Document:

Exhibit
10.20

 

PARENT PLEDGE AGREEMENT

 

THIS
PARENT PLEDGE AGREEMENT (“Agreement”), made as of this 13th day of February,
2004, by and between Interactive Health, Inc., a Delaware corporation (the “Pledgor”), and Comerica Bank, a Michigan banking corporation
(herein called “Bank”). The addresses for Pledgor and
Bank are set forth on the signature pages.

 

RECITALS

 

A.                                   Pursuant to that certain
Interactive Health LLC Credit Agreement dated as of December 30, 2003 (as
amended or otherwise modified from time to time, the “Credit Agreement”), among
Interactive Health LLC, a Delaware limited liability company (the “Company”)
and the Bank, the Bank has agreed, subject to the satisfaction of certain terms
and conditions, to extend or continue to extend financial accommodations to the
Company, as provided therein.

 

B.                                     As a condition precedent
to the making of the initial loans and issuing letters of credit and creating
and discounting acceptances under the Credit Agreement, the Pledgor
is required to execute and deliver a pledge agreement in the form of this
Agreement.

 

NOW,
THEREFORE, for and in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:

 

I.                                         Collateral and
Security Interest.

 

Pledgor hereby assigns, transfers, delivers and
pledges to the Bank, and grants to the Bank a security interest in the
following collateral to secure the prompt and complete payment and performance
when due of the Indebtedness (as defined in the Credit Agreement) whether at
stated maturity by acceleration or otherwise:

 

1.                                       all
of Pledgor’s present and future interest(s) as a
member (or other equity interest hereunder, as the case may be), in the
Company, together with all of the certificates and/or instruments representing
such membership or other equity interest and all cash, securities, dividends,
rights and other property at any time and from time to time received,
receivable or otherwise distributed  in respect of or in exchange for any
or all of such interests;

 

2.                                       all
other property hereafter delivered to the Bank in substitution for or in
addition to the foregoing, all certificates and instruments representing or
evidencing such property, and all cash, securities, interest, dividends, rights
and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all thereof;

 

 

3.                                       all contract rights and claims of the Pledgor
against the Company, and all collateral therefor,
including but not limited to the various promissory notes issued by the members
of the Company to evidence their respective original contribution obligations;

 

4.                                       all
additions, replacements, substitutions, renewals, interest, dividends,
distributions, rights of any kind (including but not limited to stock splits,
stock rights, voting and preferential rights), products, and proceeds of or
pertaining to the above including, without limit, cash or other property which
were proceeds and are recovered by a bankruptcy trustee or otherwise as a
preferential transfer by Pledgor;

 

all said property, products and proceeds herein called the
“Collateral.” The creation of a security interest in proceeds is not to be
construed to give Pledgor any right to dispose of the
Collateral. Pledgor warrants that Pledgor
has clear title to the Collateral, free from any liens, claims or encumbrances
except the security interest created by this Agreement, and has full power and
authority to execute and perform this Agreement.

 

II.                                     Warranties,
Covenants and Agreements.

 

A.                                   To induce the Bank to enter
into this Agreement and the Credit Agreement, Pledgor
represents and warrants, as continuing representations and warranties so long
as the Agreement remains in effect, that:

 

1.               The
individual signatory hereto has authority to execute and deliver this Agreement
on behalf of Pledgor.

 

2.               No financing
statement covering the Collateral, or any part
thereof, has been or will be filed with any filing officer, except as required
hereunder or as permitted under the Credit Agreement (including the schedules
thereto).

 

3.               No other
agreement, pledge or assignment covering the Collateral, or any part thereof,
has been made and no security interest, other than the one created hereby or
pursuant to pledges and security agreements previously made in favor of Bank
has or will be attached or is or will be perfected in the Collateral or in any
part thereof, except as permitted under the Credit Agreement.

 

4.               No material
dispute, right of setoff, counterclaim or defenses exist
with respect to any part of the Collateral.

 

5.               All
information supplied and statements made in any financial or credit statements
or application for credit prior to the execution of this Agreement are true and
correct as of the date hereof in all material respects.

 

6.               The
Collateral (a) constitutes all the present and future membership interests (or
other equity interests) in the Company, (b) has been duly authorized and issued
to Pledgor, (c) is fully paid and non-assessable, (d)
is freely and validly assignable by Pledgor, and (e)
is not subject to any option, warrant right to call or commitment of any kind
or nature.

 

2

 

7.               At the time
Bank’s security interest attaches to any of the Collateral or its proceeds, Pledgor will be the lawful owner with the right to transfer
any interest therein, and that Pledgor will make such
further assurances as to prove its title to the Collateral as may be reasonably
required and will defend the Collateral and its proceeds against the lawful
claims and demands of all persons whomsoever. The delivery at any time by Pledgor to Bank of Collateral or financing statements
covering Collateral shall constitute a representation and warranty by Pledgor under this Agreement that, with respect to such
Collateral, and each item thereof, Pledgor is owner
of the Collateral and the matters heretofore warranted in this paragraph II are
true and correct.

 

B.                                     Pledgor
agrees that: (i) it will not sell, transfer, assign
or otherwise dispose of any of the Collateral or any interest therein or offer
to do so without the prior written consent of Bank; (ii) it will pay all taxes
and assessments upon the Collateral or for its use or operation before any
interest or penalty for nonpayment attaches thereto unless said payment is
being contested in good faith and it establishes a reserve as required by
generally accepted accounting principles; (iii) it will promptly furnish Bank
with any information in writing which Bank may reasonably request concerning the
Collateral; (iv) it will promptly notify Bank of any material change in any
material fact or circumstances warranted or represented by Pledgor
in this Agreement in connection with the Collateral or the Indebtedness; (v) it
will promptly and properly perform all of its covenants and duties under this
Agreement or under any other document or agreement to which it is a party, now
or hereafter arising, for or in connection with the Indebtedness or the
Collateral; (vi) it will promptly notify Bank of any material claim, action or
proceeding affecting the Collateral and title therein, or in any part thereof,
or the security interest created herein, and, at the request of the Bank,
appear in and defend, at Pledgor’s expense, any such
action or proceeding; (vii) it will execute such endorsements or assignments of
the Collateral as Bank may reasonably request; and (viii) it will keep the
Collateral free at all times from any and all claims, liens, security
interests, and encumbrances other than those in favor of Bank, and shall
deliver or cause to be delivered to Bank all certificates or other instruments
representing the Collateral.

 

C.                                     Bank agrees to use
reasonable care in the custody and preservation of Collateral in its possession
but assumes no duty to take steps necessary to preserve rights against prior
parties.

 

D.                                    If Bank, acting in its
sole discretion, redelivers Collateral to Pledgor or Pledgor’s designee for the purpose of:

 

(a) the ultimate sale or exchange thereof, or

 

(b) presentation, collection, renewal, or registration of
transfer thereof,

 

such redelivery shall be in trust
for the benefit of Bank and shall not constitute a release of Bank’s security
interest therein or in the proceeds or products thereof unless Bank
specifically so agrees in writing. If Pledgor
requests any such redelivery, Pledgor will deliver
with such request a duly executed financing statement in form and substance
satisfactory to Bank. Any proceeds of Collateral coming into the Pledgor’s possession as a result of any such redelivery
shall be held in trust for Bank and forthwith delivered to

 

3

 

Bank for application on the Indebtedness.
Subject to the terms of the Credit Agreement, Bank may (if, in its sole
discretion, it elects to do so) deliver the Collateral or any part of the
Collateral to Pledgor, and such delivery by Bank
shall discharge Bank from any and all liability or responsibility for such
Collateral.

 

E.                                      Pledgor
hereby acknowledges it has guaranteed to the Bank the due and punctual payment
to the Bank when due, whether by acceleration or otherwise, of the Indebtedness
pursuant to that certain Guaranty of even date herewith, including, without
limitation, principal, interest (including interest accruing on or after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding by or against the Company, whether or not a
claim for post-filing or post-petition interest is allowed in such a
proceeding), and all other liabilities and obligations, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection with the Credit
Agreement or the other Loan Documents, whether such Indebtedness is now
existing or hereafter arising.  Pledgor waives notice of acceptance of this Agreement and
presentment, demand, protest, notice of protest, dishonor, notice of dishonor,
notice of demand, notice of intent to demand, notice of acceleration, notice of
intent to accelerate, notice of default and diligence in collecting any
Indebtedness, and agrees that the Bank may modify the terms of borrowing,
compromise, extend, increase, accelerate, renew or forbear to enforce payment
of any part or all of any Indebtedness, or permit the Company to incur
additional Indebtedness, all without notice to Pledgor
and without affecting in any manner the Bank’s rights under this Agreement.
Except (i) to the extent unenforceable in accordance
with applicable law or (ii) in connection with any notice required to be
delivered to Pledgor by Bank in accordance with the
Loan Documents, Pledgor further waives any and all
other notices to which Pledgor might otherwise be
entitled. Pledgor acknowledges and agrees that the
Bank’s rights under this Agreement are not conditioned upon pursuit by the Bank
of any remedy the Bank may have against the Company or any other person or any
other security. No invalidity, irregularity or unenforceability of any part or
all of the Indebtedness or any documents evidencing the same, by reason of any
bankruptcy, insolvency or other law or order of any kind or for any other
reasons, and no defense or setoff available at any time to the Company, shall
impair, affect or be a defense or setoff to the Bank’s rights under this
Agreement.

