DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 15, 2005

BROOKSTONE, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	0-21406	06-1182895
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Innovation Way, Merrimack, NH	03054
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 603-880-9500.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into Material Definitive Agreement.

Amendment to Merger Agreement

On July 15, Brookstone, Inc., a Delaware corporation (“Brookstone”), Brookstone Holdings Corp., a Delaware corporation (“Parent”), and Brookstone Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“Acquisition”) agreed to amend the Agreement and Plan of Merger dated April 15, 2005 (the “Merger Agreement”), by and among Brookstone, Parent and Acquisition. A copy of Amendment No. 1 to the Merger Agreement is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated by reference into this Item. In addition, a copy of the press release issued by Brookstone on July 15, 2005 is attached as Exhibit 99.1 to this Current Report and is incorporated by reference into this Item.

Forward-Looking Statements

This Current Report and the exhibits furnished herewith contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include statements regarding expectations as to the completion of the merger and the other transactions contemplated by the amended merger agreement. The forward-looking statements contained herein involve risks and uncertainties that could cause actual results to differ materially from those referred to in the forward-looking statements. Such risks include, but are not limited to, the ability of the parties to the amended merger agreement to complete the proposed merger on the terms described in the amended merger agreement or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval, the failure to obtain the necessary financing for the merger or the failure to satisfy the other closing conditions. These factors, and other factors that may affect the business or financial results of Brookstone are described in Brookstone’s filings with the Securities and Exchange Commission. Brookstone does not undertake an obligation to update forward-looking statements.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits:

Exhibit 2.1	Amendment No. 1 to Agreement and Plan of Merger, dated as of July 15, 2005, by and among Brookstone Holdings Corp., Brookstone Acquisition Corp., and Brookstone, Inc.
Exhibit 99.1	July 15, 2005 Press Release

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

July 18, 2005

By:	/S/    DANIEL J. BURKE
	Daniel J. Burke
	Assistant Secretary and General Counsel
	(duly authorized to sign on behalf of registrant)

EX-2.1

Exhibit 2.1

EXECUTION COPY

AMENDMENT NO. 1

TO

AGREEMENT AND PLAN OF MERGER

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER, dated as of July 15, 2005 (this “Amendment No. 1”), by and among Brookstone Holdings Corp., a Delaware corporation (“Parent”), Brookstone Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Parent (“Acquisition”), and Brookstone, Inc., a Delaware corporation (the “Company”).

WHEREAS, Parent, Acquisition and the Company are parties to that certain Agreement and Plan of Merger, dated as of April 15, 2005, and as the same is amended hereby and may be further amended, modified or supplemented from time to time (the “Merger Agreement”). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement; and

WHEREAS, the parties hereto wish to amend the Merger Agreement in accordance with Section 9.1 thereof.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, agreements and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

AMENDMENTS TO THE MERGER AGREEMENT

Section 1.1  Section 1.1 of the Merger Agreement is hereby amended by adding the following defined terms:

“Aggregate Financing” has the meaning set forth in Section 2.2(e) of Amendment No. 1.

“Amendment No. 1” means that certain Amendment No. 1 to Agreement and Plan of Merger, dated as of July 15, 2005, by and among Parent, Acquisition and the Company.

“Commitment Letters” means the Financing Commitment and the Equity Commitment Letters, collectively.

“Company Board Recommendation” has the meaning set forth in Section 2.1(b) of Amendment No. 1.

“Financing Commitment” means that certain commitment letter dated as of July 15, 2005 from Goldman Sachs Credit Partners L.P., Bank of America, N.A., UBS Loan Finance LLC and UBS Securities LLC whereby Goldman Sachs Credit Partners L.P., Bank of America, N.A. and UBS Loan Finance LLC have committed, upon the terms and subject to the conditions set forth therein, to provide senior debt financing in an amount of up to $100 million, and whereby Goldman Sachs Credit Partners and UBS Loan Finance LLC have committed, upon the terms and subject to the conditions set forth therein, to provide bridge financing in an amount up to $190 million, in connection with the transactions contemplated by this Agreement (the “Debt Financing”).

