture, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange or









 



15



automated quotation system on which the Securities may be
listed or designated for issuance, or to conform to usage.



     The Securities shall be issued initially in the form of one or more permanent Global
Securities, with the applicable legends as provided in Section 2.03. Each Global Security shall be
duly executed by the Company and authenticated and delivered by the Trustee, and shall be
registered in the name of DTC or its nominee and retained by the Trustee, as Securities Custodian,
at its corporate trust office, for credit to the accounts of the Agent Members holding the
Securities evidenced thereby. The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of the Trustee, as
Securities Custodian, and of DTC or its nominee, as hereinafter provided.



     Section 2.03 . Legends. Each Security issued hereunder shall, upon issuance, bear the legend set
forth in Section 2.03(i), and each Common Stock certificate representing shares of the Common Stock
issued upon conversion of any Security issued hereunder, shall, upon issuance, unless as otherwise
set forth below, bear the legend set forth in Section 2.03(ii) (each such legend, a “Restricted
Securities Legend”), and such legend shall not be removed except as provided in Section 2.03(iii).
Each Security that bears or is required to bear the Restricted Securities Legend set forth in
Section 2.03(i) (together with each Common Stock certificate representing shares of the Common
Stock issued upon conversion of such Security that bears or is required to bear the Restricted
Securities Legend set forth in Section 2.03(ii), collectively, the “Restricted Securities”) shall
be subject to the restrictions on transfer set forth in this Section 2.03 (including the Restricted
Securities Legend set forth below), and the Holder of each such Restricted Security, by such
Holder’s acceptance thereof, shall be deemed to have agreed to be bound by all such restrictions on
transfer.



     As used in Section 2.03, the term “transfer” encompasses any sale, pledge, transfer or other
disposition whatsoever of any Restricted Security.




     (i) Restricted Securities Legend for Securities. Except as provided in Section
2.03(iii), any certificate evidencing such Security (and all Securities issued in
exchange therefor or substitution thereof, other than stock
certificates representing shares of the Common Stock, if any, issued upon conversion thereof which shall bear the
legend set forth in Section 2.03(ii), if applicable) shall bear a Restricted Securities
Legend in substantially the following form:




“THIS SECURITY AND THE RELATED GUARANTEES AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE RELATED GUARANTEES, THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE









 



16



ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION.




THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES THEREOF UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION) (THE “RESALE RESTRICTION PERIOD”), ONLY (A) TO EDDIE BAUER
HOLDINGS, INC. (THE “COMPANY”), OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING UNDER
RULE 144, IF AVAILABLE, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL. EACH PURCHASER ACKNOWLEDGES
THAT PRIOR TO THE EXPIRATION OF THE RESALE RESTRICTION PERIOD, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF
THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER EXPIRATION OF THE
RESALE RESTRICTION PERIOD.”




     (ii) Restricted Securities Legend for the Common Stock Issued Upon Conversion of the
Securities. Each stock certificate representing Common Stock issued upon conversion of
Securities bearing a Restricted Securities Legend will, subject to the availability of a
Shelf Registration Statement and registration thereunder as set forth in the Registration
Rights Agreement, bear the following legend:




“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, NEITHER THIS









 



17



SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.




THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES THEREOF UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION) (THE “RESALE RESTRICTION PERIOD”), ONLY (A) TO EDDIE BAUER
HOLDINGS, INC. (THE “COMPANY”), OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR
(C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, INCLUDING UNDER RULE 144, IF AVAILABLE, SUBJECT IN EACH OF THE
FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR
THE PROPERTY OF SUCH INVESTOR ACCOUNT OR ACCOUNTS BE AT ALL TIMES WITHIN ITS OR
THEIR CONTROL. EACH PURCHASER ACKNOWLEDGES THAT PRIOR TO THE EXPIRATION OF THE
RESALE RESTRICTION PERIOD, THE COMPANY AND THE TRANSFER AGENT RESERVE THE RIGHT TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER EXPIRATION OF THE RESALE RESTRICTION PERIOD.”




     (iii) Removal of the Restricted Securities Legends. The Restricted Securities
Legend may be removed from any Security or any Common Stock
certificate representing shares of the Common Stock issued upon conversion of any Security if there is delivered
to the Company such satisfactory evidence, which may include an opinion of independent
counsel, as may be reasonably required by the Company, that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that transfers of such
Security or shares of the Common Stock issued upon
conversion of Securities, as the case may be, will not violate the registration
requirements of the Securities Act or the registration or qualification requirements
under any state securities laws. Upon provision of such satisfactory evidence, at the
written direction of the Company, (x) in the case of a Security, the Trustee shall
authenticate and deliver in exchange for such Security another Security or Securities
having an equal aggregate principal amount that does not bear such legend or (y) in the
case of a Common Stock certificate representing shares of the Common Stock, the transfer
agent for the Common Stock shall counter-sign and deliver in exchange for the Common
Stock certificate or certificates representing such shares of Common Stock









 



18



bearing such
legend, one or more new Common Stock certificates representing a like
aggregate number of shares of Common Stock that do not bear such legend. If the Restricted Securities Legend
has been removed from a Security or Common Stock certificates representing shares of the
Common Stock issued upon conversion of any Security as provided above, no other Security
issued in exchange for all or any part of such Security, or no other Common Stock
certificates issued in exchange for such Common Stock, shall bear such legend, unless the
Company has reasonable cause to believe that such other Security is a “restricted
security” (or such shares of Common Stock are “restricted securities”) within the meaning
of Rule 144 and instructs the Trustee or the transfer agent for the Common Stock, as
applicable, in writing to cause a Restricted Securities Legend to appear thereon.



     Any Security (or Security issued in exchange or substitution therefor) as to which the
conditions for removal of the Restricted Securities Legend set forth in such Restricted Securities
Legend or Section 2.03(i) have been satisfied may, upon surrender of such Security for exchange to
the Registrar in accordance with the provisions of Section 2.08, be exchanged for a new Security or
Securities, of like tenor and aggregate principal amount, which shall not bear the Restricted
Securities Legend required by Section 2.03(i).



     Any Common Stock certificate representing shares of Common Stock issued upon conversion of any
Security as to which the conditions for removal of the Restricted Securities Legend set forth in
the Restricted Securities Legend or Section 2.03(ii) have been satisfied may, upon surrender of the
Common Stock certificates representing such shares of Common Stock for exchange in accordance with
the procedures of the transfer agent for the Common Stock, be exchanged for a new Common Stock
certificate or certificates representing a like aggregate number of shares of Common Stock, which
shall not bear the Restricted Securities Legend.




     (iv) Global Security Legend. Each Global Security shall also bear the following
legend (the “Global Security Legend”) on the face thereof:




“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.




TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS
OF









 



19



THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO IN THE TERMS OF SECURITIES ATTACHED HERETO.”



     Section 2.04 . Execution and Authentication. One Officer shall sign the Securities for the
Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer
holds that office at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.



     A Security shall not be valid until an authorized signatory of the Trustee manually
authenticates the Security. Upon the written order of the Company signed by an Officer of the
Company (a “Company Order”), the Trustee shall authenticate a Security executed by the Company.
The signature of the Trustee on a Security shall be conclusive evidence that such Security has been
duly and validly authenticated and issued under this Indenture. A Security shall be dated the date
of its authentication.



     The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the
Company to authenticate the Securities. Any such instrument shall be evidenced by an instrument
signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the Company.
Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by the Authenticating Agent. An Authenticating Agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and demands.



     In case the Company or any Subsidiary Guarantor, pursuant to Article 4, shall be consolidated
or merged with or into any other Person or shall convey, transfer, sell, lease or otherwise dispose
of its properties and assets substantially as an entirety to any Person, and the successor Person
resulting from such consolidation, or surviving such merger, or into which the Company or any
Subsidiary Guarantor shall have been merged, or the Person which shall have received a conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental
hereto with the Trustee pursuant to Article 4, any of the Securities authenticated or delivered
prior to such consolidation, merger, conveyance, transfer, sale, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for other Securities
executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like tenor as the
Securities surrendered for such exchange and of like principal amount; and the Trustee, upon
Company Order of the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be authenticated and
delivered in any new name of a successor Person pursuant to this Section 2.04 in exchange or
substitution for or upon registration of transfer of any Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the exchange of all Securities
at the time outstanding for Securities authenticated and delivered in such new name.












 





 20 





     Section 2.05 . Registrar and Paying Agent. The Company shall maintain, or cause to be maintained,
an office or agency where Securities may be presented for registration of transfer or for exchange
(the “Registrar”) and an office or agency where Securities may be presented for payment (the
“Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and
exchange (the “Securities Register”). The Company may have one or more co-registrars and one or
more additional paying agents. The term “Paying Agent” includes any additional paying agent and
the term “Registrar” includes any co-registrar.



     The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent
or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such agent. The Company
shall notify the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any of its wholly owned
Domestic Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.



     The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities.
The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or
Paying Agent and to the Trustee; provided, however, that no such removal shall become effective
until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement
entered into by the Company and such successor Registrar or successor Paying Agent, as the case may
be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i)
above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and
the Trustee.



     Section 2.06 . Paying Agent to Hold Money in Trust. By no later than 11:00 a.m., New York City
time, on the date on which any principal of or interest (including any Additional Interest) on any
Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in
immediately available funds to pay such principal or interest (including any Additional Interest),
when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing
that such Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by such Paying Agent for the
payment of principal of or interest (including any Additional Interest) on the Securities and shall
notify the Trustee in writing of any default by the Company in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to account for any funds
disbursed by such Paying Agent. Upon complying with this Section 2.06, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money delivered to the
Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.









 



21


     Any money deposited with the Trustee or any Paying Agent, or then held by the Company or the
Subsidiary Guarantors, in trust for the payment of the principal of or interest (including
Additional Interest, if any) on the Securities and remaining unclaimed for two years after such
principal or interest (including Additional Interest, if any) has become due and payable shall be
paid to the Company or Subsidiary Guarantors on request, or (if then held by the Company or a
Subsidiary Guarantor) shall be discharged from such trust; and the holder of Securities shall
thereafter, as an unsecured general creditor, look only to the Company and the Subsidiary
Guarantors, as the case may be, for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company or Subsidiary
Guarantors, as the case may be, as trustee thereof, shall thereupon cease, provided, however, that
the Trustee or such Paying Agent, before being required to make any such repayment, may at the
expense of the Company or Subsidiary Guarantors, as the case may be, cause to be published once, in
any newspaper of general circulation in the borough of Manhattan, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then remaining will be
repaid to the Company or Subsidiary Guarantors, as the case may be.



     Section 2.07 . Holder Lists. The Registrar shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of Holders and shall
otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, or to the extent
otherwise required under the TIA, the Company, on its own behalf and on behalf of each of the
Subsidiary Guarantors, shall furnish or cause the Registrar to furnish to the Trustee, in writing
at least five Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders and the Company shall otherwise comply
with TIA § 312(a).



     Section 2.08 . General Provisions Relating to Transfer and Exchange. The Securities are issuable
only in registered form. A Holder may transfer a Security only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying with the terms of
this Indenture. No such transfer shall be effected until, and such
transferee shall succeed to the rights of a Holder only upon, final acceptance and registration of
the transfer by the Registrar in the Securities Register. Furthermore, any Holder of a Global
Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests
in such Global Security may be effected only through a book-entry system maintained by the Holder
of such Global Security (or its agent) and that ownership of a beneficial interest in the Global
Security shall be required to be reflected in a book-entry.



     When Securities are presented to the Registrar with a request to register the transfer or to
exchange them for an equal aggregate principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Securities are duly endorsed or
accompanied by a written instrument of transfer duly executed by the Holder thereof or by an
attorney who is authorized in writing to act on behalf of the Holder). Subject to Section 2.04, to









 



22



permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar’s request. No service charge shall be made for any
registration of transfer or exchange of the Securities, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other similar governmental charge payable upon
exchanges in connection with which a Security is issued to a Person other than the Holder
submitting the Security for exchange).



     Neither the Company nor the Registrar shall be required to exchange or register a transfer of
any Securities surrendered for conversion or, if a portion of any Security is surrendered for
conversion, the portion thereof surrendered for conversion.



     The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Security (including any transfers between beneficial owners
of any Global Security) other than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance as to form with the
express requirements hereof.



     Section 2.09 . Book-Entry Provisions for the Global Securities. (a) The Global Securities
initially shall:




	 	(i)	 	be registered in the name of DTC (or a nominee thereof);
	 
	 	(ii)	 	be delivered to the Trustee as Securities Custodian;
	 
	 	(iii)	 	bear the Restricted Securities Legend set forth in Section 2.03(i); and
	 
	 	(iv)	 	bear the Global Security Legend set forth in Section 2.03(iv).





     Members of, or participants in, DTC (“Agent Members”) shall have no rights under this
Indenture with respect to any Global Security held on their behalf by DTC, or the Trustee as its
custodian, or under such Global Security, and DTC may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing contained herein shall prevent the
Company, the Trustee or any agent of the Company or Trustee from giving effect to any written
certification, proxy or other authorization furnished by DTC or impair, as between DTC and the
Agent Members, the operation of customary practices governing the exercise of the rights of a
Holder of any Security.



     (b) The Holder of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Securities.









 



23


     (c) A Global Security may not be transferred, in whole or in part, to any Person other than
DTC (or a nominee thereof), and no such transfer to any such other Person may be registered.
Beneficial interests in a Global Security may be transferred in accordance with the rules and
procedures of DTC and the provisions of Section 2.10.



     (d) If at any time:




     (i) DTC notifies the Company in writing that it is unwilling or unable to continue
to act as depositary for the Global Securities and a successor depositary for the Global
Securities is not appointed by the Company within 90 days of such notice;




     (ii) DTC ceases to be registered as a “clearing agency” under the Exchange Act and a
successor depositary for the Global Securities is not appointed by the Company within 90
days of such cessation;




     (iii) the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the Definitive Securities under this Indenture in exchange for all
or any part of the Securities represented by a Global Security or Global Securities,
subject to the procedures of DTC; or




     (iv) an Event of Default has occurred and is continuing and the Registrar has
received a request from DTC or the Company for the issuance of Definitive Securities in
exchange for such Global Security or Global Securities;


DTC shall surrender such Global Security or Global Securities to the Trustee for cancellation and
the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and Company
Order for the authentication and delivery of Securities, shall authenticate and make available for
delivery in exchange for such Global Security or Global Securities, Definitive Securities in an
aggregate principal amount equal to the aggregate principal amount of such Global Security or
Global Securities. Such Definitive Securities shall be registered in such
names as DTC shall identify in writing as the beneficial owners of the Securities represented by
such Global Security or Global Securities (or any nominee thereof).




     (e) Notwithstanding the foregoing, in connection with any transfer of beneficial interests in
a Global Security to the beneficial owners thereof pursuant to Section 2.09(d), the Registrar shall
reflect on its books and records the date and a decrease in the principal amount of such Global
Security in an amount equal to the principal amount of the beneficial interests in such Global
Security to be transferred.



     Section 2.10 . Special Transfer Provisions. Unless a Security is no longer a Restricted Security,
the following provisions shall apply to any sale, pledge or other transfer of such Securities:



     (a) Transfer of Securities to a QIB. The following provisions shall apply with respect to the
registration of any proposed transfer of Securities to a QIB:









 



24



     (i) If the Securities to be transferred consist of a beneficial interest in the
Global Securities, the transfer of such interest may be effected only through the
book-entry systems maintained by DTC.




     (ii) If the Securities to be transferred consist of Definitive Securities, the
Registrar shall register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security stating (or has
otherwise advised the Company and the Registrar in writing) that the sale has been made
in compliance with the provisions of Rule 144A to a transferee who has signed a
certification stating or has otherwise advised the Company and the Registrar in writing
that:




     (A) it is purchasing the Securities for its own account or an account with
respect to which it exercises sole investment discretion;




     (B) it and any such account is a QIB within the meaning of Rule 144A;




     (C) it is aware that the sale to it is being made in reliance on Rule 144A;




     (D) it acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not to request
such information; and




     (E) it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided by Rule
144A.