 

F.                                      Pledgor
delivers this Agreement based solely on the Pledgor’s
independent investigation of (or decision not to investigate) the financial
condition of the Company and the Loan Parties and is not relying on any
information furnished by the Bank. Pledgor assumes
full responsibility for obtaining any further information concerning the
Company’s and each of the Loan Parties’ financial condition, the status of the
Indebtedness or any other matter which Pledgor may
deem necessary or appropriate now or later. Pledgor
waives any duty on the part of Bank, and agrees that it is not relying upon nor
expecting the Bank, to disclose to Pledgor any fact
now or later known by the Bank, whether relating to the operations or condition
of the Company or any Loan Party, the existence, liabilities or financial
condition of any guarantor of the Indebtedness, the occurrence of any Default
or Event of Default (each as defined in the Credit Agreement) with respect to
the Indebtedness, or otherwise, notwithstanding any effect such fact may have
upon Pledgor’s risk under this Agreement or the Pledgor’s rights against the Company or any Loan Party. Pledgor knowingly accepts the full range of risk
encompassed in this Agreement, which risk includes without limit the
possibility that Company or any Loan Party may incur Indebtedness to the Bank
after the financial condition of the Company or any

 

4

 

Loan
Party, or Company’s or any Loan Party’s ability to pay debts as they mature,
has deteriorated.

 

G.                                     Pledgor
represents that: (a) the Bank has not made any representation to Pledgor as to the creditworthiness of the Company or any
Loan Party; and (b) Pledgor has established adequate
means of obtaining from the Company or any Loan Party on a continuing basis
financial and other information pertaining to the Company’s or any Loan Party’s
financial condition. Pledgor acknowledges that the
Bank does not have any obligation to keep Pledgor
adequately informed of any facts, events or circumstances which might in any
way affect the risks of Pledgor under this Agreement.

 

H.                                    Pledgor
acknowledges that the effectiveness of this Agreement is not conditioned on any
or all of the Indebtedness being guaranteed by anyone else. Subject to the
terms of the Credit Agreement, Bank, in its sole discretion, without notice to Pledgor, may release, exchange, enforce and otherwise deal
with any security now or later held by the Bank for payment of the Indebtedness
without affecting in any manner the Bank’s rights under this Agreement. Pledgor acknowledges and agrees that the Bank does not have
any obligation to acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure
payment of the Indebtedness, and Pledgor is not
relying upon assets in which Bank has or may have a lien or security interest
for payment of the Indebtedness.

 

I.                                         Until all of the
Indebtedness has been paid in full, Pledgor
irrevocably and absolutely waives any and all rights of subrogation,
contribution, indemnification, recourse, reimbursement and any similar rights
against the Company or any Loan Party with respect to this Agreement, whether
these rights arise under an express or implied contract or by operation of law.
It is the intention of the parties that, until all of the Indebtedness has been
paid in full, Pledgor shall not be (or be deemed to
be) a “creditor” (as defined in Section 101 of the Federal Bankruptcy
Code, as the same may be amended) of the Company or any Loan Party (or any
other guarantor) by reason of the existence of this Agreement in the event that
the Company or any Loan Party becomes a debtor in any proceeding under the
Federal Bankruptcy Code. This waiver is given to induce the Bank to enter into
certain written contracts with the Company and the Loan Parties included in the
Indebtedness. Pledgor warrants and agrees that none
of Bank’s rights, remedies or interests shall be directly or indirectly
impaired because of any of Pledgor’s status as an
“insider” or “affiliate” of the Company or any Loan Party, and Pledgor shall take any action, and shall execute any
document, which the Bank may reasonably request in order to effectuate this
warranty to the Bank.

 

J.                                        Pledgor
shall take or cause to be taken and execute or cause to be executed all
financing statements, endorsements, assignments and other writings requested by
Bank to establish, maintain, reinstate, and/or continue the perfected and first
priority status of the security interest of Bank in the Collateral or implement
or further effectuate the terms or purpose of this Agreement, although the
failure of Pledgor to do so shall not affect in any
way Bank’s perfected and first priority security interest in the Collateral,
and will upon request promptly pay all costs and expenses of filing and
recording, including the costs of any record searches, deemed necessary by Bank
from time to time, to establish or determine the validity and the priority of
Bank’s security interest. Pledgor further makes,
constitutes and appoints Bank its true and lawful attorney-in-fact with full
power of substitution to take any action in furtherance of this

 

5

 

Agreement,
including, without limitation, the signing of financing statements, endorsing
of instruments, and the execution and delivery of all documents and agreements
necessary to obtain or accomplish any protection for or collection or
disposition of any part of the Collateral. Such appointment shall be deemed
irrevocable and coupled with an interest and may be exercised only at any time
following the occurrence and during the continuance of an Event of Default.

 

K.                                    Pledgor
waives any right to require the Bank to: (a) proceed against any person,
including without limit the Company or any Loan Party; (b) proceed against or
exhaust any security held from the Company or any Loan Party or any other
person; (c) pursue any other remedy in the Banks’ power; or (d) make any
presentments or demands for performance, or give any notices of nonperformance,
protests, notices of protest or notices of dishonor in connection with any
obligations or evidences of Indebtedness held by the Bank as security, in
connection with any other obligations or evidences of Indebtedness which
continues in whole or in part of the Indebtedness secured under this Agreement,
or in connection with the creation of new or additional Indebtedness.

 

L.                                      Pledgor
waives any defense based upon or arising by reason of (a) any disability or
other defense of the Company, any Loan Party or any other person; (b) the
cessation or limitation from any cause, other than final and irrevocable
payment in full, of the Indebtedness; (c) any lack of authority of any officer,
director, partner, agent or any other person acting or purporting to act on
behalf of the Company or any Loan Party or any defect in the formation of the
Company or any Loan Party; (d) the application by the Debtor of the proceeds of
any Indebtedness for purposes other than the purposes represented by the
Company or any Loan Party to Bank or intended or understood by the Bank or any
Loan Party or Pledgor; (e) any act or omission by the
Bank which directly or indirectly result in or aids the discharge of the
Company or any Loan Party or any Indebtedness by operation of law or otherwise;
or (f) any modification of the Indebtedness, in any form, including without
limit the renewal, extension, acceleration or other change in time for payment
of the Indebtedness, or other change in the terms of Indebtedness or any part
of it, including without limit increase or decrease of the rate of interest. Pledgor waives any defense Pledgor
may have based upon any election of remedies by the Bank which destroys Pledgor’s subrogation rights or Pledgor’s
right to proceed against the Company or any Loan Party for reimbursement,
including without limit any loss of rights Pledgor
may suffer by reason of any rights, powers or remedies of the Company of any
Loan Party in connection with any anti-deficiency laws or any other laws
limiting, qualifying or discharging the Indebtedness.

 

III.                                 Default; Rights and
Remedies.

 

A.                                   The occurrence of any Event
of Default as defined in the Credit Agreement (including without limitation, a
breach of any of the provisions of this Agreement) shall be deemed to be an Event
of Default under this Agreement and shall entitle the Bank to exercise its
remedies under this Agreement or as otherwise provided by law.

 

B.                                     Upon the occurrence and
during the continuance of an Event of Default, Bank shall be entitled, subject
to applicable law, to exercise all of its remedies specified herein, in the
Credit Agreement, or in any other document executed in connection with the
Credit Agreement or this Agreement, or provided by law and to enforce its
security interest in the Collateral.