Section 1.2  Section 1.2 of the Merger Agreement is hereby amended by adding the following defined terms and corresponding section references:

“Equity Commitment Letters	5.6”
“Original Aggregate Financing	5.6”
“Original Debt Financing	5.6”
“Original Financing Commitment	5.6”

and by deleting the references to “Aggregate Financing,” “Commitment Letters,” “Company Board Recommendation,” “Debt Financing,” and “Financing Commitment” appearing therein.

Section 1.3  The first sentence of Section 3.1(c) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“Each share of Common Stock, issued and outstanding immediately prior to the Effective Time, other than any Dissenting Shares and shares of Common Stock to be canceled pursuant to Section 3.1(b), shall be converted into the right to receive $20.00 in cash, without interest (the “Per Share Merger Consideration”).”

Section 1.4  The first sentence of Section 4.2(b) of the Merger Agreement is hereby amended by deleting only the reference to “(the “Company Board Recommendation”)” set forth therein.

Section 1.5  Section 5.6 of the Merger Agreement is hereby amended and restated in its entirety as follows:

“(a) Parent has delivered to the Company complete and correct copies of (i) a fully executed commitment letter dated as of the date hereof from J.W. Childs Associates, L.P. (“JWC”) whereby JWC has committed, upon the terms and subject to the conditions set forth therein, to provide equity financing in the aggregate amount of up to $100 million in connection with the transactions contemplated by this Agreement; (ii) a fully executed commitment letter dated as of the date hereof from OSIM International, Ltd. (“OSIM”) whereby OSIM has committed, upon the terms and subject to the conditions set forth therein, to provide equity financing in the aggregate amount of up to $90 million in connection with the transactions contemplated by this Agreement and (iii) a fully executed commitment letter dated as of the date hereof from Temasek Capital (Private) Limited (“Temasek”) whereby Temasek has committed, upon the terms and subject to the conditions set forth therein, to provide equity financing in the aggregate amount of up to $50 million in connection with the transactions contemplated by this Agreement (the commitment letters referred to in clauses (i)-(iii) being referred to as the “Equity Commitment Letters”). As of the date hereof, the Equity Commitment Letters are valid and in full force and effect and have not been amended, modified, withdrawn, terminated or replaced. As of the date hereof, there is no breach or default existing and no event has occurred which, with notice or lapse of time or both, would constitute a default thereunder. As of the date hereof, none of JWC, OSIM or Temasek has notified Parent or Acquisition of its intention to terminate such respective Person’s commitment under the Equity Commitment Letters or not to provide in full the financing contemplated thereby. As of the date of this Agreement, there are no facts or circumstances actually known to Parent or Acquisition (exclusive of general market conditions) that in their good faith estimation would reasonably be expected to cause the financings under the Equity Commitment Letters not to be consummated.

(b) Parent has delivered to the Company a complete and correct copy of a fully executed commitment letter dated as of the date hereof from Goldman Sachs Credit Partners L.P. and Bank of America, N.A. (the “Original Financing Commitment”) whereby such financial institutions committed, upon the terms and subject to the conditions set forth therein, to provide senior debt financing in an amount of up to $100 million, and bridge financing in an amount up to $205 million, in connection with the transactions contemplated by this Agreement (the “Original Debt Financing”). As of the date hereof, the Original Financing Commitment is valid and in full force and effect and has not been amended, modified, withdrawn, terminated or replaced. As of the date hereof there is no breach or default existing and no event has occurred

2

which, with notice or lapse of time or both, would constitute a default thereunder. As of the date hereof, none of Goldman Sachs Credit Partners L.P. or Bank of America, N.A. has notified Parent or Acquisition of its intention to terminate such respective Person’s commitment under the Original Financing Commitment or not to provide in full the financing contemplated thereby. As of the date hereof, there are no facts or circumstances actually known to Parent or Acquisition (exclusive of general market conditions) that in their good faith estimation would reasonably be expected to cause the Original Debt Financing not to be consummated. All commitment and other fees required to be paid under the Original Financing Commitment on or prior to the date hereof have been paid in full.