     (b) General. By its acceptance of any Security bearing the Restricted Securities Legend, each
Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in
this Indenture and agrees that it will transfer such Security only as provided in this Indenture.
The Registrar shall not register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The Registrar shall be
entitled to receive and rely on written instructions from the Company verifying that such transfer
complies with such restrictions on transfer. In connection with any transfer of Securities, each
Holder agrees by its acceptance of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that the Registrar shall
not be required to determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.









 



25


     The Registrar shall retain copies of all certifications, letters, notices and other written
communications received pursuant to Section 2.09 hereof or this Section 2.10. The Company shall
have the right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written notice to the
Registrar.



     Section 2.11 . Mutilated, Destroyed, Lost or Stolen Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, in the absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall issue and the Trustee shall
authenticate a replacement Security if the requirements of Section 8-405 of the UCC are met, such
that the Holder (a) notifies the Company or the Trustee within a reasonable time after such Holder
has notice of such loss, destruction or wrongful taking and the Registrar has not registered a
transfer prior to receiving such notification, (b) makes such request to the Company or Trustee
prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the
UCC and (c) satisfies any other reasonable requirements of the Trustee. Such Holder shall furnish
an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company,
the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a
Security is replaced, and the Company shall execute and upon Company Order the Trustee shall
authenticate and make available for delivery, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.



     In case any such mutilated, destroyed, lost or stolen Security has become due and payable, the
Company in its discretion may, instead of issuing a new Security, pay such Security.



     Upon the issuance of any new Security under this Section 2.11, the Company may require the
payment by the Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees and expenses of
the Trustee) in connection therewith.



     Every new Security issued pursuant to this Section 2.11 in lieu of any mutilated, destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company and any other obligor upon the Securities, whether or not the mutilated, destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits
of this Indenture equally and ratably with any and all other Securities duly issued hereunder.



     The provisions of this Section 2.11 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.



     Section 2.12 . Outstanding Securities. Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.12 as not outstanding. A Security does not









 



26



cease to be outstanding in the event the Company or a Subsidiary of the Company holds the Security;
provided, however, that (i) for purposes of determining which Securities are outstanding for
consent or voting purposes hereunder, the provisions of Section 13.06 shall apply and (ii) in
determining whether the Trustee shall be protected in making a determination whether the Holders of
the requisite principal amount of outstanding Securities are present at a meeting of Holders of
Securities for quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying
upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee
actually knows to be held by the Company or an Affiliate of the Company shall not be considered
outstanding.



     If a Security is replaced, paid pursuant to Section 2.11 or converted and such conversion is
settled under Article 12, and it ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser.



     If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
Fundamental Change Purchase Date or at Stated Maturity, money sufficient to pay all principal and
interest (including any Additional Interest) payable on that date with respect to the Securities
(or portions thereof) to be purchased or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Holders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.



     Section 2.13 . Temporary Securities. In the event that Definitive Securities are to be issued
under the terms of this Indenture, until such Definitive Securities are ready for delivery, the
Company may prepare and upon receipt of a
Company Order the Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the Company shall
prepare and upon receipt of a Company Order the Trustee shall authenticate Definitive Securities.
After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at any office or agency maintained
by the Company for that purpose and such exchange shall be without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the Company shall execute, and
the Trustee shall authenticate and make available for delivery in exchange therefor, one or more
Definitive Securities representing an equal principal amount of Securities. Until so exchanged,
the Holder of temporary Securities shall in all respects be entitled to the same benefits under
this Indenture as a Holder of Definitive Securities.



     Section 2.14 . Cancellation. The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Securities surrendered for registration of transfer, exchange, payment or
cancellation and dispose of such Securities in accordance with its internal policies and customary
procedures including delivery of a certificate (a “Certificate of Destruction”)









 



27



describing such
Securities disposed of (subject to the record retention requirements of the Exchange Act) or
deliver canceled Securities to the Company pursuant to written direction by an Officer. The
Company may not issue new Securities to replace Securities it has paid for or delivered to the
Trustee for cancellation for any reason other than in connection with a transfer or exchange.



     At such time as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, repurchased, canceled or converted, such Global Security shall
be returned by DTC to the Trustee for cancellation or retained and canceled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global Security,
repurchased, canceled or converted, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and records of the Trustee
(if it is then the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.



     Any Securities repurchased by the Company may, at its option, be surrendered to the Trustee
for cancellation, but in no event may any such Securities be reissued or resold by the Company.



     Section 2.15 . Payment of Interest; Defaulted Interest. Interest (including any Additional
Interest) on any Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Security (or one or more
predecessor Securities) is registered at 5:00 p.m., New York
City time, on the Regular Record Date for such payment at the office or agency of the Company
maintained for such purpose pursuant to Section 2.05; provided, however, that interest will be paid
at the Stated Maturity only to the Person to whom the principal amount is paid.



     Any interest on any Security which is payable, but is not paid when the same becomes due and
payable and such nonpayment continues for a period of 30 calendar days, shall forthwith cease to be
payable to the Holder on the Regular Record Date, and such defaulted interest and (to the extent
lawful) interest on such defaulted interest at the annual rate borne by the Securities plus 1%
(such defaulted interest and interest thereon herein collectively called “Defaulted Interest”)
shall be paid by the Company at its election, in each case, as provided in clause (a) or (b) below:



     (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities (or their respective predecessor Securities) are registered at 5:00 p.m., New
York City time, on a Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not
less than 30 calendar days after such notice) of the proposed payment (the “Special Interest
Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior to the date









 



28



of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a record date
(the “Special Record Date”) for the payment of such Defaulted Interest which shall be not more than
15 calendar days and not less than 10 calendar days prior to the Special Interest Payment Date and
not less than 10 calendar days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record Date, and in the
name and at the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be
given in the manner provided for in Section 13.02, not less than 10 calendar days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor having been so given, such Defaulted
Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the
Securities (or their respective predecessor Securities) are registered at 5:00 p.m., New York City
time, on such Special Record Date and shall no longer be payable pursuant to the following clause
(b).



     (b) The Company may make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.



     Subject to the foregoing provisions of this Section 2.15, each Security delivered under this
Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest (including any Additional Interest) accrued and unpaid, and
to accrue, which were carried by such other Security.



     Section 2.16 . Computation of Interest. Interest (including any Additional Interest) on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day months.



     Section 2.17 . CUSIP and ISIN Numbers. The Company in issuing the Securities may use “CUSIP” and
“ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” and “ISIN”
numbers in notices as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such notice shall not be affected by any
defect in or omission of such CUSIP or ISIN numbers. The Company shall promptly notify the Trustee
in writing of any change in the CUSIP and ISIN numbers.



ARTICLE 3

Covenants




     Section 3.01 . Payment of Securities. The Company shall promptly pay the principal of and
interest (including any Additional Interest) on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest (including any Additional
Interest)









 



29



shall be considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture immediately available funds sufficient to pay all principal
and interest (including any Additional Interest) then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.



     To the extent lawful, the Company shall pay interest on overdue principal at the annual rate
borne by the Securities plus 1%, and it shall pay interest on overdue installments of interest
(including any Additional Interest) at the same rate.



     Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the
extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by
the United States of America from principal or interest (including any Additional Interest)
payments hereunder.



     Section 3.02 . Financial Statements. (a) In the event and for so long as the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company shall furnish to any Holder, beneficial owner or prospective purchaser of
the Securities or the Common Stock issued upon conversion of the Securities, upon such Person’s
request, the information, if any, required under Rule 144A(d)(4) under the Securities Act until
such time as such securities are no longer ''restricted securities’’ within the meaning of Rule 144
under the Securities Act, assuming these securities have not been owned by an affiliate of the
Company.



     (b) The Company covenants and agrees to provide to the Trustee such reports, information and
documents, if any, as required by TIA §314(a).



     (c) Delivery of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to
rely exclusively on Officers’ Certificates).



     Section 3.03 . Subsidiary Guarantors. The Company will cause each Subsidiary that is not a
Subsidiary Guarantor and that becomes a party to any of the Credit Facilities, whether as a
borrower, a co-borrower or a guarantor, to execute and deliver to the Trustee a supplemental
indenture substantially in the form of Exhibit B pursuant to which such Subsidiary will become a
Subsidiary Guarantor and fully and unconditionally Guarantee, jointly and severally with the other
Subsidiary Guarantors, the Guaranteed Obligations, as provided under Article 10.



     Section 3.04 . Maintenance of Office or Agency. The Company will maintain, or cause to be
maintained, an office or agency where the Securities may be presented or surrendered for payment,
where, if applicable, the Securities may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the Trustee of any change
in the location of any such office or agency. If at any time the Company shall fail









 



30



to maintain
any such required office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.



     The Company may also from time to time designate one or more other offices or agencies where
the Securities may be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation. The Company will give prompt written notice to the Trustee of
any such designation or rescission and any change in the location of any such other office or
agency.



     Section 3.05 . Corporate Existence. Except as otherwise provided in Article 4, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate existence and (ii) the
material rights (charter and statutory), licenses and franchises of the Company, except, in the
case of clause (ii), to the extent the Board of Directors determines it no longer desirable (and
the approval by the Board of Directors of any action or omission directly or indirectly resulting
in the loss of any such right, license or franchise shall be conclusive evidence of such
determination, and no specific action of the Board of Directors shall be required to satisfy clause
(ii)).



     Section 3.06 . Payment of Taxes and Other Claims. The Company will pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material liability or lien upon the
property of the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate reserves, if necessary (in the good faith judgment of
management of the Company), are being maintained in accordance with GAAP or where the failure to
effect such payment will not be disadvantageous to the Holders.



     Section 3.07 . Compliance Certificate. The Company shall deliver to the Trustee within 120
calendar days after the end of each fiscal year of the Company a certificate of the principal
executive officer, principal financial officer or principal accounting officer of the Company,
stating whether or not, to the knowledge of such officer, any Default or Event of Default occurred
during such period and if so, describing each Default or Event of Default, its status and the
action the Company is taking or proposes to take with respect thereto. The Company also shall
comply with TIA § 314(a)(4).



     Section 3.08 . Further Instruments and Acts. Upon request of the Trustee, the Company will
execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.









 



31


     Section 3.09 . Statement by Officers as to Default. The Company shall deliver to the Trustee, as
soon as possible and in any event within 30 calendar days after the Company becomes aware of the
occurrence of any Event of Default or Default, an Officers’ Certificate setting forth the details
of such Event of Default or Default, its status and the action which the Company proposes to take
with respect thereto.



     Section 3.10 . Additional Interest. If Additional Interest is payable by the Company pursuant to
the Registration Rights Agreement, the Company shall deliver to the Trustee an Officers’
Certificate to that effect stating (i) the amount of such Additional Interest that is payable and
(ii) the date on which such Additional Interest is payable. Unless and until a Trust Officer of
the Trustee receives such a certificate, the Trustee may assume without inquiry that no Additional
Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled
to it, the Company shall deliver to the Trustee an Officers’ Certificate setting forth the
particulars of such payment.



     Section 3.11 . Stay, Extension and Usury Laws. The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take benefit or advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or interest (including
any Additional Interest) on the Securities as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of this Indenture.
The Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.



     Section 3.12 . No Amendment of Ownership Limitations. The Company covenants that it will take no
action that would have the effect of extending past January 4, 2009, or otherwise imposing,
limitations on ownership and transfer of securities of the Company set forth in the Company’s
certificate of incorporation.



ARTICLE 4

Successor Company




     Section 4.01 . Consolidation, Merger and Sale of Assets of the Company. The Company shall not
consolidate with or merge with or into, or, in one transaction or any series of related
transactions, convey, transfer, sell, lease or dispose of all or substantially all of its
properties and assets to, any Person (if the Company is not the resulting, surviving or transferee
Person), unless:



     (a) the resulting, surviving or transferee Person (the “Successor Company”) is a corporation
or limited liability company organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia, and the Successor Company expressly assumes by
supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, all of the obligations of the Company under the Securities,









 



32



this Indenture and, to the extent that it is otherwise still operative, by supplemental
agreement all of the Company’s obligations under the Registration Rights Agreement;



     (b) immediately after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and



     (c) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, stating that such consolidation, merger, conveyance, transfer, sale, lease or disposition
complies with this Indenture.



     For purposes of this Section 4.01, the conveyance, transfer, sale, lease or disposition of all
or substantially all of the properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Company on a consolidated basis, shall be
deemed to be the transfer of all or substantially all of the properties and assets of the Company.



     The Successor Company will succeed to, and be substituted for, and may exercise every right
and power of, the Company under the Securities and this Indenture with the same effect as if such
Successor Company had been named as the Company in the Indenture. Upon such substitution, except
in the case of a lease, the Company will be released from the obligations under the Securities.



     Section 4.02 . Consolidation, Merger and Sale of Assets of the Subsidiary Guarantors. Subject to
Section 10.02, each Subsidiary Guarantor shall not consolidate with or merge with or into, or
convey, transfer, sell, lease or dispose of all or substantially all its assets to, another Person
(if such Subsidiary Guarantor is not the resulting, surviving or transferee Person), unless:



     (a) the Successor Company is a corporation or limited liability company organized and existing
under the laws of the United States of America, any State thereof or the District of Columbia, and
the Successor Company expressly assumes by supplemental indenture, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of such Subsidiary
Guarantor under this Indenture and, to the extent not included herein, its Subsidiary Guarantee,
and, to the extent that it is otherwise still operative, by supplemental agreement all of such
Subsidiary Guarantor’s obligations under the Registration Rights Agreement;



     (b) immediately after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and



     (c) the Subsidiary Guarantor shall have delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, stating that such consolidation, merger, conveyance, transfer, sale, lease
or disposition complies with this Indenture and its Subsidiary Guarantee.









 



33


     The Successor Company will succeed to, and be substituted for, and may exercise every right
and power of, such Subsidiary Guarantor under such Subsidiary Guarantee and this Indenture with the
same effect as if such Successor Company had been named as a Subsidiary Guarantor in the Indenture.
Upon such substitution, except in the case of a lease, the Subsidiary Guarantor will be released
from the obligations under this Indenture and its Subsidiary Guarantee.



ARTICLE 5

Reserved




ARTICLE 6

Defaults and Remedies




     Section 6.01 . Events of Default. Each of the following is an “Event of Default”:



     (a) default in any payment of interest or Additional Interest (as required by the Registration
Rights Agreement) on any Security when the same becomes due and payable, and such default continues
for a period of 30 calendar days;



     (b) default in the payment of the principal of any Security when the same becomes due and
payable at its Stated Maturity, upon required purchase, upon declaration, upon conversion or
otherwise;



     (c) failure by the Company to comply with its obligation to convert the Securities in
accordance with this Indenture, upon exercise of a Holder’s conversion right and such failure
continues for a period of five calendar days;



     (d) failure by the Company to give a Company Notice in connection with a Fundamental Change to
Holders or notice to Holders required pursuant to Section 12.01(a)(iii), in each case on a timely
basis as required under this Indenture;



     (e) failure by the Company to comply with any of its obligations under Article 4;




     (f) failure by the Company to comply with, or a breach by the Company of, any other covenant
or agreement in this Indenture or under the Securities (other than those referred to in Section
6.01(a) through (e)) and such default continues for 60 calendar days after the notice specified
below;



     (g) failure by the Company or any Subsidiary Guarantor or any Significant Subsidiary that is
not a Subsidiary Guarantor to pay any indebtedness for borrowed money within any applicable grace
period after final maturity or the acceleration of any such indebtedness by the holders thereof
because of a default if the total amount of such indebtedness unpaid or
accelerated exceeds $5,000,000 in the aggregate, and such failure continues for ten calendar
days after the notice specified below;









 



34


     (h) a Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary
Guarantee;




     (i) one or more judgments or decrees shall be entered against the Company or any Guarantor or
any Significant Subsidiary that is not a Subsidiary Guarantor involving in the aggregate a
liability of $5,000,000 or more (to the extent that such amount is not paid or covered by insurance
as to which the relevant insurance company has not disclaimed coverage), and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof;




     (j) the Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:




     (i) commences a voluntary case or proceeding;




     (ii) consents to the entry of judgment, decree or order for relief against it in an
involuntary case or proceeding;




     (iii) consents to the appointment of a Custodian of it or for any substantial part
of its property;




     (iv) makes a general assignment for the benefit of its creditors;




     (v) consents to or acquiesces in the institution of a bankruptcy or an insolvency
proceeding against it;




     (vi) takes any corporate action to authorize or effect any of the foregoing; or




     (vii) takes any comparable action under any foreign laws relating to insolvency; or




     (k) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:




     (i) is for relief against the Company or any Significant Subsidiary in an
involuntary case;




     (ii) appoints a Custodian of the Company or any Significant Subsidiary for all or
substantially all of the Company’s or such Significant Subsidiary’s property; or




     (iii) orders the winding up or liquidation of the Company or any Significant
Subsidiary;




and, in each case, the order or decree or relief remains unstayed and in effect for 90
calendar days.









