EXHIBIT 10.13


 




 





CREDIT AGREEMENT


 


Dated as of July 31, 2002


 


among


 


HERBALIFE INTERNATIONAL, INC.,

as Borrower,


 


WH HOLDINGS (CAYMAN ISLANDS) LTD.,


WH INTERMEDIATE HOLDINGS LTD.,


WH LUXEMBOURG HOLDINGS S.a.R.L.,


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


WH LUXEMBOURG CM S.a.R.L., and


THE SUBSIDIARY GUARANTORS PARTY HERETO,


as Guarantors


 


THE LENDERS PARTY HERETO,


 


RABOBANK INTERNATIONAL,

as Documentation Agent,


 


GENERAL ELECTRIC CAPITAL CORPORATION,

as Syndication Agent,


 


UBS WARBURG LLC,

as Arranger,


 


and


 


UBS AG, STAMFORD BRANCH,

as Administrative Agent and Collateral Agent




 





 
















 


TABLE OF CONTENTS


 




	
  ARTICLE I

  	
  Definitions

  	
   

  
	
   

  	
  SECTION 1.01.

  	
  Defined Terms

  	
   

  
	
   

  	
  SECTION 1.02.

  	
  Classification of
  Loans and Borrowings

  	
   

  
	
   

  	
  SECTION 1.03.

  	
  Terms Generally

  	
   

  
	
   

  	
  SECTION 1.04.

  	
  Accounting Terms; GAAP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  The Credits

  	
   

  
	
   

  	
  SECTION 2.01.

  	
  Commitments

  	
   

  
	
   

  	
  SECTION 2.02.

  	
  Loans

  	
   

  
	
   

  	
  SECTION 2.03.

  	
  Borrowing Procedure

  	
   

  
	
   

  	
  SECTION 2.04.

  	
  Evidence of Debt;
  Repayment of Loans

  	
   

  
	
   

  	
  SECTION 2.05.

  	
  Fees

  	
   

  
	
   

  	
  SECTION 2.06.

  	
  Interest on Loans

  	
   

  
	
   

  	
  SECTION 2.07.

  	
  Termination and
  Reduction of Commitments

  	
   

  
	
   

  	
  SECTION 2.08.

  	
  Interest Elections

  	
   

  
	
   

  	
  SECTION 2.09.

  	
  Amortization of Term
  Borrowings

  	
   

  
	
   

  	
  SECTION 2.10.

  	
  Optional and Mandatory
  Prepayments of Loans

  	
   

  
	
   

  	
  SECTION 2.11.

  	
  Alternate Rate of
  Interest

  	
   

  
	
   

  	
  SECTION 2.12.

  	
  Increased Costs

  	
   

  
	
   

  	
  SECTION 2.13.

  	
  Breakage Payments

  	
   

  
	
   

  	
  SECTION 2.14.

  	
  Payments Generally;
  Pro Rata Treatment; Sharing of Set-offs

  	
   

  
	
   

  	
  SECTION 2.15.

  	
  Taxes

  	
   

  
	
   

  	
  SECTION 2.16.

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
   

  
	
   

  	
  SECTION 2.17.

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  Representations and
  Warranties

  	
   

  
	
   

  	
  SECTION 3.01.

  	
  Organization; Powers

  	
   

  
	
   

  	
  SECTION 3.02.

  	
  Authorization;
  Enforceability

  	
   

  
	
   

  	
  SECTION 3.03.

  	
  Governmental
  Approvals; No Conflicts

  	
   

  
	
   

  	
  SECTION 3.04.

  	
  Financial Statements

  	
   

  
	
   

  	
  SECTION 3.05.

  	
  Properties

  	
   

  
	
   

  	
  SECTION
  3.06.

  	
  Equity
  Interests and Subsidiaries; Consent

  	
   

  
	
   

  	
  SECTION
  3.07.

  	
  Litigation;
  Compliance with Laws

  	
   

  
	
   

  	
  SECTION 3.08.

  	
  Agreements

  	
   

  
	
   

  	
  SECTION
  3.09.

  	
  Federal
  Reserve Regulations

  	
   

  
	
   

  	
  SECTION 3.10.

  	
  Investment Company
  Act; Public Utility Holding Company Act

  	
   

  
	
   

  	
  SECTION 3.11.

  	
  Use of Proceeds

  	
   

  
	
   

  	
  SECTION 3.12.

  	
  Taxes

  	
   

  
	
   

  	
  SECTION 3.13.

  	
  No Material
  Misstatements

  	
   

  
	
   

  	
  SECTION 3.14.

  	
  Labor Matters

  	
   

  
	
   

  	
  SECTION 3.15.

  	
  Solvency

  	
   

  
	
   

  	
  SECTION 3.16.

  	
  Employee Benefit
  Plans

  	
   

  
	
   

  	
  SECTION 3.17.

  	
  Environmental
  Matters

  	
   

  
	
   

  	
  SECTION 3.18.

  	
  Insurance

  	
   

  
	
   

  	
  SECTION 3.19.

  	
  Security Documents

  	
   

  
	
   

  	
  SECTION 3.20.

  	
  Material Adverse
  Changes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  Conditions of Lending

  	
   

  
	
   

  	
  SECTION 4.01.

  	
  All Credit Extensions

  	
   

  
	
   

  	
  SECTION 4.02.

  	
  Initial Credit
  Extension

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  Affirmative Covenants

  	
   

  
	
   

  	
  SECTION 5.01.

  	
  Financial Statements,
  Reports, Etc

  	
   

  
	
   

  	
  SECTION 5.02.

  	
  Litigation and Other
  Notices

  	
   

  
	
   

  	
  SECTION 5.03.

  	
  Existence; Businesses
  and Properties

  	
   

  
	
   

  	
  SECTION 5.04.

  	
  Insurance

  	
   

  
	
   

  	
  SECTION 5.05.

  	
  Taxes

  	
   

  
	
   

  	
  SECTION 5.06.

  	
  Employee Benefits

  	
   

  
	
   

  	
  SECTION 5.07.

  	
  Maintaining Records;
  Access to Properties and Inspections

  	
   

  
	
   

  	
  SECTION 5.08.

  	
  Use of Proceeds

  	
   

  
	
   

  	
  SECTION 5.09.

  	
  Compliance with
  Environmental Laws; Environmental Reports

  	
   

  
	
   

  	
  SECTION 5.10.

  	
  Interest Rate
  Protection

  	
   

  
	
   

  	
  SECTION
  5.11.

  	
  Additional
  Collateral; Additional Guarantors

  	
   

  
	
   

  	
  SECTION 5.12.

  	
  Security Interests;
  Further Assurances

  	
   

  
	
   

  	
  SECTION 5.13.

  	
  Post-Closing Matters

  	
   

  
						






 


i
















 




	
  ARTICLE VI

  	
  Negative Covenants

  	
   

  
	
   

  	
  SECTION 6.01.

  	
  Indebtedness

  	
   

  
	
   

  	
  SECTION 6.02.

  	
  Liens

  	
   

  
	
   

  	
  SECTION 6.03.

  	
  Investments, Loans and
  Advances

  	
   

  
	
   

  	
  SECTION 6.04.

  	
  Mergers,
  Consolidations, Sales and Purchases of Assets

  	
   

  
	
   

  	
  SECTION 6.05.

  	
  Dividends

  	
   

  
	
   

  	
  SECTION 6.06.

  	
  Transactions with
  Affiliates

  	
   

  
	
   

  	
  SECTION 6.07.

  	
  Financial Covenants

  	
   

  
	
   

  	
  SECTION 6.08.

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

  	
   

  
	
   

  	
  SECTION 6.09.

  	
  Limitation on Certain
  Restrictions on Subsidiaries

  	
   

  
	
   

  	
  SECTION 6.10.

  	
  Limitation on Issuance
  of Capital Stock

  	
   

  
	
   

  	
  SECTION 6.11.

  	
  Limitation on Creation
  of Subsidiaries

  	
   

  
	
   

  	
  SECTION 6.12.

  	
  Sale and Leaseback
  Transactions

  	
   

  
	
   

  	
  SECTION 6.13.

  	
  Business

  	
   

  
	
   

  	
  SECTION 6.14.

  	
  Limitation on
  Accounting Changes

  	
   

  
	
   

  	
  SECTION 6.15.

  	
  Fiscal Year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  Guarantee

  	
   

  
	
   

  	
  SECTION 7.01.

  	
  The Guarantee

  	
   

  
	
   

  	
  SECTION 7.02.

  	
  Obligations
  Unconditional

  	
   

  
	
   

  	
  SECTION 7.03.

  	
  Reinstatement

  	
   

  
	
   

  	
  SECTION 7.04.

  	
  Subrogation;
  Subordination

  	
   

  
	
   

  	
  SECTION 7.05.

  	
  Remedies

  	
   

  
	
   

  	
  SECTION 7.06.

  	
  Instrument for the
  Payment of Money

  	
   

  
	
   

  	
  SECTION 7.07.

  	
  General Limitation on
  Guarantee Obligations

  	
   

  
	
   

  	
  SECTION 7.08.

  	
  Continuing Guarantee

  	
   

  
	
   

  	
  SECTION 7.09.

  	
  Release of
  Guarantors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  Collateral Account;
  Application of Collateral Proceeds

  	
   

  
	
   

  	
  SECTION 9.01.

  	
  Collateral Account

  	
   

  
	
   

  	
  SECTION
  9.02.

  	
  Proceeds
  of Casualty Events and Collateral Dispositions

  	
   

  
	
   

  	
  SECTION 9.03.

  	
  Application of
  Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  The Administrative Agent and
  the Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  Miscellaneous

  	
   

  
	
   

  	
  SECTION 11.01.

  	
  Notices

  	
   

  
	
   

  	
  SECTION 11.02.

  	
  Waivers; Amendment

  	
   

  
	
   

  	
  SECTION 11.03.

  	
  Expenses; Indemnity

  	
   

  
	
   

  	
  SECTION 11.04.

  	
  Successors and
  Assigns

  	
   

  
	
   

  	
  SECTION 11.05.

  	
  Survival of
  Agreement

  	
   

  
	
   

  	
  SECTION 11.06.

  	
  Counterparts;
  Integration; Effectiveness

  	
   

  
	
   

  	
  SECTION 11.07.

  	
  Severability

  	
   

  
	
   

  	
  SECTION 11.08.

  	
  Right of Set-off

  	
   

  
	
   

  	
  SECTION 11.09.

  	
  Governing Law;
  Jurisdiction; Consent to Service of Process

  	
   

  
	
   

  	
  SECTION 11.10.

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
   

  	
  SECTION 11.11.

  	
  Headings

  	
   

  
	
   

  	
  SECTION 11.12.

  	
  Confidentiality

  	
   

  
	
   

  	
  SECTION 11.13.

  	
  Interest Rate
  Limitation

  	
   

  
	
   

  	
  SECTION 11.14.

  	
  Obligations
  Conditional on Making of Initial Loans

  	
   

  
					






 


	
  ANNEXES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annex I

  	
   

  	
  Amortization Table

  	
   

  
	
  Annex II

  	
   

  	
  Lenders’ Notice Information
  and Commitments

  	
   

  
	
  Annex III

  	
   

  	
  Consolidated EBITDA

  	
   

  
	
  Annex IV

  	
   

  	
  Limitations on Guarantees and
  Indemnities Under Applicable Foreign Laws

  	
   

  



 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
   

  	
  Deposit
  Accounts

  



 


ii
















 


	
  Schedule
  1.01(b)

  	
   

  	
  Immaterial
  Subsidiaries

  
	
  Schedule
  1.01(c)

  	
   

  	
  Mortgaged
  Real Property

  
	
  Schedule
  1.01(d)

  	
   

  	
  Refinancing
  Indebtedness to be Repaid

  
	
  Schedule
  1.01(e)

  	
   

  	
  Subsidiary
  Guarantors

  
	
  Schedule
  3.03

  	
   

  	
  Governmental
  Approvals; Compliance with Laws

  
	
  Schedule
  3.05(b)

  	
   

  	
  Real
  Properties

  
	
  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
  4.02(n)

  	
   

  	
  Leased
  Properties

  
	
  Schedule
  5.11(b)

  	
   

  	
  Section
  5.11(b) Listed Subsidiaries

  
	
  Schedule
  5.13

  	
   

  	
  Post-Closing
  Matters

  
	
  Schedule
  6.01

  	
   

  	
  Existing
  Indebtedness

  
	
  Schedule
  6.02

  	
   

  	
  Existing
  Liens

  
	
  Schedule
  6.03

  	
   

  	
  Existing
  Investments

  



 


iii
















 


	
  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-1

  	
   

  	
  Form
  of Agreement and Estoppel Certificate

  
	
  Exhibit
  E-2

  	
   

  	
  Form
  of Landlord Lien Waiver and Access Agreement

  
	
  Exhibit
  F

  	
   

  	
  Form
  of U.S. Security Agreement

  
	
  Exhibit
  G

  	
   

  	
  Form
  of Intercompany Note

  
	
  Exhibit
  H

  	
   

  	
  Form
  of Joinder Agreement

  
	
  Exhibit
  I-1

  	
   

  	
  Form
  of Perfection Certificate

  
	
  Exhibit
  I-2

  	
   

  	
  Form
  of Perfection Certificate Supplement

  
	
  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 Monitoring Fee Agreement

  
	
  Exhibit
  M

  	
   

  	
  Form
  of Letter of Credit Request

  



 


iv
















 


CREDIT AGREEMENT


 


This CREDIT AGREEMENT (as amended,
restated, supplemented or otherwise modified from time to time, this “AGREEMENT”),
dated as of July 31, 2002, is among HERBALIFE INTERNATIONAL, INC., a Nevada
corporation (“BORROWER”); WH HOLDINGS (CAYMAN ISLANDS) LTD., a Cayman Islands
corporation (“HOLDINGS”); WH INTERMEDIATE HOLDINGS LTD., a Cayman Islands
corporation and a direct, wholly-owned subsidiary of Holdings (“PARENT”); WH
LUXEMBOURG HOLDINGS S.a.R.L., a Luxembourg corporation and a direct,
wholly-owned subsidiary of Parent (“LUXEMBOURG HOLDINGS”); WH LUXEMBOURG
INTERMEDIATE HOLDINGS S.a.R.L. (“LUXEMBOURG INTERMEDIATE HOLDINGS”) and WH
LUXEMBOURG CM S.a.R.L. (“LUXEMBOURG CM,” and together with Luxembourg Holdings
and Luxembourg Intermediate Holdings, the “LUXCOS”), each a Luxembourg
corporation and a direct, wholly-owned subsidiary of Luxembourg Holdings; 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, the LuxCos and each other Subsidiary Guarantor from time
to time executing a Guarantee (defined herein) as required hereunder, the
“GUARANTORS”); THE LENDERS PARTY HERETO; UBS WARBURG LLC, as lead arranger (in
such capacity, the “ARRANGER”); RABOBANK INTERNATIONAL, as Documentation Agent
(in such capacity, the “DOCUMENTATION AGENT”); GENERAL ELECTRIC CAPITAL
CORPORATION, as Syndication Agent (in such capacity, the “SYNDICATION AGENT”);
and UBS AG, STAMFORD BRANCH, as administrative agent for the Lenders (in such
capacity, the “ADMINISTRATIVE AGENT”), collateral agent for the Secured Parties
(defined herein) (in such capacity, the “COLLATERAL AGENT”), and Issuing Bank.


