exv10w69



 







CREDIT AGREEMENT




Dated as of July 21, 2006




among




HERBALIFE INTERNATIONAL, INC.,

as Borrower,


 `

HERBALIFE LTD.,

WH INTERMEDIATE HOLDINGS LTD.,

HBL LTD.,

WH LUXEMBOURG HOLDINGS S.à.R.L.,

HLF LUXEMBOURG HOLDINGS S.à R.L.,

WH CAPITAL CORPORATION,

WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L.,

HERBALIFE INTERNATIONAL LUXEMBOURG S.à.R.L.,

HV HOLDINGS LTD.,

HERBALIFE DISTRIBUTION LTD.,

HERBALIFE LUXEMBOURG DISTRIBUTION S.à.R.L.,

THE SUBSIDIARY GUARANTORS PARTY HERETO,

as Guarantors,




THE LENDERS PARTY HERETO,




COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. 

“RABOBANK INTERNATIONAL”, NEW YORK BRANCH,

HSBC BANK USA, NATIONAL ASSOCIATION,

BANK OF AMERICA, N.A.,

FORTIS CAPITAL CORP.,

and

CITICORP USA, INC.

as Co-Documentation Agents,




J.P. MORGAN SECURITIES INC.

and

MORGAN STANLEY SENIOR FUNDING, INC.,

as Co-Syndication Agents,




MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED,




J.P. MORGAN SECURITIES INC.,




and




MORGAN STANLEY SENIOR FUNDING, INC.,

as Joint Lead Arrangers and Joint Bookrunners,




MERRILL LYNCH CAPITAL CORPORATION,

as Administrative Agent and Collateral Agent




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I Definitions	 	 	6	 
	SECTION 1.01.
	 	Defined Terms	 	 	6	 
	SECTION 1.02.
	 	Classification of Loans and Borrowings	 	 	30	 
	SECTION 1.03.
	 	Terms Generally	 	 	30	 
	SECTION 1.04.
	 	Accounting Terms; GAAP	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE II The Credits	 	 	31	 
	SECTION 2.01.
	 	Commitments	 	 	31	 
	SECTION 2.02.
	 	Loans	 	 	31	 
	SECTION 2.03.
	 	Borrowing Procedure	 	 	33	 
	SECTION 2.04.
	 	Evidence of Debt; Repayment of Loans	 	 	33	 
	SECTION 2.05.
	 	Fees	 	 	34	 
	SECTION 2.06.
	 	Interest on Loans	 	 	35	 
	SECTION 2.07.
	 	Termination and Reduction of Commitments	 	 	36	 
	SECTION 2.08.
	 	Interest Elections	 	 	37	 
	SECTION 2.09.
	 	Amortization of Term Borrowings	 	 	38	 
	SECTION 2.10.
	 	Optional and Mandatory Prepayments of Loans	 	 	38	 
	SECTION 2.11.
	 	Alternate Rate of Interest	 	 	42	 
	SECTION 2.12.
	 	Increased Costs	 	 	42	 
	SECTION 2.13.
	 	Breakage Payments	 	 	44	 
	SECTION 2.14.
	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	 	44	 
	SECTION 2.15.
	 	Taxes	 	 	46	 
	SECTION 2.16.
	 	Mitigation Obligations; Replacement of Lenders	 	 	48	 
	SECTION 2.17.
	 	Letters of Credit	 	 	49	 
	SECTION 2.18.
	 	Facility Increase	 	 	53	 
	 
	 	 	 	 	 	 
	ARTICLE III Representations and Warranties	 	 	54	 
	SECTION 3.01.
	 	Organization; Powers	 	 	54	 
	SECTION 3.02.
	 	Authorization; Enforceability	 	 	54	 
	SECTION 3.03.
	 	Governmental Approvals; No Conflicts	 	 	55	 
	SECTION 3.04.
	 	Financial Statements	 	 	55	 
	SECTION 3.05.
	 	Properties	 	 	55	 
	SECTION 3.06.
	 	Equity Interests and Subsidiaries; Consent	 	 	56	 
	SECTION 3.07.
	 	Litigation; Compliance with Laws	 	 	56	 
	SECTION 3.08.
	 	Agreements	 	 	57	 
	SECTION 3.09.
	 	Federal Reserve Regulations	 	 	57	 
	SECTION 3.10.
	 	Investment Company Act	 	 	57	 
	SECTION 3.11.
	 	Use of Proceeds	 	 	57	 
	SECTION 3.12.
	 	Taxes	 	 	57	 
	SECTION 3.13.
	 	No Material Misstatements	 	 	57	 
	SECTION 3.14.
	 	Labor Matters	 	 	58	 
	SECTION 3.15.
	 	Solvency	 	 	58	 
	SECTION 3.16.
	 	Employee Benefit Plans	 	 	58	 
	SECTION 3.17.
	 	Environmental Matters	 	 	59	 
	SECTION 3.18.
	 	Insurance	 	 	60	 
	SECTION 3.19.
	 	Security Documents	 	 	60	 






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	 	 	 	 	Page
	SECTION 3.20.
	 	Material Adverse Changes	 	 	61	 
	 
	 	 	 	 	 	 
	ARTICLE IV Conditions of Lending	 	 	61	 
	SECTION 4.01.
	 	All Credit Extensions	 	 	61	 
	SECTION 4.02.
	 	Initial Credit Extension	 	 	62	 
	 
	 	 	 	 	 	 
	ARTICLE V Affirmative Covenants	 	 	66	 
	SECTION 5.01.
	 	Financial Statements, Reports, Etc	 	 	66	 
	SECTION 5.02.
	 	Litigation and Other Notices	 	 	69	 
	SECTION 5.03.
	 	Existence; Businesses and Properties	 	 	69	 
	SECTION 5.04.
	 	Insurance	 	 	70	 
	SECTION 5.05.
	 	Taxes	 	 	70	 
	SECTION 5.06.
	 	Employee Benefits	 	 	71	 
	SECTION 5.07.
	 	Maintaining Records; Access to Properties and Inspections	 	 	71	 
	SECTION 5.08.
	 	Use of Proceeds	 	 	71	 
	SECTION 5.09.
	 	Compliance with Environmental Laws; Environmental Reports	 	 	71	 
	SECTION 5.10.
	 	Interest Rate Protection	 	 	72	 
	SECTION 5.11.
	 	Additional Collateral; Additional Guarantors	 	 	72	 
	SECTION 5.12.
	 	Security Interests; Further Assurances	 	 	73	 
	SECTION 5.13.
	 	Know-Your-Customer Rules	 	 	74	 
	SECTION 5.14.
	 	Post-Closing Matters	 	 	75	 
	 
	 	 	 	 	 	 
	ARTICLE VI Negative Covenants	 	 	75	 
	SECTION 6.01.
	 	Indebtedness	 	 	75	 
	SECTION 6.02.
	 	Liens	 	 	77	 
	SECTION 6.03.
	 	Investments, Loans and Advances	 	 	79	 
	SECTION 6.04.
	 	Mergers, Consolidations, Sales and Purchases of Assets	 	 	81	 
	SECTION 6.05.
	 	Dividends	 	 	82	 
	SECTION 6.06.
	 	Transactions with Affiliates	 	 	84	 
	SECTION 6.07.
	 	Financial Covenants	 	 	85	 
	SECTION 6.08.
	 	Limitation on Modifications of Indebtedness; Modifications of Certificate of	 	 	 	 
	 
	 	Incorporation, Other Constitutive Documents or Bylaws and Certain Other Agreements, Etc.	 	 	85	 
	SECTION 6.09.
	 	Limitation on Certain Restrictions on Subsidiaries	 	 	86	 
	SECTION 6.10.
	 	Sale and Leaseback Transactions	 	 	86	 
	SECTION 6.11.
	 	Holding Companies	 	 	86	 
	SECTION 6.12.
	 	Business	 	 	86	 
	SECTION 6.13.
	 	Limitation on Accounting Changes	 	 	87	 
	SECTION 6.14.
	 	Fiscal Year	 	 	87	 
	 
	 	 	 	 	 	 
	ARTICLE VII Guarantee	 	 	87	 
	SECTION 7.01.
	 	The Guarantee	 	 	87	 
	SECTION 7.02.
	 	Obligations Unconditional	 	 	87	 
	SECTION 7.03.
	 	Reinstatement	 	 	89	 
	SECTION 7.04.
	 	Subrogation; Subordination	 	 	89	 
	SECTION 7.05.
	 	Remedies	 	 	89	 
	SECTION 7.06.
	 	Instrument for the Payment of Money	 	 	90	 
	SECTION 7.07.
	 	General Limitation on Guarantee Obligations	 	 	90	 
	SECTION 7.08.
	 	Continuing Guarantee	 	 	90	 
	SECTION 7.09.
	 	Release of Guarantors	 	 	90	 






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	 	 	 	 	Page
	ARTICLE VIII Events of Default	 	 	91	 
	 
	 	 	 	 	 	 
	ARTICLE IX Collateral Account; Application of Collateral Proceeds	 	 	94	 
	SECTION 9.01.
	 	Collateral Account	 	 	94	 
	SECTION 9.02.
	 	Proceeds of Casualty Events and Collateral Dispositions	 	 	95	 
	SECTION 9.03.
	 	Application of Proceeds	 	 	95	 
	 
	 	 	 	 	 	 
	ARTICLE X The Administrative Agent and the Collateral Agent	 	 	96	 
	 
	 	 	 	 	 	 
	ARTICLE XI Miscellaneous	 	 	98	 
	SECTION 11.01.
	 	Notices	 	 	98	 
	SECTION 11.02.
	 	Waivers; Amendment	 	 	99	 
	SECTION 11.03.
	 	Expenses; Indemnity	 	 	101	 
	SECTION 11.04.
	 	Successors and Assigns	 	 	102	 
	SECTION 11.05.
	 	Survival of Agreement	 	 	104	 
	SECTION 11.06.
	 	Counterparts; Integration; Effectiveness	 	 	105	 
	SECTION 11.07.
	 	Severability	 	 	105	 
	SECTION 11.08.
	 	Right of Set-off	 	 	105	 
	SECTION 11.09.
	 	Governing Law; Jurisdiction; Consent to Service of Process	 	 	105	 
	SECTION 11.10.
	 	WAIVER OF JURY TRIAL	 	 	106	 
	SECTION 11.11.
	 	Headings	 	 	106	 
	SECTION 11.12.
	 	Confidentiality	 	 	106	 
	SECTION 11.13.
	 	Interest Rate Limitation	 	 	107	 
	SECTION 11.14.
	 	USA Patriot Act Notice	 	 	107	 
	 
	 	 	 	 	 	 
	ANNEXES
	 	 	 	 	 	 
	Annex I
	 	Amortization Table	 	 	 	 
	Annex II
	 	Lenders' Notice Information and Commitments	 	 	 	 
	Annex III
	 	Limitations on Guarantees and Indemnities Under Applicable Foreign Laws	 	 	 	 
	 
	 	 	 	 	 	 
	SCHEDULES
	 	 	 	 	 	 
	Schedule 1.01(a)
	 	Deposit Accounts	 	 	 	 
	Schedule 1.01(b)
	 	Immaterial Subsidiaries	 	 	 	 
	Schedule 1.01(e)
	 	Subsidiary Guarantors	 	 	 	 
	Schedule 3.03
	 	Governmental Approvals; Compliance with Laws	 	 	 	 
	Schedule 3.06(a)
	 	Subsidiaries; Non-Guarantor Subsidiaries	 	 	 	 
	Schedule 3.07
	 	Litigation	 	 	 	 
	Schedule 3.08
	 	Material Agreements	 	 	 	 
	Schedule 3.18
	 	Insurance	 	 	 	 
	Schedule 4.02(g)
	 	Local Counsel	 	 	 	 
	Schedule 5.14
	 	Post-Closing Matters	 	 	 	 
	Schedule 6.01
	 	Existing Indebtedness	 	 	 	 
	Schedule 6.02
	 	Existing Liens	 	 	 	 
	Schedule 6.03
	 	Existing Investments	 	 	 	 






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	EXHIBITS	 	 
	Exhibit A

	 	Form of Administrative Questionnaire
	Exhibit B

	 	Form of Assignment and Acceptance
	Exhibit C

	 	Form of Borrowing Request
	Exhibit D

	 	Form of Interest Election Request
	Exhibit E

	 	[Reserved]
	Exhibit F

	 	Form of U.S. Security Agreement
	Exhibit G

	 	Form of Intercompany Note
	Exhibit H

	 	Form of Joinder Agreement
	Exhibit I

	 	Form of Perfection Certificate
	Exhibit J-1

	 	Form of Revolving Note
	Exhibit J-2

	 	Form of Term Note
	Exhibit K

	 	Form of Financial Officer’s Compliance Certificate
	Exhibit L

	 	Form of Financial Condition Certificate
	Exhibit M

	 	Form of Letter of Credit Request






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CREDIT AGREEMENT




     This CREDIT AGREEMENT (as amended, restated, supplemented or otherwise modified from time to
time, this “Agreement”), dated as of July 21, 2006, is among HERBALIFE INTERNATIONAL, INC., a
Nevada corporation (“Borrower”); HERBALIFE LTD., a Cayman Islands exempted company with limited
liability (“Holdings”); WH INTERMEDIATE HOLDINGS LTD., a Cayman Islands exempted company with
limited liability and a direct wholly-owned subsidiary of Holdings (“Parent”); HBL LTD., a Cayman
Islands exempted company with limited liability and a direct wholly-owned subsidiary of Parent
(“Cayman III”); WH LUXEMBOURG HOLDINGS S.à.R.L., a Luxembourg corporation and a direct wholly-owned
subsidiary of Parent (“Luxembourg Holdings”); HERBALIFE INTERNATIONAL LUXEMBOURG S.à.R.L., a
Luxembourg corporation and a direct wholly-owned subsidiary of Luxembourg Holdings (“HIL”); HLF
LUXEMBOURG HOLDINGS, S.à.R.L., a Luxembourg corporation and a direct wholly-owned subsidiary of
Luxembourg Holdings (“New Lux”); WH CAPITAL CORPORATION, a Nevada corporation and a direct
wholly-owned subsidiary of New Lux (“WH Capital”); WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L., a
Luxembourg corporation and a direct wholly-owned subsidiary of WH Capital (“Luxembourg Intermediate
Holdings”); HV HOLDINGS LTD., a Cayman Islands exempted company with limited liability and a direct
wholly-owned subsidiary of Parent ( “HV”); HERBALIFE DISTRIBUTION LTD., a Cayman Islands exempted
company with limited liability and a direct wholly-owned subsidiary of HV ( “Cayman Distribution”);
HERBALIFE LUXEMBOURG DISTRIBUTION S.à.R.L., a Luxembourg corporation and a direct wholly-owned
subsidiary of HIL (“Luxembourg Distribution”); EACH OF THE SUBSIDIARY GUARANTORS LISTED ON THE
SIGNATURE PAGES HERETO OR FROM TIME TO TIME BECOMING A PARTY HERETO BY EXECUTION OF A JOINDER
AGREEMENT (together with Holdings, Parent, Cayman III, Luxembourg Holdings, HIL, HIL Swiss, New
Lux, WH Capital, Luxembourg Intermediate Holdings, HV, Cayman Distribution, Luxembourg Distribution
and each other Subsidiary Guarantor from time to time executing a Guarantee (defined herein) as
required hereunder, the “Guarantors”); THE LENDERS PARTY HERETO; MERRILL LYNCH, PIERCE, FENNER &
SMITH, INCORPORATED, J.P. MORGAN SECURITIES INC. and MORGAN STANLEY SENIOR FUNDING, INC., as joint
lead arrangers and joint bookrunners (in such capacity, the “Arrangers”); COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK INTERNATIONAL”, NEW YORK BRANCH, HSBC BANK USA, NATIONAL
ASSOCIATION, BANK OF AMERICA, N.A., FORTIS CAPITAL CORP. and CITICORP USA, INC., as
co-documentation agents (in such capacity, the “Co-Documentation Agents”); J.P. MORGAN SECURITIES
INC. and MORGAN STANLEY SENIOR FUNDING, INC., as co-syndication agents (in such capacity, the
"Co-Syndication Agents”); MERRILL LYNCH CAPITAL CORPORATION, as administrative agent for the
Lenders (in such capacity, the “Administrative Agent”); MERRILL LYNCH CAPITAL CORPORATION, as
collateral agent for the Secured Parties (defined herein) (in such capacity, the “Collateral
Agent”); and RABOBANK INTERNATIONAL, as Issuing Bank.



WITNESSETH:




     WHEREAS, Borrower has requested that the Lenders extend certain credit facilities to Borrower
hereunder, the proceeds of which will be used to (a) repay all outstanding obligations under that
certain Credit Agreement dated as of December 21, 2004 (as amended, amended and restated, supplemented or otherwise modified as of the date hereof, the “Existing Credit
Agreement”) among Borrower, the guarantors party thereto, the lenders party thereto, Rabobank
International, as documentation agent, Merrill Lynch, Pierce, Fenner & Smith, Incorporated, as



5









 







syndication agent, Morgan Stanley Funding, Inc. and Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, as joint lead arrangers and joint bookrunners, Morgan Stanley Senior Funding, Inc.,
as administrative agent, and Morgan Stanley & Co., Incorporated, as collateral agent (the
“Refinancing”); (b) redeem all of the Holdings Senior Notes (as defined herein) (the “Redemption”
and, together with the Refinancing and all other transactions contemplated hereby and in connection
therewith, the “Transactions”); (c) repay the related fees and expenses incurred in connection with
the Transactions (collectively “Transaction Costs”); and (d) fund ongoing working capital and
general corporate needs of Holdings and its Subsidiaries, all subject to the terms and conditions
contained herein;



     WHEREAS, each of Holdings, Parent, Cayman III, Luxembourg Holdings, HIL, HIL Swiss, New Lux,
WH Capital, Luxembourg Intermediate Holdings, HV, Cayman Distribution, Luxembourg Distribution and
the other Subsidiary Guarantors desires to guarantee Borrower’s obligations hereunder and under the
other applicable Loan Documents, as each will benefit from the Loans (as defined below) made
hereunder; and



     WHEREAS, the Lenders are willing to make such credit facilities available upon and subject to
the terms and conditions contained herein.



     NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants
contained herein, the parties hereto agree as follows:



ARTICLE I




Definitions




     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the
meanings specified below:



     “ABR,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.



     “ABR Borrowing” means a Borrowing comprised of ABR Loans.



     “ABR Loan” means any ABR Term Loan or ABR Revolving Loan.



     “ABR Revolving Loan” means any Revolving Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of Article II.



     “ABR Term Loan” means any Term Loan bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of Article II.



     “Additional Lender” has the meaning assigned to such term in Section 2.18.



     “Additional Term Loan Commitment” has the meaning assigned to such term in Section
2.18.



     “Additional Term Loans” has the meaning assigned to such term in Section 2.18.



     “Administrative Agent” has the meaning assigned to such term in the preamble hereto.



6









 





     “Administrative Agent Fees” has the meaning assigned to such term in Section 2.05(b).



     “Administrative Questionnaire” means an Administrative Questionnaire in the form of
Exhibit A, or such other form as may be supplied from time to time by the Administrative
Agent.



     “Affiliate” means, when used with respect to a specified person, another person that directly,
or indirectly through one or more intermediaries, Controls, is Controlled by or is under common
Control with the person specified; provided, however, that, for purposes of Section 6.06,
the term “Affiliate” shall also include any person that directly or indirectly owns more than 10%
of any class of Equity Interests of the person specified or that is an officer or director of the
person specified.



     “Agents” means each of the Co-Syndication Agents, the Co-Documentation Agents, the
Administrative Agent and the Collateral Agent.



     “Agreement” has the meaning assigned to such term in the preamble hereto.



     “Alternate Base Rate” means, for any day, a rate per annum (rounded upward, if necessary, to
the next 1/100 of 1%) equal to the greater of (a) the Base Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 0.50%. If the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error) that it is unable
to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of
the Administrative Agent to obtain sufficient quotations in accordance with the terms of the
definition thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Base Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the Base Rate or the
Federal Funds Effective Rate, respectively.



     “Applicable Commitment Fee Percentage” means an amount per annum equal to (i) with respect to
the Revolving Commitment, 0.375% and (ii) with respect to the Term Loan Commitment, 0.75%.



     “Applicable Margin” means (i) for the first two full quarters after the Closing Date (A)(I)
1.25% in the case of Revolving Loans maintained as Eurodollar Loans and (II) 0.25% in the case of
Revolving Loans maintained as ABR Loans and (B)(I) 1.50% in the case of Term Loans maintained as
Eurodollar Loans and (II) 0.50% in the case of Term Loans maintained as ABR Loans and (ii) for the
period after the first two full quarters after the Closing Date (A) the Applicable Margin for
Revolving Loans shall be determined by reference to the Debt Rating and the Applicable Percentage set forth below; provided, in the event of a split rating, the
higher of such Debt Ratings shall be used to determine the Applicable Margin, except that, if there
is a two-tier difference in the Debt Ratings, the Debt Rating one notch higher than the lower of
the two Debt Ratings shall be used to determine the Applicable Margin and (B)(I) 1.50% in the case
of Term Loans maintained as Eurodollar Loans and (II) 0.50% in the case of Term Loans maintained as
ABR Loans.



7









 





	 	 	 	 	 
	Senior Credit	 	Applicable Percentage
	Facilities Rating	 	(Revolving Loans)
	Moody’s/S&P	 	Eurodollar	 	ABR
	3 Ba1/BB+
	 	1.25%
	 	0.25%
	<Ba1/BB+
	 	1.50%
	 	0.50%






     “Arrangers” has the meaning assigned to such term in the preamble hereto.



     “Asset Sale” means (a) any conveyance, sale, lease, sublease, assignment, transfer or other
disposition (including by way of merger or consolidation and including any sale and leaseback
transaction) of any property (including stock of any of Holdings’ Subsidiaries by the holder
thereof) by Holdings or any of its Subsidiaries to any person other than a Loan Party or any
Subsidiary thereof (other than sales and other dispositions of inventory in the ordinary course of
business) and (b) any issuance or sale by any Subsidiary of Holdings of its Equity Interests to any
person other than a Loan Party.



     “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and
its assignee, and accepted by the Administrative Agent, in the form of Exhibit B, or such
other form as shall be approved by the Administrative Agent.



     “Attributable Indebtedness” means, when used with respect to any sale and leaseback
transaction, as at the time of determination, the present value (discounted at a rate equivalent to
Borrower’s then-current weighted-average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in any such sale and leaseback
transaction.



     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.



     “Base Rate” means, for any day, a rate per annum that is from time to time published in the
“Money Rates” section of the Wall Street Journal as being the “Prime Rate” (or, if more than one
rate is published as the Prime Rate, then the highest of such rates). The Base Rate will change as
of the date of publication in the Wall Street Journal of a Base Rate that is different from that
published on the preceding Business Day. In the event that The Wall Street Journal shall, for any
reason, fail or cease to publish the Base Rate, Administrative Agent shall choose a reasonably
comparable index or source to use as the basis for the Base Rate.



     “Board” means the Board of Governors of the Federal Reserve System of the United States of
America.



     “Borrower” has the meaning assigned to such term in the preamble hereto.



     “Borrowing” means Loans made of the same Class and Type and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect.



     “Borrowing Request” means a request by Borrower in accordance with the terms of Section
2.03 and substantially in the form of Exhibit C, or such other form as shall be
approved by the Administrative Agent.



8









 





     “Business Day” means any day other than a Saturday, Sunday or day on which banks in New York
City are authorized or required by law to close; provided, however, that when used in connection
with a Eurodollar Loan, the term “Business Day” does not include any day on which banks are not
open for dealings in dollar deposits in the London interbank market.



     “Capital Expenditures” means, with respect to any person, for any period, the aggregate of all
expenditures of such person and its Consolidated Subsidiaries for the acquisition of fixed or
capital assets which should be capitalized under GAAP on a consolidated balance sheet of such
person and its Consolidated Subsidiaries. Notwithstanding the foregoing, Capital Expenditures
shall not include (i) expenditures up to the amount of Net Cash Proceeds from Asset Sales (other
than through leases) in accordance with this Agreement, (ii) expenditures of Net Cash Proceeds from
a Casualty Event in accordance with this Agreement, and (iii) expenditures made in connection with
Permitted Acquisitions.



     “Capital Lease Obligations” of any person means the obligations of such person to pay rent or
other amounts under any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be classified and accounted
for as capital leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance with GAAP.



     “Cash Equivalent” means, as to any person: (a) securities issued or directly, unconditionally
and fully guaranteed or insured by the United States or any agency or instrumentality thereof
(provided that, the full faith and credit of the United States is pledged in support thereof)
having maturities of not more than one year from the date of acquisition by such person; (b) time
deposits and certificates of deposit of any Lender (or affiliate thereof) or any commercial bank
having, or that is the principal banking subsidiary of a bank holding company organized under the
laws of the United States, any state thereof, the District of Columbia or any country (or political
subdivision thereof) which is a member of the Organization for Economic Cooperation and Development
having, capital and surplus aggregating in excess of $500 million with maturities of not more than
one year from the date of acquisition by such person; (c) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clause (a) above
entered into with any bank meeting the qualifications specified in clause (b) above; (d)
commercial paper issued by any person incorporated in the United States rated at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s, and in each case
maturing not more than one year after the date of acquisition by such person; (e) investments in
money market or mutual funds substantially all of whose assets are comprised of securities of the
types described in clauses (a) through (d) above; (f) demand deposit accounts
(including the deposit accounts identified on Schedule 1.01(a)) maintained in the ordinary
course of business; (g) investments in tax-exempt obligations of any state of the United
States of America, or any municipality of any such state, in each case rated “AA” or better by
S&P, “Aa2” or better by Moody’s or an equivalent rating by any other credit rating agency of
recognized national standing, provided that, such obligations mature within six months from the
date of acquisition thereof; and (h) investments in mutual funds or variable rate notes that invest
primarily in tax exempt obligations of the types described in clauses (a)-(g) above.



     “Casualty Event” means, with respect to any property (including Real Property) of any person,
any loss of title with respect to such property or any loss of or damage to or destruction of, or
any condemnation or other taking (including by any Governmental Authority) of, such property for
which such person or any of its subsidiaries receives insurance proceeds or proceeds of a
condemnation award or other compensation. “Casualty Event” includes any taking of all or any part
of any Real Property of any person or any part thereof, in or by condemnation or other



9









 








eminent domain proceedings pursuant to any law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any Real Property of any person or any part thereof by any
Governmental Authority, civil or military.



     “Cayman III” has the meaning assigned to such term in the preamble hereof.



     “Cayman Distribution” has the meaning assigned to such term in the preamble hereof.



     “CERCLA” has the meaning assigned thereto in the definition of “Environmental Law.”



     A “Change in Control” is deemed to have occurred if: (a) Holdings at any time ceases to own,
directly or indirectly, 100% of the capital stock of Borrower and each Guarantor (other than
Holdings); (b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this
clause (b) such person or group is deemed to have “beneficial ownership” of all securities
that any such person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of Voting Stock
representing more than 35% of the voting power of the total outstanding Voting Stock; (c) a Change
of Control (as defined in the Holdings Senior Note Agreement) or a “change of control” or similar
event, however denominated shall occur under and as defined under any other indenture or Material
Agreement to which Borrower or any Subsidiary is a party; or (d) during any period of two
consecutive years, individuals who at the beginning of such period constituted the Board of
Directors of Holdings (together with any new directors whose election to such Board of Directors or
whose nomination for election by the stockholders of Holdings was approved by a vote of at least a
majority of the directors of Holdings then still in office who were either directors at the
beginning of such period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of Holdings.



     “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this
Agreement, (b) any change in any law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or Issuing Bank (or for purposes of Section 2.12(b), by any lending office of such
Lender or by such Lender’s or Issuing Bank’s holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.



     “Charges” has the meaning assigned to such term in Section 11.13.



     “Class” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Revolving Loans or Term Loans.



     “Closing Date” means the date of the initial Credit Extension.



     “Co-Documentation Agent” has the meaning assigned to such term in the preamble hereto.



     “Co-Syndication Agent” has the meaning assigned to such term in the preamble hereto.



     “Collateral” means all of the Security Agreement Collateral and all other property of whatever
kind and nature pledged as collateral under any Security Document.



10









 





     “Collateral Account” has the meaning assigned to such term in the U.S. Security Agreement.



     “Collateral Agent” has the meaning assigned to such term in the preamble hereto.



     “Commercial Letter of Credit” means any letter of credit or similar instrument issued for the
account of Borrower for the benefit of a Loan Party or any of their respective Subsidiaries, for
the purpose of providing the primary payment mechanism in connection with the purchase of any
materials, goods or services in the ordinary course of business of such Loan Party or Subsidiary,
as the case may be.



     “Commitment” means, with respect to any Lender, such Lender’s Revolving Commitment or Term
Loan Commitment, as the context shall require.



     “Commitment Fee” has the meaning assigned to such term in Section 2.05(a).



     “Commitment Letter” means the Commitment Letter, dated June 27, 2006, among Herbalife
International, Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Merrill Lynch Capital
Corporation, JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc. and Morgan Stanley Senior
Funding, Inc., as amended.



     “Companies” means Holdings and its Subsidiaries; and “Company” means any one of them.



     “Consolidated Companies” means Holdings and its Consolidated Subsidiaries.



     “Consolidated Current Assets” means, with respect to any person as at any date of
determination, the total assets of such person and its Consolidated Subsidiaries that are properly
classified as current assets on a consolidated balance sheet of such person and its Consolidated
Subsidiaries in accordance with GAAP.



     “Consolidated Current Liabilities” means, with respect to any person as at any date of
determination, the total liabilities of such person and its Consolidated Subsidiaries that are properly classified as current liabilities (other than the current portion of any Loans or
Capital Lease Obligations) on a consolidated balance sheet of such person and its Consolidated
Subsidiaries in accordance with GAAP.



     “Consolidated EBITDA” means, with respect to any person for any period, Consolidated Net
Income for such period, adjusted, in each case only to the extent (and in the same proportion)
deducted in determining Consolidated Net Income, without duplication, by (x) adding thereto (i)
Consolidated Interest Expense, (ii) provision for taxes based on income, (iii) depreciation, (iv)
amortization (including amortization of deferred fees and the accretion of original issue
discount), (v) all other noncash items subtracted in determining Consolidated Net Income (including
any noncash compensation charge arising from any grant of stock, stock options or other
equity-based awards of such person or any of its Subsidiaries and noncash losses or charges related
to impairment of goodwill and other intangible assets and excluding any noncash charge that results
in an accrual of a reserve for cash charges in any future period) for such period, (vi)
nonrecurring expenses and charges, (vii) aggregate cash payments made in respect of the Tax
Indemnity in respect of any period prior to the Closing Date, not to exceed $15 million for any
fiscal year and (viii) Transactions Costs; and (y) subtracting therefrom the



11









 







aggregate amount of all noncash items, determined on a consolidated basis, to the extent such items were added in
determining Consolidated Net Income for such period.



     “Consolidated Indebtedness” means, with respect to any person as at any date of determination,
the aggregate amount of all Indebtedness (including the then outstanding principal amount of all
Loans, all Capital Lease Obligations and all LC Exposure) of such person and its Consolidated
Subsidiaries on a consolidated basis as determined in accordance with GAAP.



     “Consolidated Interest Coverage Ratio” means, as of the last day of any fiscal quarter of
Holdings, the ratio computed for the period consisting of such fiscal quarter and each of the three
immediately preceding fiscal quarters of: (a) Consolidated EBITDA (for all such fiscal quarters)
to (b) Consolidated Interest Expense (for all such fiscal quarters).