 



35


     The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.



     Notwithstanding the foregoing, a Default under clause (f) or (g) of this Section 6.01 will not
constitute an Event of Default until the Trustee or the Holders of 25% or more in principal amount
of the outstanding Securities notify the Company of the Default in writing and the Company does not
cure such Default within the time specified in clause (f) or (g) of this Section 6.01, as
applicable, after receipt of such notice.



     Section 6.02 . Acceleration. If an Event of Default (other than an Event of Default specified in
Section 6.01(j) or 6.01(k) above with respect to the Company) occurs and is continuing, the Trustee
by notice to the Company, or the Holders of at least 25% in outstanding principal amount of the
outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the
request of such Holders shall, declare the principal of and accrued and unpaid interest (including
any Additional Interest), if any, on all the Securities to be due and payable. Upon such a
declaration, such principal and accrued and unpaid interest (including any Additional Interest), if
any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(j) or
6.01(k) above occurs with respect to the Company and is continuing, the principal of and accrued
and unpaid interest (including any Additional Interest), if any, on all the Securities outstanding
shall be immediately due and payable automatically with no further action by the Trustee or the
Holders.



     Section 6.03 . Other Remedies. If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of or interest (including any
Additional Interest) on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.



     The Trustee may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive
of any other remedy. All available remedies are cumulative.



     Section 6.04 . Waiver of Past Defaults. The Holders of a majority in principal amount of the
outstanding Securities by notice to the Trustee may:



          (a) waive, by their consent (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or
Event of Default and its consequences except (i) a Default or Event of Default in the payment of
the principal of or interest (including any Additional Interest) on a Security (including payments
pursuant to the required repurchase provisions of such Security, if any, or upon conversion of the
Securities) or (ii) a Default or Event of Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Holder affected; and







 



36





          (b) rescind any such acceleration with respect to the Securities and its consequences if (i)
rescission would not conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, other than the nonpayment of the principal of and interest
(including any Additional Interest) on the Securities (including payments pursuant to the required
repurchase provisions of such Securities, if any, or upon conversion of the Securities) that have
become due solely by such declaration of acceleration, have been cured or waived.



When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any consequent right.




     Section 6.05 . Control by Majority. The Holders of a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Sections 7.01 and 7.02, that the Trustee determines is unduly prejudicial to the
rights of other Holders or would involve the Trustee in personal liability; provided, however, that
the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with
such direction.



     Section 6.06 . Limitation on Suits. Subject to Section 6.07, a Holder may not pursue any remedy
with respect to this Indenture or the Securities unless:



     (a) such Holder has previously given to the Trustee written notice stating that an Event of
Default is continuing;



     (b) Holders of at least 25% in principal amount of the outstanding Securities have requested
that the Trustee pursue the remedy;



     (c) such Holders have offered to the Trustee security or indemnity reasonably satisfactory to
it against any loss, liability or expense to be incurred in compliance with such request;



     (d) the Trustee has not complied with such request within 60 calendar days after receipt of
the request and the offer of security or indemnity; and



     (e) the Holders of a majority in principal amount of the outstanding Securities have not given
the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request
within such 60-calendar-day period.



     A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.



     Section 6.07 . Rights of Holders to Receive Payment. Notwithstanding any other provision of this
Indenture (including, without limitation, Section 6.06), the right of any Holder to receive payment
of principal of or interest (including any Additional Interest) on the Securities









 



37



(including
payments pursuant to the required repurchase provisions of such Securities, if any, or upon
conversion of the Securities) held by such Holder, on or after the respective due dates expressed
in the Securities, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such Holder.



     Section 6.08 . Collection Suit by Trustee. If an Event of Default specified in clauses (a) or (b)
of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount then due and owing (together
with interest on any unpaid interest (including any Additional Interest) to the extent lawful) and
the amounts provided for in Section 7.07.



     Section 6.09 . Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company, its Subsidiaries or its or their respective creditors or properties and,
unless prohibited by law or applicable regulations, may be entitled and empowered to participate as
a member of any official committee of creditors appointed in such matter, and may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and
any other amounts due to the Trustee under Section 7.07.



     Section 6.10 . Priorities. If the Trustee collects any money or property pursuant to this Article
6, it shall pay out the money or property in the following order:




     FIRST: to the Trustee for amounts due under Section 7.07;




     SECOND: to Holders for amounts due and unpaid on the Securities for principal
(including payments pursuant to the required repurchase provisions of the Securities, if
any, or upon conversion of the Securities) and interest (including any Additional Interest),
ratably, without preference or priority of any kind, according to the amounts due and
payable on the Securities for principal (including payments pursuant to the required
repurchase provisions of the Securities or upon conversion of the Securities) and interest
(including any Additional Interest), respectively; and




     THIRD: to the Company.



     The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10. At least 15 calendar days before such record date, the Company shall mail to each
Holder and the Trustee a notice that states the record date, the payment date and amount to be
paid.









 



38


     Section 6.11 . Restoration of Rights and Remedies. If the Trustee or any Holder has instituted a
proceeding to enforce any right or remedy under this Indenture and the proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the
Holder, then, subject to any determination in the proceeding, the Company, the Trustee, any
Subsidiary Guarantors and the Holders will be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Company, the Trustee, any
Subsidiary Guarantors and the Holders will continue as though no such proceeding had been
instituted.



     Section 6.12 . Undertaking of Costs. In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee,
a court in its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.12 does not apply to a suit by the Trustee, a suit by the Company, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in outstanding principal
amount of the Securities.



ARTICLE 7

Trustee




     Section 7.01 . Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree
of care and skill in its exercise
as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s
own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee reasonable
indemnity or security against loss, liability or expense that might be incurred in compliance with
such request or direction.



     (b) Except during the continuance of an Event of Default:




     (i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and




     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed therein,
upon certificates, opinions or orders furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such certificates, opinions
or orders which by any provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need









 



39



not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).



     (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:




     (i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




     (ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer of the Trustee unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and




     (iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05.



     (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.



     (e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company.



     (f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.



     (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.



     (h) Every provision of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to
the provisions of the TIA.



     (i) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company shall be sufficient if signed by an Officer of the Company.



     Section 7.02 . Rights of Trustee. Subject to Section 7.01:



     (a) The Trustee may conclusively rely on any document (whether in its original or facsimile
form) reasonably believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee
shall receive and retain financial reports and statements of the Company as provided









 



40



herein, but
shall have no duty to review or analyze such reports or statements to determine compliance under
covenants or other obligations of the Company.



     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.



     (c) The Trustee may act through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.



     (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct
constitutes willful misconduct or negligence.



     (e) The Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or opinion of such
counsel.



     (f) The Trustee shall not be responsible or liable for special, indirect, or consequential
loss or damage of any kind whatsoever (including, but not limited to, loss of profit) resulting
from actions taken in good faith and which the Trustee believes to be authorized or within its
rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.



     (g) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, Securities
Custodian and other Person employed to act hereunder.



     (h) The Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of Officers authorized at such time to take specified actions pursuant to
this Indenture.



     Section 7.03 . Individual Rights of Trustee. The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11. In addition, the Trustee shall be permitted to engage in transactions
with the Company; provided, however, that if the Trustee acquires any conflicting interest the
Trustee must (i) eliminate such conflict within 90 calendar days of acquiring such conflicting
interest, (ii) apply to the Commission for permission to continue acting as Trustee or (iii)
resign.









 



41


     Section 7.04 . Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Securities, shall not be
accountable for the Company’s use of the proceeds from the Securities, shall not be responsible for
the use or application of any money received by any Paying Agent other than the Trustee and shall
not be responsible for any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the Trustee’s
certificate of authentication.



     Section 7.05 . Notice of Defaults. If a Default or Event of Default occurs and is continuing and
if a Trust Officer of the Trustee has actual knowledge thereof, the Trustee shall mail by first
class mail to each Holder at the address set forth in the Securities Register notice of the Default
or Event of Default within 90 calendar days after it occurs. Except in the case of a Default or
Event of Default in payment of principal of or interest (including any Additional Interest) on any
Security (including payments pursuant to the required repurchase provisions of such Security, if
any, or upon conversion of the Securities), the Trustee may withhold the notice if and so long as
its board of directors, a committee of its board of directors or a committee of its Trust Officers
in good faith determines that withholding the notice is in the interests of Holders.



     Section 7.06 . Reports by Trustee to Holders. As promptly as practicable after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee shall mail to each
Holder a brief report dated as of such May 15 that
complies with TIA § 313(a), if required by such TIA § 313(a). The Trustee also shall comply with
TIA § 313(b). The Trustee shall also transmit by mail all reports required by TIA § 313(c).



     Section 7.07 . Compensation and Indemnity. The Company and the Subsidiary Guarantors shall be
jointly and severally liable for paying the Trustee from time to time such compensation for its
acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. In addition to such compensation, the Company and
the Subsidiary Guarantors shall be jointly and severally liable for reimbursing the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it. Such expenses shall
include the reasonable compensation and out-of-pocket expenses, disbursements and advances of the
Trustee’s agents, counsel, accountants and experts. The Company and each Subsidiary Guarantor,
jointly and severally, shall indemnify the Trustee against any and all loss, liability, damages,
claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without
negligence or bad faith on its part in connection with the administration of this trust and the
performance of its duties hereunder, including the costs and expenses of enforcing this Indenture
(including this Section 7.07) and of defending itself against any claims (whether asserted by any
Holder, the Company, any Subsidiary Guarantor or otherwise). The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company or any Subsidiary Guarantors of its obligations hereunder.
The Company shall defend the claim and the Trustee shall provide reasonable cooperation at the
Company’s expense in the defense. The Trustee may have separate counsel and the Company and the
Subsidiary Guarantors, as applicable, shall pay the fees and expenses of such counsel, provided
that the Company shall not









 



42



be required to pay such fees and expenses if it assumes the Trustee’s
defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of
interest between the Company and the Subsidiary Guarantors, as applicable, and the Trustee in
connection with such defense. The Company and the Subsidiary Guarantors need not reimburse any
expense or indemnify against any loss, liability or expense which is finally determined by a court
of competent jurisdiction to have been incurred by the Trustee through the Trustee’s own willful
misconduct, negligence or bad faith.



     To secure the Company’s and the Subsidiary Guarantors’ payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay principal of and
interest (including any Additional Interest) on particular Securities. Such lien shall survive the
satisfaction and discharge of this Indenture. The Trustee’s right to receive payment of any
amounts due under this Section 7.07 shall not be subordinate to any other unsecured liability or
debt of the Company or any Subsidiary Guarantors.



     The Company’s and the Subsidiary Guarantors’ payment obligations pursuant to this Section 7.07
shall survive the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Sections 6.01(j) and 6.01(k) with respect to the
Company, the expenses are intended to constitute expenses of administration under any
Bankruptcy Law.



     Section 7.08 . Replacement of Trustee. The Trustee may resign at any time by so notifying the
Company. The Holders of a majority in principal amount of the Securities may remove the Trustee by
so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee
if:




	 	(a)	 	the Trustee fails to comply with Section 7.10;
	 
	 	(b)	 	the Trustee is adjudged bankrupt or insolvent;
	 
	 	(c)	 	a receiver or other public officer takes charge of the Trustee or its property; or
	 
	 	(d)	 	the Trustee otherwise becomes incapable of acting.





     If the Trustee resigns or is removed by the Company or by the Holders of a majority in
principal amount of the outstanding Securities and such Holders do not reasonably promptly appoint
a successor Trustee, or if a vacancy exists in the office of the Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.



     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to









 



43



Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.



     If a successor Trustee does not take office within 60 calendar days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of
the outstanding Securities may petition, at the Company’s expense, any court of competent
jurisdiction for the appointment of a successor Trustee.



     If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is
stayed as provided in TIA § 310(b), any Holder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.



     Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.



     Section 7.09 . Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all
its corporate trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be the successor
Trustee.



     In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have
been authenticated but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor
Trustee shall only apply to its successor or successors by merger, consolidation or conversion.



     Section 7.10 . Eligibility; Disqualification. The Trustee shall at all times satisfy the
requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at least
$100 million as set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation
of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if the requirements
for such exclusion set forth in TIA § 310(b)(1) are met.



     Section 7.11 . Preferential Collection of Claims Against Company. The Trustee shall comply with
TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has
resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.




 









 





 44




ARTICLE 8

Discharge of Indenture




     Section 8.01 . Discharge of Liability on Securities. When:



     (1) the Company shall deliver to the Registrar for cancellation all Securities theretofore
authenticated (other than any Securities which have been destroyed, lost or stolen and in lieu of
or in substitution for which other Securities shall have been authenticated and delivered) and not
theretofore canceled, or



     (2) all the Securities not theretofore canceled or delivered to the Registrar for cancellation
shall have (a) been surrendered for conversion (after all related Observation Periods
have elapsed) and the Company shall have delivered to the Holders cash and shares of Common
Stock, as applicable, sufficient to pay all amounts owing in respect of all Securities (other than
any Securities which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and delivered) not
theretofore canceled or delivered to the Registrar for cancellation or (b) become due and payable
on the Stated Maturity or Fundamental Change Purchase Date, as applicable, and the Company shall
deposit with the Trustee cash sufficient to pay all amounts owing in respect of all Securities
(other than any Securities which shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Securities shall have been authenticated and delivered) not
theretofore canceled or delivered to the Registrar for cancellation, including the principal amount
and interest (including any Additional Interest) accrued and unpaid to such Stated Maturity or
Fundamental Change Purchase Date, as the case may be,



and if in either case (1) or (2) the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture with respect to the Securities shall cease to
be of further effect (except as to (i) remaining rights of registration of transfer, substitution
and exchange and conversion of Securities; (ii) rights hereunder of Holders to receive from the
Trustee payments of the amounts then due, including interest (including any Additional Interest)
with respect to the Securities and the other rights, duties and obligations of Holders, as
beneficiaries hereof solely with respect to the amounts, if any, so deposited with the Trustee; and
(iii) the rights, obligations and immunities of the Trustee, Authenticating Agent, Paying Agent,
Conversion Agent and Registrar under this Indenture with respect to the Securities), and the
Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel
as required by Section 8.03 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture with respect to the
Securities; however, the Company hereby agrees to reimburse the Trustee, Authenticating Agent,
Paying Agent, Conversion Agent and Registrar for any costs or expenses thereafter reasonably and
properly incurred by the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and
Registrar and to compensate the Trustee, Authenticating Agent, Paying Agent, Conversion Agent and
Registrar for any services thereafter reasonably and properly rendered by the Trustee,
Authenticating Agent, Paying Agent, Conversion Agent and Registrar in connection with this
Indenture with respect to the Securities.









 



45


     Section 8.02 . Reinstatement. If the Trustee or the Paying Agent is unable to apply any money to
the Holders entitled thereto by reason of any order or judgment of any court of governmental
authority enjoining, restraining or otherwise prohibiting such application, the Company’s
obligations under this Indenture with respect to the Securities and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance with this Indenture
and the Securities to the Holders entitled thereto; provided, however, that if the Company makes
any payment of principal amount of or interest (including any Additional Interest) on any
Securities following the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money held by the Trustee
or Paying Agent.



     Section 8.03 . Officers’ Certificate; Opinion of Counsel. Upon any application or demand by the
Company to the Trustee to take any action under Section 8.01, the Company shall furnish to the
Trustee an Officers’ Certificate or Opinion of Counsel stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been complied with.



