Document:

EXHIBIT 4.2

REGISTRATION RIGHTS AGREEMENT

Dated as of January 17, 2007

by and between

AHERN RENTALS, INC.

and

CIBC WORLD MARKETS CORP.

and

BANC OF AMERICA SECURITIES LLC

as Initial Purchasers

$90,000,000

91⁄4% SENIOR SECOND PRIORITY SECURED NOTES DUE 2013

TABLE OF CONTENTS

 

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  	
  1

  
	
  2.

  	
  Exchange Offer

  	
   

  	
  4

  
	
  3.

  	
  Shelf Registration

  	
   

  	
  7

  
	
  4.

  	
  Liquidated Damages

  	
   

  	
  8

  
	
  5.

  	
  Registration Procedures

  	
   

  	
  9

  
	
  6.

  	
  Registration Expenses

  	
   

  	
  17

  
	
  7.

  	
  Indemnification

  	
   

  	
  17

  
	
  8.

  	
  Rules 144 and 144A

  	
   

  	
  20

  
	
  9.

  	
  Underwritten Registrations

  	
   

  	
  21

  
	
  10.

  	
  Miscellaneous

  	
   

  	
  21

  
	
  (a)

  	
  Remedies

  	
   

  	
  21

  
	
  (b)

  	
  No Inconsistent Agreements

  	
   

  	
  21

  
	
  (c)

  	
  Adjustments Affecting Registrable Notes

  	
   

  	
  21

  
	
  (d)

  	
  Amendments and Waivers

  	
   

  	
  22

  
	
  (e)

  	
  Notices

  	
   

  	
  22

  
	
  (f)

  	
  Successors and Assigns

  	
   

  	
  23

  
	
  (g)

  	
  Counterparts

  	
   

  	
  23

  
	
  (h)

  	
  Headings

  	
   

  	
  23

  
	
  (i)

  	
  Governing Law

  	
   

  	
  23

  
	
  (j)

  	
  Severability

  	
   

  	
  24

  
	
  (k)

  	
  Notes Held by the Company or Its Affiliates

  	
   

  	
  24

  
	
  (l)

  	
  Third Party Beneficiaries

  	
   

  	
  24

  
	
  (m)

  	
  Entire Agreement

  	
   

  	
  24

  
					

 

 i

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”)
is made and entered into as of January 17, 2007, by and between Ahern Rentals,
Inc., a Nevada corporation (the “Company”) and CIBC World Markets Corp.
and Banc of America Securities LLC (together, the “Initial Purchasers”).

This Agreement is entered into in connection with the
Purchase Agreement, dated January 11, 2007, by and between the Company and the
Initial Purchasers (the “Purchase Agreement”) relating to the sale by the
Company to the Initial Purchasers of $90,000,000 aggregate principal amount of
the Company’s 91⁄4% Second Priority Senior Secured Notes due 2013 (the “Notes”).  In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement for the benefit of the holders
of Registrable Notes (as defined), including, without limitation, the Initial
Purchasers.  The execution and delivery
of this Agreement is a condition to the Initial Purchasers’ obligation to
purchase the Notes under the Purchase Agreement.

The parties hereby agree as follows:

1.                                       Definitions

As used in this Agreement, the following terms shall
have the following meanings:

Advice:  See the last paragraph of Section 5.

Agreement:  See the first introductory paragraph to this
Agreement.

Applicable Period:  See Section 2(b).

Business Day:  A day that is not a Saturday, a Sunday, or a
day on which banking institutions in New York, New York are required to be closed.

Closing Date:  The Closing Date as defined in the Purchase
Agreement.

Commission:  The Securities and Exchange Commission.

Company:  See the first introductory paragraph to this
Agreement.

Effectiveness Date:  (i) The 180th day after the Issue Date,
in the case of the Exchange Registration Statement or an Initial Shelf
Registration filed in lieu of the Exchange Registration Statement, and
(ii) in the case of an Initial Shelf Registration filed following delivery
of a Shelf Notice, the 90th day after the delivery of a Shelf Notice.

Effectiveness Period:  See Section 3(a).

Event Date:  See Section 4(b).

Exchange Act:  The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.

Exchange Notes:  See Section 2(a).

Exchange Offer:  See Section 2(a).

Exchange Registration Statement:  See Section 2(a).

Filing Date:  The 90th day after the Issue Date (regardless
of whether the actual filing precedes such date).

Holder:  Any registered holder of Registrable Notes.

Indemnified Person:  See Section 7(c).

Indemnifying Person:  See Section 7(c).

Indenture:  The Indenture, dated as of August 18, 2005,
by and between the Company and Wells Fargo Bank, N.A., as trustee, pursuant to
which the Notes are being issued, as amended or supplemented from time to time
in accordance with the terms thereof.

Initial Purchasers:  See the first introductory paragraph to this
Agreement.

Initial Shelf Registration:  See Section 3(a).

Inspectors:  See Section 5(o).

Issue Date:  The date on which the Notes were sold to the
Initial Purchasers pursuant to the Purchase Agreement.

Issuer:  The Company.

Liquidated Damages:  See Section 4(a).

NASD:  National Association of Securities Dealers,
Inc.

Notes:  See the second introductory paragraph to this
Agreement.

Participant:  See Section 7(a).

Participating Broker-Dealer:  See Section 2(b).

Person:  Any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government (including any agency or
political subdivision thereof).

Private Exchange:  See Section 2(b).

 2
 

Private Exchange Notes:  See Section 2(b).

Prospectus:  The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Notes covered by such Registration Statement, and
all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.

Purchase Agreement:  See the second introductory paragraph to this
Agreement.

Records:  See Section 5(o).

Registrable Notes:  Each Note upon original issuance thereof and
at all times subsequent thereto, each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance thereof and at all times
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto, until, in the case of any such Note,
Exchange Note or Private Exchange Note, as the case may be, the earliest to
occur of (i) a Registration Statement (other than, with respect to any
Exchange Note as to which Section 2(c)(iv) hereof is applicable) covering such
Note, Exchange Note or Private Exchange Note, as the case may be, has been
declared effective by the Commission and such Note, Exchange Note or Private
Exchange Note, as the case may be, has been disposed of in accordance with such
effective Registration Statement, (ii) such Note, Exchange Note or Private
Exchange Note, as the case may be, is sold in compliance with Rule 144,
(iii) in the case of any Note, such Note may be resold without restriction
under federal securities laws, or (iv) such Note, Exchange Note or Private
Exchange Note, as the case may be, ceases to be outstanding for purposes of the
Indenture.

Registration Statement:  Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Notes pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.

Rule 144:  Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the Commission providing for
offers and sales of securities made in compliance therewith resulting in offers
and sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements
of the Securities Act.

Rule 144A:  Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the Commission.

 3
 

Rule 415:  Rule 415 under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

Securities Act:  The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.

Shelf Notice:  See Section 2(c).

Shelf Registration:  See Section 3(b).

Subsequent Shelf Registration:  See Section 3(b).

TIA: 
The Trust Indenture Act of 1939, as amended.

Trustee:  The trustee under the Indenture and, if
existent, the trustee under any indenture governing the Exchange Notes and
Private Exchange Notes (if any).

underwritten registration or underwritten offering:  A registration in which securities of the
Company are sold to an underwriter for reoffering to the public.

2.                                       Exchange
Offer

(a)           The
Company agrees to file with the Commission promptly, but no later than the
Filing Date, an offer to exchange (the “Exchange Offer”) any and all of
the Registrable Notes (other than Private Exchange Notes, if any) for a like
aggregate principal amount of debt securities of the Company which are
substantially identical to the Notes (the “Exchange Notes”) (and which
are entitled to the benefits of the Indenture or a trust indenture which is
substantially identical to the Indenture (other than such changes to the
Indenture or any such identical trust indenture as are necessary to comply with
any requirements of the Commission to effect or maintain the qualification
thereof under the TIA) and which, in either case, has been qualified under the
TIA), except that the Exchange Notes shall have been registered pursuant to an
effective Registration Statement under the Securities Act, shall contain no
restrictive legend thereon, and shall contain no provisions for Liquidated Damages.  The Exchange Offer shall be registered under
the Securities Act on the appropriate form (the “Exchange Registration
Statement”) and shall comply with all applicable tender offer rules and
regulations under the Exchange Act.  The
Company agrees to use commercially reasonable efforts to (x) cause the Exchange
Registration Statement to be declared effective under the Securities Act
promptly, but no later than the Effectiveness Date; (y) keep the Exchange Offer
open for at least 20 Business Days (or longer if required by applicable law)
after the date that notice of the Exchange Offer is first mailed to Holders and
keep the Exchange Registration Statement effective until the completion of the
Exchange Offer; and (z) complete the Exchange Offer within 210 days after the
Issue Date.  If after such Exchange
Registration Statement is initially declared effective by the Commission, the Exchange
Offer or the issuance of the Exchange Notes thereunder is interfered with by
any stop order, injunction or other order or requirement of the Commission or
any other governmental agency or court, such Exchange Registration Statement
shall be deemed not to have become effective for purposes of this
Agreement.  Each Holder who participates
in the Exchange Offer will be required to represent that any Exchange Notes
received by it will be acquired in the ordinary 

 4
 

course of its business, that at the time of the completion of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes, that such
Holder is not an affiliate of the Company within the meaning of the Securities
Act, and any additional representations that counsel to the Company advises are
necessary under then-existing interpretations of the Commission in order for
the Exchange Registration Statement to be declared effective.  Upon completion of the Exchange Offer in accordance
with this Section 2, the provisions of this Agreement shall continue to
apply, mutatis mutandis, solely with
respect to Registrable Notes that are Private Exchange Notes and Exchange Notes
held by Participating Broker-Dealers, and the Company shall have no further
obligation to register Registrable Notes (other than Private Exchange Notes and
other than in respect of any Exchange Notes as to which clause 2(c)(iv) hereof
applies) pursuant to Section 3 of this Agreement.