     “Consolidated Interest Expense” means, with respect to any person for any period, the total
consolidated cash interest expense (including that portion attributable to Capital Leases
Obligations) of such person and its Consolidated Subsidiaries for such period (calculated without
regard to any limitations on the payment thereof and including commitment fees, letter-of-credit
fees and net amounts payable under Interest Rate Protection Agreements) determined in accordance
with GAAP.



     “Consolidated Net Income” means, with respect to any person for any period, the consolidated
net after tax income of such person and its Consolidated Subsidiaries determined in accordance with
GAAP, but excluding in any event (a) net earnings or loss of any other person (other than a
Subsidiary of Holdings) in which such person or any of its Consolidated Subsidiaries has an
ownership interest, except (in the case of any such net earnings) to the extent such net earnings
shall have actually been received by such person or any of its Consolidated Subsidiaries in the
form of cash distributions and (b) the income (or loss) of any other person accrued prior to the
date it becomes a Subsidiary of such person or any of its Consolidated Subsidiaries or is merged
into or consolidated with such person or any of its Consolidated Subsidiaries or that other
person’s assets are acquired by such person or its Consolidated Subsidiaries after the Closing
Date.



     “Consolidated Subsidiaries” means, as to any person, all subsidiaries of such person that are
consolidated with such person for financial reporting purposes in accordance with GAAP.



     “Contested Collateral Lien Conditions” means, with respect to any Permitted Lien of the type
described in Sections 6.02(a), (b) and (d), the following conditions:




     (a) any proceeding instituted contesting such Lien shall conclusively operate to stay
the sale or forfeiture of any portion of the Collateral on account of such Lien;




     (b) the appropriate Loan Party shall maintain cash reserves in an amount sufficient to
pay and discharge such Lien in accordance with GAAP; and




     (c) such Lien shall in all respects be subject and subordinate in priority to the Lien
and security interest created and evidenced by the Security Documents, except if and to the
extent that the law or regulation creating, permitting or authorizing such Lien provides
that such Lien is or must be superior to the Lien and security interest created and
evidenced by the Security Documents.



12









 





     “Contingent Obligation” means, as to any person, any obligation of such person guaranteeing or
intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether directly or
indirectly, including any obligation of such person, whether or not contingent, (a) to purchase any
such primary obligation or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor; (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; or (d) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof; provided, however,
that the term “Contingent Obligation” shall not include (w) endorsements of instruments for deposit
or collection in the ordinary course of business, (x) any product warranties issued on products by
Holdings or any of its Subsidiaries in the ordinary course of business, (y) any obligation to buy
back products in the ordinary course of business made pursuant to the buyback policy of Holdings
and its Subsidiaries or pursuant to applicable Requirements of Law, and (z) any operating lease
guarantees (other than in respect of Synthetic Lease Obligations) executed by Borrower in the
ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for
which such person may be liable pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such person is required to perform thereunder) as determined by such
person in good faith.



     “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “Controlling” and “Controlled” have meanings
correlative thereto.



     “Control Agreement” has the meaning assigned to such term in the U.S. Security Agreement.



     “Credit Extension” has the meaning assigned to such term in Section 4.01.



     “Debt Issuance” means the incurrence by Holdings or any of its Subsidiaries of any
Indebtedness after the Closing Date (other than as permitted by Section 6.01).



     “Debt Rating” means the Moody’s Rating and/or the S&P Rating, as the context may require.



     “Default” means any event or condition that is, or upon notice or lapse of time would
constitute, an Event of Default.



     “Delayed Draw Closing Date” means the date that the Lenders with a Term Loan Commitment make
the initial Term Loans hereunder.



     “Designated Subsidiaries” means Herbalife (China) Health Products Ltd., Herbalife Dominicana,
S.A., Herbalife Del Ecuador, S.A., Herbalife International SDN. BHD. and Herbalife International
Products N.V.



13









 





     “Dividend” with respect to any person means that such person has paid a dividend or returned
any equity capital to its stockholders or made any other distribution, payment or delivery of
property (other than common stock of such person) or cash to its stockholders as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for consideration any shares of
any class of its capital stock outstanding on or after the Closing Date (or any options or warrants
issued by such person with respect to its capital stock), or set aside any funds for any of the
foregoing purposes. Without limiting the foregoing, “Dividend” with respect to any person also
includes all payments made by such person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of any funds for the
foregoing purposes.



     “dollars” or “$“means the lawful money of the United States of America.



     “Domesticated Foreign Subsidiary” means a Foreign Subsidiary which has become domesticated
into the United States.



     “environment” means ambient air, surface water and groundwater (including potable water,
navigable water and wetlands), the land surface or subsurface strata, natural resources such as
flora and fauna, the workplace or as otherwise defined in any Environmental Law.



     “Environmental Claim” means any written accusation, allegation, notice of violation,
investigation or potential liability claim, demand, order, directive, cost recovery action or other
cause of action by, or on behalf of, any Governmental Authority or any person for damages,
injunctive or equitable relief, personal injury (including sickness, disease or death), Response
action costs, tangible or intangible property damage, natural resource damages, nuisance,
pollution, any adverse effect on the environment caused by any Hazardous Material, or for fines,
penalties, restrictions or modification of operations or equipment, resulting from or based upon (a) the existence, or the continuation of the existence, of a Release (including sudden or
non-sudden, accidental or non-accidental Releases of Hazardous Material); (b) exposure to any
Hazardous Material; (c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any Environmental Law or
Environmental Permit.



     “Environmental Law” means any and all applicable present and future treaties, laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority, or the common law
relating in any way to the protection or preservation of the environment (including preservation or
reclamation of natural resources), the management, Release or threatened Release of any Hazardous
Material or to public or occupational health and safety matters, including The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq. (collectively “CERCLA”), the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq., the
Clean Air Act of 1970, as amended, 42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act of
1976, 15 U.S.C. §§ 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. §§ 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§
11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §§ 300(f) et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq., and any similar or implementing
state,



14









 







local or foreign law, and all amendments to or regulations promulgated under, any of the
foregoing.



     “Environmental Permit” means any permit, approval, authorization, certificate, license,
variance, filing or permission required by or from any Governmental Authority pursuant to any
Environmental Law.



     “Equity Interest” means, with respect to any person, any and all shares, interests,
participations or other equivalents, including membership interests (however designated, whether
voting or non-voting), of capital of such person, including, if such person is a partnership,
partnership interests (whether general or limited) and any other interest (other than an interest
constituting Indebtedness) or participation that confers on a person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnership, whether outstanding
on or issued after the Closing Date.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as the same may be amended
from time to time.



     “ERISA Affiliate” means, with respect to any employer any trade or business (whether or not
incorporated) that, together with such employer, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Tax Code.



     “ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the
regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day
notice period is waived by regulation); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Tax Code or Section 302 of
ERISA), whether or not waived, the failure to make by its due date a required installment under
Section 412(m) of the Tax Code with respect to any Plan or the failure to make any required
contribution to a Multiemployer Plan; (c) the filing pursuant to Section 412(d) of the Tax Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect
to any Plan; (d) the incurrence by any Company or any of its ERISA Affiliates of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Company
or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, or the
occurrence of any event or condition that could reasonably be expected to constitute grounds under
ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (f) the
provision to an affected party by the administrator of any Plan pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (g) the withdrawal by any Company or any of its ERISA Affiliates from any Plan
with two or more contributing sponsors or the termination of any such Plan resulting in liability
to any Company or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (h)
the receipt by any Company or any of its ERISA Affiliates of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) making of any
amendment to any Plan that could result in the imposition of a lien or the posting of a bond or
other security; (j) the occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Tax Code or Section 406 of ERISA) that could result in a Material Adverse
Effect; (k) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Tax Code or
pursuant to ERISA with respect to any Plan; and (l) the assertion of a material claim (other than
routine claims for benefits) against any Plan or the assets thereof, or against any Company or any
of its ERISA Affiliates in connection with any Plan.



15









 





     “Eurodollar Borrowing” means a Borrowing comprised of Eurodollar Loans.



     “Eurodollar Loan” means any Eurodollar Revolving Loan or Eurodollar Term Loan.



     “Eurodollar Revolving Loan” means any Revolving Loan bearing interest at a rate determined by
reference to the LIBOR Rate in accordance with the provisions of Article II.



     “Eurodollar Term Loan” means any Term Loan bearing interest at a rate determined by reference
to the LIBOR Rate in accordance with the provisions of Article II.



     “Event of Default” has the meaning assigned to such term in Article VIII.



     “Excess Cash Flow” means, for any fiscal year of Holdings, the sum, without duplication, of




     (a) Consolidated EBITDA of Holdings for such fiscal year; plus




     (b) losses from Asset Sales; plus




     (c) reductions to noncash working capital of Holdings and its Consolidated
Subsidiaries for such fiscal year (i.e., the decrease, if any, in Consolidated Current
Assets minus Consolidated Current Liabilities from the beginning to the end of such fiscal
year); minus




     (d) the amount of any cash income taxes payable by Holdings and its Consolidated
Subsidiaries with respect to such fiscal year; minus




     (e) Consolidated Interest Expense of Holdings during such fiscal year; minus




     (f) Capital Expenditures made in cash in accordance with Section 6.07(c)
during such fiscal year, to the extent funded from internally generated funds; minus




     (g) permanent repayments of Indebtedness made by Holdings and its Consolidated
Subsidiaries during such fiscal year (including payments of principal in respect of the
Revolving Loans to the extent there is an equivalent reduction in the Revolving Commitments
hereunder); minus




     (h) aggregate cash payments made in respect of the Tax Indemnity not to exceed $15.0
million in any fiscal year; minus




     (i) additions to noncash working capital of Holdings and its Consolidated Subsidiaries
for such fiscal year (i.e., the increase, if any, in Consolidated Current Assets minus
Consolidated Current Liabilities from the beginning to the end of such fiscal year); minus




     (j) gains from Asset Sales.



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



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank
or any other recipient of any payment to be made by or on account of any obligation of Borrower
hereunder, (a) foreign, federal, state or local income or franchise taxes imposed on



16









 







(or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which
such recipient is doing business, is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by Borrower under Section 2.16), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable to such Foreign
Lender’s failure to comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office
(or assignment), to receive additional amounts from Borrower with respect to such withholding tax
pursuant to Section 2.15(a).



     “Existing Credit Agreement” has the meaning assigned to such term in the recitals hereto.



     “Federal Funds Effective Rate” means, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for the day for such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.



     “Fee Letter” means the Fee Letter, dated June 27, 2006, among Herbalife International, Inc.,
Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Merrill Lynch Capital Corporation, JPMorgan
Chase Bank, N.A., J.P. Morgan Securities Inc. and Morgan Stanley Senior Funding, Inc., as amended.



     “Fees” mean the Commitment Fees, the Administrative Agent Fees, the LC Participation Fees and
the Fronting Fees.



     “Financial Officer” means, as applied to any person, the Chief Financial Officer, Chief
Accounting Officer, Treasurer or Controller of such person.



     “FIRREA” means the Federal Institutions Reform, Recovery and Enforcement Act of 1989.



     “Foreign Lender” means any Lender that is not a United States person within the meaning of
Section 7701(a)(30) of the Tax Code.



     “Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement that
would be an “employee pension benefit plan” under Section 3(2) of ERISA if such plan, program,
policy, arrangement or agreement was not maintained outside the United States primarily for the
benefit of persons substantially all of whom are nonresident aliens with respect to which any
Company could incur liability.



     “Foreign Security Agreements” means each security, pledge or similar agreement necessary or
desirable to evidence the grant of a security interest or pledge of assets of any Subsidiary
Guarantor that is a Foreign Subsidiary and that is required hereunder, in each case in form and
substance satisfactory to the Collateral Agent and as such agreement may thereafter be amended,
supplemented or otherwise modified from time to time.



17









 





     “Foreign Subsidiary” means a Subsidiary that is organized under the laws of a jurisdiction
other than the United States or any state thereof or the District of Columbia.



     “Fronting Fees” has the meaning assigned to such term in Section 2.05(c).



     “GAAP” means generally accepted accounting principles in the United States.



     “Governmental Authority” means any federal, state, local or foreign court or governmental
agency, authority, instrumentality or regulatory body.



     “Guaranteed Obligations” has the meaning assigned to such term in Section 7.01.



     “Guarantees” means the guarantees issued pursuant to Article VII (or pursuant to any
other form of guarantee required by applicable Requirements of Law and in form and substance reasonably satisfactory to the Administrative Agent) by Holdings, Parent, the LuxCos, HIL
Swiss, Cayman III, WH Capital and the Subsidiary Guarantors.



     “Guarantors” has the meaning assigned to such term in the preamble hereof.



     “Hazardous Materials” means all pollutants, contaminants, chemicals, wastes, substances and
constituents including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls (“PCBs”) or PCB-containing materials or equipment, radon gas,
infectious or medical wastes and all other substances or wastes, of any nature subject to
regulation, or that can give rise to liability under any Environmental Law.



     “Hedging Agreement” means any Interest Rate Protection Agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.



     “HIL Swiss” means HIL Swiss International G.m.b.H., a limited liability company organized
under to the laws of Switzerland.



     “Holding Companies” means, collectively, Holdings, Parent, Cayman III, Luxembourg Holdings,
New Lux, WH Capital, Luxembourg Intermediate Holdings and, individually, each of the foregoing.



     “Holdings” has the meaning assigned to such term in the preamble hereto.



     “Holdings Senior Note Agreement” means that certain Indenture dated as of March 8, 2004 (as in
effect on the date hereof) by and among Holdings and WH Capital, as issuers, and The Bank of New
York, as trustee.



     “Holdings Senior Note Documents” means the Holdings Senior Notes, the Holdings Senior Note
Agreement, and all other documents executed and delivered with respect to either of the foregoing.



     “Holdings Senior Notes” means the $275.0 million in the aggregate principal amount of 91/2%
Notes due 2011 issued by Holdings and WH Capital under the Holdings Senior Note Agreement.



     “HV” has the meaning assigned to such term in the preamble hereof.



18









 





     “Immaterial Subsidiary” means a Subsidiary that generates less than $1.0 million of net sales
during any fiscal year (or, in the case of a Subsidiary without prior operating history, is
reasonably projected by Borrower to generate less than $1.0 million of net sales during its first
full year of operation). Notwithstanding the foregoing, Herbalife Hungary Trading, Limited and
Herbalife International SDN, BHD shall be deemed Immaterial Subsidiaries. All Immaterial
Subsidiaries in existence on the Closing Date are identified on Schedule 1.01(b).



     “Indebtedness” of any person means, without duplication, (a) all obligations of such person
for borrowed money; (b) all obligations of such person evidenced by bonds, debentures, notes or
similar instruments; (c) all obligations of such person upon which interest charges are customarily paid or accrued; (d) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person; (e) all obligations
of such person issued or assumed as the deferred purchase price of property or services (excluding
trade accounts payable incurred in the ordinary course of business); (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such person, whether or not
the obligations secured thereby have been assumed; (g) all Capital Lease Obligations, Purchase
Money Obligations and Synthetic Lease Obligations of such person; (h) all obligations of such
person in respect of Hedging Agreements; provided that, the amount of Indebtedness of the type
referred to in this clause (h) of any person shall be zero unless and until such
Indebtedness shall be terminated, in which case the amount of such Indebtedness shall be the
termination payment due thereunder by such person; (i) all obligations of such person as an account
party in respect of letters of credit, letters of guaranty and bankers’ acceptances; (j) all
Attributable Indebtedness of such person; and (k) all Contingent Obligations of such person in
respect of Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (j) above. The Indebtedness of any person shall include the Indebtedness of any
other entity (including any partnership in which such person is a general partner) to the extent
such person is liable therefor as a result of such person’s ownership interest in or other
relationship with such entity, except to the extent that the terms of such Indebtedness provide
that such person is not liable therefor.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Indemnitee” has the meaning assigned to such term in Section 11.03(b).



     “Information” has the meaning assigned to such term in Section 11.12.



     “Intellectual Property” has the meaning assigned to such term in the U.S. Security Agreement.



     “Intercompany Note” means a promissory note, substantially in the form of Exhibit G,
evidencing Indebtedness payable by a payor Company to a payee Loan Party.



     “Interest Election Request” means a request by Borrower to convert or continue a Revolving
Borrowing or Term Borrowing in accordance with Section 2.08(b), substantially in the form
of Exhibit D.



     “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March,
June, September and December to occur during the period that such Loan is outstanding and the final
maturity date of such Loan; and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part, and in the case of



19









 







a Eurodollar Loan with an Interest Period of more than three-months’ duration, each day prior to the
last day of such Interest Period that occurs at intervals of three-months’ duration after the first
day of such Interest Period.



     “Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six, or if available by all Lenders, one week, nine months or twelve months thereafter (provided that one week Interest Periods may only
be used for purposes of minimizing breakage costs in connection with a proposed prepayment of all
or a portion of the Loans) provided that, (A) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next succeeding Business
Day unless such next succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day; and (B) any Interest Period that
commences on the last Business Day of a calendar month, or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest Period, shall end on the
last Business Day of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of such Borrowing.



     “Interest Rate Protection Agreement” means any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement or similar agreement or arrangement designed to protect
Holdings or its Subsidiaries against fluctuations in interest rates and not entered into for
speculation.



     “internally generated funds” means funds not constituting the proceeds of any Loan, Debt
Issuance, Asset Sale, insurance recovery or Indebtedness (in each case without regard to the
exclusions from the definition thereof).



     “Investments” has the meaning assigned to such term in Section 6.03.



     “Issuing Bank” means, as the context may require, (a) Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A. “Rabobank International”, New York Branch with respect to Letters
of Credit issued by it; (b) any other Lender that may become an Issuing Bank pursuant to
Section 2.17(i), with respect to Letters of Credit issued by such Lender; or (c)
collectively, all of the foregoing.



     “Joinder Agreement” means a joinder agreement substantially in the form of Exhibit H.



     “LC Commitment” means the commitment of the Issuing Bank to issue Letters of Credit pursuant
to Section 2.17.



     “LC Disbursement” means a payment or disbursement made by the Issuing Bank pursuant to a
Letter of Credit.



     “LC Exposure” means at any time the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time, plus (b) the aggregate principal amount of all LC Disbursements
that have not yet been reimbursed at such time. The LC Exposure of any Revolving Lender at any
time shall mean its Pro Rata Percentage of the aggregate LC Exposure at such time.



     “LC Participation Fee” has the meaning assigned to such term in Section 2.05(c).



20









 





     “LC Sub-Account” has the meaning assigned to such term in Section 9.01(d).



     “Leases” means any and all leases, subleases, tenancies, options, concession agreements,
rental agreements, occupancy agreements, franchise agreements, access agreements and any other
agreements (including all amendments, extensions, replacements, renewals, modifications and/or
guarantees thereof), whether or not of record and whether now in existence or hereafter entered
into, affecting the use or occupancy of all or any portion of any Real Property.



     “Lenders” means (a) the financial institutions listed on Annex II (other than any such
financial institution that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any financial institution that has become a party hereto pursuant to an
Assignment and Acceptance.



     “Lender Affiliate” means with respect to any Lender that is a fund that invests in bank loans,
any other fund that invests in commercial loans and is managed or advised by the same investment
advisor as such Lender or by an Affiliate of such advisor.



     “Letter of Credit” means any (i) Standby Letter of Credit and (ii) Commercial Letter of
Credit, in each case, issued or to be issued by an Issuing Bank for the account of Borrower
pursuant to Section 2.17.



     “Letter of Credit Request” means a request by Borrower in accordance with the terms of
Section 2.17 and substantially in the form of Exhibit M, or such other form as
shall be approved by the Administrative Agent and the Issuing Bank.



     “Leverage Ratio” means, as of the last day of any fiscal quarter of Holdings, the ratio of:
(a) Consolidated Indebtedness of Holdings on such date to (b) Consolidated EBITDA of Holdings
computed for the period consisting of such fiscal quarter and each of the three immediately
preceding fiscal quarters.



     “LIBOR Rate” means, with respect to any Eurodollar Borrowing for any Interest Period therefor,
the rate per annum determined by the Administrative Agent to be the arithmetic mean (rounded to the
nearest 1/100th of 1%) of the offered rates for deposits in dollars with a term comparable to such
Interest Period that appears on the Telerate British Bankers Assoc. Interest Settlement Rates Page
(as defined below) at approximately 11:00 a.m., London, England time, on the second full Business
Day preceding the first day of such Interest Period; provided, however, that (i) if no comparable
term for an Interest Period is available, the LIBOR Rate shall be determined using the weighted
average of the offered rates for the two terms most nearly corresponding to such Interest Period,
and (ii) if there shall at any time no longer exist a Telerate British Bankers Assoc. Interest
Settlement Rates Page, “LIBOR Rate” shall mean, with respect to each day during each Interest
Period pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the rate per
annum equal to the rate at which the Administrative Agent determines that prime banks are offered
deposits in dollars at approximately 11:00 a.m., London, England time, two Business Days prior to
the first day of such Interest Period in the London interbank market for delivery on the first day
of such Interest Period for the number of days comprised therein and in an amount comparable to its
portion of the amount of such Eurodollar Borrowing to be outstanding during such Interest Period.
“Telerate British Bankers Assoc. Interest Settlement Rates Page” means the display designated as
Page 3750 on the Telerate System Incorporated Service (or such other page as may replace such page
on such service for the purpose of displaying the rates at which dollar deposits are offered by leading banks in the
London interbank deposit market).



21









 





     “Lien” means, with respect to any property, (a) any mortgage, deed of trust, lien, pledge,
encumbrance, claim, charge, assignment, hypothecation, security interest or encumbrance of any
kind, any other type of preferential arrangement in respect of such property, including any
easement, right-of-way or other encumbrance on title to Real Property, in each of the foregoing
cases whether voluntary or imposed by law; and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such property.



     “Loan Documents” means this Agreement, each Guarantee, the Letters of Credit, the Notes (if
any) and the Security Documents.



     “Loan Parties” means Holdings, Parent, Cayman III, the LuxCos, WH Capital, Borrower, and each
other Guarantor.



     “Loan” means, as the context may require, a Revolving Loan or a Term Loan.



     “LuxCos” means Luxembourg Holdings, New Lux and Luxembourg Intermediate Holdings.



     “Luxembourg Distribution” has the meaning assigned to such term in the preamble hereof.



     “Luxembourg Holdings” has the meaning assigned to such term in the preamble hereof.



     “Luxembourg Intermediate Holdings” has the meaning assigned to such term in the preamble
hereof.



     “Margin Stock” has the meaning assigned to such term in Regulation U.



     “Material Adverse Effect” means (a) a material adverse effect on the business, property,
results of operations or condition, financial or otherwise, of Holdings and its Subsidiaries, taken
as a whole; (b) material impairment of the ability of the Loan Parties to perform their obligations
under any Loan Document; (c) material impairment of the rights of or benefits or remedies available
to the Lenders or the Collateral Agent under any Loan Document; or (d) a material adverse effect on
the Collateral or the Liens in favor of the Collateral Agent (for its benefit and for the benefit
of the other Secured Parties) on the Collateral or the priority of such Liens.



     “Material Agreement” means those agreements, documents or instruments to which Holdings or any
of its Subsidiaries is a party and which the breach thereof by such party or failure by such party
to maintain such agreement, document or instrument in effect would reasonably be expected to have a
Material Adverse Effect.



     “Maximum Rate” has the meaning assigned to such term in Section 11.13.



     “Moody’s” means Moody’s Investors Service, Inc.



     “Moody’s Rating” means the debt rating of Borrower’s senior secured debt rating most recently
announced by Moody’s.



     “Multiemployer Plan” means a multiemployer plan within the meaning of Section 4001(a)(3) of
ERISA (a) to which any Company or any of its ERISA Affiliates is then making or



22









 







accruing an obligation to make contributions, (b) to which any Company or any ERISA Affiliate has within the
preceding five plan years made contributions, or (c) with respect to which any Company or any ERISA
Affiliate could incur liability.



     “Net Cash Proceeds” means:



     (a) with respect to any Asset Sale, the cash proceeds received by any Loan Party (including
cash proceeds subsequently received (as and when received by any Loan Party) in respect of noncash
consideration initially received) net of (i) selling expenses (including reasonable brokers’ fees
or commissions, legal fees, transfer and similar taxes and Borrower’s reasonable and good faith
estimate of income, franchise, sales, and other applicable taxes required to be paid by Holdings or
any of its Subsidiaries in connection with such Asset Sale in the taxable year that such sale is
consummated or in the immediately succeeding taxable year, the computation of which shall take into
account the reduction in tax liability resulting from any available operating losses and net
operating loss carryovers, tax credits, and tax credit carry forwards, and similar tax attributes;
(ii) amounts escrowed or provided as a reserve, in accordance with GAAP, against any liabilities
under any indemnification obligations or purchase price adjustment associated with such Asset Sale
(provided that, to the extent and at the time any such amounts are released from such escrow or
reserve, such amounts shall constitute Net Cash Proceeds); (iii) Borrower’s good faith estimate of
payments required to be made with respect to unassumed liabilities relating to the assets sold
within 90 days of such Asset Sale (provided that, to the extent such cash proceeds are not used to
make payments in respect of such unassumed liabilities within 90 days of such Asset Sale, such cash
proceeds shall constitute Net Cash Proceeds); and (iv) the principal amount, premium or penalty, if
any, interest and other amounts on any Indebtedness for borrowed money that is secured by a senior
Lien on the asset sold in such Asset Sale and that is repaid with such proceeds (other than any
such Indebtedness assumed by the purchaser of such asset);



     (b) with respect to any Debt Issuance, the cash proceeds thereof, net of customary fees,
commissions, discounts, costs and other expenses incurred in connection therewith; and



     (c) with respect to any Casualty Event, the cash insurance proceeds, condemnation awards and
other compensation received in respect thereof, net of all reasonable costs and expenses incurred
in connection with the collection of such proceeds, awards or other compensation in respect of such
Casualty Event.



     “New Lux” has the meaning assigned to such term in the preamble hereof.



     “New Wholly Owned Subsidiary” has the meaning assigned to such term in Section
5.11(b).



     “Non-Guarantor Subsidiary” means (a) all of the Companies designated on Schedule
3.06(a) (as in effect on the Closing Date) as a “Non-Guarantor Subsidiary”, (b) each Subsidiary that has been and remains released from its Guarantee in accordance with Section 7.09
hereof, and (c) each New Wholly Owned Subsidiary that is not required to become a Guarantor
hereunder in accordance with Section 5.11.



     “Notes” means any notes evidencing the Term Loans or Revolving Loans issued pursuant to this
Agreement, if any, substantially in the form of Exhibit J-1 or J-2, as applicable.



23









 





     “Obligations” means (a) obligations of each Loan Party from time to time arising under or in
respect of the due and punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the
Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (ii) each payment required to be made by each Loan Party under this
Agreement in respect of any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and
(iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of each Loan Party under this
Agreement and the other Loan Documents; (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of each Loan Party under or pursuant to this Agreement and
the other Loan Documents; (c) the due and punctual payment and performance of all obligations of
each Loan Party under each Hedging Agreement entered into with any counterparty that was a Lender
or Affiliate of a Lender at the time such Hedging Agreement was entered into; and (d) the due and
punctual payment and performance of all obligations in respect of overdrafts and related
liabilities owed to any Lender, any Affiliate of a Lender, the Administrative Agent or the
Collateral Agent arising from treasury, depositary and cash management services or in connection
with any automated clearinghouse transfer of funds.



     “Officers’ Certificate” means, as applied to any person, a certificate executed on behalf of
such person by its Chairman of the Board (if an officer), its Chief Executive Officer, its
President or one of its Vice Presidents (or an equivalent officer) or by its Chief Financial
Officer, Vice President-Finance or its Treasurer (or an equivalent officer), each in their official
(and not individual) capacity.



     “Other Taxes” means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made under any Loan
Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.



     “Parent” has the meaning assigned to such term in the preamble hereto.



     “Participant” has the meaning assigned to such term in Section 11.04(e).



     “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.



     “Perfection Certificate” means a certificate in the form of Exhibit I-1.



     “Permitted Acquisitions” means any acquisition of 100% of the issued and outstanding Equity
Interests of, or assets constituting a business, division or product line of, any other person,
provided, that (a) Holdings shall be in compliance on a pro forma basis with Section
6.07(a) and (b) after giving effect to such acquisition as of the last measurement date
(to be determined on a basis consistent with Article 1 of Regulation S-X promulgated under the
Securities Act of 1933 (as amended) and as interpreted by the staff of the Securities and Exchange
Commission as of January 1, 1997) which pro forma adjustments shall be certified by the principal
financial officer or principal accounting officer of Holdings using the historical financial
statements of the acquired business and the consolidated financial statements of Holdings and its
Subsidiaries



24









 







which shall be reformulated (i) as if such acquisition and any other acquisitions which have been consummated during such period, any Indebtedness or other liabilities incurred or
repaid in connection with any such acquisition had been consummated or incurred or repaid at the
beginning of such period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the interest rates
applicable to outstanding Loans as of the date of calculation of such pro forma adjustments), (ii)
solely if quantifiable based on the underlying accounting records of such property, entity or
business unit, (iii) only if factually supportable and (iv) otherwise in conformity with certain
procedures to be agreed upon between Administrative Agent and the Borrower, all such calculations
to be in form and substance reasonably satisfactory to Administrative Agent and (b) no Default or
Event of Default shall have occurred and be continuing or result therefrom and (c) the Borrower
shall have complied with the provisions of Section 5.11.



     “Permitted Holders” means the Sponsors and their Affiliates.



     “Permitted Liens” has the meaning assigned to such term in Section 6.02.



     “person” means any natural person, corporation, business trust, joint venture, association,
company, limited liability company, partnership or government, or any agency or political
subdivision thereof.



     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Tax Code or Section 307 of ERISA, and in
respect of which any Company or any of its ERISA Affiliates is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA or with respect to which any Company could incur liability.



     “Preferred Stock” means, with respect to any person, any and all preferred or preference
Equity Interests (however designated) of such person whether now outstanding or issued after the
Closing Date.



     “Pro Rata Percentage” of any Revolving Lender at any time means the percentage of the total
Revolving Commitment represented by such Lender’s Revolving Commitment.



     “property” means any right, title or interest in or to property or assets of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity
Interests or other ownership interests of any person and whether now in existence or owned or
hereafter entered into or acquired.



     “Purchase Money Obligation” means, for any person, the obligations of such person in respect
of Indebtedness incurred for the purpose of financing all or any part of the purchase price of any
property (including Equity Interests of any person) or the cost of installation, construction or
improvement of any property or assets and any refinancing thereof; provided, however, that such
Indebtedness is incurred within 90 days after such acquisition of such property by such person.



     “Real Property” means, collectively, all right, title and interest (including any leasehold
estate) in and to any and all parcels of or interests in real property owned, leased or operated by
any person, whether by lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and appurtenant fixtures and




25









 






equipment, all general intangibles and contract rights and other property and rights
incidental to the ownership, lease or operation thereof.




     “Redemption” has the meaning assigned to such term in the recitals hereto.



     “Register” has the meaning assigned to such term in Section 11.04(c).



     “Refinancing” has the meaning assigned to such term in the recitals hereto.



     “Regulation D” means Regulation D of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.



     “Regulation T” means Regulation T of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.



     “Regulation U” means Regulation U of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.



     “Regulation X” means Regulation X of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.



     “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating
of any Hazardous Material in, into, onto or through the environment.



     “Released Guarantor” has the meaning assigned to such term in Section 7.09.