 


WITNESSETH:


 


WHEREAS, Holdings, Parent, the LuxCos
and WH Acquisition Corp., a Nevada corporation and an indirect, wholly-owned
subsidiary of Holdings (“WH ACQUISITION”), have been formed by Whitney &
Co., LLC and Golden Gate Private Equity, Inc. for the purpose of acquiring all
of the outstanding shares of capital stock of Borrower (the “ACQUISITION”);


 


WHEREAS, for the purpose of
effectuating the Acquisition, Borrower, Holdings and WH Acquisition have
entered into that certain Agreement and Plan of Merger, dated as of April 10,
2002 (as amended, supplemented or otherwise modified from time to time in
accordance with the provisions hereof and thereof, the “MERGER AGREEMENT”), whereby
on the Closing Date WH Acquisition will be merged with and into Borrower (the
“MERGER”), with Borrower surviving the Merger;


 


WHEREAS, to provide part of the
funding necessary for the Acquisition and to provide for other general
corporate purposes, Borrower has requested the Lenders to extend certain credit
facilities in the form of (a) Term Loans on the Closing Date, in an aggregate
principal amount not in excess of $180.0 million and (b) Revolving Loans at any
time and from time to time after the Closing Date and prior to the Revolving
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of $25.0 million;


 


WHEREAS, Borrower has further
requested the Issuing Bank to issue letters of credit, in an aggregate face
amount at any time outstanding not in excess of $10.0 million, to support
payment obligations incurred in the ordinary course of business by Borrower and
its Subsidiaries;


 
















 


WHEREAS, the proceeds of the Loans
are to be used in accordance with Section 3.11; and


 


WHEREAS, Holdings, Parent, the
LuxCos, and the Subsidiary Guarantors have agreed to guarantee Borrower’s
Obligations hereunder and under the other applicable Loan Documents, as a
condition precedent to the Lenders extending Loans and the Issuing Bank issuing
Letters of Credit to Borrower;


 


NOW, THEREFORE, the Lenders are
willing to extend such credit to Borrower and the Issuing Bank is willing to
issue letters of credit for the account of Borrower on the terms and subject to
the conditions set forth herein. Accordingly, 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 BORROWING” means a
Borrowing comprised of ABR Term Loans.


 


“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.


 


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


 


“ADJUSTED LIBOR RATE” means, with
respect to any Eurodollar Borrowing for any Interest Period, (a) an interest
rate per annum (rounded upward, if necessary, to the next 1/100 of 1%)
determined by the Administrative Agent to be equal to the LIBOR Rate for such
Eurodollar Borrowing in effect for such Interest Period divided by (b) 1 minus
the Statutory Reserves (if any) for such Eurodollar Borrowing for such Interest
Period.


 


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


 


“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.


 


1
















 


“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 the Syndication Agent,
the Administrative Agent and the Collateral Agent.


 


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


 


“AGREEMENT AND ESTOPPEL CERTIFICATE”
means any Agreement and Estoppel Certificate between a Loan Party, as tenant,
and the applicable holder of the fee interest, as landlord, substantially in
the form of Exhibit E-1.


 


“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.


 


“ANNUALIZED BASIS” means, with
respect to the determination of any amount for any period (for purposes of this
definition, the “SUBJECT PERIOD”), the product obtained by multiplying (i) the
amount accrued during the period commencing with (and including) the Closing
Date and ending on the last day of the Subject Period and (ii) the quotient
obtained by dividing (x) 365 by (y) the number of days from (and including) the
Closing Date to (and including) the last day of the Subject Period.


 


“APPLICABLE COMMITMENT FEE
PERCENTAGE” means, for any day, an amount per annum equal to 0.50%.


 


“APPLICABLE MARGIN” means, for any
day, (a) (i) with respect to any Eurodollar Term Loan, an amount per annum
equal to 4.00%, and (ii) with respect to any ABR Term Loan, an amount per annum
equal 3.00%, and (b) with respect to any Revolving Loan, the applicable amount
per annum set forth below:


 


	
  LEVERAGE
  RATIO

  	
   

  	
  APPLICABLE PERCENTAGE

  (REVOLVING LOANS)

  	
   

  
	
   

  	
  Eurodollar

  	
   

  	
  ABR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level I

  >2.25:1.0

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  
	
  Level II

  <2.25:1.0

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  



 


2
















 


Each change
in the Applicable Margin with respect to Revolving Loans resulting from a
change in the Leverage Ratio shall be effective with respect to all Revolving
Loans and Letters of Credit outstanding on and after the date of delivery to
the Administrative Agent of the financial statements and certificates required
by Section 5.01(a) or (b) and Section 5.01(c), respectively, indicating such
change until the date immediately preceding the next date of delivery of such
financial statements and certificates indicating another such change.
Notwithstanding the foregoing, (a) from the Closing Date to the date of
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(c) for the
first full fiscal period ended after the Closing Date, the Leverage Ratio shall
be deemed to be at Level I for purposes of determining the Applicable Margin
with respect to Revolving Loans and (b) at any time during which Borrower has
failed to deliver the financial statements and certificates required by Section
5.01(a) or (b) and Section 5.01(c), the Leverage Ratio shall be deemed to be at
Level I for purposes of determining the Applicable Margin with respect to
Revolving Loans.


 


“APPLICABLE TAX RATE” means, in
respect of any particular Tax Determination Year, a percentage equal to the
highest marginal United States federal income tax rate applicable to an
individual in respect of such Tax Determination Year as determined by the Tax
Amounts CPA.


 


“ARRANGER” 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 Parent’s
Subsidiaries by the holder thereof) by Parent or any of its Subsidiaries to any
person other than a Loan Party (other than sales and other dispositions of
inventory in the ordinary course of business) and (b) any issuance or sale by
any Subsidiary of Parent 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 equal to the corporate base rate of interest established
by the Administrative Agent from time to time; each change in the Base Rate
shall be effective on the date such change is publicly announced as being
effective. The corporate base rate is not necessarily the lowest rate charged
by the Administrative Agent to its customers.


 


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


 


3
















 


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


 


“BORROWING” means Loans of the same
Class and Type, made, converted or continued on the same date 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.


 


“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 with Net
Cash Proceeds from Asset Sales (other than through leases) in accordance with
this Agreement, to the extent such expenditures do not exceed the book value of
such assets, and (ii) expenditures of Net Cash Proceeds from a Casualty Event
in accordance with this Agreement.


 


“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 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 or the District of Columbia 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 Standard & Poor’s Rating Service or at least P-2 or
the equivalent thereof by Moody’s Investors Service, Inc., 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 Standard & Poor’s Rating Service, “Aa2” or better by Moody’s
Investors Service, Inc. or an equivalent rating by any other credit rating
agency of recognized national standing, provided that,


 


4
















 


such
obligations mature within six months from the date of acquisition thereof; and
(h) investments in mutual funds or variable rate notes that invest in tax
exempt obligations of the types described in clause (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 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.


 


“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 100% of the capital
stock of Parent; (b) Parent at any time ceases to own 100% of the capital stock
of Luxembourg Holdings; (c) Luxembourg Holdings at any time ceases to own 100%
of the capital stock of each of Luxembourg CM and Luxembourg Intermediate
Holdings; (d) for a period of one month following the Closing Date, Parent and
Luxembourg Holdings cease to own, directly or indirectly, 100% of the capital
stock of Borrower; (e) at any time after one month following the Closing Date
Luxembourg Intermediate Holdings at any time ceases to own 100% of the capital
stock of Borrower; (f) prior to an IPO, the Permitted Holders cease to own, or
to have the power to vote or direct the voting of, Voting Stock representing
more than 50% of the voting power of the total outstanding Voting Stock; (g)
following an IPO, either (i) the Permitted Holders cease to own, or to have the
power to vote or direct the voting of, Voting Stock representing at least 35%
of the voting power of the total outstanding Voting Stock or (ii) 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 (ii) 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 30% of the voting power of the total outstanding Voting Stock; or (h)
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
662/3% 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.


 


5
















 


“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, and when used in reference
to any Commitment, refers to whether such Commitment is a Revolving Commitment
or Term Loan Commitment.


 


“CLOSING DATE” means the date of the
initial Credit Extension.


 


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


 


“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 Borrower or any of its Subsidiaries, for the purpose of
providing the primary payment mechanism in connection with the purchase of any
materials, goods or services by Borrower or any of its Subsidiaries in the
ordinary course of business of Borrower or such Subsidiaries.


 


“COMMITMENT” means, with respect to
any Lender, such Lender’s Revolving Commitment or Term Loan Commitment.


 


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


 


“COMMITMENT LETTER” means the
Commitment Letter, dated April 10, 2002, among Whitney & Co., LLC, Golden
Gate Private Equity, Inc., UBS AG, Stamford Branch, and UBS Warburg LLC, as
amended.


 


“COMPANIES” means Holdings and its
Subsidiaries; and “COMPANY” means any one of them.


 


“COMPANY LEASE” has the meaning
assigned to such term in Section 3.05(b).


 


“CONSOLIDATED COMPANIES” means Parent
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 may properly be 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 may properly
be 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


 


6
















 


same
proportion) deducted in determining Consolidated Net Income (and with respect
to the portion of Consolidated Net Income attributable to any Subsidiary of
Parent only to the extent a corresponding amount would be permitted at the date
of determination to be distributed to Borrower by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Subsidiary or its stockholders), by
(x) adding thereto (i) the amount of Consolidated Interest Expense, (ii)
provision for taxes based on income, (iii) any Tax Amounts Payment made during
such period, (iv) amortization (including amortization of deferred fees and the
accretion of the discount related to the Senior Subordinated Notes), (v)
depreciation, (vi) 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, (vii) nonrecurring expenses and charges of WH Acquisition and
Borrower related to the Merger and the other Transactions, including the
issuance of the Senior Subordinated Notes and the Holdings Senior Discount
Notes, and related expenses and charges, and (viii) for any applicable
determination period or portion thereof ending on or prior to September 30,
2003, the one-time charges for the applicable periods set forth on Annex III
attached hereto; and (y) subtracting therefrom (i) dividends paid to such
person pursuant to Section 6.05(c) and (ii) the 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 FIXED CHARGE COVERAGE
RATIO” means, as of the close of any fiscal quarter of Parent, 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 Fixed Charges (for all such fiscal
quarters); provided that, in the event the applicable four-fiscal-quarter period
would include any period of time prior to the Closing Date, the amounts
referred to in clause (a) of the definition of “Consolidated Fixed Charges”
shall be determined, for the purposes of calculation of Consolidated Fixed
Charge Coverage Ratio, on an Annualized Basis.


 


“CONSOLIDATED FIXED CHARGES” means,
with respect to any person for any period, the sum, without duplication, of (a)
Consolidated Interest Expense for such period, (b) the amount of all Capital
Expenditures made in cash by such person and its Subsidiaries during such
period, and (c) the scheduled principal amount of all amortization payments on
all Indebtedness (including the principal component of all Capital Lease
Obligations, to the extent not covered by clause (b) above) of such person and
its Subsidiaries for such period (as determined on the first day of the
respective period).


 


“CONSOLIDATED INDEBTEDNESS” means,
with respect to any person as at any date of determination, the aggregate
amount of all Indebtedness (but including in any event 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 Parent, 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), provided that, in the event the applicable four-fiscal-quarter
period would include any period of time prior to the Closing Date,


 


7
















 


Consolidated
Interest Expense for the purposes of this clause (b) shall be determined on an
Annualized Basis.


 


“CONSOLIDATED INTEREST EXPENSE”
means, with respect to any person for any period, the total consolidated cash
interest expense 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 plus,
without duplication, (a) the portion of Capital Lease Obligations of such
person and its Consolidated Subsidiaries representing the interest factor for
such period, (b) imputed interest on Attributable Indebtedness, (c) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any person (other than Borrower or a Wholly Owned Subsidiary of
Borrower) in connection with Indebtedness incurred by such plan or trust, (d)
all interest payable with respect to discontinued operations, and (e) imputed
interest on Synthetic Lease Obligations.


 


“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 (provided that, in the event that the applicable four-fiscal-quarter
period would include any period prior to the Closing Date, Consolidated Net
Income would include the net after tax income of Borrower and its Subsidiaries
prior to the Closing Date from the first day of the applicable four-fiscal
quarter period), reduced by the



amount of any Tax Amounts Payment made during such period, 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 (subject to the limitation in clause (b) below)
in the form of cash distributions, (b) any portion of the net earnings of any
of such person’s Consolidated Subsidiaries that is unavailable for payment of
dividends to such person or any other of its Consolidated Subsidiaries by
reason of the provisions of any agreement or applicable law or regulation,
except (in the case of any such portion of net earnings) to the extent such net
earnings are receivable by such person or any of its Consolidated Subsidiaries
in some other manner, and (c) 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 (other than pursuant to the
Merger).


 


“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) at the option and upon request of the
Collateral Agent, the appropriate Loan Party shall maintain cash reserves in an
amount sufficient to pay and discharge such Lien and the Arranger’s reasonable
estimate of all interest and penalties related thereto; and


 


8
















 


(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.


 


“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 Parent 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 Parent 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 Parent, the LuxCos or 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).


 


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


 


“DISQUALIFIED CAPITAL STOCK” means
any Equity Interest that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, (a) matures (excluding any maturity as the result of an optional


 


9
















 


redemption
by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the first anniversary of the Term Loan
Maturity Date; (b) is convertible into or exchangeable (unless at the sole
option of the issuer thereof) for (i) debt securities, or (ii) any Equity
Interests referred to in clause (a) above, in each case at any time prior to
the first anniversary of the Term Loan Maturity Date; or (c) contains any
repurchase obligation that may come into effect prior to payment in full of all
amounts hereunder.


 


“DIVIDEND” with respect to any person
means that such person has declared or paid a dividend or returned any equity
capital to its stockholders or authorized 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, or shall have permitted any of its
subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of such person outstanding on or after the
Closing Date (or any options or warrants issued by such person with respect to
its capital stock). Without limiting the foregoing, “DIVIDEND” with respect to
any person also includes all payments made or required to be 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.


 


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


 


“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.


 


“ENGAGEMENT LETTER” means the
Engagement Letter, dated April 10, 2002, among Whitney & Co., LLC, Golden
Gate Private Equity, Inc. and UBS Warburg LLC.


 


“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


 


10
















 


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. Sections
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. Sections 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C.
Sections 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C.
Sections 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Sections 651 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., the Safe Drinking
Water Act of 1974, as amended, 42 U.S.C. Sections 300(f) et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 5101 et seq., and any similar
or implementing state, 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 FINANCING” means the initial
cash equity investment in Holdings by the Permitted Holders and certain
co-investors acceptable to the Administrative Agent on or prior to the Closing
Date, in an amount not less than $176.0 million, and the concurrent or
subsequent cash equity investment in Holdings by certain distributors and
management on or after the Closing Date, in each case on terms and conditions
reasonably satisfactory to the Administrative Agent.


 


“EQUITY FINANCING DOCUMENTS” means
all documents executed and delivered with respect to the Equity Financing.


 


“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 date hereof.


 


“EQUITY ISSUANCE” means, without
duplication, any issuance or sale by Holdings or any of its Subsidiaries (other
than by Borrower to Luxembourg Intermediate Holdings, by Luxembourg
Intermediate Holdings or Luxembourg CM to Luxembourg Holdings, by Luxembourg
Holdings to Parent, or by Parent to Holdings) after the Closing Date of (a) any
Equity Interests (including any Equity Interests issued upon exercise of any
warrant or option) or any warrants or options to purchase Equity Interests, or
(b) any other security or instrument representing an Equity Interest (or the
right to obtain any Equity Interest) in the issuing or selling person;
provided, however, that an Equity Issuance shall not include any such sale or
issuance by Holdings of (i) not more than an aggregate amount of 15.5% of the
shares of its Equity Interests or any warrants or options to purchase its
Equity Interests (including such Equity Interests issued upon exercise of any
warrant or option but excluding any Disqualified Capital Stock), in each


 


11
















 


case to
directors, officers or employees of any Company, (ii) its Equity Interests in
connection with the Equity Financing and (iii) warrants to purchase its Equity
Interests issued in connection with the Holdings Senior Discount Notes.