(c) The aggregate proceeds of the financings under the Original Financing Commitment and the Equity Commitment Letters (the “Original Aggregate Financing”), together with an assumed cash balance of the Acquired Companies as of the Closing of at least $24 million and an assumed aggregate reinvestment by certain members of the Company’s management of the after-Tax proceeds received by them in respect of their Identified Options in the equity of Parent and its Affiliates of at least $7.6 million, is sufficient to consummate the transactions contemplated by this Agreement (without giving effect to Amendment No. 1), including (x) to pay the aggregate cash consideration to which the Stockholders, the holders of Identified Options and the holders of Identified Awards become entitled under Section 3.1(c), Section 3.2(a) and Section 3.2(b) of this Agreement (without giving effect to Amendment No. 1), respectively and (y) to pay all fees, costs and expenses incurred in connection with this Agreement (without giving effect to Amendment No. 1) and the transactions contemplated hereby. The Original Financing Commitment and the Equity Commitment Letters accurately set forth all of the material terms of the Original Aggregate Financing, including a true, correct and complete description of all of the material conditions to the Original Aggregate Financing.”

Section 1.6  Section 7.2(a) of the Merger Agreement is hereby amended by inserting the following at the end thereof:

“(iii) the representations and warranties of the Company set forth in Sections 2.1(a), 2.1(b) and 2.1(d)(i) of Amendment No. 1 shall be true and correct as of the date of Amendment No. 1 and as of the Effective Time (or, to the extent such representations and warranties speak as of a specified date, they need only be so true and correct as of such specified date) and (iv) all other representations and warranties of the Company contained in Amendment No. 1 shall be true and correct as of the date of Amendment No. 1 and as of the Effective Time (or, to the extent such representations and warranties speak as of a specified date, they need only be so true and correct as of such specified date), interpreted without giving effect to references to materiality or a Company Material Adverse Effect, except where the failure of all such representations and warranties to be so true and correct has not had and would not reasonably be expected to have a Company Material Adverse Effect.”

Section 1.7  Section 7.3(a) of the Merger Agreement is hereby amended by inserting the following at the end thereof:

“(iii) the representations and warranties of Parent and Acquisition set forth in Section 2.2(a), and Section 2.2(c)(i) of Amendment No. 1 shall be true and correct as of the date of Amendment No. 1 and as of the Effective Time (or, to the extent such representations and warranties speak as of a specified date, they need only be so true and correct as of such specified date) and (iv) all other representations and warranties of Parent and Acquisition contained in Amendment No. 1 shall be true and correct as of the date of Amendment No. 1 and as of the Effective Time (or, to the extent such representations and warranties speak as of a specified date, they need only be so true and correct as of such specified date), interpreted without giving effect to references to materiality or a material adverse effect, except where the failure of all such representations and warranties to be so true and correct has not had and would not reasonably be expected to have a material adverse effect on the ability of Parent and Acquisition to perform their obligations under this Agreement and consummate the transactions contemplated hereby in a timely manner.”

3

Section 1.8  Section 8.1(b) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“by either Parent or the Company by notice to the other if the Merger shall not have been consummated on or before October 5, 2005 (unless the failure to consummate the Merger results from a failure on the part of the party seeking to terminate this Agreement to perform any material obligation required to be performed by such party at or prior to the Effective Time);”

ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1  Except as disclosed in the Company Disclosure Letter, the Company represents and warrants to Parent and Acquisition that:

(a) The Company has the requisite corporate power and authority to execute and deliver this Amendment No. 1 and subject to obtaining the Required Stockholder Approval, to consummate the transactions contemplated by the Merger Agreement as amended hereby, including the Merger. The execution and delivery of this Amendment No. 1 and the consummation by the Company of the transactions contemplated by the Merger Agreement as amended hereby, including the Merger, have been duly and validly authorized by the Board of Directors, and no other corporate action on the part of the Company is necessary to authorize this Amendment No. 1 or to consummate the transactions contemplated the Merger Agreement as amended hereby, including the Merger, other than the Required Stockholder Approval and all actions expressly contemplated by the Merger Agreement (as amended hereby) for which action of the Board of Directors (or a committee thereof) is necessary. This Amendment No.1 has been duly and validly executed and delivered by the Company, and (assuming this Amendment No.1 constitutes a valid and binding obligation of the other parties thereto) constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that such enforceability may be subject to, and limited by, applicable bankruptcy, insolvency, reorganization, moratorium, receivership and similar Laws affecting the enforcement of creditors’ rights generally and general equitable principles.