     “Required Lenders” means, at any time, Lenders having Loans, LC Exposure and unused Revolving
Commitments representing at least a majority of the sum of all Loans outstanding, LC Exposure and
unused Revolving Commitments at such time.



     “Requirements of Law” means, collectively, any and all requirements of any Governmental
Authority including any and all laws, ordinances, rules, regulations or similar statutes or case
law.



     “Response” means (a) “response” as such term is defined in CERCLA, 42 U.S.C. § 9601(24), and
(b) all other actions required by any Governmental Authority or voluntarily undertaken to: (i)
clean up, remove, treat, abate or in any other way address any Hazardous Material in the
environment; (ii) prevent the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection with, or as a
precondition to, clause (i) or (ii) above.



     “Responsible Officer” of any corporation means any executive officer or Financial Officer of
such corporation and any other officer or similar official thereof responsible for the
administration of the obligations of such corporation in respect of this Agreement.



     “Revolving Availability Period” means the period from and including the Closing Date to but
excluding the earlier of the Revolving Maturity Date and the date of termination of the Revolving
Commitments.



     “Revolving Borrowing” means a Borrowing comprised of Revolving Loans.



26









 





     “Revolving Commitment” means, with respect to each Lender, the commitment of such Lender to
make Revolving Loans hereunder as set forth on Annex II, or in the Assignment and
Acceptance pursuant to which such Lender assumed its Revolving Commitment, as applicable, as the
same may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender pursuant to Section
11.04. The amount of each Lender’s Revolving Commitment is set forth on Annex II, or
in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Revolving
Commitment, as applicable. The aggregate amount of the Lenders’ Revolving Commitments as of the
Closing Date is $100.0 million.



     “Revolving Commitment Fee” has the meaning assigned to such term in Section 2.05(a).



     “Revolving Exposure” means, with respect to any Lender at any time, the aggregate principal
amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at
such time of such Lender’s LC Exposure.



     “Revolving Lender” means a Lender with a Revolving Commitment.



     “Revolving Loans” means a Loan made by the Lenders to Borrower pursuant to Section
2.01(b).



     “Revolving Maturity Date” means the sixth anniversary of the Closing Date.



     “S&P” mean Standard & Poor’s Rating Service, a division of The McGraw-Hill Companies.



     “S&P Rating” means the rating of Borrower’s senior secured debt rating most recently announced
by S&P.



     “Secured Parties” has the meaning assigned to such term in the Security Documents.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Security Agreements” means, collectively, the U.S. Security Agreement and each Foreign
Security Agreement.



     “Security Agreement Collateral” has the meaning set forth in any Security Agreement delivered
on the Closing Date or thereafter pursuant to the terms of this Agreement.



     “Security Documents” means the Security Agreements, the Perfection Certificate and each other
security document or pledge agreement required by applicable local law to grant a valid, perfected
security interest in any property acquired or developed, and all instruments of perfection required
by this Agreement or any Security Agreement to be filed with respect to the security interests in
property and fixtures created pursuant to any Security Agreement and any other document or
instrument utilized to pledge as collateral for the Obligations any property of whatever kind or
nature.



     “Sponsor” means each of Whitney V, L.P., Whitney Strategic Partners V, L.P. and CCG
Investments (BVI), L.P.



27









 





     “Standby Letter of Credit” means any standby letter of credit or similar instrument issued for
the purpose of supporting (a) workers’ compensation liabilities of Borrower or any Subsidiary, (b)
the obligations of third-party insurers of Borrower or any Subsidiary arising by virtue of the laws
of any jurisdiction requiring third-party insurers to obtain such letters of credit, or (c)
performance, payment, deposit or surety obligations of Borrower or any Subsidiary if required by
law or governmental rule or regulation or in accordance with custom and practice in the industry.



     “Subsidiary” means, with respect to any person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the
parent or one or more Subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.



     “Subsidiary Guarantor” means each Subsidiary listed on Schedule 1.01(e), each other
Subsidiary that is or becomes a party to this Agreement pursuant to Section 5.11 (but
excluding any Released Guarantor that remains released from its Guarantee in accordance with
Section 7.09).



     “Synthetic Lease” means, as applied to any person, any lease (including leases that may be
terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is
not a capital lease in accordance with GAAP and (b) in respect of which the lessee retains or
obtains ownership of the property so leased for federal income tax purposes, other than any such
lease under which that person is the lessor.



     “Synthetic Lease Obligation” means the monetary obligation of a person under a Synthetic
Lease.



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



     “Tax Indemnity” means that certain indemnity payable by Holdings and Borrower to certain
shareholders of Holdings in respect of certain tax matters as set forth in that certain
Indemnification Agreement dated as of December 1, 2004 among Holdings, Whitney Strategic Partners
V, L.P., Whitney Private Debt Fund, L.P., Green River Offshore Fund, CCG Investments (BVI), L.P.,
CCG Associates-QP, LLC, CCG Associates-AI, LLC, CCG AV, LLC-Series C, CCG AV, LLC-Series E, CCG CI,
LLC, and GGC Administration, LLC.



     “Tax Refund” has the meaning assigned to such term in Section 2.15(f).



     “Tax Return” means all returns, statements, filings, attachments and other documents or
certifications required to be filed in respect of Taxes or any amendments thereof or thereto.



     “Taxes” mean any and all present or future taxes, duties, levies, fees, assessments, imposts,
deductions, charges or withholdings, whether computed on a separate, consolidated, unitary,
combined or other basis and any and all liabilities (including interest, fines, penalties or
additions to tax) with respect to the foregoing.



28









 





     “Term Lender” means a Lender with an outstanding Term Loan.



     “Term Loan” means the term loans made by the Lenders to Borrower on the Delayed Draw Closing
Date; unless the context otherwise requires, “Term Loan” includes any term loans made by the
Lenders to Borrower pursuant to any Additional Term Loan Commitments extended in accordance with
Section 2.18. Each Term Loan shall be either an ABR Term Loan or a Eurodollar Term Loan.



     “Term Loan Commitment” means, with respect to each Lender, the commitment, if any, of such
Lender to make a Term Loan hereunder on the Delayed Draw Closing Date, expressed as an amount
representing the maximum principal amount of the Term Loan to be made by such Lender hereunder.
The initial amount of each Lender’s Term Loan Commitment is set forth in Annex II. The
initial aggregate amount of the Lenders’ Term Loan Commitments is $200.0 million. Unless the
context otherwise requires, “Term Loan Commitments” includes any Additional Term Loan Commitments.



     “Term Loan Commitment Fee” has the meaning assigned to such term in Section 2.05(d).



     “Term Loan Maturity Date” means the seventh anniversary of the Closing Date.



     “Term Loan Repayment Date” haves the meaning assigned to such term in Section 2.09(a).



     “Transaction Costs” has the meaning assigned to such term in the recitals hereto.



     “Transaction Documents” means any and all documents entered into or delivered in connection
with the Transactions, including, without limitation, the Loan Documents delivered on the Closing
Date and documents entered into in connection with the Redemption.



     “Transactions” has the meaning assigned to such term in the recitals hereto.



     “Type,” when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
LIBOR Rate or the Alternate Base Rate.



     “UCC” has the meaning set forth in the U.S. Security Agreement.



     “U.S. Security Agreement” means a Security Agreement substantially in the form of Exhibit
F among the Loan Parties and Collateral Agent for the benefit of the Secured Parties, as the
same may be amended in accordance with the terms thereof and hereof, or such other agreements
reasonably acceptable to Collateral Agent as shall be necessary to comply with applicable
Requirements of Law and effective to grant to Collateral Agent (on behalf of the Secured Parties) a
perfected, first-priority security interest in the Security Agreement Collateral covered thereby.



     “WH Capital” has the meaning assigned to such term in the recitals hereto.



     “Voting Stock” means any class or classes of capital stock of Holdings pursuant to which the
holders thereof have the general voting power under ordinary circumstances to elect at least a
majority of the Board of Directors of Holdings.



29









 





     “Wholly Owned Subsidiary” means, as to any person, (a) any corporation 100% of whose capital
stock (other than directors’ qualifying shares) is at the time owned by such person and/or one or
more Wholly Owned Subsidiaries of such person and (b) any partnership, association, joint venture,
limited liability company or other entity in which such person and/or one or more Wholly Owned
Subsidiaries of such person have a 100% equity interest at such time.



     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA.



     SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving
Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Borrowing”).



     SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be modified by the phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a)
any definition of or reference to any agreement, instrument of other document herein shall be
construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified in accordance with the provisions hereof and thereof;
(b) any reference herein to any person shall be construed to include such person’s successors and
assigns; (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision of this
Agreement; (d) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to articles and sections of, and exhibits and schedules to, this Agreement; and
(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. All references to the knowledge of any Company or to facts known by
any Company shall mean actual knowledge of any Responsible Officer of any Loan Party or any of its
Subsidiaries.



     SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP, as in effect from time to
time. Financial statements and other information required to be delivered by Holdings to Lenders
pursuant to Sections 5.01(a), (b) and (c) shall be prepared in accordance
with GAAP as in effect at the time of such preparation. Notwithstanding the foregoing,
calculations in connection with the definitions, covenants and other provisions hereof shall
utilize accounting principles and policies in conformity with those used to prepare the historical
financial statements delivered on the Closing Date. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan Document, and Borrower,
the Administrative Agent or the Required Lenders shall so request, the Administrative Agent, the
Lenders and Borrower shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to the approval of
the Required Lenders); provided that, until so amended, such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein.



30









 





ARTICLE II




The Credits




     SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon the representations and warranties
herein set forth:




     (a) each Term Lender agrees, severally and not jointly, to make a Term Loan to
Borrower on the Delayed Draw Closing Date in a principal amount equal to its Term Loan
Commitment; and




     (b) each Revolving Lender agrees, severally and not jointly to make Revolving Loans to
Borrower, at any time and from time to time after the Closing Date, and until the earlier
of the Revolving Maturity Date and the termination of the Commitment of such Lender in
accordance with the terms hereof, in an aggregate principal amount at any time outstanding
that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving
Commitment.


Amounts paid or prepaid in respect of Term Loans may not be reborrowed. Within the limits set
forth in clause (b) above and subject to the terms, conditions and limitations set forth
herein, Borrower may borrow, pay or prepay and reborrow Revolving Loans.




     SECTION 2.02. Loans.




     (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their applicable Commitments; provided, however, that
the failure of any Lender to make any Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be made by
such other Lender). Except for Loans deemed made pursuant to Section 2.02(f),
Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an
integral multiple of $1.0 million or (ii) equal to the remaining available balance of the
applicable Commitments.




     (b) Subject to Sections 2.11 and 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as Borrower may request pursuant to
Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided
that, any exercise of such option shall not affect the obligation of Borrower to repay such
Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may
be outstanding at the same time; provided, however, that Borrower shall not be entitled to
request any Borrowing that, if made, would result in more than ten Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they commence on
the same date, shall be considered separate Borrowings.




     (c) Except with respect to Loans made pursuant to Section 2.02(f), each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 12:00 noon, New York City time, and the
Administrative Agent shall promptly credit the amounts so received to an account as



31









 






directed by Borrower in the applicable Borrowing Request maintained with the Administrative
Agent or, if a Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to the respective
Lenders.




     (d) Unless the Administrative Agent shall have received notice from a Lender prior to
the date of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with Section 2.02(c), and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a corresponding
amount. If the Administrative Agent shall have so made funds available, then, to the
extent that such Lender shall not have made such portion available to the Administrative
Agent, such Lender and Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such
Lender, a rate determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest error). If such
Lender shall repay to the Administrative Agent such corresponding amount, such amount shall
constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement.




     (e) Notwithstanding any other provision of this Agreement, Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing of Eurodollar Loans
if the Interest Period requested with respect thereto would end after the Revolving
Maturity Date or the Term Loan Maturity Date, as applicable.




     (f) If the Issuing Bank shall not have received from Borrower the payment required to
be made by Section 2.17(e) within the time specified in such section, the Issuing
Bank will promptly notify the Administrative Agent of the LC Disbursement and the
Administrative Agent will promptly notify each Revolving Lender of such LC Disbursement and
its Pro Rata Percentage thereof. Each Revolving Lender shall pay by wire transfer of
immediately available funds to the Administrative Agent on such date (or, if such Revolving
Lender shall have received such notice later than 12:00 noon, New York City time, on any
day, not later than 11:00 a.m., New York City time, on the immediately following Business
Day), an amount equal to such Lender’s Pro Rata Percentage of such LC Disbursement (it
being understood that such amount shall be deemed to constitute an ABR Revolving Loan of
such Lender, and such payment shall be deemed to have reduced the LC Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received by it from
the Revolving Lenders. The Administrative Agent will promptly pay to the Issuing Bank any
amounts received by it
from Borrower pursuant to Section 2.17(e) prior to the time that any Revolving
Lender makes any payment pursuant to this Section 2.02(f); any such amounts
received by the Administrative Agent thereafter will be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made such payments and to the
Issuing Bank, as their interests may appear. If any Revolving Lender shall not have made
its Pro Rata Percentage of such LC Disbursement available to the Administrative Agent as
provided above, such Lender and Borrower severally agree to pay interest on such amount,
for each day from and including the date such amount is required to be paid in accordance



32









 






with this Section 2.02(f) to but excluding the date such amount is paid, to the
Administrative Agent for the account of the Issuing Bank at (i) in the case of Borrower, a
rate per annum equal to the interest rate applicable to Revolving Loans pursuant to
Section 2.06(a), and (ii) in the case of such Lender, for the first such day, the
Federal Funds Effective Rate, and for each day thereafter, the Alternate Base Rate.



     SECTION 2.03. Borrowing Procedure. To request a Borrowing (including in respect of a Borrowing of the Term Loans to be made
hereunder), Borrower shall notify the Administrative Agent of such request by telephone (promptly
confirmed by telecopy) or by delivering a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 2:00 p.m.,
New York City time, one Business Day before the date of the proposed Borrowing; provided that, any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.17(e) may be given not later than 11:00 a.m., New York City time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed not later than 3:00 p.m., New York City time, on such Business Day by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request substantially in
the form of Exhibit C and signed by Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:




     (a) the aggregate amount of such Borrowing;




     (b) the date of such Borrowing, which shall be a Business Day;




     (c) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;




     (d) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and




     (e) the location and number of Borrower’s account to which funds are to be disbursed,
which shall comply with the requirements of Section 2.02.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Revolving Borrowing, then Borrower shall be deemed to have selected an Interest Period of one
month’s duration. Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and
of the amount of such Lender’s Loan to be made as part of the requested Borrowing.




     SECTION 2.04.` Evidence of Debt; Repayment of Loans. (a) Borrower hereby unconditionally promises to pay to (i) each Lender holding Term Loans,
the principal amount of each Term Loan of such Lender as provided in Section 2.09; and (ii)
each Revolving Lender, the then unpaid principal amount of each Revolving Loan of such Lender on
the Revolving Maturity Date.




     (b) Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of Borrower to such Lender resulting from each



33









 






Loan made by such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.




     (c) The Administrative Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type and Class thereof and the Interest Period
applicable thereto; (ii) the amount of any principal or interest due and payable or to
become due and payable from Borrower to each Lender hereunder; and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.




     (d) The entries made in the accounts maintained pursuant to Sections 2.04(b)
and (c) shall be prima facie evidence of the existence and amounts of the
obligations therein recorded (in the absence of manifest error); provided, however, that
the failure of any Lender or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligations of Borrower to repay the Loans
in accordance with their terms.




     (e) Any Lender may request that Loans of any Class made by it be evidenced by a Note.
In such event, Borrower shall prepare, execute and deliver to such Lender a Note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such Note and interest thereon shall at all times (including after
assignment pursuant to Section 11.04) be represented by one or more Notes in such
form payable to the order of the payee named therein (or, if such Note is a registered
note, to such payee and its registered assigns).


All payments shall be made on the dates due, in immediately available funds, to the Administrative
Agent for distribution, if and as appropriate, among the Lenders.




     SECTION 2.05. Fees.




     (a) Revolving Commitment Fee. Borrower agrees to pay to each Revolving
Lender, a revolving commitment fee (a “Revolving Commitment Fee”) equal to the Applicable
Commitment Fee Percentage times the average daily unused amount of the Revolving
Commitments of such Revolving Lender. All Revolving Commitment Fees shall be payable
quarterly in arrears on the last Business Day of March, June, September and December in
each year (commencing with the first such date to occur after the Closing Date) and on each
date (including the Revolving Maturity Date) on which the Revolving Commitment of such
Lender shall expire or be terminated as provided herein. All Revolving Commitment Fees
shall be computed on the basis of the actual number of days elapsed in a year of 360 days.
The Revolving Commitment Fee due to each Lender shall commence to accrue on the Closing
Date and shall cease to accrue on the date on
which the Revolving Commitment of such Lender shall expire or be terminated as
provided herein.




     (b) Administrative Agent Fees. Borrower agrees to pay to the Administrative
Agent, for its own account, the administrative fees set forth in the Fee Letter or such
other fees payable in the amounts and at the times separately agreed upon between Borrower
and the Administrative Agent (the “Administrative Agent Fees”).



34









 






     (c) LC and Fronting Fees. Borrower agrees to pay (i) to each Revolving Lender
a participation fee (“LC Participation Fee”) with respect to its participations in Letters
of Credit, which shall accrue at a rate equal to the Applicable Margin from time to time
used to determine the interest rate on Eurodollar Revolving Loans pursuant to Section
2.06 on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Closing Date to but excluding the later of the date on which such Lender’s Revolving
Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee (“Fronting Fee”), which shall accrue at the rate of
0.125% per annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Closing Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any LC Exposure, as well as the
Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder. LC Participation Fees and
Fronting Fees accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Closing Date; provided that, all such
fees shall be payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall be payable
on demand. Any other fees payable to the Issuing Bank pursuant to this Section
2.05(c) shall be payable within ten days after demand. All LC Participation Fees and
Fronting Fees shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the last day).




     (d) Term Loan Commitment Fee. Borrower agrees to pay to each Lender with a
Term Loan Commitment, a term loan commitment fee (a “Term Loan Commitment Fee”) equal to
the Applicable Commitment Fee Percentage times the unused amount of the Term Loan
Commitments of such Lender. All Term Loan Commitment Fees shall be payable in arrears on
the date on which the Term Loan Commitment of such Lender shall expire or be terminated as
provided herein. All Term Loan Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Term Loan Commitment Fee due to
each Lender shall commence to accrue on the Closing Date and shall cease to accrue on the
date on which the Term Loan Commitment of such Lender shall expire or be terminated as
provided herein.


All Fees shall be paid on the dates due, in immediately available funds, to the Administrative
Agent for distribution, if and as appropriate, among the Lenders, except that the Fronting Fees
shall be paid directly to the Issuing Bank. Once paid, none of the Fees shall be refundable under
any circumstances.




     SECTION 2.06. Interest on Loans.




     (a) Subject to the provisions of Section 2.06(c), the Loans comprising each
ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin in effect from time to time.




     (b) Subject to the provisions of Section 2.06(c), the Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the LIBOR Rate for



35









 






the Interest Period in effect for such Borrowing plus the Applicable Margin in effect from
time to time.




     (c) Notwithstanding the foregoing, upon the occurrence and during the continuation of
any Event of Default, and at the election of the Required Lenders following written notice
thereof to the Borrower, the outstanding principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments thereon and any fees and other amounts
hereunder, in each case that are due and payable and have not been paid, shall thereafter
bear interest (including post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws) payable upon demand at a rate that is 2% per annum in
excess of the interest rate otherwise applicable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate that is 2%
per annum in excess of the interest rate otherwise payable under this Agreement for ABR
Loans); provided that, in the case of Eurodollar Loans, upon the expiration of the Interest
Period in effect at the time any such increase in interest rate is effective, such
Eurodollar Rate Loans, at the time the Borrower is notified in accordance with Section
2.08(c), shall thereupon become ABR Loans and shall thereafter bear interest payable
upon demand at a rate that is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for ABR Loans. Payment or acceptance of the increased rates of
interest provided for in this Section 2.06(c) is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.




     (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment
Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving
Commitments; provided that, (i) interest accrued pursuant to Section 2.06(c) shall
be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability
Period), accrued interest on the principal amount repaid or prepaid shall be payable on the
date of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.




     (e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate shall be computed on
the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate or LIBOR Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.



     SECTION 2.07. Termination and Reduction of Commitments.




     (a) The Revolving Commitments and the LC Commitment shall automatically terminate on
the Revolving Maturity Date.




     (b) Borrower may at any time terminate, or from time to time reduce, the Revolving
Commitments; provided that, (i) each reduction of the Revolving Commitments shall be in an
amount that is an integral multiple of $500,000 and not less than $1.0 million and (ii) the
Revolving Commitments shall not be terminated or reduced



36









 






if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.10(b),
the sum of the Revolving Exposures would exceed the aggregate amount of Revolving
Commitments.




     (c) Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Revolving Commitments under Section 2.07(b) at least three Business Days
prior to the effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of such notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered by Borrower
pursuant to this Section 2.07(b) shall be irrevocable. Any termination or
reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving
Commitments shall be made ratably among the Revolving Lenders in accordance with their
respective Revolving Commitments.




     (d) The Term Loan Commitments shall terminate on the earliest to occur of (i) the
Delayed Draw Closing Date, (ii) that date that is 45 days after the Closing Date and (iii)
the termination of the Term Loan Commitments in accordance with Article VIII.



     SECTION 2.08. Interest Elections.




     (a) Each Revolving Borrowing and Term Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter,
Borrower may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor,
all as provided in this Section 2.08. Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate Borrowing.




     (b) To make an election pursuant to this Section 2.08, Borrower shall notify
the Administrative Agent of such election by telephone by the time that a Borrowing Request
would be required under Section 2.03 if Borrower were requesting a Revolving
Borrowing or Term Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request substantially in the form of
Exhibit D.




     (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:




     (i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);



37









 






     (ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term “Interest Period”.




If any such Interest Election Request requests a Eurodollar Borrowing but does not specify
an Interest Period, then (except in the case of clause (iv) above) Borrower shall
be deemed to have selected an Interest Period of one month’s duration.




     (d) Promptly following receipt of an Interest Election Request, the Administrative
Agent shall advise each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.




     (e) If an Interest Election Request with respect to a Eurodollar Borrowing is not
timely delivered prior to the end of the Interest Period applicable thereto, then, unless
such Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies Borrower, then, after the occurrence
and during the continuance of a Default, (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.



     SECTION 2.09. Amortization of Term Borrowings.




     (a) Borrower shall pay to the Administrative Agent, for the account of the Term
Lenders, on the dates set forth on Annex I, or if any such date is not a Business
Day, on the next preceding Business Day (each such date being a “Term Loan Repayment
Date”), a principal amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.09(b) and 2.10) equal to the amount set forth on Annex I
for such date (less all mandatory and optional prepayments made thereon), together in each
case with accrued and unpaid interest on the principal amount to be paid to but excluding
the date of such payment.




     (b) To the extent not previously paid, all Term Loans shall be due and payable on the
Term Loan Maturity Date.



     SECTION 2.10. Optional and Mandatory Prepayments of Loans.




     (a) Optional Prepayments. Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, subject to the requirements of
this Section 2.10; provided that, each partial prepayment shall be in an amount
that is an integral multiple of $1.0 million and, in the case of any prepayment of the Term
Loans, not less than $5.0 million.



38









 






     (b) Revolving Loan Prepayments. In the event of any termination of all the
Revolving Commitments, Borrower shall, on the date of such termination, repay or prepay all
its outstanding Revolving Borrowings and replace all outstanding Letters of Credit, cause
the issuance of backstop letters of credit, and/or deposit an amount equal to the LC
Exposure in the LC Sub-Account. In the event of any partial reduction of the Revolving
Commitments, (i) at or prior to the effective date of such reduction, the Administrative
Agent shall notify Borrower and the Revolving Lenders of the sum of the Revolving Exposures
after giving effect thereto and (ii) if the sum of the Revolving Exposures would exceed the
aggregate amount of Revolving Commitments after giving effect to such reduction or
termination, then Borrower shall, on the date of such reduction or termination, repay or
prepay Revolving Borrowings and/or replace or cash collateralize outstanding Letters of
Credit in an amount sufficient to eliminate such excess.




     (c) Asset Sales. Not later than five Business Days following the receipt of
any Net Cash Proceeds of any Asset Sale (in the case of Asset Sales by non-U.S. parties, to
the extent such amounts can be repatriated to the United States without materially adverse
tax or other economic consequences taking into account the amount of proceeds received from
such Asset Sale as determined by the Administrative Agent (after consultation with
Borrower)), Borrower shall apply 100% of the Net Cash Proceeds received with respect
thereto to make prepayments in accordance with Sections 2.10(i) and (j);
provided that:




     (i) no such prepayment shall be required with respect to (A) any
Asset Sale permitted by Sections 6.04(b)(i), 6.04(d),
6.04(e), 6.04(g), 6.04(i), and 6.04(k),
(B) the disposition of assets subject to a condemnation or eminent domain
proceeding or insurance settlement to the extent it does not constitute a
Casualty Event, (C) Asset Sales resulting in no more than $2.5 million in
Net Cash Proceeds in any fiscal year and (D) an issuance of Equity
Interests by a Non-Guarantor Subsidiary to another Non-Guarantor
Subsidiary; and




     (ii) so long as no Default or Event of Default shall then exist or
would arise therefrom, no such prepayment shall be required to the extent
that Borrower shall have delivered an Officers’ Certificate to the
Administrative Agent on or prior to such date stating that the Net Cash
Proceeds of such Asset Sale will be used to purchase replacement assets or
other assets useful in such person’s business within 270 days of such
Asset Sale and setting forth estimates of the proceeds to be so expended;
provided, however, that if any portion of such Net Cash Proceeds are not
reinvested in accordance with this clause (ii), such unused
portion shall be applied on the last day of such period as a mandatory
prepayment as provided in this Section 2.10(c).




     (d) Debt Issuance. Upon any Debt Issuance after the Closing Date, Borrower
shall make prepayments in accordance with Sections 2.10(h) and (i) in an
aggregate principal amount equal to 100% of the Net Cash Proceeds of such Debt Issuance.




     (e) [Reserved]



39









 






     (f) Casualty Events. Not later than one Business Day following the receipt of
any Net Cash Proceeds from a Casualty Event (in the case of a Casualty Event by non-U.S.
parties, to the extent such amounts can be repatriated to the United States without
materially adverse tax or other economic consequences taking into account the amount of
proceeds received from such Casualty Event as determined by the Administrative Agent (after
consultation with Borrower)), Borrower shall make prepayments in accordance with
Sections 2.10(i) and (j) in an amount equal to 100% of such Net Cash
Proceeds; provided, however, that:




     (i) so long as no Default or Event of Default then exists or would
arise therefrom, the Net Cash Proceeds thereof shall not be required to be
so applied on such date to the extent that Borrower has delivered an
Officers’ Certificate to the Collateral Agent on or prior to such date
stating that such proceeds shall be used to fund the acquisition of
property used or usable in the business of a Loan Party or a Subsidiary
thereof or repair, replace or restore the property in accordance with the
provisions of the applicable Security Document in respect of which such
Casualty Event has occurred, in each case within 270 days following the
date of the receipt of such Net Cash Proceeds;




     (ii) to the extent such Casualty Event affects any of the Collateral,
all property acquired to effect any repair, replacement or restoration of
such Collateral shall be made subject to the Lien of the Security
Documents in accordance with the provisions of Section 5.11;




     (iii) if all or any portion of such Net Cash Proceeds shall not be so
applied within such 270-day period, such unused portion shall be applied
on the last day of such period as a mandatory prepayment as provided in
this Section 2.10(f); and




     (iv) no such prepayment shall be required with respect to Casualty
Events resulting in no more than $1.0 million in Net Cash Proceeds in any
fiscal year.




     (g) Excess Cash Flow. Within 10 days of the date of the delivery of the
audited annual financial statements contemplated by Section 5.01(a), commencing
with the fiscal year ending on December 31, 2006, Borrower shall make prepayments in
accordance with Section 2.10(i)(ii) and Section 2.10(j) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then ended; provided,
that if the Moody’s Rating is equal to or greater than Ba1 and the S&P Rating is equal to
or greater than BB+, then Borrower shall make prepayments in accordance with Section
2.10(i)(ii) and Section 2.10(j) in an aggregate principal amount equal to 25%
of Excess Cash Flow for the fiscal year then ended; provided, further, in the event of a
split rating, the higher of such Debt Ratings shall be used to determine the applicable
percentage above, except that, if there is a two tier difference in the Debt Ratings, the
Debt Rating one notch higher
than the lower of the two Debt Ratings shall be used to determine the applicable
percentage above.




     (h) Redemption of Holdings Senior Notes. If Holdings does not redeem all of
the aggregate principal amount of Holdings Senior Notes outstanding as of the Closing Date
within 45 days after the Closing Date, (i) the Borrower shall make prepayments in



40









 






accordance with Section 2.10(i) and Section 2.10(j), in an aggregate
principal amount equal to the excess of (x) the sum of (A) all Term Loans outstanding as of
such date plus (B) all Holdings Senior Notes outstanding as of such date over (y)
the aggregate principal amount of all Holdings Senior Notes outstanding as of the Closing
Date and (ii) all unused Term Loan Commitments outstanding as of such date shall
immediately terminate.




     (i) Application of Prepayments.




     (i) Optional prepayments under this Agreement shall be applied to
Loans of the Class and Type (and, in the case of prepayment of Term Loans,
to reduce the scheduled installments of principal) as specified by
Borrower in the applicable notice of prepayment in Section
2.10(j); provided that, in the event Borrower fails to specify the
Loans to which any such prepayment shall be applied, such prepayment shall
be applied first to repay outstanding Revolving Loans to the full extent
thereof, and second to repay outstanding Term Loans to the full extent
thereof. Mandatory prepayments of Term Loans made under this Agreement
shall be applied to reduce the remaining scheduled installments of
principal due in respect of the Term Loans under Section 2.09 pro
rata on the basis of the respective amounts thereof then unpaid. After
application of mandatory prepayments pursuant to the immediately preceding
sentence and to the extent there are mandatory prepayment amounts
remaining after such application, any such remaining portion of the
mandatory prepayment amounts shall be applied (i) to prepay the Revolving
Loans to the full extent thereof and to further permanently reduce the
Revolving Commitments ratably among the Revolving Lenders by the amount of
such prepayment (and Borrower shall comply with Section 2.10(b)),
and (ii) then, to the extent of any remaining portion of the mandatory
prepayment amounts, to further permanently reduce the Revolving
Commitments ratably among the Revolving Lenders to the full extent
thereof.




     (ii) Amounts to be applied pursuant to this Section 2.10 to
the prepayment of Term Loans and Revolving Loans shall be applied, as
applicable, first to reduce outstanding ABR Term Loans and ABR Revolving
Loans, respectively. Any amounts remaining after each such application
shall be applied to prepay Eurodollar Term Loans or Eurodollar Revolving
Loans, as applicable. Notwithstanding the foregoing, if the amount of any
prepayment of Loans required under this Section 2.10 shall be in
excess of the amount of the ABR Loans at the time outstanding, only the
portion of the amount of such prepayment as is equal to the amount of such
outstanding ABR Loans shall be immediately prepaid and, at the election of
Borrower, the balance of such required prepayment shall be either (x)
deposited in the Collateral
Account and applied to the prepayment of Eurodollar Loans on the last
day of the then next-expiring Interest Period for Eurodollar Loans (with
all interest accruing thereon for the account of Borrower) or (y) prepaid
immediately, together with any amounts owing to the Lenders under
Section 2.13. Notwithstanding any such deposit in the Collateral



41









 






Account, interest shall continue to accrue on such Loans until prepayment.