ARTICLE 9

Amendments




     Section 9.01 . Without Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee
may amend this Indenture or the Securities without notice to or consent of any Holder:



     (a) to cure any ambiguity, omission, defect or inconsistency;



     (b) to comply with Article 4 in respect of the assumption by a Successor Company of an
obligation of the Company or a Subsidiary Guarantor, as applicable, under this Indenture;



     (c) to provide for uncertificated Securities in addition to or in place of certificated
Securities; provided, however, that the uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code;



     (d) to add Guarantees with respect to the Securities;



     (e) to secure the Securities;



     (f) to add to the covenants of the Company for the benefit of the Holders or to surrender any
right or power herein conferred upon the Company or any Subsidiary Guarantor;



     (g) to make any change that does not materially adversely affect the rights of any Holder; or









 



46


     (h) to comply with any requirement of the Commission in connection with the qualification of
this Indenture under the TIA.



     After an amendment under this Section 9.01 becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of an amendment under this
Section 9.01.



     Section 9.02 . With Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities without notice to any Holder but with the written consent of the Holders of at least a
majority in principal amount of the Securities then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange offer for,
Securities) and past Defaults (except (i) a Default or Event of Default in the payment of the
principal of or interest (including any Additional Interest) on a Security (including payments
pursuant to the required repurchase and conversion provisions of such Security, if any, or upon
conversion of the Securities) or (ii) a Default or Event of Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder affected) or compliance
with the provisions of this Indenture may be waived with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer
for, Securities). However, without the consent of each Holder affected (in addition to the
majority in principal amount of the Securities then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange offer for,
Securities), an amendment or waiver may not:



     (a) reduce the amount of Securities whose Holders must consent to an amendment of this
Indenture or to waive any past Defaults;



     (b) reduce the rate of or extend the stated time for payment of interest (including any
Additional Interest) on any Security;



     (c) reduce the principal of or extend the Stated Maturity of any Security;



     (d) make any change that impairs or adversely affects the conversion rights of any Securities;



     (e) reduce the Fundamental Change Purchase Price payable upon the repurchase of any Security
or amend or modify in any manner adverse to holders of the Securities the Company’s obligation to
make such payments, whether through an amendment to or waiver of a provision in the covenants,
definitions or otherwise;



     (f) make any Security payable in money other than that stated in the Security (it being
understood that all references to cash in this Indenture and the Securities are to U.S. legal
tender);









 



47


     (g) impair the right of any Holder to receive payment of principal of and interest (including
any Additional Interest) on such Holder’s Securities on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;



     (h) make any change to the amendment provisions which require each Holder’s consent or to the
waiver provisions; or



     (i) terminate any Subsidiary Guarantees with respect to the Securities (unless expressly
permitted under this Indenture).



     It shall not be necessary for the consent of the Holders under this Section 9.02 to approve
the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof. A consent to any amendment or waiver under this Indenture by any
Holder of the Securities given in connection with a tender or exchange of such Holder’s Securities
will not be rendered invalid by such tender or exchange.



     After an amendment under this Section 9.02 becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such notice to all
Holders, or any defect therein, shall not impair or affect the validity of an amendment under this
Section 9.02.



     Section 9.03 . Compliance with TIA. Every amendment or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.



     Section 9.04 . Revocation and Effect of Consents and Waivers. A consent to an amendment or a
waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security
or portion of the Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the
Security if the Trustee receives the notice of revocation before the date the amendment or waiver
becomes effective or otherwise in accordance with any related solicitation documents. After an
amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver shall
become effective upon receipt by the Trustee of the requisite number of written consents under
Section 9.01 or 9.02, as applicable.



     The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action described above or
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall become valid or
effective more than 120 Business Days after such record date.









 



48


     Section 9.05 . Notation on or Exchange of Securities. If an amendment changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the
Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such amendment.



     Section 9.06 . Trustee to Sign Amendments. The Trustee shall sign any amendment authorized
pursuant to this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does adversely affect the rights, duties,
liabilities or immunities of the Trustee, the Trustee may, but need not, sign it. In signing such
amendment the Trustee shall be entitled to receive and (subject to Sections 7.01 and 7.02) shall be
fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture and that such amendment is the legal,
valid and binding obligation of the Company and any Subsidiary Guarantors, enforceable against them
in accordance with its terms, subject to customary exceptions, and complies with the provisions
hereof (including Section 9.03).



ARTICLE 10

Subsidiary Guarantees




     Section 10.01 . Subsidiary Guarantees. Subject to the provisions of this Article 10, the
Subsidiary Guarantors hereby fully and unconditionally Guarantee, jointly and severally, on a
senior basis, to each Holder and to the Trustee and its successors and assigns (i) the full and
punctual payment when due, whether at Stated Maturity, by acceleration, by purchase or otherwise,
of all obligations of the Company under this Indenture (including obligations to the Trustee) and
the Securities, whether for payment of principal of or interest (including any Additional Interest)
on the Securities and all other monetary obligations of the Company under this Indenture and the
Securities and (ii) the full and punctual performance within applicable grace periods of all other
obligations of the Company whether for fees, expenses, indemnification or otherwise under this
Indenture and the Securities (all the foregoing being hereinafter collectively called the
“Guaranteed Obligations”). Subject to Section 10.02, the Subsidiary Guarantors further agree that
the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or
further assent from the Subsidiary Guarantors, and that the Subsidiary Guarantors shall remain
bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation.



     To the extent permitted by law, each Subsidiary Guarantor waives presentation to, demand of
payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any Default under the
Securities or the Guaranteed Obligations. The obligations of the Subsidiary Guarantors hereunder
shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand
or to enforce any right or remedy against the Company or any other Person









 



49

under this Indenture, the
Securities or any other agreement or otherwise; (ii) any extension or
renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement; (iv) the release of
any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (v)
the failure of any holder or the Trustee to exercise any right or remedy against any other
Subsidiary Guarantor; or (vi) any change in the ownership of the Subsidiary Guarantors, except as
provided in Section 10.02.




     Each Subsidiary Guarantor agrees that its Subsidiary Guarantee constitutes a Guarantee of
payment, performance and compliance when due (and not a Guarantee of collection) and waives any
right to require that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.



     Except as set forth in Section 10.02, the obligations of the Subsidiary Guarantors hereunder
shall not be subject to any reduction, limitation, impairment or termination for any reason (other
than payment of the Guaranteed Obligations in full), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of the Subsidiary Guarantors herein shall not be discharged or impaired
or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or omission or delay to do
any other act or thing which may or might in any manner or to any extent vary the risk of the
Subsidiary Guarantors or would otherwise operate as a discharge of the Subsidiary Guarantors as a
matter of law or equity.



     Subject to Section 3.03, each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall
remain in full force and effect until payment in full of all the Guaranteed Obligations or such
Subsidiary Guarantor is released from its Subsidiary Guarantee in compliance with Section 10.02.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest (including any Additional Interest) on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.



     In furtherance of the foregoing and not in limitation of any other right which any Holder or
the Trustee has at law or in equity against the Subsidiary Guarantors by virtue hereof, upon the
failure of the Company to pay any Guaranteed Obligation when and as the same shall become due,
whether at Stated Maturity, by acceleration, by purchase or otherwise, the Subsidiary Guarantors
hereby promise to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause
to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest (including any
Additional Interest) on such Guaranteed Obligations (but only









 



50

to the extent not prohibited by law) and (iii) all other monetary obligations of the Company
to the holders and the Trustee pursuant to this Indenture and the Securities.




     Each Subsidiary Guarantor further agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations Guaranteed hereby
until payment in full of all Guaranteed Obligations. Each Subsidiary Guarantor further agrees
that, as between such Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (i) the maturity of the Guaranteed Obligations Guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the Guaranteed
Obligations Guaranteed hereby, and (ii) in the event of any declaration of acceleration of such
Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due
and payable) shall forthwith become due and payable by the Subsidiary Guarantor for the purposes of
this Section 10.01.



     Each Subsidiary Guarantor also agrees to pay any and all reasonable costs and expenses
(including reasonable attorneys’ fees and expenses) incurred by the Trustee or any Holder in
enforcing any rights under this Section 10.01.



     Upon request of the Trustee, the Subsidiary Guarantors shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.



     Section 10.02 . Limitation on Liability; Release and Discharge; Termination on Conversion.
Any other term or provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations Guaranteed hereunder by each Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby Guaranteed without rendering this Indenture,
as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.



     Each Subsidiary Guarantor shall be deemed to be released from all obligations under this
Indenture, its Subsidiary Guarantee (to the extent not included herein) and the Securities (without
any further action by the Trustee or the Holders) upon (i) the sale or other disposition (including
by way of any merger or consolidation), in one transaction or a series of related transactions, of
a majority of the total voting power of the Capital Stock or other interests of such Subsidiary
Guarantor, (ii) the sale or other disposition of all or substantially all of the assets of the
Subsidiary Guarantor, or (iii) upon the release of such Subsidiary Guarantor from any liability
under the Credit Facilities and any Guarantee or similar obligation in respect thereof, other than,
in each case in clause (i) or (ii), the sale or other disposition to the Company or any Affiliate
of the Company. At the request and at the expense of the Company, the Trustee shall execute and
deliver an appropriate instrument evidencing such release (in the form provided by the Company).









 



51


     Each Subsidiary Guarantor shall also be deemed released from all of its obligations under this
Indenture and its Subsidiary Guarantee and such Subsidiary Guarantee will terminate upon the
discharge of the Securities pursuant to the provisions of Article 8 hereof.



     Each Subsidiary Guarantee with respect to a Security will automatically terminate immediately
prior to such Security’s conversion.



     Section 10.03 . Right of Contribution. Each Subsidiary Guarantor hereby agrees that to the extent
that any Subsidiary Guarantor shall have paid more than its proportionate share of any payment made
on the obligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to
seek and receive contribution from and against the Company or any other Subsidiary Guarantor who
has not paid its proportionate share of such payment. The provisions of this Section 10.03 shall
in no respect limit the obligations and liabilities of each Subsidiary Guarantor to the Trustee and
the Holders and each Subsidiary Guarantor shall remain liable to the Trustee and the Holders for
the full amount Guaranteed by such Subsidiary Guarantor hereunder.



ARTICLE 11

Purchase at the Option of Holder Upon a Fundamental

Change




     Section 11.01 . Purchase at the Option of the Holder Upon a Fundamental Change. If a Fundamental
Change shall occur at any time, each Holder shall have the right, at such Holder’s option, to
require the Company to purchase all or a portion of such Holder’s Securities on a date specified by
the Company that is no later than 35 calendar days after the date of the Company Notice of the
occurrence of such Fundamental Change, subject to extension to comply with applicable law (the
“Fundamental Change Purchase Date”). The Securities shall be purchased in multiples of $1,000 of
the principal amount. The Company shall purchase such Securities at a price (the “Fundamental
Change Purchase Price”), which shall be paid in cash, equal to 100% of the principal amount of the
Securities to be purchased plus any accrued and unpaid interest (including any Additional Interest)
to, but not including, the Fundamental Change Purchase Date, unless the Fundamental Change Purchase
Date is between a Regular Record Date and the interest payment date to which it relates, in which
case the Fundamental Change Purchase Price shall equal 100% of the principal amount of Securities
to be purchased and any accrued and unpaid interest (including any Additional Interest) shall be
paid to the Holder of record on the Regular Record Date.



     (a) Notice of Fundamental Change. The Company shall mail to all Holders, the Paying Agent and
the Trustee a Company Notice of the occurrence of a Fundamental Change and of the purchase right
arising as a result thereof, including the information required by Section 11.02(a) hereof, on or
before the 20th calendar day after the occurrence of such Fundamental Change.



     (b) Exercise of Option. For Securities to be so purchased at the option of the Holder, the
Holder must deliver or cause to be effected a book-entry transfer of such Securities to the









 



52

Paying Agent (together with all necessary endorsements) at the offices of the Paying Agent, together with
a written notice of purchase (a “Fundamental Change Purchase Notice”) in the form entitled “Form of
Fundamental Change Purchase Notice” attached to the Securities duly completed, by 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change Purchase Date;
provided, however, that the Fundamental Change Purchase Price shall be so paid pursuant to this
Section 11.01 only if the Securities so delivered or transferred to the Paying Agent shall conform
in all respects to the description thereof in the related Fundamental Change Purchase Notice. The
Fundamental Change Purchase Notice shall state:





     (i) if Definitive Securities have been issued, the certificate numbers of the
Securities which the Holder shall deliver to be purchased or, if Definitive Securities
have not been issued, the Fundamental Change Purchase Notice must comply with appropriate
DTC procedures;




     (ii) the portion of the principal amount of the Securities which the Holder shall
deliver to be purchased, which portion must be $1,000 in principal amount or a multiple
thereof; and




     (iii) that such Securities shall be purchased as of the Fundamental Change Purchase
Date pursuant to the terms and conditions specified in paragraph 4 of the Securities and
in this Indenture.



     (c) Procedures. The Company shall purchase from a Holder, pursuant to this Section 11.01,
Securities if the principal amount of such Securities is $1,000 or a multiple of $1,000 if so
requested by such Holder.



     Any purchase by the Company contemplated pursuant to the provisions of this Section 11.01
shall be consummated by the delivery of the Fundamental Change Purchase Price to be received by the
Holder promptly following the later of the Fundamental Change Purchase Date or the time of
book-entry transfer or delivery of the Securities.



     Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 11.01 shall have the right at any
time prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the
Fundamental Change Purchase Date to withdraw such Fundamental Change Purchase Notice (in whole or
in part) by delivery of a written notice of withdrawal to the Paying Agent in accordance with
Section 11.02(b).



     The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Purchase Notice or written notice of withdrawal thereof.



     On or before 11:00 a.m., New York City time, on the Fundamental Change Purchase Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is
acting as the Paying Agent, shall segregate and hold in trust) cash sufficient to pay









 



53

the aggregate Fundamental Change Purchase Price of the Securities to be purchased pursuant to this Section 11.01.
Payment by the Paying Agent of the Fundamental Change Purchase Price for such Securities shall be
made promptly following the later of the Fundamental Change Purchase Date or the time of book-entry
transfer or delivery of such Securities. If the Paying Agent holds, in accordance with the terms
of this Indenture, cash sufficient to pay the Fundamental Change Purchase Price of such Securities
on the Business Day following the Fundamental Change Purchase Date, then, on and after such date,
such Securities shall cease to be outstanding and interest (including any Additional Interest) on
such Securities shall cease to accrue, whether or not book-entry transfer of such Securities is
made or such Securities are delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Fundamental Change Purchase Price and previously
accrued and unpaid interest (including any Additional Interest) upon delivery or transfer of the
Securities). Nothing herein shall preclude any withholding tax required by law.




     The Company shall require each Paying Agent (other than the Trustee) to agree in writing that
the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all cash held by the
Paying Agent for the payment of the Fundamental Change Purchase Price and shall notify the Trustee
of any default by the Company in making any such payment. If the Company or an Affiliate of the
Company acts as Paying Agent, it shall segregate the cash held by it as Paying Agent and hold it as
a separate trust fund. The Company at any time may require a Paying Agent to deliver all cash held
by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the
Paying Agent shall have no further liability for the cash delivered to the Trustee.



     Section 11.02 . Further Conditions and Procedures for Purchase at the Option of the Holder Upon a
Fundamental Change .



     (a) Notice of Fundamental Change. The Company shall send notices (each, a “Company
Notice”) to the Holders at their addresses shown in the Securities Register maintained by the
Registrar, and to the Trustee and Paying Agent, on or before the 20th calendar
day after the occurrence of the Fundamental Change (such date of delivery, a “Company Notice
Date”). Each Company Notice shall include a form of Fundamental Change Purchase Notice to be
completed by a Holder and shall state:




     (i) the events causing the Fundamental Change;




     (ii) the date of the Fundamental Change;




     (iii) the last date on which a Holder may exercise its purchase rights under Section
11.01;




     (iv) the applicable Fundamental Change Purchase Price;




     (v) the applicable Fundamental Change Purchase Date;









 



54



     (vi) the name and address of the Paying Agent and the Conversion Agent, if
applicable;




     (vii) if applicable, the conversion rights of the Holders with respect to the
Securities and the Conversion Rate at the time of such notice and any expected
adjustments to the Conversion Rate;




     (viii) the procedures the Holder must follow under Sections 11.01 and 11.02;




     (ix) that Securities must be surrendered to the Paying Agent to collect payment of
the Fundamental Change Purchase Price;




     (x) if applicable, that Securities as to which a Fundamental Change Purchase Notice
has been given may be converted only if the applicable Fundamental Change Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;




     (xi) that the Fundamental Change Purchase Price for any Securities as to which a
Fundamental Change Purchase Notice has been given and not withdrawn shall be paid by the
Paying Agent promptly following the later of the Fundamental Change Purchase Date, or the
time of book-entry transfer or delivery of such Securities;




     (xii) that, unless the Company defaults in making payment of such Fundamental Change
Purchase Price on Securities covered by any Fundamental Change Purchase Notice, interest
(including any Additional Interest) will cease to accrue on and after the Fundamental
Change Purchase Date;




     (xiii) the procedures for withdrawing a Fundamental Change Purchase Notice; and




     (xiv) the CUSIP or ISIN number of the Securities.