 


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


 


“ERISA AFFILIATE” means any trade or
business (whether or not incorporated) that, together with Borrower, 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 incurrence by any Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal from any Plan or Multiemployer Plan; (g) the
receipt by any Company or 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; (h) the 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;
(i) 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; (j) 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 (k) 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
ERISA Affiliates in connection with any Plan.


 


“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
Adjusted LIBOR Rate in accordance with the provisions of Article II.


 


“EURODOLLAR TERM BORROWING” means a
Borrowing comprised of Eurodollar Term Loans.


 


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


 


12
















 


“EVENT OF DEFAULT” has the meaning
assigned to such term in Article VIII.


 


“EXCESS CASH FLOW” means, for any
fiscal year of Parent, the sum, without duplication, of


 


(d) Consolidated EBITDA of Parent for such
fiscal year; plus


 


(e) extraordinary net cash gains or net
cash gains from sales of assets, if any, during such fiscal year not included
in Consolidated Net Income; plus


 


(f) reductions to noncash working capital
of Parent 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


 


(g) the amount of any cash income taxes
payable by Parent and its Consolidated Subsidiaries with respect to such fiscal
year and, to the extent permitted hereunder, any Tax Amounts Payments made
during such fiscal year; minus


 


(h) Consolidated Interest Expense of Parent
during such fiscal year; minus


 


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


 


(j) permanent repayments of Indebtedness
made by Parent 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); but only to the extent such repayments are permitted hereunder and
do not occur in connection with a refinancing of all or any portion of the
Loans; minus


 


(k) extraordinary cash losses from the sale
of assets permitted hereunder during such fiscal year and not included in
Parent’s Consolidated Net Income; minus


 


(l) additions to noncash working capital of
Parent 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);


 


provided
that, with respect to Parent’s fiscal year 2002 only, for the purposes of this
definition of “EXCESS CASH FLOW,” each of the foregoing shall be calculated for
the period from and including the Closing Date through and including the last
day of Parent’s fiscal year 2002.


 


“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) federal, state or local income or franchise taxes
imposed on (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


 


13
















 


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).


 


“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 Bank
Facilities Fee Letter, dated April 10, 2002, among Whitney & Co., LLC,
Golden Gate Private Equity, Inc., UBS AG, Stamford Branch, and UBS Warburg LLC,
as amended.


 


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


 


“FINAL DETERMINATION” means a final
“determination” as defined under Section 1313 of the Tax Code or a similar
determination under applicable state, local or foreign law.


 


“FINAL DETERMINATION AMOUNT” means,
in respect of any particular Tax Determination Year, any additional taxes,
interest, and penalties resulting from a Final Determination and arising from
or attributable to amounts paid or accrued pursuant to the Intercompany Service
Agreement.


 


“FINANCIAL OFFICER” of any person
means the chief financial officer, principal 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.


 


14
















 


“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.


 


“GOVERNMENTAL REAL PROPERTY
DISCLOSURE REQUIREMENTS” means any Requirement of Law of any Governmental
Authority requiring notification of the buyer, mortgagee or assignee of Real
Property, or notification, registration or filing to or with any Governmental
Authority, prior to the sale, mortgage or assignment of any Real Property or
transfer of control of an establishment, of the actual or threatened presence
or release into the environment, or the use, disposal or handling of Hazardous
Material on, at, under or near the Real Property to be sold, mortgaged or
assigned or the establishment for which control is to be transferred.


 


“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 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.


 


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


 


“HOLDINGS CFC GROUP” means Holdings
and the members of the Parent CFC Group.


 


“HOLDINGS SENIOR DISCOUNT NOTE
AGREEMENT” means any indenture, note purchase agreement or other agreement
pursuant to which any Holdings Senior Discount Notes are issued.


 


“HOLDINGS SENIOR DISCOUNT NOTE
DOCUMENTS” means the Holdings Senior Discount Notes, the Holdings Senior
Discount Note Agreement, and all other documents executed and delivered with
respect to either of the foregoing.


 


“HOLDINGS SENIOR DISCOUNT NOTE ESCROW
ACCOUNT” means the securities account in the name of Holdings, into which the
first two and one-half years of interest payable on the Holdings Senior
Discount Notes shall be deposited upon or prior to the issuance thereof.


 


15
















 


“HOLDINGS SENIOR DISCOUNT NOTES”
means the senior discount notes issued by Holdings in connection with the
Merger, a portion of the proceeds of which have been contributed to Parent and
Borrower as a contribution to the equity of Borrower for which no consideration
other than the issuance of Qualified Capital Stock is given.


 


“IMMATERIAL SUBSIDIARY” means a
Subsidiary that generates less than $1.0 million of retail 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
retail sales during its first full year of operation). Notwithstanding the
foregoing, in no event shall H & L (Suzhou) Health Products Ltd. constitute
an Immaterial Subsidiary. 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 on normal trade
terms and not overdue by more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with GAAP
have been established); (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 then 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.


 


16
















 


“INTERCOMPANY SERVICE AGREEMENT”
means a service agreement (or, if more than one service agreement is entered
into, the aggregate of all such service agreements) entered into by and among
an Intercompany Service Provider and one or more members of the Parent Group,
the pricing of which is determined on an arm’s-length basis and in compliance
with the “best method rule” and the “documentation requirements” under Sections
482 and 6662 of the Tax Code and the Treasury regulations promulgated
thereunder.


 


“INTERCOMPANY SERVICE PROVIDER” means
any member of the Parent CFC Group that is a Loan Party and that is obligated
to render services pursuant to the Intercompany Service Agreement.


 


“INTERCOMPANY SERVICE RECEIPTS”
means, in respect of any Tax Determination Year, amounts received or receivable
by the Intercompany Service Provider from members of the Parent Group in
respect of services provided by the Intercompany Service Provider to such
members pursuant to an Intercompany Service Agreement.


 


“INTERCOMPANY SERVICE SUBPART F
INCOME” means, in respect of any Tax Determination Year, (i) the subpart F
income of any member of the Holdings CFC Group for such year as determined
under Section 951(a)(1)(A) of the Tax Code and (ii) the amount of earnings of
any member of the Holdings CFC Group for such year as determined under Section
951(a)(1)(B) of the Tax Code in respect of any Section 956 amount that, in the
case of each of the immediately preceding clauses (i) and (ii) and without
duplication, arises from or is attributable to Intercompany Service Receipts
(or the distribution, payment, or transfer of receipts by such member to
another member of the Holdings CFC Group).


 


“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 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 months thereafter, as Borrower may elect;
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; provided, however,
that an Interest Period shall be limited to seven days to the extent required
under Section 2.03(e) hereof.


 


17
















 


“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, Equity
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. 


 


“IPO” means an underwritten public
offering of Equity Interests of Holdings pursuant to a registration statement
filed with the Securities and Exchange Commission in accordance with the
Securities Act.


 


“ISSUING BANK” means, as the context
may require, (a) UBS AG, Stamford 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.


 


“KOREAN CONSUMER REFUND GUARANTEE”
means the guarantee or letter of credit issued to any applicable Korean
Governmental Authority as required to comply with the consumer refund laws of
Korea, together with any supporting obligations in respect thereof.


 


“LANDLORD LIEN WAIVER AND ACCESS
AGREEMENT” means the Landlord Lien Waiver and Access Agreement, substantially
in the form of Exhibit E-2 or otherwise in form and substance reasonably
satisfactory to the Collateral Agent.


 


“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).


 


“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.


 


18
















 


“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 Parent, the ratio of: (a) Consolidated
Indebtedness of Parent on such date to (b) Consolidated EBITDA of Parent
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 is 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).


 


“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 or
any filing of any financing statement under the UCC or any other similar notice
of Lien under any similar notice or recording statute of any Governmental
Authority, 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 any agreement to give any of the foregoing; (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any


 


19
















 


financing
lease having substantially the same economic effect as any of the foregoing)
relating to such property; and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.


 


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


 


“LOAN PARTIES” means Holdings,
Parent, the LuxCos, Borrower, and the Subsidiary Guarantors.


 


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


 


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


 


“LUXEMBOURG CM” 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.


 


“MANAGERS” means Whitney & Co.,
LLC and GGC Administration, L.L.C.


 


“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,
prospects 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 any of 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.


 


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


 


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


 


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


 


“MERGER DOCUMENTS” means the
collective reference to the Merger Agreement, all schedules and exhibits
attached thereto, and all other instruments or documents delivered in
accordance therewith.


 


“MONITORING FEES” means payments to
Whitney & Co., LLC or GGC Administration, L.L.C. in the nature of periodic
monitoring or management fees, pursuant to the Monitoring Fee Agreements.


 


“MONITORING FEE AGREEMENTS” means
those certain separate monitoring fee agreements among (i) Borrower, and
Whitney & Co., LLC, and (ii) Borrower and GGC Administration, L.L.C.,
substantially in the form attached hereto as Exhibit L, as in effect on the
Closing Date.


 


20
















 


“MORTGAGE” means an agreement,
including a mortgage, deed of trust or any other document, creating and
evidencing a Lien on a Mortgaged Real Property, which shall be in form and
substance reasonably satisfactory to the Administrative Agent, with such
schedules and including such provisions as shall be necessary to conform such
document to applicable or local law or as shall be customary under local law,
as the same may at any time be amended in accordance with the terms thereof and
hereof.


 


“MORTGAGED REAL PROPERTY” means (a)
each Real Property identified on Schedule 1.01(c) and (b) each Real Property,
if any, that shall be subject to a Mortgage delivered after the Closing Date
pursuant to Section 5.12.


 


“MULTIEMPLOYER PLAN” means a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA (a) to
which any Company or any ERISA Affiliate is then making or 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:


 


(m) 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 Borrower or any of its
respective 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);


 


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


 


(o) 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.


 


21
















 


“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 listed on Schedule 3.06(a) (as in effect on the Closing
Date), (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.


 


“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.


 


“OFFERING MEMORANDUM” means that
certain Offering Memorandum, dated June 21, 2002, relating to the offer and
sale of the Senior Subordinated Notes on the date of first issuance thereof
under the Senior Subordinated Note Agreement.


 


“OFFICERS’ CERTIFICATE” means, as
applied to any corporation, a certificate executed on behalf of such
corporation 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.


 


22
















 


“PARENT CFC GROUP” means Parent and
any direct or indirect Subsidiary of Parent other than Borrower and any direct
or indirect Subsidiary of Borrower.


 


“PARENT GROUP” means Parent and its
Subsidiaries.


 


“PARENT GROUP TAX SAVINGS AMOUNT”
means, in respect of any Tax Determination Year, the excess of (x) the tax
liability incurred by the Parent Group for such Tax Determination Year as
determined as if no Intercompany Service Agreement had been entered into by and
among Intercompany Service Provider and any Subsidiary of the Parent Group over
(y) the actual tax liability incurred by the Parent Group for such Tax
Determination Year (as determined on a basis consistent with any Final
Determination in respect of any previous Tax Determination Year), which
liability shall take into account any taxes that have been, or will be,
incurred by the Parent Group in connection with the making of a Tax Amounts
Payment in respect of such Tax Determination Year. If, in respect of any Tax
Determination Year, Parent or any Subsidiary of the Parent Group has received a
Notice of Deficiency, in respect of which there has been no Final
Determination, related to any item arising from or attributable to amounts paid
or accrued pursuant to the Intercompany Service Agreement, the Parent Group Tax
Savings Amount shall be determined on a basis consistent with such Notice of
Deficiency except to the extent that, based on the advice of the Tax Amounts
CPA, Borrower determines on a basis reasonably satisfactory to the
Administrative Agent that, more likely than not, Parent or such Subsidiary will
prevail on the merits in connection with contesting such Notice of Deficiency.


 


“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 or any other form approved by the
Collateral Agent, as the same shall be supplemented from time to time by a
Perfection Certificate Supplement.


 


“PERFECTION CERTIFICATE SUPPLEMENT”
means a certificate supplement in the form of Exhibit I-2 or any other form
approved by the Collateral Agent.


 


“PERMITTED HOLDERS” means each
Sponsor and its 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 its ERISA Affiliate 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.


 


23
















 


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


 


“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.


 


“QUALIFIED CAPITAL STOCK” of any
person means any capital stock of such person that is not Disqualified Capital
Stock.


 


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


 


“REFINANCING” means the repayment in
full and the termination of any commitment to make extensions of credit under
all of the outstanding Indebtedness of Borrower and its Subsidiaries listed on
Schedule 1.01(d), in each case on or prior to the Closing Date.


 


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


 


“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.


 


“RELATED FINANCING TRANSACTIONS”
means the issuance of the Senior Subordinated Notes, the Holdings Senior
Discount Notes, and the Equity Financing.


 


“RELATED PARTY” means, with respect
to any of the Principals, any person who controls, is controlled by, or is
under common control with such Principal; provided that, for purposes of this
definition only “control” means the beneficial ownership of more than 80% of
the total voting


 


24
















 


power of a
person normally entitled to vote in the election of directors, managers or
trustees, as applicable, of a person.


 


“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 and
Term Loan Commitments representing at least a majority of the sum of all Loans
outstanding, LC Exposure and unused Revolving Commitments and Term Loan
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. Section 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.


 


“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 initial aggregate amount of the Lenders’ Revolving Commitments
is $25.0 million.


 


“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.


 


25
















 


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


 


“REVOLVING MATURITY DATE” means the
fifth anniversary of the Closing Date.


 


“SECTION 5.11(b) LISTED SUBSIDIARIES”
has the meaning assigned to such term in Section 5.11(b).


 


“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 Mortgages, 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 UCC
or other financing statements or instruments of perfection required by this
Agreement, any Security Agreement or any Mortgage to be filed with respect to
the security interests in property and fixtures created pursuant to any
Security Agreement or any Mortgage and any other document or instrument
utilized to pledge as collateral for the Obligations any property of whatever
kind or nature.


 


“SENIOR SUBORDINATED NOTE AGREEMENT”
means that certain Indenture, dated as of June 27, 2002, by and among WH
Acquisition, as issuer, Parent and the LuxCos, as initial guarantors, and The
Bank of New York, as trustee; it being understood that upon consummation of the
Merger, Borrower will assume WH Acquisition’s obligations under the Senior
Subordinated Note Agreement and will cause the Subsidiary Guarantors to become
guarantors thereunder.


 


“SENIOR SUBORDINATED NOTE DOCUMENTS”
means the Senior Subordinated Notes, the Senior Subordinated Note Agreement,
that certain Registration Rights Agreement, dated as of June 27, 2002, by and
among WH Acquisition and Borrower on the one hand, and UBS Warburg LLC, as
initial purchaser, on the other hand, any documents evidencing the Senior
Subordinated Note Guarantees, and all other documents executed and delivered
with respect to any of the foregoing.


 


“SENIOR SUBORDINATED NOTE GUARANTEES”
means the guarantees of Parent, the LuxCos and the Subsidiary Guarantors
pursuant to the Senior Subordinated Note Agreement.