(b) On or prior to the date hereof, the Board of Directors has, based on the unanimous recommendation of the Special Committee, adopted resolutions (i) determining that the Merger Agreement as amended hereby and the transactions contemplated thereby are fair to, and in the best interests of, the Company and the Stockholders, (ii) declaring advisable and approving this Amendment No. 1 and the Merger in accordance with the DGCL and (iii) resolving to recommend to the Stockholders (the “Company Board Recommendation”) that they vote in favor of the adoption of the Merger Agreement as amended hereby in accordance with the DGCL.

(c) Except as set forth in Section 4.5 of the Company Disclosure Letter attached to the Merger Agreement, the execution, delivery and performance by the Company of this Amendment No. 1 and the consummation by the Company of the transactions contemplated by the Merger Agreement as amended hereby, including the Merger, do not and will not require any consent, approval, action, order, authorization, or permit of, or registration or filing with, any Governmental Authority, other than (i) the filing of the Certificate of Merger in accordance with the DGCL and appropriate documents with the relevant Governmental Authorities of other states in which the Acquired Companies are qualified to do business; (ii) compliance with any applicable requirements of the HSR Act; (iii) compliance with any applicable requirements of the Exchange Act; (iv) compliance with the rules and regulations of NASDAQ; (v) such as may be required under the Securities Act and any applicable state securities or blue sky Laws; and (vi) other consents, approvals, actions, orders, authorizations, registrations, declarations, filings and permits which, if not obtained or made, would not reasonably be expected to have a Company Material Adverse Effect.

(d) Except as set forth in Section 4.6 of the Company Disclosure Letter attached to the Merger Agreement, the execution, delivery and performance by the Company of this Amendment No. 1 and the consummation by the Company of the transactions contemplated by the Merger Agreement as amended

4

hereby, including the Merger, do not and will not (i) contravene, breach or conflict with (A) any of the Company Organizational Documents or (B) subject to Section 6.5 of the Merger Agreement and to the failure to obtain the Required Stockholder Approval at the Stockholders Meeting, any resolution adopted by the board of directors (or equivalent governing body) or stockholders or equityholders of any of the Acquired Companies, (ii) assuming compliance with the matters referred to in Section 2.1(c) hereof, contravene, breach or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Acquired Companies or by which any of their respective properties is bound or affected, (iii) constitute a default (or an event that with notice or lapse of time or both could reasonably be expected to become a default), give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration or require the consent of any Person, under any Material Contract or any Permit, (iv) result in the creation or imposition of any Encumbrance on any asset owned or used by any Acquired Company, (v) cause any of the Acquired Companies to become subject to, or to become liable for, the payment of, any Tax; or (vi) require a consent from any Person under any Real Property Lease, except, in the case of clauses (ii)-(vi) for any such contraventions, conflicts, violations, breaches, defaults or other occurrences or matters that would not reasonably be expected to have a Company Material Adverse Effect.

(e) The Company Financial Advisor has delivered to the Special Committee its opinion to the effect that, as of the date of this Amendment No. 1, the Per Share Merger Consideration of $20.00 is fair, from a financial point of view, to the holders of Common Stock (other than any member(s) of the Company’s management (or their Affiliates), who, in connection with the Merger, enter into arrangements with Parent or its Affiliates relating to employment or equity ownership in Parent or its Affiliates). The Company will deliver a written copy of the opinion referred to in the preceding sentence to Parent, solely for informational purposes within one (1) Business Day after the Special Committee’s receipt thereof. The Company has obtained the authorization of the Company Financial Advisor to include a reproduced copy of such written opinion in the Proxy Statement.