 

6

 

Additionally,
upon the occurrence and during the continuance of an Event of Default and
subject to applicable law, Bank will be entitled to (i)
receive all dividends payable in respect of the Collateral pledged under this
Agreement; (ii) change the registration of any registerable
Collateral to any other name or form; (iii) appoint any officer or agent of
Bank as Pledgor’s true and lawful proxy and
attorney-in-fact, with power (exercisable so long as such Event of Default is
continuing), to exercise all voting rights in respect of the shares evidencing
the Collateral pledged hereby; (iv) endorse Pledgor’s
name or any of its officers’ names or agents’ names upon any notes, checks,
drafts, money orders, or other instruments of payment (including payments
payable under any policy of insurance on the Collateral) or Collateral that may
come into possession of the Bank in full or part payment of any amounts owing
to the Bank; (v) give written notice to the issuer of such Collateral to effect
such change or changes of address so that all mail from the issuer of such
Collateral and related thereto addressed to Pledgor
may be delivered directly to Bank; (vi) to execute on behalf of Pledgor any financing statements, amendments,
subordinations or other filings pursuant to the Credit Agreement; and (vii) do
any and all things necessary to be done in and about the premises as fully and
effectually as Pledgor might or could do, and hereby
ratifying all that said proxy and attorney shall lawfully do or cause to be
done by virtue hereof. The proxy and power of attorney described herein shall
be deemed to be coupled with an interest and shall be irrevocable for the term
of the Credit Agreement, and all transactions thereunder
and thereafter as long as any Indebtedness or any of the commitments to lend
remain outstanding. Upon the occurrence and during the continuance of an Event
of Default, the Bank shall have all rights and powers of a secured creditor
under the UCC and any other applicable law, including the full power, subject
to applicable law, to collect, compromise, endorse, sell or otherwise deal with
the Collateral or proceeds thereof on behalf of the Bank in its own name or in
the name of Pledgor. The parties agree that ten (10)
days written notice sent by certified or registered mail to Pledgor
at the address designated below shall be deemed reasonable notice of any
disposition of the Collateral, should notice be required by law.

 

C.                                     So long as the Bank has
not given notice to the Pledgor that an Event of
Default (as defined in the Credit Agreement) has occurred and is continuing:

 

1.               The Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers (but any such exercise by the Pledgor
of stock purchase or subscription rights may be made only from funds of the Pledgor not comprising part of the Collateral) relating or
pertaining to the Collateral or any part thereof for any purpose; provided,
however, that the Pledgor agrees that it shall
not exercise any such right or power in any manner which  would have a material adverse effect on the
value of the Collateral or any part thereof.

 

2.               The Pledgor shall be entitled to receive and retain any and all
lawful dividends payable in respect of the Collateral which are paid in cash if
such dividends are permitted by the Credit Agreement, but all dividends and
distributions in respect of the Collateral or any part thereof made in
membership interests or other property or representing any return of capital,
whether resulting from a subdivision, combination or reclassification of
Collateral or any part thereof or received in exchange for Collateral or any
part thereof or as a result of any merger, consolidation, acquisition or other
exchange of assets to which the issuer may be a party or otherwise or as a
result of any exercise of any stock purchase or subscription right, shall be
and become part of the Collateral hereunder and, if received

 

7

 

by the Pledgor, shall be forthwith
delivered to the Bank in due form for transfer (i.e., endorsed in blank or
accompanied by stock or bond powers executed in blank) to be held for the
purposes of this Agreement.

 

Upon notice from the Bank during the existence of an Event
of Default, and so long as the same shall be continuing, all rights and powers
which the Pledgor is entitled to exercise pursuant to
the preceding paragraph, and all rights of the Pledgor
to receive and retain dividends pursuant to the preceding paragraph shall
forthwith cease, and all such rights and powers shall thereupon become vested
in the Bank which shall have, during the continuance of such Event of Default,
the sole and exclusive authority to exercise such rights and powers and to
receive such dividends.  Any and all
money and other property paid over to or received by the Bank pursuant to this
paragraph shall be retained by the Bank as additional Collateral hereunder and
applied in accordance with the provisions hereof.

 

IV.                                 Miscellaneous.

 

A.                                   Subject to the terms of the
Credit Agreement, the Bank may assign any of the Indebtedness and deliver all
or any part of the Collateral to its assignee, who then shall have with respect
to the Collateral so delivered all the rights and powers of the Bank under this
Agreement and after that the Bank shall be fully discharged from all liability
and responsibility with respect to the Collateral so delivered.

 

B.                                     Notwithstanding any prior
revocation, termination, surrender, or discharge of this Agreement in whole or
part, the effectiveness of this Agreement shall automatically continue or be
reinstated, as the case may be, in the event that (a) any payment received or
credit given by the Bank in respect of the Indebtedness is returned, disgorged,
or rescinded as a preference, impermissible setoff, fraudulent conveyance,
diversion of trust funds, or otherwise under any applicable state or federal
law, including, without limitation, laws pertaining to bankruptcy or
insolvency, in which case this Agreement shall be enforceable against Pledgor as if the returned, disgorged, or rescinded payment
or credit had not been received or given by the Bank, and whether or not the
Bank relied upon this payment or credit or changed its position as a
consequence of it; or (b) any liability is imposed, or sought to be imposed,
against the Bank relating to the environmental condition of, or the presence of
hazardous or toxic substances on, in or about, any property given as collateral
to the Bank for the Indebtedness, whether this condition is known or unknown,
now exists or subsequently arises (excluding only conditions which arise after
any acquisition by the Bank of any such property, by foreclosure, in lieu of
foreclosure or otherwise, to the extent due to the wrongful act or omission of
the Bank), in which case this Agreement shall be enforceable to the extent of
all liability, costs and expenses (including without limit reasonable
attorneys’ fees) incurred by the Bank as the direct or indirect result of any
environmental condition or hazardous or toxic substances to the extent for
which the Company is obligated to the Bank pursuant to the Credit Agreement.
For purposes of this Agreement, “environmental condition” includes, without
limitation, conditions existing with respect to the  surface or ground water, drinking water
supply, land surface or subsurface and the air; and “hazardous or toxic
substances” shall include any and all substances now or subsequently determined
by any federal, state or local authority to be hazardous or toxic, or otherwise
regulated by any of these authorities. Pledgor will
comply in all material respects with

 

8

 

all statutes, laws,
ordinances and regulations relating to the Collateral, including without limitation
any registration requirements and all federal, state and local environmental
protection, toxic substance and other similar laws and regulations applicable
to Pledgor’s business or to any of the Collateral or
any premises where any of the Collateral is located (Pledgor
hereby representing and warranting that, as of the date hereof, it is in
compliance with all such laws and regulations), and hold harmless and indemnify
Bank from and against any and all liability or claims asserted against or
suffered by Bank as a result of any failure by Pledgor
to comply with this paragraph (or any misrepresentation or breach of warranty
hereunder), such indemnity to survive any payoff and discharge of the
Indebtedness.

 

C.                                     Pledgor
acknowledges that the Bank, subject to the terms of the Credit Agreement, has
the right to sell, assign, transfer, negotiate or grant participations or any
interest in, any or all of the Indebtedness and any related obligations,
including without limit this Agreement. To the extent deemed necessary by the
Bank in connection with the above and subject to Section 11.20 of the
Credit Agreement, the Bank may disclose all documents and information which the
Bank now has or later acquires relating to Pledgor,
the Indebtedness or this Agreement, however obtained. Pledgor
further agrees that the Bank may disclose the documents and information to the
Company or any Loan Party.

 

D.                                    This Agreement constitutes
the entire agreement of Pledgor and the Bank with
respect to the subject matter of this Agreement. No waiver, consent,
modification, or change of the terms of this Agreement shall bind Pledgor or Bank unless in writing and signed by the waiving
party or an authorized officer of the waiving party, and then this waiver,
consent, modification, or change shall be effective only in the specific
instance and for the specific purpose given. This Agreement shall inure to the
benefit of Bank and its successors and assigns. This Agreement shall be binding
on Pledgor and Pledgor’s
successors, and assigns, including without limit any debtor in possession or
trustee in bankruptcy for Pledgor. Pledgor has entered into this Agreement in good faith for
the purpose of inducing the Bank to extend credit to make other financial
accommodations to Company and the Loan Parties and Pledgor
acknowledges that the terms of this Agreement are reasonable. If any provision
of this Agreement is unenforceable in whole or in part for any reason, the
remaining provisions shall continue to be effective. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.

 

E.                                      Pledgor
agrees to reimburse the Bank for any and all reasonable costs and expenses
(including without limit court costs, legal fees, and reasonable attorney fees
whether inside or outside counsel is used, whether or not suit is instituted
and, if instituted, whether at the trial court level, appellate level, in a
bankruptcy, probate or administrative proceeding or otherwise and audit
expenses) incurred in enforcing any of the duties and obligations of Pledgor or rights of the Bank under this Agreement, except,
however, costs and expenses arising solely as a result of the gross negligence
or willful misconduct by Bank.