     (j) Notice of Prepayment. Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment
of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business
Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of prepayment,
and (iii) in the case of any mandatory prepayment under Section 2.10(g), not later
than 11:00 a.m., New York City time, ten Business Days before the date of prepayment. Each
such notice shall be irrevocable and shall specify the prepayment date, the principal
amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included
in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.06.



     SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:




     (a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for ascertaining the
LIBOR Rate for such Interest Period; or




     (b) the Administrative Agent is advised by the Required Lenders that the LIBOR Rate
for such Interest Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to Borrower and the Lenders by telephone or
telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies
Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.




     SECTION 2.12. Increased Costs.




     (a) If any Change in Law shall:




     (i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or the Issuing Bank; or




     (ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or



42









 






Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or
to increase the cost to such Lender or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise) (except
for purposes of this subsection (a) any such increased cost or reduction resulting from
Taxes or Other Taxes (as to which Section 2.15 shall govern)), then Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.





     (b) If any Lender or the Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return on such
Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of Credit issued
by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the
policies of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time Borrower will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction
suffered.




     (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case
may be, as specified in Section 2.12(a) or Section 2.12(b), in detail
sufficient to allow the Borrower to verify the computation thereof, shall be delivered to
Borrower and shall be conclusive absent manifest error. Borrower shall pay such Lender or
the Issuing Bank, as the case may be, the amount shown as due on any such certificate
within ten days after receipt thereof.




     (d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section 2.12 shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that, Borrower
shall not be required to compensate a Lender or the Issuing Bank pursuant to this
Section 2.12 for any increased costs or reductions incurred more than 180 days
prior to the date that such Lender or the Issuing Bank, as the case may be, notifies
Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive effect
thereof.




     (e) Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves under Regulation D with respect to “Eurocurrency liabilities” within the
meaning of Regulation D, or under any similar or successor regulation with respect



43









 






Eurocurrency liabilities or Eurocurrency funding, additional interest on the unpaid
principal amount of each Eurodollar Loan equal to the actual costs of such reserves
allocated to such Eurodollar Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable on each
date on which interest is payable on such LIBOR Loan, provided Borrower shall have received
at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant
interest payment date, such additional interest shall be due and payable 10 days from
receipt of such notice.



     SECTION 2.13. Breakage Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay any Revolving Loan or
Term Loan on the date specified in any notice delivered pursuant hereto or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by Borrower pursuant to Section 2.16, then, in any such event, Borrower
shall compensate each Lender for the reasonable loss, cost and expense attributable to such event.
In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest
that would have accrued on the principal amount of such Loan had such event not occurred, at the
LIBOR Rate that would have been applicable to such Loan, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of a failure to
borrow, convert or continue, for the period that would have been the Interest Period for such
Loan), over (ii) the amount of interest that would accrue on such principal amount for such period
at the interest rate that such Lender would bid were it to bid, at the commencement of such period,
for dollar deposits of a comparable amount and period from other banks in the Eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section 2.13, in detail sufficient to allow the Borrower to verify
the computation thereof, shall be delivered to Borrower and shall be conclusive absent manifest
error. Borrower shall pay such Lender the amount shown as due on any such certificate within ten
days after receipt thereof.



     SECTION 2.14. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.




     (a) Borrower shall make each payment required to be made by it hereunder or under any
other Loan Document (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.12, 2.13 or
2.15, or otherwise) on or before the time expressly required hereunder or under
such other Loan Document for such payment (or, if no such time is expressly required, prior
to 2:00 p.m., New York City time), on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on the next
succeeding
Business Day for purposes of calculating interest thereon. All such payments shall be
made to the Administrative Agent at its offices at 4 World Financial Center,
22nd Floor, New York, New York 10080, Attention: Nancy Meadows, except payments
to be made directly to the Issuing Bank as expressly provided herein and except that
payments pursuant to Sections 2.12, 2.13, 2.15 and 11.03
shall be made directly to the persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other person to the
appropriate recipient promptly



44









 






following receipt thereof. If any payment under any Loan
Document shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.




     (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first towards payment
of interest and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and (ii) second
towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.




     (c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of its
Revolving Loans, Term Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Revolving Loans,
Term Loans and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Revolving Loans, Term Loans
and participations in LC Disbursements of the other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective Revolving
Loans, Term Loans and participations in LC Disbursements; provided that, (i) if any such
participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest, and (ii) the provisions of this Section
2.14(c) shall not be construed to apply to any payment made by Borrower pursuant to and
in accordance with the express terms of this Agreement or any payment obtained by a Lender
as consideration for the assignment or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this Section
2.14(c) shall apply). Borrower consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were a direct
creditor of Borrower in the amount of such participation.




     (d) Unless the Administrative Agent shall have received notice from Borrower prior to
the date on which any payment is due to the Administrative Agent for the account of the
Lenders or the Issuing Bank hereunder that Borrower will not make such payment, the
Administrative Agent may assume that Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Bank, as the case may be, the amount due. In such event, if Borrower has not
in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or Issuing Bank with interest



45









 






thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of payment to
the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.




     (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.02(f), 2.14(d), 2.17(d) or 11.03(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Administrative Agent for the account
of such Lender to satisfy such Lender’s obligations under such sections until all such
unsatisfied obligations are fully paid.



     SECTION 2.15. Taxes.




     (a) Any and all payments by or on account of any obligation of Borrower hereunder or
under any other Loan Document shall be made without set-off, counterclaim or other defense
and free and clear of and without deduction or withholding for any and all Indemnified
Taxes or Other Taxes; provided that, if Borrower shall be required by law to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable under this
Section 2.15) the Administrative Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such deductions or
withholdings been made, (ii) Borrower shall make such deductions or withholdings and (iii)
Borrower shall pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law.




     (b) In addition, Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.




     (c) Borrower shall indemnify the Administrative Agent, each Lender and the Issuing
Bank, within ten Business Days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on account of any
obligation of Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.15) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. If in the
reasonable opinion of Borrower, any amount has been paid to, by or on behalf of the
Administrative Agent, any Lender or the Issuing Bank (as the case may be) pursuant to
clause (a), (b) or this (c) of this Section 2.15 with
respect to
Taxes or Other Taxes which are not correctly or legally asserted, the Administrative
Agent, such Lender or the Issuing Bank (as the case may be) will cooperate with Borrower in
seeking to obtain a refund for the benefit of Borrower of such amount, provided that, the
rendering of any such cooperation by the Administrative Agent, such Lender, or the Issuing
Bank, would not, in the reasonable opinion of the Administrative Agent, such Lender, or the
Issuing Bank, (i) cause the Administrative Agent, such Lender, or the Issuing Bank, to
incur any expense or liability (which is not otherwise paid in full by Borrower prior to or
at the time that such expense or liability is incurred) or (ii) have any adverse effect on
the Administrative Agent, such Lender, or the Issuing Bank.



46









 






A certificate as to the amount
of such payment or liability, in detail sufficient to allow the Borrower to verify the
computation thereof, delivered to Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall
be conclusive absent manifest error. If the Administrative Agent, any Lender, or the
Issuing Bank receives a written notice of Tax assessment from any Governmental Authority
regarding any Tax in respect of which indemnification may be required pursuant to this
Section 2.15(c), the Administrative Agent, such Lender, or the Issuing Bank, as the
case may be, shall notify Borrower within 120 days following the receipt of such notice
that such notice has been received; provided, however, that the failure of the
Administrative Agent, such Lender, or the Issuing Bank to provide such notice shall not
relieve Borrower of its obligation to make any indemnification payment under this
Agreement.




     (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by
Borrower to a Governmental Authority, Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.




     (e) On or before the Closing Date in the case of the Administrative Agent, any Lender
or the Issuing Bank, or on or before the acceptance of any appointment as the
Administrative Agent in the case of a successor Agent, or on or before the effective date
of an Assignment and Acceptance pursuant to which it became a Lender in the case of an
assignee, or on or prior to the date that any Lender becomes an Issuing Bank pursuant to
Section 2.17(i), and if otherwise reasonably requested from time to time by
Borrower or the Administrative Agent, within 30 days of such request, the Administrative
Agent, each Lender or the Issuing Bank which is not a U.S. Person within the meaning of
Section 7701(a)(30) of the Tax Code shall provide to each of the Administrative Agent and
Borrower two duly completed and signed copies of Internal Revenue Service Forms W-8BEN, or
W-8ECI or successor form(s), as the case may be, certifying as to such Administrative
Agent’s, Lender’s or Issuing Bank’s (if applicable) status for purposes of determining
exemption from United States withholding taxes with respect to all payments to be made to
the Administrative Agent, each Lender or the Issuing Bank under this Agreement. Until
Borrower and the Administrative Agent have received such forms and indicating that payments
under this Agreement are subject to an exemption from or reduction of United States
withholding tax, Borrower or the Administrative Agent (if not withheld by Borrower) shall
withhold taxes from such payments at the applicable statutory rate, without any obligation
to “gross-up” or make the Administrative Agent, such Lender or Issuing Bank whole under
clause (a) of this Section. In the case of an Administrative Agent, Lender, or
Issuing Bank that is subject to a reduction of, rather than exemption from, United States
withholding tax, the obligation of Borrower to
“gross-up” under clause (a) of this Section shall not apply in respect of the
amount of United States withholding tax that the Administrative Agent, such Lender, or the
Issuing Bank is subject to at the time they become a party to this Agreement (provided,
however, that in the case of an assignee that becomes a Lender pursuant to Section
11.04, the obligation of Borrower to “gross-up” under clause (a) of this
Section, or indemnify for Indemnified Taxes under clause (c) of this Section, shall
apply in respect of the amount of United States withholding tax that is applicable to
payments made on or after the date upon which the assignee first becomes a Lender to the
same extent that Borrower would have been obligated to “gross-up” under clause (a)
of this Section, or indemnify for



47









 






Indemnified Taxes under clause (c) of this
Section, had the Administrative Agent, relevant Lender, or the Issuing Bank, as the case
may be, not made such assignment to such assignee).




     (f) If (i) the Administrative Agent, any Lender, or the Issuing Bank receives a cash
refund in respect of an overpayment of Indemnified Taxes or Other Taxes from a Governmental
Authority with respect to, and actually resulting from, an amount of Indemnified Taxes or
Other Taxes actually paid to or on behalf of the Administrative Agent, such Lender, or
Issuing Bank by Borrower (a “Tax Refund”) and (ii) the Administrative Agent, such Lender,
or the Issuing Bank, as the case may be, determines in its reasonable opinion that such Tax
Refund has been correctly paid by such Governmental Authority and will not be required to
be repaid to such Governmental Authority, then the Administrative Agent, such Lender, or
the Issuing Bank, as the case may be, shall use its reasonable efforts to notify Borrower
of such Tax Refund and to forward the proceeds of such Tax Refund (or relevant portion
thereof) to Borrower as reduced by any expense or liability incurred by the Administrative
Agent, such Lender, or the Issuing Bank, as the case may be, in connection with obtaining
such Tax Refund.



     SECTION 2.16. Mitigation Obligations; Replacement of Lenders.




     (a) Mitigation of Obligations. If any Lender requests compensation under Section 2.12, or if Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, then such Lender shall use
reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12
or 2.15, as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.




     (b) Replacement of Lenders. If any Lender requests compensation under Section 2.12, or if Borrower is
required to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, or if any Lender defaults in its
obligation to fund Loans hereunder, then Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 11.04), all of its interests, rights and obligations
under this Agreement to an assignee selected by Borrower that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that,
(i) Borrower shall have received the prior written consent of the Administrative Agent
(and, if a Revolving Commitment is being assigned, the Issuing Bank), which consent shall
not unreasonably be withheld; (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from
the assignee (to the extent of such outstanding principal and accrued interest and fees) or
Borrower (in the case of all other amounts); and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required to
be made pursuant to Section 2.15, such assignment will result in a material
reduction in such compensation or payments. A



48









 






Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling Borrower to require such assignment and delegation
cease to apply.



     SECTION 2.17. Letters of Credit.




     (a) General. Subject to the terms and conditions set forth herein, Borrower
may request the issuance of Letters of Credit for its own account or the account of any
other Loan Party or Subsidiary thereof in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time during the
Revolving Availability Period (provided that, Borrower shall be a co-applicant with respect
to each Letter of Credit issued for the account of or in favor of another Loan Party or
Subsidiary). In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter-of-credit application or other
agreement submitted by Borrower to, or entered into by Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement shall control.




     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (at least three Business Days in
advance of the requested date of issuance, amendment, renewal or extension, or such shorter
period as is acceptable to such respective Issuing Bank) a duly completed Letter of Credit
Request, together with such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by the Issuing Bank, Borrower also
shall submit a letter-of-credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of
each Letter of Credit, Borrower shall be deemed to represent and warrant that) after giving
effect to such issuance, amendment, renewal or extension, (i) the LC Exposure shall not
exceed $25.0 million, (ii) the total Revolving Exposures shall not exceed the total
Revolving Commitments, (iii) the stated amount of each Letter of Credit shall be no less
than $500,000, or such lesser amount as is acceptable to the Issuing Bank, and (iv) each
Letter of Credit shall be denominated in dollars.




     (c) Expiration Date. Each Letter of Credit shall expire no later than the
close of business on the earlier of (i) in the case of a Standby Letter of Credit, (x) the
date one year after the date of the issuance of such Standby Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or extension) and (y)
the date that is 15 Business Days prior to the Revolving Maturity Date and (ii) in the case
of a Commercial Letter of Credit, (x) the date that is 180 days after the date of issuance
of such Commercial Letter of Credit (or, in the case of any renewal or extension thereof,
one year after such renewal or extension) and (y) the date that is 15 Business Days prior
to the Revolving Maturity Date.




     (d) Participations. By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action on the
part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving
Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a



49









 






participation in
such Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender’s Pro Rata
Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by Borrower
on the date due as provided in Section 2.17(e), or of any reimbursement payment
required to be refunded to Borrower for any reason. Each Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this Section 2.17(d) in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or Event of Default or reduction or
termination of the Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.




     (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to
the Issuing Bank an amount equal to such LC Disbursement not later than 2:00 p.m., New York
City time, on the date that such LC Disbursement is made, if Borrower shall have received
notice of such LC Disbursement prior to 11:00 a.m., New York City time on such date, or, if
such notice has not been received by Borrower prior to such time on such date, then not
later than 2:00 p.m., New York City time, on (i) the Business Day that Borrower receives
such notice, if such notice is received prior to 11:00 a.m., New York City time, on the day
of receipt, or (ii) the Business Day immediately following the day that Borrower receives
such notice, if such notice is not received prior to such time on the day of receipt;
provided that, Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an ABR
Revolving Borrowing in an equivalent amount and, to the extent so financed, Borrower’s
obligation to make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing. If Borrower fails to make such payment when due, the Issuing Bank
shall notify the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from Borrower in
respect thereof and such Lender’s Pro Rata Percentage thereof. Promptly following receipt
of such notice, each Revolving Lender shall pay to the Administrative Agent its Pro Rata
Percentage of the unreimbursed LC Disbursement in the same manner as provided in
Section 2.02(f), with respect to Loans made by such Lender, and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by
the Administrative Agent of any payment from Borrower pursuant to this Section
2.17(e), the Administrative Agent shall, to the extent that Revolving Lenders have made
payments pursuant to this Section 2.17(e) to reimburse the Issuing Bank, distribute
such payment to such Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this Section 2.17(e) to reimburse
the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans as
contemplated above) shall not constitute a Loan and shall not relieve Borrower of its
obligation to reimburse such LC Disbursement.




     (f) Obligations Absolute. The obligation of Borrower to reimburse LC
Disbursements as provided in Section 2.17(e) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or



50









 






provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in
any respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of such
Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this Section
2.17(f), constitute a legal or equitable discharge of, or provide a right of set-off
against, the obligations of Borrower hereunder. Neither the Administrative Agent, the
Lenders nor the Issuing Bank, nor any of their Affiliates, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other communication under
or relating to any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that, the foregoing shall not be
construed to excuse the Issuing Bank from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are hereby waived
by Borrower to the extent permitted by applicable law) suffered by Borrower that are caused
by the Issuing Bank’s failure to exercise care when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful misconduct on
the part of the Issuing Bank (as finally determined by a court of competent jurisdiction),
the Issuing Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary, or refuse
to accept and make payment upon such documents if such documents are not in strict
compliance with the terms of such Letter of Credit.




     (g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for payment under a
Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and
Borrower by telephone (confirmed by telecopy) of such demand for payment
and whether the Issuing Bank has made or will make an LC Disbursement thereunder;
provided that, any failure to give or delay in giving such notice shall not relieve
Borrower of its obligation to reimburse the Issuing Bank and the Revolving Lenders with
respect to any such LC Disbursement (other than with respect to the timing of such
reimbursement obligation set forth in Section 2.17(e)).




     (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless Borrower shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving
Loans; provided that, if Borrower fails to reimburse such LC Disbursement when due pursuant
to Section 2.17(e), then Section 2.06(c) shall apply. Interest accrued
pursuant to this Section 2.17(h) shall be for the account of the Issuing



51









 






Bank, except that interest accrued on and after the date of payment by any Revolving Lender
pursuant to Section 2.17(e) to reimburse the Issuing Bank shall be for the account
of such Lender to the extent of such payment.




     (i) Resignation or Removal of the Issuing Bank; Additional Issuing Banks. The
Issuing Bank may resign as Issuing Bank or be replaced at any time by written agreement
among Borrower, the Administrative Agent, the replaced Issuing Bank and the successor
Issuing Bank. Borrower may, at any time and from time to time with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and such Lender, by
written agreement designate one or more additional Lenders to act as an issuing bank under
the terms of this Agreement. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Bank or any such additional Issuing Bank. At the time any such
replacement shall become effective, Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank pursuant to Section 2.05(c). From and after
the effective date of any such replacement or addition, as applicable, (i) the successor or
additional Issuing Bank shall have all the rights and obligations of the Issuing Bank under
this Agreement with respect to Letters of Credit to be issued thereafter by such Lender,
and (ii) references herein and in the other Loan Documents to the term “Issuing Bank” shall
be deemed to refer to such successor or such addition to any previous Issuing Bank, or to
such successor or such addition and all previous Issuing Banks, as the context shall
require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of Credit. If at
any time there is more than one Issuing Bank hereunder, Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Letter of Credit.




     (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving
Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding
the deposit of cash collateral pursuant to this Section 2.17(j), Borrower shall
deposit in the LC Sub-Account, in the name of the Collateral Agent and for the benefit of
the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that, the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the
occurrence of any Event of Default with respect to Borrower described in paragraph
(g) or (h) of Article VIII. Each such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the obligations of
Borrower under this Agreement. The Collateral Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Collateral Agent and at the risk and expense of Borrower,
such deposits shall not bear interest. Interest or profits, if any, on such investments
shall accumulate in such account. Moneys in such account shall be invested in Cash
Equivalents and applied by the Collateral Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of Revolving




52









 






Lenders with LC Exposure representing greater than 50% of the
total LC Exposure), be applied to satisfy other Obligations of Borrower under this
Agreement. If Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount plus any accrued interest or
realized profits or such amounts (to the extent not applied as aforesaid) shall be returned
to Borrower within three Business Days after all Events of Default have been cured or
waived.



     SECTION 2.18. Facility Increase. Borrower may by written notice to the Administrative Agent elect to request on one or more
occasions (i) the establishment of one or more additional term loan commitments (each, an
“Additional Term Loan Commitment”; and the term loans made pursuant to such Additional Term Loan
Commitments are referred to herein as “Additional Term Loans”) and/or (ii) an increase in the
aggregate Revolving Commitments, so long as after giving affect to any such request the aggregate
amount of Additional Term Loan Commitments and increases in the aggregate Revolving Commitments
does not exceed $200.0 million. Each such notice shall specify (a) the date (each, an “Increased
Amount Date”) on which Borrower proposes that the Additional Term Loan Commitments and/or increase
in Revolving Commitments, as the case may be, shall be effective, which shall be a date not less
than 10 Business Days nor more than 90 days after the date on which such notice is delivered to the
Administrative Agent or such earlier date as may reasonably be acceptable to the Administrative
Agent and (b) the amount of the Additional Term Loan Commitments being requested (which shall be in
minimum increments of $5.0 million and a minimum amount of $25.0 million, or the amount equal to
the then remaining Additional Term Loan Commitment. Each Revolving Lender shall, by notice to the
Borrower and the Administrative Agent given not more than 10 days after the date of the Borrower’s
notice, either agree to increase its Revolving Commitments by all or a portion of such Revolving
Lender’s pro rata portion of the offered amount or decline to increase its Revolving Commitment
(and any Revolving Lender that does not deliver such a notice within such period of 10 days shall
be deemed to have so declined). Each Term Lender shall, by notice to the Borrower and the
Administrative Agent given not more than 10 days after the date of the Borrower’s notice, either
agree to make such Additional Term Loan Commitment by all or a portion of such Term Lender’s pro
rata portion of the offered amount or decline to make such Additional Term Loan Commitment (and any
Term Lender that does not deliver such a notice within such period of 10 days shall be deemed to
have so declined). In the event that, on the 10th day after the Borrower shall have delivered a
notice pursuant to this Section 2.18, the amount of the Additional Term Loan Commitments
agreed to are less than the Additional Term Loan Commitments requested by the Borrower, the
Borrower may arrange for one or more banks or other entities to extend
Additional Term Loan Commitments in an aggregate amount equal to the unsubscribed amount;
provided, however, that each Additional Lender, if not already a Lender hereunder, shall be
subject to the prior approval of the Administrative Agent (and, in the case of an increase in the
Revolving Commitments, the Issuing Bank), which consent shall not be unreasonably withheld or
delayed (each, an “Additional Lender”); provided that any Lender approached to provide all or a
portion of the Additional Term Loan Commitments or increase in Revolving Commitments, as the case
may be, may elect or decline, in its sole discretion, to provide an Additional Term Loan Commitment
or increase its Revolving Commitment. Any such Additional Term Loan Commitments and increase in
the aggregate Revolving Commitments shall become effective, as of such Increased Amount Date;
provided that (1) no Default or Event of Default shall exist on the Increased Amount Date before or
immediately after giving effect to such Additional Term Loan Commitments or increase in Revolving
Commitments, as the case may be; (2) Borrower shall be in pro forma compliance with each of the
covenants set forth in Section 6.07 as of the last day of the most recently ended fiscal
quarter for which financial statements are available to Borrower after giving effect to such
Additional Term Loan Commitments or increase in Revolving Commitments, as the case may be;



53









 




and (3) the Additional Term Loan Commitments or increase in Revolving Commitments, as the case may be,
shall be effected pursuant to one or more joinder agreements (in form and substance reasonable
acceptable) executed and delivered by Borrower, Administrative Agent and the corresponding Lenders,
and each of which shall be recorded in the Register. Any Additional Term Loans made on an
Increased Amount Date shall, for all purposes, constitute “Term Loans” hereunder. On any Increased
Amount Date on which any Additional Term Loan Commitments are effective, subject to the
satisfaction of the foregoing terms and conditions, (i) each Additional Lender with an Additional
Term Loan Commitment shall make an Additional Term Loan to Borrower in an amount equal to its
Additional Term Loan Commitment, and (ii) each Additional Lender with an Additional Term Loan
Commitment shall become a Lender hereunder with respect to the Additional Term Loan Commitment and
the Additional Term Loans made pursuant thereto. Administrative Agent shall notify Lenders
promptly upon receipt of Borrower’s notice of each Increased Amount Date of the Additional Term
Loan Commitments or the increase in Revolving Commitments and the Additional Lenders, if any.




     The terms and provisions of the Additional Term Loans and Additional Term Loan Commitments
shall be identical to the initial Term Loans made hereunder. The Additional Term Loans will
constitute Obligations hereunder for all purposes of this Agreement and the Security Documents and
will be secured by the Collateral securing the other Obligations. The parties hereto acknowledge
and agree that the Administrative Agent may hereunder or pursuant to any Joinder Agreement may,
without the consent of any other Lenders, effect such amendments to this Agreement and the other
Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to
effect the provisions of this Section 2.18, including, without limitation, conforming
amendments (which may be in the form of an amendment and restatement) to provide for the Additional
Term Loans to share ratably in the benefits of this Agreement and the other Loan Documents with the
Term Loans and Revolving Loans; provided that such amendments may not alter the obligations of the
Loan Parties under the Loan Documents except as provided in this Section.



ARTICLE III




Representations and Warranties




     Each of the Loan Parties, as applicable, represents and warrants to the Administrative Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders that:



     SECTION 3.01. Organization; Powers. Each Company (a) is duly organized and validly existing under the laws of the jurisdiction
of its organization, (b) has all requisite power and authority to carry on its business as now
conducted, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, and (c) is qualified and in good
standing (to the extent such concept is applicable in the applicable jurisdiction) to do business
in every jurisdiction where such qualification is required, except in such jurisdictions where the
failure to so qualify, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.



     SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into by each Loan Party are within such Loan Party’s powers
and have been duly authorized by all necessary action. This Agreement has been duly executed and
delivered by each Loan Party and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid
and binding obligation




54










 







of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.




     SECTION 3.03. Governmental Approvals; No Conflicts. Except as set forth on Schedule
3.03, the Transactions (a) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except (i) such as have been obtained or
made and are in full force and effect, (ii) filings necessary to perfect Liens created under the
Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of
which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect;
(b) will not violate (i) any applicable law or regulation except for violations that could not
reasonably be expected to result in a Material Adverse Effect, or (ii) the charter, bylaws or other
organizational documents of any Company (other than any Immaterial Subsidiary) or any order of any
Governmental Authority; (c) will not violate, result in a default or require any consent or
approval under any indenture, agreement or other instrument binding upon any Company or its assets,
or give rise to a right thereunder to require any payment to be made by any Company, except for
violations, defaults or the creation of such rights that could not reasonably be expected to result
in a Material Adverse Effect; and (d) will not result in the creation or imposition of any Lien on
any asset of any Company, except Liens created under the Loan Documents and Permitted Liens.



     SECTION 3.04. Financial Statements. All financial statements delivered to the Lenders by
Borrower have been prepared in accordance with GAAP applied on a consistent basis throughout the
periods presented (except as disclosed therein, and in the case of interim financial statements for the absence of
footnotes and year-end adjustments). The unaudited pro forma financial statements and the notes
thereto delivered to the Lenders by Borrower have been prepared on a basis consistent with the
historical financial statements of Holdings and its Subsidiaries and give effect to assumptions
used in the preparation thereof on a reasonable basis and in good faith and present fairly in all
material respects the historical transactions and the proposed Transactions.



     SECTION 3.05. Properties.




     (a) Each Loan Party has good title to, or valid leasehold interests in or other valid
rights to use, all of such Company’s Real Property, and all of such Loan Party’s personal
property material to its business. Title to all such property held by such Loan Party is
free and clear of all Liens except for Permitted Liens. The property of the Companies,
taken as a whole, (i) is in good operating order, condition and repair (ordinary wear and
tear excepted) (except to the extent such condition could not reasonably be expected to
result in a Material Adverse Effect) and (ii) constitutes all the properties that are
required for the business and operations of the Companies as currently conducted.




     (b) Each Company owns, or is licensed to use, all Intellectual Property used in the
conduct of its business as currently conducted, except for those the failure to own or
license that, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. No claim has been asserted and is pending by any person
challenging or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Company know of any valid
basis for any such claim. The use of such Intellectual Property by each Company does



55









 







not infringe the rights of any person, except for such claims and infringements that,
individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.




     (c) No Company has received any notice of, nor has any knowledge of, the occurrence or
pendency or contemplation of any Casualty Event, zoning change, variance or special zoning
exception affecting or that would affect all or any portion of the property that would
reasonably be expected to have a Material Adverse Effect.



     SECTION 3.06. Equity Interests and Subsidiaries; Consent.




     (a) Schedule 3.06(a) sets forth a list of (i) all Subsidiaries of Holdings and
their jurisdiction of organization as of the Closing Date; (ii) the number of shares of
each class of its Equity Interests authorized, and the number outstanding, on the Closing
Date and the number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the Closing Date of each such Subsidiary; and
(iii) a designation as to whether such Subsidiary constitutes a Non-Guarantor Subsidiary.
Schedule 3.06(a) designates the only Subsidiaries of Borrower that constitute
Non-Guarantor Subsidiaries on the Closing Date. Such schedule may be amended from time to
time without the prior written consent of the Administrative Agent so long as the Loan
Parties and their Subsidiaries comply with all related obligations under this Agreement
(including obligations described in Section 5.11 hereof). All Equity Interests of
each direct and indirect Subsidiary of Holdings are duly and validly issued, are fully paid
and non-assessable. Each Loan Party is the record and beneficial owner of, and has good
and marketable title to, the Equity Interests pledged by it under the applicable Security
Agreement, free of any and all Liens, rights or claims of other persons, except for
the security interest created by the Security Agreements.




     (b) No consent of any person including any other general or limited partner, any other
member of a limited liability company, any other shareholder or any trust beneficiary is
necessary or desirable in connection with the creation, perfection or first priority status
of the security interest of the Collateral Agent in any Equity Interests, pledged to the
Collateral Agent for the benefit of the Secured Parties under any Security Agreement or the
exercise by the Collateral Agent of the voting or other rights provided for in any Security
Agreement or the exercise of remedies in respect thereof.



     SECTION 3.07. Litigation; Compliance with Laws.




     (a) Except as set forth on Schedule 3.07, there are no investigations,
actions, suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to the knowledge of any Company, threatened against or affecting any
Company or any business, property or rights of any such person (i) that involve any Loan
Document or the Transactions or (ii) as to which there is a reasonable possibility of an
adverse determination and that could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.




     (b) Except for matters covered by Section 3.17, no Company or any of its
property is in violation of, nor will the continued operation of their property as
currently conducted violate, any Requirements of Law (including any zoning or building
ordinance, code or approval or any building permits) or any restrictions of record or
agreements affecting the Real Property or is in default with respect to any judgment, writ,



56









 







injunction, decree or order of any Governmental Authority, in each case where such
violation or default could reasonably be expected to result in a Material Adverse Effect.



     SECTION 3.08. Agreements.




     (a) No Company is a party to any agreement or instrument or subject to any corporate
or other constitutional restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.




     (b) No Company is in default in any manner under any provision of any indenture or
other agreement or instrument evidencing Indebtedness, or any other agreement or instrument
to which it is a party or by which it or any of its property are or may be bound, where
such default could reasonably be expected to result in a Material Adverse Effect.




     (c) Schedule 3.08 accurately and completely lists all Material Agreements
(other than Leases of Real Property) to which any Loan Party is a party that were in effect
on the Closing Date and Borrower has delivered to the Administrative Agent complete and
correct copies of all such Material Agreements, including any amendments, supplements or
modifications with respect thereto in effect as of the Closing Date.



     SECTION 3.09. Federal Reserve Regulations.




     (a) No Company is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.




     (b) No part of the proceeds of any Loan or any Letter of Credit will be used in any
manner, whether directly or indirectly, for any purpose that violates, or that is
inconsistent with, the provisions of the regulations of the Board, including Regulation T,
U or X. The pledge of the Securities Collateral (as defined in the Security Agreement)
pursuant to the Security Agreements does not violate such regulations.



     SECTION 3.10. Investment Company Act. No Company is an “investment company” or a company
“controlled” by an “investment company,” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.



     SECTION 3.11. Use of Proceeds. Borrower will use the proceeds of the Loans (a) to finance a
portion of the Transactions, (b) to pay fees and expenses related thereto and (c) for general
corporate purposes of Holdings and its Subsidiaries.