Section 2.2  Except as disclosed in the Parent Disclosure Letter, Parent and Acquisition represent and warrant to the Company that:

(a) Each of Parent and Acquisition has all necessary corporate power and authority to execute and deliver this Amendment No. 1 and to consummate the transactions contemplated by the Merger Agreement as amended hereby, including the Merger. The respective boards of directors of Parent and Acquisition have unanimously adopted resolutions approving and declaring advisable this Amendment No. 1 and the transactions contemplated by the Merger Agreement as amended hereby, including the Merger. The execution and delivery and performance of this Amendment No.1 and the consummation by each of Parent and Acquisition of the transactions contemplated by the Merger Agreement as amended hereby, including the Merger, have been duly and validly authorized by all necessary corporate action on the part of Parent and Acquisition and no other corporate action on the part of Parent or Acquisition (including, without limitation, any votes or approvals of their respective boards of directors (or any committees thereof) or stockholders) is necessary to authorize this Amendment No.1 or to consummate the transactions contemplated by the Merger Agreement as amended hereby. This Amendment No.1 has been duly and validly executed and delivered by each of Parent and Acquisition and (assuming this Amendment No.1 constitutes the valid and binding obligations of the Company) constitutes the legal, valid and binding obligations of each of Parent and Acquisition, enforceable against each of them in accordance with its terms except to the extent that such enforceability may be subject to, and limited by, applicable bankruptcy, insolvency, reorganization, moratorium, receivership and similar Laws affecting the enforcement of creditors’ rights generally and general equitable principles.

(b) The execution, delivery and performance by Parent and Acquisition of this Amendment No. 1 and the consummation by them of the transactions contemplated by the Merger Agreement as amended hereby, including the Merger, do not and will not require any consent, approval, action, order, authorization, or permit of, or registration or filing with, any Governmental Authority, other than (a) the filing of the

5

Certificate of Merger in accordance with the DGCL and appropriate documents with the relevant Governmental Authorities of other states in which the Acquired Companies are qualified to do business; (b) compliance with any applicable requirements of the HSR Act; (c) compliance with any applicable requirements of the Exchange Act; (d) such as may be required under the Securities Act and any applicable state securities or blue sky Laws; and (e) other consents, approvals, actions, orders, authorizations, registrations, declarations, filings and permits which, if not obtained or made, would not reasonably be expected to have a material adverse affect on the ability of Parent and Acquisition to perform their obligations under the Merger Agreement as amended hereby, and consummate the transactions contemplated thereby in a timely manner.

(c) The execution, delivery and performance by Parent and Acquisition of this Amendment No. 1 and the consummation by them of the transactions contemplated by the Merger Agreement as amended hereby, including the Merger, do not and will not (i) contravene, breach or conflict with (A) Parent’s or Acquisition’s certificate of incorporation or bylaws, (B) any resolution adopted by the board of directors (or any committees thereof) or stockholders of Parent or Acquisition, (ii) assuming compliance with the matters referred to in Section 2.2(b) hereof, contravene, breach or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent or Acquisition or by which any of their respective properties is bound or affected, (iii) constitute a default under (or an event that with notice or lapse of time or both could reasonably be expected to become a default) or give rise (with or without notice or lapse of time or both) to a right of termination, amendment, cancellation or acceleration under any material Contract to which Parent and/or Acquisition is party, or (iv) require a consent from any Person except, in the case of clauses (ii)-(iv) for any such contraventions, conflicts, violations, breaches, defaults or other occurrences that would not prevent or materially delay consummation of the Merger or have a material adverse affect on the ability of Parent and Acquisition to perform their obligations under the Merger Agreement as amended hereby and consummate the transactions contemplated thereby in a timely manner.

(d) Parent has delivered to the Company a complete and correct copy of the fully-executed Financing Commitment. As of July 15, 2005, the Financing Commitment is valid and in full force and effect and has not been amended, modified, withdrawn, terminated or replaced. As of July 15, 2005, there is no breach or default existing and no event has occurred which, with notice or lapse of time or both, would constitute a default thereunder. As of July 15, 2005, none of Goldman Sachs Credit Partners L.P., Bank of America, N.A., UBS Loan Finance LLC or UBS Securities LLC has notified Parent or Acquisition of its intention to terminate such respective Person’s commitment under the Financing Commitment or not to provide in full the financing contemplated thereby. As of July 15, 2005, there are no facts or circumstances actually known to Parent or Acquisition (exclusive of general market conditions) that in their good faith estimation would reasonably be expected to cause the Debt Financing not to be consummated. All commitment and other fees required to be paid under the Financing Commitment on or prior to July 15, 2005 have been paid in full.