 


“SENIOR SUBORDINATED NOTES” means
Borrower’s $165.0 million 11 3/4% Senior Subordinated Notes due 2010, issued
pursuant to the Senior Subordinated Note Agreement, and any registered notes
issued by Borrower in exchange for, and as contemplated by any of the Senior
Subordinated Notes with substantially identical terms as the Senior Subordinated
Notes.


 


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


 


26
















 


“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.


 


“STATUTORY RESERVES” means, for any
Interest Period for any Eurodollar Borrowing, the average maximum rate at which
reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during such Interest Period under Regulation D by member
banks of the United States Federal Reserve System in New York City with
deposits exceeding one billion dollars against “Eurodollar liabilities” (as
such term is used in Regulation D). Eurodollar Borrowings shall be deemed to
constitute Eurodollar liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
that may be available from time to time to any Lender under Regulation D.


 


“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 hereof and including each Foreign Subsidiary that enters into any other
Guarantee required by applicable Requirements of Law).


 


“SYNDICATION AGENT” shall have the
meaning assigned to such term in the preamble hereto.


 


“SYNTHETIC LEASE OBLIGATION” means
the monetary obligation of a person under (a) a so-called synthetic,
off-balance sheet or tax retention lease, or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance
sheet of such person but which, upon the insolvency or bankruptcy of such
person, would be characterized as the indebtedness of such person (without
regard to accounting treatment).


 


“TAX AMOUNTS CPA” means PricewaterhouseCoopers
L.L.P. or any other certified public accounting firm of national reputation.
The Tax Amounts CPA shall reasonably determine, for each Tax Determination
Year, the Applicable Tax Rate, the Final Determination Amount, Intercompany
Service Receipts, Intercompany Service Subpart F Income, Tax Amounts Payment
and Parent Group Tax Savings Amount.


 


“TAX AMOUNTS PAYMENT” means, in
respect of any Tax Determination Year, an amount payable to Tax Amounts
Recipients equal to the lesser of (hereinafter referred to as the “INITIAL


 


27
















 


LIMITATION”)
(A) the product of (x) the Applicable Tax Rate and (y) the Intercompany Service
Subpart F Income that is (or would be) includible in the gross income of the
Tax Amounts Recipients (assuming, for this purpose, that each such Tax Amounts
Recipient is a “United States shareholder” as defined in Section 951(b) of the
Tax Code) for such year under Section 951(a) of the Tax Code, (B) the Parent
Group Tax Savings Amount for such year, (C) the product of (x) 6.0% and (y) the
sum of (i) Consolidated Net Income of the Parent Group for such year, (ii)
consolidated income tax expense for the Parent Group for such year, (iii) Tax
Amounts Payments made to Tax Amounts Recipients during such year, and (iv) in
the case of the fiscal year ending December 31, 2002, the non-recurring
expenses and charges of Borrower and WH Acquisition related to the Merger and
Related Financing Transactions, to the extent such non-recurring expenses and
charges of Borrower and WH Acquisition related to the Merger and Related
Financing Transactions were treated as deductions for purposes of computing
Consolidated Net Income for such year or (D) $10.0 million. The Initial
Limitation shall be reduced (but not below zero) by any Final Determination
Amount in respect of a previous Tax Determination Year. A Final Determination
Amount shall be applied to reduce an Initial Limitation for the Tax
Determination Year during which the Final Determination in respect of such
Final Determination Amount occurs. A Final Determination Amount shall be deemed
to be reduced to the extent that such Final Determination Amount has been
applied to reduce an Initial Limitation. Thereafter, the remaining Final
Determination Amount, if any, shall be applied to reduce the Initial Limitation
for each successive Tax Determination Year in like fashion until such Final
Determination Amount has been reduced to zero.


 


“TAX AMOUNTS RECIPIENT” means, in
respect of any Tax Determination Year, persons who hold capital stock of
Holdings on December 31 of such year or, if earlier, on the last day of such
year that Holdings continues to be a “controlled foreign corporation” as
defined under Section 957 of the Tax Code.


 


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


 


“TAX DETERMINATION YEAR” means the
calendar year (and, in the case of the 2002 calendar year, the relevant portion
thereof) in respect of which a Tax Amounts Recipient is (or would be) required
to include in gross income under Section 951(a) of the Tax Code his pro rata
share of Intercompany Service Subpart F Income (assuming for this purpose, that
such Tax Amounts Recipient is a “United States shareholder” as defined in
Section 951(b) of the Tax Code).


 


“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.


 


“TERM LENDER” means a Lender with a
Term Loan Commitment or an outstanding Term Loan.


 


“TERM LOAN” means the term loans made
by the Lenders to Borrower pursuant to Section 2.01(a). Each Term Loan shall be
either an ABR Term Loan or a Eurodollar Term Loan.


 


28
















 


“TERM LOAN COMMITMENT” means, with
respect to each Lender, the commitment, if any, of such Lender to make a Term
Loan hereunder on the Closing Date, expressed as an amount representing the
maximum principal amount of the Term Loan to be made by such Lender hereunder,
as such commitment 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 initial amount of each
Lender’s Term Loan Commitment is set forth on Annex II, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its Term Loan
Commitment, as applicable. The initial aggregate amount of the Lenders’ Term
Loan Commitments is $180.0 million.


 


“TERM LOAN MATURITY DATE” means the
sixth anniversary of the Closing Date.


 


“TERM LOAN REPAYMENT DATE” haves the
meaning assigned to such term in Section 2.09(a).


 


“TITLE COMPANY” means any title
insurance company as shall be retained by Borrower and reasonably acceptable to
the Administrative Agent.


 


“TITLE POLICY” has the meaning
assigned to such term in Section 4.02(o)(iii).


 


“TRANSACTION DOCUMENTS” means any and
all documents entered into or delivered in connection with the Transactions,
including the Merger Documents, the Loan Documents, the Equity Financing
documents, the Senior Subordinated Note Documents, and the Holdings Senior
Discount Note Documents.


 


“TRANSACTIONS” means, collectively,
the transactions to occur pursuant to the Transaction Documents, including (a)
the consummation of the Merger; (b) the execution and delivery of the Loan
Documents and the initial Borrowings hereunder; (c) the Refinancing; (d) the
Related Financing Transactions; and (e) the payment of all fees and expenses to
be paid on or prior to the Closing Date and owing in connection with the
foregoing.


 


“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 Adjusted
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 ACQUISITION” 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
Parent 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, each Lender agrees,
severally and not jointly:


 


(a) to make a Term Loan to Borrower on the
Closing Date in a principal amount not to exceed its Term Loan Commitment; and


 


(b) 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 and not less than $2.0
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 five
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 directed
by Borrower in the applicable Borrowing Request maintained with the


 


31
















 


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 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 with this Section 2.02(f) to but excluding
the date such amount is paid, to the


 


32
















 


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 Revolving Borrowing or Term
Borrowing, 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) whether the requested Borrowing is to
be a Revolving Borrowing or a Term Borrowing;


 


(b) the aggregate amount of such Borrowing;


 


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


 


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


 


(e) 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”; provided that,
until the Syndication Agent shall have notified Borrower that the primary
syndication of the Commitments has been completed (which notice shall be given
by the Syndication Agent as promptly as practicable and, in any event, within
60 days after the Closing Date) Borrower shall only be permitted to request an
Interest Period of seven days); and


 


(f) 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.


 


33
















 


SECTION
2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS.


 


(a) Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each Lender
holding Term Loans, the principal amount of each Term Loan of such Lender as
provided in Section 2.09; and (ii) to the Administrative Agent for the account
of 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 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).


 


SECTION
2.05. FEES.


 


(a) COMMITMENT FEE. Borrower agrees to pay
to each Lender, through the Administrative Agent, a commitment fee (a
“COMMITMENT FEE”) equal to the Applicable Commitment Fee Percentage times the
average daily unused amount of the Revolving Commitments of such Lender. All
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 any Commitment of such Lender shall expire or
be terminated as provided herein. All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The
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.


 


34
















 


(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”).


 


(c) LC AND FRONTING FEES. Borrower agrees
to pay (i) to the Administrative Agent for the account of 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 0.25% 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).


 


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 Adjusted LIBOR Rate for 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, the outstanding principal amount of all Loans
and, to the extent permitted by applicable law,


 


35
















 


any
interest payments thereon and any fees and other amounts hereunder, 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
payable 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 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 Adjusted 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 Term Loan Commitments shall
automatically terminate at 5:00 p.m., New York City time, on the Closing Date.
The Revolving Commitments and the LC Commitment shall automatically terminate
on the Revolving Maturity Date. Notwithstanding the foregoing, all the
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
August 31, 2002, if the initial Credit Extension shall not have occurred by
such time.


 


(b) Borrower may at any time terminate, or
from time to time reduce, the Commitments of any Class; provided that, (i) each
reduction of the Commitments of any Class 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 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.


 


36
















 


(c) Borrower shall notify the
Administrative Agent of any election to terminate or reduce the 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 Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.


 


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);


 


(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


 


37
















 


term
“Interest Period”; provided that, until the Syndication Agent shall have
notified Borrower that the primary syndication of the Commitments has been
completed (which notice shall be given by the Syndication Agent as promptly as
practicable and, in any event, within 60 days after the Closing Date), Borrower
shall only be permitted to request an Interest Period of seven days.


 


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 $500,000 and not less than $1.0 million.


 


(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 and/or deposit an
amount equal to the LC Exposure in the LC Sub-Account. In the


 


38
















 


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 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(h) and
(i); provided that:


 


(i) no such prepayment shall be required
with respect to (A) any Asset Sale permitted by Section 6.04(b)(i), (d) or (f),
(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, and (C) Asset Sales for fair market value resulting in no more
than $2.5 million in Net Cash Proceeds in any fiscal year; and


 


(ii) so long as no Default shall then exist
or would arise therefrom, no such prepayment shall be required to the extent
that (A) Borrower shall have delivered an Officer’s 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, and (B) all
such Net Cash Proceeds in excess of $2.5 million individually and $5.0 million
in the aggregate in any fiscal year of Borrower shall be held in the Collateral
Account and released therefrom only in accordance with the provisions of
Article IX; 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 of
principal of outstanding Term Loans 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) EQUITY ISSUANCE. Upon any Equity
Issuance after the Closing Date (other than in connection with the Equity Financing),
Borrower shall make prepayments in accordance with Sections 2.10(h) and (i) in
an aggregate principal amount equal to 50% of the Net Cash Proceeds of such
Equity Issuance.


 


(f) CASUALTY EVENTS. Not later than one
Business Day following the receipt of any Net Cash Proceeds from a Casualty
Event, Borrower shall make prepayments in


 


39
















 


accordance
with Sections 2.10(h) and (i) 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 Borrower and its Subsidiaries 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) all such Net Cash Proceeds in excess
of $1.0 million individually or in the aggregate for all such Casualty Events
shall be held in the Collateral Account and released therefrom only in
accordance with the terms of Article IX;


 


(iv) 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


 


(v) 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. No later than 120
days after the end of each fiscal year of Borrower, commencing with the fiscal
year ending on December 31, 2002, Borrower shall make prepayments in accordance
with Section 2.10(h)(ii), Section 2.10(i) and Section 2.10(j) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then
ended.


 


(h) APPLICATION OF PREPAYMENTS.


 


(i) Optional prepayments under this
Agreement shall be applied as specified by Borrower in the applicable notice of
prepayment in Section 2.10(i); 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 under this Agreement shall be applied
first to reduce outstanding Term Loans pro rata against the remaining scheduled
installments of principal due in respect of the Term Loans under Section 2.09.
After application of mandatory


 


40
















 


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


 


(i) 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.


 


41
















 


(j) WAIVABLE MANDATORY PREPAYMENT.
Notwithstanding the other provisions of this Section 2.10, if Borrower is
required to make any mandatory prepayment under Section 2.10(g), then promptly
after receiving notice thereof from Borrower in accordance with Section
2.10(i), the Administrative Agent will notify each Term Lender holding
outstanding Term Loans of the amount of such Term Lender’s ratable share of
such prepayment to be applied toward reducing such Term Lender’s outstanding
Term Loans, and such Term Lender’s option to refuse such amount. Each such Term
Lender may exercise its option to refuse such amount by giving written notice
thereof (which may be by telecopy) to Borrower and the Administrative Agent on
or before 11:00 a.m., New York City time, five Business Days before the date of
such prepayment (it being understood that any Term Lender that does not so
notify Borrower and the Administrative Agent within such time will be deemed to
have elected, as of such date, not to exercise such option). That portion of
such mandatory prepayment creditable to the Term Lenders that have elected not
to refuse their ratable shares in accordance with this Section 2.10(j) shall be
ratably applied to reduce such Term Lenders’ principal amounts outstanding in
accordance with Section 2.10(h). To the extent there are mandatory prepayment
amounts remaining after the application described above in this Section
2.10(j), then the Administrative Agent will promptly notify each Revolving
Lender of the amount of such Revolving Lender’s ratable share of such
prepayment to be applied toward reducing such Revolving Lender’s outstanding
Revolving Loans and permanently reducing such Revolving Lender Revolving
Commitments, and such Revolving Lender’s option to refuse such amount. Each
such Revolving Lender may exercise its option to refuse such amount by giving
written notice thereof (which may be by telecopy) to Borrower and the
Administrative Agent on or before 11:00 a.m., New York City time, one Business
Day before the date of such prepayment (it being understood that any Revolving
Lender that does not so notify Borrower and the Administrative Agent within
such time will be deemed to have elected, as of such date, not to exercise such
option). That portion of such mandatory prepayment creditable to the Revolving
Lenders that have elected not to refuse their ratable shares in accordance with
this Section 2.10(j) shall be ratably applied to reduce such Revolving Lenders’
principal amounts outstanding and to further permanently reduce such Revolving
Lenders’ Revolving Commitments by the amount of such prepayment and then, to
the extent of any remaining portion of the mandatory prepayment amounts, to
further permanently reduce such Revolving Lenders’ Revolving Commitments to the
full extent thereof, all in accordance with Section 2.10(h). That portion of
such mandatory prepayment creditable to the Term Lenders and Revolving Lenders
that have elected to refuse their ratable shares in accordance with this
Section 2.10(j) shall be, if not already paid hereunder, retained by Borrower,
or if already paid hereunder, promptly credited to an account maintained with
the Administrative Agent as directed by Borrower.


 


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 Adjusted LIBOR Rate for
such Interest Period; or


 


(b) the Administrative Agent is advised by
the Required Lenders that the Adjusted 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;


 


42
















 


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 (except any such
reserve requirement reflected in the Adjusted LIBOR Rate) 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 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), 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 (b) 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.


 


43
















 


(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.


 


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 Adjusted 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 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 677 Washington Boulevard, Stamford, Connecticut, 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


 


44
















 


shall
distribute any such payments received by it for the account of any other person
to the appropriate recipient promptly 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


 


45
















 


on
demand the amount so distributed to such Lender or Issuing Bank with interest
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)


 


46
















 


have
any adverse effect on the Administrative Agent, such Lender, or the Issuing
Bank. A certificate as to the amount of such payment or liability 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 a Subsidiary 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 a 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 $10.0 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 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.