     Simultaneously with providing such Company Notice, the Company will publish a notice
containing the information in such Company Notice in a newspaper of general circulation in New York
City or publish such information on its then existing website or through such other public medium
as it may use at the time.



     At the Company’s request, made at least five Business Days prior to the date upon which such
notice is to be mailed, and at the Company’s expense, the Paying Agent shall give the Company
Notice in the Company’s name; provided, however, that, in all cases, the text of the Company Notice
shall be prepared by the Company.



     (b) Effect of Fundamental Change Purchase Notice; Withdrawal; Effect of Event of Default.
Upon receipt by the Company of the Fundamental Change Purchase Notice specified in Section
11.01(b), the Holder of the Securities in respect of which such Fundamental Change Purchase Notice
was given shall (unless such Fundamental Change Purchase Notice is









 



55

withdrawn as specified in the
following two paragraphs) thereafter be entitled to receive solely the Fundamental Change Purchase
Price with respect to such Securities. Such Fundamental Change Purchase Price shall be paid by the
Paying Agent to such Holder promptly following the later of (x) the Fundamental Change Purchase
Date, with respect to such Securities (provided the conditions in this Article 11 have been
satisfied) and (y) the time of delivery or book-entry transfer of such Securities to the Paying
Agent by the Holder thereof in the manner required by Section 11.01. Securities in respect of which
a Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted on
or after the date of the delivery of such Fundamental Change Purchase Notice unless such
Fundamental Change Purchase Notice has first been validly withdrawn as specified in the following
two paragraphs.




     A Fundamental Change Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent at any time prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Fundamental Change Purchase Date to which
it relates, specifying:




     (i) the principal amount of the Securities with respect to which such notice of
withdrawal is being submitted;




     (ii) if Definitive Securities have been issued, the certificate number of the
Securities in respect of which such notice of withdrawal is being submitted, or, if
Definitive Securities have not been issued, the written notice of withdrawal must comply
with appropriate DTC procedures; and




     (iii) the principal amount, if any, of such Securities which remains subject to the
original Fundamental Change Purchase Notice and which has been or shall be delivered for
purchase by the Company.



     There shall be no purchase of any Securities pursuant to Section 11.01 if an Event of Default
has occurred and is continuing (other than a default that is cured by the payment of the
Fundamental Change Purchase Price). The Paying Agent shall promptly return to the respective
Holders thereof any Securities (x) with respect to which a Fundamental Change Purchase Notice has
been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default that is cured by the payment of the Fundamental Change
Purchase Price) in which case, upon such return, the Fundamental Change Purchase Notice with
respect thereto shall be deemed to have been withdrawn.



     (c) Securities Purchased in Part. Any Securities that are to be purchased only in part shall
be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee or the Authenticating
Agent shall authenticate and shall make available for delivery to the Holder of such Securities,
without service charge, a new Security or Securities, of any authorized denomination as









 



56

requested
by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Securities so surrendered which is not purchased.




     (d) Covenant to Comply with Securities Laws Upon Purchase of Securities. In connection with
any offer to purchase Securities under Section 11.01, the Company shall, to the extent applicable,
(a) comply with Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange
Act, if applicable; (b) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, if applicable; and (c) otherwise comply with all applicable federal and
state securities laws so as to permit the rights and obligations under Section 11.01 to be
exercised in the time and in the manner specified in Section 11.01.



     (e) Repayment to the Company. The Trustee and the Paying Agent shall return to the Company
any cash or property that remains unclaimed, as provided in paragraph 8 of the Securities, together
with interest that the Trustee or Paying Agent, as the case may be, has expressly agreed in writing
to pay, if any, that is held by them for the payment of a Fundamental Change Purchase Price;
provided, however, that to the extent that the aggregate amount of cash or property deposited by
the Company pursuant to Section 11.01(c) exceeds the aggregate Fundamental Change Purchase Price of
the Securities or portions thereof which the Company is obligated to purchase as of the Fundamental
Change Purchase Date then promptly on and after the Business Day following the Fundamental Change
Purchase Date the Trustee and the Paying Agent shall return any such excess to the Company together
with interest that the Trustee or Paying Agent, as the case may be, has expressly agreed in writing
to pay, if any.



ARTICLE 12

Conversion




     Section 12.01 . Conversion of Securities. (a) Right to Convert. Subject to the procedures for
conversion set forth in this Article 12, prior to the Restriction Release Date, a Holder may
convert all or a portion of its Securities only when the conditions specified in clause (iii) below
are met and only during the related specified time period. Subject to the procedures for
conversion set forth in this Article 12, following the Restriction Release Date, a Holder may
convert all or a portion of its Securities at any time prior to 5:00 p.m., New York City time, on
the Business Day immediately preceding the Stated Maturity at the Conversion Rate; provided,
however, that prior to April 1, 2013, the Holder may convert all or a portion of its Securities
only when any of the conditions specified in clauses (i), (ii) and (iii) below are met and during
the related specified period. Whenever the Securities shall become convertible prior to April 1,
2013, upon the satisfaction of one or more of the conditions stated in clauses (i), (ii) or (iii)
below, the Company or, at the Company’s request, the Trustee in the name and at the expense of the
Company, shall notify, in the case of clause (i) and (ii), promptly, and in the case of clause
(iii), within the time periods specified in clause (iii)(A)(B) and (C), the Trustee, the Conversion
Agent and the Holders of the event triggering such
convertibility in the manner provided in Section 13.02 and the Company shall also publicly announce
such information by publication on the Company’s website or through such other public medium as it
may use at such time. Whenever the Securities shall become convertible upon the satisfaction of
one or more of the









 



57

conditions stated in clauses (iii)(B) or (iii)(C), the Company or, at the
Company’s request, the Trustee in the name and at the expense of the Company, shall also provide
notice of the event triggering such convertibility in accordance with the provisions of Section
11.02. Any notice so given shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice.





     (i) Conversion Upon Satisfaction of Sale Price Condition. Following the Restriction
Release Date, a Holder may surrender all or a portion of its Securities for conversion
during any calendar quarter (and only during such calendar quarter) commencing after June
30, 2007, if the Last Reported Sale Price for the Common Stock for at least 20 Trading
Days during the period of 30 consecutive Trading Days ending on the last Trading Day of
the immediately preceding calendar quarter is greater than or equal to 120% of the
Conversion Price in effect on such last Trading Day.




     (ii) Conversion Upon Satisfaction of Trading Price Condition. Following the
Restriction Release Date, a Holder may surrender all or a portion of its Securities for
conversion during the five Business Day period after any 10 consecutive Trading Day
period (the “Measurement Period”) in which the Trading Price per $1,000 in principal
amount of a Security, as determined following a request by a Holder in accordance with
the procedures set forth in this Section 12.01(a)(ii), for each day in the Measurement
Period was less than 98% of the product of the Last Reported Sale Price of the Common
Stock and the applicable Conversion Rate. In connection with any conversion in
accordance with this Section 12.01(a)(ii), the Bid Solicitation Agent shall have no
obligation to determine the Trading Price of the Securities unless requested by the
Company; and the Company shall have no obligation to make such request unless a Holder
provides the Company with reasonable evidence that the Trading Price per $1,000 principal
amount of Securities would be less than 98% of the product of the Last Reported Sale
Price of the Common Stock and the applicable Conversion Rate. Promptly after receiving
such evidence, the Company shall instruct the Bid Solicitation Agent to determine the
Trading Price of the Securities beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Securities is greater
than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock
and the applicable Conversion Rate.




     (iii) Conversion Upon Specified Corporate Transactions.




     (A) If the Company (1) distributes to all or substantially all holders of
Common Stock rights entitling them to purchase, for a period expiring within 60
calendar days after the date of the distribution, shares of Common Stock at less
than the average of the Last Reported Sale Prices of a share of Common Stock
for the 10 consecutive Trading Day period ending on the Business Day preceding
the announcement of such issuance, or (2) distributes to all or substantially all
holders of Common Stock assets, debt securities or rights to purchase securities









 



58



of the Company, which distribution has a per share Fair Market Value, as reasonably
determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price
of the Common Stock on the Trading Day preceding the declaration date for such
distribution, then, in each case, the Company must notify the Trustee, the
Conversion Agent and the Holders, in the manner provided in Section 13.02, at least
35 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution. Once
the Company has given such notice, Holders may surrender all or a portion of their
Securities for conversion at any time until the earlier of 5:00 p.m., New York City
time, on the Business Day immediately prior to such Ex-Dividend Date or the
Company’s announcement that such distribution will not take place.




     (B) If the Company is party to a transaction described in clause (2) of the
definition of Fundamental Change (without, for the avoidance of doubt, giving
effect to the proviso set forth in the definition thereof relating to Publicly
Traded Securities), the Company must notify the Trustee, the Conversion Agent and
the Holders, in the manner provided in Section 13.02, at least 35 Scheduled Trading
Days prior to the anticipated Effective Date for such transaction. Once the Company
has given such notice, Holders may surrender all or a portion of their Securities
for conversion at any time until 35 calendar days after the actual Effective Date
of such transaction (or if such transaction also constitutes a Fundamental Change
for purposes of Section 11.01, the related Fundamental Change Purchase Date).




     (C) If a Fundamental Change of the type described in clause (1) or (5) in the
definition thereof occurs, the Company must notify the Trustee, the Conversion
Agent and the Holders, in the manner provided in Section 13.02, on or before the
20th calendar day after the occurrence of the Fundamental Change and Holders may
surrender all or a portion of their Securities for conversion at any time beginning
on the actual Effective Date of such Fundamental Change until and including the
later of (i) the date which is 30 calendar days after the actual Effective Date of
such transaction and (ii) the related Fundamental Change Purchase Date.


A Holder may convert a portion of the principal amount of Securities if the portion is $1,000 or a
multiple of $1,000. The cash payable and/or the number of shares of Common Stock issuable upon
conversion of a Security shall be determined as set forth in Section 12.01(c).



Notwithstanding any other provision of the Securities or this Indenture, all Holders’ rights with
respect to conversion of the Securities and the Company’s obligation to deliver shares of Common
Stock at the Conversion Rate upon such conversion (the “Conversion Obligation”),
are subject, in their entirety, to the Company’ right, in its sole and absolute discretion, to
elect to satisfy such Conversion Obligation in any manner permitted pursuant to Section 12.01(c).










 



59


     (b) Conversion Procedures. The following procedures shall apply to the conversion of
Securities:




     (i) In respect of a Definitive Security, a Holder must (A) complete and manually
sign a written notice of conversion (a “Conversion Notice”) in the form entitled “Form of
Conversion Notice” attached to the Security, or facsimile of such Conversion Notice; (B)
deliver such Conversion Notice, which is irrevocable, and the Security to the Conversion
Agent at the office maintained by the Conversion Agent for such purpose; (C) to the
extent any shares of Common Stock issuable upon conversion are to be issued in a name
other than the Holder’s, furnish endorsements and transfer documents as may be required
by the Conversion Agent and, if required pursuant to Section 12.01(e), pay all transfer
or similar taxes or duties; and (D) if required pursuant to Section 2.01(d), pay funds
equal to interest (including any Additional Interest) payable on the next interest
payment date.




     (ii) In respect of a beneficial interest in a Global Security, a Beneficial Owner
must (A) comply with DTC’s procedures for converting a beneficial interest in a Global
Security, (B) to the extent any shares of Common Stock issuable upon conversion are to be
issued in a name other than the Holder’s, if required pursuant to Section 12.01(e), pay
all transfer or similar taxes or duties and (C) if required pursuant to Section 2.01(d),
pay funds equal to interest (including any Additional Interest) payable on the next
interest payment date.


The date a Holder satisfies the foregoing requirements is the “Conversion Date” hereunder.




     If a Holder converts more than one Security at the same time, the cash and number of shares of
Common Stock issuable upon the conversion, if any, shall be based on the total principal amount of
the Securities converted.



     If a Holder has delivered a Fundamental Change Purchase Notice with respect to a Security, the
Holder may not surrender that Security for conversion until the Holder has withdrawn the notice in
accordance with Section 11.02(b).



     Upon surrender of a Security that is converted in part, the Company shall execute, and the
Trustee or the Authenticating Agent shall authenticate and make available for delivery to the
Holder, a new Security in an authorized denomination equal in principal amount to the unconverted
portion of the Security surrendered.



     (c) Settlement Upon Conversion. (i) The Company may elect at any time to settle its
Conversion Obligation with respect to all future conversions solely by the delivery of shares of
Common Stock, solely by the delivery of cash or on a “net share settlement basis” as described in
Section 12.01(c)(iv) below by giving notice to the Trustee and Holders in conformity with the
requirements of Section 12.06; provided, however, that the Company will settle all conversions
occurring before the Restriction Release Date by paying cash and accordingly no irrevocable
election to settle conversion by the delivery of shares of Common Stock or on a “net share









 



60

settlement basis” may be made until after the Restriction Release Date; and provided, further, that
no irrevocable election to settle conversions by the delivery of shares of Common Stock or on a
“net share settlement basis” may be made at any time when the Company may be prevented from
delivering shares of Common Stock by the covenant set forth in Section 12.01(c)(vi).




     (ii) Unless the Company has irrevocably elected a form of settlement pursuant to Section
12.01(c)(i), the Company shall inform the Holders through the Trustee of the method it will choose
to satisfy its Conversion Obligations at any time on or before the date that is two Trading Days
following the applicable Conversion Date (such period, the “Settlement Notice Period”). If the
Company fails to provide notice within the Settlement Notice Period, the Company shall satisfy its
Conversion Obligations only in shares of Common Stock (and cash in lieu of fractional shares),
unless the Company has irrevocably elected a form of settlement pursuant to Section 12.01(c)(i).
If the Company chooses to satisfy any portion of its Conversion Obligations in cash, it will
specify the amount to be satisfied in cash as a percentage of the Conversion Obligations or a fixed
dollar amount. The Company shall treat all Holders converting on the same Trading Day in the same
manner; however, the Company shall not have any obligation to settle Conversion Obligations arising
on different Trading Days in the same manner.



     (iii) If the Company elects to satisfy any portion of its Conversion Obligations in cash
(other than cash in lieu of fractional shares), a Holder may retract its Notice of Conversion at
any time during the two Trading Day period beginning on the Trading Day after the Company has
notified the Trustee of its method of settlement (the “Conversion Retraction Period”), provided
that no such retraction can be made (and a Notice of Conversion shall be irrevocable) if: (i) the
Company has irrevocably elected to pay solely cash or net share settlement upon conversion of the
Securities prior to a Holder’s delivery of a Conversion Notice, (ii) a Holder is converting its
Securities prior to the Restriction Release Date or (iii) a Holder is converting its Securities
during the period beginning 25 Trading Days immediately preceding the Stated Maturity and ending
one Trading Day immediately preceding the Stated Maturity, even if the Company has not otherwise
notified the Holder prior to the Conversion Date of its settlement method election.



     The Company may, in lieu of sending individual notices of its election, send one notice to all
Holders of the method the Company chooses to satisfy its Conversion Obligation for conversions
following delivery of a notice relating to the occurrence of specified events triggering conversion
rights or on or following the 25th Trading Day immediately preceding the Stated
Maturity.