     SECTION 3.12. Taxes. Each Company has (a) filed or caused to be filed all federal Tax Returns
and all material state, local and foreign Tax Returns or materials required to have been filed by
it and (b) duly paid or caused to be duly paid all Taxes (whether or not shown on any Tax Return)
due and payable by it and all assessments received by it, except Taxes that are being contested in
good faith by appropriate proceedings and for which such Company shall have set aside on its books
adequate reserves in accordance with GAAP.



     SECTION 3.13. No Material Misstatements. No written information, report, financial statement,
exhibit or schedule furnished by or on behalf of any Company to any Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or delivered pursuant
thereto, taken together with all related information so furnished, contained,



57









 







contains or will contain (when delivered) any material misstatement of fact or omitted, omits or will omit (when
delivered) to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading as of the date such
information is dated or certified; provided that, to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a forecast, projection or
pro forma adjustment, each Company represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information, report, financial
statement, exhibit or schedule (it being understood that, with respect to projected financial
information, actual results may vary significantly from such projected results).



     SECTION 3.14. Labor Matters. As of the Closing Date, there are no strikes, lockouts or
slowdowns against any Company pending or, to the knowledge of any Company, threatened which could
reasonably be expected to result in a Material Adverse Effect. The hours worked by and payments
made to employees of any Company have not been in violation of the Fair Labor Standards Act or any
other applicable federal, state, local or foreign law dealing with such matters in any manner that
could reasonably be expected to result in a Material Adverse Effect. All payments due from any
Company, or for which any claim may be made against any Company, on account of wages and
employee health and welfare insurance and other benefits, have been paid or accrued as a liability
on the books of such Company except where the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. The consummation of the Transactions will not give rise to
any right of termination or right of renegotiation on the part of any union under any collective
bargaining agreement to which any Company is bound.



     SECTION 3.15. Solvency. Immediately after the consummation of the Transactions to occur on
the Closing Date and immediately following the making of each Loan and after giving effect to the
application of the proceeds of each Loan, (a) the fair value of the assets of the Loan Parties,
taken as a whole, will exceed their debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of the Loan Parties, taken as a whole, will be
greater than the amount that will be required to pay the probable liability of their collective
debts and other liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Loan Parties, taken as a whole, will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Loan Parties, taken as a whole, will not have
unreasonably small capital with which to conduct the business in which they are engaged as such
business is now conducted and is proposed to be conducted following the Closing Date.



     SECTION 3.16. Employee Benefit Plans.




     (a) Each Company and its ERISA Affiliates are in compliance in all material respects
with the applicable provisions of ERISA and the Tax Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events, could reasonably be expected to
result in a Material Adverse Effect. No liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Plan or any trust established under Title IV
of ERISA has been or is expected to be incurred by any Company or any ERISA Affiliate. No
Company or any of its ERISA Affiliates sponsor, contribute, participate in or have any
liability under a plan established under Title IV of ERISA or a Multiemployer Plan.



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     (b) Each Foreign Plan has been maintained in substantial compliance with its terms and
with the requirements of any and all applicable laws, statutes, rules, regulations and
orders and has been maintained, where required, in good standing with applicable regulatory
authorities, except when such failure to comply is not reasonably expected to result in a
Material Adverse Effect. No Company has incurred any material obligation in connection
with the termination of or withdrawal from any Foreign Plan that is reasonably expected to
result in a Material Adverse Effect. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Plan that is funded, determined as of the end of
the most recently ended fiscal year of the respective Company on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of the assets of
such Foreign Plan by an amount that is reasonably expected to result in a Material Adverse
Effect.



     SECTION 3.17. Environmental Matters.




     (a) The Real Property of the Companies does not contain, and has not previously
contained, therein, thereon or thereunder, including the soil and groundwater thereunder,
any Hazardous Materials in amounts or concentrations that (i) constitute or constituted a
violation of, (ii) require a Response under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Response and liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;




     (b) All operations of the Companies are in compliance, and, to the knowledge of the
Companies, the Real Property is, and in the last three years such operations and the Real
Property have been in compliance, with all Environmental Laws and all necessary permits
have been obtained and are in effect, except to the extent that such non-compliance or
failure to obtain any necessary permits, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect;




     (c) There have been no Releases or threatened Releases by any Company or, to their
knowledge, by any other party, at, from, under or proximate to the Real Property or
otherwise in connection with the operations of any Company, which Releases or threatened
Releases, in the aggregate, could reasonably be expected to result in a Material Adverse
Effect;




     (d) None of the Companies has received any notice of an Environmental Claim in
connection with the Real Property or operations of any Company or with regard to any person
whose liabilities for environmental matters any of the Companies has retained or assumed,
in whole or in part, contractually, by operation of law or otherwise, that, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;




     (e) Hazardous Materials have not been transported from Real Property of the Companies
by or on behalf of any of the Companies, nor have Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of such Real Property in a manner that
could give rise to liability under, or in violation of, any Environmental Law, nor has any
Company retained or assumed any liability, contractually, by operation of law or otherwise,
with respect to the generation, treatment, storage, transport or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or retained or
assumed liabilities, in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;



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     (f) No Lien has been recorded, or to the knowledge of any Company threatened, under
any Environmental Law with respect to any owned Real Property or relating to any operations
or assets of any Company;




     (g) No Real Property of the Companies is (i) listed or proposed for listing on the
National Priorities List under CERCLA or (ii) to the knowledge of the Companies, listed on
the Comprehensive Environmental Response, Compensation and Liability Information System
promulgated pursuant to CERCLA, or (iii) to the knowledge of the Companies, included on any
similar list maintained by any Governmental Authority (except in the case of clauses
(ii) and (iii), for listings relating to events or conditions that could not
reasonably be expected to have a Material Adverse Effect); and




     (h) No Company is currently conducting any Response pursuant to any Environmental Law
with respect to any Real Property or any other location except such waste management
activities, air emission or water discharges which are conducted in compliance with
Environmental Laws in the normal course of the Companies’ operations or any other Response
that could not reasonably be expected to result in a Material Adverse Effect.



     SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all insurance maintained by each Loan Party as of the Closing Date. As of such
date, such insurance is in full force and effect and all premiums have been duly paid. Each
Company has insurance in such amounts and covering such risks and liabilities as are in accordance
with normal industry practice.



     SECTION 3.19. Security Documents.




     (a) The Security Agreements are effective to create in favor of the Collateral Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable security interest in
and Lien on the Security Agreement Collateral and, when (i) financing statements and other
filings in appropriate form are filed in the appropriate governmental offices and (ii) the
Loan Parties have complied with Article III of the U.S. Security Agreement, the security
interest granted under the U.S. Security Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors thereunder in
such Collateral (other than (A) the Intellectual Property and (B) such Collateral in which
a security interest cannot be perfected under the Uniform Commercial Code as in effect at
the relevant time in the relevant jurisdiction for filing), in each case subject to no
Liens other than Permitted Liens.




     (b) When the appropriate financing statements are filed in the appropriate filing
offices and the U.S. Security Agreement is filed in the United States Patent and Trademark
Office and the United States Copyright Office, the security interests granted under the
U.S. Security Agreement shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the grantors thereunder in the Intellectual Property
(as defined in the U.S. Security Agreement), in each case subject to no Liens other than
Permitted Liens (it being understood that subsequent recordings in the United States Patent
and Trademark Office and the United States Copyright Office may be necessary to perfect a
Lien on registered trademarks, trademark applications and copyrights acquired by the
grantors after the Closing Date).



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     (c) Each Security Document delivered pursuant to Section 5.11 will, upon
execution and delivery thereof, be effective to create in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all
of the Loan Parties’ right, title and interest in and to the Collateral described therein,
and when such Security Document is filed or recorded in the appropriate offices as may be
required under applicable law, such Security Document will constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan Parties in
such Security Agreement Collateral, in each case subject to no Liens other than the
applicable Permitted Liens.



     SECTION 3.20. Material Adverse Changes. Since December 31, 2005, there has been no change that could reasonably be expected to
result in a Material Adverse Effect.



ARTICLE IV




Conditions of Lending




     The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of
Credit hereunder are subject to the satisfaction of the following conditions:



     SECTION 4.01. All Credit Extensions. On the date of each Borrowing (including the date that
the Term Loans hereunder are made), and on the date of each issuance, amendment, extension or
renewal of a Letter of Credit (each such event being called a “Credit Extension”):




     (a) The Administrative Agent shall have received a notice of such Borrowing as
required by Section 2.03 (or such notice shall have been deemed given in accordance
with Section 2.03) or, in the case of the issuance, amendment, extension or renewal
of a Letter of Credit, the Issuing Bank and the Administrative Agent shall have received a
notice requesting the issuance, amendment, extension or renewal of such Letter of Credit as
required by Section 2.17(b).




     (b) No Default or Event of Default shall have occurred and be continuing and no
Default or Event of Default will result from such Borrowing.




     (c) Each of the representations and warranties set forth in Article III hereof
or in any other Loan Document shall be true and correct in all material respects (except
that any representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects) on and as of the date of such
Credit Extension with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date (in which
case shall have been true and correct in all material respects (except that those that are
qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all
respects) on and as of such earlier date).


Each Credit Extension shall be deemed to constitute a representation and warranty by Borrower and
each other Loan Party on the date of such Credit Extension as to the matters specified in
paragraphs (b) and (c) above.




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     SECTION 4.02. Initial Credit Extension. The effectiveness of this Agreement is subject to the
fulfillment, to the satisfaction of the Administrative Agent, of each of the following conditions:




     (a) Loan Documents. All legal matters incident to this Agreement, the
Borrowings and extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders, to the Issuing Bank and to the Administrative Agent and the
Administrative Agent shall have received a duly executed counterpart of each of the Loan
Documents, including, without limitation, this Agreement, each Security Agreement and
the Perfection Certificate.




     (b) Corporate Documents. The Administrative Agent shall have received:




     (i) a certificate of the Secretary or Assistant Secretary of each
Loan Party dated the Closing Date and certifying (A) that attached thereto
is a true and complete copy of the certificate or articles of
incorporation or other constitutive documents, including all amendments
thereto certified as of a recent date by the Secretary of State (or like
official) of the jurisdiction of its organization (if such document is of
a type that may be so certified), (B) that attached thereto is a true and
complete copy of the bylaws or other organizational documents of each Loan
Party as in effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (C) below, (C)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors or other governing body of such person
authorizing the execution, delivery and performance of the Loan Documents
to which such person is a party and, in the case of Borrower, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect and (D) as to the
incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf
of such person (together with a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate in this clause (i));




     (ii) certificates as to the good standing of each Loan Party as of a
recent date, from the Secretary of State (or like official) of the
jurisdiction of its organization, to the extent such certificates or their
equivalent are issued by such jurisdiction; and




     (iii) such other documents as the Administrative Agent, the Issuing
Bank or the Lenders may reasonably request.




     (c) Officer’s Certificate. The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer of Borrower,
confirming compliance with the conditions precedent set forth in Section 4.01 and
stating that each of Holdings and its Subsidiaries is compliance with all applicable
Requirements of Law, including all applicable environmental laws and regulations, except to
the extent such noncompliance could not reasonably be expected to have a Material Adverse
Effect.




     (d) Redemption of the Holdings Senior Notes and Other Transactions, Etc.



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     (i) The Lenders shall be reasonably satisfied with the form and
substance of the Transaction Documents; the Transactions scheduled to
occur on the Closing Date shall have been consummated or shall be
consummated simultaneously on the Closing Date, in each case in all
material respects in accordance with the terms hereof and the terms of the
Transaction Documents (and without the waiver or amendment of
any such terms not approved by the Administrative Agent and the
Arrangers).




     (ii) The Administrative Agent shall have received copies of the
Holdings Senior Note Documents certified by a Responsible Officer of
Holdings as true, complete and current.




     (iii) The Refinancing shall have been consummated in full to the
satisfaction of the Lenders with all Liens in favor of the lenders to the
Existing Credit Agreement being unconditionally released; the
Administrative Agent shall have received a “pay-off” letter with respect
to all debt being refinanced in the Refinancing; the Administrative Agent
shall have received from any person holding any Lien securing any such
debt, such UCC (or other) termination statements, mortgage releases,
releases of assignments of leases and rents and other instruments, in each
case in proper form for recording, as the Administrative Agent shall have
reasonably requested to release and terminate of record the Liens securing
such debt.




     (iv) The Lenders shall be reasonably satisfied with the
capitalization, the terms and conditions of any equity arrangements, the
ownership, management, tax, corporate, legal or other organizational
structure of Borrower and each Guarantor.




     (v) Holdings shall have delivered or shall deliver substantially
contemporaneously with the closing hereunder to the indenture trustee
(with a copy to the Administrative Agent) under the Holdings Senior Note
Agreement a notice of redemption of all Holdings Senior Notes.




     (e) Indebtedness. After giving effect to the Transactions (other than the
Redemption) and the other transactions contemplated hereby, no Company shall have
outstanding any Indebtedness, Preferred Stock or minority interests other than (i) the
Loans and extensions of credit hereunder, (ii) the Holdings Senior Notes, (iii) the
Indebtedness described on Schedule 6.01 attached hereto and (iv) the minority
interests described on Schedule 3.06(a) attached hereto.




     (f) Financial Statements; Pro Forma Balance Sheet; Projections. The Lenders
shall have received, reviewed, and be reasonably satisfied with, (i) the unaudited
consolidated balance sheets and related statements of income, stockholders’ equity and cash
flows of Holdings and its Subsidiaries for each fiscal quarter of the fiscal year in which
the Closing Date occurs ended prior to 45 days prior to the Closing Date and for the
comparable periods of the preceding fiscal year; (ii) the pro forma consolidated balance
sheets and statements of income for Holdings and its Subsidiaries, as well as the pro forma
levels of EBITDA and other operating data, for the fiscal year ended December 31, 2005 and
each fiscal quarter of the fiscal year in which the Closing Date



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occurs ended prior to 45 days prior to the Closing Date and for the comparable periods of the preceding fiscal year,
after giving effect to the transactions contemplated hereby; and (iii) final forecasts of
the financial performance of Holdings and its Subsidiaries. The forecasts provided to the
Lenders and any cost savings shall be included in such financial statements prepared in
accordance with GAAP only to the extent permitted to be included
in pro forma financial statements set forth in a registration statement filed with the
Securities and Exchange Commission.




     (g) Opinions of Counsel. The Administrative Agent shall have received, on
behalf of itself, the other Agents, the Arrangers, the Lenders and the Issuing Bank, a
favorable written opinion of Gibson, Dunn & Crutcher LLP, special counsel for certain of
the Loan Parties, and of each other local counsel listed on Schedule 4.02(g), in
each case (A) in form reasonably acceptable to the Administrative Agent, (B) dated the
Closing Date, (C) addressed to the Agents, the Arrangers, the Issuing Bank, and the Lenders
and (D) covering such other matters relating to the Loan Documents and the Transactions as
the Administrative Agent shall reasonably request.




     (h) Requirements of Law. The Administrative Agent shall be satisfied that the
Transactions shall be in full compliance with all material Requirements of Law, including
Regulations T, U and X of the Board.




     (i) Financial Condition Certificate. The Administrative Agent shall have
received a certificate from the chief financial officer of Borrower, substantially in the
form of Exhibit L, dated the Closing Date and with appropriate attachments, demonstrating,
after giving effect to the Transaction, the solvency of the Loan Parties on a consolidated
basis.




     (j) Consents. The Administrative Agent shall be satisfied that all material
consents and approvals required from Governmental Authorities and third parties in
connection with the Transactions have been obtained and remain in effect, and there shall
be no governmental or judicial action (or any adverse development therein), actual or
threatened, that the Lenders shall reasonably determine has or could have, singly or in the
aggregate, a Material Adverse Effect or could materially and adversely affect the ability
of Holdings and its Subsidiaries to fully and timely perform their respective obligations
under the Transaction Documents, or the ability of the parties to consummate the financings
contemplated hereby or the other Transactions.




     (k) Litigation. Except as set forth on Schedule 3.07, there shall be
no litigation, public or private, or administrative proceedings, governmental investigation
or other legal or regulatory developments that, singly or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, or could materially and
adversely affect the ability of Holdings and its Subsidiaries to fully and timely perform
their respective obligations under the Transaction Documents, or the ability of the parties
to consummate the financings contemplated hereby or the other Transactions.




     (l) Sources and Uses. The sources and uses of the Loans shall be as set forth
in Section 3.11.




     (m) Fees and Expenses. The Arrangers, Lenders and Administrative Agent shall
have received all fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all reasonable out-of-



64









 







pocket expenses (including the reasonable legal fees and expenses of Skadden, Arps, Slate, Meagher
& Flom LLP, special counsel to the Administrative Agent and other foreign and local counsel
to the Administrative Agent) required to be reimbursed or paid by Borrower hereunder or
under any other Loan Document.




     (n) Personal Property Requirements. The Collateral Agent shall have received
from each Loan Party (except to the extent the Administrative Agent determines that any of
the following is not commercially feasible, taking into account the cost to procure and the
effectiveness and enforceability under local law):




     (i) all certificates, agreements or instruments representing or
evidencing the Pledged Equity Interests and the Pledged Intercompany Debt
(each as defined in the U.S. Security Agreement) accompanied by
instruments of transfer and stock powers endorsed in blank;




     (ii) all other certificates, agreements, including Control
Agreements, or instruments necessary to perfect security interests in all
Chattel Paper, all Instruments, all Deposit Accounts and all Investment
Property of each Loan Party (as each such term is defined in the U.S.
Security Agreement and to the extent required by the terms of the U.S.
Security Agreement);




     (iii) UCC financing statements in appropriate form for filing under
the UCC and such other documents under applicable Requirements of Law in
each jurisdiction as may be necessary or appropriate to perfect the Liens
created, or purported to be created, by the Security Documents;




     (iv) certified copies of Requests for Information (Form UCC-11), tax
lien, judgment lien, bankruptcy and pending lawsuit searches or equivalent
reports or lien search reports, each of a recent date listing all
effective financing statements, lien notices or comparable documents that
name (A) any domestic Loan Party as debtor and that are filed in those
state and county jurisdictions in which any of the property of such
domestic Loan Party is located and the state and county jurisdictions in
which such domestic Loan Party’s principal place of business is located,
and (B) any foreign Loan Party, to the extent obtainable from the District
of Columbia, none of which encumber the Collateral covered or intended to
be covered by the Security Documents (other than those relating to Liens
acceptable to the Collateral Agent);




     (v) delivery of such documents and instruments and instruments as the
Collateral Agent may request for filing with the United States Patent,
Trademark and Copyright Offices, and the execution and/or delivery of such
other security and other documents, and the taking of all actions as may
be necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect the Liens created, or purported to be created, by
the Security Agreements;




     (vi) any documents required to be submitted to the Collateral Agent
by the Loan Parties as may be necessary or desirable to perfect the



65









 







security interest of the Collateral Agent pursuant to each Foreign
Security Agreement; and




     (vii) evidence acceptable to the Collateral Agent of payment by the
Loan Parties of all applicable recording taxes, fees, charges, costs and
expenses required for the recording of the Security Documents.




     (o) Insurance. The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section 5.04
and the applicable provisions of the Security Documents, each of which shall be endorsed or
otherwise amended to include a “standard” or “New York” lender’s loss payable endorsement
and to name the Collateral Agent as additional insured, in form and substance satisfactory
to the Administrative Agent.




     (p) Subsidiary Guarantors. Each Subsidiary Guarantor listed on Schedule
1.01(e) that is a Foreign Subsidiary and is not a signatory to this Agreement
(including, without limitation, HIL Swiss) shall have executed and delivered a Guarantee in
form and substance satisfactory to the Administrative Agent.




     (q) Ratings. The Administrative Agent shall have received certified copies of
the Moody’s Rating and the S&P Rating.



ARTICLE V




Affirmative Covenants




     Each Loan Party covenants and agrees with each Lender that so long as this Agreement shall
remain in effect and until the Commitments have been terminated and the principal of and interest
on each Loan, all Fees and all other expenses or amounts payable under any Loan Document shall have
been paid in full and all Letters of Credit have been canceled or have expired and all amounts
drawn thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent
in writing, each Loan Party will, and will cause each of its Subsidiaries to:



     SECTION 5.01. Financial Statements, Reports, Etc. In the case of Borrower, furnish to the
Administrative Agent and each Lender:




     (a) Annual Reports. Contemporaneously with the date on which consolidated
financial statements for such year are required to be delivered to the Securities and
Exchange Commission under the Exchange Act, (i) the consolidated balance sheet of Holdings
as of the end of such fiscal year and related consolidated statements of income, cash flows
and stockholders’ equity for such fiscal year, and notes thereto (including a note with a
balance sheet and statements of income and cash flows separating out the Loan Parties
(other than Holdings) from the Non-Guarantor Subsidiaries), all prepared in accordance with
Regulation S-X under the Securities Act and in a manner acceptable to the Securities and
Exchange Commission and accompanied by an opinion of KPMG LLP or other independent public
accountants of recognized national standing satisfactory to the Administrative Agent (which
opinion shall not be qualified as to scope or contain any going concern or other
qualification), stating that such financial statements fairly present, in all material
respects, the consolidated financial condition, results of operations, cash



66









 







flows and changes in stockholders’ equity of the Consolidated Companies as of the end of and for such
fiscal year in accordance with GAAP; and (ii) a management’s discussion and analysis of the
financial condition and results of operations for such fiscal year, as compared to the
previous fiscal year;




     (b) Quarterly Reports. Contemporaneously with the date on which consolidated
financial statements for such year are required to be delivered to the Securities and
Exchange Commission under the Exchange Act, (i) the consolidated balance sheet of Holdings
as of the end of such fiscal quarter and related consolidated statements of income and cash
flows for such fiscal quarter and for the then elapsed portion of the fiscal year, in
comparative form with the consolidated statements of income and cash flows for the
comparable periods in the previous fiscal year, and notes thereto (including a note with a
balance sheet and statements of income and cash flows separating out the Loan Parties from
the Non-Guarantor Subsidiaries), all prepared in accordance with Regulation S-X under the
Securities Act and in a manner acceptable to the Securities and Exchange Commission and
accompanied by a certificate of a Financial Officer stating that such financial statements
fairly present, in all material respects, the consolidated financial condition, results of
operations and cash flows of the Consolidated Companies as of the date and for the periods
specified in accordance with GAAP and on a basis consistent with the audited financial
statements referred to in Section 5.01(a), subject to normal year-end audit
adjustments and the absence of footnotes; and (ii) a management’s discussion and analysis
of the financial condition and results of operations for such fiscal quarter and the then
elapsed portion of the fiscal year, as compared to the comparable periods in the previous
fiscal year;




     (c) Financial Officer’s Compliance Certificate. (i) Concurrently with any
delivery of financial statements under Sections 5.01(a) and (b), a
certificate of a Financial Officer certifying that no Default or Event of Default has
occurred or, if such a Default or Event of Default has occurred, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken with respect
thereto; (ii) concurrently with any delivery of financial statements under Sections
5.01(a) and (b), a certificate of a Financial Officer, substantially in the
form of Exhibit K attached hereto, setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the covenants
contained in Section 6.07 and, in the case of Section 5.01(a), setting
forth Borrower’s calculation of Excess Cash Flow (if applicable); and (iii) in the case of
Section 5.01(a) above, a report of the accounting firm opining on or certifying
such financial statements stating that in the course of its regular audit of the financial
statements of Holdings and its Subsidiaries, which audit was conducted in accordance with
GAAP, nothing came to their attention that caused them to believe that the any Loan Party
failed to comply with the terms, covenants, provisions or conditions of Article VI
of this Agreement, insofar as they relate to financial and accounting matters, or if any
Default or Event of Default has been noted, specifying the nature and extent thereof;




     (d) Public Reports. Promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed by any
Company with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national
securities exchange, as the case may be;



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     (e) Management Letters. Promptly after the receipt thereof by any Company, a
copy of any “management letter” received by any such person from its certified public
accountants and management’s responses thereto;




     (f) Budgets. At least once in any calendar year, and in any event within 30
days of the date the below referenced budget or strategic plan, as the case may be, is
approved by the Board of Directors of Holdings, (i) an annual budget of Holdings and its
Subsidiaries in form reasonably satisfactory to the Administrative Agent (including
budgeted statements of income by each of Borrower’s business units and sources and uses of
cash and balance sheets) prepared by Holdings for each fiscal month of the fiscal year
covered by such budget prepared in detail and (ii) a strategic plan prepared in summary
form; and, in the case of the annual budget, such budget shall be prepared in detail with
appropriate presentation and discussion of the principal assumptions upon which such budget
is based, accompanied by the statement of a Financial Officer of each of Holdings and
Borrower to the effect that the budget is a reasonable estimate for the period covered
thereby (it being understood that actual results may vary significantly from any such
projected or forecasted results);




     (g) Annual Meetings with Lenders. Within 120 days after the close of each
fiscal year of Borrower (commencing with fiscal year 2006), each of Holdings and Borrower
shall, at the request of the Administrative Agent or Required Lenders, hold a meeting (at a
mutually agreeable location and time and at the expense of the participating Lenders (other
than with respect to the cost of the location of such meeting, which shall be paid by
Borrower)) with all Lenders who choose to attend such meeting at which meeting shall be
reviewed the financial results of the previous fiscal year and the financial condition of
the Companies and the budgets presented for the current fiscal year of the Companies;




     (h) Notices in Connection with the Holdings Senior Note Documents. Until the
Redemption has been consummated, promptly following the delivery or receipt by any Loan
Party of any written notice or other written communication pursuant to or in connection
with any Holdings Senior Note Document, a copy of such notice or communication; and




     (i) Other Information. Promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of any Company, or
compliance with the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.




     (j) Deemed Delivery. Information required to be delivered pursuant to clauses
(a), (b) and (d) of this Section shall be deemed to have been delivered on the date on
which the Borrower posts such information on the Borrower’s website on the Internet at
http://ir.herbalife.com/phoenix.zhtml?c=183888&p=irol-irhome, at
www.sec.gov/edgar/searchedgar/webusers.htm or at another website identified in a notice to
the Administrative Agent and the Lenders and accessible by the Lenders without charge,
provided that the Borrower shall deliver paper copies of the information required to be
delivered pursuant to clauses (a), (b) and (d) to any Lender that requests such delivery.



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     SECTION 5.02. Litigation and Other Notices. Furnish to the Administrative Agent and each
Lender prompt written notice upon any Responsible Officer of a Loan Party becoming aware of the
following:




     (a) any Default or Event of Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;




     (b) the filing or commencement of, or any threat or notice of intention of any person
to file or commence, any action, suit or proceeding, whether at law or in equity by or
before any Governmental Authority (i) against any Company (or any Affiliate thereof) that
could reasonably be expected to result in a Material Adverse Effect or (ii) with respect to
any Loan Document;




     (c) any development that has resulted in, or could reasonably be expected to result in
a Material Adverse Effect;




     (d) the occurrence of a Casualty Event in excess of $1.0 million; provided that the
Net Cash Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are to be applied in accordance with the applicable
provisions of this Agreement and the Security Documents; and




     (e) the incurrence of any material Lien (other than Permitted Liens) on, or claim
asserted against any of the Collateral.



     SECTION 5.03. Existence; Businesses and Properties.




     (a) Do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly permitted under
Section 6.05 or, in the case of any Subsidiary, where the failure to perform such
obligations, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.




     (b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits, franchises, authorizations,
patents, copyrights, trademarks and trade names material to the conduct of its business;
comply with all applicable Requirements of Law (including any and all zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any restrictions
of record or agreements affecting the Real Property) and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted, except where the
failure to comply, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; pay and perform its obligations under all Leases,
except where the failure to comply, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect; and at all times maintain and preserve
all property material to the conduct of such business and keep such property in good
repair, working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be properly
conducted at all times; provided, however, that nothing in this Section 5.03(b)
shall prevent (i) sales of assets, consolidations or mergers by or involving any Company in
accordance with Section 6.04; (ii) the withdrawal by any Company of its
qualification as a foreign corporation in any jurisdiction where such withdrawal,
individually or in the



69









 







aggregate, could not reasonably be expected to result in a Material
Adverse Effect; or (iii) the abandonment by any Company of any property, rights,
franchises, licenses, trademarks, tradenames, copyrights or patents that such person
reasonably determines are not useful to its business.



     SECTION 5.04. Insurance.




     (a) Keep its insurable property adequately insured at all times by financially sound
and reputable insurers; maintain such other insurance, to such extent and against such
risks, including fire, flood (provided that, with respect to flood insurance, the Borrower
shall not be required to acquire flood insurance to the extent such coverage is not
available on commercially reasonable terms) and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses operating in the
same or similar locations, including public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection with the use
of any property owned, occupied or controlled by it, to the extent obtainable on
commercially reasonable terms; and maintain such other insurance as may be required by law.




     (b) All such insurance shall (i) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at least 30 days
after receipt by the Collateral Agent of written notice thereof; (ii) name the Collateral
Agent as insured party or loss payee; (iii) if reasonably requested by the Collateral
Agent, include a breach-of-warranty clause; and (iv) be reasonably satisfactory in all
other respects to the Collateral Agent.




     (c) Notify the Administrative Agent and the Collateral Agent immediately whenever any
separate insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this Section 5.04 is taken out by any Company; and
promptly deliver to the Administrative Agent and the Collateral Agent a duplicate original
copy of such policy or policies.




     (d) Borrower shall deliver to the Administrative Agent and the Collateral Agent and
the Lenders a report of a reputable insurance broker annually with respect to such
insurance and such supplemental reports with respect thereto as the Administrative Agent or
the Collateral Agent may from time to time reasonably request.



     SECTION 5.05. Taxes. Pay and discharge promptly when due all Taxes before the same shall
become delinquent or in default, as well as all lawful claims for labor, materials and supplies or
otherwise that, if unpaid, might give rise to a Lien (other than a Permitted Lien) upon such
properties or any part thereof; provided, however, that such payment and discharge shall not be
required with respect to any such Taxes, as well as all lawful claims for labor, materials and
supplies or otherwise, so long as the validity or amount thereof shall be contested in good faith
by appropriate proceedings and the applicable Company shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP and such proceeding (or orders entered in
connection with such proceedings) operate to prevent the forfeiture or sale of the property or
assets subject to any such Lien and suspend collection of the contested Tax and enforcement of a
Lien and, in the case of Collateral, the applicable Company shall have otherwise complied with the
provisions of the applicable Security Document in connection with such nonpayment.



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     SECTION 5.06. Employee Benefits. (a) Comply in all material respects with the applicable
provisions of ERISA and the Tax Code, and (b) furnish to the Administrative Agent (i) as soon as
possible after, and in any
event within ten days after any Responsible Officer of the Companies or their ERISA Affiliates
or any ERISA Affiliate knows or has reason to know that any ERISA Event has occurred that, alone or
together with any other ERISA Event, could reasonably be expected to result in liability of the
Companies or their ERISA Affiliates under Title IV of ERISA, Section 302 of ERISA or Section
401(a)(29) or 412(n) of the Tax Code in any amount or other liability in an aggregate amount
exceeding $1.0 million, a statement of a Financial Officer of Holdings setting forth details as to
such ERISA Event and the action, if any, that the Companies propose to take with respect thereto,
and (ii) upon request by the Administrative Agent, copies of: (w) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any Company or any ERISA Affiliate
with the Internal Revenue Service with respect to each Plan, (x) the most recent actuarial
valuation report for each Plan, (y) all notices received by any Company or any ERISA Affiliate from
a Multiemployer Plan sponsor or any governmental agency concerning an ERISA Event, and (z) such
other documents or governmental reports or filings relating to any Plan (or employee benefit plan
sponsored or contributed to by any Company) as the Administrative Agent shall reasonably request.



     SECTION 5.07. Maintaining Records; Access to Properties and Inspections. Keep proper books of
record and account (i) in which full, true and correct entries are made in conformity with GAAP and
in all material respects in conformity with all Requirements of Law, and (ii) in which all material
dealings and transactions in relation to its business and activities are recorded. Each Company
will permit any representatives designated by the Administrative Agent or any Lender to visit and
inspect the financial records and the property of such Company at reasonable times during normal
business hours and upon reasonable advance notice (no more frequently than twice during any fiscal
year of Holdings and at the sole cost and expense of the Lenders unless a Default or Event of
Default shall have occurred and be continuing) and to make extracts from and copies of such
financial records, and permit any representatives designated by the Administrative Agent or any
Lender to discuss the affairs, finances and condition of any Company with and be advised as to the
same by the officers thereof and the independent accountants therefor.



     SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request the issuance of
Letters of Credit only for the purposes set forth in Section 3.11.



     SECTION 5.09. Compliance with Environmental Laws; Environmental Reports.




     (a) Comply and cause all lessees and other persons occupying Real Property, to the
extent owned, operated or otherwise controlled by any Company, to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its operations
and property and obtain and renew all material Environmental Permits applicable to its
operations and property and conduct any Response in accordance with Environmental Laws;
provided, however, that no Company shall be required to comply with the foregoing to the
extent that either (i) its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP or (ii) the failure to so comply could not reasonably
be expected to result in a Material Adverse Effect.




     (b) If a Default caused by reason of a breach of Section 3.17 or
5.09(a) shall have occurred and be continuing for more than 20 days without the
Companies commencing activities reasonably likely to cure such Default, at the written request
of the



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Required Lenders through the Administrative Agent, provide to the Lenders within 45
days after such request, at the expense of Borrower, an environmental site assessment
report regarding the matters that are the subject of such default, including where
appropriate, any soil and/or groundwater sampling prepared by an environmental consulting
firm and in form and substance reasonably acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated cost of any
compliance or Response to address them in connection with such Default.



     SECTION 5.10. Interest Rate Protection. No later than the 90th day after the Closing Date,
Borrower shall enter into, for a minimum of three years after the Closing Date, Interest Rate
Protection Agreements acceptable to the Administrative Agent that result in an amount to be
determined by the Administrative Agent of up to 25% of the aggregate principal amount of Terms
Loans outstanding hereunder being effectively subject to a fixed or maximum interest rate
acceptable to the Administrative Agent.



     SECTION 5.11. Additional Collateral; Additional Guarantors.




     (a) Subject to this Section 5.11 and except to the extent the Administrative
Agent (after consultation with Borrower) determines that any of the following is not
commercially reasonable (taking into account the expense of obtaining the same, the ability
of Borrower or the relevant Subsidiary to obtain any necessary approvals or consents
required to be obtained under applicable law in connection therewith, and the effectiveness
and enforceability thereof under applicable law), with respect to any assets acquired after
the Closing Date by Borrower or any other Loan Party that are intended to be subject to the
Lien created by any of the Security Documents but that are not so subject, and with respect
to any assets held by Borrower or any other Loan Party on the Closing Date not made subject
to a Lien created by any of the Security Documents but of a type intended to be subject to
the Lien created by the applicable Security Documents (but, in any event, excluding any
assets described in Section 5.11(b)), promptly (and in any event within 60 days
after the acquisition thereof or upon the Administrative Agent’s request): (i) execute and
deliver to the Collateral Agent such amendments or supplements to the relevant Security
Documents or such other documents as the Collateral Agent shall deem necessary or advisable
to grant to the Collateral Agent, for its benefit and for the benefit of the other Secured
Parties, a Lien on such properties or assets, subject to no Liens other than Permitted
Liens, and (ii) take all actions necessary to cause such Lien to be duly perfected to the
extent required by such Security Document in accordance with all applicable Requirements of
Law, including the filing of financing statements in such jurisdictions as may be
reasonably requested by the Collateral Agent. Borrower or any such Loan Party shall
otherwise take such actions and execute and/or deliver to the Collateral Agent such
documents as the Collateral Agent shall require to confirm the validity, perfection and
priority of the Lien of Security Documents against such after-acquired properties or
assets, and such assets held on the Closing Date not made subject to a Lien created by any
of the Security Documents.




     (b) To the extent the Administrative Agent (after consultation with Borrower)
determines that any of the following is commercially reasonable (taking into account the
expense (including taxes) of obtaining the same, the ability of Borrower or the relevant
Subsidiary to obtain any necessary approvals or consents required to be obtained under
applicable law in connection therewith, and the effectiveness and enforceability thereof
under applicable law), with respect to any person that becomes, after the Closing
Date, a Wholly Owned Subsidiary directly owned by a Loan Party and organized under the laws



72









 







of the United States, Cayman Islands, Luxembourg, England and Wales, Japan, Mexico,
Switzerland or a political subdivision of any thereof (a “New Wholly Owned Subsidiary”),
promptly, and in any event no later than 60 days after each such person becomes a New
Wholly Owned Subsidiary, cause such Subsidiary (i) to become a Guarantor and deliver to the
Collateral Agent the certificates representing the Equity Interests of such Subsidiary
(provided, that, in no event shall the stock of any such Subsidiary be required to be
pledged if such pledge is illegal under applicable law and no reasonable alternative
structure can be devised having substantially the same effect as such pledge that would not
be illegal under applicable law), together with undated stock powers executed and delivered
in blank by a duly authorized officer of such Subsidiary’s parent, as the case may be, and
all Intercompany Notes owing from such Subsidiary to any Loan Party; and (ii) (A) to
execute a Joinder Agreement or such comparable documentation, in form and substance
reasonably satisfactory to the Administrative Agent, and (B) to take all actions reasonably
necessary or advisable to cause the Lien created by each Security Agreement to be duly
perfected to the extent required by such agreement in accordance with all applicable
Requirements of Law, including the filing of financing statements in such jurisdictions as
may be reasonably requested by the Collateral Agent (provided, that any such Subsidiary
shall not be required to comply with clause (ii)(A) and (B) above if
satisfying such requirements is illegal under applicable law and no reasonable alternative
structure can be devised having substantially the same effect as such pledge that would not
be illegal under applicable law).




     (c) Notwithstanding anything to the contrary contained herein, in the case of any (x)
New Wholly Owned Subsidiary that has not previously become (and, if so, does not remain) a
Guarantor or (y) other Non-Guarantor Subsidiary directly owned by a Loan Party, 66% of the
Equity Interests of any such Subsidiary (and 100% of the Equity Interests of any
Domesticated Foreign Subsidiary) (exclusive, however, of Herbalife China LLC, Herbalife
Del Ecuador, S.A., Herbalife International Products, N.V. or any Immaterial Subsidiary)
shall be subject to a Lien or be required to be pledged under the applicable Loan Document
(except to the extent the Administrative Agent, after consultation with Borrower,
determines that such Lien or pledge is not commercially reasonable (taking into account the
expense, including taxes, of obtaining the same, the ability of Borrower or such Subsidiary
to obtain any necessary approvals or consents required to be obtained under applicable law
in connection therewith, and the effectiveness and enforceability thereof under applicable
law)); and, in any event, no Loan Party shall be required to deliver any supplemental Loan
Document to give effect to this clause (c) that is governed by any law other than
the laws of the United States, Cayman Islands, Luxembourg, England and Wales, Japan,
Mexico, Switzerland or any political subdivision of any thereof).



     SECTION 5.12. Security Interests; Further Assurances.(a)(i) Promptly, upon the reasonable
request of the Administrative Agent, any Lender or the Collateral Agent, at Borrower’s expense,
execute, acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record, or cause to be registered, filed or recorded, in an
appropriate governmental office, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by Administrative Agent or the Collateral Agent reasonably
necessary or desirable for the continued validity, perfection and priority of the Liens on the
Collateral covered thereby superior and prior
to the rights of all third persons other than the holders of Permitted Liens and subject to
other Liens except as permitted by the Security Documents, or use commercially reasonable efforts
to obtain any consents as may be necessary or appropriate in connection therewith, to the extent
contemplated hereby; (ii)



73









 







deliver or cause to be delivered to the Administrative Agent and the
Collateral Agent from time to time such other documentation, consents, authorizations, approvals
and orders in form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent as the Administrative Agent or the Collateral Agent shall deem necessary to
perfect or maintain the Liens on the Collateral pursuant to the Security Documents; and (iii) upon
the exercise by the Administrative Agent or the Collateral Agent of any power, right, privilege or
remedy pursuant to any Loan Document that requires any consent, approval, registration,
qualification or authorization of any Governmental Authority or any other person, execute and
deliver and/or obtain all applications, certifications, instruments and other documents and papers
that the Administrative Agent or the Collateral Agent may be so required to obtain (other than in
respect of any registration under the Securities Act).



     (b) Each Loan Party shall, at its own cost and expense, take any and all actions necessary to
defend title to the Collateral against all persons and to defend the security interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not expressly
permitted pursuant to Section 6.02. Notwithstanding anything to the contrary contained
herein, if an Event of Default has occurred and is continuing, the Administrative Agent and the
Collateral Agent shall have the right to require any Loan Party to execute and deliver
documentation, consents, authorizations, approvals and orders in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent as the Administrative Agent and
the Collateral Agent shall deem necessary to grant to the Collateral Agent, for its benefit and for
the benefit of the other Secured Parties, a valid and perfected Lien subject to no Liens other than
Permitted Liens on such assets and properties not otherwise required hereunder, except to the
extent such requirements are illegal under applicable law, and no reasonable alternative structure
can be devised having substantially the same effect as such actions that would not be illegal under
applicable law. If the Administrative Agent, the Collateral Agent or the Required Lenders
determine that they are required by law or regulation to have appraisals prepared in respect of the
Real Property of any Loan Party constituting Collateral, Borrower shall provide to the
Administrative Agent appraisals that satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of FIRREA and are in form and substance satisfactory to the
Administrative Agent and the Collateral Agent.



     SECTION 5.13. Know-Your-Customer Rules.



     If :




     (a) (i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the date of this
Agreement;




     (i) any change in the status of a Loan Party after the date of this
Agreement; or




     (ii) a proposed assignment or transfer by a Lender of any of its
rights and obligations under this Agreement to a party that is not a
Lender prior to such assignment or transfer,




     obliges the Administrative Agent or any Lender (or, in the case of
clause (iii) above, any prospective new Lender) to comply with
“know your customer” or similar identification procedures in circumstances where
the necessary



74









 







information is not already available to it, each Loan Party shall
promptly upon the request of the Administrative Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Administrative Agent (for itself or on behalf of any Lender) or
any Lender (for itself or, in the case of the event described in clause
(iii) above, on behalf of any prospective new Lender) in order for the
Administrative Agent, such Lender or, in the case of the event described in
clause (iii) above, any prospective new Lender to carry out and be
satisfied it has complied with all necessary “know your customer” or other similar
checks under all applicable laws and regulations pursuant to the transactions
contemplated in the Loan Documents.



     (b) Each Lender shall promptly upon the request of the Administrative Agent supply, or procure
the supply of, such documentation and other evidence as is reasonably requested by the
Administrative Agent (for itself) in order for the Administrative Agent to carry out and be
satisfied it has complied with all necessary “know your customer” or other similar checks under all
applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.



     SECTION 5.14. Post-Closing Matters. Execute and deliver the documents and complete the tasks
set forth on Schedule 5.14, in each case within the time limits specified on such schedule
or as such time as may be extended by the Collateral Agent in its sole discretion.



ARTICLE VI




Negative Covenants




     Each Loan Party covenants and agrees with each Lender that, so long as this Agreement shall
remain in effect and until the Commitments have been terminated and the principal of and interest
on each Loan, all Fees and all other expenses or amounts payable under any Loan Document have been
paid in full and all Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent in
writing, no Loan Party will, nor will any Loan Party cause or permit any of its Subsidiaries to:



     SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist, directly or indirectly,
any Indebtedness, except:




     (a) Indebtedness incurred pursuant to this Agreement and the other Loan Documents;




     (b) Indebtedness under Interest Rate Protection Agreements entered into in compliance
with Section 5.10 and such other non-speculative Interest Rate Protection
Agreements that may be entered into from time to time by any Company and that such Company
in good faith believes will provide protection against fluctuations in interest
rates with respect to floating rate Indebtedness then outstanding, and permitted to
remain outstanding, pursuant to the other provisions of this Section 6.01;




     (c) Indebtedness under Hedging Agreements (other than Interest Rate Protection
Agreements) entered into from time to time by any Company in accordance with Section
6.03(c);



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     (d) intercompany Indebtedness of the Companies outstanding to the extent permitted by
Sections 6.03(d), (k), (l), (m), (n) and (o);




     (e) Indebtedness of a Company in respect of Purchase Money Obligations, Synthetic
Leases and Capital Lease Obligations and refinancings or renewals thereof, in an aggregate
amount not to exceed at any time outstanding (i) if in respect of lease obligations
incurred in connection with the establishment of new real estate leasehold interests,
$100.0 million, so long as such payments are made over not less than ten years, (ii) if in
respect of the build out and related tenant improvements for the new leasehold interests
contemplated by the preceding clause (i), $25.0 million, and (iii) otherwise $20.0
million outstanding at any time;




     (f) Indebtedness in respect of workers’ compensation claims, self-insurance
obligations, performance bonds, surety appeal or similar bonds and completion guarantees
provided by a Company in the ordinary course of its business;




     (g) (i) Indebtedness (other than as described in clause (iii) below) actually
outstanding on the Closing Date and listed on Schedule 6.01, provided, that, any
such scheduled Indebtedness that constitutes intercompany Indebtedness (A) owing to a Loan
Party by a Loan Party must be subordinated to the Obligations of the Loan Parties in
accordance with a subordination agreement in form and substance reasonably satisfactory to
the Administrative Agent, and (B) shall be permitted under Section 6.03; (ii)
refinancings or renewals thereof, provided, that, (A) any such refinancing Indebtedness is
in an aggregate principal amount not greater than the aggregate principal amount of the
Indebtedness being renewed or refinanced, plus the amount of any premiums required to be
paid thereon and fees and expenses associated therewith, (B) such refinancing Indebtedness
has a later or equal final maturity and longer or equal weighted average life than the
Indebtedness being renewed or refinanced and (C) the covenants, events of default
subordination and other provisions thereof (including any guarantees thereof) shall be, in
the aggregate, not materially less favorable to the Lenders than those contained in the
Indebtedness being renewed or refinanced; and (iii) the Holdings Senior Notes (including
any notes issued in exchange therefor in accordance with any registration rights agreement
entered into in connection with the issuance of the Holdings Senior Notes);




     (h) so long as no Default or Event of Default exists or would result therefrom,
Indebtedness of Borrower in respect of the Tax Indemnity, so long as Borrower is not
obligated to make payments in excess of $15.0 million in any fiscal year and the obligation
to make any such payment relates to a taxable year that closed prior to the Closing Date;




     (i) other Indebtedness of a Company or any Subsidiary thereof not to exceed $25.0
million in aggregate principal amount at any time outstanding;




     (j) Indebtedness assumed in connection with a Permitted Acquisition so long as such
Indebtedness is in existence at the time of the consummation of the Permitted Acquisition
and is not created in anticipation thereof;




     (k) Indebtedness of a Company or any Subsidiary thereof incurred in respect of bank
guarantees, letters of credit or similar instruments to support local regulatory,



76









 







solvency, consumer requirements and tax disputes not to exceed $25.0 million in the aggregate at any
time outstanding; and




     (l) Indebtedness of a Company or any Subsidiary thereof incurred in connection with
the acquisition of a corporate jet designated by Borrower to the Administrative Agent for
an aggregate purchase price (including (i) fees and expenses related to such purchase and
(ii) costs associated with retrofitting, refurbishing or otherwise modifying such airplane)
not to exceed $20.0 million;




provided, however, that notwithstanding anything to the contrary herein, no Subsidiary of
Holdings (other than WH Capital) may guarantee or otherwise become liable for any
obligations in respect of the Holdings Senior Notes or any other Holdings Senior Note
Document.



     SECTION 6.02. Liens. Create, incur, assume or permit to exist, directly or indirectly, any
Lien on any property now owned or hereafter acquired by it or on any income or revenues or rights
in respect of any thereof, except (each of the following being the “Permitted Liens”):




     (a) inchoate Liens for Taxes not yet due and payable or delinquent and Liens for Taxes
(including in respect of deposits made in respect of such Taxes) that (i) are being
contested in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered in connection
with such proceedings) have the effect of preventing the forfeiture or sale of the property
or assets subject to any such Lien, or (ii) in the case of any such charge or claim that
has or may become a Lien against any of the Collateral, such Lien and the contest thereof
shall satisfy the Contested Collateral Lien Conditions;




     (b) Liens in respect of property of a Company or any Subsidiary thereof imposed by law
that were incurred in the ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s,
suppliers’, repairmen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business (i) for amounts not yet overdue or (ii) for amounts that are
overdue and that are being contested in good faith by appropriate proceedings, so long as
(A) adequate reserves have been established in accordance with GAAP, and (B) in the case of
any such Lien that has or may become a Lien against any of the Collateral, such Lien and
the contest thereof shall satisfy the Contested Collateral Lien Conditions;




     (c) easements, rights-of-way, restrictions (including zoning restrictions), covenants,
encroachments, protrusions and other similar charges or encumbrances, and minor title
deficiencies on or with respect to any Real Property, in each case whether now or hereafter
in existence, not (i) securing Indebtedness and (ii) individually or in the
aggregate materially interfering with the conduct of the business of the Companies at
such Real Property;




     (d) Liens arising out of judgments or awards not resulting in an Event of Default and
in respect of which such Company shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall be secured a subsisting stay of
execution pending such appeal or proceedings;



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     (e) Liens (other than any Lien imposed by ERISA or Section 401(a)(29) or 412(n) or the
Tax Code) (i) imposed by law or deposits made in connection therewith in the ordinary
course of business in connection with workers’ compensation, unemployment insurance and
other types of social security; (ii) incurred in the ordinary course of business to secure
the performance of tenders, statutory obligations (other than excise taxes), surety, stay,
customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar obligations (including
obligations imposed by the applicable laws of foreign jurisdictions and exclusive of
obligations for the payment of borrowed money); or (iii) arising by virtue of deposits made
in the ordinary course of business to secure liability for premiums to insurance carriers;
provided that, (x) with respect to clauses (i), (ii) and (iii)
above such Liens are set amounts not yet due and payable or delinquent or, to the extent
such amounts are so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance
with GAAP, which proceedings for orders entered in connection with such proceedings have
the effect of preventing the forfeiture or sale of the property or assets subject to any
such Lien, (y) to the extent such Liens are not imposed by law, such Liens shall in no
event encumber any property other than cash and Cash Equivalents, and (z) in the case of
any such Lien against any of the Collateral, such Lien and the contest thereof shall
satisfy the Contested Collateral Lien Conditions;




     (f) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by a Company or any Subsidiary thereof in
the ordinary course of business in accordance with the past practices of a Company or
Subsidiary;




     (g) Liens arising pursuant to Purchase Money Obligations, Synthetic Lease Obligations
or Capital Lease Obligations incurred pursuant to Section 6.01(e); provided that,
(i) the Indebtedness secured by any such Lien (including refinancings thereof) does not
exceed 100% of the cost (including financing cost) of the property being acquired or leased
at the time of the incurrence of such Indebtedness and (ii) any such Liens attach only to
the property being financed pursuant to such Purchase Money Obligations, Synthetic Lease
Obligations or Capital Lease Obligations and directly related assets, such as proceeds
(including insurance proceeds), products, accessions and substitutions, and do not encumber
any other property of any Company;




     (h) bankers’ Liens, rights of set-off and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts maintained by a
Company or any Subsidiary, in each case granted in the ordinary course of business in favor
of the bank or banks with which such accounts are maintained, securing amounts owing to
such bank with respect to cash management and operating account arrangements, including
those involving pooled accounts and netting arrangements;
provided that, in no case shall any such Liens secure (either directly or indirectly)
the repayment of any Indebtedness;




     (i) Liens on assets of a person (and its Subsidiaries) existing at the time such
person is acquired or merged with or into or consolidated with a Company or any of its
Subsidiaries (and not created in anticipation or contemplation thereof); provided that,
such Liens do not extend to assets not subject to such Liens at the time of acquisition
(other than improvements thereon) and, in respect of a Replacement Lien, such Liens do not
encumber any property other than the property subject thereto on the date such person



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is acquired or merged with or into or consolidated with a Company or any of its Subsidiaries;




     (j) Liens pursuant to the Security Documents;




     (k) Liens in existence on the Closing Date and set forth on Schedule 6.02,
including Liens replacing such Liens (“Replacement Liens”); provided that, (i) the
aggregate principal amount of the Indebtedness, if any, secured by such Liens does not
increase; and (ii) such Liens do not encumber any property other than the property subject
thereto on the Closing Date;




     (l) Licenses of Intellectual Property (i) granted by Holdings and its Subsidiaries in
the ordinary course of business and not interfering in any material respect with the
ordinary conduct of the business of Holdings and its Subsidiaries and (ii) between or among
the Loan Parties;




     (m) cash deposits required to secure obligations in respect of (i) letters of credit
and bank guarantees actually outstanding on the Closing Date and listed on Schedule
6.01 and (ii) refinancings or renewals thereof permitted under Section 6.01(g);




     (n) restrictions on transfers of securities imposed by applicable securities laws;




     (o) Liens securing Indebtedness permitted under Section 6.01(k) in an amount
not to exceed $25.0 million at any one time;




     (p) Liens securing Indebtedness and other obligations in an amount not to exceed $25.0
million at any one time; and




     (q) Liens securing Indebtedness permitted under Section 6.01(1) in an amount
not to exceed $20.0 million;


provided, however, that no Liens shall be permitted to exist, directly or indirectly, on any
Securities Collateral (as defined in the U.S. Security Agreement) except to the extent permitted
under Section 6.02(m) above).




     SECTION 6.03. Investments, Loans and Advances. Directly or indirectly, lend money or credit
or make advances to any person, or purchase or acquire any stock, obligations or securities of, or
any other interest in, or make any capital contribution to, any other person, or purchase or own a
futures contract or otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the
nature of a futures contract (all of the foregoing, collectively, “Investments”), except that
the following shall be permitted:




     (a) the Companies may consummate the Transactions in accordance with the provisions of
the Transaction Documents;




     (b) Holdings and its Subsidiaries may (i) acquire and hold accounts receivables owing
to any of them if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary terms, (ii) acquire and hold cash and Cash
Equivalents, (iii) endorse negotiable instruments for collection in the ordinary course of
business, or (iv) make lease, utility and other similar deposits in the ordinary course of
business;



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     (c) the Loan Parties may enter into Interest Rate Protection Agreements to the extent
permitted by Section 6.01(b) and may enter into and perform its obligations under
Hedging Agreements entered into in the ordinary course of business and so long as any such
Hedging Agreement is not speculative in nature;




     (d) any Loan Party may make an Investment in any other Loan Party; provided that, if
such Investment is in the form of an intercompany loan, such loan shall be (i) evidenced by
an Intercompany Note, (ii) pledged (and delivered) by such Loan Party that is the lender of
such intercompany loan as Collateral pursuant to the applicable Security Agreement and
(iii) subordinated to the prior payment in full of the Obligations pursuant to a
subordination agreement in form and substance reasonably satisfactory to the Administrative
Agent;




     (e) Holdings and its Subsidiaries may make Investments in the form of advances to
employees for travel, relocation and like expenses, in each case, in the ordinary course of
business and consistent with such Company’s past practices;




     (f) Holdings and its Subsidiaries may make Investments in the form of loans and
advances not to exceed $7.0 million in the aggregate at any one time outstanding pursuant
to this Section 6.03(f) to employees, directors and distributors of Holdings and
its Subsidiaries for the purpose of funding the purchase of Equity Interests of Holdings by
such employees, directors and distributors;




     (g) Holdings and its Subsidiaries may sell or transfer amounts to the extent permitted
by Section 6.04;




     (h) Investments in securities of trade creditors or customers in the ordinary course
of business and consistent with such Company’s past practices that are received in the
settlement of bona fide disputes or pursuant to any plan of reorganization or liquidation
or similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers;




     (i) Investments made by Holdings or any Subsidiary as a result of consideration
received in connection with an Asset Sale or other transaction effected in compliance with
Section 6.04;




     (j) Investments outstanding on the Closing Date and identified on Schedule
6.03;




     (k) the Loan Parties may make Investments in other persons, including Non-Guarantor
Subsidiaries; provided that, (i) after giving pro forma effect to each such Investment, the
aggregate amount of all such Investments made by all Loan Parties on and after the Closing
Date pursuant to this Section 6.03(k) that are outstanding at any time does not exceed
$100.0 million (excluding any amounts invested in any Non-Guarantor Subsidiary that
subsequently becomes a Guarantor (effective only upon such person becoming a Guarantor and
only for so long as such person remains a Guarantor)) and (ii) if such Investment is in the
form of an intercompany loan, such loan shall be (A) evidenced by an Intercompany Note and
(B) pledged (and delivered) by the Loan Party that is the lender of such intercompany loan
as Collateral pursuant to the applicable Security Agreement;



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     (l) the Loan Parties may make Investments in Non-Guarantor Subsidiaries for the
purposes of enabling such Non-Guarantor Subsidiaries to comply with statutory obligations
imposed by Governmental Authorities; provided that, if such Investment is in the form of an
intercompany loan, each such intercompany loan shall be evidenced by an Intercompany Note
and shall be pledged (and delivered) by the Loan Party that is the lender of such
intercompany loan as Collateral pursuant to the applicable Security Agreement; provided,
further that after giving pro forma effect to each such Investment, the aggregate amount of
all such Investments made by all Loan Parties on and after the Closing Date pursuant to
this Section 6.03(l) that are outstanding at any time does not exceed $25.0 million
(excluding any amounts invested in any Non-Guarantor Subsidiary that subsequently becomes a
Guarantor (effective only upon such person becoming a Guarantor and only for so long as
such person remains a Guarantor));




     (m) Investments by the Loan Parties in Non-Guarantor Subsidiaries; provided, that, (i)
such Investments are contemporaneously or within five Business Days remitted to the Loan
Parties, and (ii) such Investments are made to facilitate repatriation of monies to the
United States;




     (n) Investments by Non-Guarantor Subsidiaries in Loan Parties;




     (o) Investments by Non-Guarantor Subsidiaries in Non-Guarantor Subsidiaries;




     (p) Investments by Borrower in the Collateral Account and LC Sub-Account;




     (q) Permitted Acquisitions; and




     (r) so long as no Default or Event of Default exists or would result therefrom,
Investments resulting from the purchase, repurchase, redemption or other acquisition for
value of Holdings Senior Notes.



     SECTION 6.04. Mergers, Consolidations, Sales and Purchases of Assets. Wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell,
lease or otherwise dispose of all or any part of its property or assets (other than sales and other
dispositions of inventory in the ordinary course of business), or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets (other than purchases
or other acquisitions of assets used or useful in the Companies’ business, but not all or
substantially all of a person’s assets) of any person, except that:




     (a) Capital Expenditures shall be permitted to the extent permitted by Section
6.07(c);




     (b) (i) Asset Sales of used, worn out, obsolete or surplus property by any Company in
the ordinary course of business and the abandonment or other Asset Sale of Intellectual
Property that is, in the reasonable judgment of Borrower, no longer economically
practicable to maintain or useful in the conduct of the business of the Companies, taken as
a whole, shall be permitted; (ii) any Company shall be permitted to barter obsolete
inventory for advertising media and for other ordinary course trade purposes; and (iii)
subject to Section 2.10(c), sell, lease or otherwise dispose of any assets,
provided that, the aggregate consideration received in respect of all Asset Sales pursuant
to this clause (iii) shall not exceed $6.0 million in any four fiscal quarters of
Holdings;



81









 






     (c) Investments shall be permitted to the extent permitted by Section 6.03;




     (d) Holdings and its Subsidiaries may sell Cash Equivalents in the ordinary course of
business;




     (e) Holdings and its Subsidiaries may lease (as lessee or lessor) real or personal
property and may guaranty such lease in the ordinary course of business;




     (f) any Subsidiary may be merged into Borrower (as long as Borrower is the surviving
corporation of such merger and remains a Wholly Owned Subsidiary of Holdings) or any other
Wholly Owned Subsidiary Guarantor; provided, however, that the Lien on and security
interest in such property granted in favor of the Collateral Agent under the Security
Documents shall be maintained in accordance with the provisions of Section 5.11;




     (g) (i) any Loan Party or any Subsidiary thereof (in any case, other than Borrower)
may merge, convey, sell, transfer, assign or otherwise dispose of assets to Borrower or any
other Loan Party and (ii) Borrower may convey, sell, transfer, assign or otherwise dispose
of assets constituting Equity Interests of Designated Subsidiaries and other intangible
assets relating to the operations of such Foreign Subsidiary to HIL;




     (h) Holdings and its Subsidiaries may incur Liens that are not prohibited hereunder;




     (i) any Non-Guarantor Subsidiary may merge, convey, sell, transfer, assign or
otherwise dispose of assets to any Company;




     (j) Holdings and its Subsidiaries may make Investments pursuant to and in accordance
with Section 6.03;




     (k) licenses and sublicenses by any Company of software, Intellectual Property and
other general intangibles in the ordinary course of business and which do not materially
interfere with the ordinary conduct of business of such Company;




     (l) Holdings and its Subsidiaries may settle, release or surrender tort or other
litigation claims in the ordinary course of business;




     (m) any Non-Guarantor Subsidiary and any Immaterial Subsidiary may voluntarily
dissolve, liquidate or wind up; and




     (n) Holdings may sell its capital stock to officers, directors, distributors and
employees of Holdings and its Subsidiaries.


To the extent the Required Lenders waive the provisions of this Section 6.04 with respect
to the sale of any Collateral, or any Collateral is sold as permitted by this Section 6.04,
such Collateral (unless sold to a Company) shall be sold free and clear of the Liens created by the
Security Documents, and the Agents shall take all actions deemed appropriate to effect the
foregoing.




     SECTION 6.05. Dividends. Pay any Dividends with respect to any Company, except that:



82









 






     (a) any Subsidiary of Borrower (i) may pay cash Dividends to Borrower or any Wholly
Owned Subsidiary of Borrower and (ii) if such Subsidiary is not a Wholly Owned Subsidiary
of Borrower, may pay cash Dividends to its shareholders generally so long as Borrower or
its Subsidiary that owns the equity interest or interests in the Subsidiary paying such
Dividends receives at least its proportionate share thereof (based upon its relative
holdings of Equity Interests in the Subsidiary paying such Dividends and taking into
account the relative preferences, if any, of the various classes of Equity Interests in
such Subsidiary);




     (b) any Non-Guarantor Subsidiary (i) may pay cash Dividends to its parent and (ii) if
such Non-Guarantor Subsidiary is not a Wholly Owned Subsidiary, may pay cash Dividends to
its shareholders generally so long as the Subsidiary of Holdings that owns the Equity
Interest in the Subsidiary paying such Dividends receives at least its proportionate share
thereof (based upon its relative holdings of Equity Interests in the Subsidiary paying such
Dividends and taking into account the relative preferences, if any, of the various classes
of Equity Interests in such Subsidiary)




     (c) so long as no Default or Event of Default exists or would result therefrom,
Borrower and each Guarantor may pay Dividends for the purpose of enabling Holdings to, and
Holdings may, repurchase outstanding shares of its capital stock (or options to purchase
such common stock) following the death, disability, retirement or termination of employment
of current or former employees, officers, distributors or directors of any Company;
provided that, (i) all amounts used to effect such repurchases are obtained by Holdings
from a substantially concurrent issuance of its capital stock (or exercise of options to
purchase such capital stock) to other employees, members of management, distributors,
executive officers or directors of Holdings, Borrower or any of its Subsidiaries; or (ii)
to the extent the proceeds used to effect any repurchase pursuant to this clause
(ii) are not obtained as described in preceding clause (i), the aggregate
amount of Dividends paid by Holdings pursuant to this Section 6.05(c) (exclusive of
amounts paid as described pursuant to preceding clause (i)) shall not exceed $10.0
million in the aggregate on and after the Closing Date plus the amount of any key-man life
insurance proceeds actually received in any fiscal year of Holdings;




     (d) so long as no Default or Event of Default exists or would result therefrom,
Borrower and each Guarantor may pay cash Dividends for the purpose of paying, so long as
all proceeds thereof are promptly used to pay, each Loan Party’s operating expenses
incurred in the ordinary course of business and other corporate overhead costs and
expenses (including legal and accounting expenses and similar expenses); provided that, the
aggregate amount of Dividends paid pursuant to this Section 6.05(d) shall not
exceed $150,000 in any fiscal year of Holdings;




     (e) so long as, after giving effect to any such cash Dividend on a pro forma basis, no
Default or Event of Default exists or would result therefrom, Borrower and each Guarantor
may pay cash Dividends for the purpose of enabling Holdings to pay (so long as all proceeds
thereof are used by Holdings to pay) regularly scheduled payments of stated interest (and
any applicable withholding tax gross-up payments or other tax indemnity payments in respect
thereof) on, or the redemption price (including any premium required and interest on
amounts redeemed) in respect of, the Holdings Senior Notes (pursuant to the terms of the
Holdings Senior Note Documents as in effect on the Closing Date), so long as, until such
time as the amount of cash Dividends made by Borrower pursuant to this Section
6.05(e) are applied to the payment of such regularly



83









 







scheduled payments of stated
interest (and any applicable withholding tax gross-up payments or other tax indemnity
payments in respect thereof) on, or the redemption price (including any premium required
and interest on amounts redeemed) in respect of, the Holdings Senior Notes, the Collateral
Agent shall have a valid and perfected Lien on and security interest in such proceeds in
accordance with Sections 5.11 and 5.12;




     (f) so long as no Default or Event of Default exists or would result therefrom,
Holdings and any Subsidiary of Holdings may make Dividends in respect of any stock
appreciation rights, plans, equity incentive or achievement plans or any similar plan, so
long as such rights or similar plans are approved by the board of directors of Holdings (or
a duly constituted committee thereof);




     (g) so long as no Default or Event of Default exists or would result therefrom, any
Subsidiary of Holdings may purchase the capital stock of Holdings in connection with the
exercise of stock option or similar arrangements by a director, officer or employee of such
Subsidiary; provided, that such capital stock is immediately granted to the applicable
director, officer or employee of such Subsidiary;




     (h) Borrower and each Guarantor may pay cash Dividends to allow Holdings to pay cash
Dividends so long as (i) no Default or Event of Default exists or would result therefrom
and (ii) after giving effect to any such Dividend by Holdings the aggregate amount of
Dividends paid by Holdings after the Closing Date pursuant to this Section 6.05(h)
does not exceed the sum of (i) $300.0 million plus (ii) 50% of cumulative Consolidated Net
Income of Holdings and its Subsidiaries for the period (taken as one accounting period)
from the beginning of the first fiscal quarter of the 2007 fiscal year to the last day of
the fiscal quarter most recently ended prior to the date of the Dividend to be made by
Holdings for which financial statements are available; and




     (i) Borrower and its direct and indirect parent companies may pay cash Dividends to
their respective parent companies (and such parent companies may pay cash Dividends) to the
extent of U.S. federal and state income and other tax obligations of WH Capital to the
extent that such U.S. federal and state income and tax obligations are reasonably
attributable to income or operations of the Borrower and any of its Subsidiaries. Any
payments made pursuant to this Section 6.05(i) shall, no later than the 30th day
after receipt, either be used to pay such obligations to the applicable taxing authority or
be remitted to the Borrower.



     SECTION 6.06. Transactions with Affiliates. Enter into, directly or indirectly, any
transaction or series of related transactions, whether or not in the ordinary course of business,
with any Affiliate of any Company, other than in the ordinary course of business and on terms and
conditions substantially as favorable to such Company as would reasonably be obtained by such
Company at that time in a comparable arm’s-length transaction with a person other than an
Affiliate, except that:




     (a) Dividends that are not otherwise restricted hereby may be made;




     (b) loans may be made and other transactions may be entered into between and among any
Company and its Affiliates to the extent permitted by Sections 6.01 and
6.03;




     (c) assets sales permitted by Section 6.04 may be consummated;



84









 






     (d) customary fees may be paid to non-officer directors of the Loan Parties, and
customary indemnities may be provided to all directors of the Loan Parties;




     (e) transactions between or among the Loan Parties may be effected; and




     (f) the Transactions may be effected.



     SECTION 6.07. Financial Covenants.




     (a) Maximum Leverage Ratio. Permit the Leverage Ratio of Holdings, as of the
last day of the fiscal quarter of Holdings ending on September 30, 2006 and every fiscal
quarter thereafter, to exceed 2.50:1.00.




     (b) Minimum Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio of Holdings, as of the last day of the fiscal quarter of Holdings ending on
September 30, 2006 and every fiscal quarter thereafter, to be less than 4.00:1.00.




     (c) Limitation on Capital Expenditures. (i) Make any Capital Expenditures,
other than Capital Expenditures made by Holdings and its Consolidated Subsidiaries (A)
which in the aggregate do not exceed $62.5 million in any fiscal year or (B) for purposes
of (i) acquiring the office buildings designated by Borrower to the Administrative Agent
for an aggregate purchase price for all such acquisitions not to exceed $50.0 million and
(ii) the build out and tenant improvements for the new leasehold interests contemplated by
Section 6.01(e) which in the aggregate do not exceed $25.0 million or (C) for
purposes of acquiring a corporate jet designated by Borrower to the Administrative Agent
for an aggregate purchase price (including (i) fees and expenses related to such purchase
and (ii) costs associated with retrofitting, refurbishing or otherwise modifying such
airplane) not to exceed $20.0 million. (ii) Notwithstanding anything to the contrary
contained in clause (i) above, to the extent that the Capital Expenditures made by
Holdings and its Consolidated Subsidiaries in any period set forth in clause (i)
above are less than the amount permitted to be made in such period (without giving effect
to any additional amount available as a result of this clause (ii)), the amount of
such difference may be carried forward and used to make Capital Expenditures in the next
succeeding fiscal year of Holdings.



     SECTION 6.08. Limitation on Modifications of Indebtedness; Modifications of Certificate of
Incorporation, Other Constitutive Documents or Bylaws and Certain Other Agreements, Etc.




     (a) Amend or modify, or permit the amendment or modification of, any provision of any
agreement comprising a Material Agreement other than any amendments, modifications,
agreements or changes pursuant to this clause (a) that could not reasonably be
expected to result in a Material Adverse Effect; and




     (b) In respect of the Borrower, amend, modify or change its articles of incorporation
or other constitutive documents (including by the filing or modification of any certificate
of designation) or bylaws, or any agreement entered into by it, with respect to its capital
stock (including any shareholders’ agreement) that could reasonably be expected to result
in a Material Adverse Effect.



85









 





     SECTION 6.09. Limitation on Certain Restrictions on Subsidiaries. Directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Subsidiary of Borrower to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned by Borrower or any
Subsidiary of Borrower, or pay any Indebtedness owed to Borrower or a Subsidiary of Borrower; (b)
make loans or advances to Borrower or any of Borrower’s Subsidiaries; or (c) transfer any of its
properties to Borrower or any of Borrower’s Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other
Loan Documents, (iii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of Borrower or a Subsidiary of Borrower, (iv) existing restrictions
under Indebtedness existing on the Closing Date and described in Schedule 6.01 attached
hereto, (v) restrictions with respect solely to any Subsidiary of Holdings imposed pursuant to a
binding agreement which has been entered into for the sale or disposition of all of the Equity
Interests or assets of such Subsidiary; provided that, such restrictions apply solely to the Equity
Interests or assets of such Subsidiary which are being sold, (vi) in connection with and pursuant
to refinancings permitted under this Agreement, replacements of restrictions imposed pursuant to
clause (iv) or this clause (vi) that are not more restrictive taken as a whole than
those being replaced and do not apply to any other person or assets other than those that would
have been covered by the restrictions in the Indebtedness so refinanced or replaced, or (vii)
customary provisions with respect to the disposition or distribution of assets in joint venture
agreements and other similar agreements relating solely to the assets subject to such agreement.



     SECTION 6.10. Sale and Leaseback Transactions. Enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property, real or personal, used
or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property that it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except such transactions among Loan Parties,
unless (i) the sale of such property is permitted by Section 6.04 and (ii) any Liens
arising in connection with its use of such property are permitted by Section 6.02.



     SECTION 6.11. Holding Companies. Notwithstanding anything to the contrary contained in this
Agreement, with respect to the Holding Companies, (i) incur, directly or indirectly, any
Indebtedness other than the Obligations under the Loan Documents to which any such Company is a
party, the Holdings Senior Notes and any intercompany Indebtedness between Holding Companies
permitted hereunder or incurred in connection with the payments required to consummate the
Transactions, (ii) create or suffer to exist any Lien upon any property or assets now owned or
hereafter acquired by such Company other than the Liens permitted to exist under Sections 6.02(a),
(b), (d), (h), (j) and (l), (iii) engage in any business or own any assets other than holding the
Equity Interest of such Company’s direct Subsidiaries, claims against another Company, proceeds
received in connection with the Transactions, and activities reasonably related to each of the
foregoing; (iv) consolidate with or merge with or into, or convey, transfer (except in connection
with the Transactions) or lease all or any portion of its assets to, any person other than a Loan
Party or (iv) sell or otherwise dispose of any Equity Interest of any of such Company’s
Subsidiaries other than to Loan Party.



     SECTION 6.12. Business. Holding and its Subsidiaries, engage (directly or indirectly) in any
business other than those businesses in which Borrower and its Subsidiaries are engaged on the
Closing Date (or that are incidental, complementary or substantially related thereto or are
reasonable extensions thereof).



86









 





     SECTION 6.13. Limitation on Accounting Changes. Make or permit any change in accounting
policies or reporting practices without the consent of the Required Lenders, which consent shall
not be unreasonably withheld, except changes that, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect or are required by GAAP.



     SECTION 6.14. Fiscal Year. Change its fiscal year-end to a date other than December 31.



ARTICLE VII




Guarantee




     SECTION 7.01. The Guarantee. The Guarantors hereby irrevocably and unconditionally, jointly
and severally guarantee as primary obligors and not as sureties to each Secured Party and their
respective successors and assigns the prompt payment in full when due (whether at stated maturity,
by acceleration or otherwise) of the principal of and interest on (including any interest, fees,
costs or charges that would accrue but for the provisions of Title 11 of the United States Code
after any bankruptcy or insolvency petition under Title 11 of the United States Code) the Loans
made by the Lenders to, and the Notes held by each Lender of, Borrower, and all other Obligations
from time to time owing to the Secured Parties by any Loan Party under any Loan Document or
Interest Rate Protection Agreement relating to the Loans, in each case strictly in accordance with
the terms thereof (such obligations being herein collectively called the “Guaranteed Obligations”). The
Guarantors hereby irrevocably and unconditionally, jointly and severally agree that if Borrower or
other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration
or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such
extension or renewal.



     SECTION 7.02. Obligations Unconditional. The obligations of the Guarantors under Section
7.01 shall constitute a guaranty of payment (and not of collection) and are absolute,
irrevocable and unconditional, joint and several (except to the extent otherwise limited in
accordance with applicable Requirements of Law as described in Annex III attached hereto or
in any other Guarantee required by applicable Requirements of Law), irrespective of the value,
genuineness, validity, regularity or enforceability of the Guaranteed Obligations of Borrower under
this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or security for any of
the Guaranteed Obligations and, to the fullest extent permitted by applicable law, irrespective of
any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or
defense of a surety or Guarantor (except for payment in full). Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of the Guarantors hereunder, which shall remain absolute, irrevocable and
unconditional under any and all circumstances as described above:




     (i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;



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     (ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein shall be done or omitted;




     (iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;




     (iv) any Lien or security interest granted to, or in favor of, the
Issuing Bank or any Lender or Agent as security for any of the Guaranteed
Obligations shall fail to be perfected; or




     (v) the release of any other Guarantor.



     The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that any Loan Party exhaust any right,
power or remedy or proceed against Borrower under this Agreement or the Notes, if any, or any
other agreement or instrument referred to herein or therein, or against any other person under any
other guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors waive any
and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee
or acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance upon this
Guarantee, and all dealings between Borrower and the Secured Parties shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. This Guarantee shall be
construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without
regard to any right of offset with respect to the Guaranteed Obligations at any time or from time
to time held by the Secured Parties, and the obligations and liabilities of the Guarantors
hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any
other person at any time of any right or remedy against Borrower or against any other person that
may be or become liable in respect of all or any part of the Guaranteed Obligations or against any
collateral or guarantee therefor or right of offset with respect thereto. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the extent of its terms
upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the
Lenders, and their respective successors and assigns, notwithstanding that from time to time during
the term of this Agreement there may be no Guaranteed Obligations outstanding.



     For purposes of this paragraph only, references to the “principal” include each Loan Party and
references to the “creditor” include each Secured Party. In accordance with Section 2856 of the
California Civil Code, each Guarantor waives all rights and defenses (i) available to such
Guarantor by reason of Sections 2787 through 2855, 2899, and 3433 of the California Civil Code,
including all rights or defenses such Guarantor may have by reason of protection afforded to the
principal with respect to any of the Guaranteed Obligations, or to any other guarantor of any of
the Guaranteed Obligations with respect to any of such guarantor’s obligations under its guarantee,
in either case in accordance with the antideficiency or other laws of the State of California
limiting or discharging the principal’s Indebtedness or such other guarantor’s



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obligations, including Sections 580a, 580b, 580d and 726 of the California Code of Civil Procedure; and (ii)
arising out of an election of remedies by the creditor, even though such election, such as a
nonjudicial foreclosure with respect to security for any Guaranteed Obligation (or any obligation
of any other guarantor of any of the Guaranteed Obligations), has destroyed such Guarantor’s right
of subrogation and reimbursement against the principal (or such other guarantor) by the operation
of Section 580d of the California Code of Civil Procedure or otherwise. No other provision of this
Guarantee shall be construed as limiting the generality of any of the covenants and waivers set
forth in this paragraph. As provided below, this Agreement shall be governed by, and shall be
construed and enforced in accordance with the laws of the State of New York. This paragraph is
included solely out of an abundance of caution, and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this Agreement or to any
of the Guaranteed Obligations.



     SECTION 7.03. Reinstatement. The obligations of the Guarantors under this Article VII
shall be automatically reinstated if and to the extent that for any reason any payment by or on
behalf of Holdings, Borrower or any other Loan Party in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise. The Guarantors
jointly and severally (except to the extent otherwise limited in accordance with applicable Requirements
of Law as described in Annex III attached hereto or in any other Guarantee required by
applicable Requirements of Law) agree that they will indemnify each Secured Party on demand for all
reasonable costs and expenses (including reasonable fees of counsel) incurred by such Secured Party
in connection with such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law, other than any costs
or expenses resulting from the gross negligence, bad faith or willful misconduct of such Secured
Party.



     SECTION 7.04. Subrogation; Subordination. Each Guarantor hereby agrees that until the
indefeasible payment and satisfaction in full in cash of all Guaranteed Obligations and the
expiration and termination of the Commitments of the Lenders under this Agreement it shall not
exercise any right or remedy arising by reason of any performance by it of its guarantee in
Section 7.01, whether by subrogation or otherwise, against Borrower or any other Guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. The
payment of any amounts due with respect to any indebtedness of Borrower or any other Guarantor now
or hereafter owing to any Guarantor or Borrower by reason of any payment by such Guarantor under
the Guarantee in this Article VII is hereby subordinated to the prior indefeasible payment
in full in cash of the Guaranteed Obligations. In addition, any Indebtedness of the Guarantors now
or hereafter held by any Guarantor is hereby subordinated in right of payment in full in cash to
the Guaranteed Obligations. Each Guarantor agrees that it will not demand, sue for or otherwise
attempt to collect any such indebtedness of Borrower or any other Guarantor to such Guarantor until
the Obligations shall have been indefeasibly paid in full in cash. If, notwithstanding the
preceding sentence, any Guarantor shall, prior to the indefeasible payment in full in cash of the
Guaranteed Obligations, collect, enforce or receive any amounts in respect of such indebtedness,
such amounts shall be collected, enforced and received by such Guarantor as trustee for the Secured
Parties and be paid over to Administrative Agent on account of the Guaranteed Obligations without
affecting in any manner the liability of such Guarantor under the other provisions of the guaranty
contained herein.



     SECTION 7.05. Remedies. The Guarantors jointly and severally (except to the extent otherwise
limited in accordance with applicable Requirements of Law as described in




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Annex III attached hereto) agree that, as between the Guarantors and the Lenders, the obligations of Borrower
under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as
provided in Article VIII (and shall be deemed to have become automatically due and payable
in the circumstances provided in said Article VIII) for purposes of Section 7.01,
notwithstanding any stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against Borrower and that, in the event
of such declaration (or such obligations being deemed to have become automatically due and
payable), such obligations (whether or not due and payable by Borrower) shall forthwith become due
and payable by the Guarantors for purposes of Section 7.01.




     SECTION 7.06. Instrument for the Payment of Money. Each Guarantor hereby acknowledges that
the guarantee in this Article VII constitutes an instrument for the payment of money, and
consents and agrees that any Lender or Agent, at its
sole option, in the event of a dispute by such Guarantor in the payment of any moneys due
hereunder, shall have the right to bring a motion-action under New York CPLR Section 3213 to the
extent permitted thereunder.



     SECTION 7.07. General Limitation on Guarantee Obligations. In any action or proceeding
involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the obligations of any
Guarantor under Section 7.01 would otherwise be held or determined to be void, voidable,
invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the
amount of its liability under Section 7.01, then, notwithstanding any other provision to
the contrary, the amount of such liability shall, without any further action by such Guarantor, any
Loan Party or any other person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as determined in such
action or proceeding.



     SECTION 7.08. Continuing Guarantee. The Guarantees in this Article VII are continuing
guarantees of payment, and shall apply to all Guaranteed Obligations whenever arising.



     SECTION 7.09. Release of Guarantors. If at any time after the Closing Date and in connection
with the Guarantee of any Loan Party in this Article VII (i) subject to the requirements of
Section 5.11(c), in the case of a Foreign Subsidiary, the Administrative Agent (after
consultation with Borrower) determines that in the case of any existing Guarantor, it would not be
commercially reasonable for such Guarantor to remain a Guarantor (taking into account the expense
(including taxes), the ability of Borrower or such Guarantor to obtain any necessary approvals or
consents required to be obtained under applicable law (but have not been previously obtained) in
connection therewith, and the effectiveness and enforceability thereof under applicable law) or
(ii) such Guarantee becomes illegal under applicable law and such Loan Party delivers to the
Administrative Agent, the Lenders and the Collateral Agent a legal opinion from its counsel to such
effect, and no reasonable alternative structure can be devised having substantially the same effect
as the issuance of a Guarantee that would not be illegal under applicable law, then, so long as
such Guarantor has been released or is contemporaneously released under any other guaranty such
Guarantor may be a party to, in case of each of the immediately preceding clauses (i) and
(ii), the Collateral Agent shall (at the expense of Borrower) take all action necessary to
release its security interest in that portion of the Security Agreement Collateral owned by such
Guarantor (provided, however, that 66% of the Equity Interests of such Guarantor (and 100% of the
Equity Interests of any Domesticated Foreign Subsidiary) shall not be released from the Security
Agreement Collateral)), and such Guarantor shall be released from its obligations in respect of the
Guarantees in this Article VII (such Guarantor being hereinafter



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referred to as a “Released
Guarantor,” so long as it continues to be a Non-Guarantor Subsidiary), which release from such
Guarantees, in the case of an event described in the immediately preceding clause (i),
shall become effective as of the closing of the last day of the taxable year that immediately
precedes the date that the Administrative Agent makes a determination described in such clause
(i); provided that, such Released Guarantor shall continue to be subject to Section
5.11(b).



ARTICLE VIII




Events of Default




     In case of the happening of any of the following events (“Events of Default”):




     (a) default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof (including a Term Loan Repayment Date) or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;




     (b) default shall be made in the payment of any interest on any Loan or any Fee or any
other amount (other than an amount referred to in paragraph (a) above) due under
any Loan Document, when and as the same shall become due and payable, and such default
shall continue unremedied for a period of five Business Days;




     (c) any representation or warranty made or deemed made in or in connection with any
Loan Document or the borrowings or issuances of Letters of Credit hereunder, or any
representation, warranty, statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material respect when so
made, deemed made or furnished;




     (d) default shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in Section 5.02, 5.03,
5.08, or 5.14 or in Article VI;




     (e) default shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in any Loan Document (other than those specified
in paragraph (a), (b) or (d) above), or under any Hedging Agreement
entered into with any Lender or Affiliate of a Lender, and such default shall continue
unremedied or shall not be waived for a period of 30 days after the earlier of (i) an
officer of such Company becoming aware of such default or (ii) receipt by Borrower and such
Company of notice from the Administrative Agent or any Lender of such default; provided,
however, that with respect to any default in obligations under Section 5.09(a),
such 30-day period shall be extended if the relevant Company has commenced and continues
diligently to pursue prudent and necessary response actions and otherwise complies with
Section 5.09(b) and any applicable Environmental Laws;




     (f) any Company (other than any Immaterial Subsidiary) shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness (other than
the Obligations) when and as the same shall become due and payable (after all applicable
grace periods have expired); or (ii) fail to observe or perform any other term, covenant,



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condition or agreement contained in any agreement or instrument evidencing or governing any
such Indebtedness if the effect of any failure referred to in this clause (ii) is
to cause, or to permit the holder or holders of such Indebtedness or a trustee on its or
their behalf (with or without the giving of notice, the lapse of time or both) to cause,
such Indebtedness to become due prior to its stated maturity; provided that, it shall not
constitute an Event of Default pursuant to this paragraph (f) unless the aggregate
amount of all such Indebtedness referred to in clauses (i) and (ii) exceeds
$10.0 million at any one time;




     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of any Company
(other than any Immaterial Subsidiary), or of a substantial part of the property or assets
of any Company (other than any Immaterial Subsidiary), under the Bankruptcy Code, or any
other federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii)
the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any Company (other than any Immaterial Subsidiary) or for a substantial part
of the property or assets of any Company; or (iii) the winding-up or liquidation of any
Company (other than any Immaterial Subsidiary); and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;




     (h) any Company (other than any Immaterial Subsidiary) shall (i) voluntarily commence
any proceeding or file any petition seeking relief under the Bankruptcy Code, or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in paragraph (g) above; (iii)
apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Company (other than any Immaterial Subsidiary) or
for a substantial part of the property or assets of any Company (other than any Immaterial
Subsidiary); (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding; (v) make a general assignment for the benefit of
creditors; (vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due; (vii) take any action for the purpose of effecting any of the
foregoing; or (viii) wind up or liquidate (except as otherwise permitted under Section
6.04);




     (i) one or more judgments for the payment of money in an aggregate amount in excess of
$10.0 million (to the extent not covered by insurance as to which the insurer does not
dispute coverage thereof) shall be rendered against any Company or any combination thereof
and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed;




     (j) an ERISA Event occurs, an event of noncompliance with respect to any Foreign Plan
occurs or, if the present value of the accrued benefit liabilities (whether or not vested)
under any Foreign Plan that is funded, determined as of the end of the most recently ended
fiscal year of the respective Loan Party on the basis of actuarial assumptions proper under
applicable foreign law, exceeds the current value of the assets of such Foreign Plan by
more than $2.5 million, that in the opinion of the Required Lenders, when taken together
with all other such ERISA Events, noncompliance and underfunding, could reasonably be
expected to result in liability to any Company or its ERISA Affiliates in an aggregate
amount exceeding $2.5 million;



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     (k) any security interests and Liens on an asset or assets of the Loan Parties whose
fair market value in the aggregate is greater than $500,000, purported to be created by any
Security Document shall cease to be in full force and effect, or shall cease to give the
Collateral Agent, for the benefit of the Secured Parties, the Liens, rights, powers and
privileges purported to be created and granted under such Security Documents (including a
perfected first priority security interest in and Lien on all of the Collateral thereunder
(except as otherwise expressly provided in such Security Documents)) in favor of the
Collateral Agent, or shall be asserted by Holdings, Borrower or any other Loan Party not
to be a valid, perfected, first priority (except as otherwise expressly provided in
this Agreement or such Security Document) security interest in or Lien on the Collateral
covered thereby;




     (l) any Guarantee or any Security Document shall cease to be in full force and effect,
except to the extent expressly permitted to be released hereunder in accordance with
Section 7.09;




     (m) any Loan Document or any material provisions thereof shall at any time and for any
reason be declared by a court of competent jurisdiction to be null and void, or a
proceeding shall be commenced by any Loan Party or any other person, or by any Governmental
Authority, seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof), or any Loan Party shall repudiate or
deny that it has any liability or obligation for the payment of principal or interest or
other obligations purported to be created under any Loan Document; or




     (n) there shall have occurred a Change in Control;


then, and in every such event (other than an event described in paragraph (g) or
(h) above), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to Borrower,
take any or all of the following actions, at the same or different times: (i) terminate forthwith
the Commitments (including any unused Term Loan Commitments); (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by Borrower and the Guarantors,
anything contained herein or in any other Loan Document to the contrary notwithstanding; and (iii)
direct Borrower to pay (and Borrower hereby agrees upon receipt of such notice, or upon the
occurrence of any event specified in paragraph (g) or (h) above to pay) to the
Administrative Agent such additional amounts of cash, to be invested in Cash Equivalents and held
as security for Borrower’s reimbursement Obligations in respect of Letters of Credit then
outstanding, equal to the LC Exposure at such time. In any event described in paragraph
(g) or (h) above, the Commitments (including any unused Term Loan Commitments) shall
automatically terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of Borrower accrued
hereunder and under any other Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower and the Guarantors, anything contained herein or in any other Loan Document to
the contrary notwithstanding.




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ARTICLE IX




Collateral Account; Application of Collateral Proceeds




     SECTION 9.01. Collateral Account.




     (a) The Collateral Agent is hereby authorized to establish and maintain at its office
at 4 World Financial Center, 22nd Floor, New York, NY 10080, Attention: Nancy
Meadows, in the name of the Collateral Agent with a copy to Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, NY 10036, Attention: Robert A. Copen
and pursuant to a Control Agreement, a restricted deposit account designated “Collateral
Account.” Each Loan Party shall deposit into the Collateral Account from time to time (i)
the cash proceeds of any of the Collateral (including pursuant to any disposition thereof)
to the extent contemplated herein or in any other Loan Document, and (ii) any cash such
Loan Party is required to pledge as additional collateral security hereunder pursuant to
the Loan Documents.




     (b) The balance from time to time in the Collateral Account shall constitute part of
the Collateral and shall not constitute payment of the Obligations until applied as
hereinafter provided. So long as no Event of Default has occurred and is continuing or
will result therefrom, the Collateral Agent shall, within two Business Days of receiving a
request of the applicable Loan Party for release of cash proceeds constituting (i) Net Cash
Proceeds from the Collateral Account, remit such cash proceeds on deposit in the Collateral
Account to or upon the order of such Loan Party, so long as such Loan Party has satisfied
the conditions relating thereto set forth in Section 9.02; (ii) Net Cash Proceeds
from any sale or other disposition of Collateral from the Collateral Account, remit such
cash proceeds on deposit in the Collateral Account, so long as such Loan Party has
satisfied the conditions relating thereto set forth in Section 9.02; and (iii) with
respect to the LC Sub-Account at such time as all Letters of Credit shall have been
terminated and all of the liabilities in respect of the Letters of Credit have been
indefeasibly paid in full. At any time following the occurrence and during the continuance
of an Event of Default, the Collateral Agent may (and, if instructed by the Required
Lenders as specified herein, shall) in its (or their) discretion apply or cause to be
applied (subject to collection) the balance from time to time outstanding to the credit of
the Collateral Account to the payment of the Obligations in the manner specified in
Section 9.03, subject, however, in the case of amounts deposited in the LC
Sub-Account, to the provisions of Sections 2.17(j) and 9.03. The Loan
Parties shall have no right to withdraw, transfer or otherwise receive any funds deposited
in the Collateral Account except to the extent specifically provided herein.




     (c) Amounts on deposit in the Collateral Account shall be invested from time to time
in Cash Equivalents as the applicable Loan Party (or, after the occurrence and during the
continuance of an Event of Default, the Collateral Agent) shall determine, which Cash
Equivalents shall be held in the name and be under the control of the Collateral Agent (or
any sub-agent); provided that, at any time after the occurrence and during the continuance
of an Event of Default, the Collateral Agent may (and, if instructed by the Required
Lenders as specified herein, shall) in its (or their) discretion at any time and from time
to time elect to liquidate any such Cash Equivalents and to apply or cause to be applied
the proceeds thereof to the payment of the Obligations in the manner specified in
Section 9.03.



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     (d) Amounts deposited into the Collateral Account as cover for liabilities in respect
of Letters of Credit under any provision of this Agreement requiring such cover shall be
held by the Administrative Agent in a separate sub-account designated as the “LC
Sub-Account” (the “LC Sub-Account”).



     SECTION 9.02. Proceeds of Casualty Events and Collateral Dispositions.




     (a) So long as no Event of Default shall have occurred and be continuing, in the event
there shall be any Net Cash Proceeds in respect of any Casualty Event or from any
Asset Sale of Collateral, the applicable Loan Party shall have the right, at such Loan
Party’s option, to apply such Net Cash Proceeds in accordance with the applicable
provisions of this Agreement.




     (b) In the event any Net Cash Proceeds are required to be deposited in the Collateral
Account in accordance with Section 2.10, the Collateral Agent shall not release any
part of such Net Cash Proceeds until the applicable Loan Party has furnished to the
Collateral Agent (i) an Officers’ Certificate setting forth: (A) a brief description of
the reason for the release, (B) the dollar amount of the expenditures to be made, or costs
incurred by such Loan Party in connection with such release and (C) each request for
payment shall be made on at least ten day’s prior notice to the Collateral Agent and such
request shall state that the properties acquired in connection with such release have a
fair market value at least equal to the amount of such Net Cash Proceeds requested to be
released from the Collateral Account; and (ii) all security agreements and other items
required by the provisions of Sections 5.11 and 5.12 to, among other
things, subject such reinvestment properties or assets to the Lien of the Security
Documents in favor of the Collateral Agent, for its benefit and for the benefit of the
other Secured Parties.