(b)           The
Company shall include within the Prospectus contained in the Exchange
Registration Statement a section entitled “Plan of Distribution,” reasonably
acceptable to the Initial Purchasers, which shall contain a summary statement
of the positions taken or policies made by the Staff of the Commission with
respect to the potential “underwriter” status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (a “Participating
Broker-Dealer”), whether such positions or policies have been publicly
disseminated by the Staff of the Commission or such positions or policies, in
the judgment of the Initial Purchasers, represent the prevailing views of the
Staff of the Commission.  Such “Plan of
Distribution” section shall also allow, to the extent permitted by applicable
policies and regulations of the Commission, the use of the Prospectus by all
Persons subject to the prospectus delivery requirements of the Securities Act,
including, to the extent so permitted, all Participating Broker-Dealers, and
include a statement describing the manner in which Participating Broker-Dealers
may resell the Exchange Notes.

The Company shall use commercially reasonable efforts
to keep the Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein, in order to permit such Prospectus
to be lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time beginning when the Exchange
Notes are first issued in the Exchange Offer and ending upon the date such
Persons are no longer required to comply with the prospectus delivery
requirements in connection with offers and sales of the Exchange Notes (the “Applicable
Period”).

If, upon completion of the Exchange Offer, any Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Company upon the request of any
Initial Purchaser shall, simultaneously with the delivery of the Exchange Notes
in the Exchange Offer, issue and deliver to such Initial Purchaser, in exchange
(the “Private Exchange”) for the Notes held by such Initial Purchaser, a
like principal amount of debt securities of the Company that are identical in
all material respects to the Exchange Notes except for the existence of
restrictions on transfer thereof under the Securities Act and securities laws
of the several states of the U.S. (the “Private Exchange Notes”) (and
which are issued pursuant to the same indenture as the Exchange Notes).  The Private Exchange Notes shall bear the
same CUSIP number as the Exchange Notes. 
Interest on the Exchange Notes and Private Exchange Notes will accrue
from the last interest payment date on which interest was paid on the Notes 

 5
 

surrendered in exchange therefor or, if no interest
has been paid on the Notes, from the Issue Date.

In connection with the Exchange Offer, the Company
shall:

(1)           mail
to each Holder a copy of the Prospectus forming part of the Exchange
Registration Statement, together with an appropriate letter of transmittal and
related documents;

(2)           utilize
the services of a depositary for the Exchange Offer with an address in the
Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate
thereof;

(3)           permit
Holders to withdraw tendered Registrable Notes at any time prior to the close
of business, New York time, on the last Business Day on which the Exchange
Offer shall remain open; and

(4)           otherwise
comply in all material respects with all applicable laws.

As soon as practicable after the close of the Exchange
Offer or the Private Exchange, as the case may be, the Company shall:

(1)           accept
for exchange all Registrable Notes validly tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;

(2)           deliver
to the Trustee for cancellation all Registrable Notes so accepted for exchange;
and

(3)           cause
the Trustee to authenticate and deliver promptly to each Holder tendering such
Registrable Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in principal amount to the Notes of such Holder so accepted for
exchange.

The Exchange Notes and the Private Exchange Notes may
be issued under (i) the Indenture or (ii) an indenture identical in all
material respects to the Indenture, which in either event will provide that the
Exchange Notes will not be subject to the transfer restrictions set forth in
the Indenture and that the Exchange Notes, the Private Exchange Notes and the
Notes, if any, will vote and consent together on all matters as one class and
that none of the Exchange Notes, the Private Exchange Notes or the Notes, if
any, will have the right to vote or consent as a separate class on any matter.

(c)           If,
(i) because of any change in law or in currently prevailing interpretations
of the staff of the Commission, the Company is not permitted to effect an
Exchange Offer, (ii) the Exchange Offer is not completed within 210 days
of the Issue Date, (iii) any holder of Private Exchange Notes so requests
in writing to the Company or (iv) in the case of any Holder that participates
in the Exchange Offer (and tenders its Registrable Notes prior to the
expiration thereof), such Holder does not receive Exchange Notes on the date of
the exchange that may be sold without restriction under federal securities laws
(other than due solely to the status of such 

 6
 

Holder as an affiliate of the Company within the meaning of the
Securities Act) and so notifies the Company within 20 Business Days following
the completion of the Exchange Offer (and providing a reasonable basis for its
conclusions), in the case of each of clauses (i)-(iv), then the Company shall
promptly deliver to the Holders and the Trustee written notice thereof (the “Shelf
Notice”) and shall file a Shelf Registration pursuant to Section 3.

3.                                       Shelf
Registration

If a Shelf Notice is delivered as contemplated by
Section 2(c), then:

(a)           Shelf
Registration.  The Company shall as
promptly as practicable file with the Commission a Registration Statement for
an offering to be made on a continuous basis pursuant to Rule 415 covering all
of the Registrable Notes (the “Initial Shelf Registration”).  If the Company shall not have yet filed the
Exchange Registration Statement, the Company shall file with the Commission the
Initial Shelf Registration on or prior to the Filing Date and shall use commercially
reasonable efforts to cause such Initial Shelf Registration to be declared
effective under the Securities Act on or prior to the Effectiveness Date.  Otherwise, the Company shall file with the
Commission the Initial Shelf Registration within 30 days of the delivery of the
Shelf Notice and shall use commercially reasonable efforts to cause such Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date.  The Initial
Shelf Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings).  The Company
shall not permit any securities other than the Registrable Notes to be included
in any Shelf Registration.  The Company
shall use commercially reasonable efforts to keep the Initial Shelf
Registration continuously effective under the Securities Act until the date
which is 24 months from the Issue Date (or, if Rule 144(k) under the Securities
Act is amended to permit unlimited resales by non-affiliates within a lesser
period, such lesser period) (subject to extension pursuant to the last
paragraph of Section 5 hereof) (the “Effectiveness Period”) or such
shorter period ending when (i) all Registrable Notes covered by the
Initial Shelf Registration have been sold in the manner set forth and as contemplated
in the Initial Shelf Registration, (ii) a Subsequent Shelf Registration
covering all of the Registrable Notes has been declared effective under the
Securities Act or (iii) there are no longer any Registrable Notes outstanding.

(b)           Subsequent
Shelf Registrations.  If the Initial
Shelf Registration or any Subsequent Shelf Registration ceases to be effective
for any reason at any time during the Effectiveness Period (other than because
of the sale of all of the securities registered thereunder), the Company shall
use commercially reasonable efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within
30 days of such cessation of effectiveness amend the Shelf Registration in
a manner to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional “shelf” Registration Statement pursuant to
Rule 415 covering all of the Registrable Notes (a “Subsequent Shelf
Registration”).  If a Subsequent
Shelf Registration is filed, the Company shall use commercially reasonable
efforts to cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Subsequent Shelf
Registration continuously effective for a period equal to the number of days in
the Effectiveness Period less the aggregate number of days during which 

 7
 

the Initial Shelf Registration or any Subsequent Shelf Registrations
was previously continuously effective. 
As used herein the term “Shelf Registration” means the Initial
Shelf Registration and any Subsequent Shelf Registration.

(c)           Supplements
and Amendments.  The Company shall
promptly supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Shelf Registration or by any underwriter of
such Registrable Notes, in each case, with the Company’s  consent, which consent shall not be unreasonably
withheld or delayed.