     (iv) With respect to any Notice of Conversion received by the Company, the consideration to be
distributed (“Conversion Settlement Distribution”) for any Security subject to such Notice of
Conversion shall consist of cash, Common Stock or a combination thereof (as selected by the
Company) as set forth in this clause (iv) and clause (v) below:




     (A) if the Company elects to satisfy the entire Conversion Obligation in shares
of Common Stock, the Conversion Settlement Distribution shall be a number of shares
equal to the product of: (A) the aggregate principal amount of









 



61



the Securities to be converted divided by $1,000, multiplied by (B) the then applicable Conversion Rate,
plus cash for any fractional shares pursuant to Section 12.01(d);




     (B) if the Company elects to satisfy the entire Conversion Obligation in cash,
the Conversion Settlement Distribution shall be cash in an amount equal to the
product of: (A) a number equal to the product of (x) the aggregate principal amount
of Securities to be converted divided by $1,000 multiplied by (y) the then
applicable Conversion Rate, and (B) the average Daily VWAP of the Common Stock
during the Observation Period.




     (C) if the Company elects “net share settlement” with respect to the Conversion
Obligation, the Company will deliver to converting Holders, in respect of each
$1,000 principal amount of Securities being converted, a “Settlement Amount” of cash
and shares of Common Stock, if any, equal to the sum of the Daily Settlement Amounts
for each of the 25 Trading Days during the Observation Period for such Security.



     (v) Settlement by the Company of the Conversion Obligation when the Company has elected to
settle entirely by the delivery of shares of Common Stock will occur as soon as practicable after
the Company is required to notify the Holder that is has chosen this method of settlement but in no
event more than four Trading Days after the relevant Conversion Date. Settlement by the Company of
the Conversion Obligation when the Company must settle entirely in cash or that the Company has
elected to satisfy entirely in cash will occur on the third Trading Day following the final Trading
Day of the relevant Observation Period, unless the Securities have become exchangeable solely for a
fixed amount of cash following the occurrence of a Fundamental Change transaction in which event
settlement will occur in cash on the third Trading Date following the relevant Conversion Date.
Settlement by the Company of the Conversion Obligation when the Company has elected “net share
settlement” will occur on the third Business Day immediately following the final Trading Day of the
related Observation Period.



     (vi) Notwithstanding anything to the contrary, in no event will the Company issue shares of
Common Stock beyond the maximum level permitted by the continued listing standards of The Nasdaq
Stock Market. In accordance with such listing standards, the restriction set forth in this
paragraph will apply at any time when the Securities are outstanding, regardless of whether the
Company then has a class of securities quoted on The Nasdaq Stock Market.



     (d) Cash Payments in Lieu of Fractional Shares. The Company shall not issue a fractional share
of Common Stock upon conversion of Securities. Instead the Company shall deliver cash for the
current market value of the fractional share. The current market value of a fractional share shall
be determined to the nearest 1/10,000th of a share by multiplying the Daily
VWAP of a full share of Common Stock on the final Trading Day immediately preceding the
settlement of such conversion by the fractional amount and rounding the product to the nearest
whole cent.









 



62


     (e) Taxes on Conversion. If a Holder converts Securities, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon
the conversion. However, the Holder shall pay any such tax which is due because the Holder requests
the shares to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name other than the
Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be
due because the shares are to be issued in a name other than the Holder’s name, but the Conversion
Agent shall have no duty to determine if any such tax is due. Nothing herein shall preclude any
withholding of tax required by law.



     (f) Certain Covenants of the Company.




     (i) The Company shall, prior to issuance of any Securities hereunder, and from time
to time as may be necessary, reserve out of its authorized but
unissued Common Stock or shares of Common Stock held in treasury, a sufficient number of shares of Common Stock,
free of preemptive rights, to permit the conversion of the Securities in accordance with
the terms hereof.




     (ii) All shares of Common Stock delivered upon conversion of the Securities shall be
newly issued shares or shares held in treasury, shall be duly and validly issued and
fully paid and nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.




     (iii) The Company shall endeavor promptly to comply with all federal and state
securities laws regulating the issuance and delivery of shares of Common Stock upon the
conversion of Securities, if any, and shall cause to have listed or
quoted all such shares of Common Stock on each U.S. national securities exchange or automatic quotation
system or over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.



     Section 12.02 . Adjustments to Conversion Rate. The Conversion Rate shall be adjusted from time
to time by the Company as follows:



     (a) If the Company issues shares of Common Stock as a dividend or distribution on shares of
the Common Stock, or effects a share split or share combination, the Conversion Rate will be
adjusted based on the following formula:








	 	 	 	 	 	 	 
	 

	 	where,	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to such
event
	 
	 	 	 	 	 	 
	 

	 	CR'
	 	=
	 	the Conversion Rate in effect immediately after such event












 



63


	 	 	 	 	 	 	 
	 

	 	OS0
	 	=
	 	the number of shares of Common Stock outstanding
immediately prior to such event
	 
	 	 	 	 	 	 
	 

	 	OS'
	 	=
	 	the number of shares of Common Stock outstanding
immediately after such event





Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the
Business Day following the Record Date for such dividend or distribution, or the date fixed for
determination for such share split or share combination. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in treasury by the Company. If any dividend
or distribution of the type described in this Section 12.02(a) is declared but not so paid or made,
or the outstanding shares of Common Stock are not subdivided or combined, as the case may be, the
Conversion Rate shall again be adjusted, effective as of the date the Board of Directors determines
not to pay such divided or distribution, or subdivide or combine the outstanding shares of Common
Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend or
distribution, or subdivision or combination, had not been declared.




     (b) If the Company issues to all or substantially all holders of its Common Stock any rights
or warrants entitling them for a period of not more than 60 calendar days to subscribe for or
purchase shares of Common Stock at a price per share less than the average of the Last Reported
Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Business
Day immediately preceding the date of announcement of the issuance of such rights or warrants, the
Conversion Rate will be adjusted based on the following formula:








	 	 	 	 	 	 	 
	 

	 	where,	 	 	 	 
	 

	 	CR0
	 	=
	 	the Conversion Rate in effect immediately prior to such
event
	 
	 	 	 	 	 	 
	 

	 	CR'
	 	=
	 	the Conversion Rate in effect immediately after such event
	 
	 	 	 	 	 	 
	 

	 	OS0
	 	=
	 	the number of shares of Common Stock outstanding
immediately prior to such event
	 
	 	 	 	 	 	 
	 

	 	X
	 	=
	 	the total number of shares of Common Stock issuable
pursuant to such rights or warrants
	 
	 	 	 	 	 	 
	 

	 	Y
	 	=
	 	the number of shares of Common Stock equal to the
aggregate price payable to exercise such rights divided
by the average of the Last Reported Sale Prices of the
Common Stock over the 10 consecutive Trading Day period
ending on the Business Day immediately preceding the date
of announcement of the issuance of such rights or
warrants







 









 





64



Such adjustment shall be successively made whenever any such rights or warrants are issued and
shall become effective immediately after 9:00 a.m., New York City time, on the Business Day
following the date fixed for determination of Holders entitled to receive such rights or warrants.
The Company will not issue any such rights or warrants in respect of any shares of Common Stock
held in treasury by the Company. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of shares of Common Stock
actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had not been fixed.



In determining whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Last Reported Sale Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be determined by the
Board of Directors.




     (c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness or
other assets or property of the Company to all or substantially all holders of the Common Stock,
excluding:




     (i) dividends or distributions and rights or warrants referred to in clause (a) or
(b) above; and




     (ii) dividends or distributions paid exclusively in cash;


then the Conversion Rate will be adjusted based on the following formula:








where,




	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such
distribution
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such distribution
	 
	 	 	 	 
	SP0

	 	=
	 	the average of the Last Reported Sale Prices of the Common Stock
over the 10 consecutive Trading Day period ending on the
Business Day immediately preceding the Ex-Dividend Date for such
distribution
	 
	 	 	 	 
	FMV

	 	=
	 	the Fair Market Value (as determined by the Board of Directors)
of the shares of Capital Stock, evidences of indebtedness,
assets or property distributed with respect to each outstanding
share of Common Stock on the Record Date for such distribution.












 



65

Such adjustment shall become effective immediately prior to 9:00 a.m., New York City time, on the
Business Day following the Record Date such distribution.



With respect to an adjustment pursuant to this clause (c) where there has been a payment of a
dividend or other distribution on the Common Stock or shares of Capital Stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit (a
“Spin-Off”), the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the
tenth Trading Day immediately following, and including, the effective date for such Spin-Off will
be increased based on the following formula:








where,




	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to such
adjustment
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after such adjustment
	 
	 	 	 	 
	FMV0

	 	=
	 	the average of the Last Reported Sale Prices of the Capital
Stock or similar equity interest distributed to holders of
Common Stock applicable to one share of Common Stock over the
first 10 consecutive Trading Day period after the effective
date of the Spin-Off
	 
	 	 	 	 
	MP0

	 	=
	 	the average of the Last Reported Sale Prices of Common Stock
over the first 10 consecutive Trading Day period after the
effective date of the Spin-Off.





Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the
Spin-Off.




     (d) If the Company pays any cash dividend or distribution to all or substantially all holders
of Common Stock, the Conversion Rate will be adjusted based on the following formula:








where,




	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect immediately prior to
the Record Date for such distribution












 



66


	 	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect immediately after
the Record Date for such distribution
	 
	 	 	 	 
	SP0

	 	=
	 	the Last Reported Sale Price of the Common Stock
on the Trading Day immediately preceding the
Ex-Dividend Date for such distribution
	 
	 	 	 	 
	C

	 	=
	 	the amount in cash per share the Company
distributes to holders of Common Stock





Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the
Record Date for such dividend or distribution; provided that if such dividend or distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.




     (e) If the Company or any of its Subsidiaries make a payment in respect of a tender or
exchange offer for Common Stock, to the extent that the cash and value of any other consideration
included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the
Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender offer or exchange offer (such last date, the “Expiration Time”), the
Conversion Rate will be increased based on the following formula:








where,




	 	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect on the date such
tender offer or exchange offer expires
	 
	 	 	 	 
	CR'

	 	=
	 	the Conversion Rate in effect on the day next
succeeding the date such tender offer or exchange
offer expires
	 
	 	 	 	 
	AC

	 	=
	 	the aggregate value of all cash and any other
consideration (as determined by the Board of
Directors) paid or payable for shares purchased in
such tender offer or exchange offer
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
immediately prior to the date such tender offer or
exchange offer expires












 



67


	 	 	 	 	 
	OS'

	 	=
	 	the number of shares of Common Stock outstanding
immediately after the date such tender offer or
exchange offer expires
	 
	 	 	 	 
	SP’

	 	=
	 	the average of the Last Reported Sale Prices of
Common Stock over the 10 consecutive Trading Day
period commencing on the Trading Day next
succeeding the date such tender offer or exchange
offer expires.





If the Company is obligated to purchase shares pursuant to any such tender offer or exchange offer,
but the Company is permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such tender offer or exchange offer had not
been made.




     (f) [reserved]



     (g) Notwithstanding the foregoing provisions of this Section 12.02, no adjustment shall be
made thereunder, nor shall an adjustment be made to the ability of a Holder to convert, for any
distribution described therein if the Holder, as a result of holding the Securities, will otherwise
participate in the distribution without conversion of such Holder’s Securities.



     (h) The Company may (but is not required to) make such increases in the Conversion Rate, in
addition to those required by clauses (a) through (e) of this Section 12.02 as the Board of
Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock
or rights to purchase Common Stock in connection with a dividend or distribution of shares (or
rights to acquire shares) or any similar event treated as such for income tax purposes.



     (i) To the extent permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount for any period of at least 20 Business Days if the Board of Directors
shall have made a determination that such increase would be in the best interests of the Company,
which determination shall be conclusive.



     (j) Notwithstanding any provision herein to the contrary, no adjustment to the Conversion Rate
need be made:




     (i) upon the issuance of any shares of Common Stock pursuant to any present or
future plan providing for the reinvestment of dividends or interest payable on securities
of the Company and the investment of additional optional amounts in shares of Common
Stock under any plan;




     (ii) upon the issuance of any shares of Common Stock or options or rights to
purchase shares of Common Stock pursuant to any present or future employee, director or
consultant benefit plan or program of or assumed by the Company or any of its
Subsidiaries;









 



68



     (iii) upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security not described in
clause (ii) above and outstanding as of the Issue Date;




     (iv) for a change in the par value of the Common Stock; or




     (v) for accrued and unpaid interest (including Additional Interest, if any).


To the extent the Securities become convertible into cash, assets or property (other than Capital
Stock of the Company or securities to which Section 12.03 applies), no adjustment shall be made
thereafter as to the cash, assets or property. Interest shall not accrue on such cash, assets or
property.




     (k) All calculations under this Section 12.02 and Section 12.03 shall be made by the Company
and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share,
as the case may be. Except as described above in this Section 12.02 and Section 12.03, the Company
will not adjust the Conversion Rate.



     (l) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate
setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a Trust Officer of the Trustee shall have
received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has
knowledge is still in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the date on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to the Holder of each Security at such Holder’s last address
appearing on the Securities Register provided for in Section 2.05 of this Indenture within 20
Business Days after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.



     (m) Any case in which this Section 12.02 provides that an adjustment shall become effective
immediately after (i) a Record Date for a dividend or distribution described in Section 12.02(a),
Section 12.02(c) or Section 12.02(d), (ii) the date fixed for the determination of a share split or
combination pursuant to Section 12.02(a), (iii) the date fixed for the determination of Holders
entitled to receive rights or warrants pursuant to 12.02(b) or (iv) the Expiration Time for any
tender or exchange offer pursuant to Section 12.02(e), (each a “Determination Date”), the Company
may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined)
(x) issuing to the Holder of any Security converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such Adjustment Event over
and above the Common Stock issuable upon such conversion before giving effect to such adjustment
and (y) paying to such Holder any amount in cash in lieu of any









 



69



fraction pursuant to Section 12.01.
For purposes of this Section 12.02(m), the term “Adjustment Event” shall mean:




     (1) in any case referred to in clause (i) hereof, the date any such dividend or
distribution is paid or made;




     (2) in any case referred to in clause (ii) hereof, the occurrence of such event;




     (3) in any case referred to in clause (iii) hereof, the date of expiration of such
rights or warrants;




     (4) in any case referred to in clause (iv) hereof, the date a sale or exchange of
Common Stock pursuant to such tender or exchange offer is consummated and becomes
irrevocable.



     (n) For purposes of this Section 12.02, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company will not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.



     (o) Whenever any provision of this Article 12 requires a calculation of an average of Last
Reported Sale Prices or Daily VWAP over a span of multiple days, the Company will make appropriate
adjustments (determined in good faith by the Board of Directors) to account for any adjustment to
the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion
Rate where the Ex-Dividend Date of the event occurs, at any time during the period from which the
average is to be calculated.



Section 12.03. Adjustment Upon Certain Fundamental Changes. (a) If a Holder elects to convert Securities pursuant to Section 12.01(a)(iii) above in
connection with a transaction described therein and such Fundamental Change pursuant to clause (1)
or (2) of the definition of “Fundamental Change” occurs, the Conversion Rate for such Securities
shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) as
described below. Any conversion will be deemed to have occurred in connection with such Fundamental
Change only if such Securities are surrendered for conversion at a time when the Securities would
be convertible in light of the expected or actual occurrence of a Fundamental Change and
notwithstanding the fact that a Security may then be convertible because another condition to
conversion has been satisfied or no condition to conversion exists.




     (b) The number of Additional Shares by which the Conversion Rate will be increased will be
determined by reference to the table attached as Schedule A hereto, based on the date on which the
Fundamental Change occurs or becomes effective (the “Effective Date”) and the Stock Price with
respect to such transaction; provided that if the Stock Price is between two Stock Price amounts
set forth in such table or the Effective Date is between two Effective Dates in the table, the
number of Additional Shares will be determined by a straight-line interpolation









 



70



between the number
of Additional Shares set forth for the higher and lower Stock Price amounts and the two dates, as
applicable, based on a 365-day year; provided further that if the Stock Price is greater than
$37.00 per share (subject to adjustment as set forth in clause (c) below) or less than $10.84 per
share (subject to adjustment as set forth in clause (c) below), then no Additional Shares will be
added to the Conversion Rate. Notwithstanding the foregoing, in no event will the total number of
shares of Common Stock issuable upon conversion exceed 92.2509 shares per $1,000 principal amount
of Securities, subject to adjustments in the same manner as the Conversion Rate pursuant to Section
12.02.