(e) The aggregate proceeds of the financings under the Commitment Letters (the “Aggregate Financing”), together with an assumed cash balance of the Acquired Companies as of the Closing of at least $33 million and an assumed aggregate reinvestment by certain members of the Company’s management of the after-Tax proceeds received by them in respect of their Identified Options in the equity of Parent and its Affiliates of at least $7.6 million, is sufficient to consummate the transactions contemplated by the Merger Agreement as amended hereby, including (x) to pay the aggregate cash consideration to which the Stockholders, the holders of Identified Options and the holders of Identified Awards become entitled under Section 3.1(c), Section 3.2(a) and Section 3.2(b) of the Merger Agreement, respectively and (y) to pay all fees, costs and expenses incurred in connection with the Merger Agreement as amended hereby and the transactions contemplated thereby. The Commitment Letters accurately set forth all of the material terms of the Aggregate Financing, including a true, correct and complete description of all of the material conditions to the Aggregate Financing.

6

ARTICLE III

MISCELLANEOUS

Section 3.1  Except as otherwise provided herein, all of the terms, covenants and other provisions of the Merger Agreement are hereby ratified and confirmed and shall continue to be in full force and effect in accordance with their respective terms. After the date hereof, all references to the “Agreement” in the Merger Agreement (other than any references contained in the first sentence of Section 4.2(b) and in Sections 5.6(b) and (c) thereof) shall refer to the Merger Agreement as amended by this Amendment No. 1. For the avoidance of doubt, references in the Merger Agreement to “the date of this Agreement”, “the date hereof”, and similar expressions, will continue to mean April 15, 2005.

Section 3.2  This Amendment No. 1 may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument, and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties; it being understood that all parties need not sign the same counterpart.

Section 3.3  This Amendment No. 1 shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

* * * * *

7

IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be executed as of the date first above written.

BROOKSTONE, INC.
By:	/S/ PHILIP W. ROIZIN
	Name: Philip W. Roizin
	Title: Executive Vice President, Finance and Administration
BROOKSTONE HOLDINGS CORP.
By:	/S/ JAMES C. RHEE
	Name: James C. Rhee
	Title: Vice President
BROOKSTONE ACQUISITION CORP.
By:	/S/ JAMES C. RHEE
	Name: James C. Rhee
	Title: Vice President

8

EX-99.1

Exhibit 99.1

FOR:	BROOKSTONE, INC.
CONTACT:	Philip Roizin
	EVP of Finance and
	Administration
	(603) 880-9500
	Robert Fusco
	Investor Relations
	(603) 880-9500

Brookstone Announces Amended Merger Agreement at $20 Purchase Price Per Share in Cash

MERRIMACK, NH, July 15, 2005—Product developer and specialty retail company Brookstone, Inc. (“Brookstone” or the “Company”), OSIM International, a Singapore-listed healthy lifestyle products company that operates over 700 stores in Asia, JW Childs Associates, L.P. (“JW Childs”), a Boston-based private equity firm, and Temasek Holdings (Private) Limited (“Temasek”, and collectively with OSIM and JW Childs, the “Investor Group”), a Singapore-based investment company, today announced amended terms for the proposed acquisition of Brookstone, Inc.

Under the new terms of the amended Agreement and Plan of Merger, each outstanding share of Brookstone’s common stock will be converted into the right to receive $20.00 in cash. In addition, the terms of the financing commitment obtained by the Investor Group from Goldman, Sachs & Co., Bank of America, N.A., UBS Loan Finance LLC and UBS Securities LLC for the acquisition have been modified so that bridge financing will be available if both the ratio of total adjusted debt to adjusted EBITDAR for the Brookstone business (excluding Gardeners Eden) is 5.94:1 or less on a latest twelve-months basis measured on the end of each month through August 31, 2005 and Brookstone has a minimum adjusted EBITDA equal to or exceeding $45 million on a rolling latest twelve-months basis measured on the end of each month through August 31, 2005. Based on current financial projections, Brookstone expects to be able to satisfy these conditions. In addition, the termination date for the amended Agreement and Plan of Merger has been moved up to October 5, 2005 from October 31, 2005.