 


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 (with references to the
Companies being references thereto after giving effect to the Transactions
unless otherwise expressly stated) 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 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


 


53
















 


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. Deloitte & Touche LLP are
independent accountants within the meaning of Regulation S-X of the Securities
Act. The historical financial statements and the notes thereto included in the
Offering Memorandum present fairly in all material respects the consolidated
financial position, income statement, cash flows and changes in stockholder’s
equity of Borrower and its Subsidiaries at the respective dates and for the
respective periods indicated. All such financial statements have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
presented (except as disclosed therein). The unaudited pro forma financial
statements and the notes thereto included in the Offering Memorandum have been
prepared on a basis consistent with the historical financial statements of
Borrower 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 and proposed transactions contemplated
by the Offering Memorandum; and such pro forma financial statements comply as
to form in all material respects with the requirements applicable to pro forma
financial statements set forth in Regulation S-X under the Securities Act,
except that Article 11 of Regulation S-X under the Securities Act does not
require the inclusion of pro forma financial statements for the twelve months
ended March 31, 2002. The other financial and statistical information and data
included in the Offering Memorandum (other than industry and market-related
data) are accurately presented in all material respects and prepared on a basis
consistent with the financial statements and the books and records of Borrower
and its Subsidiaries.


 


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) For each Loan Party, Schedule 3.05(b)
contains a true and complete list of each parcel of Real Property (i) owned by
such Loan Party as of the Closing Date, including a description of the type of
interest therein held by such Loan Party, and the name of the Loan Party
holding such interest; or (ii) leased, subleased or otherwise occupied or
utilized by any Loan Party, as lessee or sublessee, as of the Closing Date,
including a description of the type of interest therein held by such Loan
Party, the name of the Loan Party holding such interest, and whether such
lease, sublease or other instrument (each, a “COMPANY LEASE”) requires the
consent of the landlord thereunder or other parties thereto to the
Transactions. Each Company Lease is a legal, valid and binding agreement,
enforceable in accordance with its terms, of the Loan Party that is a party
thereto, and there is no, nor has any Loan Party received notice of any,
default thereunder (or to the knowledge of any Loan Party, any condition or
event that, after notice or a lapse of time or both, would constitute a default
thereunder). No Loan Party, and, to the knowledge of each Loan Party, no third
party to any Company Lease, has assigned any Company Lease or sublet any part
of the premises covered thereby or


 


54
















 


exercised
any renewal or purchase option thereunder. No penalties are accrued and unpaid
by any Loan Party under any Company Lease. True and complete copies of all
Company Leases, together with all modifications, extensions, amendments and
assignments thereof have heretofore been made available to the Administrative
Agent. None of the Loan Parties has granted any options or rights of first
refusal, or rights of first offer to third parties to purchase or otherwise
acquire an interest in any of the Real Property.


 


(c) 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 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.


 


(d) 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.


 


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 Subsidiary of
Holdings are duly and validly issued, are fully paid and non-assessable and,
except as disclosed on Schedule 3.06(a), are owned directly or indirectly by
Holdings. All Equity Interests of Parent are owned directly by Holdings, all
Equity Interests of Luxembourg Holdings are owned directly by Parent, all Equity
Interests of Luxembourg CM and Luxembourg Intermediate Holdings are owned
directly by Luxembourg Holdings, and all Equity Interests of Borrower are owned
directly by the Luxembourg Intermediate Holdings. 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


 


55
















 


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 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, if adversely determined, 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,
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 set forth on
Schedule 3.05(b)) to which any Loan Party is a party that are in effect on the
Closing Date in connection with the operation of the business conducted thereby
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.


 


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,


 


56
















 


U
or X. The pledge of the Securities Collateral pursuant to the Security
Agreements does not violate such regulations.


 


SECTION
3.10. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. No
Company is (a) 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, or (b) a “holding company,” an
“affiliate” of a “holding company” or a “subsidiary company” of a “holding
company,” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.


 


SECTION
3.11. USE OF PROCEEDS. Borrower will use the proceeds of (a) the
Term Loans to finance a portion of the Transactions and pay related fees and
expenses and (b) the Revolving Loans after the Closing Date for general
corporate purposes (it being understood that no Revolving Loans shall be made
on the Closing Date).


 


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. None of any 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 (including the
Offering Memorandum), taken together with all related information so furnished,
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit 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.


 


57
















 


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 ERISA Affiliate
sponsors, contributes, participates in or has any liability under a plan
established under Title IV of ERISA or a Multiemployer Plan.


 


(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


 


58
















 


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;


 


(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 each 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.


 


59
















 


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 offices specified in Section III.B
of the Perfection Certificate and (ii) the Loan Parties have complied with
Article III of the U.S. Security Agreement, 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 (as defined in the U.S. Security Agreement) 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 U.S. Security Agreement is
filed in the United States Patent and Trademark Office and the United States
Copyright Office, 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).


 


(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, 2001, 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, and on
the date of each issuance, amendment, extension or renewal of a Letter of
Credit (each such event being called a “CREDIT EXTENSION”):


 


60
















 


(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) Borrower and each other Loan Party
shall be in compliance in all material respects with all the terms and
provisions set forth herein and in each other Loan Document on its part to be
observed or performed, and, at the time of and immediately after such Credit
Extension, no Default or Event of Default shall have occurred and be
continuing.


 


(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.


 


SECTION
4.02. INITIAL CREDIT EXTENSION. On the Closing Date:


 


(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 there shall have been delivered to the
Administrative Agent an executed counterpart of each of the Loan Documents,
including this Agreement, each Security Agreement, each Mortgage, the
Perfection Certificate and each other applicable Loan Document.


 


(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


 


61
















 


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, (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) a long form certificate 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 paragraphs (b) and (c) of Section 4.01.


 


(d) FINANCINGS AND OTHER TRANSACTIONS, ETC.


 


(i) Borrower shall have received an amount
from the Equity Financing equal to at least $176.0 million; the terms and
documentation of the Equity Financing shall be in form and substance reasonably
satisfactory to the Lenders; and the purchasers of the equity in the Equity
Financing shall be reasonably acceptable to the Lenders.


 


(ii) The Lenders shall be reasonably
satisfied with the form and substance of the Transaction Documents; the total
financing requirements for the Transactions shall not exceed $759.5 million
(unless otherwise agreed to by the Administrative Agent); the Transactions
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
Arranger); and the fees and expenses of the Transactions shall not exceed $70.0
million, provided that, with the Administrative Agent’s prior approval, such
fees and expenses may exceed $70.0 million but shall not exceed $75.0 million
(unless otherwise agreed to by the Required Lenders).


 


(iii) Borrower shall have received at least
$162.9 million in gross proceeds from the issuance and sale of the Senior
Subordinated Notes, and the Senior Subordinated Note Documents shall be
certified by Borrower’s chief financial officer as true, complete and current.


 


(iv) Borrower shall have received,
indirectly as an equity investment, at least $24.0 million of the net proceeds
from the issuance


 


62
















 


and
sale of the Holdings Senior Discount Notes, and the Holdings Senior Discount
Note Documents shall be certified by Borrower’s chief financial officer as
true, complete and current.


 


(v) The Refinancing shall have been
consummated in full to the reasonable satisfaction of the Lenders with all
Liens in favor of the existing lenders 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.


 


(vi) The Lenders shall be reasonably
satisfied with the capitalization, the terms and conditions of any equity
arrangements and the corporate or other organizational structure of Holdings,
Parent, the LuxCos, Borrower, and their respective Subsidiaries.


 


(vii) Borrower and its Subsidiaries shall
have, on a consolidated basis after giving effect to the Transactions and the
other transactions contemplated hereby, a pro forma cash balance that, when
added to the unused Revolving Commitments hereunder, aggregates to at least
$60.0 million.


 


(e) INDEBTEDNESS AND MINORITY INTERESTS.
After giving effect to the Transactions 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) any preferred stock issued in connection with the Equity Financing, (iii)
the Senior Subordinated Notes and the Senior Subordinated Guarantees, (iv) the
Holdings Senior Discount Notes, (v) the Indebtedness described on Schedule 6.01
attached hereto, and (vi) 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 Borrower
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) (A) the pro forma
consolidated balance sheets and statements of income for Borrower and its
Subsidiaries, as well as the pro forma levels of EBITDA and other operating
data, for the fiscal year ended December 31, 2001 and 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, after giving effect to the transactions contemplated hereby, and (B) a
statement of Borrower’s pro forma consolidated cash balance as of the Closing
Date certified by Borrower’s chief financial officer as demonstrating
compliance with Section 4.02(d)(vii), after giving effect to the Transactions;
and (iii) final forecasts of the financial performance of Borrower and its
subsidiaries. The forecasts provided to the


 


63
















 


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 Arranger,
the Lenders and the Issuing Bank, (i) a favorable written opinion of Chadbourne
& Parke, 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 Arranger, 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, and (ii) a
copy of each legal opinion delivered under the other Transaction Documents,
together with reliance letters from the party delivering such opinion
authorizing the Agents, Lenders and the Issuing Bank to rely thereon as if such
opinion were addressed to them.


 


(h) SOLVENCY OPINION. The Administrative
Agent shall have received a written opinion, in form and substance and from an
independent investment banking or appraisal firm reasonably satisfactory to the
Administrative Agent, as to the solvency of the Loan Parties on a consolidated
basis after giving effect to the Transactions.


 


(i) 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. The Lenders shall have received satisfactory evidence of compliance with
all other 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 on Holdings
and its Subsidiaries, taken as a whole.


 


(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 on the Transactions or the other
transactions contemplated hereby.


 


(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. The Arranger and Administrative
Agent shall have received all Fees and other amounts due and payable on or
prior to the Closing Date, including, to the


 


64
















 


extent
invoiced, reimbursement or payment of all reasonable out-of-pocket expenses
(including the reasonable legal fees and expenses of Skadden, Arps, Slate,
Meagher & Flom LLP, special 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 (other than any
Non-Guarantor Subsidiary and 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 shall
have been delivered to the Collateral Agent;


 


(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) evidence of the completion of all
recordings and filings of, or with respect to, each Security Agreement,
including filings 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, except for any
of the foregoing to be provided after the Closing Date pursuant to Section 5.13
hereof;


 


65
















 


(vi) any documents required to be submitted
to the Collateral Agent by the Loan Parties as may be necessary or desirable to
perfect the security interest of the Collateral Agent pursuant to each Foreign
Security Agreement, except for any of the foregoing to be provided after the
Closing Date pursuant to Section 5.13 hereof;


 


(vii) with respect to each Real Property
located in the United States in which a Loan Party holds the tenant’s interest
thereunder set forth on Schedule 4.02(n) where the Loan Parties maintain
Collateral having a value in excess of $1.0 million, such Loan Party shall use
its best efforts to obtain a Landlord Lien Waiver and Access Agreement on or
prior to the Closing Date; and


 


(viii) 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, except, with respect to any Foreign Security Agreement, for
any of the foregoing to be provided after the Closing Date pursuant to Section
5.13 hereof.


 


(o) REAL PROPERTY REQUIREMENTS. The
Collateral Agent shall have received (or, only with respect to clause (i)
below, each Loan Party agrees to use commercially reasonable efforts to deliver
to the Collateral Agent):


 


(i) Mortgages encumbering each Mortgaged
Real Property in favor of the Collateral Agent, for the benefit of the Secured
Parties, duly executed and acknowledged by the Loan Party that is the owner of
or holder of an interest in such Mortgaged Real Property, and otherwise in form
for recording in the recording office of each political subdivision where each
such Mortgaged Real Property is situated, and such certificates, affidavits,
questionnaires or returns as shall be required in connection with the recording
or filing thereof to create a Lien under applicable law, and such UCC financing
statements and fixture filings, all of which shall be in form and substance
reasonably satisfactory to Collateral Agent, and any other instruments
necessary to grant a mortgage lien under the laws of any applicable
jurisdiction;


 


(ii) with respect to each Mortgaged Real
Property for which a Mortgage is obtained in accordance with clause (i) above,
an Agreement and Estoppel Certificate executed by the applicable Loan Party and
fee interest holder, and such other consents, approvals, amendments,
supplements, memoranda of lease estoppels, tenant subordination agreements or
other instruments as necessary or required to consummate the Transactions or as
shall reasonably be deemed necessary by the Collateral Agent in order for the
owner or holder of the fee or leasehold interest constituting such Mortgaged
Real Property to grant the Lien contemplated by the Mortgage with respect to
such Mortgaged Real Property;


 


(iii) with respect to each Mortgage, a
policy (or commitment to issue a policy) of title insurance insuring (or
committing to insure) the Lien of such Mortgage as a valid first mortgage Lien
on the Real


 


66
















 


Property
and fixtures described therein in an amount equal to 115% of the fair market
value of the fee or leasehold interest, as applicable, of such Real Property
which policies (or commitments) (each, a “TITLE POLICY”) shall (A) be issued by
the Title Company, (B) to the extent necessary, include such reinsurance
arrangements (with provisions for direct access, if necessary) as shall be
reasonably acceptable to the Collateral Agent, (C) contain a “tie-in” or
“cluster” endorsement (if available under applicable law) (i.e., policies that
insure against losses regardless of location or allocated value of the insured
property up to a stated maximum coverage amount), (D) have been supplemented by
such endorsements (or where such endorsements are not available, opinions of
special counsel, architects or other professionals reasonably acceptable to the
Collateral Agent to the extent that such opinions can be obtained at a cost
that is reasonable with respect to the value of the Real Property subject to
such Mortgage) as shall be requested by the Collateral Agent, to the extent
such endorsements are available in the applicable jurisdiction (including
endorsements on matters relating to usury, first loss, last dollar, zoning,
contiguity, revolving credit, doing business, non-imputation, public road
access, survey, variable rate, environmental lien and so-called comprehensive
coverage over covenants and restrictions), and (E) contain no exceptions to
title other than exceptions for the Permitted Liens applicable to such
Mortgaged Real Property and otherwise acceptable to the Collateral Agent;


 


(iv) with respect to each Mortgaged Real
Property for which a Mortgage is obtained in accordance with clause (i) above,
such affidavits, certificates, information (including financial data) and
instruments of indemnification (including a so-called “gap,” “mechanics lien,”
and “owner’s” indemnifications and affidavits) as shall be required to induce
the Title Company to issue the Title Policy/ies (or commitment) and
endorsements contemplated in clause (iii) above;


 


(v) evidence reasonably acceptable to the
Collateral Agent of payment by Borrower of all Title Policy premiums, escrow,
search and examination charges, and related charges, mortgage recording taxes,
fees, charges, costs and expenses required for the recording of the Mortgages
and issuance of the Title Policies referred to in clause (iii) above;


 


(vi) with respect to each Real Property or
Mortgaged Real Property, copies of all Leases in which Borrower or any
Subsidiary holds the lessor’s interest or other agreements relating to
possessory interests, if any. To the extent any of the foregoing affect any
Mortgaged Real Property for which a Mortgage is obtained in accordance with
clause (i) above, such agreement shall be subordinate to the Lien of the
Mortgage to be recorded against such Mortgaged Real Property, either expressly
by its terms or pursuant to a subordination, non-disturbance and attornment
agreement, and shall otherwise be acceptable to the Collateral Agent;


 


(vii) with respect to each Mortgaged Real
Property for which a Mortgage is obtained in accordance with clause (i) above,
Borrower and


 


67
















 


each
Subsidiary shall have made all notification, registrations and filings, to the
extent required by, and in accordance with, all Governmental Real Property
Disclosure Requirements applicable to such Mortgaged Real Property, including
the use of forms provided by state or local agencies, where such forms exist,
whether to Borrower or to or with the state or local agency; and


 


(viii) with respect to each Mortgaged Real
Property for which a Mortgage is obtained in accordance with clause (i) above,
an Officers’ Certificate or other evidence reasonably satisfactory to the
Arranger that as of the date thereof (A) there is no outstanding citation,
violation or similar notice indicating that the Mortgaged Real Property
contains conditions that are not in compliance in any material respect with
local codes or ordinances relating to building or fire safety or structural
soundness, (B) there has not occurred any taking or destruction of any
Mortgaged Real Property and (C) there are no material disputes regarding
boundary lines, location, encroachment or possession of such Mortgaged Real
Property and to the best knowledge of Borrower or any Subsidiary that is the
owner of or holder of an interest in such Mortgaged Real Property, no state of
facts exist that could give rise to any such claim.


 


(p) 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.


 


(q) SUBSIDIARY GUARANTORS. Each Subsidiary
Guarantor listed on Schedule 1.01(e) that is a Foreign Subsidiary and is not a
signatory to this Agreement shall have executed and delivered a Guarantee in
form and substance satisfactory to the Administrative Agent.


 


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:


 


68
















 


(a) ANNUAL REPORTS. Within 90 days after
the end of each fiscal year, (i) the consolidated balance sheet of Parent 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 Deloitte & Touche 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 flows and changes in stockholders’
equity of the Consolidated Companies as of the end of and for such fiscal year
in accordance with GAAP; (ii) a management report in a customary form setting
forth, on a consolidated basis, the financial condition, results of operations
and cash flows as of the end of and for such fiscal year, as compared to the
Companies’ (other than Holdings) financial condition, results of operations and
cash flows as of the end of and for the previous fiscal year and its budgeted
results of operations and cash flows (including notes separating out the
financial condition, results of operations and cash flows of the Loan Parties
(other than Holdings) from the financial condition, results of operations and
cash flows of the Non-Guarantor Subsidiaries), and (iii) 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. Within 45 days after
the end of each of the first three fiscal quarters of each fiscal year, (i) the
consolidated balance sheet of Parent 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 (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 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; (ii) a management report in a
customary form setting forth, on a consolidated basis, the financial condition,
results of operations and cash flows as of the end of and for such fiscal
quarter and for the then elapsed portion of the fiscal year, as compared to the
Companies’ (other than Holdings) financial condition, results of operations and
cash flows as of the end of such fiscal quarter and for the comparable periods
in the previous fiscal year and its budgeted results of operations and cash
flows (including notes separating out the financial condition, results of
operations and cash flows of the Loan Parties (other than Holdings) from the
financial condition, results of operations and cash flows of the Non-Guarantor
Subsidiaries); and (iii) 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;


 


69
















 


(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 has occurred or, if such a 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; 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 Parent 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 has been noted, specifying the nature and extent thereof;


 


(d) FINANCIAL OFFICER’S CERTIFICATE
REGARDING COLLATERAL. Concurrently with any delivery of financial statements
under Sections 5.01(a), a Perfection Certificate Supplement;


 


(e) 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, or
distributed to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor), as the case may be;


 


(f) 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;


 


(g) BUDGETS. No later than 60 days after
the first day of each fiscal year of Parent, an annual budget 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 Parent for (i) each fiscal month of
such fiscal year prepared in detail and (ii) each of the five years immediately
following such fiscal year prepared in summary form, in each case, of Parent
and its Subsidiaries for each fiscal month of such fiscal year prepared in
detail with appropriate presentation and discussion of the principal
assumptions upon which such budgets are based, accompanied by the statement of
a Financial Officer of each of Parent 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);


 


(h) ANNUAL MEETINGS WITH LENDERS. Within
120 days after the close of each fiscal year of Borrower, 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


 


70
















 


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;


 


(i) NOTICES IN CONNECTION WITH THE NOTE
DOCUMENTS. Promptly following the delivery or receipt by any Loan Party of any
written notice or communication pursuant to or in connection with any Senior
Subordinated Note Document or any Holdings Senior Discount Note Document, a
copy of such notice or communication; and


 


(j) 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.


 


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, 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 $100,000 and will ensure that the Net Proceeds of any such event (whether in
the form of insurance proceeds, condemnation awards or otherwise) are collected
and 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; maintain
and operate such business in substantially the manner in which it is presently


 


71
















 


conducted
and operated; 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; 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 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 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; and, with respect to any Mortgaged Property,
otherwise maintain all insurance coverage required under the applicable
Mortgage, such policies to be in such form and amounts and having such coverage
as may be reasonably satisfactory to the Collateral Agent and the Lenders.


 


(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.


 


72
















 


(e) Obtain flood insurance in such total
amount as the Administrative Agent or the Required Lenders may from time to
time require, to the extent obtainable on commercially reasonable terms, if at
any time the area in which any improvements located on any real property
covered by a Mortgage is designated a “flood hazard area” in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), and otherwise comply with the National Flood Insurance
Program as set forth in the Flood disaster Protection Act of 1975, as amended
from time to time.


 


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 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.


 


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 Parent 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 Parent 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


 


73
















 


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
undertake any Response to the extent that 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.


 


(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 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, and for a minimum of three years
thereafter maintain, Interest Rate Protection Agreements acceptable to the
Administrative Agent that result in an amount to be determined by the Administrative
Agent of up to 50% 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 Holdings, Parent, the LuxCos, 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 Holdings, Parent, the LuxCos, and 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


 


74
















 


days
after the acquisition thereof or upon the Administrative Agent’s request): (i)
execute and deliver to the Administrative Agent such amendments or supplements
to the relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for its benefit and for the benefit of the other Secured
Parties, a Lien on such properties or assets (including using its best efforts
to deliver a Landlord Lien Waiver and Access Agreement with respect to each
Real Property located in the United States in which a Loan Party holds the
tenant’s interest thereunder and where the Loan Parties maintain Collateral
having a value in excess of $1.0 million), 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
Administrative Agent. Borrower shall otherwise take such actions and execute
and/or deliver to the Administrative Agent such documents as the Administrative
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 is a Wholly
Owned Subsidiary of Parent or any of its Subsidiaries that are listed on
Schedule 5.11(b) (a “SECTION 5.11(b) LISTED SUBSIDIARY”), any Subsidiary that
has become a Released Guarantor pursuant to Section 7.09, and any person that
becomes a Wholly Owned Subsidiary of Parent or any of its Subsidiaries after
the Closing Date (a “NEW WHOLLY OWNED SUBSIDIARY”), promptly (and in any event
(x) in the case of a New Wholly Owned Subsidiary, no later than 60 days after
each such person becomes a New Wholly Owned Subsidiary, and (y) in the case of
each Section 5.11(b) Listed Subsidiary or a New Wholly Owned Subsidiary that is
required to become a Guarantor, or the stock or assets of which are required to
be pledged, pursuant to clauses (i) and (ii) immediately below, no later than
90 days following the Closing Date and, in the case of any such Subsidiary that
continues to not be a Guarantor, no later than 60 days following the close of
any taxable year that such Subsidiary continues not to be a Guarantor), cause
such Subsidiary (i) to become a Guarantor and deliver to the Administrative
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 Administrative 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 


 


75
















 


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:


 


(i) in the case of any (x) Section 5.11(b)
Listed Subsidiary and New Wholly Owned Subsidiary that has not previously
become (and, if so, does not remain) a Guarantor and (y) other Non-Guarantor
Subsidiary, 65% of the Equity Interests of any such Subsidiary (and 100% of the
Equity Interests of any Domesticated Foreign 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


 


(ii) notwithstanding clause (c)(i)
immediately above and as of the end of any fiscal quarter of Parent:


 


(1) if the aggregate consolidated revenues
of the Non-Guarantor Subsidiaries exceeds 35.0% of Parent’s consolidated
revenues, then within 60 days of such date Borrower shall cause a sufficient
number of the Non-Guarantor Subsidiaries to become Guarantors hereunder so
that, after giving pro forma effect to such action, the aggregate consolidated
revenues of the Subsidiaries remaining as Non-Guarantor Subsidiaries is less
than 35.0% of Parent’s consolidated revenues; or


 


(2) if the aggregate consolidated sum of
the Non-Guarantor Subsidiaries’ fixed assets, receivables and inventories
exceeds 35.0% of the aggregate consolidated sum of Parent’s fixed assets,
receivables and inventories (which fixed assets, receivables and inventories
shall be computed after eliminating intercompany profit), then within 60 days
of such date Borrower shall cause a sufficient number of the Non-Guarantor
Subsidiaries to become Guarantors hereunder so that, after giving pro forma
effect to such action, the aggregate consolidated sum of fixed assets,
receivables and inventories of the Subsidiaries remaining as Non-Guarantor
Subsidiaries is less than 35.0% of the aggregate consolidated sum of Parent’s
fixed assets, receivables and inventories.


 


If the condition set forth in clause
(ii)(1) or (ii)(2) above is established, Borrower shall, or shall cause the
applicable Foreign Subsidiaries to, take all such further action and execute
and deliver all such further agreements or documents as the Administrative
Agent deems necessary or advisable to receive the full benefits of the
Guarantees and Security Documents to be entered into by such Foreign
Subsidiaries to the extent


 


76
















 


necessary
to preclude the 35.0% thresholds set forth in the immediately preceding clauses
(ii)(1) and (ii)(2) from being exceeded, except to the extent such actions,
executions, or, deliveries are illegal under applicable law, and no reasonable
alternative structure can be devised having substantially the same effect as
such actions, executions, or deliveries that would not be illegal under
applicable law.


 


(d) REAL PROPERTY. Upon the written request
of the Administrative Agent (provided that, except as otherwise provided in
Section 5.12, the Administrative Agent shall not make such written request if
(after consultation with Borrower) it determines that any of the following is
not commercially feasible (taking into account the expense of obtaining the
same and the effectiveness and enforceability thereof under applicable law)),
each Loan Party will promptly grant to the Administrative Agent, within 60 days
of such request, security interests and Mortgages in such owned or leased Real
Property of such Loan Party located in the United States as is acquired or
leased by such Loan Party after the Closing Date by Borrower or such Subsidiary
and that is used for warehouse, manufacturing, distribution, or laboratory purposes,
has a value as determined in good faith by the Administrative Agent in excess
of $1.0 million or is otherwise material to the business operations of Borrower
or such Subsidiary, as additional security for the Secured Obligations (unless
(i) the subject property is already mortgaged to a third party to the extent
permitted by Section 6.02 or (ii) in the encumbrancing of such leased Real
Property requires the consent of any applicable lessor, where Parent and its
Subsidiaries have attempted in good faith, but are unable, to obtain such
lessor’s consent). Such Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Collateral Agent and shall
constitute valid and enforceable perfected Liens subject only to Permitted
Liens and such other Liens reasonably acceptable to the Collateral Agent. The
Mortgages or instruments related thereto shall be duly recorded or filed in
such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Mortgages and all taxes, fees and other charges payable
in connection therewith shall be paid in full. Such Loan Party shall otherwise
take such actions and execute and/or deliver to the Collateral Agent such
documents as the Administrative Agent shall require to confirm the validity,
perfection and priority of the Lien of any existing Mortgage or new Mortgage
against such after-acquired Real Property (including a Title Policy, a survey
and local counsel opinion (in form and substance reasonably satisfactory to the
Collateral Agent) and all other items described in Section 4.02(o) in respect
of such Mortgage) within 60 days of the written request of the Collateral Agent.


 


SECTION
5.12. SECURITY INTERESTS; FURTHER ASSURANCES. 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. 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 obtain any


 


77
















 


consents,
including landlord or similar Lien waivers and consents, as may be necessary or
appropriate in connection therewith, to the extent contemplated hereby. Deliver
or cause to be delivered to the Administrative Agent from time to time such
other documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent shall deem necessary to perfect or maintain the Liens on
the Collateral pursuant to the Security Documents. 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.
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 as the
Administrative Agent shall deem necessary to grant to the Administrative 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. POST-CLOSING MATTERS. Execute and deliver the documents and
complete the tasks set forth on Schedule 5.13, in each case within the time
limits specified on such schedule.


 


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;


 


78
















 


 (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);


 


(d) intercompany Indebtedness of the
Companies outstanding to the extent permitted by Sections 6.03(d) and (h);


 


(e) Indebtedness in respect of Purchase
Money Obligations and Capital Lease Obligations and refinancings or renewals
thereof, in an aggregate amount not to exceed at any time outstanding $20.0
million at that 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 clauses (iii) and (iv) below) actually outstanding on the Closing
Date and listed on Schedule 6.01, provided that, any such scheduled
Indebtedness that constitutes intercompany Indebtedness (A) 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 not be repaid, prepaid, refinanced or renewed unless the
repayment, prepayment, refinancing or renewal thereof is treated as an
Investment and 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, no less
favorable to the Lenders than those contained in the Indebtedness being renewed
or refinanced; (iii) the Senior Subordinated Notes and the Holdings Senior
Discount Notes (including any notes issued in exchange therefor in accordance
with any registration rights document entered into in connection with the
issuance of the Senior Subordinated Notes or the Holdings Senior Discount
Notes); and (iv) up to $4.7 million of Indebtedness plus accrued interest in
connection with that certain Loan Agreement, dated September 25, 2001, between
Herbalife International Urunleri Ticaret Limited (a) irketi and ABN Amro Bank
N.V., provided that, such Indebtedness shall be paid in full, shall not be
refinanced, and all agreements and documents related thereto shall cease to
have any force or effect within 75 days after the Closing Date;


 


(h) Indebtedness in respect of the Korean
Consumer Refund Guarantee; and


 


79
















 


(i) other Indebtedness of Borrower and its
Subsidiaries not to exceed $10.0 million in aggregate principal amount at any
time outstanding.


 


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 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
Borrower and its Subsidiaries 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;


 


(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


 


80
















 


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 Borrower and its Subsidiaries in the ordinary course of
business in accordance with the past practices of Borrower and its
Subsidiaries;


 


(g) Liens arising pursuant to Purchase
Money 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 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 Borrower and its Subsidiaries,
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 existing at
the time such person is acquired or merged with or into or consolidated with
Borrower 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 are no more favorable to the lienholders than the existing Lien;


 


(j) Liens pursuant to the Security
Documents;


 


(k) Liens in existence on the Closing Date
and set forth on Schedule 6.02; 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
granted by Borrower and its Subsidiaries in the ordinary course of business and
not interfering in any material respect with the ordinary conduct of the
business of Borrower and its Subsidiaries;


 


(m) cash deposits and other Liens required
to secure obligations in respect of the Korean Consumer Refund Guarantee;


 


81
















 


(n) 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);


 


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


 


(p) Liens on the Holdings Senior Discount
Note Escrow Account; and


 


(q) Liens on assets not constituting Collateral
and securing Indebtedness permitted under Section 6.01(i) in an amount not to
exceed $2.0 million at any one time;


 


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(n) 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) Borrower 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;


 


(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 and is (i) related to income related to
foreign currency exposure of any Company or otherwise related to purchases
permitted hereunder from foreign suppliers or (ii) entered into to protect such
Companies against fluctuations in the prices of raw materials used in their
businesses;


 


(d) any Company may make intercompany loans
to any Loan Party and any Loan Party may make intercompany loans and advances
to any other Loan Party, and any Subsidiary that is not a Loan Party may make
intercompany loans and advances to any other Subsidiary that is not a Loan
Party; provided that, any such loan by any Loan Party shall be evidenced by an
Intercompany Note, and shall be pledged (and delivered) by such Loan Party that
is the lender of such intercompany loan as Collateral pursuant to the applicable
Security Agreement; provided further that, (i) no Loan Party may make loans to
any Foreign Subsidiary (other than a Domesticated Foreign Subsidiary) or
Non-Guarantor Subsidiary pursuant to this Section 6.03(d) unless otherwise
permitted under this Section 6.03, and (ii) any loans made by any Foreign
Subsidiary (other than a Domesticated Foreign Subsidiary) or Non-Guarantor
Subsidiary to any Loan Party


 


82
















 


pursuant
to this Section 6.03(d) shall be subordinated to the obligations of the Loan
Parties pursuant to an Intercompany Note;


 


(e) Borrower 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) Parent and its Subsidiaries may make
Investments in the form of loans and advances not to exceed $7.0 million 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 Capital Stock of Parent or Holdings by such employees,
directors and distributors;


 


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


 


(h) Investments (other than as described in
Section 6.03(d)) (i) by Borrower in any Subsidiary Guarantor, (ii) by any
Company in Borrower or any Subsidiary Guarantor, and (iii) by a Subsidiary
Guarantor in another Subsidiary Guarantor;


 


(i) 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;


 


(j) Investments made by Borrower 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;


 


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


 


(l) the Loan Parties may make Investments
in other Persons, including Non-Guarantor Subsidiaries (which, in the case of
Investments in Non-Guarantor Subsidiaries, must be in the form of intercompany
loans to such Non-Guarantor Subsidiaries and shall be evidenced by an
Intercompany Note pledged (and delivered) by the Loan Party that is the lender
of such intercompany loan as Collateral pursuant to the applicable Security
Agreement); provided 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 $10.0 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) the Loan Parties may make Investments
in Non-Guarantor Subsidiaries in the form of intercompany loans to such
Non-Guarantor Subsidiaries for the purposes of enabling such Non-Guarantor
Subsidiaries to comply with statutory obligations imposed by Governmental
Authorities; provided that, 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


 


83
















 


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(m) that are
outstanding at any time does not exceed $10.0 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));


 


(n) 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,
(ii) such Investments are made to facilitate repatriation of monies to the
United States, and (iii) the aggregate amount of all such Investments made
under this Section 6.03(n) outstanding at any one time shall not exceed $5.0
million;


 


(o) the Loan Parties may make Investments
in Herbalife Korea Co. Ltd. in the form of intercompany loans and payables to
Herbalife Korea Co. Ltd. for the purposes of cash collateralizing or otherwise
securing obligations in respect of the Korean Consumer Refund Guarantee;
provided that, (i) any 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; (ii) any such Investment is immediately
deposited into a bank account and used solely for the purposes referred to
above in this Section 6.03(o); and (iii) to the extent cash deposits securing
obligations in respect of the Korean Consumer Refund Guarantee are no longer
required, Borrower shall cause Herbalife Korea Co. Ltd. to immediately repay
the Loan Parties such amount;


 


(p) Investments by Non-Guarantor
Subsidiaries in Loan Parties that are contemporaneously or within five Business
Days remitted to Non-Guarantor Subsidiaries; and


 


(q) Investments by Borrower in the
Collateral Account and LC Sub-Account.


 


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 (or agree to
do any of the foregoing at any future time) 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 (or agree to
do any of the foregoing at any future time), except that:


 


(a) Capital Expenditures by Borrower and
its Subsidiaries shall be permitted to the extent permitted by Section 6.07(d);


 


(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


 


84
















 


pursuant
to this clause (iii) shall not exceed $5.0 million in any four fiscal quarters
of Parent;


 


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


 


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


 


(e) Borrower 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) the Transactions shall be permitted as
contemplated by the Transaction Documents;


 


(g) 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
5.10;


 


(h) any Subsidiary may merge, convey, sell,
transfer, assign or otherwise dispose of assets to Borrower or any other Loan
Party;


 


(i) Parent and its Subsidiaries may incur
Liens that are not prohibited hereunder;


 


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


 


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


 


(l) 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;


 


(m) any Loan Party may settle, release or
surrender tort or other litigation claims in the ordinary course of business;


 


(n) any Immaterial Subsidiary may
voluntarily dissolve, liquidate or wind up; and


 


(o) 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.


 


85
















 


SECTION
6.05. DIVIDENDS. Authorize, declare or pay, directly or indirectly,
any Dividends with respect to any Company, except that:


 


(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) so long as no Default exists or would
result therefrom, Borrower may pay Dividends to Luxembourg Intermediate
Holdings, Luxembourg CM and Luxembourg Intermediate Holdings may pay Dividends
to Luxembourg Holdings, Luxembourg Holdings may pay Dividends to Parent, and
Parent may pay Dividends to Holdings, 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 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(b) (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
Parent;


 


(c) so long as no Default exists or would
result therefrom, Borrower may pay cash Dividends to Luxembourg Intermediate
Holdings, Luxembourg CM and Luxembourg Intermediate Holdings may pay cash
Dividends to Luxembourg Holdings, Luxembourg Holdings may pay cash Dividends to
Parent, and Parent may pay cash Dividends to Holdings, for the purpose of
paying, so long as all proceeds thereof are promptly used by Luxembourg
Intermediate Holdings, Luxembourg CM, Luxembourg Holdings, Parent or Holdings,
as applicable, to pay, its 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(c) shall not exceed
$150,000 in any fiscal year of Holdings;


 


(d) so long as no Default exists or would
result therefrom, Borrower may pay, in respect of any particular Tax
Determination Year following the close of such Tax Determination Year, cash
Dividends to Luxembourg Intermediate Holdings, Luxembourg CM and Luxembourg
Intermediate Holdings may pay cash Dividends to Luxembourg Holdings, Luxembourg
Holdings may pay cash Dividends to Parent, and Parent may pay cash Dividends to
Holdings, for the purpose of making, so long as all proceeds thereof are used
by Holdings to make, with respect to each such Tax Determination Year, the
disbursement of a Tax Amounts Payment following the close of such Tax
Determination Year; provided that, 30 days prior to the declaration and
disbursement of such Tax


 


86
















 


Amounts
Payment, the payor thereof delivers to the Administrative Agent an Officer’s
Certificate certifying that the Tax Amounts CPA has made the determinations
required to be made by the Tax Amounts CPA in accordance with this Agreement,
and setting forth in detail reasonably satisfactory to the Administrative Agent
the basis for the determinations of the Tax Amounts Payment;


 


(e) so long as, after giving effect to any
such cash Dividend on a pro forma basis: (i) no Default or Event of Default
exists or would result therefrom, and (ii) the Leverage Ratio, as of the last
day of the most recently ended fiscal quarter of Parent, is not greater than
2.00:1.00, then, upon the later of (x) March 31, 2005 and (y) the depletion of
all funds in the Holdings Senior Discount Note Escrow Account, Borrower may pay
cash Dividends to Luxembourg Intermediate Holdings, Luxembourg CM and
Luxembourg Intermediate Holdings may pay cash Dividends to Luxembourg Holdings,
Luxembourg Holdings may pay cash Dividends to Parent, and Parent may pay cash
Dividends to Holdings, for the purpose of paying (so long as all proceeds
thereof are promptly used by Holdings to pay) regularly scheduled interest
payments on the Holdings Senior Discount Notes (pursuant to the terms of the
Holdings Senior Discount Note Documents as in effect on the Closing Date); and


 


(f) from time to time and in any event no
later than nine months after the Closing Date, Holdings may repurchase or
redeem shares of its capital stock owned by the Permitted Holders to the extent
such repurchases or redemptions are funded entirely by proceeds from the
concurrent or substantially concurrent issuance of shares of capital stock of
Holdings to the distributors or members of management of 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, or any other payments
otherwise payable pursuant to Section 6.05(d), may be paid to the extent
provided in Section 6.05;


 


(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) 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;


 


(d) the Transactions may be effected;


 


(e) payments may be made between Loan
Parties pursuant to Intercompany Service Agreements;


 


(f) Intercompany Service Receipts can be
directly or indirectly paid or otherwise transferred to any member of the
Holdings CFC Group that is a Loan Party for the purpose of making a Tax Amount
Payment otherwise permitted hereunder; and


 


87
















 


(g) so long as no Default exists or would
result therefrom, Borrower may pay, or cause to be paid, Monitoring Fees to the
Principals and their Related Parties in accordance with the Monitoring Fee
Agreements in an amount equal to (i) $2.5 million in any 12-month period,
payable quarterly in equal installments, plus (ii) reasonable out-of-pocket
expenses.


 


SECTION
6.07. FINANCIAL COVENANTS.


 


(a) MAXIMUM LEVERAGE RATIO. Permit the
Leverage Ratio of Parent, as of the last day of each fiscal quarter of Parent
specified below, to exceed the ratio set forth opposite such fiscal quarter set
forth below:


 


	
  FISCAL QUARTER

  	
   

  	
  LEVERAGE RATIO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Third
  and Fourth Fiscal Quarters of Fiscal Year 2002

  	
   

  	
  3.50 to 1.00

  	
   

  
	
  First and Second Fiscal Quarters of Fiscal Year 2003

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  Third and Fourth Fiscal Quarters of Fiscal Year 2003

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  First and Second Fiscal Quarters of Fiscal Year 2004

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  Third and Fourth Fiscal Quarters of Fiscal Year 2004

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2005

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2006 and thereafter

  	
   

  	
  2.00 to 1.00

  	
   

  



 


 


(b) MINIMUM INTEREST COVERAGE RATIO. Permit
the Consolidated Interest Coverage Ratio of Parent, as of the last day of each
fiscal quarter of Parent specified, to be less than the ratio set forth
opposite such fiscal quarter set forth below: 


 


	
  FISCAL QUARTER

  	
   

  	
  INTEREST COVERAGE

  RATIO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Third
  and Fourth Fiscal Quarters of Fiscal Year 2002 and First and Second Fiscal Quarters
  of Fiscal Year 2003

  	
   

  	
  3.00 to 1.00

  	
   

  
	
  Third
  and Fourth Fiscal Quarters of Fiscal Year 2003

  	
   

  	
  3.25 to 1.00

  	
   

  
	
  First
  Fiscal Quarter of Fiscal Year 2004

  	
   

  	
  3.50 to 1.00

  	
   

  
	
  Second
  and Third Fiscal Quarters of Fiscal Year 2004

  	
   

  	
  3.75 to 1.00

  	
   

  
	
  Fourth
  Fiscal Quarter of Fiscal Year 2004

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2005

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2006 and thereafter

  	
   

  	
  4.50 to 1.00

  	
   

  



 


(c) MINIMUM FIXED CHARGE COVERAGE RATIO.
Permit the Consolidated Fixed Charge Coverage Ratio of Parent, as of the last
day of each fiscal quarter of Parent specified below, to be less than the ratio
set forth opposite such fiscal quarter set forth below:


 


	
  FISCAL QUARTER

  	
   

  	
  FIXED CHARGE

  COVERAGE RATIO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Third
  and Fourth Fiscal Quarters of Fiscal Year 2002 and First, Second and Third
  Fiscal Quarters of Fiscal Year 2003

  	
   

  	
  1.30 to 1.00

  	
   

  
	
  Fourth
  Fiscal Quarter of Fiscal Year 2003

  	
   

  	
  1.35 to 1.00

  	
   

  
	
  First
  and Second Fiscal Quarters of Fiscal Year 2004

  	
   

  	
  1.45 to 1.00

  	
   

  
	
  Third
  and Fourth Fiscal Quarters of Fiscal Year 2004

  	
   

  	
  1.50 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2005

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  Each
  Fiscal Quarter of Fiscal Year 2006 and thereafter

  	
   

  	
  1.70 to 1.00

  	
   

  



 


88
















 


(d) LIMITATION ON CAPITAL EXPENDITURES. (i)
Make or commit to make any Capital Expenditures, other than Capital
Expenditures made or committed to be made by Parent and its Consolidated
Subsidiaries in each fiscal year of Parent which in the aggregate do not exceed
$25.0 million. (ii) Notwithstanding anything to the contrary contained in
clause (i) above, to the extent that the Capital Expenditures made by Parent
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 Parent.


 


SECTION
6.08. LIMITATION ON MODIFICATIONS OF INDEBTEDNESS; MODIFICATIONS OF
CERTIFICATE OF INCORPORATION, OTHER CONSTITUTIVE DOCUMENTS OR BYLAWS AND
CERTAIN OTHER AGREEMENTS, ETC. (i) Amend or modify, or permit the amendment or
modification of, any provision of any existing Indebtedness (including the
Senior Subordinated Notes and the Holdings Senior Discount Notes), either
Monitoring Fee Agreement or any Transaction Document, or of any agreement
(including any purchase agreement, indenture, loan agreement or security agreement)
relating thereto, or of Borrower’s corporate policy on cash management and
short-term investments (as in effect on the Closing Date), other than any
amendments or modifications to any Indebtedness, any Transaction Document,
either Monitoring Fee Agreement or such corporate policy that do not in any way
materially and adversely affect the interests of the Lenders, provided that,
the modifications described in clause (iii) of Section 6.01(g) may be given
effect; (ii) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of, or
any prepayment or redemption as a result of any asset sale, change of control
or similar event of, any Indebtedness outstanding under the Senior Subordinated
Notes or the Holdings Senior Discount Notes, provided that, so long as no
Default or Event of Default exists or would result therefrom, Borrower may make
prepayments on the Senior Subordinated Notes in accordance with the Senior
Subordinated Note Documents to the extent of the remaining 50% of Excess Cash
Flow referred to in Section 2.10(g) after application of Sections 2.10(g) and
(j); (iii) 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), or
enter into any new agreement with respect to its capital stock, other than any amendments,
modifications, agreements or changes pursuant to this clause (iii) or any such
new agreements pursuant to this clause (iii) that do not in any way adversely
and materially affect the interests of the Lenders; and provided that, Parent
may issue such capital stock as is not prohibited by Section 6.10 or any other
provision of this Agreement and may amend articles of incorporation or other
constitutive documents to authorize any such capital stock; or (iv) amend or
terminate any Company Lease relating to any Mortgaged Property other than any
amendments or terminations that do not in any way materially and adversely
affect the interests of the Lenders or take any action or fail to take any
action that, with or without either notice or lapse of time, would constitute a
default under any Company Lease relating to any Mortgaged Property.


 


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 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


 


89
















 


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
Parent 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. LIMITATION ON ISSUANCE OF CAPITAL STOCK. Parent will not
permit any Subsidiary to issue any Equity Interest (including by way of sales
of treasury stock) or any options or warrants to purchase, or securities
convertible into, Equity Interests, except (i) for stock splits, stock
dividends and additional Equity Interest issuances that do not decrease the
percentage ownership of any Subsidiary in any class of the Equity Interest of
such Subsidiary; (ii) Subsidiaries of Borrower formed after the Closing Date
pursuant to Section 6.11 may issue Equity Interests to Borrower or the
Subsidiary of Borrower that is to own such stock; (iii) Borrower may issue
common stock that is Qualified Capital Stock to Luxembourg Intermediate
Holdings; and (iv) only to the extent required in accordance with applicable
law, any Foreign Subsidiary may issue directors’ qualifying shares.
Notwithstanding the foregoing, the preceding limitation shall not apply with
respect to issuances of Equity Interests of Holdings. All Equity Interests
(other than capital stock issued by Holdings) issued in accordance with this
Section 6.10 shall, to the extent required by Section 5.12 or the applicable Security
Agreement, be delivered to the Collateral Agent for pledge pursuant to the
applicable Security Agreement.


 


SECTION
6.11. LIMITATION ON CREATION OF SUBSIDIARIES. Establish, create or
acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that, Parent may establish or create one or more
Wholly Owned Subsidiaries of Parent or one of its Wholly Owned Subsidiaries
without such consent so long as (except to the extent any of the following is
expressly exempted or otherwise limited pursuant to Section 5.11(b), but
subject, in any event, to the requirements of Section 5.11(c)): (a) 100% of the
Equity Interest of any new Subsidiary is upon the creation or establishment of
any such new Subsidiary pledged and delivered to the Collateral Agent for the
benefit of the Secured Parties under the applicable Security Agreement; and (b)
upon the creation or establishment of any such new Subsidiary, such Subsidiary
becomes a party to the applicable Security Documents and shall become a
Subsidiary Guarantor hereunder and execute a Joinder Agreement and other
applicable Loan Documents all in accordance with Section 5.11(b).


 


SECTION
6.12. 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.


 


90
















 


SECTION
6.13. BUSINESS. Unless otherwise expressly provided herein:


 


(a) With respect to Holdings, engage in any
business activities or have any assets or liabilities other than (i) its
ownership of the Equity Interests of Parent, (ii) participation in the
issuances of its Equity Interests, so long as Holdings complies with its
obligations relating thereto under this Agreement, (iii) entering into
Intercompany Service Agreements, and (iv) activities and assets reasonably
related to the foregoing clauses (i), (ii) and (iii);


 


(b) With respect to Parent, engage in any
business activities or have any assets or liabilities other than (i) its
ownership of the Equity Interests of Luxembourg CM and Luxembourg Intermediate
Holdings, (ii) participation in the issuances of its Equity Interests, (iii)
entering into Intercompany Service Agreements, and (iv) activities and assets
reasonably related to the foregoing clauses (i), (ii) and (iii);


 


(c) With respect to Luxembourg Intermediate
Holdings, engage in any business activities or have any assets or liabilities
other than (i) its ownership of the Equity Interests of Borrower, (ii)
participation in the issuances of its Equity Interests, (iii) entering into
Intercompany Service Agreements, and (iv) activities and assets reasonably
related to the foregoing clauses (i), (ii) and (iii);


 


(d) With respect to Luxembourg CM, engage
in any business activities or have any assets or liabilities other than (i)
entering into contracts with third-party manufacturers for products relating to
Borrower’s business, and (ii) performing other necessary operational functions
with respect to Borrower; or


 


(e) With respect to Borrower 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 complementary or substantially related thereto or are
reasonable extensions thereof).


 


SECTION
6.14. 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
6.15. 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


 


91
















 


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 IV 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;


 


(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.


 


92
















 


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 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


 


93
















 


Guarantors
jointly and severally (except to the extent otherwise limited in accordance
with applicable Requirements of Law as described in Annex IV 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 Annex IV 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,


 


94
















 


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 the Senior Subordinated Note Guarantee of such Loan Party has
been released or is contemporaneously released under the Senior Subordinated
Note Documents, 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 65% 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 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


 


95
















 


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 or 5.08 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, 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 $5.0
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)


 


96
















 


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;


 


(i) one or more judgments for the payment
of money in an aggregate amount in excess of $5.0 million 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, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of any Company to enforce any such
judgment;


 


(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 $1.0 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 $1.0 million;


 


(k) any security interest and Lien
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) the Guarantees 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;


 


97
















 


(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;


 


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


 


(o) the Merger shall not have occurred on
the Closing Date in accordance with the terms and conditions of the Merger
Agreement;


 


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 either or both of the following actions, at the same
or different times: (i) terminate forthwith the 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
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.


 


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 677 Washington Boulevard,
Stamford, Connecticut 06901, in the name of the Collateral Agent 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, (ii) the cash proceeds of any Casualty Event with respect to
Collateral to the extent contemplated herein or in any other Loan Document, and
(iii) any cash such


 


98
















 


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.


 


(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.


 


99
















 


(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 Mortgages 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 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.


 


100
















 


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 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 unless and until written notice thereof 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 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


 


101
















 


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 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 Syndication Agent and the Documentation Agent 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 Syndication Agent nor the Documentation Agent shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with


 


102
















 


respect to
the Syndication Agent and the Documentation Agent 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 Documentation Agent and
Syndication Agent 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: Chief Financial Officer


Phone:
(310) 410-9600


Telecopy
No.: (310) 557-3929;


 


With
courtesy copies to each of:


 


Whitney
& Co., LLC


177
Broad Street

Stamford, Connecticut  06901


Attention:  Kevin J. Curley


Phone:
(203) 973-1400


Telecopy
No.: (203) 973-1422;


 


Golden
Gate Private Equity, Inc.


One
Embarcadero Center, Suite 3300

San Francisco, California  94111

Attention:  Jesse Rogers

Phone: (415) 627-4500

Telecopy No.: (415) 627-4501;


 


Chadbourne
& Parke LLP


30
Rockefeller Plaza

New York, New York  10112


Attention:  Bruce Rader, Esq.


Phone:  (212) 408-5100


Telecopy
No.:  (212) 541-5369;


 


103
















 


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


 


UBS
AG, Stamford Branch

Banking Product Services


677
Washington Boulevard


Stamford,
Connecticut  06901


Attention:  Lynne Alfarone, Associate Director


Phone:  (203) 719-4308


Telecopy
No.:  (203) 719-3888;


 


With
a courtesy copy to:


 


UBS
Warburg LLC


1999
Avenue of the Stars

Suite 1500

Los Angeles, CA 90067


Attention:  Todd Wadler, Director


Phone:
(310) 556-6758


Telecopy
No.:  (310) 772-7305; 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, regardless of whether
the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank
may have had notice or knowledge of such Default at the time.


 


104
















 


(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, 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 or any of the LuxCos from its
Guarantee 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 


 


105
















 


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.


 


(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; provided,
however, that Borrower shall not have the right to replace a Lender solely as a
result of the exercise of such Lender’s rights (and the withholding of any
required consent by such Lender) pursuant to Section 11.02(b).


 


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 Arranger 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 Arranger 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 IV
attached hereto, the Loan Parties agree, jointly and severally, to indemnify
the Agents, the Arranger, 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)


 


106
















 


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.


 


(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
Arranger, 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 Arranger or
the Issuing Bank under Section 11.03(a) or (b), each Lender severally agrees to
pay to the Agents, the Arranger 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 Arranger 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
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


 


107
















 


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 the Commitment and Loans by the
Arranger 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, together with
a processing and recordation fee of $3,500; 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.


 


108
















 


(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), the processing and recordation fee referred to
in Section 11.04(b) and any written consent to such assignment required by
Section 11.04(b), the Administrative Agent shall accept such Assignment and
Acceptance and record the information 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). 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.


 


(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


 


109
















 


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 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 Engagement Letter, 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).


 


110
















 


(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,


 


111
















 


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 Borrower or any Subsidiary on a confidential
basis relating to Borrower 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. OBLIGATIONS CONDITIONAL ON MAKING OF INITIAL LOANS.
Notwithstanding anything herein to the contrary, Borrower has no obligation or
liability arising under this Agreement until the date on which the initial
Loans are made under this Agreement.


 


{signature pages follow}


 


112
















 


 


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:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH
  HOLDINGS (CAYMAN ISLANDS) LTD., a

  Cayman Islands corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH
  INTERMEDIATE HOLDINGS LTD., a Cayman

  Islands corporation, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH
  LUXEMBOURG CM S.a.R.L., a Luxembourg

  corporation, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


113
















 


	
   

  	
  WH
  LUXEMBOURG HOLDINGS S.a.R.L., a

  Luxembourg corporation, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WH
  LUXEMBOURG INTERMEDIATE HOLDINGS

  S.a.R.L., a Luxembourg corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  INTERNATIONAL OF AMERICA,

  INC., a California corporation, as a

  Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  INTERNATIONAL OF EUROPE, INC.,

  a California corporation, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL COMMUNICATIONS,

  INC., a California corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  INTERNATIONAL DISTRIBUTION,

  INC., a California corporation, as a

  Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


114
















 


	
   

  	




  HERBALIFE
  TAIWAN, INC., a California

  corporation, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE INTERNATIONAL (THAILAND),

  LTD., a California corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  CHINA, LLC, a Delaware limited liability company, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  INTERNATIONAL DO BRASIL LTDA.,

  a corporation dually incorporated in

  Brazil and Delaware, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  OF JAPAN K.K., a corporation

  dually incorporated in Japan and

  Delaware, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  INTERNATIONAL FINLAND OY, a

  Finnish corporation, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


115
















 


	
   

  	
  HERBALIFE
  INTERNATIONAL OF ISRAEL (1990)

  LTD., an Israeli corporation, as a

  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERBALIFE
  SWEDEN AKTIEBOLAG, a Swedish

  corporation, as a Guarantor  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS
  AG, STAMFORD BRANCH, as

  Administrative Agent, Collateral Agent,

  Issuing Bank, and a Lender  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS
  WARBURG LLC, as Arranger

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RABOBANK
  INTERNATIONAL, as Documentation

  Agent  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


116
















 


	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION

  (Merchant Banking Group), as Syndication

  Agent  

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew
  Colucci

  
	
   

  	
   

  	
  Title:
  

  	
  Its
  Authorized Signatory

  
					



 


ANNEX I


 


AMORTIZATION TABLE


 


	
  DATE

  	
   

  	
  TERM LOAN AMOUNT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2002

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  December 31, 2002

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2003

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2003

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 30, 2003

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 31, 2003

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2004

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2004

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
  $

  	
  180,000,000

  	
   

  



 


I-1
















 


ANNEX II


 


LENDERS AND COMMITMENTS 


 


	
  LENDER

  	
   

  	
  TERM LOAN

  COMMITMENT

  	
   

  	
  REVOLVING

  COMMITMENT

  	
   

  	
  TOTALS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS AG, Stamford
  Branch

  	
   

  	
  $

  	
  180,000,000.00

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  205,000,000.00

  	
   

  
	
  Banking Product
  Services

  677 Washington Boulevard

  Stamford, Connecticut  06901

  Attention:  Lynne Alfarone,

  Associate Director

  Phone:  (203) 719-4308

  Telecopy No.:  (203) 719-3888

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals:

  	
   

  	
  $

  	
  180,000,000.00

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  205,000,000.00

  	
   

  



 


II-1
















 


 


ANNEX III


 


CONSOLIDATED EBITDA


 


LAST TWELVE MONTHS ENDED MARCH 31, 2002


 


	
   

  	
   

  	
  QUARTER ENDED

  	
   

  	
  LTM ENDED

  	
   

  
	
   

  	
   

  	
  6/30/01

  	
   

  	
  9/30/01

  	
   

  	
  12/31/01

  	
   

  	
  3/31/02

  	
   

  	
  3/31/02

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income

  	
   

  	
  $

  	
  10,044

  	
   

  	
  $

  	
  14,026

  	
   

  	
  $

  	
  9,957

  	
   

  	
  $

  	
  19,913

  	
   

  	
  $

  	
  53,940

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA
  Adjustments:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest Income,
  net

  	
   

  	
  (1,909

  	
  )

  	
  (664

  	
  )

  	
  (353

  	
  )

  	
  (575

  	
  )

  	
  (3,501

  	
  )

  
	
  Income Taxes

  	
   

  	
  6,794

  	
   

  	
  9,443

  	
   

  	
  6,788

  	
   

  	
  13,369

  	
   

  	
  36,394

  	
   

  
	
  Depreciation and
  Amortization

  	
   

  	
  4,332

  	
   

  	
  4,652

  	
   

  	
  4,996

  	
   

  	
  4,909

  	
   

  	
  18,889

  	
   

  
	
  Minority
  Interest in Earnings of Herbalife

  	
   

  	
  146

  	
   

  	
  138

  	
   

  	
  226

  	
   

  	
  140

  	
   

  	
  650

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA

  	
   

  	
  19,407

  	
   

  	
  27,595

  	
   

  	
  21,614

  	
   

  	
  37,756

  	
   

  	
  106,372

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-recurring
  Items:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Severance and
  Other Employee-Related Expenses (a)

  	
   

  	
  1,047

  	
   

  	
  2,082

  	
   

  	
  6,691

  	
   

  	
  973

  	
   

  	
  10,793

  	
   

  
	
  Product Costs
  under Previous Supply Agreements (b)

  	
   

  	
  2,251

  	
   

  	
  630

  	
   

  	
  2,881

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other (c)

  	
   

  	
  286

  	
   

  	
  64

  	
   

  	
  308

  	
   

  	
  64

  	
   

  	
  722

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted EBITDA

  	
   

  	
  $

  	
  22,991

  	
   

  	
  $

  	
  30,371

  	
   

  	
  $

  	
  28,613

  	
   

  	
  $

  	
  38,793

  	
   

  	
  $

  	
  120,768

  	
   

  



 










(a)
Severance costs related to changes in senior management and replacement of
certain key executives at lower salary levels.


 


(b) Product
cost savings resulting from expiration of long-term contract with primary
supplier.


 


(c)
Nonrecurring legal and professional fees and donated services.


 


NOTE THAT
THE ABOVE SCHEDULE EXCLUDES ESTIMATED FEES RELATED TO THE MERGER AND THE OTHER
TRANSACTIONS, INCLUDING LEGAL FEES, PROFESSIONAL SERVICES FEES, FINANCIAL
ADVISORY FEES, FEES RELATED TO THE FAIRNESS OPINIONS OBTAINED, PRINTING FEES,
AND RELATED ITEMS. SUCH ITEMS ARE CONSIDERED TO BE NONRECURRING AND WOULD BE
ADDED BACK IN THE CALCULATION OF CONSOLIDATED EBITDA.


 


III-1
















 


ANNEX IV


 


LIMITATIONS ON GUARANTEES AND INDEMNITIES
UNDER APPLICABLE FOREIGN LAWS


 


LIMITATIONS
ON THE GUARANTEE OF HERBALIFE INTERNATIONAL OF ISRAEL (1990) LTD. (“HERBALIFE
ISRAEL”)


 


1.                                       Herbalife
Israel’s guarantee under the Agreement together with all Herbalife Israel’s
obligations and undertakings under and in connection with the Agreement shall
be in an unlimited amount, subject to the provisions of any applicable Israeli
law.


 


2.                                       Any and all
payments by or on account of any obligation of Herbalife Israel under any of
the Loan Documents shall be subject to withholding tax at source as required
under applicable Israeli law, unless an appropriate exemption of such deduction
has been obtained. Any amounts withheld at source shall be treated as if paid
on account of such obligations.


 


3.                                       Notwithstanding
the provisions of Agreement, the Indebtedness of Herbalife Israel now and
hereafter held by Herbalife Israel shall be subordinated in right of payment in
full in cash to the Guaranteed Obligations, except if (i) applicable Israeli
law provides otherwise; or (ii) if any prior third party has not agreed to such
subordination.


 


4.                                       The
provision of Section 7.05 of the Agreement shall apply subject to applicable
Israeli law.


 


LIMITATIONS
ON THE GUARANTEE OF HERBALIFE SWEDEN AKTIEBOLAG (“HERBALIFE SWEDEN”)


 


1.                                       The
obligations of Herbalife Sweden under the Credit Agreement shall be limited if
(and only if) required by an application of the provisions of the Swedish
Companies Act (Sw: aktiebolagslagen) (1975:1385) in force from time to time
regulating the purpose of a company’s business, prohibited loans and guarantees
and distribution of assets (including profits/dividends) and it is understood
that the liability of Herbalife Sweden under this Credit Agreement only applies
to the extent permitted by the above mentioned provisions of the Swedish
Companies Act.


 


LIMITATIONS
ON THE GUARANTEE OF HERBALIFE INTERNATIONAL OF FINLAND OY


 


1.                                       Under
Chapter 12, Section 7 Subsection 1 of the Finish Companies Act, the Guarantee
is limited to the amount of retained earnings.


 


LIMITATIONS
ON THE GUARANTEE HERBALIFE INTERNATIONAL DO BRASIL LTDA.


 


1.             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.


 


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


 


IV-1