     SECTION 9.03. Application of Proceeds. The proceeds received by the Collateral Agent in
respect of any sale of, collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Collateral Agent of its remedies shall be applied, together with
any other sums then held by the Collateral Agent pursuant to this Agreement, promptly by the
Collateral Agent as follows:




     (a) First, to the payment of all reasonable costs and expenses, fees, commissions and
taxes of such sale, collection or other realization, including compensation to the
Collateral Agent and its agents and counsel, and all expenses, liabilities and advances
made or incurred by the Collateral Agent in connection therewith, together with interest on
each such amount at the highest rate then in effect under this Agreement from and after the
date such amount is due, owing or unpaid until paid in full;




     (b) Second, to the payment of all other reasonable costs and expenses of such sale,
collection or other realization, including compensation to the other Secured Parties and
their agents and counsel and all costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith, together with interest on each such amount
at the highest rate then in effect under this Agreement from and after the date such amount
is due, owing or unpaid until paid in full;




     (c) Third, without duplication of amounts applied pursuant to clauses (a) and
(b) above, to the indefeasible payment in full in cash, pro rata, of (i) interest,
principal and other amounts constituting Obligations (other than the Obligations arising
under the Interest Rate Protection Agreements), in each case equally and ratably in
accordance with



95









 







the respective amounts thereof then due and owing and (ii) the Obligations
arising under the Interest Rate Protection Agreements in accordance with the terms of the
Interest Rate Protection Agreements; and




     (d) Fourth, the balance, if any, to the person lawfully entitled thereto (including
the applicable Loan Party or its successors or assigns).


In the event that any such proceeds are insufficient to pay in full the items described in
clauses (a) through (c) of this Section 9.03, the Loan Parties shall remain
liable for any deficiency.




ARTICLE X




The Administrative Agent and the Collateral Agent




     Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
(it being understood that reference in this Article X to the Administrative Agent shall be
deemed to include the Collateral Agent) as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.



     The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent hereunder.



     The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or Event of Default has occurred and is continuing; (b) the Administrative Agent
shall not have any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 11.02); and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to Borrower or any of its Subsidiaries that is communicated
to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 11.02) or
in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall
not be deemed to have knowledge of any Default or an Event of Default unless and until written
notice of a Default is given to the Administrative Agent by Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan Document; (ii) the
contents of any certificate, report or other document delivered thereunder or in connection
therewith; (iii) the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document; (iv) the validity, enforceability, effectiveness or



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genuineness of any Loan Document or any other agreement, instrument or document; or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document,
other than to confirm receipt of items expressly required to be delivered to the Administrative
Agent.



     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper person.



     The Administrative Agent also may rely upon any statement made to it orally or by telephone
and believed by it to be made by the proper person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.



     The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Affiliates. The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Affiliates of each Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative Agent.



     The Administrative Agent may resign as administrative agent hereunder at any time upon at
least 30-days’ prior notice to the Lenders, the Issuing Bank and Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with Borrower, to appoint a
successor from among the Lenders. If no successor shall have been so appointed by the Required
Lenders or shall have accepted appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent, which successor shall be a
commercial banking institution organized under the laws of the United States (or any state thereof)
or a United States branch or agency of a commercial banking institution, and having combined
capital and surplus of at least $250.0 million; provided, however, that if such retiring
Administrative Agent is unable to find a commercial banking institution which is willing to accept
such appointment and which meets the qualifications set forth above, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor as provided above. Upon the acceptance by a successor of its
appointment as Administrative Agent hereunder, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The
fees payable by Borrower to a successor Administrative Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article X and
Section 11.03 shall continue in effect for the benefit of such retiring Administrative
Agent, its sub-agents and their respective Affiliates in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.



     Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each



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Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any document furnished
hereunder or thereunder.



     The Lenders identified in this Agreement, the Co-Syndication Agents and the Co-Documentation
Agents shall not have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders. Without limiting the foregoing, neither the
Co-Syndication Agents nor the Co-Documentation Agents shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to
the Co-Syndication Agents and the Co-Documentation Agents as it makes with respect to the
Administrative Agent or any other Lender in this Article X. Notwithstanding the foregoing,
the parties hereto acknowledge that the Co-Documentation Agents and Co-Syndication Agents hold such
titles in name only, and that such titles confer no additional rights or obligations relative to
those conferred on any Lender hereunder.



ARTICLE XI




Miscellaneous




     SECTION 11.01. Notices. Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:




	 	(a)	 	if to any Loan Party, to Borrower at:




Herbalife International, Inc.

1800 Century Park East

Los Angeles, California 90067

Attention: William D. Lowe

Phone: (310) 410-9600

Telecopy No.: (310) 557-3913;



With a copy to:



Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067-3026

Attention: Brian D. Kilb, Esq.

Phone: (310) 552-8500

Telecopy No.: (310) 551-8741;





	 	(b)	 	if to the Administrative Agent or the Collateral Agent, to it at:




Merrill Lynch Capital Corporation

4 World Financial Center

22nd Floor

New York, New York 10080

Attention: Nancy Meadows




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Phone: (212) 449-2879

Telecopy No.: (212) 738-1186



Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Robert A. Copen

Phone: (212) 735-3536

Telecopy No.: (917) 777-3536; and





     (c) if to a Lender, to it at its address (or telecopy number) set forth on Annex
II or in the Assignment and Acceptance pursuant to which such Lender shall have become
a party hereto.


All notices and other communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy or by certified or registered mail, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this Section
11.01 or in accordance with the latest unrevoked direction from such party given in accordance
with this Section 11.01, and failure to deliver courtesy copies of notices and other
communications shall in no event affect the validity or effectiveness of such notices and other
communications.




     SECTION 11.02. Waivers; Amendment.




     (a) No failure or delay by the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any other right
or power. The rights and remedies of the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have. No waiver
of any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by Section
11.02(b), and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default or Event of Default, regardless of whether the Administrative
Agent, the Collateral Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.




     (b) Neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this Agreement, pursuant
to an agreement or agreements in writing entered into by Borrower and the Required Lenders
or, in the case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the written consent of the Required Lenders;
provided that, no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender; (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon,



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or reduce any Fees payable hereunder,
without the written consent of each Lender affected thereby (except in connection with any
waiver of the applicability of any post-default increase in interest rates); (iii) postpone
the maturity of any Loan, or any scheduled date of payment of or installment otherwise due
on the principal amount of any
Term Loan under Section 2.09, or the required date of reimbursement of any LC
Disbursement, or any date for the payment of any interest or fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment or postpone the scheduled date of expiration of any Letter of
Credit beyond the Revolving Maturity Date, without the written consent of each Lender
affected thereby; (iv) change Section 2.14(b) or (c) in a manner that would
alter the pro rata sharing of payments or set-offs required thereby without the written
consent of each Lender; (v) change the percentage set forth in the definition of “Required
Lenders” or any other provision of any Loan Document (including this Section
11.02(b)) specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any determination or grant
any consent thereunder without the written consent of each Lender (or each Lender of such
Class, as the case may be); (vi) except as otherwise expressly permitted under this
Agreement, (A) release Holdings, Parent, Cayman III, any of the LuxCos and WH Capital from
their respective Guarantees or limit its liability in respect of such Guarantee or (B)
release all or substantially all of the Subsidiary Guarantors from their Guarantees, or
limit the liability of all or substantially all of the Subsidiary Guarantors in respect of
their Guarantees, in each case without the written consent of each Lender; (vii) release
all or substantially all of the Collateral from the Liens of the Security Documents or
alter the relative priorities of the Obligations entitled to the Liens of the Security
Documents (except in connection with securing additional Obligations equally and ratably
with the other Obligations), in each case without the written consent of each Lender; or
(viii) change any provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders holding Loans of any Class
differently than those holding Loans of any other Class without the written consent of
Lenders holding a majority in interest of the outstanding Loans and unused Commitments of
each affected Class; provided further that, (1) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, the Collateral Agent, or
the Issuing Bank without the prior written consent of the Administrative Agent, the
Collateral Agent, or the Issuing Bank, as the case may be; and (2) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties under this
Agreement of the Revolving Lenders (but not the Term Lenders) or the Term Lenders (but not
the Revolving Lenders) may be effected by an agreement or agreements in writing entered
into by Borrower and the requisite percentage in interest of the affected Class of Lenders
that would be required to consent thereto under this Section 11.02(b) if such Class
of Lenders were the only Class of Lenders hereunder at the time. Notwithstanding the
foregoing, any provision of this Agreement may be amended by an agreement in writing
entered into by Borrower, the Required Lenders and the Administrative Agent (and, if its
rights or obligations are affected thereby, the Issuing Bank) if (x) by the terms of such
agreement the Commitment of each Lender not consenting to the amendment provided for
therein shall terminate upon the effectiveness of such amendment and (y) at the time such
amendment becomes effective, each Lender not consenting thereto receives payment in full of
the principal of and interest accrued on each Loan made by it and all other amounts owing
to it or accrued for its account under this Agreement.



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     (c) If, in connection with any proposed change, waiver, discharge or termination of
any of the provisions of this Agreement as contemplated by Section 11.02(b), the
consent of the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have the right to
replace one or more of such non-consenting Lender or Lenders (so long as all non-
consenting Lenders are so replaced) with one or more persons pursuant to Section
2.16 so long as at the time of such replacement each such new Lender consents to the
proposed change, waiver, discharge or termination.



     SECTION 11.03. Expenses; Indemnity.




     (a) Borrower agrees to pay all reasonable out-of-pocket expenses (including reasonable
legal fees and expenses of counsel, expenses incurred in connection with due diligence and
travel, courier, reproduction, printing and delivery expenses) incurred by the
Administrative Agent, the Arrangers and the Issuing Bank in connection with the syndication
of the credit facilities provided for herein and the preparation, execution and delivery,
administration of this Agreement and the other Loan Documents or in connection with any
amendments, modifications, enforcement costs or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be consummated), or
incurred by the Administrative Agent, the Arrangers or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and the other
Loan Documents or in connection with the Loans made or Letters of Credit issued hereunder,
including the reasonable fees, charges and disbursements of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel for the Administrative Agent and the Collateral Agent (and one
local counsel in each foreign jurisdiction where the Administrative Agent deems such local
counsel advisable and any additional counsel to the Lenders required in the event of a
conflict of interest), and, in connection with any such enforcement or protection, the
fees, charges and disbursements of any consultants and advisors in connection with any
out-of-court workout or in any bankruptcy case.




     (b) Except to the extent otherwise limited in accordance with applicable Requirements
of Law as described in Annex III attached hereto, the Loan Parties agree, jointly
and severally, to indemnify the Agents, the Arrangers, each Lender, and the Issuing Bank,
each Affiliate of any of the foregoing persons, and each of their respective directors,
officers, trustees, employees and agents (each such person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, all reasonable out-of-pocket costs and
any and all losses, claims, damages, liabilities and related expenses, including reasonable
counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) any actual or proposed use
of the proceeds of the Loans or issuances of Letters of Credit; (ii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee
is a party thereto; or (iii) any actual or alleged presence or Release or threatened
Release of Hazardous Materials, on, under or from any property owned, leased or operated by
any Company, or any Environmental Claim related in any way to any Company; provided that,
such indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the bad
faith, gross negligence or willful misconduct of such Indemnitee. No Loan Party shall
assert any claim against any Indemnitee for special, indirect, consequential, punitive or
exemplary damages on any theory of liability in



101









 







connection in any way with this Agreement
or any Loan Document or any agreement or instrument contemplated hereby or thereby or
referred to herein or therein, the transactions contemplated hereby or thereby, any Loan,
Letter of Credit or the use of the proceeds thereof or any act or omission or event
occurring in connection therewith.




     (c) The provisions of this Section 11.03 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of the Loans,
the expiration of the Commitments, the expiration of any Letter of Credit, the invalidity
or unenforceability of any term or provision of this Agreement or any other Loan Document,
or any investigation made by or on behalf of the Agents, the Arrangers, the Issuing Bank or
any Lender. All amounts due under this Section 11.03 shall be payable on written
demand therefor accompanied by reasonable documentation with respect to any reimbursement,
indemnification or other amount requested.




     (d) To the extent that the Loan Parties fail to pay any amount required to be paid by
it to the Agents, the Arrangers or the Issuing Bank under Section 11.03(a) or
(b), each Lender severally agrees to pay to the Agents, the Arrangers or the
Issuing Bank, as the case may be, such Lender’s pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that, the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against any
of the Agents, the Arrangers or the Issuing Bank in its capacity as such. For purposes
hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of
the total Revolving Exposure, outstanding Term Loans and unused Commitments at the time.



     SECTION 11.04. Successors and Assigns.




     (a) The provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that no Loan
Party may assign or otherwise transfer any of its rights or obligations hereunder (except
in a transaction permitted under Section 6.04(f) or 6.04(g)) without the
prior written consent of each Lender (and any attempted assignment or transfer by any Loan
Party without such consent shall be null and void). Nothing in this Agreement, express or
implied, shall be construed to confer upon any person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Affiliates of each of the Agents, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.




     (b) Any Lender may assign to one or more assignees (other than Holdings or any of its
Affiliates or Subsidiaries) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the time owing to
it); provided that, (i) except in the case of an assignment to a Lender, an Affiliate of a
Lender or a Lender Affiliate, each of Borrower and the Administrative Agent (and, in the
case of an assignment of all or a portion of a Revolving Commitment or any Lender’s
obligations in respect of its LC Exposure, the Issuing Bank) must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld or delayed);
(ii) except in the case of an assignment to a Lender, an Affiliate of a Lender or a Lender
Affiliate, any assignment made in connection with the primary syndication of



102









 







the Commitment
and Loans by the Arrangers or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall be in a
principal amount that is an integral multiple of
$500,000 and not less than $1.0 million, unless each of Borrower and the
Administrative Agent otherwise consent; (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement, except that this clause (iii) shall not be construed to
prohibit the assignment of a proportionate part of all the assigning Lender’s rights and
obligations in respect of one Class of Commitments or Loans; (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment and
Acceptance; and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided further that, any consent of
Borrower otherwise required under this Section 11.04(b) shall not be required if a
Default or an Event of Default under Article VIII has occurred and is continuing.
Subject to acceptance and recording thereof pursuant to Section 11.04(d), from and
after the effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement
(provided that, any liability of Borrower to such assignee under Section 2.12,
2.13 or 2.15 shall be limited to the amount, if any, that would have been
payable thereunder by Borrower in the absence of such assignment), and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.12, 2.13, 2.15 and 11.03).
Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with this Section 11.04(b) shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with Section 11.04(e).




     (c) The Administrative Agent, acting for this purpose as an agent of Borrower, shall
maintain at one of its offices in Stamford, Connecticut a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive and Borrower, the Administrative Agent, the
Issuing Bank and the Lenders may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.




     (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder) and any written consent to such
assignment required by Section 11.04(b), together with payment to the
Administrative Agent of a registration and processing fee of $3,500 (provided that the
Administrative Agent may, in its sole discretion, waive any such fee), the Administrative
Agent shall accept such Assignment and Acceptance and record the information



103









 







contained therein in the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this Section 11.04(d).




     (e) Any Lender may, without the consent of Borrower, the Administrative Agent or the
Issuing Bank, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided that, (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of such
obligations and (iii) Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant
to which a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that, such agreement or instrument
may provide that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
11.02(b) that affects such Participant. Subject to Section 11.04(f), Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.12,
2.13 and 2.15 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to Section 11.04(b), provided, that the
respective Lender shall provide to the Borrower written notice of the name and address of
such Participant, which notice may be delivered via email or facsimile, in each case, with
a copy thereof to the Borrower via U.S. mail. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.08 as though it
were a Lender; provided that, such Participant agrees to be subject to Section
2.14(c) as though it were a Lender, provided, further, that the respective Lender shall
provide to the Borrower written notice of the name and address of such Participant, which
notice may be delivered via email or facsimile, in each case, with a copy thereof to the
Borrower via U.S. mail.




     (f) A Participant shall not be entitled to receive any greater payment under
Section 2.12, 2.13 or 2.15 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the prior written consent of
Borrower. A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.15 unless Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit of
Borrower, to comply with Section 2.15(e) as though it were a Lender.




     (g) Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and the other
provisions of this Section 11.04 shall not apply to any such pledge or assignment
of a security interest; provided that, no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for such Lender as a party hereto.



     SECTION 11.05. Survival of Agreement. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any other Loan



104









 







Document shall be considered to have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the
Agents, the Issuing Bank or any Lender may have had notice or knowledge of any Default or Event of
Default or incorrect representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.14, 2.15 and 11.03 and Article
X shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.



     SECTION 11.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement, the other Loan Documents, the Commitment Letter and the Fee Letter constitute the
entire contract among the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof.
Except as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.



     SECTION 11.07. Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



     SECTION 11.08. Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates are hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final (other than deposits in trust accounts)) at any
time held and other obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of any Loan Party against any of and all the obligations of any Loan Party now or
hereafter existing under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such obligations may be
unmatured. The rights of each Lender under this Section 11.08 are in addition to other
rights and remedies (including other rights of set-off) that such Lender may have.



     SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process.




     (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK
(INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).



105









 






     (b) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, in any action or proceeding arising
out of or relating to any Loan Document, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.




     (c) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in Section
11.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.




     (d) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 11.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.



     SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 11.10.



     SECTION 11.11. Headings. Article and section headings and the table of contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.



     SECTION 11.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Lender Affiliates’ directors,



106









 







officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the
persons to whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential pursuant to the terms hereof); (b)
to the extent requested by any regulatory authority; (c) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process; (d) to any other party to this
Agreement; (e) in connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same
as those of this Section 11.12, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction
relating to Borrower and its obligations; (g) with the consent of Borrower; or (h) to the extent
such Information (i) is publicly available at the time of disclosure or becomes publicly available
other than as a result of a breach of this Section 11.12, or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other
than Borrower or any Subsidiary. For the purposes of this Section 11.12, “Information”
shall mean all information received from a Company or any Subsidiary on a confidential basis
relating to a Company or any Subsidiary or its business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by Borrower or any Subsidiary. Any person required to maintain the
confidentiality of Information as provided in this Section 11.12 shall be considered to
have complied with its obligation to do so if such person has exercised the same degree of care to
maintain the confidentiality of such Information as such person would accord to its own
confidential information.



     SECTION 11.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if
at any time the interest rate applicable to any Loan, together with all fees, charges and other
amounts that are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 11.13 shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



     SECTION 11.14. USA Patriot Act Notice. Each Lender and the Agents (for the Agents and not on behalf of any Lender) hereby notifies
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-5
(signed into law on October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name and address of Borrower
and other information that will allow such Lender or the Agent, as applicable, to identify Borrower
in accordance with the Act.



[signature pages follow]




107









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.



	 	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL, INC.,	 	 
	 	 	a Nevada corporation, as Borrower	 	 
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WH CAPITAL CORPORATION,	 	 
	 	 	a Nevada corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL OF AMERICA, INC.,	 	 
	 	 	a Nevada corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL OF EUROPE, INC.,	 	 
	 	 	a California corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL COMMUNICATIONS, INC.,	 	 
	 	 	a California corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement




 









 






	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL DISTRIBUTION, INC.,	 	 
	 	 	a California corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE TAIWAN, INC.,	 	 
	 	 	a California corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL (THAILAND), LTD.,	 	 
	 	 	a California corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL DO BRASIL LTDA.,	 	 
	 	 	a corporation dually organized in Brazil and Delaware,
as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement



 









 






	 	 	 	 	 	 	 
	 	 	HERBALIFE LTD.,	 	 
	 	 	a Cayman Islands exempted company with limited liability, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WH INTERMEDIATE HOLDINGS LTD.,	 	 
	 	 	a Cayman Islands exempted company with limited liability, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HBL LTD.,	 	 
	 	 	a Cayman Islands exempted company with limited liability, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HV HOLDINGS LTD.,	 	 
	 	 	a Cayman Islands exempted company with limited liability, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE DISTRIBUTION LTD.,	 	 
	 	 	a Cayman Islands exempted company with limited liability, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement



 









 






	 	 	 	 	 	 	 
	 	 	WH LUXEMBOURG HOLDINGS S.à.R.L.,	 	 
	 	 	a Luxembourg corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HLF LUXEMBOURG HOLDINGS S.à R.L.,	 	 
	 	 	a Luxembourg corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	WH LUXEMBOURG INTERMEDIATE HOLDINGS S.à.R.L.,	 	 
	 	 	a Luxembourg corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE INTERNATIONAL LUXEMBOURG S.à.R.L.,	 	 
	 	 	a Luxembourg corporation, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HERBALIFE LUXEMBOURG DISTRIBUTION S.à.R.L.,	 	 
	 	 	a Luxembourg corporation, as a Guarantor	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





 Credit Agreement



 









 






	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED,	 	 
	 	 	as Joint Lead Arranger and Joint Bookrunner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL CORPORATION,	 	 
	 	 	as a Lender, Administrative Agent and Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement



 









 






	 	 	 	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,	 	 
	 	 	as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement



 









 






	 	 	 	 	 	 	 
	 	 	MORGAN STANLEY SENIOR FUNDING, INC.,	 	 
	 	 	as Joint Lead Arranger, Joint Bookrunner
and Co-Syndication Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MORGAN STANLEY & CO. INCORPORATED,	 	 
	 	 	as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 





Credit Agreement




 








 







	 	 	 	 	 	 	 
	 	 	COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK INTERNATIONAL”,
NEW YORK BRANCH, as Co-Documentation Agent, a Lender and Issuing Bank	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION, as Co-Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement




 









 








	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Co-Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement






 









 








	 	 	 	 	 	 	 
	 	 	FORTIS CAPITAL CORP., as Co-Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	CITICORP USA, INC., as Co-Documentation Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement





 









 








	 	 	 	 	 	 	 
	 	 	[LENDERS], as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






Credit Agreement




 









 








Annex I




Amortization Table




	 	 	 	 	 
	Date	 	Term Loan Amount
	December 31, 2006

	 	$	500,000	 
	March 31, 2007

	 	$	500,000	 
	June 30, 2007

	 	$	500,000	 
	September 30, 2007

	 	$	500,000	 
	December 31, 2007

	 	$	500,000	 
	March 31, 2008

	 	$	500,000	 
	June 30, 2008

	 	$	500,000	 
	September 30, 2008

	 	$	500,000	 
	December 31, 2008

	 	$	500,000	 
	March 31, 2009

	 	$	500,000	 
	June 30, 2009

	 	$	500,000	 
	September 30, 2009

	 	$	500,000	 
	December 31, 2009

	 	$	500,000	 
	March 31, 2010

	 	$	500,000	 
	June 30, 2010

	 	$	500,000	 
	September 30, 2010

	 	$	500,000	 
	December 31, 2010

	 	$	500,000	 
	March 31, 2011

	 	$	500,000	 
	June 30, 2011

	 	$	500,000	 
	September 30, 2011

	 	$	500,000	 
	December 31, 2011

	 	$	500,000	 
	March 31, 2012

	 	$	500,000	 
	June 30, 2012

	 	$	500,000	 
	September 30, 2012

	 	$	500,000	 
	December 31, 2012

	 	$	500,000	 
	March 31, 2013

	 	$	500,000	 
	June 30, 2013

	 	$	500,000	 
	Tranche B Maturity Date

	 	$	186,500,000	 






Annex I-1




 









 








Annex II




Lenders’ Notice Information and Commitments




	 	 	 	 	 	 	 	 	 
	Lender	 	Revolving Commitment	 	Term Loan Commitment
	Merrill Lynch Capital Corporation
	 	$	5,000,000	 	 	$	63,000,000	 
	JPMorgan Chase Bank, N.A.
	 	$	15,000,000	 	 	$	5,000,000	 
	Morgan Stanley Senior Funding, Inc.
	 	$	5,000,000	 	 	$	0	 
	HSBC Bank USA, National Association
	 	$	12,000,000	 	 	$	20,000,000	 
	Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A.
“Rabobank International”, New York
Branch
	 	$	12,000,000	 	 	$	20,000,000	 
	Bank of America, N.A.
	 	$	16,500,000	 	 	$	0	 
	Citicorp USA, Inc.
	 	$	16,500,000	 	 	$	0	 
	Fortis Capital Corp.
	 	$	5,000,000	 	 	$	15,000,000	 
	General Electric Capital Corporation
	 	$	0	 	 	$	20,000,000	 
	The Governor and Company of the
Bank of Ireland
	 	$	0	 	 	$	20,000,000	 
	Bayerische Hypo- Und Vereinsbank
AG, New York Branch
	 	$	5,000,000	 	 	$	10,000,000	 
	Union Bank of California, N.A.
	 	$	5,000,000	 	 	$	10,000,000	 
	The CIT Group/Equipment Financing,
Inc.
	 	$	0	 	 	$	10,000,000	 
	Comerica West Incorporated
	 	$	3,000,000	 	 	$	7,000,000	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	100,000,000	 	 	$	200,000,000	 
	 
	 	 	 	 	 	 	 	 






	 	 	 
	Merrill Lynch Capital Corporation

	 	JPMorgan Chase Bank, N.A.
	 
	 	 
	Merrill Lynch Capital Corporation

	 	JPMorgan Chase Bank, N.A.
	4 World Financial Center

	 	1999 Avenue of the Stars
	22nd Floor

	 	Floor 27
	New York, NY 10080

	 	Los Angeles, CA 90067-6022
	Attention: Nancy Meadows

	 	Attention: Jana Chiat
	Phone: (212) 449-2879

	 	Phone: (310) 760-7274
	Telecopy No.: (212) 738-1186; and

	 	Telecopy No.: (310) 860-7110; and
	 
	 	 
	Merrill Lynch Bank USA

	 	J.P. Morgan Securities Inc.
	Attention: Document Compliance Specialist

	 	1999 Avenue of the Stars
	15 West South Temple, 3rd FL

	 	Floor 27
	Salt Lake City, UT 84101

	 	Los Angeles, CA 90067-6022






Annex II-1






 









 








	 	 	 
	Phone: (801) 526-8300

	 	Attention: Lucy B. Nixon
	Telecopy No.: (801) 531-7470

	 	Phone: (310) 860-7257
	 

	 	Telecopy No.: (310) 860-7110
	 
	 	 
	Morgan Stanley Senior Funding, Inc.

	 	HSBC Bank USA, National Association
	 
	 	 
	Morgan Stanley Senior Funding, Inc.

	 	HSBC Bank USA, National Association
	One Pierrepont Plaza, 7th Floor

	 	660 S. Figueroa Street, Suite 800
	300 Cadman Plaza West

	 	Los Angeles, CA 90017
	Brooklyn, NY 11201

	 	Attention: Steven Brennan
	Attention: Joshua Rawlins/Darragh Dempsey

	 	Phone: (213) 553-8003
	Phone: (718) 754-7291/1288

	 	Telecopy No.: (213) 553-8056
	Telecopy No.: (718) 754-7249/7250
	 	 
	 
	 	 
	Cooperatieve Centrale

	 	Bank of America, N.A.
	Raiffeisen-Boerenleenbank, B.A. “Rabobank
	 	 
	International”, New York Branch

	 	Bank of America, N.A.
	 

	 	333 South Hope Street, Suite 1300
	 

	 	Los Angeles, CA 90071-1406
	Rabobank Support Services, Inc.

	 	Attention: Matthew Koenig
	Corp. Services – Loan Admin.

	 	Phone: (213) 621-7190
	10 Exchange Place, 16th Floor

	 	Telecopy No.: (213) 621-3612
	Jersey City, NJ 07302
	 	 
	Attention: Alishia Hazell
	 	 
	Phone: (201) 449-5319
	 	 
	Telecopy No.: (201) 449-5326; and
	 	 
	 
	 	 
	Rabobank International
	 	 
	13355 Noel Road, Suite 1000
	 	 
	Dallas, TX 75240
	 	 
	Attention: J. David Thomas
	 	 
	Phone: (972) 419-5266
	 	 
	Telecopy No.: (972) 419-6315
	 	 
	 
	 	 
	Citicorp USA, Inc.

	 	Fortis Capital Corp.
	 
	 	 
	Citicorp USA, Inc.

	 	Fortis Capital Corp.
	388 Greenwich Street, 21st Floor

	 	Two Emarcadero Center, Suite 1330
	New York, NY 10013

	 	San Francisco, CA 94111
	Attention: Rory Boyle

	 	Attention: Ignacio Solveyra
	Phone: (212) 816-7964

	 	Phone: (415) 283-3009
	Telecopy No.: (646)291-1866

	 	Telecopy No.: (415) 283-3013






Annex II-2




 









 








	 	 	 
	General Electric Capital Corporation

	 	The Governor and Company of the Bank of Ireland
	 
	 	 
	General Electric Capital Corporation
	 	 
	Corporate Financial Services

	 	The Governor and Company of the Bank of
	201 Merritt 7, P.O. Box 5201

	 	Ireland
	Norwalk, CT 06856-5201

	 	Bank of Ireland Leveraged Finance
	Attention: Ante Sucic

	 	U.S. Representative Office
	Phone: (203) 956-4223

	 	75 Holly Hill Lane
	Telecopy No.: (203) 956-4003

	 	Greenwich, CT 06830
	 

	 	Attention: Eimear Lillis
	 

	 	Phone: (203) 861-8969
	 

	 	Telecopy No.: (203) 552-0656
	 
	 	 
	Bayerische Hypo- Und Vereinsbank AG,

New York Branch

	 	Union Bank of California, N.A.
	 

	 	Union Bank of California, N.A.
	Bayerische Hypo- Und Vereinsbank AG, New

	 	445 S. Figueroa Street
	York Branch

	 	Los Angeles, CA 90071
	150 East 42nd Street

	 	Attention: Gail Boyle
	New York, NY 10017

	 	Phone: (213) 236-5076
	Attention: Marianne Weinzinger

	 	Telecopy No.: (213) 236-7558
	Phone: (212) 672-5352
	 	 
	Telecopy No.: (212) 672-5530
	 	 
	 
	 	 
	The CIT Group/Equipment Financing, Inc.

	 	Comerica West Incorporated
	 
	 	 
	The CIT Group/Equipment Financing, Inc.

	 	Comerica Bank
	CIT Syndicated Loan Group

	 	611 Anton Boulevard, 4th Floor
	One Stamford Plaza, 263 Tresser Blvd, 9th

	 	Costa Mesa, CA 92626
	Floor

	 	Attention: Elise Walker
	Stamford, CT 06901

	 	Phone: (714) 433-3226
	Attention: Vincent J. Devito

	 	Telecopy No.: (714) 433-3236
	Phone: (203) 564-1423
	 	 
	Telecopy No.: (203) 564-1482
	 	 






Annex II-3




 









 








Annex III




Limitations on Guarantees and Indemnities Under Applicable Foreign Laws




Limitations on the Guarantee Herbalife International Do Brasil Ltda.





Central bank approval is necessary if cash has to be sent out of Brazil for the Guarantee.



Limitations on the Guarantee Herbalife International (Thailand) Ltd.





Under the Exchange Control Law, to collect on the Guarantee the beneficiary must receive
approval from the Bank of Thailand to remit money.



Limitation on the Guarantee by Herbalife International Luxembourg S.à.R.L. and Herbalife
Luxembourg Distributions S.à.R.L.





The obligations and liabilities of any guarantor which is incorporated under the laws of
Luxembourg under this guarantee shall be limited, at any time, to an aggregate amount not
exceeding ninety percent (90%) of such Guarantor’s capitaux propres where capitaux propres
means such Luxembourg Guarantor’s shareholders’ equity (including the share capital, share
premium, legal and statutory reserves, other reserves, profits or losses carried forward,
investment subsidies and regulated provisions) as shown on the latest financial statements
(“comptes annuels”) available at the date of the relevant payment hereunder and approved by
the shareholders of the Guarantors and certified by the statutory or the independent
auditor, as the case may be.



Annex III-1