Michael Anthony, Chairman of the Board, President and Chief Executive Officer of Brookstone said, “This transaction continues to offer great value to our stockholders. Due to weaker than expected financial performance, certain terms of the Agreement and Plan of Merger had to be refined in order to obtain the requisite financing to complete the transaction. The change in financing terms and in the price per share has permitted the Investor Group to maintain committed financing with conditions that we believe will be satisfied based upon our current outlook for the business.”

The transaction is subject to approval by Brookstone’s shareholders, funding under the financing commitments, and other customary conditions. CIBC World Markets is serving as financial advisor to the Special Committee of the Board of Directors of Brookstone.

For the second quarter ending July 31, 2005, Brookstone is now anticipating a loss for the quarter of between $0.16 and $0.19 per fully diluted share including the Gardeners Eden business but exclusive of charges related to the planned Gardeners Eden divestiture.

Brookstone, Inc. is a product development and specialty retail company that operates 288 Brookstone Brand stores nationwide and in Puerto Rico as well as five Gardeners Eden brand stores. Typically located in high-traffic regional shopping malls, lifestyle centers and airports, the Brookstone stores feature unique and innovative consumer products. The Company also operates a Direct-Marketing business that consists of three catalog titles—Brookstone, Hard-to-Find Tools and Gardeners Eden—as well as e-commerce web sites at http://www.brookstone.com and http://www.gardenerseden.com. On June 29, 2005, Brookstone announced a plan to divest the Gardeners Eden business.

OSIM is a global leader in healthy lifestyle products and is listed on the main board of the Singapore Exchange. It is the leading Asian brand for healthy lifestyle products. Established in 1980, OSIM is a brand management and niche marketing company with a focus on the consumer. OSIM uses innovative selling approaches and constantly enhances its innovation capabilities to produce successful products with superior designs, features and quality. Today, OSIM operates a wide point-of-sales network of over 700 outlets in Asia, Australia, Africa, the Middle East, United Kingdom and North America.

JW Childs is a leading private equity firm based in Boston, Massachusetts specializing in leveraged buyouts and recapitalizations of middle-market growth companies. Since 1995, JWC has invested in 34 companies with a total transaction value of $7.8 billion. JWC currently invests through J.W. Childs Equity Partners III, L.P., an investment fund with total committed capital from leading financial institutions, pension funds, insurance companies and university endowments of $1.75 billion.

Temasek Holdings is an Asia investment company headquartered in Singapore. Established in 1974, it manages a diversified global portfolio of S$90 billion, spanning Singapore, Asia and the OECD economies. Its investments are in a range of industries: telecommunications and media, financial services, property, transportation and logistics, energy and resources, infrastructure, engineering and technology, as well as pharmaceuticals and biosciences.

Statements in this release which are not historical facts, including statements about the Company’s confidence or expectations, earnings, anticipated operations of its e-commerce sites and those of third-party service providers, and other statements about the Company’s operational outlook, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the effectiveness of e-commerce technology and marketing efforts, availability of products, availability of adequate transportation of such products, and other factors detailed from time to time in the Company’s annual and other reports filed with the Securities and Exchange Commission. Words such as “estimate”, “project”, “plan”, “believe”, “feel”, “anticipate”, “assume”, “may”, “will”, “should” and similar words and phrases may identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof.

Statements about the expected timing, completion and effects of the proposed merger or the possibility of satisfying the conditions of the debt financing for the merger, and all other statements in this release other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward- looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Brookstone may not be able to complete the proposed merger on the terms described in the amended merger agreement or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval, the failure of financing or the failure to satisfy the other closing conditions. These factors, and other factors that may affect the business or financial results of Brookstone are described in Brookstone’s filings with the SEC.

#    #    #