     (c) The Stock Prices set forth in the first row of the table in Schedule A hereto will be
adjusted as of any date on which the Conversion Rate of the Securities is adjusted pursuant to
Section 12.02. The adjusted Stock Prices will equal the Stock Prices applicable immediately prior
to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to such adjustment and the denominator of which is the Conversion Rate as so
adjusted. The number of Additional Shares set forth in such table will be adjusted in the same
manner as the Conversion Rate as set forth in Section 12.02.



     Section 12.04. Effect of Reclassification, Consolidation, Merger or Sale. (a) If any of the following events occur:



     (i) any recapitalization, reclassification or change of the outstanding shares of Common Stock
(other than a subdivision or combination to which Section 12.02(a) applies);



     (ii) any consolidation, merger, binding share exchange or combination of the Company with
another Person;



     (iii) any conveyance, transfer, sale, lease or other disposition to any other Person of all or
substantially all of the properties and assets of the Company and its Subsidiaries; or



     (iv) any statutory share exchange,


as a result of which holders of Common Stock received cash, securities or other property (or any
combination thereof) with respect to or in exchange for such Common Stock (any such event or
transaction, a “Reorganization Event”), the Securities will become convertible into the kind and
amount of consideration that Holders of Common Stock received in such Reorganization Event (the
“Reference Property”) upon such Reorganization Event by a holder of a number of shares of Common
Stock equal to the Conversion Rate immediately prior to such Reorganization Event and the Company
or successor Person shall execute a supplemental indenture to such effect. For purposes of the
foregoing, the type and amount of consideration that a holder of Common Stock would have been
entitled to receive in the case of any such Reorganization Event that causes the Common Stock to be
converted into the right to receive more than a single type of consideration (determined based in
part upon any form of stockholder election) will be deemed to be the weighted average of the types
and amounts of consideration received by the holders of Common Stock that affirmatively make such
an election; the Holders of the Securities will have no right to make any such election themselves
with respect to the Securities. In all cases, the provisions








 



71


 under Section 12.01(c) shall continue
to apply with respect to the calculation of the Settlement Amount. Such supplemental indenture
shall provide for provisions and adjustments which shall be as nearly equivalent as may be
practicable to the provisions and adjustments provided for in this Article 12, Article 9 and
Article 11 and the definition of Fundamental Change, as appropriate, as determined in good faith by
the Company (which determination shall be conclusive and binding), to make such provisions apply to
such other Person if different from the original issuer of the Securities.




     (b) Following the effective time of any such Reorganization Event, settlement of Securities
converted shall be in cash and/or units of Reference Property determined in accordance with Section
12.01(c) above based on the Daily Conversion Value and Daily VWAP of such Reference Property. For
the purposes of determining such Daily Conversion Value and Daily VWAP, (i) if the Reference
Property includes securities for which the price can be
determined in a manner contemplated by the definition of Daily VWAP, then the value of such
securities shall be determined in accordance with the principles set forth in such definition, as
determined in good faith by the Company (which determination shall be conclusive and binding); (ii)
if the Reference Property includes other property (other than securities as to which clause (i)
applies or cash), then the value of such property shall be the Fair Market Value of such property
as determined by the Company’s Board of Directors in good faith; and (iii) if the Reference
Property includes cash, then the value of such cash shall be the amount thereof.



     (c) Any issuer of securities included in the Reference Property shall execute an amendment to
the Registration Rights Agreement (to the extent any Registrable Securities (as defined therein)
remain outstanding) to make the provisions thereof applicable to such securities included in the
Applicable Consideration.



     (d) The Company shall cause notice of the execution of any supplemental indenture required by
this Section 12.04 to be mailed to each Holder, in the manner provided in Section 13.02, within 20
calendar days after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.



     (e) The above provisions of this Section 12.04 shall similarly apply to successive
Reorganization Events.



     (f) If this Section 12.04 applies to any event or occurrence, Section 12.02 shall not apply in
respect of such event or occurrence.



     (g) The Company shall not become a party to any Reorganization Event unless its terms are
consistent with the foregoing. None of the foregoing provisions shall affect the right of a Holder
of Securities, if any, to convert the Securities as set forth in Section 12.01 prior to the
effective time of such Reorganization Event.



     Section 12.05. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or
responsibility to the Company or any Holder of Securities to determine the Conversion Rate, or
whether any facts exist which may require any









 



72



adjustment of the Conversion Rate, or with respect to
the nature or extent or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Trustee and any other Conversion Agent shall not be accountable
with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon the conversion of any
Security; and the Trustee and any other Conversion Agent make no representations with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to issue, transfer or deliver any cash or shares of Common Stock or stock certificates or
other securities or property upon the surrender of any Security for the purpose of conversion or to
comply with any of the duties, responsibilities or covenants of the Company contained in this
Article 12. Without limiting the generality of the foregoing, neither the Trustee nor any
Conversion Agent shall be under any responsibility to
determine the correctness of any provisions contained in any supplemental indenture entered into
pursuant to Section 12.04 relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders upon the conversion of their Securities after any
Reorganization Event or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 7.01, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, an Officers’ Certificate with respect thereto.



     Section 12.06. Notice to Holders Prior to Certain Actions. Except where notice is required pursuant to Section 12.01(iii)(A), in case:



     (a) the Company shall declare a dividend (or any other distribution) on its Common Stock that
would require an adjustment in the Conversion Rate pursuant to Section 12.02; or



     (b) the Company shall authorize the granting to the holders of all or substantially all of its
Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other
rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section
12.02; or



     (c) of any reclassification or reorganization of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value), or of any consolidation or merger to
which the Company is a party and for which approval of any stockholders of the Company is required,
or of the sale or transfer of all or substantially all of the assets of the Company;



     (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;



     (e) of the occurrence of the Restriction Release Date;



     (f) of any irrevocable elections pursuant to Section 12.01(d) with respect to the form of
settlement of conversions;









 



73

the Company shall cause to be filed with the Trustee and to be mailed to each Holder of Securities
in the manner provided in Section 13.02, as promptly as possible but in any event at least three
calendar days prior to the applicable date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution or rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights are to be determined, (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding
up is expected to become effective or occur, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up or (z) the date of the occurrence of the Restriction
Release Date or the date of the Company’s irrevocable settlement election. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of any related dividend,
distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or
winding up. Any notice of the occurrence of the Restriction Release Date shall include a brief
description of the events relating to such occurrence as well as a statement of the effect of the
occurrence of the Restriction Release Date on the conversion rights of Holders of the Securities.
Any notice of an irrevocable settlement election shall indicate the form of settlement irrevocably
elected by the Company and until such notice has been given as provided in this Section 12.06,
converting Holders will retain their rights with respect to the settlement of conversions fully or
partially in cash to retract conversions of Securities as provided in Section 12.01(c).




     Section 12.07. Stockholder Rights Plan. To the extent that the Company has a rights plan in effect upon conversion of the Securities
into Common Stock, the Holders will receive, in addition to the Common Stock, the rights under the
rights plan, unless prior to any conversion, the rights have separated from the Common Stock, in
which case, and only in such case, the Conversion Rate will be adjusted at the time of separation
as if the Company distributed to all or substantially all holders of Common Stock shares of the
Company’s Capital Stock, evidences of indebtedness or assets or property as described in Section
12.02(c) above, subject to readjustment in the event of the expiration, termination or redemption
of such rights. In lieu of any such adjustment, the Company may amend such applicable stockholder
rights agreement to provide that upon conversion of the Securities the Holders will receive, in
addition to the Common Stock issuable upon such conversion, the rights which would have attached to
such Common Stock if the rights had not become separated from the Common Stock under such
applicable stockholder rights agreement.



ARTICLE 13



Miscellaneous




     Section 13.01. TIA Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in this Indenture by the TIA, the provision required by the TIA shall
control.









 



74


     Section 13.02. Notices. Any notice or communication shall be in writing (including telecopy promptly confirmed in
writing) and delivered in person or mailed by first-class mail addressed as follows:


if to the Company or any Subsidiary Guarantor:



Eddie Bauer Holdings, Inc.

15010 N.E. 36th Street

Redmond, WA 98052

Attention: General Counsel

Fax number: 425-755-7671



if to the Trustee:



The Bank of New York

101 Barclay Street – Floor 8W

New York, NY 10286

Attention: Corporate Trust Administration

Fax: 212-815-5704




     The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.



     Any notice or communication mailed to a registered Holder shall be mailed to the Holder at the
Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.



     Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it, except that notices to
the Trustee shall be effective only upon receipt.



     Section 13.03. Communication by Holders with other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights
under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA § 312(c).



     Section 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any
action under this Indenture, the Company shall furnish to the Trustee:



     (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and









 



75


     (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating
that, in the opinion of such counsel, all such conditions precedent have been complied with.



     Section 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for
in this Indenture shall include:



     (a) a statement that the individual making such certificate or opinion has read such covenant
or condition;



     (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;



     (c) a statement that, in the opinion of such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and



     (d) a statement as to whether or not, in the opinion of such individual, such covenant or
condition has been complied with.



     In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’
Certificate or on certificates of public officials.



     Section 13.06. When Securities Are Disregarded. In determining whether the Holders of the required principal amount of Securities have concurred
in any direction, waiver or consent, Securities owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Company
shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.



     Section 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by, or a meeting of, Holders. The Registrar
and the Paying Agent may make reasonable rules for their functions.



     Section 13.08. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions
are authorized or required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest or
Additional Interest, if any, shall accrue for the intervening period. If a Regular Record Date is
a Legal Holiday, the record date shall not be affected.









 



76


     Section 13.09. Governing Law; Waiver of Jury Trial. THIS INDENTURE AND THE SECURITIES AND SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. EACH OF THE COMPANY, THE SUBSIDIARY
GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OF OR RELATING TO EACH OF
THIS INDENTURE, THE NOTES OR THE SUBSIDIARY GUARANTEES.



     Section 13.10. No Recourse Against Others. An incorporator, director, officer, employee, Affiliate or stockholder of the Company, solely by
reason of this status, shall not have any liability for any obligations of the Company under the
Securities, this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for the issue of the
Securities.



     Section 13.11. Successors. All agreements of the Company and the Subsidiary Guarantors in this Indenture and the Securities
and the Subsidiary Guarantees shall bind their respective successors. All agreements of the
Trustee in this Indenture shall bind its successors.



     Section 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.



     Section 13.13. Qualification of Indenture. The Company shall qualify this Indenture under the TIA in accordance with the terms and
conditions of the Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys’ fees and expenses for the Company, the Trustee and the Holders) incurred in
connection therewith, including, but not limited to, costs and expenses of qualification of this
Indenture and the registration of the resale of the Securities and the Subsidiary Guarantees and
the printing of this Indenture and the Securities.



     Section 13.14. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended to be considered a
part hereof and shall not modify or restrict any of the terms or provisions hereof.



     Section 13.15. Severability Clause. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and such provision shall be ineffective only to the extent of such invalidity,
illegality or unenforceability.



     Section 13.16. Calculations. Except as otherwise provided herein, the Company will be responsible for making all calculations
called for under this Indenture and the Securities. The Company will make all such calculations in
good faith and, absent manifest error, its calculations









 



77



will be final and binding on Holders. The
Company upon request will provide a schedule of its calculations to each of the Trustee and the
Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively
upon the accuracy of the Company’s calculations without independent verification. The Trustee will
deliver a copy of such schedule to any Holder upon the request of such Holder.



[Remainder of the page intentionally left blank]











 



78




     IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date
first written above.



	 	 	 	 	 
	 	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	 
	 









 



79

	 	 	 	 	 
	 	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 BANK OF NEW YORK, as Trustee

 	 
	 	By:  	/s/
Mary LaGumina 	 
	 	 	Name:  	Mary LaGumina 	 
	 	 	Title:  	Vice President 	 










 



 

	 	 	 	 	 




SCHEDULE A



The following table sets forth the number of shares by which the Conversion Rate will be increased
per $1,000 principal amount of Securities pursuant to Section 12.03 of this Indenture:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective date
	 	$	10.84	 	 	$	13.00	 	 	$	15.00	 	 	$	17.00	 	 	$	19.00	 	 	$	21.00	 	 	$	23.00	 	 	$	25.00	 	 	$	27.00	 	 	$	29.00	 	 	$	31.00	 	 	$	33.00	 	 	$	35.00	 	 	$	37.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4/4/2007
	 	 	18.4502	 	 	 	14.3411	 	 	 	11.4148	 	 	 	9.3352	 	 	 	7.7731	 	 	 	6.5512	 	 	 	5.5669	 	 	 	4.7568	 	 	 	4.0794	 	 	 	3.5062	 	 	 	3.0166	 	 	 	2.5955	 	 	 	2.2312	 	 	 	1.9147	 
	4/1/2008
	 	 	18.4502	 	 	 	13.3426	 	 	 	10.5166	 	 	 	8.5659	 	 	 	7.1279	 	 	 	6.0149	 	 	 	5.1228	 	 	 	4.3897	 	 	 	3.7760	 	 	 	3.2555	 	 	 	2.8095	 	 	 	2.4245	 	 	 	2.0901	 	 	 	1.7985	 
	4/1/2009
	 	 	18.4502	 	 	 	12.1469	 	 	 	9.4364	 	 	 	7.6248	 	 	 	6.3284	 	 	 	5.3430	 	 	 	4.5606	 	 	 	3.9200	 	 	 	3.3839	 	 	 	2.9282	 	 	 	2.5365	 	 	 	2.1968	 	 	 	1.9006	 	 	 	1.6410	 
	4/1/2010
	 	 	18.4502	 	 	 	10.8304	 	 	 	8.1458	 	 	 	6.4844	 	 	 	5.3520	 	 	 	4.5169	 	 	 	3.8644	 	 	 	3.3338	 	 	 	2.8903	 	 	 	2.5127	 	 	 	2.1869	 	 	 	1.9031	 	 	 	1.6542	 	 	 	1.4347	 
	4/1/2011
	 	 	18.4502	 	 	 	9.2852	 	 	 	6.5946	 	 	 	5.0940	 	 	 	4.1542	 	 	 	3.4973	 	 	 	2.9979	 	 	 	2.5963	 	 	 	2.2616	 	 	 	1.9764	 	 	 	1.7294	 	 	 	1.5134	 	 	 	1.3228	 	 	 	1.1537	 
	4/1/2012
	 	 	18.4502	 	 	 	7.4856	 	 	 	4.6847	 	 	 	3.3792	 	 	 	2.6878	 	 	 	2.2528	 	 	 	1.9364	 	 	 	1.6849	 	 	 	1.4753	 	 	 	1.2960	 	 	 	1.1403	 	 	 	1.0036	 	 	 	0.8826	 	 	 	0.7748	 
	4/1/2013
	 	 	18.4502	 	 	 	5.3780	 	 	 	2.2301	 	 	 	1.2510	 	 	 	0.9367	 	 	 	0.7877	 	 	 	0.6830	 	 	 	0.5976	 	 	 	0.5252	 	 	 	0.4627	 	 	 	0.4083	 	 	 	0.3605	 	 	 	0.3182	 	 	 	0.2804	 
	4/1/2014
	 	 	18.4502	 	 	 	3.0681	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 






Schedule A










 



 


EXHIBIT A




[FORM OF FACE OF SECURITY]




[Restricted Securities Legend, if applicable]




[Global Security Legend, if applicable]




EDDIE BAUER HOLDINGS, INC.




No. [___]




CUSIP NO.: [                    ]

ISIN: [                    ]




5.25% Convertible Senior Notes due 2014




     Eddie Bauer Holdings, Inc., a Delaware corporation, promises to pay to [                    ], or
registered assigns, the principal sum of [                     Dollars ($                    )][insert in Global Security: ,
as revised by the Schedule of Increases and Decreases in Global Security attached hereto], on April
1, 2014.



     Interest Payment Dates: April 1 and October 1



     Regular Record Dates: March 15 and September 15



     Additional provisions of this Security are set forth on the attached “Terms of Securities.”