4.                                       Liquidated
Damages

(a)           The
Company and the Initial Purchasers agree that the Holders of Registrable Notes
will suffer damages if the Company fails to fulfill its obligations under Section 2
or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. 
Accordingly, the Company agrees to pay, as liquidated damages and as the
sole remedy to the  Holders of
Registrable Notes, additional interest on the Registrable Notes (“Liquidated
Damages”) under the circumstances and to the extent set forth below (each
of which shall be given independent effect):

(i)      if (A) neither the Exchange Registration
Statement nor the Initial Shelf Registration has been filed on or prior to the
Filing Date or (B) notwithstanding that the Company has completed or will
complete an Exchange Offer, the Company is required to file a Shelf
Registration and such Shelf Registration is not filed on or prior to the 30th
day after delivery of the Shelf Notice, then, in the case of subclause (A),
commencing on the day after the Filing Date or, in the case of subclause (B),
commencing on the 31st day following delivery of the Shelf Notice, Liquidated
Damages shall accrue on the Registrable Notes over and above the stated
interest at a rate of 0.25% per annum for the first 90 days immediately
following the Filing Date or such 30th day, as the case may be, such Liquidated
Damages rate increasing by an additional 0.25% per annum at the beginning of
each subsequent 90-day period;

(ii)     if (A) neither the Exchange Registration
Statement nor the Initial Shelf Registration is declared effective on or prior
to the Effectiveness Date applicable thereto or (B) notwithstanding that the
Company has completed or will complete an Exchange Offer, the Company is
required to file a Shelf Registration and such Shelf Registration is not
declared effective by the Commission on or prior to the applicable
Effectiveness Date, then, commencing on the day after such applicable
Effectiveness Date, Liquidated Damages shall accrue on the Registrable Notes
over and above the stated interest at a rate of 0.25% per annum for the first
90 days immediately following the day after the applicable Effectiveness Date,
such Liquidated Damages rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period; and

 8
 

(iii)          if (A) the Company has not exchanged
Exchange Notes for all Notes validly tendered in accordance with the terms of
the Exchange Offer on or prior to the 210th day after the Issue Date,
(B) the Exchange Registration Statement ceases to be effective prior to
completion of the Exchange Offer or (C) if applicable, a Shelf
Registration has been declared effective and such Shelf Registration ceases to
be effective at any time during the Effectiveness Period (without, in the case
of clauses (B) and (C), being succeeded within 30 days by an additional registration
statement filed and declared effective), then Liquidated Damages shall accrue
on the Registrable Notes over and above the stated interest at a rate of 0.25%
per annum for the first 90 days commencing on the (x) 210th day after the Issue
Date in the case of (A) above or (y) the day such Exchange Registration
Statement or Shelf Registration ceases to be effective in the case of (B) and
(C) above, such Liquidated Damages rate increasing by an additional 0.25% per annum
at the beginning of each such subsequent 90-day period;

provided, however, that the
Liquidated Damages rate on the Registrable Notes may not exceed in the
aggregate 1.0% per annum; provided  further that (1) upon the
filing of the Exchange Registration Statement or each Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange
Registration Statement or each Shelf Registration, as the case may be (in the
case of (ii) above), or (3) upon the exchange of Exchange Notes for all
Registrable Notes tendered (in the case of (iii)(A) above) or upon the
effectiveness of an Exchange Registration Statement or Shelf Registration which
had ceased to remain effective (in the case of (iii)(B) and (C) above),
Liquidated Damages on any Registrable Notes then accruing Liquidated Damages as
a result of such clause (or the relevant subclause thereof), as the case may
be, shall cease to accrue.

(b)           The
Company shall notify the Trustee within two Business Days after each and every
date on which an event occurs in respect of which Liquidated Damages are required
to be paid (an “Event Date”).  Any
amounts of Liquidated Damages due pursuant to (a)(i), (a)(ii) or (a)(iii) of
this Section 4 will be payable in cash semi-annually on each regular
interest payment date specified in the Indenture (to the Holders of Registrable
Notes of record on the regular record date therefor (as specified in the
Indenture) immediately preceding such dates), commencing with the first such
regular interest payment date occurring after any such Liquidated Damages
commences to accrue.  The amount of
Liquidated Damages will be determined by multiplying the applicable Liquidated Damages
rate by the principal amount of the Notes subject thereto, multiplied by a
fraction, the numerator of which is the number of days such Liquidated Damages
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months), and the denominator of which is 360.

5.                                       Registration
Procedures

In connection with the filing of any Registration
Statement pursuant to Section 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of such securities covered thereby in
accordance with the intended method or methods of disposition thereof, and pursuant
thereto and in connection with any Registration Statement filed by the Company
hereunder, the Company shall:

 9

(a)           Prepare
and file with the Commission prior to the Filing Date, the Exchange
Registration Statement or, if the Exchange Registration Statement is not filed
or is unavailable, a Shelf Registration as prescribed by Section 2 or 3, and
use commercially reasonable efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; provided
that, if (1) a Shelf Registration is filed pursuant to Section 3, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period and has advised the Company that it is a Participating
Broker-Dealer, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Company shall, if requested, furnish to
and afford the Holders of the Registrable Notes to be registered pursuant to
such Shelf Registration or each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case at least
five Business Days prior to such filing). 
The Company shall not file any such Registration Statement or Prospectus
or any amendments or supplements thereto if the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
Registration Statement, or any such Participating Broker-Dealer, as the case
may be, their counsel, or the managing underwriters, if any, shall reasonably
object.

(b)           Prepare
and file with the Commission such amendments and post-effective amendments to
each Shelf Registration or Exchange Registration Statement, as the case may be,
as may be necessary to keep such Registration Statement continuously effective
for the Effectiveness Period or the Applicable Period, as the case may be;
cause the related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange Act
applicable to it with respect to the disposition of all securities covered by
such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus.  The Company shall be deemed not to have used
commercially reasonable efforts to keep a Registration Statement effective
during the Applicable Period if it voluntarily takes any action that would
result in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being able to
sell such Registrable Notes or such Exchange Notes during that period unless
such action is required by applicable law, rule or regulation or unless the
Company complies with this Agreement, including, without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of Section 5.

(c)           If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period
from whom the Company has received written notice that it will be a
Participating Broker-Dealer, notify the selling Holders of Registrable Notes,
and each such Participating Broker-Dealer, and the managing underwriters, if
any, promptly (but in any event within three Business Days), and confirm such
notice in writing, (i) when a Prospectus 

 

 10
 

 

or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge,
one conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) if
at any time when a prospectus is required by the Securities Act to be delivered
in connection with sales of the Registrable Notes the representations and
warranties of the Company contained in any underwriting agreement contemplated
by Section 5(n) hereof cease to be true and correct in any material respect,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of a Registration
Statement or any of the Registrable Notes or the Exchange Notes to be sold by
any Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose, (v) of the
happening of any event, the existence of any condition or any information becoming
known that makes any statement made in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in, or amendments or supplements to, such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (vi) of the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.

(d)           If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
use commercially reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order preventing
or suspending the use of a Prospectus or suspending the qualification (or
exemption from qualification) of any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer, for sale in any
jurisdiction, and, if any such order is issued, to use commercially reasonable
efforts to obtain the withdrawal of any such order at the earliest possible
date.

(e)           If
a Shelf Registration is filed pursuant to Section 3 and if requested by
the managing underwriters, if any, or the Holders of a majority in aggregate
principal amount of the Registrable Notes being sold in connection with an
underwritten offering, (i) as promptly as practicable incorporate in a
prospectus supplement or post-effective amendment such information or revisions
to information therein relating to such underwriters or selling Holders as the
managing underwriters, if any, or such Holders or their counsel reasonably
request to be included or made therein, (ii) make all required filings of
such prospectus supplement or such post-

 

 11
 

 

effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to such Registration Statement.

(f)            If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
furnish to each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests and to counsel and each managing
underwriter, if any, without charge, one conformed copy of the Registration
Statement or Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits.

(g)           If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer, deliver to each selling Holder of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, their respective counsel, and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of preliminary prospectus) and each amendment
or supplement thereto and any documents incorporated by reference therein as
such Persons may reasonably request; and, subject to the last paragraph of this
Section 5, the Company hereby consents to the use of such Prospectus and
each amendment or supplement thereto by each of the selling Holders of
Registrable Notes and each Participating Broker-Dealer, and the underwriters or
agents, if any, and dealers (if any), in connection with the offering and sale
of the Registrable Notes covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any
amendment or supplement thereto.

(h)           Prior
to any public offering of Registrable Notes or any delivery of a Prospectus
contained in the Exchange Registration Statement by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
use commercially reasonable efforts to register or qualify, and cooperate with
the selling Holders of Registrable Notes and each such Participating
Broker-Dealer, and the underwriters, if any, in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Notes or Exchange Notes, as the case may be, for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the managing
underwriter or underwriters, if any, reasonably request in writing; provided
that where Exchange Notes held by Participating Broker-Dealers or Registrable
Notes are offered pursuant to an underwritten offering, counsel to the
underwriters shall, at the reasonable cost and expense of the Company, perform
the Blue Sky investigations and file registrations and qualifications required
to be filed pursuant to this Section 5(h); keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the Exchange Notes by Participating Broker-Dealers or
the Registrable Notes covered by the applicable Registration Statement; provided
that the Company shall not be required to (A) qualify generally to do business
in any jurisdiction 

 

 12
 

 

where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in any such jurisdiction
where it is not then so subject.

(i)            If
a Shelf Registration is filed pursuant to Section 3, cooperate with the
selling Holders of Registrable Notes, any Participating Broker-Dealer and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes to be
sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company; and enable such
Registrable Notes to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or Holders may reasonably
request.

(j)            Use
commercially reasonable efforts to cause the Registrable Notes covered by the
Registration Statement to be registered with or approved by such governmental
agencies or authorities as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to complete the disposition of such
Registrable Notes, in which case the Company will cooperate in all reasonable
respects with the filing of such Registration Statement and the granting of
such approvals.

(k)           If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi)
hereof, as promptly as practicable prepare and (subject to Section 5(a)
hereof) file with the Commission, at the Company’s sole expense, a supplement
or post-effective amendment to the Registration Statement or a supplement to
the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such Prospectus
will be delivered by a Participating Broker-Dealer, any such Prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.

(l)            Use
commercially reasonable efforts to cause the Registrable Notes covered by a
Registration Statement to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement or the managing
underwriter or underwriters, if any.

(m)          Prior
to the effective date of the first Registration Statement relating to the
Registrable Notes, (i) provide the Trustee with printed certificates for
the Registrable Notes or the Exchange Notes, as the case may be, in a form
eligible for deposit with The Depository Trust Company and (ii) provide a
CUSIP number for the Registrable Notes or the Exchange Notes, as the case may
be.

(n)           In
connection with an underwritten offering of Registrable Notes pursuant to a
Shelf Registration, enter into an underwriting agreement as is customary in
underwritten offerings 

 

 13
 

 

of debt securities similar to the Notes and take all such other actions
as are reasonably requested by the managing underwriter or underwriters in
order to expedite or facilitate the registration or the disposition of such
Registrable Notes and, in such connection, (i) make such representations
and warranties to the underwriters, with respect to the business of the Company
and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are customarily
made by issuers to underwriters in underwritten offerings of debt securities
similar to the Notes, and confirm the same in writing if and when requested;
(ii) obtain the opinion of counsel to the Company and updates thereof in
form and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters customarily
covered in opinions requested in underwritten offerings of debt securities
similar to the Notes and such other matters as may be reasonably requested by
managing underwriters; (iii) obtain “cold comfort” letters and updates
thereof in form and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public accountants
of the Company (and, if necessary, any other independent certified public
accountants of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each of the underwriters, such letters to
be in customary form and covering matters of the type customarily covered in “cold
comfort” letters in connection with underwritten offerings of debt securities
similar to the Notes and such other matters as reasonably requested by the
managing underwriter or underwriters; and (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or
such other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Notes covered by such Registration
Statement and the managing underwriter or underwriters or agents) with respect
to all parties to be indemnified pursuant to said Section.  The above shall be done at each closing under
such underwriting agreement, or as and to the extent required thereunder.

(o)           If
(1) a Shelf Registration is filed pursuant to Section 3, or (2) a Prospectus
contained in an Exchange Registration Statement filed pursuant to Section 2 is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
make available for inspection by any selling Holder of such Registrable Notes
being sold, and each Participating Broker-Dealer, any underwriter participating
in any such disposition of Registrable Notes, if any, and any attorney retained
by any such selling Holder, each Participating Broker-Dealer, as the case may
be, or underwriter (collectively, the “Inspectors”), each of which
Inspectors shall have certified to the Company that they have a current
intention to sell the Registrable Notes pursuant to the Shelf Registration, at
the offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the “Records”) as shall be reasonably necessary
to enable them to exercise any applicable due diligence responsibilities, and
cause the officers, directors and employees of the Company to supply all
information reasonably requested by any such Inspector in connection with such
Registration Statement.  Records which
the Company determines, in good faith, to be confidential and any Records which
it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in such Registration Statement,
(ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction, (iii) the information
in such Records has been made 

 

 14
 

 

generally available to the public other than as a result of a disclosure
or failure to safeguard by such Inspector or (iv) disclosure of such
information is, in the opinion of counsel for any Inspector, necessary or
advisable in connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and arising out
of, based upon, related to, or involving this Agreement, or any transactions
contemplated hereby or arising hereunder. 
Each selling Holder of such Registrable Notes and each Participating
Broker-Dealer will be required to agree that information obtained by it as a
result of such inspections shall be deemed confidential, and in any event shall
not be used by it as the basis for any market transactions in the securities of
the Company, unless and until such is made generally available to the
public.  Each Inspector, each selling
Holder of such Registrable Notes and each Participating Broker-Dealer will be
required to further agree that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction pursuant to clauses (ii)
or (iv) of the previous sentence or otherwise, give notice to the Company and
allow the Company to undertake appropriate action to obtain a protective order
or otherwise prevent disclosure of the Records deemed confidential at its
expense.

(p)           Provide
an indenture trustee for the Registrable Notes or the Exchange Notes, as the
case may be, and cause the Indenture or the trust indenture provided for in
Section 2(a), as the case may be, to be qualified under the TIA not later than
the effective date of the Exchange Offer or the first Registration Statement
relating to the Registrable Notes; and, in connection therewith, cooperate with
the trustee under any such indenture and the Holders of the Registrable Notes,
to effect such changes to such indenture as may be required for such indenture
to be so qualified in accordance with the terms of the TIA; and execute, and
use commercially reasonable efforts to cause such trustee to execute, all
documents as may be required to effect such changes, and all other forms and
documents required to be filed with the Commission to enable such indenture to
be so qualified in a timely manner.

(q)           Comply
with all applicable rules and regulations of the Commission and make generally
available to its securityholders earnings statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter
in which Registrable Notes are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal quarter of
the Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.

(r)            Upon
consummation of the Exchange Offer or a Private Exchange, obtain an Officer’s
Certificate addressed to the Trustee for the benefit of all Holders of Registrable
Notes participating in the Exchange Offer or the Private Exchange, as the case
may be, that the articles of incorporation, by-laws and resolutions of the
Company have not been amended or revoked in any manner which would prohibit the
Company from having the authority to duly issue, authenticate and deliver the
Exchange Notes or Private Exchange Notes.

(s)           If
the Exchange Offer or a Private Exchange is to be completed, upon delivery of
the Registrable Notes by Holders to the Company (or to such other Person as
directed 

 

 15
 

 

by the Company) in exchange for the Exchange Notes or the Private
Exchange Notes, as the case may be, the Company shall mark, or caused to be
marked, on such Registrable Notes that such Registrable Notes are being
cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as
the case may be; in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.

(t)            Cooperate
with each seller of Registrable Notes covered by any Registration Statement and
each underwriter, if any, participating in the disposition of such Registrable
Notes in connection with any filings required to be made with the NASD.

(u)           Use
commercially reasonable efforts to take all other steps reasonably necessary to
effect the registration of the Registrable Notes covered by a Registration
Statement contemplated hereby.

The Company may require each Holder of Registrable
Notes as to which any registration is being effected to furnish to the Company
such information regarding such Holder and the distribution of such Registrable
Notes as the Company may, from time to time, reasonably request.  The Company may exclude from such registration
the Registrable Notes of any Holder who fails to furnish such information
within a reasonable time after receiving such request.  Each Holder as to which any Shelf
Registration is being effected agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by
such Holder to the Company or of the occurrence of any event in either case as
a result of which any Prospectus relating to such Shelf Registration contains
or would contain an untrue statement of material fact regarding such Holder or
such Holder’s intended method of disposition of such Registrable Notes required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading and promptly to
furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such Prospectus
shall not contain, with respect to such Holder or the disposition of such
Registrable Notes, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.

Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder
will forthwith discontinue disposition of such Registrable Notes covered by
such Registration Statement or Prospectus or Exchange Notes to be sold by such
Holder or Participating Broker-Dealer, as the case may be, and, in each case,
dissemination of such Prospectus until such Holder’s or Participating
Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and
has received copies of any amendments or supplements thereto.  In the event the Company shall give any such
notice, each of the Effectiveness Period and the Applicable Period shall be
extended by the number of days during such periods from and including the date
of the giving of such notice to and including the date when each seller of
Registrable Notes covered by such Registration Statement or 

 

 16
 

 

Exchange Notes to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) or (y) the Advice.

6.                                       Registration
Expenses

All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not the Exchange Offer or a Shelf Registration is filed or becomes
effective, including, without limitation, (i) all registration and filing
fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky
laws (including, without limitation, reasonable fees and disbursements of
counsel in connection with Blue Sky qualifications of the Registrable Notes or
Exchange Notes and determination of the eligibility of the Registrable Notes or
Exchange Notes for investment under the laws of such jurisdictions
(x) where the holders of Registrable Notes are located, in the case of the
Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of
Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer
during the Applicable Period)), (ii) printing expenses, including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, or by the Holders of a majority
in aggregate principal amount of the Registrable Notes included in any
Registration Statement or by any Participating Broker-Dealer, as the case may
be, (iii) reasonable messenger, telephone and delivery expenses incurred in
connection with the Exchange Registration Statement and any Shelf Registration,
(iv) fees and disbursements of counsel for the Company and reasonable fees
and disbursements of one special counsel for the Initial Purchasers and the
sellers of Registrable Notes, (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(n)(iii)
(including, without limitation, the expenses of any special audit and “cold
comfort” letters required by or incident to such performance), (vi) rating
agency fees, (vii) Securities Act liability insurance, if the Company
desires such insurance, (viii) fees and expenses of all other Persons
retained by the Company, (ix) internal expenses of the Company (including,
without limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties), (x) the expense of any
annual or special audit, (xi) the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange,
(xii) the fees and disbursements of underwriters, if any, customarily paid
by issuers or sellers of securities (but not including any underwriting
discounts or commissions or transfer taxes, if any, attributable to the sale of
the Registrable Notes which discounts, commissions or taxes shall be paid by
Holders of such Registrable Notes) and (xiii) the expenses relating to
printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any other
documents necessary in order to comply with this Agreement.

7.                                       Indemnification

(a)           The
Company agrees to indemnify and hold harmless each Holder of Registrable Notes
and each Participating Broker-Dealer, the officers, directors, employees and
agents 

 

 17
 

 

of each such Person, and each Person, if any, who controls any such
Person within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a “Participant”), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, the reasonable legal fees and other reasonable expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or caused, by, arising out of or based upon
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
or Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or caused by, arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Participant furnished
to the Company in writing by or on behalf of such Participant expressly for use
therein; provided, however, that the Company shall not be liable
if such untrue statement or omission or alleged untrue statement or omission
was contained or made in any preliminary prospectus and corrected in the
Prospectus or any amendment or supplement thereto and the Prospectus does not
contain any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense suffered or
incurred by the Participants resulted from any action, claim or suit by any
Person who purchased Registrable Notes or Exchange Notes which are the subject
thereof from such Participant and it is established in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the confirmation of
the sale of such Registrable Notes or Exchange Notes sold to such Person if
required by applicable law, unless such failure to deliver or provide a copy of
the Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 5 of this Agreement.

(b)           Each
Participant will be required to agree, severally and not jointly, to indemnify
and hold harmless the Company, its directors and officers and each Person who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to each Participant, but only with reference to
information relating to such Participant furnished to the Company in writing by
such Participant expressly for use in any Registration Statement or Prospectus,
any amendment or supplement thereto, or any preliminary prospectus.  The liability of any Participant under this
paragraph shall in no event exceed the proceeds received by such Participant
from sales of Registrable Notes or Exchange Notes giving rise to such obligations.

(c)           If
any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any Person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such Person (the “Indemnified Person”) shall
promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Person”) in writing, and the Indemnifying Person, upon request of 

 

 18
 

 

the Indemnified Person, shall retain counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify
the Indemnifying Person shall not relieve it of any obligation or liability
which it may have under Section 7 (a) or 7 (b) above except to the extent that
the Indemnifying Person is unaware of the commencement of such action and such
omission results in the forfeiture by the Indemnifying Person of substantial
rights and defenses.  In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed in writing to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and the Indemnified
Person shall have reasonably concluded that there may be one or more legal
defenses available to it and/or other Indemnified Persons that are different
from or in addition to those available to any such Indemnifying Person.  It is understood that, unless there is a
conflict among Indemnified Persons, the Indemnifying Person shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred.  Any such separate firm for the Participants
and control Persons of Participants shall be designated in writing by
Participants who sold a majority in interest of Registrable Notes sold by all
such Participants and any such separate firm for the Company, its directors,
officers and such control Persons of the Company shall be designated in writing
by the Company.  The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there is a final
non-appealable judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. 
Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses actually incurred by counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its consent if (i) such settlement is entered into more than 30 days
after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying
Person is contesting, in good faith, the request for reimbursement.  No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
release of such Indemnified Person, in form and substance satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of an Indemnified Person.

 

 19
 

 

(d)           If
the indemnification provided for in the first and second paragraphs of this
Section 7 is unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Person or Persons on the one hand and the Indemnified
Person or Persons on the other in connection with the statements or omissions
(or alleged statements or omissions) that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof) as well as any other
relevant equitable considerations.  The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Participants or
such other Indemnified Person, as the case may be, on the other, the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and any other equitable considerations
appropriate under the circumstances.

(e)           The
parties agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro  rata allocation
(even if the Participants were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any reasonable legal or other expenses
actually incurred by such Indemnified Person in connection with investigating
or defending any such action or claim. 
Notwithstanding the provisions of this Section 7, in no event shall
a Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

(f)            The
indemnity and contribution agreements contained in this Section 7 will be
in addition to any liability which the Indemnifying Persons may otherwise have
to the Indemnified Persons referred to above.

8.                                       Rules
144 and 144A

The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the Commission thereunder in a timely
manner and, if at any time it is not required to file such reports, it will,
upon the request of any Holder of Registrable Notes, make publicly available
other information so long as necessary to permit sales pursuant to Rule 144 and
Rule 144A under the Securities Act.  The
Company further covenants, for so long as any Registrable Notes remain outstanding,
to make available to any Holder or beneficial owner of Registrable Notes in
connection 

 

 20
 

 

with any sale thereof and any prospective purchaser of
such Registrable Notes from such Holder or beneficial owner, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Notes pursuant to Rule 144A.

9.                                       Underwritten
Registrations

If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering
will be selected by the Holders of a majority in aggregate principal amount of
such Registrable Notes included in such offering and reasonably acceptable to
the Company.

No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder’s Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

10.                                 Miscellaneous

(a)           Remedies.  In the event of a breach by the Company of
any of its obligations under this Agreement, each Holder of Registrable Notes
and each Participating Broker-Dealer holding Exchange Notes, in addition to
being entitled to exercise all rights provided herein, in the Indenture or, in
the case of an Initial Purchaser, in the Purchase Agreement, or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement.  The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific performance
in respect of such breach, it shall waive the defense that a remedy at law
would be adequate. Notwithstanding the foregoing, payment of Liquidated Damages
is the sole remedy to the Holders of Registrable Notes if the Company breaches
its obligations under Section 2 or Section 3 of this Agreement.

(b)           No
Inconsistent Agreements.  The Company
has not entered, as of the date hereof, and shall not enter, after the date of
this Agreement, into any agreement with respect to any of its securities that
is inconsistent with the rights granted to the Holders of Registrable Notes in
this Agreement or otherwise conflicts with the provisions hereof.  The Company has not entered and shall not
enter into any agreement with respect to any of its securities which will grant
to any Person piggy-back rights with respect to a Registration Statement.

(c)           Adjustments
Affecting Registrable Notes.  The
Company shall not, directly or indirectly, take any action with respect to the
Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.

 

 21

(d)           Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, without prior
written consent of (A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and
(B) in circumstances that would adversely affect Participating
Broker-Dealers, the Participating Broker-Dealers holding not less than a majority
in aggregate principal amount of the Exchange Notes held by all Participating
Broker-Dealers; provided, however, that Section 7 and this
Section 10(d) may not be amended, modified or supplemented without the
prior written consent of the Company, each Holder and each Participating
Broker-Dealer (including any person who was a Holder or Participating
Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be,
disposed of pursuant to any Registration Statement).  Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Notes whose
securities are being tendered pursuant to the Exchange Offer or sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise in any material respect the rights of other Holders
of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being tendered or being
sold by such Holders pursuant to such Registration Statement.

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

1.             if
to a Holder of Registrable Notes or any Participating Broker-Dealer, at the
most current address of such Holder or Participating Broker-Dealer, as the case
may be, set forth on the records of the registrar under the Indenture, with a
copy in like manner to the Initial Purchasers as follows:

CIBC WORLD MARKETS CORP.

BANC OF AMERICA SECURITIES LLC

c/o CIBC World Markets Corp.

300 Madison Avenue

New York, New York  10017-6204

Facsimile No.:  (212) 885-4941

Attention:  Leveraged Finance Group

with a copy to:

Cahill Gordon
& Reindel llp

80 Pine Street

New York, New York  10005

Facsimile No.:  (212) 269-5420

Attention:  Luis Penalver, Esq.

2.             if
to the Initial Purchasers, at the address specified in Section 10(e)(1);

 22
 

3.             if
to the Company, as follows:

Ahern Rentals, Inc.

4241 S. Arville Street

Las Vegas, Nevada 89103

Facsimile No.:  (702) 638-2120

Attention:  Don F. Ahern

with copies to:

Stoel Rives LLP

900 SW Fifth Avenue

Suite 2600

Portland, Oregon

Facsimile No.:  (503) 220-2480

Attention:  Robert J. Moorman, Esq.

All such notices and communications shall be deemed to
have been duly given:  when delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; one Business Day after being timely delivered
to a next-day air courier guaranteeing overnight delivery; and when receipt is
acknowledged by the addressee, if telecopied.

Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee under the Indenture at the address specified in such Indenture.

(f)             Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties hereto
and the Holders; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign holds Registrable Notes.

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

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

(i)            Governing
Law.  THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.  EACH 

 23
 

OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(j)            Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

(k)           Notes
Held by the Company or Its Affiliates. 
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Company
or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

(l)            Third
Party Beneficiaries.  Holders of
Registrable Notes and Participating Broker-Dealers are intended third party
beneficiaries of this Agreement and this Agreement may be enforced by such Persons.

(m)          Entire
Agreement.  This Agreement, together
with the Purchase Agreement and the Indenture, is intended by the parties as a
final and exclusive statement of the agreement and understanding of the parties
hereto and thereto in respect of the subject matter contained herein and
therein, and any and all prior oral or written agreements, representations, or
warranties, contracts, understandings, correspondence, conversations and
memoranda between the Initial Purchasers on the one hand and the Company on the
other, or between or among any agents, representatives, parents, subsidiaries,
affiliates, predecessors in interest or successors in interest, with respect to
the subject matter hereof and thereof are merged herein and replaced hereby.

 24
 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

	
  

  	
   

  
	
  

  	
  AHERN RENTALS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DON F. AHERN

  
	
   

  	
   

  	
  Name: Don F.
  Ahern

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CIBC WORLD
  MARKETS CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BRIAN S.
  PERMAN

  
	
   

  	
   

  	
  Name: Brian S.
  Perman

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA
  SECURITIES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MICHAEL
  BROWNE

  
	
   

  	
   

  	
  Name: Michael
  Browne

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

 25Exhibit 10.47

SECOND
AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO
LEASE (this “Amendment”) is dated
as of December 19, 2006, and is made by and between FORWARD ONE, LLC, a California limited liability company (“Landlord”), and MD  BEAUTY, INC.,
a Delaware corporation (“Tenant”).

Recitals

A.       ECI Stevenson LLC, Landlord’s predecessor-in-interest, and
Tenant entered into that certain Office Lease dated February 23, 2005 (the “Original Lease”), which was amended by
that First Amendment to Lease dated March 9, 2006 (the “First Amendment”). As used herein, the
term “Lease” means the Original
Lease, as amended by the First Amendment.

B.        Under the terms of the Lease, Tenant leases from Landlord
those certain Premises containing a total of approximately 49,813 rentable
square feet (the “Existing Premises”)
located on the sixteenth (16th), eighteenth (18th), twenty-second (22nd) and
twenty-third (23rd) floors of the 23-story office building located at 71
Stevenson Street, San Francisco, California (the “Building”).

C.        Landlord and Tenant desire to amend the Lease to expand the
Premises by approximately 14,405 rentable square feet (the “Expansion Premises”) consisting of the
entire seventeenth (17th) floor of the Building, and to make certain other
changes to the Lease, all as more specifically set forth below.

NOW,
THEREFORE, in consideration of the foregoing Recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree that the Lease is amended as follows:

1.         Definitions. Except as otherwise expressly provided
herein, all capitalized terms used in this Amendment shall have the same
meaning given such terms in the Lease.

2.         Term Commencement and Rent Commencement. As used in
this Amendment: (i) the term “Expansion
Premises Commencement Date” means
the date on which Landlord delivers the Expansion Premises to Tenant in their
as-is condition, without Landlord’s Work pursuant to Exhibit B having been commenced or
completed, it being the parties’ understanding and agreement that Landlord’s
Work will be performed concurrently with Tenant’s Work pursuant to Exhibit B; and (ii) the term “Expansion Premises Rent Commencement Date”
means the date that is ninety (90) days after the Expansion Premises
Commencement Date. Promptly following the determination of the Expansion
Premises Commencement Date and the Expansion Premises Rent Commencement Date,
the parties shall sign a letter agreement documenting such dates.

3.         Leasing of Expansion Premises. Commencing on the
Expansion Premises Commencement Date, and continuing through the Lease
Expiration Date, Landlord leases to Tenant, and Tenant leases from Landlord,
the Expansion Premises under the terms and

 1
 

conditions of the Lease,
as amended by this Amendment, and the Expansion Premises together with the
Existing Premises shall be the “Premises” for all purposes under the Lease, as
amended by this Amendment. The approximate configuration and location of the
Expansion Premises is shown on Exhibit A
attached hereto. Landlord and Tenant agree that the rentable area of the
Expansion Premises for all purposes under the Lease and this Amendment shall be
14,405 rentable square feet.

4.         Delivery of Possession of Expansion
Premises.

(a)       Target Delivery Date. As of the
date of this Amendment, the Expansion Premises are leased and occupied by the
General Services Administration pursuant to a lease that is scheduled to expire
on April 19, 2007. Landlord shall attempt, but is not obligated, to deliver the
Expansion Premises to Tenant on April 20, 2007. If Landlord is not able to
deliver possession of the Expansion Premises by July 20, 2007, then: (i)
Landlord shall so notify Tenant of such fact (the “Delay Notice”) on or before
July 20, 2007; and (ii) Landlord shall have no liability on account thereof,
but Tenant shall have the right to terminate its obligation to lease the
Expansion Premises pursuant to this Amendment, by written notice given to
Landlord not later than ten (10) days after Tenant’s receipt of the Delay
Notice. If Tenant does not provide such termination notice by such date, then
Tenant’s right to lease the Expansion Premises shall be governed by Paragraph
4(b) below. If Tenant timely exercises its termination right with respect
to the Expansion Premises, then Tenant shall have no further right to lease the
Expansion Premises and Landlord shall reimburse Tenant its out-of-pocket costs
paid to third parties in connection with the design and construction of the
tenant improvements proposed to have been constructed in the Expansion Premises
(“Tenant’s Costs”), up to a maximum amount of and not exceeding $50,000.00.
Landlord shall be obligated to reimburse Tenant’s Costs only as set forth in
the preceding sentence. Landlord shall not be obligated to reimburse Tenant’s
Costs following any termination pursuant to Paragraph 4(b) below.
Landlord shall pay such amount to Tenant within twenty (20) days after Landlord’s
receipt of proof of payment of such costs and back-up invoices and/or other
documentation detailing the nature of such costs and itemizing the goods and
services provided.

(b)       Continuation of Expansion Obligation.
If Tenant does not exercise its termination right with respect to the Expansion
Premises pursuant to Paragraph 4(a) above, then Tenant shall continue to
be obligated to lease the Expansion Premises pursuant to this Amendment, but,
commencing on July 21, 2007, Tenant shall have the right to terminate such
obligation upon ninety (90) days’ prior written notice to Landlord (the “Termination
Notice”). The Termination Notice may be given at any time on or after July 21,
2007. Notwithstanding Tenant’s delivery of a Termination Notice, if Landlord is
able to deliver possession of the Expansion Premises prior to the expiration of
the 90-day period following the Termination Notice, then such Termination
Notice shall be of no force or effect and Tenant shall accept delivery of
possession of the Expansion Premises. If Tenant does not timely deliver a
Termination Notice, then Tenant’s obligation to lease the Expansion Premises
pursuant to this Amendment shall continue until such time as Landlord is able
to deliver the Expansion Premises to Tenant, but in all events shall terminate
on the Lease Expiration Date. Landlord shall have no liability if Landlord is
unable to deliver possession of the Expansion Premises.

 2
 

5.         Base Rent for Expansion Premises. Commencing on the
Expansion Premises Rent Commencement Date (notwithstanding any later date of
completion of the tenant improvements to be constructed in the Expansion
Premises) and continuing through the Lease Expiration Date, in addition to the
Base Rent payable by Tenant for the Existing Premises pursuant to the Lease,
Tenant shall pay Base Rent for the Expansion Premises, in accordance with the
terms and conditions of the Lease, in the following amounts for the following
periods:

	
  Months

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Installment of

  Base Rent

  	
   

  	
  Annual Rental Rate

  Per Rentable

  Square Foot

  	
   

  
	
  July 1, 2007 —
  June 30, 2008:

  	
   

  	
  $

  	
  511,377.50

  	
   

  	
  $

  	
  42,614.79

  	
   

  	
  $

  	
  35.50

  	
   

  
	
  July 1, 2008 —
  June 30, 2009:

  	
   

  	
  $

  	
  525,782.50

  	
   

  	
  $

  	
  43,815.21

  	
   

  	
  $

  	
  36.50

  	
   

  
	
  July 1, 2009 —
  June 30, 2010:

  	
   

  	
  $

  	
  540,187.50

  	
   

  	
  $

  	
  45,015.63

  	
   

  	
  $

  	
  37.50

  	
   

  
	
  July 1, 2010 —
  June 30, 2011:

  	
   

  	
  $

  	
  554,592.50

  	
   

  	
  $

  	
  46,216.04

  	
   

  	
  $

  	
  38.50

  	
   

  
	
  July 1, 2011 —
  June 30, 2012:

  	
   

  	
  $

  	
  568,997.50

  	
   

  	
  $

  	
  47,416.46

  	
   

  	
  $

  	
  39.50

  	
   

  
	
  July 1, 2012 —
  June 30, 2013:

  	
   

  	
  $

  	
  583,402.50

  	
   

  	
  $

  	
  48,616.88

  	
   

  	
  $

  	
  40.50

  	
   

  
	
  July 1, 2013 —
  June 30, 2014:

  	
   

  	
  $

  	
  597,807.50

  	
   

  	
  $

  	
  49,817.29

  	
   

  	
  $

  	
  41.50

  	
   

  
	
  July 1, 2014 — July 31,
  2015:

  	
   

  	
  $

  	
  612,212.50

  	
   

  	
  $

  	
  51,017.71

  	
   

  	
  $

  	
  42.50

  	
   

  

 

Base Rent shall be payable in the amounts set forth for each time
period specified above, regardless of the actual Expansion Premises Rent
Commencement Date. For example, if the Expansion Premises Rent Commencement
Date were August 15, 2008, then: (i) Base Rent would be payable at the annual
rate of $36.50 per square foot; (ii) the monthly installment of Base Rent for
August 2008 would be prorated based on the partial month; (iii) the next full
monthly installment of Base Rent would be payable on September 1, 2008; and
(iv) effective as of July 1, 2009, Base Rent would be payable at the annual
rate of $37.50 per square foot.

6.         Construction of Tenant Improvements. Tenant shall
construct the Tenant Improvements in the Expansion Premises in accordance with
the Tenant Work Letter attached hereto as Exhibit
B and the applicable provisions of the Lease.

7.         Tenant’s Share. From and after
the Expansion Premises Commencement Date, Tenant’s Share is changed to 19.87%.

8.         Parking. The parties acknowledge and agree that
Tenant shall not be entitled to any additional parking spaces on account of its
leasing the Expansion Premises pursuant to this Amendment.

9.         Brokers. Tenant warrants and represents to Landlord
that in negotiating the transaction contemplated by this Amendment, neither
Tenant nor anyone on Tenant’s behalf has dealt with any broker or finder who
might be entitled to a fee or commission for this Amendment, other than John
Cecconi of The CAC Group (who represented Tenant) and Anton Qiu of TRI
Commercial (who represented Landlord). Tenant shall indemnify, defend, protect
and hold Landlord harmless from and against any and all claims, demands,
liabilities, costs and expenses, including attorneys’ fees, incurred by
Landlord arising out of or related to any claim

 3
 

for commissions or other
compensation made by any other broker or finder based upon any dealings with or
statements made by Tenant or Tenant’s Representatives.

10.       Miscellaneous; Full Force and Effect;
No Other Amendment. The submission of this Amendment for examination does
not constitute an option for Tenant to lease or use the Expansion Premises.
This Amendment shall become effective as a binding agreement only upon
execution and delivery of a fully executed copy by Landlord to Tenant. Except
as amended by this Amendment, the Lease has not been amended or modified and
all of the terms and provisions of the Lease, as modified by this Amendment,
remain unmodified and in full force and effect. Landlord and Tenant hereby
ratify the Lease, as amended herein. This Amendment contains the entire
agreement between Landlord and Tenant regarding the subject matters contained
herein and, except for the Lease, supersedes all prior or contemporaneous
agreements, understandings, proposals and other representations by or between Landlord
and Tenant, whether written or oral, all of which are merged herein. This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. This Amendment may be executed and
delivered in multiple counterparts, each of which shall have the force and
effect of an original.

IN
WITNESS WHEREOF, Landlord and Tenant have executed this
Amendment as of the day and year first above written.

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  FORWARD ONE,
  LLC,

  a California limited liability company

  	
   

  	
  MD BEAUTY, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  FORWARD TIME
  CORPORATION,

  	
   

  	
  By:

  	
  /s/ Myles McCormick

  	
   

  
	
   

  	
  a California
  corporation, its Manager

  	
   

  	
  Name:

  	
  Myles McCormick

  
	
   

  	
   

  	
  Title:

  	
  CFO/COO

  
	
   

  	
  By:

  	
  /s/ Paul Zen

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Paul Zen,

  	
   

  	
  By:

  	
  /s/ Charles Bracher

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  	
  Name:

  	
  Charles Bracher

  
	
   

  	
   

  	
  Title:

  	
  VP, Finance

  

 4
 

EXHIBIT
A:

FLOOR PLAN OF EXPANSION PREMISES

 

 5

EXHIBIT B:

TENANT WORK LETTER

THIS TENANT WORK LETTER (“Agreement”)
is made and entered into by and between Landlord and Tenant as of the date of
the Second Amendment to Lease (the “Amendment”). This Agreement shall be deemed
a part of the Amendment. Capitalized terms which are used herein and defined in
the Amendment or the Lease shall have the meaning given in the Amendment or the
Lease, as appropriate.

1.         General.

1.1.      The Parties’ Respective Obligations.

1.1.1.               Landlord’s Work. At
Landlord’s sole cost and expense, Landlord’s contractor shall perform: (i) all
work to the restrooms in the Expansion Premises required to bring them into
compliance with the disabled access requirements of the San Francisco Building
Code (the “ADA Requirements”); and (ii) any fire or life safety code compliance
work that, as a result of the performance of Tenant’s Work (as defined below),
may be required in those portions of the Common Areas of the Building that are
in the path of travel to the Expansion Premises (but excluding the elevator
lobby area of the Expansion Premises). The work described in clauses (i) and
(ii) of the preceding sentence is hereinafter referred to as “Landlord’s Work.”
Tenant acknowledges that the term “Common Areas” does not include any portion
of the 17th floor of the Building (other than stairwells), and specifically
excludes those portions of the 17th floor that were previously considered
Common Areas when the 17th floor was configured for occupancy by multiple
tenants (such as hallways and elevator lobby areas). Landlord shall perform
Landlord’s Work in compliance with all applicable laws, but in all other
respects Landlord’s Work shall be performed in a manner, with materials and
pursuant to plans and specifications determined by Landlord in Landlord’s sole
discretion. Tenant acknowledges that Landlord’s Work relating to the restrooms
in the Expansion Premises is limited to only that work required to be performed
in order to bring the restrooms into compliance with the ADA Requirements.
Tenant shall be responsible for all other improvements, upgrades and other work
in the restrooms required under applicable laws or desired by Tenant. Other
than Landlord’s obligation to perform Landlord’s Work, Tenant shall lease the
Expansion Premises in their “as is” condition, and Landlord shall have no
obligation to make any improvements or to perform any work in the Expansion
Premises or elsewhere in the Building. Landlord shall deliver the Expansion
Premises to Tenant in their as-is condition, without Landlord’s Work having
been commenced or completed, it being the parties’ understanding and agreement
that Landlord’s Work will be performed concurrently with Tenant’s Work (as
defined below).

1.1.2                Tenant’s Work. Except to
the extent expressly included in the scope of Landlord’s Work pursuant to Section
1.1.1, Tenant shall be responsible for performing all work in and to the
Expansion Premises and the other portions of the Building that is required: (i)
to prepare the Expansion Premises for Tenant’s occupancy pursuant to the Lease
and as otherwise may be required to comply with all applicable laws, codes,
rules and regulations; or (ii) as a result of, or is triggered by, the permits
obtained for Tenant’s Work and/or the performance of Tenant’s Work.

Without limiting the
generality of the foregoing, Tenant’s Work shall include all work required to
be performed in order to bring the Expansion Premises and other portions of the
Building (including, without limitation, so-called “core walls” and any
portions of the Building that are Common Areas) into compliance with all
applicable laws, codes, rules and regulations (including, without limitation,
fire and life safety requirements). The work that is required to be performed
by Tenant pursuant to the Amendment and this Agreement is hereinafter referred
to as “Tenant’s Work”. Tenant’s Work shall be performed at Tenant’s sole cost
and expense, subject to the Construction Allowance described below.

1.2.      Construction Allowance. In the
manner provided in this Section 1.2. Landlord shall pay to Tenant a “Construction
Allowance” of up to $576,200.00, but not exceeding the actual cost of Tenant’s
Work. Upon the completion of Tenant’s Work, Tenant shall submit to Landlord a
written notice indicating that Tenant has completed Tenant’s Work, which notice
shall be accompanied by all of the following (collectively, “Tenant’s
Completion Notice”): (i) copies of paid invoices and lien waivers from Tenant’s
general contractor and all primary subcontractors, showing that full payment
has been received for the construction of Tenant’s Work; (ii) certification
from Tenant’s architect that all of Tenant’s Work has been completed in
accordance with the plans and specifications approved by Landlord and all local
governmental and quasi-governmental authorities with jurisdiction; (iii) a copy
of the building permit or job card for Tenant’s Work, showing that Tenant’s
Work has been finally approved by the appropriate building inspector; and (iv)
any other evidence reasonably required by Landlord indicating that all legal
requirements for Tenant’s occupancy of the Expansion Premises have been
satisfied and that the cost of all labor and materials has been paid in full.
Landlord shall pay the Construction Allowance to Tenant within thirty (30) days
after the date of Landlord’s receipt of Tenant’s Completion Notice (including
all of the materials and documentation specified above). In no event shall the
Construction Allowance be applicable to any of Tenant’s trade fixtures, office
equipment or other equipment, inventory, promotional materials or related
expenses.

2.         Approval of Plans for Tenant’s Work.

2.1.      Notification of Architect. Tenant
shall notify Landlord in writing of the name and address of the licensed
architect which Tenant desires to engage for the preparation of plans for
Tenant’s Work. Tenant’s architect shall be subject to Landlord’s prior written
approval. Tenant shall retain such architect’s administrative services
throughout the performance of Tenant’s Work. Designers who are not licensed architects
will not be acceptable.

2.2.      Submittal of Plans.

2.2.1.               Tenant’s Preliminary Plans.
Tenant shall deliver to Landlord, for Landlord’s review and approval, “Tenant’s
Preliminary Plans,” which shall include the following: (i) interior elevations;
(ii) a  floor plan; (iii)
architectural finish schedule; (iv) reflected ceiling plans; (v) electrical,
mechanical and plumbing plans; and (vi) outline specifications. Within ten (10)
business days after Landlord’s receipt of Tenant’s Preliminary Plans, Landlord
shall either approve or disapprove Tenant’s Preliminary Plans. If Landlord
disapproves Tenant’s Preliminary Plans, then Landlord shall state in reasonable
detail the changes which Landlord requires to be made thereto.

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2.2.2.               Tenant’s Final Plans.
Promptly after Landlord’s approval of Tenant’s Preliminary Plans, Tenant shall
deliver to Landlord, for Landlord’s review and approval, complete plans,
specifications and working drawings which incorporate and are consistent with
Tenant’s Preliminary Plans, as previously approved by Landlord, and which show
in detail the intended design, construction and finishing of all portions of
Tenant’s Work, in sufficient detail for construction (“Tenant’s Final Plans”).
Within five (5) business days after Landlord’s receipt of Tenant’s Final Plans,
Landlord shall either approve or disapprove Tenant’s Final Plans. If Landlord
disapproves Tenant’s Final Plans, then Landlord shall state in reasonable
detail the changes which Landlord requires to be made thereto.

2.3.      Landlord’s Approval. Landlord’s
approval of any of Tenant’s plans, signs or materials samples shall not be
valid unless such approval is in writing and signed by Landlord. Landlord’s
approval of any of Tenant’s plans, including any preliminary draft or version
thereof, shall not be deemed to be a representation as to their completeness,
adequacy for Tenant’s intended use of the Expansion Premises or compliance with
applicable law. Tenant shall pay to Landlord all reasonable costs incurred by
Landlord in its review of Tenant’s Preliminary Plans and Tenant’s Final Plans.

3.         Standard of Construction. Tenant’s Work shall comply
with all applicable laws, codes, rules and regulations of all governmental and
quasi-governmental authorities with jurisdiction. Only new and first-class
materials shall be used in the construction of Tenant’s Work. Tenant shall not
change any portion of Tenant’s Work from the description thereof contained in
Tenant’s Final Plans, as approved by Landlord, unless Tenant first obtains
Landlord’s written approval.

4.         Prior to Commencement of Tenant’s Work.

4.1.      Approval of Contractors. Tenant’s
general contractor and primary subcontractors shall be subject to Landlord’s
prior written approval, and Tenant shall submit to Landlord, at least twenty
(20) days prior to the commencement of construction, by notice given in the
manner specified in the Lease, the following information: (i) the name and
address of the general contractor and the primary subcontractors which Tenant
proposes to engage for the performance of Tenant’s Work; (ii) a fully completed
Contractor’s Qualification Statement (AIA Document A305) for Tenant’s proposed
general contractor and each of Tenant’s proposed primary subcontractors; (iii)
the construction cost breakdown and total cost for all portions of Tenant’s
Work; (iv) the actual commencement date of construction and the estimated date
of completion of Tenant’s Work, including fixturization; (v) evidence of
insurance as required by Article 6 below; and (vi) Tenant’s contractor’s
performance and/or labor and materials bonds, if required by Landlord. All
contractors engaged by Tenant shall be bondable, licensed contractors,
possessing good labor relations, capable of performing quality workmanship and
working in harmony with Landlord’s construction manager and any other
contractors in the Building.

4.2.      Notice of Nonresponsibility. Prior
to the commencement of construction, Landlord shall have the right to post in a
conspicuous location on the Expansion Premises and/or Building, as well as to
record in the County Recorder’s office, a Notice of Nonresponsibility.

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5.         Commencement and Performance of Tenant’s Work.

5.1.      Commencement. Tenant shall
diligently proceed with Tenant’s Work and shall complete Tenant’s Work as soon
as possible.

5.2.      Coordination of Tenant’s Work.
Tenant’s contractors shall perform Tenant’s Work in a manner and at times that
do not interfere with the ongoing business operations in the Building. Tenant
and its contractors shall not do anything that would jeopardize the labor
relations of others in the Building. Any delays in the completion of Tenant’s
Work, and any damage to any work caused by Tenant’s contractors, shall be at
Tenant’s cost and expense.

5.3.      Staging Areas. Storage of Tenant’s
contractors’ construction materials, tools and equipment shall be confined
within the Expansion Premises and in any other areas designated for such
purposes by Landlord. If such materials, tools and equipment are assigned space
or spaces outside the Expansion Premises, they shall be moved to such other
space as Landlord may direct from time to time in order to avoid interference
or delays with other work or the ongoing business operations in the Building.
In no event shall any materials or debris be stored in the common areas. Tenant’s
contractors shall not run pipes or conduits over or through any other tenant’s
space, or the common areas, except as directed by Landlord.

5.4.      Supervision of Contractors. Tenant’s
Work shall be performed in accordance with such reasonable rules and regulations
as Landlord shall promulgate from time to time. Tenant acknowledges that other
construction work may be in progress at the Building and that conflicts between
Tenant’s Work and such other work shall be subject to final resolution by
Landlord’s representatives. Tenant shall be fully responsible for, and shall
indemnify, defend and protect Landlord with respect to, the operations and
activities of Tenant’s general contractor and all subcontractors employed by
such general contractor, and all other individuals or contractors employed by
Tenant in the completion of Tenant’s Work. All such contractors and/or
individuals shall repair any damage which they may cause to any work in the
Expansion Premises or the Building.

5.5.      Changes to Tenant’s Work. Tenant
shall obtain Landlord’s written approval prior to performing any work that
deviates from Tenant’s Final Plans, as previously approved by Landlord, or
making any modifications whatsoever to Landlord’s building shell and/or
utilities or other work not explicitly shown on Tenant’s Final Plans, as
previously approved by Landlord.

6.         Insurance Required of Tenant and Tenant’s Contractors.

6.1.      Workers’ Compensation and Liability
Insurance. Tenant’s general contractor and all subcontractors shall carry,
at a minimum, the following coverages, with the following limits of liability:

(a)       Workers’
Compensation. Workers’ Compensation, as required by state law, plus
Employer’s Liability Insurance, with a limit of not less than five hundred

 4
 

thousand dollars ($500,000.00), and any other
insurance required by any employee benefit statute or other similar statute.

(b)       Liability.
Commercial General Liability Insurance (including Contractor’s Protective
Liability) with a minimum combined single limit of liability of not less than
two million dollars ($2,000,000.00). Such insurance shall provide for
explosion, collapse and underground coverage. All such insurance shall provide
coverage against any and all claims for bodily injury, including death
resulting there from, and damage to or destruction of property of any kind
whatsoever and to whomsoever belonging and arising from such contractor’s
operations, whether such operations are performed by Tenant’s general
contractor, subcontractors or any of their subcontractors, or by anyone
directly or indirectly employed by any of them.

6.2.      Tenant’s Liability Insurance. At
all times during the performance of Tenant’s Work, Tenant shall obtain and
maintain the liability insurance required to be maintained pursuant to the
Lease. If required in order to provide such coverage, such policy shall be
endorsed to insure against any loss or damage arising out of the performance of
Tenant’s Work.

6.3.      Tenant’s Builder’s Risk Insurance.
Tenant shall obtain an “All Physical Loss” Builder’s Risk Insurance policy
covering Tenant’s Work. The policy shall name Landlord and Tenant as named
insureds. The amount of insurance to be provided shall be one hundred percent
(100%) of the replacement cost of Tenant’s Work.

6.4.      Additional Insureds. Except as
otherwise required by the express terms of this Agreement, all such insurance
policies required under this Agreement shall include Landlord and Landlord’s
agents as additional insureds, except Workers’ Compensation Insurance, which
shall contain an endorsement waiving all rights of subrogation against Landlord
and its agents. All of Tenant’s insurance in which Landlord is required to be
an additional insured shall provide that such insurance coverage shall not be
reduced or cancelled except upon thirty (30) days’ prior written notice to
Landlord. Tenant shall provide Landlord with certificates of insurance prior to
the commencement of Tenant’s Work. Such certificates shall indicate that such
insurance complies with the requirements of this Article 6, including the
requirement that such insurance coverage shall not be reduced or cancelled
except upon thirty (30) days’ prior written notice to Landlord.

6.5.      Liens. Upon completion of Tenant’s
Work, Tenant shall deliver to Landlord unconditional lien waivers from Tenant’s
general contractor and all subcontractors and suppliers and certification in
form acceptable to Landlord that all bills of every description resulting from
Tenant’s Work have been paid. Tenant shall keep the Expansion Premises free and
clear of all claims and liens and shall indemnify, defend and protect Landlord
against, and hold Landlord harmless from, any and all such claims and liens
including, but not be limited to, attorneys’ fees and costs.

7.         As-Built Plans. Upon completion of Tenant’s Work, Tenant
shall submit to Landlord two (2) complete sets of as-built plans (one [1] of
which shall be reproducible) and specifications describing all portions of
Tenant’s Work.

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