 

F.                                      Notices to the parties
under this Agreement shall be given (and shall be deemed given) in accordance
with Section 8.5 of the Credit Agreement, at address for each party set
forth herein or at such other address of a party as designated in writing by
such party.

 

9

 

G.                                     In the event of any
express conflict between the terms and provisions of this Agreement and the
terms and provisions of the Credit Agreement, the terms and provisions of the
Credit Agreement shall control.

 

H.                                    WAIVER OF JURY TRIAL.
THE BANK (BY ACCEPTANCE OF THE BENEFITS HEREUNDER) AND THE PLEDGOR AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL
BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANK NOR PLEDGOR SHALL SEEK TO CONSOLIDATE,
BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE BANK OR PLEDGOR EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY ALL OF THEM.

 

I.                                         Pledgor
hereby irrevocably submits to the non-exclusive jurisdiction of any United
States Federal or Michigan state court sitting in Detroit in any action or
proceeding arising out of or relating to this Agreement and Pledgor
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such United States Federal or
Michigan state court. Pledgor irrevocably consents to
the service of any and all process in any such action or proceeding brought in
any court in or of the State of Michigan by the delivery of copies of such
process to Pledgor at its address specified below or
by certified mail directed to such address or such other address as may be
designated by Pledgor in any notice to that complies
as to delivery with the terms of Section 11.4 of the Credit Agreement.
Nothing in this paragraph shall affect the right of the Bank to serve process
in any other manner permitted by law or limit the right of the Bank to bring
any such action or proceeding against Pledgor or any
of its property in the courts of any other jurisdiction. Pledgor
hereby irrevocably waives any objection to the laying of venue of any such suit
or proceeding in the above described courts.

 

J.                                        This Agreement
includes all amendments and supplements hereto and assignments hereof and Pledgor and Bank shall not be bound by any amendment or
undertaking not expressed in a writing executed by each of them.

 

K.                                    All capitalized terms not
specifically defined herein which are defined in the Credit Agreement are used
as defined in the Credit Agreement. Except as otherwise provided herein, all
other terms used in this Agreement shall have the meanings given under Article 9
of the Michigan Uniform Commercial Code, or in any other article, if not
defined in Article 9. Michigan Uniform Commercial Code shall mean Act 174
of the Michigan Public Acts of 1962, as amended, revised or replaced from time
to time, including without limit as amended by Act No. 348 of the Michigan
Public Acts of 2000.

 

10

 

L.                                      This Agreement shall be
a continuing security interest in every respect (whether or not the outstanding
balance of the Indebtedness is reduced to zero) and Bank’s security interest in
the Collateral as granted herein shall continue in full force and effect until
all of the Indebtedness are repaid and discharged in full and no commitment
(whether optional or obligatory) to extend any credit under the Credit
Agreement remains outstanding.

 

11

 

Notwithstanding
anything to the contrary set forth in this Agreement, the total obligations of Pledgor hereunder shall be limited to Bank’s enforcement of
its rights and remedies under this Agreement with respect to its liens and
security interests in the Collateral.

 

 

	
   

  	
  INTERACTIVE
  HEALTH, INC., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/
  Thomas Dragotto

  
	
   

  	
   

  
	
   

  	
  Its:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  3030
  Walnut Avenue

  
	
   

  	
  Long
  Beach, CA 90807

  

 

	
  Accepted
  and Approved:

  
	
   

  
	
  COMERICA
  BANK

  
	
   

  
	
   

  
	
  By: 

  	
  /s/
  Marc D. Adams

  	
   

  
	
   

  
	
   

  
	
  Its: Associate Comerica Bank Private Equity Group

  
	
   

  
	
   

  
	
  Address:

  
	
   

  
	
  One
  Detroit Center, 9th Floor

  
	
  500
  Woodward Avenue

  
	
  Detroit,
  Michigan  48226

  
	
  Attn:
  Daryl Krause

  

 

12Exhibit 10.21

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

INTERACTIVE HEALTH LLC

 

and

 

INTERACTIVE HEALTH FINANCE CORP.

 

and

 

INTERACTIVE HEALTH, INC.

 

and

 

JEFFERIES & COMPANY, INC.

 

and

 

IMPERIAL CAPITAL LLC

 

Dated as of March 26, 2004

 

 

 

 

This Registration
Rights Agreement (this “Agreement”) is made and entered into as of
March 26, 2004, by and among (i) Interactive Health LLC, a Delaware
limited liability company (the “Company”), and Interactive Health
Finance Corp., a Delaware corporation (“Finance” and together with the
Company, the “Issuers”), (ii) Interactive Health, Inc., a Delaware
corporation  and the sole member of the
Company (“Parent”), and (iii) Jefferies & Company, Inc. and Imperial
Capital LLC (together, the “Initial Purchasers”), which have agreed to
purchase the Issuers’ 71/4% Senior Notes due 2011 (the “Series A Notes”)
pursuant to the Purchase Agreement (as defined below).

 

This Agreement
is made pursuant to the Purchase Agreement, dated March 22, 2004 (the “Purchase
Agreement”), by and among the Issuers, Parent and the Initial
Purchasers.  In order to induce the
Initial Purchasers to purchase the Series A Notes, the Issuers and the
Guarantors have agreed to provide, subject to the conditions herein, the
registration rights set forth in this Agreement.  The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in
Section 9 of the Purchase Agreement. 
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Indenture, dated March 26, 2004, among the
Issuers, Parent and U.S. Bank National Association, as Trustee, relating to the
Series A Notes and the Series B Notes (the “Indenture”).

 

The parties
hereby agree as follows:

 

SECTION 1.                            DEFINITIONS

 

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

 

“Act”
shall mean the Securities Act of 1933, as amended.

 

“Affiliate”
shall have the meaning set forth in Rule 144 of the Act.

 

“Agreement”
shall have the meaning set forth in the preamble hereof.

 

“Broker-Dealer”
shall mean any broker or dealer registered under the Exchange Act.

 

“Business Day”  Any day except a Saturday, Sunday or any
other day on which banking institutions in the City of New York, or in the city
of the corporate trust office of the Trustee, are authorized or obligated by
law or regulation to close.

 

“Closing Date”
shall mean the date hereof.

 

“Commission”
shall mean the Securities and Exchange Commission.

 

“Company”
shall have the meaning set forth in the preamble hereof.

 

“Consummate”
shall mean, and an Exchange Offer shall be deemed Consummated for purposes of
this Agreement upon, the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Series B
Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange
Offer Registration Statement

 

 

continuously effective and the
keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the
Issuers to the Registrar under the Indenture of Series B Notes in the same
aggregate principal amount as the aggregate principal amount of Series A Notes
tendered by Holders thereof pursuant to the Exchange Offer.

 

“Consummation
Deadline” shall have the meaning set forth in Section 3(a) hereof.

 

“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.

 

“Exchange
Effectiveness Deadline” shall have the meaning set forth in Section 3(a)
hereof.

 

“Exchange
Offer” shall mean the exchange and issuance by the Issuers of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the outstanding principal amount of
Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.

 

“Exchange
Offer Filing Deadline” shall have the meaning set forth in
Section 3(a) hereof.

 

“Exchange
Offer Registration Statement” shall mean the Registration Statement
relating to the Exchange Offer, including the related Prospectus.

 

“Finance”
shall have the meaning set forth in the preamble hereof.

 

“Guarantors”
shall mean Parent and each future subsidiary of the Company, if any, that is
required by the terms of the Indenture to guarantee the Series A Notes and/or
Series B Notes.

 

“Holders”
shall have the meaning set forth in Section 2 hereof.

 

“indemnified
party” shall have the meaning set forth in Section 8(c) hereof.

 

“indemnifying
party” shall have the meaning set forth in Section 8(c) hereof.

 

“Indenture”
shall have the meaning set forth in the preamble hereof.

 

“Initial
Purchasers” shall have the meaning set forth in the preamble hereof.

 

“Issuers”
shall have the meaning set forth in the preamble hereof.

 

“Parent”
shall have the meaning set forth in the preamble hereof.

 

“Person”
shall mean any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, limited
liability company or government or other entity.

 

“Prospectus”
shall mean the prospectus included in a Registration Statement at the time such
Registration Statement is declared effective, as amended or supplemented by any

 

2

 

prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.

 

“Purchase
Agreement” shall have the meaning set forth in the preamble hereof.

 

“Recommencement
Date” shall have the meaning set forth in Section 6(d) hereof.

 

“Registration
Default” shall have the meaning set forth in Section 5 hereof.

 

“Registration
Statement” shall mean any registration statement of the Issuers and the
Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

 

“Rule 144”
shall mean Rule 144 promulgated under the Act.

 

“Series A
Notes” shall have the meaning set forth in the preamble hereof.

 

“Series B
Notes” shall mean the Issuers’ 71/4% 
Series B Senior Notes due 2011 to be issued pursuant to the Indenture
(a) in the Exchange Offer or (b) as contemplated by Section 4 hereof.

 

“Shelf Effectiveness
Deadline” shall have the meaning set forth in Section 4(a) hereof.

 

“Shelf Filing
Deadline” shall have the meaning set forth in Section 4(a) hereof.

 

“Shelf
Registration Statement” shall have the meaning set forth in Section 4
hereof.

 

“Suspension Notice”
shall have the meaning set forth in Section 6(d) hereof.

 

“TIA”
shall mean the Trust Indenture Act of 1939 as in effect on the date of the
Indenture.

 

“Transfer
Restricted Securities” means each Series A Note until (i) the date on which
such Series A Note has been exchanged by a Person other than a Broker-Dealer
for a Series B Note in the Exchange Offer; (ii) following the exchange by a
Broker-Dealer in the Exchange Offer of a Series A Note for a Series B Note, the
date on which the Series B Note is sold to a purchaser who receives from such
Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement; (iii) the date on which
such note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement; (iv) the date on which such
note is distributed to the public pursuant to Rule 144; or (v) the date on
which such note ceases to be outstanding.

 

3

 

SECTION 2.                            HOLDERS

 

A Person is
deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.

 

SECTION 3.                            REGISTERED EXCHANGE OFFER

 

(a)                                  The Issuers and the
Guarantors may, in their sole discretion, cause the Exchange Offer Registration
Statement to be filed with the Commission at any time after the Closing Date; provided that the failure to file the
Exchange Offer Registration Statement within 90 days after the Closing Date (such
90th day being the “Exchange Offer Filing Deadline”) will, subject to
Sections 4 and 5 hereof, cause the Issuers to be obligated to jointly and
severally pay liquidated damages to each Holder pursuant to Section 5
hereof.  If the Issuers and the Guarantors
elect to file the Exchange Offer Registration Statement, the Issuers and
Guarantors will (i) use their reasonable best efforts to cause such Exchange
Offer Registration Statement to become effective on or prior to 180 days after
the Closing Date (such 180th day being the “Exchange Effectiveness Deadline”),
(ii) in connection therewith, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the
registration and qualification of the Series B Notes to be made under the Blue
Sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iii) commence and use their reasonable  best efforts to Consummate the Exchange Offer on or prior to 30
days after such Exchange Offer Registration Statement has been declared
effective (such 30th day being the “Consummation Deadline”).  The Exchange Offer shall be on the
appropriate form permitting (x) registration of the Series B Notes to be
offered in exchange for the Series A Notes that are Transfer Restricted
Securities and (y) resales of Series B Notes by Broker-Dealers that tendered
into the Exchange Offer Series A Notes that such Broker-Dealer acquired for its
own account as a result of market-making activities or other trading activities
(other than Series A Notes acquired directly from the Issuers or any of their
Affiliates) as contemplated by Section 3(c) hereof.

 

(b)                                 If the Issuers and the
Guarantors elect to file the Exchange Offer Registration Statement, they shall
use their respective reasonable best efforts to cause the Exchange Offer
Registration Statement to be effective continuously, and shall keep the
Exchange Offer open for a period of not less than the minimum period required
under applicable federal and state securities laws to Consummate the Exchange
Offer; provided, however, that in no
event shall such period be less than 20 Business Days.  The Issuers and the Guarantors shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws.  No securities other than the
Series B Notes shall be included in the Exchange Offer Registration Statement.

 

(c)                                  If the Issuers and the
Guarantors elect to file the Exchange Offer Registration Statement, the Issuers
shall include a “Plan of Distribution” section in the Prospectus contained
in the Exchange Offer Registration Statement and indicate therein that any
Broker-Dealer who holds Transfer Restricted Securities that were acquired for
the account of such Broker-Dealer as a result of market-making activities or
other trading activities (other than Series A Notes acquired directly from the
Issuers or any of their Affiliate), may exchange such Transfer

 

4

 

Restricted Securities pursuant to
the Exchange Offer.  Such “Plan of Distribution”
section shall also contain all other information with respect to such
sales by such Broker-Dealers that the Commission may require in order to permit
such sales pursuant thereto, but such “Plan of Distribution” shall not name any
such Broker-Dealer or disclose the amount of Transfer Restricted Securities
held by any such Broker-Dealer, except to the extent required by the Commission
as a result of a change in policy, rules or regulations after the date of this
Agreement.

 

Because such
Broker-Dealer may be deemed to be an “underwriter” within the meaning of the
Act and must, therefore, deliver a prospectus meeting the requirements of the
Act in connection with the initial sale of any Series B Notes received by such
Broker-Dealer in the Exchange Offer, the Issuers and the Guarantors shall
permit the use of the Prospectus contained in the Exchange Offer Registration
Statement by such Broker-Dealer to satisfy such prospectus delivery
requirement.  To the extent necessary to
ensure that the Prospectus contained in the Exchange Offer Registration
Statement is available for sales of Series B Notes by Broker-Dealers, the
Issuers and the Guarantors agree to use their respective reasonable  best efforts to keep the Exchange
Offer Registration Statement continuously effective, supplemented, amended and
current as required by and subject to the provisions of Section 6(a) and
(c) hereof and in conformity with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from
time to time, for a period of one year from the Consummation Deadline or such
shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto.  The Issuers and the Guarantors shall provide
sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request, and in no event later than one day after
such request, at any time during such period.

 

SECTION 4.                            SHELF REGISTRATION

 

(a)                                  Shelf Registration.  If, after electing to file the Exchange Offer
Registration Statement, (i) the Issuers and the Guarantors are not permitted to
consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder notifies the Issuers
prior to the 20th Business Day following the Consummation Deadline that (A) it
is prohibited by law or Commission policy from participating in the Exchange
Offer; or (B) it may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder; or (C) it is a Broker-Dealer and
holds Series A Notes acquired directly from the Issuers or any of their
Affiliates, then the Issuers and the Guarantors shall:

 

(x)                                   use
their respective reasonable best efforts, to cause to be filed, on or prior to
60 days after the earlier of (i) the date on which the Issuers determine that
the Exchange Offer Registration Statement cannot be filed as a result of clause
(a)(i) of this Section 4 and (ii) the date on which the Issuers receive
the notice specified in clause (a)(ii) of this Section 4, (such earlier date,
the “Shelf Filing Deadline”), a shelf registration statement pursuant to
Rule 415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (the “Shelf

 

5

 

Registration
Statement”)), relating to all Transfer Restricted Securities provided, however, that notwithstanding
this Section 4(a)(x), the Issuers and the Guarantors shall not be required
to file the Shelf Registration Statement prior to Exchange Offer Filing
Deadline; and

 

(y)                                 use
their respective reasonable  best
efforts to cause such Shelf Registration Statement to become effective on or
prior to 120 days after the earlier of (i) the date on which the Issuers
determine that the Exchange Offer Registration Statement cannot be filed as a
result of clause (a)(i) of this Section 4 and (ii) the date on which the
Issuers receive the notice specified in clause (a)(ii) of this Section 4,
(such 90th day the “Shelf Effectiveness Deadline”).

 

If, after the
Issuers have elected to and have filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) hereof, the Issuers are
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable law (i.e., clause
(a)(ii) of this Section 4), then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements of clause
(x) of this Section 4(a); provided,
that in such event, the Issuers shall remain obligated to meet the Shelf
Effectiveness Deadline set forth in clause (y) of this Section 4(a).

 

To the extent
necessary to ensure that the Shelf Registration Statement is available for
sales of Transfer Restricted Securities by the Holders thereof entitled to the
benefit of this Section 4(a) and the other securities required to be
registered therein pursuant to Section 6(b)(ii) hereof, the Issuers and
the Guarantors shall use their respective reasonable  best efforts to keep any Shelf Registration Statement required by
this Section 4(a) continuously effective, supplemented, amended and
current as required by and subject to the provisions of Sections 6(b) and (c)
hereof and in conformity with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years (as extended pursuant to
Section 6(c)(i) hereof) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.

 

(b)                                 Provision by Holders of
Certain Information in Connection with the Shelf Registration Statement.  No Holder may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant to this
Agreement unless and until such Holder furnishes to the Issuers in writing,
within 20 days after receipt of a request therefor, the information specified
in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein.  No Holder
shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information.  Each selling Holder agrees to promptly
furnish additional information required to be disclosed in order to make the
information previously furnished to the Issuers by such Holder not materially
misleading.

 

6

 

SECTION 5.                            LIQUIDATED DAMAGES

 

If (a) any
Registration Statement contemplated or required by this Agreement, as
applicable, is not filed with the Commission on or prior to the applicable
Exchange Offer Filing Deadline or Shelf Filing Deadline, (b) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Exchange Effectiveness Deadline or Shelf Effectiveness
Deadline, (c) the Exchange Offer has not been Consummated on or prior to the
Consummation Deadline or (d) the Shelf Registration Statement or the Exchange
Offer Registration Statement is filed and declared effective but thereafter
ceases to be effective or usable in connection with resales of Transfer
Restricted Securities during the periods specified in this Agreement (each such
event referred to in clauses (a) through (d) above, a “Registration Default”),
then the Issuers hereby jointly and severally agree to pay to each Holder of
Transfer Restricted Securities affected thereby liquidated damages at a rate
equal to 0.25% per annum on the outstanding Accreted Value (as such term is
defined in the Indenture) of Transfer Restricted Securities held by such Holder
with respect to the first 90-day period immediately following the occurrence of
the first Registration Default.  The
amount of the liquidated damages shall increase at a rate of 0.25% per annum on
the outstanding Accreted Value of Transfer Restricted Securities held by such
Holder with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum rate of liquidated damages of 1.25%
per annum of the outstanding Accreted Value of Transfer Restricted Securities
held by such Holder; provided, that
the Issuers shall in no event be required to pay liquidated damages for more
than one Registration Default at any given time.  Notwithstanding anything to the contrary set
forth herein, (i) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of
clause (a) of this Section 5, (ii) upon the effectiveness of the Exchange
Offer Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of clause (b) of this Section 5, (iii) upon
Consummation of the Exchange Offer, in the case of clause (c) of this
Section 5, or (iv) upon the filing of a post-effective amendment to the
Registration Statement or an additional Registration Statement that causes the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) to again be declared effective or made usable in the
case of clause (d) of this Section 5, the liquidated damages payable with
respect to the Transfer Restricted Securities as a result of such clauses (a),
(b), (c) or (d) of this Section 5, as applicable, shall cease.

 

All accrued
liquidated damages will be paid by the Issuers to the Holders entitled thereto,
in the manner provided for the payment of interest in the Indenture, on the
next scheduled Interest Payment Date (as such date is defined in the
Indenture), as more fully set forth in the Indenture and the Notes.  Notwithstanding the fact that any Notes for
which liquidated damages are due cease to be Transfer Restricted Securities,
all obligations of the Issuers to pay liquidated damages with respect to
securities shall survive until such time as such obligations with respect to
the Notes have been satisfied in full.

 

SECTION 6.                            REGISTRATION PROCEDURES

 

(a)                                  Exchange Offer
Registration Statement.  If the
Issuers and the Guarantors elect to file the Exchange Offer Registration
Statement, in connection with the Exchange Offer, the Issuers and the
Guarantors shall (i) comply with all applicable provisions of Section 6(c)
hereof, (ii) use their respective reasonable best efforts to effect such
exchange and to permit the resale of

 

7

 

Series B Notes by Broker-Dealers
that tendered in the Exchange Offer Series A Notes that such Broker-Dealer
acquired for its own account as a result of its market-making activities or
other trading activities (other than Series A Notes acquired directly from the
Issuers or any of their Affiliates) being sold in accordance with the intended
method or methods of distribution thereof, and (iii) comply with all of the
following provisions:

 

(A)                              As a
condition to its participation in the Exchange Offer, each Holder of Transfer
Restricted Securities (including, without limitation, any Holder who is a
Broker-Dealer) shall furnish, upon the request of the Issuers, prior to the
Consummation of the Exchange Offer, a written representation to the Issuers and
the Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect that
(1) it is not an Affiliate of the Issuers, (2) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the Series B Notes to be issued in
the Exchange Offer and (3) it is acquiring the Series B Notes in its ordinary
course of business.  As a condition to
its participation in the Exchange Offer, each Holder using the Exchange Offer
to participate in a distribution of the Series B Notes shall acknowledge and
agree that, if the resales are of Series B Notes obtained by such Holder in
exchange for Series A Notes acquired directly from the Issuers or an Affiliate
thereof, it (x) could not, under Commission policy as in effect on the date of
this Agreement, rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission’s letter to Shearman & Sterling dated July 2, 1993,
and similar no-action letters of this Section 6), and (y) must comply with
the registration and prospectus delivery requirements of the Act in connection
with a secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement containing
the selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K.

 

(b)                                 Shelf Registration
Statement.  In connection with the
Shelf Registration Statement, the Issuers and the Guarantors shall:

 

(i)                                     comply with all the
provisions of Section 6(c) hereof and use their respective reasonable  best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof
(as indicated in the information furnished to the Issuers pursuant to
Section 4(b) hereof), and pursuant thereto the Issuers and the Guarantors
shall prepare and file with the Commission a Registration Statement relating to
the registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof within the time periods
and otherwise in accordance with the provisions hereof; and

 

(ii)                                  issue, upon the request of
any Holder or purchaser of Series A Notes covered by any Shelf Registration
Statement contemplated by this Agreement, Series B

 

8

 

Notes having an
aggregate principal amount equal to the aggregate principal amount of Series A
Notes sold pursuant to the Shelf Registration Statement and surrendered to the
Issuers for cancellation; the Issuers shall register the Series B Notes on the
Shelf Registration Statement for this purpose and issue the Series B Notes to
the purchaser(s) of securities subject to the Shelf Registration Statement in
the names as such purchaser(s) shall designate.

 

(c)                                  General Provisions.  In connection with any Registration Statement
that the Issuers and the Guarantors elect to file pursuant to Section 3 or
are required to file pursuant to Section 4 and any Prospectus related to
any such Registration Statement, the Issuers and the Guarantors shall:

 

(i)                                     use their respective
reasonable  best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Sections 3 or 4 of this
Agreement, as applicable.  Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain an untrue statement of material
fact or omit to state any material fact necessary to make the statements
therein not misleading or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by this Agreement,
the Issuers and the Guarantors shall file promptly an appropriate amendment to
such Registration Statement or a supplement to the relevant prospectus curing
such defect, and, if Commission review is required, use their respective
reasonable  best efforts to cause
such amendment to be declared effective as soon as practicable;

 

(ii)                                  prepare and file with the
Commission such amendments and post-effective amendments to the applicable
Registration Statement as may be necessary to keep such Registration Statement
effective for the period specified in Sections 3 or 4 of this Agreement, as
applicable; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the
Act in a timely manner; and comply with the provisions of the Act with respect
to the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Registration Statement
or supplement to the Prospectus;

 

(iii)                               advise the Initial Purchasers
and, with respect to a Shelf Registration Statement, the underwriter(s), if
any, and the selling Holders and, if requested by such Persons, to confirm such
advice in writing (which notice shall not contain any material non-public
information, unless such Holder agrees to keep such information
confidential),  (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by
the Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale

 

9

 

in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event that
makes any statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Registration Statement in order to make the statements therein
not misleading, or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or any
state securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Issuers and
the Guarantors shall use their respective reasonable  best efforts to obtain the withdrawal or lifting of such order at
the earliest possible time;

 

(iv)                              subject to Section 6(c)(i)
hereof, if any fact or event contemplated by Section 6(c)(iii)(D) hereof
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities,
the Prospectus shall not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

 

(v)                                 furnish to the Initial
Purchasers and with respect to a Shelf Registration Statement, each Holder
named in such Shelf Registration Statement, 
in connection with such exchange or sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the initial
filing of such Registration Statement), which documents shall be subject to the
review and comment of such Holders in connection with such sale, if any, for a
period of at least five Business Days, and the Issuers shall not file any such
Registration Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents incorporated
by reference) to which such Holders shall reasonably object within five
Business Days after such Holders’ receipt thereof.  A Holder shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment, Prospectus
or supplement, as applicable, as proposed to be filed, contains an untrue statement
of a material fact or omits to state any material fact necessary to make the
statements therein not misleading or fails to comply with the applicable
requirements of the Act;

 

(vi)                              promptly prior to the filing of
any document that is to be incorporated by reference into a Registration Statement
or Prospectus, provide copies of such document to each Holder who so requests
in connection with such exchange or sale, if any, make the Issuers’ and the
Guarantors’ representatives available for discussion of such document and other
customary due diligence matters, and include such information in such document
prior to the filing thereof as such Holders may reasonably request;

 

10

 

(vii)                           make available, at reasonable
times, for inspection by each Holder and any attorney or accountant retained by
such Holders, all financial and other records, pertinent corporate documents of
the Issuers and the Guarantors (other than portions of agreements and other
documents that are granted confidential treatment by the Commission) and cause
the Issuers’ and the Guarantor’s officers, directors and employees to supply
all information reasonably requested by any such Holder, attorney or accountant
in connection with such Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its effectiveness;

 

(viii)                        if requested by any Holders in
connection with such exchange or sale, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment
if necessary, such information as such Holders may reasonably request to have
included therein, including, without limitation, information relating to the
“Plan of Distribution” of the Transfer Restricted Securities; and make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after the Issuers are notified of the matters to be
included in such Prospectus supplement or post-effective amendment;

 

(ix)                                furnish to each Holder in
connection with such exchange or sale without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein
and all exhibits, including exhibits incorporated therein by reference, if so
requested by such Holder (other than portions of agreements and other documents
that are granted confidential treatment by the Commission);

 

(x)                                   deliver to each Holder
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons reasonably
may request; the Issuers and the Guarantors hereby consent to the use (in
accordance with law) of the Prospectus and any amendment or supplement thereto
by each selling Holder in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;

 

(xi)                                upon the request of any
Holder, enter into such agreements (including an underwriting agreement in the
event of a shelf registration statement) and make such representations and
warranties and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted Securities pursuant
to any applicable Registration Statement contemplated by this Agreement as may
be reasonably requested by any Holder in connection with any sale or resale
pursuant to any applicable Registration Statement.  In such connection, the Issuers and the Guarantors
shall:

 

(A)                              upon
request of any Holder, to use their reasonable  best efforts to cause to be furnished to each Holder, upon
Consummation of the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:

 

(1)                                  opinions,
dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as

 

11

 

the case may
be, of counsel for the Issuers and the Guarantors covering matters similar to
those set forth in paragraph (e) of Section 9 of the Purchase Agreement
and such other matters as such Holder may reasonably request, and in any event
including a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Issuers and the
Guarantors, representatives of the independent certified public accountants of
the Issuers and the Guarantors and the Initial Purchasers and their
representatives at which the contents of the Exchange Offer Registration
Statement and related matters were discussed and, although it does not express
any opinion upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the applicable Registration
Statement and has not made any independent check or verification thereof,
during the course of such participation, no facts have come to its attention
which led it to believe that such Registration Statement as of its date or the
closing date of the Exchange Offer contained or contains an untrue statement of
a material fact or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except as to the consolidated financial statements
and notes thereto and other financial or statistical data included therein or
omitted therefrom as to which such counsel need express no statement or
opinion).  Without limiting the
foregoing, such counsel may state further that such counsel assumes no
responsibility for, has not independently verified, and expresses no views as
to, the financial statements, notes or other historical or pro forma financial
or accounting data or schedules included in any Registration Statement
contemplated by this Agreement or the related Prospectus or omitted therefrom;
and

 

(2)                                  a
customary comfort letter, dated the date of Consummation of the Exchange Offer,
or as of the date of effectiveness of the Shelf Registration Statement, as the
case may be, from the Issuers’ independent accountants, in the customary form
and covering matters of the type customarily covered in comfort letters to
underwriters in connection with underwritten offerings, and affirming the
matters set forth in the comfort letters delivered pursuant to
Section 9(h) of the Purchase Agreement; and

 

(B)                                deliver
such other documents and certificates as may be reasonably requested by the
selling Holders to evidence compliance with the matters covered in clause (A)
of this Section 6(c)(xi) and with any customary conditions contained in
any agreement entered into by the Issuers and the Guarantors pursuant to clause
(xi) of this Section 6(c);

 

(xii)                             prior to any public offering of
Transfer Restricted Securities, cooperate with the selling Holders and their
counsel in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may reasonably request and do any and all other

 

12

 

acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the applicable Registration
Statement; provided, however, that
neither the Issuers nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;

 

(xiii)                          in connection with any sale of
Transfer Restricted Securities that will result in such securities no longer
being Transfer Restricted Securities, (A) cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends and (B) register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at least two
Business Days prior to such sale of Transfer Restricted Securities;

 

(xiv)                         use their respective reasonable best
efforts to cause the disposition of the Transfer Restricted Securities covered
by the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller
or sellers thereof to consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xii) of this Section 6(c);

 

(xv)                            issue, upon the request of any
Holder of Series A Notes covered by the Shelf Registration Statement, Series B
Notes, having an aggregate principal amount equal to the aggregate principal
amount of Series A Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Series B Notes to be registered in
the name of such Holder or in the name of the purchaser(s) of such Notes, as
the case may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;

 

(xvi)                         provide a CUSIP number for all
Transfer Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted Securities and provide
the Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;

 

(xvii)                      cooperate and assist in any filings
required to be made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any “qualified independent
underwriter”) that is required to be retained in accordance with the rules and
regulations of the NASD;

 

(xviii)                   otherwise use their respective reasonable
best efforts to comply with all applicable rules and regulations of the
Commission, and make generally available to the Holders with regard to any
applicable Registration Statement, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) covering a twelve-month period beginning after the effective date of
the

 

13

 

Registration
Statement (as such term is defined in paragraph (c) of Rule 158 under the Act);

 

(xix)                           cause the Indenture to be qualified
under the TIA not later than the effective date of the first Registration
Statement contemplated or required by this Agreement, as applicable, and, in
connection therewith, cooperate with the Trustee and the Holders to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use their
reasonable best efforts to cause the Trustee to execute all documents that 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; and

 

(xx)                              provide promptly to each Holder,
upon request, each document filed with the Commission pursuant to the
requirements of Sections 13 or 15(d) of the Exchange Act.

 

(d)                                 Restrictions on Holders.  Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) hereof or any notice from the Issuers of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof
(in each case, a “Suspension Notice”), such Holder shall forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder has received copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(iv)
hereof, or (ii) such Holder is advised in writing by the Issuers that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the “Recommencement Date”). 
Each Holder receiving a Suspension Notice hereby agrees that it shall
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder’s possession which have been replaced by the Issuers with more
recently dated Prospectuses or (ii) deliver to the Issuers (at the Issuers’
expense) all copies, other than permanent file copies, then in such Holder’s
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice.  The time period regarding the effectiveness
of such Registration Statement set forth in Sections 3 or 4 herein, as
applicable, shall be extended by a number of days equal to the number of days
in the period from and including the date of delivery of the Suspension Notice
to the Recommencement Date.

 

(e)                                  Participation in
Underwritten Registration.  In the
event of an offer and sale of Transfer Restricted Securities pursuant to an
underwriting agreement and Registration Statement contemplated by this
Agreement, no Holder may participate in such offer and sale unless such Holder
(i) agrees to sell such Holder’s Transfer Restricted Securities on the basis
provided in the underwriting arrangements approved by the Persons entitled to
approve such arrangements and (ii) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of the
underwriting arrangements.

 

14

 

SECTION 7.                            REGISTRATION EXPENSES

 

(a)                                  All expenses incident to the
Issuers’ and the Guarantors’ performance of or compliance with this Agreement
shall be borne by the Issuers and the Guarantors, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Series B
Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Issuers and the Guarantors and, subject to the limitations
in Section 7(b) hereof, the fees and disbursements of counsel for the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Series B Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Issuers and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).

 

The Issuers (or
the Issuers and the Guarantors) shall, in any event, bear their and the
Guarantors’ internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Issuers or the Guarantors.

 

(b)                                 In connection with any
Registration Statement contemplated or required by this Agreement, as
applicable, (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuers and the Guarantors
shall reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Series A Notes into in the Exchange Offer and/or
selling or reselling Series A Notes or Series B Notes pursuant to the “Plan of
Distribution” contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins
LLP unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared.

 

SECTION 8.                            INDEMNIFICATION

 

(a)                                  The Issuers and the
Guarantors, jointly and severally, agree to indemnify and hold harmless each
Holder, its directors, officers and each Person, if any, who controls such
Holder (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act), from and against any and all losses, claims, damages,
liabilities and judgments, (including without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary prospectus or Prospectus (or any amendment or supplement thereto)
provided by the Issuers to any Holder or any prospective purchaser of Series B
Notes or registered Series A Notes, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the

 

15

 

statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by, arise out of, or are based on, (i) an untrue statement
or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Issuers
by any of the Holders or (ii) any untrue statement or alleged untrue statement
or omission or alleged omission from any preliminary prospectus if a copy of
the related Prospectus (as then amended or supplemented) was not delivered by
or on behalf of the Holder, provided the Issuers complies with its requirements
under Section 6 hereof, with respect to whom indemnification is sought to
the Person asserting the claim or action, if required by law to have been so
delivered by or on behalf of such Holder and the statement or omission from
such preliminary prospectus was corrected in the related Prospectus.

 

(b)                                 Each Holder agrees, severally
and not jointly, to indemnify and hold harmless the Issuers and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Issuers, or the Guarantors to the same extent as the
foregoing indemnity from the Issuers and the Guarantors set forth in
Section 8(a) hereof, but only with reference to information relating to
such Holder furnished in writing to the Issuers by such Holder expressly for
use in any Registration Statement, preliminary prospectus or Prospectus (or any
amendment or supplement thereto).  In no
event shall any Holder, its directors, officers or any Person who controls such
Holder be liable or responsible for any amount in excess of the total amount
received by such Holder with respect to its sale of Transfer Restricted
Securities giving rise to the indemnification obligation.

 

(c)                                  In case any action shall be
commenced involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b) hereof (the “indemnified party”),
the indemnified party shall promptly notify the person against whom such
indemnity may be sought (the “indemnifying party”) in writing and the
indemnifying party shall assume the defense of such action, including the
employment of counsel reasonably satisfactory to the indemnified party and the
payment of all fees and expenses of such counsel, as incurred (except that in
the case of any action in respect of which indemnity may be sought pursuant to
both Sections 8(a) and 8(b) hereof, a Holder shall not be required to assume
the defense of such action pursuant to this Section 8(c) hereof, but may
employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of the Holder).  Any indemnified party
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the indemnified party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the
indemnifying party and the indemnifying party has agreed in writing to pay the
fees and expenses of such counsel, (ii) the indemnifying party shall have
failed to assume the defense of such action or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any such
action (including any impleaded parties) include both the indemnified party and
the indemnifying party, and the indemnified party shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of the indemnified party).  In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and

 

16

 

expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred.  Such firm shall be
designated in writing by a majority of the Holders, in the case of the parties
indemnified pursuant to Section 8(a) hereof, and by the Issuers, in the
case of parties indemnified pursuant to Section 8(b) hereof. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action effected with its written consent, which
consent shall not be withheld unreasonably. 
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims
arising out of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.

 

(d)                                 To the extent that the
indemnification provided for in this Section 8 is unavailable to an
indemnified party in respect of any losses, claims, damages, liabilities or
judgments referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or judgments (i) in such proportion as is appropriate to reflect
the relative benefits received by the Issuers and the Guarantors, on the one
hand, and the Holders, on the other hand or (ii) if the allocation provided by
Section 8(d)(i) hereof is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in Section 8(d)(i) hereof but also the relative fault of the Issuers
and the Guarantors, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations.  The relative
fault of the Issuers and the Guarantors, on the one hand, and of the Holder, on
the other hand, 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 Issuers or such Guarantor, on the one hand, or by the Holder,
on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

The Issuers, the
Guarantors and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any matter, including any action that could have given rise to
such losses, claims, damages, liabilities or judgments.  Notwithstanding the provisions of this
Section 8, no Holder, its directors, its officers or any Person, if any,
who controls such Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total discount received by such

 

17

 

Holder with respect to the Series
A Notes exceeds the amount of any damages which such Holder 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 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.  No party shall be liable
for contribution with respect to any action or claim settled without its prior
written consent; provided, however,
that such written consent was not unreasonably withheld.

 

SECTION 9.                            RULE 144A AND RULE 144

 

The Issuers and
the Guarantors agree with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Issuers or any
such Guarantor (i) is/are not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A; and (ii) is/are subject to Section 13 or
15(d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.

 

SECTION 10.                     MISCELLANEOUS

 

(a)                                  Remedies.  The Issuers and the Guarantors acknowledge
and agree that any failure by the Issuers and/or the Guarantors to comply with
their respective obligations under Sections 3 and 4 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Issuers’ and the Guarantors’ obligations under
Sections 3 and 4 hereof.  The Issuers and
the Guarantors further agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.

 

(b)                                 No Inconsistent Agreements.  Neither the Issuers nor the Guarantors shall,
on or after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof.  Neither the Issuers nor any Guarantor is a
party to any agreement granting any registration rights with respect to its
securities to any Person, other than such rights as have been waived with
respect to any Exchange Offer Registration Statement contemplated by this
Agreement.  The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuers’ and the Guarantors’
securities under any agreement in effect on the date hereof.

 

(c)                                  Amendments and Waivers.  The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the

 

18

 

provisions hereof may not be
given unless (i) in the case of Section 5 hereof and this
Section 10(c)(i), the Issuers have obtained the written consent of Holders
of all outstanding Transfer Restricted Securities and (ii) in the case of all
other provisions hereof, the Issuers have obtained the written consent of
Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Issuers or their Affiliates). 
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being tendered pursuant to the Exchange
Offer, and that does not affect directly or indirectly the rights of other
Holders whose Transfer Restricted Securities are not being tendered pursuant to
such Exchange Offer, may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
Exchange Offer.

 

(d)                                 Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested), fax,
telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)                                     if to a Holder, at the
address set forth on the records of the Registrar under the Indenture, with a
copy to the Registrar under the Indenture; and

 

(ii)                                  if to the Issuers, Parent or
any other Guarantor:

 

Interactive Health

3030 Walnut Avenue

Long Beach, California 90807

Attention:
President

Fax: (562)
426-8700

 

with a copy to:

 

Gibson, Dunn
& Crutcher LLP

2029 Century
Park East

Los Angeles,
California 90067

Attention:  Jonathan Layne, Esq.

Fax: (310)
552-7053

 

All such notices
and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged,
if sent by fax, and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.

 

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

 

Upon the date of
filing of the Exchange Offer or a Shelf Registration Statement, as the case may
be, notice shall be delivered to the Initial Purchasers in the form attached
hereto as Exhibit A.

 

19

 

(e)                                  Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms hereof
or of the Purchase Agreement or the Indenture. 
If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof.

 

(f)                                    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.

 

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

 

(h)                                 Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.

 

(i)                                     Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

(j)                                     Third Party
Beneficiary.  The Holders shall be
third party beneficiaries to the agreements made hereunder between the Issuers
and the Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, and shall have the right to enforce such agreements directly to the
extent they may deem such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.

 

(k)                                  Entire Agreement.  This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. 
There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted with respect to the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

 

(signature pages follow)

 

20

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INTERACTIVE HEALTH LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig Womack

  	
   

  
	
   

  	
  Name:               Craig
  Womack

  
	
   

  	
  Title:                     Chief
  Executive Officer and Chief

  Operating Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INTERACTIVE HEALTH FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig Womack

  	
   

  
	
   

  	
  Name:               Craig
  Womack

  
	
   

  	
  Title:                     Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INTERACTIVE HEALTH, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig Womack

  	
   

  
	
   

  	
  Name:               Craig
  Womack

  
	
   

  	
  Title:                     Chief
  Executive Officer and Chief

  Operating Officer

  
						

 

(Signature
Page to Registration Rights Agreement)

 

 

	
  Accepted and Agreed to:

  	
   

  
	
   

  	
   

  
	
  JEFFERIES & COMPANY, INC.

  	
   

  
	
  as Representative of the
  Initial Purchasers

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Dan Esters

  	
   

  	
   

  
	
  Name:               Dan
  Esters

  	
   

  
	
  Title:                     Managing
  Director

  	
   

  
				

 

(Signature
Page to Registration Rights Agreement)

 

 

EXHIBIT A

 

NOTICE OF FILING OF

A/B EXCHANGE OFFER REGISTRATION STATEMENT

 

To:                              Jefferies
& Company

11100 Santa
Monica Blvd.

10th Floor

Los Angeles,
California 90025

Attention:  Syndicate Department

Fax: (310)
575-5200

 

From:                  Interactive
Health LLC

71⁄4% Senior Notes
due 2011

 

Date:                                               ,
2004

 

For your
information only (NO ACTION REQUIRED):

 

Today,
                            ,
2004, we filed [an A/B Exchange Registration Statement] [a Shelf Registration
Statement] with the Securities and Exchange Commission.  We currently expect this registration
statement to be declared effective within      business
days of the date hereof.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]