 



2


     Dated:



	 	 	 	 	 
	 	EDDIE BAUER HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



TRUSTEE’S CERTIFICATE OF AUTHENTICATION




THE BANK OF NEW YORK, as Trustee, certifies

that this is one of the Securities referred to

in the Indenture.




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 









 



 


TERMS OF SECURITIES




5.25% Convertible Senior Notes due 2014





     Eddie Bauer Holdings, Inc., a Delaware corporation (such corporation, and its successors and
assigns under the Indenture hereinafter referred to, being herein called the “Company”), issued
these Securities under an Indenture dated as of April 4, 2007 (as it may be amended or supplemented
from time to time in accordance with the terms thereof, the “Indenture”), among the Company, the
Subsidiary Guarantors and the Trustee, to which reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the
Company, the Subsidiary Guarantors and the Holders. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb) and the Holders are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of those terms.
Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the
Indenture.



     To Guarantee the due and punctual payment of the principal and interest (including any
Additional Interest), if any, on the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration, by repurchase or otherwise, according to the terms of the Securities and
the Indenture, the Subsidiary Guarantors have fully and unconditionally Guaranteed (and future
guarantors, together with the Subsidiary Guarantors, will fully and unconditionally Guarantee),
jointly and severally, such obligations on a senior basis pursuant to the terms of the Indenture.



1. Interest




     The Company promises to pay interest on the principal amount of this Security at the rate of
5.25% per annum.



     The Company will pay interest semiannually on April 1 and October 1 of each year commencing
October 1, 2007. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities or, if no interest has been paid, from April 4, 2007.
Interest will be computed on the basis of a 360-day year of twelve 30-day months.



2. Method of Payment




     By no later than 11:00 a.m., New York City time, on the date on which any principal of or
interest (including any Additional Interest), on any Security is due and payable, the Company shall
deposit with the Paying Agent money sufficient to pay such amount. The Company will pay principal
and interest in money of the United States that at the time of payment is legal tender for payment
of public and private debts.



     Payments in respect of Securities represented by a Global Security (including principal and
interest (including any Additional Interest)) will be made by wire transfer of immediately









 



2



available funds to the accounts specified by The Depository Trust Company. The Company will
pay principal of Definitive Securities at the office or agency designated by the Company for such
purpose. Interest (including any Additional Interest) on Definitive Securities will be payable (i)
to Holders having an aggregate principal amount of $5,000,000 or less, by check mailed to the
Holders of these Securities and (ii) to Holders having an aggregate principal amount of more than
$5,000,000, either by check mailed to each Holder or, upon application by a Holder to the Registrar
not later than the relevant record date, by wire transfer in immediately available funds to that
Holder’s account within the United States, which application shall remain in effect until the
Holder notifies, in writing, the Registrar to the contrary.



3. Redemption




     No sinking fund is provided for the Securities and the Securities are not redeemable at the
option of the Company prior to maturity.



4. Purchase at the Option of the Holder Upon a Fundamental Change 




     If a Fundamental Change shall occur at any time, each Holder shall have the right, at such
Holder’s option and subject to the terms and conditions of the Indenture, to require the Company to
purchase all or a portion of its Securities at a Fundamental Change Purchase Price specified in the
Indenture.



5. Conversion




     Subject to the conditions and procedures set forth in the Indenture, and, prior to April 1,
2013, upon satisfaction of conditions and during the periods specified in the Indenture, a Holder
may convert Securities, on or prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding Stated Maturity, into shares of Common Stock at the Conversion Rate.



     The initial Conversion Rate is 73.8007 shares of Common Stock per $1,000 principal amount of
Securities, subject to adjustment in certain events described in the Indenture. Upon conversion,
in lieu of delivery of shares of Common Stock in satisfaction of the Company’s obligation
conversion, the Company may elect to deliver cash or a combination of cash and shares of Common
Stock, provided that if the Securities are converted prior to the Restriction Release Date (as
defined in the Indenture), the Company must pay cash in settlement in respect of such converted
Securities. The Company shall deliver cash in lieu of any fractional share of Common Stock.



     A Holder may convert a portion of the Securities only if the principal amount of such portion
is $1,000 or a multiple of $1,000. No payment or adjustment shall be made for dividends on the
Common Stock except as provided in the Indenture.



6. Denominations; Transfer; Exchange




     The Securities are in registered form without coupons in denominations of principal amount of
$1,000 and multiples of $1,000. A Holder may transfer or exchange Securities in









 



3



accordance with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of
Securities surrendered for conversion or, if a portion of any Security is surrendered for
conversion, the portion thereof surrendered for conversion.



7. Persons Deemed Owners




     The registered Holder of this Security may be treated as the owner of it for all purposes.



8. Unclaimed Money




     If money for the payment of principal or interest (including any Additional Interest) remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company.
After any such payment, Holders entitled to the money must look only to the Company and not to the
Trustee for payment.



9. Amendment, Waiver




     Subject to certain exceptions, the Indenture contains provisions permitting an amendment of
the Indenture or the Securities with the written consent of the Holders of at least a majority in
principal amount of the then outstanding Securities and the waiver of any Event of Default (other
than with respect to nonpayment or in respect of a provision that cannot be amended without the
written consent of each Holder affected) or noncompliance with any provision with the written
consent of the Holders of a majority in principal amount of the then outstanding Securities.



     In addition, the Indenture permits an amendment of the Indenture or the Security without the
consent of any Holder under circumstances specified in the Indenture.



10. Defaults and Remedies




     If an Event of Default specified in the Indenture occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all the Securities by
notice to the Company to be due and payable immediately. In addition, certain specified Events of
Default will cause the Securities to become immediately due and payable without further action by
the Holders.



     Holders may not enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing Default or Event of Default (except a Default or
Event of Default in payment of principal or interest (including any Additional Interest)) if it
determines that withholding notice is in their interest.









 



4


11. Trustee Dealings with the Company




     Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would have if it were not
Trustee.



12. No Recourse Against Others




     An incorporator, director, officer, employee, Affiliate, agent or stockholder, of the Company,
solely by reason of this status, shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of the Securities.



13. Authentication




     This Security shall not be valid until an authorized signatory of the Trustee manually
authenticates this Security.



14. Abbreviations




     Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=
tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (= Uniform Gift to Minors
Act).



15. CUSIP Numbers




     Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed
the Trustee to use CUSIP numbers in notices as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Securities or as contained in any
notice, and reliance may be placed only on the other identification numbers placed thereon.



16. Governing Law




     This Security shall be governed by, and construed in accordance with, the law of the State of
New York.



     The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Security. Requests may be made to
Eddie Bauer Holdings, Inc., 15010 N.E. 36th Street, Redmond, WA 98052, Attention:
General Counsel, Fax number: 425-755-7671.









 



5


[TO BE ATTACHED TO GLOBAL SECURITIES]




SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY




     The following increases or decreases in this Global Security have been made:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal Amount of this Global	 	 	Signature of authorized	 
	 	 	Amount of decrease in Principal	 	 	Amount of increase in Principal	 	 	Security following such	 	 	signatory of Trustee or	 
	Date	 	Amount of this Global Security	 	 	Amount of this Global Security	 	 	decrease or increase	 	 	Securities Custodian	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 











 



6


ASSIGNMENT FORM




To assign this Security, fill in the form below:

I or we assign and transfer this Security to



 



(Print or type assignee’s name, address and zip code)



 



(Insert assignee’s soc. sec. or tax I.D. No.)



and irrevocably appoint                      agent to transfer this Security on the



books of the Company. The agent may substitute another to act for him.




 





	 	 	 	 	 	 	 
	Date:

	 	 	 	     Your Signature:	 	 
	 

	 	 
	 	 	 	 





	 	 	 
	Signature Guarantee:

	 	 
	 

	 	 
	(Signature must be guaranteed)







 




Sign exactly as your name appears on the other side of this Security.



The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions) with membership in an approved signature guarantee
medallion program, pursuant to S.E.C. Rule 17Ad-15.



In connection with any transfer or exchange of any of the Securities evidenced by this certificate
occurring prior to the date that is two years after the later of the date of original issuance of
such Securities and the last date, if any, on which such Securities were owned by the Company or
any Affiliate of the Company, the undersigned confirms that such Securities are being:




CHECK ONE BOX BELOW:





	o 	 	 acquired for the undersigned’s own account, without transfer; or
	 
	o 	 	 transferred to the Company or one of its subsidiaries; or
	 
	o 	 	 transferred pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”); or
	 
	o 	 	transferred pursuant to and in compliance with Rule 144A under the Securities
Act; or
	 
	o 	 	 transferred pursuant to another available exemption from the registration
requirements of the Securities Act.




Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities
evidenced by this certificate in the name of any Person other than the registered Holder thereof;
provided, however, that if the final box is checked, the Trustee or the Company may require,








 



7


prior to registering any such transfer of the Securities, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or the Company may reasonably request
to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, such as the exemption provided by
Rule 144 under such Act.




	 	 	 	 	 
	 

	 	 

Signature:
	 	 






Signature Guarantee:




	 	 	 	 	 	 	 
	 

(Signature must be guaranteed)

	 	 	 	 

Signature:
	 	 





The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions) with membership in an approved signature guarantee
medallion program, pursuant to S.E.C. Rule 17Ad-15.



TO BE COMPLETED BY PURCHASER IF THE FOURTH BOX ABOVE IS CHECKED.



The undersigned represents and warrants that it is purchasing this Security for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing representations in order to
claim the exemption from registration provided by Rule 144A.




                                                            

Dated:











 



 




FORM OF CONVERSION NOTICE




To: Eddie Bauer Holdings, Inc.




     The undersigned registered Holder of this Security hereby exercises the option to convert this
Security, or portion hereof (which is $1,000 principal amount or a multiple thereof) designated
below, for cash, shares of Common Stock of Eddie Bauer Holdings, Inc., or a combination of cash and
shares of Common Stock of Eddie Bauer Holdings, Inc. in accordance with the terms of the Indenture
referred to in this Security, and directs that cash and/or the shares issuable and deliverable upon
such conversion, and any Securities representing any unconverted principal amount hereof, be issued
and delivered to the registered Holder hereof unless a different name has been indicated below. If
cash, shares or any portion of this Security not converted are to be issued in the name of a Person
other than the undersigned, the undersigned shall pay all transfer taxes payable with respect
thereto.



     This notice shall be deemed to be an irrevocable exercise of the option to convert this
Security.



Dated:




	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Signature(s)	 	 
	 

	 	 	 	The signature(s) should be guaranteed by
an eligible guarantor institution (banks,
stockbrokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program, pursuant to
S.E.C. Rule 17Ad-15.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Signature Guarantee
	 	 
	 
	 	 	 	 	 	 
	Fill in for registration of
shares if to be delivered, and
Securities if to be issued
other than to and in the name
of registered holder:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

(Name)

	 	 	 	 Principal
amount to be converted (if less
than all): $                    	 	 
	 
	 	 	 	 	 	 
	 

(Street Address)

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

(City state and zip code)

	 	 	 	 

Social Security or Other Taxpayer Number
	 	 
	Please print name and address
	 	 	 	 	 	 













 



 




FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE




To:      Eddie Bauer Holdings, Inc.




     The undersigned registered Holder of this Security hereby acknowledges receipt of a notice
from Eddie Bauer Holdings, Inc. (the “Company”) as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to repurchase this Security, or the
portion hereof (which is $1,000 principal amount or a multiple thereof) designated below, in
accordance with the terms of the Indenture referred to in this Security and directs that the check
in payment for this Security or the portion thereof and any Securities representing any
unrepurchased principal amount hereof, be issued and delivered to the registered Holder hereof
unless a different name has been indicated below. If any portion of this Security not repurchased
is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.



Dated:




	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Signature(s)	 	 
	 

	 	 	 	The signature(s) should be guaranteed by
an eligible guarantor institution (banks,
stockbrokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program, pursuant to
S.E.C. Rule 17Ad-15.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Signature Guarantee
	 	 
	 
	 	 	 	 	 	 
	Fill in if a check is to be
issued, or Securities are to
be issued, other than to and
in the name of registered
Holder:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

(Name)

	 	 	 	 Principal
amount to be purchased
(if less than all): $                    	 	 
	 
	 	 	 	 	 	 
	 

(Street Address)

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

(City, state and zip code)

	 	 	 	 

Social Security or Other Taxpayer Number
	 	 
	Please print name and address
	 	 	 	 	 	 













 



 




EXHIBIT B




FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS




     This Supplemental Indenture, dated as of                      (this “Supplemental Indenture” or
“Guarantee”), among [name of future Subsidiary Guarantor] (the “Additional
Guarantor”), Eddie Bauer Holdings, Inc. (together with its successors and assigns, the
“Company”), each other then-existing Subsidiary Guarantor under the Indenture referred to
below, and The Bank of New York, as Trustee under the Indenture referred to below.



W I T N E S S E T H:




     WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have heretofore executed and
delivered an Indenture, dated as of April 4, 2007 (as amended, supplemented, waived or otherwise
modified, the “Indenture”), providing for the issuance of 5.25% Convertible Senior Notes
due 2014 of the Company (the “Securities”);



     WHEREAS, Section 3.03 of the Indenture provides that the Company is required to cause each
Subsidiary that is not a Subsidiary Guarantor and that becomes a party to any of the Credit
Facilities, whether as a borrower, a co-borrower or a guarantor, to execute and deliver to the
Trustee a supplemental indenture pursuant to which such Subsidiary will unconditionally Guarantee,
on a joint and several basis with the other Subsidiary Guarantors, the Guaranteed Obligations, as
provided under Article 10 of the Indenture; and



     WHEREAS, pursuant to Section 9.01(d) of the Indenture, the Trustee, the Company and the
Subsidiary Guarantors are authorized to execute and deliver this Supplemental Indenture to amend
the Indenture, without the consent of any Holder;



     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Additional Guarantor, the Company,
the other Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and
ratable benefit of the Holders of the Securities as follows:



ARTICLE I




Definitions




     SECTION 1.1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or
recital hereto are used herein as therein defined, except that the term “Holders” in this Guarantee
shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf or
for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of
similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole
and not to any particular section hereof.









 



 

2




ARTICLE II




Agreement to be Bound; Subsidiary Guarantee




     SECTION 2.1. Agreement to be Bound. The Additional Guarantor hereby becomes a party to the Indenture as a Subsidiary Guarantor and
as such will have all of the rights and be subject to all of the obligations and agreements of a
Subsidiary Guarantor under the Indenture. The Additional Guarantor agrees to be bound by all of
the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the
obligations and agreements of a Subsidiary Guarantor under the Indenture.



     SECTION 2.2. Subsidiary Guarantee. The Additional Guarantor fully and unconditionally Guarantees to each Holder of the Securities
and the Trustee the Guaranteed Obligations pursuant to Article 10 of the Indenture on a senior
basis.



ARTICLE III




Miscellaneous




     SECTION 3.1. Notices. All notices and other communications to the Additional Guarantor shall be given as provided in
the Indenture to the Additional Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company.



     SECTION 3.2. Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person,
other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in
respect of this Supplemental Indenture or the Indenture or any provision herein or therein
contained.



     SECTION 3.3. Governing Law; Waiver of Jury Trial. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK. EACH OF THE COMPANY, THE ADDITIONAL GUARANTOR, THE OTHER SUBSIDIARY
GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OF OR RELATING TO EACH OF
THIS SUPPLEMENTAL INDENTURE.



     SECTION 3.4. Severability Clause. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability.



     SECTION 3.5. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and









 



3



all the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of
Securities heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee
makes no representation or warranty as to the validity or sufficiency of this Supplemental
Indenture.



     SECTION 3.6. Counterparts. The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts,
all of which together shall constitute one and the same agreement.



     SECTION 3.7. Headings. The headings of the Articles and the sections in this Supplemental Indenture are for convenience
of reference only and shall not be deemed to alter or affect the meaning or interpretation of any
provisions hereof.









 



4


     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first above written.



	 	 	 	 	 
	 	[NEW SUBSIDIARY GUARANTOR],

as a Subsidiary Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address: 	 	 
	 
	 	EDDIE BAUER HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[EXISTING SUBSIDIARY GUARANTORS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF NEW YORK, as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: